As filed with the Securities and Exchange Commission on December 13, 1996
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TNP ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Texas 75-1907501
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4100 International Plaza
P.O. Box 2943
Fort Worth, Texas 76113
(817) 731-0099
(Address, including zip code, and telephone number, including area
code, of registrant s principal executive offices)
MICHAEL D. BLANCHARD
Corporate Secretary and General Counsel
TNP Enterprises, Inc.
4100 International Plaza
P.O. Box 2943
Fort Worth, Texas 76113
(817) 731-0099
Fax: (817) 737-1333
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
BRIAN D. BARNARD
Haynes and Boone, LLP
1300 Burnett Plaza
801 Cherry Street
Fort Worth, Texas 76102-6866
(817) 347-6600
Fax: (817) 347-6650
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. \ \
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. \x\
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. \ \
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.\ \
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. \ \
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Title of Each Class Amount to be Proposed Proposed Maximum Amount of
of Securities to be Registered Registered Maximum Aggregate Registration Fee
Offering Price Offering Price
Per Share (1) (1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 1,000,000 Shares $25 1/2 $25,500,000 $7,727.27
=========================================================================================================================
</TABLE>
(1) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(c)
under the Securities Act of 1933, as amended (the Securities Act ). The
proposed maximum offering price per share will be determined from time to
time by the registrant in connection with the issuance by the registrant of
the securities registered hereunder.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act, of 1933, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 10, 1996
PROSPECTUS
TNP ENTERPRISES, INC.
Direct Stock Purchase Plan
---------------------------------------
TNP Enterprises, Inc. (the Company ) hereby offers participation in its
Direct Stock Purchase Plan (the Plan ). The Plan is designed to provide
investors with a convenient method to purchase shares (the Shares ) of Common
Stock, no par value, of the Company (the Common Stock ), and to reinvest the
cash dividends paid to the holders of Shares. This Plan replaces the Company s
prior dividend reinvestment and stock purchase plan; current participants in
that plan automatically continue in this Plan.
Participants in the Plan may:
- Reinvest Common Stock dividends in Shares.
- Make an initial investment of at least $100 or, if already a
holder of Common Stock, at least $25.
- Make optional investments at any time of at least $25 up to a
maximum of $100,000 per calendar year.
- Receive certificates for whole Shares credited to their
Plan accounts.
- Deposit certificates representing Shares into the Plan for
safekeeping.
- Sell Shares credited to their Plan accounts through the Plan.
Shares purchased under the Plan will be either newly issued shares of
Common Stock or purchased in the open market, at the option of the Company. Open
market purchases will be effected through an Independent Agent (as hereinafter
defined) selected by the Company (as hereinafter defined). The Common Stock is
listed on the New York Stock Exchange ( NYSE ) under the symbol TNP. On December
11, 1996 the last reported price on the NYSE of the Common Stock was $26 per
share.
The purchase price of newly issued Shares purchased under the Plan will be
the average of the closing prices, computed to four decimal places, of the
Common Stock as reported on the NYSE for the last five trading days preceding
the Investment Date (as hereinafter defined) for such Shares. The price of
Shares purchased or sold in the open market will be the weighted average price
per share of the aggregate number of Shares purchased or sold, respectively, in
the open market for the relevant period. There will be no discount from these
purchase prices offered for Shares purchased under the Plan. The Company will
pay the costs of administration of the Plan and any brokerage commissions and
related fees incurred for the purchase of Shares. Participants in the Plan will
be responsible for any taxes incurred in the purchases of Shares and bear the
costs relating to the sale of shares of Common Stock sold in the open market.
Such costs include a $5.00 transaction fee, brokerage commissions up to a
maximum amount of $0.25 per share, any other related service charges and
applicable taxes.
To the extent required by applicable law in certain jurisdictions,
including Arizona, Florida, North Carolina and North Dakota, Shares offered
under the Plan to persons not presently record holders of Common Stock will be
offered only through a registered broker/dealer in such jurisdictions.
This Prospectus contains a summary of the material provisions of the Plan
and, therefore, this Prospectus should be retained by participants in the Plan (
Participants ) for future reference.
---------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------------------------
_____________________, 1996
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and if given or made, such
information or representations must not be relied upon as having been authorized
by the Company or any underwriter, dealer or agent. This Prospectus does not
constitute an offer or solicitation by any person in any jurisdiction in which
it is unlawful to make an offer or solicitation. The delivery of this Prospectus
at any time does not imply that the information herein is correct as of any time
subsequent to the date of this Prospectus.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the Exchange Act ). In accordance with the
Exchange Act, the Company files reports, proxy statements and other information
with the Securities and Exchange Commission (the Commission ). The reports,
proxy statements and other information can be inspected and copied at the public
reference facilities that the Commission maintains at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commissions regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of these
materials can be obtained at prescribed rates from the Public Reference Section
of the Commission at the principal offices of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549. In addition, reports, proxy statements, and other
information concerning the Company may be inspected at the offices of the New
York Stock Exchange at 20 Broad Street, New York, New York 10005. Such material
may also be accessed electronically by means of the Commission s home page on
the Internet at http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (the Registration Statement ) under the Securities Act of 1933, as amended
(the Securities Act ), with respect to the Common Stock. This Prospectus, which
constitutes a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain items of which are
contained in schedules and exhibits to the Registration Statement as permitted
by the rules and regulations of the Commission. Statements made in the
Prospectus concerning the contents of any documents referred to herein are not
necessarily complete. With respect to each such document filed with the
Commission as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description, and each such statement shall be deemed
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference in
this Prospectus:
(i) Annual Report on Form 10-K for the year ended December 31, 1995;
(ii) Quarterly Report on Form 10-Q for the quarter ended March 31, 1996;
(iii) Quarterly Report on Form 10-Q for the quarter ended June 30, 1996;
(iv) the description of the Common Stock included in the Company s Report on
Form 8-B dated January 9, 1985;
(v) Current Report on Form 8-K dated September 25, 1996; and
(vi) Quarterly Report on Form 10-Q for the quarter ended September 30, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
with this Prospectus from their respective dates of filing.
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
<PAGE>
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference (other than
exhibits to such documents which are not specifically incorporated by reference
in such documents). Written requests for such copies should be directed to the
Company at 4100 International Plaza, P.O. Box 2943, Fort Worth, Texas 76113.
Telephone requests may be directed to Michael D. Blanchard, Corporate Secretary
and General Counsel of the Company, at (817) 731-0099.
<PAGE>
THE COMPANY
TNP Enterprises, Inc., a non-utility holding company, is engaged in the
generation, purchase, transmission, distribution and sale of electricity to
customers within the States of Texas and New Mexico through its wholly-owned
subsidiary, Texas-New Mexico Power Company ( TNP ). The Company is exempt from
regulation as a registered holding company as that term is defined in the Public
Utility Holding Company Act of 1935. TNP provides electric service to
approximately 216,000 customers in 85 municipalities and adjacent rural areas.
TNP s service territory is divided into three operating regions. TNP s largest
region, the Gulf-Coast Region, includes the area along the Texas Gulf Coast,
between the cities of Houston and Galveston. The North-Central Region, TNP s
second largest region, extends from Lewisville, Texas, which is north of
Dallas-Fort Worth International Airport, to municipalities along the Red River
and southwest of Fort Worth. The Mountain Region includes areas in Southwest and
South Central New Mexico and in Far West Texas. The areas served by TNP contain
a population of approximately 420,000.
TNP owns one electric generating facility, TNP One, which is located in
Robertson County, Texas. TNP One consists of two 150-megawatt units, each of
which utilizes lignite-fueled, circulating fluidized bed technology. The two
units are supplying, on an annualized basis, approximately 25 percent of TNP s
power requirements.
The Company and its subsidiaries are all Texas corporations. Their
executive offices are located at 4100 International Plaza, P.O. Box 2943, Fort
Worth, Texas 76113 and their telephone number is (817) 731-0099.
APPLICATION OF PROCEEDS
Purchases of Common Stock under the Plan may be satisfied by either (i) the
purchase of authorized but unissued shares of Common Stock issued by the Company
( newly issued shares ), or (ii) the purchase of shares of Common Stock in the
open market. The Company does not know the number of Shares that the Company
ultimately will sell under the Plan or the price at which such Shares will be
sold. The Company will use the proceeds from sales of newly-issued Shares for
general corporate purposes, or advance or contribute such proceeds to one or
more of its subsidiaries for their general corporate purposes. Such purposes may
include, but are not limited to, the redemption, repayment or retirement of
outstanding indebtedness of the Company or its subsidiaries. The Company will
not receive any proceeds when Shares of Common Stock are purchased under the
Plan in the open market.
DESCRIPTION OF THE PLAN
Purpose
The purpose of the Plan is to provide current and potential investors with
a convenient way to purchase shares of Common Stock and to reinvest the
dividends paid on shares of Common Stock without payment of a brokerage
commission.
Advantages
Interested investors who are not already record or registered holders
of Common Stock may become Participants by (i) completing and signing
a new enrollment form ( Enrollment Form ), (ii) making an initial
minimum investment of at least $100 to purchase Common Stock through
the Plan and (iii) paying an account set-up fee of $5.00.
Record or registered holders of Common Stock who are not already
participating in the Plan may become Participants by completing and
signing an Enrollment Form and doing at least one of the following:
(i) electing to have their dividends reinvested in Common Stock, (ii)
depositing certificates representing Common Stock into the Plan for
safekeeping or (iii) making an initial minimum investment of at least
$25 to purchase Shares through the Plan.
In addition to having dividends reinvested in Common Stock,
Participants may purchase additional Common Stock under the Plan in
amounts of at least $25 for any single investment up to $100,000 per
calendar year. A Participant may make optional investments
occasionally or at regular intervals, as the Participant desires.
Funds invested in the Plan are fully invested in Common Stock through
the purchase of whole shares and fractional shares. Dividends will be
paid on the total number of Shares held in the account, including
fractional Shares. The Company will pay any brokerage commissions and
fees incurred for the purchase of Shares through the Plan.
Participants will be responsible for applicable taxes.
The Plan offers a safekeeping service through which Participants may
deposit, free of any service charges, certificates representing Common
Stock into the Plan. Shares deposited will be credited to the account
of the Participant. Participants can select this service without
participating in any other feature of the Plan.
A Participant may direct the Company, at any time and at no cost to
the Participant, to transfer all or a portion of the Shares credited
to his account (including safekeeping) to the account of another
Participant (or to set up an account for a new Participant in
connection with such transfer) or to send certificate(s) representing
shares to the Participant or another designated person or entity.
The Administrator will mail statements to Participants during the
month following any transaction or activity, showing current
transactions, total Shares credited to their accounts and other
information related to their accounts. Otherwise, statements will be
mailed quarterly. The Administrator also will send each Participant a
confirmation promptly after each sale of Common Stock under the Plan.
(Note: Participants should retain all statements for tax purposes.)
Participants may direct that their dividends on Shares credited to
their accounts or shares of Common Stock held outside the Plan be
reinvested in Shares. Dividends that the Participant elects not to
reinvest will be paid in the usual manner.
Participants may sell Shares credited to their accounts (including
those Shares deposited into the Plan for safekeeping) through the
Plan. In addition, for the sale of Shares through the Plan,
Participants will only pay brokerage commissions up to a maximum
amount of $0.25 per share, a $5.00 transaction fee, any other related
service charges and applicable taxes.
Disadvantages
Participants have no control over the price and, in the case of Shares
purchased or sold in the open market by an Independent Agent, the time at which
Common Stock is purchased or sold, respectively, for such Participant s account.
Purchases in the open market may be, but are not required to be, made on the
relevant Investment Date. Sales by Participants under the Plan will be made by
the Independent Agent as soon as practicable after processing the sales request,
but may not occur for several days. Therefore, Participants bear the market risk
associated with fluctuations in the price of the Common Stock. See
Administration, When Funds Will Be Invested, Purchase of Shares and How to Sell
Shares.
No interest will be paid on funds held by the Administrator (as
hereinafter defined) pending investment under the Plan.
Funds for optional and initial investments must be received by the
Administrator no later than the business day prior to an Investment
Date to be invested beginning on that Investment Date. Otherwise, the
funds may be held by the Administrator and invested beginning on the
next Investment Date. Funds for optional and initial investments need
not be returned to Participants unless the Administrator receives a
written request no later than three business days prior to the
applicable Investment Date, or 35 days have passed since receipt. See
Initial and Optional Cash Investments.
Description of the Plan
The following description summarizes the material terms and provisions of
the Plan and is not a complete description of all of its terms and provisions.
It is qualified in its entirety by reference to all of the terms and provisions
of the Plan, which is an exhibit to the Registration Statement.
Administration
The Plan is administered by The Bank of New York (the Administrator ). The
Administrator s address and telephone number for the processing of all Plan
transactions are as follows:
The Bank of New York
Dividend Reinvestment Department
P.O. Box 1958
Newark, New Jersey 07101-9774
1-(800) 524-4458
The Administrator s address and telephone number for all account inquiries,
forms and other information about the Plan are:
The Bank of New York
Investor Relations Department
P.O. Box 11258
Church Street Station
New York, NY 10286
1-(800) 524-4458
Telephone communications may be made between 8:00 a.m. and 5:00 p.m.,
Central Time, Monday through Friday.
Participants may accomplish many Plan transactions by telephone (other than
enrolling in the Plan, making cash investments, or transferring Shares) after
they have received a personal identification, or pin number, from the
Administrator.
The Administrator receives all funds invested by Participants, maintains
records of each Participant s account activities, issues account statements and
performs other duties required by the Plan. The Administrator or its nominee, as
custodian, will hold one or more certificates registered in its name or have
such Shares on deposit at a depository representing Shares purchased under or
deposited for safekeeping into the Plan and credited to Participants accounts.
The Administrator will promptly transmit funds to be used to purchase Common
Stock to a segregated bank account or to an independent agent selected by the
Company (the Independent Agent ), and will promptly forward sales instructions
to the Independent Agent. The Independent Agent will execute open-market
purchases and sales of the Common Stock under the Plan. BNY Brokerage, Inc., a
registered broker-dealer and wholly-owned subsidiary of The Bank of New York
Company, Inc., will initially serve as the Independent Agent. The Company has
the discretion to select other broker-dealers as the Independent Agent.
