AGREEMENT
This Agreement is made by and between Texas-New Mexico Power
Company ("TNP"), TNP Enterprises, Inc. ("TNPE"), and the
subsidiaries of TNP and TNPE not specifically named as parties
hereto, but collectively made parties hereto and referred to as
the "Subsidiaries", and James M. Tarpley (hereinafter referred to
as the "Executive"), an employee, executive officer and member of
the Board of Directors of TNP, TNPE and the Subsidiaries
immediately prior to the Effective Time of Resignation (as
hereinafter defined).
PREAMBLE
WHEREAS, it is the stated intent of the Boards of Directors
of TNP and TNPE that in consideration of the resignation by the
Executive of all officer and director positions with TNP, TNPE
and the Subsidiaries and in consideration of certain services and
agreements as set forth below, from and after the Effective Time
of Resignation the Executive shall continue as an employee until
age 62 at the same level of compensation and with all the other
rights of remuneration and benefits,, of every nature, as he
enjoyed immediately prior to the Effective Time of Resignation
and, upon attainment of age 62, the Executive shall retire from
the service of TNP, TNPE and the Subsidiaries and shall be
entitled to the benefits and other payments due an employee on
retirement at such age.
NOW, THEREFORE, upon the terms and subject to the conditions
set forth herein the parties hereto agree as follow:
1. For and in consideration of the compensation and rights
of the Executive set forth in paragraph 2 below, the Executive
has resigned, and does hereby confirm resignation of, all
positions as an officer and director of TNP, TNPE and the
Subsidiaries, in all manner effective as of noon, central
standard time, on November 9, 1993 (the "Effective Time of
Resignation").
2. (A) From the Effective Date (as hereinafter defined)
until the earlier of the death of the Executive and his attaining
age 62, he shall remain an employee of TNP and shall receive the
following payments and enjoy the following rights and benefits:
(1) Payment by TNP to the Executive of an annual
compensation of $184,000, payable bi-weekly and with
deductions and withholdings therefrom for FICA-OASDI,
Federal M-03, FICA-Hl, Group Medical, Basic Thrift and
Additional Thrift.
(2) Payment by TNP to the Executive of the sum of $100,000
per year, payable bi-weekly, in consideration for the
covenants made by the Executive pursuant to paragraph 3
of this Agreement.
(3) (i) The uninterrupted continuation of the Executive as
a "Participant" in the Thrift Plan, the Pension Plan
and the Excess Benef it Plan of TNP,, including rights
of designation and selection of options under such
Plans as are available to participants in those Plans
(and specifically including any rights and options
resulting from the reinstatement of employer
contributions to the Thrift Plan after June 30, 1994),
subject to limitations imposed by the Department of
Labor guidelines or by law applicable to an employee
under such Plans, (ii) all rights of the Executive and
his vife under the Medical Plan and the Group Life
Insurance Plan of TNP, including rights to designate
beneficiaries and the full amount of life insurance
coverage to which he vould be entitled if he had
continued to be an officer and director of TNP, TNPE
and the Subsidiaries at the compensation level he
enjoyed immediately prior to the Effective Time of
Resignation and (iii) continued coverage under
officers' and directors I professional liability
insurance to be maintained by TNP and TNPE for any
claims or causes of action heretofore or hereafter
inade against, or affecting the liability of, the
Executive as an off icer or director of TNP, TNPE or
any of the Subsidiaries. It is understood that the
Executive I o benef its under the Excess Benefit Plan
shall take into account all cash amounts payable to
Executive under paragraph 2 (A) (1) and (2) above.
Additionally,, to the extent provided by the Board of
Directors of TNP as to any other Participant, the
Executive shall continue to receive the "Company
Matching Contribution" as current compensation as
selected by the Executive and his wife by Election Of
Compensation Portions Pursuant to Article III of the
Thrift Plan, dated June 15, 1989, until such time as
another available election as to such rights is made by
the Executive.
(B) Upon attaining the age of 62, the Executive shall
retire and have all the rights of a retired employee, who retired
from the offices from which he resigned as set forth in paragraph
1 above, including (without limitation) all rights of payment and
other rights under the Pension Plan, the Thrift Plan, the Medical
Plan, the Group Life Insurance Plan and the Excess Benefit Plan
of TNP. His rights under the Pension Plan, the Thrift Plan,
the Medical Plan, the Group Life Insurance Plan and the Excess
Benefit Plan of TNP upon retirement at age 62 shall take into
account any amendments to the Plans after the Effective Time of
Resignation. It is understood and agreed that in calculating
service for determining benefits under the Pension Plan of TNP
(and the Excess Benefit Plan of TNP, if applicable) service shall
commence with the Executive's hire date of July 1, 1958 and end
on his attainment of age 62 or death, whichever first occurs.
