EXHIBIT 10.49
EMPLOYMENT
AGREEMENT
EMPLOYMENT AGREEMENT (this “
Agreement ”), effective as of November 12, 2008,
by and between El Paso Electric Company, a Texas corporation
(“ Company ”), and David W. Stevens
(“ Executive ”).
WHEREAS, the Company desires to
employ Executive as its Chief Executive Officer and serve as a
member of its Board of Directors on the terms and conditions set
forth herein; and
WHEREAS, Executive is willing, on
the terms and subject to the conditions provided in this Agreement,
to undertake the responsibilities contemplated herein, to furnish
services to Company as provided herein, and to be subject to
certain employment restrictions and obligations;
NOW, THEREFORE, in consideration of
the premises and the covenants herein contained and other good,
valuable, and binding consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as
follows:
A RTICLE 1
E MPLOYMENT
Section 1.01 .
Responsibilities And Authority. Company hereby employs
Executive to serve as its Chief Executive Officer and serve as a
member of its Board of Directors starting on or about
November 17, 2008 (the date of Executive’s commencement
of employment, the “ Start Date ”). The duties
of Executive shall be those duties which can reasonably be expected
to be performed by a person with the title of Chief Executive
Officer. Executive shall report directly to the Board of Directors
of the Company (the “ Board ”) and shall perform
such other duties as may be assigned to him and as are not
inconsistent with his position. The Company will appoint Executive
to the Board and shall use reasonable efforts to do so on or
promptly following the Start Date.
Section 1.02 . Acceptance Of
Employment. Executive accepts employment by Company on the
terms and conditions herein provided and agrees, subject to the
terms of this Agreement, to devote substantially all of his
business time to advance the business of the Company. Nothing
contained in this Agreement shall be construed so as to prevent
Executive from investing his personal assets in such a manner and
otherwise engaging in business transactions that are not
inconsistent with the interests of the Company and that will not
require a substantial portion of Executive’s business time or
otherwise interfere with the performance of his duties hereunder.
Executive expressly represents and warrants to the Company that the
Executive is not a party to any contract or agreement and is not
otherwise obligated in any way, and is not subject to any rules or
regulations, whether governmentally imposed or otherwise, which
will or may restrict in any way the
Executive’s ability to fully perform the
Executive’s duties and responsibilities under this
Agreement.
Section 1.03 . Agreement
Term. The term of this Agreement shall be for an initial term
of five years from the Start Date (such five-year period, the
“ Initial Term ” and, as the term of this
Agreement may be extended or shortened as set forth herein, the
“ Term ”). The Term shall be extended
automatically for three one-year periods (each, a “
Renewal Term ”) following the Initial Term unless
either party has given 90 days prior written notice of termination
of the Term. Following such period, the parties may agree mutually
in writing to extend the Term.
Section 1.04. At-will
Employment . Notwithstanding anything else herein,
Executive’s employment with Company shall be at-will and may
be terminated during or after the Term by either party at any time
for any or no reason, including by the Company either with or
without cause, with no further payment obligations beyond such
termination date other than those specified in Section 2.03(a)
below.
A RTICLE 2
C OMPENSATION A ND
I NCENTIVES
Section 2.01 . Base
Compensation. During the Term, Company shall pay Executive a
base cash salary at the aggregate initial rate of $500,000 per
annum. Thereafter, the base salary amount will be reviewed annually
by the Board, which may, in its discretion, make appropriate annual
merit increases. The compensation paid to Executive pursuant to
this Section is hereinafter referred to as “ Base
Compensation .” The Base Compensation shall be paid to
Executive in accordance with the Company’s payroll policy as
in effect from time to time.
Section 2.02. Annual
Bonus . During the Term, Executive shall be eligible for an
annual performance bonus under the terms of the Company’s
bonus plans in place from to time. Executive’s target bonus
opportunity will be 60% of Base Compensation, with actual bonus
based on completion of performance goals determined by the Board or
a committee of the Board. For fiscal 2008, the amount of
Executive’s bonus will be based on actual results compared to
the Company’s 2008 performance bonus plan targets and will be
prorated for the period from the Start Date through
December 31, 2008.
Section 2.03 . Equity
Awards . The Company will issue the equity awards set forth
below pursuant to separate award agreements. Executive shall be
eligible to receive other equity awards as determined by the Board
or a committee of the Board in its sole discretion.
(a) Restricted Stock Award .
On or promptly following the Start Date, the Company will issue
Executive a restricted stock award (the “ Initial Stock
Award ”) representing the number of shares of Company
common stock determined by dividing $500,000 by the closing price
of the Company’s common stock on the Start Date as reported
on the New York Stock Exchange (rounded up to the nearest whole
share). The
2
Initial Stock Award shall vest in three equal
annual installments from the Start Date. If the Company terminates
Executive’s employment without Cause prior to the third
anniversary of the Start Date, and if Executive signs within 21
days following his termination date, and lets become effective, the
release of claims attached hereto as Exhibit A (the “
Release ”), any portion of the Initial Stock Award
remaining unvested on such termination date shall become fully
vested on the effective date of such Release. For purposes of this
Agreement, “ Cause ” shall mean the willful and
continued failure by the Executive to perform his duties, or the
engaging by the Executive in illegal conduct or misconduct in
connection with Executive’s employment that is materially
injurious to the Company, in each case following written notice and
a reasonable opportunity to cure the failure or cease any
non-criminal misconduct.
(b) LTIP . Executive’s
participation in the Company’s long-term incentive plan
(“ LTIP ”) will begin with the grants to be made
in calendar year 2009 to other executives. Such 2009 award will
have an intrinsic value (at target) on the grant date of
approximately $650,000. LTIP awards typically consist of restricted
stock with a three-year cliff vesting (25%) and performance
stock with a three-year performance cycle based on total
shareholder return compared to a peer group of companies (75%). In
future years, Executive will be eligible to receive LTIP awards as
determined by the Board or a committee of the Board.
Section 2.04 . Reimbursement
Of Moving Costs. Executive will be reimbursed the full cost of
moving to the El Paso area in accordance with the Company’s
policies for an executive officer, including reasonable house
hunting and relocation trips. If Company policy does not allow for
reimbursement of certain expenses which Executive believes to be
fair and reasonable, Executive can appeal to the Chairman of the
Board for reimbursement of such expenses. Executive will be
reimbursed for temporary lodging in the El Paso area, not to exceed
thre
