(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
INFORMATION REQUIRED IN PROXY STATEMENT
Securities Exchange Act of 1934 (Amendment No. )Filed by the Registrant ☒Filed by a Party other than the Registrant oCheck the appropriate box:oPreliminary Proxy StatementoSoliciting Material Under Rule 14a-12oConfidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))☒Definitive Proxy StatementoDefinitive Additional MaterialsEL PASO ELECTRIC COMPANY(Name of Registrant as Specified In Its Charter)(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)Payment of Filing Fee (Check the appropriate box):☒No fee required.oFee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.1)Title of each class of securities to which transaction applies:2)Aggregate number of securities to which transaction applies:3)Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):4)Proposed maximum aggregate value of transaction:5)Total fee paid:oFee paid previously with preliminary materials:oCheck box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.1)Amount previously paid:2)Form, Schedule or Registration Statement No.:3)Filing Party:4)Date Filed:
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El Paso, Texas 79901
(915) 543-5711
15, 2016
TheShareholders:
The
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Chief Executive Officer
El Paso, Texas 79901
Information concerning these matters is set forth invote;
Your vote is important. To ensure your representation, even if you cannot attend the Annual Meeting, please mark, sign, date and return the enclosed proxy card promptly.
Sincerely,
Thomas V. Shockley, IIIChief Executive Officer
EL PASO ELECTRIC COMPANY
100 N. Stanton StreetEl Paso, Texas 79901
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of El Paso Electric Company:
The Annual Meeting of Shareholders of El Paso Electric Company will be held at the Stanton Tower Building, located at 100 N. Stanton Street, El Paso, Texas 79901, on May 28, 2015, at 10:00 a.m., Mountain Daylight Time, for the following purposes:
The Board knows of no matter, other than those set forth in the paragraphs above (which are discussed at greater length in the accompanying Proxy Statement), that will be presented for consideration at the Annual Meeting.
The Board has fixed
The Board has made these materials available
As owners of El Paso Electric Company, your vote is important. Whether or not you are able to attend the Annual Meeting in person, it is important that your shares be represented. Please vote as soon as possible. If you attend the meeting and decide to vote in person, you may revoke your proxy. Shareholders attending the meeting whose shares are registered in the name of a broker and who intend to vote in person should bring an affidavit of ownership from such broker so that beneficial ownership can be verified without delay on the meeting date.
proxy card
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Corporate Secretary
15, 2016
PLEASE MARK, SIGN, DATE AND
RETURN YOUR PROXY CARD PROMPTLY OR VOTE BY INTERNET OR TELEPHONE.
THANK YOU.
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El Paso Electric Company 
EL PASO ELECTRIC COMPANY or in person by the Board, officers, employees and other agents of the Company. 2016. there is no “required vote” on this resolution. The Board, in the exercise of its fiduciary duties, will consider the outcome of the advisory vote in determining how to proceed following such vote. The affirmative vote of the majority of the shares of Common Stock present in person or represented by proxy and entitled to vote on the proposal will be considered as the approval, shareholder of record, the shares represented by such proxy will not be voted. The rules of the New York Stock Exchange (the “NYSE”) determine whether proposals presented at shareholder meetings are routine or non-routine. If a proposal is routine, a broker or other entity holding shares for an owner in street name may vote for the proposal without receiving voting instructions from the owner under certain circumstances. If a proposal is non-routine, the broker or other entity may vote on the proposal only if the owner has provided voting instructions. A broker non-vote occurs when the broker or other entity is unable to vote on a proposal because the proposal is non-routine and the owner does not provide any voting instructions. The Company would like to thank Ms. Patricia Z. Holland-Branch for her valuable service and time on the Board. Ms. Holland-Branch will be retiring from the Board pursuant to the director retirement policy in the Corporate Governance Guidelines. recommended by the Board, unless authority to do so is withheld. Each nominee has agreed to the nomination and has agreed to serve if elected. Should any nominee become unavailable for election, the proxies will be voted for the election of such other person as the Board may recommend in place of such nominee. previously served as chairman of the Texas Business Leadership Council, where he now serves on the executive committee; member of the Texas Institute for Education Reform; member of the Texans for Education Reform; member of the Western Governors University Texas Advisory Board; member of the Paso del Norte Foundation; and board member of WestStar Bank. He was previously chairman of the Texas Higher Education Strategic Planning Committee; vice chairman of of United Continental Holdings, Inc. Analysis (“CD&A”). from the Company for goods and services if such payments were more than the greater of 2% of such other entity’s gross consolidated revenues for such fiscal year or $1 million. After a review of all relevant factors and applying these categorical standards and the independence criteria of the NYSE, the Board has determined that: material in amount, between the Company and AT&T (for The Board has determined that each member of the Audit Committee meets such independence requirements. within 90 days following certification of the shareholder vote. The Nominating and Compliance Officer, who reports directly to the Chief Executive Officer and has independent reporting access to the Board of Directors, is compensation program, and the incentives created by the compensation awards that it approves, on the Company’s risk profile. In addition, the Company reviews all of its compensation policies and procedures, including the incentives that they create and factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to the Company. Based on this review, the Company has concluded that its compensation policies and procedures are not reasonably likely to have a material adverse effect on the Company. environmental issues, including compliance with applicable environmental laws and regulations. Nominating and Corporate Governance, Public Policy and Corporate Chairman, received a meeting fee of $1,000 per meeting for each Board and Committee meeting (other than Audit Committee meetings) attended. Directors are also reimbursed for travel expenses incurred in connection with their duties as directors. Non-employee directors are not eligible to participate in the executive incentive program, savings programs or any of the retirement programs for the Company’s employees. Other than as described in this section, there are no separate benefit plans for active directors. The Company’s Restated Articles of Incorporation and Bylaws, as amended, provide for indemnification of the Company’s directors and executive officers up to the maximum extent provided by the Texas Business Organizations Code of collective bargaining agreements. The Compensation Committee is also responsible for evaluating, adopting and administering benefit the Company’s website at www.epelectric.com. responsibilities of the Energy Resources and Environmental Committee are described in detail in a written charter adopted by the Board as amended and available on the Company’s website at www.epelectric.com. including, but not limited to those relating to local government and the Company’s state and federal regulators; communication and public relations activities related to the Company’s brand and reputation; matters relating to corporate and social responsibility; and contributions by the employee political action committee as well as corporate activities related to civic and charitable affairs in accordance with applicable regulations. The roles and responsibilities of the Public Policy and Corporate Reputation Committee are described in detail in a written charter adopted by the Board as amended and so and will respond to appropriate questions. If the shareholders related to the services provided to the Company for the fiscal years ended December 31, 2015 and 2014 by KPMG LLP 404 certification) and review of the Company’s financial statements included in the Company’s Quarterly Reports on Form 10-Q during the fiscal years ended December 31, professional services provided in connection with rate case filings in 2015. described above in accordance with the requirements of the process, but may not delegate this authority to management. The Audit Committee may delegate its authority to pre-approve services to one or more Audit Committee members, provided Statement. committed to excellence in governance and recognizes that executive compensation is an important matter for our shareholders. The Board and the Compensation Committee believe that the Company’s executive officer compensation program, as described in the CD&A and other related sections of this Proxy Statement, is reasonable and effective in aligning the interests of the executive officers with the interests of the Company’s shareholders. We believe consistent with our philosophy of pay for performance and annually. Our CEO reviews other executive officers’ performance and reports with the Compensation Committee the non-equity compensation elements for the other executive officers, although the Compensation Committee approves the actual compensation awarded. The Compensation Committee generally makes decisions regarding base salary, annual bonus targets and equity incentive awards at one or more regularly scheduled meetings during the first quarter of each year. The Compensation Committee continues to review compensation matters throughout the year and changes or approves compensation at other times in response to hiring needs, market changes and other occurrences. The Compensation Committee’s decisions about equity awards are not “timed” or otherwise affected by the planned announcement of material information. At least annually, (and at other times when material decisions are being considered) the Compensation Committee reviews a summary of compensation (also called a “tally sheet”) with its outside independent executive compensation consulting firm for each executive officer showing all compensation, equity holdings and accrued retirement benefits. The tally sheets are designed to inform the Compensation Committee of the total compensation potentially payable to the executive officers, particularly in the event of change in control and/or separation from the Company, but were not a material factor in making any particular compensation decision during the year. executive officer’s responsibility level, experience and individual ACBP. the event that plan performance is achieved at For our NEOs, the goals under the officers as a group. other NEO. For our NEOs, Group. executive officers with benefits in the event of involuntary termination (other than for cause or disability) or adverse job changes in connection with or after ensuring that in the event of an actual proposed change of control, key executive officers Our executive officers are expected to meet these guidelines within five years after becoming executive officers. As of the end of — important to retain THE COMPENSATION COMMITTEE the first day In addition, unreduced pension benefits are provided to participants who retire after age 62 with 20 years of service or after a participant’s age and service exceed 85. balance accounts grow each year with pay credits and interest credits. Pay the employee’s date of hire as a Vice President or above or the employee’s date of promotion to Vice President or above. In addition, the Company may select any other employee of the Company who is in a select group of management or highly compensated employees to participate in the Excess Benefit Plan. Benefits payable from the Excess Benefit Plan are subject to the same vesting schedule, age/service requirements and The Excess Benefit Plan is subject to the rules of the Internal Revenue Code, Section 409A, which requires that for certain specified employees of a publicly-traded corporation, benefits payable following separation from service cannot be paid until six months following separation from service except following the death of the participant. Any payment that would have been distributed to the participant during the six month period following separation from service, will be accumulated and paid to the participant in a single lump sum as soon as termination had occurred on December 31, over 2,069,863 shares, but only has the power to vote 1,942,863 shares of Common Stock. MJG-IV beneficially owns 4,000 shares (0.01%) and has sole voting and dispositive power over the shares, and Mario J. Gabelli beneficially owns 8,000 shares (0.02%) and has sole voting and dispositive power over the shares. According to the filing, the aggregate amount beneficially owned by the Gabelli Reporting Parties is 4,001,143 shares (9.94%) as of November 14, 2011. According to updated 13F filings dated February 5, 2015. scheduled date of the annual meeting. A shareholder’s notice should list each proposal and a brief description of the business to be brought before the meeting; the name and address of the shareholder proposing such business; the class and number of shares held by the shareholder; and any material interest of the shareholder in the business. If a shareholder wishes to nominate a director, the shareholder must provide the nomination to the Nominating and Corporate Governance Committee in advance in writing at the Company’s principal offices pursuant to the notice provisions provided in the Company’s Bylaws. For more details see “Evaluation of Director Nominees” above. Page GENERAL 43 4 Class III Directors (Term Expiring in 2018) 5 Qualifications of Directors 6 Board Nominees and Continuing Directors 8 Board Structure 9 9 Standards of Board Independence 9 Majority Voting Policy 10 The Board’s Role in Risk Oversight 10 Business Conduct Policies 11 Meetings 12 2015 Director Compensation 12 Committees 13 Evaluation of Director Nominees 15 Page 20 Named Executive Officers (“NEOs”) 20 2015 Executive Compensation Highlights 20 Executive Compensation Process 21 Compensation Benchmarking 21 Primary Components of Compensation 22 22 2015 Annual Cash Bonus Plan 24 24 Other Executive Benefits 2125 26 28 2329 2430 2430 2531 2631 2632 2733 34 35 37 SHAREHOLDER PROPOSALS AND DIRECTOR
NOMINATIONS FOR 2017 ANNUAL MEETING
OF SHAREHOLDERS 20152016 Proxy Statement PROXY STATEMENT SUMMARYThis summary highlights information contained elsewhere in this proxy statement. It does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.ANNUAL MEETING INFORMATIONThursday, May 28, 201510:00 a.m. (Mountain Daylight Time)Stanton Tower Building100 N. Stanton StreetEl Paso, TX 79901Record Date: March 30, 2015Voting:•Shareholders as of the record date are entitled to vote.•Please vote your shares as soon as possible. Your broker will NOT be able to vote your shares with respect to any of the matters presented at the meeting other than the ratification of the selection of our independent registered public accounting firm, unless you give your broker specific voting instructions.•Registered holders may vote via the Internet, by telephone, in person at the annual meeting, or, if they received a printed copy of these proxy materials, by mail, and beneficial shareholders may vote in accordance with the instructions they receive from the bank, broker or other person who is the holder of record of their shares.Attending theAnnual Meeting:•The meeting starts at 10:00 a.m. (Mountain Daylight Time). You will be required to present either a Notice of Internet Availability of Proxy Materials or the admission ticket enclosed with the paper copy of the proxy materials.•You do not need to attend the Annual Meeting of Shareholders to vote if you submitted your proxy in advance of the meeting.Even if you plan to attend our annual meeting in person, please cast your vote as soon as possible by:
using the Internet atwww.proxyvote.com••••••••••••••••••••
calling toll-free from theUnited States, U.S. territories andCanada to 1-800-690-6903•••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••
scanning this QR code to vote withyour mobile device
mailing your signed proxy cardANNUAL MEETING AGENDA AND VOTING RECOMMENDATIONSProposalBoard Voting RecommendationPageReference(for moredetail)Management proposalsElection of four Class III directorsFOR EACH DIRECTORNOMINEE3Ratification of KPMG LLP as our independent registered public accounting firm for fiscal 2015FOR13Advisory vote on executive compensationFOR14El Paso Electric Company 2015 Proxy Statement iBOARD NOMINEES AND CONTINUING DIRECTORSThe following table provides summary information about each director nominee and continuing director.NameAgeDirectorSincePrincipal OccupationIndependentACCCECERECNCGPPCRSCQualifications & SkillsNOMINEES FOR CLASS III DIRECTORS (TERM EXPIRING IN 2018)James W. Harris681996Managing Partner of OP Food Products, LLC and Managing Partner of Harris Financial Advisors, LLC
• corporate finance and accounting • corporate governance • regulated financialWoodley L. Hunt692012Executive Chairman, Hunt Companies, Inc. • corporate finance and accounting• governmental affairs • knowledge of Texas communities • non-profit• real estateStephen N. Wertheimer641996Managing Director and Founding Partner, W Capital Partners 
• corporate finance and accounting• corporate governance • regulated financialCharles A. Yamarone561996Managing Director, Houlihan Lokey 
• corporate finance and accounting • legal • regulated financialCLASS I DIRECTORS (TERM EXPIRING IN 2016)John Robert Brown702003Owner and President, Brownco Capital, LLC • consumer retail and marketing• corporate finance and accounting • governmental affairs • knowledge of Texas communitiesJames W. Cicconi621997Senior Executive Vice President of External and Legislative Affairs, AT&T Services, Inc. • governmental affairs • legal• telecommunicationsPatricia Z. Holland-Branch711997Owner, Chairman and Chief Executive Officer of The Facilities Connection, Inc. • consumer retail and marketing• governmental affairs • knowledge of Texas communitiesThomas V. Shockley, III702010Chief Executive Officer, El Paso Electric Company and Ex-Officio member of the Committees of the Board• regulated utility • utility operationsCLASS II DIRECTORS (TERM EXPIRING IN 2017)Catherine A. Allen682009Founder, Chairman and CEO, The Santa Fe Group • knowledge of New Mexico communities • non-profit • strategic planning • technologyEdward Escudero442012President and CEO, High Desert Capital LLC • consumer retail and marketing• corporate finance and accounting • knowledge of Texas communities• regulated utility • utility operationsEric B. Siegel571996Retired Limited Partner, Apollo Advisors, LP and Consultant and Special Advisor to the Chairman of the Milwaukee Brewers Baseball Club • corporate finance and accounting • legal • regulated financial• strategic planningMEETINGS IN 2014121104241 Chairperson Member Financial ExpertACAudit CommitteeCCCompensation CommitteeECExecutive CommitteeERECEnergy Resources and Environmental CommitteeNCGNominating and Corporate Governance CommitteePPCRPublic Policy and Corporate Reputation CommitteeSCSecurity Committeeii El Paso Electric Company 2015 Proxy Statementfor
