Exhibit 10.04

EMPLOYMENT SEPARATION AGREEMENT AND RELEASE

This Employment Separation Agreement and Release ("Agreement") is a contract
entered into between EI Paso Electric Company, a Texas corporation (the
"Company"), and Richard G. Fleager ("Employee"), and is effective as of the
Effective Date (as defined in Section 16 below) unless revoked by Employee
within seven (7) days following its execution by Employee.

WHEREAS, the Company and Employee have reached an accord regarding the financial
and other aspects of Employee's separation from employment, which was effective
on April 2, 2012 (the “Separation Date”); and

WHEREAS, the Company and Employee desire to enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
agreements hereinafter set forth, the Company and Employee agree as follows:

1. Separation. Employee's employment, and any other position which Employee held
with the Company, its subsidiaries, and affiliates, ceased on the Separation
Date. Except as provided in this Agreement, Employee agrees not to seek
reemployment with the Company, its subsidiaries, and affiliates, and no payments
made to Employee under the terms of this Agreement shall be construed as a
continuation of Employee's employment with the Company. This provision does not
prohibit Employee from working for the Company at the Company's request.

2. Severance Benefits. Subject to (i) Employee's execution and delivery of this
Agreement to the Company within 21 days following the date this Agreement was
first given to Employee and not revoking or otherwise withdrawing his acceptance
of this Agreement for a period of seven (7) days following Executive's delivery
of this executed Agreement to the Company, and (ii) Employee continuing to
comply with this Agreement, the Company agrees to provide the following
severance benefits to Employee (less deductions for applicable federal, state,
and local taxes):

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an aggregate cash payment of $520,000, which will be paid in a lump sum payment
no more than 10 business days following the Effective Date; and

3. Other Benefits.

(a) Employee will receive (or has previously received), a lump sum cash payment
for any accrued and unpaid salary and any accrued hours of unused PTO through
the Separation Date, subject to deductions for applicable federal, state, and/or
local taxes.

(b) Employee may elect to continue, at his sole cost and expense, health care,
medical and dental benefit coverage under and in accordance with the provisions
of the

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Company's Employee Welfare Benefit Plan, the Consolidated Omnibus Budget
Reconciliation Act of 1996 ("COBRA"), and Section 4980B of the Internal Revenue
Code (the "Code").

(c) Nothing in this Agreement shall affect Employee's rights (as such exist
immediately prior to the Separation Date) in the Company's retirement plans
which are subject to the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"). To the extent Employee is a participant in the Company's
Retirement Income Plan for Employees (“RIP”) and Excess Benefit Plan (“EBP”),
nothing in this Agreement shall affect Employee's rights (as such exist on the
Separation Date) under the RIP and EBP. Employee is also entitled to all
amounts, if any, accrued by and vested in Employee as of the Separation Date,
under and in accordance with the El Paso Electric Company Savings Plan ("401(k)
Plan").

(d) Except as otherwise provided in this Agreement, Employee's participation in
any and all other benefit and compensation plans and arrangements of the Company
(including, without limitation, accident and disability insurance programs and
life insurance) ceased on the Separation Date.

(e) All unvested equity-based awards (including any restricted stock awards and
performance awards) previously granted to Employee ceased vesting on the
Separation Date and terminated on the Separation Date.

4. Releases and Covenant Not to Sue.

(a) Employee agrees to and does fully and completely release, discharge and
waive any and all claims, complaints, causes of action, demands of whatever kind
or nature which Employee has or may have against the Company, its subsidiaries,
affiliates, predecessors, and successors and all of their respective directors,
officers, and employees by reason of any event, matter, cause, or thing that has
occurred prior to the date of execution of this Agreement (hereinafter "Employee
Claims"). Employee agrees that this Agreement specifically covers, but is not
limited to, any and all Employee Claims which Employee has or may have against
the Company relating in any way to compensation, or to any other terms,
conditions, or circumstances of Employee's employment with the Company, and to
the cessation of such employment, based on statutory or common law claims for
employment discrimination, including claims under the Civil Rights Act of 1964,
42 U.S.C §2000(e) et seq., the Americans with Disabilities Act, the Age
Discrimination in Employment Act, the Texas Labor Code, and any other equivalent
federal or state laws or statutes, and any and all discrimination or retaliation
claims under state or federal law, wrongful discharge, breach of contract,
defamation, intentional infliction of emotional distress, breach of fiduciary
duty, or any other theory whether legal or equitable; provided, however, that
this release shall not affect Employee's rights under or with respect to any
retirement plan which is subject to ERISA and is qualified under Section 401 (a)
of the Code. Employee further agrees and covenants that should he or any other
person, organization, or other entity file, charge, claim, sue or cause or
permit to be filed any charge with the EEOC, the Texas Workforce Commission

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or any other agency, any civil action, suit or legal or administrative
proceeding against the Company or the released parties involving any matter
occurring at any time in the past, Employee will not seek or accept any personal
relief (including, but not limited to, monetary award, recovery, relief or
settlement) in such charge, civil action, suit or proceeding. Notwithstanding
the foregoing, Employee does not waive any right he may have to enforce this
Agreement, any right which may not be waived as a matter of law, or any right to
indemnification in accordance with the Company's articles of incorporation or
bylaws.

