exhibit10a.htm


    
      
        

      

    

     

     

    Exhibit
10.A

     

     

     

     

     

     

     

     

     

     

     

     

    
 

    El
Paso Corporation

     

     

    2005
Omnibus Incentive Compensation Plan

     

     

    (as
amended and restated)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

     

    

      TABLE OF
CONTENTS

    

    
       

      
        	
                SECTION
      1

              	 
    	
                ESTABLISHMENT
      AND OBJECTIVES

              	
                1

              
	 
    	 
    	 
    	 
    
	
                SECTION
      2

              	 
    	
                DEFINITIONS

              	
                1

              
	
                2.1

              	 
    	
                Award

              	
                1

              
	
                2.2

              	 
    	
                Award
      Agreement

              	
                1

              
	
                2.3

              	 
    	
                Beneficiary

              	
                2

              
	
                2.4

              	 
    	
                Board of
      Directors

              	
                2

              
	
                2.5

              	 
    	
                Cash
      Awards

              	
                2

              
	
                2.6

              	 
    	
                Cause

              	
                2

              
	
                2.7

              	 
    	
                Change in
      Capitalization

              	
                2

              
	
                2.8

              	 
    	
                Change in
      Control

              	
                2

              
	
                2.9

              	 
    	
                Code

              	
                4

              
	
                2.10

              	 
    	
                Common
      Stock

              	
                5

              
	
                2.11

              	 
    	
                Covered
      Employee

              	
                5

              
	
                2.12

              	 
    	
                Effective
      Date

              	
                5

              
	
                2.13

              	 
    	
                Employer

              	
                5

              
	
                2.14

              	 
    	
                Exchange
      Act

              	
                5

              
	
                2.15

              	 
    	
                Fair Market
      Value

              	
                5

              
	
                2.16

              	 
    	
                Good
      Reason

              	
                5

              
	
                2.17

              	 
    	
                Incentive
      Award

              	
                6

              
	
                2.18

              	 
    	
                Incentive
      Stock Option

              	
                6

              
	
                2.19

              	 
    	
                Management
      Committee

              	
                6

              
	
                2.20

              	 
    	
                Maximum
      Annual Employee Grant

              	
                7

              
	
                2.21

              	 
    	
                Nonqualified
      Option

              	
                7

              
	
                2.22

              	 
    	
                Option
      Price

              	
                7

              
	
                2.23

              	 
    	
                Other
      Stock-Based Award

              	
                7

              
	
                2.24

              	 
    	
                Participant

              	
                7

              
	
                2.25

              	 
    	
                Performance
      Goals

              	
                7

              
	
                2.26

              	 
    	
                Performance
      Period

              	
                9

              
	
                2.27

              	 
    	
                Performance
      Shares

              	
                9

              
	
                2.28

              	 
    	
                Performance
      Units

              	
                 9

              
	
                2.29

              	 
    	
                Plan
      Administrator

              	
                10

              
	
                2.30

              	 
    	
                Prior
      Plans

              	
                10

              
	
                2.31

              	 
    	
                Restricted
      Stock

              	
                10

              
	
                2.32

              	 
    	
                Restricted
      Stock Units

              	
                10

              
	
                2.33

              	 
    	
                Restriction
      Period

              	
                10

              
	
                2.34

              	 
    	
                Rule
      16b-3

              	
                10

              
	
                2.35

              	 
    	
                Section 16
      Insider

              	
                10

              
	
                2.36

              	 
    	
                Section
      162(m)

              	
                10

              
	
                2.37

              	 
    	
                Subsidiary

              	
                10

              


      

       

       

       

      
        
          
          

        

        
          i

          
            

          

        

        
          
          

        

         

         

      

      
        	 
    	 
    	 
    	 
    
	
                SECTION
      3

              	 
    	
                ADMINISTRATION

              	
                11

              
	
                3.1

              	 
    	
                Plan
      Administrator

              	
                11

              
	
                3.2

              	 
    	
                Authority of
      Plan Administrator

              	
                11

              
	
                3.3

              	 
    	
                Indemnification
      of Plan Administrator

              	
                12

              
	
                3.4

              	 
    	
                Delegation to
      Management Committee

              	
                12

              
	 
    	 
    	 
    	 
    
	
                SECTION
      4

              	 
    	
                ELIGIBILITY

              	
                13

              
	 
    	 
    	 
    	 
    
	
                SECTION
      5

              	 
    	
                SHARES
      AVAILABLE FOR THE PLAN

              	
                13

              
	
                5.1

              	 
    	
                Aggregate
      Shares

              	
                13

              
	
                5.2

              	 
    	
                Limitations

              	
                14

              
	
                5.3

              	 
    	
                Adjustments
      in Authorized Shares

              	
                14

              
	
                5.4

              	 
    	
                Effect of
      Certain Transactions

              	
                15

              
	 
    	 
    	 
    	 
    
	
                SECTION
      6

              	 
    	
                STOCK
      OPTIONS

              	
                16

              
	
                6.1

              	 
    	
                Grant of
      Options

              	
                16

              
	
                6.2

              	 
    	
                Special
      Provisions Applicable to Incentive Stock Options

              	
                16

              
	
                6.3

              	 
    	
                Terms of
      Options

              	
                17

              
	 
    	 
    	 
    	 
    
	
                SECTION
      7

              	 
    	
                STOCK
      APPRECIATION RIGHTS

              	
                21

              
	
                7.1

              	 
    	
                Grant of
      Stock Appreciation Rights

              	
                21

              
	
                7.2

              	 
    	
                Exercise of
      Stock Appreciation Rights

              	
                21

              
	
                7.3

              	 
    	
                Special
      Provisions Applicable to Stock Appreciation Rights

              	
                21

              
	 
    	 
    	 
    	 
    
	
                SECTION
      8

              	 
    	
                PERFORMANCE
      SHARES AND PERFORMANCE UNITS

              	
                22

              
	
                8.1

              	 
    	
                Grant of
      Performance Shares and Performance Units

              	
                22

              
	
                8.2

              	 
    	
                Value of
      Performance Shares and Performance Units

              	
                22

              
	
                8.3

              	 
    	
                Payment of
      Performance Shares and Performance Units

              	
                23

              
	
                8.4

              	 
    	
                Form and
      Timing of Payment

              	
                23

              
	
                8.5

              	 
    	
                Nontransferabilty
      of Performance Shares and Performance Units

              	
                23

              
	 
    	 
    	 
    	 
    
	
                SECTION
      9

              	 
    	
                RESTRICTED
      STOCK

              	
                24

              
	
                9.1

              	 
    	
                Grant of
      Restricted Stock

              	
                24

              
	
                9.2

              	 
    	
                Restriction
      Period

              	
                24

              
	
                9.3

              	 
    	
                Other
      Restrictions

              	
                24

              
	
                9.4

              	 
    	
                Voting
      Rights; Dividends and Other Distributions

              	
                25

              
	
                9.5

              	 
    	
                Issuance of
      Shares; Settlement of Awards

              	
                25

              
	 
    	 
    	 
    	 
    
	
                SECTION
      10

              	 	
                RESTRICTED
      STOCK UNITS 

              	
                25

              
	
                10.1

              	 
    	
                Grant of
      Restricted Stock Units

              	
                25

              
	
                10.2

              	 
    	
                Restriction
      Period

              	
                25

              
	
                10.3

              	 
    	
                Other
      Restrictions

              	
                26

              
	
                10.4

              	 
    	
                Dividend
      Equivalents

              	
                26

              
	
                10.5

              	 
    	
                Issuance of
      Shares; Settlement of Awards

              	
                26

              


      

       

       

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

         

         

      

      
        	 
    	 
    	 
    	 
    
	
                SECTION
      11

              	 	
                INCENTIVE
      AWARDS 

              	
                27

              
	
                11.1

              	 
    	
                Incentive
      Awards

              	
                27

              
	
                11.2

              	 
    	
                Performance
      Goal Certification

              	
                27

              
	
                11.3

              	 
    	
                Discretion to
      Reduce Awards; Participant’s Performance

              	
                27

              
	
                11.4

              	 
    	
                Required
      Payment of Incentive Awards

              	
                27

              
	
                11.5

              	 
    	
                Restricted
      Stock Election

              	
                28

              
	
                11.6

              	 
    	
                Nontransferability
      of Incentive Awards

              	
                28

              
	 
    	 
    	 
    	 
    
	
                
                  SECTION
      12

                

              	 	
                CASH AWARDS
      AND OTHER STOCK-BASED AWARDS 

              	
                29

              
	
                12.1

              	 
    	
                Grant of Cash
      Awards

              	
                29

              
	
                12.2

              	 
    	
                Other
      Stock-Based Awards

              	
                29

              
	
                12.3

              	 
    	
                Value of Cash
      Awards and Other Stock-Based Awards

              	
                29

              
	
                12.4

              	 
    	
                Payment of
      Cash Awards and Other Stock-Based Awards

              	
                29

              
	
                12.5

              	 
    	
                Transferability
      of Cash Awards and Other Stock-Based Awards

              	
                29

              
	 
    	 
    	 
    	 
    
	
                SECTION
      13

              	 
    	
                TERMINATION
      OF EMPLOYMENT

              	
                30

              
	 
    	 
    	 
    	 
    
	
                SECTION
      14

              	 
    	
                EFFECT OF A
      CHANGE IN CONTROL

              	
                30

              
	 
    	 
    	 
    	 
    
	
                SECTION
      15

              	 
    	
                REGULATORY
      APPROVALS AND LISTING

              	
                31

              
	 
    	 
    	 
    	 
    
	
                SECTION
      16

              	 
    	
                TERM OF
      PLAN

              	
                31

              
	 
    	 
    	 
    	 
    
	
                SECTION
      17

              	 
    	
                GENERAL
      PROVISIONS

              	
                32

              
	
                17.1

              	 
    	
                Forfeiture
      Events

              	
                32

              
	
                17.2

              	 
    	
                No Individual
      Rights

              	
                32

              
	
                17.3

              	 
    	
                Other
      Compensation

              	
                33

              
	
                17.4

              	 
    	
                Nontransferabilty

              	
                33

              
	
                17.5

              	 
    	
                Leaves of
      Absence

              	
                33

              
	
                17.6

              	 
    	
                Transfers

              	
                33

              
	
                17.7

              	 
    	
                Unfunded
      Obligations

              	
                33

              
	
                17.8

              	 
    	
                Beneficiaries

              	
                34

              
	
                17.9

              	 
    	
                Governing
      Law

              	
                34

              
	
                17.10

              	 
    	
                Satisfaction
      of Tax Obligations

              	
                34

              
	
                17.11

              	 
    	
                Participants
      in Foreign Jurisdictions

              	
                35

              
	 
    	 
    	 
    	 
    
	
                SECTION
      18

              	 	COMPLIANCE WITH RULE 16b-3,
      SECTION 162(m) AND SECTION
      409A	
                35

              
	
                18.1

              	 
    	
                Rule 16b-3 of
      the Exchange Act and Section 162(m) of the Code

              	
                35

              
	
                18.2

              	 
    	
                Section 409A
      of the Code

              	
                36

              


      

       

       


      
        
           


        

        
          iii 


          
            

          

        

        
           


        

      


      


      
        	
                SECTION
      19

              	 
    	
                AMENDMENT,
      TERMINATION OR DISCONTINUANCE OF THE PLAN 
    

              	
                36

              
	
                19.1

              	 
    	
                Amendment of
      Plan

              	
                36

              
	
                19.2

              	 
    	
                Termination
      or Suspension of Plan

              	
                36

              
	 
    	 
    	 
    	 
    
	
                SECTION
      20

              	 
    	
                DEFERRAL
      ELECTIONS

              	
                36

              


      

       

       

       

       

      
 

    

    
      
        
           


        

        
          iv 


          
            

          

        

        
           


        

      

    

     

    
 

    El
Paso Corporation

    2005
Omnibus Incentive Compensation Plan

    (as
amended and restated)

     

     

    SECTION
1    ESTABLISHMENT
AND OBJECTIVES

     

    El Paso Corporation
(hereinafter referred to as the “Company”) hereby establishes an
incentive compensation plan to be known as the “El Paso Corporation 2005 Omnibus
Incentive Compensation Plan” (hereinafter referred to as the
“Plan”).  The Plan first became effective on May 26, 2005 (the
“Effective Date”).  The Plan, as amended and restated, will become
effective on May 6, 2009 if it is approved by the Company’s stockholders at the
2009 annual meeting.  The Plan shall remain in effect as provided in
Section 16 hereof.