AGREEMENT <PAGE 2>
(C) Notwithstanding the foregoing, it is understood and
agreed that: (i) the Executive shall not be a participant in, or
beneficiary under, the Disability Plan of TNP, in respect of the
understanding and agreement of the parties hereto that no
"disability" suffered by the Executive during his life shall in
any manner restrict, limit or reduce the payments and other
rights of Executive under paragraph 2 above and (ii) that the
special liability insurance coverage and "flight" life insurance
coverage carried by TNP in respect of the Executive's private
aircraft operation shall not continue in effect after the
Effective Time of Resignation (but the parties agree that the
basic insurance coverage rights set forth in paragraph 2 (A) (3)
above are not affected hereby).
(D) It is understood and agreed that: (i) the Executive
shall be entitled to payment or reimbursement of travel and other
business expenses incurred by him in accordance with applicable
employer policy through the Effective Date,, (ii) the Executive
shall be entitled, both before and after age 62, subject to TNP's
reservations policy, to use of the lake recreation facilities of
TNP (so long as the same or similar facilities exist), and (iii)
the Executive shall be entitled to retain the use of a Petroleum
Club of Fort Worth corporate membership through his attainment of
age 62, but the Executive shall be responsible for dues and
charges related to his use of such membership.
3. In consideration of the payment set forth in paragraph
2(A)(2) above, the Executive shall maintain confidential and not
utilize in any future positions with other entities or otherwise
for his own personal gain, or publish, any confidential or
proprietary information of TNP, TNPE or the Subsidiaries, nor
shall he utilize any such confidential or proprietary information
in competition with, or to the detriment of, TNP, TNPE and the
Subsidiaries. The Executive also agrees that he will not
participate in opposition to TNP or TNPE (i) in any regulatory
proceeding, either in his individual behalf or in support of
others, (ii) in any acquisition of the common stock or
substantially all of the assets of TNP or TNPE which is opposed
by TNP or TNPE or (iii) in any action of a utility or other
entity to obtain a then existing customer or customers of TNP
which is opposed by TNP. The foregoing agreements shall not
prohibit the Executive's employment by any entity which may be
involved in any such opposition to TNP or TNPE from time to time
provided that the Executive complies with the foregoing
restrictions on his personal actions.
4. In consideration of the compensation set forth in
paragraph 2 (A) (1) above, the Executive shall assist TNP with
respect to general administrative and management functions for
the operation of TNP. Executive shall make himself available to
the officers and Board of Directors of TNP on an as needed basis.
TNP and TNPE acknowledge and agree that while Executive is
employed hereunder, he may represent; perform services for, or be
employed by such third parties as the Executive may elect in his
discretion,
AGREEMENT <PAGE 3>
and that he may pursue his personal business interests
unrestricted by his employment hereunder, in each case subject to
paragraph 3 above. The parties hereto mutually agree and conf
irm that Ira Butler, Jr. is fully acquainted with the
understandings and positions of TNP and TNPE and of the Executive
vith respect to such contemplated services of the Executive and
should there ever arise any dispute between the parties as to a
request for such services or the undertaking or declining to
undertake such requested services, a final and binding decision
shall be made as to any such matter by Ira Butler, Jr. In the
event of the death or failure to perform the service herein
contemplated by Ira Butler, Jr., the parties hereto agree that W.
Douglas Bailey shall make any such decision, it being understood
that W. Douglas Bailey possesses the same understandings as to
this provision as does Ira Butler, Jr. Reasonable billings for
time and expenses of Messrs. Butler or Bailey serving in the
foregoing capacity shall be paid by TNP.
