Document:

exv10wi

Exhibit 10.I

EL PASO CORPORATION

2004 KEY EXECUTIVE SEVERANCE

PROTECTION PLAN

Effective as of March 9, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION 1 ESTABLISHMENT OF PLAN
	 	 	1	 
	 
	 	 	 	 
	SECTION 2 DEFINITIONS
	 	 	1	 
	2.1 Base Salary
	 	 	1	 
	2.2 Benefits Protection Trust
	 	 	1	 
	2.3 Board
	 	 	1	 
	2.4 Bonus Amount
	 	 	2	 
	2.5 Cause
	 	 	2	 
	2.6 Change in Control
	 	 	2	 
	2.7 Company
	 	 	4	 
	2.8 Effective Date
	 	 	4	 
	2.9 Employer
	 	 	5	 
	2.10 Executive Employee
	 	 	5	 
	2.11 Good Reason
	 	 	5	 
	2.12 Notice of Termination
	 	 	6	 
	2.13 Operating Companies
	 	 	6	 
	2.14 Participant
	 	 	6	 
	2.15 Permanent Disability
	 	 	6	 
	2.16 Plan
	 	 	6	 
	2.17 Severance Benefit
	 	 	6	 
	 
	 	 	 	 
	SECTION 3 ELIGIBILITY
	 	 	6	 
	3.1 Participation
	 	 	6	 
	3.2 Duration of Participation
	 	 	7	 
	 
	 	 	 	 
	SECTION 4 SEVERANCE BENEFITS
	 	 	7	 
	4.1 Right to Severance Benefit
	 	 	7	 
	4.2 Amount of Severance Benefit
	 	 	8	 
	 
	 	 	 	 
	SECTION 5 TERMINATION OF EMPLOYMENT
	 	 	9	 
	5.1 Written Notice Required
	 	 	9	 
	5.2 Termination Date
	 	 	9	 
	 
	 	 	 	 
	SECTION 6 ADDITIONAL PAYMENTS BY THE COMPANY
	 	 	10	 
	6.1 Gross-Up Payment
	 	 	10	 
	6.2 Determination By Accountant
	 	 	10	 
	6.3 Notification Required
	 	 	11	 
	6.4 Repayment
	 	 	12	 
	 
	 	 	 	 
	SECTION 7 SUCCESSORS TO COMPANY
	 	 	12	 
	7.1 Successors
	 	 	12	 
	7.2 Sale of Operating Companies
	 	 	13	 

					
	 	 	 	 	 
	El Paso Corporation 

2004 Key Executive Severance Protection Plan
	 	- i -
	 	Table of Contents

 

 

	 	 	 	 	 
	SECTION 8 AMENDMENT AND PLAN TERMINATION
	 	 	13	 
	8.1 Amendment and Termination
	 	 	13	 
	8.2 Form of Amendment
	 	 	14	 
	 
	 	 	 	 
	SECTION 9 MISCELLANEOUS
	 	 	14	 
	9.1 Indemnification
	 	 	14	 
	9.2 Employment Status
	 	 	14	 
	9.3 Validity and Severability
	 	 	14	 
	9.4 Governing Law; Choice of Forum
	 	 	15	 
	9.5 Payment to Benefits Protection Trust
	 	 	15	 
	APPENDIX I
	 	 	16	 
	 
	 	 	 	 
	APPENDIX II
	 	 	17	 

					
	 	 	 	 	 
	El Paso Corporation 

2004 Key Executive Severance Protection Plan
	 	- ii -
	 	Table of Contents

 

 

EL PASO CORPORATION

2004 KEY EXECUTIVE SEVERANCE PROTECTION PLAN

Effective as of March 9, 2004

     WHEREAS, the Board of Directors of El Paso Corporation recognizes that the threat of a change
in ownership or control of the Company may occur which can result in significant distractions of
its key executive personnel because of the uncertainties inherent in such a situation; and

     WHEREAS, the Board has determined that it is essential and in the best interest of the Company
and its stockholders to retain the services of its key executive personnel in the event of a threat
of a Change in Control of the Company and to ensure their continued dedication and efforts in such
event without undue concern for their personal financial and employment security.

     NOW, THEREFORE, in order to fulfill the above purposes, the following plan has been developed
and is hereby adopted.

SECTION 1 ESTABLISHMENT OF PLAN

     As of the Effective Date, the Company hereby establishes a severance compensation plan known
as the El Paso Corporation 2004 Key Executive Severance Protection Plan as set forth in this
document.

SECTION 2 DEFINITIONS

     As used herein the following words and phrases shall have the following respective meanings
unless the context clearly indicates otherwise.

2.1 Base Salary

     As to any Participant the amount that the Participant is entitled to receive as wages or
salary from his or her Employer on an annualized basis, as in effect immediately prior to a Change
in Control or, if greater, at any time following the Change in Control.

2.2 Benefits Protection Trust

     The El Paso Corporation Benefits Protection Trust.

2.3 Board

     The Board of Directors of the Company.

 

 

2.4 Bonus Amount

     The term “Bonus Amount” shall mean, as to any Participant, an amount equal to the
Participant’s target bonus opportunity that becomes payable to the Participant in the event of a
“qualifying change in control” under the Company’s 2001 Omnibus Incentive Compensation Plan (or
under the same or similar terms of any successor bonus plan or program thereto) for the fiscal year
in which a Change in Control occurs, determined as if the Participant had continued in employment
until the end of such fiscal year and as if the Company and the Participant had fully met all
performance targets and goals (if applicable) for such year, but excluding any single or one time
“spot” award.

