-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NGtqL29CFgywSXIiUpSlysC/1j5xrHvDGghnIgmDQC948aG0SjHpYyBqqu2V2X/t 8Hl/YRT4wrv3wRcGGDor5A== 0000921530-99-000205.txt : 19991019 0000921530-99-000205.hdr.sgml : 19991019 ACCESSION NUMBER: 0000921530-99-000205 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19991018 GROUP MEMBERS: GEORGE SOROS GROUP MEMBERS: SOROS FUND MANAGEMENT LLC GROUP MEMBERS: STANLEY F. DRUCKENMILLER SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CRYSTAL GAS STORAGE INC CENTRAL INDEX KEY: 0000745907 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 720163810 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-09234 FILM NUMBER: 99729950 BUSINESS ADDRESS: STREET 1: 229 MILAM ST CITY: SHREVEPORT STATE: LA ZIP: 71101 BUSINESS PHONE: 3182227791 FORMER COMPANY: FORMER CONFORMED NAME: CRYSTAL OIL CO DATE OF NAME CHANGE: 19950719 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SOROS FUND MANAGEMENT LLC CENTRAL INDEX KEY: 0001029160 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 133914976 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 888 SEVENTH AVENUE 33RD FLOOR CITY: NEW YORK STATE: NY ZIP: 10106 BUSINESS PHONE: 2128721054 MAIL ADDRESS: STREET 1: C/O AKIN, GUMP, STRAUSS,HAUER,FELD, STREET 2: 399 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10022 SC 13D/A 1 AMD # 14 TO SCH 13D RE CRYSTAL GAS STORAGE, INC SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 14)* CRYSTAL GAS STORAGE, INC. f/k/a CRYSTAL OIL COMPANY --------------------------------------------------- (Name of Issuer) Common Stock, $0.01 Par Value ----------------------------- (Title of Class of Securities) 229241104 -------------- (CUSIP Number) Stephen M. Vine, Esq. Patrick J. Dooley, Esq. Akin, Gump, Strauss, Hauer & Feld, L.L.P. 590 Madison Avenue New York, New York 10022 (212) 872-1000 ------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 15, 1999 ------------------------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [ ]. Note. Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Continued on following page(s) Page 1 of 29 Pages Exhibit Index: Page 10 Page 2 of 29 Pages SCHEDULE 13D CUSIP No. 229241104 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Soros Fund Management LLC 2 Check the Appropriate Box If a Member of a Group* a. [ ] b. [X] 3 SEC Use Only 4 Source of Funds* Not applicable 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6 Citizenship or Place of Organization Delaware 7 Sole Voting Power Number of 1,637,001 Shares Beneficially 8 Shared Voting Power Owned By 0 Each Reporting 9 Sole Dispositive Power Person 1,637,001 With 10 Shared Dispositive Power 0 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,637,001 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* [x] 13 Percent of Class Represented By Amount in Row (11) 60.70% 14 Type of Reporting Person* OO; IA *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 3 of 29 Pages SCHEDULE 13D CUSIP No. 229241104 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person George Soros (in the capacity described herein) 2 Check the Appropriate Box If a Member of a Group* a. [ ] b. [x] 3 SEC Use Only 4 Source of Funds* Not applicable 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6 Citizenship or Place of Organization United States 7 Sole Voting Power Number of 80,647 Shares Beneficially 8 Shared Voting Power Owned By 1,637,001 Each Reporting 9 Sole Dispositive Power Person 80,647 With 10 Shared Dispositive Power 1,637,001 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,717,648 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* [ ] 13 Percent of Class Represented By Amount in Row (11) 63.69% 14 Type of Reporting Person* IA; IN *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 4 of 29 Pages SCHEDULE 13D CUSIP No. 229241104 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Stanley F. Druckenmiller (in the capacity described herein) 2 Check the Appropriate Box If a Member of a Group* a. [ ] b. [x] 3 SEC Use Only 4 Source of Funds* Not applicable 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) [ ] 6 Citizenship or Place of Organization United States 7 Sole Voting Power Number of 0 Shares Beneficially 8 Shared Voting Power Owned By 1,637,001 Each Reporting 9 Sole Dispositive Power Person 0 With 10 Shared Dispositive Power 1,637,001 11 Aggregate Amount Beneficially Owned by Each Reporting Person 1,637,001 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* [x] 13 Percent of Class Represented By Amount in Row (11) 60.70% 14 Type of Reporting Person* IA *SEE INSTRUCTIONS BEFORE FILLING OUT! Page 5 of 29 Pages This Amendment No. 14 to Schedule 13D relates to shares of Common Stock, $0.01 par value per share (the "Shares"), of Crystal Gas Storage, Inc., previously known as Crystal Oil Company (the "Issuer"). This Amendment No. 14 supplementally amends the initial statement on Schedule 13D dated January 31, 1986 and all amendments thereto (collectively, the "Initial Statement") filed by the Reporting Persons (as defined herein). This Amendment No. 14 is being filed by the Reporting Persons to report that certain of the Reporting Persons have entered into a Shareholders Agreement (as defined below) in connection with the announced Merger (as defined below) of the Issuer and El Paso Energy Acquisition Co., a Delaware corporation ("El Paso Acquisition"), which is a wholly-owned subsidiary of El Paso Energy Corporation, a Delaware corporation ("El Paso Energy"). