Registration No.________
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PUBLIC SERVICE COMPANY OF NEW MEXICO
New Mexico 85-0019030
Alvarado Square
Albuquerqe, New Mexico 87158
(505) 241-2700
FIRST RESTATED AND AMENDED
PUBLIC SERVICE COMPANY OF NEW MEXICO
PERFORMANCE STOCK PLAN
MAX MAERKI
Senior Vice President and Chief Financial Officer
PUBLIC SERVICE COMPANY OF NEW MEXICO
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
The Commission is requested to
mail signed copies of all
orders, notices and
communications to :
C. L. MOORE
KELEHER & McLEOD, P.A.
414 Silver Avenue, S. W.
Albuquerque, New Mexico 87103
CALCULATION OF REGISTRATION FEE
Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee
Common Stock
$5.00 par value........ 3,000,000 Shares $17.4375 $52,312,500 $18,038.79
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating
the registration fee on the basis of the average of high and low sale
price of the Registrant's Common Stock on the New York Stock Exchange
Composite Transaction Tape on April 30, 1996.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference
The following documents previously filed with the Securities
and Exchange Commission by the Company (File No. 1-6986) are incorporated by
reference in the Registration Statement:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995, as filed on February 23, 1996 (the "1995 10-K Report").
2. The Company's Current Report on Form 8-K dated March 13,
1996.
3. The description of the Company's Common Stock contained in
a registration statement filed under the Securities Exchange Act of 1934, as
amended, including any amendment or report filed for the purpose of updating
such description.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, after
the filing date of the 1995 10-K Report and prior to the filing of a
post-effective amendment which indicates that all securities have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
ITEM 4. Description of Securities.
Not Applicable
ITEM 5. Interests of Named Experts and Counsel.
Not Applicable. It is currently contemplated that the
securities will not be original issuance securities. If that situation should
change, an appropriate opinion of counsel will be filed.
ITEM 6. Indemnification of Directors and Officers.
Section 8 of Article II of the Company's By-Laws contains the
following provisions with respect to indemnification of directors and officers.
Each person who shall have served as a director or an officer
of the Company, or, at the request of the Company, as a
director or an officer of any other corporation, partnership
or joint venture, whether profit or not profit, in which the
Company (a) owns shares of capital stock, (b) has an ownership
interest, (c) is a member, or (d) is a creditor, and
regardless of whether or not such person is then in office,
and the heirs, executors, administrators and personal
representatives of any such person shall be indemnified by the
Company to the full extent of the authority of the Company to
so indemnify as authorized by the law of New Mexico.
<PAGE>
Section 53-11-4.1 of the Business Corporation Act of the State
of New Mexico provides that a corporation shall have power to indemnify any
person made (or threatened to be made) a party to any proceeding (whether
threatened, pending or completed) by reason of the fact that the person is or
was a director (or, while a director, is or was serving in any of certain other
capacities) if: (1) the person acted in good faith; (2) the person reasonably
believed: (a) in the case of conduct in the person's official capacity with the
corporation, that the person's conduct was in its best interests; and (b) in all
other cases, that the person's conduct was at least not opposed to its best
interests; and (3) in the case of any criminal proceeding, the person had no
reasonable cause to believe the person's conduct was unlawful. Indemnification
may be made against judgments, penalties, fines, settlements and reasonable
expenses actually incurred by the person in connection with the proceeding, but
may be limited or unavailable with respect to certain proceedings. In some
instances, indemnification of a director may be mandatory or, upon the
application of a director, may be ordered by a court. Reasonable expenses
incurred by a director may, under certain circumstances, be paid or reimbursed
in advance of a final disposition of a proceeding. Unless limited by its
articles of incorporation, a corporation may (or, as the case may be, shall)
indemnify and advance expenses to an officer of the corporation to the same
extent as to a director under Section 53-11-4.1. Also, unless limited by its
articles of incorporation, a corporation has (1) the power to indemnify and to
advance expenses to an employee or agent of the corporation to the same extent
that it may indemnify and advance expenses to directors under the statute and
(2) additional power to indemnify and to advance reasonable expenses to an
officer, employee or agent who is not a director to such further extent,
consistent with law, as may be provided by its articles of incorporation,
bylaws, general or specific action of its Board of Directors, or contract.
Section 53-11-4.1 was amended in 1987 to provide that the
indemnification authorized thereunder shall not be deemed exclusive of any
rights to which those seeking indemnification may be entitled under the articles
of incorporation, the by-laws, an agreement, a resolution of shareholders or
directors or otherwise. At the Company's 1987 Annual Meeting of Stockholders,
the stockholders approved certain agreements with the Company's directors and
officers relating to indemnification of directors and officers. Such agreements
have been entered into with each director and officer. The agreements provide
for indemnification of directors and officers to the fullest extent permitted by
law, including advancement of litigation expenses where appropriate. The
agreements provide for the appointment of a reviewing party by the Board of
Directors to make a determination whether claimed indemnification is permitted
under applicable law.
Insurance is maintained on a regular basis (and not
specifically in connection with this offering) against liabilities arising on
the part of directors and officers out of their performance in such capacities
or arising on the part of the Company out of its foregoing indemnification
provisions, subject to certain exclusions and to the policy limits.
