<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14a INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
PUBLIC SERVICE COMPANY OF NEW MEXICO
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
-----------------------------------------------------------------------
<PAGE> 2
[PNM LOGO]
Public Service Company
of New Mexico
Alvarado Square
Albuquerque, NM 87158
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TUESDAY, JUNE 8, 1999
9:30 A.M., MOUNTAIN DAYLIGHT TIME
SOUTH BROADWAY CULTURAL CENTER
1025 BROADWAY S.E.
ALBUQUERQUE, NEW MEXICO
April 26, 1999
Dear Shareholder:
You are cordially invited to attend the 1999 Public Service Company of
New Mexico Annual Meeting of Shareholders to:
o Elect three directors.
o Approve appointment of Arthur Andersen LLP as independent
public accountants for 1999.
o Conduct other business properly brought up at the meeting.
Shareholders of record at the close of business on April 18, 1999 may
vote at the meeting.
Your vote is important. Whether you plan to attend or not, please sign,
date, and return the enclosed proxy card in the envelope provided. If you attend
the meeting and prefer to vote in person, you may do so.
This Proxy Statement and proxy card are being distributed on or about
April 26, 1999.
I look forward to seeing you at the meeting.
Sincerely,
/s/ JOHN T. ACKERMAN
John T. Ackerman
Chairman
<PAGE> 3
- - --------------------------------------------------------------------------------
TABLE OF CONTENTS
- - --------------------------------------------------------------------------------
PROXY STATEMENT
<TABLE>
<S> <C>
Notice of Annual Meeting........................................................Cover
Attendance and Voting Matters.......................................................1
The PNM Board of Directors..........................................................2
PNM Common Stock Owned by Executive Officers and Directors..........................7
Persons Owning More than Five Percent of PNM Common Stock...........................7
Performance Graph...................................................................8
Compensation and Human Resources Committee
Report on Executive Compensation....................................................9
Executive Compensation.............................................................12
Appointment of Arthur Andersen LLP.................................................16
Other Matters
Section 16(a) Beneficial Ownership Reporting Compliance...................17
Annual Report and Other Matters...........................................17
Shareholder Proposals for the Year 2000 Annual Meeting....................17
Solicitation..............................................................17
Revocability of Proxy.....................................................18
</TABLE>
<PAGE> 4
- - --------------------------------------------------------------------------------
ATTENDANCE AND VOTING MATTERS
- - --------------------------------------------------------------------------------
ADMISSION TICKETS
Admission Tickets will be distributed at the registration tables in the
lobby of the South Broadway Cultural Center prior to the Annual Meeting.
Attendance is limited to shareholders of record on April 18, 1999. If your
shares are held in the name of your broker, bank, or other nominee, please bring
an account statement or letter from the nominee indicating that you are the
beneficial owner of the shares as of the record date.
VOTING METHODS
You can vote on matters to come before the meeting in two ways:
o You can come to the Annual Meeting and cast your vote there;
or
o You can vote by signing and returning the enclosed proxy card.
If you do so, your shares will be voted in the manner you
indicate. In the absence of specific instructions, proxies
will be voted by those named in the proxy FOR the election of
directors nominated, FOR the approval of the selection of
Arthur Andersen LLP as independent public accountants, and on
all other matters in accordance with their best judgment.
Each share of PNM common stock you own entitles you to one vote. As of
April 18, 1999, there were 40,895,683 shares of PNM common stock outstanding.
THE QUORUM REQUIREMENT
A quorum of shareholders is necessary to hold a valid meeting. If at
least a majority of the outstanding common stock is represented at the Annual
Meeting, in person or by proxy, a quorum will exist.
VOTE NECESSARY FOR ACTION
A quorum and the affirmative vote of the holders of a majority of the
shares of PNM common stock present, in person or by proxy, and entitled to vote
at the Annual Meeting are required to elect directors, approve the selection of
independent public accountants, and to approve other actions. Abstentions have
the effect of a vote against the matter. Shares not voted on a matter by brokers
and other entities holding shares for beneficial owners will not be counted in
calculating voting results on that matter.
MATTERS RAISED AT THE MEETING NOT INCLUDED IN THIS STATEMENT
We do not know of any matters to be acted upon at the meeting other
than those discussed in this statement. If any other matter is presented, proxy
holders will vote on the matter in their discretion.
1
<PAGE> 5
- - --------------------------------------------------------------------------------
THE PNM BOARD OF DIRECTORS
- - --------------------------------------------------------------------------------
STRUCTURE
Our Board of Directors is divided into three classes for purposes of
election. One class is elected at each Annual Meeting of Shareholders to serve
for a three-year term.
At the 1999 Annual Meeting of Shareholders, the terms of three
directors are expiring. Those directors elected at this Annual Meeting will hold
office for a three-year term expiring in 2002, with the possible exception of
Dr. Lattman. Under a policy adopted by the Board in 1991, a director must submit
his or her written resignation upon reaching age 72. In accordance with that
policy, Dr. Lattman has submitted his written resignation for acceptance by the
Board at such time as the Board in its discretion deems advisable. It is
currently anticipated that the Board will be reorganizing during Dr. Lattman's
next term to more appropriately address the competitive issues of electric
restructuring. Dr. Lattman's resignation would give the Board the latitude to
fill his position accordingly.
The other directors are not up for election this year and will continue
in office for the remainder of their terms.
If a nominee is unavailable for election, proxy holders will vote for
another nominee proposed by the Board.
DIRECTORS NOMINATED THIS YEAR FOR TERMS EXPIRING IN 2002
LAURENCE H. LATTMAN, 75, is a resident of Albuquerque, New Mexico and
has been a director since May 1993. Dr. Lattman served as President of New
Mexico Institute of Mining and Technology from 1983 until his retirement in
1993.