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Initial Statement. The Initial Statement is supplementally amended as follows. Item 2. Identity and Background. This Statement is being filed on behalf of each of the following persons (collectively, the "Reporting Persons"): (i) Soros Fund Management LLC ("SFM LLC"); (ii) Mr. George Soros ("Mr. Soros"); and (iii) Mr. Stanley F. Druckenmiller ("Mr. Druckenmiller"). This Statement relates to Shares held for the accounts of Quantum Partners LDC ("Quantum Partners"), Quantum Fund N.V. ("Quantum Fund") and Mr. Soros. Updated information concerning the Managing Directors of SFM LLC is attached hereto as Annex A. Item 4. Purpose of Transaction. Except as set forth in Item 6 and incorporated herein by reference, neither Quantum Partners, Quantum Fund, the Reporting Persons nor, to the best of their knowledge, any of the other individuals identified in response to Item 2, has any plans or proposals that relate to or would result in any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Mr. Gary Gladstein, a Managing Director of SFM LLC, and Mr. Neal Moszkowski, an employee of SFM LLC, are Directors of the Issuer and in such capacities may have an influence on the corporate activities of the Issuer, including as may relate to transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Notwithstanding the foregoing, the Reporting Persons reserve the right to acquire, or cause to be acquired, additional securities of the Issuer, to dispose of, or cause to be disposed, such securities at any time or to formulate other purposes, plans or proposals regarding the Issuer or any of its securities, to the extent deemed advisable in light of general investment and trading policies of the Reporting Persons and/or SFM Clients, market conditions or other factors. Item 5. Interest in Securities of the Issuer. Page 6 of 29 Pages (a) (i) Each of SFM LLC and Mr. Druckenmiller may be deemed the beneficial owner of 1,637,001 Shares (approximately 60.70% of the total number of Shares outstanding assuming the conversion of the convertible securities of the Issuer held for the account of Quantum Partners). This number includes (1) 183,346 Shares held for the account of Quantum Fund and (2) the following securities held for the account of Quantum Partners: (A) 1,444,720 Shares and (B) 3,971,260 shares of Preferred Stock (which may be converted into 8,935 Shares). (ii) Mr. Soros may be deemed the beneficial owner of 1,717,648 Shares (approximately 63.69% of the total number of Shares outstanding assuming the conversion of all of the convertible securities of the Issuer held for the account of Quantum Partners). This number includes (1) 80,647 Shares held directly for the account of Mr. Soros; (2) 183,346 Shares held for the account of Quantum Fund; and (3) 1,453,655 Shares held for the account of Quantum Partners (assuming the conversion of all of the convertible securities of the Issuer held by Quantum Partners, as described in (a)(i) above). (b) (i) Pursuant to the terms of the contract between Quantum Fund and SFM LLC, SFM LLC may be deemed to have sole power to direct the voting and disposition of the 1,637,001 Shares held for the accounts of Quantum Fund and Quantum Partners (assuming conversion of all of the convertible securities held for the account of Quantum Partners). (ii) Pursuant to the terms of the contract between Quantum Fund and SFM LLC and the position held by Mr. Soros with SFM LLC, Mr. Soros may be deemed to have shared power to direct the voting and disposition of the 1,637,001 Shares held for the account of Quantum Fund and Quantum Partners (assuming conversion of all of the convertible securities held for the account of Quantum Partners). (iii) Mr. Soros has the sole power to vote and to dispose of the 80,647 Shares held for his personal account. (iv) Pursuant to the terms of the contract between Quantum Fund and SFM LLC and the position held by Mr. Druckenmiller with SFM LLC, Mr. Druckenmiller may be deemed to have shared power to direct the voting and disposition of the 1,637,001 Shares held for the account of Quantum Fund and Quantum Partners (assuming conversion of all of the convertible securities owned by Quantum Partners). (c) Except as disclosed in Item 6 hereof, which is incorporated by reference in this Item 5, there have been no transactions effected with respect to the Shares since August 19, 1999 (60 days prior to the date hereof) by Quantum Partners, Quantum Fund or by any of the Reporting Persons. (d) (i) The shareholders of Quantum Partners, including Quantum Fund, have the right to participate in the receipt of dividends from, or proceeds from the sale of, securities, including the Shares, held for the account of Quantum Partners in accordance with their ownership interests in Quantum Partners. (ii) The shareholders of Quantum Fund have the right to participate in the receipt of dividends from, or proceeds from the sale of, securities, including the Shares, held for the account of Quantum Fund in accordance with their ownership interests in Quantum Fund. (iii) Mr. Soros has the sole right to participate in the receipt of dividends from, or proceeds from the sale of securities, including the Shares, held for his account. (e) Not applicable. Page 7 of 29 Pages Each of SFM LLC and Mr. Druckenmiller expressly disclaims beneficial ownership of any Shares held directly for the account of Mr. Soros. Item 6. Contracts, Arrangements, Understandings in Relationship with Respect to Securities of the Issuer. On October 15, 1999, each of SFM LLC and Mr. Soros entered into separate Shareholders Agreements (each, a "Shareholders Agreement") with El Paso Energy and El Paso Acquisition in connection with the merger of the Issuer and El Paso Acquisition (the "Merger") pursuant to the Agreement and Plan of Merger (the "Merger Agreement") entered into among the Issuer, El Paso Energy and El Paso Acquisition. A copy