As filed with the Securities and Exchange Commission on November 2, 1999
Registration No. 333-
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1 ON FORM S-8
TO FORM S-4 *
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EL PASO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0568816
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
(Address, including zip code, of Principal Executive Offices)
EL PASO ENERGY CORPORATION
EXECUTIVE AWARD PLAN OF SONAT INC.
(formerly Executive Award Plan of Sonat Inc.)
(Full title of the plan)
Britton White Jr., Esq.
Executive Vice President and General Counsel
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
========================================================================
Proposed
Maximum Proposed
Title of Securities Amount to Offering Maximum Amount
to be Registered be Price Aggregate of
Registered Per Offering Registration
(1) Share Price Fee
- ------------------------------------------------------------------------
Common Stock (including 5,398,915 (2) (2) (2)
associated common stock shares
purchase rights), par
value $3.00 per share
=========================================================================
(1) Includes an indeterminate amount of additional shares which
may be necessary to adjust the number of shares reserved for
issuance pursuant to the Executive Award Plan of Sonat Inc. as a
result of any future stock split, stock dividend or similar
adjustment of the outstanding Common Stock of the Registrant.
(2) Not applicable. All filing fees payable in connection with
the issuance of these securities were paid in connection with the
filing of the Registrant's Registration Statement on Form S-4
(No. 333-75781) filed April 7, 1999.
(*) Filed as a Post-Effective Amendment on Form S-8 to such
Registration Statement on Form S-4 pursuant to the procedure
described herein in the section captioned "Introductory
Statement."
<PAGE>
INTRODUCTORY STATEMENT
On October 25, 1999, El Paso Energy Corporation (the
"Company" or "Registrant") and Sonat Inc., a Delaware corporation
("Sonat"), consummated the merger (the "Merger") of Sonat with
and into the Company as provided by the Second Amended and
Restated Agreement and Plan of Merger dated effective as of March
13, 1999, by and between the Company and Sonat (the "Merger
Agreement"). As a result of the Merger, Sonat's common stock and
associated common stock purchase rights ("Sonat Common Stock")
were converted into shares of the Company's common stock, par
value $3.00 per share, and associated preferred stock purchase
rights ("Common Stock") and such shares of Sonat Common Stock
have ceased to be outstanding. All certificates evidencing
shares of Sonat Common Stock represent only the right to receive,
without interest, shares of the Common Stock, in accordance with
the provisions of the Merger Agreement. In connection with the
Merger, the Company assumed each unexpired and unexercised
outstanding stock option to purchase Sonat Common Stock (each a
"Sonat Option") issued pursuant to the Executive Award Plan of
Sonat Inc. Each Sonat Option was automatically converted in the
Merger into an option to purchase or acquire the same number of
shares of Common Stock at a price per share of Common Stock
equal to the Sonat Option exercise price.
The Registrant hereby amends its Registration Statement on
Form S-4 (No. 333-75781) (the "Form S-4") by filing this Post-
Effective Amendment No. 1 on Form S-8 relating to up to
5,398,915 shares of Common Stock, subject to adjustment,
issuable pursuant to certain Sonat Options assumed by the Company
in the Merger. All such shares of Common Stock were previously
registered on the Form S-4, and are being transferred to this
Form S-8.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I
of the General Instructions to the Registration Statement on Form
S-8 will be sent or given to employees of the Registrant selected
to participate in the Plan as required by Rule 428(b)(1)
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). These documents and the documents
incorporated herein by reference pursuant to Item 3 of Part II of
this Registration Statement taken together, constitute a
prospectus that meets the requirements of Section 10(a) of the
Securities Act (the "Prospectus").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Securities and
Exchange Commission (the "Commission") by the Registrant pursuant
to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), are hereby incorporated by reference in this Registration
Statement:
(a) The Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998, which contains audited
financial statements for the most recent year for which such
statements have been filed;
(b) All other reports filed by the Registrant pursuant
to Section 13(a) or 15(d) of the Exchange Act, since the end
of the fiscal year covered by the Annual Report referred to
in (a) above;
(c) The Joint Proxy Statement/Prospectus dated April 7, 1999,
filed with the Commission pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "Securities Act"), and
included in its Registration Statement on Form S-4 (File No. 333-
75781) and as amended by Amendment No. 1 dated April 8, 1999, and
as further amended by Amendment No. 2, dated April 30, 1999; and
(d) The description of the Registrant's Common Stock,
par value $3.00, per share contained in the Registrant's
Registration Statement on Form 8-A filed with the Commission
on August 3, 1998, and a description of the Registrant's
preferred stock purchase rights associated with its Common
Stock, contained in Registrant's Registration Statement on
Form 8-A/A filed with the Commission on January 29, 1999,
pursuant to Section 12 of the Exchange Act, including any
amendments or reports filed for the purposes of updating
such descriptions.
