CITY CLERK DEPT

2022 OCT 6 na:25

SECOND AMENDMENT
TO THE AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN THE CITY OF EL PASO
AND TOMAS GONZALEZ

This Second Amendment (the "Second Amendment") to the Amended and Restated
Employment Agreement between the City of El Paso and Tomas Gonzalez as amended by the
First Amendment (as defined below) is made and entered into to be effective as of the 'l+h
day of October, 2022 (the "Effective Date") by and between the City of El Paso, Texas, A Texas
mlll'liciptlcorporation(the "City") and Tomas Gonzalez (the "Manager").

WITNESS ETH:

WHEREAS, the City and the Manager entered into the Amended and Restated City
Manager Employment Agreement dated effective December 11 , 2018 for the employment of
the Manager as the City Manager of the City (the "Employment Agreement"); and

WHEREAS, the City and the Manager entered into the First Amendment to the
Amended and Restated City Manager Employment Agreement dated effective June 21, 2022
which extended the term of the Employment Agreement to June 22, 2029 (the "First
Amendment"); and

WHEREAS, the Employment Agreement, as amended by the First Amendment,

memorialized the basic terms of employment including, but not limited to job duties and
responsibilities, compensation and benefits, termination, severance pay, and performance
evaluations, among other things; and

WHEREAS, the City and the Manager desire to amend the Employment Agreement,
as amended by the First Amendment, as hereinafter provided in this Second Amendment.

NOW, THEREFORE, for and in consideration of good and valuable consideration,

the receipt and sufficiency of which are hereby acknowledged, and the performance of the
covenants contained in this Second Amendment, the City and the Manager agree as follows:

1. "3 .2 Salary Adiustments" Effective as of the Effective Date hereof, Section 3.2. of the
Employment Agreement as amended, shall be deleted and replaced with the following:

/4. In no event shall the Manager's base salary ("Base Salary") be reduced during the term of
this Agreement except by mutual written agreement of the parties; or in the event of an
across the board reduction of wages for all non-collective bargaining City employees, in
which event the Employee's salary will be reduced by the same percentage.

b. Subject to the limitations on salary increases provided in Subparagraphs 3.2 (d) and (e),
the Manager shall be eligible for across the board pay increases or other similar pay

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 increases that the City Council provides to other administrative, non-collective bargaining
employees of the City in the same manner that other administrative non-collective
bargaining employees of the City are eligible to receive. The across the board pay increases
contained and set forth in this Section 3.2 (b) are hereinafter referred to collectively as
"Additional Salary Increases".

c. Subject to the limitations on salary increases provided in Subparagraphs 3.2 (d) and (e),
the Manager shall be eligible for an annual merit increase equal to five percent (5%) of
the Manager's annual base salary ("Merit Increase") if the Manager receives an "exceeds
standards" rating on the annual performance evaluation performed as set forth in Paragraph
V below. Merit Increases shall be effective at the start of the next pay period following the
approval of the performance evaluation by the City Council.

d. Subject to the provisions of Section 3.2 (e) below, in the event Additional Salary Increases
occurring alone, or a Merit Increase occurring alone, and/or each occurring in conjunction
with the other, cause the Manager's Base Salary to exceed $450,000.00 ("Excess Above
Base") the amount of Excess Above Base shall not be paid to the Manager but instead shall
be allocated to the City's street department for use in street improvement, and the Base
Salary shall be capped at $450,000.00 ("Salary Cap").

e. During the term of this Agreement and commensurate with the conduct of the Manager's
annual performance evaluation, the City shall annually conduct a market-based review of
the base salary of the Manager in comparison to the base salary of the city managers in
Arlington, TX, Austin, TX, Dallas, TX, Fort Worth, TX, San Antonio, TX, Oklahoma City,
OK, Phoenix, AZ and Tucson, AZ ("Comparison Cities") and El Paso, TX ("Benchmark
City"). The City shall request this information from the Comparison Cities on or before
May 31 of each year. In the event that Additional Salary Increases as defined above, or a
Merit Increase as defined above would, but for the provisions of Section 3.2(d) above,
increase the Base Salary above $450,000.00, the Manager shall receive an increase up to
$450,000.00, unless the average of the three highest base salaries of the City Managers in
the Comparison Cities, is greater than $450,000.00, in which case the Base Salary will be
increased to the lesser of (i) the Base Salary with the Merit Increase or Additional Other
Increase, or (ii) the base salary of the average of the three highest City Manager base
salaries of the Comparison Cities. In the event of any such salary adjustment pursuant to
the terms of this Section 3.2 (e) the adjusted Base Salary shall become the new Salary Cap
for purposes of calculating the Excess Above Base as set forth in Section 3.2 (d) above. If
the Base Salary is eligible for adjustment based on the market-based review, such
adjustment will take effect at the start of the pay period immediately following the market-
based review.

