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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
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[ ] Confidential, for Use of the Commission Only (as permitted by
Rule14a-6(e)(2))
[ ] Definitive Proxy Statement
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[X] Soliciting Material Pursuant to Rule 14a-12
EL PASO CORPORATION
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EL PASO CORPORATION ANNOUNCES SLATE FOR 2003 ANNUAL
MEETING
HOUSTON, TX, APRIL 7, 2003--El Paso Corporation (NYSE:EP) today announced its
slate of director nominees to be voted on at the company's annual meeting in
June 2003.
El Paso's 12 Board nominees are:
o John M. Bissell - Chairman of the Board, BISSELL Inc.
o Juan Carlos Braniff - Vice Chairman, Grupo Financiero BBVA Bancomer
o James L. Dunlap - Business Consultant; Former Vice Chairman, President
and Chief Operating Officer of Ocean Energy/United Meridian Corporation
o Robert W. Goldman - Business Consultant; Former Senior Vice President,
Finance and Chief Financial Officer of Conoco Inc.
o Anthony W. Hall, Jr. - City Attorney, City of Houston, Texas
o Ronald L. Kuehn, Jr. - Chairman and Chief Executive Officer, El Paso
Corporation
o J. Carleton MacNeil, Jr. - Financial Consultant, Securities and
Investment Brokerage
o Thomas R. McDade - Senior Partner, McDade Fogler Maines, L.L.P.
o J. Michael Talbert - Chairman of the Board, Transocean Inc.
o Malcolm Wallop - Chairman, Western Strategy Group
o John Whitmire - Chairman of the Board, CONSOL Energy, Inc.
o Joe B. Wyatt - Chancellor Emeritus, Vanderbilt University
"In selecting our slate for this year's annual meeting, El Paso has
undertaken a process designed to assure continuity while effecting measured
change in the composition of our Board of Directors," said Ronald L. Kuehn,
Jr., El Paso's chairman and chief executive officer. "The combined expertise
of El Paso's nominees in the energy industry, finance, academia and the law,
and the mix of new directors and directors with detailed knowledge of our
company, will create a Board that is particularly well-equipped to help us
achieve our long-term goals. The individuals on our slate are leaders in
their respective fields. Their complementary knowledge and skills will add
tremendous value to our organization. Under their objective and independent
leadership, we will be well-positioned to continue executing on our
operational and financial plan while substantially enhancing the value of our
core businesses."
Current Board members Byron Allumbaugh, James F. Gibbons, and William A. Wise
will not be standing for re-election. Mr. Kuehn said, "I would like to thank
Byron Allumbaugh, Jim Gibbons, and Bill Wise for their many years of hard
work and dedicated service to El Paso's Board."
El Paso noted that all but one of the 12 Board nominees are independent; 11
have substantial experience serving on public company boards; five have
extensive management and operating experience in the oil and gas industry;
four hold or have held positions as Chairman, President or Chief Executive
Officer of a New York Stock Exchange (NYSE)-listed company; and the company's
nominees have operating experience at more than a dozen energy industry
companies, including Conoco, CONSOL Energy, Lone Star Gas, Ocean Energy,
Phillips, Shell, Sonat, Texaco, Transocean, Union Texas Petroleum and United
Meridian. The company also noted that, of its 12 nominees, four joined the
El Paso Board this year, four are prior Coastal board members and two are
prior Sonat board members.