of each Shareholders Agreement is attached hereto as Exhibit D and Exhibit E and each is incorporated herein by reference in response to this Item 6. Pursuant to Section 1(a) of each Shareholders Agreement, each of SFM LLC and Mr. Soros have agreed to (or to cause to, in case such person is a beneficial owner but not the stockholder of record) (i) vote all Shares and other Voting Securities (as defined therein) in favor of the Merger; (ii) not vote any Shares and Voting Securities in favor of any action or agreement which would result in a breach in any material respect of any covenant, representation or obligation of the Issuer under the Merger Agreement and (iii) vote all Shares and Voting Securities against any action or agreement which would interfere or impede the Merger. Pursuant to Section 1(b) of each Shareholders Agreement, each of SFM LLC and Mr. Soros appointed, on their behalf, designees of El Paso Acquisition as attorneys, agents and proxies to vote the Shares and Voting Securities in favor of the Merger and other transactions contemplated by the Merger Agreement as otherwise contemplated by Section 1(b) thereof. Pursuant to Section 3(a) of each Shareholders Agreement, each of SFM LLC and Mr. Soros agreed for the term of each Shareholders Agreement not to sell, sell short, transfer, pledge or assign the Shares and Voting Securities subject to the Shareholders Agreement. Each Shareholders Agreement shall terminate and expire on the earliest of (1) the Effective Time of the Merger (as defined in the Merger Agreement), (2) the time of termination of the Merger Agreement pursuant to Section 7.1 thereof, (3) March 31, 2000 or (4) upon the amendment or waiver of any provision of the Merger Agreement that would have any adverse effect on SFM LLC or Mr. Soros, as the case may be. The foregoing description of the Shareholders Agreement does not purport to be complete and is qualified in its entirety by reference to each of the Shareholders Agreement attached as Exhibit D and Exhibit E hereto. Except as disclosed above, the Reporting Persons, Quantum Fund, Quantum Partners and other SFM Clients do not have any contracts, arrangements, understandings or relationships with respect to any securities of the Issuer. Item 7. Material to be Filed as Exhibits. D. Shareholder Agreement dated October 15, 1999 by and among SFM LLC, El Paso Corporation and El Paso Acquisition. E. Shareholder Agreement dated October 15, 1999 by and among Mr. Soros, El Paso Corporation and El Paso Acquisition. Page 8 of 29 Pages SIGNATURES After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: October 18, 1999 SOROS FUND MANAGEMENT LLC By: /S/ MICHAEL C. NEUS ------------------------------------ Michael C. Neus Assistant General Counsel GEORGE SOROS By: /S/ MICHAEL C. NEUS ------------------------------------- Michael C. Neus Attorney-in-Fact STANLEY F. DRUCKENMILLER By: /S/ MICHAEL C. NEUS ------------------------------------- Michael C. Neus Attorney-in-Fact Page 9 of 29 Pages ANNEX A The following is a list of all of the persons (other than Stanley Druckenmiller) who serve as Managing Directors of SFM LLC, as well as the number of Shares, if any, held for the account of each: Number of Shares Scott K. H. Bessent Walter Burlock L. Kevin Dann Gary Gladstein............................. 1,850 Duncan Hennes Ron Hiram Sheldon Kasowitz David N. Kowitz Carson Levit Alexander C. McAree Steven Okin Frank Sica Sean C. Warren Each of the above-listed persons is a United States citizen whose principal occupation is serving as Managing Director of SFM LLC, and each has a business address c/o Soros Fund Management LLC, 888 Seventh Avenue, 33rd Floor, New York, New York 10106. To the best of the Reporting Persons' knowledge: (a) The consideration used for purchasing the Shares reported above was the personal funds of each of the Managing Directors who purchased such Shares. (b) All of the Shares reported above were acquired for investment purposes. (c) Each of the Managing Directors (i) holds the Shares reported above as being held for his or her own account, (ii) has the sole power to vote or dispose of such Shares and has the right to receive the dividends from, or proceeds from the sale of, the Shares, and (iii) has not effected any transactions in the Shares since August 19, 1999 (60 days prior to the date hereof). (d) Gary Gladstein serves as a Director of the Issuer. Except as disclosed in the previous sentence, none of the Managing Directors has any contracts, arrangements, understandings or relationships with respect to the Shares. Page 10 of 29 Pages EXHIBIT INDEX Page No. -------- D. Shareholders Agreement dated October 15, 1999 by and among Soros Fund Management LLC, El Paso Energy Corporation and El Paso Energy Acquisition Co.......................... 11 E. Shareholders Agreement dated October 15, 1999 by and among George Soros, El Paso Energy Corporation and El Paso Energy Acquisition Co..................................... 20 EX-99 2 EXHIBIT D - SHAREHOLDERS AGREEMENT Page 11 of 29 Pages SHAREHOLDERS AGREEMENT SHAREHOLDERS AGREEMENT (this "Agreement") dated as of October 15, 1999 among the persons and entities listed on Schedule 1 hereto (each, a "Holder" and, collectively, the "Holders"), El Paso Energy Corporation, a Delaware corporation ("Parent"), and El Paso Energy Acquisition Co., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"). Parent, Sub and Crystal Gas Storage, Inc., a Louisiana corporation (the "Company"), propose to enter into an Agreement and Plan of Merger (the "Merger Agreement" which term for purposes of this Agreement shall not include any amendment or waiver of any provision of the Merger Agreement that would have any