Who is Eligible to Participate in the Plan
ANY PERSON OR ENTITY, whether or not a record holder of Common Stock, MAY
PARTICIPATE IN THE PLAN, provided that (i) the person or entity fulfills the
prerequisites for participation described below under How to Enroll in the Plan
and (ii) in the case of citizens or residents of a country other than the United
States, its territories and possessions, participation would not violate local
laws applicable to the Company, the Plan and the Participant.
How to Enroll in the Plan
Current Participants in the Company s Dividend Reinvestment and Stock
Purchase Plan. The Plan is replacing the Company s Dividend Reinvestment and
Stock Purchase Plan (the Dividend Plan ). CURRENT DIVIDEND PLAN PARTICIPANTS
WILL AUTOMATICALLY BECOME PARTICIPANTS IN THE PLAN AND NEED NOT TAKE ANY FURTHER
ACTION AT THIS TIME, UNLESS THEY WISH TO MAKE A CHANGE IN THEIR PARTICIPATION.
If Dividend Plan participants wish to make any change in their participation
(for example, to elect to change their dividend reinvestment option), they must
submit a written request or call the Plan Administrator to request a change.
Partial reinvestment of dividends will not be available under the Plan. The
Administrator will reinvest all dividends paid to participants in the Dividend
Plan whose dividends were partially reinvested, unless the participants in the
Dividend Plan notify the Administrator that they desire to receive their
dividend payments in cash. A Dividend Plan participant should submit a written
request or call the Administrator if he or she wishes to receive a dividend
payment in cash rather than having the dividends reinvested.
New Participants.
Applicants Who Are Not Shareholders. Eligible applicants who are not
Company shareholders may join the Plan at any time after being furnished with a
copy of this Prospectus by completing and signing an Enrollment Form and
returning it, along with an initial investment of at least $100 and an account
set-up fee of $5.00, to the Administrator. See Initial and Optional Cash
Investments, below.
Applicants Who Are Record Shareholders. Eligible applicants who are record
shareholders of the Company (i.e., who hold the stock in their own name) and who
are not already Dividend Plan participants may join the Plan at any time after
being furnished with a copy of this Prospectus by completing and signing an
Enrollment Form and returning it: (a) with an initial investment of at least $25
to the Administrator (see Initial and Optional Cash Investments, below) (no
set-up fee is required for existing shareholders); or (b) electing to have
dividends on their Common Stock invested in Common Stock (see Reinvestment of
Dividends, below); or (c) depositing certificates representing shares of Common
Stock into the Plan for safekeeping (see Safekeeping Service, below).
Applicants Whose Shares Are Registered in Names Other Than Their Own.
Persons (also known as beneficial owners) whose shares of Common Stock are
registered in names other than their own, such as in the name of a bank, broker
or trustee, may participate in the Plan with respect to their shares by either
(i) having the shares of Common Stock that they wish to be subject to the Plan
transferred into their own name and depositing those Shares into the Plan for
safekeeping and/or electing to reinvest cash dividends in Common Stock, or (ii)
consulting and making arrangements with their banker, broker, nominee for the
terms, fees and conditions on which they can reinvest dividends in Common Stock.
Applicants who are Employees. Employees of the Company and its subsidiaries
may enroll in the Plan either by (i) submitting an Employee Enrollment Form and
an initial cash investment of at least $25 to the Administrator, or (ii)
submitting an Employee Enrollment Form and a completed Payroll Deduction Form to
the Company Payroll Office, which will forward the Employee Enrollment Form to
the Administrator. An employee investing through regular payroll deductions must
invest at least $12.50 per pay period (or at least $6.25 per week, if the
employee is paid weekly). Employees may make additional optional investments
when enrolling or at any other time in the same manner as other Participants.
Payroll deduction is not available to contract or temporary employees. See
Initial and Optional Cash Investments, and Employee Participation, below.
A person will become a Participant after the Administrator has received and
accepted a properly completed Enrollment Form and other necessary investments,
fees and/or documents.
Where to Get Forms
Enrollment Forms and all other Plan forms, stock powers and additional
copies of this Prospectus may be obtained at any time by written request to the
Administrator at the address set forth under Administration above, or by calling
the Administrator at 1 (800) 524-4458.
Initial and Optional Cash Investments
Initial Investment. Interested investors, whether or not record or
registered holders of Common Stock, may become Participants by investing through
the Plan as hereinafter described. ELIGIBLE APPLICANTS WHO ARE NOT RECORD OR
REGISTERED HOLDERS OF COMMON STOCK MUST SUBMIT TO THE ADMINISTRATOR A MINIMUM
INITIAL INVESTMENT OF AT LEAST $100 WITH THEIR COMPLETED ENROLLMENT FORMS PLUS
AN ACCOUNT SET-UP FEE OF $5.00. Eligible applicants who are record or registered
holders of Common Stock must submit to the Administrator a minimum initial
investment of at least $25 with their completed Authorization Forms. See New
Participants, above.
Optional Investments. Investments may be made by personal check or money
order drawn on a U.S. bank, in U.S. currency, payable to Bank of New York. Third
party checks will not be accepted and will be returned to sender. Please do not
send cash. Optional investments must be at least $25 for any single investment.
There is no obligation to make any optional investments and the amount and
timing of investments may vary from time to time at the discretion of the
Participant.
PARTICIPANTS WHO WISH TO MAKE OPTIONAL INVESTMENTS ON A REGULAR BASIS
SHOULD CONTACT THE ADMINISTRATOR TO REQUEST AN AUTOMATIC MONTHLY DEDUCTION FORM.
THIS PROGRAM PROVIDES THE CONVENIENCE OF AUTOMATIC MONTHLY INVESTMENTS
DEDUCTED DIRECTLY FROM YOUR BANK ACCOUNT, WITHOUT THE NEED TO MAIL CHECKS.
Investment Limit. The total initial and optional investments may not exceed
$100,000 per calendar year. This amount may be invested all at one time.
When Funds Will Be Invested.
An Investment Date will occur once every month. However, the Administrator
may determine that more frequent Investment Dates shall be necessary. If the
Administrator changes the frequency of Investment Dates, a notice describing any
such change will be sent to Participants.
An Investment Date under the Plan generally will be the fifteenth day of
the month, or if a weekend day or holiday, the next business day after the
fifteenth of the month. During months in which dividends are paid, the
Investment Date will be the dividend payment date. If Shares are purchased on
the open market, and if, in the discretion of the Independent Agent, it is not
practicable to make all the investments on the fifteenth of the month, the
Shares will be purchased as soon as practicable thereafter in accordance with
applicable securities laws and regulations or New York Stock Exchange Rules.
Shares will be purchased beginning on the first Investment Date following
the receipt of funds by the Administrator, provided that the Administrator
receives the funds no later than one business day prior to an Investment Date.
Otherwise, the Administrator may hold the funds for investment on the next
Investment Date. See Purchase of Shares. NO INTEREST WILL BE PAID ON FUNDS HELD
BY THE ADMINISTRATOR PENDING INVESTMENT. Accordingly, Participants and
interested investors may wish to transmit funds so as to reach the Administrator
shortly before an Investment Date.
Upon a Participant s written request, received by the Administrator no
later than three business days prior to the applicable Investment Date, the
Administrator will return funds not already invested in Common Stock to the
Participant. Refunds of funds submitted by check or money order will not be made
until the Administrator has actually collected funds from the instruments.
Accordingly, the refunds may be significantly delayed. If the Administrator does
not receive the request to stop investment by three business days prior to an
Investment Date, the Administrator will invest any funds then held in Common
Stock on the Investment Date. Refund requests should be made in writing to the
Administrator.
Pending purchase of Common Stock pursuant to the Plan, funds for optional
and initial investments will be credited to a Participant s account and held in
a bank account that will be separated from any other funds or monies of the
Company. Funds not invested in Common Stock within 35 days of receipt will be
promptly returned to the Participant. All funds are subject to collection by the
Administrator in U.S. dollars. The Participant or interested investor may choose
and will bear the risk of the method of delivery of any funds. Funds will be
deemed received when actually received by the Administrator.
Reinvestment of Dividends
Participants may elect on their Enrollment Form whether to reinvest
dividends paid on (i) Common Stock purchased through the Plan and credited to
their accounts, and (ii) Common Stock deposited into the Plan for safekeeping.
If a Participant does not make an election, dividends will be reinvested. Once a
Participant elects reinvestment, dividends on the designated Common Stock will
be reinvested in Shares. The amount reinvested will be reduced by any amount
that is required to be withheld under any applicable tax or other statutes.
Registered Shares can also be set up to reinvest. Record shareholders may elect
on an Enrollment Form to reinvest dividends without otherwise participating in
the Plan.
Dividends will be invested in Common Stock on the date of payment, or as
soon as practicable thereafter. Dividends not invested in Common Stock within 30
days of receipt will be returned to the Participant. No interest will be paid on
funds held by the Administrator pending investment. See When Funds Will Be
Invested and Purchases of Shares. How to Change Plan Options
Participants may change their Plan options, including the dividend
reinvestment option, by delivering instructions to that effect to the
Administrator. The instructions may be given on a Transaction Request form or by
telephone at 1-(800) 524-4458. To be effective for a particular dividend, the
Administrator must receive the instructions on or before the record date
relating to the dividend. IF THE ADMINISTRATOR DOES NOT RECEIVE INSTRUCTIONS ON
OR BEFORE THE RECORD DATE, THE INSTRUCTIONS WILL NOT BECOME EFFECTIVE UNTIL
AFTER THE DIVIDEND IS PAID. The Shares purchased with the funds will be credited
to the Participant s account.
Direct Deposit of Dividends Not Reinvested
Participants who elect not to reinvest dividends may receive their
dividends by electronic deposit to their bank, savings, or credit union account.
To receive a direct deposit of funds, Participants must complete and sign a
Direct Deposit Authorization Form and return it to the Administrator. Direct
deposit will become effective as soon as practicable after the Administrator has
received a completed Direct Deposit Authorization Form. Changes in designated
direct deposit accounts may be made by delivering written instructions or a
completed Direct Deposit Authorization Form to the Administrator.
Cash dividends on Common Stock not designated for reinvestment and not
directly deposited will be paid by check on the applicable dividend payment
date. The dividend payment dates for Common Stock generally have been, but are
not required to be, the 15th day of March, June, September, and December.
Purchases of Shares
Shares purchased for Participants under the Plan will be either newly
issued Shares or purchased in the open market by an Independent Agent (See
Administration). As of the date of this Prospectus, Shares purchased for
Participants under the Plan are newly issued Shares. The Company shall select
the source of Shares. The Company may not change its determination regarding the
source of purchases of the Shares more than once during any three-month period.
Whenever Shares are being purchased for Participants in the open market, the
Company will not exercise its right to change the source of purchases of Shares
unless the Chief Financial Officer or Financial Committee of the Board of
Directors determines that the Company needs to increase equity capital or there
is another valid reason for the change.
Purchases of newly issued Shares from the Company will be made on the
relevant Investment Date at the average of the closing price of the Common Stock
reported on the NYSE as published in The Wall Street Journal for the last five
trading days preceding the Investment Date. If no trading is reported for the
trading day, the Company may determine the purchase price on the basis of the
market quotations it deems appropriate. No brokerage commissions will be charged
for shares acquired directly from the Company.
Open-market purchases of Shares will occur on the relevant Investment Date,
or as soon thereafter as practicable (see When Funds Will Be Invested above).
The Administrator will promptly return funds that have not been invested in
Common Stock within 35 days after the receipt of optional and/or initial
investments. Dividends not invested in Common Stock within 30 days after receipt
will be returned to the Participant. The price of Shares purchased in the open
market for Participants will be the weighted average market price per share of
the aggregate number of shares of Common Stock purchased or sold as of the
relevant Investment Date. The Company will pay any brokerage commissions and
related fees incurred for the purchase of Shares. The Participants will be
responsible for all applicable taxes.
The number of Shares (including any fractional shares rounded to four
decimal places ) credited to the account of a Participant for a particular
Investment Date will be determined by dividing the total amount of dividends and
funds provided for investment for a Participant on the Investment Date by the
relevant purchase price per Share.
With regard to open market purchases and sales of Shares by an Independent
Agent, neither the Company, the Administrator (if it is not also the Independent
Agent) nor any Participant will have authority or power to direct the time or
price at which Shares may be purchased or sold, the markets on which the Shares
are to be purchased or sold (including on any securities exchange, in the
over-the-counter market or in negotiated transactions), or the selection of the
broker or dealer (other than any Independent Agent) through or from whom
purchases and sales may be made. The Independent Agent may commingle each
Participant s funds with those of other Participants for the purpose of
executing purchase and sale transactions, but will not offset purchases against
sales. Dividend and voting rights will commence upon settlement, whether Shares
are purchased from the Company or any other source.
Safekeeping Service
Participants may take advantage of the Plan s cost-free safekeeping
services at the time of enrollment or at any later time. A Participant holding
Common Stock in certificate form may deposit these Shares into the Plan by
delivering a completed Enrollment Form or Transaction Request Form and stock
certificates to the Administrator. THE CERTIFICATES SHOULD NOT BE ENDORSED. The
Shares deposited will be transferred into the name of the Administrator or its
nominee, as custodian, and credited to the Participant s account. References in
this Prospectus to the Shares in a Participants account will include Shares
deposited into the Plan for safekeeping unless otherwise indicated. Cash
dividends paid on Shares in Participants accounts that were deposited into the
Plan for safekeeping may be reinvested in Shares in accordance with the
Participants reinvestment election designated on their Enrollment Form. However,
Participants can select the safekeeping service without participating in any
other feature of the Plan.
How to Sell Shares
A Participant may request that all or a portion of the Shares in the
Participant s account be sold by delivering to the Administrator a completed
Transaction Request Form or by calling the Administrator. The Independent Agent
will sell Shares at least once per week or more frequently, if volume requires.
The price of Shares sold in the open market for Participants will be the
weighted average price per share of the aggregate number of Shares sold on the
relevant date of sale. The proceeds of the sale (less brokerage commissions of
up to $.25 per share, a $5.00 transaction fee, and any other related service
charges and applicable taxes) will then be paid to the Participants by check.