     

    The objectives of
the Plan are to promote the interests of the Company and its stockholders by
strengthening its ability to attract and retain salaried employees of the
Company and its Subsidiaries (as defined below) by furnishing suitable
recognition of their ability and industry, to align their interests and efforts
to the long-term interests of the Company’s stockholders, and to provide them
with a direct incentive to achieve the Company’s strategic and financial
goals.  In furtherance of these purposes, the Plan provides for the
grant of stock options, stock appreciation rights, Restricted Stock, Restricted
Stock Units, Performance Shares, Performance Units, Incentive Awards, Cash
Awards, and Other Stock-Based Awards to Participants in accordance with the
terms and conditions set forth below.

     

     

     

    SECTION
2    DEFINITIONS

     

    Unless otherwise required by the
context, the following terms when used in the Plan shall have the meanings set
forth in this Section 2:

     

    2.1    Award

     

    An “Award” granted under the Plan
means any stock option, stock appreciation right, Restricted Stock, Restricted
Stock Unit, Performance Share, Performance Unit, Incentive Award, Cash Award or
Other Stock-Based Award, in each case payable in cash or in shares of Common
Stock as may be designated by the Plan Administrator.

     

    2.2    Award
Agreement

     

    The “Award Agreement” is the written
agreement setting forth the terms and conditions applicable to an Award granted
under the Plan (which, in the discretion of the Plan Administrator, need not be
countersigned by a Participant).  The Plan Administrator may, in its
discretion, provide for the use of electronic, internet or other non-paper Award
Agreements.

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

       

    

    2.3    Beneficiary

     

    The person or persons designated by
the Participant pursuant to Section 6.3(f) or Section 17.8 of this Plan to whom
payments are to be paid pursuant to the terms of the Plan in the event of the
Participant’s death.

     

    2.4    Board
of Directors

     

    The Board of Directors of the
Company.

     

    2.5    Cash
Awards

     

    As defined in Section
12.1.

     

    2.6    Cause

     

    A termination of a
Participant by his or her Employer shall be for “Cause” if the Employer
determines that the Participant has (i) failed to substantially perform his or
her duties to the Employer’s satisfaction (other than a failure resulting from
the Participant’s incapacity due to physical or mental illness) which has not
been cured to the Employer’s satisfaction; (ii) willfully engaged in conduct
which is injurious to the Company or any of its affiliates, monetarily or
otherwise; (iii) has been convicted of any felony, or a misdemeanor involving
moral turpitude; or (iv) willfully engaged in conduct in violation of the
Company’s policies or Code of Business Conduct. Whether a Participant has been
terminated for Cause will be determined by the Employer in the exercise of its
discretion.

     

     

    2.7    Change
in Capitalization

     

    A “Change in Capitalization” means
any increase or reduction in the number of shares of Common Stock, any change
(including, without limitation, in the case of a spin-off, dividend or other
distribution in respect of shares, a change in value) in the shares of Common
Stock or any exchange of shares of Common Stock for a different number or kind
of shares of Common Stock or other securities of the Company or another
corporation, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of warrants, rights
or debentures, stock dividend, stock split or reverse stock split, cash
dividend, property dividend, combination or exchange of shares, repurchase of
shares, change in corporate structure or otherwise.

     

    2.8    Change
in Control

     

    A “Change in Control” shall mean the
occurrence of any of the following after the Effective Date:

     

     

     

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

       

    

    (a)           An
acquisition (other than directly from the Company) of any voting securities of
the Company (the “Voting Securities”) by any “Person” (as the term “person” is
used for purposes of Section 13(d) or 14(d) of the Exchange Act), immediately
after which such Person has “Beneficial Ownership” (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of more than twenty percent (20%) of
(1) the then-outstanding shares of Common Stock (or any other securities into
which such shares of Common Stock are changed or for which such shares of Common
Stock are exchanged) (the “Shares”) or (2) the combined voting power of the
Company’s then-outstanding Voting Securities; provided,
however,
that in determining whether a Change in Control has occurred pursuant to this
paragraph (a), the acquisition of Shares or Voting Securities in a “Non-Control
Acquisition” (as hereinafter defined) shall not constitute a Change in
Control.  A “Non-Control Acquisition” shall mean an acquisition by (i)
an employee benefit plan (or a trust forming a part thereof) maintained by (A)
the Company or (B) any corporation or other Person the majority of the voting
power, voting equity securities or equity interest of which is owned, directly
or indirectly, by the Company (for purposes of this definition, a “Related
Entity”), (ii) the Company or any Related Entity, or (iii) any Person in
connection with a “Non-Control Transaction” (as hereinafter
defined);

     

    (b)           The
individuals who, as of the Effective Date, are members of the Board of Directors
(the “Incumbent Board of Directors”), cease for any reason to constitute at
least a majority of the members of the Board of Directors or, following a Merger
(as hereinafter defined), the board of directors of (x) the corporation
resulting from such Merger (the “Surviving Corporation”), if fifty percent (50%)
or more of the combined voting power of the then-outstanding voting securities
of the Surviving Corporation is not Beneficially Owned, directly or indirectly,
by another Person (a “Parent Corporation”) or (y) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation; provided,
however,
that, if the election, or nomination for election by the Company’s common
stockholders, of any new director was approved by a vote of at least two-thirds
of the Incumbent Board of Directors, such new director shall, for purposes of
the Plan, be considered a member of the Incumbent Board of Directors; and provided,
further,
however,
that no individual shall be considered a member of the Incumbent Board of
Directors if such individual initially assumed office as a result of an actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors (a “Proxy Contest”), including by reason of
any agreement intended to avoid or settle any Proxy Contest; or

     

    (c)           The
consummation of:

     

    (i)           A
merger, consolidation or reorganization (1) with or into the Company or
(2) in which securities of the Company are issued (a “Merger”), unless such
Merger is a “Non-Control Transaction.”  A “Non-Control Transaction”
shall mean a Merger in which:

     

    (A)           the
stockholders of the Company immediately before such Merger own directly or
indirectly immediately following such Merger at least fifty percent (50%) of the
combined voting power of the outstanding voting securities of (x) the
Surviving Corporation, if there is no Parent Corporation or (y) if there is one
or more than one Parent Corporation, the ultimate Parent
Corporation;

     

     

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

       

    

    (B)           the
individuals who were members of the Incumbent Board of Directors immediately
prior to the execution of the agreement providing for such Merger constitute at
least a majority of the members of the board of directors of (x) the
Surviving Corporation, if there is no Parent Corporation, or (y) if there is one
or more than one Parent Corporation, the ultimate Parent Corporation;
and

     

    (C)           no
Person other than (1) the Company, (2) any Related Entity, or (3) any
employee benefit plan (or any trust forming a part thereof) that, immediately
prior to the Merger, was maintained by the Company or any Related Entity, or (4)
any Person who, immediately prior to the Merger had Beneficial Ownership of
twenty percent (20%) or more of the then outstanding Shares or Voting
Securities, has Beneficial Ownership, directly or indirectly, of twenty percent
(20%) or more of the combined voting power of the outstanding voting securities
or common stock of (x) the Surviving Corporation, if fifty percent (50%) or more
of the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) if there is one or more than one Parent Corporation,
the ultimate Parent Corporation;

     

    (ii)           A
complete liquidation or dissolution of the Company; or

     

    (iii)           The
sale or other disposition of all or substantially all of the assets of the
Company and its Subsidiaries taken as a whole to any Person (other than (x) a
transfer to a Related Entity, (y) a transfer under conditions that would
constitute a Non-Control Transaction, with the disposition of assets being
regarded as a Merger for this purpose or (z) the distribution to the
Company’s stockholders of the stock of a Related Entity or any other
assets).

     

    Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur solely because any
Person (the “Subject Person”) acquired Beneficial Ownership of more than the
permitted amount of the then outstanding Shares or Voting Securities as a result
of the acquisition of Shares or Voting Securities by the Company which, by
reducing the number of Shares or Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject Persons;
provided,
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Shares or Voting Securities by the Company
and, after such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Shares or Voting Securities and such
Beneficial Ownership increases the percentage of the then outstanding Shares or
Voting Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.

     

    2.9    Code

     

    The Internal Revenue Code of 1986,
as amended and in effect from time to time, and the temporary or final
regulations of the Secretary of the U.S. Treasury adopted pursuant to the
Code.

     

     

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

       

    

    2.10    Common
Stock

     

    The Common Stock of the Company, $3
par value per share, or such other class of shares or other securities as may be
applicable pursuant to the provisions of Section 5.

     

    2.11    Covered
Employee

     

    A “Covered Employee” means, with
respect to any grant of an Award, a Participant who the Plan Administrator deems
is or may be or become a “covered employee” as defined in Section 162(m)(3) of
the Code for any year and who may receive remuneration over $1 million in such
year which would not be deductible under Section 162(m).

     

    2.12    Effective
Date

     

    “Effective Date” shall have the
meaning ascribed to such term in Section 1 hereof.

     

    2.13    Employer

     

    “Employer” shall mean, as to any
Participant on any date, the Company or the affiliate of the Company that
employs the Participant on such date.

     

    2.14    Exchange
Act

     

    The Securities Exchange Act of 1934,
as amended.

     

    2.15    Fair
Market Value

     

    The “Fair Market Value” of the
Common Stock on any date shall be deemed to be the average between the highest
and lowest quoted selling prices at which Common Stock is sold on such date as
reported in the NYSE-Composite Transactions by The Wall Street Journal or any
other comparable service the Plan Administrator may determine is reliable for
such date, or if no Common Stock was traded on such date, on the next preceding
day on which Common Stock was so traded.  If the Fair Market Value of
the Common Stock cannot be determined pursuant to the preceding provisions, the
“Fair Market Value” of the Common Stock shall be determined by the Plan
Administrator in good faith.

     

    2.16    Good
Reason

     

    “Good Reason” shall mean, as to any
Participant who is an officer of his or her Employer, the occurrence of any of
the following events or conditions following a Change in
Control:

     

    (a)           a
change in the Participant’s status, position or responsibilities (including
reporting responsibilities) which represents a substantial reduction of his or
her status, position or responsibilities as in effect immediately prior thereto;
the assignment to the Participant of any duties or responsibilities which are
inconsistent with such status, position or responsibilities; or any removal of
the Participant from or failure to reappoint or reelect him or her to any of
such positions, except in connection with the termination of his or her
employment for Cause, Permanent Disability, as a result of his or her death, or
by the Participant other than for Good Reason;

     

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

       

    

    (b)           a
reduction in the Participant’s annual base salary;

     

    (c)           the
requirement by the Participant’s Employer (without the consent of the
Participant) that he or she have a principal place of employment which is
outside a fifty (50) mile radius of his or her principal place of employment
immediately prior to a Change in Control;

     

    (d)           the
failure by the Company or any of its affiliates to (i) continue in effect any
material compensation or benefit plan, program or practice in which the
Participant was participating immediately prior to the Change in Control,
including, without limitation, this Plan, the El Paso Corporation Pension Plan,
the El Paso Corporation Supplemental Benefits Plan and the El Paso Corporation
Retirement Savings Plan, with any amendments and restatements of such plans made
prior to such Change in Control, or (ii) provide the Participant with
compensation and benefits at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each compensation or employee
benefit plan, program and practice of the Company and its affiliates as in
effect immediately prior to the Change in Control (or as in effect following the
Change in Control, if greater);

     

    (e)           any
material breach by the Company of any provision of this Plan;
or

     

    (f)           any
purported termination of the Participant’s employment for Cause by the Employer
which does not otherwise comply with the terms of this Plan.

