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Exhibit 10.A
 
 

 
EL PASO CORPORATION –
EP ENERGY EMPLOYEE RETENTION PLAN
 
 
El Paso Corporation (the “Company”) considers it essential and in the best
interests of the Company and its Affiliates (as defined herein) to foster the
continuous dedication and employment of employees of the Company and its
Affiliates who primarily provide support to the Company’s exploration and
production business unit (the “EP Energy Business”), and to incentivize certain
key employees of the EP Energy Business to maximize the sale price of the EP
Energy Business in connection with the anticipated acquisition of the Company by
Kinder Morgan, Inc., a Delaware corporation (“Purchaser”).  Therefore, this El
Paso Corporation – EP Energy Employee Retention Plan (the “Retention Plan”) has
been established pursuant to Section 5.13(c) of the Agreement and Plan of Merger
among Purchaser, Sherpa Merger Sub, Inc., Sherpa Acquisition, LLC, Sirius
Holdings Merger Corporation, Sirius Merger Corporation and the Company, dated as
of October 16, 2011 (the “Transaction Agreement”), effective November 15, 2011
(the “Effective Date”).
 
Section 1. Certain Definitions.  Except as set forth otherwise in the preamble
to this Retention Plan or below, each capitalized but undefined term used in
this Retention Plan shall have the meaning set forth in the Transaction
Agreement.
 
(a) “Affiliate” means any entity controlled by, controlling or under common
control with the Company or Purchaser, as the case may be, as determined at the
applicable time.
 
(b) “Asset” means any asset of the Company or any of its Affiliates primarily
dedicated to the EP Energy Business designated as such in writing by the Company
(subject to Purchaser’s written approval, which approval shall not be
unreasonably withheld).
 
(c) “Award Letter” means the document distributed to each Participant by the
Company which sets forth the amount of the Participant’s Tier I Retention Bonus
and/or minimum percentage interest in the Tier II-A Pool or Tier II-B Pool, as
the case may be, that may be earned pursuant to the terms and conditions of this
Retention Plan.
 
(d) “Base Salary” means a Participant’s annualized base salary or wages as of
the Effective Date, taking into account, to the extent necessary to ensure that
the Tier I Pool shall provide no more than an aggregate of $20 million in Tier I
Retention Bonuses, any overtime calculations as required by law under applicable
wage and hour regulations.
 
(e) “Cause” means the occurrence of any of the following events as determined by
the Committee: (A) the willful and continued failure by a Participant to
substantially perform the Participant’s duties and obligations to the Company
(other than any such failure resulting from the Participant’s incapacity due to
physical or mental illness), (B) the engaging by a Participant in conduct that
is materially injurious to the Company or in material violation of written
Company or, following the Closing, Purchaser policy, (C) the conviction of a
Participant of, or pleading guilty or no contest by a Participant to, a felony
or a crime of theft, dishonesty, fraud or embezzlement, in each case involving
the property of the Company, or (D) the Participant’s misconduct or gross
negligence that prevents the Participant from performing the Participant’s
duties to the Company.
 
 
 

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(f) “Code” means the Internal Revenue Code of 1986, as amended, including
Treasury regulations promulgated thereunder.
 
(g) “Committee” means Brent J. Smolik (“Smolik”) or (i) prior to Closing, such
other person or persons as are appointed by the Compensation Committee of the
Board of Directors of the Company (the “Compensation Committee”) and (ii) at and
following Closing, and only if Smolik is no longer employed with the Company or
any of its Affiliates, such other person or persons as are appointed by the two
members of the Board of Directors of Purchaser appointed by the Company in
connection with the Transaction (the “Company Appointees”); provided that,
notwithstanding the above, as to Smolik’s own participation in this Retention
Plan, the Committee shall be (A) prior to Closing, the Compensation Committee
and (B) at and following Closing, the Company Appointees.
 
(h) “Early Sale Date” means the date that is thirty (30) calendar days after the
Closing Date.
 
(i) “Full Release” means a general release of claims in a form determined by the
Committee (subject to the Purchaser’s prior written approval, which shall not be
unreasonably withheld) against the Company, Purchaser, and their respective
Affiliates, successors, assigns, officers, directors, and representatives.
 
