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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 28, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PUBLIC SERVICE COMPANY OF NEW MEXICO
New Mexico 85-0019030
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
MAX MAERKI
Senior Vice President and Chief Financial Officer
PUBLIC SERVICE COMPANY OF NEW MEXICO
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering.[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[ ]
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
<TABLE>
<CAPTION>
Proposed
Title of Proposed Maximum
Securities Maximum Aggregate Amount of
to be Amount Offering Price Offering Registration
Registered to be Registered Per Share (1) Price (1) Fee
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$5.00 par value 2,000,000 Shares $ 19.625 $39,250,000 $13,534.48
</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee on the basis of the average high and low sale price of the
Registrant's Common Stock on the New York Stock Exchange Composite Transaction
Tape on August 23, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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P R O S P E C T U S
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PUBLIC SERVICE COMPANY OF NEW MEXICO
PNM DIRECT PLAN
COMMON STOCK
($5 PAR VALUE)
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The Public Service Company of New Mexico PNM Direct Plan (the "Plan"),
to be effective as of September __, 1996, is designed to provide investors
with a convenient way to purchase shares of common stock, $5 par value
("Common Stock") of Public Service Company of New Mexico (the "Company"),
and to reinvest all or a portion of the cash dividends paid on the Common
Stock of the Company in shares of Common Stock.
PARTICIPANTS IN THE PLAN MAY:
# Reinvest all or a portion of cash dividends paid on Common Stock
registered in their names or on Common Stock credited to their
Plan accounts in shares of Common Stock.
# Make an initial investment in Common Stock with a cash payment of
at least $50, and additional optional investments thereafter of at
least $50, up to a maximum of $60,000 per calendar year, including
the initial investment.
# Receive, upon written request, certificates for whole shares of
Common Stock credited to their Plan accounts.
# Deposit certificates representing Common Stock into the Plan for
safekeeping.
# Sell shares of Common Stock credited to their Plan accounts
through the Plan.
Shares of Common Stock will be purchased under the Plan, at the option
of the Company, from newly issued shares, or shares purchased on the open
market. Purchases will be effected through an independent agent appointed
by the Company. The Common Stock is listed on the New York Stock Exchange.
The closing price of the Common Stock on September __, 1996 on the New York
Stock Exchange was $_____.
The purchase price of newly issued Common Stock purchased under the
Plan for an Investment Date (as defined in the Plan) will be the average of
the high and low sales prices of the Common Stock reported on the New York
Stock Exchange Composite Tape as published in The Wall Street Journal or,
for any day on which there is no such publication, in another generally
accepted publication for the first business day of the relevant Investment
Period (as defined in the Plan), provided that the New York Stock Exchange
is open on such day. The price of shares of Common Stock purchased or sold
on the open market will be the weighted average price per share (adjusted
for brokerage commissions, any related service charges, and applicable
taxes) of the aggregate number of shares purchased or sold, respectively,
on the open market during the relevant Investment Period. The Company will
pay the costs of administration of the Plan, except that Plan Participants
will bear the cost of brokerage commissions, any related service charges,
and applicable taxes relating to shares of Common Stock purchased or sold
on the open market.
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To the extent required by applicable law in certain jurisdictions,
shares of Common Stock offered under the Plan to persons not presently
record holders of Common Stock are offered only through a registered
broker/dealer in such jurisdictions.
This Prospectus contains a summary of the material provisions of the
Plan and, therefore, this Prospectus should be retained by Participants in
the Plan ("Participants") for future reference.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is September __, 1996.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements, and other information can be obtained at
prescribed rates from the Public Reference Section of the Commission or may
be inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at certain of its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center,
13th Floor, New York, New York 10048. The Common Stock is listed on the
New York Stock Exchange. Reports, proxy material, and other information
concerning the Company can be inspected at the office of this Exchange at
Room 401, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents previously filed with the Commission by the
Company (File No. 1-6986) are hereby incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (the "1995 Form 10-K").
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, and June 30, 1996 (the June 10-Q).
3. The Company's Current Report on Form 8-K dated March 13, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of the June 10-Q
and prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated by reference herein
will be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded will not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on
the oral or written request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents. Requests
for such copies should be directed to Public Service Company of New Mexico,
Alvarado Square, Albuquerque, New Mexico 87158, or by calling (505)
241-2650 or (800-545-4425) toll-free nationwide.
THE COMPANY
The Company was incorporated in 1917 under the laws of the State of
New Mexico and is a public utility primarily engaged in the generation,
transmission, distribution and sale of electricity and in the transmission,
distribution and sale of natural gas within the State of New Mexico. The
Company is also engaged in the operation and management of the City of
Santa Fe's water system and in the development of new business activities
in the energy and utility related services area. The principal executive
offices of the Company are at Alvarado Square, Albuquerque, New Mexico
87158, and its telephone number is (505) 241-2700.
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The following questions and answers describe the provisions of the
Public Service Company of New Mexico PNM Direct Plan (the "Plan"). For
convenience of reference, the definitions of certain key terms are included
below:
DESCRIPTION OF THE PLAN
DEFINITIONS
Administrator -- Public Service Company of New Mexico (the
"Company" or "PNM"). See also "Plan
Administrator".
Cash Investment -- A payment made subsequent to enrollment in
the Plan. The maximum aggregate Cash
Investment (including the Initial Cash
Investment) is $60,000 per account per
calendar year.
Company -- Public Service Company of New Mexico.
Dividend Payment Date -- The date determined by the Company's
Board of Directors on which Common Stock
dividends are payable.
Dividend Record Date -- The date determined by the Company's
Board of Directors for establishing
shareholders who are entitled to a dividend
which has been declared.
Eligible Investor -- An investor who makes an Initial Cash
Investment of at least $50 or a
Shareholder of Record.
Enrollment Forms -- Forms available through the Company that
the investor must complete to be able to
participate in the Plan.
Ex-Dividend Date -- A date prior to the Dividend Record Date,
based on industry regulations, necessary
to allow for the settlement of traded
securities by the Dividend Record Date.
Common Stock purchased between the
Ex-Dividend Date and the Dividend Record
Date is not entitled to the succeeding
dividend.
Initial Cash Investment -- A payment made to the Company to purchase
shares of Common Stock to open a Plan
account. The minimum initial Cash
Investment is $50.
Investment Date -- The date on which the purchase price for
all shares of Common Stock to be purchased
has been determined. The purchased
shares are credited to a Participant's
account on the Investment Date.
Investment Period -- The period during which Common Stock is
purchased. The Investment Period begins
on the first business day of each month.
Investment Statement -- A statement sent to a Participant after an
Investment Period in which the
Participant's account had investment
activity. The Investment Statement
includes the purchase price and number of
shares of Common Stock purchased.
Plan -- Public Service Company of New Mexico PNM
Direct Plan.
Plan Administrator -- Public Service Company of New Mexico.
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Plan History Statement -- A statement sent to a Participant upon
withdrawal (including by way of the sale of
shares or the issuance of a certificate
for shares) of all or a portion of shares
from the Participant's account.
Shareholder of Record -- An investor whose shares are registered on
the books of the Company.
PURPOSE OF THE PLAN
1. WHAT IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide shareholders and interested investors
with a convenient and economical way to purchase shares of Common Stock
with Cash Investments (including an Initial Cash Investment) or reinvested
dividends.
ADVANTAGES AND DISADVANTAGES OF THE PLAN
2. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE PLAN?
THE PLAN OFFERS INVESTORS THE FOLLOWING ADVANTAGES:
A. DIRECT PURCHASE OF STOCK -- Persons not presently owning shares of
Common Stock may become shareholders by making an Initial Cash
Investment of at least $50 (but not more than $60,000 per account per
calendar year). See Question 5.
Participants may invest additional funds at any time to purchase
shares of Common Stock. The maximum annual Cash Investment (including
the Initial Cash Investment) is $60,000 per account.
B. SELL STOCK -- Participants may sell shares held in their Plan
account through the Plan. See Questions 32 and 33.
C. CERTIFICATE SAFEKEEPING -- Participants may deposit their Common
Stock certificates with the Company, whether or not the Common Stock
represented by such certificates was purchased through the Plan, and
have their ownership maintained on the Company's records in their Plan
account. This convenience is provided at no cost to the Participant
and eliminates the possibility of loss, inadvertent destruction, or
theft of certificates. Also, because shares deposited for safekeeping
are treated in the same manner as shares purchased through the Plan,
they may be transferred or sold through the Plan. See Question 31.
D. REINVESTMENT OF DIVIDENDS -- All or a portion of Common Stock
dividends may be reinvested to purchase additional shares of Common
Stock. See Questions 7 through 9.
E. SIMPLIFIED RECORDKEEPING -- An Investment Statement will be
mailed to a Participant after an Investment Period in which the
Participant's account had investment activity. The statement is
cumulative, providing year-to-date Plan account activity. A Plan
History Statement will be sent when shares are sold, transferred or
otherwise withdrawn from the Plan. See Questions 34 and 37.
F. REDUCED BROKER COMMISSIONS -- The broker commissions negotiated by
the Company for buying or selling shares are typically substantially
less than those paid by individual investors for this service. No
commissions are paid for newly issued shares. See Questions 27 and
33.
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G. TRANSFER OF SHARES -- Participants may transfer shares held in
their Plan account to another individual's account at no cost. The
normal transfer requirements will apply. See Questions 30 and 43.
H. FULL INVESTMENT OF FUNDS -- The full amount of reinvested
dividends and Cash Investments can be invested because the Plan
permits fractional shares to be credited to Plan accounts. Dividends
are paid on fractional shares as well as on whole shares. See Question
28.
PLAN PARTICIPATION PRESENTS INVESTORS WITH THE FOLLOWING DISADVANTAGES:
A. NO INTEREST ON FUNDS PENDING INVESTMENT -- No interest is paid on
dividends or Cash Investments held pending investment or reinvestment.
See Question 17.
B. DELAY IN DETERMINING PURCHASE PRICE -- The number of shares
purchased for an investor's Plan account will not be determined until
all shares for the relevant Investment Period have been purchased.
Therefore, investors will not know the number of shares purchased or
the purchase price until the Investment Date. See Questions 25
through 29.
C. RETURN OF CASH INVESTMENTS ON REQUEST -- Cash Investments
(including Initial Cash Investments) sent to the Plan Administrator
will not be returned to the investor unless a written request is
received by the Plan Administrator by the last Company business day of
the month prior to the relevant Investment Period. See Question 19.
D. PERIODIC DELAYS FOR ISSUING CERTIFICATES OR SELLING SHARES --
Requests for issuance of certificates or the sale of shares from a
Plan account will be delayed during the dividend processing period.
This is a 13-15 business day period which begins on the Ex-Dividend
Date. See Questions 30, 33, and 34.
E. BROKER COMMISSIONS -- While the broker commissions negotiated by
the Plan Administrator for buying or selling stock are typically less
than those paid by individual investors for this service, certain
investors may be able to negotiate lower commissions on an individual
basis. Also, the commissions negotiated by the Plan Administrator may
change from time to time. See Questions 27 and 33.
