EL PASO ENERGY CORPORATION 2001 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

Exhibit 10.C

EL PASO ENERGY CORPORATION

2001 STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS

Effective as of January 29, 2001

TABLE OF CONTENTS

EL PASO ENERGY CORPORATION
2001 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
Effective as of January 29, 2001

SECTION 1 PURPOSE

     The purpose of the E1 Paso Energy Corporation 2001 Stock Option Plan for Non-Employee Directors (the “Plan”) is to attract and retain the services of experienced and knowledgeable non-employee Directors of E1 Paso Energy Corporation (the “Company”), and to provide an incentive for such Directors to increase their proprietary interests in the Company’s long-term success and progress.

SECTION 2 SHARES SUBJECT TO THE PLAN

     2.1 Subject to Section 2.2, the maximum number of shares of common stock of the Company, par value $3.00 per share, (the “Common Stock”) for which stock options may be granted under the Plan is five hundred thousand (500,000) (the “Shares”). The Shares shall be shares held in the Company’s treasury or issued out of authorized but unissued shares of the Company, or partly out of each, as shall be determined by the Plan Administrator (defined in Section 3 below).

     2.2 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 Plan Administrator, may make appropriate adjustments in the number of Shares authorized for the Plan and, with respect to outstanding stock options, the Plan Administrator may make appropriate adjustments in the number of shares and the option price. In the event of any adjustment in the number of Shares covered by any stock option, any fractional Shares resulting from such adjustment shall be disregarded and each such stock option shall cover only the number of full Shares resulting from such adjustment.

SECTION 3 ADMINISTRATION OF THE PLAN

     Unless otherwise determined by the Board of Directors and subject to Section 9, the Plan shall be administered by a management committee (the “Plan Administrator”) consisting of the Chief Executive Officer of the Company and such other senior officers as the Chief Executive Officer shall designate. The Plan Administrator shall have the sole authority to construe and interpret the Plan, shall prescribe, amend and rescind rules relating to the Plan from time to time as it deems proper and in the best interests of the Company, and shall take any other action necessary for the administration of the Plan.

SECTION 4 PARTICIPATION IN THE PLAN

     Each member of the Board elected or appointed who is not otherwise an employee of the Company or any subsidiary corporation (a “Participant”) shall be eligible to receive stock option grants as provided in the Plan.

SECTION 5 STOCK OPTION GRANTS AND TERMS

     Each stock option granted to a Participant under the Plan and the issuance of Shares thereunder shall be subject to the following terms:

5.1 Option Grants

     A Participant shall automatically receive (a) a grant of stock options to purchase up to ten thousand (10,000) Shares when the Participant is initially elected or appointed as a Director of the Company and (b) a grant of stock options to purchase up to five thousand (5,000) Shares on each date the Participant is reelected as a Director of the Company at the annual meeting of stockholders of the Company, beginning with such annual meeting in 2001. The amount of stock options each Participant shall receive for each plan year, such amount not to exceed the foregoing maximums, shall be determined by the Board from time to time. Upon the occurrence of an event described in Section 2.2 above, the number of stock options granted to a Participant pursuant to this Section 5.1 shall be adjusted accordingly.

     Each stock option granted under the Plan shall be evidenced by a written instrument delivered by or on behalf of the Plan Administrator containing terms, provisions and conditions not inconsistent with the Plan.

5.2 Vesting of Options

     Each stock option granted to a Participant under the Plan shall be fully vested and immediately exercisable upon grant.

5.3 Option Price

     The option price for a stock option granted under the Plan shall be the fair market value of the Shares covered by the stock option at the time the stock option is granted to the Participant. For purposes of the Plan, “fair market value” shall be the mean between the highest and lowest quoted selling prices at which the Common Stock was sold on such date as reported in the NYSE Composite Transactions by The Wall Street Journal for such date or, if no Common Stock was traded on such date, on the next preceding date on which Common Stock was so traded.

5.4 Time and Manner of Exercise of a Stock Option

     Each option may be exercised in whole or in part at any time and from time to time; provided, however, that no fewer than one hundred (100) Shares (or the remaining Shares then purchasable under the stock option, if less than one hundred (100) Shares) may be purchased upon exercise of any stock option hereunder and that only whole Shares will be issued pursuant to the exercise of any stock option.

     The purchase price of shares purchased under stock options shall be paid in full to the Company incident to the exercise of the stock option by delivery of consideration equal to the product of the option price and the number of shares purchased (the “Purchase Price”). Such consideration may be paid (i) in cash or (ii) at the discretion of the Plan Administrator, in shares of 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. The Plan Administrator can determine that additional forms of payment will be permitted. To the extent permitted by the Plan Administrator and applicable laws and regulations (including, but not limited to, federal tax and securities laws, regulations and state corporate law), an option may also be exercised in a “cashless” exercise by delivery of a properly executed exercise notice together with irrevocable instructions to a broker designated by the Plan Administrator to promptly deliver to the Company the amount of sale or loan proceeds to p