(j) “Gross Sale Proceeds” means the sum of (A) any cash or the fair market value
of other assets received by the Company, Purchaser, or any of their respective
Affiliates in consideration for the sale or other disposition of all or any
portion of the Assets on or prior to the Tier II Designated Date, whether
occurring before, on, or after the Closing Date, including for this purpose any
debt of the Company, Purchaser, or any of their respective Affiliates which is
assumed by the buyer or transferee of any Asset in connection with such sale or
disposition, and (B) free cash flow generated by the Assets for the period
commencing on the Closing Date and ending on the earlier of (1) the Tier II
Designated Date and (2), as to any particular Asset, the date of its sale or
disposition.
 
(k) “Limited Release” means a release of claims in a form determined by the
Committee (subject to the Purchaser’s prior written approval, which shall not be
unreasonably withheld) against the Company, Purchaser, and their respective
Affiliates, successors, assigns, officers, directors, and representatives
providing that the payment of the Participant’s Retention Bonus (if any) is in
full satisfaction of all claims for payment against such parties arising out of,
relating to, or with respect to, the participation of such Participant in this
Retention Plan.
 
(l) “Officer” means any officer of the EP Energy Business as determined by the
Company.
 
(m) “Participant” means any Tier I Participant, Tier II-A Participant, or Tier
II-B Participant.
 
(n) “Retention Bonus” means a Tier I Retention Bonus and/or Tier II Retention
Bonus, as applicable.
 
(o) “Tier I Designated Date” means the earlier of (A) the first anniversary of
the Closing Date, (B) the earliest date upon which at least 85% of the Assets
have been sold or divested (calculated based on the relative values of the
Assets as determined by the Committee and subject to Purchaser’s prior written
approval, which shall not be unreasonably withheld), and (C) as to certain Tier
I Participants, the date upon which the particular Asset or, if such Participant
is assigned more than one Asset, the earliest date upon which the last of such
assigned Assets, for which such a Participant is, as of the date of the
Participant’s Award Letter (as designated in the Participant’s Award Letter),
assigned the responsibility to facilitate a sale or divestiture under this
Retention Plan is sold or divested.
 
 
 
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(p) “Tier II Designated Date” means the first anniversary of the Closing Date.
 
(q) “Tier I Participant” means any full-time employee of the EP Energy Business
(including, for the avoidance of doubt, any Tier II-B Participant but excluding,
for the avoidance of doubt, any Tier II-A Participant) selected for
participation in the Tier I Pool prior to the Effective Date by senior
management of the Company who manage the EP Energy Business in accordance with
Section 2, subject to Purchaser’s prior written confirmation of each such
employee’s full-time employment status, which confirmation shall not be
unreasonably withheld.
 
(r) “Tier II-A Participant” means any full-time employee of the EP Energy
Business who has certain skills necessary or helpful to facilitate the sale or
disposition of the Assets or is needed to continue to manage the Assets prior to
their sale or disposition and who is (A) an Officer selected for participation
in the Tier II-A Pool prior to the Effective Date by senior management of the
Company who manage the EP Energy Business or (B) a new hire or promoted EP
Energy Business employee designated to participate in the Tier II-A Pool on or
after the Effective Date by senior management of the Company who manage the EP
Energy Business (in each case of (A) and (B) subject to prior written approval
by Purchaser, which approval shall not be unreasonably withheld), in each case
in accordance with Section 2.
 
(s) “Tier II-B Participant” means any full-time employee of the EP Energy
Business (including, for the avoidance of doubt, any Tier I Participant who is
not a Tier II-A Participant) who has certain skills necessary or helpful to
facilitate the sale or disposition of the Assets or is needed to continue to
manage the Assets prior to their sale or disposition and who is (A) a key
employee (excluding an Officer) selected for participation in the Tier II-B Pool
prior to the Effective Date by senior management of the Company who manage the
EP Energy Business or (B) a new hire or promoted EP Energy Business employee
designated to participate in the Tier II-B Pool on or after the Effective Date
by senior management of the Company who manage the EP Energy Business (in each
case of (A) and (B) subject to prior written approval by Purchaser, which
approval shall not be unreasonably withheld), in each case in accordance with
Section 2.
 
(t) “Tier I Pool” means the retention bonus pool established pursuant to Section
3(a) of this Retention Plan.
 