5. (A) The Executive does hereby release and forever
discharge TNP, TNPE and the Subsidiaries and their past and
present board members, off icers, employees, agents, attorneys
and other representatives from all claims, demands and causes of
action, including but not limi 'ted to those under the Texas
State Constitution, the United States Constitution, the Equal
opportunity commission, the Texas commission on Human Rights, the
Employee Retirement Income Security Act, the Fair Labor Standards
Act, the Workers' Compensation Act of the State of Texas, the
Texas Unemployment Compensation Act, all civil rights and
anti-discrimination laws, all state and federal laws pertaining
to declaratory judgments, claims for defamation, libel, slander,
invasion of privacy, negligence, intentional or negligent inf
liction of mental anguish, breach of covenant of good faith and
fair dealing, breach of implied contract or claims for quantum
meruit, all laws concerning wrongful discharge, personal injury
or occupational disease or injury and claims for breach of an
oral or written contract, including without restricting the
foregoing generality, any and all claims f or reinstatement, back
pay, front pay, overtime pay, holiday pay, furnishing of a home,
unpaid wages, salary continuation benef its, health insurance,
vacation pay, or other fringe benefits, and including actual
damages, liquidated damages, exemplary damages, consequential
damages, damages for mental anguish,, damages f or loss of
employment prospects, damages for injury to reputation,, lost
compensation, incurred liabilities, attorney's fees of any kind,
injunctive or declaratory relief, costs, and any other causes of
action now existing, whether known or not known. It is
understood and agreed that this release provision extends to any
act, cause, matter or thing claimed or alleged or which could
have been claimed or alleged by the Executive or based upon or
connected therewith, during the entirety of the Executivers
employment with TNP, TNPE and the Subsidiaries prior to January
1. 1994, the effective date of this Agreement (the "Effective
Date"). The Executive has read this release provision and fully
understands it to be a release of all claims arising out of -his
prior employment and his resignation therefrom set forth in
AGREEMENT <PAGE 4>
paragraph 1 above. The Executive represents and warrants that he
is legally competent to &Me this release and enter into this
Agreement, and does so of his own free will and accord without
reliance on any representation of any kind or character not
expressly set forth herein; that he has been advised that he is
free to employ an attorney to advise him of the propriety in
entering into this Agreement, including the release in this
paragraph 5 (A) , and that he has been advised that he may take
up to 21 days to consider this Agreement, if he so chooses; and
that he has also been advised and that he understands that when
he chooses to sign this Agreement that he has 7 days to revoke
this Agreement, and that any such revocation must be in writing
and delivered in person to TNP, TNPE and the subsidiaries.
(B) TNP, TNPE and the Subsidiaries do hereby release and
forever discharge the Executive from all claims, demands, causes
of action and liabilities, and all damages of every nature
therefore, now existing, whether known or not known, based upon
any conduct of the Executive during the entirety of the
Executive's employment with TNP, TNPE and the Subsidiaries prior
to the Effective Date, with the exception of any undisclosed act
amounting to willful misconduct or undisclosed criminal conduct
in breach and default of the Executive's duties and
responsibilities to TNP, TNPE or the Subsidiaries. With respect
to any claims, demands or causes of action made by third parties
against the Executive for alleged misconduct during the entirety
of the Executive's employment with TNP, TNPE and the Subsidiaries
prior to the Effective Date, the indemnification and
reimbursement provisions of such companies' Articles of
Incorporation and Bylaws, in addition to officers' and
directors' liability insurance referenced above, shall be
available to the Executive for the indemnification and
reimbursement set forth therein.
6. TNP and TNPE (including their current and future
officers and directors) shall assure that this Agreement and all
rights of the Executive hereunder shall be fully assumed by any
successor to them, by merger, reorganization, asset purchase or
otherwise. This Agreement shall be binding upon and inure to the
benefit of any such successors in interest to TNP and TNPE, but
shall not otherwise be assignable, transferable or delegable
without the prior written consent of the Executive.
7. TNP and TNPE (in their behalf and in behalf of the
subsidiaries) represent and warrant that: (i) they have all
requisite power and authority to execute and deliver this
Agreement and perform their duties and obligations hereunder,,
(ii) all necessary corporate proceedings of each of them have
been duly taken to authorize the execution, delivery and
performance of this Agreement by each of such entities, (iii)
this Agreement has been duly executed and delivered by such
entities, is a legal, valid and binding obligation of each of
them and is enforceable as to each of them in accordance with its
terms, and (iv) from the Effective Time of Resignation through
December 31, 1993, all rights to compensa
AGREEMENT <PAGE 5>
tion (including the continuation of the Executive as a "Partici-
pant" as described in paragraph 2 (A) (3) above) have continued
uninterrupted as contemplated in the Preamble of this Agreement.
