<PAGE>   1
                                                                    EXHIBIT 3.2

                                  TENNECO INC.
                  CERTIFICATE OF RETIREMENT OF PREFERRED STOCK
                             REDEEMED OR PURCHASED
                  --------------------------------------------

         Tenneco Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as follows:

         FIRST: That pursuant to the provisions of Section 160 of the General
Corporation Law of the State of Delaware, and subject to the provisions of its
Certificate of Incorporation, as amended, One Hundred Ninety-Five Thousand
Seven Hundred Sixty-One (195,761) shares of its issued and outstanding $7.40
Cumulative Preferred Stock were purchased and/or redeemed by the corporation
and pursuant to the provisions of Section 243 of the General Corporation Law of
the State of Delaware, such shares of sock have the status of retired shares.

         SECOND. That the Certificate of Incorporation of the corporation
prohibits the reissuance of such retired shares of Cumulative Preferred Stock.

         THIRD: That pursuant to the-provisions of Section 243 of the General
Corporation Law of the State of Delaware, upon this Certificate becoming
effective, the Certificate of Incorporation of the corporation shall be amended
so that the authorized Cumulative Preferred Stock of the corporation shall be
reduced by the aggregate of the shares so retired, to-wit: One Hundred
Ninety-Five Thousand Seven Hundred Sixty One (195,761) shares.

         FOURTH: This Certificate shall become effective on March 1, 1996.

         IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to
be signed by Mark A. McCollum, Vice President and Controller, and attested by
James D. Gaughan, Assistant Secretary, this 16th day of February, 1996.

                                          TENNECO INC.

                                          By: /s/ MARK A. MCCOLLUM
                                             --------------------------------
                                             Mark A. McCollum, Vice President
ATTEST:                                      and Controller

/S/JAMES D. GAUGHAN
-------------------
James D. Gaughan
Assistant Secretary
<PAGE>   2
                      CERTIFICATE OF ELIMINATION OF THE
             SERIES A CUMULATIVE PREFERRED STOCK OF TENNECO INC.
                                      
                          Pursuant to Section 151(g)
                        of the General Corporation Law
                           of the State of Delaware

                 Tenneco Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, hereby certifies as follows:

                 1.       That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 10,062,500 shares of Series A Cumulative Preferred
Stock, without par value (the "Series A Cumulative Preferred Stock"), and
established the voting powers, designations, preferences and relative,
participating and other rights, and the qualifications, limitations or
restrictions thereof, and, on December 19, 1991, filed a Certificate of
Designation with respect to such Series A Cumulative Preferred Stock in the
office of the Secretary of State of the State of Delaware.

                 2.       That no shares of said Series A Cumulative Preferred
Stock are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

                 3.       That the Board of Directors of the Corporation
                          has adopted the following resolutions:

                          WHEREAS, by resolution of the Board of Directors of
                 the Corporation and by a Certificate of Designation filed in
                 the office of the Secretary of State of the State of Delaware
                 on December 19,1991, this Corporation authorized the issuance
                 of a series of 10,062,500 shares of Series A Cumulative
                 Preferred Stock, without par value, of the Corporation (the
                 "Series A Cumulative Preferred Stock") and established the
                 voting powers, designations, preferences and relative,
                 participating and other rights, and the qualifications,
                 limitations or restrictions thereof; and

                          WHEREAS, as of the date hereof no shares of such
                 Series A Cumulative Preferred Stock are outstanding and no
                 shares of such Series A Cumulative Preferred
<PAGE>   3
                 Stock will be issued subject to said Certificate of 
                 Designation; and

                          WHEREAS, it is desirable that all matters set forth
                 in the Certificate of Designation with respect to such Series
                 A Cumulative Preferred Stock be eliminated from the
                 Certificate of Incorporation, as heretofore amended, of the
                 Corporation;

                          NOW, THEREFORE, BE IT AND IT HEREBY IS

                          RESOLVED, that all matters set forth in the
                 Certificate of Designation with respect to such
                 Series A Cumulative Preferred Stock be eliminated from the
                 Certificate of Incorporation, as heretofore amended, of the
                 Corporation; and it is further

                          RESOLVED, that the officers of the Corporation be,
                 and hereby are, authorized and directed to file a Certificate
                 with the office of the Secretary of State of the State of
                 Delaware setting forth a copy of these resolutions whereupon
                 all matters set forth in the Certificate of Designation with
                 respect to such Series A Cumulative Preferred Stock shall be
                 eliminated from the Certificate of Incorporation, as 
                 heretofore amended, of the Corporation.

                 4.       That, accordingly, all matters set forth in the
Certificate of Designation with respect to such Series A Cumulative Preferred
Stock be, and hereby are, eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

                 IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.                                                   

                                  TENNECO INC.

                                  By:/s/ ROBERT T. BLAKELY
                                     ---------------------
                                     Robert T. Blakely
                                     Senior Vice President
ATTEST:

/s/ JAMES D. GAUGHAN
--------------------
James D. Gaughan
Assistant Secretary                     


                                      -2-
<PAGE>   4
                       CERTIFICATE OF ELIMINATION OF THE
                 VARIABLE RATE PREFERRED STOCK OF TENNECO INC.

                           Pursuant to Section 151(g)
                         of the General Corporation Law
                            of the State of Delaware

                 Tenneco Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, hereby certifies as follows:

                 1.       That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 200,396 shares of Variable Rate Preferred Stock,
without par value (the "Variable Rate Preferred Stock"), and established the
voting powers, designations, preferences and relative, participating and other
rights, and the qualifications, limitations or restrictions thereof, and, on
October 9, 1987, filed a Certificate of Designation with respect to such
Variable Rate Preferred Stock in the office of the Secretary of State of the
State of Delaware.

                 2.       That no shares of said Variable Rate Preferred Stock
are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

                 3.       That the Board of Directors of the Corporation has
adopted the following resolutions:

                          WHEREAS, by resolution of the Board of Directors of
                 the Corporation and by a Certificate of Designation filed in
                 the office of the Secretary of State of the State of Delaware
                 on October 9, 1987, this Corporation authorized the issuance of
                 a series of 200,396 shares of Variable Rate Preferred Stock,
                 without par value, of the Corporation (the "Variable Rate
                 Preferred Stock") and established the voting powers,
                 designations, preferences and relative, participating and other
                 rights, and the qualifications, limitations or restrictions
                 thereof; and
        
                          WHEREAS, as of the date hereof no shares of such 
                 Variable Rate Preferred Stock are outstanding and no shares 
                 of such Variable Rate Preferred Stock will be issued subject 
                 to said Certificate of Designation; and   
                          

<PAGE>   5
                          WHEREAS, it is desirable that all matters set forth 
                 in the Certificate of Designation with respect to such 
                 Variable Rate Preferred Stock be eliminated from the 
                 Certificate of Incorporation, as heretofore amended, of 
                 the Corporation;

                          NOW, THEREFORE, BE IT AND IT HEREBY IS

                          RESOLVED, that all matters set forth in the  
                 Certificate of Designation with respect to such Variable 
                 Rate Preferred Stock be eliminated from the Certificate 
                 of Incorporation, as heretofore amended, of the 
                 Corporation; and it is further 

                          RESOLVED, that the officers of the Corporation be, 
                 and hereby are, authorized and directed to file a Certificate
                 with the office of the Secretary of State of the State of 
                 Delaware setting forth a copy of these resolutions whereupon 
                 all matters set forth in the Certificate of Designation 
                 with respect to such Variable Rate Preferred Stock shall 
                 be eliminated from the Certificate of Incorporation, as 
                 heretofore amended, of the Corporation.

                 4.       That, accordingly, all matters set forth in the
Certificate of Designation with respect to such Variable Rate Preferred Stock
be, and hereby are, eliminated from the Certificate of Incorporation, as
heretofore amended, of the Corporation.

                 IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.

                                  TENNECO INC.

                                  BY:/s/ ROBERT T. BLAKELY
                                     ---------------------
                                     Robert T. Blakely
                                     Senior Vice President 
ATTEST:

/s/ JAMES D. GAUGHAN
--------------------
James D. Gaughan
Assistant Secretary                      


                                      -2-
<PAGE>   6
                       CERTIFICATE OF ELIMINATION OF THE
                 PARTICIPATING PREFERRED STOCK OF TENNECO INC.

                           Pursuant to Section 151(g)
                         of the General Corporation Law
                            of the State of Delaware

                 Tenneco Inc., a corporation organized and existing under the
laws of the State of Delaware (the "Corporation"), in accordance with the
provisions of Section 151(g) of the General Corporation Law of the State of
Delaware, hereby certifies as follows:

                 1.       That, pursuant to Section 151 of the General
Corporation Law of the State of Delaware and authority granted in the
Certificate of Incorporation of the Corporation, as theretofore amended, the
Board of Directors of the Corporation, by resolution duly adopted, authorized
the issuance of a series of 1,859,000 shares of Participating Preferred Stock,
without par value (the "Participating Preferred Stock"), and established the
voting powers, designations, preferences and relative, participating and other
rights, and the qualifications, limitations or restrictions thereof, and, on
October 9, 1987, filed a Certificate of Designation with respect to such
Participating Preferred Stock in the office of the Secretary of State of the
State of Delaware.

                 2.       That no shares of said Participating Preferred Stock
are outstanding and no shares thereof will be issued subject to said
Certificate of Designation.

