Document:

kmiex10_6.htm

 

Exhibit 10.6

ANNUAL INCENTIVE PLAN

OF

KINDER MORGAN, INC.

ARTICLE 1.

GENERAL

1.1           Purpose

The Annual Incentive Plan (the "Plan") of Kinder Morgan, Inc. (the "Company") is intended to advance the best interests of the Company and its Affiliates by providing certain employees with additional incentives through the discretionary payment of bonuses based on the performance of the Company and/or the employees relating to specified objective financial and business criteria, thereby increasing the personal stake of such employees in the continued success and growth of the Company and encouraging them to remain in the employ of the Company.  The Plan shall provide for Awards (as defined below) to executives (the "Executive Sub-Plan") and non-executives (the "Non-Executive Sub-Plan").

1.2           Definitions

(a)           “Affiliate” means any entity in which the Company has a direct or indirect ownership interest; provided, that, for purposes of the definitions of "Change in Control" and "Permitted Holders," "Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with, the Person in question.  As used in this definition of "Affiliate," referred to in the last proviso of the preceding sentence, the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

(b)           “Award” means any award granted under the Plan to an Eligible Employee by the Committee subject to such terms and conditions as the Committee may establish under the terms of the Plan.

 

(c)           “Board” means the Board of Directors of the Company.

 

(d)           “Bonus Opportunity” means a cash amount established with respect to an Executive Sub-Plan Award, which will form the basis for determining the amount payable under such Award, subject to the level of achievement of the applicable Performance Goals.

 

(e)           “Change in Control” means:

 

(i)           the acquisition by any Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than any of the Permitted

 

  

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Holders, in a single transaction or a series of related transactions, by way of merger, amalgamation, consolidation or other business combination or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision), of more than 50% of the total voting power of the Company (or the surviving or resulting entity thereof) after giving effect to such transaction;

 

(ii)           a sale, merger or similar transaction or related series of transactions involving the Company, as a result of which the Permitted Holders do not collectively hold (either directly or indirectly) more than 50% of the voting power of the Company (or the surviving or resulting entity thereof) after giving effect to such transaction or related series of transactions; provided, however, that such sale, merger or similar transaction shall not constitute a Change in Control in the event that, following such sale, merger or similar transaction (a) the Permitted Holders continue to collectively own at least 35% of the voting power of the Company (or the surviving or resulting entity thereof), (b) no other Person or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), including any group acting for the purpose of acquiring, holding or disposing of securities (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) owns more than 35% of the voting power of the Company (or the surviving or resulting entity thereof), and (c) either Richard D. Kinder or C. Park Shaper is a senior executive officer of the Company (or the surviving or resulting entity thereof);

 

(iii)           the sale or transfer of all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, in a single transaction or a series of related transactions, in any case, other than to an entity of which more than 50% of the voting power is held (either directly or indirectly) by one or more Permitted Holders or by Persons who held (either directly or indirectly) more than 50% of the voting power of the Company immediately prior to such transaction (or in each case their Affiliates);

 

(iv)           during any period of two consecutive years following the closing of the IPO, individuals who at the beginning of such period constitute the Board, and any new director whose election by the Board 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 other than normal retirement, death or disability to constitute at least a majority of the Board then in office; or

 

(v)           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 all or substantially all of the Company's assets (or any transaction having a similar effect).

 

(f)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(g)           “Committee” means the Board or the Compensation Committee, as administrator of the Plan.

 

 

  

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(h)           “Compensation Committee” means a committee of one or more members of the Board appointed by the Board to administer the Plan in accordance with Section 1.3(c).

 

(i)           “Covered Employee” has the same meaning as set forth in Code Section 162(m)(3).

 

(j)           “Eligible Employee” means any employee of the Company or its Affiliates, except (i) an employee who is included in a unit of employees covered by a collective bargaining agreement unless such agreement expressly provides for eligibility under this Plan, and (ii) a director who is not an employee of the Company or its Affiliates.

 

(k)           “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

(l)           “IPO” means the initial underwritten public offering of Stock for cash pursuant to a registration statement filed under the Securities Act reasonably promptly after approval of the Plan by the Company's stockholders.

 

(m)           “Mandatory Minimum” means the minimum amount of bonus to be paid under the Plan for each calendar year, as determined by the Committee pursuant to Section 2.7.

 

(n)           “Outside Director” means a Director who is an “outside director” within the meaning of Code Section 162(m) and Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation.

 

(o)           “Participant” means an Eligible Employee who has been granted an Award under the Plan.

 

(p)           “Performance Criteria” means the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Year with respect to any Award under the Executive Sub-Plan.  The Performance Criteria that will be used to establish such Performance Goal(s) shall be based on the attainment of specific levels of performance of the Company (or Affiliate, division or operational unit of the Company) and shall be limited to the following:

 

(i)           Company earnings per share;

 

(ii)           Company or subsidiary cash distributions to stockholders or common unitholders;

 

(iii)           Company or subsidiary earnings before interest and taxes or earnings before interest, taxes and corporate charges;

 

(iv)           Company, subsidiary or business unit net income;

 

(v)           Company, subsidiary or business unit revenues;

 

(vi)           Company, subsidiary or business unit unit revenues minus unit variable costs;

 

 

  

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(vii)           Company, subsidiary or business unit return on capital, return on equity, return on assets, or return on invested capital;

 

(viii)           Company, subsidiary or business unit cash flow, return on assets or cash flows from operating activities;

 

(ix)           Company, subsidiary or business unit capital expenditures;

 

(x)           Company, subsidiary or business unit operations and maintenance expense or general and administrative expense;

 

(xi)           Company, subsidiary or business unit debt-equity ratios and key profitability ratios; and

 

(xii)           Company stock price.

 

(q)           “Performance Goals” means, for a Performance Year, one or more goals established by the Committee for the Performance Year based upon the Performance Criteria.  The Performance Goals shall be expressed as an objective formula or standard that precludes discretion to increase the amount of compensation payable that would otherwise be due upon attainment of the goal.  The Performance Goals may be applied on an absolute basis or relative to an identified index or peer group, as specified by the Committee.  The Committee is authorized, in its sole and absolute discretion, to adjust or modify the calculation of a Performance Goal for such Performance Year (provided, that if an Award is intended to constitute Qualified Performance Based Compensation, such adjustment or modification may be made only to the extent permitted under Code Section 162(m) and the regulations thereunder) in order to prevent the dilution or enlargement of the rights of Participants based on the following events:

 

(i)           asset write-downs;

 

(ii)           litigation or claim judgments or settlements;

 

(iii)           the effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results;

 

(iv)           any reorganization and restructuring programs;

 

(v)           extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor or pronouncement thereto) and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year;

 

(vi)           acquisitions or divestitures;

 

(vii)           any other specific unusual or nonrecurring events, or objectively determinable category thereof;

 

 

  

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(viii)           foreign exchange gains and losses; and

 

(ix)           a change in the Company’s fiscal year.

