Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant / x /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as
permitted by Rule
14a-6(e)(2))
/ x / Definitive Proxy Statement
/ x / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TNP ENTERPRISES, INC.
(Name of Registrant as Specified in Its Charter)
------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/x/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
TNP ENTERPRISES, INC.
4100 International Plaza, Tower II
Fort Worth, Texas 76109
(817) 731-0099
NOTICE OF ANNUAL MEETING OF HOLDERS OF COMMON STOCK
To Be Held on April 26, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Holders of TNP
Enterprises, Inc. Common Stock will be held on Friday, April 26, 1996, at 11:00
a.m., Central Time, at 4100 International Plaza, Tower II, 9th Floor, Fort
Worth, Texas 76109 for the following purposes:
1. To elect three Class 2 directors to hold office until the 1999 Annual
Meeting of Holders of Common Stock and one Class 3 director to hold
office until the 1997 Annual Meeting of Holders of Common Stock or
their respective successors are elected and qualified;
2. To ratify the appointment of KPMG Peat Marwick LLP, Certified
Independent Public Accountants, as independent auditors for 1996; and
3. To transact any other business that properly may come before the
annual meeting or any adjournments of the annual meeting.
The record date for determining shareholders entitled to notice of and to
vote at the annual meeting is the close of business on March 18, 1996.
Whether or not you expect to attend the annual meeting in person, please
complete, sign, and date the enclosed proxy card and return it promptly in the
postage-paid envelope provided so that your shares of common stock can be
represented and voted at the annual meeting. If you attend the annual meeting,
your proxy will be returned to you upon your request and you may vote your
shares in person.
By Order of the Board of Directors
Michael D. Blanchard,
Secretary
Fort Worth, Texas
March 26, 1996
<PAGE>
TNP ENTERPRISES, INC.
4100 International Plaza, Tower II
Fort Worth, Texas 76109
PROXY STATEMENT
For
ANNUAL MEETING OF HOLDERS OF COMMON STOCK
To Be Held on April 26, 1996
SOLICITATION AND REVOCABILITY OF PROXIES
On behalf of TNP Enterprises, Inc. ("TNPE"), TNPE's board of directors
solicits the enclosed proxy card to be voted at the Annual Meeting of Holders of
Common Stock scheduled for Friday, April 26, 1996, at 11:00 a.m., Central Time,
at 4100 International Plaza, Tower II, 9th Floor, Fort Worth, Texas 76109 (the
"Annual Meeting"). SHARES REPRESENTED BY PROPERLY EXECUTED PROXIES RETURNED TO
TNPE ON THE ENCLOSED CARD WILL BE VOTED AT THE ANNUAL MEETING IN ACCORDANCE WITH
THE SHAREHOLDERS' DIRECTIONS MARKED ON THE PROXIES; IF NO DIRECTIONS ARE
INDICATED, THEN SHARES REPRESENTED BY PROXY WILL BE VOTED FOR ELECTION OF ALL
DIRECTOR NOMINEES AND FOR APPOINTMENT OF KPMG PEAT MARWICK LLP AS INDEPENDENT
AUDITORS.
The enclosed proxy card confers discretionary authority to vote with
respect to all of the following matters that may come before the Annual Meeting:
(1) matters that TNPE's board of directors does not know a reasonable time
before the Annual Meeting are to be presented at the Annual Meeting; (2)
approving minutes of the last annual meeting, subject to certain limitations;
(3) electing a substitute director nominee to replace a previous nominee that is
unable to serve; (4) shareholder proposals not discussed in this proxy
statement; and (5) matters incidental to the conduct of the Annual Meeting.
Management does not intend to present any business for a vote at the Annual
Meeting other than the matters set forth in the preceding Notice of Annual
Meeting, and it has no information that others will do so. If other matters
requiring a shareholder vote properly come before the Annual Meeting, then,
subject to limitations of applicable regulations under the Securities Exchange
Act of 1934, the persons appointed as proxies intend to vote all shares
represented by proxy in accordance with their best judgment.
Any shareholder who has executed and returned a proxy may revoke it at any
time before it is voted. A proxy can be revoked by submitting written notice of
revocation to TNPE's Secretary, by submitting a new proxy with a later date, or
by voting in person at the Annual Meeting after first withdrawing any proxy
previously given.
Proxies to be voted at the Annual Meeting are being solicited by mail
through TNPE's transfer agent, Society National Bank, by KeyCorp Shareholder
Services, Inc., Dallas, Texas, and through Texas-New Mexico Power Company's
("TNP's") 40l(k) trustee, NationsBank of Georgia N.A., Atlanta, Georgia.
Officers, directors, and regular employees of TNP, TNPE's wholly owned electric
utility subsidiary, may assist TNPE in getting proxies returned by telephone or
oral communication as part of their ordinary business duties. Brokerage houses
and other custodians, nominees, and fiduciaries will be requested to forward
solicitation material to beneficial owners of TNPE common stock.
TNPE will pay for preparing, printing, assembling, and mailing this proxy
statement, the enclosed proxy card, and any additional material, and for
forwarding solicitation material to beneficial owners of TNPE common stock.
This proxy statement and the enclosed proxy card are first being sent or
given to holders of TNPE's common stock on or about March 26, 1996.
<PAGE>
VOTING RIGHTS
The record date for determining shareholders entitled to notice of and to
vote at the Annual Meeting is the close of business on March 18, 1996. On that
date, 10,962,703 shares of TNPE common stock, no par value, were issued and
outstanding. Each share of TNPE common stock is entitled to one vote in director
elections and in any other matter that comes before the Annual Meeting.
Cumulative voting is not permitted. No other class of TNPE securities is
entitled to vote at the Annual Meeting. The presence, in person or by proxy, of
shareholders holding a majority of the outstanding shares of TNPE's common stock
is necessary to constitute a quorum at the Annual Meeting. The affirmative vote
of a plurality of shares of common stock represented at the Annual Meeting and
entitled to vote is required to elect directors. All other matters to be voted
on will be decided by the affirmative vote of a majority of the shares of common
stock represented at the meeting and entitled to vote.
Abstentions and broker nonvotes are each counted in determining the
number of shares present at the Annual Meeting for purposes of a quorum. A
broker nonvote occurs if a registered broker-dealer holding customer securities
in the broker-dealer's name does not receive instructions from its customer on
how to vote the customer's securities. Applicable rules and regulations do not
permit the broker-dealer to vote on the customer's behalf on nonroutine matters.
