EXHIBIT 10.05
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
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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
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serve to limit or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such increase and
the term Annual Base Salary shall refer to Annual Base Salary as so increased.
As used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, for each fiscal
year ending during the Employment Period the Executive shall be eligible, based
upon the Executive's achievement of performance goals, and the Company's
achievement of financial and other operating goals, in each case set by the
Compensation Committee of the Board, in consultation with the Executive, at
levels substantially consistent with past practice, during such fiscal year, to
receive a bonus (the "Annual Bonus") at a target level of not less than 17% of
the Annual Base Salary (the "Target Bonus Amount") with the opportunity,
substantially consistent with past practice, to earn in excess of such amount
based upon the attainment of agreed upon performance goals. Each such Annual
Bonus shall be paid no later than the last business day of the third month of
the fiscal year next following the fiscal year for which the Annual Bonus is
awarded (the "Last Payment Date").
(iii) Long-Term Incentive Compensation. During the Employment Period,
the Executive shall be entitled to participate in all long-term incentive plans,
practices, policies and programs applicable generally to other peer executives
of the Company.
(iv) Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all savings and retirement plans,
practices, policies and programs on a basis no less favorable than that
generally applicable to peer executives of the Company.
(v) Welfare Benefit Plans. During the Employment Period, the
Executive and/or the Executive's dependents, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company on a
basis no less favorable than that generally applicable to peer executives of the
Company.
(vi) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the Company's policies.
(vii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of the Company on a basis no less favorable than that generally
applicable to peer executives of the Company but, in any event, shall be
entitled to no less than four weeks of vacation per year during the Employment
Period.
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3. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. If the Disability of the Executive occurs during the
Employment Period pursuant to the definition of Disability set forth below, the
Company may give the Executive written notice, in accordance with Section 10(b)
of this Agreement, of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company shall terminate
effective on the 60th day after receipt of such notice by the Executive (the
"Disability Effective Date"); provided that, within the 60 days after such
receipt, the Executive shall not have returned to substantially full time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from the performance of the
Executive's duties with the Company on a full time basis for an aggregate of 120
out of any 180 consecutive business days as a result of incapacity due to mental
or physical illness which is determined to be total and permanent by an
independent physician selected by the Company or its insurers and reasonably
acceptable to the Executive or the Executive's legal representative.
(b) Cause. The Company may terminate the Executive's employment during
the Employment Period for Cause. For purposes of this Agreement, "Cause" shall
mean the willful and continued failure by the Executive to perform his or her
duties, or the engaging by the Executive in illegal conduct or misconduct which
is materially injurious to the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there shall have
been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is given an
opportunity, together with counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, the Executive is guilty of the conduct
described above, and specifying the particulars thereof in detail.
(c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:
(i) the assignment to the Executive of any duties inconsistent with the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities set forth in Section 2(a)
of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for these purposes (A) assignment to a comparable position and duties 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, (B) an isolated and
insubstantial action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive, and (C) any
action to which the Executive has given his or her written consent;
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(ii) any failure by the Company to comply with any of the provisions of
Section 2(b) of this Agreement, other than an isolated and insubstantial failure
not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive without the Executive's written
consent to be based at any office or location located more than 100 miles from
the office or location provided in Section 2(a)(i)(B) hereof or the Company's
requiring the Executive to travel on Company business to a substantially greater
extent than required immediately prior to the Effective Date;
(iv) any failure by the Company to comply with and satisfy Section 9(c) of
this Agreement; or
(v) the Company's purported termination of Agreement other than in
accordance with its terms.