FOR THE
ANNUAL MEETING OF SHAREHOLDERSTo Be Held on May 28, 2015
TO BE HELD ON MAY 26, 201620152016 Annual Meeting of Shareholders (the “Annual Meeting”) to be held on May 28, 2015,26, 2016, at 10:00 a.m., Mountain Daylight Time, at El Paso Electric Company’s (the “Company”) principal offices, and at any adjournment thereof. The Company’s principal offices are located at the Stanton Tower Building, 100 N. Stanton Street, El Paso, Texas 79901.bornepaid by the Company.Company, including a fee of $6,500 plus expenses to Georgeson LLC, who will help us solicit proxies. In addition to the use of thepersonal interview, telephone, fax, or other electronic meansTo assist in the solicitation, the Company has engaged Georgeson Inc. for a fee of $6,500 plus out-of-pocket expenses. The Company will also reimburse brokers, banks and other persons for reasonable expenses in forwarding the Notice of the Meeting to beneficial owners and forwarding printed proxy materials by mail to beneficial owners who specifically request them.17, 2015.15, 2016.30, 2015,29, 2016, the record date for determination of the shareholders entitled to notice of and to vote at the Annual Meeting, the Company had outstanding 40,389,97040,483,000 shares of its common stock, no par value (the “Common Stock”). outstanding share of Common Stock is entitledoutstanding at the record date entitles the holder to one vote.vote on all matters submitted to a vote of the shareholders at the Annual Meeting. The holders of at least a majority of the issued and outstanding shares of Common Stock must be represented in person or by proxy at the Annual Meeting for a quorum to be present and business to be conducted.Assuming a quorum is present, directors are elected by a plurality of the votes cast at the meeting. 2015.byon an advisory vote,basis, of the compensation of our Named Executive Officers (“NEOs”). El Paso Electric Company 2016 Proxy StatementmeetingAnnual Meeting and voting in person. The shares represented by a proxy given and not so revoked will be voted and, where the shareholder specifies a choice with respect to any matter to be acted upon and for which a ballot is provided in the proxy form, the shares will be voted in accordance with the specification so made. If a proxy is properly executed and returned, but no choice is specified, the shares will be voted “FOR” each director nominee, and “FOR” each of proposals two and three.three, and vote “ONE YEAR” for proposal four. With respect to any other matters that will come before the Annual Meeting, the proxysuch shares will be voted in the discretion of the proxy holder. If no proxy is returned by aEl Paso Electric Company 2015 Proxy Statement 1company stockshares of Common Stock through a broker does not provide the broker with voting instructions as to any matter on which the broker is not permitted to exercise its discretion and vote without specific instruction.and the advisory vote on executive compensation, and the advisory vote on the frequency of executive compensation advisory votes are non-routine items. This means that brokers who do not receive voting instructions from their clients as to how to vote their shares for these proposals cannot exercise their discretionary authority to vote your shares for these proposals. Therefore, it is important that you instruct your broker as to how you wish to have your shares voted on these proposals, even if you wish to vote as recommended by the Board. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 20152016 is a routine item under the NYSE rules.2 20152016 Proxy Statement –
ELECTION OF CLASS IIII DIRECTORS(“Bylaws”(the “Bylaws”) divides the Board into three classes, as equally as numerically possible, each of which is elected for a three-year term. The Board currently has eleven members with three to four members in each class.IIII Directors asThe Board, acting through the Nominating and Corporate Governance Committee, is responsible for recommending to the shareholders a group of nominees that, taken together, have the experience, qualifications, attributes and skills to function effectively as a board. Our Corporate Governance Guidelines require the Nominating and Corporate Governance Committee to periodically review the composition of the Board in light of the current challenges and needs of the Company and determine whether to add or remove individuals “after considering issues of judgment, diversity, skills, background and experience.”Four of the eleven current directors were originally appointed to the Board at the time of the Company’s emergence from bankruptcy in 1996. The various creditor and public constituencies at the time sought individuals with financial, regulatory and managerial skills that both represented a break with the past and an ability to direct a fragile entity back to viability. This core group of directors instituted policies that returned the Company’s debt to investment grade status within a short period and improved its posture with customers and regulators, which led to a substantial increase in the price of the Common Stock in succeeding years. During that period, as directors retired or as the needs of the Company evolved, the Board added other individuals with skills (such as knowledge of the local service areas and of legislative and regulatory affairs) that became more important as the Company stabilized and grew.In addition to the characteristics common to all of our directors, which include integrity, a strong professional reputation and record of achievement in senior executive capacities, the Nominating and Corporate Governance Committee has included on our Board persons with diverse backgrounds and skills reflecting the needs of the Company. In presenting this year’s nominees, the Nominating and Corporate Governance Committee also considered the invaluable experience they have gained in dealing with the Company’sunique challenges over many years, their ability to work as a collegial group during intense and stressful periods in the past and their willingness to spend the time necessary to perform their roles despite other professional commitments.The Nominating and Corporate Governance Committee considers the following additional factors as important qualifications and skills of each member of the current Board:—Experience in a broad range of occupations and industries, which provides differing viewpoints and expertise relating to execution of the Company’s business plan. These include consumer retail and marketing (Messrs. Brown, Escudero and Ms. Holland-Branch), telecommunications (Mr. Cicconi), regulated financial (Messrs. Harris, Siegel, Wertheimer and Yamarone), regulated utility (Messrs. Escudero and Shockley), non-profit (Ms. Allen and Mr. Hunt), technology (Ms. Allen), real estate (Mr. Hunt) legal (Messrs. Cicconi, Siegel and Yamarone) and corporate finance and accounting (Messrs. Brown, Escudero, Harris, Hunt, Siegel, Wertheimer and Yamarone); and—Geographic presence in and knowledge of the communities and constituencies served by the Company in Texas (Messrs. Brown, Escudero, Hunt and Ms. Holland-Branch) and New Mexico (Ms. Allen); and—Experience in areas applicable to service on the Board’s Committees, including corporate financial management and accounting (Messrs. Escudero, Hunt and Yamarone), governmental affairs (Messrs. Brown, Cicconi and Hunt and Ms. Holland-Branch), utility operations (Messrs. Escudero and Shockley), corporate governance (Messrs. Harris and Wertheimer) and strategic planning (Ms. Allen and Mr. Siegel).THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OFMESSRS. HARRIS, HUNT, WERTHEIMER AND YAMARONE,AS CLASS III DIRECTORS.El Paso Electric Company 2015 Proxy Statement 3IIII DIRECTORS (NEW TERM TO EXPIRE IN 2018) John Robert Brown James W. Cicconi HarrisBush and also served as the Senior Issues Advisor to President Bush’s 1988 and 1992 election campaigns. In 2016, he was appointed by the U.S. Secretary of Commerce to the U.S. Department of Commerce’s Digital Economy Board of Advisors. Mr. Cicconi has been a director of the Company since 1997 and serves as Chairman of our Public Policy and Corporate Reputation Committee. He also serves as a member of our Audit and Executive Committees. El Paso Electric Company 2016 Proxy Statement Mary E. Kipp Thomas V. Shockley, III Catherine A. Allen Edward Escudero Eric B. Siegel James W. Harris 68,69, has served as the Managing Partner of OP Food Products, LLC since 2013 and Managing Partner of Harris Financial Advisors, LLC since 2013. From 1993 until 2013, Mr. Harris served as Founder and President of Seneca Financial Group Inc. Previously, Mr. Harris served as Managing Director at Lehman Brothers and Head of the Financial Restructuring Group. Before joining Lehman Brothers, he spent 10ten years at Citibank, N.A. where he worked in the Bank’s Institutional Recovery Group and managed lending activities in the international and domestic banking groups. From 2001 to 2003, he was an adjunct professor at Columbia University'sUniversity’s Graduate School of Business in New York. From 2006 to 2012, Mr. Harris was an adjunct professor at the Kenan-Flagler School of Business Administration at the University of North Carolina in Chapel Hill North Carolina where he taught a course on Managing Business Turnarounds. Mr. Harris currently serves on the advisory board of the public radio station, WUNC, in Chapel Hill, North Carolina. He previously served as a director of Peregrine Systems Inc. and was a member of its audit committee. Mr. Harris has been a director of the Company since 1996 and serves on our Compensation, Executive, and Nominating and Corporate Governance Committees.Woodley L. Hunt Woodley L. Hunt 69,70, is Executive Chairman of the Board of Directors of Hunt Companies, Inc.’s and its affiliated companies (“Hunt”Hunt Companies”). Founded in 1947, Hunt Companies is a national developer, investorholding company that invests and manageroperates in businesses focused in the real estate and infrastructure markets. The activities of real assets providing a broad range of services to publicHunt Companies’ affiliates and private sector clients. For decades, Hunt has focused on the key areas of public-private partnerships, multifamily housing, military housing, community development, commercial and mixed-use development, land development, real assetinvestees include investment management, mortgage banking, direct lending, loan servicing, asset management, property management, development, construction, consulting and property/asset management.advisory. In addition to his duties with the Hunt Companies, Mr. Hunt is chairman of the Texas Higher Education Strategic Planning Committee; a member of the board of directors for Complete College America; foundation trustee of the College for all Texans Foundation; member of the board of visitors of the University of Texas MD Anderson Cancer Center-Houston; founding chairman of the Borderplex Alliance in El Paso;Thethe University of Texas System Board of Regents; a member of the board of directors of the University of Texas Investment Management Company; founding chairman and board member of the Medical Centers of the Americas Foundation; chairman of the Texas Select Commission on Higher Education and El Paso Electric Company 2016 Proxy Statementwasthe Texas Tax Reform Commission; a member of the National Board of the Fund for the Improvement of Postsecondary Education; a member of the Texas Advisory Committee on Higher Education Cost Efficiencies; a member of the Task Force on Higher Education Incentive Funding; a member of the Council for Continuous Improvement and Innovation in Texas Higher Education; and chairman of the Paso del Norte Health Foundation. He was a member of the board of directors and chairman of the finance committee of PNM Resources and has served on numerous other civic, non-profit and professional boards. Mr. Hunt has been a director of the Company since December 2012 and serves on our Compensation and Public Policy and Corporate Reputation Committees.Stephen N. Wertheimer Stephen N. Wertheimer 64,65, has been a Managing Director and Founding Partner of W Capital Partners since 2001. He has over 30 years of experience in investment banking and principal investments. Prior to founding W Capital Partners, Mr. Wertheimer served as a Managing Director of CRT Capital Group, LLC. He was a Founder and Managing Member of Water Capital Management from 1991 to 1997. From 1988 to 1991, he served as a Managing Director and the Group Head of Investment Banking-Asia of PaineWebber Incorporated. Prior to 1988, Mr. Wertheimer was a Managing Director at First Chicago Corporation, where he specialized in tax-structured domestic and international principal investments and was a Vice President with Bank of America’s tax financing group making equity investments for the parent corporation. Mr. Wertheimer has extensive board experience having served on the boards of over thirtyforty companies, both public and private. Mr. Wertheimer is a member of the International Council of Advisors of the National Geographic Society. He is also a member of the board and audit and compensation committees of directors of Dynacast International,private companies Ravn Air Group, Inc., Moosejaw Inc., and World Kitchen, Inc. Mr. Wertheimer also serves on the board of Moosejaw Inc. and serves as a board advisor at Inspirato, LLC. Mr. Wertheimer has been a director of the Company since 1996 and serves as Chairman of our Energy Resources and Environmental Committee. He also Charles A. Yamarone 4 El Paso Electric Company 2015 Proxy StatementNOMINEES AND DIRECTORS OF THE COMPANYCharles A. YamaroneManaging Director,Chief Corporate Governance and Compliance Officer, Houlihan Lokey56,57, has been Chief Corporate Governance and Compliance Officer of Houlihan Lokey since January 1, 2016. From January 2014 through December 2015, he was a Managing Director of Houlihan Lokey since January 2014 where he has been a senior investment banker since November 2009. He currently manages the Capital Markets Group, providing leadership toadvises senior management on all aspects of Houlihan Lokey’s corporate governance and compliance matters arising as a teamresult of 25 professionals crafting customized financing solutions for the firm’s clients.Houlihan Lokey’s initial public offering and subsequent status as an NYSE-listed public company. Between 1991 and 2009, he was a senior officer of Libra Securities (“Libra”), an institutional broker dealer, and was involved in all areas of Libra’s business including capital markets, corporate finance, sales and trading, research, legal, compliance and operations. Mr. Yamarone is a director of United Continental Holdings, Inc. (United Airlines), and was chairman of the compensation committee since United Airlines and Continental Airlines merged in 2010 until June 2014. He is currently a memberexecutiveaudit, and compensation committees. He had previously served on the Continental Airlines board of directors since 1995, where he was chairman of the human resources committee and a member of the corporate governance and social responsibility committee. He previously served as a director of four other public companies: Bally’s Grand, Inc., LIVE Entertainment, Merry-Go-Round Enterprises, Inc. and Vagabond Inns, Inc. Mr. Yamarone has been a director of the Company since 1996. In February 2015, Mr. Yamarone was appointed Chairman of the Board of Directors. He is Chairman of our Compensation Committee and he also serves as a member of our Audit, Energy Resources and Environmental, and Executive Committees. He is an ex-officio member of the Nominating and Corporate Governance, Public Policy and Corporate Reputation and Security Committees. As an ex-officio member, Mr. Yamarone has a standing invitation to attend these Board committee meetings, but he does not count for quorum purposes, or vote on committee matters.John Robert BrownOwnerPresident, Brownco Capital, LLCDirector since 2003Mr. Brown, age 70, has beenCorporate Governance Committee, is responsible for recommending to the Ownershareholders a group of nominees that, taken together, have the experience, qualifications, attributes and President of Brownco Capital, LLC,skills to function effectively as a private investment company, since November 2007. From May 1992board. Our Corporate Governance Guidelines require the Nominating and Corporate Governance Committee to March 2008, Mr. Brown wasperiodically review the President and Chairmancomposition of the Board of Desert Eagle Distributing of El Paso, Inc., a distributor of Anheuser-Busch products in West Texas and Eastern New Mexico. He currently serves on the board of directors of WestStar Bank and the University of Texas at El Paso Development Board. He previously served on the Texas Tech University Board of Regents from 1995 until 2003 and served as chairmanlight of the Board of Regents from 2001 until 2002. He also served as a commissioner for the Texas Parkscurrent challenges and Wildlife Commission from 2003 until 2009. In 2010, Mr. Brown was inducted into the El Paso Business Hall of Fame. Mr. Brown has been a directorneeds of the Company since June 2003 and servesdetermine whether to add or remove individuals “after considering issues of judgment, diversity, skills, background and experience.”Audit, Energy ResourcesBoard, persons with diverse backgrounds and Environmental, and Public Policyskills reflecting the needs of the Company. In presenting this year’s nominees, the Nominating and Corporate Reputation Committees.James W. CicconiSenior Executive Vice President for External and Legislative Affairs, AT&T Services, Inc.Director since 1997Mr. Cicconi, age 62, has been Senior Executive Vice President of External and Legislative Affairs for AT&T Services, Inc. since November 2005. PriorGovernance Committee also considered the invaluable experience they have gained in dealing with the Company’s unique challenges over many years, their ability to that, Mr. Cicconi served as Executive Vice President for Law and Government Affairs and General Counsel of AT&T Corp. He servedwork as a partner of Akin, Gump, Strauss, Hauer & Feld, LLP (“Akin Gump”) from 1991collegial group during intense and stressful periods in the past and their willingness to 1998. While practicing law at Akin Gump, Mr. Cicconi specialized in administrative and regulatory law, as well as federal legislation, representing a range of corporate clients. He was also involved in a numberof significant transactions, including public sales, restructurings and acquisitions. Mr. Cicconi served as Deputy Chief of Staff to President George H. W. Bush and also served as the Senior Issues Advisor to President Bush’s 1988 and 1992 election campaigns. Mr. Cicconi has been a director of