ITEM 7. Exemption From Registration Claimed.
Not Applicable.
ITEM 8. Exhibits.
Exhibit No. Description
4.1 Restated Articles of Incorporation of the
Company as amended through May 10, 1985
(incorporated by reference to Exhibit 4-(b) to
Registration Statement No. 2-99990 of the
Company).
4.2 Indenture of Mortgage and Deed of Trust dated
as of June 1, 1974, between the Company and The
Bank of New York (formerly Irving Trust Company),
as Trustee, together with the Ninth Supplemental
Indenture dated as of January 1, 1967, the
Twelfth Supplemental Indenture dated as of
September 15, 1971, the Fourteenth Supplemental
Indenture dated as of December 1, 1974, and the
Twenty-second Supplemental Indenture dated as of
October 1, 1979 thereto relating to First
Mortgage Bonds of the Company (incorporated by
reference to Exhibit 4-(d) to Registration
Statement No. 2-99990 of the Company).
<PAGE>
4.3 Portions of sixteen supplemental indentures
to the Indenture of Mortgage and Deed of Trust
dated as of June 1, 1947, between the Company and
The Bank of New York (formerly Irving Trust
Company), as Trustee, relevant to the declaration
or payment of dividends or the making of other
distributions on or the purchase by the Company
of shares of the Company's Common Stock
(incorporated by reference to Exhibit 4-(e) to
Registration Statement No 2-99990 of the
Company).
4.4 U. S. $100,000,000 Revolving Credit Agreement
dated as of December 14, 1993 among the Company
and the banks and co-agents named therein
(incorporated by reference to Exhibit 10.57 to
Annual Report of the Registrant on Form 10-K for
fiscal year ended December 31, 1993).
4.4.1 Amendment No. 1, dated June 7, 1995 to the
U. S. $100,000,000 Revolving Credit Agreement
dated as of December 14, 1993 among the Company
and the banks and co-agents named therein
(incorporated by reference to Exhibit 10.57.1 to
the Quarterly Report of the Registrant on Form
10-Q for the quarter ended June 30, 1995).
4.5 Reimbursement Agreement, dated as of November 1,
1992 between Public Service Company of New Mexico
and Canadian Imperial Bank of Commerce, New York
Agency (incorporated by reference to Exhibit 4.5
to Registration Statement No. 33-65418 of the
Company).
4.5.1 Amendment No. 1 dated as of July 1, 1994, to the
Reimbursement Agreement dated as of November 1,
1992 between Public Service Company of New Mexico
and Canadian Imperial Bank of Commerce, New York
Agency (incorporated by reference to Exhibit
10.60.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994).
4.5.2 Amendment No. 2 dated as of October 1, 1995,
to the Reimbursement Agreement dated as of
November 1, 1992 between Public Service Company
of New Mexico and Canadian Imperial of Commerce,
New York Agency (incorporated by reference to
Exhibit 10.60.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended September 30,
1995).
23.1 Consent of Arthur Andersen LLP
99.1 First Restated and Amended Public Service
Company of New Mexico Performance Stock Plan
<PAGE>
ITEM 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers of 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 1993;
(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;
(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) do
not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed 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.
(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.
(4) If the registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any financial
statements required by Rule 3-19 of Regulation S-X at the start of any delayed
offering or throughout a continuous offering.
(5) That, for 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 the registration statement 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.
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 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by 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 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-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Albuquerque, State of New Mexico, on May 06,
1996.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/ Benjamin F. Montoya
------------------------------
(Benjamin F. Montoya, President
and Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed below by the following persons in
the capacities and on the date indicated. Each person whose signature appears
below hereby authorizes Benjamin F. Montoya, Max Maerki, and Donna Burnett, and
each of them, as attorneys-in fact, to sign in his or her name and behalf,
individually and in each capacity designated below, and to file any amendments,
including post-effective amendments, to this registration statement.
Signature Capacity Date
/s/B. F. Montoya Principal Executive Officer May 06, 1996
-----------------------------
B. F. Montoya and Director
President and Chief
Executive Officer
/s/M. H. Maerki Principal Financial Officer May 06, 1996
-----------------------------
M. H. Maerki
Senior Vice President
and Chief Financial Officer
/s/D. M. Burnett Principal Accounting Officer May 06, 1996
-----------------------------
D. M. Burnett
Corporate Controller
and Chief Accounting Officer
/s/J. T. Ackerman Director May 06, 1996
-----------------------------
J. T. Ackerman
/s/R. G. Armstrong Director May 06, 1996
- ------------------------------
R. G. Armstrong
/s/J. A. Godwin Director May 06, 1996
- -----------------------------
J. A. Godwin
/s/L. H. Lattman Director May 06, 1996
- -----------------------------
L. H. Lattman
/s/M. Lujan, Jr. Director May 06, 1996
- -----------------------------
M. Lujan, Jr.
/s/R. U. Ortiz Director May 06, 1996
- -----------------------------
R. U. Ortiz
/s/R. M. Price Director May 06, 1996
- -----------------------------
R. M. Price
/s/P. F. Roth Director May 06, 1996
- -----------------------------
P. F. Roth
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 13, 1996
included in Public Service Company of New Mexico's Form 10-K for the year ended
December 31, 1995.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Albuquerque, New Mexico
May 6, 1996
<PAGE>
EXHIBIT 99.1
FIRST RESTATED AND AMENDED
PUBLIC SERVICE COMPANY OF NEW MEXICO
PERFORMANCE STOCK PLAN
THIS FIRST RESTATED AND AMENDED PUBLIC SERVICE COMPANY OF NEW MEXICO
PERFORMANCE STOCK PLAN is made as of the 1st day of January 1996, by the Public
Service Company of New Mexico (the "Company"), subject to shareholder approval.