(d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 10(b) of this
Agreement. In the case of a Good Reason termination, such Notice of Termination
shall be given within 90 days of the occurrence of the event that provides the
basis for the termination as a condition of such claim being treated as a Good
Reason termination hereunder. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated and (iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date (which date
shall be not more than 30 days after the giving of such notice). The failure by
the Executive or the Company to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for any reason (including Good Reason), the date of receipt of the
Notice of Termination or any later date specified therein that is within 30 days
of such Notice, as the case may be, (ii) if the Executive's employment is
terminated by the Company other than for Cause or Disability, the Date of
Termination shall be the date on which the Company notifies the Executive of
such termination and (iii) if the Executive's employment is terminated by reason
of death or
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Disability, the Date of Termination shall be the date of death of the Executive
or the Disability Effective Date, as the case may be.
4. Obligations of the Company upon Termination. (a) Good Reason; Other
than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:
A. the sum of (1) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid; (2) the product of (x) higher of
the bonus paid to the Executive for the most recent full year prior to the Date
of Termination or the average of the past 3 years' bonuses (the "Highest Annual
Bonus") and (y) a fraction, the numerator of which is the number of days in the
current year through the Date of Termination, and the denominator of which is
365; and (3) any accrued vacation pay to the extent not theretofore paid (the
sum of the amounts described in clauses (1), (2), and (3) shall be hereinafter
referred to as the "Accrued Obligations");
B. the amount equal to the product of (1) 2.99 and (2) the sum of (x) the
Executive's Annual Base Salary and (y) the Highest Annual Bonus; and
C. the actuarial equivalent of the amounts by which the Executive's total
vested benefits under The El Paso Electric Company Retirement Plan (or any
successor plan put into effect prior to a Change in Control), computed as if
Executive had three additional years of benefit accrual service, exceed the
Executive's actual pension benefits. For this computation, the Executive's final
average salary shall be deemed to be the Executive's annual base compensation in
effect immediately prior to the time a Notice of Termination is given and the
benefit and accrual formulas and actuarial assumptions shall be no less
favorable than those in effect at such time; "base compensation" shall include
any amounts deducted by the Company for Executive's account under any agreement
with the Company or Section 125 and 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code").
(ii) for two years after the Executive's Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue the medical, long-term
disability, dental, accidental death and dismemberment and life insurance
benefits to the Executive and/or the Executive's dependents at least equal to
those which would have been provided to them in accordance with the plans,
programs, practices and policies in effect under Section 2(b)(v) of this
Agreement (the "Continuing Benefit Plans") as if the Executive's employment had
not been terminated (either by permitting the Executive and/or the Executive's
dependents to
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participate in the Continuing Benefit Plans, or by providing the Executive
and/or the Executive's dependents with equivalent benefits outside the
Continuing Benefit Plans, as the Company may elect, so long as the net after-tax
benefit to them is the same as if the Executive had remained an employee of the
Company participating in the Continuing Benefit Plans); provided, however, that
if the Executive becomes reemployed with another employer and is eligible to
receive medical, long-term disability, dental, accidental death and
dismemberment or life insurance benefits under another employer-provided plan,
the medical, long-term disability, dental, accidental death and dismemberment
and life insurance benefits described herein shall be secondary to those
provided under such other plan during such applicable period of eligibility. For
purposes of determining eligibility (but not the time of commencement of
benefits) of the Executive for retiree benefits pursuant to the Continuing
Benefit Plans and any other welfare benefit plans, practices, policies and
programs provided by the Company and its affiliated companies, the Executive
shall be considered to have remained employed until two years after the Date of
Termination and to have retired on the last day of such period;
(iii) for one year after the Executive's Date of Termination, the Company
shall provide outplacement services for the Executive; and
(iv) to the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company, as of
the Date of Termination (such other amounts are benefits shall be thereinafter
referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligation to the Executive's Legal Representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. The term Other Benefits as utilized in this
Section 4(b) shall include death benefits as in effect on the date of the
Executive's death.
(c) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability during the Employment Period, this Agreement shall
terminate without further obligation to the Executive, other than for payment of
Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination.