(b) This Agreement constitutes a general release and is not an admission of
liability. The Company and any other persons released have denied liability, and
the Company has agreed to pay the consideration set forth herein merely to avoid
disputes or litigation and in an effort to ease the economic impact of
Employee's separation from employment. To the extent any claims against the
Company have not been released by this Agreement, Employee assigns those claims
to the Company. Notwithstanding the foregoing, Employee does not waive any right
he may have to enforce this Agreement.
(c)    Employee covenants not to sue any of the released parties for any claims
released in this Agreement.

5. Confidentiality, No Disparagement.

(a) Employee agrees not to cause or participate in the publication of any
information concerning the facts underlying the cessation of Employee's
employment with the Company or the terms and conditions of this Agreement to any
person or entity, except as required by law or legal process. This provision
shall not prevent Employee from disclosing such information to Employee's
immediate family or to Employee's legal counsel and accountants in order to
obtain professional advice; provided that each is advised as to and agree to
observe the confidentiality of such information.

(b) Employee agrees that he shall not make negative statements or
representations, or otherwise communicate negatively, directly or indirectly, in
writing, orally, or otherwise, or take any action which may, directly or
indirectly, disparage or be damaging to the Company its subsidiaries,
affiliates, successors or, assigns or their respective officers, directors,
employees, businesses or reputations. Employee's truthful testimony pursuant to
a subpoena or other legally compulsive process will not be a violation of this
Section 5. However, Employee agrees that if required to testify by law or legal
process, he will give written notice to the Company's General Counsel at the
Company's corporate offices, as soon as practicable, of the subpoena or process
or other document compelling his testimony so that Company may take whatever
lawful actions it believes are appropriate to respond.

(c) The Company agrees that it shall not authorize any officer, agent, employee,
or other representative of the Company to make negative statements or
representations, or otherwise communicate negatively, directly or indirectly, in
writing, orally or otherwise, concerning Employee or Employee's performance of
his duties while employed by the Company, or in connection therewith take any
action which may, directly or indirectly, in

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any way disparage or be damaging to Employee. The Company does not waive its
obligation, or that of its employees and agents, to testify truthfully as
required by law or legal process or to comply with its disclosure and filing
requirements under securities laws and other applicable laws.

6. Taxes. Except for the amounts withheld by the Company, Employee agrees to be
solely and fully responsible for satisfying any federal, state, or local income
tax liability that may be assessed against Employee as a result of any
consideration tendered by the Company pursuant to this Agreement. Employee
acknowledges the Company has provided no legal or other advice to him concerning
the tax consequences, if any, of the payments or benefits under this Agreement.

7. Proprietary Information. Employee acknowledges that the Company's and its
affiliates' trade secrets, data and information, including but not limited to
attorney-client privileged information and other information concerning
legislation, regulation, tax, litigation and other legal matters, labor,
securities, customers, employees, facilities, products and their development,
technical information, marketing, investment, and sales activities and
procedures, promotion and pricing techniques, credit and financial data, and
other information concerning the Company or its affiliates and any information
of third parties made available to the Company, its subsidiaries, or affiliates
(the "Proprietary Information") are valuable, special, and unique assets of the
Company and its affiliates, access to and knowledge of which have been gained by
virtue of Employee's position and involvement with the Company and its
affiliates. Employee agrees that all Proprietary Information obtained by
Employee as a result of any such position or involvement shall be considered
confidential. In addition, Employee shall maintain the confidential and
attorney-client privileged nature of all communications involving legal services
rendered by Employee to Company, sought from Employee or the legal department by
Company, or sought by Employee on behalf of the Company. In recognition of such
fact, Employee agrees that Employee will not disclose any such Proprietary
Information to any person or other entity for any reason or purpose whatsoever,
and that Employee will not make use of any Proprietary Information for his own
purposes, for the benefit of any person or other entity or to the detriment of
the Company. Employee further acknowledges and agrees that only the Company can
waive the privilege regarding any of the Company's attorney-client and/or work
product privileged information and that Employee's unauthorized disclosure of
the Company's privileged information is a breach of this Section.

8. Remedies/Liquidated Damages.

(a)Employee agrees that, in addition to any other remedy at law or in equity
that Company may have upon a material breach of this Agreement, including the
breach of Sections 5 or 7, that if he breaches this Agreement, (i) he will forgo
his right to any amounts due under Section 2 of this Agreement not previously
paid and (ii) he will repay to the Company any amounts previously paid under
Section 2 of this Agreement. Employee further acknowledges and agrees that the
harm caused by any breach of Section 5 or 7 of this Agreement is incapable or
difficult of estimation, that the value of the payments received and to be
received from Company is a reasonable forecast of just compensation as a result
of any such breach, and that, in the event of such breach,

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otherwise obtaining an adequate remedy will be inconvenient or non-feasible for
the Company. In the event of such breach by Employee, including without
limitation his legal counsel, if any, Employee shall also be liable to Company
for all reasonable costs and attorneys' fees incurred by Company in enforcing
the provisions of Section 5 and 7, including but not limited to the bringing of
any suit to recover the liquidated damages.