F. PRICE OF SHARES -- Plan Participants cannot designate a specific
price at which to sell or purchase Common Stock. Requests for the
sale of Plan shares are accumulated and the Plan Administrator places
a market order with the appointed agent. Similarly, a market order is
placed with the independent agent to purchase stock with all funds
available for investment. See Questions 24, 27, and 32.
PLAN ADMINISTRATION
3. WHO ADMINISTERS THE PLAN?
The Company administers the Plan. Administration duties include
recordkeeping, sending periodic statements of account, and holding shares
purchased through the Plan or otherwise deposited for safekeeping. See
Question 32. Such shares will be registered in the name of a nominee on
behalf of Plan Participants. Communications about the Plan should be
directed to:
Public Service Company of New Mexico
Shareholder Records Department
Alvarado Square, MS 0802
Albuquerque, NM 87158-0802
When writing, please include a day-time telephone number to expedite our
reply.
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The nationwide toll-free Shareholder Records Department telephone number is
800-545-4425. In the Albuquerque area, call 241-2650.
PARTICIPATION IN THE PLAN
4. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any interested investors making an Initial Cash Investment of at least $50
and all Common Stock Shareholders of Record are eligible to participate.
Citizens or residents of a country other than the United States or its
territories and possessions should determine whether they are subject to
any governmental regulations prohibiting or restricting participation in
the Plan, and must provide evidence satisfactory to the Administrator that
their participation will not violate any such regulations, before enrolling
in the Plan.
Beneficial owners of Common Stock whose shares are held in a name other
than their own (for example, a bank, broker, or trustee) may participate in
the Plan with respect to such shares by transferring those shares into
their own name.
5. HOW DOES AN ELIGIBLE INVESTOR ENROLL IN THE PLAN?
After being furnished with a Plan Prospectus, Eligible Investors may join
the Plan by completing and signing an Enrollment Form and returning it to
the Company. Non-shareholder investors must also submit an Initial Cash
Investment of at least $50 (but not more than $60,000). Once enrolled in
the Plan, Eligible Investors will remain enrolled until they discontinue
their participation or the Plan is terminated. See Questions 34, 35 and
41.
6. WHEN MAY AN ELIGIBLE INVESTOR JOIN THE PLAN?
An Eligible Investor may join the Plan at any time by completing and
returning an Enrollment Form.
PARTICIPATION OPTIONS
7. WHAT PARTICIPATION OPTIONS ARE AVAILABLE IN THE PLAN?
On the Enrollment Form, the investor is offered the following participation
options:
-- Full Dividend Reinvestment
-- Partial Dividend Reinvestment or
-- Cash Investment Only
8. HOW DOES THE "FULL DIVIDEND REINVESTMENT" OPTION OF THE PLAN WORK?
Participants enrolling in the Full Dividend Reinvestment option will have
dividends earned on all Common Stock, both in their Plan account and of
record, reinvested to purchase additional shares of Common Stock. The
reinvestment of dividends will commence with the first dividend to which
the Participant is entitled payable after the next Dividend Record Date
following enrollment. A Participant may also make Cash Investments of up
to $60,000 per account annually to purchase Common Stock.
9. HOW DOES THE "PARTIAL DIVIDEND REINVESTMENT" OPTION OF THE PLAN
WORK?
Participants enrolling in the Partial Dividend Reinvestment option can
designate a specific number of shares on which they wish to receive cash
dividends, with dividends on the balance of shares being reinvested to
purchase Common Stock. Participants may also elect to receive cash
dividends on shares they hold in certificate form, with dividends on shares
held in their Plan account being reinvested. The reinvestment of dividends
will commence with the first dividend to which the Participant is entitled
payable after the next
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Dividend Record Date following enrollment. In addition, a Participant may
make Cash Investments of up to $60,000 per account annually to purchase
Common Stock.
If a Participant has elected this option and subsequently directs that a
portion of his or her shares are to be sold, transferred, or withdrawn,
unless the Participant otherwise directs, all shares on which a Participant
receives reinvested dividends will be sold, transferred, or withdrawn prior
to the sale, transfer, or withdrawal of any shares on which a Participant
receives cash dividends.
10. HOW DOES THE "CASH INVESTMENT ONLY" OPTION OF THE PLAN WORK?
Participants enrolling in the Cash Investment Only option may make Cash
Investments of at least $50, but not more than $60,000 per account
annually. Dividends earned on all Common Stock, both in the Plan account
and of record, will be paid directly to the investor in the manner in which
dividends are normally paid. The Cash Investment will purchase additional
shares of Common Stock.
NOTE: IF PARTICIPANTS DO NOT INDICATE A PARTICIPATION OPTION ON THE
ENROLLMENT FORM, THEIR ACCOUNT WILL AUTOMATICALLY BE ENROLLED INTO THE
"FULL DIVIDEND REINVESTMENT" OPTION.
11. MAY PARTICIPANTS CHANGE THEIR PARTICIPATION OPTION?
Yes. The participation option may be changed by completing and signing a
new Enrollment Form and returning it to the Company. The change will be
effective as of the next Dividend Record Date following receipt of the new
Enrollment Form.
12. MAY THE COMPANY RESTRICT PARTICIPATION IN THE PLAN?
Yes. The Company reserves the right to restrict participation in the Plan
if it believes that such participation may be contrary to the general
intent of the Plan or in violation of applicable law.
INITIAL CASH INVESTMENTS AND CASH INVESTMENTS
13. WHO IS ELIGIBLE TO MAKE CASH INVESTMENTS?
Any Shareholder of Record who has submitted a signed Enrollment Form is
eligible to make Cash Investments regardless of the participation option
chosen, subject to the maximum contribution. See Question 16.
14. WHO IS ELIGIBLE TO MAKE AN INITIAL CASH INVESTMENT?
Any interested investor may submit a signed Enrollment Form and make an
Initial Cash Investment, subject to the minimum and maximum contributions.
See Question 16.
15. HOW ARE INITIAL CASH INVESTMENTS AND CASH INVESTMENTS MADE?
Initial Cash Investments and Cash Investments must be made by check, money
order, or wire transfer payable through a U.S. bank or other financial
institution, in U.S. dollars, to PNM Direct Plan. Do not send cash.
Initial Cash Investments must be accompanied by a completed Enrollment
Form; an Enrollment Form or a Cash Investment form should accompany Cash
Investments to ensure credit to the proper account. An employee of the
Company may elect to make an Initial Cash Investment or Cash Investments
through payroll deductions by completing and returning a Payroll Deduction
Authorization Form. The Company also allows for Cash Investments to be
made by electronic debit from a specified account by completing and
returning an Electronic Debit Authorization Form.
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16. IS THERE A MINIMUM AND MAXIMUM CASH INVESTMENT?
Yes. The minimum Initial Cash Investment is $50. The minimum for
subsequent Cash Investments is $50. The maximum aggregate Cash Investment
(including the Initial Cash Investment) is $60,000 per account per calendar
year.
17. WHEN WILL A PARTICIPANT'S INITIAL CASH INVESTMENT OR CASH
INVESTMENT BE INVESTED?
Initial Cash Investments and Cash Investments will be invested during the
Investment Period of the calendar month immediately following the calendar
month in which the funds are received. Because interest is not paid on
funds pending investment, it is to your benefit to mail your Cash
Investments so they are received shortly before the end of the calendar
month. Funds are considered to be received when delivered, either by
postal service or in person, during Company business hours to the Company's
corporate headquarters (see "Shareholder Information" below for address).
In the event that a check submitted for investment is returned unpaid for
any reason, the Plan Administrator will consider the request for investment
of such funds null and void. Any shares purchased upon the prior credit of
such funds will be immediately removed from the Participant's account. The
Plan Administrator will be entitled to sell those shares to satisfy any
uncollected amounts. If the net proceeds of the sale of such shares are
insufficient to satisfy the balance of such uncollected amounts, the Plan
Administrator will be entitled to sell additional shares from the
Participant's account to satisfy the uncollected balance.
18. WHEN WILL SHARES PURCHASED WITH INITIAL CASH INVESTMENTS OR CASH
INVESTMENTS BE ENTITLED TO RECEIVE DIVIDENDS?
Shares purchased with an Initial Cash Investment or Cash Investment will be
entitled to dividends if the shares were credited to the Participant's
account as of a date preceding the Dividend Record Date for payment of a
dividend.
19. MAY A PARTICIPANT REQUEST THAT AN INITIAL CASH INVESTMENT OR CASH
INVESTMENT BE RETURNED?
Yes. A Participant may request, in writing, the return of an Initial Cash
Investment or Cash Investment. The funds will be returned if the request
is received by the last Company business day of the month prior to the
relevant Investment Period.
NOTE: INTEREST IS NOT PAID ON FUNDS HELD PENDING INVESTMENT.
REINVESTMENT OF DIVIDENDS
20. IS THERE A MINIMUM OR MAXIMUM AMOUNT FOR REINVESTED DIVIDENDS?
No. Dividends designated for reinvestment through the Plan are not subject
to a minimum or maximum.
21. WHEN WILL A PARTICIPANT'S DIVIDENDS BE REINVESTED?
A Participant's dividends will be reinvested during the Investment Period
of the month following the month in which the dividend is payable. For
example, November dividends will be reinvested in December.
22. WHEN WILL SHARES PURCHASED WITH REINVESTED DIVIDENDS BE ENTITLED
TO RECEIVE DIVIDENDS?
Shares purchased with reinvested dividends will be entitled to dividends on
the Dividend Payment Date following the purchase of such shares.
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PURCHASES
23. WHAT IS THE SOURCE OF COMMON STOCK PURCHASED THROUGH THE PLAN?
Common Stock purchased through the Plan will be purchased, at the
discretion of the Company and in accordance with applicable law, either on
the open market or directly from the Company or through a combination of
the foregoing. Shares purchased from the Company will be authorized but
unissued shares of the Company. The Company currently anticipates that
shares will initially be purchased on the open market and not issued by the
Company. Issuance of Common Stock by the Company requires approval by the
New Mexico Public Utility Commission.
24. HOW IS COMMON STOCK PURCHASED ON THE OPEN MARKET?
Common Stock will be purchased through an independent agent appointed by
the Company. The independent agent will have full discretion in all
matters related to such purchases, including the day and time of purchase,
price paid, number of shares purchased, and the markets or persons through
whom the purchases are made.
25. WHEN ARE SHARES PURCHASED FOR THE PLAN?
Purchases of shares on the open market may begin on the first day of the
relevant Investment Period and will be completed no later than 30 days
thereafter. Dividends not invested in Common Stock within 30 days of the
Dividend Payment Date therefor and Cash Investments not invested in Common
Stock within 35 days of receipt will be promptly returned to Participants.
Shares purchased by the Plan from the Company (newly issued Common Stock)
will be acquired as of the first day of the relevant Investment Period,
provided that the New York Stock Exchange is open on such day. See
Question 26.
