Document:

Form of Amended and Restated Change of Control Agreement

 EXHIBIT 10.1 
  
 EL PASO ELECTRIC COMPANY 
 AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT 
 FOR EXECUTIVE OFFICERS 
  
 AGREEMENT by and between El Paso Electric Company, a Texas corporation (the
“Company”), and                  (the “Executive”), dated as of the
                 day of             , 200    . 
  
 WITNESSETH 
  
 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 of a Change in Control 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 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/or to cancel this Agreement at any time prior to the occurrence of a Change in Control. 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                      of the Company or his or her then current position at the time of a Change in
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 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 
  

 2 

 “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
                 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. 
  
 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 
  

 3 

 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) a material reduction in
Executive’s 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; 
  
 (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 
  

 4 

 Company business to a substantially greater extent than required immediately prior to the occurrence of a Change in
Control; 
  
 (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 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: 
  

 5 

 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) the target bonus of the Executive for the year of termination under the Company’s Annual Short-Term Bonus Plan (the “Target 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) [two] [three]1 and (2) the sum of (x) the Executive’s Annual Base Salary and
(y) the Target 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 [two] [three] 1 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 participate in the
Continuing Benefit Plans, paying Executive’s premiums for COBRA coverage under applicable plans, by providing the Executive and/or the Executive’s dependents with equivalent benefits outside the Continuing Benefit Plans or by providing
Executive a cash payment sufficient for the Executive to purchase equivalent benefits, 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 
  

	1	3X for Hedrick, Bates, and Carrillo; 2X for others. 

  

 6 

 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 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 
  

 7 

 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) hereof
(the “Agreement Payments”) would be subject to the tax imposed by Section 4999 of the Code (the “Excise Tax”), the Company shall pay to Executive at the time specified in Section 7(b) below an amount (the “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 the Excise Tax not applied, as determined by the Company’s independent auditors or another nationally recognized public accounting firm selected by the Company
(in either case, the “Independent Auditors”). 
  
 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 in 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 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 
  

 8 

 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 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 45th day following payment of any amounts under Section 4(a)(i). 
  
 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, 
  

 9 

 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 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. 
  

 10 

 (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: 
  
 If to the Executive: 
  
 [                    ] 
 [                    ] 
 [                    ] 
  
 If to the Company: 
  
 El Paso Electric Company 
 100 North Stanton 
 El Paso, Texas 79901

 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 
  

 11 

 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 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. 
  

 12 

 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”

	
	

	 [                        ]

	
	 EL PASO ELECTRIC COMPANY

	
	

	 Gary R. Hedrick

	 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 10, 2005, 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 10, 2005 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 all of the Company’s assets either directly or indirectly) in substantially the same 
  

 A-1 

 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 in 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-2O.R. Barham Employment Agreement

 Exhibit 10.4 
  
 EMPLOYMENT AGREEMENT 
  
 THIS EMPLOYMENT AGREEMENT, dated as of this 7th day of March 2005, by and between Virginia Financial Group, Inc., a Virginia corporation (the
“Company”), and O.R. Barham, Jr. (the “Executive”). 
  
 WHEREAS, the Company considers the availability of the Executive’s services to be important to the management and conduct of the Company’s business and desires to secure the continued availability of the Executive’s services;
and 
  
 WHEREAS, the Executive is willing to make his services
available to the Company on the terms and subject to the conditions set forth herein. 
  
 In consideration of the mutual covenants and agreements set forth herein, the parties agree as follows: 
  
 Part I: General Employment Terms 
  
 1. Employment and Duties. The Company will employ the Executive as President and Chief Executive Officer of the Company on the terms and subject to
the conditions of this Agreement. The Executive accepts such employment and agrees to perform the managerial duties and responsibilities of President and Chief Executive Officer. The Executive agrees to devote his time and attention on a full-time
basis to the discharge of such duties and responsibilities of an executive nature as may be assigned him by the Board of Directors of the Company. The Executive may accept any elective or appointed positions or offices with any duly recognized
associations or organizations whose activities or purposes are closely related to the banking business or service to which would generate good will for the Company and its subsidiaries. 
  
 2. Term. The term of this Agreement (the “Term”) is effective as of January 1, 2005 and will continue
through December 31, 2007, unless terminated or extended as hereinafter provided. This Agreement shall be extended for successive one-year periods following the original term unless either party notifies the other in writing at least ninety (90)
days prior to the end of the original term, or the end of any additional one-year renewal term, that the Agreement shall not be extended beyond its current term. 
  