2.5 Cause

     A termination of a Participant by his or her Employer shall be for “Cause” if evidenced by a
resolution adopted in good faith by two-thirds (2/3) of the Board that the Participant (i)
willfully and continually failed to substantially perform his or her duties with his or her
Employer (other than a failure resulting from the Participant’s incapacity due to physical or
mental illness) which failure continued for a period of at least thirty (30) days after a written
notice of demand for substantial performance has been delivered to the Participant specifying the
manner in which the Participant has failed to substantially perform, or (ii) willfully engaged in
conduct which is demonstrably and materially injurious to the Company or any of its affiliates,
monetarily or otherwise; provided, however, that no termination of the
Participant’s employment shall be for Cause as set forth in clause (ii) above until (A) there shall
have been delivered to the Participant a copy of a written notice setting forth that the
Participant was guilty of the conduct set forth in clause (ii) and specifying the particulars
thereof in detail, and (B) the Participant shall have been provided an opportunity to be heard by
the Board (with the assistance of the Participant’s counsel if the Participant so desires). No
act, nor failure to act, on the Participant’s part shall be considered “willful” unless he or she
has acted, or failed to act, with an absence of good faith and without a reasonable belief that his
or her action or failure to act was in the best interest of the Company or any of its affiliates.
Notwithstanding anything contained in this Plan to the contrary, no failure to perform by the
Participant after Notice of Termination is given by the Participant shall constitute Cause.

2.6 Change in Control

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

     (a) An acquisition (other than directly from the Company) of any voting securities of the
Company (the “Voting Securities”) by any “Person” (as the term “person” is used for purposes of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)),
immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than twenty percent (20%) of (1) the then-outstanding
shares of common stock of the Company (or any other securities into which such shares of

2

 

common stock
are changed or for which such shares of common stock are exchanged) (the “Shares”) or (2) the
combined voting power of the Company’s then-outstanding Voting Securities; provided,
however, that in determining whether a Change in Control has occurred pursuant to this
paragraph (a), the acquisition of Shares or Voting Securities in a “Non-Control Acquisition” (as
hereinafter defined) shall not constitute a Change in Control. A “Non-Control Acquisition” shall
mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained
by (A) the Company or (B) any corporation or other Person the majority of the voting power, voting
equity securities or equity interest of which is owned, directly or indirectly, by the Company (for
purposes of this definition, a “Related Entity”), (ii) the Company or any Related Entity, or (iii)
any Person in connection with a “Non-Control Transaction” (as hereinafter defined);

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

     (c) The consummation of:

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

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

     (B) the individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such Merger
constitute at least a majority of the members of the board of directors of (x) the

3

 

Surviving Corporation, if there is no Parent Corporation, or (y) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation; and

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

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

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

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

2.7 Company

     “Company” shall mean El Paso Corporation.

2.8 Effective Date

     The “Effective Date” of this Plan is March 9, 2004.

4

 

2.9 Employer

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

2.10 Executive Employee

     All employees of the Employer employed in an Executive Salary Grade Position.

2.11 Good Reason

     “Good Reason” shall mean, as to any Participant, the occurrence of any of the following events
or conditions following a Change in Control:

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

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

     (c) the requirement by the Participant’s Employer (without the consent of the Participant)
that he or she have a principal place of employment which is outside a thirty-five (35) mile radius
of his or her principal place of employment immediately prior to a Change in Control, except for
reasonably required travel on the Employer’s business which is not materially greater than such
travel requirements prior to the Change in Control;

     (d) the failure by the Company or any of its affiliates to (i) continue in effect any material
compensation or benefit plan, program or practice in which the Participant was participating
immediately prior to the Change in Control, including, without limitation, the Company’s 2001
Omnibus Incentive Compensation Plan, Pension Plan, Supplemental Benefits Plan and Retirement
Savings Plan, with any amendments and restatements of such plans made prior to such Change in
Control, or (ii) provide the Participant with compensation and benefits at least equal (in terms of
benefit levels and/or reward opportunities) to those provided for under each compensation or
employee benefit plan, program and practice of the Company and its affiliates as in effect
immediately prior to the Change in Control (or as in effect following the Change in Control, if
greater);

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

5

 

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

2.12 Notice of Termination

     “Notice of Termination” shall mean a notice which indicates the specific provisions in this
Plan relied upon as the basis for any termination of employment and which sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Participant’s
employment under the provision so indicated. No purported termination of employment shall be
effective without such Notice of Termination.

2.13 Operating Companies

     Subsidiary companies of the Company designated by the Company on Appendix I of the Plan.

2.14 Participant

     An Executive Employee who meets the eligibility requirements of Section 3.

2.15 Permanent Disability

     A Participant shall be deemed to have become permanently disabled for purposes of this Plan if
the Chief Executive Officer of the Company (or, in the case of a determination with respect to the
Chief Executive Officer, the Board) finds, upon the basis of medical evidence satisfactory to him
or her, that the Participant is totally disabled, whether due to physical or mental condition, so
as to be prevented from engaging in further employment by the Employer and that such disability
will be permanent and continuous during the remainder of his or her life.

2.16 Plan

     This El Paso Corporation 2004 Key Executive Severance Protection Plan.

2.17 Severance Benefit

     The benefit payable in accordance with Section 4 of the Plan.

SECTION 3 ELIGIBILITY

3.1 Participation

     Executive Employees shall become Participants in the Plan if they are designated by the Board
or Compensation Committee thereof as Participants; provided, however, that an
Executive Employee who is a participant in the Company’s Key Executive Severance Protection Plan or
Employee Severance Protection Plan must waive participation therein (in form satisfactory to the
Company) as a condition to becoming a

6

 

Participant in this Plan. Participants shall be identified on Appendix II of the Plan. The
Company shall amend Appendix II from time to time as necessary to include new Participants in the
Plan or remove Participants from the Plan who are no longer eligible to participate in the Plan, in
each case in accordance with the terms and conditions of the Plan.