26. WHEN WILL SHARES BE CREDITED TO A PARTICIPANT'S ACCOUNT?
Participants' shares will be credited to their Plan accounts on the
Investment Date and are considered to be owned by the Participant on that
day. If the Investment Date falls on a date when the New York Stock
Exchange is closed, the first day immediately succeeding such day on which
the New York Stock Exchange is open will be the Investment Date.
27. HOW IS THE PURCHASE PRICE OF THE COMMON STOCK DETERMINED?
The purchase price of Common Stock purchased on the open market will be the
weighted average price, including broker commissions, related service
charges, and applicable taxes, of all shares purchased during the
Investment Period.
The purchase price of Common Stock purchased from the Company (newly issued
Common Stock) will be the average of the high and low prices of the Common
Stock reported on the New York Stock Exchange Composite Tape as published
in The Wall Street Journal or, for any day on which there is no such
publication, in another generally accepted publication for the first
business day of the relevant Investment Period, provided that the New York
Stock Exchange is open on such day.
If the stock is purchased both on the open market and through the Company,
the purchase price will be the weighted average price of such shares in
accordance with the foregoing two paragraphs.
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28. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR A
PARTICIPANT?
The number of shares purchased for a Participant will be equal to the
Participant's Cash Investments for the month plus dividends available for
reinvestment (see Question 21) divided by the purchase price of the shares.
The Participant's account will be credited with the whole and fractional
shares on the Investment Date.
29. CAN A PARTICIPANT REQUEST THE PURCHASE OF A SPECIFIC NUMBER OF
SHARES?
No. Since the purchase price of the Common Stock cannot be calculated until
the Common Stock is purchased, a Participant may not purchase a specific
number of shares.
CERTIFICATES
30. WILL CERTIFICATES BE ISSUED FOR SHARES PURCHASED THROUGH THE PLAN?
No. The certificates for shares purchased through the Plan are registered
in the name of a nominee on behalf of Plan Participants. A certificate
will be issued to Participants only upon request.
Participants requesting the issuance of a certificate for their Plan shares
should submit the request in writing to the Plan Administrator, specifying
the number of shares to be issued. Certificates will generally be issued
within five days following the receipt of the request. However, requests
received during the dividend processing period will be delayed. See
"Disadvantages of the Plan -- D." Certificates cannot be issued for
fractional shares.
The certificate will be issued in the name(s) of the Participant(s).
Requests to issue a certificate into another registration must meet the
requirements for transfer of stock. See Question 43.
See Question 9 for information relating to the certification of only a
portion of a Participant's Plan shares when the Participant has elected the
Partial Dividend Reinvestment option for his or her shares.
SAFEKEEPING OF CERTIFICATES
31. CAN CERTIFICATES BE RETURNED TO THE COMPANY TO BE HELD IN THE
PARTICIPANT'S PLAN ACCOUNT?
Yes. Certificates for Common Stock may be returned to the Plan
Administrator to take advantage of the safekeeping feature of the Plan.
THE CERTIFICATES SHOULD NOT BE ENDORSED AND REGISTERED MAIL IS RECOMMENDED.
The certificates should be submitted with a letter to the Plan
Administrator directing the Plan Administrator to deposit the shares
represented by such certificates into the Plan account of the Participant.
Alternatively, the certificates can be submitted with a safekeeping
authorization form. Investors may submit certificates for safekeeping at
any time while participating in the Plan.
COMMON STOCK SURRENDERED FOR SAFEKEEPING WILL BE TREATED AS SHARES
PURCHASED THROUGH THE PLAN.
SALE OF SHARES
32. HOW MAY PARTICIPANTS SELL THEIR PLAN SHARES OR TRANSFER SHARES?
Participants may sell their Plan shares by submitting a written request to
the Company. The request should indicate the number of shares to be sold
and must be signed by ALL account owners. Shares acquired through and held
in the Plan, as well as shares surrendered for safekeeping, may be sold in
this manner. A request to sell shares is irrevocable after it is received
by the Company. The Company's appointed agent will have full
12
<PAGE> 13
discretion in all matters related to the sale, including the time of sale,
sale price, and the markets or persons through whom the shares are sold.
Participants cannot specify a price at which to sell their stock.
Participants may also elect to transfer (whether by gift, private sale, or
otherwise) ownership of all or a portion of their Account Shares to the
Account of another Participant or establish an Account for a Person not
already a Participant by delivering to the Administrator a completed
account action request form to that effect and a stock assignment (stock
power) acceptable to the Administrator along with such other documentation
as may be required by the Administrator. No fraction of a share of Common
Stock credited to the transferor's Account shall be transferred unless the
Transferor's entire Account is transferred. For Participants' convenience a
gift certificate is available to represent a transfer by gift.
Shares held outside the Plan may not be sold through the Plan.
See Question 9 for information relating to the sale of only a portion of a
Participant's Plan shares when the Participant has elected the Partial
Dividend Reinvestment option for his or her shares.
33. WHEN WILL PLAN SHARES BE SOLD?
Plan shares will generally be sold within five business days following
receipt of the sale request. However, sale requests received during the
dividend processing period will be delayed until the dividend processing
period is completed. See "Disadvantages of the Plan -- D."
A check will be issued for the proceeds of the sale minus the broker
commissions, any related service charges, and applicable taxes, and will be
made payable to the registered account owners only.
TERMINATION OF PLAN PARTICIPATION
34. HOW MAY A PARTICIPANT TERMINATE PARTICIPATION IN THE PLAN?
Participants may terminate participation in the Plan either by selling all
the shares in their Plan account or by having a certificate issued for a
specific number of whole shares in their Plan account and selling the
balance of shares. See Questions 30, 32, and 33. Certificates cannot be
issued for fractional shares; fractional shares must be sold when
terminating participation.
Plan Participants must notify the Company in writing of their intention to
terminate participation in the Plan, have all account owners sign the
request, and indicate whether they wish to receive a stock certificate or
sell their shares.
Participants terminating their Plan participation will receive a Plan
History Statement detailing the account history. THIS STATEMENT SHOULD BE
RETAINED FOR TAX PURPOSES.
Cash Investments received prior to the request to terminate Plan
participation will be invested during the next Investment Period unless the
Participant timely requests the return of that Cash Investment. See
Question 19.
The termination of Plan participation will be delayed if the request is
received during the dividend processing period. See "Disadvantages of the
Plan -- D."
35. MAY THE COMPANY TERMINATE A PARTICIPANT'S PLAN PARTICIPATION?
Yes. If a Participant does not maintain at least one whole share of Common
Stock in the Plan account or does not own any Common Stock of record for
which cash dividends are designated for reinvestment pursuant to the Plan,
the Participant's participation may be terminated by the Company upon
written notice to the
13
<PAGE> 14
Participant. A Participant whose participation has been terminated will
receive a check for the cash value of any fractional share in the Plan
account.
In addition, the Company may terminate a Participant's participation in the
Plan if it believes that such participation may be contrary to the general
intent of the Plan or in violation of applicable law. The Participant will
receive a certificate for whole shares and a check for the cash value of
the fractional share in the Plan account.
COSTS
36. WHAT COSTS ARE ASSOCIATED WITH PARTICIPATION IN THE PLAN?
The only costs associated with Plan participation are the broker
commissions, related service charges, and applicable taxes for the sale or
purchase of shares for a Participant's account. All other administrative
costs are borne by the Company.
REPORTS TO PARTICIPANTS
37. WHAT REPORTS ARE SENT TO PARTICIPANTS?
Plan Participants will receive an Investment Statement as soon as possible
after each month in which an investment occurs in their Plan account, which
will provide detailed account information for the current calendar year.
THIS STATEMENT SHOULD BE RETAINED FOR TAX PURPOSES.
Participants who have sold, transferred, or withdrawn shares from their
Plan accounts will receive a Plan History Statement detailing the account
history. THIS STATEMENT SHOULD BE RETAINED FOR TAX PURPOSES.
Plan Participants will also receive copies of all shareholder
communications such as annual reports, and notices of shareholder meetings
and proxy materials.
Plan Participants will receive an IRS Form 1099-DIV showing total dividends
reported to the Internal Revenue Service which were paid to the Participant
both on shares of record and Plan account shares. An IRS Form 1099-B will
be provided for reporting the proceeds from the sale of shares through the
Plan. See Question 45 for further information regarding tax reporting.
OTHER INFORMATION
38. WHAT HAPPENS IF THE COMPANY DECLARES A DIVIDEND PAYABLE IN COMMON
STOCK OR A STOCK SPLIT?
Any dividends in the form of shares of Common Stock and any shares
resulting from a Common Stock split on shares held in a Participant's Plan
account will be credited to the Participant's Plan account.
39. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF
SHAREHOLDERS?
Participants in the Plan will receive a proxy statement and a proxy card
representing Plan account shares as well as any other Common Stock held of
record. The Participant's shares will be voted in accordance with the
instructions indicated on the proxy card. Shares for which a proxy is not
received will not be voted.
40. WHAT IS THE RESPONSIBILITY OF THE COMPANY AND ITS AGENTS UNDER
THE PLAN?
Neither the Company, in its individual capacity or as Administrator, nor
any independent agent appointed by the Company pursuant to the Plan will be
liable for any act done in good faith or for any good faith omission to act
with respect to the Plan, including, without limitation, any claim of
liability arising out of failure to
14
<PAGE> 15
terminate a Participant's account upon such Participant's death prior to
receipt of notice in writing of such death or with respect to the prices or
times at which, or sources from which, shares are purchased or sold for
Participants, or with respect to any fluctuation in market value before or
after any purchase or sale of shares.
PARTICIPANTS MUST RECOGNIZE THAT THE COMPANY CANNOT ASSURE THEM A PROFIT,
OR PROTECT THEM AGAINST LOSSES, ON SHARES PURCHASED PURSUANT TO THE PLAN.
THE MARKET PRICE OF COMMON STOCK CAN FLUCTUATE SUBSTANTIALLY. PARTICIPANTS
ACCEPT THE RISKS AS WELL AS THE BENEFITS OF THE PLAN.
41. MAY THE PLAN BE CHANGED OR DISCONTINUED?
Yes. The Company reserves the right to suspend, modify, or terminate the
Plan at any time. The Company may register additional shares from time to
time. Any suspension, modification, or termination of the Plan will be
communicated by the Company to all Plan Participants.
42. MAY COMMON STOCK HELD IN A PLAN ACCOUNT BE PLEDGED AS COLLATERAL?
No. Common Stock held in a Plan account may not be pledged as collateral.
Participants wishing to use their Common Stock as collateral must have
certificates issued for the shares. The certificates can then be delivered
for collateral.
43. MAY COMMON STOCK HELD IN A PLAN ACCOUNT BE TRANSFERRED OR
ASSIGNED TO ANOTHER PERSON?
Yes. A Participant may transfer or assign Plan shares to another person or
entity by meeting the requirements for transfer of stock. Requests for
stock transfer requirements should be sent to:
Public Service Company of New Mexico
Shareholder Records Department
Alvarado Square, MS 0802
Albuquerque, NM 85158-0802
or by calling the Company at 800-545-4425 or, in Albuquerque, at 241-2650.
See Question 9 for information relating to the transfer of only a portion
of a Participant's Plan shares when the Participant has elected the Partial
Dividend Reinvestment option for his or her shares.