(d) Cause; Other than for Good Reason. If the Executive's employment
shall be terminated for Cause or the Executive terminates his or her employment
without Good Reason during the Employment Period, this Agreement shall terminate
without further
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obligation to the Executive other than the obligation to pay to the Executive
(x) his or her Annual Base Salary through the Date of Termination and (y) Other
Benefits, in each case to the extent theretofore unpaid.
5. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 10(f), shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Company or any of its affiliated
Companies. Any rights that are vested and any benefits that the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or
any contract or agreement with the Company or any of its affiliated companies at
or subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
6. Full Settlement. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and,
except as provided in section 4(a)(ii) of this Agreement, such amounts shall not
be reduced whether or not the Executive obtains other employment. The Company
agrees to pay as incurred, to the full extent permitted by law, all legal fees
and expenses which the Executive may reasonably incur as a result of any contest
regardless of the outcome thereof by the Company, the Executive or others of the
validity or enforceability of, liability under, any provision of this Agreement
of any guarantee of performance thereof including as a result of any contest by
the Executive about the amount of any payment pursuant to this Agreement;
provided, however, that the foregoing shall not apply in connection with any
such contest in which the finder of fact determines that the contest is
frivolous or was brought by the Executive in bad faith.
7. Gross-Up Provision. (a) If the payments provided by Section 4(a)(i)-(iv)
hereof (the "Agreement Payments") become subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Code as in effect on the date of this Agreement
(or any similar tax), Executive will be responsible for the Excise Tax and the
Company will not pay Executive an additional amount (the "Gross-up Payment").
If, however, the "Agreement Payments" become subject to the Excise Tax (or any
similar tax) by virtue of changes in the Code which occur after the date of this
Agreement, the Company shall pay to Executive at the time specified in Section
7(b) below a "Gross-up Payment" such that the net amount retained by Executive,
after deduction of any Excise Tax on the Total Payments (as hereinafter
defined), and any federal, state and local income tax and Excise Tax upon the
Gross-up Payment provided for by this subsection (a) shall be equal to what the
Total Payments would have been had such changes in the Code not occurred.
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For purposes of determining whether any of the Agreement Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) any other
payments or benefits received or to be received by Executive in connection with
a Change in Control or Executive's termination of employment (under this
Agreement or any other agreement with the Company or any person whose actions
result in a Change of Control or any person affiliated with the Company) (which,
together with the Agreement Payments, shall constitute the "Total Payments")
shall be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors such other payments or benefits (in whole or in part) are not subject
to the Excise Tax, (ii) the amount of the Total Payments which shall be treated
as subject to the Excise Tax shall be equal to the lesser of (A) the Total
Payments or (B) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause (i), above), and (iii) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the Gross-up Payment, Executive shall be
deemed to pay federal, state, and local income taxes at the highest applicable
marginal rate for the calendar year in which the Gross-up Payment is to be made
net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes. If the Excise Tax is finally
determined to be less than the amount taken into account at the time the
Gross-up Payment is made, Executive shall repay the portion attributable to such
reduction (plus the portion of the Gross-up Payment attributable to a reduction
in Excise Tax and/or a federal and state and local income tax deduction), plus
interest on the amount of such repayment at the rate provided in Section
1274(b)(2)(B)of the Code. If the Excise Tax is later determined to exceed the
amount taken into account at the time the Gross-up Payment is made, the Company
shall make an additional gross-up payment (plus any interest payable with
respect to such excess at the rate provided in Section 1274(b)(2)(B) of the
Code) when such excess is finally determined.
(b) The Gross-up Payment or portion thereof provided for in subsection
(a) above shall be paid not later than the thirtieth day following payment of
any amounts under Section 4(a)(i); provided, however, that if the amount of such
Gross-up Payment or portion thereof cannot be finally determined on or before
such day, the Company shall pay to Executive on such day an estimate, as
determined in good faith by the Company, of the minimum amount of such payments
and shall pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined, but in no event later than the forty-fifth day after payment of
any amounts under Section 4(a)(i). If the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth day
after demand
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by the Company (together with interest at the rate provided for in Section
1274(b)(2)(B) of the Code).