Abstentions and broker nonvotes have no effect on determining plurality, except
to the extent that they affect the total votes that any particular candidate
receives.
ELECTION OF DIRECTORS
TNPE's board of directors consists of nine members, divided into three
classes of three members each: Class 1, Class 2, and Class 3. Directors in each
class are elected to serve three-year terms. Only Class 2 positions and one
Class 3 position will be due for nomination and election at the Annual Meeting.
The other Class 3 positions and Class 1 positions will be due for nomination and
election at the 1997 and 1998 annual meetings, respectively. However, directors
of any class appointed after the Annual Meeting to fill vacancies on the board
will be due for nomination and election at the 1997 annual meeting. Each nominee
director who is elected or re-elected as a TNPE director will be a member of
TNP's board of directors. In 1995, TNPE's and TNP's boards of directors held six
and five meetings, respectively. The boards acted by unanimous consent two times
and four times, respectively.
The persons appointed as proxies intend to vote all shares represented by
proxy FOR election of John A. Fanning, Dwight R. Spurlock, and Dennis H. Withers
as Class 2 directors and Carol D. Surles as Class 3 director, unless shareholder
directions on individual proxy cards indicate otherwise. TNPE's board of
directors (with nominee directors abstaining) nominated Messrs. Fanning,
Spurlock, and Withers and Dr. Surles, all of whom are currently TNPE and TNP
directors, to stand for election or re-election to TNPE's board of directors
until their terms expire or their respective successors are elected and
qualified. If any nominee for Class 2 or Class 3 director becomes unavailable to
serve as a director, then the persons appointed as proxies intend to vote all
shares of TNPE common stock represented by proxy for a substitute to be
nominated by TNPE's board of directors.
Certain information regarding each nominee and director is provided below.
The number of shares of TNPE common stock that each nominee and director owns
beneficially is presented in the table in "Security Ownership of Management and
Certain Beneficial Owners."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL CLASS 2 AND CLASS 3
DIRECTOR NOMINEES.
CLASS 1 DIRECTORS
R. Denny Alexander, age 50, has been a director of both TNPE and TNP since
1989. Mr. Alexander has owned and managed R. Denny Alexander & Company, an
investment management firm, since 1978. He has also served as Managing Partner
of OPNB Building Joint Venture, a real estate investment
<PAGE>
partnership, since 1978. Since 1982, Mr. Alexander has served as director of
Overton Bancshares, Inc., a bank holding company, and since 1984 as Chairman of
Overton Bank and Trust, National Association, a national bank.
Sidney M. Gutierrez, 44, joined TNPE's and TNP's boards of directors in
November 1994. Since 1984, he was a NASA astronaut serving as Space Shuttle
Mission Commander and Chief of the Operations Development Branch and, since
1991, an Air Force officer serving in the rank of Colonel, in each case until
his retirement in 1994. Since 1994, Mr. Gutierrez has served as Manager of the
Strategic Initiatives Department and as a Manager in the Exploratory Systems
Development Center at Sandia National Laboratories' Sandia Corporation, a prime
contractor for the Department of Energy. He is a committee chairman on the
Governor's Technical Excellence Committee and a member of the Board of Directors
of Goodwill Industries of New Mexico and the New Mexico Space Center Commission.
Kevern R. Joyce, 49, was appointed Chief Executive Officer, President, and
director of TNPE and TNP in April 1994 and was elected Chairman of the Board of
both companies in April 1995. From 1992 until he joined TNPE and TNP, Mr. Joyce
served as Senior Vice President and Chief Operating Officer, and from 1990 to
1992, he was Vice President - Rates and Conservation, of Tucson Electric Power
Company.
CLASS 2 DIRECTORS
John A. Fanning, 56, has been a member of TNPE's and TNP's boards of
directors since 1984. He served as Executive Vice President of Snyder Oil
Corporation from March 1990 to November 1995, and served on the board of
directors of its subsidiary, Snyder Oil Company, Inc., from 1981 to 1995.
Dwight R. Spurlock, 63, joined TNPE's and TNP's boards of directors in
1993. He was both companies' Interim President and Chief Executive Officer from
November 1993 to April 1994. From 1990 until his retirement in 1992, Mr.
Spurlock was TNP's Sector Vice President - Operations. Mr. Spurlock has been a
director of Texas City National Bank since 1976.
Dennis H. Withers, 50, was elected as a member of TNPE's and TNP's boards
of directors in August, 1995. Before that date, he was an advisory director on
both boards from December 1994. Mr. Withers has been President of Trinity Forge,
Inc., a metal forging manufacturing company, since 1979, and a director since
1972. He has been a director of Overton Bancshares, Inc., a bank holding
company, since 1985, and a director of Overton Bank and Trust, National
Association, since 1993.
CLASS 3 DIRECTORS
Cass O. Edwards, II, 69, has been a member of TNPE's and TNP's boards of
directors since 1984 and 1975, respectively. Mr. Edwards will be retiring from
both companies' boards after the Annual Meeting. TNPE's board of directors and
its Nominating Committee are seeking a qualified candidate who may or may not be
a member of TNPE's and TNP's management to fill the Class 3 vacancy resulting
from Mr. Edwards' retirement. The board expects to appoint a new Class 3
director in 1996, who will stand for election at the 1997 annual meeting.
Harris L. Kempner, Jr., 56, has been a TNPE board member since 1984, and a
TNP board member since 1980. He has been President of Kempner Capital
Management, an investment advisory firm, since 1981; a Trustee of H. Kempner
Trust Association, which engages in investments, since 1964; Chairman Emeritus
and Advisor to the board of United States National Bank, located in Galveston,
Texas, since 1992; a director of Balmorhea Ranches, a cattle operation, and
Imperial Holly Corp., a sugar products company, since 1982; a director or
advisory director of Cullen/Frost Bankers, Inc., a bank holding company, since
1982; a director of American Indemnity Company, an insurance company, since
1987; and a director of American Indemnity Financial, an insurance company,
since 1990.