BENJAMIN F. MONTOYA, 63, is a resident of Rio Rancho, New Mexico and
has been a director since October 1993. Mr. Montoya has served as President and
Chief Executive Officer of PNM since August 1993, and previously served as
Senior Vice President and General Manager, Gas Supply Business Unit, Pacific Gas
and Electric Company (1991-1993). Other directorships: Norwest Corporation, a
bank holding company, and Furr's Supermarkets, Inc.
ROBERT M. PRICE, 68, is a resident of Edina, Minnesota and has been a
director since July 1992. Mr. Price has been President of PSV Inc., a technology
consulting business located in Burnsville, Minnesota, since 1990. Between 1961
and 1990, Mr. Price served in various executive positions, including Chairman
and Chief Executive Officer, of Control Data Corporation, a mainframe computer
manufacturer and business services provider. Other directorships: Tupperware
Corporation, International Multifoods Corp., Fourth Shift Corporation, and
Affinity Technology Group, Inc.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
2
<PAGE> 6
DIRECTORS WITH TERMS EXPIRING IN 2001
JOHN T. ACKERMAN, 57, is a resident of Albuquerque, New Mexico and has
been a director since June 1990. Mr. Ackerman has served as Chairman of the
Board of PNM since 1991 and served as President and Chief Executive Officer of
PNM from 1990 until his retirement in 1993.
JOYCE A. GODWIN, 55, is a resident of Albuquerque, New Mexico and has
been a director since May 1989. Ms. Godwin served as Vice President and
Secretary of Presbyterian Healthcare Services of Albuquerque, New Mexico, from
1979 until her retirement in December 1993. Ms. Godwin also served as Chairman
and President of Southwest Business Ventures, Inc., a holding company for
Presbyterian Healthcare Services' for-profit ventures, from 1986 until her
retirement in December 1993. Other directorships: Charter Bank, Albuquerque, New
Mexico and TJ International.
MANUEL LUJAN, JR., 71, is a resident of Albuquerque, New Mexico and has
been a director since April 1994. Mr. Lujan has been a consultant on U.S.
governmental matters, focusing on Western U.S. issues, since 1993. Mr. Lujan
served as U.S. Secretary of the Interior from 1989 to 1993 and served in the U.
S. House of Representatives from 1969 to 1989. Mr. Lujan has been an insurance
agent with Manuel Lujan Insurance, Inc. since 1948. Other directorships: Bank
1st, Albuquerque, New Mexico and SODAK Gaming, Inc.
DIRECTORS WITH TERMS EXPIRING IN 2000
ROBERT G. ARMSTRONG, 52, is a resident of Roswell, New Mexico and has
been a director since May 1991. Mr. Armstrong is the President of Armstrong
Energy Corporation, Roswell, New Mexico, an oil and gas exploration and
production company.
REYNALDO U. ORTIZ, 52, is a resident of Denver, Colorado and has been a
director since April 1992. Mr. Ortiz is an international telecommunications
consultant. Mr. Ortiz served as the International Managing Director and Senior
Vice President of Qwest Communications International, a telecommunications
company, from January 1998 to December 1998. He served as President and Chief
Executive Officer of Sophia Communications, Inc., a startup wireless
communications company, from January 1997 through December 1997. He served as
President and Chief Executive Officer of LyncStar Communications, Inc. (a
provider of integrated network communications services) from March through
December 1996, served as Chief Executive Officer of Jones Education Networks,
Inc. (a cable television programming company) from March 1994 through February
1996, and was Senior Vice President, Jones Financial Group, Inc. from January
through March 1994.
PAUL F. ROTH, 66, is a resident of Santa Fe, New Mexico and has been a
director since May 1991. Mr. Roth served as the President of the Dallas Chamber
of Commerce, Dallas, Texas, from 1991 to 1992. Between 1956 and 1991, Mr. Roth
served in various executive positions, including President, of the Texas
Division of Southwestern Bell Telephone Company, Dallas, Texas.
3
<PAGE> 7
BOARD MEETINGS AND COMMITTEES
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
MEMBERSHIP ROSTER
(STANDING BOARD COMMITTEES)
- - ----------------------------------------------------------------------------------------------------------------------
Compensation & Customer & Nominating &
Name Board Audit Human Resources Public Policy Executive Finance Governance
- - ----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
J. T. Ackerman x* x*
- - ----------------------------------------------------------------------------------------------------------------------
R. G. Armstrong x x* x x
- - ----------------------------------------------------------------------------------------------------------------------
J. A. Godwin x x x* x x*
- - ----------------------------------------------------------------------------------------------------------------------
L. H. Lattman x x x x
- - ----------------------------------------------------------------------------------------------------------------------
M. Lujan, Jr. x x x
- - ----------------------------------------------------------------------------------------------------------------------
B. F. Montoya x x
- - ----------------------------------------------------------------------------------------------------------------------
R. U. Ortiz x x x
- - ----------------------------------------------------------------------------------------------------------------------
R. M. Price x x x x*
- - ----------------------------------------------------------------------------------------------------------------------
P. F. Roth x x* x x x
- - ----------------------------------------------------------------------------------------------------------------------
No. of Meetings in
1998 8 4 5 8 4 5 4
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
*Chair
In 1998, the full Board met eight times. In addition, the outside
directors met three times during 1998. Directors attended meetings of individual
Board committees as shown in the above table. For the Board as a whole,
attendance in 1998 at full Board and committee meetings exceeded 96%. Only one
director, Mr. Ortiz, attended less than 75% of all meetings.
The AUDIT COMMITTEE consists entirely of non-employee directors. It
assesses the work of PNM's internal auditors and independent public accountants
and the effectiveness of the business control structure. It also reviews the
financial statements of PNM and oversees PNM's financial reporting. The
committee represents the Board of Directors in accounting and auditing related
activities of PNM. It has the responsibility to make recommendations to the
Board with respect to appointment of the independent public accountants, to
approve the scope of the annual audit and to monitor and review the
effectiveness of PNM's management of accounting functions. The committee also
has the responsibility to monitor and report to the Board the status of PNM's
activities to assure that its computers and other systems will be year 2000
compliant.