                 3.       That the Board of Directors of the Corporation has
adopted the following resolutions:

                          WHEREAS, by resolution of the Board of Directors of 
                 the Corporation and by a Certificate of Designation filed in 
                 the office of the Secretary of State of the State of Delaware 
                 on October 9, 1987, this Corporation authorized the issuance 
                 of a series of 1,859,000 shares of Participating Preferred 
                 Stock, without par value, of the Corporation (the 
                 "Participating Preferred Stock") and established the 
                 voting powers, designations, preferences and relative, 
                 participating and other rights, and the qualifications, 
                 limitations or restrictions thereof; and
        
                         WHEREAS, as of the date hereof no shares of such 
                 Participating Preferred Stock are outstanding and no 
                 shares of such Participating Preferred Stock will be issued 
                 subject to said Certificate of Designation; and
                             
<PAGE>   7
                          WHEREAS, it is desirable that all matters set forth 
                in the Certificate of Designation with respect to such 
                Participating Preferred Stock be eliminated from the 
                Certificate of Incorporation, as heretofore amended, of 
                the Corporation;

                          NOW, THEREFORE, BE IT AND IT HEREBY IS

                          RESOLVED, that all matters set forth in the
                 Certificate of Designation with respect to such Participating
                 Preferred Stock be eliminated from the Certificate of
                 Incorporation, as heretofore amended, of the Corporation; and
                 it is further

                          RESOLVED, that the officers of the Corporation be,
                 and hereby are, authorized and directed to file a Certificate
                 with the office of the Secretary of State of the State of
                 Delaware setting forth a copy of these resolutions whereupon
                 all matters set forth in the Certificate of Designation with
                 respect to such Participating Preferred Stock shall be
                 eliminated from the Certificate of Incorporation, as heretofore
                 amended, of the Corporation.

         4. That, accordingly, all matters set forth in the Certificate of
Designation with respect to such Participating Preferred Stock be, and hereby
are, eliminated from the Certificate of Incorporation, as heretofore amended,
of the Corporation.

                 IN WITNESS WHEREOF, Tenneco Inc. has caused this Certificate
to be signed by Robert T. Blakely, its Senior Vice President, as of this 27th
day of February, 1996.

                                  TENNECO INC.

                                  By:/s/ ROBERT T. BLAKELY
                                     ---------------------
                                     Robert T. Blakely
                                     Senior Vice President
ATTEST:

/s/ JAMES D. GAUGHAN
--------------------
James D. Gaughan
Assistant Secretary
<PAGE>   8

                                  TENNECO INC.

  Certificate of Designation, Preference and Rights of Junior Preferred Stock
                    by Resolution of the Board of Directors
                      Providing for an Issue of 6,000,000
                  Shares of Junior Preferred Stock Designated
              "8 1/4% Cumulative Junior Preferred Stock, Series A"


         I, Karl A. Stewart, Vice President and Secretary of Tenneco Inc.
(thereinafter referred to as the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 151 thereof. DO HEREBY CERTIFY:

         That pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation of said Corporation, as amended, the Board of
Directors is authorized to issue Junior Preferred Stock, without par value, of
the Corporation ("Junior Preferred Stock") in one or more series, and the Board
of Directors (i) has authorized the issuance of the series of Junior Preferred
Stock hereinafter provided for, and (ii) has authorized a special committee of
the Board of Directors (the "Junior Preferred Stock Issuance Committee") to
adopt the resolution set forth below creating a series of 6,000,000 shares of 
Junior Preferred Stock, without par value, designated as 8 1/4% Cumulative 
Junior Preferred Stock, Series A.

         That the Junior Preferred Stock Issuance Committee has adopted the
following resolution:

                 RESOLVED, that pursuant to the authority vested in the Board
         of Directors of the Corporation by the Certificate of Incorporation of
         the Corporation, as amended (as such may be further amended from time
         to time, the "Certificate of Incorporation") and the authority vested
         by such Board in a Junior Preferred Stock Issuance Committee, all of
         the members of which are members of such Board, a series of Junior
         Preferred Stock, without par value, of the Corporation (the "Junior
         Preferred Stock") be, and hereby is, created to be designated "8 1/4%
         Cumulative Junior Preferred Stock, Series A" (hereinafter referred to
         as the "Series A Preferred Stock"), consisting of 6,000,000 shares,
         and the designations, powers, preferences and relative and other
         special rights and the qualifications, limitations and restrictions of
         the Series A Preferred Stock are hereby fixed and stated to be as
         follows (all terms used herein which are defined in the Certificate of
         Incorporation shall be deemed to have the meanings provided therein):

                 Section 1. Dividends. (a) The dividend rate on the Series A
         Preferred Stock shall be 8 1/4% of $50 per share of Series A Preferred
         Stock per annum (2.0625% per quarter annum). Dividends (including
         Additional DRD Dividends (as defined in Section 2) on shares of the
         Series A Preferred Stock shall accrue, whether or not declared, on a
         daily basis from the date of issuance of such shares. Accrued but
         unpaid dividends shall not bear interest.

                 (b) Dividends on the Series A Preferred Stock shall be
         payable, when, as and if declared by the Board of Directors of the
         Corporation out of assets legally available therefor, quarter-yearly
         on the last days of March, June, September and December in each year
         (each, a "Dividend Payment Date"), with the first dividend payment
         date being the next Dividend Payment Date following the date of
         issuance. Dividends on each Dividend Payment Date will be payable to
         holders of record of the Series A Preferred Stock as they appear on
         the stock books of the Corporation on a record date, not more than 60
         days preceding such Dividend Payment Date, fixed for such purpose by
         the Board of Directors in advance of such Dividend Payment Date.
         Dividends payable on the Series A Preferred Stock for any period
         shorter than a quarter-yearly dividend period shall be computed on the
         basis of a 360-day year of twelve 30-day months. The Series A
         Preferred Stock shall rank on a parity with each other series of
         Junior Preferred Stock as to the payment of dividends, except to the
         extent otherwise provided in Section 7 hereof or in the resolution or
         resolutions providing for the issuance of such other series.

                 (c) If (x) the Stock Issuance (as defined in the Amended and
         Restated Agreement and Plan of Merger, dated as of June 19, 1996, as
         such may be amended or supplemental from time to time (the "Merger
         Agreement") among the Corporation, El Paso Natural Gas Company, a
         Delaware corporation ("El Paso") 



<PAGE>   9
         and El Paso Merger Company, a Delaware corporation) is not approved
         the stockholders of El Paso at a special meeting of El Paso
         stockholders (including any adjournments or postponements thereof, the
         "El Paso Special Meeting") called to approve such issuance, (y) the
         Merger (as defined in the Merger Agreement) is effected, and (z) on or
         before the 90th day after the date of the El Paso Special Meeting,
         either Standard and Poor's Corp. ("S&P") or Moody's Investors
         Service, Inc. ("Moody's") downgrades the rating previously given by it
         to the Series A Preferred Stock, the annual dividend rate set forth in
         (a) above will be automatically subjected to a one-time upward
         adjustment to the rate set forth in the table below opposite the
         applicable ratings which are given to the Series A Preferred Stock by
         each of Moody's and S&P as of the 90th day after the El Paso Special
         Meeting, effective as of the date of original issuance of the Series A
         Preferred Stock.

<TABLE>
<CAPTION>
                                                                                               Annual
                                                                                              Dividend
          Revised Ratings (Moody's/S&P)                                                         Rate  
          -----------------------------                                                       --------
          <S>                                                                                   <C>
          Ba1/BB+  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9.000%
          Ba2/BB+ or Ba1/BB  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9.125%
          Ba2/BB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9.250%
          Ba3/BB or Ba2/BB-  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9.500%
          Ba3/BB-  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10.000%
</TABLE>

                 If any such adjustment to the annual dividend rate occurs
         after a Dividend Payment Date as to which the Corporation previously
         paid dividends on the Series A Preferred Stock, additional dividends
         will be payable, out of funds legally available therefor, on each
         share of Series A Preferred Stock on the next succeeding Dividend
         Payment Date (or if such adjustment occurs after the dividend payable
         on the next succeeding Dividend Payment Date has been declared, on the
         second succeeding Dividend Payment Date following the date of such
         adjustment) to the holder of record of such share of Series A
         Preferred Stock as of the record date established for such succeeding
         Dividend Payment Date (or second succeeding Dividend Payment Date, as
         the case may be) in an amount equal to the excess of (x) the aggregate
         amount of dividends that would have been payable on such share on all
         Dividend Payments as to which the Corporation previously paid
         dividends on the Series A Preferred Stock if dividends had accrued
         from the date of issuance of the Series A Preferred Stock at the
         adjusted annual dividend rate, over (y) the aggregate amount of
         dividends actually paid with respect to such share of Series A
         Preferred Stock. If the annual dividend rate is adjusted as provided
         above, the Corporation will cause notice of such adjustment to be sent
         to the holders of record of the Series A Preferred Stock as they
         appear in the stock register of the Corporation.