f. The City Manager shall be eligible for service time pay increases ("Service Time Pay") in
an amount set by the applicable City policy beginning in 2024 on the anniversary date of
his employment with the City. The Service Time Pay (i) shall be paid to the City Manager
annually each year in December in a lump sum payment, and (ii) shall not alter the Base
Salary.

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 g. In the event the City Council provides a new type of benefit to its other administrative,
non-collective bargaining employees of the City, the Manager shall also be eligible to
receive such benefit in the same manner as other administrative, non-collective bargaining
employees of the City, unless such benefit affects the Manager's Base Salary in which case
it is subject to the limitations on salary increases provided in Subparagraphs 3.2 (d) and
(e),.

2. "3.4 Health Insurance" Effective as of the Effective Date hereof Section 3.4 of the
Employment Agreement as amended, shall be deleted and replaced with the following:

Health Insurance. Manager's eligibility for enrollment in the City's insurance plans for
health, hospitalization, vision, dental and comprehensive medical insurance for the
Manager and his family (collectively, "Health Insurance'") shall continue pursuant to the
group health care plan provided by the City for its non-collective bargaining administrative
employees, as they may be amended from time to time during the term of this Agreement;
provided, however, that beginning with the first pay period after the approval and execution
of the Second Amendment, Manager shall not be responsible for the payment of any
premiums for Health Insurance for Manager and his dependents covered by Health
Insurance ('' Insurance Premiums'').

In addition to the health insurance benefits provided to City employees, the Manager shall
be entitled to an annual Executive Health Exam ("Health Exam") at the Cooper Clinic for
Preventative Medicine in Dallas, Texas. The City shall bear the cost of the core components
of an Executive Health Exam. The City shall contribute to the City Manager's Health
Savings Account under the City's 125 cafeteria plan, on an after-tax basis, in an amount
up to $5,500.00 annually, for expenses incurred for any medically indicated follow-up
treatments, procedures, prescriptions, or other follow-up procedures (collectively,
("Follow Up Treatment"), which are not otherwise covered by the Health Insurance ("HSA
Contribution"). The HSA Contribution shall be calculated and paid annually prior to year-
end by the City based on the City Manager's Health Insurance Explanation of Benefits for
the Follow Up Treatment, and any other documents which may be needed to establish that
the expenses were in connection with the Executive Health Exam and medically indicated,
("EOBs and other information") which EOBs and other information shall be provided by
the City Manager to the City no later than forty-five (45) days prior to the end of each
calendar year during the term hereof. The City shall bear the expense of travel and
accommodations to Dallas by Manager for the annual Health Exam, as well as any follow-
up travel and accommodations costs as may be necessary in an amount not to exceed
$5,000.00 annually. The City shall grant the City Manager such leave time as is necessary
to undergo the Health Exam and any follow up treatments or procedures. Up to three (3)
days of such leave time shall be counted as official leave, and shall not count against any
granted and/or accrued but unused vacation and sick leave. It is understood and agreed to
by the parties that the City bears no responsibility for continuing any coverage or payments
under this paragraph as part of any severance payment that may be owed to Manager.

3. "3.5 Life Insurance".

