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                                                                    EXHIBIT 10.1

                      AMERICAN BANK NOTE HOLOGRAPHICS, INC.
                            1998 STOCK INCENTIVE PLAN

                     (As Amended Effective February 2, 2000)

                                    ARTICLE I
                                  INTRODUCTION

1.1 PURPOSE. The purpose of the American Bank Note Holographics, Inc. 1998 Stock
Incentive Plan (the "Plan") is to advance the interests of American Bank Note
Holographics, Inc. (the "Company") by encouraging and enabling present and
future employees and independent contractors of the Company and its parents and
subsidiaries and non-employee directors of the Company to acquire a financial
interest in the Company through stock options and other awards under the Plan.
The Company believes that the Plan will aid the Company and its parents and
subsidiaries in attracting and retaining outstanding employees, independent
contractors and, in the case of the Company, non-employee directors and in
stimulating the efforts of such individuals to work for the success of the
Company.

1.2 ADMINISTRATION.

         (a) General. The Plan shall be administered, construed and interpreted
by a committee (the "Committee") formed by the Board of Directors of the
Company, or if no such Committee is established, then by the Board of Directors.
In the event that there is not a Committee established at any time during the
term of any option granted hereunder, references herein to the Committee shall
be interpreted to be references to the Board of Directors. Notwithstanding
anything herein to the contrary, the Plan shall be administered, construed and
interpreted by the Board of Directors of the Company with regard to grants made
to non-employee directors of the Company.

         (b) Grant of Options. The Committee shall from time to time recommend
the persons who shall participate in the Plan and the extent of their
participation. The Committee also shall recommend the price to be paid for
shares upon the exercise of options granted under the Plan, the period within
which each option may be exercised, and the terms and conditions of each
individual Stock Option Agreement or Incentive Stock Option by and between the
Company and the holder of the option. The terms and conditions of each
individual Stock Option Agreement or Incentive Stock Option shall be consistent
with the provisions of the Plan, but the Committee may provide for such
additional terms and conditions, not in conflict with the provisions of the
Plan, as it deems advisable. All such recommendations by the Committee shall be
final upon approval of the Board of Directors.

         (c) Interpretation of Plan. In interpreting the Plan, the Committee and
Board of Directors shall be governed by the principles and requirements of the
applicable sections of the Internal Revenue Code of 1986, as amended ("the
Code"), and the Treasury Regulations. All terms used herein shall have and shall
be interpreted as having the meanings set forth in the applicable provisions of
the Code. The interpretation and construction by the Committee of any
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provision of or term used in the Plan or any option granted under the Plan and
any determination pursuant to any provision of the Plan or any such option shall
be final and conclusive, unless otherwise determined by the Board of Directors.
No member of the Committee or Board of Directors shall be liable for any action
or determination made in good faith, and members of the Committee and Board of
Directors shall be entitled to indemnification and reimbursement from time to
time for expenses incurred in defense of such good faith action or
determination.

1.3 TYPES OF AWARDS UNDER THE PLAN. Awards under the Plan may be in the form of
any one or more of the following as determined by the Committee:

         (a) Stock Options as described in Article III;

         (b) Incentive Stock Options as described in Article IV; and

         (c) Alternate Appreciation Rights, as described in Article V.

1.4 SHARES SUBJECT TO PLAN.

         (a) The shares subject to the Plan shall be authorized but unissued or
treasury shares of the Company's common stock (the "Common Stock") . Subject to
readjustment in accordance with the provisions of paragraph 7.4 of the Plan, the
maximum number of shares of Common Stock for which options or alternate
appreciation rights may be granted under the Plan shall be 1,863,000 shares of
Common Stock.

         (b) Shares tendered by a Participant as payment for shares issued upon
exercise of a Stock Option or Incentive Stock Option shall be available for
issuance under the Plan. In the event that any outstanding option granted under
the Plan for any reason expires or is terminated prior to the end of the period
during which options may be granted under the Plan, the shares of Common Stock
allocable to the unexercised portion of such option may again be subject in
whole or in part to any option granted under the Plan.

1.5 TERM OF PLAN. Unless sooner terminated by the Committee, as provided for
under Section 6.2, the Plan shall remain in effect for a period of ten (10)
years from the date the Plan becomes adopted.

                                   ARTICLE II
                                   ELIGIBILITY

2.1 ELIGIBILITY. Options and alternate appreciation rights may be granted to
present and future employees and independent contractors of the Company and its
subsidiaries and parents and to non-employee directors of the Company, provided
that Incentive Stock Options may only be granted to persons who are employed by
the Company or one of its Parent Corporations or Subsidiary Corporations at the
time of grant. For purposes of the Plan, a person to whom an option or alternate
appreciation right is granted shall be referred to as a "Grantee".

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                                   ARTICLE III
                                  STOCK OPTIONS

3.1 AWARD OF STOCK OPTIONS. The Committee may from time to time, and subject to
the provisions of the Plan and such other terms and conditions as the Committee
may prescribe, grant to any participant in the Plan one or more options to
purchase for cash or shares the number of shares of Common Stock ("Stock
Options") allotted by the Committee. The date a Stock Option is granted shall
mean the date selected by the Committee as of which the Committee allots a
specific number of shares to a participant pursuant to the Plan.

3.2 STOCK OPTION AGREEMENTS. The grant of Stock Option shall be evidenced by a
written Stock Option Agreement, executed by the Company and the Grantee, stating
the number of shares of Common Stock subject to the Stock Option evidenced
thereby, and in such form as the Committee may from time to time determine.

3.3 STOCK OPTION PRICE. The option price per share of Common Stock deliverable
upon the exercise of a Stock Option shall be one hundred percent (100%) of the
fair market value of a share of Common Stock on the date the Stock Option is
granted, or such other price as determined by the Board of Directors as approved
by the shareholders, if such approval is required by law.

         (a) The "fair market value" of the shares of Common Stock shall be the
mean between the high "bid" and the low "asked" prices of the common stock in
the over-the-counter market on the day on which such value is to be determined
or, if no shares were traded on such day, on the next preceding day on which
shares were traded, an reported. If the Common Stock is not regularly traded in
the over-the-counter market but is registered on a national securities exchange,
the "fair market value" of the shares of Common Stock shall mean the closing
price of the Common Stock on such national securities exchange on the day on
which such value is to be determined or, if no shares were traded on such day,
on the next preceding day on which shares were traded, as reported by National
Quotation Bureau, Incorporated or other national quotation service. If the
Common Stock is not regularly traded in the over-the-counter market or
registered in a national securities exchange the Committee shall determine the
fair market value of the common stock in good faith.

3.4 TERM AND EXERCISE. Options granted under the Plan will either become vested
and exercisable for up to 33 1/3% of the total optioned shares upon each
succeeding anniversary (until the option is fully exercisable at the end of the
third year) or, if immediately vested, will be exercisable for restricted shares
of Common Stock with restrictions lapsing with respect to 33 1/3% of such shares
upon each succeeding anniversary (until the restrictions expire at the end of
the third year). Notwithstanding anything herein to the contrary, the Board of
Directors, upon recommendation of the Committee, may provide for alternative
exercise options at any time and may determine whether the option shall be
exercisable in full at any time during the term or in cumulative or
non-cumulative installments during the term. No Stock Option shall be
exercisable after the expiration of its option term.

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3.5 MANNER OF PAYMENT. Each Stock Option Agreement shall set forth the procedure
governing the exercise of the Stock Option granted thereunder, and shall provide
that, upon such exercise in respect of any shares of Common Stock subject
thereto, the Grantee shall pay to the Company, in full, the option price for
such shares with cash or with shares of Common Stock owned for at least six (6)
months (free and clear of any liens or encumbrances) or shall pay such option
price in accordance with such other methods as approved by the Committee from
time to time.

3.6 DEATH OF GRANTEE.

         (a) Upon the death of the Grantee, any rights to the extent exercisable
on the date of death may be exercised by the Grantee's estate, or by a person
who acquires the right to exercise such Stock Option by be quest or inheritance
or by reason of the death of the Grantee, provided that such exercise occurs
within both the remaining effective term of the Stock Option and one year after
the Grantee's death.

         (b) The provisions of this Section shall apply notwithstanding the fact
that the Grantee's employment or service may have terminated prior to death, but
only to the extent of any rights exercisable on the date of death.

3.7 RETIREMENT OR DISABILITY. At the discretion of the Committee or unless
otherwise stated in the Stock Option Agreement, upon termination of the
Grantee's employment or service by reason of retirement or permanent disability
(as each is determined by the Committee), the Grantee may, within 36 months from
the date of termination, exercise any Stock Options to the extent such options
are exercisable during such 36-month period.

3.8 TERMINATION FOR OTHER REASONS. Except as provided in Sections 3.7 and 3.8,
or except as otherwise determined by the Committee, all Stock Options shall
terminate upon the termination of the Grantee's employment or service.

