Exhibit 10.44


 


 


2001 EMPLOYMENT AGREEMENT


 


THIS 2001 EMPLOYMENT AGREEMENT
(hereinafter referred to as the “Agreement”) is made effective as of June 14,
2001, by and between WESTERN GAS RESOURCES, INC., a Delaware corporation,
(hereinafter referred to as the “Corporation”), and John C. Walter (hereinafter
referred to as the “Employee”).


 


WITNESSETH:


 


 


WHEREAS, the
Corporation, its subsidiaries and affiliates (the “Western Companies”) acquire,
design, construct and operate natural gas gathering and processing facilities,
market, store and transport natural gas, natural gas liquids and sulphur,
market electrical power and explore for, develop, and produce oil and gas.


 


WHEREAS,
employee has substantial experience in the Corporation’s business and is
currently the Corporation’s Executive Vice President, Secretary and General
Counsel.


 


WHEREAS, prior hereto, the Corporation and the Employee have entered
into that certain Employment Agreement, dated January 2, 2001, which shall be
terminated upon execution of this, Agreement and further, shall be replaced in
its entirety by this Agreement.


 


NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:


 


1.                                       Employment.
Corporation hereby employs the Employee and the Employee hereby accepts such
employment with the Corporation upon the terms and conditions hereinafter set
forth.  The Employee’s employment shall
continue until it is terminated in accordance with the provisions of paragraph
12 hereof.


 


2.                                       Powers,
Duties and Responsibilities.


 


(a)                                  Employee
shall devote his full time, attention and effort to the business of the Western
Companies during the Corporation’s normal business hours and during such other
times as are reasonably necessary for the proper performance of his
responsibilities hereunder.


 


(b)                                 Employee’s
primary duties shall be to act as Executive Vice President, Secretary and
General Counsel.  Employee shall have
such powers, duties and responsibilities, and shall perform such other functions
in connection with the business of the Companies, as may be assigned from time
to time by the Corporation.  At all
times during Employee’s employment under this Agreement (including employment
following a Change of Control of the Corporation as hereinafter described),
Employee shall be employed in the Corporation’s offices in Denver, Colorado.


 


3.                                       Compensation
and Bonus. For all of the services rendered by Employee pursuant to this
Agreement, the Corporation shall pay the Employee his or her current annual
base salary.  In no event shall
Employee’s current annual base salary be decreased, but it may, from time to
time be increased at the discretion of Employer during the term of this
Agreement (hereinafter referred to as Compensation), payable in accordance with
the Corporation’s normal pay practices during the term of Employee’s
employment.  In addition, the
Corporation may pay Employee a bonus, as may be determined pursuant to any
bonus plan applicable to the Employee for such year, if any, approved by the
Corporation’s Board of Directors from time-to-time in its sole and absolute
discretion.  Employee may provide a
written election to have any bonus due in December of any year paid in January
of the following year.


 

















 


4.                                       Officer
Insurance Coverage – Costs of Defense. During the term of Employee’s
employment and for two (2) years thereafter, to the extent the Corporation
maintains an insurance policy or policies providing directors’ and officers’
liability insurance, Employee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Corporation officer. Such coverage shall provide to Employee
officer liability insurance coverage to cover any claims that may be made
arising from his past, present, or future activities on behalf of the Western
Companies, in the same manner as such insurance is provided to the other
officers of the Corporation, provided that such insurance coverage is available
to the Corporation at a reasonable cost. 
Employee hereby represents that to his knowledge no investigation,
claim, or litigation is currently pending or threatened against him at this
time relating to or arising out of his activities as an employee of any Western
Company.


 


5.                                       Cooperation
with Respect to Investigations, Claims or Litigation. During the term of
Employee’s employment and at all times thereafter, should a Western Company
become involved in any investigation, claim, or litigation relating to or
arising out of Employee’s past, present, or future duties with a Western
Company or with respect to any matters which the Employee has knowledge,
Employee agrees to fully, and in good faith, cooperate with the Corporation
with respect to such investigation, claim, or litigation.  The Corporation shall reimburse Employee for
any and all expenses (including attorneys’ fees) and, if requested by Employee
shall (within two business days of such request) advance such expenses to
Employee, which are incurred by Employee in connection with any action for (i)
indemnification or advance payment of expenses by the Corporation under this
Agreement or any other agreement or Corporation Bylaw now or hereafter in
effect relating to claims and/or (ii) recovery under any directors’ and
officers’ liability insurance policies maintained by the Corporation,
regardless of whether Employee ultimately in determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be.


 


6.                                       Indemnification
Agreement. Exhibit “A”, attached hereto and incorporated herein by
reference is an Indemnification Agreement by and between the Corporation and
the Employee.  The Corporation and the
Employee each agree to execute and deliver such Indemnification Agreement
concurrently with the execution and delivery of this Agreement.  To the extent any provision set forth in the
Indemnification Agreement is in conflict with any provision set forth in this
Agreement, the provision set forth in the Indemnification Agreement shall
govern.


