Document:

Kinder Morgan, Inc. Exhibit 10.3

Exhibit 10.3

KINDER MORGAN, INC.

NON-EMPLOYEE DIRECTOR

NONQUALIFIED STOCK OPTION AGREEMENT

     This Nonqualified Stock Option
Agreement ("Option Agreement") is between Kinder Morgan, Inc., a Kansas
corporation (the "Company"), and , BOD NAME ("Optionee"), who
agree as follows:

     Section 1.  Introduction.  The
Company has heretofore adopted the Kinder Morgan, Inc. Non-Employee Directors Stock Awards
Plan (the "Plan") for the purpose of promoting the interests of the Company and
its stockholders by aligning the compensation of the non-employee members of the Company's
Board of Directors (the "Board") with shareholder interests. The Company, acting
through the Committee (as defined in the Plan), has determined that its interests will be
advanced by the issuance to Optionee of a nonqualified stock option under the Plan.

     Section 2.  Option.  Subject
to the terms and conditions contained herein, the Company hereby grants to Optionee the
right and option ("Option") to purchase from the Company # OF SHARES
shares of the Company's common stock, $5.00 par value ("Common Stock"), at a
price of $________ per share. 

     Section 3.  Option
Period.  The Option herein granted may be exercised by Optionee in whole or in
part at any time during a ten year period (the "Option Period") beginning on _______________________________
(the "Date of Grant"). Notwithstanding the foregoing, this Option may not be
exercised until the first business day after the annual stockholders meeting held in
_______ ("Vesting Date"), and only if Optionee is a non-employee director of the
Company on the Vesting Date. If Optionee is not a non-employee director of the Company on
the Vesting Date, this Option shall immediately expire and shall not be exercisable.

     Section 4.  Procedure
for Exercise.  The Option herein granted may be exercised by the delivery by
Optionee of notice to the General Counsel or Vice President of Human Resources and
Administration of the Company setting forth the number of shares of Common Stock with
respect to which the Option is being exercised. Promptly upon notice, Optionee will remit
(i) cash, wire transfer of immediately available funds, cashier's check, bank draft, or
postal or express money order payable to the order of the Company, (ii) certificates
representing "mature shares" of Common Stock theretofore owned by Optionee duly
endorsed for transfer to the Company, or (iii) any combination of the preceding, equal in
value to the aggregate exercise price. For purposes of this Option Agreement, "mature
shares" means shares of Common Stock that Optionee has held free of any
transferability restrictions or risk of forfeiture for at least six (6) months. Unless the
Company consents to the contrary, the Notice shall be accompanied by a representation by
Optionee that all shares purchased are being acquired for investment and not with a view
to, or for resale in connection with, any distribution of said shares. This Option shall
be deemed to have been exercised immediately prior to the close of business on the date
(i) notice of such exercise and (ii) payment in full of the exercise price for the number
of share for which Options are being exercised, are both received by the Company and
Optionee shall be treated for all purposes as the record holder of such shares of Common
Stock as of such date.

     As promptly as practicable after
receipt of such notice and payment, the Company shall deliver to Optionee certificates for
the number of shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that such
delivery shall be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificates in the United States mail, addressed to
Optionee at the address specified pursuant to this Section 4 or otherwise credits a
brokerage account designated by Optionee.

     Section 5.  Termination
of Board Membership.  If Optionee's membership on the Board is terminated
for any reason other than his or her death, this Option may be exercised by Optionee at
any time prior to the end of the calendar year containing the Date of Grant, or within
twelve (12) months after the termination of Board membership, whichever is longer (but in
no event after the expiration of ten (10) years from the Date of Grant) with respect to
all or any part of the number of shares remaining subject to the Option. At the end of
such period, this Option shall expire. If Optionee's membership on the Board is terminated
by reason of his or her death, this Option may be exercised by his or her estate or the
person or persons who acquire the right to exercise this Option by bequest or inheritance
at any time within one (1) year after the date of death to the extent Optionee was
entitled to exercise the Option at the time of his or her death (but in no event after the
expiration of a period of ten (10) years from the Date of Grant) with respect to all or
any part of the number of shares remaining subject to the Option. At the end of such
period, this Option shall expire.

     Section 6.  Transferability.  This
Option shall not be transferable otherwise than by will or the laws of descent and
distribution; provided, however, that if Optionee obtains the approval of the Committee
after making a request to the Committee in writing, Optionee may transfer or assign this
Option for estate planning purposes or to a charity. Any heir, legatee or transferee of
Optionee shall take rights herein granted subject to the terms and conditions hereof. No
transfer of this Option shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and a copy of such evidence as the
Committee may deem necessary to establish the validity of the transfer and the acceptance
by the transferee or transferees of the terms and conditions hereof. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of, or be subject to execution,
attachment or similar process, this Option, or of any right hereunder, in a manner not
permitted by the Plan or this Option Agreement, this Option and all rights hereunder shall
immediately become null and void.

     Section 7.  No Rights
as Stockholder.  Optionee shall have no rights as a stockholder with respect
to any shares of Common Stock covered by this Option Agreement until the Option is
exercised by written notice and accompanied by payment as provided in Section 4 of this
Option Agreement.