44. HOW MAY INSTRUCTIONS BE GIVEN TO THE ADMINISTRATOR?
Although currently all instructions from a Participant to the Administrator
are required to be in writing, the Administrator may in the future allow
certain instructions to be given by telephone or in any other manner as
agreed to by the Administrator and the Participant.
FEDERAL INCOME TAX INFORMATION
45. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PLAN
PARTICIPATION?
The Company believes the following is an accurate summary of the federal
tax consequences of participation in the Plan. YOU ARE ADVISED TO CONSULT
YOUR TAX OR FINANCIAL ADVISOR WITH RESPECT TO FEDERAL, STATE, LOCAL, AND
OTHER TAX LAWS WHICH APPLY TO YOUR SPECIFIC SITUATION.
In general, the dividends paid on Common Stock, whether the shares are held
in certificate form by the shareholder or held through the Plan, are
considered taxable income, whether received in cash or reinvested through
the Plan. The information return sent to you and the IRS at year-end will
provide the information required to complete your income tax returns.
15
<PAGE> 16
The tax basis of shares acquired through the reinvestment of dividends will
be equal to the value of dividends reinvested. The tax basis of shares
purchased with Cash Investments will be equal to the amount of such
investments.
Upon the sale of all or a portion of the shares from the Plan, a
Participant may recognize a capital gain or loss based on the difference
between the sales proceeds and the tax basis in the shares sold, including
any fractional shares. The capital gain or loss will be long-term if the
shares were held for more than one year.
For Participants who are subject to U.S. withholding tax, backup
withholding, or foreign taxes, the Company will withhold the required taxes
from the gross dividends or proceeds from the sale of shares. The
dividends or proceeds received by the Participant, or dividends reinvested
on behalf of the Participant, will be net of the required taxes.
USE OF PROCEEDS
Since purchases of Common Stock under the Plan may be satisfied by (i)
the purchase of new shares of Common Stock issued by the Company, or (ii)
the purchase of shares of Common Stock in the open market, the number of
shares of Common Stock, if any, that the Company ultimately will sell under
the Plan is not known. If newly issued shares of Common Stock are
purchased under the Plan, the proceeds from such sales will be used for
general corporate purposes, including, without limitation, the redemption,
repayment or retirement of outstanding indebtedness of the Company. The
Company will not receive any proceeds when shares of Common Stock are
purchased under the Plan in the open market.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 10,000,000
shares of Cumulative Preferred Stock without par value, issuable in series
from time to time, and 80,000,000 shares of Common Stock, par value $5 per
share. The Board of Directors of the Company is authorized by the
Company's Restated Articles of Incorporation to fix the designation and
number of shares of each series of Cumulative Preferred Stock, the dividend
rate, the redemption price, the voluntary and involuntary liquidation
price, sinking fund provisions, if any, and the conversion provisions, if
any. No amendment to the Restated Articles of Incorporation which would
change the rights of any class of the capital stock of the Company may be
made unless authorized by the holders of two-thirds of the shares of the
particular class affected by the amendment. As of September __, 1996,
there were outstanding: (i) 41,774,083 shares of Common Stock, and (ii)
128,000 shares of the 1965 Series, 4.58% Cumulative Preferred Stock of the
Company, having a stated value (equal to the involuntary liquidation price)
of $100 per share.
The Common Stock is listed on the New York Stock Exchange.
DIVIDEND RESTRICTIONS
Dividends are payable on the Common Stock as declared by the Board of
Directors from funds legally available therefor, but only after payment of
all accumulated dividends for all past and current dividend periods on the
shares of any series of Preferred Stock outstanding.
The Company's Restated Articles of Incorporation restrict the amount of
dividends payable on the Common Stock (other than dividends payable in
Common Stock) so long as any shares of Preferred Stock are outstanding to
(i) not more than 50% of the net income available for dividends on the
Common Stock when the ratio of Common Stock equity to total capitalization
(including outstanding indebtedness of a maturity of one year or more and
earned surplus) is less than 20%, and (ii) not more than 75% of such income
when such ratio is 20% or more but less than 25%. When the ratio is 25% or
more there is no such restriction on the payment of dividends on Common
Stock, except that such a payment shall not itself reduce the ratio below
25%.
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<PAGE> 17
The Indenture of Mortgage and Deed of Trust, under which the Company's
first mortgage bonds are outstanding, and the supplemental indentures
thereto contain provisions which restrict the aggregate amount of dividends
payable on the Common Stock so long as certain presently outstanding bonds
remain outstanding. The Company's existing secured revolving credit
facility and the reimbursement agreement associated with a letter of credit
supporting a series of pollution control revenue bonds also contain certain
restrictions relating to the payment of dividends.
The restrictions discussed above are equally applicable to the repurchase
by the Company of shares of its outstanding Common Stock.
VOTING RIGHTS
Except as hereinafter stated, all voting rights are vested in the holders
of the Common Stock who have one vote per share and have no cumulative
voting rights. Three of the Company's nine directors are elected for
three-year terms at each annual meeting of the Company's stockholders. The
holders of shares of Preferred Stock have no voting rights except as
provided by law or when four quarterly dividends on Preferred Stock have
not been paid, at which time the holders of the Preferred Stock shall have
the following rights until all dividends in arrears have been paid:
(1) Voting as a class, to elect all three directors to be elected
at the next annual meeting, and thereafter, if dividends continue
to be due and unpaid, to elect two of the three directors to be
elected at the next succeeding annual meeting and to continue to
elect a majority of the Board of Directors in such manner; and
(2) To vote on all questions in such manner that holders of
Preferred Stock shall have one vote for each ten dollars of stated
value, or part thereof, for each share of Preferred Stock held.
In addition, the Company must secure the approval of the holders of certain
percentages of Preferred Stock outstanding prior to effecting various
changes in the rights of the Preferred Stock, the issuance of additional
shares of Preferred Stock or the making of certain unsecured borrowings, in
the last two instances, when certain conditions in the Company's capital
structure exist.
LIQUIDATION RIGHTS
After payment to the holders of Preferred Stock of the full preferential
amounts to which they are entitled, the remaining assets, if any, upon
voluntary or involuntary liquidation, are distributable to the holders of
Common Stock.
PRE-EMPTIVE RIGHTS
There are no pre-emptive rights applicable to the Common Stock or Preferred
Stock.
OTHER PROVISIONS
There are no conversion rights, or redemption or sinking fund provisions,
applicable to the Common Stock, and the Common Stock is not liable to
further calls or to assessments by the Company.
EXPERTS
The consolidated financial statements of the Company as of December
31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 included in the Company's 1995 Form 10-K incorporated by
reference in this Prospectus and elsewhere in the Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and
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<PAGE> 18
are incorporated herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
LEGAL OPINIONS
Certain legal matters in connection with the Common Stock offered
hereby have been passed on for the Company by Keleher & McLeod, P. A.,
P. O. Drawer AA, Albuquerque, NM 87103.
SHAREHOLDER INFORMATION
PUBLIC SERVICE COMPANY OF NEW MEXICO
Corporate Headquarters: Alvarado Square, MS 0802
Albuquerque, NM 87158-0802
Mailing Address: P.O. Box 1047
Albuquerque, NM 87103-9937
Telephone Numbers: 505-241-2650 In Albuquerque
800-545-4425 Nationwide Toll-free
Shareholder Account Information
-- Stock Transfer Requirements: P.O. Box 1047
Albuquerque, NM 87103-9937
-- Plan and Account Information: P.O. Box 1047
Albuquerque, NM 87103-9937
Stock Listing Information
-- Ticker Symbol: PSvNM on the New York Stock Exchange
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================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF ANY OFFER TO BUY, ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
----
Available Information . . . . . . . . . . . . . . . . . . . . . 1
Incorporation of Certain
Documents by Reference. . . . . . . . . . . . . . . . . . . . 1
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purpose of the Plan . . . . . . . . . . . . . . . . . . . . . . 3
Advantages and Disadvantages
of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan Administration . . . . . . . . . . . . . . . . . . . . . . 4
Participation in the Plan . . . . . . . . . . . . . . . . . . . 5
Participation Options . . . . . . . . . . . . . . . . . . . . . 5
Initial Cash Investments
and Cash Investments. . . . . . . . . . . . . . . . . . . . . 6
Reinvestment of Dividends . . . . . . . . . . . . . . . . . . . 7
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Safekeeping of Certificates . . . . . . . . . . . . . . . . . . 9
Sale of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 9
Termination of Plan Participation . . . . . . . . . . . . . . . 10
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reports to Participants . . . . . . . . . . . . . . . . . . . . 11
Other Information . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Income Tax Information. . . . . . . . . . . . . . . . . 12
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 13
Description of Capital Stock. . . . . . . . . . . . . . . . . . 13
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Opinions. . . . . . . . . . . . . . . . . . . . . . . . . 15
Shareholder Information . . . . . . . . . . . . . . . . . . . . 15
================================================================================
[LOGO]
PUBLIC SERVICE COMPANY
OF NEW MEXICO
COMMON STOCK
($5 PAR VALUE)
PNM DIRECT PLAN
--------------------------
PROSPECTUS
--------------------------
SEPTEMBER __, 1996
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PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
*Securities and Exchange Commission registration fee $13,534
Printing, engraving and postage expenses 50,000
Legal fees 7,000
Accounting fees 4,000
Miscellaneous 10,000
-------
Total Expenses $84,534
=======
</TABLE>
---------------
*Actual, others estimated
ITEM 15. 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.
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
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<PAGE> 21
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 16. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- ------------
<S> <C>
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 Bylaws of the Company as amended through December 6, 1994 (incorporated by
reference to Exhibit 3.2 to Annual Report of the Registrant on Form 10-K
for fiscal year ended December 31, 1994).
4.3 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, together with the Ninth Supplemental Indenture dated as January 1,
1976, 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).
4.4 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).
4.5 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).
4.5.1 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).
4.6 Reimbursement Agreement, dated as 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).
4.6.1 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).
</TABLE>
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<PAGE> 22
<TABLE>
<S> <C>
4.6.2 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).
4.7 Form of PNM Direct Plan
5 Opinion of Keleher & McLeod, P.A.
15 Letter re unaudited interim financial information
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Keleher & McLeod, P. A. (included in Exhibit 5)
24 Power of attorney (See Signatures page in Part II)
</TABLE>
ITEM 17. 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 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, the
aggregate, the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) 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
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.
22
<PAGE> 23
(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 the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
23
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Albuquerque, State of New Mexico, on August 28,
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.