adverse effect on a Holder without the prior consent of such Holder) on the date of this Agreement providing for the merger of the Company and Sub (as contemplated by the terms of the Merger Agreement, the "Merger"). Each Holder has the right to vote the number of shares of common stock, par value $.01 per share, ("Company Common Stock"), or other securities (the "Voting Securities"), listed opposite the name of such Holder on Schedule 1. Parent and Sub have required, as a condition to entering into the Merger Agreement, that the Holders enter into this Agreement. The Holders believe that it is in the best interest of the Company and its stockholders to induce Parent and Sub to enter into the Merger Agreement and, therefore, the Holders are willing to enter into this Agreement. Accordingly, in consideration of the mutual covenants and agreements set forth herein and such other valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Voting of Equity Securities. --------------------------- (a) Each Holder hereby agrees that, during the time this Agreement is in effect, at any meeting of the stockholders of the Company, however called, and in any action by written consent of the stockholders of the Company, he shall (or shall cause the stockholder of record, if the Holder is the beneficial owner but not the stockholder of record of Voting Securities) at the written direction of the Parent (x) vote all Voting Securities of such Holder in favor of the Merger; (y) not vote any Voting Securities in favor of any action or agreement which would result in a breach in any material respect of any covenant, representation or warranty or any other obligation of the Company under the Merger Agreement; and (z) vote all Voting Securities of such Holder against any action or agreement which would impede, interfere with or attempt to discourage the Merger, including, but not limited to: (i) any takeover proposal (other than the Merger) involving the Company or any of its subsidiaries; (ii) any Page 12 of 29 pages change in the management or board of directors of the Company, except as otherwise agreed to in writing by Sub; (iii) any material change in the present capitalization or dividend policy of the Company; or (iv) any other material change in the Company's corporate structure or business. (b) Without limiting the generality of the foregoing, each Holder hereby irrevocably appoints designees of Sub, the attorneys, agents and proxies, with full power of substitution, for the undersigned and in the name, place and stead of the undersigned to vote the Voting Securities in favor of the Merger and other transactions contemplated by the Merger Agreement, against any transaction in clause (z) of Section 1(a), and otherwise as contemplated by Section 1(a), including the execution of written consents, with respect to all Voting Securities of the Company which the undersigned is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting, or in respect of which the undersigned is or may be entitled to act by written consent. This proxy is coupled with an interest and, except as provided below, shall be irrevocable and binding on any successor in interest of the undersigned. This proxy shall operate to revoke any prior proxy as to Voting Securities heretofore granted by the Holder. Such proxy shall terminate upon the termination of this Agreement at the Expiration Date. 2. Term. ----- This Agreement shall terminate and expire on the earliest of (1) the Effective Time of the Merger (as defined in the Merger Agreement), (2) the time of termination of the Merger Agreement pursuant to Section 7.1 thereof, (3) March 31, 2000 or (4) upon the amendment or waiver of any provision of the Merger Agreement that would have any adverse effect on Holder (such earliest date and time being referred to in this Agreement as the "Expiration Date"). 3. Covenants of the Holders. ------------------------- (a) During the period from the date of this Agreement until the Expiration Date, except in accordance with the provisions of this Agreement, each Holder severally and not jointly agrees that he will not: (i) sell, sell short, transfer, pledge, hypothecate, assign or otherwise dispose of, or enter into any contract, option, hedging arrangement or other arrangement or understanding with respect to the sale, transfer, pledge, hypothecation, assignment or other disposition of, any Voting Securities; 2 Page 13 of 29 Pages (ii) deposit any Voting Securities into a voting trust, or grant any proxies or enter into a voting agreement with respect to any Voting Securities; or (iii) initiate, solicit or knowingly encourage, directly or indirectly, any inquiries or the making or implementation of any proposal that constitutes, or may reasonably be expected to lead to, any takeover proposal (as defined in the Merger Agreement) or enter into discussions or negotiate with any person or entity in furtherance of such inquiries or to obtain a takeover proposal, or agree to or endorse any takeover proposal. (b) Any additional shares of Company Common Stock, warrants, options or other securities or rights exercisable for, exchangeable for or convertible into shares of Company Common Stock (collectively, "Equity Securities") acquired by any Holder will become subject to this Agreement and, to the extent entitled and permitted to vote with respect to the matters contemplated in Section 1(a), shall, for all purposes of this Agreement, be considered Voting Securities. 