STOCK OPTION AWARD
AGREEMENT
PNM RESOURCES,
INC.
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. 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 «Stock_Options_» shares of
Common Stock of the Company (“Stock”), at an Exercise
Price of ______ per share , subject to the
following terms and conditions. The grant is given effective as of
the ___ day of _______, 2007 (the “Grant
Date”).
Capitalized terms used in this Stock Option
Award Agreement (the “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.
(a) Except as set forth herein below, these Options
shall vest in the following manner: (i) at the end of the first
anniversary of the Grant Date, 33%; (ii) at the end of the second
anniversary of the Grant Date, 67%; and (iii) at the end of the
third anniversary of the Grant Date, 100%.
(b) Upon (i) the death, Disability, Retirement or
Impaction of the Optionee, (ii) a Change in Control of the Company,
or (iii) events resulting in full vesting as otherwise described in
Section 13.1 of the Plan, all nonvested Options shall be 100%
vested.
(c) Upon the involuntary or voluntary termination
of employment of an Optionee for reasons other than those set forth
in Subparagraph (b) above, the Option, if not previously vested,
shall be canceled.
(d) Upon termination of employment with the Company
for Cause, all Options (vested and nonvested) shall be terminated
and forfeited immediately.
(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 an Optionee’s
voluntary termination or involuntary termination of employment with
the Company for reasons other than Impaction or Cause; (ii) three
(3) years following an Optionee’s termination due to Death,
Disability, Retirement, Impaction or Change In Control of the
Company; or (iii) the tenth 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, lock-up
agreements, 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 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. For Optionees subject to Section 16 of the Exchange
Act and key employees as specified in the Insider Trading 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., Alvarado
Square, Albuquerque, New Mexico 87158, or his/her
successor.
(c) Exercise Following Optionee’s
Death . If an Optionee
dies, whether or not the Option
