Document:

exv10wjw1

 

EXHIBIT 10.J.1.

AMENDMENT NO. 1 TO THE

EL PASO CORPORATION

2004 KEY EXECUTIVE SEVERANCE PROTECTION PLAN

     WHEREAS, El Paso Corporation (the “Company”) maintains the El Paso Corporation 2004 Key
Executive Severance Protection Plan (the “Plan”), effective as of March 9, 2004;

     WHEREAS, Section 8.1 of the Plan permits the Board of Directors from time to time to amend the
Plan, in whole or in part;

     WHEREAS, it is intended hereby to amend the Plan to comply with Section 409A of the Internal
Revenue Code of 1986, as amended.

     NOW, THEREFORE, the Plan is amended as follows:

     1. Section 4.2 is hereby amended in its entirety to read as follows:

     “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;

 

 

     The amounts provided for in this 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. If a Participant is a “specified employee” as defined in Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (“Code”) (“Specified
Employee”), then any severance pay which is not otherwise exempt from Section 409A of the
Code shall be paid during a 30-day period which commences on the date which is the day after
the six-month anniversary of such Specified Employee’s Termination Date.

     (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 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

     Except as provided below with respect to a Specified Employee, the payment of any
health or medical claims for the health and medical coverage provided in this Section 4.2(b)
shall be made to a Participant as soon as administratively practicable after a Participant
has provided the appropriate claim documentation, but in no event shall the payment for any
such health or medical claim be paid later than the last day of the calendar year following
the calendar year in which the expense was incurred. Notwithstanding anything herein to the
contrary, to the extent required by Section 409A of the Code: (1) the amount of medical
claims eligible for reimbursement or to be provided as an in-kind benefit under this Plan
during a calendar year may not affect the medical claims eligible for reimbursement or to be
provided as an in-kind benefit in any other calendar year, and (2) the right to
reimbursement or in-kind benefits under this Plan

-2-

 

shall not be subject to liquidation or exchange for another benefit. With respect to a
Specified Employee, during the six-month period commencing the date after the Specified
Employee’s Termination Date, the cost of any health or medical claims for health and medical
coverage provided in this Section 4.2(b) which are not otherwise exempt from Section 409A of
the Code shall be paid by the Specified Employee to the health and medical service provider
and reimbursed by the Company after the completion of such six-month period but no later
than the last day of the calendar year following the calendar year in which such health and
medical expenses were incurred.”

     2. Section 6.1(a) is hereby amended in its entirety to read as follows:

     “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 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, provided that the payment of any Gross-Up Payment shall be made
prior to the date the Participant is to remit the Excise Tax as provided under the Code or
pursuant to any judgment or agreement with any taxing authority.”

     IN WITNESS WHEREOF, this amendment has been executed by the undersigned, thereunto duly
authorized, effective as of January 1, 2007.

	 	 	 	 	 
	 	EL PASO CORPORATION

 	 
	 	By:  	     /s/ Susan B. Ortenstone
 	 
	 	 	 	 
	 	 	 	 
	 

	 	 	 	 	 
	ATTEST:	 	 
	 	 	 	 	 
	By:
	 	/s/ Marguerite Woung-Chapman
 

	 	 
	 	 	Corporate Secretary                    	 	 

-3-exv10wkw1

 

EXHIBIT 10.K.1

AMENDMENT NO. 1 TO THE

EL PASO ENERGY CORPORATION

DIRECTOR CHARITABLE AWARD PLAN

     Pursuant to Section 6 of the El Paso Energy Corporation Director Charitable Award Plan,
Amended and Restated effective as of August 1, 1998 (the “Plan”), the Plan is hereby amended as
follows, effective February 7, 2001:

     WHEREAS, the Certificate of Incorporation of El Paso Energy Corporation, a Delaware
corporation, was amended to change the name of the corporation to El Paso Corporation effective
February 7, 2001.

     NOW THEREFORE, the name of the Plan is hereby changed to the “El Paso Corporation Director
Charitable Award Plan” and all references in the Plan to “El Paso Energy Corporation” or the
“Company” shall mean “El Paso Corporation.”

     IN WITNESS WHEREOF, the Company has caused this amendment to be duly executed on this
7th day of February 2001.

	 	 	 	 	 
	 	EL PASO CORPORATION

 	 
	 	By:  	     /s/ Joel Richards III
 	 
	 	 	Joel Richards III 	 
	 	 	Executive Vice President

Human Resources and Administration 	 
	 

	 	 	 
	Attest:
	 	 
	 
	 	 
	/s/ David L. Siddall
 

Corporate Secretaryexv10wl

 

EXHIBIT 10.L

EL PASO ENERGY CORPORATION

STRATEGIC STOCK PLAN

Amended and Restated Effective as of December 3, 1999

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	SECTION 1
	 	PURPOSES	 	 	1	 
	 
	 	 	 	 	 	 
	SECTION 2
	 	DEFINITIONS	 	 	1	 
	2.1
	 	Beneficiary	 	 	1	 
	2.2
	 	Board of Directors	 	 	1	 
	2.3
	 	Cause	 	 	1	 
	2.4
	 	Change in Control	 	 	2	 
	2.5
	 	Code	 	 	3	 
	2.6
	 	Common Stock	 	 	3	 
	2.7
	 	Company	 	 	3	 
	2.8
	 	Exchange Act	 	 	3	 
	2.9
	 	Fair Market Value	 	 	3	 
	2.10
	 	Good Reason	 	 	4	 
	2.11
	 	Management Committee	 	 	4	 
	2.12
	 	Option	 	 	5	 
	2.13
	 	Option Price	 	 	5	 
	2.14
	 	Participant	 	 	5	 
	2.15
	 	Performance Goals	 	 	5	 
	2.16
	 	Performance Period	 	 	5	 
	2.17
	 	Permanent Disability or Permanently Disabled	 	 	5	 
	2.18
	 	Plan Administrator	 	 	6	 
	2.19
	 	Restricted Stock	 	 	6	 
	2.20
	 	Rule 16b-3	 	 	6	 
	2.21
	 	Section 16 Insider	 	 	6	 
	2.22
	 	Subsidiary	 	 	6	 
	2.23
	 	Total Shareholder Return	 	 	6	 
	 