The COMPENSATION AND HUMAN RESOURCES COMMITTEE consists entirely of
non-employee directors. It reviews PNM's compensation policies and benefit
programs and their relationship to the attainment of business goals. The
committee recommends to the Board the compensation philosophy and guidelines for
the entire executive and managerial group, giving emphasis to rewarding
long-term results and maximizing shareholder value. The committee reviews PNM's
affirmative action program, conducts an annual performance evaluation of the
chief executive officer, and assures management continuity through annual review
and approval of a management development and succession program. The committee
also has oversight of PNM's code of conduct and compliance program and interacts
with PNM's employee organizations.
4
<PAGE> 8
The CUSTOMER AND PUBLIC POLICY COMMITTEE consists entirely of
non-employee directors. It reviews and monitors policies that deal with PNM's
responsibility to the communities in which it does business. The subject matter
of policies reviewed and monitored includes: customer service, the environment,
charitable contributions, government relations, and communications to various
constituencies of PNM. The committee meets with public officials, the media and
other opinion leaders throughout the year to obtain an independent assessment of
PNM's public reputation.
The EXECUTIVE COMMITTEE consists of the Chairman of the Board and the
chairs of PNM's standing Board committees. It exercises the powers of the Board
during intervals between Board meetings.
The FINANCE COMMITTEE consists of a majority of non-employee directors.
It reviews and recommends to the Board the capital structure and financial
strategy for PNM, including dividend policy. It has oversight of PNM's financial
performance, investment procedures and policies, pension fund performance and
funding level, and risk management strategies and policies. The committee
specifically has responsibility for the review and approval of certain capital
expenditures in excess of $1,000,000 and of all capital expenditures in excess
of $2,500,000.
The NOMINATING AND GOVERNANCE COMMITTEE consists entirely of
non-employee directors. It has the responsibility to make recommendations to the
Board for nominees for election as directors, as well as recommendations
concerning the effectiveness, structure, size, composition and compensation of
the Board, including committee assignments and candidates for election as
Chairman of the Board. The Nominating and Governance Committee conducts an
annual evaluation of Board performance and effectiveness, and, at least
annually, reviews conflict of interest questionnaires submitted by directors to
determine whether any potential or actual conflict of interest exists. In 1995,
the Board approved a Nominations Policy which describes the guidelines,
procedures, and selection criteria for filling vacancies on the Board,
recognizing the importance of a well-balanced Board which reflects the interests
of PNM's shareholders, customers, employees and the communities it serves. The
Nominating and Governance Committee seeks potential nominees for Board
membership in various ways and will consider suggestions submitted by
shareholders. Suggestions, together with a description of the potential
nominee's qualifications, appropriate biographical information, and the
potential nominee's signed consent to serve, should be submitted to the
Secretary of PNM prior to August 1, 1999, for consideration at the year 2000
annual meeting.
In addition to the standing committees described above, in 1997 the
Board formed an AD HOC COMMITTEE to conduct an independent investigation
concerning a regulatory ruling that accused management of improper acts. The
Board members who served on the AD HOC COMMITTEE were John Ackerman, Robert
Armstrong, Joyce Godwin and Paul Roth. There were no meetings of the AD HOC
COMMITTEE in 1998. The AD HOC COMMITTEE completed its investigation in 1997 and
issued a report finding that management had not committed the improper acts, but
recommended improvements in some internal processes. Final regulatory orders
were issued in 1998 also finding that the accusations were unfounded. The AD HOC
COMMITTEE was dissolved on September 29, 1998, after issuance of the final
regulatory orders.
5
<PAGE> 9
DIRECTOR COMPENSATION
Of PNM's current Board members, only one, Mr. Montoya, is a salaried
employee. Mr. Montoya receives no compensation for serving on the Board or its
committees. Board members who are not salaried employees of PNM receive
compensation for Board service. That compensation, for other than the Chairman
of the Board, includes:
ANNUAL RETAINER*: $20,000
ATTENDANCE FEES: $750 per Board meeting
$500 for each Board committee meeting
COMMITTEE CHAIRS: $200 for each Board committee meeting
(in addition to attendance fees)
In December 1993, the Board of Directors restructured the duties and
compensation of the position of Chairman of the Board as a non-employee
director, increasing the duties and establishing the level of compensation. The
current Chairman receives an annual retainer that is four times the amount paid
to other non-employee directors, of which one-fourth is paid on terms identical
to the retainer paid to other non-employee directors and the remaining
three-fourths in cash, and is only paid meeting fees for attending Board and
Executive Committee meetings. The meeting fees for the Chairman are three times
the meeting fees paid to other non-employee directors.
*Under PNM's Director Retainer Plan, approved by shareholders in 1996,
directors may choose to receive their annual retainer in the form of cash,
restricted stock or stock options. The restrictions on the restricted stock
generally lapse one-third each year following the year of the grant. The options
generally vest (become exercisable) one year from the date they were granted and
allow the director to purchase 2,000 shares of common stock. The exercise price
of the option is equal to the fair market value of the common stock on the date
of grant less the annual retainer divided by 2,000, subject to a minimum
exercise price.
