exv10wp






EXHIBIT 10.P




EL PASO CORPORATION




2005 COMPENSATION PLAN

FOR

NON-EMPLOYEE DIRECTORS




TABLE OF CONTENTS




	 	 	 	 	 

	SECTION 1 PURPOSE
	 	 	1	 
	1.1 Purpose
	 	 	1	 
	 
	 	 	 	 
	SECTION 2 ADMINISTRATION
	 	 	1	 
	2.1 Management Committee
	 	 	1	 
	 
	 	 	 	 
	SECTION 3 PARTICIPATION
	 	 	1	 
	3.1 Participants
	 	 	1	 
	 
	 	 	 	 
	SECTION 4 SHARES AVAILABLE FOR THE PLAN
	 	 	2	 
	4.1 Maximum Number of Shares
	 	 	2	 
	4.2 Adjustment to Number of Shares
	 	 	2	 
	 
	 	 	 	 
	SECTION 5 COMPENSATION
	 	 	2	 
	5.1 Amount of Compensation
	 	 	2	 
	5.2 Compensation Election
	 	 	2	 
	5.3 Plan Year
	 	 	3	 
	5.4 Plan Quarter
	 	 	3	 
	 
	 	 	 	 
	SECTION 6 DEFERRED COMPENSATION
	 	 	3	 
	6.1 Deferred Cash
	 	 	3	 
	6.2 Deferred Common Stock
	 	 	3	 
	6.3 Memorandum Deferred Account
	 	 	4	 
	6.4 Discretionary Investment by Company
	 	 	5	 
	 
	 	 	 	 
	SECTION 7 LONG-TERM EQUITY
	 	 	5	 
















 






	 	 	 	 	 

	7.1 Long-Term Equity Credit
	 	 	5	 
	 
	 	 	 	 
	SECTION 8 PHANTOM STOCK UNITS
	 	 	5	 
	8.1 Phantom Stock Units
	 	 	5	 
	 
	 	 	 	 
	SECTION 9 PAYMENT OF DEFFERED COMPENSATION
	 	 	6	 
	9.1 Payment of Deferred Cash
	 	 	6	 
	9.2 Payment of Deferred Common Stock
	 	 	7	 
	9.3 Acceleration of Payment of Deferred Cash and
	 	 	7	 
	Deferred Common Stock
	 	 	 	 
	 
	 	 	 	 
	SECTION 10 GENERAL PROVISIONS
	 	 	10	 
	10.1 Issuance of Common Stock
	 	 	10	 
	10.2 Unfunded Obligation
	 	 	11	 
	10.3 Beneficiary
	 	 	11	 
	10.4 Permanent Disability
	 	 	12	 
	10.5 Incapacity of Participant or Beneficiary
	 	 	12	 
	10.6 Nonassignment
	 	 	12	 
	10.7 Termination and Amendment
	 	 	12	 
	10.8 Applicable Law
	 	 	13	 
	10.9 Effective Date and Term of the Plan
	 	 	13	 
	10.10 Compliance With Section 16(b) of the Exchange Act
	 	 	13	 
	10.11 Impact of Future Regulations
	 	 	13	 






EL PASO CORPORATION




2005 COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS



SECTION 1 PURPOSE




1.1 Purpose




     The purpose of the Plan is to provide a compensation program for non-employee Directors of El
Paso Corporation (the “Company”), that will attract and retain highly qualified individuals to
serve as members of the Company’s Board of Directors (the “Board”). The Plan permits non-employee
Directors of the Company to receive their Compensation (as defined below) in the form of cash,
deferred cash, deferred shares of Company common stock, par value $3 per share, (“Common Stock”) or
any combination of the foregoing. For purposes of the Plan, the term “Compensation” shall mean the
Participant’s annual retainer and meeting fees, if any, for each regular or special meeting of the
Board and for any committee meetings attended.













 





SECTION 2 ADMINISTRATION




2.1 Management Committee




     Subject to Section 10.7, the Plan shall be administered by a management committee (the
“Management Committee”) consisting of the Chief Executive Officer of the Company or such other
senior officers as the Chief Executive Officer shall designate. The Management Committee shall
interpret the Plan, shall prescribe, amend and rescind rules relating to it from time to time as it
deems proper and in the best interests of the Company, and shall take any other action necessary
for the administration of the Plan. Any decision or interpretation adopted by the Management
Committee shall be final and conclusive and shall be binding upon all Participants (as defined in
Section 3.1).