the Company since 1997 and serves as Chairman of our Public Policy and Corporate Reputation Committee. He also serves as a member of our Audit, and Executive Committees.Patricia Z. Holland-BranchOwner, Chairman and Chief Executive Officer,The Facilities Connection, Inc.Director since 1997Ms. Holland-Branch, age 71, has been the Owner, Chairman and Chief Executive Officer of The Facilities Connection, Inc., headquartered in El Paso, Texas since 1986. The company provides its national and international clients with professional services, including interior design, project management, logistics, installation and order management services for contract furniture, demountable architectural walls and raised access flooring. She currently serves on the board of directors of the Borderplex Alliance, the advisory board for Texas Tech University Gayle Greve Hunt School of Nursing, the Sierra Providence Healthcare Network Women’s Advisory Group and is a former director for El Paso Hispanic Chamber of Commerce Foundation, Regional Economic Development Corporation, and El Paso Branch of the Federal Reserve Bank of Dallas as well as a past chairman of the board for the Greater El Paso Chamber of Commerce. Ms. Holland-Branch has been a director of the Company since 1997 and serves on our Energy Resources and Environmental, Public Policy and Corporate Reputation, and Security Committees.20152016 Proxy Statement 5Thomas V. Shockley, IIIChief Executive Officer,El Paso Electric CompanyDirector since 2010Mr. Shockley, age 70, is CEO of El Paso Electric Company. He retired in 2004 after a lengthy career in the regulated utility industry. From 2000 to 2004, he served as the Vice Chairman and Chief Operating Officer of American Electric Power Company, Inc. (“AEP”), one of the largest electric utilities in the United States. From 1997 to 2000, Mr. Shockley was President and Chief Operating Officer of Central and South West Corporation, which combined with American Electric Power of Columbus, Ohio in 2000 to form AEP. Heserves on the board of the Borderplex Alliance and University of Texas at El Paso Development Board. In his career, Mr. Shockley served in various other executive and management positions in the utility and energy industries. He previously served on the boards of directors of the Foundation Coal Company, Cellnet and on the board of Chase Energy Development. Mr. Shockley was appointed Interim Chief Executive Officer from January 2012 until May 2012, when he was elected Chief Executive Officer. Previously, he served on our Executive, External Affairs, and Energy Resources and Environmental Committees. Currently, he serves as ex-officio member of the Committees of the Board. As an ex-officio member, Mr. Shockley has a standing invitation to attend the Board committee meetings, but he does not count for quorum purposes or vote on committee matters.Catherine A. AllenFounder, Chairman and Chief Executive Officer,The Santa Fe GroupDirector since 2009Ms. Allen, age 68, has, since 1996, been the Founder, Chairman and Chief Executive Officer of The Santa Fe Group, a strategic consulting company providing services to financial institutions and related infrastructure companies in the areas of vendor risk management, cyber security and emerging technologies. Previously, Ms. Allen was a Vice President of Business Development and Alliances of Citicorp, where her responsibilities included developing and managing strategic alliances with technology and telecommunications companies for technology-based products and services. She sits on a number of non-profit boards including the University of Missouri Research and Development Committee, International Folk Art, Appleseed New Mexico Alliance, Communities in Schools, Valles Caldera Trust, Lensic Performing Arts Center, Museum of New Mexico Foundation, Women Corporate Directors, and is the board chair of the National Foundation for Credit Counseling. She is co-chair of the University of Missouri Capital Campaign Committee and she received an Honorary Doctorate of Humane Letters from the University of Missouri in 2005. She has received two Lifetime Awards for her service to the financial sector and technology, from U.S. Banker and the Executive Womens’ Forum. She was formerly CEO of BITS, a financial services consortium and non-profit industry association from 1997 to 2007. She is the author of four books. She served on the board of Stewart Title Guaranty Company, and continues to serve on the board of Synovus Financial Corporation and the advisory board for Houlihan Lokey. Ms. Allen joined our Board in May 2009 and serves as Chairman of our Security Committee. She also serves as a member of our Energy Resources and Environmental, Public Policy and Corporate Reputation, and Nominating and Corporate Governance Committees.Edward EscuderoPresident and Chief Executive Officer, High Desert Capital LLCVice Chairman of the Board since 2015Director since 2012Mr. Escudero, age 44, is President and Chief Executive Officer of High Desert Capital LLC, a finance company specializing in providing various types of capital alternatives to small-to-mid-size companies a role he has held since 2008. Previously, Mr. Escudero was Executive Vice President and Chief Financial Officer of C&R Distributing, a major distributor of fuel and lubricants and the owner of various convenience stores in West Texas and Southern New Mexico. He also served as Secretary and Chief Financial Officer of Petro Stopping Centers, LP, where he held vital roles of managing various departments including accounting, legal, human resources, audit, financial planning and information systems. He serves on a number of community boards, including the Medical Center of the Americas Foundation, El Paso Community Foundation Investment Committee, WestStar Bank, El Paso Hispanic Chamber of Commerce and the University of Texas at El Paso Centennial Commission. Formerly, Mr. Escudero served on the El Paso Water Utility Public Service Board. Mr. Escudero has been a director of the Company since December 2012 and serves as Chairman of our Audit Committee. He also serves as a member of our Executive, Nominating and Corporate Governance, Public Policy and Corporate Reputation, and Security Committees. In February 2015, Mr. Escudero was appointed Vice Chairman of the Board of Directors.Eric B. SiegelRetired Limited Partner of Apollo Advisors, LPConsultant and Special Advisor to the Chairman of the Milwaukee Brewers Baseball ClubDirector since 1996Mr. Siegel, age 57, is a retired Limited Partner of Apollo Advisors, LP ("Apollo") and has been an independent business consultant since 1995. Since 2004, Mr. Siegel has6 20152016 Proxy Statementserved as a consultant toon the advisory board of the Milwaukee Brewers Baseball Club. He previously served as a Principal and was a Limited Partner of Apollo Advisors, LP (a predecessor to Apollo Management, LP) and Lion Advisors, LP. Prior to joining Apollo, Mr. Siegel was a partner of Irell & Manella LLP, a law firm practicing corporate law. He serves as the lead independent director and member of the nominating and governance committee of Ares Capital Corporation, where he has been a board member and a member of the audit committee since 2004. Mr. Siegel hascontinuing director. Name Age Director
Since Principal Occupation Independent AC CC EC EREC NCG PPCR SC Qualifications & Skills NOMINEES FOR CLASS I DIRECTORS (TERM EXPIRING IN 2019) John Robert Brown 71 2003 Owner and President, Brownco Capital, LLC ✓ ![[MISSING IMAGE: ico_elpaso-member.jpg]](https://capedge.com/proxy/DEF 14A/0001571049-16-013939/ico_elpaso-member.jpg){kind=small}
• corporate finance and accounting • knowledge of Texas communities • governmental affairs and compliance • consumer retail and marketing • legal James W. Cicconi 63 1997 Senior Executive Vice President of External and Legislative Affairs, AT&T Services, Inc. ✓ ![[MISSING IMAGE: ico_elpaso-chair.jpg]](https://capedge.com/proxy/DEF 14A/0001571049-16-013939/ico_elpaso-chair.jpg){kind=small}
• governmental affairs and compliance • legal
• telecommunications
• technology strategy Mary E. Kipp 48 2015 Chief Executive Officer, El Paso Electric Company and Ex-Officio member of the Committees of the Board • regulated financial • knowledge of Texas communities • governmental affairs and compliance • legal
• regulated utility • utility operations
• environmental/alternative energy/
solar • corporate governance Thomas V. Shockley, III 71 2010 Retired Chief Executive Officer,
El Paso Electric Company
Retired Vice Chairman and Chief Operating Officer, American Electric Power Company, Inc. • knowledge of Texas communities
• regulated utility • utility operations
• environmental/alternative energy/
solar • strategic planning • corporate governance CLASS II DIRECTORS (TERM EXPIRING IN 2017) Catherine A. Allen 69 2009 Founder, Chairman and CEO, The Santa Fe Group ✓ • regulated financial • governmental affairs and compliance • strategic planning • non-profit • corporate governance • knowledge of New Mexico communities • technology strategy Edward Escudero 45 2012 President and CEO, High Desert Capital LLC
Vice Chairman of the Board,
El Paso Electric Company ✓ ![[MISSING IMAGE: ico_elpaso-finex.jpg]](https://capedge.com/proxy/DEF 14A/0001571049-16-013939/ico_elpaso-finex.jpg){kind=small}
• corporate finance and accounting • regulated financial • knowledge of Texas communities • consumer retail and marketing • regulated utility • utility operations • financial controls and auditing Eric B. Siegel 58 1996 Retired Limited Partner, Apollo Advisors, LP and Consultant and Special Advisor to the Chairman of the Milwaukee Brewers Baseball Club ✓ • corporate finance and accounting
• regulated financial • legal
• corporate governance • strategic planning CLASS III DIRECTORS (TERM EXPIRING IN 2018) James W. Harris 69 1996 Managing Partner of OP Food Products, LLC and Managing Partner of Harris Financial Advisors, LLC ✓ • corporate finance and accounting
• regulated financial • corporate governance • strategic planning • real estate • financial controls and auditing • energy finance and regulation • non-profit Woodley L. Hunt 70 2012 Executive Chairman, Hunt Companies, Inc. ✓ • corporate finance and accounting
• knowledge of Texas communities • governmental affairs and compliance • non-profit • real estate • regulated financial Stephen N. Wertheimer 65 1996 Managing Director and Founding Partner, W Capital Partners ✓ • corporate finance and accounting
• regulated financial • environmental/
alternative energy/solar • corporate governance • consumer retail and marketing • strategic planning
• technology strategy Charles A. Yamarone 57 1996 Chief Corporate Governance and Compliance Officer, Houlihan Lokey
Chairman of the Board, El Paso Electric Company
✓ • corporate finance and accounting
• regulated financial • legal
• corporate governance • financial
controls and auditing MEETINGS IN 2015 13 6 1 5 5 7 7 Chairperson Audit Committee Nominating and Corporate Governance Committee Member Compensation Committee Public Policy and Corporate Reputation Committee Financial Expert Executive Committee Security Committee EREC Energy Resources and Environmental Committee previously served as a director of a number of public and private companies, including Kerzner International Limited ("Kerzner") where he was a director and chairman of its audit and compensation committees from April 1994 to 2006. He rejoined the Kerzner Board from 2008 until April 2014. He has been a director of the Company since 1996 and serves as Chairman of our Executive Committee and Chairman of our Nominating and Corporate Governance Committee. He also serves as a member of our Audit, Compensation, and Security Committees.appointed after the resignation of Michael K. Parks from the Board in February 2015, is an independent director. Mr. Parkswas also an independent director when he was our Chairman.Mr. Shockley,Ms. Kipp, is the only member of management on the Board. We believe that this leadership structure enhances the accountability of the CEO to the Board and strengthens the Board’s independence from management.TheOur website and its contents are not incorporated into or considered a part of this Proxy Statement. of2014.2015. The guidelines for our executive officers are described in the Compensation Discussion and Analysis.Company shares of Common Stock such as trading options (for example, puts, calls and other derivatives) and also prohibit them from having Companyholding shares of Common Stock in margin accounts.(i)to the Company or received payments(ii)A director who serves as an executive officer or employee of, or beneficially owns more than a 10% equity interest in, any bank, corporation, partnership or other business entity to which the Company was indebted at the end of its most recently completed fiscal year in an amount more than the greater of 2% of such other entity’s total consolidated assets at the end of such fiscal year or $1 million.(iii)A director who is a member or employee of a law firm that has provided services to the Company during the most recently completed fiscal year if the total billings for such services were more than the greater of 2% of the law firm’s gross revenues for such fiscal year or $1 million.El Paso ElectricA director who is a member or employee of a law firm that has provided services to the Company 2015 Proxy Statement 7
(iv)A director who is a partner, executive officer or employee of any investment banking firm that has performed services for the Company (other than as a participating underwriter in a syndicate) during the most recently completed fiscal year if the total compensation received for such services was more than the greater of 2% of the investment banking firm’s consolidated gross revenues for such fiscal year or $1 million.—Ms. Allen, Ms. Holland-Branch, and Messrs. Brown, Cicconi, Escudero, Harris, Hunt, Siegel, Wertheimer and Yamarone are independent; and—Mr. Shockley, who is serving as the Company’s CEO, is not independent. El Paso Electric Company 2016 Proxy StatementIn addition, The Board also took into account a land sale that was approved in advance by the Board has determined that allwas beneficial to the Company and is not material in amount.“Act”“Exchange Act”).in 2014,that is included in our Corporate Governance Guidelines, requiringGuidelines. The Policy requires that director nominees to receive a majority of the votes cast (that is, each nominee must receive more “for” votes than “withhold” votes) in an uncontested election. If an incumbent director in an uncontested election does not receive a majority of the votes cast, he or she must tender a resignation promptly following certification of the shareholder vote. Our Nominating and Corporate Governance Committee will act on an expedited basis to determine whether to accept the director’s resignation and will submit its recommendation for prompt consideration by the Board. The Board will act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind the decisionother information that it considers appropriate and relevant.itsuch resignation by either the Nominating and Corporate Governance Committee or the Board. If an incumbent director’s resignation is not accepted, he or she will continue to serve until the next annual meeting and until his or her successor is duly elected, or his or her earlier resignation or removal. Pursuant to the Policy, the Board will only nominate individuals for directors only individualsa position as a director who agree to comply with the Policy.riskrisks inherent in the operation of the Company and the implementation of our strategic plan. The Board, however, plays an important role in overseeing management’s performance of these functions. In connection with its review of the operations of the Company’s business, the Board addresses the primary risks associated with various business decisions and operations. In addition, the Board reviews the risks associated with the Company’s strategic plan periodically throughout the year as part of its consideration of the strategic direction of the Company.Each of the Board’s Committees also oversees the management of Company risks that fall within such Committee’s areas of responsibility. In performing this function, each Committee has full access to management, as well as the ability to engage advisors.Planning & DevelopmentServices and ChiefCharter,charter, the Audit Committee oversees the operation of thisthe enterprise risk management program, and the Senior Vice President, Corporate Planning & DevelopmentServices and Chief Compliance Officer and his team make periodic reports to the Audit Committee about the identified risks and the management controls and methodologies in place to manage those risks. In connection with its risk management role, the Audit Committee periodically meets privately with representatives from the Company’s internal auditors and its independent registered public accounting firm. The Audit Committee provides reports to the Board that include these activities.8 El Paso Electric Company 2015 Proxy StatementCORPORATE GOVERNANCEIn November 2014,formed the Security Committee to enhance the Board'sin understanding and oversight of the systems policies, controls and procedures that management has put in place to (i) identify, manage and mitigate risks related to cybersecurity and physical security; (ii) respond to incidents with respect thereto; and (iii) protect critical infrastructure assets. The Committee will also assistassists the Board in the Board’s assessment ofassessing the adequacy of resources, funding, and focus within the Company with respect to cybersecurity and physical security. the President, the Senior Vice President and Chief Financial Officer, and the Vice President and Controller. A current copy of the Code of Ethics may be found on the Company’s website at www.epelectric.com. Any amendments to, or waivers from, any provision of the Code of Ethics applicable to the Chief Executive Officer, the President, the Senior Vice President and Chief Financial Officer, the Vice President and Controller or persons performing similar functions will be disclosed by posting such information on the Company’s website at www.epelectric.com within five business days.The Company’s CEO must certify to the NYSE each year that he is not aware of any violation by the Company of NYSE corporate governance listing standards, qualifying the certification to the extent necessary. Such certificationmust be made within thirty days of the date of the Company’s annual shareholders’ meeting. The 2014 Annual CEO Certification was submitted to the NYSE timely and without qualification.El Paso Electric Company 20152016 Proxy Statement 9sixten meetings in 20142015 and held executive sessions at each meeting. The Chairman of the Board presides at the executive sessions. All directors attended at least 75% of the total number of meetings of the Board and the Committees on which they served.Meetings.Meetings of Shareholders. All members of the Board except Mr. Harris and Mr. Wertheimer attended the 20142015 Annual Meeting.Meeting of Shareholders.2014The table set forth below provides information regarding compensation paid to the non-employee directors of the Company. Mr. Shockley does not receive separate compensation for his Board service.