     

    2.17    Incentive
Award

     

    A percentage of base salary, fixed
dollar amount or other measure of compensation which Participants are eligible
to receive, in cash and/or other Awards under the Plan, at the end of a
Performance Period if certain performance measures are
achieved.

     

    2.18    Incentive
Stock Option

     

    An option intended to meet the
requirements of an Incentive Stock Option as defined in Section 422 of the Code,
as in effect at the time of grant of such option, or any statutory provision
that may hereafter replace such Section.

     

    2.19    Management
Committee

     

    A committee consisting of the Chief
Executive Officer and such other officers of the Company appointed by the Chief
Executive Officer.

     

     

     

     

    
      
        
        

      

      
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    2.20    Maximum
Annual Employee Grant

     

    The Maximum Annual Employee Grant
set forth in Section 5.2.

     

    2.21    Nonqualified
Option

     

    An option which is not intended to
meet the requirements of an Incentive Stock Option as defined in Section 422 of
the Code.

     

    2.22    Option
Price

     

    The price per share of Common Stock
at which an option is exercisable.

     

    2.23    Other
Stock-Based Award

     

    As defined in Section
12.2.

     

    2.24    Participant

     

    An eligible employee to whom Awards
are granted under the Plan as set forth in Section 4.

     

    2.25    Performance
Goals

     

    The Plan Administrator may grant
Awards subject to Performance Goals to any Participant, including, without
limitation, to any Covered Employee.  As to any such Awards, the Plan
Administrator shall establish one or more of the following Performance Goals for
each Performance Period in writing.  Each Performance Goal selected
for a particular Performance Period shall include any one or more of the
following, either individually, alternatively or in any combination, applied to
either the Company as a whole or to a Subsidiary or business unit, either
individually, alternatively or in any combination, and measured either annually
or cumulatively over a period of years, on an absolute basis or relative to the
pre-established target, to previous years’ results or to a designated comparison
group, in each case as specified by the Plan Administrator:

     

        Financial
Goals

    
      	
          earnings;

        
	
          earnings per
  share;

        
	
          net
  income;

        
	
          revenues;

        
	
          operating cash
  flow;

        
	
          free cash flow
  (defined as operating cash flow less capital expenditures less
  dividends);

        
	
          debt
  level;

        
	
          equity
  ratios;

        
	
          expenses;

        
	
          cost reduction
  targets;

        


    

     

     

    
      
        
        

      

      
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          capital
  expended;

        
	
          working
  capital;

        
	
          weighted average
  cost of capital;

        
	
          operating or
  profit margins;

        
	
          interest-sensitivity gap
  levels;

        
	
          return on
  assets;

        
	
          return on
  equity or capital employed;

        
	
          return on
  total capital;

        


    

        Production
and Non-Regulated Business Unit Goals

    	
        amount of the oil and gas
  reserves;

      
	
        oil and gas reserve
  additions;

      
	
        oil and gas reserve replacement
  ratios;

      
	
        costs of finding oil and gas
  reserves;

      
	
        daily natural gas and/or oil
  production;

      


        Regulated
Business Unit Goals

    	
        contracted
  capacity on pipelines;

      
	
        throughput levels
  on pipelines;

      


        Corporate
and Other

    	
        total shareholder
  return;

      
	
        market share;

      
	
        charge-offs;

      
	
        assets;

      
	
        non-performing
assets;

      
	
        asset sale
  targets;

      
	
        asset quality levels;

      
	
        value of assets;

      
	
        Fair Market Value of the Common
  Stock;

      
	
        employee
  retention/attrition rates;

      
	
        investments;

      
	
        regulatory
compliance;

      
	
        satisfactory internal or external
  audits;

      
	
        improvement of financial
  ratings;

      
	
        safety targets;

      
	
        economic value added;

      
	
        value creation; or

      
	
        achievement of balance sheet or
  income statement objectives. 

      


    The Plan
Administrator shall adjust the Performance Goals to include or exclude
extraordinary charges, gain or loss on the disposition of business units, losses
from discontinued operations, restatements and accounting changes and other
unplanned special charges such as restructuring expenses, acquisitions,
acquisition expenses, including expenses related to goodwill and other
intangible assets, stock offerings, stock repurchases and loan loss
provisions.  The Plan Administrator may also provide for the manner in
which performance will be measured against the Performance Goals (or may adjust
the Performance Goals) to reflect the impact of specified corporate transactions
(such as a stock split, stock dividend or other Change in Capitalization),
special charges, and tax law changes.  In addition, the
Plan

     

    
      
        
        

      

      
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    Administrator may
make such adjustments to the Performance Goals applicable to Participants who
are not Covered Employees as it determines are appropriate.  Such
adjustments may occur at the time of the granting of an Award, or at any time
thereafter, but, in the case of Covered Employees, only to the extent permitted
by Section 162(m).  The foregoing terms shall have the same meaning as
used in the Company’s financial statements, or if the terms are not used in the
Company’s financial statements, they shall have the meaning generally applied
pursuant to general accepted accounting principles.  Performance Goals
may include a threshold level of performance below which no Award shall be
earned, target levels of performance at which specific Awards will be earned,
and a maximum level of performance at which the maximum level of Awards will be
earned.

     

    In establishing Performance Goals
with respect to Covered Employees, the Plan Administrator shall ensure such
Performance Goals (i) are established no later than the end of the first 90 days
of the Performance Period (or such other time permitted by the Internal Revenue
Service), and (ii) satisfy all other applicable requirements imposed by Section
162(m), including the requirement that such Performance Goals be stated in terms
of an objective formula or standard, and the Plan Administrator may not in any
event increase the amount of compensation payable to a Covered Employee upon the
satisfaction of any Performance Goal.  Prior to the payment of any
“performance-based compensation” within the meaning of Section 162(m), the Plan
Administrator shall certify in writing the extent to which the applicable
Performance Goals were, in fact, achieved and the amounts to be paid, vested or
delivered as a result thereof; provided,
that the Plan Administrator may reduce, but not increase, such
amount.

     

    2.26    Performance
Period

     

    That period of time during which
Performance Goals are evaluated to determine the vesting or granting of Awards
under the Plan, as the Plan Administrator may determine. 

     

    2.27    Performance
Shares

     

    An award granted under the Plan
representing the right to receive a number of shares of Common Stock for each
performance share granted, as the Plan Administrator may
determine.

     

    2.28    Performance
Units

     

    An award granted under the Plan
representing the right to receive a payment equal to the value of a performance
unit, as the Plan Administrator may determine.

     

     

     

     

    
      
        
        

      

      
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    2.29    Plan
Administrator

     

    Those committees appointed and
authorized pursuant to Section 3 to administer the Plan.

     

    2.30    Prior
Plans

     

    El Paso Corporation 2001 Omnibus
Incentive Compensation Plan, El Paso Corporation Strategic Stock Plan, El Paso
Corporation Restricted Stock Award Plan for Management Employees and El Paso
Corporation Omnibus Plan for Management Employees.

     

    2.31    Restricted
Stock

     

    Common Stock granted under the Plan
that is subject to the requirements of Section 9 and such other restrictions as
the Plan Administrator deems appropriate.  References to Restricted
Stock in this Plan shall include Restricted Stock awarded in conjunction with
Incentive Awards pursuant to Section 11 unless the context otherwise
requires.

     

    2.32    Restricted
Stock Units

     

    An award granted under the Plan
representing a right to receive a payment equal to the value of a share of
Common Stock.

     

    2.33    Restriction
Period

     

    As defined in Section
9.2.

     

    2.34    Rule
16b-3

     

    Rule 16b-3 of the General Rules and
Regulations under the Exchange Act.

     

    2.35    Section
16 Insider

     

    Any person who is selected by the
Plan Administrator to receive an Award pursuant to the Plan and who is or may be
or become subject to the requirements of Section 16 of the Exchange Act, and the
rules and regulations promulgated thereunder.

     

    2.36    Section
162(m)

     

    Section 162(m) of the Code, and
regulations promulgated thereunder.

     

    2.37    Subsidiary

     

    An entity that is designated by the
Plan Administrator as a subsidiary for purposes of the Plan and that is a
corporation, partnership, joint venture, limited liability company, limited
liability partnership, or other entity in which the Company owns directly or
indirectly, fifty percent (50%) or more of the voting power or profit interests,
or as to which the Company or one of its affiliates serves as general or
managing partner or in a similar capacity.  Notwithstanding the
foregoing, for purposes of options intended to qualify as Incentive Stock
Options, the term “Subsidiary” shall mean a corporation (or other entity treated
as a corporation for tax purposes) in which the Company directly or indirectly
holds more than fifty percent (50%) of the voting power.

     

     

     

     

    
      
        
        

      

      
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    SECTION
3    ADMINISTRATION

     

    3.1    Plan
Administrator

     

    (a)           The
Compensation Committee of the Board of Directors shall be the Plan Administrator
with respect to all Covered Employees and all Section 16 Insiders.  As
to these officers, the Plan Administrator shall be constituted at all times so
as to (i) be “independent” as such term is defined pursuant to the rules of any
stock exchange on which the Common Stock may then be listed, and (ii) meet
the non-employee director standards of Rule 16b-3 and the outside director
requirements of Section 162(m), so long as any of the Company’s equity
securities are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act.

     

    (b)           Other
than as set forth in Section 3.1(a), the Management Committee shall be the Plan
Administrator.  The Chief Executive Officer may from time to time
remove members from, or add members to, the Management Committee.

     

    (c)           Notwithstanding
Sections 3.1(a) and 3.1(b), the Board of Directors may designate itself or the
Compensation Committee of the Board of Directors as the Plan Administrator as to
any Participant or groups of Participants.

     

    3.2    Authority
of Plan Administrator

     

    Subject to the express terms and
conditions set forth herein, the Plan Administrator shall have the power from
time to time to:

     

            (a)           determine
those individuals to whom Awards shall be granted under the Plan and the number
of shares or amount of cash subject to such Awards and prescribe the terms and
conditions (which need not be identical) of each such Awards, including, in the
case of stock options and stock appreciation rights, the Option Price, vesting
schedule and duration;

     

            (b)           set
the terms and conditions of any Award consistent with the terms of the Plan
(which may be based on Performance Goals or other performance measures as the
Plan Administrator shall determine), and make any amendments, modifications or
adjustments to such Awards as are permitted by the Plan;

     

            (c)           construe
and interpret the Plan and the Awards granted hereunder and establish, amend and
revoke rules and regulations for the administration of the Plan, including,
without limitation, correcting any defect or supplying any omission, or
reconciling any inconsistency in the Plan or in any Award Agreement, in the
manner and to the extent it shall deem necessary or advisable, including so
that the Plan and the operation of the Plan comply with Rule 16b-3, the
Code to the extent applicable and other applicable law, and otherwise to make
the Plan fully effective;

     

     

     

     

    
      
        
        

      

      
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    (d)           exercise
its discretion with respect to the powers and rights granted to it as set forth
in the Plan; and

     

    (e)           generally,
exercise such powers and perform such acts as are deemed necessary or advisable
to promote the best interests of the Company with respect to the
Plan.