 


7.                                       Employee
Benefits. During the term of employment, Employee shall be eligible to
participate in the employee benefit plans provided by the Corporation in which
the Employee participates as of the date hereof, as such plans may be changed
from time to time, in accordance with the provisions of such plans, including,
but not limited to, the Corporation’s qualified retirement plans, the
Corporation’s Stock Option Plan(s), and the Corporation’s loan plan to acquire
stock.  The Employee hereby agrees and
acknowledges that nothing in this Agreement guarantees him the right to any
grant of stock options under any Stock Option Plan, or loan under any loan plan
and that the Board of Directors, in its sole and absolute discretion, in
accordance with the terms of such plans, as they may be modified from time to
time, determines whether and when any stock options are granted or loans
extended.


 


8.                                       Confidential
Information. Employee acknowledges that pursuant to the employment
hereunder, Employee occupies a position of trust and confidence. Accordingly,
in order to facilitate the performance of this Agreement and the activities
contemplated by this Agreement, the Western Companies may disclose to Employee
or Employee may develop or obtain certain proprietary or confidential information
of the Western Companies.  During
Employee’s employment hereunder and for a period of one (1) year thereafter
(which may be increased to two (2) years thereafter pursuant to section
14(a)(ii) or (v) hereof), Employee hereby agrees not to use or to disclose to
any person, other than in the discharge of his duties under this Agreement, any
“proprietary or confidential” information of the Western Companies, including,
but not limited to, any information concerning the business operations,
business strategies, or internal structure of the Western Companies; the
customers or clients of the Western Companies; any acquisition strategies of
the Western Companies; the gas and other products’ marketing or transportation
strategies of the Western Compaines, its subsidiaries or affiliates; the terms
of any gas gathering, processing,


 

















 


marketing, or transportation contracts entered into by the Western
Companies; past, present or future research done by the Western Companies
respecting the business or operations of the Western Companies, or customers or
clients or potential customers or clients of the Western Companies; personnel
data of the Western Companies, product or process knowledge; the Employee’s
work performed for, or relating to or for, any customer or client of any
Western Company or the gas or other product pricing for any customer or client
of any Western Company; any method or procedure relating or pertaining to
projects developed by any Western Company or contemplated by any Western
Company to be developed; or any gas gathering, processing, drilling, marketing,
transportation project which any Western Company is developing; or any plans or
strategy related to the foregoing which is not generally available or disclosed
to the public.


 


If the
Employee violates this agreement of confidentiality, the Corporation shall, in
addition to any other remedy provided by law, be permitted to pursue an action
for injunctive relief, monetary damages, or both.  The Employee acknowledges that all such information constitutes
confidential and/or proprietary information of the Western Companies and agrees
that such information shall be kept confidential; such information shall be
used solely for the purpose of performing the obligations hereunder or
activities contemplated by this Agreement; and that he shall not otherwise
disclose or make use of such information, except in response to a court order.


 


9.                                       Non-Solicitation.  During Employee’s employment hereunder and
for a period of three years thereafter, Employee shall not engage in any of the
following:


 


(i)                                     Hire, offer to
hire (or participate in the hiring or offer to hire of) any officer or employee
of any Western Company; or


 


(ii)                                  directly or
indirectly, solicit, divert or take away or attempt to solicit, divert or take
away any business any Western Company has enjoyed or solicited prior to the
date hereof or at any time during Employee’s term of employment with the
Corporation.


 


This
provision, however, shall not be construed to require the Employee to violate
any law forbidding anti-competitive practices or any law regarding anti-trust.


 


In addition,
nothing contained herein shall prevent Employee from hiring any officer or
employee of any Western Company as a result of a general solicitation in a
publicly available publication.  In the
event Employee violates this non-solicitation provision, the Western Company
shall, in addition to any other remedy provided by law, be permitted to pursue
an action for injunctive relief, monetary damages, or both.


 


10.                                 Ownership
of Documents.  All information,
drawings, documents and materials whether in writing, on computer disks,
computer hard drive, on magnetic tape or otherwise prepared by the Employee in
connection with his employment, or which Employee obtains in the course of or
as result of his employment by the Corporation shall be the sole and exclusive
property of the Corporation and will be delivered to the Corporation by the
Employee on the earlier of a demand by the Corporation or promptly after
termination of his employment hereunder, together with all written, computer,
magnetic tape or other evidence of the information, drawings, document and
materials, if any, furnished by any Western Company to the Employee in
connection with the Employee’s employment.


 


11.                                 Agreement
Not To Compete.  The parties hereto
recognize that the Employee is retained by the Corporation as part of a
professional, management and executive staff of the Corporation whose duties
include the formulation and execution of management policy.  Therefore, except in the event of
termination which would entitle Employee to payments pursuant to
paragraphs 14 (a) (ii), or 14 (a) (v) in which case the terms of
this provision shall not apply, the Employee hereby agrees that during the term
of his employment hereunder and for a period of one (1) year after the
termination of employment, he shall not act or engage in material competition
with the activities of or plans of any Western Company as they exist up to the
time of the Employee’s termination of employment.  Material competition by the Employee shall mean that the Employee
is involved in any business or investment activity, in any capacity including
but not limited to an employee, consultant, advisor, agent, shareholder,
independent contractor, investor,


 

















 


partner, member, owner or otherwise, which activity directly competes
with or has a material adverse economic effect on any of the business
activities or business plans of any Western Company.  Examples of such material competition include, but shall not be
limited to an activity involving the gathering and processing business within
25 miles of one of the Western Companies’ existing or planned gathering,
processing or generation facilities; an activity involving the storage or hub
business for natural gas or natural gas liquids within 100 miles of an existing
or planned storage facility of any Western Company; and/or an activity
involving the purchase of oil or gas leases, the farming-in of such leases or
any similar arrangement, within five (5) miles of the boundaries of an existing
oil or gas lease of any Western Company. 
In the event the Employee violates this agreement not to compete, the
Corporation shall, in addition to any other remedies provided by law, be permitted
to pursue an action for injunctive relief (preliminary or permanent), monetary
damages, or both.


