EXHIBIT 10.X
AGREEMENT TO RESTATE THE
BALANCE OF CERTAIN COMPENSATION
THIS AGREEMENT, dated as of ________________, 200___, is made by and between
_______________________ (the "Executive") and El Paso Corporation (the
"Company").
W I T N E S S E T H:
WHEREAS, the Executive has been and continues to be a valued key executive of
the Company; and
WHEREAS, the Company intends to loan an amount to a trust created by the
Executive (the "Trust"); and
WHEREAS, the Executive agrees to restate the balance of certain compensation
payable to the Executive under the Company's [Deferred Compensation Plan]
[Supplemental Benefits Plan] as is set forth in paragraph 2 below.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows, intending to be
legally bound, effective as of __________________, 200___.
1. The Company agrees to provide a loan to the Trust. The terms of the
loan shall be documented by a Promissory Note (the "Note") to be
executed by the Trust.
2. In consideration for the Company's promise to make the loan, [the
Executive's account balance in the Company's Deferred Compensation Plan
shall be reduced [to zero] [by $____________]] [and the Executive's
interest in the Company's Supplemental Benefits Plan shall be reduced
[to zero] [by $_____________]],effective as of the date of such loan,
but shall not affect the Executive's right to continue to accrue
benefits under said plan(s).
3. If the Executive recognizes any taxable income as a result of entering
into this Agreement, and if such recognition would generally result in
an income tax deduction for the Company, then the Company shall make a
payment to the Executive (or to the Executive's estate, if the
Executive has died) equal to the amount determined by dividing forty
percent (40%) of the taxable income by sixty percent (60%).
4. The Executive agrees that (i) the Company has not advised the Executive
as to any financial or tax risks associated with this Agreement or the
Note to be entered into pursuant to this Agreement; (ii) the Executive
has relied solely on his personal advisors in deciding to enter into
this Agreement and the related transactions; and, (iii) the Executive
(as his successors, heirs and assigns) assume responsibility for any
tax or financial risks incurred by the Executive (or his successors,
heirs and assigns) resulting from the transaction.
IN WITNESS WHEREOF, the parties hereby execute this Agreement, intending to be
legally bound as of the effective date set forth above.
EXECUTIVE: COMPANY:
El Paso Corporation
By:
------------------------------------ ----------------------------------
Printed Name: Printed Name:
----------------------- ------------------------
------------------------------------ ------------------------------------
Date Date
BENEFIT PLAN(S) FROM WHICH
AGREEMENT TO RESTATE BALANCE OF CERTAIN COMPENSATION
REDUCED AMOUNTS AND AMOUNTS REDUCED
PLAN(S) FROM WHICH
RESTATEMENT AMOUNTS
REDUCED AMOUNTS REDUCED
NAME OF PARTICIPANT (1)(2) ($)
------------------- ------------------ -------
Xxxxx Xxxxxxxxxx 1995 Compensation Plan for $1,820,000
Non-Employee Directors
H. Xxxxx Xxxxxx Supplemental Benefits Plan $ 600,000
Xxxx X. Xxxxxxx Deferred Compensation Plan $ 400,000
Supplemental Benefits Plan $ 100,000
Xxxx Xxxxxxxx III Supplemental Benefits Plan $1,000,000
Xxxxxxx Xxxxx Xx. Supplemental Benefits Plan $1,000,000
Xxxxxxx X. Xxxx Supplemental Benefits Plan $5,000,000
(1) 1995 Compensation Plan for Non-Employee Directors means the El Paso
Corporation 1995 Compensation Plan for Non-Employee Directors amended and
restated effective as of January 29, 2002, as amended.
(2) Supplemental Benefits Plan means the El Paso Corporation Supplemental
Benefits Plan amended and restated effective as of December 7, 2001, and
Deferred Compensation Plan means the El Paso Corporation Deferred
Compensation Plan amended and restated effective as of December 3, 1998, as
amended.