The capitalized terms used herein are defined in Article II.
R E C I T A L S
WHEREAS, the Original Plan was adopted by the Company effective July 1,
1993, and, consistent with the authority of the Board, the Original Plan was
subsequently amended by the First Amendment dated February 23, 1994;
WHEREAS, the Board believes it would be appropriate to further change
the Original Plan, subject to shareholder approval, to revise the manner in
which performance based awards are to be made, as well as to make certain other
changes; and
WHEREAS, in order to: (i) amend the Plan as set forth above, (ii)
simplify the Plan document, and (iii) incorporate the changes made by the First
Amendment, the Original Plan is being restated.
NOW, THEREFORE, the Original Plan, as amended, is hereby further
amended and restated in its entirety as follows:
ARTICLE I
Purpose
The purpose of the First Restated and Amended Public Service Company of
New Mexico Performance Stock Plan is to increase the proprietary interests in
the Company of certain key employees with the intent of (i) fostering a strong
incentive for such individuals to put forth maximum effort to achieve a pattern
of sustained growth of the Company, and to perform in the best interests of the
Company, its shareholders, customers and employees, (ii) retaining individuals
who will put forth such efforts, and (iii) attracting the best available
individuals to fulfill those positions in the future. The Plan was originally
approved by the shareholders of the Company effective July 1, 1993, and was
amended on February 23, 1994. The Plan is again being amended herein and
restated for administrative purposes.
ARTICLE II
Definitions
The following words and phrases, when used with an initial capital
letter, shall have the meaning set forth below unless the context clearly
indicates otherwise:
2.1 "Award" or "Awarded" shall mean an Option granted pursuant to the
terms and conditions of this Plan.
2.2 "Board" shall mean the Board of Directors of the Company.
2.3 "Cause", subject to the exception and modification set forth at the
end of this Section 2.3, shall mean termination of employment due to:
a. the failure of a Participant to substantially perform his or her
duties with the Company, or
b. the engaging by the Participant in conduct which is injurious to
the Company, monetarily or otherwise.
Provided, however, that Section 2.3a shall not apply if the failure
results from such Participant's incapacity due to physical or mental illness.
2.4 "Change in Control", subject to the exceptions and modifications
set forth at the end of this Section 2.4, shall be deemed to have occurred if:
a. any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act (as hereinafter defined) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20%
or more of the combined voting power of the Company's then outstanding
securities;
b. during any period of two consecutive years (not including any
period prior to July 1, 1993), the following individuals cease, for any
reason, to constitute a majority of the Board:
(i) those directors who, at the beginning of such
period, constitute the Board; plus
(ii) any new directors whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3rds) of the
directors then still in office who were either directors at
the beginning of such period or whose election or nomination
for election was previously so approved (such new directors
being referred to as "Approved New Directors");
c. the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation; or
d. the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
Section 2.4a shall not apply if the "person" as referred to therein is,
or shall be (i) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or (ii) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
In Section 2.4b the Approved New Director shall not include a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in Section 2.4a, 2.4c or 2.4d, hereof.
Section 2.4c shall not apply to a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation.
2.5 "Code" shall mean the Internal Revenue Code of 1986, as may be
amended from time to time.
2.6 "Committee" shall mean the Management Development and Compensation
Committee of the Board or any such other committee as may be designated by the
Board to administer the Plan, the membership of such committee not being less
than two members of the Board. All Committee members must be "disinterested
persons" if required to meet the conditions for exemption of the Awards under
the Plan from Section 16(b) of the Exchange Act.
2.7 "Company" shall mean the Public Service Company of New Mexico.
2.8 "Disability" shall mean the inability of a Participant to engage in
any substantially gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than
twelve (12) months. The permanence and degree of such impairment shall be
supported by medical evidence.
2.9 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as may be amended from time to time.
2.10 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.11 "Exercise Price" shall mean the Fair Market Value of the Stock on
the Grant Date of an Option.
2.12 "Fair Market Value of the Stock" shall mean the closing price of
one share of Stock pursuant to the "New York Stock Exchange Composite
Transactions," as reported in the Western Edition of the Wall Street Journal, on
the date such value is determined (or, if Stock is not traded on such date, on
the first immediately preceding business day on which Stock was so traded).
2.13 "Grant Date" shall mean the date an Award is granted to a
Participant.
2.14 "Initial Awards" shall mean those Awards pursuant to Section 7.1
hereof.
2.15 "Officer" shall mean a Participant who is an officer of the
Company. The final classification of a Participant as an Officer under this Plan
shall be in the sole discretion of the Committee.