<PAGE>
Dr. Carol Diann Smith Surles, 48, joined TNPE's and TNP's boards of
directors in September 1995. She has been President of Texas Woman's University
since August 1994. From July 1992 to August 1994, Dr. Surles served as Vice
President for Administration and Business Affairs of California State
University. She served as Visiting Administrator in Residence of that
university's Chancellor's Office from January 1992 to July 1992. Prior to 1992,
she was Vice President for Academic Affairs and Professor of Management at
Jackson State University in Mississippi. Dr. Surles has been a director of First
State Bank in Denton, Texas, since 1995.
Board Committees
TNPE's board of directors has four committees: an Audit Committee, a
Compensation Committee, a Financial Committee, and a Nominating Committee.
The Audit Committee
The Audit Committee recommends to the full board an accounting firm to
serve as independent auditors of TNPE and TNP; determines and reviews internal
and external audit staff qualifications; meets and reviews with the independent
auditors and the internal audit manager corporate financial reporting and
accounting procedures and policies, financial reporting and accounting adequacy,
operating controls, and the scope of all independent and internal audits; and
makes appropriate recommendations to the full board of directors. Current Audit
Committee members are Messrs. Alexander, Gutierrez, and Spurlock. The Audit
Committee met twice in 1995.
The Compensation Committee
The Compensation Committee evaluates the Chief Executive Officer's
performance; reviews the performances of all officers who report to the Chief
Executive Officer; reviews the terms and conditions of all employee benefit
plans; establishes performance goals for, and designates employees to
participate in, all incentive compensation plans; and evaluates board
compensation. Current Compensation Committee members are Messrs. Edwards,
Fanning, Gutierrez, and Kempner. The Compensation Committee met four times in
1995.
The Financial Committee
The Financial Committee reviews and approves dividend policy, securities
offerings, and capital budgets, reviews strategic, financial, and other plans,
and reports and recommends in its discretion to the full board on internal
financial affairs. Current Financial Committee members are Messrs. Alexander,
Kempner, and Spurlock. The Financial Committee held four meetings in 1995.
The Nominating Committee
The Nominating Committee evaluates and recommends to the full board,
nominees for director positions that have become vacant or are due for
nomination and election, and considers director nominees recommended by
shareholders. TNPE's bylaws require generally that shareholder nominations be
delivered to the committee at least 30 but not more than 60 days before the
first anniversary of the notice to shareholders of the preceding year's annual
meeting, with certain exceptions. A shareholder nomination must include the
shareholder's name and address, the class and number of TNPE shares that the
shareholder owns beneficially and of record and the date on which each was
acquired, sufficient information about the nominee to satisfy applicable
requirements of Regulation 14A under the Securities Exchange Act of 1934, and
the nominee's consent.
Nominating Committee members currently are Messrs. Alexander, Fanning, and
Kempner. The Nominating Committee held two meetings in 1995.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
<PAGE>
Director Compensation
Each member of TNPE's and TNP's boards of directors who is not a TNPE,
TNP, or subsidiary employee receives an annual retainer of 525 shares of TNPE
common stock from TNPE and $8,000 from TNP. Each director and board committee
member also receives $750 for each TNPE and TNP board and committee meeting that
the director or committee member attended. However, the meeting fee is limited
to $750 split evenly between TNPE and TNP if meetings of both boards or any of
their committees are held on the same day. Board and Committee members are also
reimbursed for travel and other incidental expenses incurred in connection with
their duties.
Compensation Committee Report on Executive Compensation
Compensation Philosophy and Strategy
In 1995, TNP adopted a strategic plan to create shareholder value by
meeting the challenges of a consolidating and increasingly competitive utility
industry. Success under the strategic plan will depend on employees focused on
providing value to customers and communities through competitive pricing,
innovative, high quality, personalized energy services, and community
leadership.
The Compensation Committee of the board of directors (the "Committee") has
structured the executive compensation program to accomplish the objectives of
the strategic plan by attracting and retaining highly qualified executive
officers and motivating performance by rewarding results. Three primary types of
compensation are used: base salary, short-term incentive compensation, and
long-term incentive compensation. The Committee used the services of an
international compensation consulting firm in structuring the executive
compensation program and continues to use these services in establishing the
amount and percentage ranges of each compensation component. All components of
executive compensation, including performance criteria, are matters of Committee
discretion.
Base Salary
The Committee believes that base salary should reward individual
performance on a basis competitive with other electric utilities. The Committee
uses a survey group consisting of Edison Electric Institute Survey companies
with revenues from $300 to $600 million to establish executive salary ranges.
This group includes Central Hudson Gas & Electric, Central Illinois Power,
Central Louisiana Electric, Eastern Utilities, El Paso Electric, Gulf Power,
Idaho Power, Interstate Power, Kentucky Energy, Mississippi Power, Narrangansett
Electric, TNPE, and Wolf Creek Nuclear. Base salary midpoints of all executives
are established to correspond with the 50th percentile of the survey group. Due
to their revenue size, companies participating in the survey group are not
included in the S&P Electric Companies Index used elsewhere in this proxy
statement to compare performance of TNPE's common stock for the last five years.
Incentive Compensation
In 1995, TNPE adopted incentive compensation plans pursuant to which
short-term cash and stock incentive awards, and long-term stock incentive award
opportunities, were made to executive officers and other management. Performance
criteria for all short-term incentive awards in 1995 were earnings per share and
factors developed to measure operations and maintenance costs, system
reliability, and safety. Actual awards earned can range from 0% to 150% of the
target award level, depending on the extent to which targets have been met.
Executive Short-term Incentive Compensation. Short-term incentives are
designed to reward performance measured in terms of short-term corporate
financial and operational goals and individual goals supporting shareholder- and
customer-focused objectives. The Committee establishes performance goals
<PAGE>
and amounts of all short-term award opportunities at the beginning of each year.
The portion of a potential award related to a particular goal is not earned
unless that goal is achieved for the year in question. Whether awards have been
earned is determined at year-end, with awards earned being paid as soon as
practicable after that determination. Short-term stock awards may not be sold or
transferred for two years after it is earned, except in certain limited
circumstances.
For 1995, executive officers were awarded short-term incentive
opportunities to earn up to between 15% to 30% of their salary range midpoint in
cash and stock. The Committee believes that greater weighting of the earnings
per share measure is appropriate for executive officers' because of their
greater influence on corporate financial performance. Three-fourths of the total
short-term incentive award to executive officers was paid in cash and one-fourth
was paid in stock. As the result of the extent to which 1995 performance goals
applicable to executive officers were achieved, cash awards ranged from 10.7% to
26.8%, and stock awards ranged from 3.6% to 8.9%, respectively, of salary
midpoint. Executives received dividend equivalents for 1995 on the stock that
they earned.