	 	 	 	 	 	 
	SECTION 3
	 	ADMINISTRATION	 	 	6	 
	 
	 	 	 	 	 	 
	SECTION 4
	 	ELIGIBILITY	 	 	7	 
	 
	 	 	 	 	 	 
	SECTION 5
	 	SHARES AVAILABLE FOR THE PLAN	 	 	7	 
	 
	 	 	 	 	 	 
	SECTION 6
	 	STOCK OPTIONS	 	 	8	 
	 
	 	 	 	 	 	 
	SECTION 7
	 	STOCK APPRECIATION RIGHTS	 	 	13	 
	 
	 	 	 	 	 	 
	SECTION 8
	 	LIMITED STOCK APPRECIATION RIGHTS	 	 	15	 
	 
	 	 	 	 	 	 
	SECTION 9
	 	RESTRICTED STOCK	 	 	16	 
	 
	 	 	 	 	 	 
	SECTION 10
	 	REGULATORY APPROVALS AND LISTING	 	 	18	 

					
	 	 	 	 	 
	E1 Paso Energy Corporation
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	Strategic Stock Plan	 	 	 	 

i

 

	 	 	 	 	 	 	 
	SECTION 11
	 	EFFECTIVE DATE AND TERM OF PLAN	 	 	18	 
	 
	 	 	 	 	 	 
	SECTION 12
	 	GENERAL PROVISIONS	 	 	19	 
	 
	 	 	 	 	 	 
	SECTION 13
	 	COMPLIANCE WITH RULE 16b-3	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 14
	 	AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN	 	 	21	 

					
	 	 	 	 	 
	E1 Paso Energy Corporation
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	Strategic Stock Plan	 	 	 	 

ii

 

EL PASO ENERGY CORPORATION

STRATEGIC STOCK PLAN

Amended and Restated Effective as of December 3, 1999

SECTION 1 PURPOSES

     The purposes of the El Paso Energy Corporation Strategic Stock Plan (the “Plan”) are to
promote the interests of the Company (as defined below) and its stockholders by strengthening its
ability to attract and retain officers and key management employees in the employ of the Company
and its Subsidiaries (as defined below) by furnishing suitable recognition of their ability and
industry which contributes materially to the success of the Company in strategic transactions and
to align the interests and efforts of the Company’s officers and key management employees to the
long-term interests of the Company’s stockholders. The Plan provides for the grant of stock
options, limited stock appreciation rights, stock appreciation rights and restricted stock in
accordance with the terms and conditions set forth below.

SECTION 2 DEFINITIONS

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

2.1 Beneficiary

     The person or persons designated by the Participant pursuant to Section 6.2(f) of this Plan to
whom payments are to be paid pursuant to the terms of the Plan in the event of the Participant’s
death.

2.2 Board of Directors

     The Board of Directors of the Company.

2.3 Cause

     The Company may terminate the Participant’s employment for Cause. A termination for Cause is
a termination evidenced by a resolution adopted in good faith by the Management Committee (or by
two-thirds (2/3) of the Board of Directors in the case of a Management Committee member) that the
Participant (i) willfully and continually failed to substantially perform the Participant’s duties
with the Company (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,
monetarily or otherwise; provided, however, that no termination of the Participant’s employment
shall

					
	 	 	 	 	 
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	Strategic Stock Plan	 	 	 	 

 

 

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) above and specifying the particulars thereof in detail and (B) the
Participant shall have been provided an opportunity to be heard by the Board
of Directors (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 the
Participant has acted, or failed to act, with an absence of good faith and without a reasonable
belief that the Participant’s action or failure to act was in the best interest of the Company.
Notwithstanding anything contained in the Plan to the contrary, no failure to perform by the
Participant after notice of termination is given by the Participant shall constitute Cause.

2.4 Change in Control

     As used in the Plan, a Change in Control shall be deemed to occur (i) if any person (as such
term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) is or becomes 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 Company’s
then outstanding securities, (ii) upon the first purchase of the Common Stock pursuant to a tender
or exchange offer (other than a tender or exchange offer made by the Company), (iii) upon 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) if, during any period of two (2) consecutive years, individuals who at the
beginning of such period constitute the Board of Directors cease 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 (2/3) 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.
The acquisition and merger of Tenneco Inc. shall not constitute a Change in Control under this
Plan.

			
	 	 	 
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	Strategic Stock Plan	 	 

 

 

2.5 Code

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

2.6 Common Stock

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

2.7 Company

     El Paso Energy Corporation, a Delaware corporation.

2.8 Exchange Act

     The Securities Exchange Act of 1934, as amended.

2.9 Fair Market Value

     As applied to a specific date, Fair Market Value shall be deemed to be the mean between the
highest and lowest quoted selling prices at which Common Stock is sold on such date as reported in
the NYSE-Composite Transactions by The Wall Street Journal on such date, or if no Common Stock was
traded on such date, on the next preceding day on which Common Stock was so traded.
Notwithstanding the foregoing, upon the exercise,

     (a) during the thirty (30) day period following a Change in Control, of a limited
stock appreciation right or stock appreciation right granted in connection with an option
more than six (6) months prior to a Change in Control, or

     (b) during the seven (7) month period following a Change in Control, of a limited
stock appreciation right or of a stock appreciation right granted in connection with an
option less than six (6) months prior to a Change in Control,

On or after a Change in Control, Fair Market Value on the date of exercise shall be deemed
to be the greater of (i) the highest price per share of Common Stock as reported in the
NYSE-Composite Transactions by The Wall Street Journal during the sixty (60) day period
ending on the day preceding the date of exercise of the stock appreciation right or limited
stock appreciation right, as the case may be, and (ii) if the Change in Control is one
described in clause (ii) or (iii) of Section 2.4, the highest price per share paid for
Common Stock in connection with such Change in Control.