 

(r)           “Performance Year” means, with respect to an Executive Sub-Plan Award, the calendar year within which the Performance Goals relating to that Award are to be achieved.  With respect to a Non-Executive Sub-Plan Award, the Performance Year is the calendar year applicable to the Executive Sub-Plan except that, for non-exempt Eligible Employees, the Performance Year shall be the period containing all time worked and used to determine pay beginning with the first pay period that begins in November of the prior calendar year and ending in October of the calendar year applicable for the Executive Sub-Plan.

 

(s)           “Permitted Holders” means, at any time, Richard D. Kinder and investment funds advised by, or affiliated with, Goldman, Sachs & Co., Highstar Capital LP, The Carlyle Group and Riverstone Holdings LLC.

 

(t)           “Person” means a natural person or an entity.

 

(u)           “Qualified Performance Based Compensation” has the same meaning as set forth in Treasury Regulations Section 1.162-27(e).

 

1.3           Administration Of The Plan

(a)           The Plan shall be administered by the Board unless and until the Board delegates administration to a Compensation Committee, as provided in paragraph (c).

 

(b)           The Board shall have the power and authority: (i) to construe and interpret the Plan and apply its provisions; (ii) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan; (iii) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan; (iv) to delegate its authority to one or more officers of the Company with respect to awards that do not involve Covered Employees or “insiders” within the meaning of Section 16 of the Exchange Act; (v) to determine when Awards are to be granted under the Plan; (vi) from time to time to select, subject to the limitations set forth in this Plan, those Eligible Employees to whom Awards shall be granted and to make any such grants; (vii) to prescribe the terms and conditions of each Award; (viii) to amend any outstanding Awards; (ix) to determine the duration and purpose of leaves of absences which may be granted to an Eligible Employee without constituting termination of his or her employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to employees under the Company’s employment policies; (x) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments; and (xi) to exercise discretion to make any and all other determinations which it determines to be necessary or advisable for administration of the Plan.

 

(c)           The Compensation Committee.

 

(i)           The Board may delegate administration of the Plan to a Compensation Committee of one or more members of the Board.  If administration is delegated to a

 

 

  

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Compensation Committee, the Compensation Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board as described in paragraph (b) above, including the power to delegate to a subcommittee any of the administrative powers the Compensation Committee is authorized to exercise, subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.  The Board may abolish the Compensation Committee at any time and revest in the Board the administration of the Plan.  The members of the Compensation Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Compensation Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Compensation Committee.  The Compensation Committee shall act pursuant to a vote of the majority of its members or, in the case of a committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board.  Subject to the limitations prescribed by the Plan and the Board, the Compensation Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.

 

(ii)           At such time as the Company is the issuer of any class of common equity securities required to be registered under Section 12 of the Exchange Act, the Board shall have discretion to determine whether or not it intends to comply with the exemption requirements of Code Section 162(m), if applicable.  If the Board intends to satisfy such exemption requirements, with respect to Awards to any Covered Employee, the Compensation Committee shall be a compensation committee of the Board that at all times consists solely of two or more Outside Directors.  Within the scope of such authority, the Board or the Compensation Committee may delegate to a committee that does not consist solely of two or more Outside Directors the authority to grant Awards to Eligible Employees who are either (x) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award, or (y) not persons with respect to whom the Company wishes to grant Qualified Performance Based Compensation.

 

(d)           The interpretation and construction of any provision of the Plan or of any Award granted under it by the Committee shall be final, conclusive and binding upon all parties, including the Company, its stockholders and directors, and the executives and employees of the Company and its Affiliates.  No member of the Committee shall be liable to the Company, any stockholder, any Grantee or any employee of the Company or its Affiliates for any action or determination made in good faith with respect to the Plan or any Award granted under it.  No member of the Committee may vote on any Award to be granted to him or her.

 

1.4           Eligibility

The Chairman and Chief Executive Officer of the Company ("Chairman") and all Eligible Employees identified by the Chairman who report directly to the office of the Chairman shall be

 

  

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eligible to participate in the Executive Sub-Plan.  All other Eligible Employees shall be eligible to participate in the Non-Executive Sub-Plan.

1.5           Awards Under The Plan

The Committee shall designate the Eligible Employees, if any, to be granted Awards under the Plan.  No employee shall be a Participant or be entitled to any payment hereunder unless such employee is designated as a Participant and granted an Award by the Committee.  All Awards granted under the Plan shall be on the terms and subject to the conditions hereinafter provided.

1.6           Other Compensation Programs

The existence and terms of the Plan shall not limit the authority of the Board or the Committee in compensating employees of the Company or its Affiliates in such other forms and amounts, including compensation pursuant to any other plans as may be in effect currently or adopted in the future, as the Board or the Committee may determine from time to time.

ARTICLE 2.

TERMS AND CONDITIONS OF AWARDS

2.1           Executive Sub-Plan

(a)           Establishment Of Performance Goals And Bonus Opportunity

Prior to or within 90 days after the commencement of each Performance Year (or no later than such earlier or later date as may be the applicable deadline for the establishment of Performance Goals permitting compensation payable for such Performance Year to qualify as Qualified Performance Based Compensation), the Committee shall establish written Performance Goals and a Bonus Opportunity for each Award granted to a Participant in the Executive Sub-Plan for such Performance Year.  The Performance Goals shall be based on one or more Performance Criteria.

At the time of establishing the Performance Goals, the Committee shall specify (i) the formula, standard or method to be used in calculating the compensation payable to a Participant if the Performance Goals are obtained, and (ii) the individual employee or class of employees to which the formula, standard or method applies.  The Bonus Opportunity shall be expressed as an amount of cash. The Committee may also specify a minimum acceptable level of achievement of the relevant Performance Goals, as well as one or more additional levels of achievement, and a formula to determine the percentage of the Bonus Opportunity deemed to have been earned by the Participant upon attainment of each such level of achievement, which percentage may exceed 100%.  The Performance Goals and Bonus Opportunity relating to any particular Award need not be the same as those relating to any other Award, whether made at the same or a different time.  If an Award that is intended to constitute Qualified Performance Based Compensation is based, in whole or in part, on a percentage of a Participant's salary, base pay or other compensation, the maximum amount of

 

  

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the Award must be fixed at the time the Performance Goals are established.  Notwithstanding the terms of any Award, the maximum payout under this Plan to any individual for any Performance Year shall not exceed $3,000,000.

(b)           Earning Of Award

Promptly after the date on which the necessary information for a particular Performance Year becomes available, and prior to payment of any such Award, the Committee shall determine and shall certify in writing the extent to which the Bonus Opportunity for such Performance Year has been earned, through the achievement of the relevant Performance Goals, by each Participant for such Performance Year.