All Employee Incentive Compensation. The all-employee short-term incentive
plan authorizes the Committee to make cash incentive awards to all full-time
hourly and salaried employees of TNPE and its subsidiaries, including all
executive officers. Awards under this plan to executive officers other than the
Chief Executive Officer were apportioned 60% to corporate financial goals and
40% to corporate operational goals. Overall corporate performance was 132% of
target goals applicable to executive officers. Awards to executive officers
under this plan for 1995 were 5.3% of annual salary.
401(k) Retirement Plan Incentive Matching. In 1995, 50% of TNP's
matching contribution to its 401(k) retirement plan for employees was contingent
upon meeting the earnings per share performance goal. Because the maximum
incentive matching goals were exceeded for 1995, TNP made an incentive matching
contribution equal to 50% of participating executive officers' eligible
contributions (up to 6% of eligible pay) in addition to the regular matching
contribution for the 1995 plan year.
Executive Long-Term Incentive Compensation. Long-term stock incentive
opportunities were also awarded to executive officers and other management in
1995. These awards are designed to motivate and reward long-term strategic
planning and corporate performance. The Committee believes that the longer-term
perspective of these awards balance the short-term emphasis inherent in
short-term awards. Long-term awards also focus achievement on shareholder value
by linking compensation to total shareholder return and enhance teamwork by
linking compensation to overall company performance.
For 1995, executive officers were awarded incentive opportunities to earn,
over a three-year incentive plan cycle ending December 31, 1997, target amounts
up to between 30% to 40% of their 1995 salary range midpoint in stock.
Performance criteria for this award require improvement in TNPE's competitive
position in terms of retail rate comparison and total shareholder return
relative to the S&P 500 Index and the S&P Electric Utility Index. Whether
long-term awards have been earned will be determined at the end of the
three-year plan cycle.
Internal Revenue Code Section 162(m)
Total compensation paid to executive officers did not exceed the
deductibility limits of Internal Revenue Code Section 162(m) in 1995. TNP does
not expect total compensation to exceed Section 162(m) limits in the foreseeable
future.
Compensation of Chief Executive Officer
General. The Committee places particular emphasis on individual leadership
and management performance in determining the Chief Executive Officer's
compensation level. Principal performance factors of relatively equal importance
are (i) establishing and recommending to the board strategic direction
<PAGE>
for TNPE and its subsidiaries, (ii) building and maintaining a sound management
team, (iii) providing leadership for achieving corporate goals and objectives,
and (iv) monitoring and evaluating corporate performance and recommending to the
board and executing as necessary actions to respond to performance results.
Base Salary. Kevern R. Joyce was employed as President and Chief Executive
Officer in April 1994. The amount of his base salary was established by contract
when he joined TNP. In establishing Mr. Joyce's base salary, the Committee
weighed his previous broad experience at Tucson Electric Power Company and
Public Service Company of New Hampshire and the Committees' perception of market
competitive base salary.
Incentive Compensation in 1995. Mr. Joyce earned three types of incentive
compensation in 1995: short-term cash incentive bonuses; a short-term stock
incentive bonus; and cash contributed to his 401(k) retirement plan account. Mr.
Joyce was also awarded the opportunity to earn a long-term stock incentive
bonus.
Cash awarded to Mr. Joyce under the all-employee short-term incentive
plan was determined by operation of the corporate financial and operational
goals that applied to all other employees. However, the amount of Mr. Joyce's
award was based 70% on corporate financial goals and 30% on corporate
operational goals. He received an amount equal to 5.3% of his 1995 salary under
the all-employee plan.
Mr. Joyce's target award opportunity for short-term cash and stock
incentive awards under the executive incentive plans totaled 25% of his 1995
salary. The actual award could range between 0% and 150% of the target award
opportunity, depending on the extent to which performance goals were achieved.
Ninety percent of the total value of these awards to Mr. Joyce was determined by
operation of the corporate goals applicable to the all-employee short-term
incentive plan. With respect to Mr. Joyce, however, the 90% was based 70% on
financial goals and 30% on operational goals. Mr. Joyce earned an amount equal
to 26.8% of his 1995 salary under the short-term components of the executive
incentive plans as a result of overall corporate performance of 131.0% of target
goals applicable to executive officers.
The remaining 10% of the value of Mr. Joyce's short-term incentive
awards was based on the Committee's assessment of Mr. Joyce's individual
performance in 1995. The Committee determined to weight the individual
performance component of Mr. Joyce's award at 150% because his performance
exceeded Committee expectations. The Committee evaluated his performance in
terms of leadership, integrity, communication ability and public relations,
decisiveness, creativity, and vision. The Committee considered steps that Mr.
Joyce took to encourage teamwork, innovation, and efficiency, recognize employee
contributions to corporate success, develop and communicate to employees and
others a clear and simple corporate vision; inspire subordinates to become
effective leaders committed to achieving desired results; analyze, evaluate, and
recommend new markets and business opportunities; improve corporate image before
regulators and financial community; and develop of a corporate culture of
continuous improvement. Mr. Joyce earned an amount equal to 3.6% of his 1995
salary as a result of his individual performance.
In addition to its regular matching contribution, TNP made an incentive
matching contribution to its 401(k) retirement plan on behalf of all
participants, including Mr. Joyce, equal to 50% of each participant's 1995
eligible contributions.
During 1995, Mr. Joyce was awarded the opportunity to earn over a
three-year period a target amount up to 40% of his 1995 salary in stock.
Performance criteria for this award are the same as those discussed previously
for other executives.
<PAGE>
Conclusion
Overall, the Committee believes that Mr. Joyce displayed excellent
leadership in all performance criteria. The Committee believes that its
compensation policies will serve the best interests of TNPE and its subsidiaries
and believes that 1995 executive compensation adequately reflects corporate and
individual performance in the current operating environment.
Compensation Committee
Cass O. Edwards, II
John A. Fanning
Sidney Gutierrez
Harris L. Kempner, Jr.
The Compensation Committee Report on Executive Compensation and the
performance graph that follows will not be deemed incorporated by reference by
any general statement incorporating this proxy statement by reference into any
filing under the Securities Act of 1933 or the Securities Exchange Act of 1934,
except to the extent that TNPE specifically incorporates the information by
reference.