Corporate Governance
--------------------
The El Paso Board of Directors has adopted corporate governance policies that
meet or exceed all of the requirements of the Sarbanes-Oxley Act of 2002, the
rules and regulations of the Securities and Exchange Commission (SEC), and
the proposed NYSE regulations. The company's policies have been developed
taking into account not only legal and regulatory requirements but also
current corporate governance best practices.
o 11 of the company's 12 Director nominees meet the independence
standards of the NYSE and applicable law. El Paso requires that a
minimum of 75 percent of its Directors be non-management Directors.
o Since September 2002, the company has had a Lead Director to lead
sessions of the Board of Directors without management. The Board
regularly meets without management Directors. John M. Bissell, a former
director of Coastal, serves as Lead Director.
o El Paso Directors cannot serve on the boards of more than four other
public companies and are required to attend a full-day program of
continuing board education at least once every two years.
o The audit committee consists solely of Directors who meet the
heightened independence requirements for audit committee members and
the NYSE's financial literacy standards. The committee includes a
financial expert within the meaning of the Sarbanes-Oxley Act and
applicable SEC rules.
o The company's compensation and governance committees consist solely of
independent Directors.
o The company's corporate governance guidelines and the charters of each
of the company's standing committees are publicly available, and each
committee is authorized to engage its own advisors and counsel.
o The company has a mandatory age limit that precludes Directors
standing for re-election in the year following their 73rd birthday.
o The company has adopted minimum stock ownership requirements for
Directors and executive officers.
o The company has no staggered board and no rights plan or "poison
pill," and proposes to eliminate its "Fair Price" supermajority
charter provision at this year's annual meeting.
Operational and Financial Plan
------------------------------
El Paso has been engaged for more than 15 months in a process of
repositioning the company to address the challenges facing El Paso and the
energy industry as a whole.
In the period from December 2001 through the end of 2002, El Paso:
o Closed $3.9 billion of non-core asset sales;
o Secured a new revolving credit facility with a term-out option to May
2004;
o Issued approximately $2.5 billion of equity and equity-linked
securities;
o Cut $300 million of operating expenses; andBegan an orderly exit
from the trading business.
The company has developed and has been implementing a disciplined operational
plan for 2003. Since the beginning of 2003, El Paso has:
o Completed or signed asset sales of more than $1.7 billion--more than 50
percent of the company's goal of $3.4 billion for 2003;
o Substantially reduced capital expenditures to approximately $2.6
billion for 2003 -- a 35-percent decrease from 2002;
o Continued exiting the trading business by selling its European natural
gas book;
o Completed two debt offerings of 7-year notes totaling $700 million;
o Targeted annual cost reductions of $150 million for 2003--over and above
annual expense reductions of approximately $300 million in 2002;
o Reached an agreement in principle to resolve the principal litigation
and claims relating to the sale or delivery of natural gas and/or
electricity to or in the Western U.S.; and
o Actively engaged in a process to extend the maturity of its principal
credit facilities.
In addition, El Paso is undertaking a top-to-bottom analysis to achieve
substantial further cost reductions. The company is committed to reducing
expenses and designing the most
cost-efficient structure possible for its businesses. El Paso is also
working to recapture as promptly as practicable substantial amounts of the
cash collateral currently committed to its trading, petroleum and other
businesses.
El Paso continues to move forward with the negotiation and execution of
numerous financing, asset sale and other transactions that are necessary to
meet the objectives of its plan. El Paso's Board nominees are committed to
continuing this process in order to complete the repositioning of the
company, enhance the value of its core businesses and ensure that El Paso
delivers the value inherent in its businesses.
Biographical Information
------------------------
Additional biographical information on each of the nominees follows below.
Name, Principal Occupation
And Other Selected Information
Concerning Nominees for Director
JOHN M. BISSELL Director since 2001
Chairman of the Board,
BISSELL Inc.,
Grand Rapids, Michigan -- Floor Care
Appliance and Detergent Manufacturer.
Age -- 72
Lead Director
Member -- Audit Committee
Member -- Compensation Committee
Mr. Bissell served as a director of The Coastal Corporation from 1985 to
January 2001. During the past five years, Mr. Bissell has been the Chairman
of the Board of BISSELL Inc. He has served in various executive capacities
at BISSELL Inc. since 1966. Mr. Bissell served as a director of American
Natural Resources Company, parent holding company of ANR Pipeline Company,
from May 1983 to June 1996, at which time there was a reduction in the number
of directors and he did not stand for re-election.