Paid in Cash
($)
Awards
($)
Compensation
($)
($)(a)This column reports the amount of cash compensation earned in 2014 for Board and Committee service, based on the compensation policy described below. Annually, directors can elect to receive retainers and meeting fees in cash, stock or a combination of cash and stock. Messrs. Hunt, Parks and Wertheimer elected to receive this compensation in stock in 2014. Mr. Escudero, Ms. Allen and Ms. Holland-Branch elected to receive this compensation in a combination of cash and stock. The remaining directors elected to receive their compensation in cash.(b)This column represents the aggregate grant date fair value of awards granted in 2014 computed in accordance with FASB ASC Topic 718. Fair value for restricted stock is calculated using the closing price of our stock on the grant date. On May 29, 2014, the Board voted to revise the terms of the restricted stock awards granted to directors in lieu of cash for retainers and meeting fees. Stock elections by directors in lieu of cash for retainer and meeting fees are now fully vested and are expensed at fair value on the date of grant. As a result, the amounts in this column include the modification to 13,863 outstanding restricted stock awards at the time when the fair market value on the date of modification was $37.81 per share. For additional information on valuation assumptions, see Note G of Notes to the Financial Statements in the Company’s 2014 Annual Report on Form 10 K.(c)On May 29, 2014, each non-employee director received an award of 3,500 shares of restricted stock which cannot be sold until one year after the grant. These restricted stock awards had a per share grant date fair value of $37.81 and received cash dividends of $2,940. There were no other stock awards held by the non-employee directors at fiscal year-end.(d)The Company paid quarterly dividends of $0.265 per share on its Common Stock on March 31, 2014, and $0.28 per share on its Common Stock each quarter thereafter. Unvested restricted shares qualify as participating securities, and individuals awarded these shares received their respective cash dividends.2014,2015, compensation for non-employee directors consisted of the following:(1)Each non-employee director received an annual retainer of $40,000.(2)received an additional annual fee of $10,000, and the chairman of each of the other Committees of the Board received an additional annual fee of $5,000. When a Committee Chairman is appointed during another time of year, the fee is pro-rated based on his/her days of service.(3)Each non-employee director who is a member of a Committee or who is invited to attend by the Committee(4)Each Audit Committee member or Board member invited to attend by the Audit Committee Chairman received a meeting fee of $1,500 per meeting for each Audit Committee meeting attended.(5)During 2014, the Chairman of the Board received an additional award of $150,000, which was paid in stock. In 2015, the Board voted to change the additional award for the Chairman of the Board to $100,000 payable in cash or stock. Also in 2015, the Board voted to appoint a Vice Chairman of the Board and set an additional award of $50,000 payable in cash or stock.10 El Paso Electric CompanyDuring 2015, Proxy StatementDIRECTORS’ MEETINGS, COMPENSATION, AND COMMITTEES(6)Each non-employee director received an award of 3,500 shares of restricted stock. Restricted stock awarded to directors cannot be sold until one year after the grant.(“TBOC”(the “TBOC”), and the Company maintains director and officer liability insurance. The Company has indemnification agreements with each of the Company’s directors and executive officers. Fees Earned or
Paid in Cash
($) Stock
Awards
($) All Other
Compensation
($) Total
($) Name (a) (b)(c) (d) Allen, Catherine A. $ 40,000 $ 167,366 $ 4,078 $ 211,444 Brown, John Robert 82,500 127,365 4,078 213,943 Cicconi, James W. 83,500 127,365 4,078 214,943 Escudero, Edward 44,000 228,343 4,078 276,421 Harris, James W. 62,000 127,365 4,078 193,443 Holland-Branch, Patricia Z. 29,500 167,868 4,078 201,446 Hunt, Woodley L. 190,379 4,078 194,457 Parks, Michael K. 24,500 9,695 34,195 Siegel, Eric B. 99,944 127,365 4,078 231,387 Wertheimer, Stephen N. 213,895 4,078 217,973 Yamarone, Charles A. 183,000 127,365 4,078 314,443 Executive, Energy Resources and Environmental, Executive, Public Policy and Corporate Reputation, and Security.During 2014, the was composed of Chairman Escudero and directors Brown, Cicconi, Parks, Siegel and Yamarone. Mr. Parks resigned from the Board in February 2015. In March 2015, Mr. Wertheimer joined the Audit Committee. twelvethirteen meetings in 2014,2015, is responsible for appointing the independent auditors of the Company, reviewing all recommendations of the Company’s independent auditors and the Company’s internal auditors, reviewing and approving non-audit services performed by accountants and other consultants retained by the Company, reviewing the Company’s periodic reports filed with the U.S. Securities and Exchange Commission (the “SEC”) and otherwise overseeing the Company’s financial reporting. The Audit Committee, in conjunction with senior management, also reviews the Company’s internal controls and disclosure controls and procedures. The roles and responsibilities of the Audit Committee are described in detail in a written charter adopted by the Board as amended and amendedavailable on July 29, 2011.the Company’s website at www.epelectric.com.underof the Exchange Act. No member of the Audit Committee serves on the audit committee of more than three public companies. The Board has determined that Messrs. Escudero and Yamarone meet the criteria of Audit Committee financial experts under the SEC’s rules and are independent of management. Mr. Parks met the criteria of the Audit Committee financial expert while he served on the Audit Committee. Certain additional information concerning the composition and role of the Audit Committee is set forth under the caption “Audit Committee Report” below.During 2014, the was composed of Chairman Yamarone and directors Harris, Hunt, Parks and Siegel. The Board has determined that each member of this Committee is independent under the rules of the NYSE. Mr. Parks was independent under the rules of the NYSE while serving on the Compensation Committee until his resignation in February 2015. elevensix meetings in 2014,2015, is responsible for evaluating and approving the compensation of executive officers and the Chairman of the Board. It also reviews and approves recommended Company-wide compensation increaseschanges for employees, as well as approves the adoption El Paso Electric Company 2016 Proxy Statementamendedavailable on May 9, 2013.the Company’s website at www.epelectric.com. Additional information concerning the Compensation Committee’s process and procedures for the consideration and determination of executive compensation (including its engagement of compensation consultant Frederic W. Cook & Company, Inc. (“FW Cook”) appears under the caption “Compensation Discussion and Analysis” below.2014,2015, the Nominating and Corporate GovernanceCompensation Committee was composed of Chairman Siegel (appointed May 2014)Yamarone and directors Allen, Escudero, Harris, (who served as Chairman until May 2014), ParksHunt, and Wertheimer. Mr. Parks resigned in February 2015 and was not replaced on the Nominating and Corporate Governance Committee.Siegel. The Board has determined that each member of this Committee is independent under the rules of the NYSE. Mr. Parks was independentNYSE and Rule 10C-1(b)(1) under the rules of the NYSE while serving on the Exchange Act. until his resignation in February 2015. twofive meetings in 2014,2015, is responsible for identifying qualified individuals to serve as members of the Board, recommending directors for appointment to Committees, evaluating Board performance, and overseeing and setting compensation for the members of the Board. The roles and responsibilities of the Nominating and Corporate Governance Committee are described in detail in a written charter adopted by the Board and available on November 13, 2003.2014,2015, the Energy ResourcesNominating and EnvironmentalCorporate Governance Committee was composed of Chairman WertheimerSiegel and directors Allen, Brown, Holland-BranchEscudero, Harris, and Yamarone. Wertheimer. The Board has determined that each member of this Committee is independent under the rules of the NYSE.fourfive meetings in 2014.2015. The Energy Resources and Environmental Committee is responsible for (i) reviewing and assessing the operations of the Company’s electric generating fleet, including plants for which it is an owner and operator and those plants operated by others in which it owns an interest or on which it relies; (ii) overseeing the affairs and operations of the Company and needs of the Company’s transmission system; (iii) determining whether the Company has operated Company facilities in compliance with applicable environmental laws and regulations; and (iv) identifying existing and potential environmental issues facing the Company under federal, state and local law. The roles andEl Paso Electric Company 2015 Proxy Statement 11September 24, 2009the Company’s website at www.epelectric.com.amended on January 29, 2015.During 2014, the ExecutiveEnvironmental Committee was composed of Chairman Parks (appointed May 2014 until his resignation in February 2015) Cicconi, Harris and Wertheimer. In March 2015, Mr. Siegel was appointed ChairmanWertheimer and directors EscuderoAllen, Brown, Holland-Branch and Yamarone joined the Committee. Yamarone.which did not hold any meetingsheld one meeting in 2014,2015, consults with senior management on administrative matters and directs the strategic planning effort on behalf of the Board. The Executive Committee may exercise all powers of the Board (except as prohibited by the TBOC) between meetings. In addition, the Executive Committee’s responsibilities include analyzing and making recommendations to the Board regarding the maximization of shareholder value. The roles and responsibilities of the Executive Committee are described in detail in a written charter adopted by the Board and available on July 15, 2004.2014,2015, the Executive Committee was composed of Chairman Siegel (appointed in March 2015), Cicconi, Escudero, (appointed in March 2015), Harris, Wertheimer, and Yamarone (appointed in March 2015). was composed of Chairman Cicconi and directors Allen, Brown, Escudero (appointed as a committee member in May 2014), Holland-Branch and Hunt. fourseven meetings in 2014,2015, is responsible for overseeing matters relating to the Company’s legislative and regulatory affairsamendedavailable on July 26, 2013.The Securitythe Company’s website at www.epelectric.com. was established on November 20, 2014, and during 2014 was composed of Chairman AllenCicconi and directors Allen, Brown, Escudero, Holland-Branch Siegel, and Wertheimer. Hunt.one meetingseven meetings in 2014,2015, enhances the Board'sBoard’s understanding and oversight of the systems policies, controls and procedures that management has put in place to (i) identify, manage and mitigate risks related to cybersecurity and physical security; (ii) respond to incidents with respect thereto; and (iii) protect critical infrastructure assets. The Committee will also assistassists in the Board’s assessment of the adequacy of resources, funding, and focus within the Company with respect to cybersecurity and physical security. The roles and responsibilities of the Security Committee are described in detail in a written charter adopted by the Board and available on November 20, 2014.the Company’s website at www.epelectric.com.Attn:Attention: Office of the Secretary, 100 N. Stanton Street, El Paso, Texas 79901.director.director as well. The Nominating and Corporate Governance Committee will also periodically review the composition of the Board in light of its current challenges and needs and determine whether it may be appropriate to add or remove individuals after considering issues of judgment, diversity, age, skills, background and experience. Our Board does not have a formal written policy with regard to the consideration of diversity in identifying director nominees, but its practice has been to seek a combination of skills, experience, geographic and local knowledge, backgrounds and outlook that is in the best interest of the Company and its various constituencies. No director may serve on the boards of more than three other public companies while serving on the Company’s Board.12 20152016 Proxy Statement
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM2015.2016. At the Annual Meeting, the Company will ask shareholders to ratify the Board’s selection. KPMG LLP, which served in the same capacity in 20132014 and 2014,2015, is expected to be represented at the Annual Meeting. Representatives of KPMG LLP will have an opportunity to make a statement if they desire to do2015.billedare set forth below. Principal Accounting Firm Fees Year Ended
December 31 2015 2014 Integrated audit of financial statements and internal control over financial reporting(1) $ 1,318,000 $ 1,229,000 Audit-related fees(2) 244,000 273,000 Tax fees — — All other fees — — Total fees $ 1,562,000 $ 1,502,000 Company an aggregate of $1,229,000 and $1,162,000 for professional services rendered in connection withprincipal accounting firm relating to the integrated audit of the Company’s financial statements (including the Sarbanes-Oxley Section20142015 and December 31, 2013,2014, respectively.KPMG LLP billed the Company $273,000 and $232,000Amounts include fees for audit-related services during the fiscal years ended December 31, 2014 and 2013, respectively. These audit-related services included (i) audits of state and federal regulatory filings; (ii)filings and audits of benefits plans;benefit plans in 2015 and (iii) comfort letter associated with the issuance of Senior Notes in 2014.KPMG LLP did not render tax services for the years ended December 31, 2014 or 2013.The Company paid no other fees to KPMG LLP during the fiscal years ended December 31, 2014, and 2013.Chartercharter provides that the Audit Committee will pre-approve audit services and non-audit services to be provided by the Company’s independent auditors pursuant to pre-approval policies and procedures established by the Audit Committee. The Audit Committee may consult with management in the decision-making2015.20152016 Proxy Statement 13
John Robert Brown
James W. Cicconi
Eric B. Siegel
Stephen N. Wertheimer
Charles A. Yamarone El Paso Electric Company 2016 Proxy Statement
ADVISORY VOTE TO APPROVE
THE COMPANY’S EXECUTIVE
COMPENSATIONPursuant toDodd-Frank Wall Street ReformExchange Act and Consumer Protection Act, enacted in July 2010 (“Dodd-Frank Act”),related rules of the SEC, we are once again providing our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers or NEOs (as hereinafter defined) as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. The Dodd-Frank Act and applicable SEC rules also require that, at least once every six years, shareholders be given the opportunity to vote on an advisory basis regarding the frequency (i.e., annually, every two years or every three years) of future shareholder advisory votes on the compensation of our NEOs. At the 2010 Annual Meeting, the shareholders indicated a preference for holding “Say-on-Pay” advisory votes on an annual basis as recommended by the Board. Thus, the advisory vote in this Proposal 3 reflects the approved annual frequency and the next advisory vote on the frequency of future Say-on-Pay votes will occur no later than the 2016 Annual Meeting. (“NEOs”) as disclosed pursuant to Item 402 of Regulation S-K in the Compensation Discussion and Analysis, compensation tables and related narratives and other materials in the Company’s Proxy Statement.”Our Board and Compensation Committee urge shareholders to endorse the compensation program for our executive officers by voting “FOR” the above resolution. —Strong focus on performance-based pay consisting of annual incentives tied to key financial and operating measures and long-term incentives tied to shareholder return;—75% of the ongoing long-term incentive program is tied directly to relative shareholder return;—Limited perquisites; and—No tax gross-ups in our change in control or severance programs.