2.16 "Option" shall mean a right to purchase a share of Stock granted
pursuant to the Plan, containing such terms and conditions as specified herein.
Each Option shall consist of the right to purchase one share of Stock at the
Exercise Price. Each Option shall be a non-qualified stock option and shall not
qualify as an "incentive stock option" as defined in the Code.
2.17 "Option Price" shall mean the value of the Option as determined in
the sole and absolute discretion of the Committee, as of the date each Award is
made. The Option Price shall be the same for all Options awarded on the same
date. The Option Price was only used for Awards on or before December 31, 1995.
2.18 "Original Plan" shall mean the Plan as originally adopted
effective July 1, 1993, and as amended by the First Amendment dated February 23,
1994.
2.19 "Partial Award" shall mean Performance Based Awards as described
in Section 7.2b below.
2.20 "Participant" shall mean any employee of the Company who is
selected, from time to time, to participate in the Plan by the Committee, in its
sole discretion.
2.21 "Performance Based Awards" shall mean those Awards granted
pursuant to Section 7.2.
2.22 "Performance Goals" shall mean those Company-wide goals
established pursuant to Section 7.2 used to determine the Performance Based
Awards.
2.23 "Plan" shall mean the Public Service Company of New Mexico
Performance Stock Plan, as set forth herein, and as may hereafter be amended or
restated from time to time.
2.24 "Plan Administrator" shall mean the person holding a specified
position with the Company wherein either such person or such position is
assigned the responsibility by the Committee to administer the Plan.
2.25 "Salary Range Control Point" shall mean the market control point
within the Company's salary line for those employees in the same salary range as
the Participant, based upon the Participant's employment position with the
Company. The Company's compensation system is segregated into numerous salary
ranges. Each employee is assigned to a salary range and, except in extraordinary
cases, his or her salary will be between the minimum and the maximum of the
salary range. The control point is a point between the minimum and the maximum,
that is either generally the median or the average salary based upon salary
information and the salary ranges accumulated from external market data. The
control point for those Participants who are officers and directors subject to
the restrictions of Section 16 of the Exchange Act shall be determined in the
sole discretion of the Committee. Due to inflationary and other factors, the
ranges may be periodically adjusted, and therefore the Salary Range Control
Point for all salary ranges shall be determined as of the Grant Date of an
Award. Salary Range Control Point is no longer applicable to Options granted
after December 31, 1995.
2.26 "Stock" shall mean the common stock of the Company.
2.27 "Stock Option Agreement" shall mean an agreement between the
Company and a Participant receiving an Award pursuant to this Plan, evidencing
the Award, containing such provisions as may be determined in the sole
discretion of the Committee, which shall be provided to a Participant promptly
after the Grant Date for the Initial Awards and within an administratively
reasonable period of time following the end of the calendar year to which a
Performance Based Award pertains.
2.28 "Target Award" shall mean the number of Options available for
grant for each Participant, for Performance Based Awards, if all the Performance
Goals are achieved as more fully described in Section 7.2a. Subject to Section
7.2d, the number of Options in a Target Award shall be determined annually by,
and in the sole discretion of, the Committee before the beginning of the year,
or within an administratively reasonable period of time after the beginning of
the year, to which the Performance Based Awards apply. The number of Options in
the Target Award will vary: (i) by Participant, (ii) by his or her position with
the Company, and (iii) from year to year.
2.29 "TRS Factor" (i.e., total return to shareholders factor) shall
mean the dollar value determined on the relevant date specified herein of a $100
investment made five (5) years before the Grant Date to which the indexing
applies pursuant to Section 7.2c, assuming all dividends paid during such five
(5) year period are reinvested. Such determinations shall be based upon the
performance graph disclosed in the proxy materials for the annual shareholder
meeting, immediately following the Award Date, which graph compares a five (5)
year cumulative total return on a $100 investment in Stock, to that of a
comparable industry index selected by, and in the sole discretion of, the
Committee.
ARTICLE III
Administration
Except to the extent certain responsibilities have been reserved to the
Board, the Plan shall be administered by the Committee. Subject to the
provisions of the Plan, the Committee shall have the sole and exclusive power,
discretion and authority to:
a. conclusively interpret the provisions of the Plan and
decide all questions of fact arising in its application, including but
not limited to, the right to determine whether an individual satisfies
the requirements to receive an Award, and the right to determine the
application of the rights, conditions, restrictions and features, set
forth in this Plan document, with respect to the Options granted
hereunder;
b. adopt, amend and rescind rules and regulations relating to
this Plan; and
c. make any other determinations it deems necessary or
advisable, subject only to those determinations which may be reserved
to the Board.
Notwithstanding the foregoing, the Committee may delegate ministerial
responsibilities hereunder to the Plan Administrator, including the decisions on
the initial claims procedure review pursuant to Section XIII, provided that no
delegation shall be effective to the extent the Committee has been assigned the
sole discretionary responsibility hereunder.
The Committee shall cause the Company at the Company's expense to take
any action related to the Plan which may be required or necessary to comply with
the provisions of any federal or state law or any regulations issued thereunder.