			
	 	 	 
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2.10 Good Reason

     Good Reason shall mean the occurrence of any of the following events or conditions, after a
Change in Control:

     (a) a change in the Participant’s status, title, position or responsibilities
(including reporting responsibilities) which, in the Participant’s reasonable judgment,
represents a substantial reduction of the 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 the Participant to any of such positions, except in
connection with the termination of the Participant’s employment for Cause, for Permanent
Disability or 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 Company’s requiring the Participant (without the consent of the Participant)
to be based at any place outside a thirty-five (35) mile radius of his or her place of
employment prior to a Change in Control, except for reasonably required travel on the
Company’s business which is not materially greater than such travel requirements prior to
the Change in Control;

     (d) the failure by the Company to (i) continue in effect any material compensation or
benefit plan in which the Participant was participating at the time of the 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
employee benefit plan, program and practice 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 the Plan; or

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

2.11 Management Committee

     A committee consisting of the Chief Executive Officer and such other senior officers as the
Chief Executive Officer shall designate. The Chief Executive Officer may from time to time remove
members from, or add members to, the Management Committee.

			
	 	 	 
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2.12 Option

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

2.13 Option Price

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

2.14 Participant

     An eligible employee to whom an option, limited stock appreciation right, stock appreciation
right or Restricted Stock is granted under the Plan as set forth in Section 4.

2.15 Performance Goals

     The Plan Administrator shall establish one or more performance goals (“Performance Goals”) for
each Performance Period in writing. Each Performance Goal selected for a particular Performance
Period shall be a relative or absolute measure of any one or more of the following (or such other
measures as the Plan Administrator may determine): Total Shareholder Return, operating income,
pre-tax profit, earnings per share, cash flow, return on capital, return on equity, return on net
assets, net income, debt reduction, safety, return on investment or revenues. The foregoing terms shall have the same
meaning as used in the Company’s financial statements, or if the terms are not used in the
Company’s financial statements, they shall have the meaning generally applied pursuant to general
accepted accounting principles, or as used in the industry, as applicable.

2.16 Performance Period

     That period of time during which Performance Goals are measured to determine the vesting or
granting of options, limited stock appreciation rights, stock appreciation rights or Restricted
Stock, as the Plan Administrator may determine.

2.17 Permanent Disability or Permanently Disabled

     A Participant shall be deemed to have become Permanently Disabled for purposes of the Plan if
the Plan Administrator shall find upon the basis of medical evidence satisfactory to the Plan
Administrator 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 Company or any of its
Subsidiaries, and that such disability will be permanent and continuous during the remainder of the
Participant’s life; provided, that with respect to Section 16 Insiders such determination shall be
made by the Board of Directors, or the Compensation Committee thereof, if required.

			
	 	 	 
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2.18 Plan Administrator

     The Management Committee (or the Board of Directors or a committee thereof in the case of
Section 16 Insiders, if required), pursuant to Section 3, shall administer the Plan.

2.19 Restricted Stock

     Common Stock granted under the Plan that is subject to the requirements of Section 9 and such
other restrictions as the Plan Administrator deems appropriate.

2.20 Rule 16b-3

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

2.21 Section 16 Insider

     Any person who is selected by the Plan Administrator to receive options, limited stock
appreciation rights, stock appreciation rights and/or Restricted Stock pursuant to the Plan and who
is subject to the requirements of Section 16 of the Exchange Act, and the rules and regulations
promulgated thereunder.

2.22 Subsidiary

     An entity that is designated by the Plan Administrator as a subsidiary for purposes of the
Plan and that is a corporation (or other form of business association that is treated as a
corporation for tax purposes) of which shares (or other ownership interests) having
more than fifty percent (50%) of the voting power are owned or controlled, directly or indirectly,
by the Company so as to qualify as a “subsidiary corporation” (within the meaning of Section 424(f)
of the Code).

2.23 Total Shareholder Return

     The sum of (i) the appreciation or depreciation in the price of a share of a company’s common
stock, and (ii) the dividends and other distributions paid and/or declared during the applicable
Performance Period, expressed as a percentage basis of the Fair Market Value of such share on the
first day of the applicable Performance Period, as calculated in a manner determined by the Plan
Administrator.

SECTION 3 ADMINISTRATION

     3.1 The Plan shall be administered by the Management Committee, unless the Board of Directors
shall otherwise determine the administrator of the Plan.

			
	 	 	 
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     3.2 Except for the terms and conditions explicitly set forth in the Plan, the Plan
Administrator shall have full authority to construe and interpret the Plan, to establish, amend and
rescind rules and regulations relating to the Plan, to select persons eligible to participate in
the Plan, to grant options, limited stock appreciation rights, stock appreciation rights and
Restricted Stock thereunder, to administer the Plan, to make recommendations to the Board of
Directors, to take all such steps and make all such determinations in connection with the Plan and
the options, limited stock appreciation rights, stock appreciation rights and Restricted Stock
granted thereunder as it may deem necessary or advisable, which determination shall be final and
binding upon all Participants. The Plan Administrator shall cause the Company at its expense to
take any action related to the Plan which may be required or necessary to comply with the
provisions of any federal or state law or any regulations issued thereunder.

     3.3 Each member of the Management Committee acting as Plan Administrator, while serving as
such, shall be considered to be acting in his or her capacity as an officer of the Company.
Members of the Management Committee acting under the Plan shall be fully protected in relying in
good faith upon the advice of counsel and shall incur no liability except for gross negligence or
willful misconduct in the performance of their duties.

SECTION 4 ELIGIBILITY

     To be eligible for selection by the Plan Administrator to participate in the Plan, an
individual must be an officer or key management employee of the Company, or of any Subsidiary, as
of the date on which the Plan Administrator grants to such individual an option, limited Stock
appreciation right, stock appreciation right or Restricted Stock or a person who, in the judgment
of the Plan Administrator, holds a position of responsibility and is able to contribute
substantially to the Company’s continued success. Notwithstanding the foregoing, the Plan
Administrator may make a grant under this Plan to individuals who are not officers or key
management employees, provided that the effectiveness of such grant shall be conditioned upon such
individual becoming an officer or key management employee of the Company or any Subsidiary.
Members of the Board of Directors of
the Company who are full-time salaried officers shall be eligible to participate. Members of the
Board of Directors who are not employees are not eligible to participate in this Plan.