Effective as of the Effective Date hereof, Section 3.5 of the
Employment Agreement as amended, shall be deleted and replaced with the following:

Second Amendment Page 3 of 11

 Life Insurance. During the Manager's continued employment with the City, the City shall
pay the annual premium ("Life Insurance Premium(s)") for the purchase of a 30-year level
premium term life insurance policy on the life of the Manager ("Term Life Policy'') in the
amount of $5 million, such premium payment constituting additional taxable compensation
to Manager; provided, however, that the City shall reimburse the Manager for the
applicable taxes and other standard deductions from his salary, if any. attributable to the
City's payment of the Life Insurance Premium(s). The City Manager shall provide the City
with a statement from the City Manager's tax advisor setting forth the actual taxes and
other deductions from his salary, if any, attributable to the City's payment of the Life
Insurance Premium(s) and the City shall reimburse the Manager in such amount within 30
days of receipt of such statement. The City is not responsible for reimbursing the City
Manager for any taxes triggered by the City's reimbursement under this paragraph. The
Term Life Policy provided hereunder shall be owned by the Manager or such Third Party
as Manager may designate, with the Manager having the sole right to determine the
beneficiaries under the Term Life Policy. If the Manager chooses to obtain any additional
life insurance or to continue paying the annual premiums after his employment with the
City has ended, he is solely responsible for payment of the premiums on such a plan. It is
understood and agreed to by the parties that the City bears no responsibility for continuing
any payments or coverage under this paragraph as part of any severance payment that may
be owed to Manager.

4. "3.7 Retirement Benefit." Effective as of the Effective Date hereof, Section 3.7 of the
Employment Agreement as amended, shall be deleted and replaced with the following:

The Manager is entitled to participate in the City's Pension Plan ("Pension Plan") according
to the terms of the Plan. The City shall seek to amend the provisions of the Pension Plan to
permit the City to make the mandatory employee contributions to the Pension Plan the
Manager would otherwise be required to make, up to the maximum extent allowed by law
and in accordance with the terms of the Pension Plan, and the Manager will be relieved of
such obligation. The City shall commence making the Manager's Pension Plan
contributions effective as of the immediate next pay period following the approval by the
City of such amendment to the Pension Plan and shall remain in force for as long as this
Employment Agreement shall remain in place; provided, however, that the City shall
reimburse the City Manager on an annual basis for any employee contribution to the
Pension Plan made by the City Manager beginning with the first payroll following the
parties' execution of this Second Amendment until such time that the City has amended
the Pension Plan as provided herein and commences making the City Manager's employee
contributions to the Pension Plan pursuant to the provisions of this Section 3.7.

5. "3.8 Deferred Compensation Payments." Effective as of the Effective Date hereof Section
3.8 of the Employment Agreement as amended, shall be deleted and replaced with the
following :

a. Deferred Compensation Payments. On or after the effective date of this Amended and

Second Amendment Page 4 ofll

 Restated Agreement and on or before December 31 , 2018, the Manager will receive a lump
sum contribution from the City in the amount of $20,000.00 to a 40 I (a) Deferred
Compensation Plan, or such other amount that does not cause the maximum annual amount
of contribution for calendar year 2018 to be exceeded, whichever is less, and thereafter
within 10 business days after January 1st of each year this Agreement is in effect, the
Manager shall receive an annual, lump sum contribution from the City in the maximum
amount allowable by law to a 401(a) Deferred Compensation Plan.

b. The City shall amend the provisions in the City' s 457(b) Deferred Compensation Plan
("457(b) Plan") to permit the City to make contributions to the 457(b) Plan for the benefit
of the Manager. The City shall make the contribution to the 457(b) Plan in 2022 for the
benefit of the Manager, and thereafter within ten ( 10) business days after January I of each
year that this Agreement is in effect, unless the City is unable to do so, and in such case, the
City shall pay such amount(s) directly to the City Manager. The contributions made by the
City shall be an annual, lump sum contribution in the maximum amount allowable by law
to the 457(b) Plan, including all applicable catch up provisions allowed by law. The parties
agree that the Manager's normal retirement age for purposes of the 457(b) Plan shall be age
60, which means that the City shall make special pre-retirement catch-up contributions
permissible under Code Section 457(b)(3) in 2023, 2024, and 2025 , reduced by the amount
of any direct payment made to the City Manager pursuant to this paragraph.