Payment of Dividends on Shares Sold. If the Administrator receives
instructions to sell Shares on which dividends are not being reinvested on or
after the record date relating to dividend payment, but before the dividend
payment date, the sale will be processed as described above and the dividends
will be paid to the Participant in the usual manner following the dividend
payment date. If the Administrator receives instructions to sell Shares on which
dividends are being reinvested on or after the record date relating to a
dividend payment date but before the Investment Date, and (i) if the Participant
s sale instructions cover fewer than all of the Shares credited to the account,
the sale will be processed as described in the immediately preceding paragraph,
the dividends will be invested in Shares and the newly purchased Shares will be
credited to the Participant s account or (ii) if the Participant s sale
instructions cover all of the Shares credited to the account, the sale
instructions will be processed and a check for the dividend will be provided.
How to Withdraw Shares from the Plan
Participants may withdraw some or all of the Shares credited to their
accounts from the Plan at any time by delivering to the Administrator transfer
instructions, and if the Participant will not be the record holder of the Shares
after withdrawal, a properly completed stock assignment (stock power form)
signed by the Participant with a Medallion guarantee of the Participant s
signature. The instructions may be given by using the Transaction Request Form
attached to the account statement and transaction advices. If no Shares are
being transferred to another person, the Participant may also give the
instructions by telephone. Upon the Administrator s receipt of the proper
documentation, certificates representing the designated Shares will be sent to
the Participant or to persons that the Participant has designated.
Payment of Dividends on Withdrawn Shares. If the Administrator receives a
request to withdraw Shares from a Participant s account on which dividends are
not being reinvested on or after the record date relating to a dividend payment
date but before the dividend payment date, the withdrawal will be processed as
described above and the dividends will be paid to the Participant in the usual
manner following the dividend payment date.
If the Administrator receives a request to withdraw Shares from a
Participants account on which dividends are being reinvested on or after the
record date relating to the dividend payment date but before the Investment
Date, and (i) if the Participant s withdrawal instructions cover fewer than all
of the Shares in the account, then the withdrawal will be processed as described
in the immediately preceding paragraph, dividends will be invested in Common
Stock through the Plan, and the newly purchased Shares will be credited to the
Participant s account or (ii) if the Participant s withdrawal instructions cover
all of the Shares in the account, the withdrawal instructions will be processed
and checks for the dividend and for the sale of any fractional shares will be
provided. Dividends on Shares withdrawn will continue to be reinvested in
accordance with the Participant s prior election unless the Participant elects
otherwise in writing or by telephone.
Certificates representing whole Shares withdrawn from the Plan will be sent
to the Participant or designated recipient by First Class Mail as soon as
practicable following the Administrator s receipt of the required documentation,
subject to the provisions of the preceding paragraph. Withdrawal of Shares does
not affect reinvestment of dividends on the shares withdrawn unless (i) the
Participant is no longer the record holder of the Shares, (ii) the reinvestment
is specifically discontinued by the Participant (see How to Change Plan Options
), or (iii) the Participant terminates participation in the Plan (See
Termination of Participation by a Participant).
How to Transfer Shares
To a Brokerage Account. A Participant wishing to transfer all or any part
of the Shares in his Account to a brokerage account may do so by delivering to
the Administrator a written request and a stock assignment (stock power) signed
by the Participant and with a Medallion guarantee of the Participant s
signature, acceptable to the Administrator. The written request must specify the
whole number of Shares to be transferred, if less than all of such Shares in his
Account, and the name and address of the brokerage firm to which the Shares are
to be transferred. The transfer will be handled as described in How to Withdraw
Shares from the Plan above.
Transfer of Shares From One Plan Account to Another. The transfer of Shares
from a Participant s Plan account to another account (whether by gift, private
sale or otherwise) has the same requirements as the transfer of securities
generally. The Participant should deliver to the Administrator a written request
and a stock assignment (stock power form) signed by the Participant and with a
Medallion guarantee of the Participant s signature. The Administrator will
effect the transfer as soon as practicable after it has received the required
documentation. Brokerage firms and banks generally can provide the Medallion
signature guarantee. Stock power forms are available at banks, brokerage firms
and from the Administrator. See Where to Get Forms, above.
Shares transferred will be credited to the transferee s account. Dividends
will be reinvested or paid in full in the same manner as the Shares already in
the account unless the Participant otherwise directs the Administrator in
writing. If the transferee is not already a Participant, an account will be
opened in the transferee s name and the transferee may make elections with
regard to reinvestment of dividends on the transferred Shares and other services
provided by the Plan on the Enrollment Form provided. If no election is made,
dividends will be fully reinvested. Transferees will be sent a statement of
account showing the transfer of the Shares into their accounts. The transferor
may request that a gift certificate be provided. The transferor may send the
gift certificate directly or request that it be sent by the Administrator to the
transferee.
Payment of Dividends on Transferred Shares. If the Administrator receives a
request to transfer a Participant s Plan Shares on which dividends are not being
reinvested on or after the record date relating to a dividend payment but before
the dividend payment date, the Participant will receive the dividends paid with
respect to the transferred Shares either by mail or by direct deposit into the
Participant s designated direct deposit account.
If the Administrator receives a request to transfer a Participant s Plan
Shares on which dividends are being reinvested on or after the record date
relating to a dividend payment and before the next Investment Date, the
dividends paid with respect to the transferred Shares will be invested in Common
Stock through the Plan. If the Participant s transfer instructions cover fewer
than all of the Shares in the Participant s Plan Account, the Administrator will
process the transfer as described above in Transfer of Shares from One Plan
Account to Another and all Shares purchased with the reinvested dividend payment
will be credited to the transferor Participant s account. If the transfer
instructions cover all the Shares in the Participant s Plan account, the
transfer instructions will be processed after the Investment Date, and the
Shares purchased with the reinvested dividend payment will be transferred along
with the other Shares in the Plan account in accordance with the Participant s
instructions.
Pledge of Plan Shares. Except for transfers described in How to Transfer
Shares, Shares credited to a Participant s account may not be pledged or
assigned. A Participant who wishes to pledge or assign such Shares must request
that they be withdrawn from the Plan. See How to Withdraw Shares.
How to Purchase Gift Shares for Others
Participants can purchase Common Stock for others. If the recipient is not
a record owner of Common Stock, an initial investment of at least $100, the
payment of an account set-up fee of $5.00 and a completed Enrollment Form in the
name of the recipient are required to establish an account in the recipient s
name. If the recipient is already a record owner of Common Stock or a
Participant, an investment of at least $25 may be gifted, and no account set-up
fee will be required. The gifted shares and statement of account will be handled
as discussed above under Gift or Transfer of Shares Within the Shareholder Stock
Purchase Plan. Gift certificates are available.
Account Statements and Other Communications
Participants will receive statements of account showing current
transactions for their accounts, the number of Shares credited to their
accounts, the amount of cash held in the account pending investment and other
information for the account. The Administrator will provide account statements
during the month after which the Participant has (i) made an optional
investment; (ii) deposited, transferred, sold or withdrawn Shares; or (iii) had
dividends reinvested in Common Stock. Otherwise, statements will be mailed
quarterly. The Administrator also will send each Participant a confirmation
promptly after each Plan transaction. Participants should retain these account
statements and confirmations in order to establish the cost basis, for tax
purposes, for Shares acquired under the Plan.
Participants will receive copies of all communications sent to holders of
Common Stock. These may include quarterly and annual reports to shareholders,
proxy material, consent solicitation material and Internal Revenue Service
information, if appropriate, for reporting dividend income. All notices, account
statements and other communications from the Administrator to Participants will
be addressed to the latest address of record; therefore, it is important that
Participants promptly notify the Administrator of any change of address.
Certificates for Shares
Normally, certificates for Shares purchased under the Plan will not be
issued to Participants. The number of Shares credited to an account under the
Plan will be shown on the Participant s statement of account. This convenience
protects against loss, theft or destruction of stock certificates.
Participants may obtain, free of charge at any time, a certificate for all
or part of the whole Shares credited to their accounts upon request to the
Administrator. The certificate(s) will be mailed by First Class Mail, within ten
business days of the Administrator s receipt of the request, to the Participant
s address of record.
Certificates for fractional Shares will not be issued under any
circumstances.
How to Terminate Participation in the Plan
Participants may terminate their participation in the Plan at any time by
notifying the Administrator on a Transaction Request Form or by telephone. Upon
the Administrator s receipt of the notification, Participants will receive (i) a
certificate for all of the whole Shares credited to their accounts, (ii) any
dividends and funds credited to their accounts pending investment for which the
Administrator has collected the value in U.S. dollars, and (iii) a check for the
cash value of any fractional Shares credited to their accounts. The fractional
shares will be valued at the closing sales price of the Common Stock reported on
the NYSE as published in The Wall Street Journal for the trading day preceding
the date of termination.
Costs
The Company will pay all administrative costs and expenses associated with
the Plan. PARTICIPANTS WILL BEAR THE COST OF BROKERAGE COMMISSIONS UP TO A
MAXIMUM OF $0.25 PER SHARE, RELATED SERVICE CHARGES, INCLUDING A $5.00
TRANSACTION FEE, AND ANY APPLICABLE TAXES INCURRED ON ALL SALES OF SHARES MADE
IN THE OPEN MARKET AND, IN THE CASE OF FIRST TIME PURCHASES BY APPLICANTS WHO
ARE NOT RECORD OR REGISTERED HOLDERS OF COMMON STOCK OR EMPLOYEES, AN ACCOUNT
SET-UP FEE OF $5.00. As of the date of this Prospectus, Shares purchased for
Participants under the Plan are being purchased directly from the Company. There
will be no brokerage commissions or related service charges for Shares purchased
in the open market or directly from the Company.
Federal Income Tax Consequences
THE FOLLOWING DISCUSSION RELATES TO THE MATERIAL FEDERAL INCOME TAX
CONSEQUENCES OF PARTICIPATION IN THE PLAN. THE EFFECT OF SUCH TAX CONSEQUENCES
UPON ANY PARTICIPANT WILL DEPEND UPON SUCH PARTICIPANT S INDIVIDUAL
CIRCUMSTANCES WHICH, TOGETHER WITH THE STATE AND LOCAL TAX CONSEQUENCES OF
PARTICIPATION, SHOULD BE DISCUSSED BY EACH PARTICIPANT WITH A TAX ADVISOR.
Participants will be required to include in income for federal income tax
purposes amounts equal to the dividends reinvested in Common Stock pursuant to
the Plan as if they had directly received such in cash. A Participant who
receives Shares purchased in the open market for which the Company has paid the
Participant s share of brokerage commissions and service fees may be treated as
receiving additional dividend income for tax purposes in the amount of the
Participant s share of brokerage commissions and service fees paid by the
Company.
A Participant s tax basis for Shares purchased pursuant to the Plan will be
equal to the cost of such Shares as discussed above; in the case of Shares
purchased in the open market such cost may include any brokerage commissions,
service fees and applicable taxes. Such Shares will have a holding period
beginning on the day after the Shares are allocated to the Participant s
account.
All or a portion of the dividends distributed to holders of the Company s
stock may be a return of capital and, as such, would not be taxable as ordinary
income. Reports will be provided to shareholders which will indicate if the
Company has made a return of capital distribution during the year. Shareholders
receiving a return of capital dividend must reduce the tax basis of the share on
which the dividend is paid by the amount of the dividend that is a return of
capital. If the amount that is a return of capital exceeds the tax basis, the
excess must be reported as capital gains.
Participants will not realize any taxable income when they receive
certificates for whole shares credited to their accounts under the Plan. Gain or
loss will be recognized by Participants when they sell such whole shares
previously received in certificated form from their accounts, when fractional
shares credited to their accounts are sold pursuant to the terms of the Plan,
and when Shares credited to their accounts are sold through the Plan.
If a Participant who is an employee of the Company authorizes payroll
deductions for investments in the Plan, any amounts transferred to the Plan
pursuant to such authorization will be treated as compensation in the year
otherwise payable to the employee and will be subject to income tax and payroll
taxes.
Employee Participation
Employees may participate in the Plan by making cash investments or through
payroll deductions. See How to Enroll--Applicants who are Employees.
Shares will be purchased for employees in the same manner as for other
Participants. See Purchases of Shares.
The Company will pay no interest on any optional investments or payroll
deduction amounts held prior to investment.
An employee may cancel the payroll deduction at any time and remain in the
Plan by notifying the Company s payroll administrator.
In order to withdraw from the Plan, an employee Participant must (i) call
or submit a Transaction Request Form to the Plan Administrator and (ii) submit a
written request to the Payroll Department at the Company. The employee s payroll
deduction will be canceled effective with the pay period following receipt of
the written request in the Company s Payroll office. The employee Participant s
account will be terminated as soon as practicable. See How to Withdraw Shares
from the Plan and How to Terminate Participation in the Plan.
If an employee leaves the Company or its subsidiaries, the employee will
continue to be a Participant unless the employee notifies the Administrator that
he or she is withdrawing from the Plan. See How to Withdraw Shares from the Plan
and How to Terminate Participation in the Plan.
Miscellaneous
Stock Splits, Stock Dividends and Rights Offerings. Any shares or other
securities representing stock splits or noncash distributions on Shares in the
account of a Participant will be credited to the Participant s account. Stock
splits, combinations, recapitalization and similar events affecting Shares in a
Participant s account will be credited on a pro rata basis. Transaction
processing may be curtailed or suspended until the completion of any stock
dividend, stock split or rights offering.
In the event of a rights offering, a Participant will receive rights based
upon the total number of whole Shares credited to the Participant s account.
Voting. Participants will have the exclusive right to exercise all voting
rights for Shares credited to their accounts. The Administrator will forward to
the Participant all shareholder materials relating to Shares in a Participant s
account. Participants may vote the Shares in their accounts in person or by
proxy. Participants proxy cards will represent all Shares in their accounts and
Shares registered in their names. Shares in a Participant s account will not be
voted unless the Participant or the proxy votes them. See Description of Common
Stock - Voting Rights.
Limitation of Liability. The Plan provides that neither the Company, the
Administrator (including the Company if it is acting as such) nor any
Independent Agent will be liable for any act done in good faith or for the good
faith omission to act in connection with the Plan, including, without
limitation, any claim of liability arising out of failure to terminate a
Participant s account upon the Participant s death prior to receipt of notice in
writing of the death, or with respect to the prices at which Shares are
purchased or sold for the Participant s account and the times when purchases and
sales are made, or with respect to any loss or fluctuation in the market value
after the purchase or sale of the shares. However, these Plan provisions do not
affect a Participant s right to bring a cause of action based on alleged
violations of federal securities laws.
