STOCK OPTION AWARD AGREEMENT PNM RESOURCES, INC. OMNIBUS PERFORMANCE EQUITY PLAN
Exhibit
10.2
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.
2. Vesting.
(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.
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
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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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., ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or his/her
successor.
(c) Exercise
Following Optionee’s Death.
If an
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. An 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.
2
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
the
dissolution or liquidation of the Company; or any sale or transfer of all or
any
part of its assets or business; 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 defined 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 any federal, state or local taxes of any kind as are required
by
law to be withheld with respect to the exercise of 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 all obligations for
withholding and payment of such taxes, including, in its sole discretion, and
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, to permit the Optionee,
at the Optionee’s election, to satisfy, in whole or in part, any 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 income tax withholding. 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.
3
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 ____________________.
4
PNM
RESOURCES, INC.
By
:
__________________________
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Chairman,
President and Chief Executive
Officer
5
ACKNOWLEDGEMENT
BY OPTIONEE
By
signing below, the Optionee acknowledges receipt of a copy of the Stock Option
Award Agreement dated ___________ ___, 2007 and the Plan and further
acknowledges that the Options granted under the terms of the Award Agreement
are
governed by the terms and conditions of the Plan and the Award
Agreement.
_________________________________________
(Name
of
Optionee)
_________________________________________
(Signature
of Optionee)
6