SECTION 5 SHARES AVAILABLE FOR THE PLAN

     5.1 Subject to Section 5.2, the maximum number of shares that may be issued for which options,
limited stock appreciation rights, stock appreciation rights and Restricted Stock may at any time
be granted under the Plan is four million (4,000,000) shares of Common Stock, from shares held in
the Company’s treasury or out of authorized but unissued shares of the Company, or partly out of
each, as shall be determined by the Plan Administrator, subject to, and reduced by (on a post-split
basis),

			
	 	 	 
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	 	Page 7
	Strategic Stock Plan	 	 

 

 

the number of shares of Common Stock awarded prior to the occurrence of a two-for-one stock
split effected by the Company in the form of a 100% stock dividend on April 1, 1998. Any options,
limited stock appreciation rights, stock appreciation rights and shares of Restricted Stock
outstanding under the Plan on April 1, 1998, shall be adjusted on a two-for-one basis to reflect
the stock dividend. For purposes of this Section 5.1, the aggregate number of shares of Common
Stock issued under this Plan at any time shall equal only the number of shares actually issued upon
exercise or settlement of options, limited stock appreciation rights, stock appreciation rights or
Restricted Stock and not returned to the Company upon cancellation, expiration or forfeiture
(regardless of whether the holder of such awards received dividends or other economic benefits) of
any such award or delivered (either actually or by attestation) in payment or satisfaction of the
purchase price, exercise price or tax obligation of the award.

     5.2 In the event of a recapitalization, stock split, stock dividend, exchange of shares,
merger, reorganization, change in corporate structure or shares of the Company or similar event,
the Board of Directors, upon the recommendation of the Plan Administrator, may make appropriate
adjustments in the number of shares authorized for the Plan and, with respect to outstanding
options, limited stock appreciation rights, stock appreciation rights, and Restricted Stock, the
Plan Administrator may make appropriate adjustments in the number of shares and the Option Price.

SECTION 6 STOCK OPTIONS

     6.1 Options may be granted to eligible employees in such number, and at such times during the
term of the Plan as the Plan Administrator shall determine, the Plan Administrator taking into
account the duties of the respective employees, their present and potential contributions to the
success of the Company, and such other factors as the Plan Administrator shall deem relevant in
accomplishing the purposes of the Plan. The granting of an option shall take place when the Plan
Administrator by resolution, written consent or other appropriate action determines to grant such
an option to a particular Participant at a particular price. Each option shall be evidenced by a
written instrument delivered by or on behalf of the Company containing provisions not inconsistent
with the Plan.

     6.2 All options granted under the Plan shall be subject to the following terms and conditions:

     (a) Option Price

     The Option Price shall be the Fair Market Value of the Common Stock on the date the
option is granted, unless otherwise determined by the Plan Administrator.

			
	 	 	 
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     (b) Duration of Options

     Options shall be exercisable at such time and under such conditions as set forth in
the option grant, but in no event shall any option be exercisable later than the tenth
anniversary of the date of its grant.

     (c) Exercise of Options

     Subject to Section 6.2(j), a Participant may not exercise an option until the
Participant has completed one (1) year of continuous employment with the Company or any of
its Subsidiaries from and including the date on which the option is granted, or such
shorter or longer period as the Plan Administrator may determine in a particular case.
This requirement is waived in the event of death or Permanent Disability of a Participant
before such period of continuous employment is completed and may be waived or modified in
the agreement evidencing the option or by written notice to the Participant from the Plan
Administrator. Thereafter, shares of Common Stock covered by an option may be purchased at
one time or in such installments over the balance of the option period as may be provided
in the option grant. Any shares not purchased on the applicable installment date may be
purchased thereafter at any time prior to the final expiration of the option. To the
extent that the right to purchase shares has accrued thereunder, options may be exercised
from time to time by written notice to the Company setting forth the number of shares with
respect to which the option is being exercised.

     (d) Payment

     The purchase price of shares purchased under options shall be paid in full to the
Company upon the exercise of the option by delivery of consideration equal to the product
of the Option Price and the number of shares purchased (the “Purchase Price”). Such
consideration may be either (i) in cash or (ii) at the discretion of the Plan
Administrator, in Common Stock already owned by the Participant for at least six (6)
months, or any combination of cash and Common Stock. The Fair Market Value of such Common
Stock as delivered shall be valued as of the day prior to delivery. The Plan Administrator
can determine at the time the option is granted that additional forms of payment will be
permitted. To the extent permitted by the Plan Administrator and applicable laws and
regulations (including, but not limited to, federal tax and securities laws, regulations
and state corporate law), an option may also be exercised by delivery of a properly
executed exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale or loan proceeds to
pay the Purchase Price. A Participant shall have none of the rights of a stockholder until
the shares of Common Stock are issued to the Participant.

     If specifically authorized in the option grant, a Participant may elect to pay all or
a portion of the Purchase Price by having shares of Common Stock with a

			
	 	 	 
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Fair Market Value equal to all or a portion of the Purchase Price be withheld from the shares issuable to the
Participant upon the exercise of the option; provided that such shall be permitted of a
Participant who is a Section 16 Insider only if approved in advance by the Board of
Directors or Plan Administrator, if required by Section 16, and rules promulgated
thereunder, of the Exchange Act. The Fair Market Value of such Common Stock as is withheld
shall be determined as of the same day as the exercise of the option.

     Notwithstanding any other provision in this Plan to the contrary and unless the Plan
Administrator shall otherwise determine, in the event of a “cashless” exercise, and for
that purpose only under this Plan, a Participant’s compensation shall be equal to the
difference between the actual sales price received for the underlying Common Stock and the
Option Price. For all other purposes under this Plan, the Fair Market Value shall be the
value against which compensation is determined.

     (e) Restrictions

     The Plan Administrator shall determine and reflect in the option grant, with respect
to each option, the nature and extent of the restrictions, if any, to be imposed on the shares of Common Stock which may be purchased thereunder, including, but not limited to,
restrictions on the transferability of such shares acquired through the exercise of such
options for such periods as the Plan Administrator may determine and, further, that in the
event a Participant’s employment by the Company, or a Subsidiary, terminates during the
period in which such shares are nontransferable, the Participant shall be required to sell
such shares back to the Company at such prices as the Plan Administrator may specify in the
option. In addition, the Plan Administrator may require that a Participant who wants to
effectuate a “cashless” exercise of options be required to sell the shares of Common Stock
acquired in the associated exercise to the Company, or in the open market through the use
of a broker selected by the Company, at such price and on such terms as the Plan
Administrator may determine at the time of grant, or otherwise.