8. The parties hereto agree and confirm that: (i) the
Executive has left at the offices of TNP all company records and
property heretofore utilized by him or under his control, (ii)
the personal property of the Executive located at the offices of
TNP prior to the resignation described in paragraph 1 above has
either been packed and currently remains on the premises of the
offices of TNP with the full rights of removal thereof by the
Executive upon reasonable notice or has been removed by the
Executive and (iii) the legal and accounting expenses incurred in
the preparation of this Agreement and the opinion letters to TNP
and the Executive, delivered contemporaneously vith the execution
and delivery of this Agreement, shall be borne solely by TNP.
9. It is understood and agreed that the releases and
discharges by the Executive set forth in paragraph 5(A) above and
by TNP, TNPE and the Subsidiaries set forth in paragraph 5(B)
above do not extend to any claims, demands or causes of action
arising after the Effective Date as to any duty, right,
representation or warranty made to or for the benefit of a
releasing and discharging party.
10. This Agreement shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees and/or legatees, including enforcement rights to
obtain all payments, and to enforce all rights, in behalf of the
Executive, as may be remaining or continuing hereunder. Without
the written consent of TNP, the Executive may not assign,
transfer or delegate and of his rights or obligations hereunder,
except as contemplated by the terms hereof and the terms of the
referenced compensatory plans and programs in which rights are
granted to the Executive and his wife (and others following the
death of the Executive).
11. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be by: (i)
United States of America Certified Mail, Return Receipt
Requested, postage prepaid, or (ii) Federal Express, United
States of America Express mail or similar overnight delivery or
courier services, all expenses prepaid,, or (iii) delivery in
person to the offices of TNP to the attention of the President of
TNP (in behalf of TNP, TNPE and the Subsidiaries) or to the
Executive, or (iv) telecopy, telex or similar telecommunications
equipment, as applicable to a party hereto. Set forth below are
the mailing, delivery and telecommunications points of delivery
(if applicable) of each of the initial parties hereto. Any party
hereto may change or supplement points and methods of delivery
hereunder, by notice as provided herein. The legally designated
representatives of the Estate of the Executive (or his heirs,
distributees and/or legatees following his death) shall have the
right to set forth pursuant to this provision
AGREEMENT <PAGE 6>
the point and method of delivery hereunder. Any notice or
communication given by Certified Mail shall be deemed given at
the time of certification of delivery thereof; any notice given
to a designated point of delivery by other means permitted by
this provision shall be deemed given at the time of confirmed
delivery thereof to the address or telecommunication or other
receptacle therefor and may include electronic confirmation of
the date and time of receipt at such designated point of
delivery; and deliveries in person to the President of TNP (as
contemplated herein in behalf of TNP, TNPE and the Subsidiaries)
or to the Executive may be by any means and shall be deemed given
when personally delivered. For the purposes hereof, notices and
other communications contemplated herein shall be delivered to
TNP, TNPE and the Subsidiaries:
President, Texas-New Mexico Power Company
4100 International Plaza
Fort Worth, Texas 76109
Telecopy: (817) 737-1343, Attention: President
For the purposes hereof, notices and other communications contem-
plated herein shall be delivered to the Executive:
Mr. James M. Tarpley
4424 Riveridge
Fort Worth, Texas 76109
12. Any waiver, amendment or modif ication of any provision
of this Agreement must be in writing and executed and delivered
by the Executive and by TNP (in behalf of itself and TNPE and the
Subsidiaries). If any provision of this Agreement or the
application of any provision hereof to any person or circumstance
is held invalid or unenforceable, to the extent held invalid or
unenforceable such provision shall be reformed to the extent
necessary to make it enforceable and valid and the other
provisions or other application of this Agreement shall not be
affected; provided, however, that any such invalidity or
unenforceability and such reformation of a provision shall not,
overall, materially adversely affect the rights of TNP and TNPE
hereunder or of the Executive hereunder. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Texas, without
giving effect to conflict of laws.
AGREEMENT <PAGE 7
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in all manner
effective as of the 1st day of January, 1994, the Ef fective Date
of this Agreement.
TEXAS-NEW MEXICO POWER COMPANY
(In its behalf and in behalf of
its Subsidiaries)
By: \s\ R. D. Woofter
[Name and Office]
Chairman of the Board
TNP ENTERPRISES, INC. (In its
behalf and in behalf of its
Subsidiaries)
By: \s\ R. D. Woofter
[Name and Office]
Chairman of the Board
JAMES M. TARPLEY, EXECUTIVE
\s\ James M. Tarpley
AGREEMENT <PAGE 8>