SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]/X/
Filed by a Party other than the Registrant [ ]/ /
Check the appropriate box:
[ ]/ / Preliminary Proxy Statement
[X]/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
[ ]/ / Definitive Additional Materials
[ ]/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Public Service of New Mexico
.............................................................................PUBLIC SERVICE COMPANY OF NEW MEXICO
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Patrick T. Ortiz, Esq., Corporate Secretary
..............................................................................- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
14a-6(j)Item 22(a)(2).
[ ] of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ]/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
.......................................................................------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
.......................................................................------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
.......................................................................
4) Proposed maximum aggregate value of transaction:
.......................................................................
Set0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.
[ ]determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
......................................................------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
......................................................------------------------------------------------------------------------
3) Filing Party:
......................................................------------------------------------------------------------------------
4) Date Filed:
......................................................------------------------------------------------------------------------
[LOGO OF PUBLIC SERVICE COMPANY OF NEW MEXICO APPEARS HERE][LOGO]
PUBLIC SERVICE COMPANY OF NEW MEXICO
ALVARADO SQUARE
ALBUQUERQUE, NEW MEXICO 87158
---------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 199425, 1995
---------------------
To the Holders of Common Stock of
PUBLIC SERVICE COMPANY OF NEW MEXICO
Notice is hereby given that the Annual Meeting of Stockholders of PUBLIC
SERVICE COMPANY OF NEW MEXICO ("PNM") will be held in the auditorium of the UNM
Continuing Education Conference Center at 1634 University Boulevard, N.E., in
the City of Albuquerque, New Mexico, on April 27, 1994,25, 1995, at 9:30 a.m., Mountain
Daylight Time, for the following purposes:
1. To elect three directors of PNM to hold office in accordance with the
Restated Articles of Incorporation of PNM until the Annual Meeting of
Stockholders in 1997,1998, or until their successors shall be duly elected and
qualified.
2. To consider and vote upon the approval of the selection by the Board of
Directors of PNM of Arthur Andersen & Co.LLP as independent auditors to audit
the consolidated financial statements of PNM and subsidiaries for the
fiscal year ending December 31, 1994.1995.
3. To consider and act upon such other matters as may properly come before
the meeting.
Only holders of PNM Common Stock of record at the close of business on March
8, 19946, 1995 will be entitled to notice of and to vote on all matters to come before
the meeting and any adjournment thereof.
By Order of the Board of Directors
Patrick T. Ortiz
Corporate SecretaryCORPORATE SECRETARY
March 23, 199422, 1995
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE MARK, EXECUTE, DATE AND RETURN THE ACCOMPANYING PROXY CARD AS SOON AS
POSSIBLE, USING THE ENCLOSED SELF-ADDRESSED ENVELOPE WHICH REQUIRES NO POSTAGE.
---------------------------------------------
PROXY STATEMENT
---------------------
(LOGO OF PUBLIC SERVICE COMPANY OF NEW MEXICO APPEARS HERE)(PNM LOGO)
PUBLIC SERVICE COMPANY OF NEW MEXICO
ANNUAL MEETING OF STOCKHOLDERS
APRIL 27, 199425, 1995
A proxy in the accompanying form is solicited on behalf of the Board of
Directors of PUBLIC SERVICE COMPANY OF NEW MEXICO ("PNM") for use at the 19941995
Annual Meeting of Holders of the Common Stock of PNM, to be held on April 27,
199425,
1995 in the auditorium of the UNM Continuing Education Conference Center at 1634
University Boulevard, N.E., in Albuquerque, New Mexico, at 9:30 a.m., Mountain
Daylight Time, and at any adjournments thereof, for the purposes set forth in
the accompanying notice. Stockholders may revoke their proxy by attendance at
the meeting and by voting their shares in person or by executing a later proxy
changing the vote on the earlier proxy. A proxy, when executed and not so
revoked, will be voted in accordance with the instructions thereon. In the
absence of specific instructions, proxies will be voted by those named in the
proxy FOR the election of directors nominated, FOR the approval of the selection
of Arthur Andersen & Co.LLP as independent auditors of PNM and subsidiaries, and on
all other matters in accordance with their best judgment.
This Proxy Statement is first being mailed to the holders of PNM Common
Stock on or about March 23, 1994,22, 1995, in connection with the solicitation of proxies
by PNM's Board of Directors for use at the Annual Meeting.
In addition to soliciting proxies through the mail, certain employees of PNM
may solicit proxies in person and by telephone. PNM has retained Corporate
Investor Communications,Beacon Hill
Partners, Inc. to assist in the solicitation of proxies, primarily from brokers,
banks and other nominees, for an estimated fee of $2,900.$2,500. The cost of soliciting
proxies will be borne by PNM. PNM will, upon request, reimburse brokers, banks,
nominees, custodians and other record holders for their out-of-pocket expenses
of forwarding proxy materials to the beneficial owners of the shares.
VOTING INFORMATION
Only holders of PNM Common Stock of record at the close of business on March
8, 19946, 1995 will be entitled to vote at the Annual Meeting. At such date, there were
41,774,083 shares of PNM Common Stock outstanding. Each such share of PNM Common
Stock is entitled to one vote on each of the matters properly brought before the
Annual Meeting.
In order to elect directors and approve the selection of auditors, a quorum
must be present or represented at the meeting and the affirmative vote of the
holders of a majority of the shares of PNM Common Stock present and entitled to
vote at the Annual Meeting is required.
1
Under PNM's By-laws, the presence at the meeting, either in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of PNM Common Stock is necessary to constitute a quorum to conduct business at
the Annual Meeting.
The aggregate number of votes entitled to be cast by all stockholders
present in person or represented by proxy at the meeting, whether those
stockholders vote FOR, AGAINST, or ABSTAIN from voting, will generally be
counted for purposes of determining the minimum number of affirmative votes
required for approval of those matters requiring only the affirmative vote of a
majority of the shares present at the meeting, and the total number of votes
cast FOR each of these matters will be counted for purposes of determining
whether sufficient affirmative votes have been cast. An abstention from voting
on a matter by a stockholder present in person or represented by proxy at the
meeting has the same legal effect as a vote AGAINST the matter even though the
stockholder or interested parties analyzing the results of the voting may
interpret such a vote differently. Shares not voted by brokers and other
entities holding shares on behalf of beneficial owners will not be counted in
calculating voting results on those matters for which the broker or other entity
has not voted.
PNM is not aware of any arrangements, the operation of which might at a
subsequent date result in a change in control of PNM.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following persons are the only persons known to PNM, as of March 1, 1994,8,
1995, to be the beneficial owners of more than 5% of PNM's voting securities:
TITLE PERCENT
OF NAME AND& ADDRESS OF NATURE OF BENEFICIAL NUMBER OFPERCENT
TITLE OF CLASS BENEFICIAL OWNER OWNERSHIP OF SHARES OF CLASS
----- ------------------- --------------------- ------------------ -------------------------------- -------------------------- --------------- --------- -------
Common B.A.T. Industries, p.l.c. Shared Voting & 2,547,700(1)
Stock Windsor House Dispositive Power
50 Victoria Street
London SW1H ONL
England
and
Farmers Group, Inc.
4680 Wilshire Boulevard
Los Angeles, CA 90010 TOTAL 2,547,700(1) 6.1%
Common FMR Corp. Sole Voting Power 500,500(2)
Stock 82 Devonshire Street Sole Dispositive Power 4,932,200(2)
Boston, MA 02109
TOTAL 4,932,200(2) 11.81%
Common The Prudential Insurance Company Sole Voting & 8,600(3)
Stock CompanyDispositive 8,700(1)
of America Dispositive Power
Prudential Plaza Shared Voting & 2,155,974(3)2,125,430(1)
Newark, NJ 07102-3777 Dispositive Power
TOTAL 2,164,574(3) 5.2%2,134,130(1) 5.1%
Common Scudder, Stevens & Clark, Inc.Stock Mellon Bank Corporation Sole Voting Power 606,600(4)
Stock 345 Park Avenue3,367,000(2)
One Mellon Bank Center Shared Voting Power 1,216,540(4)
New York, NY323,239(2)
Pittsburgh, PA 15258 Sole Dispositive Power 2,409,240(4)4,006,000(2)
Shared Dispositive Power 83,000(2)
TOTAL 2,409,240(4) 5.8%
2
- ---------------------
(1) As reported on Schedule 13G dated February 9, 1994 and filed with the
Securities and Exchange Commission by B.A.T. Industries p.l.c. and Farmers
Group, Inc.4,399,239(2) 10.53%
- ------------------------
(1) As reported on Amendment No. 4 to Schedule 13G dated February 2, 1995 and
filed with the Securities and Exchange Commission by The Prudential
Insurance Company of America. PNM makes no representation as to the
accuracy or completeness of such information.