ARTICLE IV
Shares Subject to Plan
4.1 Maximum Shares Available. The aggregate maximum number of Options
granted for the purchase of Stock under the Plan shall not exceed five million
(i.e., the right to receive, upon exercise, a maximum of five million shares of
Stock), subject to adjustment pursuant to Section 4.2 and 4.3. In determining
the maximum Options available pursuant to this Section 4.1, the shares of Stock
counted shall include all shares that could be, or could have been, purchased
pursuant to the exercise of all Options previously awarded (whether or not such
Options are vested pursuant to Article VIII), adjusted only as specified in
Section 4.2 and 4.3 below. Such shares of Stock, upon exercise of the Options,
shall be either authorized and unissued shares or shares purchased on the open
market. If such Stock is authorized but unissued shares, the Committee shall
obtain an opinion of counsel that such issuance pursuant to this Plan conforms
with applicable law and regulatory requirements. Prior to purchasing such shares
of Stock on the open market, the Committee will consult with counsel to
determine whether such action conforms with applicable law and contractual and
regulatory requirements.
4.2 Cancellation of Options. If, for any reason, any nonvested Options
granted under the Plan are canceled pursuant to Section 8.4, an equivalent
number of shares of Stock to which such Options applied shall again be available
for new Options in accordance with the terms hereof. Vested Options that expire
shall not again be available for Options hereunder.
4.3 Adjustments. The aggregate number of shares of Stock available for
Options under the Plan pursuant to Section 4.1, the shares subject to any
Option, and the Exercise Price per share shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Stock subsequent to
the effective date of an Award resulting from a stock split-up or share
combination, exchange of shares, recapitalization, merger, consolidation,
acquisition of property or shares, reorganization, liquidation, or the like of
or by the Company. If the Company shall be the surviving corporation in any
merger or consolidation, an Option shall pertain, apply and relate to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled after the merger or consolidation. Upon
dissolution or liquidation of the Company, or upon a merger or consolidation in
which the Company is not the surviving corporation, or upon the sale of all or
substantially all of the assets of the Company, all Options then outstanding
under the Plan will be fully vested and exercisable and all restrictions will
immediately cease, unless provisions are made in connection with such
transaction for the continuance of the Plan and the assumption or the
substitution for such Options of new options to purchase stock of the successor
employer corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and exercise prices.
ARTICLE V
Effective Date and Term of Plan
The Original Plan was effective July 1, 1993. Subject to the approval
of this First Restated and Amended Public Service Company of New Mexico
Performance Stock Plan by the shareholders of the Company, the Plan shall be
effective January 1, 1996. Options may be Awarded as provided herein through
December 31, 2000. The Plan shall continue in effect until all matters relating
to the Options and administration of the Plan have been settled.
ARTICLE VI
Eligibility for Awards
Awards may be made under the Plan only to those Participants who are
employees of the Company on the Grant Date of an Award.
ARTICLE VII
Awards of Options
7.1 Initial Awards. Initial Awards shall not be granted after July 1,
1994, and those granted before July 1, 1994, shall be subject to the following
terms and conditions. Initial Awards were awarded on, and have a Grant Date of,
July 1, 1993, and were determined by dividing fifteen percent (15%) of a
Participant's Salary Range Control Point by the Option Price, all determined as
of the Grant Date of the Award. Any employee who became a Participant after July
1, 1993, but before July 1, 1994, received an Initial Award on, and such Awards
have a Grant Date of, July 1, 1994, equal to the Options determined by dividing
seven and one-half percent (7.5%) of the Participant's Salary Range Control
Point by the Option Price, all determined as of the Grant Date of the Award.
There shall be no Award of an Option to purchase a fractional share of Stock.
7.2 Performance Based Awards. Performance Based Awards shall be granted
on an annual basis, and shall have a Grant Date as of December 31 of each
calendar year and shall be based upon satisfactory completion of Performance
Goals. The Original Plan provided for only two (2) Performance Goals. The Plan,
as restated and amended, hereby provides for two (2) or more Performance Goals.
The goals, shall be established each year by the Committee, in its absolute and
sole discretion, and communicated to the Participants before the commencement of
the calendar year to which such Awards pertain, or within an administratively
reasonable period of time thereafter as determined by the Committee. After the
goals for a specific year have been established and communicated to the
Participants, any such goals may be revised by the Committee; provided, however,
that unless such revisions are expressly contemplated in the goals as formulated
by the Committee, such revisions may be made only in the following circumstances
in the sole discretion of the Committee: (i) any such revision(s) shall be made
only to reflect the impact on the established goals of material changes in
circumstances not foreseen at the time the goals were established; and (ii) any
such revision(s) shall take place not later than the delivery of Stock Option
Agreements to Participants for the relevant year pursuant to Section 7.2e. The
Committee shall also establish the criteria to be used in determining whether
the goals have been achieved. The Performance Based Awards may be partially or
fully Awarded, based upon the criteria, and the determination of the Committee.