PROMISSORY NOTE
$________.00 HOUSTON, XXXXXX COUNTY, TEXAS ______________, 2001
FOR VALUE RECEIVED, the undersigned, [Name of Trust] ("Maker"
or "Trust") having a mailing address of ____________________, Houston, Texas
__________, promises to pay to the order of EL PASO CORPORATION, a Delaware
corporation (together with its successors and assigns, "Holder"), at its
address, 0000 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000, or at such other place
as Holder of this Note may direct, at maturity (as provided below) the
principal sum of _____________________________________________
________________ AND NO/100 DOLLARS ($___________.00), together with interest
on said principal remaining unpaid hereunder and from time to time advanced
and outstanding hereunder until paid, at the rate per annum as is set forth on
Schedule A attached hereto.
Principal and interest on this Note shall be payable as
follows:
Interest on the unpaid principal balance of this Note shall
accrue commencing on the Loan Date (as hereinafter defined and
as set forth on Schedule A attached hereto) until such
principal balance is paid in full, and shall be due and
payable, together with the entire unpaid principal balance of
this Note, at maturity, which shall be the ninetieth (90th) day
following the death of the [Insured] [last survivor of the
Insureds] listed on Schedule A attached hereto.
Interest charges will be calculated on amounts advanced
hereunder on the actual number of days said amounts are outstanding on the
basis of a 365/366 day year, as the case may be. It is the intention of Maker
and Holder to conform strictly to all applicable usury laws. It is therefore
agreed that (i) in the event that the maturity hereof is accelerated by reason
of an election by Holder, or if same is prepaid prior to maturity, or if any
transaction contemplated hereby would otherwise be usurious under applicable
law, then, in that event, all unearned interest and any other amount that
would be excessive interest under applicable law shall be cancelled
automatically or, if theretofore paid, shall either be refunded to Maker or
credited on the unpaid principal amount of this Note, whichever remedy is
chosen by Holder, (ii) the aggregate of all interest and other charges
constituting interest under applicable law and contracted for, chargeable or
receivable under this Note or otherwise in connection with the transaction for
which this Note is given shall never exceed the maximum amount of interest,
nor produce a rate in excess of the maximum rate of interest (the "Highest
Non-Usurious Rate") that Holder may charge Maker under applicable law, and
(iii) if any excess interest is provided for, it shall be deemed a mistake and
the same shall either be refunded to Maker or credited on the unpaid principal
amount hereof and this Note shall be automatically deemed reformed so as to
permit only the contracting for, charging, receiving or collection of the
maximum legal non-usurious rate and amount of interest. All sums paid or
agreed to be paid to the Holder of this Note for the use, forbearance or
detention of the indebtedness evidenced
----------------
Maker's Initials
Page 1 of 5
hereby, to the full extent allowed by applicable law, shall be amortized,
prorated, allocated and spread through the full term of the indebtedness
evidenced by this Note.
Maker agrees that the entire principal sum advanced hereunder
shall be used to pay a premium on the life insurance policy (the "Policy")
described in Schedule A attached hereto, and that no part of the principal sum
shall be used for any other purpose. The "Loan Date" shall be the date on
which the Holder advances the principal sum of this Note to Maker, or if Maker
instructs Holder to pay such principal sum directly to the insurer issuing the
Policy, the date on which Holder pays the amount to the insurer.
Maker agrees to take all reasonable steps to ensure payment of
the Policy death benefit promptly following the [death of the Insured] [death
of the last survivor of the Insureds], and further agrees to refrain from
making any distributions attributable to the receipt of Policy death benefits
to Trust beneficiaries or other parties until Maker has received written
notification from Holder (such notification not to be unreasonably withheld)
that the full amount due Holder under this Note has been received.
All payments hereon shall be made in lawful money of the United
States of America to the order of the Holder at the address set forth above or
at such other place as Holder may designate in writing to Maker from time to
time. This Note may be prepaid by Maker in whole or in part at any time
without penalty or notice. Whenever any payment to be made under this Note
shall be stated to be due on a Saturday, Sunday or a day on which commercial
banks in Texas are authorized or required by law to close (any other day being
a "Business Day"), such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of interest payable hereunder.