 


12.                                 Termination
of Employment.  Employee’s
employment pursuant to this Agreement shall terminate upon the first to occur
of the following events:


 


(a)                                  The
Employee’s death.


 


(b)                                 The
Employee’s disability as that term is defined pursuant to the Corporation’s
disability insurance plan covering its officers.


 


(c)                                  The
Employee’s written election to terminate employment, to be effective ninety
(90) days thereafter unless an earlier effective date is specified by the
Corporation.


 


(d)                                 The
Corporation’s written election to terminate Employee’s employment without
“cause.”


 


(e)                                  The
Corporation’s written election to terminate the Employee’s employment “for
cause.”


 


(f)                                    In
the event of a Change of Control (as hereinafter defined), Employee’s
employment is terminated without cause or upon the expiration of six (6) months
following a Change of Control, whichever is earlier.


 


For purposes of this Agreement, the Corporation may elect to terminate
Employee’s employment “for cause” if: (i) Employee shall have committed a
felony, fraud, theft or embezzlement involving the assets of any Western
Company; (ii) Employee violates or causes any Western Company to violate, in a
material respect, any statute, law, ordinance, rule or regulation relating to
such Western Company, which violation results in a material adverse effect to
the Corporation’s business or financial condition; and (iii) Employee engages
in any activity which is outside the scope of the Employee’s authority and
detrimental to any Western Company’s business; (iv) Employee fails to comply
with the provisions of this Agreement and Employee has either (x) not
diligently commenced to correct such detrimental activity; or (y) failed to
comply after ten (10) days’ written notice from the Corporation, which notice
provides a detailed description thereof; or (v) Employee intentionally fails or
refuses to perform his obligations or responsibility hereunder, or to carry out
any reasonable and lawful direction of the Corporation with respect to such
obligations or responsibilities.


 


13.                                 Employee’s
Rights and Obligations Upon Death or Disability.  If the Employee’s employment is terminated as a result of death
or disability, then the Employee shall be entitled to the following in full
satisfaction of all of his rights under this Agreement or at law:


 


(i)                                     Employee’s
Right to Compensation and Benefits. 
Employee shall be entitled to the pro-rata share of Compensation and
employee benefits, if any, which have been earned but not paid through the date
of Employee’s death or disability. 
Employee shall only be entitled to such additional bonus, if any, which
has been previously authorized by the Board of Directors, but has not been paid
as of the date of Employee’s death or disability.


 

















 


(ii)                                  Employee’s
Obligations.  Notwithstanding such
termination of employment, if the Employee is terminated as a result of
disability, Employee shall remain bound by the provisions of paragraphs 5, 8,
9, 10 and 11 hereof.


 


14.                                 Employee’s
Rights and Obligations Upon Termination of Employment By the Corporation
Without Cause.  If Employee’s
employment is terminated by the Corporation without cause pursuant to Section
12(d) herein, then employee shall be entitled to the following in full satisfaction
of his rights under this Agreement or at law:


 


(a)                                  Severance
Pay.


 


(i)                                     Employee shall be
entitled to severance pay in an amount equal to the annual Compensation.  Such severance pay will be payable in
accordance with the Corporation’s normal pay practices over the 12 months
following such termination of employment.


 


(ii)                                  Notwithstanding
anything else contained herein, in the event of a Change of Control of the
Corporation (as hereinafter defined) or after the sale of substantially all the
assets of the Corporation, upon the earlier of a) Employee’s employment is
terminated without cause after a Change of Control of the Corporation or b)
upon the expiration of six (6) months following said Change of Control, then
the Employee shall be entitled to severance pay equal to two (2) times the
annual Compensation of Employee. 
Severance pay pursuant to this paragraph shall be paid to the Employee
either a) over a 24-month period or b) in a one-time lump sum payment, at
Employee’s option.  If the Employee elects
payment over a 24 month period, then monthly installments shall commence on the
first day of the calendar month following the date of termination of employment
or the first day of the calendar month following the expiration of six (6)
months after a Change of Control.  If
the Employee elects payment in a one-time lump sum payment, then said payment
shall be made within thirty (30) days of the date of termination of employment
or within thirty (30) days after the expiration of the six (6) months after a Change
of Control.  In the event that the
Employee is entitled to the severance pay pursuant to this sub-section, the
obligation of the Employee not to use or to disclose any “proprietary or
confidential information” set forth in Section 8 hereof shall apply for two (2)
years following such Change of Control of the Corporation or such sale of
substantially all the assets of the Corporation.