                 Section 2. Changes in the Dividends Received Percentage. (a)
         Notwithstanding Section 1 hereof, if one or more amendments to the
         Internal Revenue Code of 1986, as amended (the "Code"), are enacted
         that reduce the percentage of the dividends received deduction as
         specified in Section 243(a)(1) of the Code or any successor provision
         (the "Dividends Received Percentage") to below 70%, the amount of each
         dividend payable per share of the Series A Preferred Stock for
         dividend payments made on or after the effective date of such change
         (or the second succeeding dividend payment after such effective date,
         as herein described) will be adjusted by multiplying the amount of the
         dividend payable pursuant to Section 1 (before adjustment pursuant to
         this Section 2) by a factor, which will be the number determined in
         accordance with the following formula (the "DRD Formula"), and
         rounding the result to the nearest cent:

                              1 - (.35(1 - .70))
                            ------------------------
                              1 - (.35(1 - DRP))
                                                                 
                 For the purposes of the DRD Formula, "DRP" means the Dividends
         Received Percentage applicable to the dividend in question. No
         amendments to the Code, other than a change in the percentage of the
         dividends received deduction set forth in Section 243 (a)(1) of the
         Code or any successor provision, will give rise to an adjustment.
         Notwithstanding the foregoing provisions of this Section 2, in the
         event that, with respect to any such amendment, the Corporation
         receives either an unqualified opinion of nationally


                                       2
<PAGE>   10
         recognized independent tax counsel selected by the Corporation or a
         private letter ruling or similar form of authorization from the
         Internal Revenue Service to the effect that such an amendment would
         not apply to dividends payable on the Series A Preferred Stock, then
         any such amendment will not result in the adjustment provided for
         pursuant to the DRD Formula. The opinion referenced in the previous
         sentence must be based upon a specific exception in the legislation
         amending the DRP or upon a published pronouncement of the Internal
         Revenue Service addressing such legislation. The Corporation's
         calculation of the dividends payable, as so adjusted and as certified
         accurate as to calculation and reasonable as to method by the
         independent public accountants then regularly engaged by the
         Corporation, will be final and not subject to review absent manifest
         error.
        
                 (b) If any amendment to the Code which reduces the Dividends
         Received Percentage to below 70% is enacted after a dividend payable
         on Dividend Payment Date has been declared but prior to the applicable
         Dividend Payment Date, the amount of dividend payable on such Dividend
         Payment Date will not be increased. Instead, an amount, equal to the
         excess of (x) the product of the dividends paid by the Corporation on
         such Dividend Payment Date and the factor derived from the DRD Formula
         (where the DRP used in the DRD Formula would be equal to the reduced
         Dividends Received Percentage for such dividends), over (y) the
         dividends paid by the Corporation on such Dividend Payment Date, will
         be payable, out of funds legally available therefor, to holders of
         record as of the record date established for the next succeeding
         Dividend Payment Date in addition to any other amounts payable on such
         date. Notwithstanding the foregoing, no such additional dividend will
         be payable pursuant to this Section 2 if the such amendment to the
         Code would not result in an adjustment to the DRD Formula due to the
         Corporation having received either an opinion of counsel or tax ruling
         referred to in paragraph (a) of this Section 2.

                 (c) If, prior to March 31, 1997, an amendment to the Code is
         enacted that reduces the Dividends Received Percentage to below 70%
         and such reduction retroactively applies to a Dividend Payment Date as
         to which the Corporation previously paid dividends on the Series A
         Preferred Stock (each an "Affected Dividend Payment Date"), additional
         dividends (the "Additional DRD Dividends") will be payable out of
         funds legally available therefor on the succeeding Dividend Payment
         Date (or if such amendment is enacted after the dividend payable on
         such Dividend Payment Date has been declared, on the second succeeding
         Dividend Payment Date following the date of enactment) to holders of
         record as of the record date established for such succeeding Dividend
         Payment Date (or second succeeding Dividend Payment Date, as the case
         my be) in an amount equal to the excess of (x) the product of the
         dividends paid by the Corporation on each Affected Dividend Payment
         Date and the factor derived from the DRD Formula (where the DRP used
         in the DRD Formula would be equal to the reduced Dividends Received
         Percentage applied to each Affected Dividend Payment Date), over (y)
         the dividends paid by the Corporation on all Affected Dividend Payment
         Dates.

                 (d) Additional DRD Dividends will not be payable in respect to
         the enactment of any amendment to the Code on or after March 31, 1997
         which retroactively reduces the Dividends Received Percentage to below
         70%, or if enacted prior to March 31, 1997, which would not result in
         an adjustment due to the Corporation having received either an opinion
         of counsel or tax ruling referred to in paragraph (a) of this Section
         2. The Corporation shall only be required to make one payment of
         Additional DRD Dividends.

                 (e) In the event that the amount of dividends payable per
         share of the Series A Preferred Stock are adjusted pursuant to the DRD
         Formula and/or Additional DRD Dividends are to be paid, the
         Corporation shall cause notice of each such adjustment and, if
         applicable, any Additional DRD Dividends to be sent to the holders of
         record of the Series A Preferred Stock as they appear in the stock
         register of the Corporation.

                 Section 3. Optional Redemption. (a) At any time or from time
         to time, on or after December 31, 2001, the Series A Preferred Stock
         may be redeemed at the option of the Corporation, in whole or in part,
         out of funds legally available therefor, at a redemption price equal
         to $50.00 per share plus an amount equal to accrued and unpaid
         dividends (whether or not declared) to but excluding the date fixed
         for redemption including any changes in dividends payable due to
         changes in the annual dividend rate or Dividends Received Percentage,
         and Additional DRD dividends, if any. In addition to any restrictions
         or limitations


                                      3
<PAGE>   11
         contained in the Certificate of Incorporation, if any, if full
         cumulative dividends on the Series A Preferred Stock for all past
         dividend periods have not been paid or declared and set apart for
         payment, the Series A Preferred Stock may be redeemed only in full
         (but not in party) by the Corporation pursuant to this paragraph (a)
         and the Corporation shall not purchase or acquire any shares of Series
         A Preferred Stock other than pursuant to Section 4 hereof or pursuant
         to a purchase or exchange offer made on the same terms to all holders
         of the Series A Preferred Stock. If fewer than all the outstanding
         shares of Series A Preferred Stock are to be redeemed, the Corporation
         will select those to be redeemed pro rata, by lot or by a
         substantially equivalent method.

                 (b) If the Dividends Received Percentage is equal to or less
         than 40% and, as a result, the amount of dividends on the Series A
         Preferred Stock payable on any Dividend Payment Date will be or is
         adjusted upwards as provided in Section 2, the Corporation, at its
         option, may redeem all, but not less than all, of the outstanding
         shares of the Series A Preferred Stock, out of funds legally available
         therefor, provided that within 60 days of the date on which an
         amendment to the Code is enacted which reduces the Dividends Received
         Percentage to 40% or less, the Corporation gives notice of redemption
         as provided in paragraph (d) of this Section 3 to all holders of
         record of the Series A Preferred Stock. A redemption of the Series A
         Preferred Stock in accordance with this paragraph (b) shall be at the
         applicable redemption price set forth in the following table, in each
         case plus an amount equal to accrued and unpaid dividends (whether or
         not declared) thereon to but excluding the date fixed for redemption,
         including any changes in dividends payable due to changes in the
         annual dividend rate or Dividends Received Percentage, and Additional
         DRD Dividends, if any:

<TABLE>
<CAPTION>
                                                                             Redemption
                                                                             Price Per
                                  Redemption Period                             Share  
                                  -----------------                          ----------
                 <S>                                                         <C>
                 November 18, 1996 to December 30, 1997 . . . . . . . .       $52.50
                 December 31, 1997 to December 30, 1998 . . . . . . . .        52.00
                 December 31, 1998 to December 30, 1999 . . . . . . . .        51.50
                 December 31, 1999 to December 30, 2000 . . . . . . . .        51.00
                 December 31, 2000 to December 30, 2001 . . . . . . . .        50.50
                 December 31, 2001 and thereafter . . . . . . . . . . .        50.00
</TABLE>


                 (c) If at any time fewer than 600,000 shares of Series A
         Preferred Stock remain outstanding, the Corporation, at its option,
         may redeem all, but not less than all, of the outstanding Series A
         Preferred Stock. A redemption of the Series A Preferred Stock in
         accordance with this paragraph (c) shall be at the applicable
         redemption price set forth in the following table, in each case plus
         an amount equal to accrued but unpaid dividends (whether or not
         declared) thereon to but excluding the date fixed for redemption,
         including any changes in dividends payable due to changes in the
         annual dividend rate or the Dividends Received Percentage, and
         Additional DRD Dividends, if any:

<TABLE>
<CAPTION>
                                                                             Redemption
                                                                             Price Per
                                  Redemption Period                             Share  
                                  -----------------                          ----------
                 <S>                                                          <C>
                 November 18, 1996 to December 30, 1997 . . . . . . .         $52.50
                 December 31, 1997 to December 30, 1998 . . . . . . .         $52.00
                 December 31, 1998 to December 30, 1999 . . . . . . .         $51.50
                 December 31, 1999 to December 30, 2000 . . . . . . .         $51.00
                 December 31, 2000 to December 30, 2001 . . . . . . .         $50.50
                 December 31, 2001 and thereafter . . . . . . . . . .         $50.00
</TABLE>

                 (d) Notice of redemption pursuant to paragraph (a), (b) or (c)
         of this Section 3 will be given by mail, (i) not less than 30 days
         prior to the date fixed for redemption thereof in the case of
         paragraph (a) and (ii) not less than 30 nor more than 60 days prior to
         the date fixed for redemption thereof, in the case of paragraphs (b)
         and (c), in each case to each record holder of the shares of Series A
         Preferred Stock to be redeemed at the address of such holder in the
         stock register of the Corporation. If a notice of redemption has been
         given, from and after the specified redemption date (unless the
         Corporation defaults in making


                                       4
<PAGE>   12
         payment of the redemption price), dividends on the Series A Preferred
         Stock so called for redemption will cease to accrue, such shares will
         no longer be deemed to be outstanding, and all rights of the holders
         thereof as stockholders of the Corporation (except the right to
         receive the redemption price will cease. Subject to applicable escheat
         and similar abandoned property laws, any moneys set aside by the
         Corporation for such redemption and unclaimed at the end of six months
         from the redemption date shall revert to the general funds of the
         Corporation, after which reversion the holders of such shares so
         called for redemption shall look only to the general funds of the
         Corporation for the payment of the amounts payable upon such
         redemption. Any interest accrued on funds so deposited shall be paid
         to the Corporation from time to time.