2.2           Non-Executive Sub-Plan

For each Performance Year, the Committee may grant Awards to Participants in the Non-Executive Sub-Plan.  The Awards shall be determined by the Committee, in its sole discretion, based on recommendations made by the Company's management.  Such recommendations may be based on a number of factors, or any combination of them, including, but not limited to, market data, Company performance, and the performance of individual Participants.  The Committee shall have the sole discretion to determine whether any Eligible Employee will be designated a Participant and may be granted an Award.

2.3           Discretionary Downward Adjustments

At any time after an Award has been granted but before the Award has been paid, the Committee, in its sole and absolute discretion, may reduce or eliminate the Award granted to any Participant for any reason or for no reason, including, without limitation, the Committee's judgment that the Performance Goals have become an inappropriate measure of achievement, a change in the employment status, position or duties of the Participant, unsatisfactory performance of the Participant, or the Participant's service for less than the entire Performance Year, for example.  With respect to Awards that are intended to constitute Qualified Performance Based Compensation, the reduction or elimination of an Award for a Participant may not increase the amount of an Award to another Participant.  In no event will the bonuses that are to be paid fall below the Mandatory Minimum amount described in Section 2.7.

2.4           Distributions

As soon as administratively feasible after the Committee has (i) determined and certified the extent to which the Bonus Opportunity relating to an Award under the Executive Sub-Plan has been earned pursuant to Section 2.1(b), or (ii) granted an Award under the Non-Executive Sub-Plan, such Award shall be distributed in one lump sum either in cash or in such other form of payment (for example, equity) that the Committee, in its discretion, may determine, provided that no such other form shall result in a deferral of compensation to which Code Section 409A applies.

 

  

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2.5           Change In Control

Notwithstanding any other provision of this Plan (other than in the last sentence of this Section 2.5) or contained in any Award granted hereunder (including any provision for deferred payment thereof), upon the occurrence of a Change in Control, the Committee, in its discretion, may take any action with respect to outstanding Awards that it deems appropriate, which action may vary among Awards granted to individual Participants.  In the event that such action is to distribute an Award, the Award shall be distributed in a lump sum no later than 30 days after the Change in Control.  If a Change in Control occurs and, in connection with or as a result of such Change in Control, Richard D. Kinder no longer holds or does not continue to hold the office of Chairman of the Company, (i) each Participant under the Executive Sub-Plan shall be deemed to have earned 100% of the Bonus Opportunities contained in any outstanding Awards for which the determination described in Section 2.1(b) has not been made, or, if such determination described in Section 2.1(b) has been made, the full amount of the portion of the Bonus Opportunity which was determined to have been earned, (ii) each Participant under the Non-Executive Sub-Plan shall be deemed to have earned an Award equal to the Award most recently paid to such Participant under the Plan (or, if no Awards have yet been paid under the Plan, (A) an Award equal to the most recent award paid to such Participant under any prior Annual Incentive Plan, or (B) if such Participant has not received an award under any prior Annual Incentive Plan, an Award equal to the average Award paid to all similarly situated Participants under this clause (ii)), and (iii) the amount of such Bonus Opportunities or Awards under (i) or (ii), as applicable, shall be paid promptly (and no later than 30 days after the Change in Control) in a cash lump sum.

2.6           Termination of Employment

Except in the case of a payment made in connection with a Change in Control under Section 2.5, a Participant shall forfeit all rights to a distribution of an Award if the Participant ceases to be employed by the Company or an Affiliate for any reason prior to the date the Award is distributed.  For greater certainty, the Participant ceases to be employed by the Company or an Affiliate on the later of the date on which the Participant receives written notice of termination or the last date on which the Participant provides services to the Company or Affiliate.

2.7           Approval of a Mandatory Minimum Bonus Amount to Be Paid Annually and Allocation of Forfeitures

(a)           The Committee shall meet before the end of each calendar year and shall approve a "Mandatory Minimum" amount of bonus to be paid under the Plan for such calendar year which, in the Committee's discretion, shall be expressed as either (1) a dollar amount, or (2) a percentage of the aggregate Bonus Opportunities for all Plan Participants for the year as established by the Committee in Section 2.1(a).

(b)           In the event the aggregate amount of bonus to be paid for a calendar year is tentatively determined to be less than the Mandatory Minimum due to forfeitures, forfeitures for the year equal to the difference between the Mandatory Minimum and the amount of bonus as tentatively determined to be paid shall be re-allocated to the group of Eligible

 

  

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Employees as the Committee deems appropriate; provided, however, that any re-allocation to a Participant who is a Covered Employee shall not cause the payment to such Participant for such year to exceed the amount determined under Section 2.1(a) for such Participant based on the actual level of achievement of the relevant Performance Goals for such year.

(c)           The Committee shall, at or before the approval of the Mandatory Minimum, certify that the Performance Goals as established in Section 2.1(a) were in fact satisfied.  In the event that the information is not available to certify that the Performance Goals were in fact satisfied, the Mandatory Minimum as approved by the Committee shall not include any payments to Covered Employees.

ARTICLE 3.

ADDITIONAL PROVISIONS

3.1           Amendments

The Board may, in its sole discretion, amend the Plan from time to time or terminate the Plan at any time.  Any such amendment may be made without stockholder approval unless required to satisfy any applicable laws (including but not limited to Code Section 162(m)) or securities exchange rules. Notwithstanding this or any other provision of this Plan to the contrary, in connection with a Change in Control (a) neither the Committee nor the Board may adjust any Award in effect immediately prior to such Change in Control in a manner adverse to the Participant, and (b) the Board may not amend the provisions of this Plan relating to such Change in Control or any such Award in a manner adverse to a Participant, in either case without the consent of the affected Participant.  In the event the Plan is terminated, the Plan shall remain in effect for purposes of administering the payment of Awards granted under the Plan until such payments have been completed.

3.2           Withholding

Payments under the Plan shall be net of an amount sufficient to satisfy any federal, state, local or provincial withholding tax obligations of the Company.

3.3           Non-Assignability; Death Of Participant

No Award under the Plan shall be assignable or transferable by the holder thereof except by will or by the laws of descent and distribution.  In the event of the death of a Participant, any payments due to such Participant shall be paid to his beneficiary designated in writing to the Committee, or, if none has been designated, to his estate.

3.4           Non-Uniform Determinations

Determinations by the Committee under the Plan (including, without limitation, determinations of the persons to receive Awards; the terms and provisions of such Awards; the relevant Performance Goals; the amount of Bonus Opportunity; and the amount of any downward

 

  

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adjustment) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.

3.5           No Guarantee Of Employment

The grant of an Award under the Plan shall not constitute an assurance of continued employment for any period.