All documents filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to
be a part hereof from the date of filing such documents. Any
statement contained herein or in a document incorporated or
deemed to be incorporated herein by reference shall be deemed to
be modified or superseded for purposes of the Registration
Statement and the prospectus to the extent that a statement
contained herein or in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies
or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of the Registration Statement or
Prospectus.
Item 4. Description of Securities.
The information required by Item 4 is not applicable to this
Registration Statement.
Item 5. Interests of Named Experts and Counsel.
The information required by Item 5 is not applicable to this
Registration Statement.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of
Delaware provides that a corporation may indemnify directors and
officers as well as other employees and individuals against
expenses (including attorneys' fees), judgements, fines and
amounts paid in settlement in connection with specified actions,
suits or proceedings if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal
action or proceedings, had no reasonable cause to believe their
conduct was unlawful. Similar indemnity is authorized for such
persons against expenses (including attorneys' fees) actually and
reasonably incurred in connection with the defense or settlement
of any such threatened, pending or completed action or suit if
such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of
competent jurisdiction otherwise provides) such person shall not
have been adjudged liable to the corporation. The statute
provides that it is not exclusive of other indemnification that
may be granted by a corporation's by-laws, disinterested director
vote, stockholder vote, agreement or otherwise.
Article X of the By-laws of the Registrant requires
indemnification to the full extent permitted under Delaware law
as from time to time in effect. Subject to any restrictions
imposed by Delaware law, the By-laws provide an unconditional
right to indemnification for all expense, liability and loss
(including attorneys' fees, judgements, fines, ERISA excise taxes
or penalties and amounts paid in settlement) actually and
reasonably incurred or suffered by any person in connection with
any actual or threatened proceeding (including, to the extent
permitted by law, any derivative action) by reason of the fact
that such person is or was serving at the request of the
Registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including an employee benefit plan. The By-laws also
provide that the Registrant may, by action of its Board of
Directors, provide indemnification to its agents with the same
scope and effect as the foregoing indemnification of directors
and officers.
Section 102(b)(7) of the General Corporation Law of the
State of Delaware permits a corporation to provide in its
certificate of incorporation that a director of the corporation
shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as
a director, except for liability for (i) any breach of the
director's duty of loyalty to the corporation or its
stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law,
(iii) payment of unlawful dividends or unlawful stock purchases
or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
Article 10 of the Registrant's Restated Certificate of
Incorporation, as amended, provides that to the full extent that
the General Corporation Law of the State of Delaware, as it now
exists or may hereafter be amended, permits the limitation or
elimination of the liability of directors, a director of the
Registrant shall not be liable to the Registrant or its
stockholders for monetary damages for breach of fiduciary duty as
a director. Any amendment to or repeal of such Article 10 shall
not adversely affect any right or protection of a director of the
Registrant for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.
The Registrant maintains Directors' and Officers' liability
insurance which provides for payment on behalf of the directors
and officers of all losses of such persons (other than matters
uninsurable under the law) arising from claims, including claims
arising under the Securities Act, for acts or omissions by such
persons while acting as directors or officers.
Item 7. Exemption from Registration Claimed.
The information required by Item 7 is not applicable to this
Registration Statement.
Item 8. Exhibits.
Exhibit
Number Description
------- -----------
5.1 Opinion of Andrews & Kurth L.L.P. regarding the
legality of the securities being registered
hereunder.
10.1 El Paso Energy Corporation Executive Award Plan
of Sonat Inc., as amended and restated effective as
of July 23, 1998, as amended.
23.1 Consent of Counsel (included in the opinion
filed as Exhibit 5.1 to this Registration
Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on the signature
page contained in Part II of this Registration
Statement).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of this
Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in this Registration
Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to
the Commission by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment
shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act that is incorporated
by reference in this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-8 and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in
the City of Houston, State of Texas, on this 25th day of October,
1999.
EL PASO ENERGY CORPORATION
By: /s/ William A. Wise
__________________________
William A. Wise
President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
authorizes H. Brent Austin and Britton White Jr., and each of
them, as attorneys-in-fact with full power of substitution, to
execute in the name and on behalf of such person, individually
and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all
post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates as
indicated.
Signature Title Date
----------- ----- ----
/s/ William A. Wise President, Chief October 25, 1999
-------------------- Executive
William A. Wise Officer and Director
/s/ H. Brent Austin Executive Vice October 25, 1999
-------------------- President
H. Brent Austin and Chief Financial
Officer
/s/ Jeffrey I. Beason Senior Vice President October 25, 1999
- --------------------- and
Jeffrey I. Beason Controller
(Chief Accounting
Officer)
/s/ Byron Allumbaugh Director October 25, 1999
- ---------------------
Byron Allumbaugh
/s/ Juan Carlos Braniff Director October 25, 1999
- -----------------------
Juan Carlos Braniff
/s/ James F. Gibbons Director October 25, 1999
- --------------------
James F. Gibbons
/s/ Ben F. Love Director October 25, 1999
- ----------------------
Ben F. Love
/s/ Kenneth L. Smalley Director October 25, 1999
- -----------------------
Kenneth L. Smalley
/s/ Malcolm Wallop Director October 25, 1999
- -----------------------
Malcolm Wallop
INDEX TO EXHIBITS
Number Description
5.1 Opinion of Andrews & Kurth L.L.P., regarding the
legality of the securities being registered
hereunder.