     (f) Nontransferability of Options

     Options granted under the Plan and the rights and privileges conferred thereby shall
not be subject to execution, attachment or similar process and may not be transferred,
assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by the applicable laws of descent and distribution. Notwithstanding
the foregoing and only as provided by the Plan Administrator or the Company, as applicable,
options may be transferred to a Participant’s immediate family members, directly or
indirectly or by means of a trust, corporate entity or partnership (a person who thus
acquires this option by such transfer, a “Permitted Transferee”). A transfer of an option
may only be effected by the Company at the request of the Participant and shall become

			
	 	 	 
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effective upon
the Permitted Transferee agreeing to such terms as the Plan Administrator may require and
only when recorded in the Company’s record of outstanding options. In the event an option
is transferred as contemplated hereby, the option may not be subsequently transferred by
the Permitted Transferee except a transfer back to the Participant or by will or the laws
of descent and distribution. A transferred option may be exercised by a Permitted
Transferee to the same extent as, and subject to the same terms and conditions as, the
Participant (except as otherwise provided herein), as if no transfer had taken place. As
used herein, “immediate family” shall mean, with respect to any person, such person’s
child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law,
and shall include adoptive relationships. In the event of exercise of a transferred option
by a Permitted Transferee, any amounts due to (or to be withheld by) the Company upon
exercise of the option shall be delivered by (or withheld from amounts due to) the
Participant, the Participant’s estate or the Permitted Transferee, in the reasonable
discretion of the Company.

     In addition, to the extent permitted by applicable law and Rule 16b-3, the Plan
Administrator may permit a recipient of a Nonqualified Option to designate in writing
during the Participant’s lifetime a Beneficiary to receive and exercise the Participant’s
options in the event of such Participant’s death (as provided in Section 6.2(i)). Except
as otherwise provided for herein, if any Participant attempts to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under the Plan or of any right or privilege
conferred thereby, contrary to the provisions of the Plan or such option, or suffers the
sale or levy or any attachment or similar process upon the rights and privileges conferred
hereby, all affected options held by such Participant shall be immediately forfeited.

     (g) Purchase for Investment

     The Plan Administrator shall have the right to require that each Participant or other
person who shall exercise an option under the Plan, and each person into whose name shares
of Common Stock shall be issued pursuant to the exercise of an option, represent and agree
that any and all shares of Common Stock purchased pursuant to such option are being
purchased for investment only and not with a view to the distribution or resale thereof and
that such shares will not be sold except in accordance with such restrictions or
limitations as may be set forth in the option. This Section 6.2(g) shall be inoperative
during any period of time when the Company has obtained all necessary or advisable
approvals from governmental agencies and has completed all necessary or advisable
registrations or other qualifications of shares of Common Stock as to which options may
from time to time be granted.

			
	 	 	 
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     (h) Termination of Employment

     Upon the termination of a Participant’s employment for any reason other than death or
Permanent Disability, the Participant’s option shall be exercisable only to the extent that
it was then exercisable and, unless the term of the options expires sooner, such options
shall expire according to the following schedule;
provided, that the Plan Administrator may at any time determine in a particular case that
specific limitations and restrictions under the Plan shall not apply:

     (i) Retirement

     The option shall expire, unless exercised, thirty-six (36) months after the
Participant’s retirement from the Company or any Subsidiary.

     (ii) Disability

     The option shall expire, unless exercised, thirty-six (36) months after the
Participant’s Permanent Disability.

     (iii) Termination

     Subject to subparagraph (iv) below, the option shall expire, unless exercised,
not later than thirty-six (36) months, as specified in the grant letter, after a
Participant resigns or is terminated as an employee of the Company or any of its
Subsidiaries, unless the Plan Administrator shall have determined in a specific
case that the option should expire sooner or should terminate when the
Participant’s employment status ceases.

     (iv) Termination Following a Change in Control

     The option shall expire, unless exercised, thirty-six (36) months after a
Participant’s termination of employment (other than a termination by the Company
for Cause or a voluntary termination by the Participant other than for Good Reason)
following a Change in Control, provided that said termination of employment occurs
within two (2) years following a Change in Control.

     (v) All Other Terminations

     Notwithstanding subparagraphs (iii) and (iv) above, the option shall expire
upon termination of employment for Cause.

     (i) Death of Participant

     Upon the death of a Participant, whether during the Participant’s period of employment
or during the thirty-six (36) month period referred to in Sections

			
	 	 	 
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6.2(h)(i), (ii) and (iii), the option shall expire, unless the original term of the option expires sooner,
twelve (12) months after the date of the Participant’s death, unless the option is
exercised within such twelve (12) month period by the Participant’s Beneficiary, legal
representatives, estate or the person or persons to whom the deceased’s option rights shall
have passed by will or the laws of descent and distribution; provided, that the Plan
Administrator shall determine in a particular case that specific limitations and
restrictions under the Plan shall not apply. Notwithstanding any other Plan provisions
pertaining to the times at which options may be exercised, no option shall continue to be
exercisable, pursuant to Section 6.2(h) or this Section 6.2(i), at a time that would violate the maximum duration of
Section 6.2(b).

     (j) Change in Control

     Notwithstanding other Plan provisions pertaining to the times at which options may be
exercised, all outstanding options, to the extent not then currently exercisable, shall
become exercisable in full upon the occurrence of a Change in Control. In addition, no
option shall continue to be exercisable at a time that would violate the maximum duration
of Section 6.2(b).

     (k) Deferral Election

     A Participant may elect irrevocably (at a time and in the manner determined by the Plan
Administrator or the Company, as appropriate) at any time prior to exercising an option granted
under the Plan that issuance of shares of Common Stock upon exercise of such option and/or
associated stock appreciation right shall be deferred until a pre-specified date in the future
or until the Participant ceases to be employed by the Company or any of its Subsidiaries, as
elected by the Participant. After the exercise of any such option and prior to the issuance of
any deferred shares, the number of shares of Common Stock issuable to the Participant shall be
credited to the deferred stock account (or such other account(s) as the Management Committee
shall deem necessary and appropriate) under a memorandum deferred account established pursuant
to the Company’s then-existing Deferred Compensation Plan (as it may be further amended) (the
“Deferred Compensation Plan”), and any dividends or other distributions paid on the Common
Stock (or its equivalent) shall be deemed reinvested in additional shares of Common Stock (or
its equivalent) until all credited deferred shares shall become issuable pursuant to the
Participant’s election, unless the Management Committee of the Deferred Compensation Plan shall
otherwise determine.