3.6           Unfunded Status Of Awards; Creation Of Trusts

The Plan is intended to constitute an "unfunded" plan.  With respect to any amounts payable to a Participant pursuant to an Award, nothing contained in the Plan (or in any documents related thereto), nor the creation or adoption of the Plan, the grant of any Award, or the taking of any other action pursuant to the Plan, shall give any such Participant any rights that are greater than those of a general creditor of the Company.  The Committee may authorize the creation of trusts or make other arrangements to meet the Company's obligations under the Plan; however, such trusts or other arrangements shall be consistent with the "unfunded" status of the Plan.

3.7           Effective Date

Subject to the approval of the Company’s stockholders, the Plan shall be effective as of January 1, 2011.  To the extent necessary for purposes of Code Section 162(m), this Plan shall be resubmitted to stockholders for reapproval at the times prescribed by Code Section 162(m) and the regulations thereunder.

3.8           Clawbacks

To the extent required by applicable laws, rules, regulations or securities exchange listing requirements, the Company shall have the right, and shall take all actions necessary, to recover any amounts paid to any individual under this Plan.

3.9           Code Section 162(m)

It is intended that the Plan comply fully with and meet all the applicable requirements of Code Section 162(m) and the regulations thereunder with respect to Awards that are intended to constitute Qualified Performance Based Compensation.  If any provision of the Plan would disqualify the Plan or would not otherwise permit the Plan to comply with Code Section 162(m) as so intended, such provision shall be construed or deemed amended to conform to the requirements or provisions of Code Section 162(m).

3.10           Code Section 409A

The Plan and all Awards granted hereunder are intended to comply with, or otherwise be exempt from, Code Section 409A. The Plan and all awards shall be administered, interpreted, and construed in a manner consistent with Code Section 409A or an exemption therefrom.  Should any

 

  

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provision of the Plan, any award hereunder, or any other agreement or arrangement contemplated by the Plan be found not to comply with, or otherwise be exempt from, the provisions of Code Section 409A, such provision shall be modified and given effect (retroactively if necessary), in the sole discretion of the Committee, and without the consent of the Participant, in such manner as the Committee determines to be necessary or appropriate to comply with, or to effectuate an exemption from, Code Section 409A.

 

  

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Exhibit 10.7

SEVERANCE AGREEMENT

 

THIS AGREEMENT (the “Agreement”), is entered into as of February 10, 2011 (the “Effective Date”), by and between Kinder Morgan, Inc. (the “Company”) and Park Shaper (“Executive”).

 

WHEREAS, the Company considers it essential to the best interests of its shareholders to attract and retain key executive management personnel;

 

WHEREAS, the Executive and the Company had previously entered into that certain Limited Liability Company agreement (the “LLC Agreement”), pursuant to which the Executive was provided with severance benefits under a severance policy in consideration of post-employment restrictive covenants; and

 

WHEREAS, the Company is now being incorporated and the Company and the Executive wish to enter into a severance agreement to supersede any prior arrangements regarding severance and restrictive covenants contained in the LLC Agreement.

 

NOW THEREFORE, in consideration of the premises and the mutual covenants herein contained, and intending to be legally bound, the Company and the Executive hereby agree as follows:

 

	
1  

	
Definitions.  For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

	
(a)  

	
“Accrued Rights” means (i) any amounts of accrued but unpaid Annual Base Salary or unused vacation days accrued through the date of termination, (ii) any bonus earned but unpaid as of the date of termination, and (iii) any vested or accrued employee benefits to which the Executive may be entitled under the employee benefit plans of the Company, payable in accordance with the terms of each applicable plan.

 

	
(b)  

	
“Affiliate” of any Person means any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such first Person.

 

	
(c)  

	
“Annual Base Salary” means the Executive’s rate of regular annual base compensation (prior to any reduction (i) pursuant to a salary reduction agreement pursuant to section 401(k) or section 125 of the Code, (ii) under any plan or arrangement deferring any base salary payments, or (iii) that is the basis for termination of employment by the Executive for Good Reason under this Agreement), and shall not include (without limitation), fees, retainers, reimbursements, bonuses, incentive awards, equity grants, options or similar payments.

 

	
(d)  

	
“Board” means the Board of Directors of the Company, or its designee.

 

	
(e)  

	
“Bylaws” means the bylaws of the Company, as in effect at the relevant time.

 

  

  

  

	
(f)  

	
“Cause” means any of the following:

 

	
(i)  

	
the Executive’s conviction of, or plea of nolo contendere to, any crime  or offense constituting a felony under applicable law, other than any motor vehicle violations for which no custodial penalty is imposed;

 

	
(ii)  

	
the Executive’s commission of fraud or embezzlement against the Company or any of its Subsidiaries;

 

	
(iii)  

	
gross neglect by the Executive of, or gross or willful misconduct by the Executive in connection with the performance of, the Executive’s duties to the Company and its Subsidiaries that, if curable, is not cured within thirty (30) calendar days after a written notice of such gross neglect, or gross or willful misconduct, specifically identifying the gross neglect or misconduct, is delivered by the Chief Executive Officer or a majority of the members of the Board to the Executive;

 

	
(iv)  

	
the Executive shall have willfully failed or refused to carry out the reasonable and lawful instructions of the Chief Executive Officer or the Board (other than as a result of illness or disability) concerning duties or actions consistent with the Executive’s office, or the Executive’s willful failure to implement any actions consistent with the Executive’s office that the Board may direct such Executive to undertake, and, in each case, such failure or refusal shall have continued for a period of thirty (30) calendar days following written notice from the Chief Executive Officer or a majority of the members of the Board;

 

	
(v)  

	
the Executive’s failure to perform the duties and responsibilities of his or her office as his or her primary business activity, provided that, subject to Section 5, so long as it does not materially interfere with his or her duties, nothing herein shall preclude the Executive from accepting appointment to or continuing to serve on any board of directors or as trustee of any business corporation or any charitable organization, from engaging in charitable and community activities, from delivering lectures and fulfilling speaking engagements, or from directing and managing his or her personal investments and those of his or her family;

 

	
(vi)  

	
a judicial determination that the Executive has breached his fiduciary duties;

 

	
(vii)  

	

the Executive’s willful and material breach of the Shareholders Agreement, the Charter or the Bylaws, including willfully causing the Company or any of its Subsidiaries or Affiliates to take any material action prohibited by the Shareholders Agreement, the Charter or the Bylaws that the Executive failed to cure, if curable, within thirty (30) calendar days following written notice  thereof, specifically identifying such willful and material breach, having been delivered by the Chief

 

  

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Executive Officer or by a majority of the members of the Board to the Executive; or

 

	
(viii)  

	
the Executive’s material breach of the provisions of Section 5 that, if curable, is not cured within thirty (30) calendar  days after notice of such breach is delivered to the Executive by the Chief Executive Officer or by a majority of the members of the Board.