(2) As reported on Amendment No. 2 to Schedule 13G dated March 8, 1995 filed
with the Securities and Exchange Commission by Mellon Bank Corporation. PNM
makes no representation as to the accuracy or completeness of such
information.
(2) As reported on Schedule 13G dated February 10, 1994, for beneficial
ownership as of January 31, 1994, and filed with the Securities and
Exchange Commission by FMR Corp. PNM understands that (i) the above shares
include 4,431,700 shares beneficially owned by Fidelity Management &
Research Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp, as a
result of acting as investment advisor to several investment companies;
(ii) Edward C. Johnson 3d, Chairman of FMR Corp., FMR Corp., and the
Fidelity Funds "each has sole power to dispose of the 4,431,700 shares
owned by the Funds"; (iii) Fidelity Management Trust Company ("Trust"), a
wholly-owned subsidiary of FMR Corp., beneficially owns 468,700 shares as a
result of serving as "investment manager of the institutional account(s)";
(iv) FMR Corp., through its control of Trust, has sole voting and
dispositive power over such 468,700 shares; and (v) a former majority-owned
subsidiary of Fidelity, Fidelity International Limited ("FIL"),
beneficially owns 31,800 shares, of which FIL has sole power to vote and
sole power to dispose. PNM makes no representation as to the accuracy or
completeness of such information.
(3) As reported on Amendment No. 3 to Schedule 13G dated January 31, 1994, for
beneficial ownership as of December 31, 1993, and filed with the Securities
and Exchange Commission by The Prudential Insurance Company of America. PNM
makes no representation as to the accuracy or completeness of such
information.
(4) As reported on Schedule 13G dated February 4, 1994 and filed with the
Securities and Exchange Commission by Scudder, Stevens & Clark, Inc. PNM
understands that Scudder, Stevens & Clark, Inc. filed the Schedule 13G on
behalf of itself, Scudder, Stevens & Clark of Canada Ltd., and Asia
Management Corporation. PNM makes no representation as to the accuracy or
completeness of such information.
2
ELECTION OF DIRECTORS
Three directors will be elected at the Annual Meeting to hold office for the
ensuing three years in accordance with PNM's Restated Articles of Incorporation
providing for staggered terms of directors of three years each. The three
directors elected at this meeting will hold office until the Annual Meeting of
Stockholders of PNM in 1997,1998, or until their successors have been elected and
qualified. It is intended that votes will be cast pursuant to proxies for the
following nominees:
NAME ADDRESS
---- -------- ---------------------------------------- -------------------------------
Robert G. Armstrong Roswell,John T. Ackerman........................ Albuquerque, New Mexico
Reynaldo U. Ortiz Denver, Colorado
Paul F. Roth Sanibel, FloridaJoyce A. Godwin......................... Albuquerque, New Mexico
Manuel Lujan, Jr........................ Albuquerque, New Mexico
If at the time of the meeting any of the nominees named herein should be
unable to serve in this capacity, a circumstance not now anticipated by
management, it is intended that the proxies will vote for such substitute
nominees as may be designated by PNM's Board of Directors. Vickie L. Fisher, a director whose term of office would have expired in 1995,
resigned on December 8, 1993, due to her appointment as Deputy Chief
Administrative Officer of the City of Albuquerque. The Nominating Committee is
considering potential replacements to fill the vacant position until 1995, but
a decision has not yet been made on Ms. Fisher's replacement. The Board hopes
to be in a position to name a replacement prior to the Annual Meeting.
Notwithstanding the vacancy, proxiesProxies cannot be
voted for a greater number of persons than three, the number of nominees named
above.
3
A vacancy on the Board of Directors, created on December 8, 1993 by the
resignation of a director, was filled on April 5, 1994 by the appointment of
Manuel Lujan, Jr. Mr. Lujan's term expires with the 1995 Annual Meeting. Mr.
Lujan is a nominee for election to the Board of Directors at such meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE NOMINEES.
Each of the directors of PNM and each of the nominees for election at the
Annual Meeting has advised PNM that, as of February 1, 1994,1995, he or she
beneficially owned directly or indirectly equity securities of PNM as set forth
below:
SHARES OF COMMON
PRINCIPAL OCCUPATION AND STOCK OWNED
BUSINESS BENEFICIALLY AS
NAME, AGE, ADDRESS AND EXPERIENCE DURING PAST OF FEBRUARY 1,
WHEN TERM OF OFFICE WILL EXPIRE FIVE YEARS 1994 (H)(I)(J)
------------------------------- ------------------------ ----------------
(a)(b)(c)(d) Robert G. Armstrong President Armstrong Energy 1,824
(47); Roswell, New Mexico Corporation, Roswell, New
(a director since May 1991); Mexico (oil and gas
1997 exploration and produc-
Annual Meeting tion)
Director, Sunwest Bank of
Roswell, N.A.
(a)(c)(g) Reynaldo U. Ortiz (47) Senior Vice President, 924
Denver, Colorado (a director Jones Financial Group,
since April 1992); 1997 Inc. (a cable-multiple
Annual Meeting system
operator) since February
1994
Vice President, Corporate
Public Policy,
U S WEST, Inc. (a tele-
communications
company) (1991-1994)
President, U S WEST
NewVector, Inc.
(1990-1991) (a subsidiary
of U S WEST, Inc.)
President, U S WEST Inter-
national (1988-1990)
(a subsidiary of U S
WEST, Inc.)
(a)(b)(d)(e)(f) Paul F. Roth Retired since October 1992 1,624
(61) President, Greater Dallas
Sanibel, Florida (a director Chamber of
since May 1991); 1997 Commerce, Dallas, Texas
Annual Meeting (September
1991-September 1992)
President, Texas Division
of Southwestern Bell Tel-
ephone Company, Dallas,
Texas
(November 1988 to March
1991)
(c)(f)(g) Laurence H. Lattman Retired since July 1993 500
(70) Albuquerque, New Mexico President, New Mexico In-
(a director since May 1993); stitute of Mining
1996 Annual Meeting and Technology (1983-July
1993)
(e)Benjamin F. Montoya (58) President and Chief Execu- 1,000
Albuquerque, New Mexico tive Officer of
(a director since September PNM since August 1993
1993); 1996 Annual Meeting Senior Vice President and
General Manager,
Gas Supply Business Unit,
Pacific Gas and
Electric Company (1991 to
August 1993)
Vice President, Sacramento
Valley Region,
Pacific Gas and Electric
Company (1990-1991)
Manager, Sacramento Divi-
sion, Sacramento Valley
Region, Distribution Busi-
ness Unit,
Pacific Gas and Electric
Company
(1989-1990)
Commander, Naval
Facilities Engineering
Command and Chief of
Civil Engineers, U.S.
Navy (1987-1989)
4
SHARES OF COMMON
STOCK OWNED
BENEFICIALLY AS
OF
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION AND BUSINESS OF FEBRUARY 1, 1995
WHEN TERM OF OFFICE WILL EXPIRE EXPERIENCE DURING PAST FIVE YEARS 1994 (H)(I)(J)
------------------------------- --------------------------------- ----------------
- ------------------------------------------ -------------------------------------------------- -----------------
(b)(d)(e) Robert M. Price (63) Retired in 1990 200
Edina, Minnesota (a director Chairman and Chief Executive
since July 1992); 1996 Annual Officer, Control Data Corporation (prior
Meeting to 1990)
Director, Rohr Industries, Inc.
Director, Premark International, Inc.
Director, International Multifoods Corp.