SECTION 3 PARTICIPATION




3.1 Participants




     Each person who is a non-employee Director of the Company on the Effective Date (as defined in
Section 10.9) of the Plan shall become a participant in the Plan (a “Participant”) on the Effective
Date. Thereafter, each non-employee Director of the Company shall become a Participant immediately
upon election to the Board.



SECTION 4 SHARES AVAILABLE FOR THE PLAN




4.1 Maximum Number of Shares




     Subject to Section 4.2, the maximum number of shares of Common Stock which may at any time be
awarded under the Plan is two million five hundred thousand (2,500,000) shares of Common Stock.
Awards may be from shares held in the Company’s treasury or issued out of authorized but unissued
shares of the Company, or partly out of each, as shall be determined by the Management Committee.



4.2 Adjustment to Number of Shares




     In the event of recapitalization, stock split, stock dividend, exchange of shares, merger,
reorganization, change in corporate structure or shares of the Company or similar event, the Board,
upon recommendation of the Management Committee, may make appropriate adjustments to the number of
shares (i) authorized for the Plan, and (ii) allocated under the Common Stock Deferral (as defined
in Section 6.2).













 





SECTION 5 COMPENSATION




5.1 Amount of Compensation




     Each Director’s Compensation shall be determined in accordance with the Company’s By-laws and
shall be paid, unless deferred pursuant to Section 6, in the Plan Year (as defined in Section 5.3)
in which it is earned in four equal quarterly installments with each installment being made on or
about the last day of the applicable Plan Quarter (as defined in Section 5.4) (the “Payment Date”).
The Management Committee, if necessary, may determine prior to the beginning of the applicable
Plan Quarter for which Compensation is to be paid that payment shall be made at a date later than
the Payment Date.



5.2 Compensation Election




     Except as provided in Section 7, by December 31 of the calendar year prior to each Plan Year,
or at such later time as may be provided by Treasury Regulations promulgated under Section 409A of
the Internal Revenue Code (the “Code”), each Participant may elect to receive his or her
Compensation for the following Plan Year (as defined below) in the form of cash, deferred cash,
deferred Common Stock or any combination of the foregoing, by submitting a written notice to the
Company in the manner prescribed by the Management Committee. In the case of a newly-elected
Director, such election may be made within thirty (30) days of the Director’s election to the Board
with respect to Compensation for services performed subsequent to the election. Any combination of
the alternatives may be elected, provided the aggregate of the alternatives elected may not exceed
one hundred percent (100%) of the Participant’s Compensation, except as provided in Section 6.2(a).
Unless otherwise provided under the terms of the Compensation, if no election is received by the
Company, the Participant shall be deemed to have made an election to receive his or her
Compensation in undeferred cash. An election under this Section 5.2 shall be irrevocable and shall
apply to the Compensation earned during the Plan Year (as defined below) for which the election is
effective.



5.3 Plan Year




     The term “Plan Year” shall mean the period which begins on the day of the Company’s annual
stockholders’ meeting and terminates the day before the succeeding annual stockholders’ meeting.



5.4 Plan Quarter




     The term “Plan Quarter” shall mean each calendar quarter except that (i) the first Plan
Quarter of any Plan Year which normally shall be a “short” quarter













 




beginning on the day of the annual stockholders’ meeting and ending on June 30, and (ii) the fourth
Plan Quarter of any Plan Year normally shall be a “long” quarter beginning on January 1 and ending
on the day before the annual stockholders’ meeting.




SECTION 6 DEFERRED COMPENSATION




6.1 Deferred Cash




     If a Participant elects pursuant to Section 5.2 to have all or a specified percentage of his
or her Compensation deferred in cash, such amount (a “Cash Deferral”) shall be recorded in a
Memorandum Deferred Account (as defined in Section 6.3) as of the date the Compensation otherwise
would have been paid.