 

Action or inaction by the Executive shall not be considered “willful” unless done or omitted by him or her in bad faith or with actual knowledge that his action or inaction was in breach of the Shareholders Agreement, the Charter, or the Bylaws, as applicable, and shall not include failure to act by reason of total or partial incapacity due to physical or mental illness.

 

	
(g)  

	
“Charter” means the certificate of incorporation of the Company, as in effect at the relevant time.

 

	
(h)  

	
“Code” means the Internal Revenue Code of 1986, as amended.

 

	
(i)  

	
“Control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

	
(j)  

	
“Good Reason” means any of the following, without the Executive’s prior consent if (x) any event or circumstances set forth in clauses (i) through (v) below shall have occurred and the Executive provides the Company with written notice thereof within a reasonable period of time (but in no event more than thirty (30) calendar days) after the Executive has knowledge of the occurrence or existence of such event or circumstance, which notice shall specifically identify the event or circumstances that the Executive believes constitutes Good Reason, (y) the Company fails to correct the circumstance or event so identified within thirty (30) calendar days after the receipt of such notice, and (z) the Executive resigns within five (5) calendar days after the expiration of the period described in clause (y) above:

 

	
(i)  

	
a material diminution in the Executive’s duties and responsibilities to the Company and its Subsidiaries to a level inconsistent with those of an executive level employee;

 

	
(ii)  

	
a material reduction in the annual base salary of the Executive or a material reduction in the aggregate welfare benefits provided to the Executive (not including any reduction related to a broader compensation or benefit reduction that is not limited to the Executive specifically);

 

	
(iii)  

	
a material reduction in the Executive’s maximum annual bonus opportunity from the Executive’s maximum annual bonus opportunity as in effect on the date of this Agreement;

 

  

3

  

	
(iv)  

	
the relocation by the Company of the Executive’s primary place of employment with the Company or any of its Subsidiaries to a location not within a 50 mile radius of such current location; or

 

	
(v)  

	
a willful and intentional breach of a material provision of the Shareholders Agreement by the Company that has a material and adverse effect on the Executive.

 

Action or inaction by the Company shall not be considered “willful” unless done or omitted by the Company in bad faith or with actual knowledge that such action or inaction is in breach of the Shareholders Agreement.

 

	
(k)  

	
“Governmental Entity” means any court, administrative agency, regulatory body, commission or other governmental authority, board, bureau or instrumentality, domestic or foreign and any subdivision thereof.

 

	
(l)  

	
“Non-Compete Period” means the period during such Executive’s employment with the Company and, to the extent applicable, the period thereafter determined in accordance with Schedule 1 hereof.

 

	
(m)  

	
“Person” means any individual, corporation, company, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, Governmental Entity or other entity.

 

	
(n)  

	
“Shareholders Agreement” means the Shareholders Agreement dated as of February 10, 2011.

 

	
(o)  

	
“Subsidiary” or “Subsidiaries” means, with respect to any Person, as of any date of determination, any other Person as to which such Person owns, directly or indirectly, or otherwise controls, more than 50% of the voting shares or other similar interests or is general partner or managing member of, or serves in a similar capacity for, such Person (including, in the case of the Company, KMP and KMR and their respective Subsidiaries).

 

Any terms not defined herein shall have the meaning ascribed to them in the Shareholders Agreement.

 

	
2  

	
Severance Benefits.

 

If the Executive’s employment hereunder is terminated by the Company without Cause, or if the Executive resigns for Good Reason, the Executive shall be entitled to receive the following (collectively, the “Severance Benefits”) in addition to the Accrued Rights, subject to the Executive’s continued compliance with the provisions of Section 5:

 

	
(a)  

	
continued payment of Annual Base Salary for twenty-four months following the date of the Executive’s termination (paid in accordance with the Company’s normal payroll practices as in effect on the date of such termination); and

 

  

4

  

	
(b)  

	
reimbursement, for a period of time that terminates upon the earlier of (i) twenty-four months following the termination date or (ii) the date the Executive becomes eligible for alternative coverage with a subsequent employer, of any premiums for continued group medical, dental and vision coverage for the Executive and/or the Executive’s eligible dependents at the same coverage levels as in effect immediately prior to the Executive’s date of termination.

 

Notwithstanding the foregoing, the Company may, at its election, cease paying any amounts or providing any benefits described above upon ninety (90) days notice to the Executive.  Upon the expiration of the ninetieth (90th) day, the Executive shall no longer be subject to the provisions of Section 5 of this Agreement.

 

	
3  

	
Waiver and Release; Timing of Payments.

 

As condition precedents to receiving any payments under this Agreement (other than those amounts already accrued prior to the date of termination, which shall be payable on the date of termination), (a) Executive shall have executed, within twenty-one (21) days, or if required for an effective release, forty-five (45) days, following the Executive’s termination of employment, a waiver and release in substantially the form attached hereto as Exhibit A (the “Release”), which Release may be updated by the Company from time to time to reflect changes in law, and (b) the seven (7) day revocation period of such Release shall have expired.  Subject to Section 6 and the execution of the Release, all payments under this Section 3 shall be payable as described above; provided, that the first payment shall be made on the sixtieth (60th) day after the Executive’s termination of employment, and such first payment shall include payment of any amounts that would otherwise be due prior thereto.

 

	
4  

	
Confidentiality.

 

The Executive shall not at any time or in any manner, either directly or indirectly, make any unauthorized use or disclosure of any knowledge or information that is unpublished, confidential, or of a proprietary nature, which was generated or acquired during the course of his employment by the Company, relating to the Company’s business or to its processes or trade secrets, or to its sources of supply or customers, or to its marketing efforts or other marketing plans or contemplated marketing actions of the Company; provided, however, nothing contained herein shall be construed to prevent the Executive from using general knowledge and skill whether acquired prior to or during employment by the Company.

 

Further, the Executive specifically represents that, during the term of employment or upon leaving the Company's employment, the Executive has not and will not remove from the Company's premises, either directly or indirectly, any drawings, writing, prints, computer disks, any documents or anything containing, embodying, or disclosing any confidential or proprietary information or any of the Company's trade secrets unless express written permission is given by a member of the Company's executive management.

 

For purposes of this section, the terms “confidential information”, “proprietary information” or “trade secrets” mean any information, whether oral, written, furnished to or

  

5

  

obtained by the Executive during the term of employment by the Company, which is neither a matter of public record nor previously published.

 

	
5  

	
Restrictive Covenants.

