Corporate Governance Guidelines of
Energy Transfer Partners, L.P.
Table of Contents
Board Composition
Director Qualifications
Director Responsibilities
Board Committees
Director Access to Officers, Employees and Other Advisers
Director Compensation
Director Orientation and Continuing Education
Chief Executive Officer Evaluation; Management
Succession
Annual Review
Energy Transfer Partners, L.P. (the "Partnership")
is a Delaware limited partnership. As such, the Partnership’s primary governance document is a
limited partnership agreement, the Amended and Restated Agreement of Limited
Partnership of Energy Transfer Partners, L.P., as amended from time to time
(the "Partnership Agreement"), to which all limited partners ("Unitholders")
are parties. Pursuant to the terms of the Partnership Agreement, the Unitholders
do not participate in the management of the Partnership, nor in the selection
or election of any board of directors of the limited partnership. Under the
Partnership Agreement, management of the Partnership is vested in the
Partnership’s general partner, Energy Transfer Partners GP, L.P. (the "Partnership GP") which in turn is
managed by its general partner, Energy Transfer Partners, L.L.C. (the "General
Partner"). The basic charter
document for the General Partner is the Amended and Restated Limited Liability
Company Agreement of the General Partner (the "General Partner Agreement"),
an agreement to which the owners of the General Partner are the only
parties. The General Partner Agreement
provides that the General Partner will be managed by its Board of Directors,
and references to the Board of Directors in the Partnership Agreement are
defined to mean the Board of Directors of the General Partner (the "Board"). Pursuant to these agreements, the corporate governance of the General
Partner is, in effect, the corporate governance of the Partnership. The New
York Stock Exchange (the "NYSE") has recognized the distinctive
characteristics of partnerships in the application of NYSE listing standards
regarding "corporate" governance. In light of the foregoing, the Board has
adopted the governance guidelines set forth below.
As used herein, the term "Partnership Group"
means the General Partner, the Partnership GP, the Partnership and the
Partnership’s subsidiaries.
-
Board Composition
The General Partner Agreement
describes the composition of the Board, and provides that the minimum number of
directors shall be 5 and the maximum number of directors shall be 13.
-
Director Qualifications
-
Board Membership Criteria. The Board will have at least three directors
who are independent as defined under the independence standards established by
the Securities and Exchange Commission (the "SEC")
and the NYSE. The Board will assess, on an annual basis, the skills and
characteristics that candidates for election to the Board should possess, as
well as the composition of the Board as a whole. This assessment will include
the qualifications under applicable independence standards and other standards
applicable to the Board and its committees, as well as consideration of skills
and experience in the context of the needs of the Board.
-
Director Independence. The Board will affirmatively determine
annually, generally at the regularly scheduled first quarter meeting of the
Board, whether each director is independent. In order to determine whether a director qualifies as "independent," the
Board will broadly consider all relevant facts and circumstances, and will
apply the standards set forth in Section 303A.02 of the NYSE Listed Company
Manual. Ownership of even a significant
amount of securities of the Partnership, the General Partner or any of their
affiliates, by itself, however, is not a bar to a finding of independence.
-
Change in Corporate Affiliation. The Board does not believe that an individual
director who changes the position of professional responsibility or primary
corporate affiliation he or she held when he or she was elected to the Board
should necessarily resign from the Board. There should, however, be an
opportunity for the Board to review the continued appropriateness of Board
membership under the circumstances. A director who changes position of
professional responsibility or primary corporate affiliation will be expected
to act in accordance with the Board’s recommendation.
-
Service on Other Boards. No director should serve on so many other
public or private company boards that his or her ability to devote the time and
attention to duties to the Board would be compromised. Determination of the
existence of such a situation would be subject to the discretion of the Board.
Directors should advise the Chairman of the Board in advance of accepting an
invitation to serve on another public company’s board. In no event should any
director serve on more than three other public company boards. No member of the
Audit Committee of the Board should simultaneously serve on more than two other
public company audit committees unless the Board determines that such
simultaneous service will not impair the ability of such member to effectively
serve on the Audit Committee and such determination is disclosed in the
Partnership’s annual proxy statement or, if the Partnership does not file an
annual proxy statement, in the Partnership’s annual report on Form 10-K filed
with the SEC.