<TABLE>
<CAPTION>
Signature Capacity Date
<S> <C> <C>
/s/ B. F. Montoya Principal Executive Officer August 28, 1996
- ------------------------------------------------------ and Director
B. F. Montoya
President and Chief
Executive Officer
/s/ M. H. Maerki Principal Financial Officer August 28, 1996
- ------------------------------------------------------
M. H. Maerki
Senior Vice President
and Chief Financial Officer
/s/ D. M. Burnett Principal Accounting Officer August 28, 1996
- ------------------------------------------------------
D. M. Burnett
Corporate Controller
and Chief Accounting Officer
/s/ J. T. Ackerman Director August 28, 1996
- -----------------------------------------------------
J. T. Ackerman
/s/ R. G. Armstrong Director August 28, 1996
- ----------------------------------------------------
R. G. Armstrong
/s/ J.A. Godwin Director August 28, 1996
- -------------------------------------------------------
J. A. Godwin
/s/ L. H. Lattman Director August 28, 1996
- ------------------------------------------------------
L. H. Lattman
/s/ M. Lujan, Jr. Director August 28, 1996
- --------------------------------------------------------
M. Lujan, Jr.
/s/ R. U. Ortiz Director August 28, 1996
- ---------------------------------------------------------
R. U. Ortiz
/s/ R. M. Price Director August 28, 1996
- --------------------------------------------------------
R. M. Price
/s/ P. F. Roth Director August 28, 1996
- ---------------------------------------------------------
P. F. Roth
</TABLE>
24
<PAGE> 25
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
----------- --------
<S> <C>
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 Bylaws of the Company as amended through December 6, 1994 (incorporated by
reference to Exhibit 3.2 to Annual Report of the Registrant on Form 10-K
for fiscal year ended December 31, 1994).
4.3 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, together with the Ninth Supplemental Indenture dated as January 1,
1976, 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).
4.4 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).
4.5 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).
4.5.1 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).
4.6 Reimbursement Agreement, dated as 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).
4.6.1 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).
</TABLE>
25
<PAGE> 26
<TABLE>
<S> <C>
4.6.2 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).
4.7 Form of PNM Direct Plan
5 Opinion of Keleher & McLeod, P.A.
15 Letter re unaudited interim financial information
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Keleher & McLeod, P. A. (included in Exhibit 5)
24 Power of attorney (See Signatures page in Part II)
</TABLE>
26
<PAGE> 1
EXHIBIT 4.7
PUBLIC SERVICE COMPANY OF NEW MEXICO
PNM DIRECT PLAN
Public Service Company of New Mexico, a New Mexico corporation (the
"Company"), hereby establishes the following Public Service Company of New
Mexico PNM Direct Plan (the "Plan"), to become effective when the Company's
Registration Statement on Form S-3 relating to Common Stock for the Plan
becomes effective:
RECITALS:
WHEREAS, the Company desires to offer stock purchase opportunities and
services in an effort to enhance its attractiveness to investors in the
Company's common stock, $5 par value (the "Common Stock"); and
WHEREAS, the purpose of the Plan is to provide interested investors
and holders of the Common Stock of the Company with a convenient and economical
means of increasing their investment in the Company through (i) regular
investment of cash dividends paid on the Common Stock, (ii) optional cash
investments, and/or (iii) initial cash investments;
NOW, THEREFORE:
ARTICLE I
Definitions
The terms defined in this Article I shall, for all purposes of this
Plan, have the following respective meanings:
Account. The term "Account" shall mean, as to any Participant, the
account maintained by the Administrator evidencing (i) the shares (and/or
fraction of a share) of Common Stock (a) purchased through the Plan and/or (b)
deposited by such Participant into the Plan pursuant to Section 4.1 hereof and
credited to such Participant; (ii) any dividends in the form of shares of
Common Stock and any shares resulting from a Common Stock split on such shares,
and (iii) cash held in the Plan pending investment in Common Stock for such
participant.
Account Action Request Form. The term "Account Action Request Form"
shall mean the documentation that the Administrator may require to be completed
and received prior to a Participant's (i) sale of Account Shares pursuant to
Section 5.1 hereof, (ii) gift or transfer of Account Shares pursuant to Section
5.2 hereof, (iii) withdrawal of Account Shares pursuant to Section 8.1 hereof
(unless such Participant will be the record holder of such Account Shares after
withdrawal), and (iv) termination of participation in the Plan pursuant to
Section 7.2 hereof.
Account Shares. The term "Account Shares" shall mean all shares
(and/or fraction of a share) of Common Stock credited to the Account of a
Participant by the Administrator, which shall include shares deposited into the
Plan pursuant to Section 4.1 hereof.
Administrator. The term "Administrator" shall mean the individual
(who may be an employee of the Company), bank, trust company, or other entity
(including the
27
<PAGE> 2
Company) appointed from time to time by the Company to act as Administrator
hereunder.
Cash Investment Form. The term "Cash Investment Form" shall mean
documentation prepared by the Administrator that may be utilized by a
Participant when making an optional cash investment pursuant to Section 2.4
hereof.
Common Stock. As defined in the Recitals.
Company. As defined in the introduction to the Recitals.
Company Share Purchase Price. The term "Company Share Purchase
Price," when used with respect to newly issued shares of Common Stock, shall
mean the average of the high and low sales prices of Common Stock on a given
trading day as reported on the New York Stock Exchange Composite Tape and
published in The Wall Street Journal, or, for any day on which there is no such
publication, as published in any other generally accepted publication
designated by the Independent Agent. In the absence of knowledge of
inaccuracy, the Independent Agent may rely upon such prices as published in The
Wall Street Journal or such other publication. In the event no trading is so
reported for a trading day, the Company Share Purchase Price for such shares
may be determined by the Independent Agent on the basis of such market
quotations as it deems appropriate.
Dividend. The term "Dividend" shall mean cash dividends paid on
Reinvestment Eligible Securities.
Dividend Payment Date. The term "Dividend Payment Date" shall mean a
date on which a cash dividend on shares of Common Stock is paid.
Dividend Processing Period. The term "Dividend Processing Period"
shall mean a 13-15 business day period which begins on the Ex-Dividend Date.
Dividend Record Date. The term "Dividend Record Date" shall mean the
date fixed for the determination of shareholders of record who will be entitled
to receive a Dividend payable on a Dividend Payment Date.
Eligible Securities. The term "Eligible Securities" shall mean those
securities of the Company, whether issued prior to or after the date hereof,
set forth in Section 6.1 hereof, and such other securities of the Company as
the Company may designate, in its sole discretion, pursuant to Section 6.2
hereof.
Enrollment Form. The term "Enrollment Form" shall mean the
documentation that the Administrator shall require to be completed and received
prior to an investor's enrollment in the Plan pursuant to Section 2.1 hereof, a
Participant's changing his or her options under the Plan pursuant to Section
7.1 hereof, or, at the option of a Participant as described in Section 4.1
hereof, a Participant's depositing shares of Common Stock into the Plan
pursuant to Section 4.1 hereof. An Enrollment Form may also be used by the
Administrator for other purposes as described herein or as determined by the
Administrator from time to time.
28
<PAGE> 3
Exchange Act. The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
Ex-Dividend Date. The term "Ex-Dividend Date" shall mean a date prior
to the Dividend Record Date, based on industry regulations, necessary to allow
for the settlement of traded securities by the Dividend Record Date.
Foreign Person. The term "Foreign Person" shall mean a Person that is
a citizen or resident of, or is organized or incorporated under, or has its
principal place of business in, a country other than the United States, its
territories, and possessions.
Independent Agent. The term "Independent Agent" shall mean an agent
independent of the Company who satisfies applicable legal requirements
(including without limitation the requirements of Rule 10b-6 and Rule 10b-18
promulgated under the Exchange Act) and who has been selected by the Company,
pursuant to Section 10.6 hereof, to serve as an Independent Agent for purposes
of making purchases and sales of Common Stock under the Plan.
Investment Date. The term "Investment Date" shall mean the date on
which the purchase price for all shares of Common Stock to be purchased during
an Investment Period has been determined. If shares are purchased from the
Company pursuant to Section 3.3 hereof, the Investment Date will be the first
day of the relevant Investment Period. If the Investment Date would otherwise
fall on a day on which the New York Stock Exchange is not open, the first day
immediately succeeding such day on which the New York Stock Exchange is open
will be the Investment Date.
Investment Period. The term "Investment Period" shall mean the period
of each calendar month during which Common Stock is purchased, beginning on the
first business day of any month.
Investment Statement. The term "Investment Statement" shall mean a
written statement prepared by the Administrator and sent to a Participant after
an Investment Period in which the Participant's account had investment
activity, or otherwise as the Administrator shall determine to be appropriate
or as provided in this Plan, which statement reflects (i) the purchase price
and number of Account Shares purchased for or credited to the Participant's
Account for such Investment Period, (ii) the total number of Account Shares
credited to the Participant's Account at the date of such statement, and (iii)
such additional information regarding the Participant's Account as the
Administrator may determine to be pertinent to the Participant.
Market Share Purchase Price. The term "Market Share Purchase Price,"
when used with respect to shares of Common Stock purchased in the open market,
shall mean the weighted average purchase price per share (including brokerage
commissions, any related service charges, and applicable taxes) of the
aggregate number of shares purchased in the open market for an Investment Date.
Market Share Sales Price. The term "Market Share Sales Price," when
used with respect to shares of Common Stock sold under the Plan, shall mean the
weighted average
29
<PAGE> 4
sales price per share (less brokerage commissions, any related service charges,
and applicable taxes) of the aggregate number of shares sold in the open market
for the relevant period.
Maximum Amount. As defined in Section 2.4 hereof.
Participant. As defined in Section 2.1 hereof.
Payroll Deduction Authorization Form. The Term "Payroll Deduction
Authorization Form" shall mean the documentation that the Administrator shall
require to be completed and received prior to the initiation of payroll
deductions to satisfy the Initial Cash Investment provisions of Section 2.3
hereof or the Optional Cash Investment provisions of Section 2.4 hereof.
Person. The term "Person" shall mean any individual (including,
without limitation, an employee of the Company), corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, estate, or unincorporated organization.
Plan. As defined in the introduction to the Recitals.
Plan History Statement. The term "Plan History Statement" shall mean
a written statement prepared by the Administrator and sent to each Participant
upon withdrawal of any or all Account Shares upon the issuance of a certificate
therefor or upon the sale of any or all Account Shares from the Participant's
Account, or otherwise as the Administrator shall determine to be appropriate or
as provided in this Plan, which statement reflects (i) the number of Account
Shares so withdrawn and certificated, (ii) the number of Account Shares so
sold, (iii) the number of Account Shares, if any, remaining in the
Participant's Account at the date of such statement, and (iv) such additional
information regarding the Participant's Account as the Administrator may
determine to be pertinent to the Participant.
Reinvestment Eligible Securities. The term "Reinvestment Eligible
Securities" shall mean (i) those Eligible Securities of which a Participant is
the record or registered holder and on which such Participant has elected to
have all or a portion of the Dividends paid reinvested in Common Stock and
(ii) a Participant's Account Shares except for Account Shares as to which the
Participant has elected not to have Dividends reinvested in Common Stock and
has notified the Administrator by delivery of a completed Enrollment Form of
such election.
Safekeeping Authorization Form. The term "Safekeeping Authorization
Form" shall mean the documentation that the Administrator shall require to be
completed by a Participant who may deposit certificates representing shares of
Common Stock in his or her name into his or her Plan account for safekeeping.
30
<PAGE> 5
A pronoun or adjective in the masculine gender includes the feminine gender,
and the singular includes the plural, unless the context clearly indicates
otherwise.