10.1 El Paso Energy Corporation Executive Award Plan
of Sonat Inc., as amended and restated effective
as of July 23, 1998, as amended.
23.1 Consent of Counsel (included in the opinion filed
as Exhibit 5.1 to this Registration Statement).
23.2 Consent of PricewaterhouseCoopers LLP.
24.1 Power of Attorney (set forth on the signature
page contained in Part II of this Registration
Statement).
Exhibit 5
[LETTERHEAD OF ANDREWS & KURTH L.L.P.]
November 2, 1999
Board of Directors
El Paso Energy Corporation
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
Gentlemen:
We have acted as special counsel to El Paso Energy
Corporation, a Delaware corporation (the "Company"), in
connection with the preparation and filing with the Securities
and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of the post-effective
amendment to Form S-4 on Form S-8 filed by the Company with the
Commission on November 2, 1999 (the "Registration Statement"),
with respect to the offering and sale by the Company of up to
5,398,915 shares (the "Shares") of the Company's common stock,
par value $3.00 per share, in connection with the El Paso Energy
Corporation Executive Award Plan of Sonat, Inc. (the "Plan").
In arriving at the opinion expressed below, we have
examined the Company's Certificate of Incorporation and By-laws,
each as amended to date, the Registration Statement, and the
originals or copies certified or otherwise identified to our
satisfaction of such other instruments and other certificates of
public officials, officers and representatives of the Company and
such other persons, and we have made such investigations of law,
as we have deemed appropriate as a basis for the opinions
expressed below.
In rendering the opinion expressed below, we have
assumed and have not verified (i) the genuineness of the
signatures on all documents that we have examined, (ii) the
conformity to the originals of all documents supplied to us as
certified or photostatic or faxed copies, (iii) the authenticity
of the originals of such documents and (iv) as to the forms of
all documents in respect of which forms were filed with the
Commission as exhibits to the Registration Statement, the
conformity in all material respects of such documents to the
forms thereof that we have examined.
Based on the foregoing, and subject to the limitations
and exceptions set forth below, it is our opinion that the Shares
will, when issued and paid for in accordance with the terms of
the Plan, be duly authorized, validly issued, fully paid and
nonassessable.
For the purposes of the opinion expressed above, we
have assumed that the Registration Statement, and any amendments
thereto (including post-effective amendments), will have become
effective.
We express no opinion other than as to the federal laws
of the United States of America and the Delaware General
Corporation laws. We hereby consent to the filing of this
opinion as an exhibit to the Registration Statement and to the
reference to this firm under the heading "Legal Matters" in the
prospectus forming part of the Registration Statement without
admitting that we are "experts" under the Act, or the rules and
regulations of the Commission issued thereunder, with respect to
any part of the Registration Statement, including this exhibit.
This opinion is rendered solely for your benefit in connection
with the above matter and may not be relied upon in any manner by
any other person or entity without our express written consent.
Very truly yours,
/s/ Andrews & Kurth L.L.P.
EXHIBIT 10.1
EXECUTIVE AWARD PLAN
OF
SONAT INC.
(As Amended and Restated as of July 23, 1998)
I. GENERAL
1.1 Purpose of the Plan
The Executive Award Plan (the "Plan") of Sonat Inc. (the
"Company") is intended to advance the best interests of the
Company and its subsidiaries by providing key employees with
additional incentives through the grant of options ("Options") to
purchase shares of Common Stock of the Company ("Common Stock")
and through the award of shares of restricted Common Stock
("Restricted Stock"), thereby increasing the personal stake of
such employees in the continued success and growth of the Company
and encouraging them to remain in the employ of the Company.
The Plan was adopted effective May 1, 1981, and has been
amended at various times. The provisions of the Plan as hereby
amended and restated may, at the discretion of the Committee
referred to below, be made available to all grants outstanding on
the effective date of this Amendment and Restatement, and all
awards granted after such date, except that no such provision
shall alter any outstanding grant in a manner unfavorable to the
holder thereof without the written consent of the holder.
1.2 Administration of the Plan
(a) The Plan shall be administered by the Executive
Compensation Committee or other designated committee (the
"Committee") of the Board of Directors of the Company (the "Board
of Directors") which shall consist of at least three Directors
all of whom are not eligible to participate in the Plan and are
"disinterested" within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act"). The
Committee shall have authority to interpret conclusively the
provisions of the Plan, to adopt such rules and regulations for
carrying out the Plan as it may deem advisable, to decide
conclusively all questions of fact arising in the application of
the Plan, and to make all other determinations necessary or
advisable for the administration of the Plan. All decisions and
acts of the Committee shall be final and binding upon all
affected Plan participants.