 


(iii)                               The severance pay
provisions of this Section 14(a) (ii) are not additive and in no event shall
the Employee be entitled to receive severance pay greater than two (2) times
the annual Compensation.


 


(iv)                              Notwithstanding anything
else contained herein, in the event of a Change of Control of the Corporation
(as hereinafter defined) or after the sale of substantially all the assets of
the Corporation, upon the earlier of a) Employee’s employment is terminated
without cause after a Change of Control of the Corporation or b) upon the
expiration of six (6) months following said Change of Control, then Employee
shall receive either of the following for unvested stock options previously
granted to Employee:


 


  A)                            in
the event of a Change of Control in which the Corporation is acquired in a cash
purchase, then Employee shall receive a lump sum payment constituting the
positive difference between the exercise price of unvested stock options
previously granted to Employee and the transaction price of common stock; or


 


  B)                              in
the event of a Change of Control in which the Corporation is acquired in a
stock purchase, then Employee’s stock options which have not vested prior to
termination without cause shall be converted to an amount of unqualified vested
options of the acquiring corporation’s stock at the original grant price to
Employee based upon the conversion rate of the acquiring corporation’s stock on
the acquisition date.


 

















 


(v)                                 Notwithstanding
anything else contained herein, in the event Employee’s employment is
terminated without cause within sixty (60) days prior to the release of a press
release regarding a Change of Control of the Corporation, then the Employee
shall be entitled to severance pay equal to two (2) times the annual
Compensation of Employee.  Severance pay
pursuant to this paragraph shall be payable to the Employee either a) over a 24
month period or b) in a one-time lump sum payment, at Employee’s option.  If the Employee elects payment over a
24-month period, then monthly installments shall commence on the first day of
the calendar month following Employee’s election for payment.  If the Employee elects payment in a one-time
lump sum payment, then said payment shall be made within thirty (30) days of
the date of Employee’s election for payment. 
In addition, for any unvested stock options previously granted to
Employee, Employee shall be entitled to either payment or conversion of such
unvested stock options as described in paragraph 14 (a) (iv).  In the event that the Employee is entitled
to the severance pay pursuant to this sub-section, the obligation of the
Employee not to use or to disclose any “proprietary or confidential
information” set forth in Section 8 hereof shall apply for two (2) years
following the, earlier of such termination or such Change of Control of the
Corporation.


 


(vi)                              For purposes of this
Agreement, “Change of Control of the Corporation” means the acquisition by any
person or persons acting in concert (including corporations, partnerships,
associations or unincorporated organizations), of legal ownership or beneficial
ownership (within the meaning of Rule 13d-3, promulgated by the Securities and
Exchange Commission and now in effect under the Securities Exchange Act of 1934
(as amended), of a number of voting shares of capital stock of the Corporation
greater than the number of voting shares of capital stock of the Corporation
which are then owned, both legally and beneficially (as defined above), by
Brion G. Wise, Bill M. Sanderson, Walter L. Stonehocker, Dean Phillips, Ward
Sauvage, their immediate families and the companies through which they and
their immediate families hold ownership in the Corporation (“the
Founders”).  None of the Founders shall
be counted among those persons acting in concert to acquire ownership unless
such Founder, acting in concert with an acquiring person or group (an “Acquiring
Group Founder”), votes against the other Founders in an election for the Board
of Directors or the modification of the Corporation’s certificate of
incorporation or by-laws or in the vote to accept or reject a plan of merger,
sale of substantially all of the assets of the Corporation or similar
proposal.  The shares of an Acquiring
Group Founder shall be counted in the acquiring group’s shares and shall not be
counted in the shares of the Founders who are not Acquiring Group Founders.


 


(b)                                 Employee’s Right to
Compensation and Benefits.  Employee
shall be entitled to the pro-rata share of Compensation and employee benefits,
if any, which have been earned but not paid through the date of termination of
employment.  Employee shall only be
entitled to such additional bonus, if any, which has been previously authorized
by the Board of Directors, but has not been paid as of the date of termination
of employment.


 


(c)                                  Payment of Excise
Taxes.  The Corporation shall be
responsible for the payment of any and all excise taxes including any increase
in income taxes resulting from such payment, which may result or be assessed to
the Employee in connection with payments, whether in cash, stock or benefits
received by the Employee under this paragraph 14 of this Agreement,  In addition, the Corporation shall defend,
indemnify, save and hold the Employee harmless from any and all claims for
excise taxes which are due or may become due or which arise or result from any
dispute with a Federal, state or local taxing authority in connection with this
paragraph 14.


 

















 


(d)                                 Employee’s
Obligations.  Notwithstanding such
termination of employment, Employee shall remain bound by the provisions of
paragraphs 5, 8, 9, 10 and 11 hereof.


 


15.                                 Employee’s
Rights and Obligations Upon Termination of Employment by the Corporation With
Cause.  If Employee’s employment is
terminated by the Corporation with cause pursuant to paragraph 12(e) herein,
then the Employee shall be entitled to the following in full satisfaction of
all his rights under this Agreement or at law:


 


(i)                                     Severance
Pay.  Employee shall not be entitled
to any severance pay.