 

The Executive agrees that he or she shall not, during the Non-Compete Period, directly or indirectly (other than on behalf of or at the request of the Company or its Subsidiaries):

 

	
(a)  

	
engage in, have an interest in, or otherwise be employed by (whether as an owner, operator, partner, member, manager, employee, officer, director, consultant, advisor, or representative), provide consulting or management services to, or permit his or her name to be used in connection with the activities of, any business or organization, engaged in a business that is competitive with a business in which the Company or any of its Subsidiaries engages (a “Competitive Business”); provided, that ownership of less than one percent (1%) of the outstanding stock of any publicly traded corporation shall not be deemed to be a violation of this Section 5 solely by reason thereof; provided, further, that, providing investment banking or legal services to a Competitive Business as an independent consultant, independent advisor or independent representative shall not be deemed to be a violation of this Section 5 solely by reason thereof so long as providing such services is not the primary duties or business activities of such individual; provided, further, that, if the Board determines that the provisions of this Section 5(a) should not apply to the Executive following the termination of the Executive’s employment by the Company, the provisions of this Section 5(a) shall be deemed waived with respect to the Executive;

 

	
(b)  

	
solicit any Person who is or, within the prior twelve (12) months, was, or whose Affiliate is or, within the prior twelve (12) months, was a customer of the Company or any of its Subsidiaries or persuade or attempt to persuade any such Person not to be a customer of the Company or any of its Subsidiaries or to reduce the amount of business that such customer does with the Company or any of its Subsidiaries, or enter into or seek to enter into any agreement (to the extent such agreement is of a nature that is related to the business in which the Company or any of its Subsidiaries engage) with, to the Executive’s knowledge, any such Person; or

 

	
(c)  

	
contact, approach or solicit for the purpose of offering employment to or hiring or retaining, or actually hire or retain any Person who is or was employed or retained by the Company or its Affiliates as an employee during the immediately preceding twelve (12) months or attempt to persuade any Person not to continue to be employed or retained by the Company or its Affiliates or to terminate his or her employment or services with the Company or its Affiliates; provided, that notwithstanding the foregoing, general solicitations of employment published in a journal, newspaper or other publication of general circulation and not specifically directed towards such employees, consultants or independent contractors shall not be deemed to constitute solicitation for purposes of this Section 5(c).

 

  

6

  

	
(d)  

	
Notwithstanding anything to the contrary in this Section 5, with respect to the country of Mexico, this Section 5 will only apply (and therefore will be limited) to activities that are competitive with the businesses in which any of the Mexican Subsidiaries of the Company engages.

 

The Executive acknowledges and agrees that: (1) the time and geographical scope of the restrictions of this Section 5 are reasonable; (2) the burden on the Executive of complying with the restrictions of this Section 5 is not unreasonable; (3) the general public policy is not harmed by the restrictions of this Section 5; and (4) the restrictions of this Section 5 are necessary for the protection of the Company and its Subsidiaries. The Executive further acknowledges and agrees (x) the Executive’s breach of the provisions of this Section 5 will cause the Company irreparable harm, which cannot be adequately compensated by money damages, (y) if the Executive breaches or threatens to breach the provisions of this Section 5 and the Company (by vote of a majority of the members of the Board) seeks an injunction against the Executive, there is a reasonable probability of the Company’s eventual success on the merits and (z) if the Executive breaches or threatens to breach the provisions of this Section 5 and the Company (by vote of a majority of the members of the Board) seeks an injunction against the Executive, a balancing of equities will be in favor of the Company.  The Executive consents and agrees that if the Executive commits any such breach or threatens to commit any breach, the Company (by vote of a majority of the members of the Board) shall be entitled to temporary and permanent injunctive relief from a court of competent jurisdiction, without posting any bond or other security and without the necessity of proof of actual damage, in addition to, and not in lieu of, such other remedies as may be available to the Company for such breach, including the recovery of money damages. If any of the provisions of this Section 5 are determined to be wholly or partially unenforceable, the Executive hereby agrees that this Agreement or any provision hereof may be reformed so that it is enforceable to the maximum extent permitted by law.  If any of the provisions of this Section 5 are determined to be wholly or partially unenforceable in any jurisdiction, such determination shall not be a bar to or in any way diminish the Company’s right to enforce any such covenant in any other jurisdiction

 

	
6  

	
Section 409A.

 

	
(a)  

	
The intent of the parties is that payments and benefit under this Agreement comply with or be exempt from Code Section 409A and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  If the Executive notifies the Company that the Executive has received advice of tax counsel of a national reputation with expertise in Section 409A that any provision of this Agreement would cause the Executive to incur any additional tax or interest under Section 409A (with specificity as to the reason therefor) or the Company independently makes such determination, the Company shall, after consulting with the Executive, reform such provision to try to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A.  To the extent that any provision hereof is modified in order to comply with or be exempt from Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the

 

  

7

  

original intent and economic benefit to the Executive and the Company of the applicable provision without violating the provisions of Section 409A.

 

	
(b)  

	
A termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A.  As permitted by Treasury Regulation 1.409A-1(h)(1)(ii), 49% shall be substituted in lieu of 20% for the average level of bona fide services performed during the immediately preceding 36 month period in order to constitute a “separation from service”.  For purposes of any such provision of this Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If the Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered nonqualified deferred compensation under Section 409A payable on account of a “separation from service,” such payment or benefit shall be made or provided on the first business day following the date which is the earlier of (A) the expiration of the six (6) month period measured from the date of such “separation from service” of the Executive, and (B) the date of the Executive’s death (the “Delay Period”).  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 6 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

	
(c)  

	
(i) All expenses or other reimbursements as provided herein shall be payable in accordance with the Company’s policies in effect from time to time, but in any event shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Executive; (ii) no such reimbursement or expenses eligible for reimbursement in any taxable year shall in any way affect the expenses eligible for reimbursement in any other taxable year; provided, that this clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit.

 

	
(d)  

	
For purposes of Section 409A, the Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the

 

  

8

  

actual date of payment within the specified period shall be within the sole discretion of the Company.

 

	
7  

	
Offsets for Other Severance Pay.

 

There shall be no duplication of severance pay in any manner.  Furthermore, the Severance Benefits shall be in lieu of any other payments or benefits in the nature of severance pay or benefits to which Executive may have otherwise been entitled to receive from the Company or its Subsidiaries.  If Executive has received severance pay or benefits, or is entitled to any notice or payment in lieu of notice of termination of employment required by federal, state or local law, including but not limited to the Worker Adjustment and Retraining Notification Act, the Severance Benefits to which the Executive would otherwise be entitled under this Agreement shall be reduced by the amount of any such payment or benefits; provided, that with respect to any payment made to Executive hereunder that is subject to Section 409A, if the Company seeks to set off a payment to be made to Executive hereunder which is subject to Section 409A against an amount owed by the Company to the Executive, the gross amount of such payment to be made to the Executive shall be deemed to be paid to the Executive for U.S. federal income tax purposes, as and when due under this Agreement, and the net amount of such payment (i.e., after deducting applicable withholding taxes) shall be applied against amounts owed by the Company to the Executive; provided, further, that the Company may set off a payment hereunder that is subject to Section 409A pursuant to this sentence only if the right to such set off, or such set off, would not violate Section 409A.