(b) The Committee shall meet once each fiscal year, and at
such additional times as it may determine or at the request of
the chief executive officer of the Company, to designate the
eligible employees, if any, to be granted awards under the Plan
and the type and amount of such awards and the time when awards
will be granted. All awards granted under the Plan shall be on
the terms and subject to the conditions hereinafter provided.
1.3 Eligible Participants
Key employees, including officers, of the Company and its
subsidiaries, and of partnerships or joint ventures in which the
Company and its subsidiaries have a significant ownership
interest as determined by the Committee (all of such
subsidiaries, partnerships and joint ventures being referred to
as "Subsidiaries") shall be eligible to participate in the Plan.
Directors who are not employees of the Company or its
Subsidiaries shall not be eligible to participate in the Plan.
1.4 Awards Under the Plan
Awards under the Plan may be in the form of (i) Options to
purchase shares of Common Stock, (ii) Stock Appreciation Rights
and Limited Stock Appreciation Rights which may be issued in
tandem with such Options, (iii) shares of Restricted Stock, and
(iv) Supplemental Payments which may be awarded with respect to
Options, Stock Appreciation Rights, Limited Stock Appreciation
Rights, and Restricted Stock, or (v) any combination of the
foregoing.
1.5 Shares Subject to the Plan
The aggregate number of shares of Common Stock which may be
issued with respect to Options or Restricted Stock granted after
April 27, 1995 (including Stock Appreciation Rights, Limited
Stock Appreciation Rights and Supplemental Payments related
thereto) shall not exceed (i) 4,000,000 shares plus (ii) the
number of shares previously authorized for use in the Plan which
have not been issued or have again become available for grants
pursuant to the following paragraph. At no time shall the number
of shares issued plus the number of shares subject to outstanding
awards under the Plan exceed the number of shares that may be
issued under the Plan. Options with respect to more than 250,000
shares of Common Stock shall not be granted to any optionee in
any 12-month period. Shares distributed pursuant to the Plan may
consist of authorized but unissued shares or treasury shares of
the Company, as shall be determined from time to time by the
Board of Directors.
If any Option under the Plan shall expire, terminate or be
canceled (except upon the holder's exercise of a related Stock
Appreciation Right or Limited Stock Appreciation Right) for any
reason without having been exercised in full, or if any shares of
Restricted Stock shall be forfeited to the Company, the
unexercised Options and forfeited shares of Restricted Stock
shall not count against the above limit and shall again become
available for grants under the Plan (regardless of whether the
holder of such Options or shares received dividends or other
economic benefits with respect to such Options or shares).
Shares of Common Stock equal in number to the shares surrendered
in payment of the option price, and shares of Common Stock which
are withheld in order to satisfy federal, state or local tax
liability, shall not count against the above limit and shall
again become available for grants under the Plan.
Notwithstanding the foregoing, any shares which were authorized
for issuance under the Plan as in effect on April 25, 1985 shall
not be available for issuance with respect to awards granted
after April 24, 1995.
1.6 Other Compensation Programs
The existence and terms of the Plan shall not limit the
authority of the Board of Directors in compensating employees of
the Company and its subsidiaries in such other forms and amounts,
including compensation pursuant to any other plans as may be
currently in effect or adopted in the future, as it may determine
from time to time.
II. STOCK OPTIONS
2.1 Terms and Conditions of Options
Subject to the following provisions, all Options granted
under the Plan shall be in such form and shall have such terms
and conditions as the Committee, in its discretion, may from time
to time determine.
(a) Option Price. The option price per share shall
not be less than the fair market value of the Common Stock
(as determined by the Committee) on the date the Option is
granted.
(b) Term of Option. The term of an Option shall not
exceed ten years from the date of grant, and,
notwithstanding any other provision of this Plan, no Option
shall be exercised after the expiration of its term.
(c) Exercise of Options. Options shall be exercisable
at such time or times and subject to such terms and
conditions as the Committee shall specify in the Option
grant. The Committee shall have discretion to at any time
declare all or any portion of the Options held by any
optionee to be immediately exercisable. An Option may be
exercised in accordance with its terms as to any or all
shares purchasable thereunder.
(d) Payment for Shares. Payment for shares as to
which an Option is exercised shall be made in such manner
and at such time or times as shall be provided by the
Committee in the Option grant. Payment may be made in cash
or in such other manner as the Committee in its discretion
may authorize.
(e) Nontransferability of Options. No Option or any
interest therein shall be transferable by the optionee other
than by will or by the laws of descent and distribution.
During an optionee's lifetime, all Options shall be
exercisable only by such optionee or by the guardian or
legal representative of the optionee.
(f) Shareholder Rights. The holder of an Option
shall, as such, have none of the rights of a shareholder.