3.9 PERFORMANCE GRANTS. The Committee may, in its discretion, place additional
restrictions on the options granted under this Article III requiring that the
option will only vest if and when the Common Stock price exceeds the grant price
by a specific amount. Generally, Performance Grants will be subject to the same
requirements described in this Article III, unless the Committee decides
otherwise. If Performance Grants are granted the requirements and restrictions
will be detailed in the Stock Option Agreement.

3.10 PERFORMANCE UNITS. The Committee may, in its discretion, place additional
restrictions on the Stock Options granted under this Article III requiring that
on exercise of the Stock Options a Grantee will purchase shares that will be
forfeited if the Grantee terminates employment or service within a certain
number of years. In connection with options described under this Section 3.10,
additional transferability restrictions may be imposed. If Performance Units are
granted the requirements and restrictions will be detailed in the Stock Option
Agreement.

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                                   ARTICLE IV
                             INCENTIVE STOCK OPTIONS

4.1 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS. Incentive Stock Options
granted pursuant to the Plan shall be evidenced by agreements (the "Incentive
Stock Option Agreements") in such form as the Committee and Board of Directors
shall, consistent with the provisions of Code sections 421 and 422 and related
sections of the Code and applicable Treasury Regulations, approve from time to
time for at least six (6) months (free and clear of any liens or encumbrances)
or shall be payable in accordance with such other methods as approved by the
Committee from time to time. Such Incentive Stock Option Agreements and the
options evidenced thereby shall comply with and be subject to the following
terms and conditions:

         (a) Number of Shares. Each Incentive Stock Option Agreement shall state
the total number of shares of Common Stock to which it pertains.

         (b) Amount Limitation. A key employee may not be granted incentive
stock options which are exercisable for the first time in any one calendar year
under the Plan and any other incentive stock option plan of the Company or any
parent or subsidiary corporation of the Company, for the purchase of Common
Stock with an aggregate fair market value of more than one hundred thousand
dollars ($100,000) (valued as of the date of grant of the Incentive Stock
Option).

         (c) Incentive Stock Option Price. The option price for each option
granted under this Article IV shall be the amount determined by the Board of
Directors, upon the recommendation of the Committee, but, subject to the
provisions of the Plan, shall not be less than one hundred percent (100%) of the
fair market value of the shares of Common Stock subject to the option on the
date of grant of the option. Notwithstanding the foregoing, the option price
shall not be less than one hundred ten percent (110%) of the fair market value
of the shares of Common Stock subject to the option on the date of grant of the
option as to any Grantee who at the time the option is granted, owned more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company. The date on which the Board of Directors approves the granting of
an option shall be considered the date on which such option is granted.

         (d) Fair Market Value. For purposes of this Article IV, the "fair
market value" of the shares of Common Stock shall be the mean between the high
"bid" and the low "asked" prices of the common stock in the over-the-counter
market on the day on which such value is to be determined or, if no shares were
traded on such day, on the next preceding day on which shares were traded, an
reported. If the Common Stock is not regularly traded in the over-the-counter
market but is registered on a national securities exchange, the "fair market
value" of the shares of Common Stock shall mean the closing price of the Common
Stock on such national securities exchange on the day on which such value is to
be determined or, if no shares were traded on such day, on the next preceding
day on which shares were traded, as reported by National Quotation Bureau,
Incorporated or other national quotation service. If the Common Stock is not
regularly traded in the over-the-counter market or registered in a national
securities exchange the Committee shall determine the fair market value of the
common stock in good faith in accordance with Code Section 422(c)(1) and
accompanying Treasury Regulations.

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         (e) Medium and Time of Payment. The option price shall be payable upon
the exercise of an option in cash or by check or, if provided in the Incentive
Stock Option or Stock Option Agreement, in shares of Common Stock owned by the
Grantee for at least six (6) months (free and clear of any liens or
encumbrances) or shall be payable in accordance with such other methods as
approved by the Committee from time to time. In the event that all or part of
the option price is paid in shares of Common Stock, the value of such shares
shall be equal to the fair market value of such shares on the date of exercise
of the option, and the Grantee shall deliver to the Company a certificate or
certificates representing such shares duly endorsed to the Company or
accompanied by a duly-executed separate instrument of transfer satisfactory to
the Committee.

         (f) Term of Incentive Stock Option. Each option granted under the Plan
shall be exercisable by the Grantee only during a term fixed by the Board of
Directors upon recommendation of the Committee ending not later than ten (10)
years after the date of grant of the option.

         (g) Exercise of Incentive Stock Option. Options granted under the Plan
will either become vested and exercisable for up to 33 1/3% of the total
optioned shares upon each succeeding anniversary (until the option is fully
exercisable at the end of the third year) or, if immediately vested, will be
exercisable for restricted shares of Common Stock with restrictions lapsing with
respect to 33 1/3% of such shares upon each succeeding anniversary (until the
restrictions expire at the end of the third year). Notwithstanding anything
herein to the contrary, the Board of Directors, upon recommendation of the
Committee, may provide for alternative exercise options at any time, and may
determine whether the option shall be exercisable in full at any time during the
term or in cumulative or non-cumulative installments during the term.

         (h) Method of Exercise. All options granted under the Plan shall be
exercised by written notice directed to the officer of the Company indicated in
the Incentive Stock Option Agreement at the Company's principal place of
business. Such written notice shall specify the form of payment made by the
Grantee or his successor of the Plan and shall be accompanied by payment in full
of the option price for the shares for which such option is being exercised. The
Company shall make delivery of certificates representing the shares for which an
option has been exercised within a reasonable period of time; provided, however,
that if any law, regulation or agreement required the Company to take any action
with respect to the shares for which an option has been exercised before the
issuance thereof, then the date of delivery of such shares shall be extended for
the period necessary to take such action.

         (i) Effect of Termination of Employment or Death.

                  (1) Termination of Employment. Except as otherwise provided in
this subparagraph (1) or in subparagraphs (2) or (3) below, upon termination of
the employment of any Grantee with the Company or any parent or subsidiary
corporation of the Company for any reason, all options held by the Grantee under
the Plan shall immediately terminate. Whether military, government or other
service or other leave of absence shall constitute a termination of employment
shall be determined in each case by the Committee in its discretion, and any
determination by the Committee shall be final and conclusive. The Board of
Directors upon

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recommendation of the Committee at its election may provide that the Grantee may
exercise an option at any time within three (3) months after the termination of
employment of the Grantee with the Company or any parent or subsidiary
corporation then employing the Grantee (or within one (1) year after the
termination of such employment if such employment is terminated due to the
Grantee's permanent disability). In no event, however, will the option be
exercisable after the expiration of the term of the option. In addition,
exercise of the option following termination of the Grantee's employment shall
be subject to the following terms and conditions: (a) with respect to any and
all installments of the option that had not become exercisable at the time of
termination of employment, the period of extension shall not, unless otherwise
provided in the Incentive Stock Option Agreement, operate to permit such
installment to become exercisable within such period; and (b) with respect to
any installment of the option that had become exercisable at the time of
termination of employment, the period of extension shall not operate to permit
the exercise of such installment after the expiration of the period within which
such installment may be exercised. For purposes of this subparagraph (1), if any
corporation ceases to be a parent or subsidiary of the Company, the employment
of any Grantee employed by such corporation shall be deemed to have terminated
unless such Grantee becomes an employee of the Company or another parent or
subsidiary of the Company simultaneously with or prior to the time such
corporation ceases to be a parent or subsidiary of the Company. For purposes of
this Section, "permanent disability" shall mean a permanent disability as
defined in Code Section 22(e)(3).

                  (2) Death. In granting any option under the Plan, the Board of
Directors and Committee may provide in the Incentive Stock Option Agreement
representing such option that in the event of the death of a Grantee at a time
when an option in exercisable by the Grantee, the Grantee's personal
representatives, heirs or legatees (the "Grantee's Successors") may exercise all
or any portion of such option held by the Grantee on the date of his death upon
proof satisfactory to the Company of their authority. The Grantee's Successors
must exercise any such option within twelve (12) months after the date of the
Grantee's death and in any event prior to the date of expiration of the option.
Such exercise otherwise shall be subject to the terms and conditions of the
Plan; provided, however, that with respect to any installment of the option that
had not become exercisable on the date of the Grantee's death, the period of
extension shall not, unless otherwise provided in the option Agreement, operate
to permit such installment to become exercisable within such period.

                  (3) Notwithstanding anything in this Section to the contrary,
the Committee may in its discretion, at any time extend the period available for
the exercise of the options under this Section. If the period available for
exercise of the options is extended beyond the restrictions outlined in Code
Section 422(a), favorable tax treatment under Code Section 421 will no longer be
available.