SECTION 7 STOCK APPRECIATION RIGHTS

     7.1 The Plan Administrator may grant stock appreciation rights to Participants in connection
with any option granted under the Plan, either at the time of the grant of such option or at any
time thereafter during the term of the option. Such stock appreciation rights shall cover the same
shares covered by the options (or such lesser

			
	 	 	 
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number of shares of Common Stock as the Plan
Administrator may determine) and shall, except as provided in Section 7.3, be subject to the same
terms and conditions as the related options and such further terms and conditions not inconsistent
with the Plan as shall from time to time be determined by the Plan Administrator.

     7.2 Each stock appreciation right shall entitle the holder of the related option to surrender
to the Company unexercised the related option, or any portion thereof, and to receive from the
Company in exchange therefor an amount equal to the excess of the Fair Market Value of one share of
Common Stock on the date the right is exercised over the Option Price per share times the number of
shares covered by the option, or portion thereof, which is surrendered. Payment shall be made in
shares of Common Stock valued at Fair Market Value as of the date the right is exercised, or in cash, or partly in shares and
partly in cash, at the discretion of the Plan Administrator; provided, however, that payment shall
be made solely in cash with respect to a stock appreciation right which is exercised within seven
(7) months following a Change in Control. Stock appreciation rights may be exercised from time to
time upon actual receipt by the Company of written notice stating the number of shares of Common
Stock with respect to which the stock appreciation right is being exercised. The value of any
fractional shares shall be paid in cash.

     7.3 Stock appreciation rights are subject to the following restrictions:

     (a) Each stock appreciation right shall be exercisable at such time or times as the
option to which it relates shall be exercisable, or at such other times as the Plan
Administrator may determine; provided, however, that such right shall not be exercisable
until the Participant shall have completed a six (6) month period of continuous employment
with the Company or any of its Subsidiaries immediately following the date on which the
stock appreciation right is granted. In the event of death or Permanent Disability of a
Participant during employment but before the Participant has completed such period of
continuous employment, such stock appreciation right shall be exercisable; but only within
the period specified in the related option. In the event of a Change in Control, the
requirement that a Participant shall have completed a six (6) month period of continuous
employment is waived with respect to a Participant who is employed by the Company at the
time of the Change in Control but who, within the six (6) month period, voluntarily
terminates employment for Good Reason or is terminated by the Company other than for Cause.

     (b) Except in the event of a Change in Control, the Plan Administrator in its sole
discretion may approve or deny in whole or in part a request to exercise a stock
appreciation right. Denial or approval of such request shall not require a subsequent
request to be similarly treated by the Plan Administrator.

     (c) The right of a Participant to exercise a stock appreciation right shall be
canceled if and to the extent the related option is exercised. To the extent

			
	 	 	 
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that a stock appreciation right is exercised, the related option shall be deemed to have been
surrendered unexercised and canceled.

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

     (e) The acquisition of Common Stock pursuant to the exercise of a stock appreciation
right shall be subject to the same restrictions as would apply to the acquisition of Common
Stock acquired upon acquisition of the related option, as set forth in Section 6.2.

SECTION 8 LIMITED STOCK APPRECIATION RIGHTS

     8.1 The Plan Administrator may grant limited stock appreciation rights to Participants in
connection with any options granted under the Plan, either at the time of the grant of such option
or at any time thereafter during the term of the option. Such limited stock appreciation rights
shall cover the same shares covered by the options (or such lesser number of shares of Common Stock
as the Plan Administrator may determine) and shall, except as provided in Section 8.3, be subject
to the same terms and conditions as the related options and such further terms and conditions not
inconsistent with the Plan as shall from time to time be determined by the Plan Administrator.

     8.2 Each limited stock appreciation right shall entitle the holder of the related option to
surrender to the Company the unexercised portion of the related option and to receive from the
Company in exchange therefor an amount in cash equal to the excess of the Fair Market Value of one
(1) share of Common Stock on the date the right is exercised over the Option Price per share times
the number of shares covered by the option, or portion thereof, which is surrendered.

     8.3 Limited stock appreciation rights are subject to the following restrictions:

     (a) Each limited stock appreciation right shall be exercisable in full for a period of
seven (7) months following the date of a Change in Control regardless of whether the holder
is employed by the Company or any of its Subsidiaries on the date the right is exercised;
provided. Limited stock appreciation rights shall be exercisable only to the same extent
and subject to the same conditions as the options related thereto are exercisable, as
provided in Section 6.2(j).

     (b) The right of a Participant to exercise a limited stock appreciation right shall be
canceled if and to the extent the related option is exercised. To the extent that a
limited stock appreciation right is exercised, the related option shall be deemed to have
been surrendered unexercised and canceled.

			
	 	 	 
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SECTION 9 RESTRICTED STOCK

     9.1 Restricted Stock may be granted to Participants in such number and at such times during
the term of the Plan as the Plan Administrator shall determine, the Plan Administrator taking into
account the duties of the respective Participants, their present and potential contributions to the
success of the Company, and such other factors as the Plan Administrator shall deem relevant in
accomplishing the purposes of the Plan. The granting of Restricted Stock shall take place when the
Plan Administrator by resolution, written consent or other appropriate action determines to grant
such Restricted Stock to a particular Participant. Each grant shall be evidenced by a written
instrument delivered by or on behalf of the Company containing provisions not inconsistent with the
Plan. The Participant receiving a grant of Restricted Stock shall be recorded as a stockholder of
the Company. Each Participant who receives a grant of Restricted Stock shall have all the rights
of a stockholder with respect to such shares (except as provided in the restrictions on
transferability), including the right to vote the shares and receive dividends and other
distributions; provided, however, that no Participant awarded Restricted Stock shall have any right
as a stockholder with respect to any shares subject to the Participant’s Restricted Stock grant
prior to the date of issuance to the Participant of a certificate or
certificates for such shares, or before the effective date of any book entry form, as applicable.