 


(ii)                                  Employee’s
Rights to Compensation and Benefits. 
Employee shall only be entitled to the pro-rata share of Compensation
and employee benefits, if any, earned but not paid through the date of
termination of employment. Employee shall only be entitled to such additional
bonus, if any, which has been previously authorized by the Board of Directors,
but has not been paid as of the date of termination of employment.


 


(iii)                               Employee’s
Obligations.  Notwithstanding such
termination of employment. Employee shall remain bound by the provisions of
paragraphs 5, 8, 9, 10 and 11 hereof.


 


16.                                 Employee’s
Rights and Obligations Upon Termination of Employment By Employee.  If Employee’s employment is terminated by
the Employee pursuant to paragraph 12(c) herein, then the Employee shall be
entitled to the following in full satisfaction of all of his rights under this
Agreement or at law:


 


(i)                                     Severance
Pay.  Employee shall be entitled to
no severance pay.


 


(ii)                                  Employee’s
Rights to Compensation and Benefits. 
Employee shall be entitled to the pro-rata share of Compensation and
Employee Benefits, if any, which have been earned but not paid through the
effective date of such termination of employment. Employee shall only be
entitled to such additional bonus, if any, which has been previously authorized
by the Board of Directors, but has not been paid as of the date of termination
of employment.


 


(iii)                               Employee’s
Obligations.  Notwithstanding such
termination of employment, Employee shall remain bound by the provisions of
paragraphs 5, 8, 9, 10 and 11 hereof.


 


17.                                 Benefit.  This Agreement shall inure to the benefit of
and be binding upon the Corporation, its successors and assigns, including, but
not limited to (i) any entity which may acquire all or substantially all of the
Corporation’s assets and business, (ii) any entity with or into which the
Corporation may be consolidated or merged, or (iii) any entity that is the
successor corporation in a share exchange, and the Employee, his heirs,
guardians and personal and legal representatives. The Employee and the
Corporation also agree that each Western Company shall be deemed to be a third
party beneficiary to this Agreement.


 


18.                                 Notices.  All notices and communications hereunder
shall be in writing and shall be deemed given when sent postage prepaid by
registered or certified mail, return receipt, requested, and, if intended for
the Corporation, shall be addressed to it, to the attention of its President,
at:


 


Western Gas Resources, Inc.


12200 North Pecos Street


Denver, Colorado 80234


 

















 


or at such other address which the Corporation shall have given notice
to the Employee in the manner herein provided, and if intended for the
Employee, shall be addressed to him at his last known residence, or at such
other address at which the Employee shall have given notice to the Corporation
in the manner provided herein:


 


John C. Walter


1641 Baneberry Lane


Golden, CO 80401


 


19.                                 Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado.


 


20.                                 Severability.  In the event one or more of the provisions
contained in this Agreement, or any application thereof, shall be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or any other
application or modification thereof, shall not in any way be affected or
impaired. The parties further agree that any such invalid, illegal or
unenforceable provision or restriction shall be deemed modified so that it
shall be enforced to the greatest extent permissible under law, and to the
extent that any court of competent jurisdiction determines any provision or
restriction herein to be overly broad, or unenforceable, such court is hereby
empowered and authorized to limit such provisions or restriction so that it is
enforceable for the longest duration of time, within the largest geographical
area and with the broadest scope.


 


21.                                 Miscellaneous.


 


a)                                      Counterparts.  This Agreement may be executed in more than
one copy, each copy of which shall serve as an original for all purposes, but
all copies shall constitute but one and the same Agreement.


 


(b)                                 Assignment.  Except as provided in paragraph 17, this
Agreement is personal to each of the parties hereto, and neither party may
assign nor delegate any of such party’s rights or obligations hereunder without
first obtaining the written consent of the other party.


 


(c)                                  Headings.  All headings set forth in this Agreement are
intended for convenience only and shall not control or affect the meaning,
construction or effect of this Agreement or of any of the provisions hereof.


 


(d)                                 Gender,
Plurals and Pronouns.  Throughout
this Agreement, the masculine gender shall include the feminine and neuter, and
the singular shall include the plural and vice versa, wherever the context and
facts require such construction.


 


(e)                                  Binding
Arbitration, Attorney’s Fees and Expenses. 
Except for disputes arising or resulting from the provisions contained
in paragraph 14 of this Agreement, if any dispute arises between the parties to
this Agreement (but not as to whether the Corporation is obligated to provide
legal representation to the Employee pursuant to Section 4 hereof), then both
parties shall submit the dispute to binding arbitration. Both parties agree to
be bound by the decision of such arbitration. The obligation to submit to
binding arbitration shall not prevent either party from seeking a court order
or an injunction enforcing the term of this Agreement. In the event of any
binding arbitration between the parties, or any litigation to enforce any
provision (except for disputes arising or resulting from the provision
contained in paragraph 14) of this Agreement or any right of either party, the
unsuccessful party to such arbitration or litigation shall pay the successful
party all costs and expenses, including reasonable attorneys’ fees, incurred.
In the event a dispute arises or results from the provisions of paragraph 14 of
this Agreement, then both parties shall submit the dispute to binding
arbitration under the foregoing provisions, except that all costs and expenses,
including reasonable attorneys’ fees, incurred shall be solely borne by the
Corporation.