                 Section 4. Mandatory Redemption. Subject to the rights of the
         holders of any class or series of stock ranking prior to the Series A
         Preferred Stock, upon the occurrence of a Mandatory Redemption Event,
         the Corporation shall redeem out of funds legally available therefor
         all of the outstanding shares of Series A Preferred Stock on a date
         (the "Mandatory Redemption Date") not more than 60 days after the date
         of such Mandatory Redemption Event a redemption price of $50.50 per
         share plus an amount equal to accrued and unpaid dividends (whether or
         not declared) thereon to but excluding the Mandatory Redemption Date,
         including any changes and dividends payable due to changes in the
         annual dividend rate or Dividends Received Percentage, and Additional
         DRD Dividends, if any.

                 A "Mandatory Redemption Event" shall mean the earliest to
         occur of the following events:

                          (i) the Transaction (as defined below) shall have
                 been voted upon by the stockholders of the Corporation and
                 shall not have been approved at the special meeting of Tenneco
                 stockholders presently scheduled to be held on December 10,
                 1996 for the purpose of considering and voting upon the
                 Transaction such meeting have been finally adjourned): (ii) the
                 Transaction shall not have been approved by the requisite vote
                 of the stockholders of the Corporation entitled to vote thereon
                 on or prior to March 31, 1997; or (iii) the Corporation shall
                 not have accepted on or prior to March 31, 1997 any
                 indebtedness of the Corporation and its subsidiaries tendered
                 to it pursuant to the cash tender offers made by it pursuant to
                 the Transaction.

                 "Transaction" means the reorganization of the Corporation
         pursuant to which (i) the Corporation and its subsidiaries will,
         pursuant to a Distribution Agreement dated as of November 1, 1996 (as
         such may be amended, supplemented or modified from time to time) among
         the Corporation, New Tenneco Inc., a newly formed wholly-owned
         subsidiary of the Corporation ("New Tenneco"), and Newport News
         Shipbuilding Inc., a wholly-owned subsidiary of the Corporation
         ("Newport News"), undertake various intercompany transfers and
         distributions designed to restructure, divide and separate their
         various businesses and assets so that all of the assets, liabilities
         and operations of (A) their automotive parts, packaging and
         administrative services businesses ("Industrial Business") are owned
         and operated by New Tenneco, and (B) their shipbuilding business
         ("Shipbuilding Business") are owned and operated by Newport News; (ii)
         the Corporation will then distribute pro rata to holders of the common
         stock of the Corporation all of the outstanding common stock of New
         Tenneco and Newport News; and (iii) thereafter a subsidiary of El Paso
         will merge with and into the Corporation, which will then consists of
         the remaining existing and discontinued operations of the Corporation
         and its subsidiaries other than those relating to the Industrial
         Business or the Shipbuilding Business, including the transmission and
         marketing of natural gas, pursuant to the Merger Agreement.

                 Notice of redemption pursuant to this Section 4 will be given
         by mail, not less than 30 nor more than 60 days prior to the Mandatory
         Redemption Date to each record holder of shares of Series A Preferred
         Stock at the address of such holder in the stock register of the
         Corporation. If a notice of redemption has been given, from and after
         the Mandatory Redemption Date (unless the Corporation defaults in
         making payment of the redemption price), dividends on the Series A
         Preferred Stock will cease to accrue, such shares will no longer be
         deemed to be outstanding, and all rights of the holders thereof as
         stockholders of the Corporation (except the right to receive the
         redemption price) will cease. Subject to applicable escheat and
         similar abandoned property laws, and moneys set aside by the
         Corporation for such redemption and unclaimed at the end six months
         from the Mandatory Redemption Date shall revert to the general funds


                                      5
<PAGE>   13
         of the Corporation, after which reversion the holders of such shares
         so called for redemption shall look only to the general funds of the
         Corporation for the payment of the amounts payable upon such
         redemption. Any interest accrued on funds so deposited shall be paid
         to the Corporation from time to time.

                 Section 5. Voting. The Series A Preferred Stock shall not have
         any voting rights except as required by law or the Certificate of
         Incorporation, or as hereinafter set forth:

                          (a) Each share of Series A Preferred Stock shall
                 entitle the holder thereof to one vote on all matters
                 submitted to a vote of the holders of Series A Preferred
                 Stock.

                          (b) The holders of Series A Preferred Stock, voting
                 as separate series from all other series of Junior Preferred
                 Stock and classes of capital stock, shall be entitled, at each
                 annual meeting of stockholders of the Corporation, to elect a
                 number of directors of the Corporation equivalent to the
                 smallest number representing at least one-sixth of the number
                 of members of the Board of Directors as if there were no
                 vacancies or unfilled newly created directorships on such
                 Board, without giving effect to any directorships created or
                 directors elected pursuant to paragraph (c) below. Any
                 director so elected shall hold office until the next annual
                 meeting and until his or her successor shall be elected and
                 qualify, subject, however, to prior death, resignation,
                 retirement, disqualification or removal from office. So long
                 as any shares of Series A Preferred Stock are outstanding, the
                 number of members of the Board of Directors of the Corporation
                 (as if there were no vacancies or unfilled newly created
                 directorships on such Board, without giving effect to any
                 directorships created or directors elected pursuant to
                 paragraph (c) below) shall be set at an integral multiple of
                 six.

                          A director elected pursuant to the terms of this
                 paragraph (b) may be removed without cause only by the holders
                 of a majority in voting power of the outstanding Series A
                 Preferred Stock.

                          At such time as all shares of the Series A Preferred
                 Stock shall cease to be outstanding, the term of office of any
                 director elected pursuant to this paragraph (b), or his or her
                 successor, shall automatically terminate.

                          (c) Whenever, at any time or times, dividends payable
                 on the Series A Preferred Stock shall be in arrears for
                 dividend periods, whether or not consecutive, containing in
                 the aggregate a number days equivalent to six calendar
                 quarters, the holders of outstanding Series A Preferred Stock
                 shall have the exclusive right, in addition to the rights
                 under (b) above, voting as a separate series from all other
                 series of Junior Preferred Stock and classes of capital stock
                 of the Corporation, at each meeting of the stockholders held
                 for the purpose of electing directors, to elect two directors
                 of the Corporation, until such time as all dividends
                 accumulated on the Series A Preferred Stock and in arrears
                 shall have been paid in full or declared and set apart for
                 payment, at which time the right of the holders of the Series
                 A Preferred Stock to vote pursuant to the provisions of this
                 paragraph (c) shall terminate, subject to revesting in the
                 event of each and every subsequent default of the character
                 and for the time above mentioned.

                          At any time when voting rights shall, pursuant to the
                 provisions of this paragraph (c), be vested in the Series A
                 Preferred Stock, the number of directors of the Corporation
                 shall be automatically increased, to the extent necessary, so
                 that two directors may be elected by the holders of the Series
                 A Preferred Stock and a proper officer of the Corporation
                 shall, upon the written request of the holders of record of at
                 least ten percent in aggregate liquidation value of the Series
                 A Preferred Stock then outstanding, addressed to the Secretary
                 of the Corporation, call a special meeting of holders of the
                 Series A preferred Stock. Such meeting shall be held at the
                 earliest practicable date but in no event shall a special
                 meeting be held if the annual meeting of the stock holders of
                 the Corporation is to be held within 90 days of the receipt by
                 the Secretary of the Corporation of such request. If such
                 meeting shall not be called by the proper officer of the
                 Corporation as required within 20 days after personal service
                 of the said written request upon the Secretary of the
                 Corporation, or within 20 days after mailing the same within
                 the United States of America by certified or registered mail,
                 return receipt requested,


                                      6
<PAGE>   14
                 addressed to the Secretary of the Corporation at its principal
                 office (such mailing to be evidenced by the registry receipt
                 issued by the postal authorities), then the holders of record
                 of at least ten percent of the aggregate liquidation value of
                 the Series A preferred Stock then outstanding may designate in
                 writing one of their number to call such meeting, and such
                 meeting may be called by such person designated upon the
                 notice required for annual meetings of stockholders but in no
                 event shall a special meeting be held if the annual meeting of
                 stockholders of the Corporation is to be held within 90 days
                 of the receipt by the Secretary of the Corporation of such
                 request. Any holder of the Series A Preferred Stock so
                 designated shall have access to the stock books of the
                 Corporation for the purpose of causing a meeting of
                 stockholders to be called pursuant to these provisions.

                          Upon any termination of the right of the holder of
                 the Series A Preferred Stock to vote for directors as a class
                 as described in this paragraph (c), the term of office of the
                 directors so elected as described in this paragraph (c) shall
                 automatically terminate and the number of directors shall be
                 reduced accordingly.

                          (d) At any meeting so called pursuant to paragraph (c)
                 above, and at any other meeting of stockholders held for the
                 purpose of electing directors at which the holders of the
                 Series A Preferred Stock shall have the right to elect
                 directors as provided in paragraph (b) or paragraph (c) above,
                 the presence in person or by proxy of a majority in voting
                 power of the outstanding shares of the Series A Preferred
                 Stock, shall be required to constitute a quorum thereof for the
                 election of any director by the holders of the Series A
                 Preferred Stock.