         (j) No Options in Certain Cases. No options shall be granted except
within a period of ten (10) years after the date on which the Incentive Stock
Option is granted. In no event shall an option be granted to any person who, at
the time such option is granted, owns (as defined in Code Section 422 (b)(6))
stock possessing more than ten percent (10%) of the total combined voting power
or value of all classes of stock of the Company or of any parent or subsidiary
corporation of the Company unless (i) the option price under such option is not
less than one

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hundred and ten percent (110%) of the fair market value of the shares of Common
Stock subject to such option on the date of grant of such option (determined as
provided in paragraph 5(c) of the Plan) and (ii) the terms of the Incentive
Stock Option Agreement shall make such option expire on the date that is no
later than the fifth (5th) anniversary after the date on which the option is
granted.

                                    ARTICLE V
                          ALTERNATE APPRECIATION RIGHTS

5.1 AWARD OF ALTERNATE RIGHTS. Concurrently with or subsequent to the award of
any Stock Option or Incentive Stock Option to purchase one or more shares of
Common Stock, the Committee may, at their discretion, and subject to the
provisions of the Plan and such other terms and conditions as the Committee may
prescribe, award to the Grantee with respect to each share of Common Stock, a
related alternate appreciation right ("Alternate Right"), permitting the Grantee
to be paid the appreciation on the option in lieu of exercising the option.

5.2 ALTERNATE RIGHTS AGREEMENT. Alternate Rights shall be evidenced by written
agreements in such form as the Committee may from time to time determine.

5.3 EXERCISE. A Grantee who has been granted Alternate Rights may, from time to
time, in lieu of the exercise of an equal number of options, elect to exercise
one or more Alternate Rights and thereby become entitled to receive from the
Company payment in Common Stock the number of shares determined pursuant to
Sections 5.4 and 5.5. Alternate Rights shall be exercisable only to same extent
and subject to the same conditions as the options related thereto are
exercisable, as provided in this Plan. The Committee may, in its discretion,
prescribe additional conditions to the exercise of any Alternate Rights.

5.4 AMOUNT OF PAYMENT. The amount of payment to which an Grantee shall be
entitled upon the exercise of each Alternate Right shall be equal to 100% of the
amount, if any, by which the fair market value (as defined in Section 3.3(a)) of
a share of Common Stock on the exercise date exceeds the fair market value of a
share of Common Stock on the date the option related to said Alternate Right was
granted or became effective, as the case may be.

5.5 FORM OF PAYMENT. The number of shares to be paid shall be determined by
dividing the amount of payment determined pursuant to Section 5.4 by the fair
market value of a share of Common Stock on the exercise date of such Alternate
Rights. As soon as practicable after exercise, the Company shall deliver to the
Grantee a certificate or certificates for such shares of Common Stock.

5.6 EFFECT OF EXERCISE. The exercise of any Alternate Rights shall cancel an
equal number of Stock Options and Incentive Stock Options, if any, related to
said Alternate Rights.

5.7 RETIREMENT OR DISABILITY. Upon termination of the Grantee's employment or
service (including employment or service as a director of the Company after an
Grantee terminates employment or service as an officer or key employee of the
Company) by reason of permanent disability or retirement (as each is determined
by the Committee), the Grantee may,

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within six months from the date of such termination, exercise any Alternate
Rights to the extent such Alternate Rights are exercisable during such six-month
period, or such longer period as determined by the Committee.

5.8 DEATH OF GRANTEE OR TERMINATION FOR OTHER REASONS. Except as provided in
Section 5.7, or except as otherwise determined by the Committee, all Alternate
Rights shall terminate upon the termination of the Grantee's employment or
service or upon the death of the Grantee, unless otherwise determined by the
Committee.

                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

6.1 AMENDMENT. The Board of Directors of the Company by majority vote may at any
time and from time to time amend the Plan in such respects as it shall deem
advisable in order that options granted under the Plan shall comply with the
Code, or to conform to any change in the law, or for any other purpose;
provided, however, that without the approval of the stockholders of the Company,
if such approval is required by federal securities and tax regulation,
applicable state laws or stock exchange rules, no such amendment shall change:

         (a) The maximum number of shares of Common Stock as to which options
may be granted under the Plan (except by operation of the adjustment provisions
of the Plan); or

         (b) The date on which the Plan will terminate as provided by Section
1.5 of the Plan; or

         (c) The minimum option price (in the case of an Incentive Stock Option
only), other than to change the manner of determining the fair market value of
the Common Stock to conform with any provisions of the Code or Treasury
Regulations thereunder applicable to award under the Plan or if such change is
necessitated by a change in the manner in which Common Stock is traded; or

         (d) The period during which options may be granted as provided in the
Plan (provided, however, that the Board of Directors of the Company shall have
the power set forth in paragraph 6.2 to terminate the Plan).

Any amendment to the Plan shall not, without the written consent of the Grantee,
affect such Grantee's rights under any option theretofore granted to such
Grantee.

6.2 TERMINATION. The Board of Directors may terminate the Plan at any time prior
to the end of the term of the plan as defined in Section 1.5. Termination of the
Plan shall not alter or impair any of the rights or obligations under any option
theretofore granted under the Plan unless the Grantee shall so consent.

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                                   ARTICLE VII
                                  MISCELLANEOUS

7.1 NONASSIGNABILITY OF OPTION RIGHTS. No option shall be assignable or
transferable by the Grantee except by will or by the laws of descent and
distribution. During the lifetime of the Grantee, the option shall be
exercisable only by the Grantee.

7.2 RIGHTS AS STOCKHOLDER. Neither the Grantee nor the Grantee's Successors
shall have rights an a stockholder of the Company with respect to shares of
Common Stock covered by the Grantee's option until the Grantee or the Grantee's
Successors become the holder of record of such shares. No adjustment will be
made for dividends or other rights for which the record date is prior to the
date on which shares are issued upon exercise of an option except as provided
herein.

7.3 MISCELLANEOUS PROVISIONS. The Agreements authorized under the Plan may
contain such Other Provisions, not inconsistent with the Plan or the applicable
provisions of the Code, as the Committee shall deem advisable.

7.4 ADJUSTMENTS.

         (a) Recapitalization. In the event that, after the effective date of
the Plan, the outstanding shares decreased or changed into or exchanged for a
different number or kind of shares or other shares or other securities of the
Company by reason of a recapitalization, reclassification, stock split-up,
combination of shares, or dividend payable in stock, appropriate adjustments
shall be made by the Committee in the number and kind of shares or other
securities for which options may be granted under the Plan. In addition, the
Committee upon the occurrence of such an event shall make appropriate
adjustments in the number and kind of shares or other securities as to which
outstanding options, or portions thereof then unexercised, shall be exercisable,
so that each Grantee's proportionate interest shall be maintained as before the
occurrence of such event. Such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of each
option and with a corresponding adjustment in the option price per share. Any
fractional shares resulting from any of the foregoing adjustments under this
subparagraph (a) shall be disregarded and eliminated. Each such adjustment under
this subparagraph (a) shall be made in such a manner that such adjustment will
not constitute a "modification" as defined in Code Section 424. All adjustments
made by the Committee unless otherwise determined by the Board of Directors)
under this subparagraph (a) shall be final and conclusive.

7.5 APPLICATION OF FUNDS. The proceeds received by the Company from the sale of
shares of Common Stock pursuant to options granted under the Plan will be used
for general corporate purposes.

7.6 NO OBLIGATION TO EXERCISE OPTION. The granting of an option shall impose no
obligation upon the Grantee to exercise such option.

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7.7 CHANGE IN CONTROL. Notwithstanding any provision in this Plan to the
contrary, upon a Change in Control all options granted will become immediately
vested and may be exercised immediately.

7.8 NON-UNIFORM DETERMINATIONS. The Committees determination's under the Plan
(including without limitation determinations of the persons to receive awards,
the form, amount and timing of such awards, the terms and provisions of such
awards and the agreements evidencing the same) need not be uniform and may be
made by it selectively among persons who receive, or are eligible to receive,
awards under the Plan, whether or not such persons are similarly situated.

7.9 WITHHOLDING TAXES. Whenever the Company proposes or is required to issue or
transfer shares of Common Stock under the Plan, the Company shall have the right
to require the Grantee to remit to the Company an amount sufficient to satisfy
and Federal, state and/or local withholding tax requirements prior to the
delivery of any certificate or certificates for such shares. Alternatively, the
Company may issue or transfer such shares of Common Stock net of the number of
shares sufficient to satisfy the withholding tax requirements, provided that, to
the extent required to avoid adverse accounting charges, shares may not be
withheld in excess of the minimum number of shares required to satisfy tax
withholding. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred.

7.10 LEAVES OF ABSENCES. The Committee shall be entitled to make such rules,
regulations and determination as it deems appropriate under the Plan with
respect to any leave of absence taken by a Grantee.