(u) “Tier II-A Pool” means the retention bonus pool established pursuant to
Section 3(b) of this Retention Plan, which provides for an aggregate value of
Tier II Retention Bonuses eligible to be earned by Tier II-A Participants in
amounts set forth in Exhibit A.
 
(v) “Tier II-B Pool” means the retention bonus pool established pursuant to
Section 3(c) of this Retention Plan, which provides for an aggregate value of
Tier II Retention Bonuses eligible to be earned by Tier II-B Participants in
amounts set forth in Exhibit B.
 
 
 
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(w) “Tier I Retention Bonus” means the amount identified as the Tier I Retention
Bonus in each Tier I Participant’s Award Letter.
 
(x) “Tier II Retention Bonus” means, subject to the terms and conditions of
Section 3(b) or 3(c), as the case may be, the retention bonus award opportunity
(expressed as a minimum percentage interest in the Tier II-A Pool or Tier II-B
Pool, as the case may be; provided, that notwithstanding anything in Sections
3(b) or 3(c) to the contrary, the minimum percentage interests shall be subject
to prior written approval by Purchaser, which approval shall not be unreasonably
withheld) designated by senior management of the Company who manage the EP
Energy Business and identified as the Tier II Retention Bonus in each Tier II-A
Participant’s or Tier II-B Participant’s Award Letter, as the case may be.
 
(y) “Transaction” means the indirect acquisition of the Company by Purchaser
pursuant to the terms and conditions of the Transaction Agreement.
 
Section 2. Participation.  Each full-time employee of the Company or any of its
Affiliates who primarily provides support for the EP Energy Business shall
become a Participant and be eligible to receive a Tier I Retention Bonus or Tier
II Retention Bonus (or both, as the case may be) upon (i) being selected by
senior management of the Company who manage the EP Energy Business as a Tier I
Participant, Tier II-A Participant, or Tier II-B Participant (or both a Tier I
Participant and a Tier II-B Participant), subject to the prior written approval
or confirmation of Purchaser, as applicable, and (ii) receiving an Award Letter
from the Company.
 
                        Section 3. Tier I Pool and Tier II Pool Retention
Bonuses.
 
(a) Tier I Pool.
 
(1) Amount and Allocation.  The Tier I Pool shall provide an aggregate of $20
million in Tier I Retention Bonuses to Tier I Participants.  Each Tier I
Participant’s Tier I Retention Bonus shall equal an amount (as set forth in the
Participant’s Award Letter) equal to the product of (A) $20 million and (B) a
fraction, the numerator of which is such Tier I Participant’s Base Salary and
the denominator of which is the sum of all Tier I Participants’ Base
Salaries.  For the avoidance of doubt, the Committee may correct any scrivener’s
errors in the Tier I Retention Bonuses set forth in the Award Letters for Tier I
Participants pursuant to its administrative powers.
 
(2) Payment.  Each Tier I Participant’s Tier I Retention Bonus shall be earned
on the Tier I Designated Date and, subject to Section 12, paid in a single lump
sum on or as soon as practicable after (but not later than seventy-four (74)
calendar days after) the Tier I Designated Date, subject to the Tier I
Participant’s continuous active employment with the Company or any of its
Affiliates from the Effective Date through the Tier I Designated Date (except as
provided otherwise in Section 4(b)).
 
(3) Forfeitures.  Except as provided otherwise in Section 4(b), if a Tier I
Participant’s employment is terminated for any reason prior to the Tier I
Designated Date, such Participant’s Tier I Retention Bonus shall be forfeited in
its entirety and the Tier I Pool shall be reduced by such Tier I Retention
Bonus.
 
 
 
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(b) Tier II-A Pool.
 
(1) Amount and Allocation.
 
(A) Funding.  The Tier II-A Pool shall provide Tier II-A Participants with the
opportunity to receive payments in respect of Tier II Retention Bonuses in
amounts that are contingent upon the level of attainment of Gross Sale Proceeds,
with the amount of the Tier II-A Pool being determined in accordance with
Exhibit A.  A sale or other disposition of at least 85% of the Assets
(calculated based on the relative values of the Assets as determined by the
Committee and subject to the Purchaser’s prior written approval, which shall not
be unreasonably withheld) on or prior to the Early Sale Date shall result in an
additional amount being added to the Tier II-A Pool, as set forth in Exhibit A.
 