(a)(b) John T. Ackerman (52)(53) Chairman of the Board since August 1993 9,93310,933
Albuquerque, New Mexico (a Chairman, President and Chief Executive Officer of
(a director since June 1990); Officer of PNM (May 1991 to August 1993)
19951998 Annual Meeting
President and Chief Executive Officer of PNM (June
1990 to May 1991)
President and Chief Operating Officer, Gas
Operations of PNM (February 1985 to June 1990)
3
SHARES OF COMMON
STOCK OWNED
BENEFICIALLY AS
OF
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION AND BUSINESS FEBRUARY 1, 1995
WHEN TERM OF OFFICE WILL EXPIRE EXPERIENCE DURING PAST FIVE YEARS (H)(I)(J)
- ------------------------------------------ -------------------------------------------------- -----------------
(a)(b)(d)(f)(g) Joyce A. Godwin (50)(51) Retired since December 1993 1,4342,434
Albuquerque, New Mexico (a Vice President and Secretary, Presbyterian
(a director since May 1989); Healthcare Services, Albuquerque, New 1995Mexico, a
1998 Annual Meeting Mexico, a company which owns, leases or manages 13
hospitals and related health care concerns in
New Mexico and Colorado (1979 to December 1993)
Chairman and President, Southwest Business
Ventures, Inc., a holding company for
Presbyterian Healthcare Services' for-
profitfor-profit
ventures (1986 to December 1993)
(a)(c)(g) Manuel Lujan, Jr. (66) Insurance Agent, Manuel Lujan 3,000
Albuquerque, New Mexico Insurance, Inc., a local, independent insurance
(a director since April 1994); agency, since 1948
1998 Annual Meeting Consultant on U.S. governmental matters, focusing
on Western U.S. issues, since 1993
U.S. Secretary of the Interior (1989-1993)
Director, SODAK Gaming, Inc.
(b)(c)(d) Robert G. Armstrong (48) President, Armstrong Energy 2,824
Roswell, New Mexico Corporation, Roswell, New Mexico (oil and gas
(a director since May 1991); exploration and production)
1997 Annual Meeting Director, Sunwest Bank of Roswell, N.A.
(c)(g) Reynaldo U. Ortiz (48) Chief Executive Officer, Jones Education 1,224
Denver, Colorado Networks, Inc. (a cable television programming
(a director since April 1992); company) since March 1994
1997 Annual Meeting
Senior Vice President, Jones Financial Group, Inc.
(a cable-multiple system operator)
(January-March 1994)
Vice President, Corporate Public Policy, U S WEST,
Inc. (a telecommunications company) (1991-1994)
President, U S WEST New Vector, Inc. (1990-1991)
(a subsidiary of U S WEST, Inc.)
President, U S WEST International (1988-1990) (a
subsidiary of U S WEST, Inc.)
4
SHARES OF COMMON
STOCK OWNED
BENEFICIALLY AS
OF
NAME, AGE, ADDRESS AND PRINCIPAL OCCUPATION AND BUSINESS FEBRUARY 1, 1995
WHEN TERM OF OFFICE WILL EXPIRE EXPERIENCE DURING PAST FIVE YEARS (H)(I)(J)
- ------------------------------------------ -------------------------------------------------- -----------------
(b)(d)(e)(f) Paul F. Roth (62) Retired since October 1992 2,624
Sanibel, Florida President, Greater Dallas Chamber of Commerce,
(a director since May 1991); Dallas, Texas (September 1991 - September 1992)
1997 Annual Meeting
President, Texas Division of Southwestern Bell
Telephone Company, Dallas, Texas (November 1988
to DecemberMarch 1991)
(c)(f)(g) Laurence H. Lattman (71) Retired since July 1993 1,500
Albuquerque, New Mexico President, New Mexico Institute of Mining and
(a director since May 1993)
- ---------------------; Technology (1983-July 1993)
1996 Annual Meeting
(e) Benjamin F. Montoya (59) President and Chief Executive Officer of 1,000
Albuquerque, New Mexico PNM since August 1993
(a director since October 1993); Senior Vice President and General Manager, Gas
1996 Annual Meeting Supply Business Unit, Pacific Gas and Electric
Company (1991 to August 1993)
Vice President, Sacramento Valley Region, Pacific
Gas and Electric Company (1990-1991)
Manager, Sacramento Division, Sacramento Valley
Region, Distribution Business Unit, Pacific Gas
and Electric Company (1989-1990)
(b)(d)(e) Robert M. Price (64) Retired in 1990 1,200
Edina, Minnesota Chairman and Chief Executive Officer, Control Data
(a director since July 1992); Corporation, a computer manufacturing company
1996 Annual Meeting (prior to 1990)
Director, Rohr Industries, Inc.
Director, Premark International, Inc.
Director, International Multifoods Corp.
- ------------------------
(a) A nominee for election at the Annual Meeting.
(b) A member of the Executive Committee.
(c) A member of the Audit Committee.
(d) A member of the Management Development and Compensation Committee.
(e) A member of the Finance Committee.
(f) A member of the Nominating Committee.
(g)A member of the Corporate and Public Responsibility Committee.
5
(h) As used herein, beneficial ownership means the sole or shared power to
vote, or to direct the voting of, a security and/or investment power with
respect to a security.
(i) As of February 1, 1994, directors and executive officers of PNM as a group
owned beneficially 29,445 shares of PNM Common Stock, or less than 1% of
the total number of shares outstanding. (Such shares include shares owned
by Mr. Eglinton, who retired in 1993). Also included in the shares shown
above for Mr. Ackerman as well as in the 29,445
(g) A member of the Corporate and Public Responsibility Committee.
(h) As used herein, beneficial ownership means the sole or shared power to
vote, or to direct the voting of, a security and/or investment power with
respect to a security.
(i) As of February 1, 1995, directors and executive officers of PNM as a group
owned beneficially 34,693 shares of PNM Common Stock, or less than 1% of
the total number of shares outstanding. Such number of shares does not
include 917 shares of PNM Common Stock owned by the spouse of an executive
officer, as to which shares beneficial ownership is disclaimed. Included in
the shares shown above for Mr. Ackerman as well as in the 34,693 shares for
directors and executive officers as a group are shares currently allocated
to executive officers and held in trust under the terms of the Employee
Stock Ownership Plan ("ESOP"), in which the participant has voting rights.
The Board of Directors has voted to take the steps necessary to terminate
the ESOP as of March 1, 1993. Upon termination, which is awaiting Internal
Revenue Service action, the shares will be distributed to the participants.
(j) Included in the shares shown above for Mr. Armstrong, Ms. Godwin, Mr.
Lattman, Mr. Lujan, Mr. Ortiz and Mr. Roth are shares held under the
Director Restricted Stock Retainer Plan, in which the directors have voting
rights. (See "COMPENSATION OF DIRECTORS").
PNM is advised that none of its directors or nominees for director owns
beneficially any shares of PNM Cumulative Preferred Stock, the only other class
of equity securities of PNM presently outstanding, or any shares in its
subsidiary companies.
See "STOCK OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS" and "CERTAIN LEGAL
PROCEEDINGS" for certain information relating to executive officers.
BOARD AND COMMITTEE MEETINGS
During 1993,1994, the Board held fifteennine meetings. The following standing committees
of the Board held the number of meetings indicated: Audit, eight;five; Corporate and
Public Responsibility, nine;eight; Executive, two;three; Finance, nine;five; Management
Development and Compensation, eleven;seven; and Nominating, eight.six. None of the directors
attended fewer than 75% of the aggregate of all meetings held by the Board and
by all committees of the Board on which he or she served.
BOARD AND COMMITTEE POLICIES
In January 1991, the Board modified existing Board service policies and
adopted a new policy to provide for an orderly rotation of the membership of the
Board. This policy was clarified in an amendment adopted in December 1993. The
Board has also adopted certain policies with regard to committee appointments.
The following is a summary of these policies.
RETIREMENT POLICIES. Upon attaining the age of 72 years, a director will
submit a written resignation to the Board for acceptance by the Board at such
time as the Board in its discretion deems advisable. A director who is an
employee of PNM will, on the date of such person's retirement as an employee of
PNM, submit a resignation to the Board for acceptance by the Board at such time
as the Board in its discretion deems advisable. The retirement policy does not
apply to any member of the Board with service as chief executive officer of PNM.
6
MAXIMUM TERM OF OFFICE. Under the Board policies, no person who is
presently serving or who hereafter serves as a director of PNM shall be
nominated to serve more than four times. It is the intent of this policy that
each member of the Board will normally serve for a period of no more than
6
twelve
years, plus a portion of an unexpired term, if any, if the director was
initially appointed to serve out an unexpired term of a director who resigned,
retired or died in office. Terms of office served prior to adoption of the
policies will be counted in determining whether the four-term limitation has
been reached. The maximum term of office policy does not apply to any member of
the Board with service as chief executive officer of PNM.