6. "Section 6.2 (c) Termination by the City Without Good Cause". Effective as of the
Effective Date hereof Section 6.2 (c) of the Employment Agreement as amended, shall be
deleted and replaced with the following :

c. Termination by the City Without Good Cause. If the City tenninates the Manager's
employment without Good Cause, then the City shall pay the Manager:

(I) Severance Payment. A Severance Payment in an amount equal to the amount of 12

months of the Manager's annual Base Salary which will include the aggregate increases
in salary which Manager would have received for the year in which the Severance Payment
is due, but for the Salary Cap set forth in Section 3.2(d) ("Severance Payment"). The
Severance Payment shall be paid in one lump sum.

(2) Accrued Obligations. In addition to the Severance Payment. the City shall pay the
Manager, in the manner required by law, the Accrued Obligations consisting of a) his base
salary to the date of termination of the Agreement, b) all granted and/or accrued but unused
vacation and sick leave as provided in paragraph 3.3(c) the value of which shall be
calculated based on the Base Salary which Manager would have received for the year in
which he separates from employment, but for the Salary Cap set forth in Section 3.2 (d),,
and c) his automobile allowance to the date of termination of the Agreement (hereinafter
referred to as the "Accrued Obligations").

7. " Section 6.2(d) Resignation of Manager". Effective as of the Effective Date hereof Section
6.2 (d) of the Employment Agreement as amended, shall be deleted and replaced with the
following:

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 d. Resignation by Manager. If the Manager resigns his employment with not less than 120
days written notice the City shall pay the Manager:

(I) Severance Payment. The Severance Payment which shall be paid in one lump sum.

(2) Accrued Obligations. In addition to the Severance Payment, the City shall pay the
Manager the Accrued Obligations.

In the absence of 120 days prior written notice, Manager will not be paid any remuneration
of any kind or nature accrued or otherwise including sick leave and vacation payout. By
accepting this Second Amendment, Manager expressly authorizes the City to withhold any
amounts due and owing to the City due to Manager's resignation from any sums due and
owing to Manager upon separation.

8. "Section 6.2(e) Non-Renewal of Agreement". Effective as of the Effective Date hereof

Section 6.2 (e) of the Employment Agreement as amended, shall be deleted and replaced
with the following:

e. Non-Renewal of Agreement. If the City elects not to renew this Agreement at the
expiration of the Original Initial Term, the Initial Renewal Term or any Renewal Term, the
City shall pay the Manager:

(I) Severance Payment. The Severance Payment which shall be paid in one lump
sum.

(2) Accrued Obligations. In addition to the Severance Payment, the City shall pay the
Manager the Accrued Obligations. The Accrued Obligations will be paid in the manner
required by law.

9. Separation and Release Agreement. In the event the severance provisions of Sections
6.2 (b), (c), and/or (d) of the Employment Agreement, as amended, are triggered, the
parties agree that they shall execute a Mutual Release of All Claims ("Mutual Release")
substantially in the form attached hereto as Exhibit " A" and incorporated herein for all
purposes.

10. Internal Revenue Code Section 409A. All reimbursements made to the City Manager
under and pursuant to the terms, provisions, and conditions of this Second Amendment
shall be structured to comply with the provisions set forth in Section 409A of the Internal
Revenue Code.

11. Consultation with an Attorney. The City advises Manager to consult with an attorney of
his choice prior to executing the Second Amendment. The City will reimburse all
reasonable and necessary legal costs and expenses incurred by the City Manager in connection
with discussions, advice, document preparation, and other legal services delivered by the City
Manager's attorney to the City Manager relating to this Second Amendment. Manager

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 CITY CLERK DEPT
2022 OCT 6 PM2:26

acknowledges that he has consulted with and has been advised by his attorney prior to
signing (executing) this Second Amendment.

12. Representations. Manager hereby represents and certifies that he (i) has been provided a
reasonable period of time to consider this Second Amendment, (ii) has carefully read all
of this Second Amendment and has been given a fair opportunity to discuss and negotiate
the terms of this Second Amendment, (iii) understands the provisions of this Second
Amendment, (iv) has been advised that he is entitled to consult with an attorney regarding
this Second Amendment, (v) has determined that it is in his best interest to enter into this
Second Amendment, (vi) has not been influenced to sign this Se~ond Amendment by any
statement, representation or coercive act of the City, the City Council or its counsel not
contained in this Second Amendment, and (vii) is entering into this Second Amendment
knowingly and voluntarily.