                                  ARTICLE VIII
                                   DEFINITIONS

8.1 CHANGE IN CONTROL. A "Change in Control," unless otherwise determined by the
Board of Directors, shall mean:

         (a) the direct or indirect acquisition, whether by sale, merger,
consolidation, or purchase of assets or stock, by any person, corporation, or
other entity or group thereof of the beneficial ownership (as that term is used
in Section 13(d)(1) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder) of shares in the Company which,
when added to any other shares the beneficial ownership of which is held by the
acquirer, shall result in the acquirer's having more than fifty (50%) of the
votes that are entitled to be cast at meetings of stockholders as to matters on
which all outstanding shares are entitled to be voted as a single class;
provided however, that such acquisition shall not constitute a Change of Control
for purposes of this Agreement if prior to such acquisition a resolution
declaring that the acquisition shall not constitute a Change of Control is
adopted by the Board with the support of a majority of the Board members who
either were members of the Board for at least two years prior to the date of the
vote on such resolution or were nominated for election to the Board by at least
two-thirds of the directors then still in office who were members of the Board
at least two years prior to the date of the vote on such resolution; and
provided further, that neither the Company, nor any person who as of July __,
1998 was a director or officer of the Company, nor

                                       11
<PAGE>   12
any trustee or other fiduciary holding securities under an employee benefit plan
of the Company, nor any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as their
ownership of shares of the Company shall be deemed to be an "acquirer" for
purposes of this Section;

         (b) the election during any two-year period to a majority of the seats
on the Board of Directors of the Company of individuals who were not members of
the Board at the beginning of such period unless such additional or replacement
directors were approved by at least eighty percent (80%) of the continuing
directors; or

         (c) stockholder approval of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.

8.2 PARENT CORPORATION. A "parent corporation" is any corporation in an unbroken
chain of corporations ending with the Company if, at the time the option is
granted, each of the corporations other than the Company owns stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain. Such definition of parent
corporation shall be consistent with the definition of such terms as set forth
in Code Section 424.

8.3 SUBSIDIARY CORPORATION. A "subsidiary corporation" is any corporation in an
unbroken chain of corporations beginning with the Company if, at the time the
option is granted, each of the corporations, other than the last corporation in
the unbroken chain, owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain. Such definition of subsidiary corporation shall be
consistent with the definition of such terms as set forth in Code Section 424.

                                       12<PAGE>   1
                                                                     EXHIBIT 4.5

                           $1,766,500,000 AT MATURITY

                               EL PASO CORPORATION

            ZERO COUPON CONVERTIBLE DEBENTURES DUE FEBRUARY 28, 2021

                          REGISTRATION RIGHTS AGREEMENT

                                                               February 22, 2001

Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629

Dear Sirs and Mesdames:

         El Paso Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to Credit Suisse First Boston Corporation (the "Purchaser"),
upon the terms set forth in a purchase agreement dated February 22, 2001 (the
"Purchase Agreement"), $1,766,500,000 aggregate principal amount at maturity of
its Zero Coupon Convertible Debentures due February 28, 2021 (the "Debentures").
The Debentures will be issued pursuant to a Fifth Supplemental Indenture, to be
dated February 28, 2001, which supplements the Indenture dated as of May 10,
1999, as amended (taken together, the "Indenture"), by and between the Company
and The Chase Manhattan Bank, as trustee (the "Trustee"). Under the terms of the
Indenture, the Debentures are convertible, in whole or in part, into shares of
Common Stock, par value $3.00 per share (the "Conversion Shares" and, together
with the Debentures, the "Securities"), at the option of the holders thereof, at
any time following the date of original issuance thereof at the Conversion Rate
(as defined in the Indenture) set forth in the Debentures, as adjusted from time
to time pursuant to the Indenture. As an inducement to the Purchaser to enter
into the Purchase Agreement, the Company agrees with the Purchaser, for the
benefit of the holders of the Debentures (including, without limitation, the
Purchaser) and Conversion Shares (collectively, the "Holders"), as follows:

         1. Resale Shelf Registration. The Company shall, at its cost, use its
reasonable best efforts to file as promptly as practicable (but in no event more
than 120 days after the Closing Date (as defined in the Purchase Agreement))
with the Securities and Exchange Commission (the "Commission") and thereafter
shall use its reasonable best efforts to cause to be declared effective no later
than 210 days after the Closing Date a registration statement (the "Resale Shelf
Registration Statement") on an appropriate form under the Securities Act of
1933, as amended (the "Securities Act"), relating to the offer and sale of the
Transfer Restricted Securities (as defined in Section 5 hereof) by the Holders
thereof from time to time in accordance with the methods of distribution set
forth in the Resale Shelf Registration Statement and Rule 415 under the
Securities Act (hereinafter, the "Resale Shelf Registration"); provided,
however, that no Holder (other than the Purchaser) shall be entitled to have the
Securities held by it covered by such Resale Shelf Registration Statement unless
such Holder agrees in writing to be bound by all the provisions of this
Agreement applicable to such Holder.
<PAGE>   2

            (a) The Company shall use its reasonable best efforts to keep the
         Resale Shelf Registration Statement continuously effective in order to
         permit the prospectus included therein to be lawfully delivered by the
         Holders of the relevant Securities, for a period of two years (or for
         such longer period if extended pursuant to Section 2(h) below) from the
         date of its effectiveness or such shorter period that will terminate
         when all the Securities covered by the Resale Shelf Registration
         Statement (i) have been sold pursuant thereto or (ii) are no longer
         Transfer Restricted Securities as defined in Section 5(d) (in any such
         case, such period being called the "Shelf Registration Period"). The
         Company shall be deemed not to have used its reasonable best efforts to
         keep the Resale Shelf Registration Statement effective during the
         requisite period if it voluntarily takes any action (other than as
         contemplated by Section 2(h)) that would result in Holders of
         Securities covered thereby not being able to offer and sell such
         Securities during that period, unless such action is required by
         applicable law.

            (b) Notwithstanding any other provisions of this Agreement to the
         contrary, the Company shall cause the Resale Shelf Registration
         Statement and the related prospectus and any amendment or supplement
         thereto, as of the effective date of the Resale Shelf Registration
         Statement, amendment or supplement, (i) to comply in all material
         respects with the applicable requirements of the Securities Act and the
         rules and regulations of the Commission and (ii) not to contain any
         untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary in order to make the
         statements therein, in light of the circumstances under which they were
         made, not misleading.

            (c) Each Holder agrees that if such Holder wishes to sell such
         Holder's Securities pursuant to a Resale Shelf Registration Statement
         and related prospectus, it will do so in accordance with this Section
         1(c). Each Holder wishing to sell Securities pursuant to a Resale Shelf
         Registration Statement and related prospectus agrees to deliver a Form
         of Selling Securityholder Notice and Questionnaire (the form of which
         is attached as Annex A to the Confidential Offering Circular dated
         February 22, 2001 used in connection with the offering of the
         Debentures) to the Company prior to any intended distribution of
         Securities under the Resale Shelf Registration Statement. From and
         after the date the Resale Shelf Registration Statement is declared
         effective, the Company shall, as promptly as is practicable after the
         date a Notice and Questionnaire is delivered to it, and in any event
         within 10 Business Days after such date, (i) if required by applicable
         law, file with the Commission a post-effective amendment to the Resale
         Shelf Registration Statement or prepare and, if required by applicable
         law, file a supplement to the related prospectus or a supplement or
         amendment to any document incorporated therein by reference or file any
         other required document so that the Holder delivering such Notice and
         Questionnaire is named as a selling securityholder in the Resale Shelf
         Registration Statement and the related prospectus in such a manner as
         to permit such Holder to deliver such prospectus to purchasers of the
         Securities in accordance with applicable law and, if the Company shall
         file a post-effective amendment to the Resale Shelf Registration
         Statement, use all its reasonable best efforts to cause such
         post-effective amendment to be declared effective under the Securities
         Act as promptly as is practicable, but in any event by the date that is
         60 days after the date such post-effective amendment is required by
         this clause to be filed; (ii) provide such Holder copies of any

                                       -2-
<PAGE>   3

         documents filed pursuant to clause (i) above; and (iii) notify such
         Holder as promptly as practicable after the effectiveness under the
         Securities Act of any post-effective amendment filed pursuant to clause
         (i) above; provided, that if such Notice and Questionnaire is delivered
         during a period in which the use of the prospectus is suspended
         pursuant to Section 2(h), the Company shall so inform the Holder
         delivering such Notice and Questionnaire and shall take the actions set
         forth in clauses (i), (ii) and (iii) above upon expiration of the
         suspension period. Notwithstanding anything contained herein to the
         contrary, the Company shall be under no obligation to name any Holder
         that has not supplied the requisite information required by this
         Section 1(c) as a selling securityholder in any Registration Statement
         or related Prospectus; provided, however, that any Holder that has
         subsequently supplied the requisite information required by this
         Section 1(c) pursuant to the provisions of this Section (whether or not
         such Holder has supplied the requisite information required by this
         Section 1(c) at the time the Resale Shelf Registration Statement was
         declared effective) shall be named as a selling securityholder in the
         Resale Shelf Registration Statement or related prospectus in accordance
         with the requirements of this Section 1(c).