Maker agrees that the Policy shall be owned solely by Maker,
that the Trust shall be designated as beneficiary to receive the Policy death
benefit or any benefit paid at policy maturity, and that no other person or
entity will have any interest in the Policy, except as otherwise provided
herein. Also, Maker shall not surrender the Policy, in whole or in part,
withdraw cash value from or borrow from the Policy), or otherwise pledge or
encumber the Policy, except as expressly permitted by the terms of this Note.
Maker further agrees that an event of default under this Note shall be deemed
to occur upon the occurrence of any of the following events:
(1) Maker fails to pay the Policy premium within the time allowed by the
terms of this Note (including any extensions permitted hereunder).
(2) Maker attempts to transfer all or any part of its interest in the
Policy to any party, except that a transfer of Policy rights to a
successor trustee under the terms of the Trust shall not be deemed a
transfer for the purpose of this sentence.
(3) Maker surrenders the Policy in whole or in part, or borrows from or
withdraws cash value from the Policy or otherwise pledges or encumbers
the Policy.
----------------
Maker's Initials
Page 2 of 5
(4) Maker reduces the face amount of the Policy without the consent of
Holder, but only if the face amount reduction results in distribution
of policy cash values.
The obligations created by this Note are obligations of Maker
only, and no individual or entity who is a trustee of the Trust shall have any
personal responsibility or liability with respect to this Note, except in such
party's fiduciary capacity as a trustee. In addition, no beneficiary of the
Trust, or creator of the Trust, shall have any personal responsibility or
liability with respect to this Note, except to the extent of any Policy death
benefits paid to any such beneficiary, in which case Holder may pursue
available legal remedies to recover any such amount, if Holder has not
received payment of the full amount due to Holder, for application to any
amounts outstanding under this Note.
Maker, the creator of the Trust, and any trustee or beneficiary
of the Trust shall not be responsible for paying any additional amounts as
Policy premiums, even if it becomes necessary to do so to prevent the Policy
from lapsing. However, any such party or Holder, in its sole discretion, may
pay additional Policy premiums as it elects.
Holder may transfer or assign its rights under this Note to any
individual or entity without the consent of Maker, and Holder shall give Maker
notice of any such transfer or assignment; provided, however, that Holder
shall not be liable to Maker for any failure to give any such notice, nor
shall failure to do so impair the effectiveness of such assignment or
transfer.
In the event of default in the payment of any installment of
principal or interest when due hereunder, or upon the occurrence of any event
of default under this Note or any document or instrument executed in
connection with or as security for this Note, or upon failure in performance
of any covenant, agreement, or obligation to be performed under this Note or
any documents executed in connection with or as security for this Note, Holder
may declare the entirety of this Note, outstanding principal and accrued and
unpaid interest, immediately due and payable without any notice of any kind,
including, without limitation, any notice of acceleration or of intent to
accelerate, and failure to exercise said option shall not constitute a waiver
on the part of Holder of the right to exercise the same at any other time.
No security taken for the payment of this Note shall affect the
liability of any person liable for payment of this Note. Holder may require
payment by Maker and any surety, endorser, or guarantor hereof without first
resorting to any security for this Note, and no judgment taken against any
such party shall terminate any lien, security interest or other interest of
Holder in said security.
Maker consents to the release or discharge of any party liable
hereon (including any of the undersigned) and to the release or impairment of
any collateral for this Note by Holder.
All past due principal and interest on this Note shall bear
interest from maturity of such principal or interest (in whatever manner same
may be brought about) until paid at the
----------------
Maker's Initials
Page 3 of 5
Highest Non-Usurious Rate. To the extent the Highest Non-Usurious Rate is
determined by reference to the laws of the State of Texas, same shall be
determined by reference to the "weekly ceiling" (as defined and described in
the Texas Finance Code Section 303.003, as amended, as limited by the Texas
Finance Code Section 303.009, as amended) at the applicable time in effect;
provided, however, that to the fullest extent permitted by all applicable
usury laws, the Holder shall have the right to change, from time to time, by
further written notice and disclosure to the Maker, the ceiling upon which the
Highest Non-Usurious Rate is based to the extent it is based thereon. In the
event default is made in the payment of this Note in whatever manner its
maturity may be brought about, and it is placed in the hands of an attorney
for collection, or is collected through probate, bankruptcy or other
proceedings, Maker promises to pay all costs and reasonable attorneys' fees
incurred by Holder as a result thereof.