 

	
8  

	
Term.

 

The term of this Agreement commences on the Effective Date; and if the Executive is employed with the Company or any of its Subsidiaries on May 31, 2015, the Agreement shall terminate on May 31, 2015.  If the Executive’s employment with the Company and its Subsidiaries terminates on or prior to May 31, 2015, then the Executive shall have the applicable Non-Compete Period with respect to the Restrictive Covenants set forth in Section 5 of this Agreement for the period after the Executive’s employment as set forth in the Schedule 1 hereto, which may extend past May 31, 2015.  For the avoidance of doubt, the conditions of Section 4 of the Agreement shall continue in perpetuity.

 

	
9  

	
At Will Employment.

 

This Agreement does not alter the “employment at will” status of the Executive and shall not create a contract of guaranteed employment.

 

	
10  

	
Miscellaneous.

 

	
(a)  

	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, notwithstanding any conflict of law principles.

 

	
(b)  

	
Arbitration.  Other than injunctive relief by the Company pursuant to Sections 4 or 5 of this Agreement, any dispute, controversy, or claim among or between the parties relating to or arising from this Agreement shall be submitted to and settled

 

  

9

  

by binding confidential arbitration (“Arbitration”), administered by the Houston, Texas office of the American Arbitration Association (“AAA”), and conducted pursuant to the rules then in effect of the AAA governing employment disputes.  The Arbitration hearing shall take place in Houston, Texas unless otherwise agreed to by the parties to the Arbitration.  Such Arbitration shall be before three neutral arbitrators (the “Panel”) licensed to practice law in Texas and familiar with commercial disputes.  Any award rendered in any Arbitration shall be final and conclusive upon the parties to the Arbitration, and the judgment thereon may be entered in the highest court of the forum (state or federal) having jurisdiction over the issues addressed in the Arbitration.  The administration fees and expenses of the Arbitration shall be borne equally by the parties to the Arbitration, provided that each party shall pay for and bear the cost of his/her/its own experts, evidence, and attorneys’ fees, except that, in the discretion of the Panel, any award may include the cost of a party’s counsel and/or its share of the expense of Arbitration if the Panel expressly determines that an award of such costs is appropriate to the party whose position substantially prevails in such Arbitration.  To submit a matter to Arbitration, the party seeking redress shall notify in writing the party against whom such redress is sought, describe the nature of such claim, the provision of this Agreement that has been allegedly violated, and the material facts surrounding such claim.  The Panel shall render a single written decision.  The decision of the Panel shall be binding upon the parties to the Arbitration, and after the completion of such Arbitration, the parties to the Arbitration may only institute litigation regarding this Agreement for the sole purpose of enforcing the determination of the Arbitration hearing; except that the Company may seek injunctive or equitable relief as provided herein.  Notwithstanding this Section 10(b), the Company may resort to a court of equity solely for purposes of obtaining injunctive relief to enforce Sections 4 or 5.

 

	
(c)  

	
Entire Agreement.  This Agreement is contractual and not a mere recital.  This Agreement constitutes the entire contract between the Executive and the Company.  No amendment to this Agreement shall be effective unless it is in writing and signed by duly authorized representatives of both parties hereto, and each amendment to or waiver of any provision of this Agreement shall, in addition to any other required approvals, also require the prior written approval of (i) Richard D. Kinder (so long as he (together with his Permitted Transferees) owns at least 1.0% of the Total Voting Power) and (ii) the Investor Shareholders holding Voting Securities representing a majority of the Total Voting Power then held by the Investor Shareholders (so long as the Investor Shareholders own at least an aggregate amount of 1.0% of the Total Voting Power).  For the avoidance of doubt, this Section 10(c) is for benefit of, and shall be enforceable by, Richard D. Kinder and the Investor Shareholders.

 

	
(d)  

	
Successors.  This Agreement is binding upon and inures to the benefit of the heirs, personal representatives, successors and assigns of both parties hereto.

 

  

10

  

	
(e)  

	
Notices.  All notices and other communications hereunder shall be in writing and shall be given by hand-delivery to the other parties or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

 

	  	
To the Company:

	
Vice President – Human Resources

	  	  	
Kinder Morgan, Inc.

	  	  	
500 Dallas Street, Suite 1000

	  	  	
Houston, TX 77002

	  	
To the Executive:

	
To the last address set forth on the payroll records of the Company

 

 

	
(f)  

	
Withholding.  The Company may withhold from any amounts payable under this Agreement such federal, state or local income taxes as in the reasonable determination of the Company are required to be withheld pursuant to any applicable law or regulation.

 

	
(g)  

	
Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

	
(h)  

	
Captions.  The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

 

	
(i)  

	
Counterparts.  This Agreement may be executed in one or more counterparts each of which shall be deemed an original instrument, but all of which together shall constitute but one and the same Agreement.

 

	
(j)  

	
Survivorship.  The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement for any reason to the extent necessary to the intended provision of such rights and the intended performance of such obligations.

 

  

11

  

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

 

 

 

 

	 	KINDER MORGAN, INC.	 
	 	 	 
	
 

	  	  
	  	
/s/ James E. Street

	  
	  	
James E. Street

 

Vice President, Human Resources and Administration

	  

 

 

 

 

	 	PARK SHAPER	 
	 	 	 
	
 

	  	  
	  	
/s/ Park Shaper

	  
	  	 	  

                                                                  

 

 

  

12

  

SCHEDULE 1

 

NON-COMPETE PERIODS

 

The Non-Compete Period for the period after the Executive’s employment with the Company and its Subsidiaries shall be as set forth in the table below:

 

	
Executive

	
Non-Compete Period

 

	  	
Cause

	
Voluntary termination of employment by Executive without Good Reason

	
· Termination of employment by Executive due to disability, retirement or Good Reason

· Termination of employment by Company without Cause

 

	
Park Shaper

	
2 years

	
2 years

	
2 years

 

 

 

 

 

 

  

13

  

EXHIBIT A

 

RELEASE

 

This RELEASE (“Release”) dated as of ___________, 20__ between Kinder Morgan, Inc., a Delaware corporation (the “Company”), and Park Shaper (the “Executive”).