     

    All decisions and
determinations by the Plan Administrator in the exercise of the above powers
shall be final, binding and conclusive upon the Company, its Subsidiaries, the
Participants and all other persons having or claiming any interest
therein.  The Plan Administrator shall cause the Company at the
Company’s expense to take any action related to the Plan which may be necessary
to comply with the provisions of any federal or state law or any regulations
issued thereunder, which the Plan Administrator determines are intended to be
complied with.

     

    Notwithstanding the
foregoing, the Plan Administrator shall not be entitled to exercise any
discretion otherwise authorized hereunder with respect to any Awards held by
Covered Employees if the ability to exercise such discretion or the exercise of
such discretion itself would cause the compensation attributable to such Awards
to fail to qualify as performance-based compensation under Section
162(m).

     

    3.3    Indemnification
of Plan Administrator

     

    Each member of any committee acting
as Plan Administrator, while serving as such, shall be entitled, in good faith,
to rely or act upon any advice of the Company’s independent auditors, counsel or
consultants hired by the committee, or other agents assisting in the
administration of the Plan.  The Plan Administrator and any officers
or employees of the Company acting at the direction or on behalf of the Company
shall not be personally liable for any action or determination taken or made, or
not taken or made, in good faith with respect to the Plan, and shall, to the
extent permitted by law, be fully indemnified and protected under the Company’s
charter or by-laws with respect to any such action or
determination.

     

    3.4    Delegation
to Management Committee

     

    To the maximum
extent permitted by applicable law, the Board of Directors may delegate to the
Management Committee the authority (i) to designate the officers and employees
who shall be Participants, (ii) to determine the Awards to be granted to any
such Participants or (iii) both (i) and (ii); provided,
however,
that the Management Committee shall not have the authority to grant Awards to
any member of the Management Committee.  Any such delegation shall be
made by resolution of the Board of Directors, and such resolution shall set
forth the total number of shares of Common Stock subject to such
delegation.

     

     

     

     

    
      
        
        

      

      
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    SECTION
4    ELIGIBILITY

     

    To be eligible for selection by the
Plan Administrator to participate in the Plan, an individual must be an employee
(other than an employee who is a member of a unit covered by a collective
bargaining agreement) of the Company, or of any Subsidiary, as of the date on
which the Plan Administrator grants to such individual an Award under the Plan,
or a person who, in the judgment of the Plan Administrator, holds a position of
responsibility and is able to contribute substantially to the Company’s
continued success.  Members of the Board of Directors who are
employees of the Company shall be eligible to participate in the
Plan.  Members of the Board of Directors who are not employees are not
eligible to participate in the Plan.  Each grant of an Award under the
Plan shall be evidenced by an Award Agreement.

     

     

     

    SECTION
5    SHARES
AVAILABLE FOR THE PLAN

     

    5.1    Aggregate
Shares

     

    Subject to adjustment as provided in
Section 5.3, the maximum number of shares of Common Stock that may be issued
upon the exercise or settlement of Awards granted under the Plan is 47,500,000
shares of Common Stock.

     

    Any shares of Common Stock subject
to an Award which is granted under this Plan and which terminates by expiration,
forfeiture, cancellation or otherwise shall be available for grants of Awards
under the Plan.  Likewise, shares of Common Stock that have been
issued in connection with an Award of Restricted Stock that is canceled or
forfeited prior to vesting or settled in cash, causing the shares to be returned
to the Company, shall not be counted as having been delivered under the
Plan.  In addition, any shares of Common Stock subject to a Restricted
Stock Unit, Performance Share, Performance Unit or Other Stock-Based Award which
is granted under this Plan and which is settled in cash in lieu of the issuance
of shares may again be available for grants of Awards under the
Plan.

     

    If shares of Common Stock are
returned to the Company in satisfaction of taxes relating to Restricted Stock,
in connection with a cash out of Restricted Stock (but excluding upon forfeiture
of Restricted Stock) or in connection with the tendering of shares by a
Participant in satisfaction of the exercise price or taxes relating to an Award,
such issued shares shall not become available again under the
Plan.  Each stock appreciation right issued under the Plan will be
counted as one share issued under the Plan without regard to the number of
shares issued to the Participant upon exercise of such stock appreciation
right.

     

     

     

     

    
      
        
        

      

      
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    Notwithstanding any other provision
in this Section 5.1, the grant of any Award that cannot by its terms be settled
in shares of Common Stock shall not result in the reduction of the number of
shares of Common Stock available for Awards under the Plan.

     

    Shares of Common Stock may be issued
under the Plan from shares held in the Company’s treasury or out of authorized
but unissued shares of the Company, or partly out of each, as shall be
determined by the Plan Administrator.

     

    5.2    Limitations

     

    Subject to adjustment as provided in
Section 5.3, the following limitations shall apply:

     

    (a)           All
of the shares of Common Stock that may be issued under this Plan may be granted
as stock options (including Incentive Stock Options) or stock appreciation
rights.

     

    (b)           The
number of shares of Common Stock issued under this Plan with respect to
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units
and Other Stock-Based Awards may not exceed 14,500,000 shares of Common
Stock.

     

    (c)           The
maximum number of shares, as calculated in accordance with the provisions of
Section 5.1, and maximum amount with respect to which Awards under this Plan may
be granted to any eligible employee in any one calendar year shall not exceed:
(a) 2,000,000 shares, in the case of options or stock appreciation rights;
(b) 1,000,000 shares in the case of Restricted Stock, Restricted Stock
Units, Performance Shares, Performance Units or Other Stock-Based Awards; and
(c) $10,000,000 worth of other Awards under the Plan, including Incentive
Awards.  Collectively, the foregoing maximums referred to in this
Section 5.2(c) shall be referred to as the “Maximum Annual Employee
Grants.”

     

    5.3    Adjustments
in Authorized Shares

     

    (a)           In
the event of a Change in Capitalization, the Plan Administrator shall make such
adjustments, if any, as it determines are appropriate and equitable to (a) the
maximum number and class of shares of Common Stock or other stock or securities
with respect to which Awards may be granted under the Plan, (b) the maximum
number and class of shares of Common Stock or other stock or securities that may
be issued upon exercise of Nonqualified Options and Incentive Stock Options, (c)
the Maximum Annual Employee Grants, (d) the number and class of shares of Common
Stock or other stock or securities which are subject to outstanding Awards
granted under the Plan and the Option Price or exercise price therefor, if
applicable and (e) the Performance Goals. Any such adjustment shall be final,
binding and conclusive on all persons claiming any right or interest under the
Plan.

     

     

     

     

     

    
      
        
        

      

      
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            (b)           Any
such adjustment in the shares of Common Stock or other stock or securities
(x) subject to outstanding Incentive Stock Options (including any
adjustments in the exercise price) shall be made in such manner as not to
constitute a modification as defined by Section 424(h)(3) of the Code and only
to the extent otherwise permitted by Sections 422 and 424 of the Code or (y)
subject to outstanding Awards that are intended to qualify as performance-based
compensation under Section 162(m) shall be made in such a manner as not to
adversely affect the treatment of the Awards as performance-based
compensation.

     

            (c)           If,
by reason of a Change in Capitalization, a Participant shall be entitled to, or
shall be entitled to exercise an option or stock appreciation right with respect
to, new, additional or different shares of stock or securities of the Company or
any other corporation, such new, additional or different shares shall thereupon
be subject to all of the conditions, restrictions and performance criteria which
were applicable to the shares of Common Stock subject to the option or stock
appreciation right, as the case may be, prior to such Change in
Capitalization.

     

    5.4    Effect
of Certain Transactions

     

    Following (a) the liquidation or
dissolution of the Company or (b) a merger or consolidation of the Company (a
“Transaction”), (i) each outstanding Award shall be treated as provided for in
the agreement entered into in connection with the Transaction (which treatment
may be different as among different types of Awards and different holders
thereof) or (ii) if not so provided in such agreement, each Participant shall be
entitled to receive in respect of each share of Common Stock subject to any
outstanding Awards, upon exercise of any stock option or stock appreciation
right or payment or transfer in respect of any other Award, the same number and
kind of stock, securities, cash, property or other consideration that each
holder of a share of Common Stock was entitled to receive in the Transaction in
respect of a share of Common Stock; provided,
however,
that such stock, securities, cash, property, or other consideration shall remain
subject to all of the conditions, restrictions and performance criteria which
were applicable to Awards prior to such Transaction, but giving effect to any
applicable provision of this Plan or any Award Agreement if the Transaction is a
Change in Control.  Without limiting the generality of the foregoing,
the treatment of outstanding stock options and stock appreciation rights
pursuant to clause (i) of this Section 5.4 in connection with a Transaction in
which the consideration paid or distributed to the Company’s stockholders is not
entirely shares of common stock of the acquiring or resulting corporation may
include the cancellation of outstanding stock options and stock appreciation
rights upon consummation of the Transaction provided either (x) the holders of
affected stock options and stock appreciation rights have been given a period of
at least fifteen (15) days prior to the date of the consummation of the
Transaction to exercise the stock options and stock appreciation rights (whether
or not they were otherwise exercisable) or (y) the holders of the affected stock
options and stock appreciation rights are paid (in cash or cash equivalents) in
respect of each share of Common Stock covered by the stock options or stock
appreciation rights being cancelled an amount equal to the excess, if any, of
the per share price paid or distributed to stockholders in the Transaction (the
value of any non-cash consideration to be determined by the Plan Administrator
in its sole discretion) over the exercise price thereof.  For
avoidance of doubt, (1) the cancellation of stock options and stock appreciation
rights pursuant to clause (y) of the preceding sentence may be effected
notwithstanding anything to the contrary contained in this Plan or any Award
Agreement and (2) if the amount determined pursuant to clause (y) of the
preceding sentence is zero or less, the affected stock options and stock
appreciation rights may be cancelled without any payment
therefor.  The treatment of any Award as provided in this
Section 5.4 shall be conclusively presumed to be appropriate for purposes
of Section 5.3.

     

     

     

     

    
      
        
        

      

      
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    SECTION
6    STOCK
OPTIONS

     

    6.1    Grant
of Options

     

            (a)           Options
may be granted to eligible employees in such number, and at such times during
the term of the Plan as the Plan Administrator shall determine, the Plan
Administrator taking into account the duties of the respective employees, their
present and potential contributions to the success of the Company or its
Subsidiaries, and such other factors as the Plan Administrator shall deem
relevant in accomplishing the purposes of the Plan.  The Plan
Administrator may grant an option or provide for the grant of an option, either
from time to time in the discretion of the Plan Administrator or automatically
upon the occurrence of specified events, including, without limitation, the
achievement of Performance Goals or other performance measures, the satisfaction
of an event or condition within the control of the recipient of the option or
within the control of others.  The granting of an option shall take
place when the Plan Administrator by resolution, written consent or other
appropriate action determines to grant such an option to a particular
Participant at a particular price.

     

            (b)           An
option granted under the Plan may be either an Incentive Stock Option or a
Nonqualified Option.