ARTICLE II
Participation
Section 2.1 Participation. Any Person, whether or not a record
holder of Common Stock, may elect to participate in the Plan; provided,
however, that if such Person is a Foreign Person, he or she must provide
evidence satisfactory to the Administrator that his or her participation in the
Plan would not violate local laws applicable to the Company, the Plan, or such
Foreign Person.
An election by a Person to participate in the Plan shall be made by
completing and returning to the Administrator an Enrollment Form and, subject
to the last two paragraphs of this Section 2.1 below, (i) electing to have
Dividends on Eligible Securities of which such Person is the record holder
invested in Common Stock pursuant to Section 2.2 hereof, (ii) depositing
certificates representing Common Stock of which such person is the record
holder into the Plan pursuant to Section 4.1 hereof, or (iii) making an initial
cash investment pursuant to Section 2.3 hereof.
Any Person who has met such requirements and has made and not revoked
such election is herein referred to as a "Participant." A Participant may elect
to participate in any or all of the forms of investment provided in Sections
2.2 through 2.4 hereof and to utilize the Plan's safekeeping services provided
in Section 4.1 hereof by submitting a Safekeeping Authorization Form
designating such election to the Administrator; provided, however, that,
alternatively, a Participant may elect to make optional cash investments
pursuant to Section 2.4 hereof by submitting to the Administrator a completed
optional Cash Investment Form in lieu of an Enrollment Form.
The Company reserves the right to restrict participation in this Plan
if it believes that such participation may be contrary to the general intent of
this Plan or in violation of applicable law.
Section 2.2 Dividend Reinvestment. A participant may elect any of
the Full Dividend Reinvestment, Partial Dividend Reinvestment, and Cash Only
Investment options described in Subsections 2.2.1, 2.2.2, and 2.2.3 hereof.
Subsection 2.2.1 Full Dividend Reinvestment. Participants enrolling
in the "Full Dividend Reinvestment" option will have Dividends earned on all
Common Stock, both in their Plan Accounts and held of record by such
Participants, reinvested in shares (and/or a fraction of a share) of Common
Stock to be credited to their Accounts in lieu of receiving such Dividends
directly.
Subsection 2.2.2 Partial Dividend Reinvestment. Participants
enrolling in the "Partial Dividend Reinvestment" option will have Dividends on
a designated number of shares of Reinvestment Eligible Securities held of
record or in their Plan Accounts paid directly to the Participant in the manner
otherwise associated with payment of Dividends,
31
<PAGE> 6
with the balance being reinvested in shares (and/or a fraction of a share) of
Common Stock to be credited to their Accounts in lieu of receiving such
Dividends directly.
Subsection 2.2.3 Cash Investment Only. Participants enrolling in the
"Cash Investment Only" option may make cash investments pursuant to Sections
2.3 and 2.4 hereof. Dividends on Eligible Securities held by such Participants
of record or in their Plan Accounts will not be reinvested. Such Dividends
will be paid by check or in the manner otherwise associated with payment of
such Dividends.
Subsection 2.2.4 No Option Chosen. If Participants do not indicate a
participation option as described in Subsections 2.2.1, 2.2.2, and 2.2.3 hereof
on their Enrollment Forms, such Participants will be deemed to have elected the
Full Dividend Reinvestment option described in Subsection 2.2.1 hereof.
Section 2.3 Initial Cash Investment. A Person who is not already a
Common Stock shareholder of record may become a Participant by returning to
the Administrator a completed Enrollment Form, accompanied by an initial cash
payment of at least $50, by check, money order, or wire transfer payable
through a U. S. Bank or other U. S. financial institution, in U. S. Dollars, to
PNM Direct Plan, to be invested in Common Stock pursuant to Subsections 3.3.2
or 3.4.2 hereof. An employee of the Company may become a Participant by
returning to the Administrator a completed Enrollment Form, accompanied by an
initial cash payment as described in the preceding sentence or a Payroll
Deduction Authorization Form, authorizing an initial cash investment of at
least $50, payable through payroll deductions.
Section 2.4 Optional Cash Investments. A Participant may elect to
make cash payments at any time or from time to time to the Plan, in the minimum
amount of $50, by check, money order, or wire transfer payable through a U.S.
bank or other U.S. financial institution, in U. S. Dollars, to PNM Direct Plan,
for investment in Common Stock pursuant to Subsections 3.3.2 or 3.4.2 hereof;
provided, however, that a Participant may not invest more than $60,000 in
aggregate amount in any calendar year (the "Maximum Amount") and provided
further that any such payment must be accompanied by a new Enrollment Form or a
Cash Investment Form. For purposes of determining whether the Maximum Amount
has been reached, initial cash investments made pursuant to Section 2.3 hereof
shall be counted as optional cash investments. An employee of the Company may
also elect to make cash payments at any time and from time to time to the Plan,
by returning to the Administrator a completed Payroll Deduction Authorization
Form, authorizing payroll deductions of at least $25 per pay period.
ARTICLE III
Dividend Reinvestment and Stock Purchase
Section 3.1 Dividend Reinvestment. Dividends as to which
reinvestment has been elected by a Participant shall be paid to the
Administrator or its nominee on behalf of such Participant. Dividends shall be
reinvested, at the Company's election, subject to Section 10.7 hereof, in
either (i) newly issued shares of Common Stock or (ii) shares of Common Stock
purchased in the open market.
32
<PAGE> 7
Section 3.2 Investment of Optional Cash Payments and Initial Cash
Payments. Any optional cash investments and initial cash investments received
by the Administrator from a Participant by the last Company business day of a
calendar month, and as to which no request for return has been received by the
last Company business day of the month preceding the next following Investment
Period, shall be invested, during the next following Investment Period, in
either (i) newly issued shares of Common Stock or (ii) shares of Common Stock
purchased in the open market.
Section 3.3 Investment and Reinvestment in Newly Issued Shares.
Dividend reinvestment in newly issued shares of Common Stock shall be governed
by Subsection 3.3.1 hereof. Any optional cash investments and/or initial cash
investments to be invested in newly issued shares of Common Stock will be
governed by Subsection 3.3.2 hereof.
Subsection 3.3.1 Dividend Reinvestment. As soon as practicable
following an Investment Date with respect to which the Company elects to issue
new shares of Common Stock to the Plan in order to effect the reinvestment of
Dividends, the Company shall issue to the Administrator upon the Company's
receipt of the funds described in Subsection 3.3.3(a) below, for crediting by
the Administrator to the Account of a Participant as of such Investment Date,
shares (and/or fraction of a share rounded to three decimal places or other
fraction determined from time to time by the Administrator) of Common Stock as
provided in Subsection 3.3.3 below. Such shares shall be issued or sold to,
and registered in the name of, the Administrator or its nominee as custodian
for such Participant. No interest shall be paid on Dividends held pending
reinvestment pursuant to this Subsection 3.3.1.
Subsection 3.3.2 Cash Investments. As soon as practicable following
an Investment Date with respect to which the Company elects to issue new shares
of common Stock to the Plan in order to effect the investment of optional cash
investments and/or initial cash investments, the Company shall issue to the
Administrator upon the Company's receipt of the funds described in Subsection
3.3.3(b) below, for crediting by the Administrator to the Account of a
Participant as of such Investment Date, shares (and/or fraction of a share
rounded to three decimal places or other fraction determined from time to time
by the Administrator) of Common Stock as provided in Subsection 3.3.3 below.
Such shares shall be issued or sold to, and registered in the name of, the
Administrator or its nominee as custodian for such Participant. No interest
shall be paid on cash investments held pending investment pursuant to this
Subsection 3.3.2.
Subsection 3.3.3 Number of Shares to be Issued. If shares are to be
issued or sold pursuant to Subsections 3.3.1 or 3.3.2 above, the number of
shares (and/or fraction of a share rounded to three decimal places or other
fraction determined from time to time by the Administrator) of Common Stock
that will be credited to the account of a Participant as of an Investment Date
will be equal to (a) the amount of any Dividends paid to the Administrator on
behalf of such Participant plus (b) the amount of any optional cash investments
and/or initial cash investment received by the Administrator from such
Participant, in each case, by the last Company business day of the calendar
month preceding the then applicable Investment Period and not previously
invested, subject to the provisions of Section 3.6 hereof, divided by (c) the
Company Share Purchase Price on
33
<PAGE> 8
such Investment Date, in each case, by the last Company business day of the
calendar month.
Section 3.4 Investment and Reinvestment in Shares Purchased in the
Open Market. Dividend reinvestment in shares of Common Stock purchased in the
open market shall be governed by Subsection 3.4.1 hereof. Any optional cash
investments and/or initial cash investments to be invested in shares of Common
Stock purchased in the open market shall be governed by Subsection 3.4.2 .
Subsection 3.4.1 Dividend Reinvestment. During an Investment Period
with respect to which the Company elects to effect reinvestment of Dividends in
shares of Common Stock purchased in the open market, the Administrator shall
(if it is an Independent Agent), or shall cause an Independent Agent to, apply
the amount of any Dividends paid to the Administrator on behalf of a
Participant to the purchase of shares (and/or fraction of a share rounded to
three decimal places or other fraction determined from time to time by the
Administrator) of Common Stock in the open market as provided in Subsection
3.4.3 below. Such shares shall be registered in the name of the Administrator
or its nominee as custodian for such Participant. No interest shall be paid on
Dividends held pending reinvestment pursuant to this Subsection 3.4.1.
Subsection 3.4.2 Cash Investments. During an Investment Period with
respect to which the Company elects to effect the investment of optional cash
investments and/or initial cash investments in shares of Common Stock purchased
in the open market, the Administrator shall (if it is an Independent Agent), or
shall cause an Independent Agent to, purchase for crediting by the
Administrator to the Account of a Participant a number of shares (and/or
fraction of a share rounded to three decimal places or other fraction
determined from time to time by the Administrator) of Common Stock in the open
market as provided in Section 3.4.3 below. Such shares shall be registered in
the name of the Administrator or its nominee as custodian for such Participant.
No interest shall be paid on cash investments held pending investment pursuant
to this Subsection 3.4.2.
Subsection 3.4.3 Number of Shares to be Purchased and Other Matters.
Purchases in the open market pursuant to Subsection 3.4.1 and Subsection 3.4.2
hereof may begin on the first day of the applicable Investment Period and shall
be completed no later than 30 days from such date, unless completion at a later
date is necessary or advisable under applicable law, including without
limitation any federal securities laws. Open market purchases pursuant to this
Subsection 3.4.1 and Subsection 3.4.2 hereof may be made on any securities
exchange on which the Common Stock is traded, in the over-the-counter market or
by negotiated transactions, and may be upon such terms and subject to such
conditions with respect to price and delivery to which the Independent Agent
(including the Administrator if it is also an Independent Agent) may agree.