                          At any such meeting or adjournment thereof, (x) the
                 absence of the required quorum of the Series A Preferred Stock
                 shall not prevent the election of directors other than those to
                 be elected by the Series A Preferred Stock and the absence of a
                 quorum for the election of such other directors shall not
                 prevent the election of the directors to be elected by the
                 Series A Preferred Stock, and (y) in the absence of either or
                 both such quorums, a majority in voting power of the holders
                 present in person or by proxy of the stock or stocks which lack
                 a quorum shall have power to adjourn the meeting, subject to
                 applicable law, for the election of directors which they are
                 entitled to elect from time to time without notice other than
                 announcement at the meeting until a quorum shall be present.

                          (e) If by reason of any resignation, retirement,
                 disqualification, death or removal there are not in office all
                 such directors that the holders of the Series A Preferred
                 Stock are entitled to elect pursuant to paragraph (c), then
                 any such vacancy shall be filled only by the remaining
                 director or directors elected by such holders or, only in the
                 event there is no such remaining director, by the holders of
                 the Series A Preferred Stock entitled to vote thereon. If by
                 reason of any resignation, retirement, disqualification, death
                 or removal there are not in office all such directors that the
                 holders of the Series A Preferred Stock are entitled to elect
                 pursuant to paragraph (b), then any such vacancy shall be
                 filled only by a majority of the remaining directors elected
                 by such holders or, in the event there are no such remaining
                 directors, by the majority vote of the remaining directors
                 then constituting the Board of Directors.

                          Promptly after the right of the holders of the Series
                 A Preferred Stock to fill any vacancy as set forth in the
                 first sentence of the immediately preceding paragraph arises,
                 the Board of Directors may cause a special meeting of the
                 holders of Series A Preferred Stock entitled to vote thereon,
                 to be held for the purpose of filling such vacancy and such
                 vacancy shall be filled at any such special meeting. Such
                 meeting shall be held at the earliest practicable date, but in
                 no event shall a special meeting be held if the annual meeting
                 of stockholders of the Corporation is to be held within 90
                 days of the occurrence of such vacancy.

                          Notwithstanding the immediately preceding paragraph,
                 at any time after the right of the holders of the Series A
                 Preferred Stock to fill any vacancy as set forth above in the
                 first sentence of the first paragraph of this paragraph (e)
                 arises, a proper officer of the Corporation shall, upon the
                 written request of the holders of record of at least ten
                 percent in aggregate liquidation value of the Series A
                 Preferred Stock then outstanding, addressed to the Secretary
                 of the Corporation, call a special meeting of holders


                                      7
<PAGE>   15
                 of the Series A Preferred Stock. Such meeting shall be held at
                 the earliest practicable date but in no event shall a special
                 meeting be held if the annual meeting stockholders of the
                 Corporation is to be held within 90 days of the occurrence of
                 such vacancy. If such meeting shall not be called by the proper
                 officer of the Corporation as required within 20 days after
                 personal service of the said written request upon the Secretary
                 of the Corporation, or within 20 days after mailing the same
                 within the United States of America by registered mail
                 addressed to the Secretary of the Corporation as its principal
                 office (such mailing to be evidenced by the registry receipt
                 issued by the postal authorities), then the holders of record
                 of at least ten percent of the aggregate liquidation value of
                 the Series A Preferred Stock then outstanding may designate in
                 writing one of their number to call such meeting, and such
                 meeting may be called by such person designated upon the notice
                 required for annual meetings of stockholders and shall be held
                 at the place at which the last preceding annual meeting of the
                 stockholders of the Corporation was held. Any holder of the
                 Series A Preferred Stock so designated shall have access to the
                 stock books of the Corporation for the purpose of causing a
                 meeting of stockholders to be called pursuant to these
                 provisions.

                          (f) In addition to any other vote or consent of
                 stockholders required by law or the Certificate of
                 Incorporation, if any, so long as any shares of Series A
                 Preferred Stock are outstanding, the Corporation shall not,
                 without the consent of the holders of at least a majority in
                 voting power of the outstanding shares of Series A Preferred
                 Stock, given in person or by proxy, either in writing or by
                 vote at annual meeting or a special meeting called for that
                 purpose:

                                  (A) issue any additional shares of Series A
                          Preferred Stock (other than the 6,000,000 shares of
                          Series A Preferred Stock authorized hereby), or issue
                          any shares of any class or series of stock ranking
                          prior to or on parity with the Series A Preferred
                          Stock as to the payment of dividends or as to the
                          distribution of assets on liquidation, dissolution or
                          winding up:

                                  (B) issue any obligations or security
                          convertible into share of stock ranking prior to or
                          on parity with the Series A Preferred Stock as to the
                          payment of dividends or as the distribution of assets
                          on liquidation, dissolution or winding up; or

                                  (C) amend the Certificate of Incorporation or
                          the Certificate of Designation if the amendment would
                          alter or change the powers, preferences or special
                          rights of the shares of Series A Preferred Stock so
                          as to affect such shares adversely.

                 Section 6. Restrictions or Dividends and Stock Repurchase.
         Subject to any additional restrictions or limitations contained in the
         Certificate of Incorporation, if any, so long as any shares of Series
         A Preferred Stock remain outstanding, unless full cumulative dividends
         on the outstanding shares of Series A Preferred Stock for all past
         dividend periods have been paid, or declared and set apart for
         payment, and the Corporation shall not be in default with respect to
         its obligations under Section 4 hereof, dividends may not be paid or
         declared and other distributions may not be made upon any class or
         series of stock of the Corporation ranking junior to or on a parity
         with the Series A Preferred Stock as to dividends or rights upon
         dissolution, liquidation or winding up the Corporation nor may any
         such class or series of stock of the Corporation be purchased,
         retired or otherwise acquired by the Corporation, in either case
         without consent, given in person or by proxy, either in writing or by
         vote at any annual meeting or as a special meeting called for that
         purpose, of the holders of at least a majority in voting power of the
         outstanding shares of Series A Preferred Stock present in person or by
         proxy at such meeting, provided that quorum, consisting of at least a
         majority in voting power of the then outstanding shares of Series A
         Preferred Stock is present; provided, however, that, notwithstanding
         the foregoing provisions of this Section 6 (but subject to any
         restrictions or limitations to the contrary contained in the
         Certificate of Incorporation), the Corporation may any time redeem,
         purchase or acquire, out of funds legally available therefor, shares
         of stock ranking junior to or on a parity with the Series A Preferred
         Stock as to dividends and rights upon liquidation, dissolution and
         winding up of the Corporation in exchange for, or out of net cash
         proceeds from a substantially concurrent sale of, other shares of any
         stock of the Corporation ranking junior to the Series A Preferred
         Stock as to dividends and rights upon liquidation, dissolution and
         winding up.
        


                                      8
<PAGE>   16
     Section 7. Ranking. (a) Any class or series of stock of the Corporation
shall be deemed to rank:

        (i) prior to the Series A Preferred Stock as to the payment of
     dividends or as to distributions of assets upon liquidation, dissolution or
     winding up, as the case may be, if the holders of such class or series 
     shall be entitled to the receipt of dividends or of amounts distributable 
     upon liquidation, dissolution or winding up, as the case may be, in 
     preference or priority to the holders of Series A Preferred Stock:

        (ii) on a parity with the Series A Preferred Stock as to the payment of
     dividends, whether or not the dividend rates or dividend payment dates 
     thereof be different from those of the Series A Preferred Stock, if the 
     holders of such class or series of stock and the holders of the Series A 
     Preferred Stock shall be entitled to the receipt of dividends in 
     proportion to their respective amounts of accrued and unpaid dividends 
     per share, without preference or priority one over the other, and on a 
     parity with the Series A Preferred Stock as to the distribution of assets 
     upon liquidation, dissolution or winding up, whether or not the 
     liquidation prices per share thereof be different from those of the Series
     A Preferred Stock, if the holders of such class or series of stock and the 
     holders of the Series A Preferred Stock shall be entitled to the receipt 
     of amounts distributable upon liquidation, dissolution or winding up
     in proportion to their respective liquidation preferences, without 
     preference or priority one over the other: and

        (iii) junior to the Series A Preferred Stock as to the payment of 
    dividends or as to the distribution of assets upon liquidation, dissolution
    or winding up, as the case may be, if the holders of Series A Preferred 
    Stock shall be entitled to receipt of dividends or of amounts distributable
    upon liquidation, dissolution or winding up, as the case may be, in 
    preference or priority to the holders of shares of such class or series.

    (b) Except for the Common Stock, par value $5.00 per share, of the
Corporation (as such may be constituted from time to time, the "Common Stock")
and the Series A Participating Junior Preferred Stock, without par value, of
the Corporation (the "Participating Junior Preferred Stock"), each other class
and series of stock of the Corporation existing on the date of the adoption of
this Certificate shall be deemed to rank prior to the Series A Preferred Stock
both as to the payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up.  The Common Stock and the Participating
Junior Preferred Stock shall be deemed to rank junior to the Series A Preferred
Stock both as to the payment of dividends and as to the distribution of assets
upon liquidation, dissolution or winding up.