6
<PAGE> 10
- - --------------------------------------------------------------------------------
PNM COMMON STOCK OWNED BY EXECUTIVE OFFICERS AND DIRECTORS
(AS OF FEBRUARY 2, 1999)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
Amount and Nature of Shares Beneficially Owned(a)
- - ----------------------------------------------------------------------------------------------------------------------
Name Aggregate No. Right to Acquire Percent of Shares
of Shares Held(b) Within 60 Days(c) Beneficially Owned
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
John T. Ackerman 10,935 -0- *
- - ----------------------------------------------------------------------------------------------------------------------
Robert G. Armstrong 4,000 3,000 *
- - ----------------------------------------------------------------------------------------------------------------------
Roger J. Flynn 1,000 -0- *
- - ----------------------------------------------------------------------------------------------------------------------
Joyce A. Godwin 3,632 3,000 *
- - ----------------------------------------------------------------------------------------------------------------------
Laurence H. Lattman 3,123 2,000 *
- - ----------------------------------------------------------------------------------------------------------------------
Manuel Lujan, Jr. 4,080 -0- *
- - ----------------------------------------------------------------------------------------------------------------------
Max H. Maerki 1,097 13,490 *
- - ----------------------------------------------------------------------------------------------------------------------
Benjamin F. Montoya 3,213 134,094 *
- - ----------------------------------------------------------------------------------------------------------------------
Patrick T. Ortiz 550 50,387 *
- - ----------------------------------------------------------------------------------------------------------------------
Reynaldo U. Ortiz 3,224 -0- *
- - ----------------------------------------------------------------------------------------------------------------------
Robert M. Price 3,000 3,000 *
- - ----------------------------------------------------------------------------------------------------------------------
Paul F. Roth 5,478 -0- *
- - ----------------------------------------------------------------------------------------------------------------------
Jeffry E. Sterba(d) 1,523 13,490 *
- - ----------------------------------------------------------------------------------------------------------------------
Directors and Executive
Officers as a Group (17) 49,791 274,234 *
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Beneficial ownership means the sole or shared power to vote, or to direct
the voting of, a security and/or investment power with respect to a
security.
(b) Shares held in the individual's name, individually or jointly with others,
or in the name of a bank, broker or nominee for the individual's account.
The total for directors and executive officers as a group does not include
914 shares owned by the spouse of one executive officer. The executive
officer disclaims beneficial ownership of those shares.
(c) The number of shares directors and executive officers have a right to
acquire through stock option exercises within 60 days after February 2,
1999.
(d) Mr. Sterba resigned on December 31, 1998.
*Less than 1% of PNM's outstanding shares of common stock.
- - --------------------------------------------------------------------------------
PERSONS OWNING MORE THAN FIVE PERCENT OF PNM COMMON STOCK
(AS OF MARCH 29, 1999)
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
VOTING DISPOSITIVE
AUTHORITY AUTHORITY PERCENT
------------------------- ------------------------- TOTAL OF
NAME AND ADDRESS SOLE SHARED SOLE SHARED AMOUNT CLASS
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Morgan Stanley, Dean Witter & Co.
1585 Broadway 0 2,229,693 0 2,234,793 2,234,793 5.4%
New York, NY 10036
- - ----------------------------------------------------------------------------------------------------------------------
The Prudential Insurance Company of America
751 Broad Street 53,800 2,596,024 53,800 2,596,024 2,649,824 6.4%
Newark, NJ 07102-3777
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
The information provided above is based on reports filed with the
Securities and Exchange Commission. PNM makes no representation as to the
accuracy or completeness of such information. These are the only persons known
to PNM, as of March 29, 1999, to be the beneficial owners of more than 5% of
PNM's common stock.
7
<PAGE> 11
- - --------------------------------------------------------------------------------
PERFORMANCE GRAPH
- - --------------------------------------------------------------------------------
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER
RETURN AMONG PNM, A PEER GROUP* AND S&P 500 STOCK INDEX
The following graph assumes that $100 was invested on December 31, 1993
in PNM Common Stock, the combination gas and electric peer group and the S&P 500
Stock Index, and that all dividends were reinvested. Historical performance does
not necessarily predict future results.
[GRAPH]
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
FISCAL YEAR ENDED
DECEMBER 31, 1993 1994 1995 1996 1997 1998
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PNM 100 115 157 178 222 198
- - ----------------------------------------------------------------------------------------------------------------------
Peer Group 100 86 108 101 135 166
- - ----------------------------------------------------------------------------------------------------------------------
S&P 500 100 101 139 171 229 294
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
* The peer group companies are combination electric and gas utilities each of
which has an investment in a nuclear power generating station. The peer group
companies are as follows: Baltimore Gas & Electric Company, Central Hudson
Gas & Electric Company, CMS Energy Corp., Commonwealth Energy System,
Consolidated Edison, Inc., Niagara Mohawk Power Corp., Northern States Power
Company, Pacific Gas & Electric Company, PECO Energy Company, Public Service
Enterprises Group, Rochester Gas & Electric Corp., SCANA Corporation,
Wisconsin Energy Corp., and WPS Resources Corp.
8
<PAGE> 12
- - --------------------------------------------------------------------------------
COMPENSATION AND HUMAN RESOURCES COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
- - --------------------------------------------------------------------------------
COMPENSATION POLICIES
The Compensation and Human Resources Committee ("Committee")
establishes compensation guidelines and targets based upon the performance of
PNM, business units within PNM, and individual executive officers. The Committee
consists of four independent directors who are not PNM employees. The
Committee's goal is to establish a compensation program that:
o links the interests of management and shareholders
o links executive compensation with long-term PNM performance
o attracts and retains executives of high caliber and ability
For 1998, that program consisted of base salary, short-term incentive
compensation, and long-term incentive compensation.
The Committee believes this compensation program was a factor
contributing to PNM's success this past year, including earnings per share of
$1.97 and operating revenues of $1.092 billion. As the performance graph
indicates, PNM stock has provided shareholders with a cumulative return over the
past five years that exceeds PNM's peer group.
BASE SALARIES
EXECUTIVE OFFICERS
Each year the Committee reviews base salaries of individual executive
officers and their salary ranges. In 1998, base salaries were conservatively
tied to the average level of base salaries among gas and electric utilities
included in compensation surveys sponsored by the Edison Electric Institute and
the American Gas Association, as well as other industries.