     9.2 A grant of Restricted Stock shall entitle a Participant to receive, on the date or dates
designated by the Plan Administrator, upon payment to the Company of the par value of the Common
Stock in a manner determined by the Plan Administrator, the number of shares of Common Stock
selected by the Plan Administrator. The Plan Administrator may require, under such terms and
conditions as it deems appropriate or desirable, that the certificates for Restricted Stock
delivered under the Plan may be held in custody by a bank or other institution, or that the Company
may itself hold such shares in custody until the Restriction Period (as defined in Section 9.3)
expires or until restrictions thereon otherwise lapse, and may require, as a condition of any
issuance of Restricted Stock that the Participant shall have delivered a stock power endorsed in
blank relating to the shares of Restricted Stock.

     9.3 During a period of years following the date of grant, as determined by the Plan
Administrator, which shall in no event be less than one (1) year and/or until the required
Performance Goals are achieved, if applicable (the “Restriction Period”), the Restricted Stock may
not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of by
the recipient, except in the event of death or Permanent Disability, the transfer to the Company as
provided under the Plan or the Plan Administrator’s waiver or modification of such restrictions in
the agreement evidencing the grant of Restricted Stock, or by resolution of the Plan Administrator
adopted at any time.

     9.4 Except as provided in Section 9.5 or 9.6, or as determined by the Plan Administrator, if a
Participant terminates employment with the Company for any reason before the expiration of the
Restriction Period, all shares of Restricted Stock still subject

			
	 	 	 
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to restriction shall be forfeited by the Participant to the Company. In addition, in the event of
any attempt by the Participant to
sell, exchange, transfer, pledge or otherwise dispose of shares of Restricted Stock in violation of
the terms of the Plan, such shares shall be forfeited to the Company.

     9.5 The Restriction Period for any Participant shall be deemed to end and all restrictions on
shares of Restricted Stock shall lapse, upon the Participant’s death or Permanent Disability or any
termination of employment determined by the Plan Administrator to end the Restriction Period.

     9.6 The Restriction Period for any Participant shall be deemed to end and all restrictions on
shares of Restricted Stock shall terminate immediately upon a Change in Control.

     9.7 When the restrictions imposed by Section 9.3 expire or otherwise lapse with respect to one
or more shares of Restricted Stock, the Company shall deliver to the Participant (or the
Participant’s legal representative, Beneficiary or heir) one (1) share of Common Stock for each
share of Restricted Stock. At that time, the agreement referred to in Section 9.1, as it relates
to such shares, shall be terminated.

     9.8 Subject to Section 9.2, a Participant entitled to receive Restricted Stock under the Plan
shall be issued a certificate for such shares. Such certificate shall be
registered in the name of the Participant, and shall bear an appropriate legend reciting the terms,
conditions and restrictions, if any, applicable to such shares and shall be subject to appropriate
stop-transfer orders.

     9.9 A Participant may elect irrevocably (at a time and in the manner determined by the Plan
Administrator or the Company, as appropriate), prior to vesting of Restricted Stock, that the
Participant relinquishes any and all rights in the shares of Restricted Stock in exchange for an
interest in the Deferred Compensation Plan and receipt of such shares shall be deferred until a
pre-specified date in the future or until the Participant ceases to be employed by the Company or
any of its Subsidiaries, as elected by the Participant. At the time the restrictions lapse on the
shares of Restricted Stock (as specified at the time of grant, or otherwise if changed by the Plan
Administrator), the number of shares of Common Stock issuable to the Participant shall be credited
to the deferred stock account (or such other account(s) as the Management Committee shall deem
necessary and appropriate) under a memorandum deferred account established pursuant to the Deferred
Compensation Plan, and any dividends or other distributions paid on the Common Stock (or its
equivalent) shall be deemed reinvested in additional shares of Common Stock (or its equivalent)
until all credited deferred shares shall become issuable pursuant to the Participant’s election,
unless the Management Committee of the Deferred Compensation Plan shall otherwise determine.

			
	 	 	 
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SECTION 10 REGULATORY APPROVALS AND LISTING

     10.1 The Company shall not be required to issue any certificate for shares of Common Stock
upon the exercise of an option or a stock appreciation right granted under the Plan, with respect
to a grant of Restricted Stock:

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

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

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

     All certificates, or book-entry accounts, for shares of Common Stock delivered under the Plan
shall also be subject to such stop-transfer orders and other restrictions as the Plan Administrator
may deem advisable under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange upon which Common Stock is then listed and any applicable
federal or State securities laws, and the Plan Administrator may cause a legend or legends to be
placed on any such certificates, or notations on such book-entry accounts, to make appropriate
reference to such restrictions. The foregoing provisions of this paragraph shall not be effective
if and to the extent that the shares of Common Stock delivered under the Plan are covered by an
effective and current registration statement under the Securities Act of 1933, as amended, or if
and so long as the Plan Administrator determines that application of such provisions as no longer
required or desirable. In making such determination, the Plan Administrator may rely upon an
opinion of counsel for the Company.

SECTION 11 EFFECTIVE DATE AND TERM OF PLAN

     The Plan was originally adopted by the Board of Directors effective as of June 19, 1996. The
Board amended and restated the Plan effective as of December 3, 1999, and also 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. Options, limited stock appreciation
rights, stock appreciation rights and Restricted Stock may be granted pursuant to the Plan from
time to time within the period commencing upon adoption of

      

			
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the Plan by the Board of Directors and ending ten (10) years after the of such adoption. Options,
limited stock appreciation rights, stock appreciation rights and Restricted Stock theretofore
granted may extend beyond that date and the terms and conditions of the Plan shall continue to
apply thereto and to shares of Common Stock acquired thereunder. To the extent required for
compliance with Rule 16b-3, shares of Common Stock underlying options, limited stock appreciation
rights, stock appreciation rights, Restricted Stock and Common Stock granted to Section 16 Insiders
may not be sold until a date at least six (6) months after the date of such grant.