13. Except as amended herein, the terms and conditions of the Employment Agreement as
amended between the City and Manager shall continue in full force and effect.

Executed and effective the I th day of October, 2022.

□TY r'r_; PASO:

bl£<k-H::,
Oscar L:eeser
Mayor

ATTEST: APPROVED AS TO FORM:

Laura Prine Lea Ream

City Clerk Davidson Troilo Ream & Garza
Counsel for City of El Paso

CITY MANAGER:

(:j":e ~
Tomas Gonzalez

Second Amendment Page 7 of 11

 EXHIBIT "A"

TO
SECOND AMENDMENT
TO THE AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN THE CITY OF EL PASO
AND TOMAS GONZALEZ

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 MUTUAL RELEASE OF ALL CLAIMS

The intent of this Mutual Release of All Claims ("Agreement") is to mutually, amicably, and finally settle
all matters relating to the employment and separation from employment by Tomas Gonzalez (hereinafter
referred to as "Gonzalez") from the City of El Paso (hereinafter referred to as the "City").

I. Separation & Last Day Worked. the City and the Manager entered into the Amended and
Restated City Manager Employment Agreement dated effective December I I, 2018, which
was subsequently amended by the parties, and which memorializes the basic terms of
employment and includes provisions relating to severance pay to which Gonzalez is entitled
under certain circumstances (the "Employment Agreement"). In connection with the
Employment Agreement the parties agreed to execute a mutual release of all claims in the
event that the severance provisions of the Employment Agreement are triggered . On
_ _ _ _ _ _ _ _, 20_ Gonzalez [separated or will be separating] from employment as the
City Manager as the City of El Paso (" Manager") and the parties agree that the severance provisions
of the Employment Agreement have been triggered.

2. Severance Consideration. As consideration for the mutual promises and obligations in this
Agreement, Gonzalez and the City agree to release any and all claims that either may have against
the other concerning Gonzalez' employment and separation from employment and following such
release, the City shall pay the Severance Payment described in the Employment Agreement. The
Severance Payment will be in the form of a lump sum distribution and will be subject to normal
withholdings for taxes and other applicable deductions and will be paid to Gonzalez no later than
fourteen days after the Effective Date of this Agreement.

3. Release of Claims by Gonzalez. Effective upon payment of the Severance Payment described in
Paragraph 2 above and in consideration for the mutual promises and undertakings contained in this
Agreement, Gonzalez hereby waives, releases and discharges, and agrees that Gonzalez will not
institute, prosecute or pursue any complaint, claim, charge, claim for relief, demand, suit, action
and cause of action, whether in law or in equity, which Gonzalez has, had or may have, if any, or
could assert against the City, its council members, officers, employees, and all other agents,
directors, representatives, attorneys, successors and assigns, at common law or under any statute,
rule, regulation, order or law, whether federal, state or local, on any ground whatsoever, known or
unknown, based upon actions of the City that occurred prior to the execution and approval of this
Agreement, including but not limited to: any and all actions for breach of his Employment
Agreement, or any other contract or agreement, oral or written, express or implied; breach of the
covenant of good faith and fair dealing, express or implied; wrongful termination in violation of
public policy, and all other claims for wrongful termination and constructive discharge;
discrimination of any type, including retaliation; all other tort claims including, but not limited to,
intentional or negligent infliction of emotional distress, invasion of privacy, negligence, negligent
investigation, negligent hiring, negligent retention, negligent supervision, assault and battery,
defamation, intentional or negligent misrepresentation and fraud; any and all claims arising under
any statute, including but not limited to Title Vil of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the Age Discrimination in Employment Act of 1967, the Older Workers' Benefit
Protection Act, the Employee Retirement and Income Security Act, the Americans with Disabilities
Act, the Federal Rehabilitation Act of 1973, 42 U.S.C. Section 1981 , the Family and Medical Leave
Act, the Unruh Act, as amended, the Texas Commission on Human Rights Act; any and all other
laws and regulations relating to employment termination, employment discrimination or retaliation,
wages, hours, benefits, compensation; and any and all claims for attorneys' fees and costs.
Gonzalez also affirms that Gonzalez has not filed, caused to be filed, and is not presently a party to

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 any claim, complaint, or action against the City in any forum or venue. It is understood and agreed
that Gonzalez is unaware of any claim, right, demand, debt, action, obligation, liability or cause of
action that Gonzalez may have against the City, which has not been released by this Agreement.