3.2 Duration of Participation

     A Participant shall cease to be a Participant in the Plan if he or she ceases to be an
Executive Employee at any time prior to a Change in Control (but subject to Section 4.1(b)) or if
his or her employment is terminated following a Change in Control under circumstances where he or
she is not entitled to a Severance Benefit under the terms of this Plan. A Participant whose
termination of employment entitles him or her to payment of a Severance Benefit shall remain a
Participant in the Plan until the full amount of the Severance Benefit has been paid to him or her.

SECTION 4 SEVERANCE BENEFITS

4.1 Right to Severance Benefit

     (a) A Participant shall be entitled to receive from the Company a Severance Benefit in the
amount provided in Section 4.2 if (i) a Change in Control has occurred and (ii) within two years
thereafter, the Participant’s employment with the Employer terminates for any reason, except that
notwithstanding the provisions of this Section 4.1(a), no benefits under this Plan will be payable
should the Participant’s termination of employment be (A) by the Employer for Cause, (B) by reason
of Permanent Disability, (C) voluntarily initiated by the Participant other than for Good Reason,
or (D) by reason of the Participant’s death.

     (b) If (i) a Participant’s employment is terminated by the Employer without Cause prior to the
date of a Change in Control or (ii) an action is taken with respect to the Participant prior to the
date of a Change in Control that would constitute Good Reason if taken after a Change in Control,
and the Participant reasonably demonstrates that such termination or action (A) was at the request
of a third party that has indicated an intention or taken steps reasonably calculated to effect a
Change in Control or (B) otherwise arose in connection with, or in anticipation of, a Change in
Control that has been threatened or proposed, such termination or action shall be deemed to have
occurred after such Change in Control for purposes of the Plan, so long as such Change in Control
actually occurs.

     (c) Notwithstanding any other provision of the Plan, the sale, divestiture or other
disposition of an Operating Company (or part thereof) before the execution of an agreement
providing for a transaction or transactions which, if consummated, would constitute a Change in
Control or before a Change in Control shall not be deemed to be a termination of employment of
Participants employed by such Operating Company (or whose employment relates to such Operating
Company, if applicable), and such Participants shall not be entitled to benefits from the Company
under this Plan as a result
of such sale, divestiture or other disposition. The sale, divestiture or other disposition of

7

 

an Operating Company (or part thereof) after the execution of an agreement providing for a
transaction or transactions which, if consummated, would constitute a Change in Control or after a
Change in Control shall not be deemed to be a termination of employment of Participants employed by
such Operating Company (or whose employment relates to such Operating Company, if applicable), and
such Participants shall not be entitled to benefits from the Company under this Plan as a result of
such sale, divestiture or other disposition, in each case so long as the provisions of Section 7.2
have been satisfied.

4.2 Amount of Severance Benefit

     If a Participant’s employment is terminated in circumstances entitling him or her to a
Severance Benefit as provided in Section 4.1, such Participant shall be entitled to the following
benefits:

     (a) the Company shall pay to the Participant, as severance pay and in lieu of any further
salary for periods subsequent to the Termination Date (as specified in Section 5.2), in a single
payment (without any discount for accelerated payment), an amount in cash equal to a formula, as
described below, and based upon a multiplier, as assigned in the table below to the Participant
according to the Participant’s salary grade level (“Executive Grade Level”):

	 	 	 	 	 
	 	 	Executive	 	Corporate Title
	Multiplier	 	Grade Level	 	(or Equivalent Position at Subsidiary Level)
	3 X

	 	XA
	 	President and
Chief Executive Officer
	 
	2 X

	 	XB – XE; XF
	 	Executive Vice President and
Senior Vice President
	 
	1 X

	 	XG – XI
	 	Vice President

(X) times the sum of (A) the Participant’s Base Salary and (B) the Bonus Amount. The Company shall
also pay to the Participant the prorated portion of the Participant’s Bonus Amount for the year in
which the Participant’s employment is terminated;

     (b) for the period of months, as specified for each Executive Grade Level in the table below,
subsequent to the Participant’s termination of employment, the Company shall at its expense
continue on behalf of the Participant and his or her dependents and beneficiaries, the basic life
insurance, flexible spending account, medical and dental benefits which were being provided to the
Participant immediately prior to the Change in Control (or, if greater, at any time thereafter).
The benefits provided in this Subsection 4.2(b) shall be no less favorable to the Participant, in
terms of amounts and deductibles and costs to him or her, than the coverage provided the
Participant under the plans providing such benefits at the time Notice of Termination is given.
The Company’s obligation hereunder to provide the foregoing benefits shall terminate to the extent
the Participant obtains replacement coverage under a subsequent employer’s benefit plans at
an equal or higher level. The Company also shall pay a lump sum equal to the amount of any
additional income tax payable by the Participant and attributable to the benefits

8

 

provided under
this subparagraph (b) at the time such tax is imposed upon the Participant;

	 	 	 	 	 
	Number of Months of	 	Executive	 	Corporate Title
	Continued Coverage	 	Grade Level	 	(or Equivalent Position at Subsidiary Level)
	36 months

	 	XA
	 	President and
Chief Executive Officer
	 
	24 months

	 	XB – XE; XF
	 	Executive Vice President and
Senior Vice President
	 
	12 months

	 	XG – XI
	 	Vice President

     The amounts provided for in Section 4.2(a) shall be paid or transferred within
thirty (30) days after the Participant’s termination of employment (or, if Section 4.1(b) applies
to the termination, then within 30 days after the Change in Control). The Participant shall not be
required to mitigate the amount of any payment provided for in this Plan by seeking other
employment or otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Participant in any subsequent employment.