CHIEF EXECUTIVE OFFICER
Mr. Montoya became the President and CEO of PNM in 1993. At that time,
data provided by an executive compensation consultant and an executive search
firm were considered in determining Mr. Montoya's compensation. Mr. Montoya's
salary remained unchanged until 1996, when the common stock dividend was
reinstated. In 1996, his compensation was increased by $30,000 to $350,000. In
1997, Mr. Montoya's compensation was increased by $25,000 to $375,000. In 1998,
his compensation remained at the same level. In setting Mr. Montoya's salary,
the Committee evaluated his performance in the prior year. Determinative factors
included:
9
<PAGE> 13
o strategic planning
o cost reduction
o customer retention and targeted market strategy
o financial targets
o human resources targets
o external relations targets
Some of the significant achievements considered are set forth below:
o continued improvement in shareholder returns
o advancement of position as a customer-focused energy services
company
o implementation of a strategic planning process
o continued improvement in financial credit rating criteria
o implementation of new business development opportunities
SHORT-TERM INCENTIVE COMPENSATION
EXECUTIVE OFFICERS
In 1998, executive officers, together with all other PNM employees,
participated in a results-pay plan. The plan has an "at risk" cash compensation
element tied to the success of the individual business units and to the overall
success of PNM. Goals are approved annually by the Board of Directors. Business
unit goals for 1998 were generally centered on customer satisfaction, cost
control, and efficiency in operations and an earnings per share ("EPS") goal.
The business unit goals for 1998 were partially achieved and the EPS goal was
fully achieved. Partial payments were made in February 1999.
CHIEF EXECUTIVE OFFICER
Mr. Montoya was not a participant in the results-pay plan; however,
based on his 1997 performance, the Board of Directors awarded Mr. Montoya a
bonus of $25,000 in 1998.
LONG-TERM INCENTIVE COMPENSATION
EXECUTIVE OFFICERS AND CHIEF EXECUTIVE OFFICER
Under PNM's Performance Stock Plan ("PSP"), non-qualified stock option
grants are awarded to all executive officers, including Mr. Montoya, as well as
other key employees, based on performance data established and recommended to
the Committee by the President. The PSP provides that the Committee, in its sole
and absolute discretion, will declare annually the level of options to be
granted. Due to plan amendments approved in 1998, which changed the
10
<PAGE> 14
timing of grants, no grants were awarded with a 1998 effective date. Grants for
1999 were approved and awarded in February 1999 and will be reported in the year
2000 Proxy Statement.
CERTAIN TAX MATTERS
Under Section 162(m) of the Internal Revenue Code ("Code"), PNM may not
deduct certain forms of compensation in excess of $1 million. PNM has no policy
with respect to Section 162(m) because no executive of PNM earns in excess of $1
million.
In June 1998, upon the recommendation of the Committee, the Board of
Directors approved a plan to provide executives with contributions benefits for
employees earning more than the Internal Revenue Service limits imposed for
qualified plans. PNM recognizes that these employees are restricted in their
ability to participate and to receive contributions in PNM's 401(k) plan due to
the IRS limits. The plan approved provides each eligible participant an
opportunity to receive the 3% company contribution and 75 cents on the dollar
for the first 6% contributed by the employee for eligible earnings in excess of
$160,000 on a before-tax basis. There were six executive officers who
participated in the executive savings plan in 1998.
Compensation and Human Resources Committee
Paul F. Roth (Chair) Joyce A. Godwin
Robert G. Armstrong Robert M. Price
11
<PAGE> 15
- - --------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
- - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
-------------------------------------------------------------------------
LONG-TERM
COMPENSATION
----------------
ANNUAL COMPENSATION AWARDS
- - -------------------------------------------------------------------------------------------------------------------------
SECURITIES
NAME AND OTHER ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(a) OPTIONS(#) COMPENSATION
- - -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
B. F. Montoya 1998 $389,423 $ 25,000(b) -- -0- (c) 22,327(d)
President and CEO 1997 358,657 75,000(b) -- 20,902 -0-
1996 341,927 -- 32,802 -0-
-0-
- - -------------------------------------------------------------------------------------------------------------------------
R. J. Flynn 1998 $166,320 $ 49,223(e) -- -0- (c) 1,842(d)
Executive Vice 1997 155,574 9,975(e) -- 7,432 -0-
President, Electric and 1996 153,995 37,400(e) -- 12,301 -0-
Gas Services 1,183(f)
- - -------------------------------------------------------------------------------------------------------------------------
M. H. Maerki 1998 $190,432(g) $ 49,927(e) -- -0- (c) 3,024(d)
Senior Vice President 1997 178,346(g) 12,408(e) -- 7,432 -0-
and Chief Financial 1996 174,095(h) 39,101(e) -- 12,301 -0-
Officer 14,201(f)
- - -------------------------------------------------------------------------------------------------------------------------
P. T. Ortiz 1998 $155,699 $ 41,588(e) -- -0- (c) 982(d)
Senior Vice President 1997 142,884 11,093(e) -- 7,432 -0-
and General Counsel 1996 135,000 34,500(e) -- 10,853 -0-
14,201(f)
- - -------------------------------------------------------------------------------------------------------------------------
J. E. Sterba 1998 $256,849(g) $ 117,161(e) -- -0- (c) 6,525(d)
Executive Vice President 1997 195,033(g) 19,968(e) -- 13,935 -0-
and Chief Operating 1996 146,965(h) 40,801(e) -- 12,301 -0-
Officer 14,201(f)
(through 12/31/98)
- - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) These amounts are less than the established reporting thresholds.
(b) Bonuses paid in June 1998 and August 1997 for previous performance.
(c) Due to Performance Stock Plan amendments approved in 1998, which
changed the timing of the grants, no grants were awarded with a 1998
effective date.