Back To Contents
-
Director Responsibilities
-
General. The function of the Board is to provide guidance to and controls on the
activities of the Partnership, in the exercise of the business judgment of each
individual director. In discharging that obligation, directors should be
entitled to rely on the honesty and integrity of the senior management of the
General Partner and the Partnership and their outside advisors and auditors.
-
Attendance and Participation. Directors are expected to attend Board
meetings and meetings of committees on which they serve, and to spend the time
needed and meet as frequently as necessary to properly discharge their
responsibilities. Information and data that are important to the Board’s
understanding of the business to be conducted at a Board or committee meeting
should ordinarily be distributed in writing to the directors before the meeting
and directors should review these materials in advance of the meeting.
-
Separation of Offices of Chairman and CEO. The Board has no policy requiring either
that the positions of the Chairman of the Board and of the Chief Executive
Officer1 be separate or that they be occupied by the same individual. The Board believes
that this issue is properly addressed as part of the succession planning
process and that a determination on this subject should be made when it elects
a new chief executive officer or at such other times as when consideration of
the matter is warranted by circumstances.
-
Board Meetings. The Board shall meet at least
two times per year. Additional meetings may be scheduled as necessary or appropriate
in light of circumstances. The Chairman of the Board, together with the Chief
Executive Officer and the Secretary of the General Partner, will prepare an
annual schedule of meetings for the Board and the standing committees. To the
extent practicable, the schedule shall reflect agenda subjects that are
generally of a recurring nature and are expected to be discussed during the
year in question.
-
Meeting Agendas. The Chairman of the Board and the Chief
Executive Officer of the General Partner will together establish the agenda for
each Board meeting. Each Board member is free to suggest the inclusion of items
on the agenda. The Board will review the Partnership Group’s long term
strategic plans and the principal issues that the Partnership Group will face
in the future during at least one Board meeting each year.
-
Meeting of Non-Management Directors. The non-management directors will meet
regularly in executive session without management participation at each
regularly scheduled board meeting. The directors meeting in executive session
do not constitute a committee of the Board and therefore shall not take action
at such sessions, although the participating directors may make recommendations
for consideration by the full Board. These meetings will be chaired on a
rotating basis by the chairmen of the General Partner’s Audit Committee and
Compensation Committee. If the non-management directors include directors who
are not independent, the independent directors will meet separately in
executive session not less than once a year.
-
Communication with Board. Interested parties may communicate
directly with the independent directors or any of the directors of the
Partnership by submitting a communication in an envelope marked "Confidential"
addressed to the desired person to the attention of the Partnership’s Corporate
Secretary at Energy Transfer Partners, L.P., 3738 Oak Lawn Ave., Dallas, Texas 75219.
Communications are distributed to the Board of Directors, or to any individual
director or directors as appropriate, depending on the facts and circumstances
outlined in the communication.
-
Communication with the Public. The Board believes that management should
speak for the Partnership Group. Individual Board members may, from time to
time, meet or otherwise communicate with various constituencies that are
involved with the Partnership Group. However, it is expected that Board members
would do this with the knowledge of management and, absent unusual
circumstances or as contemplated by the committee charters, only at the request
of management.
1 If there is no Chief Executive Officer, any references to Chief
Executive Officer shall include the President or any such other person
performing the functions of the chief executive officer.
Back To Contents
-
Board Committees
-
General. Board committees will at all times include an Audit Committee and a
Compensation Committee. Each of the
Audit Committee and the Compensation Committee will have its own charter. The charters will set forth the purposes,
goals and responsibilities of the committees.
-
Audit Committee. The Audit Committee will consist of at
least three members. All of the members of the Audit Committee will be
independent directors under the criteria established by the NYSE,
Section 10A(m)(3) of the Securities Exchange Act of 1934, and the rules
and regulations of the Securities and Exchange Commission.
-
Compensation Committee. The Compensation Committee shall be comprised
of at least two independent directors who also qualify as non-employee
directors. Other non-management directors may serve as members of the
Compensation Committee. The Compensation Committee shall elect a chairman
annually.