Interpretation and Regulation of the Plan. The officers of the Company are
authorized to take actions to carry out the Plan in a manner consistent with the
Plan s terms and conditions. The Company reserves the right to interpret and
regulate the Plan as it deems desirable or necessary in connection with the Plan
s operations.
Change or Termination of the Plan. The Company may suspend, modify or
terminate the Plan at any time, in whole, in part or in respect of Participants
in one or more jurisdictions, without the approval of Participants. Notice of
such suspension, modification or termination will be sent to all affected
Participants, who will in all events have the right to withdraw from
participation. Upon any whole or partial termination of the Plan by the Company,
affected Participants will receive (i) certificates for all of the whole Shares
credited to their accounts, (ii) any dividends and funds credited to their
accounts pending investment for which the Administrator has collected the full
face value in U.S. dollars, and (iii) a check for the cash value for any
fractional Shares credited to their accounts. Fractional shares will be valued
at the closing sales price of the Common Stock reported on the NYSE as published
in The Wall Street Journal for the trading day preceding the date of
termination.
Termination of Participation by the Company. If a Participant does not have
at least one whole share of Common Stock credited to the account, or does not
own any Common Stock for which dividends are designated for reinvestment
pursuant to the Plan, the Company may terminate the Participant s participation
in the Plan upon written notice to the Participant. Additionally, the Company
may terminate any Participant s participation in the Plan after it has provided
written notice, mailed in advance of such termination, to the Participant at the
address appearing on the Administrator s records. A Participant whose
participation has been terminated will receive (i) a certificate for all of the
whole Shares credited to the account, (ii) any dividends and funds credited to
the account pending investment for which the Administrator has collected the
face value in U.S. dollars, and (iii) a check for the cash value of any
fractional Shares credited to the account. Fractional shares will be valued at
the closing price of the Common Stock reported on the NYSE as published in The
Wall Street Journal for the trading day preceding the date of termination.
PLAN OF DISTRIBUTION
The Common Stock being offered hereby is offered pursuant to the Plan. The
Plan provides for the purchase of Shares directly from the Company, or, at the
Company s option, by an Independent Agent on the open market. As of the date of
this Prospectus, Shares purchased for Participants under the Plan are being
purchased from the Company. The Plan provides that the Company may not change
the source of purchases of Shares under the Plan more than once in any
three-month period. The Company expects that its primary consideration in
determining the source of Shares to be used for purchases under the Plan will be
its need to increase equity capital. If the Company does not need to raise funds
externally or if financing needs are satisfied using non-equity sources of funds
to maintain the Company s targeted capital structure, the Company expects that
Shares will be purchased in the open market, subject to the aforementioned
limitation on changing the source of Shares.
The Company will pay all administrative costs and expenses associated with
the Plan, except as noted below. The Company will pay any brokerage commissions
and related service charges incurred in the purchase of Shares on the open
market. Participants will be responsible for applicable taxes incurred in
purchases of Shares on the open market. Participants will also bear the cost of
brokerage commissions up to a maximum of $0.25 per share, related service
charges, including a $5.00 transaction fee and any applicable taxes incurred on
all sales of Shares made in the open market and, in the case of first time
purchases by applicants who are not record or registered holders of common
stock, an account set-up fee of $5.00. There will be no brokerage commissions or
related service charges for Shares purchased directly from the Company.
DESCRIPTION OF COMMON STOCK
The statements in this Prospectus concerning the Common Stock and the
Articles of Incorporation, as amended (the Articles ), are merely a summary and
do not purport to be complete. The relative rights, authorized amounts,
descriptions, and preferences and limitations of the preferred stock, no par
value ( Preferred Stock ), of the Company and the Common Stock are stated in
full in the Articles and other instruments, which are exhibits to the
Registration Statement. Presently, the Company has no outstanding shares of
Preferred Stock. All outstanding shares of preferred stock set forth in the
Company's consolidated financial statements incorporated in this Prospectus by
reference were issued by TNP and affect only the rights of the holders of the
Common Stock with respect to the ownership rights in the assets of TNP as a
wholly owned subsidiary of the Company.
Dividend Rights and Limitations
The holders of the Common Stock are entitled to receive such dividends as
may be declared by the Board of Directors, but no dividends may be declared or
paid on the Common Stock (other than dividends payable solely in shares of the
Common Stock) unless all past and current dividends on any issued and
outstanding Preferred Stock of the Company have been paid or declared and set
apart for payment and all requisite sinking or purchase fund obligations for the
Preferred Stock have been fulfilled.
Since TNP constitutes the Company s principal subsidiary, the ability of
the Company to pay dividends may be dependent on the ability of TNP to pay
dividends to the Company. A summary of the legal limitations on TNP s ability to
pay dividends is set forth below and is qualified in its entirety by the
documents referenced in such summary.
Under TNP s Articles of Incorporation, the Company, as holder of the common
stock of TNP, is entitled to receive such dividends as may be declared by the
Board of Directors, but no dividends may be declared or paid on the common stock
of TNP (other than dividends payable solely in Shares of TNP) unless all past
and current dividends on outstanding preferred stock of TNP have been paid or
declared and set apart for payment and all requisite sinking or purchase fund
obligations for the preferred stock of TNP have been fulfilled.
Under TNP s Indenture of Mortgage and Deed of Trust dated as of November 1,
1944 (the Mortgage ), as supplemented and modified, TNP may not pay cash
dividends on its common stock to the Company (other than dividends payable
solely in shares of its common stock), unless at the date of such declaration of
dividends on its common stock, after giving effect thereto, the sum of
$1,500,000 plus (or minus in case of a deficit) the Net Income of TNP from
December 31, 1969, to and including the date of such common stock dividend
declaration shall be greater than the aggregate amount of all such payments or
distributions declared or authorized during such period on TNP s common stock
plus the aggregate amount of all cash dividends on, and payment pursuant to any
sinking, purchase or analogous fund for, preferred stock of TNP declared or made
during such period. At September 30, 1996, the amount of restricted retained
earnings of TNP was approximately $18.66 million.
Under TNP s Credit Agreements dated as of November 3, 1995 and September
10, 1996 (the Credit Agreements ), TNP may not, without the consent of the
holders of at least two-thirds of the indebtedness under each Credit Agreement
declare or pay, directly or indirectly, any dividend or make any other
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, with respect to any shares of its capital
stock or directly or indirectly redeem, purchase, retire or otherwise acquire
for value any shares of any class of its capital stock or set aside any amount
for such purpose, subject to certain exceptions based upon TNP s compliance with
interest coverage ratios.
Similar restrictions also are contained in separate credit agreements
entered into by TGC and TGCII with third party creditors, pursuant to which TNP
is subject to certain obligations and negative covenants.
Voting Rights
The holders of the Common Stock are entitled to one vote for each share
held at all meetings of shareholders. Pursuant to the Company s Bylaws, the
Board of Directors has been divided into three equal classes. At each Annual
Meeting, directors are elected to succeed those in the class whose terms then
expire for three-year terms of one class of directors will expire each year.
Liquidation Rights
In the event of liquidation, dissolution or winding up of the affairs of
the Company, the holders of the Common Stock are entitled to receive pro rata
all assets of the Company distributable to shareholders, but only after payment
to the holders, if any, of the Preferred Stock of the Company of the full
preferential amounts fixed for all series of the Company s Preferred Stock.
Shareholder Rights Plan
The Company has a Shareholder Rights Plan (the Rights Plan ) that is
designed to protect the Company s shareholders from coercive takeover tactics
and inadequate or unfair takeover bids. The Rights Plan, adopted in 1988 and
amended on November 13, 1990, by the Company s Board of Directors, provides for
the distribution of one right for each share of Common Stock held of record as
of the close of business on November 4, 1988 and for each share of Common Stock
issued thereafter until November 4, 1998. Each right entitles the shareholder to
elect to exercise the right in whole or in part to purchase, upon the occurrence
of certain events, one share of Common Stock at an initial price of $45 per
share or, under certain circumstances, Shares at half the then-current market
price, or with an election to exercise such rights without payment of cash, to
receive the number of shares of the Common Stock or other securities having an
aggregate value equal to the excess of (i) the value of the Common Stock or
other securities on the date of the exercise of the rights over (ii) the cash
payment that would have been payable upon the exercise of the rights if an
election for cash payment had been made. Until certain triggering events occur,
the rights will trade together with the Common Stock, separate rights
certificates will not be issued, and the rights will have no voting or dividend
rights. Among the triggering events are the acquisition by a person or group of
persons of 10 Percent or more of the outstanding Common Stock or the
commencement of a tender or exchange offer which, upon consummation, would
result in a person or group of persons owning 15 percent or more of the
outstanding Common Stock. The rights expire November 4, 1998, unless earlier
redeemed or exchanged by the Company, and the existence of the rights has had no
effect on earnings per share.
The stock certificates relating to the shares of Additional Common Stock
offered hereby will bear a legend referring to the rights.
Miscellaneous
The Common Stock has no preemptive rights or cumulative voting rights and
there are no redemption, sinking fund, or conversion provisions with respect to
the Common Stock.
The outstanding Common Stock is, and the shares offered hereby when issued
will be, fully paid and nonassessable.
Transfer Agent and Registrar
As of January 1, 1997, the Transfer Agent and Registrar for the Common
Stock will be The Bank of New York, Dividend Reinvestment, P.O. Box 1958,
Newark, New Jersey 07101-9774. Until January 1, 1997, the Transfer Agent and
Registrar for the Common Stock will be Society National Bank, in care of
KeyCorp. Shareholder Services, Inc., 1201 Elm Street, Suite 5050, Dallas, Texas
75270.
EXPERTS
The consolidated financial statements of TNP Enterprises, Inc. as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, included in the Company s Annual Report on Form 10-K
for the year ended December 31, 1995, have been incorporated by reference herein
and in the registration statement in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
The report of KPMG Peat Marwick LLP covering the Companys consolidated
financial statements refers to a change in the method of accounting for
operating revenues in 1995 and changes in the methods of accounting for income
taxes and postretirement benefits in 1993.
LEGAL OPINIONS
An opinion as to the legality of the securities offered hereby has been
rendered by Michael D. Blanchard, Secretary and General Counsel for the Company.
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus and, with respect to the Additional
Common Stock, the Prospectus Supplement relating thereto, and if given or made,
such information or representations must not be relied upon as having been
authorized by the Company or any underwriter, dealer or agent. Neither this
Prospectus nor any Prospectus Supplement constitutes an offer or solicitation by
any person in any jurisdiction in which it is unlawful to make an offer or
solicitation. The delivery of this Prospectus and any Prospectus Supplement at
any time does not imply that the information herein is correct as of any time
subsequent to the date of this Prospectus and any Prospectus Supplement.
-------------------------
TABLE OF CONTENTS
Page
PROSPECTUS
AVAILABLE INFORMATION 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 2
THE COMPANY 4
APPLICATION OF PROCEEDS 4
DESCRIPTION OF THE PLAN 4
PLAN OF DISTRIBUTION 14
DESCRIPTION OF COMMON STOCK 15
EXPERTS 17
LEGAL OPINIONS 17
1,000,000 Shares
TNP ENTERPRISES, INC.
Direct Stock Purchase Plan
-------------------------
PROSPECTUS
-------------------------
__________ ____, 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission Registration Fee $7,727
Printing Expenses 6,000
Listing Fee of the New York Stock Exchange 5,000
Accounting Fees and Expenses 5,000
Legal Fees and Expenses 50,000
Blue Sky Fees and Expenses 1,000
Miscellaneous Expenses 1,000
Total $75,727
All of the above expenses except the Securities and Exchange Commission
registration fee are estimated. All of such expenses will be borne by the
Company.
Item 15. Indemnification of Directors and Officers
Article 2.02-1 of the Texas Business Corporation Act provides that any
director or officer of a Texas corporation may be indemnified against judgments,
penalties, fines, settlements and reasonable expenses actually incurred by him
in connection with or in defending any action, suit or proceeding in which he
was, is or is threatened to be made a party by reason of his position. With
respect to any proceeding arising from actions taken in his official capacity,
as a director or officer, he may be indemnified so long as it shall be
determined that he conducted himself in good faith and that he reasonably
believed that such conduct was in the corporation's best interest. In cases not
concerning conduct in his official capacity as a director or officer, a director
or officer may be indemnified so long as it shall be determined that he
conducted himself in good faith and that he reasonably believed that his conduct
was not opposed to the corporation's best interest. In the case of any criminal
proceeding, a director or officer may be indemnified if he had no reasonable
cause to believe his conduct was unlawful. If a director or officer is found
liable to the corporation on the basis that personal benefit was improperly
received by him, the indemnification is limited to reasonable expenses actually
incurred in connection with such proceeding. No indemnification may be made if
such officer or director is found liable for willful or intentional misconduct
in the performance of his duty to the corporation. If a director or officer is
wholly successful, on the merits or otherwise, in connection with such a
proceeding, such indemnification is mandatory.
Section 5 of Article 7 of the Company's Bylaws requires the indemnification
of officers and directors to the fullest extent permitted by the Texas Business
Corporation Act or any other applicable Act. The Company also has policies
insuring its officers and directors against certain liabilities for actions
taken in such capacities, including liabilities under the Act.
Article 7.06 of the Texas Miscellaneous Corporation Laws Act provides that
the articles of incorporation of a corporation may provide that a director of
the corporation shall not be liable, or shall be liable only to the extent
provided in the articles of incorporation, to the corporation or its
shareholders or members for monetary damages for an act or omission in the
director's capacity as a director, except that this article does not authorize
the elimination or limitation of the liability of a director to the extent the
director is found liable for:
(i) a breach of the director's duty of loyalty to the corporation or
its shareholders or members;
(ii) an act or omission not in good faith that constitutes a breach of
duty of the director to the corporation or an act or omission that involves
intentional misconduct or a knowing violation of the law;
(iii) a transaction from which the director received an improper
benefit, whether or not the benefit resulted from an action taken within
the scope of the director's office;
(iv) an act or omission for which the liability of a director is
expressly provided for by an applicable statute.
Article X of the Company s Articles of Incorporation provides that, to the
fullest extent allowed pursuant to the Texas Miscellaneous Corporation Laws Act,
or any other applicable laws as presently or hereafter in effect, no director of
the Company shall be personally liable to the Company or its shareholders for
monetary damages for or with respect to any acts or omissions in his capacity as
director of the Company.