 3. Compensation. 
  
 (a) Base Salary. The Company shall pay the Executive an annual base salary not less than $319,000 in 2005, $330,000 in 2006, and $342,000 in 2007.
The base salary shall be paid to the Executive in accordance with established payroll practices of the Company. In connection with the annual performance review of the Executive, the Company will review the succeeding year’s base salary amount
on or before November 30th of each year to consider whether any adjustments should be made to the base salary

 for such year; however, the base salary shall not be less than the minimum amounts referred to above for the first three
years of this Agreement, nor shall the base salary be less than $342,000 during any renewal term. 
  
 (b) Annual Bonus. During the term of this Agreement, the Executive will be eligible to participate in an annual incentive plan that will establish
measurable criteria and incentive compensation levels payable to the Executive for corporate performance in relation to defined threshold benchmarks. The Compensation Committee or the Board of Directors of the Company, as the case may be, and the
Executive will mutually establish the targeted corporate performance levels for the Company on an annual basis consistent with the Company’s business plan and objectives. Achievement of the targeted corporate performance levels will result in
an annual cash bonus payment equal to at least 35% of the Executive’s then current annual base salary. To the extent the Company exceeds the targeted performance levels, the incentive plan will provide a means by which the annual bonus will be
increased. Similarly, the incentive plan will provide a means by which the annual bonus will be decreased if the targeted performance levels are not achieved, provided certain minimum threshold benchmarks have been satisfied. Any bonus payments due
hereunder shall be paid to the Executive no later than 75 days after the end of the year. 
  
 (c) Stock Compensation. Subject to the annual approval of the Compensation Committee or the Board of Directors, as the case may be, the Executive will receive during the term of this Agreement an annual stock
award under the Company’s 2001 Incentive Stock Plan with a value equal to at least 30% of his then current base salary. The stock award, which will consist of stock options, restricted stock grants or stock appreciation rights, or any
combination thereof, will include such vesting and other terms and conditions as determined in the sole discretion of the Compensation Committee or the Board of Directors in accordance with the 2001 Incentive Stock Plan. The valuation of the stock
award will be determined using the Black-Scholes or similar methodology as determined by the Company. 
  
 (d) Supplemental Retirement Plan. As soon as reasonably practicable, the Company will establish a supplemental retirement plan for the Executive to
provide for certain supplemental nonqualified cash benefits at retirement using a defined contribution approach funded by an annual contribution from the Company in an amount equal to at least 10% of the Executive’s then current annual base
salary. 
  
 (e) Deferred Compensation Contribution. During
the term of this Agreement, the Company will make an annual contribution for the Executive’s benefit to the Executive Deferred Compensation Plan, or any successor plan, in an amount equal to at least 5% of the Executive’s then current
annual base salary. At his sole option, the Executive may direct the Company to make this annual contribution to the supplemental retirement plan to be established for his benefit in accordance with the preceding section. 
  
 4. Benefits. 
  
 (a) During the term of this Agreement, the Executive shall be eligible to
participate in any plans, programs or forms of compensation or benefits that the Company 
  

 2 

 or its subsidiaries provide to the class of employees that includes the Executive, on a basis not less favorable than
that provided to such class of employees, including, without limitation, group medical, disability and life insurance, vacation and sick leave, and a retirement plan; provided however, a reasonable transition period following any change in control,
merger, statutory share exchange, consolidation, acquisition or transaction involving the Company or any of its subsidiaries shall be permitted in order to make appropriate adjustments in compliance with this Section 4(a). The Company will allow the
Executive to continue to make salary deferral contributions to the Executive Deferred Compensation Plan. 
  
 (b) The Executive shall be entitled to five weeks vacation annually without loss of pay. 
  
 (c) The Company will pay the Executive’s country club initiation fee and dues on such basis as may be determined by the
Board of Directors of the Company from time to time. 
  
 (d)
During the term of this Agreement, the Company shall provide the Executive with an appropriate automobile or automobile allowance as determined by the Board of Directors of the Company. 
  
 5. Reimbursement of Expenses. The Company shall reimburse the Executive promptly, upon presentation of
adequate substantiation, including receipts, for the reasonable travel, entertainment, lodging and other business expenses incurred by the Executive, including, without limitation, those expenses incurred by the Executive and his spouse in attending
trade and professional association conventions, meetings and other related functions. However, the Company reserves the right to review these expenses periodically and determine, in its sole discretion, whether future reimbursement of such expenses
to the Executive will continue without prior Board approval of the expenses. 
  
