EMPLOYMENT AGREEMENT
This Agreement (the "Agreement") is made and entered into on April 17,
1997, but effective as of February 14, 1997 (the "Effective Date"), between
KINDER XXXXXX X.X., INC., (the "Company"), a Delaware corporation, and XXXXXXX
X. XXXXXX ("Employee"), who currently resides at Four Seasons Place, 0000
Xxxxxxxx Xxxxxx, Xxx. 0000, Xxxxxxx, Xxxxx 00000.
1. Agreement to Employ. The Company hereby employs Employee and
Employee hereby accepts employment upon the terms and conditions hereinafter
set forth. Employee will initially serve as the Vice Chairman of the Company
and will perform such other duties as may be designated or assigned to him from
time to time by the Company's Board of Directors and which are consistent with
the executive-level responsibilities currently assigned to Employee. Employee
agrees to devote a majority of his time to the discharge of the affairs of the
Company; but, the Company acknowledges and agrees that Employee has outside
business interests which will also require a portion of Employee's time and
attention.
2. Compensation.
a. Salary. For all services to be rendered by Employee, the Company
shall pay Employee a salary at the rate of $200,000.00 per year,
in installments of equal frequency to the Company's standard payroll
practices. Salary payments shall be subject to withholding and other
applicable taxes (e.g., federal and state withholding, FICA, earnings
tax, etc.). The amount of salary due to Employee under this
Agreement for any period of time less than one (1) month shall be
prorated, based upon the number of days worked by Employee.
b. Salary Adjustments. The salary payable to Employee hereunder
will be adjusted on each anniversary of the Effective Date, by
increasing it in the same proportion that the "Consumer Price Index"
most recently published (as of such anniversary) by the United States
Department of Labor has increased in comparison to the Consumer Price
Index which had been most recently published by the Department of Labor
one (1) year earlier. The Company will notify Employee each year of the
amount of the CPI increase and Employee's salary for that year. No
decrease in Employee salary, as adjusted from time to time, will occur
as a result of the adjustments provided herein. The "Consumer Price
Index" shall mean the Consumer Price Index for Urban Wage Earners and
Clerical Workers, U.S. City Average, for all items, as promulgated by
the Bureau of Labor Statistics of the United States Department of Labor
(or if publication of such index is discontinued, any substantially
equivalent successor index).
3. Term. This Agreement shall be for a term commencing on the
Effective Date and continuing for an initial term of three (3)
years. The term of this Agreement shall be extended on each anniversary of
the Effective Date for an additional one (1) year period, such that as of
each anniversary of the Effective Date, there shall be three (3) years
remaining in the term of this Agreement.
4. Personnel Policies and Employee Benefits. The general personnel
policies of the Company will apply to Employee with the same force and effect
as to any other employee of the Company, except to the extent such general
personnel policies are inconsistent with the terms and provisions of this
Agreement, in which event, the terms and provisions of this Agreement shall
control. Such personnel policies shall include Employee's eligibility
for employee benefits, if any, such as insurance of any kind, including life,
medical and disability insurance, and similar employee benefits as the
Board of Directors of the Company determines, in its sole discretion, from
time to time. In the event that the Company's general personnel policies
provide benefits or compensation to the Company's employees such as vacation,
and Employee is given a similar or comparable benefit pursuant to this
Agreement, the benefit shall not be cumulative and Employee shall be entitled
only to the benefits conferred by this Agreement.
5. Termination of Employment by the Company.
a. Without Cause. The Company may terminate Employee's
employment under this Agreement at any time without cause; provided,
however, that in such event, the Company shall continue to pay Employee
salary as required (and as adjusted from time to time) pursuant to
Section 2 hereof as severance pay for the remaining unexpired term of
this Agreement, as it may have been extended from time to time pursuant
to Section 3 (the "Severance Period"). Although, as stated above,
the Company will continue to make salary payments to Employee during the
Severance Period following his termination without cause, Employee will
cease to be an employee of the Company as of the date notice of
termination is given and he will not receive or accrue any benefits of
employment after such termination of employment (e.g., life insurance,
health insurance (other than COBRA extension rights), disability insurance,
vacation accrual or other benefits provided pursuant to this Agreement
or otherwise in conjunction with Employee's employment).