In adopting the four-term limitation, the Board made it clear that the
policy is not to be construed to mean that renomination for a second, third or
fourth term will be routine. An evaluation process will be implemented by the
Nominating Committee of the Board to determine that each renomination is in the
best interest of PNM.
COMMITTEE APPOINTMENT POLICIES. Under the policies pertaining to committee
appointments, members of the Management Development and Compensation Committee
and the Audit Committee must be non-employee directors only, and the Chairman of
the Nominating Committee must be a non-employee director.
COMMITTEES OF THE BOARD
The members of the standing committees of the Board are shown in the
foregoing table. The responsibilities of the committees are as follows:
The Audit CommitteeTHE AUDIT COMMITTEE consists of three outside members of the Board of
Directors. It reviews the financial statements of PNM and meets with and
receives reports and other communications from PNM'sits internal and outside
independent auditors. The Committee represents the Board of Directors in
accounting and auditing related activities of PNM. It has the responsibility to
make recommendations to the Board with respect to appointment of the independent
public accountants, to approve the scope of the annual audit and to monitor and
review the effectiveness of PNM's management of the accounting functions.
The Corporate and Public Responsibility CommitteeTHE CORPORATE AND PUBLIC RESPONSIBILITY COMMITTEE reviews and monitors
policies and their implementation that deal with PNM's responsibility to the
communities in which it does business and determines the standards which govern
business transactions. These policies include, but are not limited to,
environmental, affirmative action, charitable contributions, political action
committee, and communications to various constituencies.
The Executive CommitteeTHE EXECUTIVE COMMITTEE consists of the Chairman of the Board of Directors
and of the chairpersonsChairs of the standing committees. It exercises the power of the Board
of Directors in the management of the business affairs and property of PNM
during intervals between the meetings of the Board of Directors.
The Finance CommitteeTHE FINANCE COMMITTEE consists of a majority of outside directors. It
reviews and recommends to the Board the capital structure and financial strategy
for PNM, including dividend policy. It has overview of PNM's financial
performance, investment procedures and policies, pension fund performance and
funding level, and risk management strategies and policies. The Committee
specifically has responsibility for the review and approval of all single
capital expenditures in excess of $1 million and reviews capital expenditures in
excess of $100,000 and the quarterly capital appropriation reports.
7
The Management Development and Compensation CommitteeTHE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE consists entirely of
outside directors. It reviews the compensation policies and benefit programs of
PNM and how they relate to the attainment of goals. The Committee recommends to
the Board the compensation philosophy and guidelines for the entire executive
and managerial group, including members of the Board of Directors, giving
emphasis to rewarding long term results and maximizing shareholder value. The
Committee conducts an annual performance evaluation of the chief executive
officer and is also charged with assuring management continuity through annual
review and approval of a management development and succession program.
The Nominating CommitteeTHE NOMINATING COMMITTEE currently consists entirely of outside directors.
It has the responsibility to make recommendations to the Board with respect to
nominees to be designated by the Board for election as directors, as well as
recommendations concerning the effectiveness, structure, size and composition of
the Board, including committee assignments and candidates for election as
Chairman of the Board. The Nominating Committee expects normally to be able to
identify from its own resources the names of qualified nominees, but it will
accept from security holders recommendations of individuals to be considered as
nominees. Security holder recommendations for the 19951996 Annual Meeting, together
with a description of the proposed nominee's qualifications, relevant
biographical information, and the proposed nominee's signed consent to serve,
should be submitted in writing to the Secretary of PNM and received by that
office on or before October 1, 1994.1995. The determination of nominees recommended
by the Nominating Committee to the Board is within the sole discretion of the
Committee, and the final selection of the Board's nominees is within the sole
discretion of the Board of Directors.
CERTAIN LEGAL PROCEEDINGS
Bellamah Community Development ("BCD"), a general partnership that engaged
in real estate operations in the southwestern United States, is the debtor in a
proceeding in the United States Bankruptcy Court for the District of New Mexico
that commenced on June 1, 1989 under Chapter 11 of the Bankruptcy Code and
converted to a Chapter 7 proceeding by order entered on January 29, 1990. The
general partners of BCD include Meadows Resources, Inc., a wholly-owned
subsidiary of PNM. Certain former executive officers of PNM had served on the
management committee of BCD. In addition, Mr. Max H. Maerki, Senior Vice
President and Chief Financial Officer of PNM, had served as an executive officer
of Meadows and as vice chairman of the executive committee of BCD.
SELECTION OF AUDITORS
Action is to be taken with respect to the approval of the selection, by the
Board of Directors, of the firm of Arthur Andersen & Co.LLP as independent auditors
to audit the consolidated financial statements of PNM and subsidiaries for the
fiscal year ending December 31, 1994.1995. The firm has been the independent auditors
of PNM since 1993. Arthur Andersen & Co.LLP has no financial interest in PNM or any
of its subsidiaries. A representative of Arthur Andersen & Co.LLP will be present at
the Annual Meeting of Stockholders to answer appropriate questions and to make
any statement the representative might desire.
On January 5, 1993, PNM notified its certifying accountants for 1992, KPMG
Peat Marwick ("KPMG"), that the client-auditor relationship between PNM and
KPMG would be terminated effective with the completion of the 1992 financial
audit. The decision to change accountants was recommended by management and the
Audit Committee and approved by the Board of Directors.
8
During the relevant portion of the last two fiscal years, there was one
disagreement between PNM and KPMG on a matter of accounting principles, which,
if not resolved to the satisfaction of KPMG, would have caused KPMG to make a
reference to the subject matter of disagreement in connection with its report
for the fiscal year ended December 31, 1992. The disagreement arose subsequent
to PNM's decision to terminate the client-auditor relationship with KPMG. The
disagreement was over the appropriateness of recording the Palo Verde Nuclear
Generating Station ("PVNGS") Unit 3 and a power purchase contract with the M-S-
R Public Power Agency ("M-S-R") at their net realizable values as of December
31, 1992. KPMG discussed this disagreement with the Audit Committee of the
Board of Directors. PNM management also consulted with Arthur Andersen & Co. on
this issue. PNM authorized KPMG to respond fully to the inquiries of Arthur
Andersen & Co. concerning the subject matter of this disagreement. This
disagreement was resolved to the satisfaction of KPMG, in that PNM recorded
PNM's interest in PVNGS Unit 3 and a power purchase contract with M-S-R at
their net realizable values as of December 31, 1992 which resulted in an after
tax loss of $126.2 million.
With the exceptions described in this paragraph, KPMG's report on PNM's 1992
financial statements did not contain an adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope, or
accounting principles. KPMG modified its opinion for the year ended 1992
regarding uncertainty as to the recoverability by PNM of its investment in, and
lease costs related to, its interests in PVNGS. Also, KPMG made a reference in
its opinion for the year ended 1992 regarding a change in PNM's method of
accounting for unbilled revenues in 1992. These matters were not a subject of
disagreement with PNM.
Arthur Andersen & Co.'s report on PNM's 1993 financial statements did not
contain an adverse opinion or a disclaimer of opinion, and was not qualified or
modified as to uncertainty or audit scope. Arthur Andersen & Co.'s report was
modified as to accounting principles to describe PNM's adoption, effective
January 1, 1993, of Statement of Financial Accounting Standards No. 106,
Employer's Accounting for Postretirement Benefits Other Than Pensions, and No.
109, Accounting for Income Taxes.
None of the "reportable events" described under Securities and Exchange
Commission ("SEC") Regulation S-K, Item 304(a)(1)(v), occurred within PNM's two
most recent fiscal years (there being no relevant subsequent interim periods)
preceding the date hereof.
During the last two fiscal years prior to the engagement of Arthur Andersen &
Co., PNM did not consult Arthur Andersen & Co. regarding any of the matters or
events set forth in Item 304(a)(2)(i) and (ii) of SEC Regulation S-K.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE SELECTION
OF ARTHUR ANDERSEN & CO.LLP AS INDEPENDENT AUDITORS.