 6. Termination of Employment. 
  
 (a) Death or Incapacity. The Executive’s employment under this Agreement shall terminate automatically upon the Executive’s death. In the event of termination due to the death of the Executive, his survivors, designees or
estate shall continue to receive, in addition to all other benefits accruing upon death, full compensation hereunder for a period of three (3) months following the month in which his death occurred. If the Company determines that the Incapacity, as
hereinafter defined, of the Executive has occurred, it may terminate the Executive’s employment and this Agreement upon thirty (30) days’ written notice provided that, within thirty (30) days after receipt of such notice, the Executive
shall not have returned to full-time performance of his assigned duties. “Incapacity” shall mean the failure of the Executive to perform his assigned duties with the Company on a full-time basis as a result of mental or physical illness or
injury as determined by a physician selected by the Company for the greater of ninety (90) consecutive calendar days or the longest waiting period under any long term disability insurance contract or program provided to him as an employee.

  

 3 

 (b) Termination by Company With or Without Cause. The Company may terminate the Executives
employment during the term of this Agreement, with or without Cause. For purposes of this Agreement, “Cause” shall mean: 
  
 (i) continual or deliberate neglect by the Executive in the performance of his material duties and responsibilities as established from
time to time by the Board of Directors of the Company, or the Executive’s willful failure to follow reasonable instructions or policies of the Company after being advised in writing of such failure and being given a reasonable opportunity and
period (as determined by the Company) to remedy such failure; 
  
 (ii) conviction of, indictment for (or its procedural equivalent), or entering of a guilty plea or plea of no contest with respect to a felony, a crime of moral turpitude or any other crime with respect to which
imprisonment is a possible punishment, or the commission of an act of embezzlement or fraud against the Company or any subsidiary or affiliate thereof; 
  
 (iii) any breach by the Executive of a material term of this Agreement, or violation in any material respect of any code or standard of
behavior generally applicable to officers of the Company, after being advised in writing of such breach or violation and being given a reasonable opportunity and period (as determined by the Company) to remedy such breach or violation; 

 
 (iv) dishonesty of the Executive with respect to the
Company or any subsidiary or affiliate thereof, or breach of a fiduciary duty owed to the Company or any subsidiary or affiliate thereof; or 
  
 (v) the willful engaging by the Executive in conduct that is reasonably likely to result, in the good faith judgment of the Company, in
material injury to the Company, monetarily or otherwise. 
  
 (c)
Termination by Executive for Good Reason. The Executive may terminate his employment for Good Reason. For purposes of this Agreement, “Good Reason” shall mean: 
  
 (i) the continued assignment to the Executive of duties inconsistent with the Executive’s position,
authority, duties or responsibilities as contemplated by Section 1 hereof or, in the event of a Change in Control (as hereinafter defined), Section 10(a); 
  
 (ii) any action taken by the Company which results in a substantial reduction in the status of the Executive, including a diminution in
his position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and/or inadvertent action not taken in had faith and which is remedied by the Company promptly after receipt of notice thereof given by the
Executive; 
  

 4 

 (iii) the relocation of the Executive to any other primary place of employment which
might require him to move his residence which, for this purpose, includes any reassignment to a place of employment located more than 50 miles from the Executive’s initially assigned place of employment, without the Executive’s express
written consent to such relocation; provided, however, this subsection (iii) shall not apply in connection with the relocation of the Executive if the Company decides to relocate its headquarters; or 
  
 (iv) any failure by the Company, or any successor entity
following a Change in Control, to comply with the provisions of Sections 3 and 4 or Section 10(b) hereof or to honor any other term or provision of this Agreement, other than an isolated, insubstantial or inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive. 
  
 (d) Incapacity. If payments under a long term disability policy or plan shall cease due to discontinuance of the plan for failure for any reason of
the provider of such policy to continue to make payments, the Company will provide the benefits to the Executive in accordance with the terms of such policy or plan as if it were still in full force and effect. Notwithstanding the above, in no event
shall the Company’s obligation under this subparagraph be for more than two years. 
  