Maker and every surety, endorser and guarantor of this Note
waive, to the fullest extent permitted by law, grace, notice, demand,
presentment for payment, notice of non-payment, protest, notice of protest,
notice of intention to accelerate, notice of acceleration of the indebtedness
due hereunder and all other notice, filing of suit and diligence in collecting
this Note, and the enforcing of any of the security rights of Holder, and
consent and agree that the time of payment hereof may be extended without
notice at any time and from time to time, and for periods of time whether or
not for a term or terms in excess of the original term hereof, without notice
or consideration to, or consent from, any of them.
Any prepayment sums received by Holder shall be applied to the
payments of any accrued and unpaid interest, with any excess applied to reduce
the principal balance of this Note.
Time is of the essence with respect to all time periods set
forth in this Note.
No modification or waiver of any of the provisions of this Note
shall be effective unless in writing, signed by Holder, and only to the extent
set forth therein; and no waiver shall be effective except in the specific
instance for which given; and no failure Holder of this Note to exercise, and
no delay in exercising, any right or remedy hereunder or under any other
document, instrument or agreement shall constitute a waiver thereof on the
part of Holder; nor shall any single or partial exercise of any right or
remedy hereunder or under any other document, instrument or agreement preclude
any other or further exercise thereof or the exercise of any other right or
remedy.
Any notice, demand or request relating in any manner to this
Note shall be in writing and shall be deemed effective (i) if mailed, three
business days after being deposited in the mails, postage prepaid by certified
mail, return receipt requested, or (ii) if delivered, upon delivery, in each
such case to Maker or to Holder hereof at its address above stated, unless
such address is changed by written notice hereunder.
This Note is made and delivered in the State of Texas, with
reference to the laws of said state and it is understood and agreed that the
legality, enforceability and construction hereof shall be governed by the laws
of the State of Texas and the United States of America.
----------------
Maker's Initials
Page 4 of 5
The terms and provisions hereof shall be binding upon and inure
to the benefit of Maker and the heirs, personal representatives, successors
and assigns of Maker and Holder; provided, however, that Maker may not assign
any of its rights or obligations hereunder without the prior written consent,
in its sole discretion, of Holder.
EXECUTED EFFECTIVE the day and year first written above.
"Maker": [Name of Trust]
---------------------------
By:
-------------------------------
Printed Name:_________, as Trustee
----------------------------------
Date
----------------
Maker's Initials
Page 5 of 5
SCHEDULE A
LOAN INTEREST RATE: _______% per annum, compounded
semi-annually, subject to the usury savings provisions of
this Note
LOAN DATE:
POLICY:
Insurer:
Policy Number:
Insured(s):
PROMISSORY NOTE
LOAN AMOUNTS
AMOUNT INTEREST
OF LOAN(s) RATE
NAME OF PARTICIPANT NAME OF TRUST(s) ($)(1)(2) (%)
------------------- ---------------- ---------- --------
Xxxxx Xxxxxxxxxx The Xxxxxxxx Xxxxxxxxxx 2002 $3,276,000 5.41%
Trust; The Xxxxx Xxxxxxxxxx 2002
Trust; The Xxxxxx Xxxxxxx 2002 Trust;
The Xxxxx Xxxxx 2002 Trust
X. Xxxxx Xxxxxx Xxxxx and Xxxxxx Xxxxxx Family Trust $1,080,000 4.99%
Xxxxx X. Xxxxxxx Xxxx and Xxxxxx Xxxxxxx Family Trust $ 900,000 4.99%
Xxxx Xxxxxxxx III Xxxx and Xxxxx Xxxxxxxx Family Trust $1,800,000 4.99%
Xxxxxxx Xxxxx, Xx. White/Xxxxxxxx Family Trust $1,800,000 4.99%
Xxxxxxx X. Xxxx Wise 2001 Family Trust $9,000,000 4.99%
(1) The amount reflected for Xx. Xxxxxxxxxx consists of four loans each in the
amount of $819,000.
(2) The amount reflected for Xx. Xxxx consists of two loans each in the amount
of $4,500,000.