SECTION 5 TERMINATION OF EMPLOYMENT

5.1 Written Notice Required

     Any purported termination of employment, either by the Employer or by the Participant, shall
be communicated by written Notice of Termination to the other.

5.2 Termination Date

     In the case of the Participant’s death, the Participant’s Termination Date shall be his or her
date of death. In all other cases, the Participant’s Termination Date shall be the date specified
in the Notice of Termination subject to the following:

     (a) If the Participant’s employment is terminated by the Employer for Cause or due to
Permanent Disability, the date specified in the Notice of Termination shall be at least thirty (30)
days from the date the Notice of Termination is given to the Participant, provided that in the case
of Permanent Disability the Participant shall not have returned to the full-time performance of his
or her duties during such period of at least thirty (30) days; and

     (b) If the Participant terminates his or her employment for Good Reason, the date specified in
the Notice of Termination shall not be more than sixty (60) days from the date the Notice of
Termination is given to the Employer.

9

 

SECTION 6 ADDITIONAL PAYMENTS BY THE COMPANY

6.1 Gross-Up Payment

     (a) Subject only to Section 6.1(b) hereof, in the event it shall be determined that any
payment or distribution of any type by the Company or any of its affiliates to or for the benefit
of the Participant, whether paid or payable or distributed or distributable pursuant to the terms
of this Plan or otherwise (the “Payments”), would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any interest or penalties
with respect to such excise tax (such excise tax, together with any such interest and penalties,
are collectively referred to as the “Excise Tax”), then the Participant shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the
Participant of all taxes (including any interest or penalties imposed with respect to such taxes),
including any income taxes, employment taxes and Excise Tax, imposed upon the Gross-Up Payment, the
Participant retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Payment of the Gross-Up Payment shall be made in accordance with Section 6.3.

     (b) Notwithstanding Section 6.1(a), in the event that a reduction to the Payments
in respect of a Participant of 10% or less would cause no Excise Tax to be payable, the Participant
will not be entitled to a Gross-Up Payment and the Payments shall be reduced (but not below zero)
to the extent necessary so that the Payments shall not be subject to the Excise Tax. Unless the
Participant shall have given prior written notice specifying a different order to the Company to
effectuate the foregoing, the Company shall reduce or eliminate the Payments, by first reducing or
eliminating the portion of the Payments which are not payable in cash and then by reducing or
eliminating cash payments, in each case in reverse order beginning with payments or benefits which
are to be paid the farthest in time from the date of the Change in Control. Any notice given by
the Participant pursuant to the preceding sentence shall take precedence over the provisions of any
other plan, arrangement or agreement governing the Participant’s rights and entitlements to any
benefits or compensation.

6.2 Determination By Accountant

     All determinations required to be made under this Section 6, including whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, shall be made by the independent
accounting firm retained by the Company on the date of Change in Control (the “Accounting Firm”),
which shall provide detailed supporting calculations both to the Company and the Participant within
15 business days of the date of termination, if applicable, or such earlier time as is requested by
the Company. If the Accounting Firm determines that no Excise Tax is payable by the Participant,
it shall furnish the Participant with an opinion that he or she has substantial authority not to
report any Excise Tax on his or her federal income tax return. Any determination by the Accounting
Firm shall be binding upon the Company and the Participant. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of the initial

10

 

determination by the Accounting Firm hereunder, it is possible that Gross-Up payments which will
not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 6.3 and the Participant thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of the Participant.

6.3 Notification Required

     The Participant shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no later than ten (10) business days
after the Participant knows of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid. The Participant shall not pay such claim
prior to the expiration of the thirty (30) day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Participant in writing prior to the
expiration of such period that it desires to contest such claim, the Participant shall:

(a) give the Company any information reasonably requested by the Company relating to such
claim,

(b) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company,

(c) cooperate with the Company in good faith in order to effectively contest such claim,
and

(d) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Participant harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 6.3, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either direct the
Participant to pay the tax claimed and sue for a refund, or contest the claim in any
permissible
manner, and the Participant agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or

11

 

more appellate
courts, as the Company shall determine; provided, however, that if the
Company directs the Participant to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Participant (unless otherwise prohibited by
applicable law), on an interest-free basis and shall indemnify and hold the Participant
harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or
penalties with respect thereto, imposed with respect to such advance or with respect to any
imputed income with respect to such advance; and provided, further, that
any extension of the statute of limitations relating to payment of taxes for the taxable
year of the Participant with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company’s control of the contest
shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Participant shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other taxing authority.

6.4 Repayment

     If, after the receipt by the Participant of an amount advanced by the Company pursuant to
Section 6.3, the Participant becomes entitled to receive any refund with respect to such claim, the
Participant shall (subject to the Company’s complying with the requirements of Section 6.3)
promptly pay to the Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 6.3, a determination is made that the Participant shall
not be entitled to any refund with respect to such claim and the Company does not notify the
Participant in writing of its intent to contest such denial of refund prior to the expiration of
thirty (30) days after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent thereof the amount
of Gross-Up Payment required to be paid.

SECTION 7 SUCCESSORS TO COMPANY

7.1 Successors

     This Plan shall bind any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company, in the same manner and to the same extent that the Company would be obligated under this
Plan if no succession had taken place. In the case of any transaction in which a successor would
not by the foregoing provision or by operation of law be bound by this Plan, the Company shall
require such successor expressly and unconditionally to assume and agree to perform the Company’s
obligations under this Plan, in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.

