Exhibit








EL PASO ELECTRIC COMPANY
LONG-TERM INCENTIVE AWARD AGREEMENT
(FOR NON-EMPLOYEE DIRECTORS)




El Paso Electric Company, a Texas corporation (the "Company"), has granted to the _____________ (“Holder”), under the El Paso Electric Company Amended and Restated 2007 Long-Term Incentive Plan (the “Plan”), a restricted stock award (the "Award") of a number of shares of the Company's Common Stock, no par value ("Stock"), upon and subject to the restrictions, terms and conditions set forth below.  Capitalized terms not defined herein shall have the meanings specified in the Plan.  


1. Award Details; Acceptance of Agreement.  


The Award shall be null and void unless the Holder shall (a) accept this Agreement by executing it in the space provided below and returning it to the Company and (b) execute and return one or more irrevocable stock powers, if required by the Company.  As soon as practicable after the Holder has executed this Agreement and any such stock power or powers and returned the same to the Company; the Company shall cause to be issued in the Holder's name a stock certificate or certificates representing the total number of shares of Stock subject to the Award. In lieu of issuing a certificate, at the discretion of the Company, shares may be allocated to the Holder's account in book‐entry form in a manner that effectively prevents transfers during the Restriction Period (as defined below).


2. Rights as a Stockholder.  The Holder shall have the right to vote the shares of Stock subject to the Award and to receive dividends and other distributions thereon; provided, however, that a dividend or other distribution with respect to shares of Stock (including, without limitation, a stock dividend or stock split), other than a regular cash dividend, shall be subject to the same restrictions as the shares of Stock with respect to which such dividend or other distribution was made.


3. Custody and Delivery of Certificates Representing Shares.  Unless the Company has allocated shares to the Holder's account pursuant to Section 1 hereof, the Company shall hold the certificate or certificates representing the shares of Stock subject to the Award until the restrictions on such Award shall have lapsed, in whole or in part, pursuant to Section 4 hereof.  The Company shall as soon thereafter as practicable, subject to Section 5.3, deliver the certificate or certificates for such shares to the Holder and destroy any stock power or powers relating to such shares, if applicable.  If such stock power or powers also relates to shares as to which restrictions remain in effect, the Company may require, as a condition precedent to delivery of any certificate pursuant to this Section 3, the execution and delivery to the Company of one or more stock powers relating to such shares.  If the shares were allocated to the Holder's account in book‐entry form pursuant to Section 1 hereof, at the termination of the Restriction Period, the Company shall cause any restriction of transfer to be removed and shall cause to be issued in the Holder's name, a certificate representing the shares of stock for which restrictions have lapsed pursuant to Section 4 hereof and subject to Section 5.3 and deliver such certificate to the Holder.


4. “Restriction Period” and Vesting.  The restrictions on the applicable portion of the Award shall lapse on _____________ the “Vest Date” specified in the Award Details if Holder continues service on the Board until such Vest Date.













5.    Additional Terms and Conditions of Award.


5.1. Non-transferability of Award.  During the Restriction Period, the shares of Stock subject to the Award as to which restrictions remain in effect may not be transferred by the Holder other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company.  Except to the extent permitted by the foregoing, during the Restriction Period, the shares of Stock subject to the Award as to which restrictions remain in effect may not be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate or encumber, or otherwise dispose of such shares, the Award shall immediately become null and void.


5.2. Investment Representation.  The Holder hereby represents and covenants that (a) any share of Stock acquired upon the lapse of restrictions will be acquired for investment and not with a view to the distribution thereof within the meaning of the Securities Act of 1933, as amended (the "Securities Act"), unless such acquisition has been registered under the Securities Act and any applicable state securities law; (b) any subsequent sale of any such shares shall be made either pursuant to an effective registration statement under the Securities Act and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws; and (c) if requested by the Company, the Holder shall submit a written statement, in form satisfactory to the Company, to the effect that such representation (x) is true and correct as of the date of acquisition of any shares hereunder or (y) is true and correct as of the date of any sale of any such shares, as applicable.  As a further condition precedent to the delivery to the Holder of any shares subject to the Award, the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Board or any committee authorized by the Board shall in its sole discretion deem necessary or advisable.


5.3. Withholding Taxes.  Not applicable. 


5.4. Adjustment.  In the event of any stock split, stock dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin‐off or other similar change in capitalization or event, or any distribution to holders of Stock other than a regular cash dividend, the number and class of securities subject to the Award shall be appropriately adjusted by the Committee.  If any adjustment would result in a fractional security being subject to the Award, the Company shall pay the Holder in connection with the vesting, if any, of such fractional security, an amount in cash determined by multiplying (i) such fraction (rounded to the nearest hundredth) by (ii) the Fair Market Value on the vesting date.


The decision of the Committee regarding any such adjustment shall be final, binding and conclusive.


5.5. Compliance with Applicable Law.  The Award is subject to the condition that if the listing, registration or qualification of the shares subject to the Award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the vesting or delivery of shares hereunder, the shares of Stock subject to the Award may not be delivered, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company agrees 











to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent or approval.


5.6. Decisions of Board or Committee.  The Board or the Committee shall have the right to resolve all questions, which may arise in connection with the Award. Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.


5.7. Agreement Subject to the Plan.  This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith.  The Holder hereby acknowledges receipt of a copy of the Plan.


6.    Miscellaneous Provisions.


6.1. Successors.  This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Holder, acquire any rights hereunder in accordance with this Agreement or the Plan.


6.2. Notices.  All notices, requests or other communications provided for in this Agreement shall be made, if to the Company, to El Paso Electric Company, Stanton Tower, 100 N. Stanton, El Paso, Texas 79901, Attention:  Corporate Secretary, and if to the Holder, to Holder’s Name at the last address provided to the Company.  All notices, requests or other communications provided for in this Agreement shall be made in writing either (a) by personal delivery to the party entitled thereto, (b) by facsimile with confirmation of receipt, (c) by mailing in the United States mails to the last known address of the party entitled thereto or (d) by express courier service.  The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt of facsimile transmission, or upon receipt by the party entitled thereto if by United States mail or express courier service; provided, however, that if a notice, request or other communication is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.


6.3. Governing Law.  This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not otherwise governed by the laws of the United States, shall be governed by the laws of the State of Texas and construed in accordance therewith without giving effect to conflicts of laws principles.


6.4. Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original and both of which shall constitute one and the same instrument together, shall constitute one and the same instrument.















	
	
	EL PASO ELECTRIC COMPANY

	 

	By:

	Name:

	Title: Chief Executive Officer












Accepted this ______ day of ____________, 20__.