     Section 8.  Extraordinary
Corporate Transactions.  The existence of outstanding Options shall not
affect in any way the right or power of the Company or its stockholders to make or
authorize any or all adjustments, recapitalizations, reorganizations, exchanges or other
changes in the Company's capital structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead
of or affecting the Common Stock or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or business, or
any other corporate act or 

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proceedings, whether of a similar character or otherwise. In the event
of any merger, consolidation or other reorganization of the Company with any other
corporation or corporations in which the Company is not the survivor, there shall be
substituted for each share of Common Stock then subject to this Option, the number and
kind of shares of stock, or other securities into which each outstanding share of Common
Stock shall be converted by such merger, consolidation or reorganization. In the event of
any such adjustment, the purchase price per share of this Option shall be proportionately
adjusted as necessary.

     Section 9.  Changes
in Capital Structure.  If the outstanding shares of Common Stock or other
securities of the Company, or both, for which the Option is then exercisable shall at any
time be changed or exchanged by declaration of a stock dividend, stock split or
combination of shares, the number and kind of shares of Common Stock or other securities
subject to the Option, and the purchase price, shall be appropriately and equitably
adjusted so as to maintain the proportionate number of shares or other securities without
changing the aggregate exercise price.

     Section 10.  Compliance
With Securities Laws.  Upon the acquisition of any shares pursuant to the
exercise of the Option herein granted, Optionee (or any person acting under
Section 6) will enter into such written representations, warranties and agreements as
the Company may reasonably request in order to comply with applicable securities laws or
with this Option Agreement. If at any time the Board determines, in its discretion, that
the listing, registration or qualification of the shares subject to this Option upon any
securities exchange or under any state or federal law, or the consent or approval of any
governmental regulatory body, is necessary or desirable as a condition of, or in
connection with, the issue or purchase of shares thereunder, this Option may not be
exercised in whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained and the same shall have been free of any
conditions not acceptable to the Board.

     Section 11.  Compliance
With Laws.  Notwithstanding any of the other provisions hereof, Optionee
agrees that he or she will not exercise the Option granted hereby, and that the Company
will not be obligated to issue any shares pursuant to this Option Agreement, if the
exercise of the Option or the issuance of such shares of Common Stock would constitute a
violation by Optionee or by the Company of any provision of any law or regulation of any
governmental authority.

     Section 12.  Withholding
of Tax.  To the extent that the exercise of this Option or the disposition
of shares of Common Stock acquired by exercise of this Option results in compensation
income to Optionee for federal or state income tax purposes, Optionee shall be solely
responsible to meet its obligation under applicable tax laws or regulations.

     Section 13.  No Right
to Board Membership.  Optionee shall be considered to be in service as a
director so long as he or she remains a member of the Board. Any questions as to whether
and when there has been a termination of Board membership and the cause of such
termination shall be determined by the Committee, and its determination shall be final.
Nothing contained herein shall be construed as conferring upon Optionee the right to
continue service as a director.

     Section 14.  Resolution
of Disputes.  As a condition of the granting of the Option hereby, Optionee
and Optionee's heirs, personal representatives, successors and transferees agree that 

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any dispute or disagreement which may arise hereunder shall be
determined by the Committee in its sole discretion and judgment, and that any such
determination and any interpretation by the Committee of the terms of this Option
Agreement shall be final and shall be binding and conclusive, for all purposes, upon the
Company, Optionee, and Optionee's heirs, personal representatives, successors and
transferees.

     Section 15.  Legends
on Certificate.  The certificates representing the shares of Common Stock
purchased by exercise of the Option will be stamped or otherwise imprinted with legends in
such form as the Company or its counsel may require with respect to any applicable
restrictions on sale or transfer and the stock transfer records of the Company will
reflect stop-transfer instructions with respect to such shares.

     Section 16.  Notices.  Every
notice hereunder shall be in writing and shall be given by registered or certified mail.
All notices of the exercise of any Option hereunder shall be directed to Kinder Morgan,
Inc., One Allen Center, 500 Dallas Street, Suite 1000, Houston, Texas 77002, Attention:
General Counsel or Vice President of Human Resources and Administration. Any notice given
by the Company to Optionee directed to Optionee at the address on file with the Company
shall be effective to bind Optionee and any other person who shall acquire rights
hereunder. The Company shall be under no obligation whatsoever to advise Optionee of the
existence, maturity or termination of any of Optionee's rights hereunder and Optionee
shall be deemed to have familiarized himself or herself with all matters contained herein
and in the Plan which may affect any of Optionee's rights or privileges hereunder.

     Section 17.  Construction
and Interpretation.  Whenever the term "Optionee" is used herein
under circumstances applicable to any other person or persons to whom this Option, in
accordance with the provisions of Section 6 hereof, may be transferred, the word
"Optionee" shall be deemed to include such person or persons.

     Section 18.  Agreement
Subject to Plan.  This Option Agreement is subject to the Plan. The terms
and provisions of the Plan (including any subsequent amendments thereto) are hereby
incorporated herein by reference thereto. In the event of a conflict between any term or
provision contained herein and a term or provision of the Plan, the applicable terms and
provisions of the Plan will govern and prevail. All definitions of words and terms
contained in the Plan shall be applicable to this Option Agreement.