If less than all of the goals have been achieved, Partial Awards may be made at
year end as set forth in 7.2b below. The number of Options granted pursuant to
the Target Award or Partial Award as described below shall be further adjusted
by the indexing and adjustments provided in Section 7.2c and d below. There
shall be no Award of an Option to purchase a fractional share of Stock.
a. Target Award. The Target Award of Options shall be granted
if all Performance Goals are fully achieved.
b. Partial Award. If the Committee determines that less than
all of the Performance Goals have been achieved, the Award of Options
shall consist of the sum of the Options granted in (i) and (ii) below:
(i) Fully Achieved Performance Goals: The Partial
Award for fully achieved Performance Goals shall be determined
by multiplying the Target Award by the percentage determined
by dividing one hundred percent (100%) by the total number of
Performance Goals established by the Committee, times the
number of Performance Goals fully achieved.
(ii) Partially Achieved Performance Goals: Under the
Original Plan, Officers could not receive an Award based upon
partially achieved Performance Goals; only non-Officer
Participants could receive Awards for partially achieved
Performance Goals. Effective for Awards after December 31,
1995, Officers may receive Awards, like all other
Participants, based upon partially achieved Performance Goals
pursuant to this Section 7.2b(ii). If the Committee determines
that any of the Performance Goals were only partially
achieved, the Award of Options for a partially achieved
Performance Goal shall be determined on the basis of
guidelines established by the Committee. Unless otherwise
determined by the Committee, the guidelines shall be
communicated at the same time it establishes and communicates
the Performance Goals. The guidelines may be changed from year
to year, and may vary between job classifications, as
determined in the sole discretion of the Committee. The
Committee also has the sole discretion to determine that
specified Performance Goals for specified job classifications
shall only be awarded if fully achieved.
c. Indexing of Performance Based Awards. Notwithstanding any
provision herein to the contrary, all Performance Based Awards
determined pursuant to Section 7.2a and 7.2b above shall be further
adjusted (increased or decreased) by a factor based upon the comparison
of the Stock performance versus the comparable industry index that is
in effect for the calendar year, pursuant to the Company's proxy
statement for the next shareholder meeting following the end of such
calendar year to which such Awards apply. The indexing shall result in
a percentage comparison between the Stock versus the comparable
industry index, resulting in an index percentage (either greater or
less than 100%) which shall then be multiplied by Performance Based
Awards to determine the number of Options awarded pursuant to Section
7.2a and b. The index percentage shall be determined by dividing (i) by
(ii) wherein (i) equals the percentage determined by dividing the TRS
Factor of the Company at the end of calendar year of the Award by the
TRS Factor at the beginning of the calendar year, and (ii) shall equal
the percentage determined by dividing the TRS Factor at the end of the
calendar year of the Award by the TRS Factor at the beginning of such
calendar year for the comparable industry index. The calendar year in
which such index percentage is determined (i.e., determination of the
beginning and end of the year TRS Factor) shall be the same calendar
year as to which the Performance Goal(s) giving rise to the Option
pertain.
d. Adjustments Due to Promotions or Demotions. In the event
(i) a Participant is either promoted or demoted during a calendar year
or (ii) an employee first becomes a Participant during a calendar year,
pursuant to Section 2.20, following the effective date of this Plan,
the Target Award for such calendar year shall be increased or decreased
based upon the promotion, demotion or initial participation in the
Plan, as may be applicable, all as determined in the sole discretion of
the Committee.
e. Delivery of Stock Option Agreements. The Committee shall
cause a Stock Option Agreement evidencing the Options Awarded to be
delivered to a Participant receiving the Award in accordance with
Section 2.27.
ARTICLE VIII
Vesting
8.1 Initial Awards. Subject to the exceptions set forth in Section 8.3,
the Initial Awards shall vest on June 30, 1996, if the Participant remains in
the continuous employ of the Company from the Grant Date until June 30, 1996.
8.2 Performance Based Awards. Subject to the exceptions set forth in
Section 8.3, the Performance Based Awards having a Grant Date of December 31,
1993, 1994, and 1995 shall likewise vest on June 30, 1996, if the Participant
remains in the continuous employ of the Company from the Grant Date of such
Awards until June 30, 1996. All subsequent Performance Based Awards, granted
after December 31, 1995, shall vest three (3) years from the Grant Date of the
Award, if the Participant remains in the continuous employ of the Company from
the Grant Date to the third anniversary date of such Grant Date.
8.3 Full Vesting Due to Death, Disability, Change in Control or
Involuntary Termination. Upon (i) the death or Disability of the Participant,
(ii) the Participant being involuntarily terminated by the Company for reasons
other than Cause, (iii) a Change in Control of the Company, or (iv) events
resulting in full vesting as otherwise described in Section 4.3, all nonvested
Options shall be 100% vested.
8.4 Cancellation of Non-vested Options. Upon the involuntary or
voluntary termination of employment of a Participant for reasons other than
those set forth in 8.3 (I) and (ii), all nonvested Options previously Awarded to
such Participant shall be canceled.
ARTICLE IX
Exercise of Options
9.1 Timing of Exercise. The vested Options shall be exercisable at any
time following the vesting thereof, on or before the earlier of (i) three (3)
months following a Participant's voluntary or involuntary termination of
employment with the Company (regardless of the reason) and (ii) the tenth
anniversary date of the Grant Date of the Options.