         2. Registration Procedures. In connection with the Resale Shelf
Registration contemplated by Section 1 hereof, the following provisions apply:

            (a) The Company shall (i) furnish to the Purchaser, not less than
         two Business Days prior to the proposed filing thereof with the
         Commission, a copy of the most recent draft of the Resale Shelf
         Registration Statement and each amendment thereof and each supplement,
         if any, to the prospectus included therein and, if the Purchaser (with
         respect to any portion of an unsold allotment from the original
         offering) is participating in the Resale Shelf Registration, the
         Company shall use its reasonable best efforts to reflect in each such
         document, when so filed with the Commission, such comments as the
         Purchaser reasonably may propose; and (ii) include the names of the
         Holders, who propose to sell Securities pursuant to the Resale Shelf
         Registration Statement, as selling securityholders, and who have
         theretofore delivered to the Company a completed Form of Selling
         Securityholder Notice and Questionnaire.

            (b) The Company shall give written notice to the Purchaser and,
         except as provided in (v) below, to all Holders of the Securities
         (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied
         by an instruction to suspend the use of the prospectus until the
         requisite changes have been made):

                (i) when the Resale Shelf Registration Statement or any
            amendment thereto has been filed with the Commission and when the
            Resale Shelf Registration Statement or any post-effective amendment
            thereto has become effective;

                (ii) of any request by the Commission for amendments or
            supplements to the Resale Shelf Registration Statement or the
            prospectus included therein or for additional information;

                                       -3-
<PAGE>   4

                (iii) of the issuance by the Commission of any stop order
            suspending the effectiveness of the Resale Shelf Registration
            Statement or the initiation of any proceedings for that purpose;

                (iv) of the receipt by the Company or its legal counsel of any
            notification with respect to the suspension of the qualification of
            the Securities for sale in any jurisdiction or the initiation or
            threatening of any proceeding for such purpose; and

                (v) of the happening of any event that requires the Company to
            make changes in the Resale Shelf Registration Statement or the
            prospectus which forms a part of the Resale Shelf Registration
            Statement in order that the Resale Shelf Registration Statement or
            the prospectus does not contain an untrue statement of a material
            fact or omit to state a material fact required to be stated therein
            or necessary to make the statements therein, in the case of the
            prospectus, in light of the circumstances under which they were
            made, not misleading, provided, that such notice need only be
            provided to the Purchaser and to Holders who are named as selling
            stockholders in the prospectus relating to the Resale Shelf
            Registration Statement, as then amended or supplemented, or who have
            delivered a Form of Selling Securityholder Notice and Questionnaire
            pursuant to Section 1(c) but are not yet so named.

            (c) The Company shall make every reasonable effort to obtain the
         withdrawal at the earliest possible time of any order suspending the
         effectiveness of the Resale Shelf Registration Statement.

            (d) The Company shall furnish or otherwise make available to each
         Holder of Securities included within the coverage of the Resale Shelf
         Registration, without charge, at least one copy of the Resale Shelf
         Registration Statement and any post-effective amendment thereto,
         including financial statements and schedules, and, if the Holder so
         requests in writing, all exhibits thereto (including those, if any,
         incorporated by reference).

            (e) The Company shall, during the Resale Shelf Registration Period,
         deliver to each Holder of Securities included within the coverage of
         the Resale Shelf Registration, without charge, as many copies of the
         prospectus (including each preliminary prospectus) included in the
         Resale Shelf Registration Statement and any amendment or supplement
         thereto as such person may reasonably request. The Company consents,
         subject to the provisions of this Agreement, to the use of the
         prospectus or any amendment or supplement thereto by each of the
         selling Holders of the Securities in connection with the offering and
         sale of the Securities covered by the prospectus, or any amendment or
         supplement thereto, included in the Resale Shelf Registration Statement
         in the manner described therein.

            (f) Prior to any public offering of the Securities pursuant to any
         Resale Shelf Registration Statement, the Company shall register or
         qualify or cooperate with the Holders of the Securities included
         therein and their respective counsel in connection with

                                       -4-
<PAGE>   5

         the registration or qualification of the Securities for offer and sale
         under the securities or "blue sky" laws of such states of the United
         States as any Holder of the Securities reasonably requests in writing
         and do any and all other acts or things necessary or advisable to
         enable the offer and sale in such jurisdictions of the Securities
         covered by such Resale Shelf Registration Statement; provided, however,
         that the Company shall not be required to (i) qualify generally to do
         business in any jurisdiction where it is not then so qualified or (ii)
         take any action which would subject it to general service of process or
         to taxation in any jurisdiction where it is not then so subject.

            (g) The Company shall cooperate with the Holders of the Securities
         to facilitate the timely preparation and delivery of certificates
         representing the Securities to be sold pursuant to any Resale Shelf
         Registration Statement (to the extent such Securities are certificated)
         free of any restrictive legends and in such denominations and
         registered in such names as the Holders may request a reasonable period
         of time prior to sales of the Securities pursuant to such Resale Shelf
         Registration Statement.

            (h) Upon the occurrence of any event contemplated by paragraphs (ii)
         through (v) of Section 2(b) above during the Shelf Registration Period,
         the Company shall promptly prepare and file a post-effective amendment
         to the Resale Shelf Registration Statement or a supplement to the
         related prospectus or file any other required document so that, as
         thereafter delivered to Holders or purchasers of Securities, such
         amended or supplemented prospectus will not contain an untrue statement
         of a material fact or omit to state any material fact required to be
         stated therein or necessary to make the statements therein, in light of
         the circumstances under which they were made, not misleading; provided
         however, that the Company may delay preparing, filing and distributing
         any such supplement or amendment (and continue the suspension of the
         use of the prospectus) if the Company determines in good faith that
         such supplement or amendment would, in the reasonable judgment of the
         Company, (i) interfere with or affect the negotiation or completion of
         a transaction that is being contemplated by the Company (whether or not
         a final decision has been made to undertake such transaction) or (ii)
         involve initial or continuing disclosure obligations that are not in
         the best interests of the Company's stockholders at such time; provided
         further, that such delays and suspensions shall not extend for a period
         of more than 45 days in the aggregate in any three month period;
         provided, however, that in the case of the happening of an event under
         Section 2(b)(v) relating to an acquisition or a possible acquisition or
         financing, recapitalization, business combination or other similar
         transaction, the Company may, without incurring any obligation to pay
         Additional Interest pursuant to Section 5(a), extend the period of
         delay or suspension up to an additional 30 days; provided that the
         delays and suspensions pursuant to this Section 2(h) shall not exceed
         75 days in the aggregate, in any three month period, or 120 days, in
         the aggregate, in any 12-month period. If the Company notifies the
         Purchaser and the Holders of the Securities in accordance with
         paragraphs (ii) through (v) of Section 2(b) above to suspend the use of
         the prospectus until the requisite changes to the prospectus have been
         made, then the Purchaser and the Holders shall suspend use of such
         prospectus from and after receipt of such notice, and the period of
         effectiveness of the Resale Shelf Registration Statement provided for
         in Section 1(b) above shall be extended by the number of days from and
         including the date of the giving of such notice to and including the
         date when the

                                       -5-
<PAGE>   6

         Purchaser and the Holders shall have received such amended or
         supplemented prospectus pursuant to this Section 2(h).

            (i) Not later than the effective date of the Resale Shelf
         Registration Statement, the Company will provide CUSIP numbers for the
         Debentures and the Conversion Shares registered under the Resale Shelf
         Registration Statement and provide the Trustee with a certificate for
         the Debentures, in a form eligible for deposit with The Depository
         Trust Company.

            (j) The Company will comply with all rules and regulations of the
         Commission to the extent and so long as they are applicable to the
         Resale Shelf Registration and will make generally available to its
         security holders (or otherwise provide in accordance with Section 11(a)
         of the Securities Act) an earnings statement satisfying the provisions
         of Section 11(a) of the Securities Act, no later than 45 days after the
         end of a 12-month period (or 90 days, if such period is a fiscal year)
         beginning with the first month of the Company's first fiscal quarter
         commencing after the effective date of the Resale Shelf Registration
         Statement, which statement shall cover such 12-month period.

            (k) The Company shall cause the Indenture to be qualified under the
         Trust Indenture Act of 1939, as amended, in a timely manner and
         containing such changes, if any, as shall be necessary for such
         qualification. If such qualification would require the appointment of a
         new trustee under the Indenture, the Company shall appoint a new
         trustee thereunder pursuant to the applicable provisions of the
         Indenture.