 7. Obligations of the Company Upon Termination. 
  
 (a) Without Cause; Good Reason. Except as set forth in Sections 7(b) and 7(c) below, if, during the term of this Agreement, the Company shall terminate the Executive’s employment without Cause or the
Executive shall terminate employment for Good Reason, the Company will pay to the Executive in a lump sum within thirty (30) days after the termination of employment the sum of the Executive’s annual base salary through the date of termination
to the extent not theretofore paid and the balance of the Executive’s annual base salary for a period of eighteen (18) months from the date of termination of employment. The Company shall also maintain in full force and effect for the
Executive’s continued benefit, until eighteen (18) months from the date of termination of employment, all health and insurance plans as required by federal law, and provided that the Executive’s continued participation is possible under
the general terms and provisions of such plans and programs. If the Company reasonably determines that maintaining such health and insurance plans in full force and effect for the benefit of the Executive until eighteen months from the date of
termination of employment is not feasible, the Company shall pay the Executive a lump sum equal to the estimated cost of maintaining such plans for the Executive for eighteen months. In addition, stock option and similar agreements with the
Executive evidencing the grant of a stock option or other award under the Company’s Stock Incentive Plan, or any successor plan, will provide that the vesting of such stock awards will accelerate and become immediately exercisable and fully
vested as of the date of termination of employment without Cause or for Good Reason. In the case of stock options, the Executive will have at least ninety (90) days after termination of employment, or such longer period as may be provided for in the
separate stock option agreement, to exercise the option. 
  

 5 

 (b) Non-Competition. Notwithstanding the foregoing, all such payments and benefits under Section
7(a) otherwise continuing for periods after the Executive’s termination of employment shall cease to be paid, and the Company shall have no further obligation due with respect thereto, in the event the Executive engages in
“Competition” or makes any “Unauthorized Disclosure of Confidential Information.” In addition, in exchange for the payments on termination as provided herein, other provisions of this Agreement and other valuable consideration
hereby acknowledged, the Executive agrees that he will not engage in competition for a period of eighteen (18) months after the Executive’s employment with the Company ceases for any reason, including the expiration or nonrenewal of this
Agreement. For purposes hereof: 
  
 (i)
“Competition” means the Executive’s engaging without the written consent of the board of directors of the Company or a person authorized thereby, in an activity as an officer, a director, an employee, a partner, a more than one
percent shareholder or other owner, an agent, a consultant, or in any other individual or representative capacity within 50 miles of the Company’s headquarters or any branch office of the Company or any of its subsidiaries (unless the
Executive’s duties, responsibilities and activities, including supervisory activities, for or on behalf of such activity, are not related in any way to such competitive activity) if it involves: 
  
 (A) engaging in or entering into the business of any
banking, lending or any other business activity in which the Company or any of its affiliates is actively engaged at the time the Executive’s employment ceases, or 
  
 (B) soliciting or contacting, either directly or indirectly, any of the customers or clients of the Company
or any of its affiliates for the purpose of competing with the products or services provided by the Company or any of its affiliates, or 
  
 (C) employing or soliciting for employment any employees of the Company or any of its affiliates for the purpose of competing with the
Company or any of its affiliates. 
  
 (ii)
“Unauthorized Disclosure of Confidential Information” means the use or disclosure of information in violation of Section 8 of this Agreement. 
  
 (iii) For purposes of this Agreement, “customers” or “clients” of the Company or any of its affiliates means
individuals or entities to whom the Company or any of its affiliates has provided banking, lending, or other similar financial services at any time from the Effective Date through the date the Executive’s employment with the Company ceases.

  

 6 

 (c) Death or Incapacity. If the Executive’s employment is terminated by reason of death or
incapacity in accordance with Section 6(a) hereof, this Agreement shall terminate without further obligation to the Executive or his legal representatives under this Agreement except as otherwise specified in Section 6(a). 
  
 (d) Cause; Other Than for Good Reason. If the Executive’s
employment shall be terminated for Cause or for other than Good Reason, this Agreement shall terminate without any further obligation of the Company to the Executive other than to pay to the Executive his annual base salary through the date of
termination. The Executive will still be required to comply with the non-competition and confidentiality covenants set forth in Section 7(b). 
  
 (e) Remedies. The Executive acknowledges that the restrictions set forth in paragraph 7(b) of this Agreement are just, reasonable, and necessary to
protect the legitimate business interests of the Company. The Executive further acknowledges that if he breaches or threatens to breach any provision of paragraph 7(b), the Company’s remedies at law will be inadequate, and the Company will be
irreparably harmed. Accordingly, the Company shall he entitled to an injunction, both preliminary and permanent, restraining the Executive from such breach or threatened breach, such injunctive relief not to preclude the Company from pursuing all
available legal and equitable remedies. In addition to all other available remedies, if the Executive violates the provisions of paragraph 7(b), the Executive shall pay all costs and fees, including attorneys’ fees, incurred by the Company in
enforcing the provisions of that paragraph. If, on the other hand, it is finally determined by a court of competent jurisdiction that a breach or threatened breach did not occur under paragraph 7(b) of this Agreement, the Company shall reimburse the
Executive for reasonable legal fees incurred to defend that claim. 
  