6.2 Deferred Common Stock




     (a) If a Participant elects pursuant to Section 5.2 to have all or a specified percentage of
his or her cash Compensation deferred in Common Stock, or if an amount is required to be taken in
Common Stock pursuant to Section 5.1, and/or the Company’s By-laws, an amount shall be recorded in
a Memorandum Deferred Account, in the form of shares of Common Stock, as determined in subsection
(b) below, as of the date the Compensation otherwise would have been paid. The amount credited to
the Participant’s Memorandum Deferred Account in such case (the “Common Stock Deferral”) shall be
equal to the amount actually deferred plus a premium (the “Conversion Premium”). The Conversion
Premium shall be twenty-five percent (25%) of the Compensation actually deferred.



     (b) The number of shares of Common Stock credited to a Participant’s Memorandum Deferred
Account shall equal the Common Stock Deferral divided by the Fair Market Value of the Common Stock
on the applicable Payment Date. For purposes of this Plan, “Fair Market Value” shall be the mean
between the highest and lowest quoted selling prices at which the Common Stock is sold on the
applicable Payment Date as reported in the NYSE Composite Transactions by The Wall Street Journal
or any other comparable service the Management Committee may determine is reliable on such date, or
if no Common Stock was traded on such date, on the next preceding date on which Common Stock was so
traded.



     (c) Subject to Section 10.1, each Participant who elects deferred Common Stock shall, once the
shares of Common Stock have been credited to his or her Memorandum Deferred Account, receive
dividend equivalents and other distributions on such shares, subject to applicable laws. Any such
dividend equivalents and other distributions shall be deemed reinvested promptly in additional shares of
Common Stock and such additional shares shall be credited













 




to the Memorandum Deferred Account. To the extent a trust is established pursuant to Section 6.4, and Common Stock is held by such trust,
each Participant who elects deferred Common Stock shall have the right, subject to applicable law
and the applicable trustee, to direct the trustee to vote a percentage of the Common Stock held by
the trust that corresponds to the total number of shares of Common Stock credited to the
Participant’s Memorandum Deferred Account over the total shares of Common Stock credited to
Participants’ accounts under all plans covered by the trust arrangement.




     (d) The deferred Common Stock balance in the Memorandum Deferred Account shall be payable to
the Participant in Common Stock.



6.3 Memorandum Deferred Account




     The Company shall establish a ledger account (the “Memorandum Deferred Account”) for each
Participant for the purpose of recording the Company’s obligation to pay the Compensation as
provided in Sections 9.1 and 9.2, and for recording the Long-Term Equity Credit, described below in
Section 7.



     (a) Except as provided in Section 6.4, interest shall accrue on all Cash Deferrals to the date
of distribution and shall be credited to the Memorandum Deferred Account at the end of each
calendar quarter or such other periods as may be determined by the Management Committee. The
Management Committee shall determine the rate of interest or earnings/losses credited to the
Memorandum Deferred Account periodically and in so doing may take into account the earnings,
losses, appreciation or depreciation attributable to discretionary investments made pursuant to
Section 6.4, and any other factors it deems appropriate.



     (b) The Company shall promptly credit each Participant’s Memorandum Deferred Account with the
number of shares of Common Stock calculated in accordance with Section 6.2(b) and (c).



6.4 Discretionary Investment by Company




     The deferred amounts to be paid to the Participants are unfunded obligations of the Company.
The Management Committee may direct that an amount equal to the deferred amount shall be invested
by the Company as the Management Committee, in its sole discretion, shall determine. The
Management Committee may in its sole discretion determine that all or some portion of an amount
equal to the Common Stock Deferrals and Cash Deferrals, and (where appropriate) interest thereon,
shall be paid into one or more grantor trusts to be established by the Company. The Management
Committee may designate an investment advisor to direct investments and reinvestments of the funds, including
investment of any grantor trusts hereunder.













 





SECTION 7 LONG-TERM EQUITY




7.1 Long-Term Equity Credit




     In addition to elective deferrals under Section 6.2(a), each Participant’s Memorandum Deferred
Account shall be credited on each Payment Date with an amount equal to one-fourth (1/4) of the
Participant’s annual Compensation (the “Long-Term Equity Credit”) or as otherwise determined in
accordance with the Company’s By-laws. The Long-Term Equity Credit shall be in the form of a
Common Stock Deferral, but such credit shall not be entitled to the Conversion Premium. Except for
the absence of the Conversion Premium, the Long-Term Equity Credit shall be treated the same as all
other Common Stock Deferrals under this Plan.