With regard to open market purchases of shares of Common Stock pursuant to
Subsection 3.4.1 and Subsection 3.4.2 hereof, none of the Company, the
Administrator (if it is not also serving as the Independent Agent), or any
Participant shall have any authority or power to direct the time or price at
which shares of Common Stock may be purchased, the markets on which such
shares are to be purchased (including on any securities exchange, in the
over-the-counter market, or in negotiated transactions), or the selection of
the broker or dealer (other than the Independent Agent) through or from whom
purchases may be made, except that the timing of such purchases must be made in
accordance with
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<PAGE> 9
the terms and conditions of the Plan. For the purpose of making, or causing to
be made, purchases of shares of Common Stock pursuant to Subsection 3.4.1 and
Subsection 3.4.2 hereof, and sales of Account Shares pursuant to Section 5.1
hereof, the Administrator may authorize the Independent Agent to commingle each
Participant's funds with those of all other Participants and to offset
purchases of shares of Common Stock against sales of shares of Common Stock to
be made for Participants, resulting in a net purchase or a net sale of shares.
The number of shares (and/or fraction of a share rounded to three decimal
places or other fraction determined from time to time by the Administrator) of
Common Stock that shall be credited to a Participant's Account with respect to
and as of an Investment Date pursuant to Subsection 3.4.1 and Subsection 3.4.2
shall be equal to (a) the amount of any Dividends paid to the Administrator on
behalf of such Participant plus (b) the amount of any optional cash investments
and/or initial cash investment received by the Administrator from such
Participant, in each case, by the last Company business day of the calendar
month preceding the then applicable Investment Period and not previously
invested, subject to the provisions of Section 3.6 hereof, divided by (c) the
Market Share Purchase Price with respect to such Investment Date.
Section 3.5 Request to Stop Investment. If a written request to stop
investment of optional cash investments and/or an initial cash investment is
received by the Administrator from a Participant no later than the last Company
business day of the calendar month preceding the Investment Period during which
investment of such cash investments would be effected pursuant to the
provisions of this Plan, such optional cash investments and/or initial cash
investment shall not be invested in Common Stock and shall be returned to such
Participant. If such a request is not received by the Administrator by such
time, such optional cash investments or initial cash investment shall be
invested in shares of Common Stock for such Participant's Account.
Section 3.6 Return of Uninvested Monies. Any Dividends to be
reinvested in shares of Common Stock pursuant to Subsection 3.3.1 or Subsection
3.4.1 hereof and not reinvested in shares of Common Stock within 30 days of the
applicable Dividend Payment Date shall be promptly returned to the Participant
at his or her address of record by First Class Mail. Any optional cash
investments and initial cash investments to be invested in shares of Common
Stock pursuant to Subsection 3.3.2 or Subsection 3.4.2 hereof and not invested
in shares of Common Stock within 35 days of receipt by the Administrator or the
Company shall be promptly returned to the Participant at his or her address of
record by First Class Mail.
Section 3.7 Uncollectible Funds. In the event that a check submitted
for investment is returned unpaid for any reason, the Administrator will
consider the request for investment of such funds null and void. Any shares
purchased upon the prior credit of such funds will be immediately removed from
the Participant's Account. The Administrator will be entitled to sell those
shares to satisfy any uncollected amounts. If the net proceeds of the sale of
such shares are not sufficient to satisfy the balance of such uncollected
amounts, the Administrator may sell additional shares from the Participant's
Account to satisfy the uncollected balance.
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<PAGE> 10
ARTICLE IV
Safekeeping Services for Deposited Common Stock
Section 4.1 Deposited Common Stock. A Participant may elect to have
certificates representing shares of Common Stock of which the Participant is
the record holder deposited into the Plan by delivering such certificates to
the Administrator, along with either (i) a Safekeeping Authorization Form or
(ii) a letter with respect to such certificates directing the Administrator to
deposit the shares represented by such certificates into the Plan Account of
the Participant. Shares of Common Stock so deposited shall be transferred into
the name of the Administrator or its nominee and credited to the depositing
Participant's Account. Shares of Common Stock deposited into the Plan pursuant
to this Section 4.1 shall be treated as shares purchased pursuant to the Plan.
Section 4.2 Withdrawal of Common Stock Deposited Pursuant to Section
4.1. Shares of Common Stock deposited pursuant to Section 4.1 hereof may be
withdrawn from the Plan pursuant to Section 8.1 hereof.
ARTICLE V
Sale of Account Shares; Gift or Transfer of Account Shares
Section 5.1 Sale of Account Shares. A Participant may request, at
any time, that all or a portion of his or her Account Shares be sold by
delivering to the Administrator a completed Account Action Request Form or
other written instructions to that effect. The Administrator (if it is not
also an Independent Agent) shall forward such sale instructions to the
Independent Agent as soon as practicable after receipt thereof. The
Independent Agent shall make such sales as soon as practicable (in accordance
with any applicable stock transfer requirements and federal and state
securities laws) after processing such sale instructions. As soon as
practicable following the receipt of proceeds from such sale, the Administrator
shall mail by First Class Mail to such Participant at his or her address of
record a check in an amount equal to (a) the Market Share Sales Price
multiplied by (b) the number of his or her Account Shares sold.
With regard to open market sales of Account Shares pursuant to this
Section 5.1, none of the Company, the Administrator (if it is not also serving
as the Independent Agent) or any Participant shall have any authority or power
to direct the time or price at which shares of Common Stock may be sold, the
markets on which such shares are to be sold (including on any securities
exchange, in the over-the-counter market, or in negotiated transactions), or
the selection of the broker or dealer (other than the Independent Agent)
through or from whom sales may be made, except that the timing of such sales
must be made in accordance with the terms and conditions of the Plan.
Section 5.2 Gift or Transfer of Account Shares. A Participant may
elect to transfer (whether by gift, private sale, or otherwise) ownership of
all or a portion of his or her Account Shares to the Account of another
Participant or establish an Account for a Person not already a Participant by
delivering to the Administrator a completed Account
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<PAGE> 11
Action Request Form to that effect and a stock assignment (stock power)
acceptable to the Administrator along with such other documentation as may be
required by the Administrator. If the transferee is not already a Participant,
the Administrator will require the completion and delivery of an Enrollment
Form for the transferee prior to the transfer. No fraction of a share of
Common Stock credited to the transferor's Account shall be transferred unless
the transferor's entire Account is transferred.
Account Shares transferred in accordance with the preceding paragraph
shall continue to be registered in the name of the Administrator or its nominee
as custodian and shall be credited to the transferee's Account. Unless
otherwise requested by a transferee who is already a participant on a completed
Enrollment Form, the reinvestment of Dividends on such transferred Account
Shares in shares of Common Stock under the Plan shall be made in proportion to
the reinvestment level (i.e., full, partial or none) of the transferee's other
Account Shares. Unless otherwise requested by the transferor, the Administrator
shall deliver an Investment Statement to such transferee showing the transfer of
such Account Shares into his or her Account. The transferor may request that
the Administrator deliver such Investment Statement to the transferor for
personal delivery to the transferee and/or the transferor may request that the
Administrator deliver to such transferee a gift certificate. The transferor may
request that the Administrator send the gift certificate directly to such
transferee with the first Investment Statement following such transfer, or
request that the Administrator deliver such gift certificate to the transferor
for personal delivery to the transferee. The Administrator shall comply with
any such request of a transferor relating to Investment Statements and/or gift
certificates as soon as practicable following receipt of such request.
Section 5.3 Reinvestment of Dividends on Remaining Account Shares.
If only a portion of a Participant's Account Shares are Reinvestment Eligible
Securities and the Participant elects to (i) sell a portion of his or her
Account Shares pursuant to Section 5.1 hereof, (ii) transfer a portion of his
or her Account shares pursuant to Section 5.2 hereof, or (iii) withdraw a
portion of his or her Account Shares pursuant to Section 8.1 hereof, all of the
Account Shares which are Reinvestment Eligible Securities shall be sold,
transferred, or withdrawn, as the case may be, before any Account Shares which
are not Reinvestment Eligible Securities are sold, transferred, or withdrawn
unless the Participant gives specific instructions to the contrary in
connection with such sale, transfer, or withdrawal of Account Shares.
ARTICLE VI
Eligible Securities
Section 6.1 Eligible Securities. The following securities of the
Company shall be Eligible Securities: Common Stock.
Section 6.2 Additional Eligible Securities. The Company may from
time to time or at any time designate other securities of the Company as
Eligible Securities by notifying the Administrator in writing of the
designation of such securities as Eligible Securities.
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<PAGE> 12
ARTICLE VII
Treatment of Accounts
Section 7.1 Changing Plan Options. A Participant may elect to change
his or her Plan options, including (i) changing the reinvestment levels (i.e.,
Full Dividend Reinvestment, Partial Dividend Reinvestment, or Cash Investment
Only) of Dividends on Reinvestment Eligible Securities and (ii) changing the
designation of Reinvestment Eligible Securities, by delivering to the
Administrator a new Enrollment Form to that effect. To be effective with
respect to any Dividend Payment Date, the Enrollment Form with respect to such
Reinvestment Eligible Securities must be received by the Administrator prior to
the Dividend Record Date relating to such Dividend Payment Date. If the
Enrollment Form is not received by the Administrator by such time, such
instructions shall not become effective until after such Dividend Payment Date.
The shares of Common Stock purchased from the reinvestment of such Dividend
shall be credited to the Participant's Account. After the Administrator's
receipt of effective option changing instructions, Dividends on Reinvestment
Eligible Securities as to which the reinvestment election has been revoked will
be paid directly to the Participant in the manner otherwise associated with the
payment of Dividends.
Section 7.2 Right of Termination of Participation. If a
Participant's Account Action Request Form or other written instructions
acceptable to the Administrator indicate the Participant's desire to terminate
his or her participation in the Plan, within 30 days of the receipt of such
request, the Administrator shall either mail certificates representing all
whole Account Shares, if any, by First Class Mail to the Participant at his or
her address of record, pursuant to Section 8.1 hereof, along with a check for
the cash value of any fraction of a share of Common Stock credited to his or
her Account, or shall cause the Account Shares to be sold, or gifted or
transferred pursuant to Sections 5.1 or 5.2, respectively, in any such case, as
shall have been directed by the Participant.
Section 7.3 Stock Splits, Stock Dividends and Rights offerings. Any
shares or other securities representing stock splits or other noncash
distributions on Account Shares shall be credited to such Participant's
Account. Stock splits, combinations, recapitalizations and similar events
affecting the Common Stock shall, as to shares credited to Accounts of
Participants, be credited to such Accounts on a pro rata basis.
In the event of a rights offering, a Participant shall receive rights
based upon the total number of whole shares of Common Stock credited to his or
her Account.
Section 7.4 Shareholder Materials; Voting Rights. The Administrator
shall send or forward to each Participant all applicable proxy solicitation
materials and other shareholder materials or consent solicitation materials.
Participants shall have the exclusive right to exercise all voting rights
respecting Account Shares credited to their respective Accounts. A participant
may vote all of his or her Account Shares in person or by proxy. A
Participant's proxy card shall include all his or her Account Shares and shares
of Common Stock of which he or she is the record holder. Account Shares shall
not be voted unless a Participant or his or her proxy votes them. Fractions of
shares of Common Stock shall be voted.