(d) In June 1998, the Board of Directors approved a plan to provide
executives with contribution benefits for employees earning more than
IRS limits imposed for qualified plans.
(e) In 1995, a results-based reward program was implemented which was
designed to tie a portion of cash rewards awarded employees to the
success of their business unit and a portion to the success of PNM as a
whole. Goals are approved annually by the Board of Directors. These
amounts reflect incentive award amounts paid in 1999 for 1998
achievements, in 1998 for 1997 achievements, and in 1997 for 1996
achievements. In addition, these amounts include any lump sum awards
granted for individual performance.
(f) A deferred bonus fund of $200,000 was established in December 1994,
based on PNM's 1994 performance, from which lump sum awards to all
officers of PNM, excluding the President and CEO, were to be paid at
such time as PNM paid a dividend to shareholders. Upon the
reinstatement of the dividend in 1996, the amounts noted were paid, as
determined by the President and CEO.
(g) These amounts include sales of accrued vacation hours during 1998 and
1997 and also reflect increases in base salaries.
(h) These amounts include sales of accrued vacation hours during 1996 and
do not reflect increases in base salaries.
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<PAGE> 16
- - --------------------------------------------------------------------------------
OPTION GRANTS IN 1998
- - --------------------------------------------------------------------------------
Under PNM's Performance Stock Plan, non-qualified stock option grants
are awarded to all executive officers, including Mr. Montoya, as well as other
key employees, based on achievement of goals approved annually by the Board of
Directors. Due to plan amendments approved in 1998, which changed the timing of
the grants, no grants were awarded with a 1998 effective date. Grants for 1999
were approved and awarded in February 1999 and will be reported in the year 2000
Proxy Statement.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN 1998
AND 1998 YEAR-END OPTION VALUES
--------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 1998 DECEMBER 31, 1998(a)
- - ----------------------------------------------------------------------------------------------------------------------
NAME SHARES ACQUIRED VALUE
ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
B. F. Montoya -0- 134,094 53,704 $827,299 $26,652
R. J. Flynn 16,042 $ 90,008 -0- 19,733 -0- 9,995
M. H. Maerki 23,637 241,280 13,490 19,733 37,941 9,995
P. T. Ortiz -0- 50,387 18,285 314,493 8,818
J. E. Sterba(b) -0- 13,490 26,236 37,941 9,995
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Value equals the year-end stock price ($20.4375) minus the exercise
price, times the number of shares underlying the option. "In-the-Money"
means that the year-end stock price was greater than the exercise price
of the option.
(b) Mr. Sterba resigned effective December 31, 1998.
RETIREMENT PLAN AND RELATED MATTERS
In December 1996, the Board of Directors approved changes to PNM's
non-contributory defined benefit plan ("Retirement Plan") and implementation of
a 401(k) defined contribution plan effective January 1, 1998. Salaries used in
Retirement Plan benefit calculations were frozen as of December 31, 1997.
Additional credited service can be accrued under the Retirement Plan up to a
limit determined by age and years of service. PNM contributions to the 401(k)
plan consist of a 3 percent non-matching contribution, and a 75 percent match on
the first 6 percent contributed by the employee on a before-tax basis.
In June 1998, the Board of Directors approved a plan to provide
executives with contributions benefits for employees earning more than the
Internal Revenue Service limits imposed for qualified plans. PNM recognizes that
these employees are restricted in their ability to participate and to receive
contributions in PNM's 401(k) plan due to the IRS limits. The plan approved
provides each eligible participant an opportunity to receive the 3% company
contribution and 75 cents on the dollar for the first 6% contributed by the
employee for eligible earnings in excess of $160,000 on a before-tax basis. Six
executive officers participated in the executive savings plan in 1998.
Through December 31, 1997, the Retirement Plan covered employees who
had at least one year of service and had attained the age of 21. Vesting
occurred after five years of service.
13
<PAGE> 17
PNM made contributions in 1998 to the Retirement Plan for plan year 1997 in the
amount of $185,000. The amount of any contribution with respect to any one
person cannot be determined. Directors who were not employees did not
participate in the Retirement Plan.
The following table illustrates the annual benefits that would be
provided under the Retirement Plan to employees who retire at the indicated
compensation and year of service levels and who elect to receive the benefits,
which are calculated on a straight-life annuity basis, over their remaining
lives. Vesting of accrued benefits would also occur in the event of a change in
control of PNM. Benefits shown are maximum annual benefits payable at age 65 to
participants who retire at age 65. The table is based on the Retirement Plan.
The amounts shown in the table are not subject to any deduction for Social
Security benefits or other offset amounts.
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------
PENSION PLAN TABLE
- - ----------------------------------------------------------------------------------------------------------------------
AVERAGE OF
HIGHEST ANNUAL
BASE SALARY CREDITED YEARS OF SERVICE
FOR 3
CONSECUTIVE -------------------------------------------------------------------------------------------------
YEARS(a) 5(b) 10 15 20 25 30 32 1/2(c)
- - ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$100,000 $10,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000 $ 60,000 $ 65,000
$150,000 15,000 30,000 45,000 60,000 75,000 90,000 97,500
$200,000 20,000 40,000 60,000 80,000 100,000 120,000 130,000
$250,000 25,000 50,000 75,000 100,000 125,000 150,000 162,500
$300,000 30,000 60,000 90,000 120,000 150,000 180,000 195,000
$350.000 35,000 70,000 105,000 140,000 175,000 210,000 227,500
$400,000 40,000 80,000 120,000 160,000 200,000 240,000 260,000
$450,000 45,000 90,000 135,000 180,000 225,000 270,000 292,500
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For these purposes, compensation consists of base salaries and includes
any amount voluntarily deferred under PNM's Master Employee Savings
Plan. Generally, compensation for these purposes does not include
bonuses, payments for accrued vacation, or overtime pay.