            (l) The Company shall enter into such customary agreements
         (including, if requested an underwriting agreement in customary form)
         and take all such other action, if any, as any Holder shall reasonably
         request in order to facilitate the disposition of the Securities
         pursuant to any Resale Shelf Registration.

            (m) The Company shall (i) make reasonably available for inspection
         by the Holders, any underwriter participating in any disposition
         pursuant to the Resale Shelf Registration Statement and any attorney,
         accountant or other agent retained by the Holders or any such
         underwriter all relevant financial and other records, pertinent
         corporate documents and properties of the Company and (ii) cause the
         Company's officers, directors, employees, accountants and auditors to
         supply all relevant information reasonably requested by the Holders or
         any such underwriter, attorney, accountant or agent in connection with
         the Resale Shelf Registration Statement, in each case, as shall be
         reasonably necessary to enable such persons, to conduct a reasonable
         investigation within the meaning of Section 11 of the Securities Act;
         provided, however, that the foregoing inspection and information
         gathering shall be coordinated on behalf of the Purchaser and the other
         parties, by one firm of counsel, which firm shall be Locke Liddell &
         Sapp LLP until another firm shall be designated as described in Section
         3 hereof; and provided, further, that any information that is
         designated in writing by the Company, in good faith, as confidential at
         the time of delivery of such information shall be kept confidential by
         the Holders or any such underwriter, attorney, accountant or agent,
         unless such disclosure is made in connection with a court proceeding or
         required by law, or such information

                                       -6-
<PAGE>   7

         becomes available to the public generally or through a third party
         without an accompanying obligation of confidentiality.

            (n) The Company shall cause (i) its counsel to deliver an opinion
         and updates thereof relating to the Securities in customary form
         addressed to the managing underwriters, if any, or in the case where
         there is no underwriter, the Purchaser thereof and dated, in the case
         of the initial opinion, the effective date of such Resale Shelf
         Registration Statement (it being agreed that the matters to be covered
         by such opinion shall include the matters covered by opinions under the
         Purchase Agreement; the due authorization, execution and delivery of
         the relevant agreement of the type referred to in Section 2(l) hereof;
         the compliance as to form of such Resale Shelf Registration Statement
         and of the Indenture with the requirements of the Securities Act and
         the Trust Indenture Act, respectively; and, as of the date of the
         opinion and as of the effective date of the Resale Shelf Registration
         Statement or most recent post-effective amendment thereto, as the case
         may be, the absence from such Resale Shelf Registration Statement and
         the prospectus included therein, as then amended or supplemented, and
         from any documents incorporated by reference therein of an untrue
         statement of a material fact or the omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein not misleading (in the case of the prospectus, as
         amended or supplemented, and any documents so incorporated by reference
         in the light of the circumstances existing at the time that such
         documents were filed with the Commission under the Exchange Act));
         provided, however, such counsel need not express any opinion with
         respect to the financial statements and the related notes and schedules
         and other financial, accounting and statistical data derived from such
         financial statements included or incorporated by reference in any of
         such documents; (ii) its officers to execute and deliver all customary
         documents and certificates and updates thereof requested by any
         underwriters of the applicable Securities; and (iii) its independent
         public accountants and the independent public accountants, if any with
         respect to any other entity for which financial information is provided
         in the Resale Shelf Registration Statement to provide to the selling
         Holders of the applicable Securities and any underwriter therefor a
         comfort letter in customary form; and covering matters of the type
         customarily covered in comfort letters in connection with primary
         underwritten offerings, subject to receipt of appropriate documentation
         as contemplated, and only if permitted, by Statement of Auditing
         Standards No. 72.

            (o) If any broker-dealer registered under the Exchange Act shall
         underwrite any Securities or participate as a member of an underwriting
         syndicate or selling group or "assist in the distribution" (within the
         meaning of the Conduct Rules (the "Rules") of the National Association
         of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of
         such Securities or as an underwriter, a placement or sales agent or a
         broker or dealer in respect thereof, or otherwise, the Company will
         assist such broker-dealer in complying with the requirements of such
         Rules, including, without limitation, by (i) if such Rules, including
         Rule 2720, shall so require, engaging a "qualified independent
         underwriter" (as defined in Rule 2720) to participate in the
         preparation of the Resale Shelf Registration Statement relating to such
         Securities, to exercise usual standards of due diligence in respect
         thereto and, if any portion of the offering contemplated by such Resale
         Shelf Registration Statement is an underwritten offering or is made
         through a placement or

                                       -7-
<PAGE>   8

         sales agent, to recommend the yield of such Securities, (ii)
         indemnifying any such qualified independent underwriter to the extent
         of the indemnification of underwriters provided in Section 4 hereof and
         (iii) providing such information to such broker-dealer as may be
         required in order for such broker-dealer to comply with the
         requirements of the Rules.

            (p) The Company shall use its reasonable best efforts to take all
         other steps necessary to effect the registration of the Securities
         covered by the Resale Shelf Registration Statement contemplated hereby.

         3. Registration Expenses. The Company shall bear all fees and expenses
incurred in connection with its performance of and compliance with this
Agreement whether or not a Resale Shelf Registration Statement is filed or
becomes effective, and shall bear or reimburse the Holders of the Securities
covered thereby for the reasonable fees and disbursements of one firm of
counsel, which firm shall be Locke Liddell & Sapp LLP until another firm shall
be designated by the Holders of a majority in principal amount of the Debentures
covered thereby to act as counsel for the Holders in connection therewith.

         4. Indemnification.

            (a) The Company will indemnify and hold harmless each Holder of the
         Securities and each person, if any, who controls such Holder within the
         meaning of the Securities Act or the Exchange Act (each Holder and such
         controlling persons are referred to collectively as the "Indemnified
         Parties") from and against any losses, claims, damages or liabilities,
         joint or several, or any actions in respect thereof (including, but not
         limited to, any losses, claims, damages, liabilities or actions
         relating to purchases and sales of the Securities) to which each
         Indemnified Party may become subject under the Securities Act, the
         Exchange Act or otherwise, insofar as such losses, claims, damages,
         liabilities or actions arise out of or are based upon any untrue
         statement or alleged untrue statement of a material fact contained in
         the Resale Shelf Registration Statement or prospectus or in any
         amendment or supplement thereto or in any preliminary prospectus
         relating to the Resale Shelf Registration, or arise out of, or are
         based upon, the omission or alleged omission to state therein a
         material fact required to be stated therein or necessary to make the
         statements therein, with respect to any prospectus or preliminary
         prospectus, in light of the circumstances in which they were made, not
         misleading, and shall reimburse, as incurred, the Indemnified Parties
         for any legal or other expenses reasonably incurred by them in
         connection with investigating or, subject to Section 4(c) below,
         defending any such loss, claim, damage, liability or action in respect
         thereof; provided, however, that (i) the Company shall not be liable in
         any such case to the extent that such loss, claim, damage or liability
         arises out of or is based upon any untrue statement or alleged untrue
         statement or omission or alleged omission made in the Resale Shelf
         Registration Statement or prospectus or in any amendment or supplement
         thereto or in any preliminary prospectus relating to the Resale Shelf
         Registration in reliance upon and in conformity with written
         information pertaining to a Holder and furnished to the Company by or
         on behalf of such Holder specifically for inclusion therein and (ii)
         with respect to any untrue statement or omission or alleged untrue
         statement or omission made in any preliminary prospectus relating to
         the Resale Shelf Registration Statement, the

                                       -8-
<PAGE>   9

         indemnity agreement contained in this Section 4(a) shall not inure to
         the benefit of any Holder from whom the person asserting any such
         losses, claims, damages or liabilities purchased the Securities
         concerned, to the extent that a prospectus relating to such Securities
         was required to be delivered by such Holder under the Securities Act in
         connection with such purchase and any such loss, claim, damage or
         liability of such Holder results from the fact that there was not sent
         or given to such person, at or prior to the written confirmation of the
         sale of such Securities to such person, a copy of the final prospectus
         if the Company had previously furnished copies thereof to such Holder,
         provided, further, however, that this indemnity agreement will be in
         addition to any liability which the Company may otherwise have to such
         Indemnified Party. The Company shall also indemnify underwriters, their
         officers and directors and each person who controls such underwriters
         within the meaning of the Securities Act or the Exchange Act to the
         same extent as provided above with respect to the indemnification of
         the Holders if requested by such Holders.