 

















 


(f)                                    Waiver
of Breach.  The waiver by any party
hereto of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach by any party.


 


(g)                                 Entire
Agreement.  Except for the
Indemnification Agreement, this Agreement contains all agreements,
understandings, and arrangements between the parties hereto and no other
exists. Except for the Indemnification Agreement, all previous agreements,
understandings, and arrangements between the parties relating to employment are
terminated by this Agreement. This Agreement may be amended, waived, changed,
modified, extended or rescinded only by a writing signed by the party against
whom such amendment, waiver, change, modification, extension or rescission is
sought.


 


IN WITNESS
WHEREOF, the parties have hereunto set their hands as of the date first written
above,


 


	
   

  	
  WESTERN GAS RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ LANNY F. OUTLAW

  	
   

  
	
   

  	
   

  	
  Lanny F. Outlaw, President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  /s/ JOHN C. WALTER

  	
   

  
	
   

  	
  John C. Walter

  
					



 

















 


2001 INDEMNIFICATION AGREEMENT


 


THIS 2001 INDEMNIFICATION AGREEMENT
(this “Agreement”), effective as of June 14, 2001, between Western Gas
Resources, Inc., a Delaware corporation (the “Company”), and JOHN C. WALTER
(the “Indemnitee”).


 


WHEREAS, it is
essential to the Company to retain and attract as officers the most capable
persons available;


 


WHEREAS, Indemnitee
is an officer of the Company;


 


WHEREAS, both the
Company and Indemnitee recognize the increased risk of litigation and other
claims being asserted against officers of public companies in today’s
environment;


 


WHEREAS, the Bylaws
of the Company require tile Company to indemnify and advance expenses to its
officers to the full extent permitted by law and the Indemnitee has been
serving and continues to serve as an officer of the Company in part in reliance
on such Bylaws;


 


WHEREAS, in
recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to the Company in
an effective manner and Indemnitee’s reliance on the aforesaid Bylaws, and in
part to provide Indemnitee with specific contractual assurance that the
protection promised by such Bylaws will be available to Indemnitee (regardless
of, among other things, any amendment to or revocation of such Bylaws, or any
change in the composition of the Company’s Board of Directors or acquisition
transaction relating to the Company), the Company wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to
Indemnitee to the fullest extent (whether partial or complete) permitted by law
and as set forth in this Agreement, and, to the extent insurance is maintained,
for the continued coverage of Indemnitee under the Company’s directors’ and
officers’ liability insurance policies;


 


WHEREAS, prior
hereto, the Company and the Indemnitee had entered into an Indemnification
agreement that the parties desire to restate;


 


NOW, THEREFORE, in
consideration of the premises and of Indemnitee continuing to serve the Company
directly or, at its request, another enterprise, and intending to be legally
bound hereby, the parties hereto agree as follows:


 


1.                                       Certain
Definitions:


 


(a)                                  Change in Control:
shall be deemed to have occurred if (i) any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned directly or indirectly by
the stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, is or becomes the “beneficial owner” (as
defined in Rule 13d3 under said Act), directly or indirectly, of securities of
the Company representing 20% or more of the total voting power represented by
the Company’s then outstanding Voting Securities, or (ii) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors or nomination for election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof, or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or


 


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consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series
of transactions) all or substantially all the Company’s assets.


 


(b)                                 Claim: any
threatened, pending or completed action, suit or proceeding, or any inquiry or
investigation, whether instituted by the Company or any other party, that
Indemnitee in good faith, believes might lead to the institution of any such
action, suit or proceeding, whether civil, criminal, administrative,
investigative or other.


 


(c)                                  Expenses:
include attorneys’ fees and all other costs, expenses and obligations paid or
incurred in connection with investigating, defending, being a witness in or
participating in (including on appeal), or preparing to defend, be a witness in
or participate in any Claim relating to any Indemnifiable Event.


 


(d)                                 Indemnifiable Event:
any event or occurrence related to the fact that Indemnitee is or was a
director, officer, employee, agent or fiduciary of the Company, or is or was
serving at the request of the Company as a director, officer, employee,
trustee, agent or fiduciary of another corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise, or by reason of anything done
or not done by Indemnitee in any such capacity.


 


(e)                                  Independent Legal
Counsel an attorney or firm of attorneys, selected in accordance with the
provisions of Section 3, who shall not have otherwise performed services for
the Company or Indemnitee within the last five years (other than with respect
to matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).


 


(f)                                    Potential Change
in Control: shall be deemed to have occurred if (i) the Company enters into
an agreement, the consummation of which would result in the occurrence of a
Change in Control; (ii) any person (including the Company) publicly announces
an intention to take or to consider taking actions which if consummated would
constitute a Change in Control; (iii) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company, who is or becomes the beneficial owner, directly or indirectly, of securities
of the Company representing 9.5% or more of the combined voting power of the
Company’s then outstanding Voting Securities, increases his beneficial
ownership of such securities by five percentage points (5%) or more over the
percentage so owned by such person; or (iv) the Board adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change in Control
has occurred.


