Interim Ceo Employment Agreement- Ronald L. Keuhn, JR.

EXHIBIT 10.Y


EL PASO CORPORATION


INTERIM CEO EMPLOYMENT AGREEMENT


This Employment Agreement (the "Agreement") is entered into as of March 12, 2003, (the "Effective Date") by and between El Paso Corporation (the "Company") and you, Ronald L. Kuehn, Jr.


1. Duties and Scope of Employment.


(a) Positions and Duties. As of the Effective Date, you will serve as Chief Executive Officer of the Company. In addition, during the period of your employment under this Agreement (the "Employment Term"), you will also serve as Chairman of the Company's Board of Directors ("the Board") so long as you are a member of the Board.


(b) Obligations. During the Employment Term and in return for the consideration set forth in Section 3 of this Agreement, you will perform your duties faithfully and to the best of your ability and will devote your full business efforts and time to the Company. Notwithstanding the foregoing, you may continue to serve as a member of the Board of Directors of any company on whose Board of Directors you serve as of the Effective Date.


2. At-Will Employment. The parties agree that your employment with the Company will be "at-will" employment and may be terminated at any time with or without cause or notice.


3. Compensation.


(a) Base Salary. During the Employment Term, the Company will pay you a monthly salary of $100,000 in accordance with the Company's normal payroll practices as compensation for your services hereunder (the "Base Salary").


(b) Bonus. You will be eligible to earn a target bonus of an amount equal to 100% of Base Salary based on the achievement of Company and individual performance objectives as determined by the Compensation Committee of the Board (the "Bonus"). The Bonus, if any, will be payable upon the earlier of (i) your continued employment through the first anniversary of the Effective Date, (ii) at such time that the Company pays its annual bonus to other similarly-situated executives of the Company or (iii) the start date of a permanent Chief Executive Officer following the Company's appointment of such individual (a "CEO Appointment"); provided, however, that you will only receive a pro-rated portion of the Bonus if the Bonus is paid upon a CEO Appointment (with the amount of the Bonus based on the number of full months (rounded up to the nearest whole month) you were employed hereunder prior to the CEO Appointment and assuming all performance objectives were fully met).


(c) New Incentive Awards. Subject to approval by the Compensation Committee of the Board, the Company will grant you under the Company's 2001 Omnibus Incentive Compensation Plan (the "Compensation Plan") (i) 50,000 shares of restricted common stock of the Company (the "Stock Award"), and (ii) a non-qualified stock option to purchase, at the per-share fair market value on the date of grant, 125,000 shares of Company common stock (the "Option Grant" and together with the Stock Award, the "Incentive Awards"). The Incentive Awards will vest on the earlier of (i) your continued employment through the first anniversary of the Effective Date, or (ii) a CEO Appointment. Upon any termination of your employment hereunder, you will have three (3) years to exercise any vested shares subject to the Option Grant. Except as specified in this Agreement, the Incentive Awards will be governed by the terms and provisions of the Compensation Plan and applicable grant letter reflecting your Stock Award and your Option Grant (the "Grant Letter").


(d) Existing Options. It is understood that, as of the Effective Date, you will no longer serve as the Company's Lead Director. Accordingly, the stock options gran ...