(g) Termination of Employment. The Committee shall
have discretion to specify in the Option grant or an
amendment thereof, provisions with respect to the period,
not extending beyond the term of the Option, during which
the Option may be exercised following the optionee's
termination of employment.
(h) Change of Control. Notwithstanding the
exercisability schedule governing any Option, upon the
occurrence of a Change of Control (as defined in Section
4.9) all Options outstanding at the time of such Change of
Control and held by optionees who are employees of the
Company or its Subsidiaries at the time of the Change of
Control shall become immediately exercisable and, unless the
optionee agrees otherwise in writing, shall remain
exercisable for a period of three years following the
optionee's termination of employment or such longer period
as may be provided in the Option, but in no event beyond the
term of the Option established pursuant to Section 2.1(b).
2.2 Stock Appreciation Rights in Tandem with Options
(a) The Committee may, either at the time of grant of an
Option or at any time during the term of the Option, grant Stock
Appreciation Rights or Limited Stock Appreciation Rights with
respect to all or any portion of the shares of Common Stock
covered by such Option. A Stock Appreciation Right may be
exercised at any time the Option to which it relates is then
exercisable. A Limited Stock Appreciation Right may be exercised
only within 60 days after the occurrence of a Change of Control.
A Stock Appreciation Right or a Limited Stock Appreciation Right
may only be exercised to the extent the Option to which it
relates is exercisable, and shall be subject to the conditions
applicable to such Option. When a Stock Appreciation Right or
Limited Stock Appreciation Right is exercised, the Option to
which it relates shall cease to be exercisable to the extent of
the number of shares with respect to which the Stock Appreciation
Right or Limited Stock Appreciation Right is exercised.
Similarly, when an Option is exercised, the Stock Appreciation
Rights or Limited Stock Appreciation Rights relating to the
shares covered by such Option exercise shall terminate. Any
Stock Appreciation Right which is outstanding on the last day of
the term of the related Option (as determined pursuant to
Section 2.1(b)) shall be automatically exercised on such date
without any action by the optionee.
(b) Upon exercise of a Stock Appreciation Right, the holder
shall receive, for each share with respect to which the Stock
Appreciation Right is exercised, an amount (the "Appreciation")
equal to the difference between the option price per share of the
Option to which the Stock Appreciation Right relates and the fair
market value (as determined by the Committee) of a share of
Common Stock on the date of exercise of the Stock Appreciation
Right. The Appreciation shall be payable in cash, Common Stock,
or a combination of both, at the option of the Committee, and
shall be paid within 30 days of the exercise of the Stock
Appreciation Right.
(c) Notwithstanding the foregoing, if a Stock Appreciation
Right is exercised within 60 days after the occurrence of a
Change of Control, in addition to the Appreciation and any
Supplemental Payment (as defined in Section 2.3) to which the
holder is entitled, the holder shall receive (in cash, in Common
Stock, or a combination of both, at the discretion of the
Committee) (1) the amount by which the greater of (a) the highest
market price per share of Common Stock during the 60-day period
preceding exercise of the Stock Appreciation Right or (b) the
highest price per share of Common Stock (or the cash- equivalent
thereof as determined by the Board of Directors) paid by an
acquiring person during the 60-day period preceding a Change of
Control, exceeds the fair market value of a share of Common Stock
on the date of exercise of the Stock Appreciation Right, plus (2)
if the holder is entitled to a Supplemental Payment, an
additional payment, calculated under the same formula as used for
calculating such holder's Supplemental Payment, with respect to
the amount referred to in clause (1) of this sentence.
(d) Upon exercise of a Limited Stock Appreciation Right,
the holder shall receive, for each share with respect to which
the Limited Stock Appreciation Right is exercised, the sum of (i)
the Appreciation, as defined in Section 2.2(b); (ii) any
Supplemental Payment (as defined in Section 2.3) to which the
holder is entitled with respect to the Appreciation; (iii) the
amount by which the greater of (a) the highest market price per
share of Common Stock during the 60-day period preceding exercise
of the Limited Stock Appreciation Right or (b) the highest price
per share of Common Stock (or the cash-equivalent thereof as
determined by the Board of Directors) paid by an acquiring person
during the 60-day period preceding a Change of Control, exceeds
the fair market value of a share of Common Stock on the date of
exercise of the Limited Stock Appreciation Right; and (iv) if the
holder is entitled to a Supplemental Payment, an additional
payment, calculated under the same formula as used for
calculating such holder's Supplemental Payment, with respect to
the amount referred to in clause (iii) of this sentence. All of
such amounts shall be paid within 30 days of the exercise of the
Limited Stock Appreciation Right, and shall be paid in cash, in
Common Stock, or a combination of both, at the discretion of the
Committee.
2.3 Supplemental Payment on Exercise of Options or Stock
Appreciation Rights
The Committee, either at the time of grant or at the time of
exercise of any Option or related Stock Appreciation Right or
Limited Stock Appreciation Right, may provide for a supplemental
payment (the "Supplemental Payment") by the Company to the
optionee with respect to the exercise of any Option or related
Stock Appreciation Right or Limited Stock Appreciation Right.