 


(g)                                 Reviewing Party:
any appropriate person or body consisting of a member or members of the
Company’s Board of Directors or any other person or body appointed by the Board
who is not a party to the particular Claim for which Indemnitee is seeking
indemnification, or Independent Legal Counsel.


 


(h)                                 Voting Securities:
any securities of the Company which vote generally in the election of
directors.


 


2.                                       Basic
Indemnification Arrangement.


 


(a)                                  In the event
Indemnitee was, is or becomes a party to or witness or other participant in, or
is threatened to be made a party to or witness or other participant in, a Claim
by reason of (or arising in part out of) an Indemnifiable Event, the Company
shall indemnify Indemnitee to the fullest extent permitted by law as soon as
practicable but in any event no later than thirty days after written demand is
presented to the Company, against any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all


 


2

















 


interest, assessments and other charges paid or payable in connection
with or in respect of such Expenses, judgments, fines, penalties or amounts
paid in settlement) of such Claim. If so requested by Indemnitee, the Company
shall advance (within two business days of such request) any and all Expenses
to Indemnitee (an “Expense Advance”).


 


(b)                                 Notwithstanding the
foregoing, the obligations of the Company under Section 2(a) shall be
subject to the condition that the Reviewing Party shall not have determined (in
a written opinion, in any case in which the Independent Legal Counsel referred
to in Section 3 hereof is involved) that Indemnitee would not be permitted
to be indemnified under applicable law.


 


(c)                                  Notwithstanding the
foregoing, the obligation of the Company to make an Expense Advance pursuant to
Section 2(a) shall be subject to the condition that, if, when and to the
extent that the Reviewing Party determines that Indemnitee would not be
permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court,
of competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed).


 


(d)                                 If there has not been
a Change in Control, the Reviewing Party shall be selected by the Board of
Directors, and if there has been such a Change in Control (other than a Change
in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control), the
Reviewing Party shall be the Independent Legal Counsel referred to in
Section 3 hereof.


 


(e)                                  If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that
Indemnitee, substantively would not be permitted to be indemnified in whole or
in part under applicable law, Indemnitee shall have the right to commence
litigation in any court in the States of Colorado or Delaware having subject
matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the Reviewing
Party or any aspect thereof, including the legal or factual bases therefor, and
the Company hereby consents to service of process and to appear in any such
proceeding. Any determination by the Reviewing Party otherwise shall be
conclusive and binding on the Company and Indemnitee.


 


(f)                                    Notwithstanding
anything else contained herein, in no event shall Indemnitee be entitled to
indemnification under this Agreement for any Claims that relate to liability;
(i) under Section 16(b) of the Securities Exchange Act of 1934, as
amended; (ii) under federal or state securities laws for “insider trading”;
(iii) conduct finally adjudged as constituting active or deliberate dishonesty
or willful fraud or illegality; (iv) conduct finally adjudged as producing an,
unlawful personal benefit to Indemnitee; or (v) prior to a Change of Control,
under any Claim initiated by the Indemnitee unless the Board of Directors of
the Company shall have authorized or consented to such Claim.


 


3.                                       Change
in Control. The Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority
of the Company’s Board of Directors who were directors immediately prior to
such Change in Control) then with respect to all matters thereafter arising
concerning the rights of Indemnitee to indemnity payments and Expense Advances
under this Agreement or any other agreement or Company Bylaw now or hereafter
in effect relating to Claims for Indemnifiable Events, the Company shall seek
legal advice only from Independent Legal Counsel selected by Indemnitee and
approved by the Company (which approval shall not be unreasonably withheld).
Such counsel, among other things, shall render its written opinion to the
Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully


 


3

















 


indemnify such counsel against any and all expenses (including
attorneys’ fees), claims, liabilities and damages arising out of or relating to
this Agreement or its engagement pursuant hereto.


 


4.                                       Establishment
of Trust.


 


(a)                                  In the event of a
Potential Change in Control, the Company shall; (i) upon written request by
Indemnitee, create a trust for the benefit of Indemnitee, with the trustee
chosen by Indemnitee; (ii) from time to time upon written request of
Indemnitee, fund such trust in an amount sufficient to satisfy any and all
Expenses reasonably anticipated at the time of each such request to be incurred
in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, fines, penalties
and settlement amounts of any and all Claims relating to an Indemnifiable Event
from time to time actually paid or claimed, reasonably anticipated or proposed
to be paid.


 


(b)                                 Notwithstanding
anything else contained herein, in no event shall the Company be required to
deposit more than Five Hundred Thousand Dollars ($500,000) in any trust created
hereunder in excess of amounts deposited in respect of reasonably anticipated
Expenses.


 


(c)                                  The amount or amounts
to be deposited in the trust pursuant to the foregoing funding obligation shall
be determined by the Reviewing Party, in any case in which the Independent
Legal Counsel referred to above is involved.