(c) In the event it shall be determined by the Company's independent
auditors that the Agreement Payments would subject the Executive to the Excise
Tax, it shall also be determined whether a reduction in the Agreement Payments
would result in an after-tax amount with a greater net present value than would
occur without such reduction. If so, the Agreement Payments shall be reduced by
the minimum amount necessary to obtain such result.
If such reduced payments incorrectly result in an overpayment or
underpayment to Executive, the underpayment shall be promptly paid to Executive
and, if an overpayment shall have occurred, it shall be treated for all purposes
as a loan to Executive by the Company which Executive shall repay on the fifth
day after demand by the Company, in each case together with interest at the
applicable rate provided for in Section 1274(b)(2)(B) of the Code.
8. (a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive's employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). The Executive shall not, at any time during his or her
employment with the Company or at any time thereafter, for any reason, in any
fashion, form or manner, either directly or indirectly, communicate, divulge,
copy or permit to be copied (without the prior written consent of the Company or
as may otherwise be required by law or legal process or in order to enforce his
or her rights under this Agreement or as necessary to defend himself or herself
against a claim asserted directly or indirectly by the Company or any of its
affiliated companies) any secret or confidential information, knowledge or data
relating to the Company or any of its affiliated companies, and their respective
businesses, in any manner whatsoever, that is not otherwise publicly available
to, or for the benefit of, any person, firm, corporation or other entity, other
than the Company and those designated by it or in the course of his or her
employment with the Company and its affiliated companies. As used herein, the
term "all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses"
shall include, without limitation, the Company's plans, strategies, proposals to
potential customers and/or partners, costs, prices, proprietary systems for
buying and selling, client and customer lists, identity of prospects,
proprietary computer programs, policy or procedure-manuals, proprietary training
and recruiting procedures, proprietary accounting procedures, and the status and
contents of the Company's contracts with its suppliers, clients, customers or
prospects. The Executive
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further agrees to maintain in confidence any confidential information of third
parties received as a result of his or her employment with the Company.
(b) Enforcement. In the event of a breach or threatened breach of this
Section 8, the Executive agrees that the Company shall be entitled, in addition
to any other remedies available to it to specific performance and injunctive
relief in a court of appropriate jurisdiction to remedy any such breach or
threatened breach, and the Executive acknowledges that damages would be
inadequate and insufficient. In no event shall an asserted violation of the
provisions of this Section 8 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
(c) Survival. Any termination of the Executive's employment or of this
Agreement shall have no effect on the continuing operation of this Section 8.
9. Successors. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid (whether or
not the Company ceases to exist) which assumes and agrees to perform this
Agreement by operation of law, or otherwise. In the event of any such
succession, "Board" shall mean the board of directors or similar managing body
of the successor to the Company.
10. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without reference
to principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement may
not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
[Name]
[Home]
If to the Company:
El Paso Electric Company
000 Xxxxx Xxxxxxx
Xx Xxxx, Xxxxx 00000
Attention: Board of Directors
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
(d) The Company may withhold from any amounts payable under this Agreement
such Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
(e) Subject to Section 3(d) of this Agreement, the Executive's or the
Company's failure to insist upon strict compliance with any provision of this
Agreement or the failure to assert any right the Executive or the Company may
have hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 3(c)(i)-(v) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
(f) This Agreement constitutes the entire agreement between the parties
and is intended to be an integration of all agreements between the parties with
respect to the Executive's employment by the Company on and after the occurrence
of a Change in Control, the terms and conditions of such employment or the
termination of such employment. Any and all prior agreements, understandings or
commitments between the Company and the Executive with respect to any such
matter are hereby superseded and revoked.