The Supplemental Payment shall be in the amount specified by the
Committee, which shall not exceed, but may be equal to, the
amount necessary to pay the federal income tax payable with
respect to both exercise of the Option or related Stock
Appreciation Right or Limited Stock Appreciation Right and
receipt of the Supplemental Payment, assuming the optionee is
taxed at the maximum effective federal income tax rate applicable
thereto. The Supplemental Payment shall be paid in cash, Common
Stock, or a combination of both, at the option of the Committee.
The Supplemental Payment shall be paid within 30 days of the date
of exercise of an Option or Stock Appreciation Right or Limited
Stock Appreciation Right (or, if later, within 30 days of the
date on which income is recognized for federal income tax
purposes with respect to such exercise).
2.4 Statutory Options
Subject to the limitations on Option terms set forth in
Section 2.1, the Committee shall have the authority to grant
(i) incentive stock options within the meaning of Section 422 of
the Code and (ii) Options containing such terms and conditions as
shall be required to qualify such Options for preferential tax
treatment under the Code as in effect at the time of such grant.
Options granted pursuant to this Section 2.4 may contain such
other terms and conditions permitted by Article II of this Plan
as the Committee, in its discretion, may from time to time
determine (including, without limitation, provision for Stock
Appreciation Rights, Limited Stock Appreciation Rights and
Supplemental Payments), to the extent that such terms and
conditions do not cause the Options to lose their preferential
tax treatment. To the extent the Code and Regulations
promulgated thereunder require a plan to contain specified
provisions in order to qualify options for preferential tax
treatment, such provisions shall be deemed to be stated in this
Plan.
III. RESTRICTED STOCK
3.1 Terms and Conditions of Restricted Stock Awards
Subject to the following provisions, all awards of
Restricted Stock shall be in such form and shall have such terms
and conditions as the Committee, in its discretion, may from time
to time determine:
(a) The Restricted Stock award shall specify the
number of shares of Restricted Stock to be awarded, the
price, if any, to be paid by the recipient of the Restricted
Stock, and the date or dates on which the Restricted Stock
will vest. The vesting of Restricted Stock may be
conditioned upon the completion of a specified period of
service with the Company or its Subsidiaries, upon the
attainment of specified performance goals, or upon such
other criteria as the Committee may determine in its sole
discretion.
(b) Stock certificates representing the Restricted
Stock granted to an employee shall be registered in the
employee's name. Such certificates shall either be held by
the Company on behalf of the employee, or delivered to the
employee bearing a legend to restrict transfer of the
certificate until the Restricted Stock has vested, as
determined by the Committee. The Committee shall determine
whether the employee shall have the right to vote and/or
receive dividends on the Restricted Stock before it has
vested. No share of Restricted Stock may be sold,
transferred, assigned, or pledged by the employee until such
share has vested in accordance with the terms of the
Restricted Stock award. In the event of an employee's
termination of employment before all of his Restricted Stock
has vested, or in the event other conditions to the vesting
of Restricted Stock have not been satisfied prior to any
deadline for the satisfaction of such conditions set forth
in the award, the shares of Restricted Stock which have not
vested shall be forfeited and any purchase price paid by the
employee shall be returned to the employee. At the time
Restricted Stock vests (and, if the employee has been issued
legended certificates of Restricted Stock, upon the return
of such certificates to the Company), a certificate for such
vested shares shall be delivered to the employee (or the
beneficiary designated by the employee in the event of
death), free of all restrictions.
(c) Notwithstanding the vesting conditions set forth
in the Restricted Stock award, (i) the Committee may in its
discretion accelerate the vesting of Restricted Stock at any
time, and (ii) all shares of Restricted Stock shall vest
upon a Change of Control of the Company.
3.2 Supplemental Payment on Vesting of Restricted Stock
The Committee, either at the time of grant or at the time of
vesting of Restricted Stock, may provide for a Supplemental
Payment by the Company to the employee in an amount specified by
the Committee which shall not exceed, but may be equal to, the
amount necessary to pay the federal income tax payable with
respect to both the vesting of the Restricted Stock and receipt
of the Supplemental Payment, assuming the employee is taxed at
the maximum effective federal income tax rate applicable thereto
and has not elected to recognize income with respect to the
Restricted Stock before the date such Restricted Stock vests.
The Supplemental Payment shall be paid within 30 days of each
date that Restricted Stock vests. The Supplemental Payment shall
be paid in cash, Common Stock, or a combination of both, at the
discretion of the Committee.