4. Representations and Warranties of each Holder. Each Holder ------------------------------------------------ severally and not jointly represents and warrants to Parent and Sub as follows: (a) (i) such Holder has the right to vote the Voting Securities, listed opposite the name of such Holder on Schedule 1, (ii) such Voting Securities are, except as noted on Schedule 1, the only Equity Securities owned of record or beneficially by such Holder or in which such Holder has any interest or which such Holder has the right to vote, as the case may be, and (iii) such Holder does not have any option or other right to acquire any other Equity Securities; (b) such Holder has the right, power and authority to execute and deliver this Agreement and to perform his obligations hereunder; other than in connection with or in compliance with the disclosure provisions of the Securities Exchange Act of 1934, as amended, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any equivalent state laws the execution, delivery and performance of this Agreement by such Holder will not require the consent of or filing with any other person and will not constitute a violation of, conflict with or result in a default under (i) any contract, understanding or arrangement to which such Holder is a party or by which such Holder is bound, (ii) any judgment, decree or order applicable to such Holder, or (iii) any law, rule or regulation of any governmental body applicable to such Holder; and, assuming 3 Page 14 of 29 Pages this Agreement is the valid and binding obligation of Parent and Sub, this Agreement constitutes a valid and binding agreement on the part of such Holder, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity; (d) except as set forth on Schedule 1, none of the Voting Securities are subject to any voting trust or other agreement or arrangement (except as created by this Agreement) with respect to the voting or disposition of the Voting Securities; and there are no outstanding options, warrants or rights to purchase or acquire, or agreements (except for this Agreement) relating to, such Voting Securities; (f) no person is required to withhold any amounts pursuant to Section 1445 of the Code from any payments of Merger Consideration (as defined in the Merger Agreement) made to a Holder pursuant to the Merger ("1445 Withholding"). 5. Effect of Representations, Warranties and Covenants of -------------------------------------------------------------- Holders. The representations, warranties and covenants of the Holders shall be - ------- several and not joint. The liability of each individual Holder shall extend only to the representations, warranties and covenants of such Holder and not to any representation, warranty or covenant of any other Holder, and each Holder, severally, and not jointly, agrees to indemnify and hold harmless Parent and Sub from and against any liabilities, losses, obligations, costs or expenses (including reasonable attorneys fees), excluding consequential and punitive damages, which are finally judicially determined to have arisen out of, resulted from or been related to any breach by such Holder of its representations, warranties or covenants. 6. Representations, Warranties and Covenants of Parent and Sub. ------------------------------------------------------------- Each of Parent and Sub hereby represents and warrants to each Holder that: it is a corporation duly formed under the laws of the state of its incorporation; it has all requisite corporate power and authority to enter into and perform all its obligations under this Agreement; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on its part; this Agreement has been duly executed and delivered by it; and this Agreement constitutes a valid and binding agreement on its part, enforceable in accordance with its terms, subject to applicable bankruptcy insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. Parent and Sub shall not make, or permit to be made, any 1445 Withholding. 7. Adjustments. In the event of any increase or decrease or other ----------- change in the Voting Securities by reason of stock dividends, split-up, 4 Page 15 of 29 Pages recapitalizations, combinations, exchanges of shares or the like, the number of Voting Securities subject to this Agreement shall be adjusted appropriately. 8. Governing Law. This Agreement shall be governed by and -------------- construed in accordance with the law of the State of New York applicable to agreements entered into and to be performed wholly within such state. 9. Further Assurances. Each party hereto shall, to the extent not ------------------ entailing other than de minimis expense, perform such further acts and execute such further documents as may reasonably be required to carry out the provisions of this Agreement. Without limiting the generality of the foregoing, the Holder, to the extent it "controls" the Company, according to the HSR Act and the rules and regulations promulgated by the Federal Trade Commission to implement the HSR Act, shall, to the extent required by the HSR Act, file a premerger notification and report form under the HSR Act with respect to the Merger as promptly as reasonably possible following execution and delivery of this Agreement and shall use reasonable efforts to promptly respond to any request for additional information pursuant to Section (e)(1) of the HSR Act. 10. Assignment. This Agreement may not be assigned by any party ---------- hereto. 11. Remedies. The parties agree that legal remedies for breach of -------- this Agreement will be inadequate and that this Agreement may be enforced by Parent and Sub by injunctive or other equitable relief. 