7.2 Sales of Operating Companies

12

 

     If a Participant’s employment with his or her Employer terminates in connection with the sale,
divestiture or other disposition of the stock or assets of any Operating Company (or part thereof)
(a “Transaction”) after the execution of an agreement providing for a transaction or transactions
which, if consummated, would constitute a Change in Control or after a Change in Control, such
termination shall not be a termination of employment of the Participant for purposes of the Plan,
and (notwithstanding the rights provided to the Participant by Section 4.1(a)) the Participant
shall not be entitled to a Severance Benefit as a result of such termination of employment if (i)
the Participant is offered continued employment, or continues in employment, with the divested
Operating Company (or part thereof) or the purchaser of the stock or assets of the Operating
Company (or part thereof), as the case may be, or one of their respective affiliates (the
“Post-Transaction Employer”) on terms and conditions that would not constitute Good Reason and (ii)
the Company obtains an agreement from the acquiror of the stock or assets of the divested Operating
Company (or part thereof), enforceable by the Participant, to provide or cause the Post-Transaction
Employer to provide severance pay and benefits, if the Participant accepts the offered employment
or continues in employment with the Post-Transaction Employer or its affiliates following the
Transaction, (A) at least equal to the Severance Benefit and (B) payable upon a termination of the
Participant’s employment with the Post-Transaction Employer and its affiliates within the period
described in Section 4.1(a)(ii) (or such part of it as is then remaining) for any reason other than
Cause, Permanent Disability, the Participant’s death or a termination by the Participant without
Good Reason. For purposes of this Section 7.2, the terms Cause, Good Reason and Permanent
Disability shall have the meanings ascribed to them in Sections 2.5, 2.11 and 2.15 respectively,
but the term Employer as it is used in those Sections shall be deemed to refer to the entity
employing the Participant after the Transaction, the term Company shall mean such employer or, if
there is an ultimate parent corporation of such employer, such ultimate parent corporation, and the
terms Board and Chief Executive Officer as used in those Sections shall be deemed to refer to the
individuals or bodies serving those functions for such employer or, if applicable, such ultimate
parent corporation.

SECTION 8 AMENDMENT AND PLAN TERMINATION

8.1 Amendment and Termination

     Prior to a Change in Control, the Plan may be amended or modified in any respect, and may be
terminated, in any such case, by resolution adopted by two-thirds of the Board; provided,
however, that no such amendment, modification or termination which would adversely affect
the benefits or protections hereunder of any individual who is a Participant as of the date such
amendment, modification or termination is adopted shall be effective as it relates to such
individual unless no Change in Control occurs within one year after such adoption, any such
attempted amendment, modification or termination adopted within one year prior to a Change in
Control being null and void ab initio as it relates to all such individuals who were Participants
prior to such adoption (it
being understood that the removal of Participants from participation in the Plan shall, for
purposes of this proviso, constitute an adverse action for the Participants so removed);

13

 

provided, further, however, that the Plan may not be amended, modified or
terminated, (i) at the request of a third party who has indicated an intention or taken steps to
effect a Change in Control and who effectuates a Change in Control or (ii) otherwise in connection
with, or in anticipation of, a Change in Control which actually occurs, any such attempted
amendment, modification or termination being null and void ab initio. Any action taken to amend,
modify or terminate the Plan which is taken after the execution of an agreement providing for a
transaction or transactions which, if consummated, would constitute a Change in Control shall
conclusively be presumed to have been taken in connection with a Change in Control. From and after
the occurrence of a Change in Control, the Plan may not be amended or modified in any manner that
would in any way adversely affect the benefits or protections provided hereunder to any individual
who is a Participant in the Plan on the date the Change in Control occurs.

8.2 Form of Amendment

     The form of any amendment or termination of the Plan shall be a written instrument signed by a
duly authorized officer or officers of the Company, certifying that the amendment or termination
has been approved by the Board.

SECTION 9 MISCELLANEOUS

9.1 Indemnification

     If, after a Change in Control, a Participant institutes any legal action in seeking to obtain
or enforce, or is required to defend in any legal action the validity or enforceability of, any
right or benefit provided by this Plan, the Company will pay for all actual legal fees and expenses
(including, without limitation, attorneys’ fees, filing fees and the costs of experts) as they are
incurred by such Participant.

9.2 Employment Status

     This Plan does not constitute a contract of employment or impose on any Employer any
obligation to retain the Participant as an employee, to change the status of the Participant’s
employment as an Executive Employee, or to change any employment policies of any Employer. Without
limiting the generality of the immediately preceding sentence, the Employer of a Participant may
terminate the employment of the Participant at any time following a Change in Control, with or
without Cause, subject to Section 5 hereof.

9.3 Validity and Severability

     The invalidity or unenforceability of any provision of the Plan shall not affect the validity
or enforceability of any other provision of the Plan, which shall remain in full force and effect,
and any prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

9.4 Governing Law; Choice of Forum

14

 

     The validity, interpretation, construction and performance of the Plan shall in all respects
be governed by the laws of the State of Texas. A Participant shall be entitled to enforce the
provisions of this Plan in any state or federal court located in the State of Texas, in addition to
any other appropriate forum.

9.5 Payment to Benefits Protection Trust

     Notwithstanding any other provision of the Plan, the Company shall not be required to make any
payment to a Participant under the terms of this Plan if such payment is otherwise made to the
Participant by the Benefits Protection Trust in accordance with the provisions of said Benefits
Protection Trust.

     IN WITNESS WHEREOF, the Company has caused the Plan to be effective as of the Effective Date.