4. Release by City. Effective upon Gonzalez' s release of claims in paragraph 3 and in consideration
for the mutual promises and undertakings contained in this Agreement, the City, on behalf of itself
and its council members, officers, employees and all other agents, directors, representatives,
attorneys, successors and assigns, hereby waives, releases and discharges, and agrees that the City
will not institute, prosecute or pursue any complaint, claim, charge, claim for relief, demand, suit,
action and cause of action, whether in law or in equity, which the City has, had or may have, if any,
or could assert against Gonzalez or his representatives, attorneys, successors and assigns, at
common law or under any statute, rule, regulation, order or law, whether federal , state or local, on
any ground whatsoever, known or unknown, which arises out of or relates in any way to his
employment at the City.

s. No Admission of Liability. This Agreement is a compromise of disputed claims, the liability for
which, and the amount of damages for which, if any, are uncertain and unknown .. Nothing
contained in this Agreement shall be construed as an admission of liability by or on behalf of any
party, all such liability being expressly denied ..

6. Severability and Jurisdiction. If any of the provisions herein are determined to be invalid by a
tribunal of competent jurisdiction, it is agreed that such determination will not affect the
enforceability of the other provisions herein. Texas law shall govern the validity and interpretation
of this Agreement. .

7. Preparation of Agreement. This Agreement shall be interpreted in accordance with the plain
meaning of its terms and not strictly for or against any of the parties hereto. Regardless of which
party initially drafted this Agreement, it shall be construed and enforced as a mutually prepared
Agreement.

8. Attorney Consultation; Time to Consider. The City hereby advises Gonzalez that he should
consult with an attorney before executing this Agreement. Gonzalez shall have a period of up to
twenty-one (21) days after Gonzalez receives this Agreement within which to review and consider
the provisions of this Agreement.

9. Voluntary Agreement, Advice of Counsel and Return of Payments. In signing this Agreement,
Gonzalez expressly warrants that Gonzalez has read and fully understands this Agreement and
acknowledges that this Agreement is voluntary and that no one is making or forcing Gonzalez to
enter into it. Gonzalez understands and acknowledges that Gonzalez has seven (7) calendar days
following the execution of this Agreement to revoke his acceptance of the Agreement. If Gonzalez
choses to revoke the Agreement during the 7-day revocation period, Gonzalez must inform the City
in writing of his decision to revoke the Agreement. If Gonzalez signs this Agreement prior to the
expiration on the 21-day period, the 7-day period commences on the date Gonzalez signs this
Agreement. This Agreement will not become enforceable until the Effective Date of this
Agreement and after the expiration of this 7-day period.

10. Non-Assignment of Claims. Gonzalez and the City represent that they have not assigned,
transferred, or attempted to assign or transfer, to any person or entity, any of the claims released in
this Agreement.

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 CITY CLERK DEPT
2022 OCT 6 PM2:26

Binding Effect The City and Gonzalez agree that this Agreement will be binding on his and its
heirs, administrators, representatives, executors, successors and assigns, and shall inure to the
benefit of his or its heirs, administrators, affiliates, parent companies, representatives, executors,
successors and assigns.

12. Entire Understanding. This Agreement constitutes the entire understanding of the parties and
supersedes all prior agreements and understandings between the parties on the subjects covered.

13. Effective Date. As used in this Agreement, "the Effective Date of this Agreement" means the date
on which all of the following events have been completed: this Agreement has been fully executed
by Gonzalez and the City's Mayor and the revocation period has expired without Gonzalez
revoking the Agreement.

Agreed to: The City of El Paso

By:_ _ _ _ _ _ _ _ __ By:_ _ _ _ _ _ _ _ __
Tomas C. Gonzalez
Mayor

Date Date

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