12. Notices. All notices or other communications required or ------- permitted hereunder shall be in writing (except as otherwise provided herein) and shall be deemed duly given if delivered in person, by confirmed facsimile transmission or by overnight courier service, addressed as follows: 5 Page 16 of 29 Pages To Parent or Sub: El Paso Energy Corporation 1001 Louisiana Street Houston, Texas 77002 Attention: President Facsimile: (713) 420-6969 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Gary P. Cooperstein, Esq. Facsimile: (212) 859-4000 To each Holder: To Holder: c/o Soros Fund Management LLC 888 Seventh Avenue New York, New York 10106 Attention: Michael C. Neus, Esq. Facsimile: (212) 664-0544 with a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P. 590 Madison Avenue New York, New York 10022 Attention: Patrick J. Dooley, Esq. Facsimile: (212) 872-1002 13. Severability. If any term or other provision of this Agreement ------------ is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the 6 Page 17 of 29 Pages parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 14. Counterparts. This Agreement may be executed in counterparts, ------------ each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. 15. Binding Effect; Benefits. This Agreement shall survive the -------------------------- death or incapacity of any Holder and shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to or shall confer on any person other than the parties hereto and their respective heirs, legal representatives and successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. 16. No Agency. Nothing herein shall be deemed create any agency or --------- partnership relationship between the parties hereto. 7 Page 18 of 29 Pages IN WITNESS WHEREOF, the Holders, Parent and Sub have entered into this Agreement as of the date first written above. EL PASO ENERGY CORPORATION By: /S/ EL PASO ENERGY CORPORATION ______________________________________________ Name: Title: EL PASO ENERGY ACQUISITION CO. By: /S/ EL PASO ENERGY ACUISITION CO. ______________________________________________ Name: Title: HOLDER: SOROS FUND MANAGEMENT LLC By: /S/ GARY GLADSTEIN ______________________________________________ Name: Gary Gladstein Title: Managing Director 8 Page 19 of 29 Pages Schedule 1 ---------- Soros Fund Management LLC is investment advisor to Quantum Fund N.V. and Quantum Partners LDC, and as such exercises investment and voting discretion with respect to the Voting Securities held by such entities. Quantum Fund N.V. holds 183,346 Common shares, and Quantum Partners LDC holds 1,444,720 Common shares and 3,971,260 $.06 Convertible Voting Preferred Shares. EX-99.1 3 EXHIBIT E - SHAREHOLDERS AGREEMENT Page 20 of 29 Pages SHAREHOLDERS AGREEMENT SHAREHOLDERS AGREEMENT (this "Agreement") dated as of October 15, 1999 among the persons and entities listed on Schedule 1 hereto (each, a "Holder" and, collectively, the "Holders"), El Paso Energy Corporation, a Delaware corporation ("Parent"), and El Paso Energy Acquisition Co., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"). Parent, Sub and Crystal Gas Storage, Inc., a Louisiana corporation (the "Company"), propose to enter into an Agreement and Plan of Merger (the "Merger Agreement" which term for purposes of this Agreement shall not include any amendment or waiver of any provision of the Merger Agreement that would have any adverse effect on a Holder without the prior consent of such Holder) on the date of this Agreement providing for the merger of the Company and Sub (as contemplated by the terms of the Merger Agreement, the "Merger"). Each Holder has the right to vote the number of shares of common stock, par value $.01 per share, ("Company Common Stock"), or other securities (the "Voting Securities"), listed opposite the name of such Holder on Schedule 1. Parent and Sub have required, as a condition to entering into the Merger Agreement, that the Holders enter into this Agreement. The Holders believe that it is in the best interest of the Company and its stockholders to induce Parent and Sub to enter into the Merger Agreement and, therefore, the Holders are willing to enter into this Agreement. Accordingly, in consideration of the mutual covenants and agreements set forth herein and such other valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Voting of Equity Securities. --------------------------- (a) Each Holder hereby agrees that, during the time this Agreement is in effect, at any meeting of the stockholders of the Company, however called, and in any action by written consent of the stockholders of the Company, he shall (or shall cause the stockholder of record, if the Holder is the beneficial owner but not the stockholder of record of Voting Securities) at the written direction of the Parent (x) vote all Voting Securities of such Holder in favor of the Merger; (y) not vote any Voting Securities in favor of any action or agreement which would result in a breach in any material respect of any covenant, representation or warranty or any other obligation of the Company under the Merger Agreement; and (z) vote all Voting Securities of such Holder against any action or agreement which would impede, interfere with or attempt to discourage the Merger, including, but not limited to: (i) any takeover proposal (other than the Merger) involving the Company or any of its subsidiaries; (ii) any Page 21 of 29 Pages change in the management or board of directors of the Company, except as otherwise agreed to in writing by Sub; (iii) any material change in the present capitalization or dividend policy of the Company; or (iv) any other material change in the Company's corporate structure or business. (b) Without limiting the generality of the foregoing, each Holder hereby irrevocably appoints designees of Sub, the attorneys, agents and proxies, with full power of substitution, for the undersigned and in the name, place and stead of the undersigned