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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
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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.
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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
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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.
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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,
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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.
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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
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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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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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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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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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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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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
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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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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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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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