IV. ADDITIONAL PROVISIONS
4.1 General Restrictions
Each award under the Plan shall be subject to the
requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares
of Common Stock subject or related thereto upon any securities
exchange or under any state or federal law, or (ii) the consent
or approval of any government regulatory body, or (iii) an
agreement by the recipient of an award with respect to the
disposition of shares of Common Stock is necessary or desirable
(in connection with any requirement or interpretation of any
federal or state securities law, rule or regulation) as a
condition of, or in connection with, the granting of such award
or the issuance, purchase or delivery of shares of Common Stock
thereunder, such award may not be consummated in whole or in part
unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free
of any conditions not acceptable to the Committee.
4.2 Adjustments for Changes in Capitalization
In the event of a reorganization, recapitalization, stock
split, stock dividend, combination of shares, rights offer,
liquidation, dissolution, merger, consolidation, spin-off, sale
of assets, payment of an extraordinary cash dividend, or any
other change in or affecting the corporate structure or
capitalization of the Company, the Committee shall make
appropriate adjustment in the number and kind of shares
authorized by the Plan (including any limitations on individual
awards), in the number, price or kind of shares covered by the
awards and in any outstanding awards under the Plan.
4.3 Amendments
(a) The Board of Directors may amend the Plan from time to
time. No such amendment shall require approval by the
stockholders unless stockholder approval is required by
applicable law or stock exchange requirements.
(b) The Committee shall have the authority to amend any
grant to include any provision which, at the time of such
amendment, is authorized under the terms of the Plan; provided,
however, that (1) no outstanding award may be revoked or altered
in a manner unfavorable to the holder without the written consent
of the holder, and (2) no outstanding Option may be altered in a
manner that reduces the option price (except as provided in
Section 4.2).
4.4 Cancellation of Awards
Any award granted under the Plan may be canceled at any time
with the consent of the holder and a new award may be granted to
such holder in lieu thereof, which award may, in the discretion
of the Committee, be on more favorable terms and conditions than
the canceled award; provided, however, that any Option that is
granted in lieu of a canceled Option shall have an option price
at least equal to the option price of the canceled Option.
4.5 Withholding
(a) Whenever the Company proposes or is required to issue
or transfer shares of Common Stock under the Plan, the Company
shall have the right to require the holder to remit to the
Company an amount sufficient to satisfy any federal, state or
local withholding tax liability prior to the delivery of any
certificate for such shares. Whenever under the Plan payments
are to be made in cash, such payments shall be net of an amount
sufficient to satisfy any federal, state or local withholding tax
liability.
(b) An employee entitled to receive Common Stock under the
Plan who has not received a cash Supplemental Payment may elect
to have the federal, state and local tax liability (or a
specified portion thereof) with respect to such Common Stock
satisfied by having the Company withhold from the shares
otherwise deliverable to the employee shares of Common Stock
having a value equal to the amount of the tax liability to be
satisfied with respect to the Common Stock. An election to have
all or a portion of the tax liability satisfied using Common
Stock shall comply with such requirements as may be imposed by
the Committee and shall be subject to the disapproval of the
Committee (if expressed prior to the making of such election).
4.6 Non-Assignability
Except as expressly provided in the Plan, no award under the
Plan shall be assignable or transferable by the holder thereof
except by will or by the laws of descent and distribution.
During the life of the holder, awards under the Plan shall be
exercisable only by such holder or by the guardian or legal
representative of such holder.
4.7 Non-Uniform Determinations
Determinations by the Committee under the Plan (including,
without limitation, determinations of the persons to receive
awards; the form, amount and timing of such awards; the terms and
provisions of such awards and the agreements evidencing same; and
provisions with respect to termination of employment) need not be
uniform and may be made by it selectively among persons who
receive, or are eligible to receive, awards under the Plan,
whether or not such persons are similarly situated.
4.8 No Guarantee of Employment
The grant of an award under the Plan shall not constitute an
assurance of continued employment for any period.
4.9 Change of Control
A "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (1) the then outstanding
shares of common stock of the Company (the "Outstanding
Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to
vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that
for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control:
(A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by
the Company or (D) any acquisition by any corporation
pursuant to a transaction which complies with clauses (A),
(B) and (C) of subsection (iii); or
(ii) Individuals who, as of December 1, 1995,
constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of
the Board of Directors; provided, however, that any
individual becoming a director subsequent to such date whose
election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall
be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with
respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of Directors;
or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively,
of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination,
of the Outstanding Common Stock and Outstanding Voting
Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and
(C) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board of Directors, providing for such Business
Combination.
4.10 Duration and Termination
(a) The Plan shall be of unlimited duration.
Notwithstanding the foregoing, no incentive stock option (within
the meaning of Section 422 of the Code) shall be granted under
the Plan after April 26, 2005, but awards granted prior to such
date may extend beyond such date, and the terms of this Plan
shall continue to apply to all awards granted hereunder.
(b) The Board of Directors may discontinue or terminate the
Plan at any time. Such action shall not impair any of the rights
of any holder of any award outstanding on the date of the Plan's
discontinuance or termination without the holder's written
consent.