(B) Interest in Pool; Unallocated Amounts. Each Tier II-A Participant’s Tier II
Retention Bonus shall constitute an award opportunity (expressed as a minimum
percentage interest in the Tier II-A Pool) set forth in such Participant’s Award
Letter.  Each such Tier II-A Participant’s percentage interest in the Tier II-A
Pool may be increased after the Effective Date by senior management of the
Company who manage the EP Energy Business, subject to prior written approval
from Purchaser, which approval shall not be unreasonably withheld.  Any portion
of the Tier II-A Pool that remains unallocated as of the Tier II Designated Date
shall, without any action on behalf of the Company, Purchaser, or any
Participant, automatically be allocated on the Tier II Designated Date to Tier
II-A Participants in an amount, as to each Tier II-A Participant, equal to the
product of such portion and a fraction, the numerator of which is such Tier II-A
Participant’s Tier II Retention Bonus without regard to this sentence, and the
denominator of which is the sum of all Tier II Retention Bonuses allocated to
Tier II-A Participants without regard to this sentence (which, for the avoidance
of doubt, shall include such Tier II-A Participant’s Tier II Retention
Bonus).  Notwithstanding anything in this Section 3(b)(1)(B) to the contrary,
Tier II Retention Bonuses granted to Tier II-A Participants may not, in the
aggregate, exceed 100% of the Tier II-A Pool and, to the extent that the
aggregate Tier II Retention Bonuses granted to Tier II-A Participants exceed
100% of the Tier II-A Pool, either (i) each Tier II-A Participant’s Tier II
Retention Bonus shall, automatically and without any action on behalf of such
Tier II-A Participant, be proportionately adjusted downward such that,
immediately after such adjustment, the aggregate Tier II Retention Bonuses
granted to Tier II-A Participants equal 100% of the Tier II-A Pool or (ii) with
respect to any scrivener’s errors, the Committee may correct such errors
pursuant to its administrative powers so that the aggregate Tier II Retention
Bonuses granted to Tier II-A Participants equal 100% of the Tier II-A Pool.
 
(2) Payment.  Each Tier II-A Participant’s Tier II Retention Bonus shall be
earned on the Tier II Designated Date and, subject to Section 12, payment (if
any) of each Tier II Retention Bonus shall be made in a single lump sum on or as
soon as practicable after (but not later than seventy-four (74) calendar days
after) the Tier II Designated Date, subject to the Tier II-A Participant’s
continuous active employment with the Company or any of its Affiliates from the
Effective Date through the Tier II Designated Date (except as provided otherwise
in Section 4(b)).
 
 
 
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(3) Forfeitures.  Except as provided otherwise in Section 4(b), if the
employment of any Tier II-A Participant is terminated for any reason prior to
the Tier II Designated Date, the amount (if any) of such Participant’s Tier II
Retention Bonus shall be forfeited in its entirety and shall, without any action
on behalf of the Company, Purchaser, or any Participant, automatically be
allocated on the Tier II Designated Date to each other Tier II-A Participant in
an amount equal to the product of the forfeited amount in respect of such Tier
II Retention Bonus and a fraction, the numerator of which is each such Tier II-A
Participant’s Tier II Retention Bonus without regard to this sentence, but after
the application of the third sentence of Section 3(b)(1)(B), and the denominator
of which is the sum of all Tier II Retention Bonuses allocated to Tier II-A
Participants without regard to this sentence, but after application of the third
sentence of Section 3(b)(1)(B) (which, for the avoidance of doubt, shall include
such Tier II-A Participant’s Tier II Retention Bonus).
 
(c) Tier II-B Pool.
 
(1) Amount and Allocation.
 
(A) Funding.  The Tier II-B Pool shall provide Tier II-B Participants with the
opportunity to receive payments in respect of Tier II Retention Bonuses in
amounts that are contingent upon the level of attainment of Gross Sale Proceeds,
with the amount of the Tier II-B Pool being determined in accordance with
Exhibit B.  A sale or other disposition of at least 85% of the Assets
(calculated based on the relative values of the Assets as determined by the
Committee and subject to the Purchaser’s prior written approval, which shall not
be unreasonably withheld) on or prior to the Early Sale Date shall result in an
additional amount being added to the Tier II-B Pool, as set forth in Exhibit B.
 