 


(d)                                 The terms of the trust
shall provide that upon a Change in Control (i) the trust shall not be revoked
or the principal thereof invaded, without the written consent of the
Indemnitee, (ii) the trustee shall advance, within two business days of a
request by the Indemnitee, any and all Expenses to the Indemnitee (and the
Indemnitee hereby agrees to reimburse the trust under the circumstances under
which the Indemnitee would be required to reimburse the Company under
Section 2(b) of this Agreement), (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth
herein, (iv) the trustee shall promptly pay to Indemnitee all amounts for which
Indemnitee shall be entitled to indemnification pursuant to this Agreement or
otherwise, and (v) all unexpended funds in such trust shall revert to the
Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Indemnitee has been fully
indemnified under the terms of this Agreement.


 


5.                                       Indemnification
for Additional Expenses. The Company shall indemnify Indemnitee against any
and all expenses (including attorneys’ fees) and, if requested by Indemnitee,
shall (within two business days of such request) advance such expenses to
Indemnitee, which are incurred by Indemnitee in connection with any action
brought by Indemnitee for (i) indemnification or advance payment of Expenses by
the Company under this Agreement or any other agreement or Company Bylaw now or
hereafter in effect relating to Claims for Indemnifiable Events and/or (ii)
recovery under any directors’ and officers’ liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advance expense payment or
insurance recovery, as the case may be.


 


6.                                       Partial
Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee
is entitled. Moreover, notwithstanding any other provision of this Agreement,
to the extent that Indemnitee has been successful on the merits or otherwise in
defense of any or all Claims relating in whole or in part to an Indemnifiable
Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in
connection therewith.


 


7.                                       Burden
of Proof. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified hereunder the
burden of proof shall be on the Company to establish that Indemnitee is not so
entitled.


 


8.                                       No
Presumptions. For purposes of this Agreement, the termination of any claim,
action, suit or proceeding, by judgment, order, settlement (whether with or
without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet


 


4

















 


any particular standard of conduct or have any particular belief or
that a court has determined that Indemnification is not permitted by applicable
law.  In addition, neither the failure
of the Reviewing Party to have made a determination as to whether Indemnitee
has met any particular standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party that Indemnitee has not met such
standard of conduct or did not have such belief, prior to the commencement of
legal proceedings by Indemnitee to secure a judicial determination that
Indemnitee should be indemnified under applicable law shall be a defense to
Indemnitee’s claim or create a presumption that Indemnitee has not met any
particular standard of conduct or did not have any particular belief.


 


9.                                       Nonexclusivity,
Etc.  The rights of the Indemnitee
hereunder shall be in addition to any other rights Indemnitee may have under
the Company’s Bylaws or the Delaware General Corporation Law or otherwise.  To the extent that a change in the Delaware
General Corporation Law (whether by statute or judicial decision) permits
greater Indemnification by agreement than would be afforded currently under the
Company’s Bylaws and this Agreement, it is the intent of the parties hereto
that Indemnitee shall enjoy by this Agreement the greater benefits so afforded
by such change.


 


10.                                 Liability
Insurance.  To the extent the
Company maintains an insurance policy or policies providing directors’ and
officers’ liability insurance, Indemnitee shall be covered by such policy or
policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.


 


11.                                 Period
of Limitations.  No legal action
shall be brought and no cause of action shall be asserted by or in the right of
the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or
personal or legal representatives after the expiration of two years from the
date of accrual of such cause of action, and any claim or cause of action of
the Company shall be extinguished and deemed released unless asserted by the
timely filing of legal action within such two-year period; provided, however,
that if any shorter period of limitations is otherwise applicable to any such
cause of action such shorter period shall govern.


 


12.                                 Amendments,
Etc.  No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto.  No waiver of any
of the provisions of this Agreement shall be deemed or shall constitute a
waiver of any other provision hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.


 


13.                                 Subrogation.  In the event of payment under this
Agreement, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of Indemnitee, who shall execute all papers required
and shall do everything that may be necessary to secure such rights, including
the execution of such documents necessary to enable the Company effectively to
bring suit to enforce such rights.


 


14.                                 No
Duplication of Payments.  The
Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee has
otherwise actually received payment (under any insurance policy, Bylaw or
otherwise) of the amounts otherwise Indemnifiable hereunder.


 


15.                                 Binding
Effect, Etc.  This Agreement shall
be binding upon and inure to the benefit of and be enforcable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business, and/or assets of the Company, spouses,
heirs, executors and personal and legal representatives.  This Agreement shall continue in effect
regardless of whether Indemnitee continues to serve as an officer or director
of the Company or of any other enterprise at the Company’s request.


 


16.                                 Severability.  The provisions of this Agreement shall be
severable in the event that any of the provisions hereof (including any
provision within a single section, paragraph or sentence) is held by a court of
competent jurisdiction to be invalid, void or otherwise unenforceable in any
respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired and shall remain enforceable to the fullest extent permitted by law.


 


5

















 


17.                                 Governing
Law.  This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware applicable to contracts made and to be performed in such state
without giving effect to the principles of conflicts of laws.


 


IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of June 14, 2001


 


	
  WESTERN GAS RESOURCES, INC.

  	
  INDEMNITEE

  
	
   

  
	
  By:

  	
  /s/ Lanny F. Outlaw

  	
   

  	
  /s/ John C. Walter

  
	
   

  	
  Lanny F. Outlaw, President

  	
   

  	
  John C. Walter

  



 


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