SECTION l2 GENERAL PROVISIONS

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

     12.2 Grants, vesting or payment of stock options, limited stock appreciation rights, stock
appreciation rights or Restricted Stock shall not be considered as part of a Participant’s salary
or used for the calculation of any other pay, allowance, pension or other benefit unless otherwise
permitted by other benefit plans provided by the Company or its Subsidiaries, or required by law or
by contractual obligations of the Company or its Subsidiaries.

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

     12.4 Leaves of absence for such periods and purposes conforming to the personnel policy of the
Company, or of its Subsidiaries, as applicable, shall not be deemed terminations or interruptions
of employment, unless a Participant commences a leave of absence from which he or she is not
expected to return to active employment with the Company or its Subsidiaries.

     12.5 In the event a Participant is transferred from the Company to a Subsidiary, or vice
versa, or is promoted or given different responsibilities, the stock options, limited stock
appreciation rights, stock appreciation rights and Restricted Stock granted to the Participant
prior to such date shall not be affected. Notwithstanding the foregoing or any other provision in
this Plan, in the event a Participant becomes an officer or director of the Company subject to
Section 16(b) of the Exchange Act, the Plan Administrator may take any and all action necessary to
prevent any violation of Section 16(b), including, but not limited to, accelerating the vesting of
options, rights or Restricted Stock, canceling any unvested options, rights or Restricted Stock
and/or requiring the Participant to

      

			
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exercise any and all vested options or rights at such times as the Plan Administrator may
determine.

     12.6 The Plan shall be construed and governed in accordance with the laws of the State of
Texas, except that it shall be construed and governed in accordance with applicable federal law in
the event that such federal law preempts state law.

     12.7 Appropriate provision shall be made for all taxes required to be withheld in connection
with the exercise, grant or other taxable event with respect to options, limited stock appreciation
rights, stock appreciation rights, Restricted Stock and Performance Units under the applicable laws
and regulations of any governmental authority, whether federal, state or local and whether domestic
or foreign, including, but not limited to, the required withholding of a sufficient number of
shares of Common Stock otherwise issuable to a Participant to satisfy the said required minimum tax
withholding obligations. Unless otherwise provided in the grant, a Participant is permitted to
deliver shares of Common Stock (including shares acquired pursuant to the exercise of an option or
stock appreciation right other than the option or stock appreciation right currently being
exercised, to the extent permitted by applicable regulations) for payment of withholding taxes on
the exercise of an option, stock appreciation right, or limited stock appreciation right, upon the
grant or vesting of Restricted Stock. At the election of the Plan Administrator or, subject to
approval of the Plan Administrator at its sole discretion, at the election of a Participant, shares
of Common Stock may be withheld from the shares issuable to the Participant upon the exercise of an
option or stock appreciation right or upon the vesting of the Restricted Stock to satisfy tax
withholding obligations. The Fair Market Value of Common Stock as delivered pursuant to this
Section 12.7 shall be valued as of the day prior to delivery, and shall be calculated in accordance
with Section 2.9.

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

     Tax advice should be obtained by the Participant prior to the Participant’s (i) entering into
any transaction under or with respect to the Plan, (ii) designating or choosing the times of
distributions under the Plan, or (iii) disposing of any shares of Common Stock issued under the
Plan.

     12.8 Any amounts (deferred or otherwise) to be paid to Participants pursuant to the Plan are
unfunded obligations. Neither the Company nor any Subsidiary is required to segregate any monies
from its general funds, to create any trusts or to make any special deposits with respect to this
obligation. The Management Committee, in its sole discretion, may direct the Company to share with
its subsidiaries the costs of a portion of the incentive awards paid to Participants who are
executives of those companies. Beneficial ownership of any investments, including trust
investments which the Company may make to fulfill this obligation, shall at all times remain in the
Company. Any

      

			
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investments and the creation or maintenance of any trust or any Participant account shall not
create or constitute a trust or a fiduciary relationship between the Plan Administrator, the
Management Committee, the Company or any Subsidiary and a Participant, or otherwise create any
vested or beneficial interest in any Participant or the Participant’s Beneficiary or the
Participant’s creditors in any assets of the Company or its Subsidiaries whatsoever. The
Participants shall have no claim against the Company for any changes in the value of any assets
which may be invested or reinvested by the Company with respect to the Plan.

SECTION 13 COMPLIANCE WITH RULE 16b-3

     The Company’s intention is that, so long as any of the Company’s equity securities are
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, with respect to awards granted
to or held by Section 16 Insiders, the Plan shall comply in all respects with Rule 16b-3, or with
any other exemption available pursuant to Section 16 of the Exchange Act or rules thereunder, and,
if any Plan provision is later found not to be in compliance with Rule 16b-3, that provision shall
be deemed modified as necessary to meet the requirements of Rule 16b-3.

     Notwithstanding anything in the Plan to the contrary, the Board of Directors, in its absolute
discretion, may bifurcate the Plan so as to restrict, limit or condition the use of any provision
of the Plan to Participants who are Section 16 Insiders without so restricting, limiting or
conditioning the Plan with respect to other Participants.

SECTION 14 AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE PLAN

     14.1 Subject to the Board of Directors and Section 14.2, the Plan Administrator may from time
to time make such amendments to the Plan as it may deem proper and in the best interest of the
Company, including, but not limited to, any amendment necessary to ensure that the Company may
obtain any regulatory approval referred to in Section 10; provided, however, that no change in any
option, limited stock appreciation right, stock appreciation right or Restricted Stock theretofore
granted may be made without the consent of the Participant which would impair the right of the
Participant to acquire or retain Common Stock or cash that the Participant may have acquired as a
result of the Plan.

     14.2 The Board of Directors may at any time suspend the operation of or terminate the Plan
with respect to any shares of Common Stock or rights which are not at that time subject to option,
limited stock appreciation right, stock appreciation right or grant of Restricted Stock.

      

			
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     IN WITNESS WHEREOF, the Company has caused the Plan to be amended and restated effective as of
December 3, 1999.

	 	 	 	 	 
	 	EL PASO ENERGY CORPORATION

 	 
	 	By:  	 /s/ Joel Richards III 
 	 
	 	 	Joel Richards III 	 
	 	 	Executive Vice President 	 
	 

Attest:

	 	 	 
	/s/ David L. Siddall
 

Corporate Secretary

	 	 

      

			
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	Strategic Stock Plan

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