(B) Interest in Pool; Unallocated Amounts. Each Tier II-B Participant’s Tier II
Retention Bonus shall constitute an award opportunity (expressed as a minimum
percentage interest in the Tier II-B Pool) set forth in such Participant’s Award
Letter.  Each such Tier II-B Participant’s percentage interest in the Tier II-B
Pool may be increased after the Effective Date by senior management of the
Company who manage the EP Energy Business, subject to prior written approval
from Purchaser, which approval shall not be unreasonably withheld.  Any portion
of the Tier II-B Pool that remains unallocated as of the Tier II Designated Date
shall, without any action on behalf of the Company, Purchaser, or any
Participant, automatically be allocated on the Tier II Designated Date to Tier
II-B Participants in an amount, as to each Tier II-B Participant, equal to the
product of such portion and a fraction, the numerator of which is such Tier II-B
Participant’s Tier II Retention Bonus without regard to this sentence, and the
denominator of which is the sum of all Tier II Retention Bonuses allocated to
Tier II-B Participants without regard to this sentence (which, for the avoidance
of doubt, shall include such Tier II-B Participant’s Tier II Retention
Bonus).  Notwithstanding anything in this Section 3(c)(1)(B) to the contrary,
Tier II Retention Bonuses granted to Tier II-B Participants may not, in the
aggregate, exceed 100% of the Tier II-B Pool and, to the extent that the
aggregate Tier II Retention Bonuses granted to Tier II-B Participants exceed
100% of the Tier II-B Pool, either (i) each Tier II-B Participant’s Tier II
Retention Bonus shall, automatically and without any action on behalf of such
Tier II-B Participant, be proportionately adjusted downward such that,
immediately after such adjustment, the aggregate Tier II Retention Bonuses
granted to Tier II-B Participants equal 100% of the Tier II-B Pool or (ii) with
respect to any scrivener’s errors, the Committee may correct such errors
pursuant to its administrative powers so that the aggregate Tier II Retention
Bonuses granted to Tier II-B Participants equal 100% of the Tier II-B Pool.
 
 
 
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(2) Payment.  Each Tier II-B Participant’s Tier II Retention Bonus shall be
earned on the Tier II Designated Date and, subject to Section 12, payment (if
any) of each Tier II Retention Bonus shall be made in a single lump sum on or as
soon as practicable after (but not later than seventy-four (74) calendar days
after) the Tier II Designated Date, subject to the Tier II-B Participant’s
continuous active employment with the Company or any of its Affiliates from the
Effective Date through the Tier II Designated Date (except as provided otherwise
in Section 4(b)).
 
(3) Forfeitures.  Except as provided otherwise in Section 4(b), if the
employment of any Tier II-B Participant is terminated for any reason prior to
the Tier II Designated Date, the amount (if any) of such Participant’s Tier II
Retention Bonus shall be forfeited in its entirety and shall, without any action
on behalf of the Company, Purchaser, or any Participant, automatically be
allocated on the Tier II Designated Date to each other Tier II-B Participant in
an amount equal to the product of the forfeited amount in respect of such Tier
II Retention Bonus and a fraction, the numerator of which is each such Tier II-B
Participant’s Tier II Retention Bonus without regard to this sentence, but after
the application of the third sentence of Section 3(c)(1)(B), and the denominator
of which is the sum of all Tier II Retention Bonuses allocated to Tier II-B
Participants without regard to this sentence, but after the application of the
third sentence of Section 3(c)(1)(B) (which, for the avoidance of doubt, shall
include such Tier II-B Participant’s Tier II Retention Bonus).
 
Section 4. Termination of Employment.
 
(a) In General.  Except as set forth in Section 4(b), a Participant must be
continuously employed from the Effective Date through the Tier I Designated Date
or the Tier II Designated Date in order to receive payment in respect of the
Participant’s Tier I Retention Bonus or Tier II Retention Bonus, as the case may
be.
 
(b) Termination Without Cause.  Notwithstanding anything to the contrary in
Sections 3 and 4(a), if a Participant’s employment is terminated by the Company
or any of its Affiliates (including for this purpose, for the avoidance of
doubt, Purchaser or any of its Affiliates) without Cause on or after the Closing
Date but prior to payment of the Participant’s Tier I Retention Bonus (if any)
or Tier II Retention Bonus (if any), as the case may be, the Participant (or the
Participant’s beneficiary, in the event of the Participant’s death after such
termination but prior to such payment) will (subject to Section 12) receive
payment of the Participant’s Tier I Retention Bonus (if any) or Tier II
Retention Bonus (if any), as the case may be, in a single lump sum (A) in the
case of a Tier I Retention Bonus, on or as soon as reasonably practicable after
(but not later than seventy-four (74) calendar days after) the effective date of
the termination of the Participant’s employment, and (B) in the case of a Tier
II Retention Bonus, on or as soon as practicable after (but not later than
seventy-four (74) calendar days after) the Tier II Designated Date.
 