        Section 8. Liquidation Rights. (a) The amount that the holders of
Series A Preferred Stock shall be entitled to receive in the event of any
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary (collectively, a "Liquidation"), shall be
$50.00 per share, plus an amount equal to all accrued and unpaid dividends to
the date of Liquidation including any changes in dividends payable due to
changes in the annual dividend rate of Dividends Received Percentage, and
Additional DRD Dividends, if any, and no more.  After such amount is paid in
full, no further distributions or payments shall be made in respect of shares
of Series A Preferred Stock, such shares of Series A Preferred Stock shall no
longer be deemed to be outstanding or be entitled to any powers, preferences,
rights or privileges, including voting rights, and such shares of Series A
Preferred Stock shall be surrendered for cancellation to the Corporation.

     (b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, then before any distribution or payment shall be
made to the holders of any class or series of stock of the Corporation ranking
junior to the Series A Preferred Stock, the holders of the Series A Preferred
Stock (subject to the rights of the holders of any stock ranking prior to the
Series A Preferred Stock as to the rights on liquidation, dissolution and
winding up) shall be entitled to be paid in full the amounts set forth in
paragraph (a) of this Section 8. After such payment shall have been made in
full to the holders of the Series A Preferred Stock, the remaining assets and
funds of the Corporation shall be distributed among the holders of the stock of
the Corporation ranking junior in respect thereof to the Series A Preferred
Stock according to their respective rights.  In the event that the assets of
the Corporation available for distribution to holders

                                       9
<PAGE>   17
        of Series A Preferred Stock shall not be sufficient to make the 
        payment herein required to be made in full and to pay in full the
        liquidation preference on all other shares of stock of the Corporation
        ranking on a parity with the Series A Preferred Stock as to amounts 
        distributable upon dissolution, liquidation or winding up of the 
        Corporation, such assets shall be distributed to the holders of the 
        respective shares of Series A Preferred Stock and any such other 
        parity stock pro rata in proportion to the full amounts payable upon
        the shares of Series A Preferred Stock and any such other parity stock 
        if all amounts payable thereon were paid in full.

           Section 9. Maturity.  Unless otherwise redeemed as provided herein, 
        the term of the Series A Preferred Stock shall be perpetual.
           
           IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to
be signed by Karl A. Stewart, as Vice President and Secretary, this 18th day of
November 1996.

                                                TENNECO INC.

                                                By:/s/ Karl A. Stewart
                                                   ------------------
                                                   Name: Karl A. Stewart
                                                   Title: Vice President and
                                                          Secretary

                                                           
<PAGE>   18

                           CERTIFICATE OF AMENDMENT
                                      OF
                         CERTIFICATE OF INCORPORATION
                                      OF
                                 TENNECO INC.


        TENNECO INC., a corporation organized and existing under and by virtue
of the General Corporation Law of the State of Delaware (the "Company"), DOES
HEREBY CERTIFY:

        FIRST:  That at a meeting of the Board of Directors of the Company
resolutions were adopted setting forth proposed amendments to the Certificate
of Incorporation of said Company, as amended as of such date (the "Certificate
of Incorporation"), declaring said amendments to be advisable and directing
that the amendments be considered at a spcial meeting of the stockholders of
the Company. The resolution setting forth the proposed amendments is as 
follows:

                RESOLVED, that the Board of Directors of the Company
         hereby approves and declares it advisable that the Certificate of
         Incorporation of the Company be amended (the "Amendment") by (i)
         deleting Subsection 1 of Part II of Article FOURTH thereof in it
         entirety and inserting the paragraph set forth below in lieu therof,
         (ii) deleting Subsections 2, 3 and 4 of Part II of Article FOURTH
         thereof in their entirety, and (iii) renumbering Subsection 5 of Part
         II of Article FOURTH thereof as Subsection 2:
        
                "1.    The Board of Directors of the corporation is hereby
         expressly authorized, by resolution or resolutions thereof, to
         provide, out of the unissued shares of Junior Preferred Stock, for
         series of Junior Preferred Stock and, with respect to each such
         series, to fix the number of shares constituting such series and the
         designation of such series, the voting powers (if any) of the shares
         of such series,and preferences and relative, participating, optional
         or other special rights, if any, and any qualifications, limitations
         or restrictions, thereof, of the shares of such series.  The powers,
         preferences and relative, participating, optional and other special
         rights of each series of Junior Preferred Stock, and the
         qualifications,  limitations or restrictions thereof, if any, may
         differ from those of any and all other series at any time
         outstanding."

        SECOND:  That thereafter, pursuant to the resolution of its Board of
Directors, (i) a special meeting of the stockholders of the Company was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware (the "DGCL"), at which meeting holders
of a majority of the outstanding stock entitled to vote thereon (except for the
holders of the Company's outstanding Junior Preferred Stock), as required by
the DGCL and the Certificate of Incorporation, voted in favor of the amendment
and (ii) the holders of the shares of the Company's outstanding Junior Preferred
Stock unanimously consented, in accordance with Section 228 of the DGCL, to the
adoption of the amendments.

                                     -1-
        
<PAGE>   19

        THIRD:  That said amendment was duly adopted in accordance with the
provisions of Section 242 of the DGCL.

        IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to be
signed by Dana G. Mead, as Chairman and Chief Executive Officer, this 11th day
of December, 1996.

                                   TENNECO INC.



                                   By: /s/  DANA G. MEAD
                                     ---------------------
                                   Name:   Dana G. Mead
                                   Office: Chairman and Chief Executive Officer

<PAGE>   20
                            CERTIFICATE OF MERGER

                                      OF

                            EL PASO MERGER COMPANY

                                WITH AND INTO

                                 TENNECO INC.

                      (Under Section 251 of the General
                  Corporation Law of the State of Delaware)

        Tenneco Inc., a Delaware corporation, hereby certifies that:

        1.      The name and state of incorporation of each of the constituent
corporations is as follows:

                (a)     El Paso Merger Company, a Delaware corporation ("El
Paso Merger"); and

                (b)     Tenneco Inc., a Delaware corporation ("Tenneco").

        2.      The Amended and Restated Agreement and Plan of Merger (the
"Agreement and Plan of Merger"), dated as of June 19, 1996, among Tenneco, El
Paso Natural Gas Company, a Delaware corporation, and El Paso Merger has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with Section 251 (and, with respect to
El Paso Merger, by the written consent of its sole stockholder in accordance
with Section 228) of the General Corporation Law of the State of Delaware.

        3.      The name of the surviving corporation is Tenneco Inc. (the
"Surviving Corporation"). The name of the Surviving Corporation shall be
amended in the merger to be "El Paso Tennessee Pipeline Co."

        4.      The Certificate of Incorporation of Tenneco as in effect
immediately prior to the merger shall be amended as set forth in Annex 1 hereto
and, as so amended, shall be the Certificate of Incorporation of the Surviving
Corporation.

        5.      The executed Agreement and Plan of Merger is on file at the
principal place of business of the Surviving Corporation at 1010 Milam Street,
Houston, Texas 77002.

        6.      A copy of the Agreement and Plan of Merger will be furnished by
the Surviving Corporation, on request and without cost, to any stockholder of
any constituent corporation.    





<PAGE>   21

        7.      The merger provided for herein shall be effective at 8:00 a.m.
Eastern Standard Time on December 12, 1996.



<PAGE>   22



        IN WITNESS WHEREOF, said Tenneco Inc. has caused this Certificate to be
signed as of the 11th day of December, 1996.



                                        TENNECO INC.



                                        By: /s/ KARL A. STEWART
                                           ---------------------------------
                                        Name: Karl A. Stewart
                                        Office: Vice President and Secretary



<PAGE>   23
                                   ANNEX 1


                Article FIRST is hereby deleted in its entirety and replaced
with the following paragraph:

                "FIRST: The name of the corporation is El Paso Tennessee
Pipeline Co."

        The first two paragraphs of Article FOURTH are hereby deleted in their
entirety and replaced with the following paragraph:

                "The total number of shares of all classes of stock which the
corporation shall be authorized to issue is 20,000,000 shares of Preferred
Stock, par value $.01 per share (herein called "Preferred Stock"), and 100,000
shares of Common Stock, of the par value of $.01 per share (herein called
"Common Stock")."

        Part I of Article FOURTH is hereby deleted in its entirety.

        Part II of Article FOURTH is hereby amended to read in its entirety as
set forth in the following paragraph:

                                     "I.

                1.  The Board of Directors of the corporation is hereby
expressly authorized, by resolution or resolutions thereof, to provide, out of
the unissued shares of Preferred Stock, for series of Preferred Stock and, with
respect to each such series, to fix the number of shares constituting such
series and the designation of such series, the voting powers (if any) of the
shares of such series, and the preferences and relative, participating,
optional or other special rights, if any, and any qualifications, limitations or
restrictions thereof, of the shares of such series. The powers, preferences and
relative, participating, optional and other special rights of each series of
Preferred Stock, and the qualifications, limitations, or restrictions thereof,
if any, may differ from those of any and all other series at any time
outstanding.

                2.  Except as otherwise provided in any resolution of the Board
of Directors providing for the issuance of any particular series of Preferred
Stock, shares of Preferred Stock redeemed or otherwise acquired by the
corporation shall, upon the filing of any required certificates with the
Secretary of State of Delaware, assume the status of authorized but unissued
Preferred Stock and may thereafter, subject to the provisions of this Part I of
Article FOURTH and of any restrictions contained in any resolution of the Board
of Directors providing for the issue of any particular series of Preferred
Stock, be reissued in the same manner as other authorized but unissued
Preferred Stock."

        Parts III and IV of Article FOURTH are hereby deleted in their entirety.