(g) The Company shall indemnify and hold the Executive and his or her
legal representatives harmless to the fullest extent permitted by applicable
law, from and against
12
all judgments, fines, penalties, excise taxes, amounts paid in settlement,
losses, expenses, costs, liabilities and legal fees if the Executive is made, or
threatened to be made a party to any threatened or pending or completed action,
suit, proceeding, whether civil, criminal, administrative or investigative,
including an action by or in the right of the Company or any of its affiliated
companies to procure a judgment in its favor, by reasons of the fact that the
Executive is or was serving in any capacity at the request of the Company or any
of its affiliated companies for any other corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise. The right to
indemnification provided, in this paragraph (g) shall not be deemed exclusive
under any law or the charter or by-laws of the Company or any of its affiliated
companies or otherwise, both as to action in the Executive's official capacity
and as to action in another capacity while holding such office, and shall
continue after the Executive has ceased to be a director or officer and shall
inure to the benefit of the Executive's heirs, executors and administrators. Any
reimbursement obligation arising hereunder shall be satisfied on an as-incurred
basis. In addition, the Company agrees to continue to maintain customary and
appropriate directors and liability insurance during the Employment Period and
the Executive shall be entitled to the protection of any such insurance policies
on no less favorable a basis than is provided to any other officer or director
of the Company or any of its affiliated companies.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
"EXECUTIVE"
_____________________________________
[Name]
EL PASO ELECTRIC COMPANY
_____________________________________
Xxxx X. Xxxxxxx
President and Chief Executive Officer
13
Attachment 1
"Change in Control" shall mean:
(1) the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d) (3) or 14(d) (2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") of
beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of 30% more of either (i) the then outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (ii) the
--------------------------------
combined voting power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
--------------------------
Securities"); excluding, however, the following: (A) any acquisition directly
----------
from the Company (excluding any acquisition resulting from the exercise of an
exercise, conversion or exchange privilege unless the security being so
exercised, converted or exchanged was acquired directly from the Company), (B)
any acquisition by the Company, (C) any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any corporation pursuant to
a transaction which complies with clauses (i), (ii) and (iii) of subsection (3)
of this definition;
(2) individuals who, as of March 6, 2002, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at least a
---------------
majority of such Board; provided that any individual who becomes a director of
the Company subsequent to March 29, 2001 whose election, or nomination for
election by the Company's stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board shall be deemed a
member of the Incumbent Board; and provided further, that any individual who was
initially elected as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than the
Board shall not be deemed a member of the Incumbent Board;
(3) approval by the stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Corporate Transaction"); excluding, however, a
---------------------
Corporate Transaction pursuant to which (i) all or substantially all of the
individual or entities who are the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will beneficially own, directly
or indirectly, more than 60% of, respectively, the outstanding shares of common
stock, and the combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction (including,
without limitation, a corporation which as a result of such transaction owns the
Company or all or substantially
A-1
all of the Company's assets either directly or indirectly) in substantially the
same proportions relative to each other as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (ii) no Person (other
than: the Company; any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; the
corporation resulting from such Corporate Transaction; and any Person which
beneficially owned, immediately prior to such Corporate Transaction, directly or
indirectly, 30% or more of the Outstanding Company Common Stock or the
Outstanding Company Voting Securities, as the case may be) will beneficially
own, directly or indirectly, 30% or more of, respectively, the outstanding
shares of common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding securities of such
corporation entitled to vote generally in the election of directors and (iii)
individuals who were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, in no event shall a "Change of Control" be
deemed to have occurred as a result of the formation of a Holding Company. For
the purposes hereof, "Holding Company" shall mean an entity that becomes a
holding company for the Company or its businesses as a part of any
reorganization, merger, consolidation or other transaction, provided that the
outstanding shares of common stock of such entity and the combined voting power
of such entity entitled to vote generally in the election of directors is,
immediately after such reorganization, merger, consolidation or other
transaction, beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Voting Securities immediately prior to
such reorganization, merger, consolidation or other transaction in substantially
the same proportions as their ownership, immediately prior to such
reorganization, merger, consolidation or other transaction, of such Outstanding
Company Voting Securities.
A-2