Five Year Comparison of Cumulative Total Return
The graph below shows TNPE's performance relative to the S&P Electric
Companies Index and the S&P 500 Index. The graph spans TNPE's last five years,
assumes that $100 is invested at the close of trading on December 31, 1990, and
is calculated assuming quarterly reinvestment of dividends and quarterly
weighting by market capitalization.
****Graph****
<TABLE>
<CAPTION>
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
<S> <C> <C> <C> <C> <C> <C>
TNP Enterprises $100 $107 $114 $109 $106 $140
Inc.
S&P 500 $100 $130 $140 $155 $157 $215
S&P Electric $100 $130 $138 $155 $135 $177
Companies Index
</TABLE>
<PAGE>
Compensation Committee Interlocks and Insider Participation
The Compensation Committee recommends to the full board appropriate
executive compensation levels. Committee members are Messrs. Cass O. Edwards,
II, John A. Fanning, Sidney M. Gutierrez, and Harris L. Kempner, Jr.
Mr. Edwards, a Class 3 director who will retire after the Annual Meeting,
is a director of Overton Bank and Trust, National Association, and Chairman of
its parent holding company, Overton Bancshares, Inc. In addition, R. Denny
Alexander, a Class 1 director whose term will expire in 1998, is a director of
Overton Bancshares, Inc. and Chairman of Overton Bank and Trust, National
Association, and Dennis H. Withers, a Class 2 director nominee, is a director of
both Overton Bancshares, Inc. and Overton Bank and Trust, National Association.
TNPE and TNP use Overton Bank and Trust, National Association, for general
banking and short-term investments in the ordinary course of business. All such
transactions are conducted on substantially the same terms, including collateral
and interest rates, as those prevailing at the time for comparable transactions
between the bank and its other customers.
Executive Compensation
The following table summarizes the compensation paid to the Chief
Executive Officer, and each of the four other most highly compensated executive
officers of TNPE and its subsidiaries for services rendered in all capacities to
TNPE and its subsidiaries during 1995, 1994, and 1993.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------------------------------------------------------------
Other Annual
Name & Principal Position Year Salary Bonus (1) Compensa- All Other
tion (2) Compensation (3)
- ---------------------------- ---- -------- --------- -------- ------------------------------
(a) (b) (Total)
<S> <C> <C> <C> <C> <C> <C> <C>
Kevern R. Joyce, President & Chief 1995 $300,000 $125,152 -- $ 15,331 $ 1,512 $ 16,843
Executive Officer (4) 1994 $212,307 $ 75,000 $ 41,869 -- $ 1,008 $ 1,008
1993 -- -- -- -- -- --
Jack V. Chambers, TNP Senior Vice 1995 $185,885 $ 68,779 -- $ 11,435 $ 24,653 $ 36,088
President & Chief Customer Officer 1994 $154,266 $ 40,000 -- $ 4,837 $ 1,219 $ 6,056
1993 $148,404 -- -- -- $ 801 $ 801
Manjit S. Cheema, Vice President & 1995 $139,145 $ 39,810 -- $ 7,127 $ 419 $ 7,546
Chief Financial Officer (4) 1994 $ 61,032 $ 7,500 $ 22,477 -- $ 124 $ 124
1993 -- -- -- -- -- --
Larry W. Dillon, TNP Vice President 1995 $134,111 $ 35,908 -- $ 8,246 $ 419 $ 8,665
& Regional Customer Officer 1994 $129,319 $ 15,000 -- $ 4,029 $ 244 $ 4,273
1993 $114,697 -- $ 11,984 -- $ 542 $ 542
W. Douglas Hobbs, TNP Vice President 1995 $134,111 $ 36,241 -- $ 6,853 $ 670 $ 7,523
& Regional Customer Officer 1994 $ 85,523 $ 7,000 $ 25,509 $ 2,575 $ 651 $ 3,226
1993 $ 77,312 -- -- $ 1,160 $ 428 $ 1,588
<FN>
- ------------------------
(1) Bonus for 1995 includes cash earned by the named executives under the
Management Short-Term Incentive Plan and the Broad-Based Short-Term
Incentive Plan, respectively, in the following amounts: Mr. Joyce -
$75,972 and $15,875; Mr. Chambers - $40,961 and $9,836; Mr. Cheema
-$22,549 and $7,329; Mr. Dillon - $20,007 and $7,097; and Mr. Hobbs -
$20,243 and $7,097. 1995 bonus also includes the value of short-term
stock incentive bonuses earned by the named executives in the following
amounts: Mr. Joyce - 1,710 shares; Mr. Chambers - 922 shares; Mr. Cheema
- 508 shares; Mr. Dillon - 450 shares; and Mr. Hobbs - 455 shares. The
value of the shares is based on the $18.63 closing price of one share of
TNPE common stock on the New York Stock Exchange on December 29, 1995,
the last trading day of 1995.
(2) Other Annual Compensation included in the table consists of allowances or
reimbursements for relocation expenses except that totals for Messrs.
Joyce, Cheema, and Hobbs include $1,869, $2,046 and $1,053, respectively,
imputed income for personal use of a company car in 1994. TNPE's and
TNP's executive officers received personal benefits in addition to salary
and cash bonuses. However, the total amounts of the personal benefits do
not exceed the lesser of $50,000 or 10% of the officers' total annual
salary and bonus except as reported in the table.
(3) For all persons named in the table except Mr. Chambers, All Other
Compensation consists of (a) amounts that TNP contributed to its 401(k)
retirement plan, (b) premiums for group life insurance, and (Total) the
sum of (a) and (b). For Mr. Chambers, (b) consists of premiums for group
life insurance of $907 and $458 in 1995 and 1994, respectively, and
Excess Benefit Plan (as defined below) benefits accrued of $23,746 and
$761 in 1995 and 1994, respectively. Amounts shown under (a) include
incentive matching contributions for 1995 that were paid in 1996 to
Messrs. Joyce, Chambers, Cheema, Dillon, and Hobbs of $6,331, $3,989,
$2,972, $2,830, and $2,830, respectively.
(4) Mr. Joyce joined TNPE and its subsidiaries effective April 12, 1994,
pursuant to an employment contract providing for an annual base salary of
$300,000; Mr. Cheema joined TNP and its subsidiaries effective June 22,
1994, and TNPE and its subsidiaries effective December 16, 1994.