<PAGE>   24

        Subsection (A) of Article FIFTH is hereby deleted in its entirety and
replace with the following paragraph:

                "The number of directors which shall constitute the whole Board
of Directors shall be as determined from time to time by resolution adopted by
the affirmative vote of a majority of the Board of Directors; provided that
until otherwise determined by the Board of Directors in accordance herewith,
the number of directors shall be six (6)."

        Subsection (B)(g) of Article FIFTH is hereby amended by deleting the
words "each committee to consist of two or more directors of the corporation"
and the comma immediately following such text.

        Articles SEVENTH and NINTH are hereby deleted in their entirety and the
remaining provisions renumbered accordingly.

        The Certificates of Designation, Preferences and Rights for the $7.40
Cumulative Preferred Stock, the $4.50 Cumulative Preferred Stock and Series A
Participating Junior Preferred Stock of the corporation filed with the
Secretary of State of Delaware on October 9, 1987, October 9, 1987 and May 25,
1988, respectively, are hereby deleted in their entirety.

        The Certificate of Designation, Preferences and Rights for the 8 1/4%
Cumulative Junior Preferred Stock, Series A, filed on November 18, 1996 with
the Secretary of State of Delaware, shall be hereby amended by deleting all
references therein to Junior Preferred Stock and substituting therefor
references to Preferred Stock and renaming the 8 1/4% Cumulative Junior
Preferred Stock, Series A as the "8 1/4% Cumulative Preferred Stock, Series A."





<PAGE>   25
 
                         EL PASO TENNESSEE PIPELINE CO.
 
     CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF PREFERRED STOCK
                    BY RESOLUTION OF THE BOARD OF DIRECTORS
                      PROVIDING FOR AN ISSUE OF 3,036,600
                      SHARES OF PREFERRED STOCK DESIGNATED
              "8 1/2% CUMULATIVE JUNIOR PREFERRED STOCK, SERIES B"
                            ------------------------
 
     I, Stacy J. James, Secretary of El Paso Tennessee Pipeline Co. (hereinafter
referred to as the "Corporation"), a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 151 thereof, DO HEREBY CERTIFY:
 
     That pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of said Corporation, as amended, the Board of
Directors, by unanimous written consent, pursuant to Section 141(f) of the
General Corporation Law of the State of Delaware, dated as of March 5, 1997,
adopted a resolution providing for the issuance of a series of Preferred Stock,
to be designated "8 1/2% Cumulative Junior Preferred Stock, Series B", which
resolution is as follows:
 
     RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Certificate of Incorporation of the Corporation, as
amended (as such may be further amended from time to time, the "Certificate of
Incorporation"), a series of Preferred Stock, par value $0.01 per share, of the
Corporation (the "Preferred Stock") be, and hereby is, created to be designated
"8 1/2% Cumulative Junior Preferred Stock, Series B" (hereinafter referred to as
the "Series B Preferred Stock"), consisting of 3,036,600 shares, and the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series B Preferred Stock are
hereby fixed and stated to be as follows (all terms used herein that are defined
in the Certificate of Incorporation shall be deemed to have the meanings
provided therein):
 
     SECTION 1. Dividends. (a) The dividend rate on the Series B Preferred Stock
shall be 8 1/2% of $50 per share of Series B Preferred Stock per annum.
Dividends on shares of the Series B Preferred Stock shall accrue, whether or not
declared, on a daily basis from the date of issuance of such shares. Accrued but
unpaid dividends shall not bear interest.
 
     (b) Dividends on the Series B Preferred Stock shall be payable, when, as
and if declared by the Board of Directors of the Corporation out of assets
legally available therefor, annually on the last day of December in each year
(each, a "Dividend Payment Date"), with the first dividend payment date being
the next Dividend Payment Date following the date of issuance. Dividends on each
Dividend Payment Date will be payable to holders of record of the Series B
Preferred Stock as they appear on the stock books of the Corporation on a record
date, not more than 60 days preceding such Dividend Payment Date, fixed for such
purpose by the Board of Directors in advance of such Dividend Payment Date.
Dividends payable on the Series B Preferred Stock for any period shorter than a
year shall be computed on the basis of a 360-day year of twelve 30-day months.
The Series B Preferred Stock shall rank on a parity with each other series of
Preferred Stock as to the payment of dividends, except to the extent otherwise
provided in Section 5 hereof or in the resolution or resolutions providing for
the issuance of such other series.
 
     SECTION 2. Optional Redemption. (a) At any time or from time to time, on or
after December 31, 2001, the Series B Preferred Stock may be redeemed at the
option of the Corporation, in whole or in part, out of funds legally available
therefor, at a redemption price equal to $50.00 per share plus an amount equal
to accrued and unpaid dividends (whether or not declared) to but excluding the
date fixed for redemption. In addition to any restrictions or limitations
contained in the Certificate of Incorporation, if any, if full cumulative
dividends on the Series B Preferred Stock for all past dividend periods have not
been paid or declared and set apart for payment, the Series B Preferred Stock
may be redeemed only in full (but not in part) by the Corporation pursuant to
this paragraph (a) and the Corporation shall not purchase or acquire any shares
of Series B Preferred Stock other than pursuant to a purchase or exchange offer
made on the same terms to all holders of the Series B Preferred Stock. If fewer
than all the outstanding shares of Series B Preferred Stock
<PAGE>   26
 
are to be redeemed, the Corporation will select those to be redeemed pro rata,
by lot or by a substantially equivalent method.
 
     (b) Notice of redemption pursuant to paragraph (a) of this Section 2 will
be given by mail, not less than 30 days prior to the date fixed for redemption
thereof, to each record holder of the shares of Series B Preferred Stock to be
redeemed at the address of such holder in the stock register of the Corporation.
If a notice of redemption has been given, from and after the specified
redemption date (unless the Corporation defaults in making payment of the
redemption price), dividends on the Series B Preferred Stock so called for
redemption will cease to accrue, such shares will no longer be deemed to be
outstanding, and all rights of the holders thereof as stockholders of the
Corporation (except the right to receive the redemption price) will cease.
Subject to applicable escheat and similar abandoned property laws, any moneys
set aside by the Corporation for such redemption and unclaimed at the end of six
months from the redemption date shall revert to the general funds of the
Corporation, after which reversion the holders of such shares so called for
redemption shall look only to the general funds of the Corporation for the
payment of the amounts payable upon such redemption. Any interest accrued on
funds so deposited shall be paid to the Corporation from time to time.
 
     SECTION 3. Voting. The Series B Preferred Stock shall not have any voting
rights except as required by law or the Certificate of Incorporation, or as
hereinafter set forth:
 
          (a) Whenever, at any time or times, dividends payable on the Series B
     Preferred Stock shall be in arrears for dividend periods, whether or not
     consecutive, containing in the aggregate a number of days equivalent to six
     calendar quarters, the holders of outstanding Series B Preferred Stock
     shall have the exclusive right, voting as a separate series from all other
     series of Preferred Stock and classes of capital stock of the Corporation,
     at each meeting of the stockholders held for the purpose of electing
     directors, to elect two directors of the Corporation, until such time as
     all dividends accumulated on the Series B Preferred Stock and in arrears
     shall have been paid in full or declared and set apart for payment, at
     which time the right of the holders of the Series B Preferred Stock to vote
     pursuant to the provisions of this paragraph (a) shall terminate, subject
     to revesting in the event of each and every subsequent default of the
     character and for the time above mentioned.
 
          At any time when voting rights shall, pursuant to the provisions of
     this paragraph (a), be vested in the Series B Preferred Stock, the number
     of directors of the Corporation shall be automatically increased, to the
     extent necessary, so that two directors may be elected by the holders of
     the Series B Preferred Stock and a proper officer of the Corporation shall,
     upon the written request of the holders of record of at least ten percent
     in aggregate liquidation value of the Series B Preferred Stock then
     outstanding, addressed to the Secretary of the Corporation, call a special
     meeting of holders of the Series B Preferred Stock. Such meeting shall be
     held at the earliest practicable date but in no event shall a special
     meeting be held if the annual meeting of stockholders of the Corporation is
     to be held within 90 days of the receipt by the Secretary of the
     Corporation of such request. If such meeting shall not be called by the
     proper officer of the Corporation as required within 20 days after personal
     service of the said written request upon the Secretary of the Corporation,
     or within 20 days after mailing the same within the United States of
     America by certified or registered mail, return receipt requested,
     addressed to the Secretary of the Corporation at its principal office (such
     mailing to be evidenced by the registry receipt issued by the postal
     authorities), then the holders of record of at least ten percent in
     aggregate liquidation value of the Series B Preferred Stock then
     outstanding may designate in writing one of their number to call such
     meeting, and such meeting may be called by such person designated upon the
     notice required for annual meetings of stockholders but in no event shall a
     special meeting be held if the annual meeting of stockholders of the
     Corporation is to be held within 90 days of the receipt by the Secretary of
     the Corporation of such request. Any holder of the Series B Preferred Stock
     so designated shall have access to the stock books of the Corporation for
     the purpose of causing a meeting of stockholders to be called pursuant to
     these provisions.
 
          Upon any termination of the right of the holders of the Series B
     Preferred Stock to vote for directors as a class as described in this
     paragraph (a), the term of office of the directors so elected as described
     in
 
                                        2
<PAGE>   27
 
     this paragraph (a) shall automatically terminate and the number of
     directors shall be reduced accordingly.
 
          (b) At any meeting so called pursuant to paragraph (a) above, and at
     any other meeting of stockholders held for the purpose of electing
     directors at which the holders of the Series B Preferred Stock shall have
     the right to elect directors as provided in paragraph (a) above, the
     presence in person or by proxy of a majority in voting power of the
     outstanding shares of the Series B Preferred Stock shall be required to
     constitute a quorum thereof for the election of any director by the holders
     of the Series B Preferred Stock.
 
