PERFORMANCE RESTRICTED STOCK RIGHTS AWARD AGREEMENT PNM RESOURCES, INC. SECOND AMENDED AND RESTATED OMNIBUS PERFORMANCE EQUITY PLAN
Exhibit
10.4
PERFORMANCE
RESTRICTED
STOCK RIGHTS AWARD AGREEMENT
PNM
RESOURCES, INC. SECOND AMENDED AND RESTATED
OMNIBUS
PERFORMANCE EQUITY PLAN
PNM
Resources, Inc., a New Mexico corporation, (“PNMR” or the “Company”) hereby
awards to «First» «Last», (the “Grantee”), a
Participant in the PNM Resources, Inc. Second Amended and Restated Omnibus
Performance Equity Plan (the “Plan”), as it may be amended, a Performance
Restricted Stock Rights Award (the “Award”) for the number of shares of common
stock of Company (“Stock”) noted below. The grant is made effective
as of the 9th day of March, 2009 (the “Grant Date”).
Capitalized
terms used in this Performance Restricted Stock Rights Award Agreement (the
“Agreement”) and not otherwise defined herein shall have the meanings given to
such terms in the Plan.
1.
Grant. Company
hereby awards Grantee an opportunity to earn Restricted Stock Rights at the
Threshold, Target or Maximum Award level listed in Section 5, based upon
Company’s performance over the Performance Period (as defined in
Section 4), in accordance with and subject to the terms and conditions set
forth in this Agreement. In no event will the Award exceed the
Maximum Award level indicated in Section 5. If Grantee is a
Covered Employee, the Award is intended to be a Performance-Based Award granted
pursuant to Section 12 of the Plan.
2.
Award
Subject to Plan. This Award is granted pursuant to the Plan,
the terms of which are hereby incorporated by reference.
3.
Shareholder
Approval Required. Grantee understands and agrees that Company
has adopted the amended and restated Plan subject to shareholder
approval. If the shareholders of Company do not approve the Plan at
the annual shareholders meeting on May 19, 2009 or any extensions thereof,
the Award and this Agreement shall automatically be withdrawn and cancelled and
no amounts will be payable to Grantee hereunder.
4.
Performance
Period. The Performance Period for this Award begins on
January 1, 2009 and ends on December 31, 2009.
5.
Performance
Goals; Number of Restricted Stock Rights Earned. Grantee will
earn Restricted Stock Rights based upon the level of Company’s Adjusted Cash
Earnings during the Performance Period as set forth below:
|
If
Company’s Adjusted Cash Earnings over the Performance Period
are:
|
The
number of Restricted Stock Rights awarded to Grantee will
be:
|
|
At
least $250 MM (but not $260 MM)
|
__________
(the Threshold Award), adjusted as described below.
|
|
At
least $260 MM (but not $275 MM)
|
__________
(the Target Award), adjusted as described below.
|
|
$275
MM or more
|
__________
(the Maximum Award)
|
If
Company’s Adjusted Cash Earnings for the Performance Period are less than
$250,000,000, no Restricted Stock Rights will be due pursuant to the
Agreement. If Company’s Adjusted Cash Earnings for the Performance
Period exceed $250,000,000 but are less than $260,000,000, the number of
Restricted Stock Rights to which Grantee is entitled will be interpolated
between the Threshold and Target Award levels. If Company’s Adjusted
Cash Earnings for the Performance Period exceed $260,000,000 but are less than
$275,000,000, the number of Restricted Stock Rights to which Grantee is entitled
also will be interpolated between the Target and Maximum Award
levels.
6.
Adjusted
Cash Earnings. Company’s “Adjusted Cash Earnings” for the
Performance Period is the amount of Company’s net cash flow from
operating activities (as reflected on Company’s cash flow statement) adjusted by
the following: (a) adding amounts received by Company as
principal payments on the Palo Verde lessor notes; (b) adding amounts
received by Company as Palo Verde 3 toll revenue; (c) adding amounts
received by Company attributable to the Optim Energy, LLC, cash earnings;
(d) subtracting the changes in Company’s working capital; and
(e) subtracting the taxes paid by Company on the Gas Asset
Transaction. For purposes of this Agreement, the term “Gas Asset
Transaction” means the sale of various assets of the Gas Division by Public
Service Company of New Mexico pursuant to the Asset Purchase Agreement by and
among Public Service Company of New Mexico, Continental Energy Systems LLC and
New Mexico Gas Company, Inc. dated January 12, 2008.
