STOCK OPTION AWARD AGREEMENT PNM RESOURCES, INC. SECOND AMENDED AND RESTATED OMNIBUS PERFORMANCE EQUITY PLAN
Exhibit
10.3
PNM
RESOURCES, INC.
SECOND
AMENDED AND RESTATED
OMNIBUS
PERFORMANCE EQUITY PLAN
PNM
Resources, Inc., a New Mexico corporation (“PNM” or the “Company”), hereby
awards to «First» «Last» (the “Optionee”), an
employee of the Company and a Participant in the PNM Resources, Inc. Second
Amended and Restated Omnibus Performance Equity Plan (the “Plan”), as it may be
amended, a non-qualified stock option (“Option” or “Options”) to purchase up to,
but not to exceed in the aggregate «Total_Stock_Options» shares
of common stock of the Company (“Stock”), at an Exercise Price of $xx.xx per share, subject to
the terms and conditions set forth in this Stock Option Award Agreement (the
“Agreement”). The grant is given effective as of the ____ day of
________, 20__ (the “Grant Date”).
Capitalized
terms used in this Agreement and not otherwise defined herein shall have the
meanings given to such terms in the Plan.
1.
Grant. This
Option is granted pursuant to the Plan, the terms of which are hereby
incorporated by reference.
2.
Vesting.
(a) Except
as set forth herein below, these Options shall vest in the following
manner: (i) on the first anniversary of the Grant Date, 33%; (ii) on
the second anniversary of the Grant Date, an additional 34%; and (iii) on the
third anniversary of the Grant Date, the final 33%.
(b) Upon
the Optionee’s Termination of Employment with the Company due to death,
Disability, Retirement, Impaction or a Change in Control, all nonvested Options
shall become 100% vested as described in the applicable provisions of the
Plan.
(c) Upon
the Optionee’s involuntary or voluntary Termination of Employment with the
Company for reasons other than those set forth in Subparagraph (b) above, the
Option, if not previously vested, shall be canceled and forfeited.
(d) Upon
the Optionee’s Termination of Employment with the Company for Cause, all Options
(vested and nonvested) shall be terminated and forfeited
immediately.
3.
Exercise of
Options.
(a) Timing of
Exercise. Generally, the vested Options shall be exercisable
at any time following the vesting thereof, on or before the earlier of (i) three
(3) months following the Optionee’s voluntary or involuntary Termination of
Employment for reasons other than Impaction or Cause; (ii) three (3) years
following the Optionee’s Termination of Employment due to death, Disability,
Retirement, Impaction or Change In Control of the Company; or (iii) the tenth
(10th)
anniversary date of the Grant Date of the Options. The time period
during which Optionee may exercise any Option will not be extended for any
reason. The Company does not represent or guarantee that the Options granted
hereunder will actually be exercisable throughout
the
exercise period. Factors that could affect the exercisability of the
Options or the Optionee’s desire to exercise the Options include, but are not
limited to, the price of Company Stock remaining below the exercise price for
any Option, black-out periods that preclude the sale of Stock acquired through
the exercise of any Option or that may preclude the exercise of any Option, or
lapse of the exercise period.
Optionee
is responsible for ascertaining the times and conditions applicable to the
exercise of each Grant of Options awarded under the Plan.
(b) Time and Method of
Payment. The Options shall be exercised by the Optionee giving
written notice to the Company of his or her intent to exercise the Options,
along with the tendering of cash in full payment of the Exercise Price of the
Options being exercised, times the number of such Options being
exercised. Alternatively, in lieu of cash, the Exercise Price may be
paid, in full or in part by the Optionee, by delivery to the Company (through
actual tender or by attestation), of Stock of the Company owned by the Optionee
for more than six months. The amount credited against the Exercise
Price for Stock being assigned and delivered to the Company shall equal the Fair
Market Value of the Stock on the date of transfer times the number of shares
being assigned and delivered. In addition, the Exercise Price for any
Option may be paid through (i) a broker-assisted “cashless exercise” arrangement
by the Optionee’s delivery of written notice to the Company of his or her intent
to exercise the Options together with irrevocable instructions to the broker to
promptly deliver to the Company the amount of the sale or loan proceeds that is
equal to the Exercise Price; or (ii) any other method permitted by the
Committee, in its discretion. For Optionees subject to Section 16
of the Exchange Act and key employees as specified in the Xxxxxxx Xxxxxxx
Policy, pre-clearance for sales of stock (including a broker-assisted “cashless
exercise”) shall be obtained from the Senior Vice President and General Counsel
at PNM Resources, Inc., Xxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000, or
his/her successor.