b. With Cause. The Company may terminate Employee's employment
under this Agreement at any time for cause effective immediately upon
Notice of Termination. In the event the Company terminates this
Agreement for cause on the part of Employee, Employee shall receive
salary for the period to the date of his termination, but the Company
shall not be obligated to pay any salary or other compensation for any
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period of time after such termination. Employee shall not be entitled
to receive severance pay from the Company if his employment is
terminated for cause. For purposes of this Agreement, "cause" shall
mean the occurrence of any of the following events:
(i) A Grand Jury indictment or a prosecutorial information
(or any procedurally equivalent action) charging Employee with
illegal or fraudulent acts, criminal conduct or willful misconduct
relating to the activities of the Company;
(ii) A Grand Jury indictment or a prosecutorial information
(or any procedurally equivalent action) charging Employee with any
criminal acts involving moral turpitude having a material adverse
effect upon the Company;
(iii) Grossly negligent failure by Employee to perform his duties
in a manner which he knows, or has reason to know, to be in the
Company's best interests;
(iv) Bad faith refusal by Employee to carry out reasonable
instructions of the Board not inconsistent with the provisions of this
Agreement; or
(v) Material violation by the Employee of any of the covenants
and agreements contained in Section 1 hereof.
c. Death. If Employee dies during the term of this Agreement,
this Agreement shall terminate as of the date of such death and no
salary or severance pay will be paid for the period subsequent to
Employee's death.
d. Disability. The Company may terminate Employee's employment
under this Agreement at any time effective immediately upon written
Notice of Termination if Employee becomes "totally and permanently
disabled" (as hereinafter defined) so as to preclude Employee from
performing his duties hereunder. If so terminated, Employee shall be
entitled to receive: (i) the amount of any insurance proceeds payable to
Employee under disability insurance policies, if any, then maintained for
Employee's (and not the Company's) benefit; and (ii) salary through the
effective date of termination of employment. Employee shall be deemed
to be "totally and permanently disabled" (x) if Employee provides written
acknowledgement thereof (or if Employee is unable to give such
acknowledgement, it is provided by any adult member of his family),
(y) a qualified independent physician selected by the Company shall have
provided his opinion that Employee either (1) is permanently disabled,
or (2) is incapable of resuming substantially full performance of his
duties for the Company
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for a period of at least six (6) months after his initial disability,
or (z) Employee refuses to submit to an examination by an independent
physician selected by the Company for purposes of determining whether
a total and permanent disability has occurred.
6. Termination of Employment by Employee. Employee shall have the
right to terminate his employment at any time by providing at least
thirty (30) days' prior written Notice of Termination to the Company.
Following such termination, Employee shall receive salary for the period
through the date of termination, but the Company shall not be obligated
to pay any salary or compensation (including severance pay) for any period
of time after such termination.
7. Notice of Termination. Any termination of Employee's employment
by the Company pursuant to Section 5 or by Employee pursuant to Section 6
shall be communicated by written Notice of Termination to the other party
hereto. Said Notice shall be deemed to have been duly given when delivered
or mailed by United States certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Company:
Kinder Xxxxxx X.X., Inc.
0000 XxXxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
If to the Employee:
Xxxxxxx X. Xxxxxx
Four Seasons Place
0000 Xxxxxxxx Xxxxxx, Xxx. 0000
Xxxxxxx, Xxxxx 00000
or at such other address as either party may designate in
writing to the other.
8. Company Property; Confidentiality. Upon termination of this Agreement
for any reason whatsoever, Employee shall immediately deliver to the Company
any and all confidential, proprietary or other property, tangible or intangible,
of the Company. Employee agrees to maintain the confidentiality of all trade
secrets and proprietary and confidential information (collectively, the
"Confidential Information") of the Company, both during and subsequent to any
periods of employment with the Company, and Employee will not, without express
written authorization by the Company, directly or indirectly reveal or cause
or allow to be revealed any such Confidential Information to any
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person other than to the Company's employees who are authorized to receive
such Confidential Information in order to perform their duties for the Company,
nor will Employee use any such Confidential Information to the detriment of
the Company or other than in the course of his employment with the Company.
9. Intellectual Property. Any interest in patents, patent applications,
inventions, copyrights, developments and processes ("Inventions") which
Employee now or hereafter during the period Employee is employed by the
Company may own or develop relating to the fields in which the Company may
then be engaged shall belong to the Company; and forthwith upon request of the
Company, Employee shall execute all assignments and other documents and take
all such other action as the Company may reasonably request in order to vest
in the Company all his right, title and interest in and to the Inventions free
and clear of all liens, charges and encumbrances.