7.
Determination
of Adjusted Cash Earnings and Restricted Stock Rights
Award. The Committee will determine the Adjusted Cash Earnings
for the Performance Period and Grantee’s corresponding Restricted Stock Rights
Award, if any, on or before February 28, 2010. The Committee
then will submit its determinations with respect to the Adjusted Cash Earnings
and the number of Restricted Stock Rights to which Grantee is entitled to the
Board of Directors for review and approval. The date on which the
Board of Directors approves the number of Restricted Stock Rights is referred to
below as the “Determination Date.” The Restricted Stock Rights to
which Grantee is entitled pursuant to this Section shall vest and become payable
at the times described in Sections 8 and 9.
8.
Vesting.
(a) Except as
set forth below, the Restricted Stock Rights to which Grantee is entitled shall
vest in the following manner: (i) 33% of the Restricted Stock
Rights will vest on the first anniversary of the Determination Date,
(ii) an additional 34% of the Restricted Stock Rights will vest on the
second anniversary of the Determination Date, and (iii) the final 33% of
the Restricted Stock Rights will vest on the third anniversary of the
Determination Date.
(b) Upon
Grantee’s Separation from Service due to death, Disability, Retirement,
Impaction or Change in Control prior to the end of the Performance Period,
Grantee shall vest in a pro rata portion of the Restricted Stock Rights to which
Grantee is entitled at the end of the Performance Period as described in
Subsection 13.1(a)(iii)(3) of the Plan. The number of Restricted
Stock Rights to which Grantee is entitled hereunder shall be determined at the
conclusion of the Performance Period based upon actual performance during the
Performance Period.
(c) Upon
Grantee’s Separation from Service due to death, Disability, Retirement,
Impaction or Change in Control after the conclusion of the Performance Period,
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nonvested
Restricted Stock Rights shall become 100% vested in accordance with Subsection
13.1(a)(iii)(3) of the Plan.
(d) Upon
Grantee’s involuntary or voluntary Separation from Service for any reason other
than those set forth in Subparagraphs (b) and (c) above, the Restricted
Stock Rights, if not previously vested, shall be canceled and forfeited
immediately.
(e) Upon
Grantee’s Separation from Service for Cause, all nonvested Restricted Stock
Rights shall be canceled and forfeited immediately.
9.
Form and
Timing of Delivery of Stock.
(a) If any
Restricted Stock Rights granted hereunder vest as described in
Section 8(a), Grantee will receive the Stock payable with respect to such
vested Restricted Stock Rights within ninety (90) days following the dates on
which the Restricted Stock Rights vest.
(b) If any
Restricted Stock Rights granted hereunder vest as described in
Section 8(b), Grantee will receive the Stock within ninety (90) days
following the end of the Performance Period.
(c) Except as
otherwise provided in Section 9(d), if any Restricted Stock Rights granted
hereunder vest as described in Section 8(c), Grantee will receive the Stock
payable with respect to such Restricted Stock Rights within ninety (90) days
following the date of Grantee’s Separation from Service.
(d) The
Restricted Stock Rights granted hereunder are subject to the requirements of
Section 409A of the Code. Accordingly, the restrictions described in
Section 20.4 of the Plan apply to the Restricted Stock
Rights. In addition, if Grantee is a Specified Employee at the time
of Grantee’s Separation from Service, the six (6) month delay in payments to a
Specified Employee upon a Separation from Service (described in
Section 20.3 of the Plan) applies.
10.
Adjustments. Neither
the existence of the Plan nor the Award shall affect, in any way, the right or
power of Company to make or authorize: any or all adjustments,
recapitalizations, reorganizations, or other changes in Company’s capital
structure or its business; or any merger or consolidation of Company; or any
corporate act or proceeding, whether of a similar character or otherwise; all of
which, and the resulting adjustments in, or impact on, the Award are more fully
described in Section 5.3 of the Plan.
11.
