Exhibit 10.A
EL PASO ENERGY CORPORATION
OMNIBUS PLAN FOR
MANAGEMENT EMPLOYEES
Amended and Restated Effective as of December 3, 1999
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1 PURPOSE 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 Exchange Act 3
2.8 Fair Market Value 3
2.9 Good Reason 4
2.10 Management Committee 4
2.11 Option 5
2.12 Option Price 5
2.13 Participant 5
2.14 Permanent Disability or Permanently
Disabled 5
2.15 Plan Administrator 5
2.16 Restricted Stock 5
2.17 Subsidiary 5
SECTION 3 ADMINISTRATION 6
SECTION 4 ELIGIBILITY 6
SECTION 5 SHARES AVAILABLE FOR THE PLAN 7
SECTION 6 STOCK OPTIONS 7
SECTION 7 STOCK APPRECIATION RIGHTS 12
SECTION 8 LIMITED STOCK APPRECIATION RIGHTS 13
SECTION 9 RESTRICTED STOCK 14
SECTION 10 REGULATORY APPROVALS AND LISTING 16
SECTION 11 EFFECTIVE DATE AND TERM OF THE PLAN 16
SECTION 12 GENERAL PROVISIONS 17
SECTION 13 AMENDMENT, TERMINATION OR DISCONTINUANCE
OF THE PLAN 19
<PAGE>
EL PASO ENERGY CORPORATION
OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
Amended and Restated Effective as of December 3, 1999
SECTION 1 PURPOSE
The purpose of the El Paso Energy Corporation Omnibus
Plan for Management Employees, originally known as the El
Paso Natural Gas Company Stock Option Plan for Management
Employees, (the "Plan") is to promote the interests of
El Paso Energy Corporation (the "Company") and its
stockholders by strengthening its ability to attract and
retain key employees in the employ of the Company and its
Subsidiaries (as defined below) by furnishing suitable
recognition of their ability and industry which materially
contributes to the success of the Company. 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) 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
A termination for Cause is a termination evidenced by a
statement adopted in good faith by the Management Committee
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 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
Management Committee (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 to 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 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. In addition, the
consummation of the merger between the Company and Sonat
Inc. as publicly announced on March 15, 1999, and as the
terms of such merger may be amended or modified, shall not
constitute a Change in Control under this Plan with respect
to all grants made pursuant to the Plan to employees who are
hired, promoted, or acquired in an acquisition (including,
but not limited to, employees of EnCap Investments L.L.C.)
effective on or after January 29, 1999, through the date of
consummation of the Company and Sonat Inc. merger.
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 Exchange Act
The Securities Exchange Act of 1934, as amended.
2.8 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 was 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.
2.9 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, 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 requires 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 due to 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, including, but not limited to,
the Plan, the El Paso Energy Corporation Pension Plan
and the El Paso Energy Corporation Retirement Savings
Plan; 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.
2.10 Management Committee
A committee consisting of the Chief Executive Officer
of the Company and such other officers as the Chief
Executive Officer shall designate.
2.11 Option
A stock option which is not intended to meet the
requirements of an Incentive Stock Option, as defined in
Section 422 of the Code.
2.12 Option Price
The price per share of Common Stock at which each
Option is exercisable.
2.13 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.
2.14 Permanent Disability or Permanently Disabled
A Participant shall be deemed to have become
Permanently Disabled for purposes of the Plan if the Chief
Executive Officer of the Company shall find upon the basis
of medical evidence satisfactory to the Chief Executive
Officer that the Participant is totally disabled, whether
due to physical or mental condition, so as to be prevented
from engaging in further employment with the Company or any
of its Subsidiaries, and that such disability will be
permanent and continuous during the remainder of the
Participant's life.
2.15 Plan Administrator
The Management Committee shall, pursuant to Section 3,
administer the Plan.
2.16 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.
2.17 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.
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. The administrator
of the Plan is referred to herein as the "Plan
Administrator."
3.2 The members of the Management Committee serving as
Plan Administrator shall be appointed by the Chief Executive
Officer for such term as the Chief Executive Officer may
determine. The Chief Executive Officer may from time to
time remove members from, or add members to, the Management
Committee.
3.3 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.
3.4 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 a salaried
employee (other than an employee who is a member of a unit
covered by a collective bargaining agreement) 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 and 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.
SECTION 5 SHARES AVAILABLE FOR THE PLAN
5.1 Subject to Section 5.2, the maximum number of shares
for which Options, limited stock appreciation rights, stock
appreciation rights and Restricted Stock may at any time be
granted under the Plan is twenty-two million (22,000,000)
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), 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. When determining a
grant, the Plan Administrator may take 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 purpose of the Plan. The
granting of an Option shall take place when the Plan
Administrator determines to grant such an Option to a
particular Participant at the Option 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 under the Plan shall be granted
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 specified by the Plan Administrator.
(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 immediately following the
date on which the Option is granted, or such other
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 at
one time or in such installments at any time prior to
the final expiration of the Option as may be provided
in the Option grant. To the extent that the right to
purchase shares has accrued thereunder, Options may be
exercised from time to time by providing written notice
to the Company setting forth the number of shares to
which the Option is being exercised.