98
REPORT OF THE
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE*
THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE PHILOSOPHY
Two basic principles guide PNM's compensation program is guided by two basic principles.program. First, senior
managementmanagement's compensation program should have a compensation package that reflectsreflect both individual performance and
the achievement of PNM's goals. Second, the compensation
program should be as competitive,
relative to the utility industry, as possible in order to attract, motivate, and
retain key management members. Compensation
trends in New Mexico compensation trends are also
considered.considered in determining competitiveness of the program.
COMPENSATION ELEMENTS
The senior management compensation program, which is designed to meet the
Committee's philosophy of the Management Development and Compensation Committee (the
"Committee"), has three components: base salary, management benefits, and
incentive plans.
Base Salaries.BASE SALARIES. In 1993,1994, base salaries, the fixed component of pay, were
conservatively tied to the average level of base salaries among gas and electric
utility companies.utilities which are included in compensation surveys sponsored by the Edison
Electric Institute and the American Gas Association. The Management Development and Compensation Committee believes that
direct competitors for executive talent comprise a larger group than the group
of companies included in the peer group established to compare shareholder
returns. The companies used for compensation comparisons
are a broad-based groupFor incumbent members of electric and gas utilities which are includedsenior management, base salaries were
unchanged in compensation surveys sponsored by1994 in keeping with the Edison Electric Institute and the
American Gas Association.
Management Benefits.provisions of PNM's Performance Stock
Plan.
MANAGEMENT BENEFITS. The benefits provided for senior management are based
upon benefits provided to all employees. The benefits focus on retirement, life
insurance, and health care, needs. These benefits were generally unchanged from
the previous year. However, certain new severance and retention benefits were
established to retain key management personnel, including personnel whose
positions will be ultimately eliminated as a result of either the anticipated
sale of certain assets or the consolidation and restructuring of the existing
business. One of the executive officers named in the Summary Compensation Table
received severance benefits in 1993.
Incentive Plans.retention.
INCENTIVE PLANS. The Committee believes that the third component of the
compensation program, incentive plans, is critically important in carrying outto PNM's
compensation philosophy and in achieving PNM's goals. ThisThe Committee believes
this third element was
implementedshould have both a short-term and long-term focus. The
short-term element should consist of "at risk" pay or rewards paid out in 1993 following shareholders' approvalcash
while the long-term element should be equity or stock-based compensation.
Currently, management is in the process of implementing a results-based
reward program. The Committee expects this program to be in place by the end of
the first quarter of 1995. The program would introduce an "at risk" cash
compensation element to PNM's existing compensation program.
The long-term focus is addressed through implementation of the Performance
Stock Plan. The Performance Stock Plan is a stock option incentive plan which
provides forgrants in two different ways. The first, initial grants, are granted in
lieu of base salary merit increases and
subsequentincreases. The second provides for grants based on achieving performance goals.a
formula, where achievement of equally weighted goals determines if the options
will be granted. These goals are approved by the Board of Directors. The grants
are then adjusted based on PNM's total return to shareholders compared to the
industry peer group discussed in the "Stock
- ------------------------
*The Report of the Management Development and Compensation Committee shall not
be deemed to be incorporated into any filing by PNM under the Securities Act
of 1933 or the Securities Exchange Act of 1934.
9
Performance" section of the Proxy Statement. Individual awards are based on the
participant's position with PNM. Previous years' grants are not considered in
determining the Company.number of awards granted.
In 1994, there were two goals: one based on earnings per share and one based
on customer satisfaction. PNM achieved both of these goals. Therefore, 250,794
options, with an exercise price of $13.00, were granted effective December 31,
1994 to the executive officer participants.
In December 1994, the Board approved management's proposal for a one-time
cash bonus to be paid to employees. The bonus was based on PNM's 1994
performance. Bonuses to all PNM officers, in the aggregate amount of $200,000,
will not be paid until PNM resumes paying a dividend. When the dividend is
resumed, the amounts to be paid to executive officers will be determined. Mr.
Montoya, President and CEO, elected, and the Board agreed, that he will not
receive any portion of this bonus amount.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1994
In July 1993, the Board offered Mr. Montoya the position of President and
CEO. Data provided by an executive compensation consultant and an executive
search firm were considered in determining Mr. Montoya's compensation. Mr.
Montoya's 1994 base compensation remained unchanged from the amount originally
set when he was hired.
In 1994, Mr. Montoya received an initial grantsgrant under the Performance Stock
Plan of 8,306 stock options in lieuand he also earned 86,332 stock options based on the
attainment of base salary merit increases
for 1993PNM's earnings per share and 1994 were made effective July 1, 1993.customer satisfaction goals. The
exercise priceprices for suchthese options was the market price of PNM's Common Stock on July 1, 1993, $13.75 per
share. The total number of such options granted to all participants was
370,000, out of which PNM's executive officers received 54,068 options.
Certain Tax Matters. Currentlyare $11.50 and $13.00, respectively.
CERTAIN TAX MATTERS
PNM has no policy with respect to qualifying compensation paid to officers
for deductibility under Section 162(m) of the Internal Revenue Code. There is no policyCode because
PNM's compensation levels do not approach the limits as defined by the Code and
it is not - ---------------------
* The Report of the Management Development and Compensation Committee shall
not be deemed to be incorporated by reference into any filing by PNM under
either the Securities Act of 1933 or the Securities Exchange Act of 1934.
10
anticipated that the compensation of PNM's management will approach
those limits in the foreseeable future.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR 1993
Mr. Ackerman. In January 1993, Mr. John Ackerman, then PNM's Chief Executive
Officer (CEO) and Chairman of the Board, announced his intention to retire as
PNM's CEO. The Board determined that the position and responsibilities of
Chairman of the Board and Chief Executive Officer would be separated.
As noted in last year's Committee Report, Mr. Ackerman's relatively low
compensation was a result of PNM's circumstances prior to 1990. Mr. Ackerman's
1993 compensation did not reflect the Board's perception of his excellent
personal performance. Moreover, even though Mr. Ackerman was not a participant
in the Performance Stock Plan, his 1993 base salary remained unchanged from his
1992 level since the officers and managers participating in the Performance
Stock Plan were ineligible for base salary merit increases. However, their
retirement benefit calculation was adjusted so they would not be penalized for
participating in the Plan. The Board took similar action regarding Mr.
Ackerman. The Board adjusted Mr. Ackerman's benefits to provide him with
retirement benefits to which he would have otherwise been entitled had he been
a designated participant in the Performance Stock Plan. In addition, the Board
adjusted Mr. Ackerman's health care benefits from his date of retirement until
he is Medicare eligible. The combined health care and retirement benefit
adjustments represent an approximate 5% annual increase in overall retirement
benefits.
Mr. Montoya. The Board began a search for a new CEO in 1993. The Board did
not feel it could attract qualified candidates at Mr. Ackerman's relatively low
salary. In order to develop a competitive salary offer, the Board engaged an
executive compensation consultant. The CEO job offer was based on
recommendations from the executive compensation consultant and the executive
search firm which the Company had retained. Following an intensive search, the
Board made an offer to Mr. Ben Montoya in July 1993. Mr. Montoya accepted the
CEO position and he assumed that office on August 1, 1993. Mr. Montoya's 1993
compensation is based on the Board's offer. It is anticipated that any future
changes in Mr. Montoya's compensation will be as a result of his individual
performance and achievement of PNM's goals.
THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE PROCESS
The executive compensation program is administered by the Management
Development and Compensation Committee of the Board of Directors (the
"Compensation Committee").Committee. The Compensation
Committee consists of independent directors who are not PNM employees and who
qualify as disinterested persons for the purposes of SEC Rule 16b-3 adopted
under the Securities Exchange Act of 1934.
The Compensation Committee is accountable for all compensation matters for PNM's senior
management. As described above, the CompensationThe Committee has retained an independent executive compensation
consulting firm which is used to
make disinterested recommendations to the Committee. Thesewhose recommendations are considered by the Committee in making
decisions regarding the appropriateness of the executive compensation program.