           Section 5. Administration.  Except as otherwise herein expressly
provided, the Committee shall construe, interpret, and administer this Retention
Plan and shall, subject to the limitations described in Section 9, have the
power to amend or terminate this Retention Plan.  The Committee shall (upon the
advice of its advisers, including its financial advisers and legal counsel, and
senior management) make any valuations and calculations pursuant to this
Retention Plan in good faith and may at any time adopt, amend, modify, suspend
or terminate such rules, regulations, policies or practices as it shall
determine to be necessary or appropriate for the administration of, or the
performance of its respective responsibilities under, this Retention Plan, so
long as any such action is consistent with the provision of benefits to
Participants as described herein.  The determinations and interpretations under
this Retention Plan of the Committee need not be uniform and may be made by it
selectively among Participants (whether or not any Participants are similarly
situated).  The Committee may delegate any of its powers or authorities
hereunder to any person or group of its choosing.
 
 
 
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           Section 6. Successors.
 
(a) The right to payments pursuant to this Retention Plan is personal to each
Participant and, without the prior written consent of the Company, shall not be
assignable by a Participant other than by will or the laws of descent and
distribution.  A Participant’s rights under this Retention Plan shall inure to
the benefit of and be enforceable by a Participant’s legal representatives.
 
(b) This Retention Plan shall inure to the benefit of and be binding upon the
Company and its successors and assigns, including but not limited to Purchaser.
 
           Section 7. No Claim or Right to Retention Plan Participation; No
Right to Continued Employment.  No employee or other person shall have any claim
or right to be selected as a Participant under this Retention Plan.  Nothing
contained in this Retention Plan shall (A) confer upon any Participant any right
with respect to continued employment with the Company, Purchaser, or any of
their respective Affiliates or successors and assigns, (B) interfere with the
right of the Company, Purchaser, or any of their respective Affiliates or
successors and assigns to terminate a Participant’s employment at any time, or
(C) confer upon any Participant or other person any claim or right to any
payment under this Retention Plan except in accordance with the terms hereof.
 
          Section 8. Payments to Persons Other Than the Participant.  If the
Committee shall find that any Participant to whom any amount is payable under
this Retention Plan is unable to care for his or her affairs because of
incapacity, illness or accident or is a minor, or in the event of the
Participant’s death after a termination of the Participant’s employment without
Cause, then any payment due to such person (unless a prior claim therefor has
been made by a duly appointed legal representative) may, if the Committee so
directs, be paid to his or her spouse, a child, a relative, an institution
maintaining or having custody of such person, beneficiary, estate or any other
person deemed by the Committee, in its sole discretion, to be a proper recipient
on behalf of such person otherwise entitled to payment.  Any such payment shall
be a complete discharge of the liability of the Company therefor.
 
          Section 9. Termination, Expiration or Amendment of Retention
Plan.  The Committee may amend this Retention Plan at any time, provided that,
subject to Section 10, (i) no amendment which is adverse in any manner to a
Participant shall be effective without the written consent of such Participant
and (ii) this Retention Plan may be suspended or terminated only with the
written consent of all Participants who are employed by the Company or any of
its Affiliates at the time of such suspension or termination and who have not
been paid, or forfeited the right to receive, their Tier I Retention Bonus and
Tier II Retention Bonus.  Notwithstanding anything in this Retention Plan to the
contrary, Section 13 of this Retention Plan shall survive the termination or
expiration of this Retention Plan.
 