     

    6.2    Special
Provisions Applicable to Incentive Stock Options

     

    Each provision of the Plan and each
Incentive Stock Option granted thereunder shall be construed so that each such
option shall qualify as an Incentive Stock Option, and any provision thereof
that cannot be so construed shall be disregarded, unless the Participant agrees
otherwise.  The total number of shares which may be purchased upon the
exercise of Incentive Stock Options granted under the Plan shall not exceed the
total specified in Section 5.2(a), as adjusted pursuant to Section 5.3.
Incentive Stock Options, in addition to complying with the other provisions of
the Plan relating to options generally, shall be subject to the following
conditions:

     

     

     

     

    
      
        
        

      

      
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    (a)           Ten
Percent (10%) Stockholders

     

    A Participant must not, immediately
before an Incentive Stock Option is granted to him or her, own stock
representing more than ten percent (10%) of the voting power or value of all
classes of stock of the Company or of a Subsidiary.  This requirement
is waived if (i) the Option Price of the Incentive Stock Option to be granted is
at least one hundred ten percent (110%) of the Fair Market Value of the stock
subject to the option, determined at the time the option is granted, and (ii)
the option is not exercisable more than five (5) years from the date the option
is granted.

     

    (b)           Annual
Limitation

     

    To the extent that the aggregate
Fair Market Value (determined at the time of the grant of the option) of the
stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year exceeds One Hundred
Thousand Dollars ($100,000), such options shall be treated as Nonqualified
Options.  In applying the limitation in the preceding sentence in the
case of multiple option grants, unless otherwise required by applicable law,
options which were intended to be Incentive Stock Options shall be treated as
Nonqualified Options according to the order in which they were granted such that
the most recently granted options are first treated as Nonqualified
Options.

     

    (c)           Additional
Terms

     

    Any other terms and conditions which
the Plan Administrator determines, upon advice of counsel, must be imposed for
the option to be an Incentive Stock Option.

     

    (d)           Notice
of Disqualifying Disposition

     

    If a Participant
shall make any disposition of shares of Common Stock issued pursuant to an
Inventive Stock Option under the circumstances described in Section 421(b) of
the Code (relating to disqualifying distributions), the Participant shall notify
the Company of such disposition within twenty days thereof.

     

    6.3    Terms
of Options

     

    Except as otherwise provided in
Section 6.2, all Incentive Stock Options and Nonqualified Options under the Plan
shall be granted subject to the following terms and
conditions:

     

    (a)           Option
Price

     

    The Option Price shall be determined
by the Plan Administrator in any reasonable manner, but shall not be less than
the Fair Market Value of the Common Stock on the date the option is
granted.

     

     

     

    
      
        
        

      

      
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    (b)           Duration
of Options

     

    Options shall be exercisable at such
time and under such conditions as set forth in the Award Agreement, but in no
event shall any stock option (whether a Nonqualified Option or an Incentive
Stock Option) be exercisable later than the tenth (10th)
anniversary of the date of its grant.

     

    (c)           Exercise
of Options

     

    Shares of Common Stock covered by an
option may be purchased at one time or in such installments over the option
period as may be provided in the Award Agreement.  Any shares not
purchased on an applicable installment date may be purchased thereafter at any
time prior to the expiration of the option in accordance with its
terms.  To the extent that the right to purchase shares has accrued
thereunder, options may be exercised from time to time by written notice to the
Company setting forth the number of shares with respect to which the option is
being exercised.

     

    (d)           Payment

     

    The purchase price of shares
purchased under options shall be paid in full to the Company upon the exercise
of the option by delivery of consideration equal to the product of the Option
Price and the number of shares of Common Stock purchased (the “Purchase
Price”).  Such consideration may be either (i) in cash or (ii) at the
discretion of the Plan Administrator, in Common Stock (by either actual delivery
of Common Stock or by attestation presenting satisfactory proof of beneficial
ownership of such Common Stock) already owned by the Participant, or any
combination of cash and Common Stock.  The Fair Market Value of such
Common Stock as delivered shall be valued as of the day prior to
delivery.  The Plan Administrator can determine that additional forms
of payment will be permitted.  To the extent permitted by the Plan
Administrator and applicable laws and regulations (including, without
limitation, federal tax and securities laws, regulations and state corporate
law), an option may also be exercised in a “cashless” exercise by delivery of a
properly executed exercise notice together with irrevocable instructions to a
broker selected by the Company to promptly deliver to the Company sufficient
proceeds to pay the Purchase Price.  A Participant shall have none of
the rights of a stockholder until the shares of Common Stock are issued to the
Participant.

     

    The Plan Administrator may permit a
Participant to pay all or a portion of the Purchase Price by having shares of
Common Stock with a Fair Market Value equal to all or a portion of the Purchase
Price be withheld from the shares issuable to the Participant upon the exercise
of the option.  The Fair Market Value of such Common Stock as is
withheld shall be determined as of the same day as the exercise of the
option.

     

     

     

     

    
      
        
        

      

      
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    (e)           Restrictions

     

    The Plan Administrator shall
determine and reflect in the Award Agreement, with respect to each option, the
nature and extent of the restrictions, if any, to be imposed on the shares of
Common Stock which may be purchased thereunder, including, without limitation,
restrictions on the transferability of such shares acquired through the exercise
of such options for such periods as the Plan Administrator may determine and,
further, that in the event a Participant’s employment by the Company, or a
Subsidiary, terminates during the period in which such shares are
nontransferable, the Participant shall be required to sell such shares back to
the Company at such prices as the Plan Administrator may specify.  In
addition, to the extent permitted by applicable laws and regulations, the Plan
Administrator may require that a Participant who wants to effectuate a
“cashless” exercise of options be required to sell the shares of Common Stock
acquired in the associated exercise to the Company, or in the open market
through the use of a broker selected by the Company, at such price and on such
terms as the Plan Administrator may determine at the time of grant, or
otherwise.  Without limiting the foregoing, the Plan Administrator may
impose such restrictions, conditions or limitations as it determines appropriate
as to the timing and manner of any resales by the Participant or other
subsequent transfers by the Participant of any shares issued as a result of the
exercise of an option, including without limitation (i) restrictions under an
insider trading policy, (ii) restrictions designed to delay and/or coordinate
the timing and manner of sales by the Participant and other participants and
(iii) restrictions as to the use of a specified brokerage firm for such resales
or other transfers.

     

    (f)           Nontransferability
of Options

     

    Options granted under the Plan and
the rights and privileges conferred thereby shall not be subject to execution,
attachment or similar process and may not be transferred, assigned, pledged or
hypothecated in any manner (whether by operation of law or otherwise) other than
by will or by the applicable laws of descent and
distribution.  Notwithstanding the foregoing and only as provided by
the Plan Administrator or the Company, as applicable, Nonqualified Options may
be transferred to a Participant’s immediate family members, directly or
indirectly or by means of a trust, corporate entity or partnership (a person who
thus acquires this option by such transfer, a “Permitted
Transferee”).  A transfer of an option may only be effected by the
Company at the request of the Participant and shall become effective upon the
Permitted Transferee agreeing to such terms as the Plan Administrator may
require and only when recorded in the Company’s record of outstanding
options.  In the event an option is transferred as contemplated
hereby, the option may not be subsequently transferred by the Permitted
Transferee except a transfer back to the Participant or by will or the laws of
descent and distribution.  A transferred option may be exercised by a
Permitted Transferee to the same extent as, and subject to the same terms and
conditions as, the Participant (except as otherwise provided herein), as if no
transfer had taken place.  As used herein, “immediate family” shall
mean, with respect to any person, such person’s child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, sister-in-law, and shall include
adoptive relationships.  In the event of exercise of a transferred
option by a Permitted Transferee, any amounts due to (or to be withheld by) the
Company upon exercise of the option shall be delivered by (or withheld from
amounts due to) the Participant, the Participant’s estate or the Permitted
Transferee, in the reasonable discretion of the Company.

     

     

     

     

    
      
        
        

      

      
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    In addition, to the extent permitted
by applicable law and Rule 16b-3, the Plan Administrator may permit a recipient
of a Nonqualified Option to designate in writing during the Participant’s
lifetime a Beneficiary to receive and exercise the Participant’s Nonqualified
Options in the event of such Participant’s death.  Except as otherwise
provided for herein, if any Participant attempts to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under the Plan or of any right or
privilege conferred thereby, contrary to the provisions of the Plan or such
option, or suffers the sale or levy or any attachment or similar process upon
the rights and privileges conferred hereby, all affected options held by such
Participant shall be immediately forfeited.

     

    (g)           Purchase
for Investment

     

    The Plan Administrator shall have
the right to require that each Participant or other person who shall exercise an
option under the Plan, and each person into whose name shares of Common Stock
shall be issued pursuant to the exercise of an option, represent and agree that
any and all shares of Common Stock purchased pursuant to such option are being
purchased for investment only and not with a view to the distribution or resale
thereof and that such shares will not be sold except in accordance with such
restrictions or limitations as may be set forth in the option or by the Plan
Administrator.  This Section 6.3(g) shall be inoperative during any
period of time when the Company has obtained all necessary or advisable
approvals from governmental agencies and has completed all necessary or
advisable registrations or other qualifications of shares of Common Stock as to
which options may from time to time be granted as contemplated in Section
15.

     

    (h)           No
Repricing

     

    The Plan
Administrator shall have no authority to make any adjustment (other than in
connection with a Change in Capitalization in which an adjustment is permitted
or required under the terms of the Plan) or amendment, and no such adjustment or
amendment shall be made, that reduces or would have the effect of reducing the
exercise price of a stock option previously granted under the Plan, whether
through amendment, cancellation or replacement grants, or other means, unless
the Company’s shareholders shall have approved such adjustment or
amendment.

     

     

     

     

     

    
      
         


      

      
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    SECTION
7   STOCK APPRECIATION RIGHTS

     

    7.1    Grant
of Stock Appreciation Rights

     

    Stock appreciation rights may be
granted to eligible employees in such number, and at such times during the term
of the Plan as the Plan Administrator shall determine, the Plan Administrator
taking into account the duties of the respective employees, their present and
potential contributions to the success of the Company or its Subsidiaries, and
such other factors as the Plan Administrator shall deem relevant in
accomplishing the purposes of the Plan.  The Plan Administrator may
grant a stock appreciation right or provide for the grant of a stock
appreciation right, either from time to time in the discretion of the Plan
Administrator or automatically upon the occurrence of specified events,
including, without limitation, the achievement of Performance Goals or other
performance measures, the satisfaction of an event or condition within the
control of the recipient of the stock appreciation right or within the control
of others.  The granting of a stock appreciation right shall take
place when the Plan Administrator by resolution, written consent or other
appropriate action determines to grant such a stock appreciation right to a
particular Participant at a particular price.  A stock appreciation
right may be granted freestanding or in tandem or in combination with any other
Award under the Plan.

     

    7.2    Exercise
of Stock Appreciation Rights

     

    A stock appreciation right may be
exercised upon such terms and conditions and for a term such as the Plan
Administrator shall determine; provided,
however,
no stock appreciation right shall be exercisable later than the tenth (10th)
anniversary of the date of its grant.  Upon exercise of a stock
appreciation right, a Participant shall be entitled to receive shares of Common
Stock with an aggregate Fair Market Value determined by multiplying (i) the
difference between the Fair Market Value of a share of Common Stock on the date
of exercise of the stock appreciation right over the price fixed at the date of
grant (which price shall not be less than 100% of the Fair Market Value of a
share of Common Stock on the date of grant) times (ii) the number of shares of
Common Stock with respect to which the stock appreciation right is
exercised.  The value of any fractional shares shall be paid in
cash.

     

    7.3    Special
Provisions Applicable to Stock Appreciation Rights

     

    Stock appreciation rights are
subject to the following restrictions:

     

    (a)           A
stock appreciation right granted in tandem with any other Award under the Plan
shall be exercisable at such time or times as the Award to which it relates
shall be exercisable, or at such other times as the Plan Administrator may
determine.

