PERFORMANCE CASH AWARD AGREEMENT PNM RESOURCES, INC. SECOND AMENDED AND RESTATED OMNIBUS PERFORMANCE EQUITY PLAN
Exhibit
10.5
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_Name» «Last_Name», (the
“Participant”) a Participant in the PNM Resources, Inc. Second Amended and
Restated Omnibus Performance Equity Plan (the “Plan”), as it may be amended, a
Performance Cash Award (the “Award”) effective as of the 9th day of March,
2009.
Capitalized
terms used in this Performance Cash 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 to Participant the opportunity to earn a cash payment in an amount
equal to the Threshold, Target or Maximum Award level listed in Section 5,
based upon Company’s performance over the Performance Period (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 Participant 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. Participant 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the Award and this Agreement shall automatically be withdrawn and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 Participant hereunder.
4.
Performance
Period. The Performance Period for this Award begins on
January 1, 2009 and ends on December 31, 2009.
5.
Performance
Goals; Amount of Award. The amount of the Award to which
Participant is entitled pursuant to this Agreement, if any, is 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
Annual Performance Cash Award awarded to Participant will
be:
|
|
At
least $250 MM (but not $260 MM)
|
«PC_Thres»
(the Threshold Award), adjusted as described below.
|
|
At
least $260 MM (but not $275 MM)
|
«PC_Target»
(the Target Award), adjusted as described below.
|
|
$275
MM or more
|
«PC_Max»
(the Maximum Award)
|
If
Company’s Adjusted Cash Earnings for the Performance Period are less than
$250,000,000, no payment will be due pursuant to this Agreement. If
Company’s Adjusted Cash
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Earnings
for the Performance Period exceed $250,000,000 but are less than $260,000,000,
the amount of the payment to which Participant 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 amount of the payment to which Participant 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 Awards Payable. The Committee
will determine the Adjusted Cash Earnings for the Performance Period and the
amount of the Award to which Participant is entitled, if any, on or before
February 28, 2010. If Participant is Company’s CEO, the
Committee then will submit its determinations with respect to the Adjusted Cash
Earnings and the amount to which such Participant is entitled to the Board of
Directors for review and approval. No amount will be payable to such
Participant in the absence of approval by the Board of Directors.
8.
Form and
Timing of Payment. Participant will receive
the payment, if any, on or before March 15, 2010.
9.
Termination
of Employment Prior to Payment of Award. In order to receive
any Award pursuant to this Agreement, Participant must be employed by Company on
the date of payment of the Award. If Participant incurs a Termination
of Employment with Company prior to such date, no Award is payable to
Participant under this Agreement.
10.
Prior
Awards Pursuant to the Long-Term Performance Cash
Program. Through Participant’s acceptance of the Award and
this Agreement, Participant acknowledges and agrees that no award is payable to
Participant under the Long-Term Performance Cash Program (the “Program”)
formerly sponsored by Company. More specifically, Participant agrees
that the awards granted to Participant pursuant to the Program, if any, relating
to the 2007-2009 and 2008-2010 performance periods are hereby canceled and
Participant has no rights to such awards in the future.
11.
Withholding
and Deductions. Company is authorized to withhold from any
payments called for by this Plan all withholding and other taxes due to the
federal and any state governments and to take such other action as Company may
deem necessary or advisable to enable Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax liabilities
relating to any payment.
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12.
Non-Assignability. The
Award and Participant’s rights under this Agreement shall not be transferable
other than by will or by the laws of descent and distribution. The
Performance Cash Award is otherwise non-assignable. (See Section 14
of the Plan). The terms of this Agreement and the Plan shall be
binding on the executors, administrators, heirs and successors of
Participant.
13.
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
Participant and Company and (b) unless otherwise expressed or provided, in
writing, by an authorized officer, the employment relationship between
Participant and Company shall be defined as “employment at will” wherein either
party, without prior notice, may terminate the relationship with or without
cause.
14.
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 Participant 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.
15.
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.
16.
Validity
and Construction. The validity and construction of this Agreement shall
be governed by the laws of the State of New Mexico.
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 Cash Award Agreement to be
executed on March 27, 2009, by its duly authorized representative and
Participant has executed this Agreement.
PNM
RESOURCES, INC.
By
________________________________
Xxxxx
X.
Xxxx Participant
Senior
Vice President and
Chief
Administrative Officer
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