10. Key-Man Life Insurance. If requested by the Company, Employee shall
submit to such physical examinations and otherwise take such actions and execute
and deliver such documents as may be reasonably necessary to enable the
Company, at its expense and for its own benefit, to obtain life insurance
on the life of the Employee. The disposition of the proceeds of such policy
shall be in the sole discretion of the Company.
11. Restrictive Covenant.
a. Non-Competition. Employee agrees that while he remains in the
employ of the Company and for a period of twelve (12) months following
termination of such employment (whether such termination is effected
by Employee or the Company and whether with or without cause), Employee
will not anywhere in the United States, directly or indirectly, own,
manage, operate, join, contract or participate in the ownership,
management or control of or be employed by or be connected in any manner
with any business which is or may be competitive in any manner to the
business engaged in as of the date of such termination by the Company or
any partnership in which the Company is a general partner or any of the
direct or indirect subsidiaries or affiliates of such partnerships,
including, without limitation, Xxxxxx Xxxxxx Energy Partners, L.P.,
Xxxxxx Xxxxxx Operating L.P. "A", Xxxxxx Xxxxxx Operating L.P.
"B" and Xxxxxx Xxxxxx Natural Gas Liquids Corporation (collectively,
excluding the Company, the "Company Affiliates"). Notwithstanding the
foregoing, both during and subsequent to his employment with the Company,
Employee may: (i) own up to five percent (5%) of the outstanding equity
securities of any corporation, partnership or other business which is
listed upon a national stock exchange or traded in the over-the-counter
market, and (ii) continue his ownership, management, operation, control
and other participation with
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those businesses in which Employee is involved as of the Effective Date
and any additional businesses or opportunities which have been approved
by the Board of Directors of the Company or its Conflicts and Audit
Committee (or other appropriate committee of the Board of Directors).
b. Reformation. In the event any restriction contained in this
Section 11.a. should be considered by any court of competent jurisdiction
to be unenforceable because unreasonable either in length of time or area
to which said restriction applies, it is the intent of the parties hereto
that said court reduce and reform the provisions thereof so as to
apply to limits considered enforceable by said court.
c. Specific Performance. Recognizing that irreparable damage will
result to the Company and/or the Company Affiliates in the event of
breach of the covenants and assurances of Section 10.a. by Employee,
the Company and/or the Company Affiliates shall be entitled to an
injunction to be issued by any court of competent jurisdiction enjoining
and restraining Employee and each and every person, firm, company,
corporation, partnership or other entity acting in concert or
participating with Employee from the continuation of such breach, and in
addition thereto, Employee shall pay to the Company and the Company
Affiliates all ascertainable damages, including costs and reasonable
attorneys' fees and expenses, sustained by the Company and the Company
Affiliates by reason of the breach of said covenants and assurances.
12. Expense Reimbursement. Employee shall be reimbursed by the Company
for the reasonable and necessary business expenses incurred by Employee in the
discharge of his duties, subject to the Company's standard policies and
procedures related to expense reimbursement and approval thereof.
13. Waiver. Failure of either party to demand strict compliance with
any of the terms, covenants or conditions hereof shall not be deemed a waiver
of such term, covenant or condition, nor shall any waiver or relinquishment by
either party of any right or power hereunder at any one time or more times
be deemed a waiver or relinquishment of such right or power at any other
time or times.
14. Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
15. Governing Law; Binding Effect. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and shall be
binding upon the parties hereto, their heirs, executors, administrators,
successors and assigns.
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16. Entire and Final Agreement. This Agreement shall supersede any and
all agreements of employment, oral or written (including correspondence,
memoranda, term sheets, etc.), heretofore existing and contains the entire
agreement of the parties with respect to the subject matter hereof. This
Agreement may not be modified orally, but only by an agreement in writing,
signed by the party against whom the enforcement of any waiver, change,
modification, extension or discharge is sought.
17. Assignment. This Agreement is not assignable by any party hereto
without the written consent of the other parties hereto.
18. Section Headings. The section headings contained in this Agreement
are inserted for purposes of convenience only and shall not affect the meaning
or interpretation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
on its behalf and Employee has hereunto set his hand the day and year first
above written.
EMPLOYEE: COMPANY:
KINDER XXXXXX X.X., INC.
/s/ Xxxxxxx x. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
__________________________ ___________________________
Xxxxxxx X. Xxxxxx
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