EXECUTIVE OFFICERS (“NEOs”).14 20152016 Proxy Statement
ADVISORY VOTE ON FREQUENCY
OF EXECUTIVE COMPENSATION
ADVISORY VOTES El Paso Electric Company 2016 Proxy Statement—Attract and retain qualified executives by providing comprehensive and market-competitive compensation;—Encourage a high level of performance by linking a significant amount of executive pay to the financial results and operating performance of the Company; and—Motivate our executive team to achieve the Company’s business strategy and ensure focus on long-term shareholder return.2014 Mary E. Kipp Chief Executive Officer Thomas V. Shockley, III Chief Executive Officer (retired) Nathan T. Hirschi Senior Vice President and Chief Financial Officer Rocky R. Miracle Senior Vice President, Corporate Services and Chief Compliance Officer Steven T. Buraczyk Senior Vice President, Operations William A. Stiller Senior Vice President, Public and Customer Affairs and Chief Human Resources Officer 20142015 executive compensation program include the following:—In late 2013, we extended the term of our CEO’s employment agreement until December 15, 2015 to ensure his commitment to continued employment with the Company until such time.—In January 2014, we increased our CEO’s base pay by 8% and increased his target annual bonus from 70% to 80% of base pay to bring his target cash compensation closer to the market median.—In January 2014, we awarded our CEO a special grant of $400,000 of service-vested restricted stock in lieu of any other equity grant in 2014, with no vesting until the end of his extended employment agreement term on December 15, 2015.—We believe that our CEO’s potential severance benefits are below market standard practices, in that the agreement provides for no more than 12 months of base salary, a prorated annual bonus for the year in which termination occurs, and up to 12 months of reimbursement for health benefits coverage, together with accelerated vesting of equity.—The Compensation Committee has incorporated double-trigger severance arrangements into the CEO’s employment agreement change in control to receive change in control to receive change of control severance benefits, which is consistent with both market practice and our agreements with the other NEOs.consistent with our practice for the other NEOs.—In 2014, our earnings per share and our safety and reliability performance fell short of Target and resulted in a below-Target annual cash bonus payout to our NEOs,market competitivemarket-competitive executive compensation.—The three-year performance period for our 2012 performance-based equity awards ended in 2014, and because our relative Total Shareholder Return (“TSR”) failed to meet the threshold payout level versus our comparator group, we did not pay out any performance shares to NEOs, further demonstrating alignment of our compensation program with shareholder interests.—We planned a more focused strategy to improve safety performance for 2015 by removing the safety metrics from the Annual Cash Bonus Plan and requiring individual safety goals for the NEOs and for all employees. We also increased the weighting for the system reliability and compliance metrics in the Annual Cash Bonus Plan.—Our performance-based equity awards depend on relative TSR performance over a three-year period, and we do not pay dividends on unearned performance awards.—The Compensation Committee engaged in regular executive sessions without management present and regularly consulted with its external executive compensation consultant.—The Compensation Committee reviewed tally sheets for the CEO, other NEOs and other executive officers together with reviewing and approving the Company’s annual report to shareholders regarding executive compensation.—In September 2014, we appointed Ms. Kipp as President of the Company and approved an increase in her base salary from $325,000 to $425,000.hishis/her evaluations to the Compensation Committee. Our CEO also recommends to and discussesEl Paso Electric Company 2015 Proxy Statement 1520142015 included:—An executive compensation study covering base salary, short-term incentives, long-term incentives, benefits and perquisites for executives of the Company using an approved peer group and published surveys.—A report on CEO compensation and recommendations with respect to the CEO’s compensation package.—Regular updates on emerging trends and best practices at scheduled Compensation Committee meetings.—A review and comment on proxy disclosures, including this CD&A report, summary compensation tables, and shareholder proposals.—Ad hoc support on issues directly related to the Compensation Committee’s scope of duties and responsibilities such as attraction and retention issues and incentive plan design.—Comprehensive review of our executive compensation plans, programs and policies.aswhen requested, attended its executive sessions. In addition, members of theinterest.interest or other factors that might impair the consultants’ independence.2014,2015, we again held a shareholder advisory vote to approve the compensation of our NEOs, commonly referred to as a “say-on-pay” vote. More than 95%93% of shareholder votes (excluding abstentions and broker non-votes) were cast in favor of the compensation of our NEOs. Although this was only an advisory vote, we believe the approval by our shareholders shows support for our compensation philosophy and approach, and our Compensation Committee did not make any specific changes in response to this vote. Instead, it retained its general approach to determining our executive compensation as described in this CD&A, while focusing on particular needs that arise during the year. El Paso Electric Company 2016 Proxy Statementpaycompensation decisions made in 2014,2015, the companies in the Compensation Comparator Group consisted of the following:— ALLETE, Inc. — MGE Energy, Inc. Avista Corporation — NorthWestern Corporation Black Hills Corporation — Otter Tail Corporation Cleco Corporation — PNM Resources, Inc. The Empire District — Portland General Electric Company Great Plains Energy, Inc. — UIL Holdings Corporation(1) IDACORP, Inc. — Unitil Corporation ITC Holdings — MGE Energy, Inc.— NorthWestern Corporation— Otter Tail Corporation— PNM Resources, Inc.— Portland General Electric Company— UIL Holdings Corporation— Unitil Corporation— UNS Energy Corporation1— Westar Energy, Inc. 1 UNSUIL Holdings was acquired by Fortis in August 2014.16 El Paso Electric Company 2015 Proxy StatementCOMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)—Base salary;—Short-term incentive compensation, currently awarded through an annual cash performance-based bonus plan; and—Long-term incentive equity compensation, currently awarded in restricted shares with a combination of time-based and performance-based vesting. continuing executive officers are reviewed and set annually, or, as warranted, in connection with hiring, promotions or reassignments. The Compensation Committee generally targets the 50th percentile50th-percentile level of the Compensation Comparator Group, although theperformance.performance in setting base salaries. The Compensation Committee approved base salary increases effective January 2014,2015, for the CEO and NEOs ranging from 0% to 8%8.3%. For 2014,2015, each of the NEOs’ salaries fell within 15%5% of the 50th50th percentile, as determined by FW Cook, with the average being below the 50th percentile of similarly-positioned executives at members ofcompanies in the Compensation Comparator Group. Individual variations from the 50th percentile primarily reflect each executive’s skills, experience and performance in the position. Although individual performance and contributions are considered, no specific individual performance factors had a material impact on salaries for fiscal 2014.promotionalbase salary increase for Ms. Kipp in September 2014December 2015 when she was promoted to President.CEO, with her base salary reflecting a 38.9% change. The following table reflects changes in annual base salary during 20142015 for the CEO and NEOs.20142015 Base Salary Changes for Named
Executive Officers (“NEOs”)
Change
Chief Executive Officer
Senior Vice President and Chief Financial Officer
Executive Vice President
Executive Vice President
Senior Vice President, Human Resources and Customer Care
President
Senior Vice President and General Counsel
Senior Vice President, Corporate Planning & Development and
Chief Compliance Officer Annual Base Salary Name and Principal Position 2014 2015 Percent Change
Chief Executive Officer (through 12/15/15) $ 675,000 $ 675,000 0.0%
Chief Executive Officer (12/15/15) $ 625,000 38.9%
President $ 425,000 $ 450,000 5.9%
Senior Vice President and Chief Financial Officer $ 300,000 $ 325,000 8.3%
Senior Vice President, Corporate Services and Chief Compliance Officer $ 295,000 $ 305,000 3.4%
Senior Vice President, Operations $ 283,000 $ 305,000 7.8% William A. Stiller
Senior Vice President, Public and Customer Affairs and Chief Human Resources Officer $ 283,000 $ 290,000 2.5% *Reflects base pay increase effective September 22, 2014 upon promotion to PresidentAnnual Cash Bonus PlanACBP is to provide market-based compensation opportunities based on achievement of specific business goals and objectives that are established in advance on an annual basis. All employees, including all of our NEOs, are eligible to participate in the Annual Cash Bonus Plan.targetTarget award opportunity expressed as a percentage of base salary. The targetTarget for each of the NEOs for 20142015 was as follows: (i) 80% for Mr. Shockley;the CEO; (ii) 60% for the President; (iii) 50% for the President (formerly our Senior Vice President (“SVP”) and General Counsel until September 2014) and for the SVP and Chief Financial Officer (“CFO”);Officer; and (iii)(iv) 45% for the other NEOs. The targetTarget award represents the level of bonus payment the executive officer may earn intargetTarget or expected levels of performance. Payments at the targetTarget levels combined with base salary are further intended to approximate the 50th percentile of the total annual cash compensation opportunity among the Compensation Comparator Group. In addition, maximumMaximum and thresholdThreshold award levels are established for each metric that adjust payouts for performance levels that exceed or fall below our plan. The CEO could earn 30%28% of his targethis/her Target bonus opportunity (19%(15% for the President, 18% for the Senior Vice President and the SVP & CFOChief Financial Officer and 21%20% for the other NEOs) if all metrics were achieved at thresholdThreshold performance, and could earn no more than 195%200% of the targetTarget bonus opportunity (176%(183% for the President, 180% for the Senior Vice President and the SVP & CFOChief Financial Officer and 174%178% for the other NEOs) at maximum.El Paso Electric Company 2015 Proxy Statement 17Annual Cash Bonus PlanACBP for 20142015 were based solely on the following corporate financial and operational performance measures.
measures:—Financial performance measured by earnings per share; and— safety, and compliance goals.—No individual performance modifier was applied by the Committee in determining payouts to the NEOs under the Annual Cash Bonus Plan.The safety goals under operational performance include the following: (i) Days Away/Restricted Duty/Job Transfer (“DART”), a measure of accident and injury severity; (ii) vehicle accident frequency rate (“Vehicle”); and (iii) Leading Indicators (“LI”), a measure of each employee’s completion of defined safety activities designed to foster safety awareness and compliance with established safety rules and regulations. For 2014,goals.target goals for DART and Vehicle were established usingCommittee in determining payouts to the average performance of those metrics forNEOs under the past five years. ACBP.goals established for LI wereCustomer Satisfaction goal in the ACBP is based on two separate measures – the minimum expected performance at target with upside opportunity at maximum for additional defined achievement.The customer satisfaction goal under operational performance is to increase customer satisfaction to a level of customer loyalty. Customer loyalty is defined as the point where, given a choice, a customer is less likely to switch to a competitor.Satisfaction Survey and Call Center Performance. The establishment and measurement of the customer satisfaction survey goal is based on an annual customer survey designed and conducted by a third-party market research organization. Survey responses are provided by a combination of customer classes and are weighted ascommercial customers.industrial customers and are designed to measure overall customer satisfaction and meeting our customers’ expectations.For 2014, we established an additionalThe second customer satisfaction goal (“Call Center Service Level”) is designed to focus our customer call center employees on fast and efficient service for customers contacting us via theour call center. The Call Center Service Level is a measure of the percentage of incoming calls answered within the first minute.trainingtrainings and activityactivities during the year. The 20142015 Target performance level is based on the individual employee’s satisfactory completion of this training during the year.earnings per shareEarnings Per Share bonus goal for 20142015 was established based on a range between a thresholdThreshold of $2.20$1.75 and a maximumMaximum of $2.45.$2.15. Executive officers would receive no bonus if the threshold earnings per shareThreshold Earnings Per Share goal was not achieved. Because the plan provides that bonus payments are made only if the Company’s reported earnings per share exceed the threshold amount, and earnings per share reflect the bonus payments, any amounts otherwise earned based on achievement of various targets would need to be reduced pro rata in the event the full payments would cause the Company’s earnings per share to be lower than the threshold amount.“2014“2015 Annual Cash Bonus Plan” shows the individual metrics, their respective weighting and the performance goals at target, thresholdTarget, Threshold and maximumMaximum levels of performance. Except for the complianceCompliance metric described above, results between the thresholdThreshold and target,Target, or between the targetTarget and maximum,Maximum, are interpolated to calculate the achievement of the metric. The complianceCompliance metric pays out only at target performance, assuming the individual employee achieves that levelTarget for full compliance or at Maximum for completion of results.additional defined activities. The table also shows the actual performance result for each metric and the resulting final payout percentage of targetTarget opportunity earned by the NEOs. As noted above, the CEO has a wider and higher range of payout under this plan to better focus hishis/her short term compensation on performance. El Paso Electric Company 2016 Proxy Statement
(%)
Result
(as % of Target Bonus)
(averaged) Performance Goals Performance Result Final Payout
(as % of Target Bonus) Metric Weighting
(%) Threshold Target Maximum Actual
Result