 8. Confidentiality. The Executive recognizes that as an employee of the Company he will have access to and may participate in the origination of non-public, proprietary and confidential information and that he owes a fiduciary duty
to the Company. Confidential information may include, but is not limited to, trade secrets, customer lists and information, internal corporate planning, methods of marketing and operation, and other data or information of or concerning the Company
or its customers that is not generally known to the public or in the banking industry. The Executive agrees that he will never use or disclose to any third party any such confidential information, either directly or indirectly, except as may be
authorized in writing specifically by the Company. 
  
 Part II:
Change in Control 
  
 9. Employment After a Change in
Control. If a Change in Control of the Company occurs during the term of this Agreement, and the Executive is employed by the Company on the date the Change in Control occurs (the “Change in Control Date”), the Company will continue to
employ the Executive in accordance with the terms and conditions 
  

 7 

 of this Agreement for the period beginning on the Change in Control Date and ending on the third anniversary of such date
(the “Change in Control Employment Period”). If a Change in Control occurs on account of a series of transactions, the Change in Control Date is the date of the last of such transactions. Notwithstanding any other term or provision of this
Agreement, in the event of a Change in Control of the Company, Sections 9 through 15 in this Part II shall become effective and govern the terms and conditions of the Executive’s employment. 
  
 10. Terms of Employment. 
  
 (a) Position and Duties. During the Change in Control Employment
Period, (i) the Executive’s position, authority, duties and responsibilities will be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 90-day period immediately
preceding the Change in Control Date, and (ii) the Executive’s services will be performed at the location where the Executive was employed immediately preceding the Change in Control Date or any office that is the headquarters of the Company
and is less than 35 miles from such location; it being understood and agreed that this subsection (ii) shall supercede the provisions of Section 6(c)(iv) dealing with the relocation of the Executive following a Change in Control. 
  
 (b) Compensation and Benefits. 
  
 (i) Base Salary. During the Change in Control
Employment Period, the Executive will receive an annual base salary (the “Annual Base Salary”) at least equal to the base salary paid or payable to the Executive by the Company and its affiliated companies for the twelve-month period
immediately preceding the Change of Control Date. During the Change in Control Employment Period, the Annual Base Salary will be reviewed at least annually and will be increased at any time and from time to time as will be substantially consistent
with increases in base salary generally awarded in the ordinary course of business to other peer executives of the Company and its affiliated companies. Any increase in the Annual Base Salary will not serve to limit or reduce any other obligation to
the Executive under this Agreement. The Annual Base Salary will not be reduced after any such increase, and the term Annual Base Salary as used in this Agreement will refer to the Annual Base Salary as so increased. The term “affiliated
companies” includes any company controlled by, controlling or under common control with the Company. 
  
 (ii) Annual Bonus. During the Change in Control Employment Period, the Executive will be entitled to participate in an annual
incentive plan generally applicable to other peer executives of the Company and its affiliated companies, but in no event will such incentive plan provide the Executive with a less favorable opportunity to earn an annual bonus that is similarly
structured to the annual incentive plan as in effect at any time during the six months immediately preceding the Change in Control Date. 
  

 8 

 (iii) Incentive, Savings and Retirement Plans. During the Change in Control
Employment Period, the Executive will be entitled to participate in all incentive (including stock incentive), savings and retirement, insurance plans, policies and programs applicable generally to other peer executives of the Company and its
affiliated companies, but in no event will such plans, policies and programs provide the Executive with incentive opportunities (including an annual stock award with a value equal to at least 20% of his then current base salary as provided in
Section 3(c)), savings opportunities and retirement benefit opportunities, in each case, less favorable, in the aggregate, than those provided by the Company and its affiliated companies for the Executive under such plans, policies and programs as
in effect at any time during the six months immediately preceding the Change in Control Date. 
  
 (iv) Welfare Benefit Plans. During the Change in Control Employment Period, the Executive and/or the Executive’s family, as
the case may be, will be eligible for participation in and will receive all benefits under welfare benefit plans, policies and programs provided by the Company and its affiliated companies to the extent applicable generally to other peer executives
of the Company and its affiliated companies, but in no event will such plans, policies and programs provide the Executive with benefits that are less favorable, in the aggregate, than the most favorable of such plans, policies and programs in effect
at any time during the six months immediately preceding the Change in Control Date. 
  
 (v) Fringe Benefits. During the Change in Control Employment Period, the Executive will be entitled to fringe benefits in
accordance with the comparable plans, policies and programs of the Company and its affiliated companies in effect for the Executive at any time during the six months immediately preceding the Change in Control Date or, if more favorable to the
Executive, as in effect generally from time to time after the Change in Control Date with respect to other peer executives of the Company and its affiliated companies. 
  