-
Independent Advisors. The
Board and each Committee of the Board shall have the authority, in their
discretion and at the Partnership’s expense, to retain such independent legal,
financial or other advisors as they may deem necessary.
-
Other Committees. The Board may, from time to time,
establish or maintain additional committees as necessary or appropriate. The members of all other committees will be
selected based on the experience and skills of the potential members. The
chairman of each committee, in consultation with the committee members, will
determine the frequency and length of the committee meetings consistent with
any requirements set forth in the committee’s charter. The chairman of each
committee, in consultation with the appropriate members of the committee and
management, will develop the committee’s agenda. Each committee will keep the
full Board apprised of its work, unless the circumstances otherwise warrant.
Back To Contents
-
Director Access to Officers, Employees and Other Advisers.
Directors will have full
and free access to officers and employees of the Partnership Group. Any
meetings or contacts that a director wishes to initiate may be arranged through
the Chief Executive Officer of the General Partner or made directly by the
director. The directors will use their judgment to ensure that any such contact
is not disruptive to the business operations of the Partnership Group and will,
to the extent not inappropriate, copy the Chief Executive Officer of the
General Partner on any written communications (including e-mail) between a
director and an officer or employee of the Partnership Group. The Board also
welcomes regular attendance at each Board meeting by senior officers of the
General Partner. To the extent they consider it necessary and appropriate,
directors also will have access to the Partnership Group’s independent advisors
using the same procedures.
Back To Contents
-
Director Compensation.
The Compensation
Committee, in accordance with the policies and principles set forth in its
charter, will determine or recommend to the Board the form and amount of
director compensation. Directors who are employees of the Partnership Group
shall not be separately compensated for their services as directors. The
Compensation Committee will consider that directors’ independence may be
jeopardized if director compensation and perquisites exceed customary levels,
if the Partnership Group makes substantial charitable contributions to
organizations with which a director is affiliated, or if the Partnership Group
enters into consulting contracts with or provides other indirect forms of
compensation to a director or an organization with which the director is
affiliated.
Back To Contents
-
Director Orientation and Continuing Education
-
Orientation Program. Each new director should participate in an
orientation program, which should be conducted promptly after his or her
initial election or appointment. This orientation will include presentations by
senior management to familiarize new directors with the Partnership Group’s
operations, its significant financial, accounting and risk management issues,
its compliance programs, its Code of Business Conduct and Ethics, its principal
officers, and its internal and independent auditors. Other directors are also
welcome to attend any of these orientation programs.
-
Continuing Education. The Board believes it is appropriate for
directors, at their discretion, to have access to educational programs related
to their duties as directors on an ongoing basis to enable them to better
perform their duties and to recognize and deal appropriately with issues that
arise. The Partnership Group will provide appropriate funding for any such
program in which a director wishes to participate.
Back To Contents
-
Chief Executive Officer Evaluation; Management Succession
-
CEO Evaluation. The Compensation Committee will conduct an
annual review of the Chief Executive Officer’s performance, as provided in its
charter. The Board of Directors will review the Compensation Committee’s report
with a view to ensuring that the Chief Executive Officer is providing
appropriate leadership for the Partnership Group in the long- and short-term.
-
Management Succession. The Board, with the assistance of the
Compensation Committee, should identify and periodically update the qualities
and characteristics necessary for an effective Chief Executive Officer. The
Board recognizes that advance planning for contingencies such as the departure,
death or disability of the Chief Executive Officer or other top executives is
also critical so that, in the event of an untimely vacancy, the Partnership
Group has in place an emergency succession plan to facilitate the transition to
both interim and longer-term leadership. The designation of the Chief Executive
Officer, as in the case of other officers, is a decision for the Board.
Back To Contents
-
Annual Review
-
Board Performance Evaluations. The Board of Directors will conduct an annual
self-evaluation to determine whether it and its committees are functioning
effectively.
-
Review of Guidelines. The Board of Directors will review these
guidelines at least annually, in light of the annual self-evaluation of the
Board as well as regulatory developments.