 
 
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          Section 10. Code Section 409A.  This Retention Plan is intended to
comply with Section 409A of the Code or an exemption thereto, and, to the extent
necessary in order to avoid the imposition of a penalty tax on any Participant
under Section 409A of the Code, payments may be made under this Retention Plan
only upon an event and in a manner permitted by Section 409A of the Code.  For
purposes of Section 409A of the Code, the right to a series of installment
payments under this Retention Plan shall be treated as a right to a series of
separate payments.  Any payments or benefits that are provided upon a
termination of a Participant’s employment shall, to the extent necessary in
order to avoid the imposition of a penalty or other tax on the Participant under
Section 409A of the Code, not be provided unless such termination constitutes a
“separation from service” within the meaning of Section 409A of the Code.  Any
payments that qualify for the “short-term deferral” exception or another
exception under Section 409A of the Code shall be paid under the applicable
exception.  Notwithstanding anything in this Retention Plan to the contrary, if
a Participant is considered a “specified employee” (as defined in Section 409A
of the Code), any amounts paid under this Retention Plan shall, to the extent
necessary in order to avoid the imposition of a penalty tax on the Participant
under Section 409A of the Code, be delayed for six months after the
Participant’s “separation from service” within the meaning of Section 409A of
the Code, and the accumulated amounts shall be paid in a lump sum within ten
days after the end of such six-month period.  If the Participant dies during the
six-month postponement period prior to the payment of amounts, the amounts the
payment of which is deferred pursuant to the immediately preceding sentence
shall be paid to the personal representative of the Participant’s estate within
sixty (60) calendar days after the date of the Participant’s
death.  Notwithstanding any provision of this Retention Plan to the contrary,
the Company may, after consultation with Purchaser, take any action, without the
consent of any Participant, which it determines is necessary to avoid the
imposition of penalty or other taxes under Section 409A of the Code with respect
to any amount awarded pursuant to this Retention Plan.
 
          Section 11. Funding.  This Retention Plan is not intended to be
subject to the Employee Retirement Income Security Act of 1974, as amended.  (A)
Participants shall have no right, title, or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its obligations
under this Retention Plan, (B) nothing contained in this Retention Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship between the Company and any
Participant, beneficiary, legal representative, or any other person, (C) to the
extent that any person acquires a right to receive payments from the Company
under this Retention Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company, and (D) all payments to be made
hereunder shall be paid from the general funds of the Company, no special or
separate fund shall be established, and no segregation of assets shall be made
to assure payment of such amounts.
 
          Section 12. Receipt and Release; Full Settlement.  In order to receive
payment of a Retention Bonus, each Participant (or, to the extent applicable,
such other person who is entitled to a Retention Bonus pursuant to Section 8)
must execute (and, where applicable, not revoke) a release of claims according
to the following terms and conditions.
 
 
 
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(a) Subject to Section 12(b) (if applicable), payment of any Participant’s
Retention Bonus shall be subject to the Participant (or, to the extent
applicable, such other person who is entitled to a Retention Bonus pursuant to
Section 8), no later than fifty-seven (57) calendar days after the Tier I
Designated Date and/or Tier II Designated Date, as the case may be, and
according to the terms and conditions of the Participant’s Award Letter, signing
and delivering to the Company, and not revoking within the applicable seven
(7)-calendar-day revocation period, a Full Release; provided that in each case
the Committee must, by no later than two (2) business days after the Tier I
Designated Date and/or Tier II Designated Date, as the case may be, deliver the
Full Release to the Participant (or, to the extent applicable, such other person
who is entitled to a Retention Bonus pursuant to Section 8).
 
(b) Notwithstanding anything to the contrary in Section 12(a), if (i) a
Participant’s employment is terminated by the Company or any of its Affiliates
(including for this purpose, for the avoidance of doubt, Purchaser or any of its
Affiliates) without Cause on or after the Closing Date but prior to payment of
the Participant’s Retention Bonus (if any), and (ii) the Participant, in
connection with such termination, signs and delivers to the Company, and does
not revoke within the applicable seven (7)-calendar-day revocation period, a
Full Release or other general release of claims reasonably acceptable to
Purchaser, then payment of the Participant’s Retention Bonus (if any) shall be
subject to the Participant (or, to the extent applicable, such other person who
is entitled to a Retention Bonus pursuant to Section 8), no later than
fifty-seven (57) calendar days after (A) in the case of a Tier I Retention
Bonus, the effective date of the termination of the Participant’s employment,
and (B) in the case of a Tier II Retention Bonus, the Tier II Designated Date,
and in each case according to the terms and conditions of the Participant’s
Award Letter, signing and delivering to the Company a Limited Release; provided
that in each case the Committee must, by no later than two (2) business days
after the effective date of the termination of the Participant’s employment,
deliver the Limited Release to the Participant (or, to the extent applicable,
such other person who is entitled to a Retention Bonus pursuant to Section 8).
 