(averaged)(b) Earnings Per Share 50 $1.75 $1.92 $2.15 $2.03 73.9 69.0 Customer Satisfaction Customer Survey 10 69 75 81 81 20.0 18.0 Call Center Performance 10 70% 80% 90% 86% 16.0 14.7 Reliability (SAIDI) (min) 20 46.8 min 43.7 min 39.9 min 45.2 min* 0 0 Compliance 10 N/A Fully Compliant Defined Activity Maximum 20.0 18.0 TOTAL 100 129.9 119.7 theour 2015 Annual Report on Form 10-K, for the yearended December 31, 2014, and as shown in the above table, the Company had net income of $2.27$2.03 per basic share, which includes an accrual for the cost of the bonus pool. The Company also met (or failed to meet) its customer18 El Paso Electric Company 2015 Proxy StatementCOMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)satisfactionCustomer Satisfaction goals, its reliabilityReliability goal, its three safety goals and its complianceCompliance goal, in each instance at the levelrespective levels reflected in the above table. As a result, each NEO received a bonus, as setSummary“Summary Compensation TableTable” later in this proxy statement.Proxy Statement. The total bonus paid to Companythe Company’s approximately 1,100 employees for 20142015 was approximately $7.4$10.5 million, of which approximately$1.9 $2.7 million was paid to the NEOs and the 10 other executive officers.amountamounts of the 2014 Annual Cash Bonus Plan2015 ACBP compared with the payout opportunity at target payoutTarget for each of the NEOs:20142015 Annual Cash Bonus Plan Payouts
to Named Executive Officers (“NEOs”)
Incentive
Opportunity ($)
Bonus Paid Target
Incentive
Opportunity ($) Annual Cash
Bonus Paid Name ($) (% of Target) Mary E. Kipp 287,019 350,432 122.1% Thomas V. Shockley, III 544,154 706,924 129.9% Nathan T. Hirschi 167,308 200,652 119.9% Rocky R. Miracle 142,010 168,739 118.8% Steven T. Buraczyk 141,387 167,999 118.8% William A. Stiller 135,156 160,595 118.8% 2014,2015, except for the annual strategy execution bonus provided under Mr. Shockley’s Amended and Restated Employment Agreement, the Compensation Committee approved no other cash bonus award for any NEO, except the annual strategy execution bonus provided under Mr. Shockley’s employment agreement as described below.tool.tool based on deferred vesting. Since 2004, the Compensation Committee has granted annual long-term equity incentives consisting of two elements:—Performance shares, which are earned based on our relative total shareholder return over a three-year performance period; and—Time-vested restricted stock, which vests in one installment at the end of the same three-year period.our CEO and Messrs. Carpenter and Puente)Mr. Shockley) received these awards in March 2014,February 2015, in the amounts set forth below in the “Grants of Plan-Based Awards” table. The CEOtable below. Mr. Shockley did not receive an equity award in March 2014February 2015 when the other NEOs received their annual long-term incentive grantwillwas scheduled to end in December 2015 and the March 2014February 2015 grants were based on a three-year performance cycle ending in 2016. However, in light of Mr. Shockley agreeing to extend his term until December 2015 and in recognition of his service and performance, he received a special restricted stock grant in January 2014, which vests at the end of his December 2015 term. Messrs. Carpenter and Puente did not receive long-term equity awards in 2014 consistent with the terms of an Employment Transition Agreement each had entered into with the Company in 2013 and because their employment was expected to end in January 2015. In consideration of Mr. Stiller staying beyond his original contract period, he was awarded a restricted stock grant of $100,000 grant value which will vest at the end of 2015.2017. (excluding the CEO and Messrs. Carpenter and Puente), the mix for each annual equity award was again based on a weighting of 75%67% for performance shares and 25%33% for time-basedtime-vested restricted stock. We have chosen to place more weight on the performance shares to emphasize long-term performance and shareholder returns, consistent with the Company’s compensation philosophy. We believe that the time-basedtime-vested restricted stock awards are also an effective retention and incentive toolstool because their actual value is tied to the value of the Company’s stock no earlier than the vesting date, and the vesting schedulesschedule require that participants be employed at the end of the three-year vesting period. The initial targetTarget values (i.e.(i.e., the initial value of the time-basedtime-vested restricted stock plus performance shares at target)Target), when combined with annual cash compensation, are intended to approximate the 50th percentile of the annual total direct compensation value among the Compensation Comparator Group. Dividends on Company stockshares of Common Stock are paid quarterly on time-vested restricted stock but aretotal shareholder returnTSR percentile ranking within a specific group of companies approved by the Compensation Committee (called the “Performance Comparator Group”). The Performance Comparator Group for the 2014 equity awards was modified from previous year so that it consisted of the same companies used in the Compensation Comparator Group discussed earlier in this CD&A. This change to our Performance Comparator Group was reviewed with our independent executive compensation consultant.target,Target, depending on our ranking within the 17-member Performance16-member Compensation Comparator Group (including the Company) for total shareholder return.TSR. As with the time-basedtime-vested restricted stock, participants are required to be employed at the end of the three-year cycle to be eligible for any award. Total ShareholderEl Paso Electric Company 2015 Proxy Statement 19ReturnTSR is defined as the change in stock value, plus dividends paid, over the three-year performance period. To eliminate volatility from measuring stock price on a particular date, the beginning and ending stock price used to calculate total shareholder returnTSR is the average closing price for the month of December. The performance share payout scale is as follows: —TSR Rank in
Comparator GroupIf we rank at 90th Performance Share Payout
as Percent of Target 200% of target —If we rank between the 75th 175% 90th percentile, 175% of target—If we rank above the 50th percentile but below the 75th percentile, we interpolate Interpolate between 150% and 100% of target —If we rank at the 50th percentile, 100% of target —If we rank below the 50th percentile but at or above the 30th percentile, we interpolate Interpolate between 100% and 30% of target 0% —If we rank below the 30th percentile, 0% of target20122013 to 20142015 performance cycle, which ended on December 31, 2014,2015, our total shareholder returnTSR ranked below the 30th percentile within the PerformanceCompensation Comparator Group established at the time that long-term incentive wasincentives were granted in 2012.2013. Therefore, the performance shares awarded for that performance cycle were not earned and were forfeited.CEO Compensation. Mr. Shockley has served as CEO since January 2012, first as interim CEO and then as CEO effective June 1, 2012, at which time the Compensation Committee approved an employment agreement for him. In determining Mr. Shockley’s compensation both at the time of his hiring and since that time, the Compensation Committee and the independent members of the Board considered several key factors that are unique to his role; in particular:—His appointment as CEO was important to the Company due to his deep experience in the electric utility industry and the continuity it offered given his time on the Board and then as interim CEO.—The period of time contemplated for Mr. Shockley’s employment included several highly important and unique challenges to the Company in terms of the need for significant capital expenditures, numerous regulatory matters and the likelihood of necessary rate relief to support the expansion of the asset base, stabilizing the executive team and ensuring that a strong senior management succession plan is in place.—Understanding that Mr. Shockley would not be expected to serve for a long term given that he had previously retired from a lengthy career in the industry, the focus for his compensation package included components that were meant to serve as specific incentives for a shorter term while encouraging his focus on very specific business achievements. For example, in addition to being eligible for the Company’s Annual Cash Bonus Plan discussed above, in which all other employees participate, the Compensation Committee believed it would be important to reward the CEO for additional contributions outside of those particular metrics, such as strategic accomplishments that did not lend themselves to formulaic results but would be key to achieving the Company’s longer term objectives, including stabilizing the senior management team and putting the management succession plan in place. To achieve this objective, the Compensation Committee has the authority to award him a separate bonus each year based on its determination of his individual performance toward achieving those specific strategic objectives (detail below).—Similarly, the Compensation Committee has approved restricted stock awards for Mr. Shockley that vest during the actual expected term of his service rather than over a longer period. The Compensation Committee believed these grants were appropriate because they encourage his commitment to our stock price performance and align his compensation with the interests of our shareholders, while acknowledging the limited-term nature of his employment.The original term of Mr. Shockley’s employment agreement was through December 31, 2014. During 2013, the parties agreed to extend the term of his agreement (and his expected commitment to remain in his role) through December 15, 2015. In 2014, as a result of its review of Mr. Shockley’s compensation package, the Compensation Committee consulting with its independent executive compensation consultant, FW Cook, determined to make certain changes to his compensation. His compensation arrangements for 2014 included the following compensation elements:—His base salary for 2014 was $675,000, determined to be 3% below the median of the compensation comparator group. This was increased from $625,000 due to Mr. Shockley’s contributions in 2013 and for competitiveness reasons.—His annual performance bonus opportunity for 2014 was increased to 80% of annualized base compensation with a maximum annual bonus opportunity of 200% of his target opportunity, subject to meeting performance goals under the Company’s Annual Cash Bonus Plan. This increase in target bonus opportunity brought Mr. Shockley to the median of the compensation comparator group for this component of compensation. The 2014 plan and payouts are described above under “Annual Cash Bonus Plan.”—He remained eligible for an annual strategic cash bonus up to $350,000 for each year of the term of his agreement, based on the Compensation Committee’s subjective evaluation of the Company’s progress towards its long-term strategic goals and his contributions to this20 El Paso Electric Company 2015 Proxy StatementCOMPENSATION DISCUSSION AND ANALYSIS (“CD&A”)progress. For 2014, based on its review of Mr. Shockley’s 2014 performance, the Compensation Committee approved payment of a $250,000 strategic bonus based on its assessment of his performance and progress toward strategic goals during this period in particular by continuing to advance the Company’s priorities with the community, advancing the leadership development and succession planning process and improving the corporate culture at the Company.—As contemplated under his original employment agreement, Mr. Shockley did not receive a share grant under the Company’s three-year long-term incentive plan in 2014 as did the other continuing executive officers, although he received a grant under the three-year long-term incentive plan in 2012.—In January 2014, in recognition of both his commitment to remain with the Company through December 15, 2015 and his accomplishments and contributions during his tenure as CEO, he received a grant of 10,979 shares of Company restricted stock (valued at approximately $400,000 at grant) that will vest on December 15, 2015 if he remains with the Company on that date. The Committee determined it would be inappropriate to attach additional performance metrics to this grant due to the limited term of Mr. Shockley’s employment with the Company and the Compensation Committee’s intent to have him continue to focus on the Company’s longer term strategic plan. The CEO was already participating in the Annual Cash Bonus Plan with all other NEOs and the additional strategic bonus opportunity, and the Compensation Committee did not want to introduce additional short-term metrics. Instead, the Compensation Committee believed this grant would directly reinforce the CEO’s focus on longer-term shareholder value/growth.—Under the terms of the 2012-2014 performance cycle, as discussed earlier, the Company’s total shareholder return ranked below the 30th percentile of its Performance Comparator Group and Mr. Shockley received no payout from the 2012 performance share grant.—Mr. Shockley continued participation in all benefit plans available to senior executives of the Company including but not limited to the Company’s retirement and welfare benefit plans, monthly car allowance, life insurance coverage and annual paid time-off.Mr. Shockley’s agreement also provides for payments and benefits in the event of his termination by the Company without cause (or by Mr. Shockley under defined circumstances), including in connection with a change of control of the Company, as further described below. Because of the limited term of the agreement, the Compensation Committee decided not to provide Mr. Shockley a Change in Control Agreement as is provided to other senior executives. Instead, in the event he is terminated without cause or terminates his employment for good reason (such as if he is removed as CEO or has his duties materially reduced), including in connection with a change in control of the Company, Mr. Shockley will receive severance benefits of up to 12 months base salary, a prorated bonus for the year in which termination occurs and reimbursement of COBRA benefits for 12 months, or a cash payment in lieu thereof, and accelerated vesting of certain outstanding unvested equity awards as described below under “Change of Control Agreements and Other Termination Benefits.”The Compensation Committee reviewed with FW Cook the costs and benefits compared to those provided by the members of our Compensation Comparator Group to their respective CEOs in determining that the arrangement was reasonable and appropriate for the circumstances. FW Cook reported to the Compensation Committee that the annualized value of Mr. Shockley’s proposed target total direct compensation for 2014 was within 2% of the market median of the Compensation Comparator Group comparability data, including up to the maximum annual strategic bonus of $350,000 and the $400,000 restricted stock grant awarded in 2014.Annual Cash Bonus Plan,ACBP, applied to the qualified retirement plan formula without regard to the Code’s limitations on qualified plan benefits.such as aincluding car allowance, and, for senior officers, an allowance for financial, tax and estate planning. has approved a change of control severance agreement for each of our NEOs (except Mr. Shockley, whose arrangement is further described above and below) and all other executive officers. As further described in this Proxy Statement, these agreements provideEl Paso Electric Company 2015 Proxy Statement 21 El Paso Electric Company 2016 Proxy StatementCommittee PositionGuideline CEO Guideline CEO Three times base salarysalary Other Executive Officers Two times base salarysalary 2014,2015, all of our NEOs met or are progressing towards meeting the guidelines within their initial five-year terms. El Paso Electric Company 2016 Proxy Statement
James W. Harris
Woodley L. Hunt
Eric B. Siegel22 20152016 Proxy StatementCOMPENSATION COMMITTEE REPORT2014,2015, and each of the Company’s other three most highly 2014.Also included are Mr. Carpenter and Mr. Puente who served as Executive Vice Presidents during fiscal year 2014 and retired from the Company in January 2015. The persons named in the Summary Compensation Table are referred to collectively as the “Named Executive Officers” or “NEOs”.