Management Development and Compensation Committee
Paul F. Roth, Chair
Robert G. Armstrong
Joyce A. Godwin
Robert M. Price
1110
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding compensation
paid during each of the last three fiscal years for both the current chief executive
officer and former
Chief Executive Officers, each of the four most highly compensated executive officers serving
at the end of the year, and one additional executive officer
who retired in 1993, based on salary and bonus earned during 1993.1994.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM
COMPENSATION
--------------------------- ---------------------------------------------
AWARDS
PAYOUTSANNUAL COMPENSATION --------------
------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND --------------------- ---------
PRINCIPAL LONG TERM
POSITION SECURITIES INCENTIVE
(AS OF OTHER ANNUAL RESTRICTED UNDERLYING PLAN ALL OTHER
DECEMBER 31, SALARY BONUS COMPENSATION STOCK OPTIONS/ PAYOUTSSARS COMPENSATION
1993)(AS OF DECEMBER 31, 1994) YEAR ($) ($)(A) ($)* AWARD(S) SARS(B) (#) ($)
($)
- ------------ ---- ------ ----- ------------ ---------- -------------------------------------------- --------- ----------------------- --------- ------------- -------------- -------------
B. F. Montoya** 1994 $ 317,967 0 -- 94,638 $ 37,528(d)
President and CEO 1993 $164,578164,578(c) 0 -- 0 0 0 $ 6,924
President
and CEO
J. T. Ackerman, 1993 261,996 0 -- 0 0 0 0
Chairman of 1992 258,048 0 -- 0 0 0 0
the Board 1991 257,516 0 -- 0 0 0 0
CEO (prior
to August
1, 1993)6,924(d)
M. P. Bourque 1994 126,537 -- -- 30,748 0
Senior Vice President, 1993 126,528 0 -- 0 7,889 0
0
Senior ViceEnergy Services 1992 126,169 0 -- 0 0
0 0
President, 1991 127,128 0 -- 0 0 0 0
Marketing
and Cus-
tomer Serv-
ices
W. M. Eglinton,*** 1993 166,656 0 -- 0 0 0 203,213
Executive 1992 165,416 0 -- 0 0 0 0
Vice Presi- 1991 168,687 0 -- 0 0 0 0
dent
M. H. Maerki 1994 172,243(e) -- -- 30,748 0
Senior Vice President 1993 162,240 0 -- 0 7,889 0
0
Senior Viceand Chief Financial 1992 161,028 0 -- 0 0
0 0
President 1991 158,560 0 -- 0 0 0 0
and Chief
Financial
Officer
P. T. Ortiz**** 1994 126,384 -- -- 30,748 0
Senior Vice President, 1993 126,384 0 -- 0 7,889 0
0
Senior ViceGeneral Counsel 1992 125,203 0 -- 0 0
0 0
President, 1991 49,462 0and Secretary
J. E. Sterba 1994 126,903(e) -- -- 0 0
0 0
Regula-
tory Poli-
cy, General
Counsel,
and Secre-
tary
J. E. Sterba,Senior Vice President, 1993 124,501 0 -- 0 0
0 0
Senior ViceBulk Power Services 1992 130,105 0 -- 0 0
0 0
Presi- 1991 148,703 0 -- 0 0 0 0
dent, Cor-
porate De-
velopment
- ------------------------
(a) A deferred bonus fund of $200,000 was established in December 1994, based
on PNM's 1994 performance, from which lump sum awards to all officers of
PNM, excluding the President and CEO, will be paid at such time as PNM pays
a dividend to its shareholders. The amount of the individual awards will be
determined by the President and CEO at that time. Amounts ultimately
payable to each of the above-named executive officers are currently
unknown.
(b) The dollar value of perquisites and other personal benefits for each of the
named executive officers was less than the established reporting
thresholds.
(c) Mr. Montoya became an employee of PNM in August 1993.
(d) These amounts represent relocation, home sale and interim living expenses
paid to Mr. Montoya in 1993 and 1994.
(e) These amounts include vacation sales during 1994, and do not reflect an
increase in base salaries.
- ---------------------
* The dollar value of perquisites and other personal benefits for each of the
named executive officers was less than the established reporting thresholds.
**Mr. Montoya became CEO on August 1, 1993, replacing Mr. Ackerman. The
amount shown in the "Salary" column for Mr. Montoya includes $25,500, a one-
time payment to reflect the fact that Mr. Montoya did not receive an initial
grant of options under the Performance Stock Plan in 1993. Moving expenses
for Mr. Montoya are listed in the "All Other Compensation" column.
***Mr. Eglinton retired effective December 31, 1993. The amount shown in the
"All Other Compensation" column reflects payment under Mr. Eglinton's
severance agreement.
****Mr. Ortiz became an employee of PNM in October 1991.
1211
OPTION GRANTS IN 19931994 FISCAL YEAR
POTENTIAL
REALIZABLE VALUE
AT ASSUMED
ANNUAL RATES OF
STOCK PRICE
APPRECIATION FOR
INDIVIDUAL GRANTS
OPTION TERM
------------------------------------------------------ ----------------
*NUMBER------------------------------------------------------------
NUMBER OF
SECURITIES PERCENT OF SECURITIES TOTAL
UNDERLYING OPTIONSOPTIONS/SARS
OPTIONS/SARS GRANTED TO EXERCISE OR OPTIONSGRANT DATE
GRANTED TO EMPLOYEES IN BASE PRICE EXPIRATION 5% 10%PRESENT VALUE
NAME (#)(A) FISCAL YEAR ($/SH) DATE ($)** ($)**(B)
- ---- --------------- ------------------------------------------------------ ------------- ----------------- ----------- ---------- ------- --------------------- -------------
B. F. Montoya...........Montoya.......................... 8,306 1.0% $ 11.50 06/30/2004 $ 23,402
86,332 10.7% $ 13.00 12/31/2004 $ 275,399
M. P. Bourque.......................... 30,748 3.8% $ 13.00 12/31/2004 $ 98,086
M. H. Maerki........................... 30,748 3.8% $ 13.00 12/31/2004 $ 98,086
P. T. Ortiz............................ 30,748 3.8% $ 13.00 12/31/2004 $ 98,086
J. E. Sterba........................... 0 0 0 0 0
0
J. T. Ackerman.......... 0 0 0 0 0 0
M. P. Bourque........... 7,889 2.1% $13.75 6/30/2003 $68,219 $172,879
W. M. Eglinton.......... 0 0 0 0 0 0
M. H. Maerki............ 7,889 2.1% $13.75 6/30/2003 $68,219 $172,879
P. T. Ortiz............. 7,889 2.1% $13.75 6/30/2003 $68,219 $172,879
J. E. Sterba............ 0 0 0 0 0 0
- ------------------------
(a) These nonqualified options are exercisable following vesting on June 30,
1996. These options may also become fully exercisable upon the occurrence
of certain other events such as a change in control (as defined in the
Performance Stock Plan) of PNM.
(b) These amounts represent a theoretical present valuation based on the
Black-Scholes Option Pricing Model. The actual value, if any, an executive
officer may realize ultimately depends on the market value of PNM's Common
Stock at a future date. This valuation is provided pursuant to Securities
and Exchange Commission disclosure rules. There is no assurance that the
value realized will be at or near the value estimated by the Black-Scholes
model. Assumptions used to calculate this value are: price volatility,
24.35%; risk-free rate of return, 7.83%; dividend yield, 3%; and time to
exercise, four years. These amounts or any of the assumptions should not be
used to predict future performance of stock price or dividends. PNM has not
declared common dividends since January 1989. The inclusion of a dividend
yield assumption for the sole purpose of calculations using the
Black-Scholes Option Pricing Model is not to be construed as a projection
of the resumption of dividend payments.
- ---------------------
* These nonqualified options are exercisable following vesting on June 30,
1996. These options may also become fully exercisable upon the occurrence of
certain other events such as a change in control (as defined in the
Performance Stock Plan) of PNM.
** These are hypothetical values using assumed appreciation rates pursuant to
rules of the Securities & Exchange Commission.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND DECEMBER 31, 19931994 OPTION VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
IN-
OPTIONS AT THE-MONEYIN-THE-MONEY OPTIONS AT
DECEMBER 31, 19931994 DECEMBER 31, 1993*
------------------------- -------------------------
SHARES
ACQUIRED ON VALUE REALIZED
EXERCISE (#) ($) EXERCISABLE 1994(A)
----------------------- -----------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE EXERCISABLE/UNEXERCISABLE
NAME ------------ -------------- ----------- ------------- ----------- -------------- ------------------------------------------------ ----------------------- -----------------------
B. F. Montoya........... 0 0 0 0 Montoya................................... 0/94,638 $0/$ 0 $ 0
J. T. Ackerman.......... 0 0 0 0 $ 0 $ 012,459
M. P. Bourque........... 0 0 0 7,889 Bourque................................... 0/38,637 $0/$ 0 $ 0
W. M. Eglinton.......... 0 0 0 0 $ 0 $ 0
M. H. Maerki............ 0 0 0 7,889 Maerki.................................... 0/38,637 $0/$ 0 $ 0
P. T. Ortiz............. 0 0 0 7,889 Ortiz..................................... 0/38,637 $0/$ 0 $ 0
J. E. Sterba............ Sterba.................................... 0/0 $0/$0
0 0 $ 0 $ 0
- ---------------------
* Computed by reference to the New York Stock Exchange composite transaction
closing price of PNM's Common Stock on December 31, 1993 of $11.25
- ------------------------
(a) Computed by reference to the New York Stock Exchange composite transaction
closing price of PNM's Common Stock on December 31, 1994 of $13.00 per
share.
