Exhibit 4.3
KINDER MORGAN ENERGY
PARTNERS, L.P.
COMMON UNIT COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
(Effective as of January 18, 2005)
1. Purpose
of the Plan. Kinder Morgan Energy Partners, L.P.
(the "Partnership"), as a limited partnership, has a general
partner rather than a board of directors. Through the operation of
its limited partnership agreement and the Delegation of Control
Agreement among the Partnership, Kinder Morgan G.P., Inc. (the
"General Partner"), Kinder Morgan Management, LLC (the "Company")
and others, the board of directors of the Company (the "Board")
functions as the board of the Partnership. The Kinder Morgan Energy
Partners, L.P. Common Unit Compensation Plan for Non-Employee
Directors (the "Plan") is intended to promote the interests of the
Partnership and its unitholders by aligning the compensation of the
non-employee members of the Board with unitholders' interests.
Because the success of the Company is dependent on its operation
and management of the Partnership and its resulting performance,
the Plan is also expected to align the compensation of the
non-employee members of the Board with the interests of the
Company's shareholders.
2.
Compensation Committee. The Plan shall be
administered by the Compensation Committee of the Board (the
"Committee"), which shall be constituted so as to permit the Plan
to comply with Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Subject to the provisions of the
Plan, the Committee shall be authorized to interpret the Plan, to
establish, amend and rescind such rules and regulations as it deems
necessary for the proper administration of the Plan, and to make
all other determinations necessary or advisable for its
administration. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan in the manner
and to the extent it shall deem desirable to carry it into effect.
The interpretation by the Committee of the Plan shall be conclusive
upon all participants.
3.
Eligible Participants . Only directors of the
Company who are not salaried employees of the Company or of an
affiliate of the Company (each, a "Non-Employee Director") are
eligible to participate in the Plan.
4. Units
Subject to the Plan . The aggregate number of the
Partnership's common units representing limited partner interests
("Common Units") which may be issued under the Plan shall not
exceed 100,000, subject to adjustment as provided in Paragraph 7.
Common Units issued under the Plan shall be authorized and unissued
Common Units. The Partnership shall register with the Securities
and Exchange Commission the issuance of the Common Units subject to
the Plan.
5.
Awards. The compensation to be paid to Non-Employee
Directors is fixed by the Board, generally annually. That
compensation is expected to include an annual retainer payable in
cash. It also may include other cash compensation ("Cash
Compensation") that may be used as provided in this Plan. In lieu
of receiving such Cash Compensation in cash, a Non-Employee
Director may elect to receive such Cash Compensation in the form of
Common Units as provided herein. Such election shall be evidenced
by an agreement (the "Common Unit
Compensation Agreement") between the Partnership and such
Non-Employee Director, which agreement shall contain the terms and
conditions of such award. Such election shall be made generally at
or around the first Board meeting in January of each calendar year
and will be effective for the entire calendar year. A Non-Employee
Director shall make a new election each calendar year.
6. Number
of Common Units to be Issued . The number of Common
Units to be issued to a Non-Employee Director electing to receive
his or her Cash Compensation in the form of Common Units shall
equal the Cash Compensation awarded, divided by the closing price
of the Common Units on the New York Stock Exchange on the day the
Cash Compensation is awarded (such price, the "Fair Market Value"),
rounded down to the nearest fifty (50) Common Units. The Common
Units shall be issuable as specified in the Common Unit
Compensation Agreement. A Non-Employee Director electing to receive
his or her Cash Compensation in the form of Common Units shall
receive cash (the "Cash Payment") equal to the difference between
(i) the Cash Compensation awarded to such Non-Employee Director and
(ii) the number of Common Units to be
