2003 Committee Charter : EE

(MP) 07369/001/CORP.GOV/nom.charter.doc 09/04/03 11:26 AM
El Paso Electric Company
A Texas corporation
(the "Company")
Nominating and Corporate Governance Committee Charter
Adopted November ____, 2003
Purpose
The Nominating and Corporate Governance Committee (the
"Committee") is created by the Board of Directors of the Company to:
 identify individuals qualified to become Board members, and recommend
to the Board director nominees for election at the next annual or special
meeting of shareholders at which directors are to be elected or to fill any
vacancies or newly created directorships that may occur between such
meetings;
 recommend directors for appointment to Board committees;
 make recommendations to the Board as to determinations of director
independence;
 evaluate Board performance;
 oversee and set compensation for the Company's directors; and
 develop and recommend to the Board the Corporate Governance
Guidelines and Code of Business Conduct and Ethics of the Company and
oversee compliance with such Guidelines and Code.
Membership
The Committee shall consist of at least three members, comprised solely
of independent directors meeting the independence requirements of the New York
Stock Exchange. The independent members of the Board shall recommend
nominees for appointment to the Committee annually and as vacancies or newly
created positions occur. Committee members shall be appointed by the Board and
may be removed by the Board at any time. The Committee shall recommend to
the Board, and the Board shall designate, the Chairman of the Committee.
Authority and Responsibilities
In addition to any other responsibilities which may be assigned from time
to time by the Board, the Committee is responsible for the following matters.
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Board/Committee Nominees
 The Committee shall oversee searches for and identify qualified
individuals for membership on the Company's Board of Directors.
 The Committee shall establish criteria for Board and Board committee
membership, including as to director independence, and shall recommend
individuals for membership on the Company's Board of Directors and
directors for appointment to the committees of the Board. In making its
recommendations, the Committee shall:
 review candidates' qualifications for membership on the Board or
a committee of the Board (including a determination as to the
independence of the candidate) based on the criteria established by
the Committee (and taking into account the enhanced
independence, financial literacy and financial expertise standards
that may be required under law or New York Stock Exchange rules
for audit committee membership purposes);
 in evaluating current directors for re-nomination to the Board or reappointment
to any Board committees, assess the performance of
such director;
 periodically review the composition of the Board and its
committees in light of the current challenges and needs of the
Board and each committee, and determine whether it may be
appropriate to add or remove individuals after considering issues
of judgment, diversity, age, skills, background and experience;
 consider rotation of committee members and committee Chairmen;
and
 consider any other factors that are set forth in the Company's
Corporate Governance Guidelines or are deemed appropriate by
the Committee.
Evaluating the Board and Its Committees
 At least annually, the Committee shall lead the Board in a self-evaluation
to determine whether it and its committees are functioning effectively.
The Committee shall oversee the evaluation process and report on such
process and the results of the evaluations, including any recommendations
for proposed changes, to the Board.
 At least annually, the Committee shall review the evaluations prepared by
each Board committee of such committee's performance and consider any
recommendations for proposed changes, to the Board.
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 The Committee shall periodically review the size and responsibilities of
the Board and its committees and recommend any proposed changes to the
Board.
Director Compensation
 The Committee shall review and approve compensation (including stock
option grants and other equity-based compensation) for the Company's
directors. In so reviewing and approving director compensation, the
Committee shall:
 identify corporate goals and objectives relevant to director
compensation;
 evaluate the performance of the Board in light of such goals and
objectives and set director compensation based on such evaluation
and such other factors as the Committee deems appropriate and in
the best interests of the Company (including the cost to the
Company of such compensation);
 determine any long-term incentive component of director
compensation based on the awards given to directors in past years,
the Company's performance, shareholder return and the value of
similar incentive awards relative to such targets at comparable
companies and such other factors as the Committee deems
appropriate and in the best interests of the Company (including the
cost to the Company of such compensation); and
 evaluate the possibility that directors' independence may be
compromised for Board or committee purposes if director
compensation exceeds customary levels, if the Company makes
substantial charitable contributions to an organization with which a
director is affiliated, or if the company enters into consulting
contracts with (or provides other indirect forms of compensation
to) a director or an organization with which a director is affiliated
(which consulting contracts or other indirect forms of
compensation are expressly prohibited for Audit Committee
members).
Corporate Governance Matters
 The Committee shall develop and recommend to the Board the Corporate
Governance Guidelines and Code of Business Conduct and Ethics for the
Company. At least annually, the Committee shall review and reassess the
adequacy of such Corporate Governance Guidelines and Code of Business
Conduct and Ethics and recommend any proposed changes to the Board.
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 The Committee shall be responsible for any tasks assigned to it in the
Company's Corporate Governance Guidelines.
 The Committee shall oversee compliance with the Company's Corporate
Governance Guidelines and Code of Business Conduct and Ethics and
report on such compliance to the Board. The Committee shall also review
and consider any requests for waivers of the Company's Corporate
Governance Guidelines or Code of Business Conduct and Ethics for the
Company's directors, executive officers and other senior financial officers,
and shall make a recommendation to the Board with respect to such
request for a waiver.
 The Committee shall review potential conflicts of interest involving
directors and shall determine whether such director or directors may vote
on any issue as to which there may be a conflict.
 The Committee shall review all related party transactions and determine
whether such transactions are appropriate for the Company to undertake.
If so, the Committee is authorized to approve such transactions.
Director Orientation and Continuing Education
 The Committee shall direct and review orientation and continuing
education programs for directors.
Reporting to the Board
 The Committee shall report to the Board periodically. This report shall
include a review of any recommendations or issues that arise with respect
to Board or committee nominees or membership, Board performance,
corporate governance or any other matters that the Committee deems
appropriate or is requested to be included by the Board.
 At least annually, the Committee shall evaluate its own performance and
report to the Board on such evaluation.
 The Committee shall periodically review and assess the adequacy of this
charter and recommend any proposed changes to the Board for approval.
Procedures
The Committee shall meet as often as it determines is appropriate to carry
out its responsibilities under this charter. The Chair of the Committee, in
consultation with the other Committee members, shall determine the frequency
and length of the Committee meetings and shall set meeting agendas consistent
with this charter.
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The Committee has the sole authority to retain and terminate any search
firm assisting the Committee in identifying director candidates, including sole
authority to approve all such search firm's fees and other retention terms. In
addition, the Committee has the sole authority to retain and terminate any
compensation consultant assisting the Committee in the evaluation of director
compensation, including sole authority to approve all such compensation
consultant's fees and other retention terms.
The Committee may delegate its authority to subcommittees or the Chair
of the Committee when it deems appropriate and in the best interests of the
Company.