	 	 	 	 	 
	 	 	EL PASO CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ Susan B. Ortenstone
	 

	 	 	 	 
	 

	 	Title:
	 	Senior Vice President,
	 

	 	 	 	Human Resources

ATTEST:

	 	 	 	 	 
	By

	 	/s/ David L. Siddall	 	 
	 

	 	 

Corporate Secretary
	 	 

15

 

APPENDIX I

Operating Companies under the

El Paso Corporation

2004 Key Executive Severance Protection Plan

“Operating Companies” as defined in Section 2.13 shall include the following subsidiaries during
the specified time periods.

	 	 	 	 	 	 	 
	Employer	 	Beginning	 	Ending
	ANR Pipeline Company

	 	03/09/2004
	 
	Colorado Interstate Gas Company

	 	03/09/2004
	 
	El Paso Energy Service Company

	 	03/09/2004
	 
	El Paso Global Networks

	 	03/09/2004
	 
	El Paso Merchant Energy North America

	 	03/09/2004
	 
	El Paso Merchant Energy-Petroleum

	 	03/09/2004
	 
	El Paso Natural Gas Company

	 	03/09/2004
	 
	El Paso Power Operations Company

	 	03/09/2004
	 
	El Paso Production Company

	 	03/09/2004
	 
	Sandbar Petroleum Company

	 	03/09/2004
	 
	Southern Natural Gas Company

	 	03/09/2004
	 
	Tennessee Gas Pipeline Company

	 	03/09/2004

Acknowledged and Accepted this 9th day of March, 2004.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Susan B. Ortenstone
	 	 
	 

	 	Senior Vice President,	 	 
	 

	 	Human Resources	 	 

16

 

APPENDIX II

Eligible Employees Covered by the

El Paso Corporation

2004 Key Executive Severance Protection Plan

(as of March 9, 2004)

Executive Employees in Executive Grade Levels XA – XI as of the effective date of the Plan shall
be eligible to become Participants in the Plan; provided, however, that an Executive Employee who
is a participant in the Company’s Key Executive Severance Protection Plan or Employee Severance
Protection Plan must waive participation therein as a condition to becoming a Participant in this
Plan.

17exv10wj

Exhibit 10.J

EL PASO ENERGY CORPORATION

DIRECTOR CHARITABLE AWARD PLAN

Amended and Restated Effective as of August 1, 1998

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	SECTION 1 ESTABLISHMENT, PURPOSE, AND DURATION
	 	 	1	 
	1.1 Establishment of the Plan
	 	 	1	 
	1.2 Purpose of the Plan
	 	 	1	 
	1.3 Duration of the Plan
	 	 	1	 
	 
	 	 	 	 
	SECTION 2 DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	SECTION 3 ADMINISTRATION
	 	 	3	 
	3.1 Management Committee
	 	 	3	 
	3.2 Decisions Binding
	 	 	4	 
	 
	 	 	 	 
	SECTION 4 ELIGIBILITY AND PARTICIPATION
	 	 	4	 
	4.1 Eligibility
	 	 	4	 
	4.2 Actual Participation
	 	 	4	 
	 
	 	 	 	 
	SECTION 5 CHARITABLE AWARDS
	 	 	4	 
	5.1 Size of Charitable Awards
	 	 	4	 
	5.2 Designation of Donees
	 	 	4	 
	5.3 Changes in Designations of Donees
	 	 	5	 
	5.4 Security for Donations
	 	 	5	 
	5.5 Change in Control
	 	 	5	 
	5.6 Payment of Charitable Awards
	 	 	6	 
	 
	 	 	 	 
	SECTION 6 AMENDMENT, MODIFICATION, AND TERMINATION
	 	 	6	 
	 
	 	 	 	 
	SECTION 7 INDEMNIFICATION
	 	 	6	 
	 
	 	 	 	 
	SECTION 8 MISCELLANEOUS
	 	 	7	 
	8.1 Successors
	 	 	7	 
	8.2 Nontransferability
	 	 	7	 
	8.3 Gender and Number
	 	 	7	 
	8.4 Severability
	 	 	7	 
	8.5 Governing Law
	 	 	7	 

					
	 	 	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	- i -
	 	Table of Contents

 

 

EL PASO ENERGY CORPORATION

DIRECTOR CHARITABLE AWARD PLAN

Amended and Restated Effective as of August 1, 1998

SECTION 1 ESTABLISHMENT, PURPOSE, AND DURATION

1.1 Establishment of the Plan

     El Paso Energy Corporation, a Delaware corporation (hereinafter referred to as the “Company”),
hereby establishes a charitable award program for Directors (as defined below), to be known as the
“El Paso Energy Corporation Director Charitable Award Plan” (hereinafter referred to as the
“Plan”), as set forth in this document. The Plan provides for the contribution by the Company of
one million dollars ($1,000,000) on behalf of each Director, to Charitable Organizations (as
defined below)of each Director’s choice subject to the terms and provisions of this Plan.

     The Board of Directors of the Company amended and restated effective as of August 1, 1998.
The term “Effective Date” shall mean January 15, 1992.

1.2 Purpose of the Plan

     The purpose of the Plan is to promote the mutual interest of the Directors and the Company to
support worthy Charitable Organizations, and to enhance the positive image of the Company.

     The Plan is further intended to acknowledge the service of the Company’s Directors, and to aid
the Company in its ability to attract, motivate, and retain the services of highly qualified
Directors, upon whose judgment, interest, and special effort the continued successful operation of
the Company largely is dependent.

1.3 Duration of the Plan

     The Plan commenced on the Effective Date and shall remain in effect until terminated by the
Board of Directors.