JUAN CARLOS BRANIFF Director since 1997
Vice Chairman,
Grupo Financiero BBVA Bancomer,
Mexico City, Mexico-- Commercial Banking Institution.
Age-- 45
Chairman -- Audit Committee
Member -- Finance Committee
Mr. Braniff has served as Vice Chairman of Grupo Financiero BBVA Bancomer
since October 1999. He served as Deputy Chief Executive Officer of Retail
Banking from September 1994 to October 1999. He served as Executive Vice
President of Capital Investments and Mortgage Banking from December 1991 to
September 1994. Mr. Braniff is currently a member of the Board of Directors
of Fomento Econ?mico Mexicano S.A. de C.V. and Coca Cola FEMSA S.A. de C.V.
JAMES L. DUNLAP Director since 2003
Business Consultant.
Age -- 65
Member -- Compensation Committee
Member -- Governance Committee
Mr. Dunlap served as Vice Chairman, President and Chief Operating Officer of
Ocean Energy/United Meridian Corporation from 1996 to 1999. He was
responsible for exploration and production and the development of the
international exploration business. For 33 years prior to that date,
Mr. Dunlap served Texaco, Inc. in various positions, including Senior Vice
President, President of Texaco USA, President and Chief Executive Officer of
Texaco Canada Inc. and Vice Chairman of Texaco Ltd., London. Mr. Dunlap is
currently a member of the Board of Directors of Massachusetts Mutual Life
Insurance Company and a member of the corporation of Woods Hole Oceanographic
Institution.
ROBERT W. GOLDMAN Director since 2003
Business Consultant.
Age -- 60
Chairman -- Finance Committee
Member -- Audit Committee
Mr. Goldman's primary occupation has been as a business consultant since
October 2002. He served as Senior Vice President, Finance and Chief
Financial Officer of Conoco Inc. from 1998 to 2002 and Vice President,
Finance from 1991 to 1998. For more than five years prior to that date he
held various executive positions with Conoco Inc. and E.I. Du Pont de Nemours
& Co., Inc. Mr. Goldman was also formerly Vice President and Controller of
Conoco Inc. and Chairman, Accounting Committee, American Petroleum
Institute.
ANTHONY W. HALL, JR. Director since 2001
City Attorney,
City of Houston, Texas.
Age -- 58
Member -- Governance Committee
Member -- Finance Committee
Mr. Hall served as a director of The Coastal Corporation from August 1999
until January 2001. Mr. Hall has been City Attorney of the City of Houston
since March 1998 and prior to that was a partner in the law firm of Jackson
Walker, LLP.
RONALD L. KUEHN, JR. Director since 1999
Chairman of the Board and Chief Executive Officer,
El Paso Corporation.
Houston, Texas-- Diversified Energy Company.
Age -- 68
Mr. Kuehn has been Chairman of the Board and Chief Executive Officer since
March 2003. From September 2002 to March 2003, Mr. Kuehn was the Lead
Director of El Paso. From January 2001 to March 2003, he was a business
consultant. Mr. Kuehn served as non-executive Chairman of the Board of El
Paso from October 25, 1999 to December 31, 2000. Mr. Kuehn served as
President and Chief Executive Officer of Sonat Inc. from June 1984 until his
retirement on October 25, 1999. He was Chairman of the Board of Sonat Inc.
from April 1986 until his retirement. He is a director of AmSouth
Bancorporation, Praxair, Inc. and The Dun & Bradstreet Corporation.
J. CARLETON MACNEIL, JR. Director since 2001
Financial Consultant.
Age -- 68
Member -- Audit Committee
Member -- Governance Committee
Mr. MacNeil served as a director of The Coastal Corporation from 1997 until
January 2001. During the past five years, Mr. MacNeil's occupation has been
securities brokerage and investments. Mr. MacNeil served as a director of
American Natural Resources Company, parent holding company of ANR Pipeline
Company from August 1993 until June 1996, at which time there was a reduction
in the number of directors and he did not stand for re-election.
