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EXHIBIT 10.H.1
AMENDMENT TO THE
SONAT INC.
SUPPLEMENTAL BENEFIT PLAN
El Paso Energy Corporation, a Delaware corporation ("El Paso"), as
successor to Sonat Inc., a Delaware corporation ("Sonat"), does hereby amend the
Sonat Inc. Supplemental Benefit Plan (the "Plan") as set forth below:
WHEREAS, on October 25, 1999, Sonat merged with and into El Paso
pursuant to the terms of the Merger Agreement (as defined below); and
WHEREAS, El Paso, as successor to Sonat and pursuant to Section 6.10(a)
of the Merger Agreement, has assumed all of Sonat's obligations under the Plan;
and
WHEREAS, the Merger was a Change of Control (as defined in the Plan);
and
WHEREAS, El Paso desires to amend the Plan and to provide for the
merger of the Plan into the El Paso Supplemental Plan (as defined below).
NOW, THEREFORE, the following Plan provisions are hereby adopted:
1. A new Article VIII is added to the Plan after Article VII,
such new Article VIII to read in its entirety as follows:
ARTICLE VIII - EL PASO MERGER PROVISIONS
8.1 DEFINITIONS
The following terms shall have the following meaning, unless
the context clearly indicates otherwise:
EL PASO DEFERRED COMPENSATION PLAN shall mean the El Paso
Energy Corporation Deferred Compensation Plan, as from time to
time amended.
EL PASO SUPPLEMENTAL PLAN shall mean the El Paso Energy
Corporation Supplemental Benefits Plan, as from time to time
amended.
MERGER shall mean the merger of Sonat Inc. with and into El
Paso Energy Corporation pursuant to the Merger Agreement.
MERGER AGREEMENT shall mean the Second Amended and Restated
Agreement and Plan of Merger dated as of March 13, 1999 (as
amended from time to time) by and between Sonat Inc. and El
Paso Energy Corporation.
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MERGER EFFECTIVE TIME shall mean the Effective Time of the
Merger, as determined pursuant to the Merger Agreement.
WINDOW PROGRAM shall mean the Early Retirement Window Program
offered in connection with the Merger.
8.2 EXCESS CASH BALANCE BENEFITS
(a) In no event will credits be made to a
Participant's Cash Balance Account under
Section 5.2(a) with respect to pay periods
beginning after December 31, 1999.
(b) The Cash Balance Account of a Participant
who has a Termination of Employment before
January 1, 2000, shall be paid as provided
under the terms of the Plan as in effect
immediately before the Merger Effective
Time.
(c) The Cash Balance Account of a Participant
who does not have a Termination of
Employment before January 1, 2000, shall be
paid on the earlier of (a) the date that is
30 days following the Participant's
Termination of Employment (or, if such date
is not a business day, on the preceding
business day) and (b) March 31, 2000. All
payments made pursuant to this Section
8.2(c) shall be calculated as provided in
Sections 5.2(b) and 5.3.
8.3 EXCESS SAVINGS PLAN BENEFITS
(a) In no event will credits be made to
Participant's Accounts under Section 3.2(a)
with respect to pay periods beginning after
December 31, 1999.
(b) The Accounts of a Participant who has a
Termination of Employment before January 1,
2000, shall be paid in accordance with the
provisions of the Plan as in effect
immediately before the Merger Effective
Time.
(c) The Accounts of a Participant in the Plan
who is not a "Participant" in the El Paso
Supplemental Plan on January 1, 2000, shall
be paid in a cash lump sum on March 31,
2000, regardless of whether the Participant
has had a Termination of Employment. All
payments made pursuant to this Section
8.3(c) shall be calculated as provided in
Section 3.4(a), using a "Lump Sum Valuation
Date" of March 16, 2000.
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(d) The Account of a SODI Employee shall be paid
in a cash lump sum on March 31, 2000,
regardless of whether the SODI Employee has
had a Termination of Employment. All
payments made pursuant to this Section
8.3(d) shall be calculated as provided in
Section 3.8(b), with interest accrued
through the date of the payment.
(e) The Accounts of a Participant in the Plan
who is a "Participant" in the El Paso
Supplemental Plan on January 1, 2000, shall
be credited to the Participant's "Memorandum
Account" in the El Paso Deferred
Compensation Plan, as more fully provided
for in the El Paso Supplemental Plan and El
Paso Deferred Compensation Plan.
8.4 EXCESS RETIREMENT PLAN BENEFITS
(a) Except as provided in Sections 8.4(d) and
8.4(e), in no event will a Participant
accrue Excess Retirement Plan Benefits with
respect to service performed after December
31, 1999.
(b) Excess Retirement Plan Benefits with respect
to participants who had a Termination of
Employment before the Merger Effective Time
shall continue to be paid in accordance with
the provisions of the Plan as in effect
immediately before the Merger Effective
Time.
(c) The Excess Retirement Plan Benefits of (1) a
Participant who has a Termination of
Employment before January 1, 2000, and (2) a
SODI Employee who has a Termination of
Employment after December 31, 1999, shall be
paid in accordance with the provisions of
the Plan as in effect immediately before the
Merger Effective Time.
(d) The Excess Retirement Plan Benefits of a
Participant who has a Termination of
Employment after December 31, 1999 under the
terms of the Window Program, and who is not
a party to an Executive Severance Agreement
or an Officer Severance Agreement with
Sonat, shall be determined and paid in
accordance with the provisions of the Plan
as in effect immediately before the Merger
Effective Time.