(d) Payment
The product of the Option Price and the number of
shares purchased (the "Purchase Price") shall be paid
in full to the Company upon the exercise of an Option.
The Purchase Price may be paid 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. To the extent permitted by the Plan
Administrator and applicable laws and regulations
(including, but not limited to, federal tax and
securities laws and regulations and state corporate
law), an Option may also be exercised by delivering 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.
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 value against which compensation is
determined.
(e) Restrictions
The Plan Administrator shall determine, 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 an Option 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 Plan Administrator,
at such price and on such terms as the Plan
Administrator may determine at the time of grant, or
otherwise.
(f) Nontransferability of Options
During a Participant's lifetime, an Option may be
exercisable only by the Participant. 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, except that to the extent permitted by
applicable law, the Plan Administrator may permit a
recipient of an Option to designate in writing during
the Participant's lifetime a Beneficiary to receive and
exercise Options in the event of such Participant's
death (as provided in Section 6.2(i)). Any attempt 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 the sale or levy or any attachment or
similar process upon the rights and privileges
conferred hereby, shall be null and void.
(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.
(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 Option expires
sooner, such Option 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,
within thirty-six (36) months of 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
Except as provided in subparagraphs (iii) and
(iv) above, the Option shall expire upon
termination of employment.
(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
6.2(h)(i), (ii) and (iii), the Option shall expire,
unless the 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 may determine in a
particular case that specific limitations and
restrictions under the Plan shall not apply.
(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. No Option shall 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 a 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
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 the
related unexercised 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 rights are 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 that the Option to
which they relate shall be exercisable or at such other
times as the Plan Administrator may determine;
provided, however, that such rights shall not be
exercisable until the Participant shall have completed
six (6) months 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 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 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, provided,
however, that limited stock appreciation rights may not
be exercised under any circumstances until the
expiration of the six (6) month period following the
date of grant. 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.
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.
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, which shall in no event be less than one (1) year and
until required performance targets are achieved, if
applicable, as determined by the Plan Administrator (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, 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 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,
Permanent Disability, retirement 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.
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, or with respect to a grant of Restricted Stock prior
to:
(a) the obtaining of 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) the listing of such shares on any stock
exchange on which the Common Stock may then be listed;
or
(c) the completion of 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.
SECTION 11 EFFECTIVE DATE AND TERM OF THE PLAN
The Plan was originally adopted by the Board of
Directors as of December 14, 1993. The Board of Directors
amended and restated the Plan effective as of December 3,
1999 and 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 as the Plan
Administrator shall determine. The Plan shall terminate on
December 14, 2003. However, Options, limited stock
appreciation rights, stock appreciation rights and
Restricted Stock granted prior to the expiration of the Plan
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 hereunder.
SECTION 12 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 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.
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 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
exercise any and all vested Options or rights at such times
as the Plan Administrator may determine.
12.6 Each grant to a Participant of an Option, limited
stock appreciation right, stock appreciation right and
Restricted Stock hereunder shall make reference to this Plan
by title and date to confirm the applicability of the Plan
and the source of shares and rights covered by the grant.
12.7 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.
12.8 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
and Restricted Stock 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 for payment of withholding taxes on the
exercise of an option, stock appreciation right, or limited
stock appreciation right or 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 12.8 shall be valued as of the day prior to
delivery, and shall be calculated in accordance with Section
2.8.
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.
12.9 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
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 AMENDMENT, TERMINATION OR DISCONTINUANCE OF
THE PLAN
13.1 Subject to Section 13.2, 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
without further approval of the Board of Directors,
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.
13.2 The Plan Administrator may not amend the Plan
without the approval of the Board of Directors to:
(a) increase the number of shares or rights that
may be issued under the Plan; or
(b) otherwise materially increase the benefits
accruing to the Participants under the Plan.
13.3 The Plan Administrator may at any time suspend the
operation of or terminate the Plan with respect to any
shares of Common Stock not subject to Option, limited stock
appreciation right, stock appreciation right or Restricted
Stock at the time.
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
____________________________
Executive Vice President
ATTEST:
By: David L. Siddall
_________________________________
Corporate Secretary
AMENDMENT NO. 1 TO THE
OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
Pursuant to Section 13.1 of the El Paso Energy
Corporation Omnibus Plan for Management Employees, Amended
and Restated Effective as of December 3, 1999 (the "Plan"),
the Plan is hereby amended as follows, effective December 1,
2000:
Section 5.1 is hereby amended to read as follows:
"5.1 Subject to Section 5.2, the maximum number of
shares for which Options, limited stock appreciation rights,
stock appreciation rights and Restricted Stock may at any
time be granted under the Plan is thirty-seven million
(37,000,000) 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), 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."
IN WITNESS WHEREOF, the Company has caused this
amendment to be duly executed on this 1sth day of December,
2000.
EL PASO ENERGY CORPORATION
By: /s/ Joel Richards III
----------------------------
Joel Richards III
Executive Vice President
Attest:
/s/ David L. Siddall
---------------------
Corporate Secretary