9.2 Time and Method of Payment. The Options shall be exercised by the
Participant giving written notice to the Company of his or her intent to
exercise Options, along with the tendering of cash in full payment of the
Exercise Price of the Options being exercised, times the number of such Options
being exercised. Alternatively, in lieu of cash, the Exercise Price may be paid,
in full or in part by the Participant, by assignment and delivery to the
Company, of either Options (other than those being exercised) or Stock of the
Company owned by the Participant. The amount credited against the Exercise Price
for Stock being assigned and delivered to the Company shall equal the Fair
Market Value of the Stock times the number of shares being assigned and
delivered. For the Options being assigned and delivered to the Company, the
credit amount shall equal the Fair Market Value of the Stock on the date of the
transfer, less the Exercise Price of such Options being assigned and delivered,
times the number of such Options.
9.3 Exercise Following Participant's Death. If a Participant dies,
whether or not the Participant is an employee of the Company at the date of such
death, without having fully exercised his or her vested Options, the personal
representative or the person receiving such Options from the Participant or his
or her estate shall have the right to exercise the Options pursuant to the
methods set forth in Section 9.2, provided, however, that in no event may the
Options be exercised later than the earlier of (i) ten (10) years from the Grant
Date of such Options or (ii) three (3) months following the Participant's
termination of employment.
9.4 Delivery of Shares. Within an administratively reasonable period of
time, after the exercise of an Option, and the payment of the full Exercise
Price, and the satisfaction of all withholding obligations incurred pursuant to
such exercise, the Participant shall receive a stock certificate evidencing his
or her ownership of such Stock. A Participant shall have none of the rights of a
shareholder with respect to Options until the date a stock certificate is issued
in the Participant's name. No adjustment will be made for dividends or other
rights for which the record date is prior to the date such Stock certificate is
dated.
9.5 Cash Award. Notwithstanding any other contrary provision in this
Plan, and subject to the provisions of applicable law and to any conditions the
Committee may determine to be necessary in order to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act, the
Committee, in its sole discretion, may elect to settle all or a portion of an
Option following the exercise thereof by a Participant, in cash in lieu of
issuing shares of Stock. Such cash shall be determined based upon the Fair
Market Value of the Stock on the date such Option is exercised less the Exercise
Price.
9.6 Holding Period. If necessary to meet the conditions of SEC Rule
16b-3, shares of Stock obtained upon the exercise of any Option granted under
the Plan may, in any event, not be sold by persons subject to Section 16 of the
Exchange Act until six (6) months after the acquisition date of such Stock
Options.
ARTICLE X
Termination or Amendment
10.1 Termination and Amendments. The Board may amend, terminate or
suspend the Plan at any time, in its sole and absolute discretion; provided,
however, that no such amendment or termination shall adversely affect an Award
previously granted without the consent of the Participant holding such Option.
10.2 Other Restrictions on Amendments. If required by law or if
necessary to satisfy the conditions for exemption from Section 16(b) of the
Exchange Act pursuant to Rule 16b-3 promulgated thereunder:
a. No amendment that would change the amount, price or timing
of the Options, other than to comport with the changes in the Code or
ERISA, or the rules and regulations promulgated thereunder, shall be
made more than once every six (6) months;
b. No amendment shall be made without the approval of the
Company's stockholders (as required by Rule 16b-3) that would:
(i) increase the maximum number of shares of Stock
available for an Award of Options under Article IV hereof;
(ii) modify the requirements as to eligibility for an
Award under the Plan; or
(iii) otherwise materially increase the benefits
accruing to Participants under the Plan.
The approval of the Company's stockholders for such amendments shall be
solicited in a manner which conforms to the rules and regulations under
Section 14(a) of the Exchange Act.
ARTICLE XI
Nonexclusivity of the Plan
Nothing contained herein is intended to amend, modify or rescind any
previously approved compensation plan or program entered into by the Company.
This Plan shall be in addition to any other and all other Company plans or
programs. Neither the adoption of this Plan by the Board nor the submission of
the Plan to the Company's stockholders for approval shall be construed as
creating any limitations on the power or authority of the Committee or the Board
to adopt such other additional incentives or other compensation arrangements as
may be deemed necessary or desirable.
ARTICLE XII
Miscellaneous
12.1 Withholding Taxes. The Company shall have the right to deduct from
any payments made by the Company to the Participants, any federal, state or
local taxes of any kind as are required by law to be withheld with respect to
the exercise of Options granted hereunder, or to take such other action as may
be necessary in the opinion of the Company to satisfy all obligations for
withholding and payment of such taxes, including, in its sole discretion, and
subject to the provisions of applicable law and to any conditions the Committee
may determine to be necessary in order to comply with all applicable conditions
of Rule 16b-3 or its successors under the Exchange Act, to permit the
Participant to satisfy, in whole or in part, any tax withholding obligation
which may arise in connection with the exercise of Options by electing to have
the Company liquidate existing options or withhold shares of Stock having a Fair
Market Value of the Stock equal to the amount of the income tax withholding.
12.2 Compliance with Exchange Act. With respect to persons subject to
Section 16 of the Exchange Act, transactions under this Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board,
Committee or the Plan Administrator fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
12.3 Plan Expenses. All expenses incurred in administering this Plan
shall be borne by the Company.
12.4 Headings. The headings of the Articles and Sections in this Plan
are for convenience of reference only and are not meant to be of substantive
significance and shall not add nor detract from the meaning of such Article or
Section.