SECTION 8 PHANTOM STOCK UNITS




8.1 Phantom Stock Units




     (a) Notwithstanding Section 5.2, if the Management Committee determines that the maximum
number of shares of Common Stock which may be awarded pursuant to Section 4.1 of the Plan has been
issued, then phantom stock units which shall have an accounting value equal to the Fair Market
Value of one (1) share of Common Stock (“PSUs”) shall be credited to the Participant’s Memorandum
Deferred Account for his or her Common Stock Deferral and/or Long-Term Equity Credit for the Plan
Year. The amount of PSUs credited to the Participant’s Memorandum Deferred Account for his or her
Common Stock Deferral shall include the Conversion Premium.



     (b) Each Participant who receives PSUs shall, once the PSUs have been credited to his or her
Memorandum Deferred Account, have the right to receive dividend equivalents and other distributions
on such PSUs, subject to applicable laws. Any such dividend equivalents and other distributions
shall be deemed reinvested promptly in additional PSUs and such additional PSUs shall be credited
to the Memorandum Deferred Account until the Memorandum Deferred Account is distributed.
Participants do not have the right to vote the PSUs.



     (c) When, and if, additional shares of Common Stock become available under the Plan or a
successor plan, the PSUs credited to a Participant’s Memorandum Deferred Account shall be replaced
with an equivalent number of shares of deferred Common Stock credited to the
Participant’s Memorandum Deferred Account. Such shares of deferred Common Stock shall be treated
as all other Common Stock Deferrals under the Plan. If no additional shares of Common Stock become
available under the Plan at the time of distribution of the PSUs to the Participant, an amount
equal to the PSU balance of the Participant’s













 




Memorandum Deferred Account shall be paid to the Participant (or the Participant’s Beneficiary
in the case of the Participant’s death) in a lump sum cash payment based on the Common Stock’s Fair
Market Value on the day preceding the date of such payment. Payment of PSUs in cash shall be made
in the month following the date on which the Participant ceases to be a Director. PSUs credited to
the Participant’s Memorandum Deferred Account for the Participant’s Long-Term Equity Credit shall
be subject to any additional restrictions of such other Long-Term Equity Credits under the Plan.




SECTION 9 PAYMENT OF DEFERRED COMPENSATION




9.1 Payment of Deferred Cash




     When a Participant ceases to be a Director, the Company shall pay to the Participant (or the
Participant’s Beneficiary in the case of the Participant’s death) an amount equal to the deferred
cash balance of his or her Memorandum Deferred Account, plus interest (at a rate determined
pursuant to Section 6.3) on the outstanding deferred cash account balance to the date of
distribution, as follows:




	 	(a)	 	a lump sum cash payment, or






	 	(b)	 	in periodic installments over a period of years as determined
at the time the deferral election is made under Section 5.2.




Payment of deferred cash shall be made or, in the case of installments over a period of years,
shall begin to be made, in the month following the date on which a Participant ceases to be a
Director.




9.2 Payment of Deferred Common Stock




     When a Participant ceases to be a Director, the Company shall distribute Common Stock to the
Participant (or the Participant’s Beneficiary in the case of the Participant’s death) in an amount
equal to the number of whole shares of Common Stock in a Participant’s Memorandum Deferred Account,
as follows:




	 	(a)	 	a lump sum distribution, or






	 	(b)	 	in annual installments over a period of years as determined
at the time the deferral election is made under Section 5.2.




Any fractional shares of Common Stock held in the Participant’s account shall be paid to the
Participant (or the Participant’s Beneficiary in the case of the Participant’s death) in a lump sum
cash payment based on the Common Stock’s Fair Market Value on the day preceding the date of such
payment.














 








     Payment of deferred Common Stock shall be made or, in the case of installments over a period
of years, shall begin to be made, in the month following the date on which a Participant ceases to
be a Director, or such later date as may be necessary to comply with Section 16(b) of the
Securities Exchange Act, as amended and rules promulgated thereunder (the “Exchange Act”).