Withholding
and Deductions. Company shall have the right to require that
Grantee remit to Company an amount sufficient to satisfy any federal, state or
local taxes of any kind as are required by law to be withheld with respect to
the delivery of shares of Stock as payment for the Restricted Stock Rights
granted hereunder. Company also shall have the right to take such
other actions as may be necessary in the opinion of Company to satisfy all
obligations for withholding and payment of such taxes. Company may,
in its sole discretion, permit Grantee to elect to satisfy the minimum statutory
tax withholding obligation which may arise in connection with the Restricted
Stock Rights by requesting that Company withhold shares of Stock having a Fair
Market Value on the date of withholding equal to the amount of the minimum
statutory tax withholding. Any such election shall be subject to the
provisions of applicable law and to any conditions the Committee may determine
to be necessary in order to
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comply
with all applicable withholding requirements and the applicable conditions of
Rule 16b-3 or its successors under the Exchange Act.
12.
Dividend
Equivalents. Grantee will not be entitled to receive a
dividend equivalent for any of the Restricted Stock Rights granted
hereunder.
13.
Compliance
with Exchange Act. If Grantee is subject to Section 16 of
the Exchange Act, Restricted Stock Rights granted pursuant to this Award are
intended to comply with all applicable conditions of Rule 16b-3 or its
successors under the Exchange Act.
14.
Non-Assignability. The
Award and Grantee’s rights under this Agreement shall not be transferable other
than by will or by the laws of descent and distribution. The
Restricted Stock Rights are otherwise non-assignable. (See
Section 14 of the Plan). The terms hereof shall be binding on
the executors, administrators, heirs and successors of Grantee.
15.
Voting
Rights. During the Restricted Period, Grantee will have no
voting rights with respect to nonvested Restricted Stock Rights.
16.
Grantee
Representation. As a condition to the receipt of any shares of
Stock hereunder, Company may require a representation from Grantee that the
Stock is being acquired only for investment purposes and without any present
intention to sell or distribute such shares.
17.
Employment
Agreement. Notwithstanding anything to the contrary contained
in this Agreement, (a) neither the Plan nor this Agreement is intended to
create an express or implied contract of employment for a specified term between
Grantee and Company and (b) unless otherwise expressed or provided, in
writing, by an authorized officer, the employment relationship between Grantee
and Company shall be defined as “employment at will” wherein either party,
without prior notice, may terminate the relationship with or without
cause.
18.
Regulatory
Approvals and Listing. Company shall not be required to issue
any certificate for shares of Stock upon the vesting of Restricted Stock Rights
granted under this Agreement prior to satisfying any regulatory approval,
registration, qualification or other requirements of the Securities and Exchange
Commission, the Internal Revenue Service or any other governmental agency which
the Committee, in its sole discretion, shall determine to be necessary or
advisable. (See Section 20.1 of the Plan).
19.
Administration. This
Agreement shall at all times be subject to the terms and conditions of the Plan
and the Plan shall in all respects be administered by the Committee in
accordance with the terms of and as provided in the Plan. The
Committee shall have the sole and complete discretion with respect to the
interpretation of this Agreement and the Plan, and all matters reserved to it by
the Plan. The decisions of the majority of the Committee with respect
thereto and to this Agreement shall be final and binding upon Grantee and
Company. In the event of any conflict between the terms and
conditions of this Agreement and the Plan, the provisions of the Plan shall
control.
20.
Waiver
and Modification. The provisions of this Agreement may not be
waived or modified unless such waiver or modification is in writing signed by
Company.
21.
Validity
and Construction. The validity and construction of this Award
shall be governed by the laws of the State of New Mexico.
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MANY
OF THE PROVISIONS OF THIS AWARD AGREEMENT ARE SUMMARIES OF SIMILAR PERTINENT
PROVISIONS OF THE PLAN. TO THE EXTENT THIS AGREEMENT IS SILENT ON AN
ISSUE OR THERE IS A CONFLICT BETWEEN THE PLAN AND THIS AGREEMENT, THE PLAN
PROVISIONS SHALL CONTROL.
IN
WITNESS WHEREOF, Company has caused this Performance Restricted Stock Rights
Award Agreement to be executed on March __, 2009, by a duly authorized
representative.
PNM
RESOURCES, INC.
By
Xxxxx
X. Xxxx
Senior
Vice President and
Chief
Administrative Officer
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