As filed with the Securities and Exchange Commission on May 9, 1997
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
EL PASO NATURAL GAS COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware 74-0608280
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(Address of Principal Executive Offices, Including Zip Code)
EL PASO NATURAL GAS COMPANY OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
(Full Title of the Plan)
BRITTON WHITE, JR.
Executive Vice President and General Counsel
El Paso Natural Gas Company
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 757-2131
(Name, Address and Telephone Number, Including Area Code, of Agent For Service)
-------------------
COPY TO:
JAMES P. PRENETTA, JR.
KELLEY DRYE & WARREN LLP
Two Stamford Plaza
281 Tresser Boulevard
Stamford, Connecticut 06901
-------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
========================================================================================================================
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Aggregate Offering Registration Fee
Share(1) Price(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
par value $3 per share 2.5 million shares(2) $58.625 $146,562,500.00 $44,413.00
========================================================================================================================
</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 May 2, 1997, as reported by the New York Stock
Exchange.
(2) Includes an indeterminate number of additional shares which may be
necessary to adjust the number of shares reserved for issuance pursuant to
the El Paso Natural Gas Company Omnibus Plan for Management Employees as a
result of any future stock split, stock dividend or similar adjustment of
the outstanding Common Stock of El Paso Natural Gas Company.
================================================================================
<PAGE>
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, 1996, 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 Registrant's 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 (the "DGCL") provides
that a Delaware corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. A
Delaware corporation may indemnify any person under such Section in connection
with a proceeding by or in the right of the corporation to procure judgment in
its favor, as provided in the preceding sentence, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action, except that no indemnification shall be
made in respect thereof unless, and then only to the extent that, a court of
competent
<PAGE>
jurisdiction shall determine upon application that such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper. A Delaware corporation must indemnify any person who was successful on
the merits or otherwise in defense of any action, suit or proceeding or in
defense of any claim, issue or matter in any proceeding, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation or
is or was serving at the request of the corporation, against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith. A Delaware corporation may pay for the expenses (including attorneys'
fees) incurred by an officer or director in defending a proceeding in advance of
the final disposition upon receipt of an undertaking by or on behalf of such
officer or director to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the corporation.
Article X of the Registrant's By-laws 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 DGCL, permits a corporation to provide in its
certificate of incorporation that a director shall not be personally liable to
the corporation or its stockholders for monetary damages for a breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for any
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases, or (iv) for 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 DGCL, 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 DGCL permits the
purchase of insurance on behalf of directors and officers against any liability
asserted against directors and officers and incurred by such persons in such
capacity, or arising out of their status as such, whether or not the corporation
would have the power to indemnify directors and officers against such liability.
The Registrant maintains Directors' and Officers' liability insurance
which provides for payment on behalf of the directors and officers of the
Registrant and its subsidiaries, of certain 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 of the
Registrant and/or its subsidiaries, as the case may be.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
-2-
<PAGE>
ITEM 8. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
4.1 Restated Certificate of Incorporation of the Registrant dated
January 22, 1992 (incorporated by reference to Exhibit 3.A to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, File No. 1-2700, filed January 29, 1992);
Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of the Registrant, dated
July 7, 1992 (incorporated by reference to Exhibit 3.A.1 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, File No. 1-2700, filed February 3, 1993).
*4.2 El Paso Natural Gas Company Omnibus Plan for Management
Employees.
*5 Opinion of Kelley Drye & Warren LLP regarding legality of the
Common Stock being registered.
*23.1 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5).
*23.2 Consent of Coopers & Lybrand L.L.P.
*24 Powers of Attorney (See signature page).
- ----------
* Filed herewith.
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 (a)(1)(i) and (a)(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 with or furnished to the
Commission by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in 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-
<PAGE>
(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.
-4-
<PAGE>
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 Houston, State of Texas, on May 9, 1997.