 (vi) Vacation. During the Change in Control Employment Period, the Executive will be entitled to paid
vacation in accordance with the comparable plans, policies and programs of the Company and its affiliated companies in effect for the Executive at any time during the six months immediately preceding the Change in Control Date or, if more favorable
to the Executive, as in effect generally from time to time after the Change in Control Date with respect to other peer executives of the Company and its affiliated companies. 
  
 11. Termination of Employment Following Change in Control. 
  
 (a) Death or Incapacity. The Executive’s employment will
terminate automatically upon the Executive’s death or Incapacity during the Change in Control Employment Period. 
  
 (b) Cause. The Company may terminate the Executive’s employment during the Change in Control Employment Period for Cause (as defined in
Section 6(b)). 
  

 9 

 (c) Good Reason. The Executive’s employment may be terminated during the Change in Control
Employment Period by the Executive for Good Reason (as defined in Section 6(c). Any good faith determination of Good Reason made by the Executive during the Change in Control Employment Period shall be conclusive. 
  
 (d) Other Termination. The Board of Directors may request in writing
that the Executive relinquish his position and terminate his employment in order to facilitate or ensure that an acquisition occur that does not meet the definition in section 15 of a “Change in Control.” In this event, the
Executive’s employment will be deemed terminated without Cause, and he will be entitled to the benefits under Section 12. 
  
 (e) Notice of Termination. Any termination during the Change in Control Employment Period by the Company or by the Executive for Good Reason shall
be communicated by written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied
upon. 
  
 (f) 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 Good Reason, the date of receipt of the Notice of Termination or any later date specified therein, as the case may be,
(ii) if the Executive’s employment is terminated by the Company other than for Cause or Incapacity, the date specified in the Notice of Termination (which shall not be less than 30 nor more than 60 days from the date such Notice of Termination
is given), and (iii) if the Executive’s employment is terminated for Incapacity, 30 days after Notice of Termination is given, provided that the Executive shall not have returned to the full-time performance of his duties during such 30-day
period. 
  
 12. Compensation Upon Termination. 

 
 (a) Termination Without Cause or for Good Reason. The Executive
will be entitled to the following benefits if, during the Change in Control Employment Period, the Company terminates his employment without Cause or the Executive terminates his employment with the Company or any affiliated company for Good Reason.

  
 (i) Accrued Obligations. The Accrued
Obligations are the sum of: (1) the Executive’s Annual Base Salary through the Date of Termination at the rate in effect just prior to the time a Notice of Termination is given; (2) the amount, if any, of any incentive or bonus compensation
theretofore earned which has not yet been paid; (3) the product of the Annual Bonus paid or payable, including by reason of deferral, for the most recently completed year and 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 (4) any benefits or awards (including both the cash and stock components) which pursuant to the terms of any plans, policies or programs have been earned or become
payable, but which have not yet been paid to the Executive (but not including amounts that previously had been deferred at the 
  

 10 

 Executive’s request, which amounts will be paid in accordance with the Executive’s existing
directions). The Accrued Obligations will be paid to the Executive in a lump sum cash payment within ten days after the Date of Termination; 
  
 (ii) Salary Continuance Benefit. The Salary Continuance Benefit is an amount equal to 2.99 times the Executive’s Final
Compensation. For purposes of this Agreement, “Final Compensation” means the Annual Base Salary in effect at the Date of Termination, plus the highest Annual Bonus paid or payable for the two most recently completed years and any amount
contributed by the Executive during the most recently completed year pursuant to a salary reduction agreement or any other program that provides for pre-tax salary reductions or compensation deferrals. The Salary Continuance Benefit will be paid to
the Executive in a lump sum cash payment not later than the 45th day following the Date of Termination; 

 
 (iii) Welfare Continuance Benefit. For 36 months
following the Date of Termination, the Executive and his dependents will continue to be covered under all health and dental plans, disability plans, life insurance plans and all other welfare benefit plans (as defined in Section 3(1) of ERISA)
(“Welfare Plans”) in which the Executive or his dependents were participating immediately prior to the Date of Termination (the “Welfare Continuance Benefit”). The Company will pay all or a portion of the cost of the Welfare
Continuance Benefit for the Executive and his dependents under the Welfare Plans on the same basis as applicable, from time to time, to active employees covered under the Welfare Plans and the Executive will pay any additional costs. If
participation in any one or more of the Welfare Plans included in the Welfare Continuance Benefit is not possible under the terms of the Welfare Plan or any provision of law would create an adverse tax effect for the Executive or the Company due to
such participation, the Company will provide substantially identical benefits directly or through an insurance arrangement. The Welfare Continuance Benefit as to any Welfare Plan will cease if and when the Executive has obtained coverage under one
or more welfare benefit plans of a subsequent employer that provides for equal or greater benefits to the Executive and his dependents with respect to the specific type of benefit. The Executive or his dependents will become eligible for COBRA
continuation coverage as of the date the Welfare Continuance Benefit ceases for all health and dental benefits. 
  