SECTION 2 DEFINITIONS AND CONSTRUCTION

     Whenever used in this Plan, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized.

     (a) “Board” or “Board of Directors” means the Board of Directors of the Company.

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 1

 

 

     (b) “Change in Control” of the Company shall be deemed to have occurred if the conditions set
forth in any one or more of the following paragraphs shall have been satisfied:

     (i) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) being or becoming the “beneficial owner” (as defined in Rule 13d-3 of the Exchange
Act) directly or indirectly, of securities of the Company representing twenty percent (20%)
or more of the combined voting power of the then outstanding securities of the Company,

     (ii) the first purchase of the Company’s Common Stock pursuant to a tender or exchange
offer (other than a tender or exchange offer made by the Company),

     (iii) the approval by the Company’s stockholders of a merger or consolidation, a sale
or disposition of all or substantially all of the Company’s assets or a plan of liquidation
or dissolution of the Company, or

     (iv) during any period of two (2) consecutive years, individuals who at the beginning
of such period constitute the Board of Directors of the Company ceasing for any reason to
constitute at least a majority thereof, unless the election or nomination for the election
by the Company’s stockholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the beginning of the
period.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur if the
Company either merges or consolidates with or into another company or sells or disposes of
all or substantially all of its assets to another company, if such merger, consolidation,
sale or disposition is in connection with a corporate restructuring wherein the
stockholders of the Company immediately before such merger, consolidation, sale or
disposition own, directly or indirectly, immediately following such merger, consolidation,
sale or disposition at least eighty percent (80%) of the combined voting power of all
outstanding classes of securities of the company resulting from such merger or
consolidation, or to which the Company sells or disposes of its assets, in substantially
the same proportion as their ownership in the Company immediately before such merger,
consolidation, sale or disposition.

     (c) “Charitable Award” means, individually or collectively, a donation to be made to a
Charitable Organization chosen by a Participant pursuant to the terms of Section 5 herein.

     (d) “Charitable Organization” means any public or private charitable organization in the
United States or its possessions which is a corporation, trust,
community chest, fund, foundation, or association, provided contributions to such entity are
deductible under Section 170(c) of the Code.

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 2

 

 

     (e) “Code” means the Internal Revenue Code of 1986, as amended, or any successor statute, and
the Treasury Regulations promulgated thereunder.

     (f) “Committee” means the management committee as specified in Section 3 herein.

     (g) “Company” means El Paso Energy Corporation, a Delaware corporation, or any successor
thereto as provided in Section 8.1 herein.

     (h) “Director” means any individual who is a member of the Board of Directors of the Company.

     (i) “Effective Date” means the date on which the Plan became effective, as designated by the
Board of Directors pursuant to Section 1.1 herein.

     (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or
any successor Act thereto.

     (k) “Participant” means a Director of the Company who has been notified of his or her
eligibility to participate in this Plan, pursuant to Section 4.2 herein.

     (l) “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act, and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d).

     (m) “Qualified Donee” means any Charitable Organization which has not been denied status as a
Qualified Donee by the Board of Directors, pursuant to Section 5.2 herein.

SECTION 3 ADMINISTRATION

3.1 Management Committee

     The Plan shall be administered by the Board of Directors and a management committee (the
“Committee”) consisting of the Chief Executive Officer and such other senior officers as he or she
shall designate. The Committee shall interpret the Plan, prescribe, amend, and rescind rules
relating to it, select eligible Participants, and take all other actions necessary for its
administration. No member of the Committee shall vote on any matter that pertains solely to
himself or herself.

3.2 Decisions Binding

     All determinations and decisions made by the Board of Directors and/or the Committee pursuant
to the administration of this Plan shall be final, conclusive, and

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 3

 

 

binding on all parties,
including the Company, its stockholders, employees, Participants, and their estates and
beneficiaries.

SECTION 4 ELIGIBILITY AND PARTICIPATION

4.1 Eligibility

     Persons who are elected to serve on the Board of Directors on or after the Effective Date
shall be eligible to participate in this Plan on the second anniversary of the date of their
election to the Board; provided, however, that such Directors must have continuously served on the
Board throughout such two-year period.

4.2 Actual Participation

     Subject to the terms and conditions of this Plan, the Committee shall notify each eligible
Director of his or her eligibility to participate in this Plan as soon as practicable following the
date that each such Director first becomes eligible for participation.

SECTION 5 CHARITABLE AWARDS

5.1 Size of Charitable Awards

     Each Participant shall have the right to designate Qualified Donees to which an aggregate of
up to one million dollars ($1,000,000) shall be donated by the Company on behalf of the
Participant. Participants may designate up to four Qualified Donees; provided, however, that the
total funds which shall be donated by the Company on behalf of any one Participant shall not exceed
one million dollars ($1,000,000).

5.2 Designation of Donees

     Each Participant shall nominate Charitable Organizations to receive Charitable Awards by
providing formal notice of such nominations to the Committee. Following the receipt of the
nominations of organizations, the Committee will approve the nomination or recommend to the Board
that the nomination be denied. In the event the Committee does not recommend to the Board that the
nomination be denied within six months of receipt of such nomination, the nomination shall be
deemed accepted by the Committee. Further, if the Participant should die before the Committee, or
the Board in the case of denials, acts on the nominations, such nomination shall be deemed accepted
provided the nominee is a qualified Charitable Organization, as defined herein. The Board of
Directors, by majority vote, shall have the authority to deny status as a Qualified Donee to any
organization nominated by a Participant. In the event one or more organizations nominated by a
Participant for status as a Qualified Donee are denied such status by the Board of Directors, the
Participant may nominate additional organizations to receive a Charitable Award, subject to the
approval of the Committee (or

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 4

 

 

the denial by the Board, as applicable). If a Participant fails to
designate a Qualified Donee, the Charitable Award to be made on behalf of such Participant shall
lapse.