     

    (b)           The
right of a Participant to exercise a stock appreciation right granted in tandem
with any other Award under the Plan shall be canceled if and to the extent the
related Award is exercised or canceled.  To the extent that a stock
appreciation right is exercised, the related Award shall be deemed to have been
surrendered unexercised and canceled.

     

     

     

     

    
      
        
        

      

      
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    (c)           A
holder of stock appreciation rights shall have none of the rights of a
stockholder until shares of Common Stock, if any, are issued to such holder
pursuant to such holder’s exercise of such rights.

     

    (d)           The
acquisition of Common Stock pursuant to the exercise of a stock appreciation
right shall be subject to the same restrictions as would apply to the
acquisition of Common Stock acquired upon exercise of an option, as set forth in
Section 6.3.

     

    (e)           Except
as may otherwise be permitted by the Plan Administrator, stock appreciation
rights granted under the Plan and the rights and privileges conferred thereby
shall not be subject to execution, attachment or similar process and may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution.

     

     

     

    SECTION
8    PERFORMANCE
SHARES AND PERFORMANCE UNITS

     

    8.1    Grant
of Performance Shares and Performance Units

     

    Subject to the limitations in
Section 5.2, Performance Shares or Performance Units may be granted to eligible
employees at any time and from time to time as the Plan Administrator shall
determine.  The Plan Administrator shall have complete discretion in
determining the number of Performance Shares or Performance Units granted to
each Participant and the terms and conditions thereof, taking into account the
duties of the respective Participants, their present and potential contributions
to the success of the Company or its Subsidiaries, and such other factors as the
Plan Administrator shall deem appropriate.  Performance Shares and
Performance Units may be granted alone or in combination with any other Award
under the Plan.

     

    8.2    Value
of Performance Shares and Performance Units

     

    The Plan Administrator shall set
Performance Goals over Performance Periods.  Prior to each grant of
Performance Shares or Performance Units, the Plan Administrator shall establish
an initial number of shares of Common Stock for each Performance Share and an
initial value for each Performance Unit granted to each Participant for that
Performance Period.  Prior to each grant of Performance Shares or
Performance Units, the Plan Administrator also shall set the Performance Goals
that will be used to determine the extent to which the Participant receives the
number of shares of Common Stock for the Performance Shares or payment of the
value of the Performance Units awarded for such Performance
Period.  With respect to each such Performance Goal utilized during a
Performance Period, the Plan Administrator may assign percentages or other
relative values to various levels of performance which shall be applied to
determine the extent to which the Participant shall receive a payout of the
number of Performance Shares or value of Performance Units
awarded.

     

     

     

     

    
      
        
        

      

      
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    8.3    Payment
of Performance Shares and Performance Units

     

    After a Performance Period has
ended, the holder of a Performance Share or Performance Unit shall be entitled
to receive the value thereof as determined by the Plan
Administrator.  The Plan Administrator shall make this determination
by first determining the extent to which the Performance Goals set pursuant to
Section 8.2 have been met.  The Plan Administrator shall then
determine the applicable percentage or other relative value to be applied to,
and will apply such percentage or other relative value to, the number of
Performance Shares or value of Performance Units to determine the payout to be
received by the Participant.  In addition, with respect to Performance
Shares and Performance Units granted to each Participant, no payout shall be
made hereunder except upon written certification by the Plan Administrator that
the applicable Performance Goals have been satisfied to a particular
extent.

     

    8.4    Form
and Timing of Payment

     

    The payment described in Section 8.3
shall be made in shares of Common Stock, or in cash, or partly in shares of
Common Stock and partly in cash, at the discretion of the Plan Administrator and
set forth in the Award Agreement.  The value of any fractional shares
shall be paid in cash.  Payment shall be made in a lump sum or
installments as prescribed by the Plan Administrator and set forth in the Award
Agreement; provided that each Award Agreement shall comply with the timing of
payment requirements set forth in Section 409A of the Code, including, but not
limited to the timing of payments to “specified employees” as defined in Section
409A(a)(2)(B)(i) of the Code.  If a number of shares of Common Stock
is to be converted into an amount of cash on any date, or if an amount of cash
is to be converted into a number of shares of Common Stock on any date, such
conversion shall be done at the then-current Fair Market Value of the Common
Stock on such date.

     

    8.5    Nontransferability
of Performance Shares and Performance Units

     

    Except as otherwise provided by the
Plan Administrator, Performance Shares and Performance Units granted under the
Plan and the rights and privileges conferred thereby shall not be subject to
execution, attachment or similar process and may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation or law or otherwise)
other than by will or by the applicable laws of descent and
distribution.

     

     

     

     

    
      
        
        

      

      
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    SECTION
9    RESTRICTED
STOCK

     

    9.1    Grant
of Restricted Stock

     

    Subject to the limitations in
Section 5.2, Restricted Stock may be granted to eligible employees in such
number and at such times during the term of the Plan as the Plan Administrator
shall determine, the Plan Administrator taking into account the duties of the
respective Participants, their present and potential contributions to the
success of the Company or its Subsidiaries, and such other factors as the Plan
Administrator shall deem relevant in accomplishing the purposes of the
Plan.  The Plan Administrator may grant Restricted Stock or provide
for the grant of Restricted Stock, either from time to time in the discretion of
the Plan Administrator or automatically upon the occurrence of specified
events.

     

    9.2    Restriction
Period

     

    Except as permitted by the Plan
Administrator and specified in the Award Agreement, during a period following
the date of grant, as determined by the Plan Administrator, which in no event
shall be less than three (3) years with respect to Restricted Stock subject to
restrictions based upon time and one (1) year with respect to Restricted Stock
subject to restrictions based upon the achievement of specific Performance Goals
or other performance measures (the “Restriction Period”), the Restricted Stock
may not be sold, assigned, transferred, pledged, hypothecated or otherwise
encumbered or disposed of by the recipient.  In the event of any
attempt by the Participant to sell, exchange, transfer, pledge or otherwise
dispose of Restricted Stock in violation of the terms of the Plan without the
Company’s prior written consent, such Restricted Stock shall be forfeited to the
Company.  During the Restriction Period, the Plan Administrator shall
evidence the restrictions on the shares of Restricted Stock in such a manner as
it determines is appropriate (including, without limitation, (i) by means of
appropriate legends on shares of Restricted Stock that have been certificated
and (ii) by means of appropriate stop-transfer orders on shares of Restricted
Stock credited to book-entry accounts).

     

    9.3    Other
Restrictions

     

    The Plan Administrator shall impose
such other restrictions on Restricted Stock granted pursuant to the Plan as it
may deem advisable, including Performance Goals or other performance
measures.  The Plan Administrator may require, under such terms and
conditions as it deems appropriate or desirable, that the certificates for
Restricted Stock delivered under the Plan may be held in custody by a bank or
other institution, or that the Company may itself hold such shares in custody
until the Restriction Period expires or until restrictions thereon otherwise
lapse, and may require, as a condition of any issuance of Restricted Stock that
the Participant shall have delivered a stock power endorsed in blank relating to
the shares of Restricted Stock.

     

     

     

     

    
      
        
        

      

      
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    9.4    Voting
Rights; Dividends and Other Distributions

     

    A Participant receiving a grant of
Restricted Stock shall be recorded as a stockholder of the
Company.  Each Participant who receives a grant of Restricted Stock
shall have all the rights of a stockholder with respect to such shares (except
as provided in the restrictions on transferability), including the right to vote
the shares and receive dividends and other distributions paid with respect to
the underlying shares of Restricted Stock; provided,
however,
that no Participant awarded Restricted Stock shall have any right as a
stockholder with respect to any shares subject to the Participant’s Restricted
Stock grant prior to the date of issuance to the Participant of a certificate or
certificates, or the establishment of a book-entry account, for such
shares.

     

    9.5    Issuance
of Shares; Settlement of Awards

     

    When the restrictions imposed by
Section 9.2 expire or otherwise lapse with respect to one or more shares of
Restricted Stock, the Participant shall be obligated to return to the Company
such shares of Restricted Stock (if applicable), and the Company shall deliver
to the Participant one (1) share of Common Stock in satisfaction of each share
of Restricted Stock, which shares so delivered shall not contain any
legend.  The delivery of shares pursuant to this Section 9.5 shall be
subject to any required share withholding to satisfy tax withholding obligations
pursuant to Section 17.10.  Any fractional shares subject to such
Restricted Stock shall be paid to the Participant in cash.

     

     

     

    SECTION
10    RESTRICTED
STOCK UNITS

     

    10.1    Grant
of Restricted Stock Units

     

    Subject to the limitations in
Section 5.2, Restricted Stock Units may be granted to eligible employees in such
number and at such times during the term of the Plan as the Plan Administrator
shall determine, the Plan Administrator taking into account the duties of the
respective Participants, their present and potential contributions to the
success of the Company or its Subsidiaries, and such other factors as the Plan
Administrator shall deem relevant in accomplishing the purposes of the
Plan.  The Plan Administrator may grant Restricted Stock Units or
provide for the grant of Restricted Stock Units, either from time to time in the
discretion of the Plan Administrator or automatically upon the occurrence of
specified events.

     

    10.2    Restriction
Period

     

    Except as permitted by the Plan
Administrator and specified in the Award Agreement, during the Restriction
Period as defined in Section 9.2, Restricted Stock Units may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of by the recipient.  In the event of any attempt by the Participant
to sell, exchange, transfer,
pledge or otherwise dispose of Restricted Stock Units in violation of the terms
of the Plan without the Company’s prior written consent, such Restricted Stock
Units shall be forfeited to the Company.

     

     

     

     

    
      
        
        

      

      
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    10.3    Other
Restrictions

     

    The Plan Administrator shall impose
such other restrictions on Restricted Stock Units granted pursuant to the Plan
as it may deem advisable.  A Participant receiving a grant of
Restricted Stock Units shall not be recorded as a stockholder of the Company and
shall not acquire any rights of a stockholder unless or until the Participant is
issued shares of Common Stock in settlement of such Restricted Stock
Units.

     

    10.4    Dividend
Equivalents

     

    The Plan Administrator may provide
that Restricted Stock Units awarded under the Plan shall be entitled to an
amount per Restricted Stock Unit equal in value to the cash dividend, if any,
paid per share of Common Stock on issued and outstanding shares, on the dividend
payment dates occurring during the period between the date on which the
Restricted Stock Units are granted to the Participant and the date on which such
Restricted Stock Units are settled, cancelled, forfeited, waived, surrendered or
terminated under the Plan.  Such paid amounts called “dividend
equivalents” shall be (i) paid in cash or Common Stock or (ii) credited to the
Participant as additional Restricted Stock Units, or any combination thereof, as
the Plan Administrator shall determine.  A Restricted Stock Unit
credited to a Participant as a dividend equivalent shall vest at such time as
the Restricted Stock Unit to which it relates vests.

     

    10.5    Issuance
of Shares; Settlement of Awards

     

    When the restrictions imposed by
Section 10.2 expire or otherwise lapse with respect to one or more Restricted
Stock Units, Restricted Stock Units shall be settled (i) in cash or (ii) by
the delivery to the Participant of the number of shares of Common Stock equal to
the number of the Participant’s Restricted Stock Units that are vested, or any
combination thereof, as the Plan Administrator shall determine.  The
payment hereunder shall comply with the timing of payment requirements set forth
in Section 409A of the Code, including, but not limited to the timing of
payments to “specified employees” as defined in Section 409A(a)(2)(B)(i) of the
Code.  The delivery of shares pursuant to this Section 10.5 shall be
subject to any required share withholding to satisfy tax withholding obligations
pursuant to Section 17.10.  Any fractional shares subject to such
Restricted Stock Units shall be paid to the Participant in
cash.