13
12
STOCK OWNERSHIP OF CERTAIN EXECUTIVE OFFICERS
Each of the executive officers named in the above table (except Mr. Ackerman
and Mr. Montoya,
whose stock ownership is reported above under "ELECTION OF DIRECTORS") has
advised PNM that, as of February 1, 1994,1995, he or she beneficially owned directly
or indirectly Common Stock of PNM as set forth below:
SHARES OF COMMON STOCK
OWNED BENEFICIALLY AS OF
FEBRUARY 1, 19941995
NAME (A)(B)(C)
---- ----------------- ----------------------------------------------------------- -------------------------
M. P. Bourque..............................Bourque.............................................. 365
W. M. Eglinton(d).......................... 5,296
M. H. Maerki............................... 979Maerki............................................... 504
P. T. Ortiz................................ 0Ortiz................................................ 507
J. E. Sterba............................... 1,847
- ---------------------Sterba............................................... 1,847
- ------------------------
(a) As used herein, beneficial ownership means the sole or shared power to
vote, or to direct the voting of, a security and/or investment power with
respect to a security.
(b) Includes shares currently allotted to such executive officers and held in
trust under the terms of the ESOP. See footnote (i) to the table under
"ELECTION OF DIRECTORS".
(c) All such amounts are less than one percent of the outstanding Common Stock
of PNM.
(d) Mr. Eglinton retired from PNM in 1993.
PNM is advised that none of its executive officers owns beneficially any
shares of PNM Cumulative Preferred Stock, the only other class of equity
securities of PNM presently outstanding, or any shares in its subsidiary
companies.
STOCK PERFORMANCE*
The following graph compares the yearly percentage change in the cumulative
total shareholder return on PNM's Common Stock during the five fiscal years
ended December 31, 1993,1994, with the cumulative total return on the S&P 500 Stock
Index and the cumulative total return on an index of peer companies selected by
PNM. Companies in the peer group are combined electric and gas utilities each of
which has an investment in a nuclear power generating station. The peer group
companies are as follows: Baltimore Gas & Electric, Central Hudson Gas and
Electric, CMS Energy Corp., Commonwealth Energy System, Consolidated Edison
Company of New York, Delmarva Power & Light Company, IES Industries, Inc.,
Iowa-Illinois Gas & Electric Company, Long Island Lighting Company, New York
State Electric & Gas Corp., Niagara Mohawk Power Corp., Northern States Power
Company, Pacific Gas and Electric Philadelphia Electric,Company, PECO Energy Company, Public Service
EnterpriseEnterprises Group, Rochester Gas & Electric Corp., San Diego Gas & Electric
Company, SCANA Corporation, Wisconsin Energy Corporation, Wisconsin Public ServiceCorp., WPS Resources Corp., and WPL
Holdings.Holdings, Inc.
- ---------------------
* The------------------------
*The "STOCK PERFORMANCE" section of this Proxy Statement shall not be deemed to
be incorporated by reference into any filing by PNM under either the
Securities Act of 1933 or the Securities Exchange Act of 1934.
1413
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(1)
AMONG PUBLIC SERVICE COMPANY OF NEW MEXICO,
A PEER GROUP AND THE S&P 500 STOCK INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
CUMULATIVE TOTAL RETURN
------------------------------------------------------
1988
1989 1990 1991 1992 1993 ---- ---- ---- ---- ---- ----1994
Public Svc Co N Mex ......................... 100 120 69 80 102 9357 67 85 77 88
PEER GROUP .................................. 100 131 131 171 192 21399 127 140 156 132
S & P&P 500 ................................... 100 132 128 166 179 19797 126 136 150 152
- ---------------------
(1) This illustration assumes $100 invested on December 31, 1988 in PNM Common
Stock, the S&P 500 Stock Index and the combination gas and electric company
peer group. Each mark on the axis displaying the years 1988 through 1993
- ------------------------
(1) This illustration assumes $100 invested on December 31, 1989 in PNM Common
Stock, the S&P 500 Stock Index and the combination gas and electric company
peer group. Each mark on the axis displaying the years 1989 through 1994
represents December 31 of that year. Total Return includes reinvestment of
all dividends. The historical shareholder return shown above may not be
indicative of future performance.
RETIREMENT PLAN AND RELATED MATTERS. PNM and its subsidiaries have a
non-
contributorynon-contributory defined benefit plan (the "Retirement Plan") covering employees
who have at least one year of service and have attained the age of 21. During
19931994 and 1994,1995, PNM made or is planning to make, contributions to the Retirement Plan for plan year 19931994
in the amount of $7,441,177.$7,090,847. The amount of any contribution with respect to any
one person cannot be determined. Directors who are not employees do not
participate in the Retirement Plan.
1514
The following table illustrates the annual benefits that would be provided
under the Retirement Plan to employees who retire at the indicated compensation
and year of service levels and who elect to receive the benefits, which are
calculated on a straight-life annuity basis, over their remaining lives.
Benefits shown are maximum annual benefits payable at age 65 to participants who
retire at age 65.
PENSION PLAN TABLE
AVERAGE OF HIGHEST CREDITED YEARS OF SERVICE
AVERAGE OF HIGHEST ------------------------------------------------------------
ANNUAL BASE SALARY FOR -----------------------------------------------------------------------------------
3 32 CONSECUTIVE YEARS(A) 5(B) 10 15 20 25 30 32 1/2(C)
- ------------------------ ------- ------- -------- -------- -------- -------- ---------------------------------- --------- --------- --------- ----------- ----------- ----------- -----------
$ 50,000................50,000.................. $ 5,000 $10,000$ 10,000 $ 15,000 $ 20,000 $ 25,000 $ 30,000 $ 32,500
100,000................100,000.................. 10,000 20,000 30,000 40,000 50,000 60,000 65,000
150,000................150,000.................. 15,000 30,000 45,000 60,000 75,000 90,000 97,500
200,000................200,000.................. 20,000 40,000 60,000 80,000 100,000 120,000 130,000
250,000................250,000.................. 25,000 50,000 75,000 100,000 125,000 150,000 162,500
300,000................300,000.................. 30,000 60,000 90,000 120,000 150,000 180,000 195,000
350,000................350,000.................. 35,000 70,000 105,000 140,000 175,000 210,000 227,500
400,000................400,000.................. 40,000 80,000 120,000 160,000 200,000 240,000 260,000
450,000.................. 45,000 90,000 135,000 180,000 225,000 270,000 292,500
500,000.................. 50,000 100,000 150,000 200,000 240,000 260,000
- ---------------------
(a) For these purposes, compensation consists of base salaries and includes any
amount voluntarily deferred under the Master Employee Savings Plan. It
generally does not include bonuses, payments for accrued vacations,
overtime pay or directors' fees.250,000 300,000 325,000
- ------------------------
(a) For these purposes, compensation consists of base salaries and includes any
amount voluntarily deferred under the Master Employee Savings Plan. It
generally does not include bonuses, payments for accrued vacations, or
overtime pay.
(b) Although years of service begin accumulating from the date of employment,
vesting occurs after five years of service.
(c) The maximum number of years generally taken into account for purposes of
calculating benefits under the Retirement Plan. Under limited
circumstances, an additional 3% retirement benefit could be earned by an
employee working beyond age 62.
The amounts shown in the table above are not subject to any deduction for
Social Security benefits or other offset amounts.