Corporate Governance Guidelines
Energy Transfer Equity, L.P.
Contents
Board Composition
Director Qualifications
Director Responsibilities
Board Committees
Director Access to Officers, Employees and other Advisers2
Director Compensation
Director Orientation and Continuing Education
Chief Executive Officer Evaluation; Management Succession
Annual Review
Energy Transfer Equity, L.P. (the "Partnership")
is a Delaware limited partnership. As such, the Partnership’s primary governance document is a
limited partnership agreement, the Third Amended and Restated Agreement of
Limited Partnership of Energy Transfer Equity, L.P. (the "Partnership
Agreement"), to which all limited partners ("Unitholders") are
parties. Pursuant to the terms of the Partnership Agreement, the Unitholders do
not participate in the management of the Partnership, nor in the selection or
election of any board of directors of the limited partnership. Under the
Partnership Agreement, management of the Partnership is vested in the
Partnership’s general partner, LE GP, LLC (the "General Partner"). The basic charter document for the General
Partner is the Limited Liability Company Agreement of LE GP, LLC (the "General
Partner Agreement"), an agreement to which the owners of the General
Partner are the only parties. The
General Partner Agreement provides that the General Partner will be managed by
its Board of Directors, and references to the Board of Directors in the
Partnership Agreement are defined to mean the Board of Directors of the General
Partner (the "Board"). Pursuant to these
agreements, the corporate governance of the General Partner is, in effect, the
corporate governance of the Partnership. The New York Stock Exchange (the "NYSE")
has recognized the distinctive characteristics of partnerships in the
application of NYSE listing standards regarding "corporate" governance. In
light of the foregoing, the Board has adopted the governance guidelines set
forth below.
As used herein, the term "Partnership Group"
means the Partnership and the General Partner.
-
Board Composition
The General Partner Agreement
describes the composition of the Board, and provides that the minimum number of
directors shall be 5 and the maximum number of directors shall be 10.
Back To Top
-
Director Qualifications
-
Board Membership Criteria. The Board will have at least three directors
who are independent as defined under the independence standards established by
the Securities and Exchange Commission (the "SEC")
and the NYSE. The Board will assess, on an annual basis, the skills and
characteristics that candidates for election to the Board should possess, as
well as the composition of the Board as a whole. This assessment will include
the qualifications under applicable independence standards and other standards
applicable to the Board and its committees, as well as consideration of skills
and experience in the context of the needs of the Board.
-
Director Independence. The Board will affirmatively determine
annually, generally at the regularly scheduled first quarter meeting of the
Board, whether each director is independent. In order to determine whether a director qualifies as "independent," the
Board will broadly consider all relevant facts and circumstances, and will
apply the standards set forth in Section 303A.02 of the NYSE Listed Company
Manual. Ownership of even a significant
amount of securities of the Partnership, the General Partner or any of their
affiliates, by itself, however, is not a bar to a finding of independence.
-
Change in Corporate Affiliation. The Board does not believe that an individual
director who changes the position of professional responsibility or primary
corporate affiliation he or she held when he or she was elected to the Board
should necessarily resign from the Board. There should, however, be an
opportunity for the Board to review the continued appropriateness of Board
membership under the circumstances. A director who changes position of
professional responsibility or primary corporate affiliation will be expected
to act in accordance with the Board’s recommendation.
-
Service on Other Boards. No director should serve on so many other
public or private company boards that his or her ability to devote the time and
attention to duties to the Board would be compromised. Determination of the
existence of such a situation would be subject to the discretion of the Board.
Directors should advise the Chairman of the Board in advance of accepting an
invitation to serve on another public company’s board. In no event should any
director serve on more than three other public company boards. No member of the
Audit Committee of the Board should simultaneously serve on more than two other
public company audit committees unless the Board determines that such
simultaneous service will not impair the ability of such member to effectively
serve on the Audit Committee and such determination is disclosed in the
Partnership’s annual proxy statement or, if the Partnership does not file an
annual proxy statement, in the Partnership’s annual report on Form 10-K filed
with the SEC.