THOMAS R. MCDADE Director since 2001
Senior Partner,
McDade Fogler Maines, L.L.P.
Houston, Texas -- Law Firm.
Age -- 70
Member -- Finance Committee
Mr. McDade served as a director of The Coastal Corporation from 1993 until
January 2001. During the past five years, Mr. McDade has been the Senior
Partner at the law firm of McDade Fogler Maines, L.L.P., Houston, Texas. He
was with the Fulbright & Jaworski law firm for 30 years and became a partner
in 1971 and Senior Partner and a member of the Senior Advisory Committee of
that firm in 1989. Mr. McDade was a member of the Board of Directors of
Equity Corporation International, and served on its Compensation Committee
until its merger into Service Corporation International in January 1999.
J. MICHAEL TALBERT Director since 2003
Chairman of the Board,
Transocean Inc.
Houston, Texas-- Offshore Drilling Company.
Age-- 56
Member -- Compensation Committee
Member -- Finance Committee
Mr. Talbert has been Chairman of the Board of Transocean Inc. since October
2002. He served as Chief Executive Officer of Transocean Inc. and its
predecessor companies from 1994 until October 2002, and has been a member of
its Board of Directors since 1994. He served as President and Chief
Executive Officer of Lone Star Gas Company from 1990 to 1994. He served as
President of Texas Oil & Gas Company from 1987 to 1990, and served in various
positions at Shell Oil Company from 1970 to 1982. Mr. Talbert is a past
Chairman of the National Ocean Industries Association and a member of the
University of Akron's College of Engineering Advancement Council.
MALCOLM WALLOP Director since 1995
Chairman,
Western Strategy Group,
Arlington, Virginia -- Political Foundation,
President,
Frontiers of Freedom Foundation,
Arlington, Virginia -- Consulting Group.
Age -- 70
Chairman -- Governance Committee
Member -- Audit Committee
Mr. Wallop became Chairman of Western Strategy Group in January 1999, and has
been President of Frontiers of Freedom Foundation since January 1996. For
eighteen years prior to that date, Mr. Wallop was a member of the United
States Senate. He is a member of the Board of Directors of Hubbell Inc. and
Sheridan State Bank.
JOHN WHITMIRE Director since 2003
Chairman of the Board,
CONSOL Energy, Inc.,
Pittsburgh, Pennsylvania -- Multifuel Energy Provider
And Energy Service Provider.
Age -- 62
Member -- Compensation Committee
Mr. Whitmire has been chairman of CONSOL Energy, Inc. since March 1999. He
has served as Chairman and CEO of Union Texas Petroleum Holdings, Inc. from
1996 to 1998, and spent over 30 years serving Phillips Petroleum Company in
various positions including Executive Vice President of Worldwide Exploration
and Production from 1992 to 1996 and Vice President of North American
Exploration and Production from 1988 to 1992. He also served as a member of
the Board of Directors of Phillips Petroleum Company from 1994 to 1996. He
is a member of the Board of Directors of GlobalSantaFe.
JOE B. WYATT Director since 1999
Chancellor Emeritus,
Vanderbilt University,
Nashville, Tennessee -- Higher Education.
Age -- 67
Chairman -- Compensation Committee
Member -- Governance Committee
Mr. Wyatt has been Chancellor Emeritus of Vanderbilt University since August
2000. For more than five years prior to that date, he served as Chancellor,
Chief Executive Officer and Trustee of Vanderbilt University. From 1994
until October 1999, Mr. Wyatt was a director of Sonat Inc. He is a member of
the Board of Directors of Ingram Micro, Inc. and Hercules, Inc.
El Paso Corporation is the leading provider of natural gas services and the
largest pipeline company in North America. The company has core businesses
in production, pipelines, midstream services, and power. El Paso
Corporation, rich in assets and fully integrated across the natural gas value
chain, is committed to developing new supplies and technologies to deliver
energy. For more information, visit WWW.ELPASO.COM .