            (b) Each Holder, severally and not jointly, will indemnify and hold
         harmless the Company and each person, if any, who controls the Company
         within the meaning of the Securities Act or the Exchange Act from and
         against any losses, claims, damages or liabilities or any actions in
         respect thereof, to which the Company or any such controlling person
         may become subject under the Securities Act, the Exchange Act or
         otherwise, insofar as such losses, claims, damages, liabilities or
         actions arise out of or are based upon any untrue statement or alleged
         untrue statement of a material fact contained in the Resale Shelf
         Registration Statement or prospectus or in any amendment or supplement
         thereto or in any preliminary prospectus relating to the Resale Shelf
         Registration, or arise out of or are based upon the omission or alleged
         omission to state therein a material fact necessary to make the
         statements therein, with respect to any prospectus or preliminary
         prospectus, in light of the circumstances in which they were made, not
         misleading, but in each case only to the extent that the untrue
         statement or omission or alleged untrue statement or omission was made
         in reliance upon and in conformity with written information pertaining
         to such Holder and furnished to the Company by or on behalf of such
         Holder specifically for inclusion therein; and, subject to the
         limitation set forth immediately preceding this clause, shall
         reimburse, as incurred, the Company for any legal or other expenses
         reasonably incurred by the Company or any such controlling person in
         connection with investigating or defending any loss, claim, damage,
         liability or action in respect thereof. This indemnity agreement will
         be in addition to any liability which such Holder may otherwise have to
         the Company or any of its controlling persons.

            (c) Promptly after receipt by an indemnified party under this
         Section 4 of notice of the commencement of any action or proceeding
         (including a governmental investigation), such indemnified party will,
         if a claim in respect thereof is to be made against the indemnifying
         party under this Section 4, notify the indemnifying party of the
         commencement thereof; but the omission so to notify the indemnifying
         party will not, in any event, relieve the indemnifying party from any
         obligations to any indemnified party other than the indemnification
         obligation provided in paragraph (a) or (b) above except to the extent
         such failure materially prejudices the indemnifying party's ability to
         defend such claim. Upon such notification by any indemnified party, the
         indemnifying party shall assume the defense thereof, including the
         employment of counsel reasonably

                                       -9-
<PAGE>   10

         satisfactory to the indemnified party and the payment of all fees and
         expenses of such counsel, as incurred (except that in the case of any
         action in respect of which indemnity may be sought pursuant to both
         Sections 4(a) and 4(b), the Indemnified Parties shall not be required
         to assume the defense of such action pursuant to this Section 4(c), but
         may employ separate counsel and participate in the defense thereof, but
         the fees and expenses of such counsel, except as provided below, shall
         be at the expense of the Indemnified Parties). Any indemnified party
         shall have the right to employ separate counsel in any such claim and
         to participate in the defense of such claim, but the fees and expenses
         of such counsel shall be at the expense of the indemnified party unless
         (i) the employment of such counsel and the payment of such counsel's
         fees shall have been specifically authorized in writing by the
         indemnifying party, (ii) the indemnifying party shall have failed to
         assume the defense of such action or employ counsel reasonably
         satisfactory to the indemnified party or (iii) the named parties in any
         action in respect of any such claim (including any impleaded parties)
         include both the indemnified party and the indemnifying party, and the
         indemnified party shall have been advised by such counsel that there
         may be one or more legal defenses available to it which are different
         from or additional to those available to the indemnifying party (in
         which case the indemnifying party shall not have the right to assume
         the defense of such action on behalf of the indemnified party). In any
         such case, the indemnifying party shall not, in connection with any one
         action or separate but substantially similar or related actions in the
         same jurisdiction arising out of the same general allegations or
         circumstances, be liable for the fees and expenses of more than one
         separate firm of attorneys (and, if applicable, local counsel) for all
         indemnified parties. Such firm shall be designated in writing by the
         Indemnified Parties, in the case of the parties indemnified under
         subsection (a) above, and by the Company, in the case of the parties
         indemnified under subsection (b) above. The indemnifying party shall
         indemnify and hold harmless the indemnified party from and against any
         and all losses, claims, damages, liabilities and judgments by reason of
         any settlement of any action (i) effected with its written consent or
         (ii) effected without its written consent if the settlement is entered
         into more than twenty business days after the indemnifying party shall
         have received a request from the indemnified party for reimbursement
         for the fees and expenses of counsel (in any case where such fees and
         expenses are at the expense of the indemnifying party) and, prior to
         the date of such settlement, the indemnifying party shall have failed
         to comply with such reimbursement request. No indemnifying party shall,
         without the prior written consent of the indemnified party, effect any
         settlement or compromise of, or consent to the entry of judgment with
         respect to, any pending or threatened action in respect of which any
         indemnified party is or could have been a party and indemnity or
         contribution may be or could have been sought hereunder by such
         indemnified party unless such settlement, compromise or judgement (i)
         includes an unconditional release of such indemnified party from all
         liability on any claims that are or could have been the subject matter
         of such action and (ii) does not include any statement as to, or an
         admission of fault, culpability or a failure to act by or on behalf of
         an indemnified party.

            (d) If the indemnification provided for in this Section 4 is
         unavailable or insufficient to hold harmless an indemnified party under
         Section 4(a) or 4(b) above, then each indemnifying party shall
         contribute to the amount paid or payable by such indemnified party as a
         result of the losses, claims, damages or liabilities (or actions in

                                      -10-
<PAGE>   11

         respect thereof) referred to in Section 4(a) or 4(b) above (i) in such
         proportion as is appropriate to reflect the relative benefits received
         by the indemnifying party or parties on the one hand and the
         indemnified party on the other from the sale of the Securities,
         pursuant to the Resale Shelf Registration, or (ii) if the allocation
         provided by the foregoing clause (i) is not permitted by applicable
         law, in such proportion as is appropriate to reflect not only the
         relative benefits referred to in clause (i) above but also the relative
         fault of the indemnifying party or parties on the one hand and the
         indemnified party on the other in connection with the statements or
         omissions that resulted in such losses, claims, damages or liabilities
         (or actions in respect thereof) as well as any other relevant equitable
         considerations. The relative fault of the parties shall be determined
         by reference to, among other things, whether the untrue or alleged
         untrue statement of a material fact or the omission or alleged omission
         to state a material fact relates to information supplied by the Company
         on the one hand or such Holder or such other indemnified party, as the
         case may be, on the other, and the parties' relative intent, knowledge,
         access to information and opportunity to correct or prevent such
         statement or omission. The amount paid by an indemnified party as a
         result of the losses, claims, damages or liabilities referred to in the
         first sentence of this Section 4(d) shall be deemed to include any
         legal or other expenses reasonably incurred by such indemnified party
         in connection with investigating or defending any action or claim which
         is the subject of this Section 4(d). Notwithstanding any other
         provision of this Section 4(d), the Holders of the Securities shall not
         be required to contribute any amount in excess of the amount by which
         the net proceeds received by such Holders from the sale of the
         Securities pursuant to a Resale Shelf Registration Statement exceeds
         the amount of damages which such Holders have otherwise been required
         to pay by reason of such untrue or alleged untrue statement or omission
         or alleged omission. No person guilty of fraudulent misrepresentation
         (within the meaning of Section 11(f) of the Securities Act) shall be
         entitled to contribution from any person who was not guilty of such
         fraudulent misrepresentation. For purposes of this Section 4(d), each
         person, if any, who controls such indemnified party within the meaning
         of the Securities Act or the Exchange Act shall have the same rights to
         contribution as such indemnified party and each person, if any, who
         controls the Company within the meaning of the Securities Act or the
         Exchange Act shall have the same rights to contribution as the Company.

            (e) The agreements contained in this Section 4 shall survive the
         sale of the Securities pursuant to the Resale Shelf Registration
         Statement and shall remain in full force and effect, regardless of any
         termination or cancellation of this Agreement or any investigation made
         by or on behalf of any indemnified party.

         5. Additional Interest Under Certain Circumstances.

            (a) Additional interest (the "Additional Interest") with respect to
         the Debentures and Conversion Shares that in each case are Transfer
         Restricted Securities shall be assessed as follows if any of the
         following events occur (each such event in clauses (i) through (iii)
         below a "Registration Default":

                (i) If on or prior to the 120th day after the Closing Date the
            Resale Shelf Registration Statement has not been filed with the
            Commission;

                                      -11-
<PAGE>   12

                (ii) If on or prior to the 210th day after the Closing Date, the
            Resale Shelf Registration Statement has not been declared effective
            by the Commission; or

                (iii) If after the Resale Shelf Registration Statement is
            declared effective (A) such Resale Shelf Registration Statement
            thereafter ceases to be effective or (B) such Resale Shelf
            Registration Statement or the related prospectus ceases to be usable
            (except in either case as permitted in Section 5(b)) in connection
            with resales of Transfer Restricted Securities during the periods
            specified herein because either (1) any event occurs as a result of
            which the related prospectus forming part of such Resale Shelf
            Registration Statement would include any untrue statement of a
            material fact or omit to state any material fact necessary to make
            the statements therein in the light of the circumstances under which
            they were made not misleading, or (2) it shall be necessary to amend
            such Resale Shelf Registration Statement or supplement the related
            prospectus, to comply with the Securities Act or the Exchange Act or
            the respective rules thereunder.