 (b) Death. If the Executive dies during the Change in Control Employment Period, this Agreement will terminate without any further obligation on
the part of the Company under this Agreement, other than for (i) payment of the Accrued Obligations and three months of the Executive’s Base Salary (which shall be paid to the Executive’s beneficiary designated in writing or his estate, as
applicable, in a lump sum cash payment within 30 days of the date of death); (ii) the timely payment or provision of the Welfare Continuance Benefit to the Executive’s spouse and other dependents for 36 months following the date of death; and
(iii) the timely payment of all death and retirement benefits pursuant to the terms of any plan, policy or arrangement of the Company and its affiliated companies. 
  

 11 

 (c) Incapacity. If the Executive’s employment is terminated because of the Executive’s
Incapacity during the Change in Control Employment Period, this Agreement will terminate without any further obligation on the part of the Company under this Agreement, other than for (i) payment of the Accrued Obligations and three months of the
Executive’s Base Salary (which shall be paid to the Executive in a lump sum cash payment within 30 days of the Date of Termination); (ii) the timely payment or provision of the Welfare Continuance Benefit for 36 months following the Date of
Termination; and (iii) the timely payment of all disability and retirement benefits pursuant to the terms of any plan, policy or arrangement of the Company and its affiliated companies. 
  
 (d) Cause; Other than for Good Reason. If the Executive’s employment is terminated for Cause during the Change
in Control Employment Period, this Agreement will terminate without further obligation to the Executive other than the payment to the Executive of the Annual Base Salary through the Date of Termination, plus the amount of any compensation previously
deferred by the Executive. If the Executive terminates employment during the Change in Control Employment Period, excluding a termination either for Good Reason, this Agreement will terminate without further obligation to the Executive other than
for the Accrued Obligations (which will be paid in a lump sum in cash within 30 days of the Date of Termination) and any other benefits to which the Executive may be entitled pursuant to the terms of any plan, program or arrangement of the Company
and its affiliated companies. 
  
 (e) Possible Reduction in
Payment and Benefits. Following any Change in Control, to the extent that any amount of pay or benefits provided under to the Executive under this Agreement would cause the Executive to be subject to excise tax under sections 280G and 4999 of
the Internal Revenue Code of 1986, as amended (the “Code”), and after taking into consideration all other amounts payable to the Executive under other Company plans, programs, policies, and arrangements, then the amount of pay and benefits
provided under this Agreement shall be reduced to the extent necessary to avoid imposition of any such excise taxes. The Executive may select the payments and benefits to be limited or reduced, including an election not to have the vesting of
certain benefits, including stock options, accelerate as a result of a Change in Control. 
  
 (f) Acceleration of Vesting of Stock Awards. Except as may be otherwise agreed to by the Executive, all stock option and similar agreements with the Executive evidencing the grant of a stock option or other
award under the Company’s Stock Incentive Plan, or any successor plan, will provide that (i) the vesting of such stock awards will accelerate and become immediately exercisable and fully vested as of the Change in Control Date, and (ii) in the
case of stock options, the Executive will have at least ninety (90) days after termination of employment, or such longer period as may be provided for in the separate stock option agreement, to exercise the stock option. 
  
 13. Fees and Expenses; Mitigation; Noncompetition. 
  
 (a) The Company will pay or reimburse the Executive for all costs and
expenses, including without limitation court costs and reasonable attorneys’ fees, incurred by 
  

 12 

 the Executive (i) in contesting or disputing any termination of the Executive’s employment or (ii) in seeking to
obtain or enforce any right or benefit provided by this Agreement, in each case provided the Executive’s claim is substantially upheld by a court of competent jurisdiction. 
  
 (b) The Executive shall not be required to mitigate the amount of any payment the Company becomes obligated to make to the
Executive in connection with this Agreement, by seeking other employment or otherwise. Except as specifically provided above with respect to the Welfare Continuance Benefit, the amount of any payment provided for in Section 12 shall not be reduced,
offset or subject to recovery by the Company by reason of any compensation earned by the Executive as the result of employment by another employer after the Date of Termination, or otherwise. 
  