Item 16. Exhibits
Exhibits filed with this report are denoted by *.
Exhibit
No. Description
The Company incorporates certain exhibits listed below by reference to the
exhibits and filings noted in parenthesis.
4(a)-Indenture of Mortgage and Deed of Trust dated as of November 1, 1944
(Exhibit 2(d) to Community Public Service Co. ( CPS ) 1978 Form S-7,
File No. 2-61323).
4(b)-Seventh Supplemental Indenture dated as of May 1, 1963 (Exhibit 2(k),
to CPS Form S-7, File No. 2-61323).
4(c)-Eighth Supplemental Indenture dated as of July 1, 1963 (Exhibit 2(l),
to CPS Form S-7, File No. 2-61323).
4(d)-Ninth Supplemental Indenture dated as of August 1, 1965 (Exhibit
2(m), to CPS Form S-7, File No. 2-61323).
4(e)-Tenth Supplemental Indenture dated as of May 1, 1966 (Exhibit 2(n),
to CPS Form S-7, File No. 2-61323).
4(f)-Eleventh Supplemental Indenture dated as of October 1, 1969 (Exhibit
2(o), to CPS Form S-7, File No. 2-61323).
4(g)-Twelfth Supplemental Indenture dated as of May 1, 1971 (Exhibit 2(p),
to CPS Form S-7, File No. 2-61323).
4(h)-Thirteenth Supplemental Indenture dated as of July 1, 1974 (Exhibit
2(q), to CPS Form S-7, File No. 2-61323).
4(i)-Fourteenth Supplemental Indenture dated as of March 1, 1975 (Exhibit
2(r), to CPS Form S-7, File No. 2-61323).
4(j)-Fifteenth Supplemental Indenture dated as of September 1, 1976
(Exhibit 2(e), File No. 2-57034).
4(k) - Sixteenth Supplemental Indenture dated as of November 1, 1981,
(Exhibit 4(x), File No. 2-74332).
4(l)-Seventeenth Supplemental Indenture dated as of December 1, 1982
(Exhibit 4(cc), File No. 2-80407).
4(m)-Eighteenth Supplemental Indenture dated as of September 1, 1983
(Exhibit (a), to Form 10-Q of TNP for the quarter ended September 30,
1983, File No. 1-4756).
4(n)-Nineteenth Supplemental Indenture dated as of May 1, 1985 (Exhibit
4(v), File No. 2-97230).
4(o)-Twentieth Supplemental Indenture dated as of July 1, 1987 (Exhibit
4(o), to Form 10-K of TNP for the year ended December 31, 1987, File
No. 2-97230).
4(p)-Twenty-First Supplemental Indenture dated as of July 1, 1989 (Exhibit
4(p), to Form 10-Q of TNP for the quarter ended June 30, 1989, File
No. 2-97230).
4(q)-Twenty-Second Supplemental Indenture dated as of January 15, 1992
(Exhibit 4(q), to Form 10-K of TNP for the year ended December 31,
1991, File No. 2-97230).
4(r)-Twenty-Third Supplemental Indenture dated as of September 15, 1993
(Exhibit 4(r), to Form 10-K of TNP for the year ended December 31,
1993, File No. 2-97230).
4(s)-Twenty-Fourth Supplemental Indenture dated as of November 3, 1995
(Exhibit 4(s) to Form 10-K of TNP for the year ended December 31,
1995, File No. 2-97230).
4(t)-Twenty-Fifth Supplemental Indenture dated as of September 10, 1996
(Exhibit 4(t) to Form 10-Q of TNP for the quarter ended September 30,
1996, File No. 2-97230).
4(u)-Indenture and Security Agreement for 12 1/2 percent Secured Debentures
dated as of January 15, 1992 (Exhibit 4(r) to TNP 1991 Form 10-K, File
No. 2-97230).
4(v)-Indenture and Security Agreement for 10 3/4 percent Secured Debentures
dated as of September 15, 1993 (Exhibit 4(t) to TNP 1993 Form 10-K,
File No. 2-97230).
4(w)-Rights Agreement and Form of Right Certificate, as amended, effective
November 13, 1990 (Exhibit 2.1 to TNPE Form 8-A, File No. 1-8847).
* 4(x)- Form of TNPE Enterprises, Inc. Direct Stock Purchase Plan.
* 5(a)- Opinion of Michael D. Blanchard as to the validity of the Common
Stock.
* 23(a) - Consent of Michael D. Blanchard contained in the opinion filed
as Exhibit 5(a).
* 23(b) - Consent of KPMG Peat Marwick, LLP.
* 24(a) - Power of Attorney appears on the signature page hereof.
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the Calculation of Registration Fee table in the effective
registration statement.
(iii)to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do
not apply if the registration statement is on Form S-3 (Section 239.13 of this
chapter), Form S-8 (Section 239.16b of this chapter) or Form F-3 (Section 239.33
of this chapter), and the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to section
13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) that, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant s annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan s annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Fort Worth, State of Texas, on the 13th day of
December, 1996.
TNP ENTERPRISES, INC.
By: /s/ M. S. Cheema
Manjit S. Cheema
Vice President and Chief
Financial Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Manjit S. Cheema and Michael D.
Blanchard, his or her true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign, execute and file with the
Securities and Exchange Commission and any state securities regulatory board or
commission any documents relating to the proposed issuance and registration of
the securities offered pursuant to this Registration Statement on Form S-3 under
the Securities Act of 1933, including any amendment or amendments relating
thereto, with all exhibits and any and all documents required to be filed with
respect thereto with any regulatory authority, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises in order to effectuate the same as fully to all intents
and purposes as he or she might or could do if personally present, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Kevern R. Joyce Chairman, President and December 13, 1996
Kevern R. Joyce Chief Executive Officer
/s/ Manjit S. Cheema Vice President and December 13, 1996
Manjit S. Cheema Chief Financial Officer
/s/ Melissa D. Davis Chief Accounting Officer December 13, 1996
Melissa D. Davis
/s/ R. Denny Alexander Director December 13, 1996
R. Denny Alexander
/s/ John A. Fanning Director December 13, 1996
John A. Fanning
/s/ Sidney M. Gutierrez Director December 13, 1996
Sidney M. Gutierrez
/s/ Harris L. Kempner, Jr. Director December 13, 1996
Harris L. Kempner, Jr.
/s/ Dwight R. Spurlock Director December 13, 1996
Dwight R. Spurlock
/s/ Dr. Carol D. Smith Surles Director December 13, 1996
Dr. Carol D. Smith Surles
/s/ Dennis H. Withers Director December 13, 1996
Dennis H. Withers
/s/ James R. Holland, Jr. Director December 13, 1996
James R. Holland, Jr.
<PAGE>
EXHIBIT INDEX
Exhibits filed with this report are denoted by *.
Exhibit
No. Description
The Company incorporates the following exhibits by reference to the exhibits and
filings noted in parenthesis.
4(a)-Indenture of Mortgage and Deed of Trust dated as of November 1, 1944
(Exhibit 2(d) to Community Public Service Co. ( CPS ) 1978 Form S-7,
File No. 2-61323).
4(b)-Seventh Supplemental Indenture dated as of May 1, 1963 (Exhibit 2(k),
to CPS Form S-7, File No. 2-61323).
4(c)-Eighth Supplemental Indenture dated as of July 1, 1963 (Exhibit 2(l),
to CPS Form S-7, File No. 2-61323).
4(d)-Ninth Supplemental Indenture dated as of August 1, 1965 (Exhibit 2(m),
to CPS Form S-7, File No. 2-61323).
4(e)-Tenth Supplemental Indenture dated as of May 1, 1966 (Exhibit 2(n),
to CPS Form S-7, File No. 2-61323).
4(f)-Eleventh Supplemental Indenture dated as of October 1, 1969 (Exhibit
2(o), to CPS Form S-7, File No. 2-61323).
4(g)-Twelfth Supplemental Indenture dated as of May 1, 1971 (Exhibit 2(p),
to CPS Form S-7, File No. 2-61323).
4(h)-Thirteenth Supplemental Indenture dated as of July 1, 1974 (Exhibit
2(q), to CPS Form S-7, File No. 2-61323).
4(i)-Fourteenth Supplemental Indenture dated as of March 1, 1975 (Exhibit
2(r), to CPS Form S-7, File No. 2-61323).
4(j)-Fifteenth Supplemental Indenture dated as of September 1, 1976
(Exhibit 2(e), File No. 2-57034).
4(k)-Sixteenth Supplemental Indenture dated as of November 1, 1981,
(Exhibit 4(x), File No. 2-74332).
4(l)-Seventeenth Supplemental Indenture dated as of December 1, 1982
(Exhibit 4(cc), File No. 2-80407).
4(m)-Eighteenth Supplemental Indenture dated as of September 1, 1983
(Exhibit (a), to Form 10-Q of TNP for the quarter ended September 30,
1983, File No. 1-4756).
4(n)-Nineteenth Supplemental Indenture dated as of May 1, 1985 (Exhibit
4(v), File No. 2-97230).
4(o)-Twentieth Supplemental Indenture dated as of July 1, 1987 (Exhibit
4(o), to Form 10-K of TNP for the year ended December 31, 1987, File
No. 2-97230).
4(p)-Twenty-First Supplemental Indenture dated as of July 1, 1989 (Exhibit
4(p), to Form 10-Q of TNP for the quarter ended June 30, 1989, File
No. 2-97230). 4(q)- Twenty-Second Supplemental Indenture dated as of
January 15, 1992 (Exhibit 4(q), to Form 10-K of TNP for the year ended
December 31, 1991, File No. 2-97230).
4(r)-Twenty-Third Supplemental Indenture dated as of September 15, 1993
(Exhibit 4(r), to Form 10-K of TNP for the year ended December 31,
1993, File No. 2-97230).
4(s)-Twenty-Fourth Supplemental Indenture dated as of November 3, 1995
(Exhibit 4(s) to Form 10-K of TNP for the year ended December 31,
1995, File No. 2-97230).
4(t)-Twenty-Fifth Supplemental Indenture dated as of September 10, 1996
(Exhibit 4(t) to Form 10-Q of TNP for the quarter ended September 30,
1996, File No. 2-97230).
4(u)-Indenture and Security Agreement for 12 1/2 percent Secured Debentures
dated as of January 15, 1992 (Exhibit 4(r) to TNP 1991 Form 10-K, File
No. 2-97230).
4(v)-Indenture and Security Agreement for 10 3/4 percent Secured Debentures
dated as of September 15, 1993 (Exhibit 4(t) to TNP 1993 Form 10-K,
File No. 2-97230).
4(w)-Rights Agreement and Form of Right Certificate, as amended, effective
November 13, 1990 (Exhibit 2.1 to TNPE Form 8-A, File No. 1-8847).
* 4(x)- Form of TNPE Enterprises, Inc. Direct Stock Purchase Plan.
* 5(a) - Opinion of Michael D. Blanchard as to the validity of the Common
Stock.
* 23(a) - Consent of Michael D. Blanchard contained in the opinion filed as
Exhibit 5(a).
* 23(b) - Consent of KPMG Peat Marwick, LLP.
* 24(a) - Power of Attorney appears on the signature page hereof.
</TABLE>
Exhibit 4(x)
TNP ENTERPRISES, INC.
DIRECT STOCK PURCHASE PLAN
TNP Enterprises, Inc., a Texas corporation (the "Corporation"), hereby
amends and restates its Dividend Reinvestment and Stock Purchase Plan, as
amended and restated effective December ____, 1996 (the "DRIP"), in its entirety
to establish the following Direct Stock Purchase Plan of TNP Enterprises, Inc.
(the "Plan"):
The DRIP has been in existence since October 1984; and
The Corporation desires to amend and restate the DRIP to include other
stock purchase opportunities and services in an effort to enhance its
attractiveness to investors in all classes of the Corporation's common stock, no
par value ("Common Stock"); and
The purpose of the Plan is to provide interested investors and holders of
Common Stock a convenient, economical means of increasing their investment in
the Corporation through (i) regular investment of cash dividends paid, (ii)
optional cash investments and/or (iii) initial cash investments in shares of
Common Stock.
ARTICLE I
Definitions
The terms defined in this Article I shall, for all purposes of this Plan,
have the following respective meanings:
Account: The term "Account" shall mean, as to any Participant, the account
maintained by the Administrator evidencing (i) the shares (and/or fractional
shares) of Common Stock (a) purchased through the Plan and/or (b) deposited by
such Participant into the Plan pursuant to Section 4.1 hereof, and credited to
such Participant and (ii) cash held in the Plan pending investment in Common
Stock for such Participant.
Account Shares: The term "Account Shares" shall mean all shares (and/or
fractional shares) of Common Stock credited to the Account of a Participant by
the Administrator, which shall include shares deposited into the Plan pursuant
to Section 4.1 hereof.
Administrator: The term "Administrator" shall mean the individual (who may
be an Employee of the Corporation), bank, trust company or other entity
(including the Corporation) appointed from time to time by the Corporation to
act as Administrator hereunder.
Common Stock: The term "Common Stock" shall mean the common stock, no par
value, of the Corporation.
Corporation: The term "Corporation" shall mean TNP Enterprises, Inc.
Corporation Share Purchase Price: The term "Corporation Share Purchase
Price," when used with respect to newly issued shares of Common Stock, shall
mean the average of the closing prices, computed to four decimal places, of the
Common Stock as reported on the NYSE as published in The Wall Street Journal for
the last five Trading Days preceding the Investment Date. If no trading is
reported for the Trading Day, the Corporation may determine the Corporation
Share Purchase Price on the basis of the market quotations it deems appropriate.
Direct Deposit Authorization Form: The term "Direct Deposit Authorization
Form" shall mean the documentation that the Administrator shall require to
forward non-reinvested Dividends to the Participant's predesignated bank,
savings or credit union account pursuant to Section 6.7 hereof.
Dividend: The term "Dividend" shall mean cash dividends paid on Common
Stock.
Dividend Payment Date: The term "Dividend Payment Date" shall mean a date
on which a cash dividend on shares of Common Stock is paid.
DRIP: The term "DRIP" shall mean the Dividend Reinvestment and Stock
Purchase Plan of TNP Enterprises, Inc.