Position
($)
($)(f)
Awards
($)(g)
Incentive Plan
Compensation
($)(h)
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($)(i)
Compensation
($)(j)
($)
Chief Executive Officer
Senior Vice President-
Chief Financial Officer(a)
Former Executive Vice President(b)
Former Executive Vice President(c)
Senior Vice President-
Human Resources and Customer Care(d)
President(e)
Senior Vice President- Corporate Planning & Development and Chief Compliance Officer(a)Mr. Hirschi was not an NEO for fiscal year 2012 and therefore compensation for 2012 is not reported.(b)In January 2015, Mr. Puente retired from the Company as an Executive Vice President (“EVP”). In November 2013, Mr. Puente entered into an employment transition agreement, which upon his retirement provided for vesting of 1,083 shares of common stock. All other previous awards of performance shares and restricted stock shares were forfeited as of the date of his retirement. The Employment Transition Agreement also awarded him an additional 24 months of salary. This compensation is reflected in the "All Other Compensation" column although payments did not commence until 2015.(c)In January 2015, Mr. Carpenter retired from the Company as an Executive Vice President (“EVP”). In November 2013, Mr. Carpenter entered into an employment transition agreement, which upon his retirement provided for vesting of 1,773 shares of common stock. All other previous awards of performance shares and restricted stock shares were forfeited as of the date of his retirement. The Employment Transition Agreement also awarded him an additional 12 months of salary. This compensation is reflected in the "All Other Compensation" column although payments did not commence until 2015.(d)Mr. Stiller was not a NEO for fiscal years 2013 and 2012, and therefore compensation for 2013 and 2012 is not reported.(e)Ms. Kipp was appointed as President on September 16, 2014, prior to which she served as SVP and General Counsel.(f)Mr. Shockley's bonus amounts reflect the annual bonus under his employment agreement that may be paid based on strategic or other performance measures, as described in the Compensation Discussion and Analysis ("CD&A").(g)This column represents the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718 for the restricted stock and performance shares granted in the applicable year. Restricted stock awards are valued at the closing market price on the date of grant. Performance shares are valued at grant date fair value, which is based upon a Monte Carlo simulation, which is a methodology for determining average payout using multiple simulations. Amounts disclosed have not been reduced by estimated service-based forfeitures. For additional information on the valuation assumptions with respect to restricted stock and performance shares, see Note G – Common Stock of Notes to the Financial Statements in the Company’s 2014 Annual Report on Form 10-K.(h)This column represents performance-based bonuses earned under the Annual Cash Bonus plan for performance during 2014, 2013, and 2012.(i)This column represents the change in pension value between the accumulated pension benefit for each NEO as of December 31 of the applicable year as compared to December 31 of the prior year. As of December 31, 2014, Mr. Stiller has not met the service period required to vest in the Pension and Excess Benefit Plans.(j)See the following table regarding each component of amounts for 2014 included in the “All Other Compensation” column in the Summary Compensation Table above. Name and Principal
Position Year Salary
($)
($)(f)
Awards
($)(g)
Incentive Plan
Compensation
($)(h)
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($)(i)
Compensation
($)(j) Total
($)
Chief Executive Officer(a) 2015 $ 471,154 $ $ 1,243,927 $ 350,432 $ 81,858 $ 39,086 $ 2,186,457 2014 344,423 206,835 149,910 143,416 20,190 864,774 2013 307,928 219,017 58,576 40,309 15,556 641,386
Former Chief Executive Officer(b) 2015 680,192 350,000 706,924 126,219 1,863,335 2014 669,231 250,000 399,965 498,912 111,839 55,929 1,985,876 2013 622,115 350,000 499,967 223,522 176,594 35,619 1,907,817
Senior Vice President-
Chief Financial Officer 2015 334,615 302,506 200,652 41,784 31,806 911,363 2014 298,269 206,835 129,822 69,807 27,479 732,212 2013 242,993 132,403 39,228 19,055 22,999 456,678
Senior Vice President-
Corporate Services and Chief
Compliance Officer(c) 2015 315,577 201,684 168,739 49,313 21,161 756,474 2014 293,385 165,447 114,713 121,897 26,753 722,195 2013 280,192 188,433 53,300 64,261 27,606 613,792 Steven T. Buraczyk
Senior Vice President-
Operations(d) 2015 314,192 201,684 167,999 67,638 20,373 771,886
Senior Vice President-
Public and Customer Affairs
and Chief Human Resources
Officer(e) 2015 300,346 176,430 160,595 27,561 36,957 701,889 2014 282,077 244,738 110,292 71,321 135,429 843,857 El Paso Electric Company 20152016 Proxy Statement 23
Principal Position
PTO
Sellback
($)(a)
Life
Insurance
($)
Contributions
To Retirement
and
401(k) Plans
($)
Use of
Company
Car/Parking
($)
Planning/
Legal
Fees
and Other
($)
Dividends
Paid on
Unvested
Awards
($)(b)
Benefit
($)(c)
Relocation
($)
($) Name Year
PTO
Sellback
($)(a) Group
Term Life
Insurance
($) Company
Contributions
To Retirement
and 401(k)
Plans
($) Personal
Use of
Company
Car/Parking
($) Financial
Planning/
Legal
Fees and
Other
($)
Paid on
Unvested
Awards
($)(b)
Fees
($)(c) Executive
Relocation
($) Total
($) Mary E. Kipp 2015 $ 17,308 $ 742 $ 7,950 $ 3,000 $ 745 $ 9,341 $ $ $ 39,086 Thomas V. Shockley, III 2015 51,923 6,213 15,900 3,000 10,030 29,153 10,000 126,219 Nathan T. Hirschi 2015 12,500 780 7,950 3,000 270 7,306 31,806 Rocky R. Miracle 2015 1,135 2,088 7,950 3,000 525 6,463 21,161 Steven T. Buraczyk 2015 472 7,950 3,000 3,147 5,804 20,373 William A. Stiller 2015 3,346 1,968 15,900 3,250 660 9,333 2,500 36,957 (a)This column represents payments for accrued and unused vacation and personal holiday time pursuant to Company policy.(b)We paid dividends on unvested time-based restricted stock; however we do not pay dividends on unearned performance share awards.(c)In accordance with Mr. Carpenter and Mr. Puente’s November 2013 Employment Transition Agreements.2014:
and
Approval
Date
Under Non-Equity
Plan Awards(d)
Under Equity Incentive Plan
Awards(e)
Other
Stock
Awards:
Number of
Shares
of Stock
or Units
(#)(f)
Fair Value
of Stock
and
Option
Awards
($)(g)
($)
($)
($)
(#)
(#)
(#) Name Grant
and
Approval
Date
Non-Equity Plan Awards(b)
Equity Incentive Plan Awards(c)
Stock
Awards:
Number of
Shares of
Stock or
Units (#)(d)
Fair Value
of Stock
and
Option
Awards
($)(e) Threshold
($) Target
($) Maximum
($) Threshold
(#) Target
(#) Maximum
(#) Mary E. Kipp(a) 02/20/15 $ 45,325 $ 287,019 $ 529,086 2,122 7,073 14,146 3,484 $ 403,329 12/15/15 27,624 840,598 Thomas V. Shockley, III 153,043 544,154 1,088,308 Nathan T. Hirschi 02/20/15 30,115 167,308 301,154 1,592 5,305 10,610 2,613 302,506 Rocky R. Miracle 02/20/15 28,402 142,010 252,462 1,061 3,537 7,074 1,742 201,684 Steven T. Buraczyk 02/20/15 28,277 141,387 251,354 1,061 3,537 7,074 1,742 201,684 William A. Stiller 02/20/15 27,031 135,156 240,277 928 3,094 6,188 1,524 176,430 (a)On January 31, 2014, the Company awarded Mr. Shockley 10,979 shares of restricted stock which will vest on December 15, 2015.(b)In January 2015, Mr. Puente retired from the Company as EVP. Upon his retirement, he forfeited his stock awards except that 1,083 shares of common stock vested immediately.(c)In January 2015, Mr. Carpenter retired from the Company as EVP. Upon his retirement, he forfeited his stock awards except that 1,773 shares of common stock which vested immediately.(d)Each executive officer has a target incentive opportunity, payable in cash, if the Company achieves specific annual goals that are established in advance by the Compensation Committee and the Board. In 2014, the performance goals were related to safety, customer satisfaction, call center performance, reliability, compliance, and earnings per share, as further described above in “Compensation Discussion and Analysis – Primary Components of Compensation – Annual Cash Bonus Plan.” If a threshold level of earnings per share is not attained, no bonuses will be paid for any of the measures. Actual amounts paid for 2014 are in the Summary Compensation Table above.(e)Amounts shown represent the performance shares available under the incentive plan, which provides market-based, long-term incentive award opportunities to the NEOs and executive officers. Performance shares are based on the total shareholder return compared to the Performance Comparator Group over the three-year period ending December 31, 2016. Payout values for the performance shares are calculated by determining the Company’s percentile ranking within the Performance Comparator Group at the end of the three-year cycle and can range from 0% to 200% of target as described above in “Compensation Discussion and Analysis – Primary Components of Compensation – Long-Term Equity Incentives.”(f)Restricted shares vest on December 31, 2016 for the NEOs except for Mr. Shockley and 2,761 shares awarded to Mr. Stiller. The Company paid quarterly dividends of $0.265 per share on its Common Stock on March 31, 2014, and $0.28 per share on its Common Stock each quarter thereafter. Unvested restricted shares qualify as participating securities and individuals awarded these shares received their respective cash dividends.(g)This column reflects the grant date fair value of restricted stock awards and performance shares under FASB ASC Topic 718. With respect to stock awards, the value was calculated as the number of restricted shares multiplied by the closing price on grant date. With respect to performance shares, the value was determined using a Monte Carlo simulation which is a methodology using the average payout of one million simulation paths discounted to the grant date using a risk-free interest rate. The Monte Carlo value for 2014 performance share awards granted on March 12, 2014 was $26.36 per share.24 20152016 Proxy Statement20142015 except for the performance shares that vested in2015.2016. The performance goals for these shares were not met and no shares were paid out. There were no option awards held by the NEOs at December 31, 2014.
Shares or
Units of
Stock That
Have Not
Vested
(#)
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested
(#)
Plan Awards:
Market or Payout
Value of Unearned
Shares, Units or
Other Rights That
Have Not Vested
($)(1)Unvested restricted stock vests on December 15, 2015.(2)Unvested restricted stock vests on December 31, 2015.(3)Unvested restricted stock vests on January 21, 2015.(4)Unvested restricted stock vests on December 31, 2016.(5)Unearned performance stock vests in January 2016 if performance goals are met. Represents the threshold number of shares at 30% of target, but actual number of shares earned may range from 0% to 200% of target.(6)Unearned performance stock vests in January 2017 if performance goals are met. Represents the threshold number of shares at 30% of target, but actual number of shares earned may range from 0% to 200% of target.(7)All of Mr. Carpenter and Mr. Puente’s outstanding restricted stock and performance shares were forfeited upon their retirement in January 2015 except that Mr. Carpenter vested in 1,773 shares of common stock without restrictions upon his retirement and Mr. Puente vested in 1,083 shares of common stock without restrictions upon his retirement.El Paso Electric Stock Awards Name Number of Shares or
Units of Stock That
Have Not Vested
(#) Market Value of
Shares or Units of
Stock That Have Not
Vested
($) Equity Incentive Plan
Awards: Number of
Unearned Shares,
Units or Other Rights
That Have Not Vested
(#) Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested
($) Mary E. Kipp(1)(4) 1,825 70,263 1,643 63,256 Mary E. Kipp(2)(5) 3,484 134,134 2,122 81,697 Mary E. Kipp(3) 27,624 1,063,524 Thomas V. Shockley, III — — — — Nathan T. Hirschi(1)(4) 1,825 70,263 1,643 63,256 Nathan T. Hirschi(2)(5) 2,613 100,601 1,592 61,292 Rocky R. Miracle(1)(4) 1,460 56,210 1,314 50,589 Rocky R. Miracle(2)(5) 1,742 67,067 1,061 40,849 Steven T. Buraczyk(1)(4) 1,460 56,210 1,314 50,589 Steven T. Buraczyk (2)(5) 1,742 67,067 1,061 40,849 William A. Stiller(1)(4) 1,277 49,165 1,150 44,275 William A. Stiller(2)(5) 1,524 58,674 928 35,728 2015 Proxy Statement 25issued a stock based retention grant to Ms. Kipp of 27,624 shares in accordance with the Company’s Amended and Restated 2007 Long Term Incentive Plan that is eligible for vesting based on the achievement of certain performance conditions and a five year service period.2014.2015. There were no options exercised during 20142015 by the NEOs.
Acquired on Vesting
(#)
($) Stock Awards Name Number of Shares
Acquired on Vesting
(#) Value Realized on
Vesting
($) Mary E. Kipp 1,588 $ 61,138 Thomas V. Shockley, III 25,350 927,557 Nathan T. Hirschi 960 36,960 Rocky R. Miracle 1,366 52,591 Steven T. Buraczyk 997 38,385 William A. Stiller 8,915 355,782 El Paso Electric Company 2016 Proxy Statement1.25%Xaverage monthly earningsXyears of service$260,000$265,000 in 2014.2015. A year of service is provided for any year during which the employee works at least 1,000 hours. Final average pay participants are eligible to participate in the Pension Plan on
Commencement
Accrued Benefit26 El Paso Electric Company 2015 Proxy StatementCOMPENSATION COMMITTEE REPORT Age At Benefit
Commencement Percent of
Accrued Benefit 65 100.00% 64 93.33 63 86.67 62 80.00 61 73.33 60 66.67 59 63.33 58 60.00 57 56.67 56 53.33 55 50.00 Pay Credit Chart Cash Balance Member’s Age
Plus Years of Vesting
Service Percentage of Cash Balance
Member’s Base Pay
for the Plan Year Less than 30 3% 30 – 39 4% 40 – 49 5% 50 – 59 6% 60 – 69 7% 70 – 79 8% 80+ 9% —A joint & survivor annuity providing a reduced monthly benefit for the life of the participant followed by a specified percentage to a named beneficiary for the beneficiary’s lifetime following the death of the participant.—A reduced annuity providing a monthly benefit for the life of the participant, with a guarantee that 120 monthly payments will be paid in the event of the early death of the participant.20142015 Annual Report on Form 10-K.El Paso Electric Company 2015 Proxy Statement 27 El Paso Electric Company 2016 Proxy Statementits Excess Benefit Plan as of December 31, 2014.
Credited Service
(#)
Accumulated Benefit
($)(1)
Last Fiscal Year
($) Name Plan Name Number of Years of
Credited Service
(#)
Accumulated Benefit
($)(1) Payments During Last
Fiscal Year
($) Mary E. Kipp Pension Plan 8 $ 203,034 Excess Benefit Plan 8 205,282 Thomas V. Shockley, III Pension Plan 4 114,693 Excess Benefit Plan 4 274,472 Nathan T. Hirschi Pension Plan 6 134,239 Excess Benefit Plan 6 65,291 Rocky R. Miracle Pension Plan 7 262,012 Excess Benefit Plan 7 153,784 Steven T. Buraczyk Pension Plan 22 739,847 Excess Benefit Plan 22 303,541 William A. Stiller Pension Plan 3 81,528 Excess Benefit Plan 3 17,355 (1)As of December 31, 2014, the Present Value of Accrued Benefits for each NEO is the sum of the present value of the final average pay portion of their accrued benefit, plus the cash balance account value for the Retirement Income Plan and Excess Benefit Plan. The present value of the final average pay portion of the accrued benefit is computed using an interest rate of 4.00% for the Retirement Income Plan and 4.10% for the Excess Benefit Plan, no pre-retirement mortality, and post-retirement mortality based on the RP-2014 Total Data Set Mortality Tables that are Fully Generational projection using Scale MP-2014.(2)As of December 31, 2014, Mr. Stiller has not met the three year requirement to vest in the Pension and Excess Benefit Plans. Mr. Stiller is a participant under the Cash Balance option which has a three year vesting requirement.(3)As of February 1, 2015, Mr. Carpenter and Mr. Puente have separated from the Company under the terms of their Employment Transition Agreements that became effective November 20, 2013.28 20152016 Proxy StatementCOMPENSATION COMMITTEE REPORTNEO other than Mr. Shockley.NEO. In the event the covered NEO is terminated without cause or resigns for good reason (including a material reduction in duties and responsibilities, a reduction in pay or a relocation of more than 50 miles) during the two-year period following a change of control, he or she will receive the following benefits under the Change of Control Agreements:—A pro rata payment of the executive officer’s target bonus for the year of termination;—A lump sum payment equal to the executive officer’s annual base salary plus target bonus for the year of termination, multiplied by three (for each NEO);—If the NEO is a final average pay participant under the Pension Plan; the actuarial equivalent of vested benefits under the Company’s retirement plan calculated with additional years of service equal to three years (for each NEO);—If the NEO is a cash balance participant under the Pension Plan; the percentage, as determined under the Pay Credit Chart multiplied by three times the executive officer’s annual base pay.—Continuation of health and other welfare benefits for two years, including service credit for those two years for purposes of eligibility (but not time of commencement of benefits) for retiree benefits under any of these plans; and—Outplacement services for one year.Underemployment agreement dated June 1, 2012, and as amended on May 2, 2013 and November 20, 2013 which has a term untilseparation from the Company, effective December 15, 2015, if he is terminated without cause or resigns due to a material reduction in responsibilities or position, or ifas per the terms of his Amended and Restated Employment Agreement, had a change in control occurs and he is terminated, he will receive a cash payment equaloccurred on December 31, 2015 there would have been no benefit payable to his annual base salary (or, if less, salary through the remaining term of the employment agreement if termination of employment occurs prior to a change in control), a prorated annual cash bonus, up to 12 months of health benefits, and accelerated vesting of his restricted shares.him.El Paso Electric Company 20152016 Proxy Statement 292014.2015. These amounts do not include benefits under our Pension Plan and Excess Benefit Plan that would be paid in connection with any retirement event, as described under the “Pension Benefits Table” above. Name Benefit Change in
Control Without
Termination Qualifying
Termination Following
a Change in Control Qualifying
Termination Before
Change in Control Mary E. Kipp Severance $ $ 3,375,000 Settlement of Unvested Equity Award(1) 1,499,037 n/a Lump Sum Equivalent for Pension Service 495,402 408,316 Welfare Benefit Continuation 39,737 Outplacement 25,000 Nathan T. Hirschi Severance 1,462,500 Settlement of Unvested Equity Award(1) 379,535 n/a Lump Sum Equivalent for Pension Service 283,453 199,530 Welfare Benefit Continuation 42,966 Outplacement 25,000 Rocky R. Miracle Severance 1,326,750 Settlement of Unvested Equity Award(1) 281,205 n/a Lump Sum Equivalent for Pension Service 542,765 415,796 Welfare Benefit Continuation 29,165 Outplacement 25,000 Steven T. Buraczyk Severance 1,326,750 Settlement of Unvested Equity Award(1) 281,205 n/a Lump Sum Equivalent for Pension Service 1,230,733 1,043,388 Welfare Benefit Continuation 39,737 Outplacement 25,000 William A. Stiller Severance 1,261,500 Settlement of Unvested Equity Award(1) 246,016 n/a Lump Sum Equivalent for Pension Service 154,532 98,882 Welfare Benefit Continuation 29,165 Outplacement 25,000
Control Without
Termination
Termination Following
a Change in Control
Termination Before
Change in Control(1)Represents the value of all unvested restricted stock and a prorated portion of performance shares at target level as of December 31, 2014. There were no unvested options at December 31, 2014 for the NEOs. Acceleration of performance awards would be on a prorated basis and subject to the Compensation Committee determining that performance has been met through a shortened performance period ending before the closing of the change of control.(2)Represents the value of separation benefits under the Employment Transition Agreements entered into in connection with planned terminations to ensure that Mr. Carpenter and Mr. Puente remained committed in their roles or for a shorter transition as determined to be necessary.30 20152016 Proxy Statement
Insider Participation2014,2015, none of the Company’s executive officers served as a member of another entity’s compensation committee or committee performing equivalent functions, and thereforefunctions. Therefore no member of the Board or their immediate family members is or has been, within the last three years, employed as an executive officer of another company where one of the Company’s executive officers served as a director or a member of that company’s compensation committee.In 2012, theChartercharter for several years. The policy applies to any transaction in which (i) the Company is a participant, (ii) any related person has a direct or indirect material interest and (iii) the amount involved exceeds $120,000, but generally excludes any transaction that would not require disclosure under Item 404(a) of Regulation S-K. The Nominating and Corporate Governance Committee is responsible for reviewing, approving and ratifying any related party transaction. The Nominating and Corporate Governance Committee intends to approve only those related person transactions that are in, or are not inconsistent with, the best interests of the Company and its stockholders.shareholders. A copy of the policy is available at www.epelectric.com under the “Investor Relations/Corporate Governance” section. submits and requires the directors and executive officers to complete director and officer questionnaires identifying transactions with the Company in which the director or executive officer or their family members have an interest. In addition, the Company has implemented an enhanced system so that proposed transactions of this nature are identified and reviewed in advance. The Company reviews these transactions due to the potential for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes, or appears to interfere, in any way with the Company’s interests. The Company’s Code of Ethics requires all directors, executive officers and employees who may have a potential or apparent conflict of interest to immediately notify our Senior Vice President, Corporate Development & PlanningServices and Chief Compliance Officer.. under the “Investor Relations/Corporate Governance” section.El Paso Electric Company 20152016 Proxy Statement 3120152016 (except as indicated in the footnote to the table), certain information regarding ownership of Common Stock by (i) each person known to the Company to own beneficially more than 5% of its Common Stock; (ii) each of the current directors, includingIIII Directors of the Company; (iii) the Named Executive Officers (“NEOs”); andExecutives; (iv) all directors and executive officers of the Company as a group (21 persons).group; and (v) Percent of Class is reflective of Schedule 13D and Schedule 13G filings.