9.3 Acceleration of Payment of Deferred Cash and Deferred Common Stock




     (a) In the event of a Participant’s death or Permanent Disability, notwithstanding the
Participant’s elections made with respect to form of distribution under Section 9.1 and 9.2, the
balance of the Participant’s Deferred Memorandum Account shall be distributed in full as soon as
practicable (but in no event later than thirty (30) days) following the Participant’s death or
Permanent Disability.



     (b) Subject to Section 409A of the Code, in case of an unforeseeable emergency, a Participant
may request a distribution from the Participant’s Deferred Memorandum Account earlier than the date
to which it was deferred.



     For purposes of this Section 9.3(b), an “unforeseeable emergency” shall be limited to a severe
financial hardship to the Participant resulting from an illness or accident of the Participant, the
Participant’s spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant,
loss of the Participant’s property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of the Participant.
The circumstances that will constitute an unforeseeable emergency will depend upon the facts of
each case, but, in any case, amounts distributed with respect to an unforeseeable emergency may not
exceed amounts necessary to satisfy such emergency, plus amounts necessary to pay taxes reasonably
anticipated as a result of the distribution, after taking into account the extent to which such
hardship is or may be relieved: (i) through reimbursement or compensation by insurance or otherwise
or (ii) by liquidation of the Participant’s assets, to the extent the liquidation of such assets
would not itself cause severe financial hardship.



     The Committee shall consider any requests for payment on the basis of an unforeseeable
emergency under this Section 9.3(b) on a uniform and nondiscriminatory basis and in accordance with
the standards of interpretation described in Section 457 of the Code and the regulations
thereunder.



     (c) All deferred cash and deferred Common Stock under this Plan shall be paid to a Participant
(or his or her Beneficiary in the case of his or her death) in the event of a Change in Control
within thirty (30) days after the date of the Change in Control, or at such later time as may be
required to enable the













 




Director to avoid liability under Section 16(b) of the Exchange Act.
Notwithstanding the foregoing, no such deferred amounts shall be paid to a Participant who
continues to serve as a Director of the Company or its successor, until such time said deferrals
would otherwise be paid. For purposes of this Plan, a “Change in Control” shall be deemed to occur
upon the occurrence of any of the following after the Effective Date:





     (i) 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 (A) 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 (B) 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 (i), 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 (1) 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”), (2) the Company or any Related Entity, or (3) any Person in connection
with a “Non-Control Transaction” (as hereinafter defined);




     (ii) The individuals who, as of the Effective Date, are members of the Board (the
“Incumbent Board of Directors”), cease for any reason to constitute at least a majority of
the members of the Board 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




(iii) The consummation of:




     (A) 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;




     (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 (i) the Company, (ii) any Related Entity, or
(iii) 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 (iv) 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;




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













 






     (C) 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.




SECTION 10 GENERAL PROVISIONS




10.1 Issuance of Common Stock




     The Company shall not be required to issue any certificate for shares of Common Stock 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, deems necessary or advisable;




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




     (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, determines to be necessary or advisable.



     All certificates for shares of Common Stock delivered under the Plan also shall be subject to
such stop transfer orders and other restrictions as the Management Committee 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 Management Committee may cause a legend or legends to be placed on any
such certificates 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 Management Committee determines that
application of such provisions is no longer required or desirable. In making such determination,
the Management Committee may rely upon an opinion of counsel for the Company.




10.2 Unfunded Obligation




     Any deferred amount to be paid to Participants pursuant to the Plan is an unfunded obligation
of the Company. The Company is not required to segregate any monies from its general funds, to
create any trusts, or to make any special deposits with respect to this obligation. Beneficial
ownership of any investments, including trust investments that 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 memorandum accounts shall not create or constitute a trust or a
fiduciary relationship between the Management Committee or the Company 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 whatsoever. The
Participants shall have no claim against the Company for any changes in the value of any assets
that may be invested or reinvested by the Company with respect to the Plan.