(b) Although years of service begin accumulating from the date of
employment, vesting occurs after five years of service.
(c) The maximum number of years generally taken into account for purposes
of calculating benefits under the non-contributory defined benefit
plan. Under limited circumstances, an additional 3% retirement benefit
could be earned by an employee working beyond age 62.
Credited years of service which can be used to calculate benefits as
shown in the above table have been accumulated by executive officers under the
Retirement Plan, the Accelerated Management Performance Plan discussed below and
the supplemental employee retirement arrangements discussed below. Credited
years of service computed as of December 31, 1998, are as follows: Mr. Montoya,
9 years; Mr. Flynn, 4.08 years; Mr. Maerki, 26.57 years; Mr. Ortiz, 7.33 years;
and Mr. Sterba, 23.87 years.. The executive officers' remuneration which would
be used to calculate benefits is determined by reference to the Retirement Plan
and the supplemental employee retirement arrangements discussed below. As of
December 31, 1998, the remuneration used to calculate benefits would be as
follows: Mr. Montoya, $373,336; Mr. Flynn, $161,163; Mr. Maerki, $170,900; Mr.
Ortiz, $138,332; and Mr. Sterba, $167,412.
Federal tax legislation imposes a $160,000 limitation beginning in 1997
on compensation that can be considered in determining retirement benefits under
qualified retirement plans. A PNM plan provides non-qualified deferred
compensation benefits to executives to the extent their
14
<PAGE> 18
retirement benefits under the Retirement Plan, the Accelerated Management
Performance Plan and supplemental employee retirement agreements are limited as
a result of the $160,000 compensation limitation.
In January 1981, the Board of Directors approved an executive
retirement program for a group of management employees. The program was intended
to attract, motivate and retain key management employees. Mr. Maerki and certain
other key management employees are eligible to participate in one or more of the
plans in the program. Mr. Sterba was eligible to participate prior to his
resignation on December 31, 1998. Under the program, as originally adopted, key
management employees had the opportunity to earn additional credit for years of
service toward retirement ("Accelerated Management Performance Plan" or "AMPP").
The AMPP, as amended and restated, phased out the accumulation of additional
credits by January 1, 1990. In addition, the amended and restated plan includes
a provision which allows key management employees who have not attained the
maximum credits for years of service to receive a reduced benefit from the plan
upon accepting early retirement. Monthly benefits received pursuant to the AMPP
are offset by monthly benefits received pursuant to the Retirement Plan.
As approved by the Board in 1989, a supplemental employee retirement
agreement was entered into with Mr. Maerki. Under the agreement, Mr. Maerki's
retirement benefits will be computed as if he had been an employee of PNM since
February 15, 1974.
Under the terms of employment agreements with Mr. Montoya, he will be
eligible to receive supplemental retirement benefits computed as if he had been
an employee of PNM since August 1, 1990.
The Board of Directors has approved the establishment of an irrevocable
grantor trust, under provisions of the Internal Revenue Code, generally in
connection with the AMPP and the supplemental retirement arrangements with Mr.
Montoya, Mr. Maerki, Mr. Sterba, and certain former executive officers. PNM may,
but is not obligated to, provide funds to the trust, which was established with
an independent trustee, to aid in meeting its obligations under such
arrangements. Funds in the amount of $12.7 million were provided to the trust in
1989. Distributions have been made from the trust since 1989. No additional
funds have been provided to the trust. In connection with amendments to the
Executive Retention Plan ("Retention Plan") discussed below, the executive
retirement program and supplemental retirement arrangements would be required to
be funded through the trust upon a change in control of PNM.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE IN CONTROL ARRANGEMENTS
The Retention Plan was adopted by the Board of Directors effective
January 1, 1992. The Retention Plan covers executive officers and other key
employees designated by the Board. Mr. Montoya's agreement, which provided him
with substantially similar benefits, was discontinued in 1998, and he is now
also covered by the Retention Plan. The Retention Plan, as recently amended,
provides certain severance benefits should the employee be terminated from PNM
as a result of a change in control of PNM, and the employee is not immediately
re-employed by the successor company, if that termination is (a) by PNM for
reasons other than cause, or (b) by the employee due to constructive
termination. The severance benefits include: (i) lump sum
15
<PAGE> 19
severance equal to 2.5 times current base compensation for executive officers;
(ii) reimbursement of reasonable legal fees and expenses incurred as a result of
termination of employment; (iii) certain insurance benefits which are
substantially similar to those received by the employee immediately prior to
termination of employment; (iv) certain other amounts; and (v) if an employee
receives any payment due to a change in control which is subject to the excise
tax provided in Section 4999 of the Internal Revenue Code, then PNM will
reimburse the employee in an amount equal to that which places the employee in
the same after-tax position as if no excise tax had been imposed. The Retention
Plan was effective for an initial term through December 31, 1992, and is to
continue in effect until terminated by the Board. The Retention Plan is also
subject to automatic extension, or revival if it has been terminated, in certain
events relating to potential changes in control.
PNM also has a non-union severance pay plan that covers any non-union
employee who is terminated due to the elimination of his or her position
("impacted employee"), including executive officers. Benefits include severance
pay in the amount of two months of base salary plus one additional week of base
salary for each year of service, which may be enhanced if the participant signs
a release agreement with PNM. Under a program adopted in 1992, an impacted
employee would have the option to remain with PNM for up to an additional year.
In 1993, the Board approved an amendment to the non-union severance pay plan.
The amendment provides a benefit for impacted executives under which an
executive would receive a lump sum distribution in lieu of the option that other
employees have to remain with PNM for an additional year and reimbursement for
placement assistance expenses incurred during the year after being impacted up
to 5% of base salary, plus certain insurance benefits. If an employee is
eligible to receive benefits under the Retention Plan, benefits are not
available to that employee under the severance pay plan.