EL PASO NATURAL GAS COMPANY
By: /S/ WILLIAM A. WISE
-----------------------------------
William A. Wise
Chairman of the Board and
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 and on the dates as indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/S/ WILLIAM A. WISE Chairman of the Board, Chief Executive May 9, 1997
- ---------------------------------- Officer and Director
William A. Wise
/S/ RICHARD O. BAISH President May 9, 1997
- ----------------------------------
Richard O. Baish
/S/ H. BRENT AUSTIN Executive Vice President and Chief May 9, 1997
- ---------------------------------- Financial Officer
H. Brent Austin
/S/ JEFFREY I. BEASON Vice President, Chief Accounting Officer May 9, 1997
- ---------------------------------- and Controller
Jeffrey I. Beason
/S/ BYRON ALLUMBAUGH Director May 9, 1997
- ----------------------------------
Byron Allumbaugh
/S/ PETER T. FLAWN Director May 9, 1997
- ----------------------------------
Peter T. Flawn
- ---------------------------------- Director May 9, 1997
Eugenio Garza Laguera
<PAGE>
/S/ JAMES F. GIBBONS Director May 9, 1997
- ----------------------------------
James F. Gibbons
/S/ BEN F. LOVE Director May 9, 1997
- ----------------------------------
Ben F. Love
/S/ KENNETH L. SMALLEY Director May 9, 1997
- ----------------------------------
Kenneth L. Smalley
/S/ MALCOLM WALLOP Director May 9, 1997
- ----------------------------------
Malcolm Wallop
</TABLE>
-6-
<PAGE>
EXHIBITS INDEX
EXHIBIT
NUMBER DESCRIPTION
4.1 Restated Certificate of Incorporation of the Registrant dated
January 22, 1992 (incorporated by reference to Exhibit 3.A to the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, File No. 1-2700, filed January 29, 1992);
Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock of the Registrant dated July
7, 1992 (incorporated by reference to Exhibit 3.A.1 of the
Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992, File No. 1-2700, filed February 3, 1993).
*4.2 El Paso Natural Gas Company Omnibus Plan for Management
Employees.
*5 Opinion of Kelley Drye & Warren LLP regarding legality of the
Common Stock being registered.
*23.1 Consent of Kelley Drye & Warren LLP (included in their opinion
filed as Exhibit 5).
*23.2 Consent of Coopers & Lybrand L.L.P.
*24 Powers of Attorney (See signature page).
- -----------
* Filed herewith.
-7-
EL PASO NATURAL GAS COMPANY
OMNIBUS PLAN FOR
MANAGEMENT EMPLOYEES
AMENDED AND RESTATED EFFECTIVE AS OF APRIL 12, 1996
<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 ...............................................2
2.6 Common Stock .......................................3
2.7 Exchange Act .......................................3
2.8 Fair Market Value ..................................3
2.9 Good Reason ........................................3
2.10 Management Committee ..............................4
2.11 Option ............................................4
2.12 Option Price ......................................4
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 .........................................5
SECTION 4 ELIGIBILITY ............................................6
SECTION 5 SHARES AVAILABLE FOR THE PLAN ..........................6
SECTION 6 STOCK OPTIONS ..........................................7
SECTION 7 STOCK APPRECIATION RIGHTS .............................11
SECTION 8 LIMITED STOCK APPRECIATION RIGHTS .....................12
SECTION 9 RESTRICTED STOCK ......................................13
SECTION 10 REGULATORY APPROVALS AND LISTING ......................14
SECTION 11 EFFECTIVE DATE AND TERM OF THE PLAN ...................15
SECTION 12 GENERAL PROVISIONS ....................................15
SECTION 13 AMENDMENT, TERMINATION OR DISCONTINUANCE
OF THE PLAN ...........................................17
<PAGE>
EL PASO NATURAL GAS COMPANY
OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
AMENDED AND RESTATED EFFECTIVE AS OF APRIL 12, 1996
SECTION 1 PURPOSE
The purpose of the El Paso Natural Gas Company Omnibus Plan for
Management Employees, formerly known as 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, 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
<PAGE>
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.
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.
<PAGE>
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
<PAGE>
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.
<PAGE>
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 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, 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 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,
(ii) the surrender of an Option, or portion thereof, upon exercise of a related
limited stock appreciation right or stock appreciation right for cash, or (iii)
the forfeiture of shares of Restricted Stock, shares of Common Stock which were
<PAGE>
subject thereto shall again be available for grants of Options, limited stock
appreciation rights, stock appreciation rights and Restricted Stock under the
Plan, as the Plan Administrator may determine.
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
<PAGE>
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.
<PAGE>
(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.
<PAGE>
(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, thirty-six (36) months 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
<PAGE>
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
<PAGE>
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,
<PAGE>
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.
<PAGE>
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.
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:
<PAGE>
(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, and was amended and restated by the Board of Directors
effective April 12, 1996. 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,
<PAGE>
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 or regulations of any
governmental authority, whether federal, state or local and whether domestic or
foreign. 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.
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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused the Plan to be amended and
restated effective as of April 12, 1996.
