EL PASO ELECTRIC COMPANY
CHANGE OF CONTROL AGREEMENT
FOR EXECUTIVE OFFICERS
AGREEMENT by and between El Paso Electric Company, a Texas
corporation (the "Company"), and [Name] (the "Executive"), dated as of the 7th
day of February, 2002.
W I T N E S S E T H
WHEREAS, the Executive currently serves as a key employee of
the Company and his or her services and knowledge are valuable to the Company in
connection with the management of the Company; and
WHEREAS, the Board of Directors of the Company (the "Board")
has determined that it is in the best interests of the Company and its
stockholders to secure the Executive's continued services and to ensure the
Executive's continued dedication and objectivity in the event of any threat or
occurrence of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Attachment 1) of the Company,
without concern as to whether the Executive might be hindered or distracted by
personal uncertainties and risks created by any such possible Change in Control,
and to encourage the Executive's full attention and dedication to the Company,
the Board has authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and the
Executive hereby agree as follows:
1. Employment Period. (a) The Company hereby agrees to employ the
Executive and the Executive hereby agrees to accept employment with and remain
in the employment of the Company, subject to the terms and conditions of this
Agreement, for the period commencing upon the occurrence of a Change in Control
and ending on the second anniversary thereof, or such later date as may be
mutually agreed upon by the Company and the Executive. Notwithstanding the
foregoing, the Executive's employment hereunder may be earlier terminated,
subject to Section 4 of this Agreement. The period of time between the
commencement and the termination of the Executive's employment hereunder shall
be referred to herein as the "Employment Period."
(b) Prior to the occurrence of a Change in Control, the Executive's
employment by the Company shall be deemed at will (or shall be governed by any
current contract of
1
employment), and this Agreement shall not confer upon the Executive any right to
continued employment by the Company in his or her current position or otherwise
nor affect in any manner the right of the Company to change the Executive's
duties and responsibilities in any manner, or to reduce Executive's compensation
or terminate the employment of the Executive at any time prior to the occurrence
of a Change in Control and in connection therewith to cancel this Agreement. In
particular, the Executive shall not have any rights under this Agreement for any
such change, reduction or termination of employment or of this Agreement "in
anticipation of " any "change of control" that shall occur prior to the
occurrence of a Change in Control.
2. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive shall serve as [Business] of the Company or
his or her then current position at the time of a Change of Control (or the
equivalent position in the division, subsidiary or other portion of any
post-merger or post-acquisition successor that is operationally responsible for
the electric business conducted by the Company prior to the merger or
acquisition), with such authority, duties and responsibilities as are
commensurate with such position and as may be consistent with such position as
may be assigned to him or her by the Board and (B) the Executive's services
shall be performed at the Company's offices in El Paso, Texas. Notwithstanding
the foregoing, the Company and the Executive may mutually agree to such changes
in the Executive's position, reporting or location of employment as are in the
best interest of the Company without violating the provisions of this paragraph.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive agrees
to devote substantially all of his or her attention and time during normal
business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder,
to use the Executive's best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements, or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
(b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary ("Annual Base Salary"), payable
biweekly, at least equal to the annual base salary paid or payable, including
any base salary which has been earned but deferred, to the Executive by the
Company in respect of the twelve-month period immediately preceding the
occurrence of a Change in Control. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the occurrence of a Change in Control and
thereafter at least annually. Any increase in Annual Base Salary shall not