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This letter includes forward-looking statements and projections, made in
reliance on the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The company has made every reasonable effort to ensure
that the information and assumptions on which these statements and
projections are based are current, reasonable, and complete. However, a
variety of factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in this
release, including, without limitation, our ability to attract and retain
qualified members of the Board of Directors; the successful recruitment and
retention of a qualified CEO; the successful implementation of the 2003
operational and financial plan; the successful implementation of the
settlement related to the Western Energy Crisis; actions by the credit rating
agencies; material and adverse impacts from our proxy contest with Selim
Zilkha/Oscar Wyatt; the successful close of financing transactions, including
an extension of our bank facilities; our ability to successfully exit the
energy trading business; our ability to divest of certain non-core assets;
changes in commodity prices for oil, natural gas, and power; general economic
and weather conditions in geographic regions or markets served by El Paso
Corporation and its affiliates, or where operations of the company and its
affiliates are located; the uncertainties associated with governmental
regulation; political and currency risks associated with international
operations of the company and its affiliates; inability to realize
anticipated synergies and cost savings associated with restructurings and
divestitures on a timely basis; difficulty in integration of the operations
of previously acquired companies; competition; and other factors described in
the company's (and its affiliates') Securities and Exchange Commission
filings. While the company makes these statements and projections in good
faith, neither the company nor its management can guarantee that anticipated
future results will be achieved. Reference must be made to those filings for
additional important factors that may affect actual results. The company
assumes no obligation to publicly update or revise any forward-looking
statements made herein or any other forward-looking statements made by the
company, whether as a result of new information, future events, or otherwise.
ADDITIONAL IMPORTANT INFORMATION
Prior to its 2003 annual meeting, El Paso will furnish to its shareholders El
Paso's definitive proxy statement relating to this meeting, together with a
WHITE proxy card. Shareholders are strongly advised to read this proxy
statement when it becomes available, as it will contain important information.
Shareholders will be able to obtain this proxy statement, any amendments or
supplements to the proxy statement and any other documents filed by El Paso
with the Securities and Exchange Commission for free at the Internet Web site
maintained by the Securities and Exchange Commission at www.sec.gov. Copies
of the proxy statement and any amendments and supplements to the proxy
statement will also be available for free at El Paso's Internet Web site at
www.elpaso.com or by writing to El Paso Corporation, Investor Relations, PO
Box 2511, Houston, TX 77252. In addition, copies of the proxy materials may
be requested by contacting our proxy solicitor, Mackenzie Partners, Inc at
(800) 322-2885 toll-free or by email at proxy@mackenziepartners.com.
To the extent that individual customers, independent industry researchers,
financial analysts, or El Paso commissioned research, are quoted, it is El
Paso's policy to use reasonable efforts to verify the source and accuracy of
the quote. El Paso has not, however, sought or obtained the consent of the
quoted source to the use of such quote as proxy soliciting material. Also,
El Paso may express opinions and beliefs. Except as otherwise expressly
attributed to another individual or entity, these opinions and beliefs are
the opinions and beliefs of El Paso.
Information regarding the names, affiliation and interests of individuals who
may be deemed participants in the solicitation of proxies of El Paso's
shareholders is contained in the Schedule 14A filed by El Paso with the
Securities and Exchange Commission on February 18, 2003, as amended by
Schedules 14A filed by El Paso on March 18, 2003, April 1, 2003 and April 7,
2003.
CONTACTS
Communications and Government Affairs Investor Relations
Norma F. Dunn, Senior Vice President Bruce L. Connery, Vice President
Office: (713) 420-3750 Office: (713) 420-5855
Fax: (713) 420-3632 Fax: (713) 420-4417
Alternate Contacts
Joele Frank/Dan Katcher
Joele Frank, Wilkinson Brimmer Katcher
Office: (212) 355-4449
Fax: (212) 355-4554