Under the terms of employment agreements entered into between PNM and
Mr. Montoya, if Mr. Montoya were to be terminated by the Board, he would receive
severance benefits substantially equal to the level of benefits provided to
other members of senior management discussed above.
- - --------------------------------------------------------------------------------
APPOINTMENT OF ARTHUR ANDERSEN LLP
- - --------------------------------------------------------------------------------
The Audit Committee of the Board of Directors selects and hires
independent public accountants to audit the consolidated financial statements of
PNM and subsidiaries. The Audit Committee's selection for 1999 must be approved
by you.
The Audit Committee selected Arthur Andersen LLP to audit PNM's books
of account and other corporate records for 1999. This firm has audited PNM's
books since 1993, and no relationship exists other than the usual relationship
between independent public accountant and client. A representative of Arthur
Andersen LLP will be available at the Annual Meeting to respond to questions and
to make any statement the representative may desire.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
16
<PAGE> 20
- - --------------------------------------------------------------------------------
OTHER MATTERS
- - --------------------------------------------------------------------------------
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Securities Exchange Act of 1934 requires PNM's executive officers
and directors to file certain reports of ownership and changes in ownership with
the Securities and Exchange Commission. Based upon a review of reports filed
with the SEC and written representations by persons required to report, all
reports required to be filed pursuant to Section 16(a) of the Exchange Act with
respect to 1998 reporting were filed on a timely basis, except that: (i) one
transaction each by M. H. Maerki, Senior Vice President and Chief Financial
Officer, W. J. Real, Executive Vice President, Energy Services and Power
Production, and R. Blake Ridgeway, Senior Vice President, Energy Services, was
reported late, respectively, on a Form 4 filing; and (ii) a charitable
contribution of PNM stock by M. Lujan, Jr., Director, was reported late on an
amended Form 5.
ANNUAL REPORT AND OTHER MATTERS
PNM's Annual Report, including consolidated financial statements, was
mailed to shareholders beginning on April 12, 1999. COPIES OF PNM'S 1998 ANNUAL
REPORT ON FORM 10-K ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN REQUEST TO BARBARA
BARSKY, SENIOR VICE PRESIDENT AND SECRETARY, ALVARADO SQUARE MS 2806,
ALBUQUERQUE, NM 87158, or electronically at [email protected]. You
may also obtain our SEC filings through the internet at http://www.sec.gov.
SHAREHOLDER PROPOSALS FOR THE YEAR 2000 ANNUAL MEETING
Any proposal to be considered for possible inclusion in PNM's year 2000
Proxy Statement must be received by PNM, Attention: Secretary, Alvarado Square,
Mail Stop 2806, Albuquerque, NM 87158, on or before December 28, 1999.
A shareholder proposal submitted outside the processes of the SEC's
proxy rules will be considered untimely if notice is received by the Company
after March 12, 2000, and the proxy for such meeting may confer discretionary
authority to vote on a matter for which notice is not received in a timely
manner.
SOLICITATION
The enclosed proxy is being solicited on behalf of PNM's Board of
Directors. This solicitation is being made by mail but also may be made in
person, by telephone or other means of electronic communication. We have hired
Beacon Hill Partners, Inc. to assist in the solicitation, for an estimated fee
of $2,500. PNM will pay all costs related to solicitation.
17
<PAGE> 21
REVOCABILITY OF PROXY
You may revoke the enclosed proxy by attending the Annual Meeting and
voting your shares in person or by providing a later executed proxy.
By Order of the Board of Directors
/s/ BARBARA L. BARSKY
Barbara L. Barsky
Secretary
18
<PAGE> 22
[PNM LOGO]
The Annual Meeting of Shareholders of Public Service Company of New Mexico will
be held at the South Broadway Cultural Center, 1025 Broadway S.E., Albuquerque,
New Mexico, at 9:30 a.m., Mountain Daylight Time, on June 8, 1999.
(VOTING INSTRUCTIONS ARE ON BACK)
-- FOLD AND DETACH HERE --
- - --------------------------------------------------------------------------------
A vote FOR the following proposals is recommended by the Board of Directors.
<TABLE>
<S> <C>
1. Election of Directors (Laurence H. Lattman, Benjamin F. 2. Selection of Arthur Andersen LLP as independent public
Montoya, and Robert M. Price) accountants for the current year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
Mark one: FOR all nominees listed above.
-----
FOR all nominees listed above except
-----
.
-----------------------------------------
WITHHOLD AUTHORITY to vote for all nominees 3. In their discretion, the proxies are authorized to vote
----- listed above. upon such other matters as may properly come before this
meeting, or any adjournment or adjournments thereof.
</TABLE>
P ------------------------------------------
R Signature
O
X ------------------------------------------
Y Signature
Dated: ______________________________,1999
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY, USING THE ENCLOSED ENVELOPE
<PAGE> 23
PUBLIC SERVICE COMPANY OF NEW MEXICO
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby constitute and appoint J. T. Ackerman, J.
A. Godwin, and M. Lujan, Jr., and each or any one of them, true and
lawful attorney-in-fact and proxy for the undersigned, with full power
of substitution, to represent and vote the Common Stock of the
P undersigned at the Annual Meeting of Shareholders of Public Service
Company of New Mexico to be held at the South Broadway Cultural
R Center, 1025 Broadway, S.E., Albuquerque, New Mexico, at 9:30 a.m.,
Mountain Daylight Time, on June 8, 1999 and at any adjournments
O thereof, on all matters coming before said meeting.
X This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. IF NO DIRECTION IS
Y MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Please date and sign exactly as name appears hereon. When signing as
attorney, executor, administrator, trustee, guardian, etc., give full
title. If stock is held jointly, each owner should sign. If stock is
owned by a corporation, please sign full corporate name by duly
authorized officer. If a partnership, please sign in partnership name
by authorized person.