</TABLE>
Long-Term Incentive Compensation
The following table sets forth information concerning long-term stock
incentive awards to executive officers. Information in the table is based on
participant salary ranges on the award date and assumes achievement of all
pre-established performance goals. Actual awards earned can range from 0% to
150% of the designated award level. Information concerning the estimated dollar
value of plan awards is based on the $18.63 closing price of one share of TNPE
common stock on the New York Stock Exchange on December 29, 1995.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLANS -- AWARDS
IN LAST FISCAL YEAR
Number of Performance or Estimated Future Payouts Under
Shares, Units, or Other Period Until Non-Stock Price-Based Plans
------------------------------------------------
Name Other Rights (#) Maturation of Payout Target ($) Threshold ($) Maximum ($)
(1) (2)
- -------------------------- -------------------- ----------------------- --------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Kevern R. Joyce 8,271 3 years 154,047 77,024 231,071
Jack V. Chambers 4,943 3 years 92,063 46,032 138,095
Manjit S. Cheema 3,099 3 years 57,719 28,859 86,578
Larry W. Dillon 2,791 3 years 51,982 25,991 77,974
W. Douglas Hobbs 2,791 3 years 51,982 25,991 77,974
- ------------------------
<FN>
(1) The table shows the number of shares of TNPE common stock that the employee
will earn if the target performance goal is reached at cycle end. The
number of shares that can be earned equals a percentage of the employee's
base salary midpoint, which is 40% for Mr. Joyce, 35% for Mr. Chambers, and
30% for Messrs. Cheema, Dillon, and Hobbs.
(2) Asuming the actual dividends paid in 1995 and the continued payment of the
current quarterly dividend rate for the remainder of the 3-year plan cycle,
the Named Executives would be paid the following dividend equivalent
values: Kevern R. Joyce - $21,339; Jack V. Chambers - $12,753; Manjit S.
Cheema - $7,995; Larry W. Dillon - $7,201; W. Douglas Hobbs - $7,201.
</TABLE>
Thrift Plan
TNP maintains a deferred compensation plan under IRS Code Section 401(k)
called the "Texas-New Mexico Power Company Thrift Plan for Employees" (the
"Thrift Plan"). All employees of TNPE and its subsidiaries are eligible to
participate in the Thrift Plan. Eligible employees may elect to contribute up to
<PAGE>
12% of their compensation, as defined in the Thrift Plan, subject to the maximum
amount allowed under the IRS Code. Participating employees may elect to increase
or decrease the amount of their contributions on a daily basis. Contributions by
TNP for the benefit of participants are made in amounts equal to 50% of the
participant's contributions up to 6% of eligible pay, as defined in the Thrift
Plan, subject to the maximum amount allowed under the Internal Revenue Code. TNP
may make matching contributions up to an additional 50% (66% beginning in 1996)
of an employee's contribution if certain performance goals are met. A
participant's vested interest in the Thrift Plan is distributed upon the
participant's retirement, permanent and total disability, death, or termination
of employment and in certain other circumstances permitted by applicable law.
The participant's contributions to the Thrift Plan are always 100% vested.
Contributions to the Thrift Plan and earnings on contributions are generally tax
deferred and, as such, are not subject to tax until distributed, subject to
restrictions imposed by the Internal Revenue Code.
Thrift Plan participants are entitled to elect to have contributions to
their respective accounts invested in one or more money market, equity, and bond
funds permitted for Thrift Plan investments, as well as in shares of TNPE common
stock. Thrift Plan participants are entitled to (i) direct voting of any TNPE
common stock held in their accounts on all matters submitted to shareholders for
a vote and (ii) dispose of any TNPE common stock held in their accounts and make
other permitted Thrift Plan investments. NationsBank of Georgia N.A., Atlanta
Georgia, serves as trustee of the Thrift Plan.
Pension Plan
The following table sets forth certain information concerning annual
benefits payable upon normal retirement at age 65 to TNPE and TNP employees
under TNP's pension plan.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Years of Service
--------------------------------------------------------------
Remuneration (1) 15 20 25 30 35 40
- ---------------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
$ 125,000 $ 29,994 $ 39,992 $ 49,990 $ 59,988 $ 69,986 $ 78,111
150,000 36,369 60,615 72,738 84,861 94,611 48,492
175,000 42,744 71,240 85,488 99,736 111,111 56,992
200,000 49,119 81,865 98,238 114,611 127,611 65,492
250,000 61,869 103,115 123,738 144,361 160,611 82,492
300,000 74,619 124,365 149,238 174,111 193,611 99,492
350,000 87,369 116,492 145,615 174,738 203,861 226,611
400,000 100,119 133,492 166,865 200,238 233,611 259,611
450,000 112,869 159,492 188,115 225,738 263,361 292,611
500,000 125,619 167,492 209,365 251,238 293,111 325,611
- ----------------------
<FN>
(1) Benefits in other than the $125,000 row are shown without taking into
account IRS Code Section 415 limits or the $150,000 salary cap in effect
after 1993, resulting from IRS Code Section 401(a)-17-1 limits.
Consequently, a portion of the benefits would be paid from the unfunded
Excess Benefit Plan (as defined below).
</TABLE>
Potentially all employees are eligible to participate in TNP's
noncontributory defined benefit retirement plan (the "Pension Plan"). Because
TNP's Pension Plan is a defined benefit plan, annual contributions to the
Pension Plan are computed on an actuarial basis and cannot be calculated readily
on a per person basis. Benefits for each eligible employee are based on the
employee's years of service computed through the month in which the employee
retires multiplied by a specified percentage of the employee's average monthly
compensation for each full calendar year of service completed after 1993.
Average monthly compensation for
<PAGE>
executive officers named in the Summary Compensation Table above in
"Compensation of Directors and Executive Officers--Executive Compensation"
consists only of salary. Pension benefits are not subject to deduction for
Social Security benefits, but are subject to reduction for retirement prior to
age 62. TNP made no contribution to the Pension Plan for 1995.
Highly compensated employees whose pensions are subject to reduction below
the amount that the Pension Plan otherwise would have provided as a result of
compliance with IRS Code Section 415 and 401(a)-17-1, and who the board of
directors designate as eligible, may also participate in TNP's unfunded "Excess
Benefit Plan." As of the date of this proxy statement, 13 active or retired
employees have been designated as eligible to participate in the Excess Benefit
Plan, including the executive officers named in the Summary Compensation Table
located as described in the preceding paragraph. The two retired employees are
now receiving excess benefit payments. TNP owns policies insuring their lives.