(b)In addition, Employee acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of Section 5 and
7 would be inadequate and, in recognition of this fact, Employee agrees that, in
the event of a breach or threatened breach, in addition to any remedies at law,
the Company, without posting any bond, will be entitled to obtain equitable
relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction and any other equitable remedy which may then
be available.

9. Entire Agreement, Amendment. This Agreement shall supercede any and all
existing agreements between Employee and the Company or any of its affiliates
relating to the termination of Employee's employment, and contains the entire
understanding of the parties with respect to the termination of Employee's
employment. It may not be altered, modified, or amended except by a written
agreement signed by both parties hereto.

10. No Waiver. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such
party's rights or deprive such party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement

11. Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal, or unenforceable in any respect,
the validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected thereby.

12. Benefits of Agreement. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, representatives,
successors, and assigns.

13. Attorneys' Fees. If legal or equitable action is filed to enforce the terms
of this Agreement, the prevailing party shall be entitled to court costs,
collection costs, and reasonable attorneys' fees in addition to any other relief
to which the party may be entitled.

14. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without reference to its
conflicts of law or choice of laws rules.

15. Counterparts. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.

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16.    Authority/Ownership of Claims. Each of the undersigned represents and
warrants that he has full authority to bind the party represented. Further,
Employee warrants and represents that he is the sole owner of the claims
released in this Agreement and has not assigned or otherwise transferred to any
other person or entity any interest in any claim, demand, action and/or cause of
action he has, may have or may claim to have against the Company or the released
parties.

17.    Cooperation. Employee agrees to fully cooperate with the Company in
connection with any investigations, claims, lawsuits or proceedings by any
governmental regulatory or legislative body with respect to matters pertaining
to the Company that arose during or relate to the period of time during which
Employee was employed by the Company or any claims, lawsuits or proceedings that
relate in any manner to Employee's conduct or duties at Company, including any
legal matters of which Employee gained knowledge while employed by Company. The
Company will reimburse Employee for all reasonable business expenses of the kind
customarily reimbursed by the Company and which are incurred by Employee in
connection with such cooperation.

18.    Assignment. This Agreement may be assigned or transferred to any
successor of the Company, and any such successor of the Company shall be deemed
substituted for all purposes as the “Company” under the terms of this Agreement.
As used in this Agreement, the term “successor” means any person, firm,
corporation or business entity, which at any time, whether by merger, purchase
or otherwise, acquires all or substantially all of the assets of the Company.

19.    No Reliance. Employee agrees that he is not relying on any promise or
representation not specifically and expressly made in this Agreement.

20.    Company Documents, Information or Property. Employee agrees that Employee
has returned to Company all documents relating to Company or its business
operations (and all copies thereof, whether in paper or electronic form) and all
Company property, including but not limited to, computer equipment, badges and
any other Company property in Employee's possession or control. Notwithstanding
the foregoing, Employee shall be permitted to retain his Company-provided phone
and iPad, subject to Employee cooperating with the Company to ensure that no
Company information remains on such devices. Employee represents and agrees
Employee will not take, nor has Employee taken, any Company documents or
property from the control or premises of Company and that if, at any time after
the Separation Date, Employee comes into possession of any Company documents or
property, Employee will return the documents or property to Company immediately.

21.    Acknowledgement. Employee acknowledges that he has carefully read this
Agreement and fully understands and accepts all of its provisions, including
without limitation the release in Section 4 hereof which specifically refers to
Employee's rights and claims under the federal Age Discrimination in Employment
Act, as well as to the laws of the State of Texas prohibiting age
discrimination, and Employee understands that such rights and claims are
irrevocably being waived by Employee. Employee further acknowledges that:

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(a)Employee has been provided twenty-one (21) days to review and consider this
Agreement and Employee understands and acknowledges that any changes made to
this Agreement, whether material or immaterial, will not re-start this
twenty-one (21) day period;

(b)Employee is aware that even if he signs this Agreement, Employee may revoke
the Agreement for a period of seven (7) days following the day he signs the
Agreement, and the Agreement shall not be effective or enforceable until the
revocation period has expired (the “Effective Date”). Employee understands he
must provide written revocation, if any, to Company, Attn: Mary Kipp, Senior
Vice President, General Counsel and Chief Compliance Officer, 100 N. Stanton, El
Paso, TX 79901;

(c)Employee has been advised by Company to seek the advice of legal counsel of
Employee's choice;

(d)Employee signs the Agreement voluntarily and of his own free will and

(e)The consideration recited in this Agreement is adequate to make it final and
binding, and is in addition to payments or benefits to which Employee would
otherwise be entitled as a former employee of the Company.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the date and year written below.

Date:     April 11, 2012                 /s/ Richard G. Fleager
Richard G. Fleager

Date:    April 2, 2012                    EL PASO ELECTRIC COMPANY

By: /s/ Thomas V. Shockley                         
Name: Thomas V. Shockley
Title: Interim Chief Executive Officer