     

     

     

     

     

    
      
        
        

      

      
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    SECTION
11    INCENTIVE
AWARDS

     

    11.1    Incentive
Awards

     

    Prior to the beginning of each
Performance Period, or not later than 90 days following the commencement of the
relevant fiscal year, the Plan Administrator shall establish Performance Goals
or other performance measures which must be achieved for any Participant to
receive an Incentive Award for that Performance Period.  The
Performance Goals or other performance measures may be based on any combination
of corporate and business unit Performance Goals or other performance
measures.  The Plan Administrator may also establish one or more
Company-wide Performance Goals or other performance measures which must be
achieved for any Participant to receive an Incentive Award for that Performance
Period.  Such Performance Goals or other performance measures may
include a threshold level of performance below which no Incentive Award shall be
earned, target levels of performance at which specific Incentive Awards will be
earned, and a maximum level of performance at which the maximum level of
Incentive Awards will be earned.  Each Incentive Award shall specify
the amount of cash and the amount of any other Awards subject to such Incentive
Award.

     

    11.2    Performance
Goal Certification

     

    An Incentive Award shall become
payable to the extent provided herein in the event that the Plan Administrator
certifies in writing prior to payment of the Incentive Award that the
Performance Goals or other performance measures selected for a particular
Performance Period have been attained.  In no event will an Incentive
Award be payable under this Plan if the threshold level of performance set for
each Performance Goal or other performance measure for the applicable
Performance Period is not attained.

     

    11.3    Discretion
to Reduce Awards; Participant’s Performance

     

    The Plan Administrator, in its sole
and absolute discretion, prior to a Change in Control, may reduce the amount of
any Incentive Award otherwise payable to a Participant upon attainment of any
Performance Goal or other performance measure for the applicable Performance
Period.  A Participant’s individual performance must be satisfactory,
regardless of the Company’s performance and the attainment of Performance Goals
or other performance measures, before he or she may be paid an Incentive
Award.  In evaluating a Participant’s performance, the Plan
Administrator shall consider the Performance Goals or other performance
measures, the Participant’s responsibilities and accomplishments, and such other
factors as it deems appropriate.

     

    11.4    Required
Payment of Incentive Awards

     

    The Plan Administrator shall make a
determination within thirty (30) days after the  information that is
necessary to make such a determination is available for a particular Performance
Period whether the Performance Goals or other performance measures for the
Performance Period have been achieved and the amount of the Incentive Award for
each Participant.  The Plan Administrator shall certify the foregoing
determinations in writing.  In the absence of an election by the
Participant pursuant to Section 11.5, the Incentive Award shall be paid not
later than December 31 of the calendar year in which the foregoing
determinations have been made as follows.

     

     

     

     

    
      
        
        

      

      
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    (a)           Participants
shall receive their Incentive Awards in any combination of cash and/or other
Awards under the Plan as determined by the Plan Administrator.  The
payment hereunder shall comply with the timing of payment requirements set forth
in Section 409A of the Code, including, but not limited to the timing of
payments to “specified employees” as defined in Section 409A(a)(2)(B)(i) of the
Code.

     

    (b)           Because
the Participant bears forfeiture, price fluctuation, and other attendant risks
during the Restriction Period associated with Restricted Stock, the Plan
Administrator may determine, as set forth in the Award Agreement, that
Participants who are awarded Restricted Stock as part of their Incentive Award
shall be awarded additional Restricted Stock up to the amount of Restricted
Stock which a Participant is awarded pursuant to Section 11.4(a).  No
additional Restricted Stock is required to be awarded pursuant to this
Section 11.4(b).

     

    11.5    Restricted
Stock Election

     

    To the extent permitted by
applicable law, in lieu of receiving all or any portion of cash awarded as part
of a Participant’s Incentive Award pursuant to Section 11.4(a), the Plan
Administrator may determine, as set forth in the Award Agreement, that
Participants may elect to receive Restricted Stock with a value equal to the
portion of the Incentive Award which the Participant would otherwise have
received in cash, but has elected to receive in Restricted Stock (“Restricted
Stock Election”).  Participants must make their Restricted Stock
Election at such time and in such a manner as prescribed by the Plan
Administrator, which may determine, as set forth in the Award Agreement, that
each Participant who makes the Restricted Stock Election shall be awarded
additional shares of  Restricted Stock granted pursuant to Section
11.4(b) up to the amount of the Participant’s Restricted Stock
Election.  Notwithstanding the foregoing, no additional shares of
Restricted Stock are required to be awarded pursuant to this Section
11.5.

     

    11.6    Nontransferability
of Incentive Awards

     

    Except as otherwise
determined by the Plan Administrator, Incentive Awards may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution.

     

     

     

     

    
      
        
        

      

      
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    SECTION
12    CASH
AWARDS AND OTHER STOCK-BASED AWARDS

     

    12.1    Grant
of Cash Awards

     

    Subject to the
terms and provisions of this Plan, the Plan Administrator, at any time and from
time to time, may grant cash awards to Participants in such amounts and upon
such terms, including the achievement of specific performance criteria, as the
Plan Administrator may determine (each, a “Cash Award”).

     

    12.2    Other
Stock-Based Awards

     

    The Plan
Administrator may grant other types of equity-based or equity-related Awards not
otherwise described by the terms of this Plan (including the grant or offer for
sale of unrestricted shares of Common Stock) in such amounts and subject to such
terms and conditions, as the Plan Administrator shall determine (each, an “Other
Stock-Based Award”).  Such Other Stock-Based Awards may involve the
transfer of actual shares of Common Stock to Participants, or payment in cash or
otherwise of amounts based on the value of shares of Common Stock.

     

    12.3    Value
of Cash Awards and Other Stock-Based Awards

     

    Each Cash Award
granted pursuant to this Section 12 shall specify a payment amount or payment
range as determined by the Plan Administrator.  Each Other Stock-Based
Award shall be expressed in terms of shares of Common Stock or units based on
shares of Common Stock, as determined by the Plan Administrator.  The
Plan Administrator may establish performance criteria applicable to such awards
in its discretion.  If the Plan Administrator exercises its discretion
to establish performance criteria, the number and/or value of such cash awards
or Other Stock-Based Awards that will be paid out to the Participant will depend
on the extent to which the performance goals are met.

     

    12.4    Payment
of Cash Awards and Other Stock-Based Awards

     

    Payment, if any,
with respect to a Cash Award or an Other Stock-Based Award shall be made in
accordance with the terms of the Award, in cash or shares of Common Stock as the
Plan Administrator determines.  The value of any fractional shares
shall be paid in cash.  The payment hereunder shall comply with the
timing of payment requirements set forth in Section 409A of the Code, including,
but not limited to the timing of payments to “specified employees” as defined in
Section 409A(a)(2)(B)(i) of the Code.

     

    12.5    Transferability
of Cash Awards and Other Stock-Based Awards

     

    Except as otherwise
determined by the Plan Administrator, neither Cash Awards nor Other Stock-Based
Awards may be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution.

     

     

     

     

    
      
        
        

      

      
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    SECTION
13    TERMINATION
OF EMPLOYMENT

     

    The Award Agreement
applicable to each Award shall set forth the effect of a termination of the
holder’s employment upon such Award; provided,
however,
that, unless explicitly set forth otherwise in an Award Agreement or as
determined by the Plan Administrator, (1) all of a Participant’s unvested and/or
unexercisable Awards shall automatically be forfeited upon termination of the
Participant’s employment for any reason, and, as to Awards consisting of stock
options or stock appreciation rights, the Participant shall be permitted to
exercise the vested portion of the option or stock appreciation right for at
least three months following termination of his or her employment, and (2) all
of a Participant’s Awards (whether vested or unvested, exercisable or
unexercisable) shall automatically be forfeited upon termination of the
Participant’s employment for Cause.  Provisions relating to the effect
of a termination of employment upon an Award shall be determined in the sole
discretion of the Plan Administrator and need not be uniform among all Awards or
among all Participants.  Unless the Plan Administrator determines
otherwise, the transfer of employment of a Participant as between the Company
and its affiliates and Subsidiaries shall not constitute a termination of
employment.  The Plan Administrator shall have the discretion to
determine the effect, if any, that a sale or other disposition of a
Participant’s Employer will have on the Participant’s Awards.

     

     

    SECTION
14    EFFECT
OF A CHANGE IN CONTROL

     

    Except as otherwise
provided in an Award Agreement, in the event of a Participant’s termination of
employment (i) by his or her Employer without Cause or (ii) if Section 2.16 is
applicable to the Participant, by the Participant for Good Reason, in each case
within two years following a Change in Control:

     

    (a)           all
options and stock appreciation rights then held by the Participant shall become
fully vested and exercisable;

     

    (b)           the
Restriction Periods applicable to all shares of Restricted Stock and all
Restricted Stock Units then held by the Participant shall immediately
lapse;

     

    (c)           the
performance periods applicable to any Performance Shares, Performance Units and
Incentive Awards that have not ended shall end and such Awards shall become
vested and payable in cash in an amount equal to the target amount thereof
(assuming achievement of target levels by both Participants and the Company)
within ten days following such termination; and

     

    (d)           any
restrictions applicable to Cash Awards and Other Stock-Based Awards shall
immediately lapse and, if applicable, become payable within ten days following
such termination.

     

     

     

     

    
      
        
        

      

      
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    SECTION
15    REGULATORY
APPROVALS AND LISTING

     

    The Company shall not be required to
issue any certificate for shares of Common Stock under the Plan prior
to:

     

    (a)           obtaining
any approval or ruling from the Securities and Exchange Commission, the Internal
Revenue Service or any other governmental agency which the Company, in its sole
discretion, shall determine to be necessary or advisable;

     

    (b)           listing
of such shares on any stock exchange on which the Common Stock may then be
listed; and

     

    (c)           completing
any registration or other qualification of such shares under any federal or
state laws, rulings or regulations of any governmental body which the Company,
in its sole discretion, shall determine to be necessary or
advisable.

     

    All certificates, or book-entry
accounts, for shares of Common Stock delivered under the Plan shall also be
subject to such stop-transfer orders and other restrictions as the Plan
Administrator may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any stock exchange upon
which Common Stock is then listed and any applicable federal or state securities
laws, and the Plan Administrator may cause a legend or legends to be placed on
any such certificates, or notations on such book-entry accounts, to make
appropriate reference to such restrictions.  The foregoing provisions
of this paragraph shall not be effective if and to the extent that the shares of
Common Stock delivered under the Plan are covered by an effective and current
registration statement under the Securities Act of 1933, as amended, or if and
so long as the Plan Administrator determines that application of such provisions
are no longer required or desirable.  In making such determination,
the Plan Administrator may rely upon an opinion of counsel for the
Company.  Without limiting the foregoing, the Plan Administrator may
impose such restrictions, conditions or limitations as it determines appropriate
as to the timing and manner of any resales by the Participant or other
subsequent transfers by the Participant of any shares issued under this Plan,
including without limitation (i) restrictions under an insider trading policy,
(ii) restrictions designed to delay and/or coordinate the timing and manner
of sales by the Participant and other Participants and (iii) restrictions as to
the use of a specified brokerage firm for such resales or other
transfers.

     

     

    SECTION
16    TERM
OF PLAN

     

    The Plan shall remain in effect,
subject to the right of the Board of Directors to terminate the Plan at any time
pursuant to Section 19, until all shares of Common Stock subject to it shall
have been purchased or acquired according to the provisions
herein.  However, in no event may an Award be granted under the Plan
on or after the tenth (10th)
anniversary of the Effective Date.  After this Plan is terminated, no
future Awards may be granted pursuant to the Plan, but Awards previously granted
shall remain outstanding in accordance with their applicable terms and
conditions and this Plan’s terms and conditions. The Plan replaced the Prior
Plans, and no further Awards may be made under the Prior
Plans.