Beneficial Ownership***
55 East 52nd Street
New York, NY 10022
One Corporate Center
Rye, NY 10580-1435
100 E. Pratt Street
Baltimore, MD 21202
100 Vanguard Blvd.
Malvern, PA 19355
(21 persons) Name and Address of Beneficial Owner Amount and Nature of
Beneficial Ownership***Actual percentage may differ due to stock transactions made subsequent to beneficial owner’s filing date. Percent of
Class
55 East 52nd Street
New York, NY 10055 4,310,814(1) 10.70%* GAMCO Investors, Inc.
One Corporate Center
Rye, NY 10580-1435 4,001,143(2) 9.94%* T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202 3,590,441(3) 8.80%* The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355 3,186,093(4) 7.88%* Fuller & Thaler Asset Management, Inc.
411 Borel Avenue Suite 300
San Mateo, CA 94402 2,443,171(5) 6.00%* FMR LLC
245 Summer Street
Boston, MA 02210 2,194,021(6) 5.43%* Allen, Catherine A. 28,831(7) ** Less than 1%. Brown, John Robert 42,000(8) ** Cicconi, James W. 60,279(9) ** Escudero, Edward 16,835(10) ** Harris, James W. 52,632(11) ** Holland-Branch, Patricia Z. 26,802(12) ** Hunt, Woodley, L. 18,050(13) ** Siegel, Eric B. 56,425(14) ** Wertheimer, Stephen N. 43,573(15) ** Yamarone, Charles A. 12,000(16) ** Shockley, Thomas V., III 46,445(17) ** Kipp, Mary E. 53,327(18) ** Hirschi, Nathan T. 14,744(19) ** Buraczyk, Steven T. 20,890(20) ** Miracle, Rocky R. 23,970(21) ** Stiller, William A. 10,702(22) ** Other Officers 10,681(23) ** All Directors and executive officers as a group 538,186(24) 1.33% ***For purposes of this disclosure, restricted stock is assumed to have voting power but no investment power.32 20152016 Proxy StatementSECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTthe Investment Advisers Act of 1940, which will be referred to as (“SEC Act”) and
(“Advisers Act”), respectively.(1)Information regarding ownership of Common Stock by BlackRock, Inc. ("BlackRock"), is included in reliance on information set forth in an Amendment No. 6 in Schedule 13G/A filed with the SEC on January 9, 2015, reflecting ownership as of December 31, 2014. BlackRock is a Delaware parent holding company or control person in accordance with Rule 13d-1(b)(1)(ii)(G) in Section 240 of the SEC Act. According to the filing, BlackRock beneficially owns 4,075,969 shares (10.11%) of Common Stock with sole voting power over 3,977,162 shares and sole dispositive power over 4,075,969 of the shares of Common Stock.(2)Information regarding ownership of Common Stock by GGCP, Inc. ("GGCP"), GGCP Holdings LLC, (“GGCP Holdings”), GAMCO Investors, Inc. ("GBL"), Gabelli Funds, LLC ("Gabelli Funds"), GAMCO Asset Management Inc. ("GAMCO"), Teton Advisors, Inc. ("Teton Advisors"), Gabelli Securities, Inc. ("GSI"), Gabelli & Company, Inc. ("Gabelli & Company"), MJG Associates, Inc. ("MJG Associates"), Gabelli Foundation, Inc. ("Foundation"), MJG-IV Limited Partnership ("MJG-IV"), and Mario J. Gabelli (collectively the "Gabelli Reporting Parties") is included herein in reliance on information set forth in Amendment No. 5 in Schedule 13D filed with the SEC, reflecting ownership as of November 14, 2011. Updated ownership information is included herein in reliance on updated 13F filings dated February 5, 2015 which reflect Gabelli’s ownership as of December 31, 2014. GGCP is a manager and a member of GGCP Holdings which is the controlling shareholder of GBL. GBL is the parent company for a variety of companies engaged in the securities business, including GAMCO, Gabelli Funds, and GSI. GSI is an investment manager and the parent company of Gabelli & Company which is classified as a registered broker-dealer under the SEC Act. GAMCO, Gabelli Funds, and Teton Advisors are each investment advisors, and each of these entities is registered under the Advisers Act. GBL, GAMCO, and Gabelli & Company are New York corporations. GGCP is a Wyoming corporation and GGCP Holdings is a Delaware limited liability corporation. GSI and Teton Advisors are Delaware corporations and Gabelli Funds is a New York limited liability company. MJG Associates is a Connecticut corporation, and the Foundation is a Nevada corporation. Mario J. Gabelli is the controlling stockholder and Chief Executive Officer and director of GGCP. Mario J. Gabelli is also the Chairman and Chief Executive Officer of GBL. Mario J.Gabelli is also a member of GGCP Holdings. Mario J. Gabelli is also deemed to be the controlling shareholder of Teton Advisors through his control of GGCP and MJG-IV. The Gabelli Reporting Parties do not admit that they constitute a group.2015,2016, the Gabelli Reporting Parties owned 3,875,7633,706,677 shares (9.60%(9.16%) of Common Stock as of December 31, 2014.(3)Information regarding ownership of Common Stock by T. Rowe Price Associates, Inc. ("Price Associates") is included herein in reliance on information set forth in Amendment No. 12 in Schedule 13G/A filed on February 17, 2015, with the SEC, reflecting ownership as of December 31, 2014. Price Associates is an Investment Adviser in accordance with Rule 13d-1(b)(1)(ii)(D) & (E) as defined in Section 240 of the SEC Act. According to the filing, Price Associates beneficially owns 3,788,500 shares (9.39%) of Common Stock as of December 31, 2014. These securities are owned by various individual and institutional investors which Price Associates serves as investment adviser with power to direct investments and or sole power to vote the securities. For purposes of the reporting requirements of the SEC Act, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities. Price Associates maintains sole dispositive power over 3,788,500 shares of Common Stock, but only has sole voting power over 766,540 shares of Common Stock.(4)Information regarding ownership of Common Stock by the Vanguard Group, Inc (“Vanguard”), Vanguard Fiduciary Trust Company (“VFTC”) and Vanguard Investments Australia, LTD. (“VIA”) is included herein in reliance on information set forth in Amendment No. 4 in Schedule 13G/A filed with the SEC on February 9, 2015 reflecting ownership as of December 31, 2014. Vanguard is a Pennsylvania parent company of VFTC and VIA is classified as an Investment Advisor in accordance with Rule 13d-1(b)(1)(ii)(E) as defined in Section 240 of the SEC Act. According to the filing, Vanguard beneficially owns 2,897,259 shares (7.17%) of the Common Stock with sole dispositive power over 2,842,159 shares, shared dispositive power over 55,100 shares and sole voting power over 61,000 shares of Common Stock. VFTC, a wholly-owned subsidiary ofEl Paso Electric Company 20152016 Proxy Statement 3355,10049,500 shares (0.13%(0.12%) of Common Stock. VIA, a wholly-owned subsidiary of Vanguard is the beneficial owner of 5,9008,800 shares (0.01%(0.02%) of Common Stock.(5)Includes (i) 20,755 shares of Common Stock over which Ms. Allen has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which she has voting power but no investment power.(6)Includes (i) 35,000 shares of Common Stock over which Mr. Brown has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(7)Includes (i) 53,279 shares of Common Stock over which Mr. Cicconi has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(8)Includes (i) 7,124 shares of Common Stock over which Mr. Escudero has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(9)Includes (i) 45,632 shares of Common Stock over which Mr. Harris has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(10)Includes (i) 18,717 shares of Common Stock over which Ms. Holland-Branch has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which she has voting power but no investment power.(11)Includes (i) 9,357 shares of Common Stock over which Mr. Hunt has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(12)Includes 55,334 shares of Common Stock over which Mr. Parks has sole voting and investment power.(13)Includes (i) 40,596 shares of Common Stock over which Mr. Siegel has sole voting and investment power; (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power; and (iii) 8,975 shares of Common Stock held by spouse over which he has no voting or investment power.(14)Includes (i) 37,423 shares of Common Stock over which Mr. Wertheimer has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has voting power but no investment power.(15)Includes (i) 5,000 shares of Common Stock over which Mr. Yamarone has sole voting and investment power; and (ii) 3,500 shares of restricted Common Stock over which he has sole voting power but no investment power.(16)Includes (i) 28,029 shares of Common Stock over which Mr. Shockley has sole voting and investment power; and (ii) 25,350 shares of restricted Common Stock over which he has sole voting power but no investment power.(17)Includes (i) 7,458 shares of Common Stock over which Ms. Kipp has sole voting and investment power; and (ii) 6,897 shares of restricted Common Stock over which she has sole voting power but no investment power.(18)Includes (i) 6,991 shares of Common Stock over which Mr. Hirschi has sole voting and investment power; and (ii) 5,398 shares of restricted Common Stock over which he has voting power but no investment power.(19)Includes (i) 14,346 shares of Common Stock over which Mr. Buraczyk has sole voting and investment power; and (ii) 4,199 shares of restricted Common Stock over which he has voting power but no investment power.(20)Includes (i) 18,030 shares of Common Stock over which Mr. Miracle has sole voting and investment power; and (ii) 4,568 shares of restricted Common Stock over which he has voting power but no investment power.(21)Includes (i) 4,369 shares of Common Stock over which Mr. Stiller has sole voting and investment power; and (ii) 5,562 shares of restricted Common Stock over which he has voting power but no investment power.(22)Includes 4,467 shares of restricted Common Stock over which Mr. Boomer has voting power but no investment power.(23)Includes 3,595 shares of restricted Common Stock over which Mr. Gibson has voting power but no investment power.(24)Includes 23,782 shares of Common Stock over which Mr. Carpenter has sole voting and investment power.(25)Includes 18,572 shares of Common Stock over which Mr. Puente has sole voting and investment power.(26)Includes (i) 78,882 shares over which the other executive officers have sole voting and investment power; and (ii) 19,774 shares of restricted Common Stock over which they have voting power but no investment power.(27)Includes (i) 528,676 shares of Common Stock over which the directors and executive officers have sole voting and investment power; (ii) 114,810 shares of restricted Common Stock over which they have voting power but no investment power; and (iii) 8,975 shares of Common Stock held by a spouse which has no voting or investment power.34 20152016 Proxy StatementThe Audit Committee assists the Board in reviewing the Company’s financial reporting process. In fulfilling its responsibilities in 2014, the Audit Committee, among other things, (i) reviewed and discussed the interim financial information contained in each quarterly earnings announcement with the Company’s CFO and independent auditors prior to public release; (ii) reviewed and discussed the audited financial information contained in the Annual Report with the Company’s management, including the CFO, and independent auditors prior to public release; (iii) obtained from the independent auditors a formal written statement describing all relationships between the auditors and the Company that might bear on the auditors’ independence consistent with Independence Standards Board, Standard No. 1, “Independence Discussions with Audit Committees”; (iv) discussed with the auditors any relationships that may impact their objectivity and independence, and satisfied itself as to the auditors’ independence; (v) discussed with management, the internal auditors and the independent auditors the quality and adequacy of the Company’s internal controls and the internal audit function’s organization, responsibilities, budget and staffing; and (vi) reviewed with both the independent and the internal auditors their audit plans, audit scope, and identification of audit risks.In addition, the Audit Committee discussed and reviewed with the independent auditors all communications required by generally accepted accounting standards, including those described in the Statement on Auditing Standards No. 16, as amended, “Communication with Audit Committees” and, with and without management present, discussed and reviewed the results of the independent auditors’ examination of the financial statements. The Audit Committee also reviewed the results of the internal audit examinations.The Audit Committee reviewed with management and the independent auditors the audited financial statements of the Company as of and for the fiscal year ended December 31, 2014. Management is responsible for the preparation of the Company’s financial statements and the independent auditors are responsible for the examination of those statements.Based on the above-mentioned review and discussions with management and the independent auditors, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2014, for filing with the SEC. The Audit Committee also recommended the reappointment of KPMG LLP as the Company’s registered independent public accounting firm for the fiscal year ended December 31, 2015, and the Board concurred in such recommendation.THE AUDIT COMMITTEEEdward Escudero, ChairmanJohn Robert BrownJames W. CicconiEric B. SiegelStephen N. WertheimerCharles A. YamaroneEl Paso Electric Company 2015 Proxy Statement 352014,2015, its directors, executive officers and holders of more than 10% of the Company’soutstanding shares of Common Stock complied with all Section 16(a) filing requirements.
DIRECTOR NOMINATIONS
FOR 2017 ANNUAL MEETING OF SHAREHOLDERS20162017 Annual Meeting of Shareholders, a shareholder proposal must be received at the Company’s principal executive offices on or prior to December 19, 2015.8, 2016. The Company will consider only those proposals which meet the requirements of applicable SEC rules. Under the Company’s Bylaws, in order for a shareholder proposal that is not included in the Proxy Statement to be properly brought before the annual meeting of shareholders, notice of the proposal must be received at the Company’s principal executive offices at least 80 daysthe 20142015 Annual Report, which includes financial statements, but which does not constitute a part of the proxy36 20152016 Proxy StatementOn February 27, 2015, the Company filed with the SEC, as an exhibit to its Annual Report on Form 10-K, the Sarbanes-Oxley Act Section 302 certification regarding the quality of the Company’s public disclosure.
By Order of the Board of Directors
Corporate Secretary17, 201520152016 Proxy Statement 37
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