     All nominations of organizations to receive Charitable Awards shall be made on a Charitable
Award Nomination Form, which shall specify the following: (i) the name of the nominated
organization; (ii) the amount desired by the Participant to be donated to the organization; (iii)
the name under which the donation is to be made; and (iv) any other terms and provisions deemed
necessary by the Board of Directors or the Committee. Each completed Charitable Award Nomination
Form shall be submitted to the Executive Vice President, Human Resources and Administration.

5.3 Changes in Designations of Donees

     Participants may, at any time, nominate an alternative Charitable Organization to receive a
Charitable Award (subject to Committee approval, as described in Section 5.2 herein). In addition,
Participants may, at any time, request a change in the amount of money to be donated to each such
Qualified Donee, or a change in the name under which the donation is to be made, subject to
approval (as described in Section 5.2 herein).

     Changes in the designation of Qualified Donees or in any other terms applicable to the
Charitable Awards, shall be made on a Charitable Award Nomination Form, which shall specify the new
or additional organizations nominated to receive a Charitable Award, the amount of money to be
donated in the name of the Participant to each Qualified Donee, and any other terms or provisions
deemed necessary by the Board of Directors or the Committee.

5.4 Security for Donations

     The Company’s obligations under this Plan may be unfunded and unsecured promises to donate
money in the future. No Qualified Donee shall have the right to a donation solely by virtue of the
designation of such Qualified Donee by a Participant. Following the death of a Participant, the
rights of each Qualified Donee designated by the Participant shall be those of a general unsecured
creditor of the Company.

5.5 Change in Control

     Notwithstanding any other provision of this Plan, upon a Change in Control of the Company, the
commitment of the Company to donate the Charitable Awards to the Qualified Donees shall become an
irrevocable obligation. Following a Change in Control, the Board of Directors may not amend,
modify, or terminate the Charitable
Awards of the Participants in a way which would decrease the value of the donations. In addition,
following a Change in Control, the Participants shall retain the right to change the designations
of their Qualified Donees, pursuant to Section 5.3 herein, without Board or Committee review.

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 5

 

 

5.6 Payment of Charitable Awards

     As soon as practicable following the death of a Participant, the Company shall donate the
Charitable Awards to the Qualified Donees, in the amounts requested by the Participant and approved
by the Board of Directors or Committee. Such payment shall be made in one lump sum. No
contribution will be made under this Plan to an otherwise Qualified Donee if the payment thereof
will result in the receipt of property or other direct economic benefits to the Company or its
subsidiaries or to the Participants or to the family members of any Participant.

SECTION 6 AMENDMENT, MODIFICATION, AND TERMINATION

     Except as set forth in Section 5.5, the Board may from time to time amend, suspend, or
terminate the Plan, in whole or in part, and if the Plan is suspended or terminated, the Board may
reinstate any or all of its provisions. The Committee may amend the Plan provided that it may not
suspend or terminate the Plan or substantially increase the administrative cost of the Plan or the
obligations of the Company. The Board of Directors amended and restated the Plan effective as of
August 1, 1998, in connection with the reorganization of the Company into a holding company
structure whereby El Paso Energy Corporation became the publicly held company and El Paso Natural
Gas Company became a wholly owned subsidiary. This Plan was assumed by El Paso Energy Corporation
pursuant to an Assignment and Assumption Agreement effective as of August 1, 1998, by and between
El Paso Energy Corporation and El Paso Natural Gas Company.

SECTION 7 INDEMNIFICATION

     Each individual who is or shall have been a member of the Committee, or of the Board, shall be
indemnified and held harmless by the Company against and from any loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him or her in connection with or resulting from
any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under this Plan and against and from
any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid
by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him
or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and
defend the same before he or she undertakes to handle and defend it on his or her own behalf.

     The foregoing right in indemnification shall not be exclusive of any other rights of
indemnification to which such individuals may be entitled under the Company’s Restated Certificate
of Incorporation or By-laws, as a matter of law, or otherwise, or any power that the Company may
have to indemnify them or hold them harmless.

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 6

 

 

SECTION 8 MISCELLANEOUS

8.1 Successors

     All obligations of the Company under this Plan shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of
the Company.

8.2 Nontransferability

     The right to nominate organizations to receive Charitable Awards under this Plan shall be
personal to Participants, and may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated.

8.3 Gender and Number

     Except where otherwise indicated by the context, any masculine term used herein also shall
include the feminine; the plural shall include the singular, and the singular shall include the
plural.

8.4 Severability

     In the event any provision of this Plan shall be held illegal or invalid for any reason, the
illegality or invalidity shall not affect the remaining parts of this Plan, and this Plan shall be
construed and enforced as if the illegal or invalid provision had not been included.

8.5 Governing Law

     To the extent not preempted by Federal law, this Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of Texas.

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 7

 

 

     IN WITNESS WHEREOF, the Company has caused the Plan to be amended and restated effective as of
August 1, 1998.

	 	 	 	 	 
	 	 	EL PASO ENERGY CORPORATION
	 
	 	 	 	 
	 

	 	By
	 	/s/ Joel Richards, III
	 

	 	 	 	 
	 

	 	Title:
	 	Executive Vice President

ATTEST:

	 	 	 
	By

	 	/s/ David L. Siddall
	 

	 	 
	Title: Corporate Secretary

			
	 	 	 
	El Paso Energy Corporation 

Director Charitable Award Plan
	 	Page 8

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