     

     

     

    
      
        
        

      

      
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    SECTION
17    GENERAL
PROVISIONS

     

    17.1    Forfeiture
Events

     

    (a) The Plan
Administrator may specify in an Award Agreement that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture, or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance
conditions of an Award.  Such events may include, without limitation,
termination of employment for Cause, violation of material policies that may
apply to the Participant, breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the Participant, or other conduct by the
Participant that is detrimental to the business or reputation of the Company or
any of its affiliates or Subsidiaries.

     

    (b) If the Company is
required to prepare an accounting restatement due to the material noncompliance
of the Company, as a result of misconduct, with any financial reporting
requirement under the securities laws, and if a Participant knowingly engaged in
the misconduct, was grossly negligent with respect to such misconduct, or
knowingly or grossly negligently failed to prevent the misconduct (whether or
not the Participant is one of the individuals subject to automatic forfeiture
under Section 304 of the Sarbanes-Oxley Act of 2002), the Participant shall
reimburse the Company the amount of any payment in settlement of an Award earned
or accrued during the twelve-month period following the first public issuance or
filing with the United States Securities and Exchange Commission (whichever
first occurred) of the financial document embodying such financial reporting
requirement.

     

    17.2    No
Individual Rights

     

    Nothing contained in the Plan, or in
any Award granted pursuant to the Plan, shall confer upon any employee any right
with respect to continuance of employment by the Company or a Subsidiary, nor
interfere in any way with the right of the Company or a Subsidiary to terminate
the employment of such employee at any time with or without assigning any reason
therefor.

     

     

     

    
      
        
        

      

      
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    17.3    Other
Compensation

     

    Unless determined otherwise by the
Plan Administrator or required by contractual obligations, the grant, vesting or
payment of Awards under the Plan shall not be considered as part of a
Participant’s salary or used for the calculation of any other pay, allowance,
pension or other benefit unless otherwise permitted by other benefit plans
provided by the Company or its Subsidiaries, or required by law or by
contractual obligations of the Company or its Subsidiaries.

     

    17.4    Nontransferability

     

    Unless otherwise provided in the
Plan, the right of a Participant or Beneficiary to the payment of any Award
under the Plan may not be assigned, transferred, pledged or encumbered, nor
shall such right or other interests be subject to attachment, garnishment,
execution or other legal process.

     

    17.5    Leaves
of Absence

     

    Leaves of absence for such periods
and purposes conforming to the personnel policy of the Company, or of its
Subsidiaries, as applicable, shall not be deemed terminations or interruptions
of employment, unless a Participant commences a leave of absence from which he
or she is not expected to return to active employment with the Company or its
Subsidiaries.  The foregoing notwithstanding, with respect to
Incentive Stock Options, employment shall not be deemed to continue beyond the
first ninety (90) days of such leave unless the Participant’s reemployment
rights are guaranteed by statute or contract.  With respect to any
Participant who, after the date an Award is granted under this Plan, ceases to
be employed by the Company or a Subsidiary on a full-time basis but remains
employed on a part-time basis, the Plan Administrator may make appropriate
adjustments, as determined in its sole discretion, as to the number of shares
issuable under, the vesting schedule of or the amount payable under any unvested
Awards held by such Participant.

     

    17.6    Transfers

     

    In the event a Participant is
transferred from the Company to a Subsidiary, or vice versa, or is promoted or
given different responsibilities, Awards granted to the Participant prior to
such date shall not be affected.

     

    17.7    Unfunded
Obligations

     

    Any amounts (deferred or otherwise)
to be paid to Participants pursuant to the Plan are unfunded
obligations.  Neither the Company nor any Subsidiary is required to
segregate any monies from its general funds, to create any trusts or to make any
special deposits with respect to this obligation.  The Plan
Administrator, in its sole discretion, may direct the Company to share with its
Subsidiaries the costs of a portion of the Incentive Awards paid to Participants
who are executives of those companies.  Beneficial ownership of any
investments, including trust investments which the Company may make to fulfill
this obligation, shall at all times remain in the Company.  Any
investments and the creation or maintenance of any trust or any Participant
account shall not create or constitute a trust or a fiduciary relationship
between the Plan Administrator, the Company or any Subsidiary and a Participant,
or otherwise create any vested or beneficial interest in any Participant or the
Participant’s Beneficiary or the Participant’s creditors in any assets of the
Company or its Subsidiaries whatsoever.  The Participants shall have
no claim against the Company for any changes in the value of any assets which
may be invested or reinvested by the Company with respect to the
Plan.

     

     

     

    
      
        
        

      

      
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    17.8    Beneficiaries

     

    The designation of a Beneficiary
shall be on a form provided by the Company, executed by the Participant (with
the consent of the Participant’s spouse, if required by the Company for reasons
of community property or otherwise), and delivered to a designated
representative the Company.  A Participant may change his or her
Beneficiary designation at any time.  A designation by a Participant
under any predecessor plans shall remain in effect under the Plan unless such
designation is revoked or changed under the Plan.  If no Beneficiary
is designated, if the designation is ineffective, or if the Beneficiary dies
before the balance of a Participant’s benefit is paid, the balance shall be paid
to the Participant’s spouse, or if there is no surviving spouse, to the
Participant’s lineal descendants, pro rata, or if there is no surviving spouse
or any lineal descendant, to the Participant’s
estate.  Notwithstanding the foregoing, however, a Participant’s
Beneficiary shall be determined under applicable state law if such state law
does not recognize Beneficiary designations under plans of this sort and is not
preempted by laws which recognize the provisions of this Section
17.8.

     

    17.9    Governing
Law

     

    The Plan shall be construed and
governed in accordance with the laws of the State of Texas.

     

    17.10    Satisfaction
of Tax Obligations

     

    Appropriate provision shall be made
for all taxes required to be withheld in connection with the exercise, grant,
vesting or other taxable event of Awards under the applicable laws and
regulations of any governmental authority, whether federal, state or local and
whether domestic or foreign, including, without limitation, the required
withholding of a sufficient number of shares of Common Stock otherwise issuable
to a Participant to satisfy the said required minimum tax withholding
obligations.  To the extent provided by the Plan Administrator, a
Participant is permitted to deliver shares of Common Stock (including shares
acquired pursuant to the exercise of an option or stock appreciation right other
than the option or stock appreciation right currently being exercised, to the
extent permitted by applicable regulations) for payment of withholding taxes on
the exercise of an option or stock appreciation right, upon the grant or vesting
of Restricted Stock or Restricted Stock Units or upon the payout of Performance
Shares, Performance Units or Incentive Awards.  Shares of Common Stock
may be required to be withheld from the shares issuable to the Participant upon
the exercise of an option or stock appreciation right, upon the vesting of
Restricted Stock or Restricted Stock Units or upon the payout of Performance
Shares or Performance Units to satisfy tax withholding
obligations.  The Fair Market Value of Common Stock as delivered
pursuant to this Section 17.10 shall be determined as of the day prior to
delivery, and shall be calculated in accordance with Section
2.15.

     

     

     

    
      
        
        

      

      
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    Any Participant who makes a Section
83(b) election under the Code shall, within ten (10) days of making such
election, notify the Company in writing of such election and shall provide the
Company with a copy of such election form filed with the Internal Revenue
Service.

     

    A Participant is solely responsible
for obtaining, or failing to obtain, tax advice with respect to participation in
the Plan prior to the Participant’s (i) entering into any transaction under or
with respect to the Plan, (ii) designating or choosing the times of
distributions under the Plan, or (iii) disposing of any shares of Common Stock
issued under the Plan.

     

    17.11    Participants
in Foreign Jurisdictions

     

    The Plan Administrator shall have
the authority to adopt such modifications, procedures and subplans as may be
necessary or desirable to comply with provisions of the laws of any countries in
which the Company may operate to ensure the viability of the benefits from
Awards granted to Participants employed in such countries, to meet the
requirements of local laws that permit the Plan to operate in a qualified or
tax-efficient manner, to comply with applicable foreign laws and to meet the
objectives of the Plan.

     

     

    SECTION
18    COMPLIANCE
WITH RULE 16b-3, SECTION 162(m) AND
SECTION 409A

     

    18.1    Rule
16b-3 of the Exchange Act and Section 162(m) of the Code

     

    The Company’s
intention is that, so long as any of the Company’s equity securities are
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, the Plan
shall comply in all respects with the rules of any exchange on which the shares
of Common Stock are traded and with Rule 16b-3.  In addition, it is
the Company’s intention that, as to Covered Employees, unless otherwise
indicated in an Award Agreement, stock options, stock appreciation rights,
Performance Shares, Performance Units and Incentive Awards shall qualify as
performance-based compensation under Section 162(m).  If any Plan
provision is determined not to be in compliance with the foregoing intentions,
that provision shall be deemed modified as necessary to meet the requirements of
any such exchange, Rule 16b-3 and Section 162(m).

     

     

     

     

    
      
        
        

      

      
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    18.2    Section
409A of the Code

     

    The Plan is
intended to be administered, operated and construed in compliance with Section
409A of the Code and any guidance issued thereunder. Notwithstanding this or any
other provision of the Plan to the contrary, the Board of Directors and the Plan
Administrator may amend the Plan in any manner, or take any other action, that
either of them determines, in its sole discretion, is necessary, appropriate or
advisable to cause the Plan to comply with Section 409A and any guidance issued
thereunder. Any such action, once taken, shall be deemed to be effective from
the earliest date necessary to avoid a violation of Section 409A and shall be
final, binding and conclusive on all Participants and other individuals having
or claiming any right or interest under the Plan.

     

     

    SECTION
19    AMENDMENT,
TERMINATION OR DISCONTINUANCE OF
THE PLAN

     

    19.1    Amendment
of Plan

     

    Subject to the Board of Directors,
the Plan Administrator may from time to time make such amendments to the Plan as
it may deem proper and in the best interest of the Company, including, without
limitation, any amendment necessary to ensure that the Company may obtain any
regulatory approval referred to in Section 15; provided,
however,
that (a) to the extent required by applicable law, regulation or stock exchange
rule, stockholder approval shall be required, and (b) no change in any Award
previously granted under the Plan may be made without the consent of the
Participant if such change would impair the right of the Participant under the
Award to acquire or retain Common Stock or cash that the Participant may have
acquired as a result of the Plan.

     

    19.2    Termination
or Suspension of Plan

     

    The Board of Directors may at any
time suspend the operation of or terminate the Plan with respect to any shares
of Common Stock or rights which are not at that time subject to any Award
outstanding under the Plan.

     

     

    SECTION
20    DEFFERAL
ELECTIONS

     

    The Plan Administrator may, to the
extent permitted by applicable law, including, but not limited to Section 409A
of the Code, permit Participants to defer Awards under the Plan.  Any
such deferrals shall be subject to such terms, conditions and procedures that
the Plan Administrator may establish from time to time in its sole
discretion.

     

     

     

     


    
      
         


      

      
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    IN
WITNESS WHEREOF, the Company has caused the Plan to be amended and
restated effective as of May 6, 2009.

     

     

     

     

    
      
        	 	EL
      PASO CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	     
      /s/ Susan B.
      Ortenstone	 
	 	 	Susan
      B. Ortenstone	 
	 	 	Its
      Senior Vice President, Human Resources	 
	 	 	 	 


      

    

     

    
      
        	 ATTEST:	 
	 	 	 
	By:
      	   /s/  Marguerite
      Woung-Chapman	 
	 	Marguerite
      Woung-Chapman	 
	 	Corporate
      Secretary