Policy proceeds are payable to TNP to reimburse it for its payments to the
retirees under the Excess Benefit Plan.
As of December 31, 1995, TNP's Chief Executive Officer and four other most
highly compensated executive officers were credited with the years of service
set forth in the following table. Executive pension benefits are computed
actuarially.
<TABLE>
<CAPTION>
EXECUTIVE PENSION BENEFITS
Name Years of Credited Service
---------------- -------------------------
<S> <C>
Kevern R. Joyce 14 years, 9 months (1)
Jack V. Chambers 16 years, 11 months
Manjit S. Cheema 1 year, 6 months
Larry W. Dillon 21 years, 0 months
W. Douglas Hobbs 3 years, 8 months
- ------------------------
<FN>
(1) In accordance with TNPE's 1994 employment contract with Mr. Joyce, he was
credited with 13 years of service earned prior to joining TNPE and TNP.
Mr. Joyce will be vested in his pension benefits upon five years of
employment with TNPE and TNP. His retirement payments will be reduced by
and to the extent of any retirement payments that he receives from other
employers or their successors
</TABLE>
Contracts with Employees
Severance Agreements
Employment severance contracts between TNP and its officers and other key
personnel have been in effect since 1988. The principal purpose of the contracts
is to encourage retention of management and other key personnel required for the
orderly conduct of TNP's business during any threatened or pending acquisition
of TNPE or TNP and during any ownership transition. TNP officers have three-year
contracts; other key personnel have two-year contracts. The contracts for
officers, including the executive officers named in the Summary Compensation
Table in "Compensation of Directors and Executive Officers--Executive
Compensation," provide for lump sum compensation payments equal to three times
the officers' current annual salaries and other rights. Other key personnel
contracts provide for payments equal to their annual salary. The lump sum
payments for both officers and other key personnel become effective only if
their employment is terminated or they suffer other adverse treatment following
a "change in control" of TNPE or TNP. A "change in control" includes, among
other things, certain substantial changes in the corporate structure, ownership,
assets, existence, or board of directors of either entity. TNP's board of
directors has reviewed the contracts annually and determined whether to extend
them for an additional year, in effect returning them to their original three-
or two-year term each year. However, some were last
<PAGE>
extended by TNP's board of directors at its November 1994 meeting. The contracts
of all executives named in the Summary Compensation Table mentioned above were
extended at the board's November 1995 meeting.
Incentive Award Agreements
Effective January 1, 1995, TNPE entered into Incentive Compensation Award
Agreements with all executive officers. Pursuant to these agreements, executive
officers were awarded opportunities to earn cash and shares of TNPE common stock
subject to satisfaction of corporate and individual performance goals during
1995 and during the three-year cycle ending December 31, 1997. Amounts paid to
TNP's five most highly compensated executive officers for 1995 pursuant to these
agreements are described in the Summary Compensation Table. Potential amounts
payable at the end of the three-year cycle are described in the table entitled
"Long-Term Incentive Plans--Awards in Last Fiscal Year." TNPE entered into
substantially similar agreements with all executive officers effective January
1, 1996. However, customer satisfaction was added as a performance measure for
1996 short-term award opportunities. Moreover, the retail rate comparison
measure will not be used for long-term awards starting with the 1996 cycle
because it may result in conflict with TNP's pricing strategy. For 1996,
management short-term target cash incentive awards are expected to range from
7.5% to 18.7%, and target stock incentive awards are expected to range from 2.5%
to 6.3%, respectively, of salary midpoint, depending on salary grade and
corporate and individual performance. For 1996, target cash incentive awards
under the all-employee incentive plan are expected to equal 4% of annual wages
or salary. Potential awards under the 1996 agreements are subject to
satisfaction of specified performance goals during 1996 and during the
three-year cycle ending December 31, 1998.
SELECTION OF AUDITORS
The board of directors has appointed KPMG Peat Marwick LLP, Certified
Independent Public Accountants, to continue to serve as independent auditors for
the current year, subject to shareholder approval. A representative of KPMG Peat
Marwick LLP is expected to attend the Annual Meeting and will have an
opportunity to make a statement if the representative desires to do so and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
APPOINTMENT OF KPMG PEAT MARWICK LLP, CERTIFIED INDEPENDENT PUBLIC ACCOUNTANTS,
AS INDEPENDENT AUDITORS FOR 1996.
SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of TNPE's common stock as of March 18, 1996, by (i) each
director and nominee for director, (ii) the Chief Executive Officer and the four
other most highly compensated executive officers, (iii) all directors and
executive officers of TNPE and TNP as a group, and (iv) persons known to
management to beneficially own more than 5% of TNPE's common stock. Except as
noted below, each person included in the table has sole voting and investment
power with respect to the shares that the person beneficially owns.
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature Percent of
Name of Beneficial Owner of Beneficial Ownership Class
<S> <C> <C>
R. Denny Alexander 1,025 *
Cass O. Edwards, II 8,189 *
John A. Fanning 925 *
Sidney M. Gutierrez 537 *
Kevern R. Joyce *
7,245(1)
Harris L. Kempner, Jr. *
925(2)
Dwight R. Spurlock 2,109 *
Carol D. Surles(3) 0 *
Dennis H. Withers 1,025 *
Jack V. Chambers(4) 18,819 *
Manjit S. Cheema(5) 5,035 *
Larry W. Dillon(4) 5,437 *
W. Douglas Hobbs(4) 1,575 *
All directors and officers
as a group (20 persons)(6) 82,207 *
First Union Corporation(7) 810,250 7.4%
NationsBank of Georgia N.A.(8) 1,477,428 13.5%
Putnam Investments, Inc. and 550,000 5.0%
Putnam Investment Management Inc.(9)
- ------------------------
<FN>
* Less than 1%.
(1) Includes 3,035 shares held in Mr. Joyce's Thrift Plan account.
(2) Includes 200 shares that Mr. Kempner's wife owns, beneficial ownership of
which Mr. Kempner disclaims.
(3) Dr. Surles was appointed director effective September 1, 1995. A Form 3
reporting her appointment inadvertently was not filed until November 30,
1995.