     Section 19.  Binding
Effect.  This Option Agreement shall be binding upon and inure to the
benefit of any successors to the Company and all persons lawfully claiming under Optionee
as provided herein.

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     Section 20.  Entire
Agreement; Amendment.  This Option Agreement and any other agreements and
instruments contemplated by this Option Agreement contain the entire agreement of the
parties, and this Option Agreement may be amended only in writing signed by both parties.

     IN WITNESS WHEREOF, this
Nonqualified Stock Option Agreement has been executed as of the _____ day of ___________,
________.

		KINDER MORGAN, INC.

 

		/s/
    Joseph Listengart

		    Joseph Listengart

        VP,
    General Counsel

      

          
		  
		Print Name

		  

          
		  
		Signature

		  

        
		  
		Social Security Number

  

-5-Exhibit 10.34
                                                                   -------------

SMSC MANAGEMENT INCENTIVE PLAN FORM OF AGREEMENT

The body of this form of agreement applies to Executive Officers. Some Executive
Officers in the plan are principally devoted to specific product areas and their
incentives  are based on a  combination  of  corporate  and product  area goals.
Differences in application of the plan to those Executive Officers are explained
in the footnotes to this form of agreement.

This memorandum will serve as your formal  Management  Incentive Bonus Plan (the
"Plan")  document  for SMSC's (the  "Company's"  or  "Company")  fiscal year ___
ending February 28, ____. Your total "At-Plan"  annual incentive bonus target is
_____. There are two components to your Plan:

1.  Quarterly  incentives  based  on  the  Company  attaining  its  year-to-date
financial  performance  goals. (1)
2. A Year-End  incentive based on the Company  achieving its strategic  business
goals (2), which can be adjusted based on individual performance.

1.  Financial  Performance  Incentives  (50%  to 67% of  total  incentive  bonus
opportunity, all paid in RSAs(3))

Up to one-fourth of the financial  performance incentive bonus is earned in each
fiscal quarter if the Company attains its quarterly  year-to-date  business plan
revenue and operating income goals.(4)  Revenue and operating income  attainment
are separate and weighted  equally for the purpose of calculating  the quarterly
bonus award. Therefore, half of the quarterly incentive bonus target is based on
revenue attainment and half is based on operating income attainment.

For quarterly bonuses to be awarded,  actual year-to-date  revenue and operating
income  must  be  equal  to or  greater  than  certain  thresholds  relative  to
year-to-date  business plan goals.  The spread between the quarterly  thresholds
and  year-to-date  goals vary from one quarter to another.  Sixty percent of the
quarterly  bonus is awarded if the  year-to-date  revenue (or operating  income)
goal  is  achieved  at the  threshold  amount  and  increases  from  60% to 100%
proportionately up to full goal attainment.

Any  portion  of the  quarterly  incentive  not  earned for a quarter is carried
forward  for  possible  payment at the end of the year if the  actual  full year
performance is at or above the full year  threshold.  Any bonus amounts that are
carried  forward are awarded on a pro-rata  basis at year end if the actual full
year revenue (or operating income) attainment is above the threshold amount, but
only to the extent that the total of the incentives awarded,  and to-be-awarded,
is less than the pro-rata  percentage  calculation  for the entire year.  Earned
bonuses are awarded in the form of Restricted  Stock Awards  (RSAs),  which vest
over three years (25/25/50% per year).

2. Strategic  Incentive (33% to 50% of total  incentive bonus  opportunity,  all
paid in cash(3))

This year-end incentive bonus is based on achieving  strategic goals established
by the Board of Directors and may be adjusted for  individual  performance.  Any
earned annual incentive is paid in cash.

Other Terms and Conditions:

   -    For purposes of this plan,  actual results may exclude  certain  special
        items that are not indicative of the normal operating  performance.
   -    Earned cash  incentives will be determined and paid following the public
        release of the Company's year-end financial results.
   -    Earned quarterly RSAs are generally  granted three days after the public
        release of the Company's  quarterly financial results and are subject to
        approval by the Compensation Committee.
   -    No incentive  will be paid to you if you are not employed by the Company
        at the time when incentives are approved and ready for payment.
   -    The Company  reserves  the right to amend the plan in any way and at any
        time upon written notice to you.
   -    Any dispute  over any part of the plan will be judged and decided by the
        Company's compensation committee.

(1) Participants within a product line have 1/3rd of their quarterly incentives
based on the Company attaining its year-to-date financial performance goals and
2/3rds based on their product line attaining its year-to-date financial
performance goals.
(2) Participants  within product lines may be measured on product line strategic
goals.
(3) Half  paid in cash and half  paid of RSAs in the  cases of the CEO's and the
CFO's award.
(4) Participants within product lines have 1/12th of their financial performance
incentive bonus based on the Company  attaining its financial  performance goals
in each fiscal  quarter  and 1/6th based on their  product  line  attaining  its
financial performance goals in each fiscal quarter.

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