As filed with the Securities and Exchange Commission on January 10,
1994
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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EL PASO NATURAL GAS COMPANY
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 74-0608280
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification no.)
</TABLE>
One Paul Kayser Center
304 Texas Avenue
El Paso, Texas 79901
(Address of principal
executive offices, including zip code)
EL PASO NATURAL GAS COMPANY
STOCK OPTION PLAN FOR MANAGEMENT EMPLOYEES
(Full title of the plan)
BRITTON WHITE, JR.
Senior Vice President and General Counsel
EL PASO NATURAL GAS COMPANY
One Paul Kayser Center
304 Texas Avenue
El Paso, Texas 79901
(915) 541-2600
(Name, address and telephone number,
including area code, of agent for service)
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Copy to:
ARNOLD H. TRACY
MUDGE ROSE GUTHRIE ALEXANDER & FERDON
180 Maiden Lane
New York, New York 10038
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Amount to be Proposed Proposed Amount of
securities registered maximum maximum registration
to be offering aggregate fee
registered price offering
per share(1) price(1)
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<S> <C> <C> <C> <C>
Common Stock,
par value $3 2,500,000 shs $35.50 $88,750,000 $30,603.66
per share
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</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of
calculating the amount of the registration fee. The price per
share is estimated based on the average of the high and low trading
prices for El Paso Natural Gas Company's Common Stock on January 4,
1994, as reported by the New York Stock Exchange.
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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 El Paso Natural Gas
Company (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, 1992, 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;
and
(c) The description of the Registrant's common stock, $3 par
value (the "Common Stock"), contained in the Registration Statement
on Form 8-A (Registration No. 1-2700) filed with the Commission on
February 13, 1992 under Section 12 of the Exchange Act, including
any amendments or reports filed for the purpose of updating such
descriptions.
All documents and reports filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the
date hereof and prior to the filing of a post-effective amendment
to the Registration Statement which indicates that the securities
offered hereby have been sold, or which deregisters all such
securities remaining unsold, shall also be deemed to be
incorporated by reference into this Registration Statement and to
be a part hereof commencing on the respective dates on which such
documents are filed.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides
that a corporation may indemnify directors and officers as well as
other employees and individuals against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation--a "derivative
action"), 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
proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to
expenses (including attorneys' fees) incurred in connection with
the defense or settlement of such action, and the statute requires
court approval before there can be any indemnification where the
person seeking indemnification has been found 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, judgments, 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 as a director, officer or employee of the Registrant or
that, being or having been such a director or officer or an
employee of the Registrant, 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 Delaware General Corporation Law
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 Delaware General Corporation Law, 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 payments 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 of 1933, as amended (the
"Securities Act"), for acts or omissions by such persons while
acting as directors or officers.
Item 7. Exemption From Registration Claimed.
Not Applicable.
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
4.1 Restated Certificate of Incorporation of the Registrant
dated January 22, 1992 (filed as Exhibit 3.A to the Registrant's
Annual Report on Form 10-K for the fiscal year ended December 31,
1992 and incorporated herein by reference)
4.2 El Paso Natural Gas Company Stock Option Plan For
Management Employees
5 Opinion of Mudge Rose Guthrie Alexander & Ferdon regarding
legality of the Common Stock being registered
23.1 Consent of Mudge Rose Guthrie Alexander & Ferdon (included
in their opinion filed as Exhibit 5)
23.2 Consent of Coopers & Lybrand
24 Power of Attorney (see Signature Page)
</TABLE>
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;
and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) above do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in
this 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 provisions of
Item 6, 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,
as amended, 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 El Paso, State of Texas, on January 10, 1994.
EL PASO NATURAL GAS COMPANY
By: /S/ WILLIAM A. WISE
William A. Wise
Chairman of the Board,
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 below by
the following persons in the capacities indicated on January 10,
1994.