to vote the Voting Securities in favor of the Merger and other transactions contemplated by the Merger Agreement, against any transaction in clause (z) of Section 1(a), and otherwise as contemplated by Section 1(a), including the execution of written consents, with respect to all Voting Securities of the Company which the undersigned is or may be entitled to vote at any meeting of the Company held after the date hereof, whether annual or special and whether or not an adjourned meeting, or in respect of which the undersigned is or may be entitled to act by written consent. This proxy is coupled with an interest and, except as provided below, shall be irrevocable and binding on any successor in interest of the undersigned. This proxy shall operate to revoke any prior proxy as to Voting Securities heretofore granted by the Holder. Such proxy shall terminate upon the termination of this Agreement at the Expiration Date. 2. Term. ---- This Agreement shall terminate and expire on the earliest of (1) the Effective Time of the Merger (as defined in the Merger Agreement), (2) the time of termination of the Merger Agreement pursuant to Section 7.1 thereof, (3) March 31, 2000 or (4) upon the amendment or waiver of any provision of the Merger Agreement that would have any adverse effect on Holder (such earliest date and time being referred to in this Agreement as the "Expiration Date"). 3. Covenants of the Holders. ------------------------ (a) During the period from the date of this Agreement until the Expiration Date, except in accordance with the provisions of this Agreement, each Holder severally and not jointly agrees that he will not: -2- Page 22 of 29 Pages (i) sell, sell short, transfer, pledge, hypothecate, assign or otherwise dispose of, or enter into any contract, option, hedging arrangement or other arrangement or understanding with respect to the sale, transfer, pledge, hypothecation, assignment or other disposition of, any Voting Securities; (ii) deposit any Voting Securities into a voting trust, or grant any proxies or enter into a voting agreement with respect to any Voting Securities; or (iii) initiate, solicit or knowingly encourage, directly or indirectly, any inquiries or the making or implementation of any proposal that constitutes, or may reasonably be expected to lead to, any takeover proposal (as defined in the Merger Agreement) or enter into discussions or negotiate with any person or entity in furtherance of such inquiries or to obtain a takeover proposal, or agree to or endorse any takeover proposal. (b) Any additional shares of Company Common Stock, warrants, options or other securities or rights exercisable for, exchangeable for or convertible into shares of Company Common Stock (collectively, "Equity Securities") acquired by any Holder will become subject to this Agreement and, to the extent entitled and permitted to vote with respect to the matters contemplated in Section 1(a), shall, for all purposes of this Agreement, be considered Voting Securities. 4. Representations and Warranties of each Holder. Each Holder ------------------------------------------------ severally and not jointly represents and warrants to Parent and Sub as follows: (a) (i) such Holder has the right to vote the Voting Securities, listed opposite the name of such Holder on Schedule 1, (ii) such Voting Securities are, except as noted on Schedule 1, the only Equity Securities owned of record or beneficially by such Holder or in which such Holder has any interest or which such Holder has the right to vote, as the case may be, and (iii) such Holder does not have any option or other right to acquire any other Equity Securities; -3- Page 23 of 29 Pages (b) such Holder has the right, power and authority to execute and deliver this Agreement and to perform his obligations hereunder; other than in connection with or in compliance with the disclosure provisions of the Securities Exchange Act of 1934, as amended, and the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and any equivalent state laws the execution, delivery and performance of this Agreement by such Holder will not require the consent of or filing with any other person and will not constitute a violation of, conflict with or result in a default under (i) any contract, understanding or arrangement to which such Holder is a party or by which such Holder is bound, (ii) any judgment, decree or order applicable to such Holder, or (iii) any law, rule or regulation of any governmental body applicable to such Holder; and, assuming this Agreement is the valid and binding obligation of Parent and Sub, this Agreement constitutes a valid and binding agreement on the part of such Holder, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity; (d) except as set forth on Schedule 1, none of the Voting Securities are subject to any voting trust or other agreement or arrangement (except as created by this Agreement) with respect to the voting or disposition of the Voting Securities; and there are no outstanding options, warrants or rights to purchase or acquire, or agreements (except for this Agreement) relating to, such Voting Securities; (f) no person is required to withhold any amounts pursuant to Section 1445 of the Code from any payments of Merger Consideration (as defined in the Merger Agreement) made to a Holder pursuant to the Merger ("1445 Withholding"). 