EL PASO NATURAL GAS COMPANY
By /s/ Joel Richards, III
_________________________________
Senior Vice President
ATTEST:
By /s/ Stacy J. James
_________________________________
<PAGE>
AMENDMENT NO. 1 TO THE
OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
Pursuant to Section 13 of the El Paso Natural Gas Company Omnibus Plan
for Management Employees, as Amended and Restated Effective as of April 12, 1996
(the "Plan"), the Plan is hereby amended as follows, effective April 23, 1997:
Section 5.1 is 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 five million (5,000,000) 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, (ii) the surrender of an Option, or
portion thereof, upon exercise of a related limited stock appreciation
right or stock appreciation right for cash, or (iii) the forfeiture of
shares of Restricted Stock, shares of Common Stock which were subject
thereto shall again be available for grants of Options, limited stock
appreciation rights, stock appreciation rights and Restricted Stock
under the Plan, as the Plan Administrator may determine."
IN WITNESS WHEREOF, El Paso Natural Gas Company has caused this
amendment to be duly executed on this 23rd day of April, 1997.
EL PASO NATURAL GAS COMPANY
Attest: By: /s/ Joel Richards, III
_______________________
Joel Richards III
/s/ David Siddall Executive Vice President
________________________
EXHIBIT 5.1
KELLEY DRYE & WARREN LLP
A Limited Liability Partnership Including Professional Associations
TWO STAMFORD PLAZA
281 TRESSER BOULEVARD
STAMFORD, CT 06901-3229
May 9, 1997
El Paso Natural Gas Company
El Paso Energy Building
1001 Lousiana Street
Houston, Texas 77002
Re: EL PASO NATURAL GAS COMPANY OMNIBUS PLAN FOR MANAGEMENT EMPLOYEES
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"). The Registration Statement relates to 2,500,000 shares of
the Company's Common Stock, $3 par value per share (the "Shares"), which will be
issued pursuant to the El Paso Natural Gas Company Omnibus Plan for Management
Employees (the "Plan").
In connection with this opinion, we have examined and relied upon
copies certified or otherwise identified to our satisfaction of: (i) the Plan;
(ii) an executed copy of the Registration Statement; (iii) the Company's
Restated Certificate of Incorporation and By-laws, as amended; (iv) the minute
books and other records of corporate proceedings of the Company, as made
available to us by officers of the Company; and have reviewed such matters of
law as we have deemed necessary or appropriate for the purpose of rendering this
opinion.
For purposes of this opinion we have assumed the authenticity of all
documents submitted to us as originals, the conformity to originals of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of all documents submitted to us as copies. We
have also assumed the legal capacity of all natural persons, the genuineness
<PAGE>
El Paso Natural Gas Company
May 9, 1997
Page -2-
of all signatures on all documents examined by us, the authority of such persons
signing on behalf of the parties thereto other than the Company and the due
authorization, execution and delivery of all documents by the parties thereto
other than the Company. As to certain factual matters material to the opinion
expressed herein, we have relied to the extent we deemed proper upon
representations, warranties and statements as to factual matters of officers and
other representatives of the Company. Our opinion expressed below is subject to
the qualification that we express no opinion as to any law other than the laws
of the State New York, the federal laws of the United States of America and the
General Corporation Law of the State of Delaware. Without limiting the
foregoing, we express no opinion with respect to the applicability thereto or
effect of municipal laws or the rules, regulations or orders of any municipal
agencies within any such state.
Based upon and subject to the foregoing qualifications, assumptions
and limitations and the further limitations set forth below, it is our opinion
that the Shares to be issued by the Company 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 and paid for in accordance
with the terms of the Plan, the Shares will be validly issued, fully paid and
non-assessable.
This opinion is limited to the specific issues addressed herein, and
no opinion may be inferred or implied beyond that expressly stated herein. We
assume no obligation to revise or supplement this opinion should the present
laws of the State New York, the federal laws of the United States of America or
the General Corporation Law of the State of Delaware be changed by legislative
action, judicial decision or otherwise.
We hereby consent to the filing of this letter as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder.
This opinion is furnished to you in connection with the filing of
the Registration Statement and is not to be used, circulated, quoted or
otherwise relied upon for any other purpose.
Very truly yours,
/S/ KELLEY DRYE & WARREN LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement on
Form S-8, relating to the El Paso Natural Gas Company Omnibus Plan for
Management Employees, of our report dated February 28, 1997, on our audits of
the consolidated financial statements and financial statement schedule of El
Paso Natural Gas Company as of December 31, 1996 and 1995, and for each of the
three years in the period ended December 31, 1996, which report is included in
its Annual Report on Form 10-K for the year ended December 31, 1996, filed with
the Securities and Exchange Commission.
/S/ COOPERS & LYBRAND L.L.P
El Paso, Texas
May 6, 1997