 (c) The Executive will not be required to comply with the noncompetition
covenant in Section 7(b) if his employment is terminated during the Change in Control Employment Period without Cause or he terminates for Good Reason. 
  
 14. Continuance of Welfare Benefits Upon Death. If the Executive dies while receiving a Welfare Continuation Benefit, the Executive’s spouse
and other dependents will continue to be covered under all applicable Welfare Plans during the remainder of the 36-month coverage period. The Executive’s spouse and other dependents will become eligible for COBRA continuation coverage for
health and dental benefits at the end of such 36-month period. 
  
 15. Change of Control Defined. For purposes of this Agreement, a “Change of Control” shall mean: 
  
 (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act’) of beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act), of securities of the Company representing 20% or more of the combined voting power of the then outstanding securities; provided, however,
that the following acquisitions shall not constitute a Change of Control: 
  
 (i) acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege); 
  
 (ii) any acquisition by the Company; 
  
 (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled
by the Company; or 
  
 (iv) any acquisition
pursuant to a reorganization, merger or consolidation by any corporation owned or proposed to be owned, directly or indirectly, by shareholders of the Company if the shareholders’ ownership of 
  

 13 

 securities of the corporation resulting from such transaction constitutes a majority of the ownership of
securities of the resulting entity and at least a majority of the members of the board of directors of the corporation resulting from such transaction were members of the incumbent board as defined in this Agreement at the time of the execution of
the initial agreement providing for such reorganization, merger or consolidation; or 
  
 (b) where individuals who, as of the inception of this Agreement, constitute the board of directors of the Company (the “Incumbent Board”) cease for any reason to constitute at least a majority of such board
of directors; provided, however, that any individual becoming a director subsequent to the effective date of this Agreement whose election, or nomination for election by the shareholders was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than a member of the board
of directors; or 
  
 (c) the shareholders of the Company approve,
or the Company otherwise consummates, 
  
 (i) a
merger, statutory share exchange, or consolidation of the Company with any other corporation, except as provided in subparagraph (a)(iv) of this section, or 
  
 (ii) the sale or other disposition of all or substantially all of the assets of the Company. 
  
 Part III: Miscellaneous 
  
 16. Documents. All documents, record, tapes and other media of any
kind or description relating to the business of the Company or any of its affiliates (the “Documents”), whether or not prepared by the Executive, shall be the sole and exclusive property of the Company. The Documents (and any copies) shall
be returned to the Company upon the Executive’s termination of employment for any reason or at such earlier time or times as the Board of Directors or its designee may specify. 
  
 17. Severability. If any provision of this Agreement, or part thereof, is determined to be unenforceable for any
reason whatsoever, it shall be severable from the remainder of this Agreement and shall not invalidate or affect the other provisions of this Agreement, which shall remain in full force and effect arid shall be enforceable according to their terms.
No covenant shall be dependent upon any other covenant or provision herein, each of which stands independently. 
  

 14 

 18. Modification. The parties expressly agree that should a court find any provision of this
Agreement, or part thereof, to be unenforceable or unreasonable, the court may modify the provision, or part thereof, in a manner which renders that provision reasonable, enforceable, and in conformity with the public policy of Virginia. 

 
 19. Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Virginia. 
  
 20. Notices. All written notices required by this Agreement shall be deemed given when delivered personally or sent by registered or certified mail, return receipt requested, to the parties at their addresses set forth on the
signature page of this Agreement. Each party may, from time to time, designate a different address to which notices should be sent. 
  
 21. Amendment. This Agreement may not be varied, altered, modified or in any way amended except by an instrument in writing executed by the parties
hereto or their legal representatives. 
  
 22. Binding
Effect. This Agreement shall be binding upon the Executive and on the Company, its successors and assigns effective on the date first above written subject to the approval by the board of directors of the Company. The Company will require any
successor 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. 
  
 23. No Construction Against Any
Party. This Agreement is the product of informed negotiations between the Executive and the Company. If any part of this Agreement is deemed to be unclear or ambiguous, it shall be construed as if it were drafted jointly by all parties. The
Executive and the Company agree that neither party was in a superior bargaining position regarding the substantive terms of this Agreement. 
  
 24. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to the matters addressed herein and it supersedes
all other prior agreements and understandings, both written and oral, express or implied, with respect to the subject matter of this Agreement. 
  

 15 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written herein.

  

			
	VIRGINIA FINANCIAL GROUP, INC.
		
	By:	 	  

	 	 	Taylor E. Gore
	 	 	Chairman of the Board
		
	 	 	  

	 	 	O.R. Barham, Jr.

  

 16

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00080-of-00352.parquet"}]]