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<PAGE> 13
Solicitation of the exercise of Participants' voting rights by the
management of the Company and others under a proxy or consent provision
applicable to all holders of Common Stock shall be permitted. Solicitation of
the exercise of Participants' tender or exchange offer rights by management of
the Company and others shall also be permitted. The Administrator shall notify
the Participants of each occasion for the exercise of their voting rights or
rights with respect to a tender offer or exchange offer within a reasonable
time before such rights are to be exercised. Such notification shall include
all information distributed to the shareholders of the Company by the Company
regarding the exercise of such rights.
Section 7.5 Investment and Plan History. As soon as practicable
after each Investment Period, the Administrator shall send an Investment
Statement to each Participant for whom Dividends were reinvested or shares of
Common Stock were purchased or who deposited Common Stock into the Plan
pursuant to Section 4.1 hereof during such Investment Period. Additionally,
the Administrator shall send a Plan History Statement to each Participant
following a sale, transfer, or withdrawal of Account Shares by a Participant.
ARTICLE VIII
Certificates and Fractions of Shares
Section 8.1 Certificates. A Participant, at any time or from time to
time, may request in writing to receive a certificate for all or a portion of
his or her whole Account Shares and the Administrator shall, as soon as
practicable after receipt of such written request, mail such certificate by
First Class Mail to such Participant at his or her address of record; provided,
however, that upon the mailing of such certificate the shares of Common Stock
represented by such certificate shall no longer be Account Shares but shall
remain Reinvestment Eligible Securities (except to the extent such Participant
has elected not to have Dividends on such Account Shares reinvested in Common
Stock).
Section 8.2 Fractional Share. Fractions of shares of Common Stock
shall be credited to Accounts as provided in Article III hereof; provided,
however, that no certificate for a fraction of a share shall be distributed to
any Participant at any time; and provided, further, that the Company shall
issue and sell only whole shares of Common Stock to the Administrator in
respect of Dividends reinvested in, and purchases made by the Administrator
hereunder of, newly issued shares.
ARTICLE IX
Concerning the Plan
Section 9.1 Suspension, Modification, and Termination. The Company
may at any time and from time to time, at its sole option, suspend, modify,
amend, or terminate the Plan, in whole, in part or in respect of Participants
in one or more jurisdictions; provided, however, no such amendment shall
decrease the Account of any Participant or result in a distribution to the
Company of any amount credited to the Account of any Participant. Upon
complete termination of the Plan, the Accounts of all Participants (or in
39
<PAGE> 14
the case of partial termination of the Plan, the Accounts of all affected
Participants) shall be treated as if each such Participant had elected to
terminate his or her participation in the Plan pursuant to Section 7.2 hereof.
The Administrator shall promptly send each affected Participant notice of such
suspension, modification or termination.
Section 9.2 Rules and Regulations. The Company may from time to time
adopt such administrative rules and regulations concerning the Plan as it deems
necessary or desirable for the administration of the Plan. The Company shall
have the power and authority to interpret the terms and the provisions of the
Plan and shall interpret and construe the Plan and reconcile any inconsistency
or supply any omitted detail in a manner consistent with the general terms of
the Plan and applicable law.
Section 9.3 Costs. All costs of administration of the Plan shall be
paid by the Company; provided, however, that any brokerage commissions, service
charges, or applicable taxes incurred in connection with open market purchases
and sales of shares of Common Stock made under the Plan shall be borne by the
Participants.
Section 9.4 Termination of a Participant. If a Participant does not
have at least one whole Account Share or own or hold any other Common Stock of
record for which Dividends are designated for reinvestment pursuant to this
Plan, the Participant's participation in the Plan may be terminated by the
Company, in its sole discretion, after written notice is mailed to such
Participant at his or her address of record. Additionally, the Company, in its
sole discretion, may terminate any Participant's participation in the Plan
after written notice mailed in advance to such Participant at his or her
address of record, if the Company believes that such Participant's
participation may be contrary to the general intent of the Plan or in violation
of applicable law. Upon such termination, the Account of such Participant
shall be treated as if he or she had elected to terminate his or her
participation in the Plan pursuant to Section 7.2 hereof.
ARTICLE X
Administration of the Plan
Section 10.1 Selection of an Administrator. The Administrator shall
be appointed by the Company. The Administrator's appointment to serve as such
may be revoked by the Company at any time. The Administrator may resign at any
time upon reasonable notice to the Company. In the event that no Administrator
is appointed, the Company shall be deemed to be the Administrator for purposes
of the Plan. The Company shall be the initial Administrator.
Section 10.2 Compensation. The officers of the Company shall make
such arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator and any Independent Agent as they from
time to time deem reasonable and appropriate.
Section 10.3 Authority and Duties of Administrator. The
Administrator shall have the authority to undertake any act necessary to
fulfill its duties as set forth in the various provisions of the Plan. Upon
receipt, the Administrator shall transmit promptly all Dividends, optional cash
investments and initial cash investments to a segregated escrow
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<PAGE> 15
account at a bank or to the Independent Agent. The Administrator shall
maintain appropriate records of the Accounts of Participants.
Section 10.4 Liability of the Company, the Administrator and any
Independent Agent. The Company, the Administrator, and any Independent Agent
shall not be liable for any act done in good faith, or for the good faith
omission to act in administering or performing their duties with respect to the
Plan, including, without limitation, any claim of liability arising out of
failure to terminate a Participant's Account upon such Participant's death
prior to receipt of notice in writing of such death, or with respect to the
prices at which shares are purchased or sold for a Participant's Account and
the times when such purchases and sales are made, or with respect to any loss
or fluctuation in the market value after the purchase or sale of such shares.
Section 10.5 Records and Reports. The Administrator shall keep
appropriate records concerning the Plan, Accounts of Participants, purchases
and sales of Common Stock under the Plan, and Participants' addresses of record
and shall send shareholder materials and statements to each Participant in
accordance with the provisions of Sections 7.4 and 7.5 hereof.
Section 10.6 Selection of Independent Agent. Any Independent Agent
serving in such capacity pursuant to the Plan shall be selected by the Company,
and the Administrator and the Company, or either of them, shall, subject to the
provisions hereof, make such arrangements and enter into such agreements with
the Independent Agent in connection with the activities contemplated by the
Plan as the Administrator and the Company, or either of them, deem reasonable
and appropriate.
Section 10.7 Source of Shares of Common Stock. The Company shall not
change the source of Common Stock purchased by Participants in the Plan (i.e.,
either (i) newly issued shares of Common Stock or (ii) shares of Common Stock
purchased in the open market) more than every three months. The Company shall
not exercise its right to change the source of shares absent a recorded
determination by the Company's Board of Directors or Chief Financial Officer
that the Company's need to raise additional capital has changed or there is
another valid reason for a change.
ARTICLE XI
Miscellaneous Provisions
Section 11.1 Controlling Law. This Plan shall be construed,
regulated and administered under the laws of the State of New Mexico.
Section 11.2 Acceptance of Terms and Conditions of Plan by
Participants. Each Participant, by completing an Enrollment Form and as a
condition of participation herein, for himself or herself, his or her heirs,
executors, administrators, legal representatives and assigns, approves and
agrees to be bound by the provisions of this Plan and any subsequent amendments
hereto, and all actions of the Company and the Administrator hereunder.
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<PAGE> 16
Section 11.3 Receipt by Administrator. Monies, Enrollment Forms, and
other communications will be considered to be received when delivered, either
by postal service or in person, during business hours of the Company or the
Administrator, as the case may be, to the Company's or Administrator's
corporate headquarters.
IN WITNESS WHEREOF, the Company has caused this PNM Direct Plan to be
executed this 28th day of August, 1996.
PUBLIC SERVICE COMPANY OF
NEW MEXICO
By: /s/ BENJAMIN F. MONTOYA
-------------------------------------
BENJAMIN F. MONTOYA
President and Chief Executive Officer
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<PAGE> 1
EXHIBIT 5
August 28, 1996
Public Service Company of New Mexico
Alvarado Square
Albuquerque, NM 87158
Re: Public Service Company of New Mexico Dividend Reinvestment and
Stock Purchase Plan Entitled "PNM Direct Plan"
Ladies and Gentlemen:
We have acted as counsel for Public Service Company of New Mexico, a
New Mexico corporation (the "Company"), in connection with the registration by
the Company under the Securities Act of 1933, as amended, of 2,000,000 shares
of Common Stock, $5.00 par value per share (the "Common Stock"), to be sold
under the PNM Direct Plan (the "Plan") pursuant to a Registration Statement on
Form S-3 (the "Registration Statement") to be filed with the Securities and
Exchange Commission (the "Commission").
We have examined originals, or copies certified to our satisfaction,
of such corporate records of the Company, certificates of public officials,
certificates of officers and representatives of the Company and other documents
as we have deemed necessary as a reasonable basis for the opinions hereinafter
expressed. In our examination we have assumed the genuineness of all
signatures and the authenticity of all documents submitted to us as originals
and the conformity with the originals of all documents submitted to us as
copies. As to various questions of fact material to such opinions we have,
when relevant facts were not independently established, relied upon
certifications by officers of the Company and other appropriate persons and
statements contained in the Registration Statement.
Based upon the foregoing and having regard to legal considerations
which we deem relevant, we are of the opinion that when (i) the Registration
Statement becomes effective, (ii) the consideration to be paid for the shares
by the participants purchasing Common Stock which is purchased in the open
market on behalf of the Plan by the independent agent for the Plan
("Repurchased Shares") and sold pursuant to the Plan has been paid by such
participants, and (iii)
<PAGE> 2
August 28, 1996
Page 2
the Repurchased Shares have been sold pursuant to the Plan, the Repurchased
Shares will be duly authorized, legally issued, fully paid and nonassessable.
We understand that the Company does not intend to utilize newly issued
shares in connection with the Plan, and, accordingly, no approvals have been
obtained by the Company for newly issued shares. The use of newly issued
shares will be subject to further approvals, including Board of Directors
approval and approval by the New Mexico Public Utility Commission. We do not
express any opinion herein with respect to the authorization or issuance of
newly issued shares.
We do not express any opinion as to matters governed by any laws other
than the laws of the State of New Mexico and the Federal laws of the United
States of America.
We hereby consent to the reference to this firm under the heading
"Legal Opinions" in the Prospectus constituting a part of the Registration
Statement and to the filing of this opinion as Exhibit 5 to the Registration
Statement.
Very truly yours,
KELEHER & McLEOD, P.A.
By /s/Charles L. Moore
-----------------------------------
Charles L. Moore
CLM/sls
<PAGE> 1
EXHIBIT 15
August 26, 1996
Public Service Company of New Mexico
We are aware that Public Service Company of New Mexico has incorporated by
reference in this registration statement its Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996, which includes our reports dated May 8, 1996
and August 2, 1996, respectively, covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities Act
of 1933, such reports are not considered a part of the registration statement
prepared or certified by our firm or a report prepared or certified by our firm
within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
/s/ ARTHUR ANDERSEN LLP
Arthur Andersen LLP
43
<PAGE> 1
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
Albuquerque, New Mexico
August 26, 1996
44