(e) Any Plan provision to the contrary
notwithstanding, a Participant in the Plan
who (A) has a Termination of Employment
after December 31, 1999 under the terms of
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the Window Program, and (B) is a party to an
Executive Severance Agreement or an Officer
Severance Agreement with Sonat, shall be
entitled to Excess Retirement Plan Benefits,
payable in the form of a cash lump sum,
equal to the sum of:
(1) the Actuarial Equivalent of the excess,
if any, of (i) the amount that
hypothetically would have been payable
to the Participant as a Retirement
Benefit under the Retirement Plan (based
upon the assumption that the terms of
the Retirement Plan, as in effect
immediately before the Merger Effective
Time, applied to the Participant through
the date of the Participant's
Termination of Employment) if Sections
401(a)(17) and 415 of the Code were
nonexistent and the provisions of the
Retirement Plan incorporating the
limitations contained in Sections
401(a)(17) and 415 of the Code were
inoperative (and assuming that the
Participant elected to receive such
Benefit on the earliest date permitted
for the commencement of Retirement
Benefits under the Retirement Plan),
over (ii) the amount which
hypothetically would have been payable
to the Participant under the last
paragraph of Section 5.1(b)(iii) of the
El Paso Energy Corporation Pension Plan
(the "El Paso Pension Plan") upon
application of the actual terms of the
El Paso Pension Plan (assuming that the
Participant elected to receive such
amount on the earliest date permitted
for the commencement of benefits under
the El Paso Pension Plan); plus
(2) if the Participant has an Eligible
Spouse on the date of such Termination
of Employment, the Actuarial Equivalent
of the excess, if any, of (i) the amount
that hypothetically would have been
payable to the Eligible Spouse as a
Survivors Benefit under the Retirement
Plan upon the death of the Participant
(based upon the assumption that the
terms of the Retirement Plan, as in
effect immediately before the Merger
Effective Time, applied to the
Participant through the date of the
Participant's Termination of Employment)
if Sections 401(a)(17) and 415 of the
Code were nonexistent and Section 7.10
and the provisions of the Retirement
Plan incorporating the limitations
contained in Sections 401(a)(17) and 415
of the Code were inoperative, over (ii)
the amount which hypothetically would
have been
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payable to the Eligible Spouse under the
last paragraph of Section 5.1(b)(iii) of
the El Paso Pension Plan upon
application of the actual terms of the
El Paso Pension Plan (assuming that the
Participant and Eligible Spouse elected
to receive benefits under such Section
5.1(b)(iii) on the earliest date
permitted for the commencement of
benefits under the El Paso Pension
Plan), with such excess to be valued as
a reversionary annuity, payable
immediately upon the death of the
Participant, using the interest rate and
mortality table set forth in Section
2.3(d).
The cash lump-sum payment set forth in
this Section 8.4(e) shall be paid as
soon as practicable (and within 30 days)
after the Participant's Termination of
Employment, and shall be reduced by the
amount of any Severance Retirement
Benefit or Severance Survivors Benefit
payable under the Severance Agreement
referred to above.
(f) The Excess Retirement Plan Benefits of a
Participant in the Plan who is an employee
of El Paso or one of its subsidiaries on
January 1, 2000 and who is not a
"Participant" in the El Paso Supplemental
Plan on January 1, 2000, shall be paid in
Lump Sum Form on March 31, 2000. All
payments made pursuant to this Section
8.4(f) shall be calculated as provided in
Sections 2.3(a) and 2.3(d), based on the
assumption that the Participant had a
Termination of Employment on December 31,
1999, and taking into account the repeal of
Code Section 415(e).
(g) Upon Termination of Employment, a
Participant in the Plan who is an employee
of El Paso or one of its subsidiaries on
January 1, 2000 and who is a "Participant"
in the El Paso Supplemental Plan on January
1, 2000, shall be entitled to receive
supplemental pension benefits as more fully
provided for in the El Paso Supplemental
Plan.
8.5 VESTING BENEFITS
(a) In no event will a Participant accrue
Vesting Benefits with respect to service
performed after December 31, 1999.
(b) The Vesting Benefits of a Participant who
has a Termination of Employment before
January 1, 2000, shall
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be paid in accordance with the provisions of
the Plan as in effect immediately before the
Merger Effective Time.
(c) The Vesting Benefits of a Participant in the
Plan who is not a "Participant" in the El
Paso Supplemental Plan on January 1, 2000,
shall be paid as a cash lump sum on March
31, 2000. All payments made pursuant to this
Section 8.5(c) shall be calculated as
provided in Section 4.2, based on the
assumption that the Participant had a
Termination of Employment on December 31,
1999.
(d) Upon Termination of Employment after
December 31, 1999, a Participant in the Plan
shall be entitled to Vesting Benefits, as
more fully provided for in the El Paso
Supplemental Plan.
8.6 GENERAL PROVISIONS
The provisions of this Article VIII shall apply to
all persons who were Participants in the Plan before
January 1, 2000, any other Plan provision to the
contrary notwithstanding.
Only employees of Sonat Inc. or its subsidiaries
before the Merger Effective Time shall be eligible to
be Participants in the Plan.
IN WITNESS WHEREOF, El Paso Energy Corporation has executed this
document as of October 25, 1999.
EL PASO ENERGY CORPORATION
By: /s/ Joel Richards III
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Executive Vice President
Human Resources and Administration
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