<TABLE>
<CAPTION>
Signature Title
<S> <C>
/S/ WILLIAM A. WISE Chairman of the Board, President,
William A. Wise Chief Executive Officer and Director
/S/ LUINO DELL'OSSO, JR. Executive Vice President, Chief
Luino Dell'Osso, Jr. Operating Officer
and Director
/S/ H. BRENT AUSTIN Senior Vice President and Chief
H. Brent Austin Financial Officer
(Principal Financial Officer)
/S/ THOMAS E. RICKS Vice President and Controller
Thomas E. Ricks (Principal Accounting Officer)
/S/ BYRON ALLUMBAUGH Director
Byron Allumbaugh
/S/ EUGENIO GARZA LAGUERA Director
Eugenio Garza Laguera
/S/ BEN F. LOVE Director
Ben F. Love
/S/ KENNETH L. SMALLEY Director
Kenneth L. Smalley
</TABLE>
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EXHIBIT 4.2
EL PASO NATURAL GAS COMPANY
STOCK OPTION PLAN FOR
MANAGEMENT EMPLOYEES
Dated as of December 14, 1993
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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 . . . . . . . . . . . . . . . . . . . 2
2.6 Common Stock . . . . . . . . . . . . . . . 2
2.7 Exchange Act . . . . . . . . . . . . . . . 2
2.8 Fair Market Value . . . . . . . . . . . . . 2
2.9 Good Reason . . . . . . . . . . . . . . . . 3
2.10 Management Committee . . . . . . . . . . . 3
2.11 Option . . . . . . . . . . . . . . . . . . 4
2.12 Option Price . . . . . . . . . . . . . . . 4
2.13 Participant . . . . . . . . . . . . . . . 4
2.14 Permanent Disability or Permanently Disabled .4
2.15 Plan Administrator . . . . . . . . . . . . 4
2.16 Subsidiary . . . . . . . . . . . . . . . . 4
SECTION 3 - ADMINISTRATION . . . . . . . . . . . . . . . . . 4
SECTION 4 - ELIGIBILITY . . . . . . . . . . . . . . . . . . . 5
SECTION 5 - SHARES AVAILABLE FOR THE PLAN . . . . . . . . . . 5
SECTION 6 - STOCK OPTIONS . . . . . . . . . . . . . . . . . . 5
SECTION 7 - STOCK APPRECIATION RIGHTS . . . . . . . . . . . . 9
SECTION 8 - LIMITED STOCK APPRECIATION RIGHTS . . . . . . . . 10
SECTION 9 - REGULATORY APPROVALS AND LISTING . . . . . . . . 10
SECTION 10 - EFFECTIVE DATE AND TERM OF THE PLAN . . . . . . 11
SECTION 11 - GENERAL PROVISIONS . . . . . . . . . . . . . . . 11
SECTION 12 - AMENDMENT, TERMINATION OR DISCONTINUANCE OF THE
PLAN. . . . . . . . . . . . . . . . . . . . . . 12
EL PASO NATURAL GAS COMPANY
STOCK OPTION PLAN FOR MANAGEMENT EMPLOYEES
SECTION 1 - PURPOSE
The purpose of the El Paso Natural Gas Company Stock
Option Plan for Management Employees (the "Plan") is to promote the
interests of El Paso Natural Gas Company (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 and stock appreciation rights 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
After a Change in Control, the Company may terminate the
Participant's employment for 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, nothing in this Plan shall
prohibit or restrict the Company's ability to either merge with or
into another company or transfer all or substantially all of its
assets to another company, if such merger or transfer of assets is
in connection with a corporate restructuring.
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 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, 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:
(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 Natural Gas Company
Pension Plan and the El Paso Natural Gas Company 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 or stock appreciation right 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 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 and stock appreciation rights 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 and stock appreciation rights 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 key employee of
the Company, or of any Subsidiary, as of the date on which the Plan
Administrator grants to such individual an option, limited stock
appreciation right or stock appreciation right 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 and stock
appreciation rights may at any time be granted under the Plan is
two million five hundred thousand (2,500,000) shares of Common
Stock, from shares held in the Company's treasury or out of the
authorized but unissued shares of the Company, or partly out of
each, as shall be determined by the Plan Administrator. Upon (i)
the expiration or termination in whole or in part of unexercised
options or (ii) the surrender of an option, or portion thereof,
upon exercise of a related limited stock appreciation right or
stock appreciation right for cash, shares of Common Stock which
were subject thereto shall again be available for grants of
options, limited stock appreciation rights and stock appreciation
rights under the Plan.