This document incorporates into a single document the
provisions of the Plan as amended as of July 23, 1998.
IN WITNESS WHEREOF, this document has been executed as of
July 23, 1998.
SONAT INC.
by: /s/ Ronald L. Kuehn, Jr.
Ronald L. Kuehn, Jr.
Chairman of the Board,
President and Chief Executive
Officer
<PAGE>
AMENDMENT TO EXECUTIVE AWARD PLAN
AND CERTAIN STOCK OPTIONS GRANTED THEREUNDER
The Executive Award Plan of Sonat Inc., as amended and
restated as of July 23, 1998 (the "Plan"), and each Affected
Option (as defined below) that has been granted thereunder, are
each hereby amended as set forth below, effective as May 27,
1999.
1. A new Section 2.2(e) is hereby added to the Plan,
reading in its entirety as follows:
(e) (i) Notwithstanding the foregoing, the
provisions of this Section 2.2(e) shall apply to the
exercise of any Stock Appreciation Right or Limited
Stock Appreciation Right in connection with the merger
(the "Merger") between the Company and El Paso Energy
Corporation ("El Paso") pursuant to the Second Amended
and Restated Agreement and Plan of Merger, as amended
from time to time (the "Merger Agreement") dated as of
March 3, 1999 by and between the Company and El Paso.
(ii) All Limited Stock Appreciation Rights
shall be exercisable only at the time of the Merger and
shall, if not so exercised, terminate immediately after
the Merger. In addition, the amounts payable pursuant
to Section 2.2(d) in connection with such exercise
shall be determined by (x) excluding the amount
described in clause (iii) thereof, (y) including an
additional amount equal to the value (if any) of (I)
the right of the holder to receive a payment based upon
the pricing mechanism set forth in said clause (iii)
and (II) the right of the holder to exercise the
Limited Stock Appreciation Right during the 60-day
period following the Merger, which rights (the
"Rights") are eliminated pursuant to this Section
2.2(e), and (z) determining the amount described in
clause (iv) thereof by reference to the value of the
Rights determined in accordance with (y) hereof rather
than by reference to the amount referred to in clause
(iii) of Section 2.2(d). The value of the Rights shall
be determined by the Committee based upon the advice of
Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Donaldson, Lufkin & Jenrette Securities Corporation.
(iii) All Stock Appreciation Rights shall be
exercisable at the time of the Merger and, if so
exercised, the amounts payable pursuant to Section
2.2(c) in connection with such exercise shall be
determined by: (A) excluding the amount described in
clauses (a) and (b) thereof, (B) including an
additional amount determined in the same manner as set
forth in clause (y) of Section 2.2(e)(ii) hereof with
respect to Limited Stock Appreciation Rights; and (C)
determining the amount described in clause (2) thereof
by reference to the value of the Rights determined in
accordance with clause (B) hereof rather than by
reference to the amount described in clauses (a) and
(b) thereof. If a Stock Appreciation Right is
exercised at any time other than at the time of the
Merger, Section 2.2(c) shall not apply to such
exercise.
(iv) The consideration to be paid pursuant to
Sections 2.2(c) and (d) as modified hereby (including
the Supplemental Payment (if any)) shall be paid in the
form of common stock of El Paso, based upon the value
of such common stock on the day of the Merger.
2. Each outstanding Option granted under the Plan
that includes a Stock Appreciation Right or a Limited Stock
Appreciation Right (or both) (an "Affected Option") is hereby
amended to incorporate the provisions of new Section 2.2(e) of
the Plan set forth above.
3. It is acknowledged and agreed that as a result of
the amendments set forth above: (i) with respect to an Affected
Option with an associated Limited Stock Appreciation Right, to
the extent that the holder of such Affected Option does not
exercise the associated Limited Stock Appreciation Right at the
time of the Merger, the Affected Option will be convened into an
option to acquire common stock of El Paso pursuant to Section 2.7
of the Merger Agreement, which new option will not include a
Limited Stock Appreciation Right; and (ii) with respect to any
Affected Option with an associated Stock Appreciation Right, to
the extent that the holder of such Affected Option does not
exercise the associated Stock Appreciation Right at the time of
the Merger, the Affected Option will be converted into an option
to acquire common stock of El Paso pursuant to Section 2.7 of the
Merger Agreement, which new option will include an associated
Stock Appreciation Right to which Section 2.2(c) of the Plan does
not apply.
SONAT INC.
By: /s/ Beverely T. Krannich
Consented, agreed to and accepted:
EL PASO ENERGY CORPORATION
By: /s/ Britton White Jr.
Britton White Jr., Esq.
Date: October 25, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Post
Effective Amendment No. 1 on Form S-8 to Form S-4 (File No. 333-
75781) of our report dated March 9, 1999 relating to the consolidated
financial statements and financial statement schedule, which appears
in El Paso Energy Corporation's Annual Report on Form 10-K for the year
ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Houston, Texas
November 2, 1999