Employee: The term "Employee" shall mean all employees (including part-time
employees but excluding temporary and contract employees) of the Corporation and
its subsidiaries.
Enrollment Form: The term "Enrollment Form" shall mean the documentation
that the Administrator (i) shall require to be completed and received prior to
an investor's enrollment in the Plan pursuant to Section 2.2 or 2.3 hereof, a
Participant's changing his options under the Plan pursuant to Section 6.1
hereof, or a Participant's depositing shares of Common Stock into the Plan
pursuant to Section 4.1 hereof and (ii) may require to be completed and received
prior to an optional cash investment pursuant to Section 2.4 hereof.
Exchange Act: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder.
Foreign Person: The term "Foreign Person" shall mean a Person that is a
citizen or resident of, or is organized or incorporated under, or has its
principal place of business in, a country other than the United States, its
territories and possessions.
Independent Agent: The term "Independent Agent" shall mean an agent
independent of the Corporation who satisfies applicable legal requirements
(including, without limitation, the requirements of Rule 10b-6 and Rule 10b-18
promulgated under the Exchange Act) and who has been selected by the
Corporation, pursuant to Section 9.6 hereof, to serve as an Independent Agent
for purposes of making open market purchases and sales of Common Stock under the
Plan.
Investments: The term "Investments" shall mean initial payments or optional
payments to purchase Common Stock through the Plan. (These can be automatic
deductions from bank accounts, personal checks, money orders, other forms of
U.S. funds payable to the Direct Stock Purchase Plan of TNP Enterprises, Inc.,
and, with respect to Employees of the Corporation who are Participants in the
Plan, payroll deductions.)
Investment Date: The term "Investment Date" shall mean, generally, the
fifteenth day of the month, or if a weekend day or holiday, the next business
day after the fifteenth of the month. During months in which Dividends are paid,
the Investment Date shall be the Dividend Payment Date or as soon as practicable
thereafter. If Common Stock is purchased on the open market, and if, in the
discretion of the Independent Agent, it is not practicable to make all the
investments on the fifteenth of the month, the Common Stock shall be purchased
as soon as practicable thereafter in accordance with applicable securities laws
and regulations or rules of the NYSE. The Administrator may change the frequency
of Investment Dates, whereupon a notice that describes any such changes shall be
sent to the Participants.
Market Share Purchase Price: The term "Market Share Purchase Price," when
used with respect to shares of Common Stock purchased in the open market, shall
mean the weighted average purchase price per share of the aggregate number of
shares of each class purchased in the open market for an Investment Date. The
Corporation shall pay the costs of any brokerage commissions and related fees
incurred for the purchase of Common Stock; however, the Participant shall be
responsible for all applicable taxes.
Market Share Sales Price: The term "Market Share Sales Price," when used
with respect to shares of Common Stock sold under the Plan, shall mean the
weighted average sales price per share (less brokerage fees and commissions, any
related service charges and applicable taxes) of the aggregate number of shares
of Common Stock sold in the open market for the relevant period.
Maximum Amount: The term "Maximum Amount" shall mean $100,000 per calendar
year.
NYSE: The term "NYSE" shall mean the New York Stock Exchange.
Participant: The term "Participant" shall mean a participant in the Plan.
Person: The term "Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture, association, joint-stock
company, trust, estate or unincorporated organization.
Plan: The term "Plan" shall mean the Direct Stock Purchase Plan.
Statement of Account: The term "Statement of Account" shall mean a written
statement prepared by the Administrator and sent to each Participant which
reflects (i) current transactions completed under the Plan, (ii) the number of
Account Shares credited to such Participant's Account at the date of such
statement, (iii) the amount of cash, if any, credited to such Participant's
Account pending investment at the date of such statement and (iv) such
additional information regarding such Participant's Account as the Administrator
may determine to be pertinent to the Participant.
Termination Date. The term "Termination Date" shall mean the date the
Administrator receives a Transaction Request Form that indicates a Participant's
desire to terminate his participation in the Plan.
Trading Day: The term "Trading Day" shall mean any day on which trades are
reported on the NYSE.
Transaction Request Form: The term "Transaction Request Form" shall mean
the documentation that the Administrator shall require to be completed and
received prior to a Participant's (i) sale of Account Shares pursuant to Section
5.1 hereof, (ii) gift or transfer of Account Shares pursuant to Section 5.2
hereof, (iii) withdrawal of whole Account Shares pursuant to Section 6.2 hereof
(unless such Participant shall be the record holder of such Account Shares after
withdrawal) and (iv) termination of participation in the Plan pursuant to
Section 6.3 hereof.
A pronoun or adjective in the masculine gender includes the feminine
gender, and the singular includes the plural, unless the context clearly
indicates otherwise.
ARTICLE II
Participation
Section 2.1. Participation. Any Person, whether or not a record holder of
Common Stock, may elect to participate in the Plan; provided, however, that if
such Person is a Foreign Person, he must provide evidence satisfactory to the
Administrator that his participation in the Plan would not violate local laws
applicable to the Corporation, the Plan or such Foreign Person.
After receiving a Prospectus, a Person may elect to participate in the Plan
by completing and returning to the Administrator an Enrollment Form and doing at
least one of the following: (i) electing to have Dividends on Common Stock of
which such Person is the record holder invested in Common Stock pursuant to
Section 2.2 hereof; (ii) depositing certificates representing Common Stock of
which such person is the record holder into the Plan pursuant to Section 4.1
hereof or (iii) making an initial Investment pursuant to Section 2.3 hereof. A
Person shall become a "Participant" once the Administrator receives and accepts
a properly completed Enrollment Form and other necessary investments, fees
and/or documents, as long as such Person has not revoked such election. A
Participant may elect to participate in any or all of the forms of investment
provided in Sections 2.2 through 2.4 hereof and to utilize the Plan's
safekeeping services provided in Section 4.1 hereof by submitting an Enrollment
Form designating such election to the Administrator; provided, however, that a
Participant may elect to make optional Investments pursuant to Section 2.4
hereof by submitting to the Administrator a completed optional Investment stub
attached to a Statement of Account in lieu of an Enrollment Form.
Beneficial owners of Common Stock should either (i) transfer record
ownership of the Common Stock into their own name and deposit the Common Stock
into the Plan for safekeeping pursuant to Section 4.1 hereof and/or elect to
reinvest Dividends pursuant to Section 2.2 hereof or (ii) make arrangements with
the record owner of the Common Stock for the terms on which the Dividends can be
reinvested in Common Stock.
Notwithstanding the foregoing, each participant in the DRIP on the date
hereof is automatically a Participant without submitting a new Enrollment Form;
provided, however, that any such Participant who wishes to change his current
participation in any way must submit a written request or call the
Administrator. Partial reinvestment of Dividends shall not be available under
the Plan. The Administrator shall reinvest all Dividends paid to DRIP
participants whose Dividends were partially reinvested, unless the DRIP
participants notify the Administrator that they desire to receive their Dividend
payments in cash. A DRIP participant shall submit a written request or call the
Administrator if he or she desires to receive a Dividend payment in cash rather
than having the Dividends reinvested.
Section 2.2. Dividend Reinvestment. A Participant may elect on the
Enrollment Form to reinvest Dividends paid on (i) Common Stock purchased through
the Plan and credited to his Account and (ii) Common Stock deposited into the
Plan for safekeeping pursuant to Section 4.1, in lieu of receiving such
Dividends directly. If a Participant does not make an election, such Dividends
shall be reinvested. Once a Participant elects reinvestment, Dividends shall be
reinvested in Common Stock. The amount reinvested shall be reduced by any amount
that is required to be withheld under any applicable tax or other statutes.
Dividends not designated for reinvestment and not directly deposited
pursuant to Section 6.7 hereof shall be paid by check on the Dividend Payment
Date.
Section 2.3. Initial Investment. (i) A Person not already a Participant and
not already an owner of Common Stock may become a Participant by making an
initial Investment of at least $100 to be invested in Common Stock pursuant to
Section 3.4 hereof; provided, however, that payment for such initial Investment
must be accompanied by a completed Enrollment Form and a $5.00 account set-up
fee. (ii) A Person not already a Participant but who is a record owner of Common
Stock may become a Participant by completing an Enrollment Form and making an
initial investment of at least $25.
An Employee not already a Participant may become a Participant by (i)
submitting an Employee Enrollment Form and an initial cash investment of at
least $25 to the Administrator or (ii) submitting to the Corporation Payroll
Office an Employee Enrollment Form and a completed Payroll Deduction Form
authorizing the Corporation to make payroll deductions of not less than $6.25
per period for Employees paid weekly and not less than $12.50 per pay period for
Employees paid biweekly. No set-up fee shall be required for Employees. The
Corporation Payroll Office shall forward the Employee Enrollment Form to the
Administrator. The Corporation shall pay no interest on any optional investments
or payroll deduction amounts held prior to investment. An Employee may cancel
the payroll deduction at any time and remain in the Plan by notifying the
Corporation's payroll administrator.
Section 2.4. Optional Investments. A Participant may elect to make cash
payments at any time or from time to time, to the Plan for investment in Common
Stock pursuant to Section 3.4 hereof or by employee payroll deductions;
provided, however, that any Participant who elects to make optional Investments
pursuant to this Section 2.4 must invest at least $25 for any single investment
and may not invest more than the Maximum Amount. For purposes of determining
whether the Maximum Amount has been reached, initial Investments shall be
counted as optional Investments. Participants desiring to have optional
investments deducted from their bank account on a regular basis should complete
an Automatic Monthly Deduction Form.
Employee Participants may make optional investments when enrolling or at
any other time in the same manner as other Participants.
Investments may be made by personal check or money order drawn on a U.S.
bank, in U.S. currency, payable to the Bank of New York-TNP Enterprises, Inc.
Direct Stock Purchase Plan. Third party checks shall not be accepted and shall
be returned to sender. Cash shall not be accepted.
Section 2.5. Purchasing Gift Shares for Others. Participants can purchase
Common Stock for others. If the recipient is not a record owner of Common Stock,
an initial investment of at least $100, the payment of an account set-up fee of
$5.00 and a completed Enrollment Form in the name of the recipient are required
to establish an account in the recipient's name. If the recipient is already a
record owner of Common Stock or a Participant, an investment of at least $25 may
be gifted, and no account set-up fee shall be required. The gifted shares shall
be handled pursuant to Section 5.2.
ARTICLE III
Dividend Reinvestment and Stock Purchase
Section 3.1. Dividend Reinvestment. Dividends as to which reinvestment has
been elected by a Participant shall be paid to the Administrator or its nominee
on behalf of such Participant. Dividends shall be reinvested, at the
Corporation's election, in either (i) newly issued shares of Common Stock
purchased from the Corporation, or (ii) shares of Common Stock purchased in the
open market.
Section 3.2. Dividend Reinvestment in Newly Issued Shares. Dividend
reinvestment in newly issued shares of Common Stock shall be governed by this
Section 3.2. On an Investment Date with respect to which the Corporation elects
to issue new shares to the Plan in order to effect the reinvestment of
Dividends, the Corporation shall issue to the Administrator upon the
Corporation's receipt of the funds described in (a) below, for crediting by the
Administrator to the Account of a Participant, a number of shares (and/or
fractional shares rounded to four decimal places) of Common Stock equal to (a)
the amount of any Dividends paid to the Administrator on behalf of such
Participant since the preceding Investment Date plus the amount of any Dividends
paid to the Administrator on behalf of such Participant on such Investment Date,
reduced by any amount required to be withheld under any applicable tax or other
statutes, divided by (b) the Corporation Share Purchase Price with respect to
the Investment Date. Such shares shall be issued or sold to, and registered in
the name of, the Administrator or its nominee as custodian for such
Participants.
Dividends not invested in Common Stock within 30 days of receipt shall be
returned to the Participant. No interest shall be paid on Dividends held pending
reinvestment pursuant to this Section 3.2.
Section 3.3. Dividend Reinvestment in Shares Purchased in the Open Market.
Dividend reinvestment in shares of Common Stock purchased in the open market
shall be governed by this Section 3.3. On an Investment Date with respect to
which the Corporation elects to effect reinvestment of Dividends in shares of
Common Stock purchased in the open market, the Administrator shall (if it is an
Independent Agent), or shall cause an Independent Agent to, apply the amount of
any Dividends paid to the Administrator on behalf of the Participants since the
preceding Investment Date plus the amount of any Dividends paid to the
Administrator on behalf of the Participants on such Investment Date, reduced by
any amount required to be withheld under any applicable tax or other statutes,
to the purchase of shares of Common Stock in the open market.
Purchases in the open market pursuant to this Section 3.3 and Subsection
3.4.2 hereof may be, but are not required to be, made on the applicable
Investment Date and should be completed as soon as practicable thereafter, or at
a later date as necessary or advisable under applicable law, including without
limitation any federal securities laws. Open market purchases pursuant to this
Section 3.3 and Subsection 3.4.2 hereof may be made on any securities exchange
on which the Common Stock is traded, in the over-the-counter market or by
negotiated transactions, and may be upon such terms and subject to such
conditions with respect to price and delivery to which the Independent Agent
(including the Administrator if it is also an Independent Agent) may agree.
With regard to open market purchases of shares of Common Stock pursuant to
this Section 3.3 and Subsection 3.4.2 hereof, none of the Corporation, the
Administrator (if it is not also serving as the Independent Agent) or any
Participant shall have any authority or power to direct the time or price at
which shares of Common Stock may be purchased, the markets on which such shares
are to be purchased (including on any securities exchange, in the
over-the-counter market or in negotiated transactions) or the selection of the
broker or dealer (other than the Independent Agent) through or from whom
purchases may be made, except that the timing of such purchases must be made in
accordance with the terms and conditions of the Plan. For the purpose of making,
or causing to be made, purchases of shares of Common Stock pursuant to this
Section 3.3 and Subsection 3.4.2 hereof, and sales of Account Shares pursuant to
Section 5.1 hereof, the Independent Agent shall be entitled to commingle each
Participant's funds with those of all other Participants for the purpose of
executing purchase and sale transactions but shall not offset purchases against
sales.