 

WHEREAS, the Company and the Executive previously entered into a severance agreement dated ________, 2011 (the “Severance Agreement”); and

 

WHEREAS, the Executive's employment with the Company has terminated effective ______ __, 20__ (“Termination Date”);

 

NOW, THEREFORE, in consideration of the premises and mutual agreements contained herein and in the Severance Agreement, the Company and the Executive agree as follows:

 

1.   Capitalized terms not defined herein shall have the meaning as defined under the Severance Agreement.

 

2.   In consideration of the Executive’s release under Paragraph 3 hereof, the Company shall pay to the Executive or provide benefits to the Executive as set forth in Section 2 of the Severance Agreement.

 

3.   The Executive, on his or her own behalf and on behalf of his or her spouse, personal representatives, heirs, executors, and assigns, hereby generally release and forever discharge the Company, any present or former parent, sister, Affiliate, Subsidiary or related company, and any of its and their respective offices and branches, present or former shareholders, unit holders, partners, limited partners, officers, directors, employees, agents, representatives, legal representatives, accountants, successors, predecessors and assigns (collectively, the “Company Released Parties”), from any and all claims, demands, and actions of any nature, whether known or unknown and whether accrued or unaccrued, and specifically including, but not limited to, those in any manner arising out of or involving any aspect of the Executive’s employment or the termination of such employment at the Company or any of the Company Released Parties, and including any rights or claims under the Age Discrimination in Employment Act of 1967 (including the Older Workers Benefit Protection Act of 1990) (together “ADEA”); Title VII of the Civil Rights Act of 1964; the Vocational Rehabilitation Act; the Americans with Disabilities Act of 1990; the Vietnam Era Veterans Readjustment Assistance Act; Executive Order 11246; the Civil Rights Act of 1871; the Civil Rights Act of 1991; the National Labor Relations Act; the Worker Adjustment and Retraining Notification Act; the Family and Medical Leave Act of 1993, as amended; the Equal Pay Act, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standards Act, as amended, the Sarbanes-Oxley Act, the anti-discrimination laws of the State of Texas; and including any and all other municipal, state, and/or federal statutory, executive order, or constitutional provisions pertaining to an employment relationship, including the Texas Commission on Human Rights Act.  This settlement, release and waiver also specifically includes, but is not limited to, all such claims in the nature of tort, statutory law, common law or contract claims, including specifically but not limited to any claim of wrongful discharge, unpaid wages, unpaid time off duty, unpaid vacation, stock or stock options, unpaid benefits, unpaid severance, intentional or negligent infliction of emotional distress, defamation, discrimination, retaliation of any kind or other claims in any manner arising out of or involving any aspect of employment or termination of the Executive’s employment. The Executive further agrees not to file a lawsuit of any kind against the Company or any of the Company Released Parties arising from the Executive’s employment at the Company or any of the Company Released Parties, or the termination thereof, or based on any other set of facts or events occurring prior to the Effective Date of this Release.  The Executive also waives and releases all rights to

 

  

14

  

share in any damages or other relief awarded in any class or collective action or in any action brought by, or as a result of a complaint filed with, any federal, state or local agency.  The Executive agrees that he cannot participate as a party or class member in, or receive any portion of any recovery in, any lawsuit or proceeding that is based on any claims or rights released by this Agreement.  The Executive understands that this Release effectively releases and waives any right he or she might have to sue the Company or any of the Company Released Parties for any claim arising out of or related to his or her employment at the Company or any of the Company Released Parties, the separation of his employment, any agreements between the Company or the Company Released Parties and the Executive, or based on any other set of facts or events occurring prior to the Effective Date of this Agreement.  This release includes any and all claims concerning attorney fees, costs, and any and all other expenses related to the claims released herein.  Provided, however, that this release and waiver shall not apply to any rights which, by law, may not be waived or to rights and claims that arise after the effective date of this Release.

 

4.   The Company and the Executive acknowledge and agree that the release contained in Paragraph 3 does not, and shall not be construed to, release or limit the scope of any existing obligation of the Company and/or any of its Subsidiaries or Affiliates (i) to fail to pay any amounts or benefits pursuant to Section 2 of the Severance Agreement or with respect to the Executive’s rights as a shareholder or equity-award holder of the Company, or (ii) to the Executive and his eligible, participating dependents or beneficiaries under any existing group welfare (excluding severance), equity, or retirement plan of the Company in which the Executive and/or such dependents are participants.

 

5.   The Executive acknowledges that Section 3 of this Release includes a waiver or any rights and claims arising under the Age Discrimination in Employment Act of 1967, as amended, and the Older Workers Benefit Protection Act.  The Executive acknowledges that the consideration that he or she is receiving in exchange for this waiver of the rights and claims specified in this Section 3 of this Release exceeds anything of value to which he or she is already entitled.  The Executive acknowledges that he or she has been provided at least 21 days (or, if applicable, 45 days) to review the Release and has been advised to review it with an attorney of his or her choice.  In the event the Executive elects to sign this Release prior to this 21 day period (or, if applicable, the 45 day period), he or she agrees that it is a knowing and voluntary waiver of his or her right to wait the full 21 days (or, if applicable, the full 45 days).  The Executive further understands that he or she has 7 days after the signing hereof to revoke it by so notifying the Company in writing, such notice to be received by the Secretary of the Company within the 7 day period.  The Executive further acknowledges that he or she has carefully read this Release, knows and understands its contents and its binding legal effect.  The Executive acknowledges that by signing this Release, he or she does so of his or her own free will and act and that it is his or her intention that he or she be legally bound by its terms.

 

It is the intention of the parties in executing this Release that this Release shall be effective as a full and final accord and satisfaction and mutual release of and from all liabilities, disputes, claims and matters covered under this Release, known or unknown, suspected or unsuspected.

 

6.   By executing this Release, the Executive acknowledges that he or she: (i) is not relying upon any statements, understandings, representations, expectations, or agreements other than those expressly set forth in the Severance Agreement and this Release; (ii) has made his own investigation of the facts and is relying solely upon his own knowledge and, if applicable, the advice of his own legal counsel; (iii) knowingly waives any claim that this Release was induced by any misrepresentation or nondisclosure and any right to rescind or avoid this Release based upon presently existing facts, known or unknown, (iv) is entering into this Release freely and voluntarily; and (v) has carefully read and understood all of the provisions of this Release.  The Company and the Executive stipulate that the Company is relying upon these representations and warranties in entering into this Release.  These representations and warranties shall survive the execution of this Release.

 

  

15

  

7.   This Release shall become effective on the seventh (7th) day following the day that this Release becomes irrevocable under Paragraph 5.  All payments due to the Executive shall be payable in accordance with Section 2 of the Severance Agreement.

 

IN WITNESS WHEREOF, the parties have executed this Release on the date first above written.

 

 

 

	  	
KINDER MORGAN, INC.

  

	  
	  	
By:

	  	  
	 	  	 	
 

	  	
Name:

	  	  
	  	
Title:

	  	  

 

 

	  	
PARK SHAPER

  

	  
	  	 	  	  

 

 

 

  

16

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