(c) Exercise Following
Optionee’s Death. If the Optionee dies, whether or not the
Optionee is an employee of the Company at the date of such death, without having
fully exercised his or her vested Options, the personal representative or the
person receiving such Options from the Optionee or his or her estate shall have
the right to exercise the Options pursuant to the timing and methods set forth
in Subparagraphs (a) and (b) above.
(d) Delivery of
Shares. Within an administratively reasonable period of time
after the exercise of an Option and the payment of the full Exercise Price, and
after satisfaction of all applicable withholding requirements, the Optionee
shall receive a Stock certificate evidencing his or her ownership of such
Stock. The Optionee shall have none of the rights of a shareholder
with respect to Options until the date a Stock certificate is issued in the
Optionee’s name. No adjustment will be made for dividends or other
rights for which the record date is prior to the date such Stock certificate is
dated.
(e) Holding
Period. The shares of Stock obtained upon the exercise of any
Option granted hereunder may not, if necessary to meet Rule 16b-3 requirements,
be sold by an Optionee subject to Section 16 of the Exchange Act until six (6)
months after the delivery to the Participant of the Stock Option Award
Agreement.
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4.
Adjustments. Neither
the existence of the Plan nor this Option shall affect, in any way, the right or
power of the Company to make or authorize: any or all adjustments,
recapitalizations, reorganizations, or other changes in the Company’s capital
structure or its business; or any merger or consolidation of the 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 Option are more fully
described in Section 5.3 of the Plan.
5.
Withholding and
Deductions. The Company shall have the right to deduct from
any payments made by the Company to the Optionee, or to require that the
Optionee remit to the 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 exercise of the Options granted hereunder. The Company
also shall have the right to take such other actions as may be necessary in the
opinion of the Company to satisfy the tax withholding and payment obligations
related to the exercise of the Options granted hereunder. The Company
may, in its sole discretion, permit the Optionee to elect to satisfy the minimum
statutory tax withholding obligation which may arise in connection with the
exercise of Options by requesting that the Company withhold shares of Stock
having a Fair Market Value of the Stock 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 comply with all applicable conditions of Rule 16b-3
or its successors under the Exchange Act. Any shares of Stock
deliverable to the Optionee under the terms of this Agreement also are subject
to offset by the Company, and the Optionee hereby authorizes such offset, to
liquidate and reduce any outstanding debt or unpaid sums owed by the Optionee to
the Company or its successor.
6.
Compliance with Exchange
Act. With respect to Optionees subject to Section 16 of the
Exchange Act, Options granted or exercised pursuant to this Award are intended
to comply with all applicable conditions of Rule 16b-3 or its successors under
the Exchange Act.
7.
Dividend
Equivalents. The Optionee will not be entitled to receive a
dividend equivalent for any of the shares of Stock subject to the Options
granted hereunder.
8.
Non-Assignability. Options
shall not be transferable other than by will or by the laws of descent and
distribution, and during Optionee’s lifetime shall be exercisable only by the
Optionee. The Options are otherwise non-assignable. (See
Section 14 of the Plan).
9.
Optionee
Representation. As a condition to the exercise of any Option,
the Company may require a representation from the person exercising the Option
that the Stock is being acquired only for investment purposes and without any
present intention to sell or distribute such shares.
10.
Employment
Agreement. Notwithstanding anything to the contrary herein
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 the Optionee and the Company and (b) unless otherwise expressed or
provided, in writing, by an authorized officer, the employment relationship
between the Optionee and the Company shall be defined as “employment at will”
wherein either party, without prior notice, may terminate the relationship with
or without cause.
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11.
Regulatory Approvals and
Listing. The Company shall not be required to issue any
certificate for shares of Stock upon the exercise of an Option granted under the
Agreement prior to satisfying any regulatory or registration approval,
qualification or ruling from 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).
12.
Nonstatutory Stock
Option. The Options granted hereunder are nonstatutory (non-qualified)
stock options, and are not “incentive stock options” pursuant to the
Code.
13.
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 Optionee and the
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.
14.
Waiver and
Modification. The provisions of this Agreement may not be
waived or modified unless such waiver or modification is in writing signed by
the Company.
15.
Validity and
Construction. The validity and construction of this Option 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, the Company has caused this Stock Option Award Agreement to be
executed, effective as of ____________, 20__, by its duly authorized
representative.
PNM RESOURCES, INC.
By ________________________________
Xxxxx
X. Xxxx
Senior
Vice President and
Chief
Administrative Officer
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