The number of shares (and/or fractional shares rounded to four decimal
places) of Common Stock that shall be credited to a Participant's Account with
respect to an Investment Date to which this Section 3.3 applies shall be equal
to (a) (i) the amount of any Dividends paid to the Administrator on behalf of
such Participant since the preceding Investment Date plus (ii) the amount of any
Dividends paid to the Administrator on behalf of such Participant on such
Investment Date less (iii) any amount required to be withheld under any
applicable tax or other statutes and less (iv) any Dividends to be returned to
such Participant pursuant to this Section 3.3 divided by (b) the Market Share
Purchase Price with respect to such Investment Date. Such shares shall be
registered in the name of the Administrator or its nominee as custodian for the
Participants.
Dividends not invested in Common Stock within 30 days of receipt shall be
returned to the Participant. No interest shall be paid on Dividends held pending
reinvestment pursuant to this Section 3.3.
Section 3.4. Optional and Initial Investments. Any optional and initial
Investments received by the Administrator from a Participant at least one
business day prior to an Investment Date shall be invested, beginning on such
Investment Date, in either (i) newly issued shares of Common Stock in the manner
provided in Subsection 3.4.1 hereof, or (ii) Common Stock purchased in the open
market in the manner provided in Subsection 3.4.2 hereof. The Corporation shall
select the source of Common Stock. Optional and initial Investments not received
by the Administrator by the business day prior to an Investment Date need not be
invested on such Investment Date; provided, however, that any such optional and
initial Investments not invested on such Investment Date shall be invested
beginning on the next succeeding Investment Date.
Pending purchase of Common Stock pursuant to the Plan, funds for optional
and initial investments shall be credited to a Participant's Account and held in
a bank account that shall be separate from any other funds or monies of the
Corporation. Optional and initial Investments not invested in Common Stock
within 35 days of receipt shall be promptly returned to the Participant. All
funds are subject to collection by the Administrator in U.S. dollars. The
Participant or interested investor may choose and shall bear the risk of the
method of delivery of any. Funds shall be deemed received when actually received
by the Administrator. No interest shall be paid on optional and initial
Investments held pending investment pursuant to this Section 3.4.
Subsection 3.4.1 Newly Issued Shares. On an Investment Date with respect to
which the Corporation elects to issue new shares of Common Stock to the Plan in
order to effect the investment of optional and initial Investments, the
Corporation shall issue to the Administrator upon the Corporation's receipt of
the funds described in (a) below, for crediting by the Administrator to the
Account of a Participant, a number of shares (and/or fractional shares rounded
to four decimal places) of Common Stock equal to (a) the amount of any optional
and/or initial Investments received by the Administrator from such Participant
since the preceding Investment Date (excluding any amounts received from such
Participant on the business day of such Investment Date but including any
amounts received from such Participant on the preceding Investment Date that
were not invested on the preceding Investment Date as set forth in Section 3.4
hereof) divided by (b) the Corporation Share Purchase Price with respect to the
Investment Date. Such shares shall be issued or sold to, and registered in the
name of, the Administrator or its nominee as custodian for the Participants.
Subsection 3.4.2 Shares Purchased in the Open Market. On an Investment Date
with respect to which the Corporation elects to effect the investment of
optional and initial Investment in shares of Common Stock purchased in the open
market, the Administrator shall (if it is an Independent Agent), or shall cause
an Independent Agent to, purchase for crediting by the Administrator to the
Account of a Participant a number of shares (and/or fractional shares rounded to
four decimal places) of Common Stock in the open market equal to (a) (i) the
amount of any optional and/or initial Investments received by the Administrator
from such Participant since the preceding Investment Date (excluding any amounts
received from such Participant on the business day of such Investment Date but
including any amounts received from such Participant on the preceding Investment
Date as set forth in Section 3.4 hereof) less (ii) any optional and/or initial
Investments to be returned to such Participant pursuant to Section 3.3 hereof
divided by (b) the Market Share Purchase Price with respect to such Investment
Date. Such purchases shall be made in the manner set forth in Section 3.3
hereof. Such shares shall be registered in the name of the Administrator or its
nominee as custodian for the Participants.
Subsection 3.4.3 Request to Stop Investment. If a written request to stop
an optional or initial Investment is received by the Administrator from a
Participant no later than three business days prior to the applicable Investment
Date, any optional or initial Investments from such Participant then held by the
Administrator shall not be used to purchase Common Stock and shall be returned
to such Participant. Refunds of funds submitted by check or money order shall
not be made until the Administrator has actually collected funds from the
instruments. If the Administrator does not receive the request to stop
investment by three business days prior to the Investment Date, the
Administrator shall invest any funds then held in Common Stock on the Investment
Date.
ARTICLE IV
Safekeeping Services for Deposited Common Stock
Section 4.1. Deposited Common Stock. A Participant may elect to have
certificates representing shares of Common Stock of which the Participant is the
record holder deposited into the Plan by completing an Enrollment Form or
Transaction Request Form and delivering such certificates and Form to the
Administrator. Shares of Common Stock so deposited shall be transferred into the
name of the Administrator or its nominee, as custodian, and credited to the
depositing Participant's Account. Dividends paid on Account Shares deposited
pursuant to this Section 4.1 may be reinvested in accordance with the
Participant's reinvestment election designated on the Participant's Enrollment
Form. A Participant can select the safekeeping service without participating in
any other feature of the Plan.
Section 4.2. Withdrawal of Common Stock Deposited Pursuant to Section 4.1.
Shares of Common Stock deposited pursuant to Section 4.1 hereof may be withdrawn
from the Plan pursuant to Section 6.2 hereof.
ARTICLE V
Sale of Account Shares; Gift or Transfer of Account Shares
Section 5.1. Sale of Account Shares. A Participant may request, at any
time, that all or a portion of his whole Account Shares be sold by delivering to
the Administrator a completed Transaction Request Form to that effect or by
calling the Administrator. The Administrator (if it is not also an Independent
Agent) shall forward such sale instructions to the Independent Agent who shall
sell the Account Shares at least once per week or more frequently, if volume
requires. The Independent Agent shall make such sales as soon as practicable (in
accordance with stock transfer requirements and federal and state securities
laws) after processing such sale instructions. As soon as practicable following
the receipt of proceeds from such sale, the Administrator shall mail by First
Class Mail to such Participant at his address of record a check in an amount
equal to (a) the Market Share Sales Price multiplied by (b) the number of his
Account Shares sold.
If instructions for the sale of shares of Common Stock on which Dividends
are not being reinvested are received by the Administrator on or after the
record date relating to a Dividend Payment Date but before the Dividend Payment
Date, the sale shall be processed as described above and a separate check for
the Dividends shall be mailed to the Participant following the Dividend Payment
Date or shall be directly deposited into the Participant's designated direct
deposit account pursuant to Section 6.7 hereof. If instructions for the sale of
shares of Common Stock on which Dividends are being reinvested are received by
the Administrator on or after the record date relating to a Dividend Payment
Date but before the Investment Date, and (i) if the Participants' sale
instructions cover fewer than all of the shares of Common Stock credited to
their Accounts, the sale shall be processed as described above in the
immediately preceding paragraph, the Dividends shall be invested and the newly
purchased shares shall be credited to their Accounts or (ii) if the
Participants' sale instructions cover all of the shares of Common Stock credited
to their Accounts, the sale instructions shall be processed and a check for the
Dividend shall be provided.
With regard to open market sales of Account Shares pursuant to this Section
5.1, none of the Corporation, the Administrator (if it is not also serving as
the Independent Agent) or any Participant shall have any authority or power to
direct the time or price at which shares of Common Stock may be sold, the
markets on which such shares are to be sold (including on any securities
exchange, in the over-the-counter market or in negotiated transactions) or the
selection of the broker or dealer (other than the Independent Agent) through or
from whom sales may be made, except that the timing of such sales must be made
in accordance with the terms and conditions of the Plan.
Section 5.2. Gift or Transfer of Account Shares. A Participant may elect to
transfer (whether by gift, private sale or otherwise) ownership of all or a
portion of his Account Shares to the Account of another Participant or establish
an Account for a Person not already a Participant by delivering to the
Administrator a written request and a stock assignment (stock power) signed by
the Participant and with a Medallion guarantee of the Participant's signature.
The Administrator shall effect the transfer as soon as practicable after it has
received the required documentation.
Account Shares transferred in accordance with the preceding paragraph shall
continue to be registered in the name of the Administrator as custodian and
shall be credited to the transferee's Account. Dividends shall be reinvested or
paid in full in the same manner as the Shares already in the Account unless the
Participant otherwise directs the Administrator in writing. If the transferee is
not already a Participant, an Account shall be opened in the name of the
transferee, and the transferee may make elections with regard to reinvestment of
Dividends on the transferred Shares and other services provided by the Plan on
the Enrollment Form provided. If no election is made by the transferee,
Dividends shall be fully reinvested. The Administrator shall deliver a Statement
of Account to such transferee showing the transfer of such Account Shares into
his Account. The transferor may request that the Administrator deliver to such
transferee a gift certificate. The transferor may request that the Administrator
send the gift certificate directly to such transferee or request that the
Administrator deliver such gift certificate to the transferor for personal
delivery to the transferee. The Administrator shall comply with any such request
of a transferor relating to Statements of Account and/or gift certificates as
soon as practicable following receipt of such request.
If a request for transfer with regard to shares of Common Stock credited to
a Participant's Account on which Dividends are not being reinvested is received
on or after the record date relating to a Dividend Payment Date but before the
Dividend Payment Date, the transfer shall be processed as described above, and a
separate check for the Dividend shall be mailed to the transferor following the
Dividend Payment Date or shall be directly deposited into the transferor's
designated direct deposit account, pursuant to Section 6.7 hereof. If a
completed request for transfer with regard to shares of Common Stock credited to
a Participant's Account on which Dividends are being reinvested is received by
the Administrator on or after the record date relating to the Dividend Payment
Date but before the Investment Date, the Dividends shall be invested in Common
Stock through the Plan, and (i) if the Participant's transfer instructions cover
fewer than all of the shares of Common Stock credited to his Account, the
transfer shall be processed as described above in the immediately preceding
paragraph and the newly purchased shares of Common Stock shall be credited to
the transferor's Account or (ii) if the Participant's transfer instructions
cover all of the shares of Common Stock credited to his Account, the transfer
instructions shall be processed following the Investment Date, and the Common
Stock purchased with the reinvested Dividends shall be transferred along with
the other Account Shares in accordance with the Participant's instructions.
A Participant wishing to transfer all or any part of his Account Shares
to a brokerage account may do so by delivering to the Administrator a written
request and a stock assignment (stock power) signed by the Participant and with
a Medallion guarantee of the Participant's signature, acceptable to the
Administrator. The written request must specify the whole number of Account
Shares (if less than all his Account Shares) to be transferred and the name and
address of the brokerage firm to which the Account Shares are to be transferred.
The transfer shall be handled pursuant to Section 6.2 hereof.
ARTICLE VI
Treatment of Accounts
Section 6.1. Changing Plan Options. A Participant may elect to change his
Plan options, including the dividend reinvestment option by delivering to the
Administrator a Transaction Request Form or telephone instructions to that
effect. To be effective for a Dividend payment, the instructions must be
received by the Administrator by the business day prior to the record date
relating to such Dividend. If the instructions are not received by the
Administrator by the business day prior to the record date relating to such
Dividend, such instructions shall not become effective until after the payment
date related to such record date. The shares of Common Stock purchased from the
reinvestment of such Dividend shall be credited to the Participant's Account.
After the Administrator's receipt of effective option changing instructions,
Dividends as to which the reinvestment election has been revoked shall be paid
in cash or by direct deposit to the Participant's designated direct deposit
account, if such Participant has elected the direct deposit option pursuant to
Section 6.7 hereof.
Section 6.2. Right of Withdrawal. A Participant may, at any time or from
time to time, withdraw from the Plan all or any part (other than fractions) of
his Account Shares by delivering to the Administrator transfer instructions (by
using the Transaction Request Form attached to the Statement of Account and
transaction advices) and, if the Participant shall not be the record holder of
the Account Shares after withdrawal, a properly completed stock assignment
(stock power form) signed by the Participant with a Medallion guarantee of the
Participant's signature. If the Account Shares are not being transferred to
another person, the Participant may also give the instructions by telephone.
Subject to the limitations described in the immediately following paragraph, on
the Administrator's receipt of proper documentation, the Administrator shall
mail by First Class Mail to the Participant at his address of record, or to the
address of any Person that the Participant designated, certificates representing
such designated Account Shares.
If a request for withdrawal with regard to shares of Common Stock credited
to a Participant's Account on which Dividends are not being reinvested is
received on or after the record date relating to a Dividend Payment Date but
before the Dividend Payment Date, the withdrawal shall be processed as described
above, and the Dividends shall be paid to the Participant in the usual manner
following the Dividend Payment Date. If a request a request to withdraw shares
of Common Stock credited to a Participant's Account on which Dividends are being
reinvested is received by the Administrator on or after the record date relating
to the Dividend Payment Date but before the Investment Date, and (i) if the
Participant's withdrawal instructions cover fewer than all of the shares of
Common Stock credited to his Account, the withdrawal shall be processed as
described above in the immediately preceding paragraph, the Dividends shall be
invested in Common Stock through the Plan, and the newly purchased shares of
Common Stock credited to his Account or (ii) if the Participant's withdrawal
instructions cover all of the shares of Common Stock credited to his Account,
the withdrawal instructions shall be processed and checks for the Dividends and
for the sale of any fractional shares shall be provided. Dividends on Common
Stock withdrawn shall continue to be reinvested in accordance with the
Participant's prior election unless the Participant elects otherwise in writing
or by telephone.
Withdrawal of Account Shares shall not affect reinvestment of Dividends on
the shares withdrawn unless (i) the Participant is no longer the record holder
of such shares, (ii) the reinvestment is specifically discontinued by the
Participant pursuant to Section 6.1 hereof or (iii) the Participant has
terminated his participation in the Plan.
Other than transfers pursuant to Section 5.2 hereof, Account Shares may not
be pledged or assigned. A Participant who wishes to pledge or assign such
Account Shares must request that they be withdrawn from the Plan pursuant to
this Section 6.2.