          At any such meeting or adjournment thereof, (x) the absence of the
     required quorum of the Series B Preferred Stock shall not prevent the
     election of directors other than those to be elected by the Series B
     Preferred Stock and the absence of a quorum for the election of such other
     directors shall not prevent the election of the directors to be elected by
     the Series B Preferred Stock, and (y) in the absence of the required quorum
     of the Series B Preferred Stock, a majority in voting power of the holders
     of Series B Preferred Stock present in person or by proxy shall have power
     to adjourn the meeting, subject to applicable law, but only with respect to
     the election of directors which they are entitled to elect from time to
     time without notice other than announcement at the meeting until a quorum
     shall be present.
 
          (c) If by reason of any resignation, retirement, disqualification,
     death or removal there are not in office all such directors that the
     holders of the Series B Preferred Stock are entitled to elect pursuant to
     paragraph (a) above, then any such vacancy shall be filled only by the
     remaining director elected by such holders or, only in the event there is
     no such remaining director, by the holders of the Series B Preferred Stock
     entitled to vote thereon.
 
          Promptly after the right of the holders of the Series B Preferred
     Stock to fill any vacancy as set forth in the immediately preceding
     paragraph arises, the Board of Directors may cause a special meeting of the
     holders of Series B Preferred Stock entitled to vote thereon to be held for
     the purpose of filling such vacancy, and such vacancy shall be filled at
     any such special meeting. Such meeting shall be held at the earliest
     practicable date, but in no event shall a special meeting be held if the
     annual meeting of stockholders of the Corporation is to be held within 90
     days of the occurrence of such vacancy.
 
          Notwithstanding the immediately preceding paragraph, at any time after
     the right of the holders of the Series B Preferred Stock to fill any
     vacancy as set forth above in the first paragraph of this paragraph (c)
     arises, a proper officer of the Corporation shall, upon the written request
     of the holders of record of at least ten percent in aggregate liquidation
     value of the Series B Preferred Stock then outstanding, addressed to the
     Secretary of the Corporation, call a special meeting of holders of the
     Series B Preferred Stock. Such meeting shall be held at the earliest
     practicable date but in no event shall a special meeting be held if the
     annual meeting of stockholders of the Corporation is to be held within 90
     days of the occurrence of such vacancy. If such meeting shall not be called
     by the proper officer of the Corporation as required within 20 days after
     personal service of the said written request upon the Secretary of the
     Corporation, or within 20 days after mailing the same within the United
     States of America by registered mail addressed to the Secretary of the
     Corporation at its principal office (such mailing to be evidenced by the
     registry receipt issued by the postal authorities), then the holders of
     record of at least ten percent in aggregate liquidation value of the Series
     B Preferred Stock then outstanding may designate in writing one of their
     number to call such meeting, and such meeting may be called by such person
     designated upon the notice required for annual meetings of stockholders and
     shall be held at the place at which the last preceding annual meeting of
     the stockholders of the Corporation was held. Any holder of the Series B
     Preferred Stock so designated shall have access to the stock books of the
     Corporation for the purpose of causing a meeting of stockholders to be
     called pursuant to these provisions.
 
     SECTION 4. Restrictions on Dividends and Stock Repurchases. Subject to any
additional restrictions or limitations contained in the Certificate of
Incorporation, if any, so long as any shares of Series B Preferred Stock remain
outstanding, unless full cumulative dividends on the outstanding shares of
Series B Preferred Stock for all past dividend periods have been paid, or
declared and set apart for payment, dividends may not be
 
                                        3
<PAGE>   28
 
paid or declared and other distributions may not be made upon any class or
series of stock of the Corporation ranking junior to or on a parity with the
Series B Preferred Stock as to dividends or rights upon dissolution, liquidation
or winding up of the Corporation nor may any such class or series of stock of
the Corporation be redeemed, purchased, retired or otherwise acquired by the
Corporation, in either case without the consent, given in person or by proxy,
either in writing or by vote at any annual meeting or at a special meeting
called for that purpose, of the holders of at least a majority in voting power
of the outstanding shares of Series B Preferred Stock present in person or by
proxy at such meeting, provided that a quorum, consisting of at least a majority
in voting power of the then outstanding shares of Series B Preferred Stock is
present; provided, however, that, notwithstanding the foregoing provisions of
this Section 4 (but subject to any restrictions or limitations to the contrary
contained in the Certificate of Incorporation), the Corporation may at any time
redeem, purchase or acquire, out of funds legally available therefor, shares of
stock ranking junior to or on a parity with the Series B Preferred Stock as to
dividends and rights upon liquidation, dissolution and winding up of the
Corporation in exchange for, or out of net cash proceeds from a substantially
concurrent sale of, other shares of any stock of the Corporation ranking junior
to the Series B Preferred Stock as to dividends and rights upon liquidation,
dissolution and winding up.
 
     SECTION 5. Ranking. (a) Any class or series of stock of the Corporation
shall be deemed to rank:
 
          (i) prior to the Series B Preferred Stock as to the payment of
     dividends or as to distributions of assets upon liquidation, dissolution or
     winding up, as the case may be, if the holders of such class or series
     shall be entitled to the receipt of dividends or of amounts distributable
     upon liquidation, dissolution or winding up, as the case may be, in
     preference or priority to the holders of Series B Preferred Stock;
 
          (ii) on a parity with the Series B Preferred Stock as to the payment
     of dividends, whether or not the dividend rates or dividend payment dates
     thereof be different from those of the Series B Preferred Stock, if the
     holders of such class or series of stock and the holders of the Series B
     Preferred Stock shall be entitled to the receipt of dividends in proportion
     to their respective amounts of accrued and unpaid dividends per share,
     without preference or priority one over the other, and on a parity with the
     Series B Preferred Stock as to the distribution of assets upon liquidation,
     dissolution or winding up, whether or not the liquidation prices per share
     thereof be different from those of the Series B Preferred Stock, if the
     holders of such class or series of stock and the holders of the Series B
     Preferred Stock shall be entitled to the receipt of amounts distributable
     upon liquidation, dissolution or winding up in proportion to their
     respective liquidation preferences, without preference or priority one over
     the other; and
 
          (iii) junior to the Series B Preferred Stock as to the payment of
     dividends or as to the distribution of assets upon liquidation, dissolution
     or winding up, as the case may be, if the holders of Series B Preferred
     Stock shall be entitled to receipt of dividends or of amounts distributable
     upon liquidation, dissolution or winding up, as the case may be, in
     preference or priority to the holders of shares of such class or series.
 
     (b) Except for the Common Stock, par value $0.01 per share, of the
Corporation (as such may be constituted from time to time, the "Common Stock"),
each other class and series of stock of the Corporation existing on the date of
the adoption of this Certificate shall be deemed to rank prior to the Series B
Preferred Stock both as to the payment of dividends and as to the distribution
of assets upon liquidation, dissolution or winding up. The Common Stock shall be
deemed to rank junior to the Series B Preferred Stock both as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up.
 
     SECTION 6. Liquidation Rights. (a) The amount that the holders of Series B
Preferred Stock shall be entitled to receive in the event of any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary (collectively, a "Liquidation"), shall be $50.00 per share, plus
an amount equal to all accrued and unpaid dividends to the date of Liquidation,
and no more. After such amount is paid in full, no further distributions or
payments shall be made in respect of shares of Series B Preferred Stock, such
shares of Series B Preferred Stock shall no longer be deemed to be outstanding
or be entitled to any powers, preferences, rights or privileges, including any
voting rights, and certificates representing such shares of Series B Preferred
Stock shall be surrendered for cancellation to the Corporation.
 
                                        4
<PAGE>   29
 
     (b) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, then, before any distribution or payment shall be
made to the holders of any class or series of stock of the Corporation ranking
junior to the Series B Preferred Stock, the holders of the Series B Preferred
Stock (subject to the rights of the holders of any stock ranking prior to the
Series B Preferred Stock as to rights on liquidation, dissolution and winding
up) shall be entitled to be paid in full the amounts set forth in paragraph (a)
of this Section 6. After such payment shall have been made in full to the
holders of the Series B Preferred Stock, the remaining assets and funds of the
Corporation shall be distributed among the holders of the stock of the
Corporation ranking junior in respect thereof to the Series B Preferred Stock
according to their respective rights. In the event that the assets of the
Corporation available for distribution to holders of Series B Preferred Stock
shall not be sufficient to make the payment herein required to be made in full
and to pay in full the liquidation preference on all other shares of stock of
the Corporation ranking on a parity with the Series B Preferred Stock as to
amounts distributable upon dissolution, liquidation or winding up of the
Corporation, such assets shall be distributed to the holders of the respective
shares of Series B Preferred Stock and any such other parity stock pro rata in
proportion to the full amounts payable upon the shares of Series B Preferred
Stock and any such other parity stock if all amounts payable thereon were paid
in full.
 
     SECTION 7. Maturity. Unless otherwise redeemed as provided herein, the term
of the Series B Preferred Stock shall be perpetual.
 
     IN WITNESS WHEREOF, said El Paso Tennessee Pipeline Co. has caused this
Certificate to be signed by Stacy J. James, as Secretary, this 6th day of March,
1997.
 
                                            EL PASO TENNESSEE PIPELINE CO.
 
                                            By: /s/ Stacey J. James
                                              ----------------------------------
                                              Stacy J. James
                                              Secretary
 
                                        5