10.3 Beneficiary




     The term “Beneficiary” shall mean the person or persons to whom payments are to be paid
pursuant to the terms of the Plan in the event of the Participant’s death. The designation shall
be on a form provided by the Management Committee, executed by the Participant, and delivered to
the Management Committee. A Participant may change his or her Beneficiary designation at any time.
A designation by a Participant under a predecessor plan shall remain in effect under this Plan
unless it is revoked or changed under this Plan. If no Beneficiary is designated, the designation
is ineffective, or in the event the Beneficiary dies before the balance of the Memorandum Deferred
Account is paid, the balance shall be paid to the Participant’s spouse, or if there is no surviving
spouse, to his or her lineal descendants, pro rata, or if there is no surviving spouse or lineal
descendants, to the Participant’s legal representatives, the Participant’s estate or the person or
persons to whom the deceased’s rights under the Plan shall have passed by will or the laws of descent and distribution (unless the
Management Committee for a given year has designated investment in an annuity, in which case the
payment options selected by the Participant with respect thereto shall govern).













 





10.4 Permanent Disability




     A Participant shall be deemed to have become “Permanently Disabled” if the Participant (i) is
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, receiving income
replacement benefits for a period of not less than three (3) months under an accident and health
plan of the Company.



10.5 Incapacity of Participant or Beneficiary




     If the Management Committee finds that any Participant or Beneficiary to whom a payment is
payable under the Plan is unable to care for his or her affairs because of illness or accident or
is under a legal disability, any payment due (unless a prior claim therefor shall have been made by
a duly appointed legal representative), at the discretion of the Management Committee, may be paid
to the spouse, child, parent, brother or sister of such Participant or Beneficiary or to any person
whom the Management Committee has determined has incurred expense for such Participant or
Beneficiary. Any such payment shall be a complete discharge of the obligations of the Company
under the provisions of the Plan.



10.6 Nonassignment




     The right of a Participant or Beneficiary to the payment of any amounts under the Plan may not
be assigned, transferred, pledged or encumbered nor shall such right or other interest be subject
to attachment, garnishment, execution or other legal process.



10.7 Termination and Amendment




     Subject to the Board, the Management Committee 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, but not limited
to, any amendment necessary to ensure that the Company may obtain any regulatory approval referred
to above; provided, however, that to the extent required by applicable law, regulation or stock
exchange rule, stockholder approval shall be required. Subject to Section 409A of the Code, the
Board may at any time suspend the operation of or terminate the Plan. No amendment, suspension or termination may impair the right
of a Participant or the Participant’s designated Beneficiary to receive benefits accrued prior to
the effective date of such amendment, suspension or termination.













 





10.8 Applicable Law




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



10.9 Effective Date and Term of the Plan




     The Plan was adopted by the Board on February 18, 2005, and is subject to approval by the
Company’s stockholders. If approved by the stockholders, this Plan will replace the 1995
Compensation Plan for Non-Employee Directors Amended and Restated as of December 4, 2003, and no
further awards will be made under that plan. This Plan shall become effective on the date it is
approved by the Company’s stockholders (the “Effective Date”), and shall remain in effect, subject
to the right of the Board to terminate the Plan at any time pursuant to Section 10.7, until the
date immediately preceding the tenth (10th) anniversary of the Effective Date of the
Plan. No awards shall be granted under this Plan after such date.



10.10 Compliance With Section 16(b) of the Exchange Act




     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, with respect to awards of Common
Stock, the Plan shall comply in all respects with any exemption pursuant to Section 16(b)
promulgated under Section 16 of the Exchange Act. If any Plan provision is later found not to be
in compliance with such exemptions available pursuant to Section 16(b) of the Exchange Act, that
provision shall be deemed modified as necessary to meet the requirements of Section 16(b).



10.11 Impact of Future Legislation or Regulations




     This Plan is intended to be operated in compliance with Section 409A of the Code. The terms
of this Plan should be interpreted to comport with Section 409A and any guidance issued by the
Secretary of the Treasury or the Internal Revenue Service interpreting Section 409A. If necessary,
the terms of this Plan shall be amended to comply with such future guidance.



     IN WITNESS WHEREOF, the Company has caused the Plan to be executed effective as of May 26,
2005.



EL PASO CORPORATION




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


ATTEST:




	 	 	 	 	 
	 	 
	By  	/s/ David L. Siddall
 	 
	 	David L. Siddall                	 
	 	Corporate Secretary