Section 6.3. Right of Termination of Participation. If a Participant's
Transaction Request Form or telephone notification to Administrator indicates
the Participant's desire to terminate his participation in the Plan, the
Administrator shall treat such request as a withdrawal of all of such
Participant's whole Account Shares as of the Termination Date pursuant to
Section 6.2 hereof. The Administrator, in addition to mailing certificates
representing all whole Account Shares, if any, pursuant to Section 6.2 hereof,
shall mail by First Class Mail to the Participant at his address of record
checks for an amount equal to the sum of (i) the amount of cash credited to such
Participant's Account as of the Termination Date pending investment in Common
Stock and (ii) the cash value of any fractional shares of Common Stock credited
to his Account. Such fractional shares shall be valued at the closing price on
the NYSE for the Trading Day immediately preceding the Termination Date.
In order to withdraw from the Plan, an Employee Participant must (i) call
or submit a Transaction Request Form to the Administrator and (ii) submit a
written request to the Payroll Department at the Corporation. The Employee's
payroll deduction shall be canceled effective with the pay period following
receipt of the written request in the Corporation's payroll office. The Employee
Participant's account shall be terminated as soon as practicable. If an Employee
Participant leaves the Corporation or its subsidiaries, the Employee shall
continue to be a Participant unless the Employee notifies the Administrator that
the Employee is withdrawing from the Plan.
Section 6.4. Stock Splits, Stock Dividends and Rights Offerings. Any shares
or other securities representing stock splits or other noncash distributions on
Account Shares shall be credited to such Participant's Account. Stock splits,
combinations, recapitalization and similar events affecting the Common Stock
shall, as to shares credited to Accounts of Participants, be credited to such
Accounts on a pro rata basis.
In the event of a rights offering, a Participant shall receive rights based
upon the total number of whole shares of Common Stock credited to his Account.
Stock splits, stock dividends, rights offerings and similar events
affecting the Common Stock shall commence upon settlement, whether the Common
Stock is purchased from the Corporation or any other source.
Section 6.5. Shareholder Materials; Voting Rights. The Administrator shall
send or forward to each Participant all applicable proxy solicitation materials,
other shareholder materials or consent solicitation materials. Participants
shall have the exclusive right to exercise all voting rights respecting Account
Shares credited to their respective Accounts. A Participant may vote the Account
Shares credited to their respective Account in person or by proxy. A
Participant's proxy card shall represent all Account Shares and shares of Common
Stock of which he is the record holder. Account Shares shall not be voted unless
a Participant or the proxy votes them.
Solicitation of the exercise of Participants' voting rights by the
management of the Corporation and others under a proxy or consent provision
applicable to all holders of Common Stock shall be permitted. Solicitation of
the exercise of Participants' tender or exchange offer rights by management of
the Corporation and others shall also be permitted. The Administrator shall
notify the Participants of each occasion for the exercise of their voting rights
or rights with respect to a tender offer or exchange offer within a reasonable
time before such rights are to be exercised. Such notification shall include all
information distributed to the shareholders of the Corporation by the
Corporation regarding the exercise of such rights.
Voting rights or rights with respect to a tender offer or exchange offer
shall commence upon settlement, whether the Common Stock is purchased from the
Corporation or any other source.
Section 6.6. Statements of Account. The Administrator shall send a
Statement of Account reflecting (i) current transactions completed under the
Plan, (ii) the number of Account Shares credited to such Participant's Account
at the date of such statement, (iii) the amount of funds, if any, credited to
such Participant's Account pending investment at the date of such statement and
(iv) such additional information regarding such Participant's Account as the
Administrator may determine to be pertinent to the Participant. The
Administrator shall provide the Statement of Account during the month after
which the Participant has (i) made an optional investment; (ii) deposited,
transferred, sold or withdrawn Common Stock; or (iii) had Dividends reinvested
in Common Stock. After each Plan transaction under the Plan, the Administrator
shall promptly deliver a confirmation to such Participant. Notwithstanding the
previous sentences in this Section 6.6, the Administrator shall send a Statement
of Account at least each quarter.
Section 6.7. Direct Deposit Option. A Participant who elects not to
reinvest Dividends on Account Shares may receive the non-reinvested Dividends by
electronic direct deposit to the Participant's bank, savings or credit union
account. To receive such direct deposit of funds, a Participant must complete
and sign a Direct Deposit Authorization Form and return it to the Administrator.
Direct deposit shall become effective as soon as practicable after receipt of a
completed Direct Deposit Authorization Form. A Participant may change his
designated direct deposit account by delivering written instructions or a
completed Direct Deposit Authorization Form to the Administrator. Dividends not
designated for reinvestment and not directly deposited pursuant to this Section
6.7 shall be paid by check on the Dividend Payment Date.
ARTICLE VII
Certificates and Fractional Shares
Section 7.1. Certificates. A Participant may, at any time or from time to
time, request to receive a certificate for all or a portion of his whole Account
Shares and upon such request the Administrator shall promptly mail such
certificate (in any event, within ten business days of the receipt of such
request) by First Class Mail to such Participant at his address of record;
provided, however, that upon the mailing of such certificate the shares of
Common Stock represented by such certificate shall no longer be Account Shares
but shall remain reinvestment shares of Common Stock (except to the extent such
Participant has elected not to have Dividends reinvested in Common Stock).
Section 7.2. Fractional Shares. Fractional shares of Common Stock shall be
credited to Accounts as provided in Article III hereof; provided, however, that
no certificate for fractional shares shall be distributed to any Participant at
any time; and provided, further, that the Corporation shall issue and sell only
whole shares of Common Stock to the Administrator in respect of Dividends
reinvested in, and purchases made by the Administrator hereunder of, newly
issued shares.
ARTICLE VIII
Concerning the Plan
Section 8.1. Suspension, Modification and Termination. The Corporation may
at any time and from time to time, at its sole option, suspend, modify, amend or
terminate the Plan, in whole, in part or in respect of Participants in one or
more jurisdictions; provided, however, no such amendment shall decrease the
Account of any Participant or result in a distribution to the Corporation of any
amount credited to the Account of any Participant. Upon complete termination of
the Plan, the Accounts of all Participants (or in the case of partial
termination of the Plan, the Accounts of all affected Participants) shall be
treated as if each such Participant had elected to terminate his participation
in the Plan pursuant to Section 6.3 hereof, except that any fraction of a share
of Common Stock shall be valued as of the trading date immediately preceding the
date on which the Plan is terminated. The Administrator shall promptly send each
affected Participant notice of such suspension, modification or termination.
Section 8.2. Rules and Regulations. The Corporation may from time to time
adopt such administrative rules and regulations concerning the Plan as it deems
necessary or desirable for the administration of the Plan. The Corporation shall
have the power and authority to interpret the terms and the provisions of the
Plan and shall interpret and construe the Plan and reconcile any inconsistency
or supply any omitted detail in a manner consistent with the general terms of
the Plan and applicable law.
Section 8.3. Costs. All costs of administration of the Plan shall be paid
by the Corporation. Participants shall bear the cost of any brokerage
commissions up to a maximum of $0.25 per share, related service charges,
including a $5.00 transaction fee and any applicable taxes incurred on all sales
of Common Stock made in the open market and, in the case of first time purchases
by applicants who are not record or registered holders of Common Stock or
Employees, an Account set-up fee of $5.00. There shall be no brokerage
commissions or related service charges for Common Stock purchased in the open
market or directly from the Corporation. Any applicable taxes incurred in
connection with such open market purchase shall be borne by the Participants.
Section 8.4. Termination of a Participant. If a Participant does not have
at least one whole Account Share, the Participant's participation in the Plan
may be terminated by the Corporation, in its sole discretion, upon written
notice to such Participant by mail at his address of record. Additionally, the
Corporation, in its sole discretion, may terminate any Participant's
participation in the Plan after written notice mailed in advance to such
Participant at his address of record. Upon such termination, the Account of such
Participant shall be treated as if he had elected to terminate his participation
in the Plan pursuant to Section 6.3 hereof, except that any fraction of a share
of Common Stock shall be valued as of the trading date immediately preceding the
date on which such Participant's participation is terminated.
ARTICLE IX
Administration of the Plan
Section 9.1. Selection of an Administrator. The Administrator shall be
appointed by the Board of Directors of the Corporation. The Administrator's
appointment to serve as such may be revoked by the Corporation at any time. The
Administrator may resign at any time upon reasonable notice to the Corporation.
In the event that no Administrator is appointed, the Corporation shall be deemed
to be the Administrator for purposes of the Plan. The Corporation is presently
the Administrator.
Section 9.2. Compensation. The officers of the Corporation shall make such
arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator and any Independent Agent as they from time
to time deem reasonable and appropriate.
Section 9.3. Authority and Duties of Administrator. The Administrator shall
have the authority to undertake any act necessary to fulfill its duties as set
forth in the various provisions of the Plan. Upon receipt, the Administrator
shall deposit all Dividends, optional and initial Investments in a segregated
bank account. The Administrator shall maintain appropriate records of the
Accounts of Participants.
Section 9.4. Liability of the Corporation, the Administrator and Any
Independent Agent. The Corporation, the Administrator and any Independent Agent
shall not be liable for any act done in good faith, or for the good faith
omission to act in administering or performing their duties with respect to the
Plan, including, without limitation, any claim of liability arising out of
failure to terminate a Participant's Account upon such Participant's death prior
to receipt of notice in writing of such death, or with respect to the prices at
which shares are purchased or sold for a Participant's Account and the times
when such purchases and sales are made, or with respect to any loss or
fluctuation in the market value after the purchase or sale of such shares.
However, this provision does not affect a Participant's right to bring a cause
of action based on alleged violations of federal securities laws.
Section 9.5. Records and Reports. The Administrator shall keep appropriate
records concerning the Plan, Accounts of Participants, purchases and sales of
Common Stock made under the Plan and Participants' addresses of record and shall
send Statements of Account and confirmations to each Participant in accordance
with the provisions of Section 6.6 hereof.
Section 9.6. Selection of Independent Agent. Any Independent Agent serving
in such capacity pursuant to the Plan shall be selected by the Board of
Directors of the Corporation, and the Administrator and the Corporation, or
either of them, shall, subject to the provisions of Section 3.3 hereof, make
such arrangements and enter into such agreements with the Independent Agent in
connection with the activities contemplated by the Plan as the Administrator and
the Corporation, or either of them, deem reasonable and appropriate.
Section 9.7. Source of Shares of Common Stock. The Corporation shall not
change the source of shares of Common Stock purchased by Participants in the
Plan (i.e., either (i) newly issued shares of Common Stock or (ii) shares of
Common Stock purchased in the open market) more than one time in any 3-month
period. Any such exercise of its right to change the source of shares must be
based on a recorded determination by the Financial Committee of the Board of
Directors or Chief Financial Officer that the Corporation's need to raise
capital has changed, or there is another valid reason for such a change in the
capital structure of the Corporation or of one if its major subsidiaries.
ARTICLE X
Plan Account
Section 10.1. Creation of the Plan Account. The Corporation shall establish
a non-interest bearing segregated account at a commercial bank organized under
the laws of the United States or any state, which commercial bank must have
assets in excess of $200,000,000.
Section 10.2. Requirements of the Plan Account. The Plan account must be
held for the benefit of the Participants, and cannot be subject to any liens,
any creditor claims, or any other claims against the Corporation. Furthermore,
the Plan account cannot be subject to bankruptcy proceedings if the Corporation
files for bankruptcy under federal or state law. All Dividends, optional
Investments and initial Investments shall be promptly transmitted (i.e, by the
opening of business on the next business day if the funds are received before
noon, and by noon of the next business day if the funds are received after noon)
by the Administrator in that certain non-interest bearing account (together with
all Dividends, optional Investments and initial Investments deposited therein
from time to time).
ARTICLE XI
Miscellaneous Provisions
Section 11.1. Controlling Law. This Plan shall be construed, regulated and
administered under the laws of the State of Texas.
Section 11.2. Acceptance of Terms and Conditions of Plan by Participants.
Each Participant, by completing an Enrollment Form and as a condition of
participation herein, for himself, his heirs, executors, administrators, legal
representatives and assigns, approves and agrees to be bound by the provisions
of this Plan and any subsequent amendments hereto, and all actions of the
Corporation and the Administrator hereunder.
EXHIBIT 5(a)
December 13, 1996
Board of Directors
TNP Enterprises, Inc.
4100 International Plaza
Fort Worth, Texas 76109
Re: Registration of 1,000,000 shares of Common Stock of TNP Enterprises, Inc.
Ladies and Gentlemen:
In my capacity as general counsel to TNP Enterprises, Inc., a Texas
corporation (the "Company"), I have directed the preparation of the Company's
Registration Statement on Form S-3 (the "Registration Statement") originally
filed on December 13, 1996, with the Securities and Exchange Commission under
the Securities Act of 1933, as amended. The Registration Statement relates to
the offer and sale by the Company 1,000,000 shares (the "Shares") of its Common
Stock, no par value ("Common Stock"), pursuant to the Company's Direct Stock
Purchase Plan (the "Plan").
In connection therewith, I have examined and relied upon originals, or
copies certified to my satisfaction, of (i) the Articles of Incorporation of the
Company and the Bylaws of the Company, each as amended; (ii) the minutes and
records of the corporate proceedings of the Company with respect to the issuance
by the Company of the Shares; (iii) the Registration Statement and all exhibits
thereto; (iv) the Plan; and (v) such other documents and instruments as have
deemed necessary for the expression of the opinions contained herein. The laws
covered by the opinions expressed herein are limited to the federal laws of the
United States and the laws of the State of Texas.
In making the foregoing examinations, I have assumed the genuineness of all
signatures and the authenticity of all documents submitted to me as originals,
and the conformity to original documents of all documents submitted to me as
certified or photostatic copies thereof. As to various questions of fact
material to this opinion, where such facts have not been independently
established, I have relied, to the extent I have deemed reasonably appropriate,
upon representations or certificates of officers of the Company and its
subsidiaries or governmental officials.
Based upon the foregoing, and having due regard for such legal
considerations as I deem relevant, I am of the opinion that the Shares have been
duly authorized for issuance and, when issued in accordance with the terms of
the Plan, will be validly issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement and to the
reference to me under "Legal Matters" in the Prospectus forming a part of such
Registration Statement.
Very truly yours,
Michael D. Blanchard
General Counsel
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EXHIBIT 23(b)
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
TNP Enterprises, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report refers to a change in the method of accounting for operating revenues
in 1995 and changes in the methods of accounting for income taxes and
postretirement benefits in 1993.
KPMG Peat Marwick LLP
Fort Worth, Texas
December 11, 1996