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 and stock appreciation
rights, 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.
(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.
(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 with Approval
The option shall expire, unless exercised, thirty-six
(36) months after a Participant resigns or is terminated as an
employee of the Company or any of its Subsidiaries, provided that
the Chief Executive Officer of the Company shall have determined in
a specific case that the option should not immediately 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).
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 cancelled 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 cancelled.
(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 (l) 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 cancelled 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 cancelled.
SECTION 9 - REGULATORY APPROVALS AND LISTING
9.1 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 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 10 - EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall be dated as of December 14, 1993 and shall
be effective upon adoption by the Board of Directors. Options,
limited stock appreciation rights and stock appreciation rights may
be granted pursuant to the Plan from time to time within the period
commencing upon adoption of the Plan by the Board of Directors and
ending ten (10) years thereafter. Options, limited stock
appreciation rights and stock appreciation rights 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 11 - GENERAL PROVISIONS
11.1 Nothing contained in the Plan, or in any option,
limited stock appreciation right or stock appreciation right
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.
11.2 Grants, vesting or payment of stock options,
limited stock appreciation rights or stock appreciation rights
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.
11.3 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.
11.4 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.
11.5 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 and stock appreciation rights 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 or rights, cancelling any unvested options or
rights and/or requiring the Participant to exercise any and all
vested options or rights at such times as the Plan Administrator
may determine.
11.6 Each grant to a Participant of an option, limited
stock appreciation right and stock appreciation right 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.
11.7 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.
11.8 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 and stock appreciation rights under the
applicable laws or regulations of any governmental authority,
whether federal, state or local and whether domestic or foreign.
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 time of
distributions under the Plan or (iii) disposing of any shares of
Common Stock issued upon the exercise of an option under the Plan.
SECTION 12 - AMENDMENT, TERMINATION OR DISCONTINUANCE OF
THE PLAN
12.1 Subject to Section 12.2, 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 9; provided, however,
that no change in any option, limited stock appreciation right or
stock appreciation right 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.
12.2 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.
12.3 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 or stock appreciation right at the time.
Exhibit 5
Mudge Rose Guthrie Alexander & Ferdon
180 Maiden Lane
New York, New York 10038
January 7, 1994
El Paso Natural Gas Company
One Paul Kayser Center
304 Texas Avenue
El Paso, Texas 79901
El Paso Natural Gas Company
Stock Option Plan For Management Employees
2,500,000 Shares of Common Stock,
$ 3.00 Par Value
Dear Sirs:
We are acting as special counsel to El Paso Natural Gas
Company, a Delaware Corporation (the "Company"), in connection with
the preparation and filing with the Securities and Exchange
Commission of a Registration Statement on Form S-8 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), with respect to the Company's Stock Option
Plan For Management Employees (the "Plan"). The Registration
Statement covers 2,500,000 shares of Common Stock, $3 par value, of
the Company (the "Shares").
As special counsel to the Company, we have examined the
Registration Statement and such corporate records and other
documents and instruments and have made such investigations of law,
as we have considered necessary or appropriate for the purpose of
rendering this opinion.
Based upon and subject to the foregoing we are of the
opinion that:
(1) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Delaware.
(2) The Shares issuable pursuant to the Plan have been
duly authorized and reserved for issuance and, when certificates
for the Shares have been duly executed by the Company,
countersigned by a transfer agent, duly registered by a registrar
for the Shares and issued in accordance with the terms of the Plan,
the Shares will be validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement. By giving the foregoing
consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Act.
Very truly yours,
/S/ MUDGE ROSE GUTHRIE ALEXANDER & FERDON
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this El Paso
Natural Gas Company registration statement on Form S-8, relating to
the El Paso Natural Gas Company Stock Option Plan For Management
Employees, of our report dated January 29, 1993, on our audits of
the consolidated financial statements and the related consolidated
financial statement schedules of El Paso Natural Gas Company at
December 31, 1992 and 1991, and for the years ended December 31,
1992, 1991 and 1990, which are included in the El Paso Natural Gas
Company Annual Report on Form 10-K.
/S/ COOPERS & LYBRAND
El Paso, Texas
January 10, 1994