(c) Notwithstanding anything to the contrary contained in Sections 3 or 4 of
this Retention Plan, if the seventy-four (74)-calendar-day period during which
payment of the Participant’s Tier II Retention Bonus (if any) must be made
begins in one taxable year of the Participant and ends in the immediately
subsequent taxable year of the Participant, such Participant’s Tier II Retention
Bonus (if any) shall be paid in the immediately subsequent taxable year and
otherwise in accordance with the terms of Section 12 of this Retention Plan.
 
(d) The Company’s obligation to make the payments provided for in this Retention
Plan and otherwise to perform its obligations hereunder shall not be affected by
any set-off, counterclaim, recoupment, defense, or other claim, right or action
that the Company or any of its Affiliates may have against a Participant or
others.  In no event shall a Participant be obligated to seek other employment,
or take any other action by way of mitigation of the amounts payable to the
Participant under any of the provisions of this Retention Plan, and such amounts
shall not be reduced whether or not the Participant obtains other employment.
 

 
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          Section 13. Governing Law; Dispute Resolution.
 
(a) This Retention Plan shall be governed by and construed in accordance with
the laws of the State of Texas, without reference to the principles of conflict
of laws thereof or those of any other jurisdiction which could cause the
application of the law of any jurisdiction other than the State of Texas.
 
(b) Any action to enforce any of the provisions of this Retention Plan shall be
brought in any state or federal court located in the State of Texas.  The
parties consent to the jurisdiction of such courts and to the service of process
in any manner provided by Texas law.  Each party irrevocably waives any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such court and any claim that such
suit, action or proceeding brought in such court has been brought in an
inconvenient forum and agrees that service of process in accordance with the
foregoing sentences shall be deemed in every respect effective and valid
personal service of process upon such party.
 
(c) TO THE FULLEST EXTENT PERMITTED BY LAW, THE COMPANY AND EACH PARTICIPANT
WAIVE ANY AND ALL RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS RETENTION PLAN AND THE APPLICABLE AWARD LETTER.  THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
RETENTION PLAN AND THE APPLICABLE AWARD LETTER, INCLUDING WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS.  THE COMPANY AND EACH PARTICIPANT ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT TO THE PARTICIPANT’S PARTICIPATION IN THIS
RETENTION PLAN, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN CONNECTION WITH
THE PARTICIPANT’S PARTICIPATION IN THIS RETENTION PLAN AND THAT EACH WILL
CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.  THE COMPANY
AND EACH PARTICIPANT FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS
WAIVER WITH ITS OR HIS OR HER, AS THE CASE MAY BE, LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS RETENTION
PLAN OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE RETENTION PLAN,
INCLUDING THE APPLICABLE AWARD LETTER.  IN THE EVENT OF LITIGATION, THIS
RETENTION PLAN MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
 

 
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Section 14. Miscellaneous.
 
(a) The captions of this Retention Plan are not part of the provisions hereof
and shall have no force or effect.
 
(b) All notices and other communications hereunder shall be in writing and shall
be given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, or by nationally recognized overnight
courier, addressed as follows:
 
If to a Participant:
 
At the most recent home address on file at the Company.
 
If to the Company:
 
El Paso Corporation
1001 Louisiana Street
Houston, TX 77002
Attention:  General Counsel
Facsimile: (713) 420-5043
 
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.  Notice and communications shall be effective
when actually received by the addressee.
 
(c) No Tier I Retention Bonus or Tier II Retention Bonus shall count toward, be
substituted in lieu of, or be considered in determining payments or benefits due
to a Participant under any other plan, program or agreement of the Company,
Purchaser or any of their respective Affiliates.
 
(d) The invalidity or unenforceability of any provision of this Retention Plan
shall not affect the validity or enforceability of any other provision of this
Retention Plan.
 
(e) The Company will withhold from any amounts payable under this Retention Plan
such United States federal, state or local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
 
(f) The Participant’s or the Company’s failure to insist upon strict compliance
with any provision of this Retention Plan or the failure to assert any right the
Participant or the Company may have hereunder, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Retention Plan.
 
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