         Each of the foregoing will constitute a Registration Default whatever
         the reason for any such event and whether it is voluntary or
         involuntary or is beyond the control of the Company or pursuant to
         operation of law or as a result of any action or inaction by the
         Commission.

         Additional Interest shall accrue on the Debentures and Conversion
         Shares that are Transfer Restricted Securities from and including the
         date on which any such Registration Default shall occur to but
         excluding the date on which all such Registration Defaults have been
         cured, at a rate of 0.25% per annum for the first 90 day period from
         and including the date of the Registration Default and thereafter at a
         rate of 0.50% per annum, calculated based on the aggregate Applicable
         Principal Amount of such Debentures and, in the case of the Conversion
         Shares, the aggregate Applicable Conversion Price.

            (b) A Registration Default referred to in Section 5(a)(iii) hereof
         shall be deemed not to have occurred and be continuing in relation to
         the Resale Shelf Registration Statement or the related prospectus if
         (A) (i) such Registration Default has occurred solely as a result of
         (x) the filing of a post-effective amendment to such Resale Shelf
         Registration Statement to incorporate annual audited financial
         information with respect to the Company or as contemplated by Section
         1(c) where such post-effective amendment is not yet effective and needs
         to be declared effective to permit Holders to use the related
         prospectus or (y) other material events, with respect to the Company
         that would need to be described in such Resale Shelf Registration
         Statement or the related prospectus and (ii) in the case of clause (y),
         the Company is proceeding promptly and in good faith to amend or
         supplement such Resale Shelf Registration Statement and related
         prospectus to describe such events; provided, however, that in any case
         if such Registration Default occurs for a continuous period in excess
         of 30 days (60 days in the case of a post-effective amendment to the
         Resale Shelf Registration Statement as contemplated by Section
         1(c)(i)), Additional Interest shall be payable in accordance with

                                      -12-
<PAGE>   13

         the above paragraph from the day such Registration Default occurs until
         such Registration Default is cured or (B) during the period permitted
         by Section 2(h) during which use of a prospectus is suspended.

            (c) Any amounts of Additional Interest due pursuant to clause (i),
         (ii) or (iii) of Section 5(a) above will be payable in cash to the
         Record Holder on the Damages Payment Dates with respect to the
         Debentures and Conversion Shares. The amount of Additional Interest
         will be determined by multiplying the applicable Additional Interest
         rate by, in the case of the Debentures, the Applicable Principal Amount
         or, in the case of the Conversion Shares, the Applicable Conversion
         Price, in each case multiplied by a fraction, the numerator of which is
         the number of days such Additional Interest rate was applicable during
         such period (determined in the manner specified in Section 5(d) and on
         the basis of a 360-day year comprised of twelve 30-day months), and the
         denominator of which is 360.

            (d) Certain Definitions. For purposes of this Section 5:

                (i) Applicable Conversion Price. The Applicable Conversion Price
            means the Applicable Principal Amount divided by the Conversion Rate
            in effect as of the next succeeding February 28 or August 28
            following such Registration Default in the case of the first such
            payment of Additional Interest with respect to a Registration
            Default (and thereafter at the next succeeding February 28 or August
            28 until the cure of such Registration Default) or, if no Debentures
            are then outstanding, the last Conversion Rate that was in effect
            when the Debentures were last outstanding.

                (ii) Applicable Principal Amount. Applicable Principal Amount
            with respect to each $1,000 principal amount at maturity of
            Debentures means the sum of the $452.89 original price of such
            Debenture plus accrued original issue discount with respect to such
            Debenture through the next succeeding February 28 or August 28
            following such Registration Default in the case of the first such
            payment of Additional Interest with respect to a Registration
            Default (and thereafter at the next succeeding February 28 or August
            28 until the cure of such Registration Default) or, if no Debentures
            are then outstanding, such sum calculated as if such Debentures were
            then outstanding.

                (iii) Damages Payment Date. Each February 28 and August 28 in
            the case of Debentures and the Conversion Shares.

                (iv) Record Holder. With respect to any Damages Payment Date
            relating to any Debenture or Conversion Shares as to which any
            Additional Interest has accrued, the registered holder of such
            Debenture or Conversion Shares, as the case may be, 15 days prior to
            the next succeeding Damages Payment Date.

                (v) Transfer Restricted Securities. Each Security until (i) the
            date on which such Security has been effectively registered under
            the Securities Act and

                                      -13-
<PAGE>   14

            disposed of in accordance with the Resale Shelf Registration
            Statement or (ii) the date on which such Security is distributed to
            the public pursuant to Rule 144 under the Securities Act or is
            saleable pursuant to Rule 144(k) under the Securities Act.

         6. Rules 144 and 144A. The Company shall use its reasonable best
efforts to file the reports required to be filed by it under the Securities Act
and the Exchange Act in a timely manner and, if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Debentures, make publicly available such other information as is necessary to
permit sales of the Transfer Restricted Securities pursuant to Rules 144 and
144A. The Company covenants that it will take such further action as any Holder
of Debentures may reasonably request, all to the extent required from time to
time to enable such Holder to sell Debentures without registration under the
Securities Act within the limitation of the exemptions provided by Rules 144 and
144A (including the requirements of Rule 144A(d)(4)). The Company will provide a
copy of this Agreement to prospective purchasers of Debentures identified to the
Company by the Purchaser upon request. Upon the request of any Holder of
Debentures, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 6 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.

         7. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Resale Shelf Registration are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering ("Managing Underwriters") will be
selected by the Holders of a majority in aggregate Applicable Principal Amount
of such Transfer Restricted Securities to be included in such offering;
provided, however, that such Managing Underwriters must be reasonably
satisfactory to the Company. No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such person's
Transfer Restricted Securities on the basis reasonably provided in any
underwriting arrangements approved by the persons entitled hereunder to approve
such arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting agreements.

         8. Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Conversion Shares constituting Transfer
Restricted Securities (with Holders of Debentures deemed to be the Holders, for
purposes of this Section 8(a), of the number of outstanding shares of Conversion
Shares into which such Debentures are or would be convertible or exchangeable as
of the date on which such consent is requested). Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders of Transfer Restricted
Securities whose securities are being sold pursuant to a Resale Shelf
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Transfer Restricted Securities may be given by
Holders of at least a majority of the Transfer Restricted Securities being sold
by such Holders pursuant to such Resale Shelf Registration Statement; provided,
that the provisions of this sentence may not be amended,

                                      -14-
<PAGE>   15

modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Transfer Restricted Securities
outstanding at the time of any such amendment, modification, supplement, waiver
or consent thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8, whether or
not any notice, writing or marking indicating such amendment, modification,
supplement, waiver or consent appears on the Transfer Restricted Securities or
is delivered to such Holder. Each Holder may waive compliance with respect to
any obligation of the Company under this Agreement as it may apply or be
enforced by such particular Holder.

         9. Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:

         if to a Holder of the Securities:

            at the most current address given by such Holder to the Company.

         if to the Purchaser:

            Credit Suisse First Boston Corporation
            Eleven Madison Avenue
            New York, NY 10010-3629
            Fax No.: (212) 892-0776
            Attention: Transactions Advisory Group

         with a copy to:

            Locke Liddell & Sapp LLP
            3400 Chase Tower
            600 Travis Street
            Houston, TX  77002
            Fax. No.: (713) 223-3717
            Attention: David Taylor

         if to the Company, at its address as follows:

            El Paso Corporation
            El Paso Energy Building
            1001 Louisiana Street
            Houston, TX 77002
            Fax. No.: (713) 420-4099
            Attention: Corporate Secretary

                                      -15-
<PAGE>   16

         with a copy to:

            Andrews & Kurth L.L.P.
            600 Travis, Suite 4200
            Houston, TX 77002
            Fax No.: (713) 220-4285
            Attention: G. Michael O'Leary

All such notices and communications shall be deemed to have been duly given: at
the time delivered by hand, if personally delivered; three business days after
being deposited in the mail, postage prepaid, if mailed; when receipt is
acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

         10. No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.

         11. Successors and Assigns. This Agreement shall be binding upon the
Company and its successors and assigns.

         12. Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         13. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

         14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.

         15. Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.

         16. Securities Held by the Company. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be
affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

                                      -16-
<PAGE>   17

         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Purchaser and the Company in accordance with its terms.

                                      Very truly yours,

                                      EL PASO CORPORATION

                                      By:    /s/ C. Dana Rice
                                            ------------------------------------
                                      Title: Senior Vice President and Treasurer
                                            ------------------------------------

The foregoing Registration Rights
    Agreement is hereby confirmed
    and accepted as of the date first
    above written.

CREDIT SUISSE FIRST BOSTON
    CORPORATION

By:       /s/ Paul A. Davis
   -------------------------------
   Paul A. Davis, Director

                                      -17-

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