12.5 Gender and Use of Singular/Plural. The use of the masculine gender
herein shall also include within its meaning the feminine, and the singular
shall include the plural, and the plural shall include the singular, unless the
context clearly indicates to the contrary.
12.6 Applicable Law. The place of administration of the Plan shall be
conclusively deemed to be within the State of New Mexico, and the validity,
construction, interpretation and administration with respect to the Plan and its
rules and regulations and the rights of any and all Participants having or
claiming to have an interest hereunder shall be governed first by the provisions
of ERISA or to the extent not preempted by ERISA, exclusively and solely in
accordance with the laws of the State of New Mexico.
12.7 Non-Assignability. Options shall not be transferable other than by
will or by the laws of descent and distribution, and during a Participant's
lifetime shall be exercisable only by the Participant. Except as provided in the
immediately preceding sentence, neither a Participant nor any person taking on
behalf of a Participant may anticipate, assign or alienate (either at law or in
equity) any benefit provided under the Plan and the Committee shall not
recognize any such anticipation, assignment or alienation. Furthermore, a
benefit under the Plan is not subject to attachment, garnishment, levy,
execution or any other legal or equitable process.
12.8 No Obligations to Exercise Options. The granting of an Option
shall impose no obligation upon the Participant to exercise such Option.
12.9 Agreement and Representation of Employees. As a condition to the
exercise of any portion of an Option, the Company may require the person
exercising such Option to represent at the time of such exercise that any shares
of stock acquired at exercise are being acquired only for investment purposes
and without any present intention to sell or distribute such shares, if, in the
opinion of counsel for the Company, such a representation is required under the
Exchange Act or any other applicable law, regulation or rule of any governmental
agency.
12.10 Entire Plan. This Plan contains the entire provisions with
respect to the matters contemplated herein and supersedes all prior plans or
understandings among the parties hereto relating to an Award.
12.11 Employment Agreement. Notwithstanding anything to the contrary
herein contained the Plan, (i) the execution of the Plan shall not create an
express or implied contract of employment for a specified term between the
Participant and the Company and (ii) unless otherwise expressed or provided, in
writing, by an authorized officer, the employment relationship between the
Participant and the Company shall be defined as "employment at will" wherein
either party, without prior notice, may terminate the relationship with or
without cause.
12.12 Service of Process. The Secretary of the Company shall be an
agent for Service of Process for matters relating to this Plan.
12.13 Validity. The invalidity or unenforceability of any provision of
this Plan shall not affect the validity or enforceability of any other provision
of this Plan which shall remain in full force and effect.
12.14 Regulatory Approvals and Listing. The Company shall not be
required to issue any certificate for shares of Common Stock upon the exercise
of an Option granted under the Plan prior to:
(a) the obtaining of any approval or ruling from the
Securities and Exchange Commission, the Internal Revenue Service or any
other governmental agency which the Committee, in its sole discretion,
shall determine to be necessary or advisable;
(b) the listing of such shares on any stock exchange on which
the Stock may then be listed; or
(c) the completion of any registration or other qualification
of such shares under any federal or state laws, rulings or regulations
of any governmental body which the Committee, in its sole discretion,
shall determine to be necessary or advisable.
ARTICLE XIII
Claims Procedure
The Committee or its designee, within ninety (90) days after receipt of
a written notice of a claim hereunder, shall render a written decision on the
claim. If there is an adverse determination with respect to the claim, either in
whole or in part, the decision shall include:
(i) The specific reason or reasons for the adverse
determination;
(ii) Any indication of the specific Plan provisions on which
the adverse determination is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect the claim and any explanation of
why such material or information is necessary; and
(iv) An explanation of the Plan's appeal procedure, indicating
that the appeal of the adverse determination must be made in writing
addressed to the Committee, and received within sixty (60) days after
the receipt by the claimant of the Committee's or its designee's
written adverse determination. Failure to protect, perfect and appeal
within the sixty-day period shall make the adverse determination
conclusive.
If the claimant should appeal to the Committee, he or she, or his or
her duly authorized representative, must do so in writing and may submit in
writing whatever issues and comments he or she, or his or her duly authorized
representative, feels are pertinent. The claimant, or his or her duly authorized
representative, may review pertinent Plan documents. The Committee shall render
a written decision on the questions raised in the appeal, setting forth a
specific reason for its decision, including reference to the Plan's provisions,
within sixty (60) days after receipt of the request for review unless special
circumstances (such as a hearing) would make a rendering of a decision within
the sixty (60) day limit unfeasible, but in no event shall the Committee render
a decision respecting an appeal of an adverse determination later than one
hundred twenty (120) days after its receipt of a request for review.
Any adverse determination or decision on an appeal of an adverse
determination made by the Committee (or its designee) pursuant to the Plan shall
be stated in writing and such notice shall be written in a manner that may be
understood without legal or actuarial counsel.
IN WITNESS WHEREOF, the Company has caused this First Restated and
Amended Public Service Company of New Mexico Performance Stock Plan to be
executed, effective as of January 1, 1996.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/ Benjamin F. Montoya
-----------------------------
BENJAMIN F. MONTOYA
President and Chief Executive Officer