5. Effect of Representations, Warranties and Covenants of -------------------------------------------------------------- Holders. The representations, warranties and covenants of the Holders shall be - ------- several and not joint. The liability of each individual Holder shall extend only to the representations, warranties and covenants of such Holder and not to any representation, warranty or covenant of any other Holder, and each Holder, severally, and not jointly, agrees to indemnify and hold harmless Parent and Sub from and against any liabilities, losses, obligations, costs or expenses (including reasonable attorneys fees), excluding consequential and punitive damages, which are finally judicially determined to have arisen out of, resulted from or been related to any breach by such Holder of its representations, warranties or covenants. 6. Representations, Warranties and Covenants of Parent and Sub. ------------------------------------------------------------- Each of Parent and Sub hereby represents and warrants to each Holder that: it is a corporation duly formed under the laws of the state of its incorporation; it has all requisite corporate power and authority to enter into and perform all its obligations under this Agreement; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on its part; this Agreement -4- Page 24 of 29 Pages has been duly executed and delivered by it; and this Agreement constitutes a valid and binding agreement on its part, enforceable in accordance with its terms, subject to applicable bankruptcy insolvency, moratorium or other similar laws relating to creditors' rights and general principles of equity. Parent and Sub shall not make, or permit to be made, any 1445 Withholding. 7. Adjustments. In the event of any increase or decrease or other ----------- change in the Voting Securities by reason of stock dividends, split-up, recapitalizations, combinations, exchanges of shares or the like, the number of Voting Securities subject to this Agreement shall be adjusted appropriately. 8. Governing Law. This Agreement shall be governed by and -------------- construed in accordance with the law of the State of New York applicable to agreements entered into and to be performed wholly within such state. 9. Further Assurances. Each party hereto shall, to the extent not ------------------ entailing other than de minimis expense, perform such further acts and execute such further documents as may reasonably be required to carry out the provisions of this Agreement. Without limiting the generality of the foregoing, the Holder, to the extent it "controls" the Company, according to the HSR Act and the rules and regulations promulgated by the Federal Trade Commission to implement the HSR Act, shall, to the extent required by the HSR Act, file a premerger notification and report form under the HSR Act with respect to the Merger as promptly as reasonably possible following execution and delivery of this Agreement and shall use reasonable efforts to promptly respond to any request for additional information pursuant to Section (e)(1) of the HSR Act. -5- Page 25 of 29 Pages 10. Assignment. This Agreement may not be assigned by any party ---------- hereto. 11. Remedies. The parties agree that legal remedies for breach of -------- this Agreement will be inadequate and that this Agreement may be enforced by Parent and Sub by injunctive or other equitable relief. 12. Notices. All notices or other communications required or ------- permitted hereunder shall be in writing (except as otherwise provided herein) and shall be deemed duly given if delivered in person, by confirmed facsimile transmission or by overnight courier service, addressed as follows: -6- Page 26 of 29 Pages To Parent or Sub: El Paso Energy Corporation 1001 Louisiana Street Houston, Texas 77002 Attention: President Facsimile: (713) 420-6969 With a copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Gary P. Cooperstein, Esq. Facsimile: (212) 859-4000 To each Holder: To Holder: c/o Soros Fund Management LLC 888 Seventh Avenue New York, New York 10106 Attention: Michael C. Neus, Esq. Facsimile: (212) 664-0544 with a copy to: Akin, Gump, Strauss, Hauer & Feld, L.L.P. 590 Madison Avenue New York, New York 10022 Attention: Patrick J. Dooley, Esq. Facsimile: (212) 872-1002 13. Severability. If any term or other provision of this Agreement ------------ is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the -7- Page 27 of 29 Pages parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible. 14. Counterparts. This Agreement may be executed in counterparts, ------------ each of which shall be deemed to be an original, but all of which together shall constitute one and the same agreement. 15. Binding Effect; Benefits. This Agreement shall survive the -------------------------- death or incapacity of any Holder and shall inure to the benefit of and shall be binding upon the parties hereto and their respective heirs, legal representatives, successors and permitted assigns. Nothing in this Agreement, expressed or implied, is intended to or shall confer on any person other than the parties hereto and their respective heirs, legal representatives and successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement. 16. No Agency. Nothing herein shall be deemed create any agency or --------- partnership relationship between the parties hereto. - 8 - Page 28 of 29 Pages IN WITNESS WHEREOF, the Holders, Parent and Sub have entered into this Agreement as of the date first written above. EL PASO ENERGY CORPORATION By: /S/ EL PASO ENERGY CORPORATION ______________________________________________ Name: Title: EL PASO ENERGY ACQUISITION CO. By: /S/ EL PASO ENERGY ACQUISITION CO. ______________________________________________ Name: Title: HOLDER: GEORGE SOROS By: /S/ GARY GLADSTEIN ______________________________________________ Name: Gary Gladstein Title: Attorney in Fact - 9 - Page 29 of 29 Pages Schedule 1 ---------- George Soros -- 80,647 Common Shares -----END PRIVACY-ENHANCED MESSAGE-----