(4) Includes 17,897 shares, 4,987 shares, and 720 shares held in the Thrift
Plan accounts of Messrs. Chambers, Dillon, and Hobbs, respectively.
(5) Includes 1,116 shares held in Mr. Cheema's Thrift Plan account. Also
includes 194 shares that Mr. Cheema's wife owns directly and 817 shares
held in his wife's Thrift Plan account, beneficial ownership of which he
disclaims. Mr. Cheema bought 900 shares of TNPE common stock on September
2, 1994, and 1,500 shares on October 21, 1994, in open market transactions.
These purchases inadvertently were not reported to the Securities and
Exchange Commission on a Form 4. They were reported on a Form 5 on February
5, 1996.
(6) Includes 49,687 shares held in Thrift Plan accounts of executive officers.
(7) The address of First Union Corporation is One First Union Center,
Charlotte, North Carolina 28288-0137. First Union Corporation has sole
voting power with respect to 775,250 shares, shared voting power with
respect to the remaining 35,000 shares, and sole dispositive power with
respect to all 810,250 shares. First Union Corporation is the parent
holding company of Evergreen Asset Management Group and Lieber and Company,
both of which are investment advisers registered under the Investment
Advisers Act of 1940. The subsidiary investment advisers actually acquired
the shares of TNPE common stock included in the table of which First Union
Corporation is deemed to have beneficial ownership. The information
included in the table and this note is derived from First Union
Corporation's amended report on Schedule 13G dated February 12, 1996, filed
with the Securities and Exchange Commission. The report did not disclose
the subsidiaries' addresses or voting and dispositive power over the common
stock that it covered.
(8) The address of NationsBank of Georgia N.A. (the "Trustee") is 715 Peachtree
Street, Atlanta, Georgia 30308. The Trustee holds all Thrift Plan shares
included in the table as trustee of the Thrift Plan.
(9) The address of Putnam Investments, Inc. and Putnam Investment Management,
Inc. is One Post Office Square, Boston, Massachusetts 10036. Both are
investment advisers registered under the Investment Advisers Act of 1940.
They have no voting or dispositive power over the shares included in the
table. They hold the shares on behalf of their investment advisory clients.
The parent holding company of Putnam Investments, Inc. is Marsh & McLennan
Companies, Inc., the address of which is 1166 Avenue of the Americas. The
information included in the table and this note is derived from a joint
report on Schedule 13G dated January 29, 1996, filed with the Securities
and Exchange Commission.
</TABLE>
SHAREHOLDER PROPOSALS
TNPE shareholders who intend to present a proposal for action at the 1997
annual meeting must notify TNPE's Secretary of their intention by notice
received at TNPE's principal executive offices at least 30 but not more than 60
days before the first anniversary of the Notice of Annual Meeting that precedes
this proxy statement, with certain exceptions. TNPE will be unable to include in
its 1997 proxy statement shareholder proposals not presented within this period.
The notice must provide the exact wording and purpose of the shareholder
proposal, describe the shareholder's reasons for supporting the proposal, give
the shareholder's name and address, provide the class and number of shares of
TNPE stock that the shareholder owns beneficially and of record and the date on
which each was acquired, and disclose any material interest that the shareholder
has in the subject of the proposal. Shareholder proposals must also satisfy
applicable requirements of Regulation 14A under the Securities Exchange Act of
1934.
ANNUAL REPORT
TNPE's 1995 Annual Report is being mailed to shareholders with this proxy
statement. The Annual Report includes a copy of TNPE's and TNP's 1995 Combined
Report on Form 10-K, including the financial statements required to be filed
with the Securities and Exchange Commission and an Exhibits Index, but not
including exhibits. TNPE will provide a copy of any exhibit to each shareholder
to whom this proxy statement and the enclosed proxy card are sent on the
shareholders' written request and payment of TNPE's reasonable expenses in
furnishing the copy.
Kevern R. Joyce,
President
Fort Worth, Texas
Dated: March 26, 1996
TNP ENTERPRISES, INC.
ANNUAL MEETING OF HOLDERS OF COMMON STOCK - APRIL 26, 1996
This Proxy is Solicited on Behalf of TNP Enterprises, Inc. and Its
Board of Directors.
PROXY The undersigned shareholder, revoking all proxies, hereby appoints
KEVERN R. JOYCE, MANJIT S. CHEEMA, and MICHAEL D. BLANCHARD, and any
one or more of them, as proxies, each with full power of substitution,
and authorizes them to represent and vote as designated below all
shares of TNP Enterprises, Inc. ("TNPE") common stock that the
undersigned has the power to vote at TNPE's Annual Meeting of Holders
of Common Stock on Friday, April 26, 1996, in Fort Worth, Texas and at
any adjournment of the annual meeting, on the proposals set forth on
the reverse side of this card.
1. ELECTION OF CLASS 2 AND ONE CLASS 3 NOMINEE DIRECTORS: John A.
Fanning, Dwight R. Spurlock, Dennis H. Withers, and Carol D. Surles.
--------- --------
FOR All Nominees WITHHOLD AUTHORITY
(Except as Marked to to Vote for all Nominees
the Contrary Below) Listed Above
--------- --------
INSTRUCTION: To withhold authority to vote for any nominees listed, write the
nominee's name on the line below.
- -------------------------------------------------------------------------------
2. RATIFICATION OF APPOINTMENT OF KPMG PEAT MARWICK as Independent Auditors
for 1996.
-------- -------- --------
FOR AGAINST ABSTAIN
- -------- -------- --------
(Continued and to be voted and signed on the reverse side.)
<PAGE>
(Continued from reverse side.)
3. In their discretion, the proxies are authorized to vote upon any other
business that properly comes before the Annual Meeting, subject to
limitations set forth in applicable regulations under the Securities
Exchange Act of 1934.
When properly executed, this proxy will be voted in the manner directed on this
card by the undersigned holder of common stock. If no direction is made, then
this proxy will be voted FOR Proposals 1 and 2.
Please sign exactly as the shareholder's name appears on this proxy card. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee, guardian, officer, partner, or similar
fiduciary or authority, please state the capacity in which you are signing.
DATED: , 1996
------------
---------------------------------------
Signature(s)
---------------------------------------
Signature(s)
- ------------------------------------------------------------
PLEASE MARK, SIGN, DATE, AND
RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
- ------------------------------------------------------------
