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Agreement shall automatically be withdrawn and cancelled and no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.
|
|
|
__________ (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.
(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
