HOUSTON, April 7, 2003 — El Paso Corp. has 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:
* John M. Bissell – Chairman of the Board, BISSELL Inc.
* Juan Carlos Braniff – Vice Chairman, Grupo Financiero BBVA Bancomer
* James L. Dunlap – Business Consultant; Former Vice Chairman, President and Chief Operating Officer of Ocean Energy/United Meridian Corporation
* Robert W. Goldman – Business Consultant; Former Senior Vice President, Finance and Chief Financial Officer of Conoco Inc.
* Anthony W. Hall, Jr. – City Attorney, City of Houston, Texas
* Ronald L. Kuehn, Jr. – Chairman and Chief Executive Officer, El Paso Corporation
* J. Carleton MacNeil, Jr. – Financial Consultant, Securities and Investment Brokerage
* Thomas R. McDade – Senior Partner, McDade Fogler Maines, L.L.P.
* J. Michael Talbert – Chairman of the Board, Transocean Inc.
* Malcolm Wallop – Chairman, Western Strategy Group
* John Whitmire – Chairman of the Board, CONSOL Energy, Inc.
* 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. 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.
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.
* 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.
* 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.
* 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.
* 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.
* The company’s compensation and governance committees consist solely of independent Directors.
* 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.
* The company has a mandatory age limit that precludes Directors standing for re-election in the year following their 73rd birthday.
* The company has adopted minimum stock ownership requirements for Directors and executive officers.
* 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:
* Closed $3.9 billion of non-core asset sales;
* Secured a new revolving credit facility with a term-out option to May 2004;
* Issued approximately $2.5 billion of equity and equity-linked securities;
* Cut $300 million of operating expenses; and
* Began 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:
* 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;
* Substantially reduced capital expenditures to approximately $2.6 billion for 2003 — a 35-percent decrease from 2002;
* Continued exiting the trading business by selling its European natural gas book;
* Completed two debt offerings of 7-year notes totaling $700 million;
* Targeted annual cost reductions of $150 million for 2003-over and above annual expense reductions of approximately $300 million in 2002;
* 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
* 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.
El Paso Corp. is a 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 .