Back To Top
-
Director Responsibilities
-
General. The function of the Board is to provide guidance to and controls on the
activities of the Partnership, in the exercise of the business judgment of each
individual director. In discharging that obligation, directors should be
entitled to rely on the honesty and integrity of the senior management of the
General Partner and the Partnership and their outside advisors and auditors.
-
Attendance and Participation. Directors are expected to attend Board
meetings and meetings of committees on which they serve, and to spend the time
needed and meet as frequently as necessary to properly discharge their
responsibilities. Information and data that are important to the Board’s
understanding of the business to be conducted at a Board or committee meeting
should ordinarily be distributed in writing to the directors before the meeting
and directors should review these materials in advance of the meeting.
-
Separation of Offices of Chairman and CEO. The Board has no policy requiring either
that the positions of the Chairman of the Board and of the Chief Executive
Officer1 be separate or that they be occupied by the same individual. The Board believes
that this issue is properly addressed as part of the succession planning
process and that a determination on this subject should be made when it elects
a new chief executive officer or at such other times as when consideration of
the matter is warranted by circumstances.
-
Board Meetings. The Board shall meet at least
two times per year. Additional meetings may be scheduled as necessary or
appropriate in light of circumstances. The Chairman of the Board, together with
the Chief Executive Officer and the Secretary of the General Partner, will
prepare an annual schedule of meetings for the Board and the standing
committees. To the extent practicable, the schedule shall reflect agenda
subjects that are generally of a recurring nature and are expected to be
discussed during the year in question.
-
Meeting Agendas. The Chairman of the Board and the Chief
Executive Officer of the General Partner will together establish the agenda for
each Board meeting. Each Board member is free to suggest the inclusion of items
on the agenda. The Board will review the Partnership Group’s long term
strategic plans and the principal issues that the Partnership Group will face
in the future during at least one Board meeting each year.
-
Meeting of Non-Management Directors. The non-management directors will meet
regularly in executive session without management participation at each
regularly scheduled board meeting. The directors meeting in executive session
do not constitute a committee of the Board and therefore shall not take action
at such sessions, although the participating directors may make recommendations
for consideration by the full Board. These meetings will be chaired on a
rotating basis by the chairmen of the General Partner’s Audit Committee and
Compensation Committee. If the non-management directors include directors who
are not independent, the independent directors will meet separately in executive
session not less than once a year.
-
Communication with Board. Interested parties may communicate
directly with the independent directors or any of the directors of the
Partnership by submitting a communication in an envelope marked "Confidential"
addressed to the desired person to the attention of the Partnership’s Corporate
Secretary at Energy Transfer Equity, L.P., 3738 Oak Lawn Avenue, Dallas, Texas 75219.
Communications are distributed to the Board of Directors, or to any individual
director or directors as appropriate, depending on the facts and circumstances
outlined in the communication.
-
Communication with the Public. The Board believes that management should
speak for the Partnership Group. Individual Board members may, from time to
time, meet or otherwise communicate with various constituencies that are
involved with the Partnership Group. However, it is expected that Board members
would do this with the knowledge of management and, absent unusual
circumstances or as contemplated by the committee charters, only at the request
of management.
Back To Top
-
Board Committees
-
General. Board committees will at all times include an Audit Committee and a
Compensation Committee. Each of the Audit
Committee and the Compensation Committee will have its own charter. The charters will set forth the purposes,
goals and responsibilities of the committees.
-
Audit Committee. The Audit Committee will consist of at
least three members. All of the members of the Audit Committee will be
independent directors under the criteria established by the NYSE,
Section 10A(m)(3) of the Securities Exchange Act of 1934, and the rules
and regulations of the Securities and Exchange Commission.
-
Compensation Committee. The Compensation Committee shall be comprised
of at least two independent directors who also qualify as non-employee
directors. Other non-management directors may serve as members of the
Compensation Committee. The Compensation Committee shall elect a chairman
annually.
-
Independent Advisors. The Board and each Committee of the Board shall have the authority, in
their discretion and at the Partnership’s expense, to retain such independent
legal, financial and other advisors as they may deem necessary.
-
Other Committees. The Board may, from time to time,
establish or maintain additional committees as necessary or appropriate. The members of all other committees will be
selected based on the experience and skills of the potential members. The
chairman of each committee, in consultation with the committee members, will
determine the frequency and length of the committee meetings consistent with
any requirements set forth in the committee’s charter. The chairman of each
committee, in consultation with the appropriate members of the committee and
management, will develop the committee’s agenda. Each committee will keep the
full Board apprised of its work, unless the circumstances otherwise warrant.
Back To Top
-
Director Access to Officers, Employees and other Advisers.2
Directors will have full and free access to officers and employees of the Partnership
Group. Any meetings or contacts that a director wishes to initiate may be
arranged through the Chief Executive Officer of the General Partner or made
directly by the director. The directors will use their judgment to ensure that
any such contact is not disruptive to the business operations of the
Partnership Group and will, to the extent not inappropriate, copy the Chief
Executive Officer of the General Partner on any written communications
(including e-mail) between a director and an officer or employee of the
Partnership Group. The Board also welcomes regular attendance at each Board
meeting by senior officers of the General Partner. To the extent they consider
it necessary and appropriate, directors also will have access to the
Partnership Group’s independent advisors using the same procedures.
Back To Top
-
Director Compensation.
The Compensation Committee, in accordance with the policies and principles set forth in its
charter, will determine or recommend to the Board the form and amount of
director compensation. Directors who are employees of the Partnership Group
shall not be separately compensated for their services as directors. The
Compensation Committee will consider that directors’ independence may be
jeopardized if director compensation and perquisites exceed customary levels,
if the Partnership Group makes substantial charitable contributions to
organizations with which a director is affiliated, or if the Partnership Group
enters into consulting contracts with or provides other indirect forms of compensation
to a director or an organization with which the director is affiliated.
Back To Top
-
Director Orientation and Continuing Education
-
Orientation Program. Each new director should participate in an
orientation program, which should be conducted promptly after his or her
initial election or appointment. This orientation will include presentations by
senior management to familiarize new directors with the Partnership Group’s
operations, its significant financial, accounting and risk management issues,
its compliance programs, its Code of Business Conduct and Ethics, its principal
officers, and its internal and independent auditors. Other directors are also
welcome to attend any of these orientation programs.
-
Continuing Education. The Board believes it is appropriate for
directors, at their discretion, to have access to educational programs related
to their duties as directors on an ongoing basis to enable them to better
perform their duties and to recognize and deal appropriately with issues that
arise. The Partnership Group will provide appropriate funding for any such
program in which a director wishes to participate.
Back To Top
-
Chief Executive Officer Evaluation; Management Succession
-
CEO Evaluation. The Compensation Committee will conduct an
annual review of the Chief Executive Officer’s performance, as provided in its
charter. The Board of Directors will review the Compensation Committee’s report
with a view to ensuring that the Chief Executive Officer is providing
appropriate leadership for the Partnership Group in the long- and short-term.
-
Management Succession. The Board, with the assistance of the
Compensation Committee, should identify and periodically update the qualities
and characteristics necessary for an effective Chief Executive Officer. The
Board recognizes that advance planning for contingencies such as the departure,
death or disability of the Chief Executive Officer or other top executives is
also critical so that, in the event of an untimely vacancy, the Partnership
Group has in place an emergency succession plan to facilitate the transition to
both interim and longer-term leadership. The designation of the Chief Executive
Officer, as in the case of other officers, is a decision for the Board.
Back To Top
-
Annual Review
-
Board Performance Evaluations. The Board of Directors will conduct an annual
self-evaluation to determine whether it and its committees are functioning
effectively.
-
Review of Guidelines. The Board of Directors will review these
guidelines at least annually, in light of the annual self-evaluation of the Board
as well as regulatory developments.
Back To Top
1 If there is no Chief Executive Officer, any references to Chief Executive
Officer shall include the President or any such other person performing the
functions of the chief executive officer.
2 References to officers or employees of
the Partnership also include persons performing such functions for the
Partnership pursuant to the Shared Services Agreement between the Partnership
and Energy Transfer Partners, L.P.