Credited years of service which can be used to calculate benefits as shown
in the above table have been accumulated by executive officers under the
Retirement Plan, the Accelerated Management Performance Plan discussed below and
the supplemental employee retirement agreements discussed below. Credited years
of service so computed as of December 31, 19931994 are as follows: Mr. Montoya, 0 years; Mr. Ackerman, 301.42
years; Ms. Bourque, 7 years; Mr. Eglinton,
308 years; Mr. Maerki, 21.3622.36 years; Mr. Ortiz, 2.253.25 years; and
Mr. Sterba, 18.7619.76 years. The executive officers' remuneration which would be
used to calculate benefits is determined by reference to the Retirement Plan and
the supplemental employee retirement agreementsagreement discussed below. Such amounts as
of December 31, 19931994 are as follows: Mr. Montoya, $320,000 (annualized base salary); Mr.
Ackerman, $257,108;$320,004; Ms. Bourque,
$126,528; Mr. Eglinton, $166,656;$134,932; Mr. Maerki, $162,240;$170,312; Mr. Ortiz, $126,384;$134,456; and Mr. Sterba, $124,500. Mr. Ackerman and Mr.
Eglinton retired as employees on December 31, 1993.$124,832.
In January 1981, the Board of Directors approved an executive retirement
program for a group of management employees. The program was intended to
attract, motivate and retain key management employees. Messrs. Ackerman,
Eglinton, Maerki and Sterba
and certain other key management employees are eligible to participate in one or
more of the plans in the program. Under the program, as originally adopted, key
15
management employees had the opportunity to earn additional credit for years of
service toward retirement (the "Accelerated Management Performance Plan"). The
Accelerated Management Performance Plan, as amended and restated, phased out the
16
accumulation of additional credits by January 1, 1990. In addition, the amended
and restated plan includes a provision allowing key management employees to
receive a reduced benefit from the plan upon attaining early retirement without
having attained the maximum credits for years of service. Monthly benefits
received pursuant to the Accelerated Management Performance Plan are offset by
monthly benefits received pursuant to the Retirement Plan.
As approved by the Board in 1989, and 1990,a supplemental employee retirement
agreements wereagreement was entered into with Messrs. Maerki, Eglinton and Ackerman.Mr. Maerki. Under the agreement with Mr. Maerki,
his retirement benefits would be computed as if he had been in the continuous
employment of PNM since February 15, 1974. Under
the agreements with Mr. Ackerman and Mr. Eglinton, benefits under the
Accelerated Management Performance Plan are computed as if each had accumulated
maximum performance credits. The agreements with Mr. Ackerman and Mr. Eglinton
did not affect their retirement benefits because both participants otherwise
accumulated their maximum performance credits.
The Board of Directors has approved the establishment of an irrevocable
grantor trust under provisions of the Internal Revenue Code generally in
connection with the management benefit plans discussed in the preceding two
paragraphs and the supplemental retirement agreements with certain former
executive officers. Under the terms of the trust, PNM may, but is not obligated
to, provide funds to the trust, which has been established with an independent
trustee, to aid in meeting its obligations under such plans. Funds in the amount
of approximately $12.7 million were provided to the trust in 1989. No additional
funds have been provided to the trust.
The Retirement Plan was amended in 1993. The amendment affected the officers
and managers who participated in the Performance Stock Plan and were ineligible
for base salary merit increases. The retirement benefit calculation was adjusted
so that such persons would not be penalized for participating in the Performance
Stock Plan.
The Board took similar action regarding Mr. Ackerman.
The Board adjusted Mr. Ackerman's benefits to provide him with retirement
benefits that he would have otherwise been entitled to had he been a designated
participant in the Performance Stock Plan, resulting in a retirement benefit
adjustment of $4,707 per year.
Federal tax legislation enacted in 1993 imposed a $150,000 limitation on
compensation that can be considered in determining retirement benefits under
qualified retirement plans. A PNM plan adopted in 1993 provides nonqualified
deferred compensation benefits to executives to the extent their retirement
benefits under the Retirement Plan, the Accelerated Management Performance Plan
and supplemental employee retirement agreements are limited as a result of the
$150,000 compensation limitation imposed by the 1993 tax legislation.
COMPENSATION OF DIRECTORS
Shareholders approved the Director"Director Restricted Stock Retainer PlanPlan" at the
May 1992 Annual Meeting. Subsequent to that Annual Meeting, each non-employee
director received a restricted stock grant of 924 shares (fair market value of
$12,012). A portionPortions of that stock vested in 1993 and 1994 in accordance with the
terms of the plan. Mr. Robert M. Price, and Dr. Laurence H. Lattman, and Mr. Manuel
Lujan, Jr. were not directors at the date of grant and did not receive the 1992
restricted stock grant. Mr.
Price received an $800 monthly retainer in 1993 through May 1993. The Director Restricted Stock Retainer Plan aswas amended
providesto provide for a cash retainer to be paid in lieu of restricted stock in the
event PNM is unable to grant restricted stock because of regulatory, legal or
contractual restrictions on issuing or repurchasing stock for the plan. In June 1993,plan and to
allow directors received the $12,000
annual retainer in cash. Directors are also reimbursedelection, upon specified prior notice, to receive cash
instead of restricted stock. A trust was established for expenses incurred in
connection with service as a director.
17
the purpose of
purchasing and holding restricted stock grants pending the lapse of
restrictions. The trustee of such trust is an independent third party.
Directors who were not full-time employees received $350 in 19931994 for each
meeting of the Board or a committee thereof attended. Any director who is an
employee of PNM or one of its subsidiaries
16
receives no compensation for services as director. In December 1993, the Board
of Directors restructured the duties and compensation of the position of
Chairman of the Board, increasing the duties and establishing the level of
compensation. The Chairman now receives an annual retainer that is four times
the amount paid to other non-
employeenon-employee directors, of which one-fourth is paid on
terms identical to the retainer paid to other non-employee directors, and is
paid meeting fees for attending Board and Executive Committee meetings. The
meeting fees for the Chairman are three times the meeting fees paid to
non-employee directors.
Effective January 1, 1995, the fees for attendance at Board meetings and
committee meetings were increased to $600 and $450, respectively, per meeting.
The Chair of each committee, excluding the Executive Committee, receives an
additional $200 per committee meeting. Directors are also reimbursed for
expenses incurred in connection with service as a director.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE OF CONTROLCHANGE-IN-CONTROL ARRANGEMENTS
As of December 31, 1991, anAn Executive Retention Plan (the "Retention Plan") was adopted by the Board
of Directors.Directors effective January 1, 1992. The Retention Plan covers executive
officers and other key employees designated by the Board. Mr. Montoya has been
provided with substantially similar benefits by agreement with PNM. Mr.
Ackerman is the only executive officer who was not covered by the Retention
Plan. The
Retention Plan provides certain severance benefits should the employee's
employment with PNM be terminated subsequent to a change in control of PNM or as
the result of a sale or other disposition of all or substantially all the assets
of a major operating unit, if such termination is for death, by PNM for reasons
other than cause, or by the employee due to constructive termination. The
severance benefits include: (i) lump sum severance equal to 2.5 times current
base salary for executive officers; (ii) reimbursement of all legal fees and
expenses incurred as a result of termination of employment; and (iii) certain
insurance benefits which are substantially similar to those received by the
employee immediately prior to termination of employment. The Retention Plan was
effective for an initial term through December 31, 1992, and is subject to
automatic extension for additional one year terms unless revoked by the Board by
the October 1 date immediately preceding the commencement of the next successive
one year term. The plan was reaffirmed in 1994. The Retention Plan is also
subject to automatic extension, or revival if it has been revoked, in the event
of a change in control during certain time periods.
PNM also has a non-union severance pay plan that covers any non-union
employee who is terminated due to the elimination of his or her position (an
"impacted employee"), including executive officers. Benefits include severance
pay in the amount of two months of base salary plus one additional week of base
salary for each year of service, which may be enhanced if the participant signs
a release agreement with PNM. AnUnder a program adopted in 1993, an impacted
employee would also have the option to remain with PNM for an additional year but
would give up the option to receive enhanced benefits. InAlso in 1993, the Board
approved an amendment to the non-
unionnon-union severance pay plan. The amendment
provides a benefit for impacted executives under which an executive would
receive a lump sum distribution in lieu of the option that other employees have
to remain with PNM for an additional year and reimbursement for placement
assistance expenses incurred during the year after impaction up to 5% of base
salary. Under the amendment, certain employees, including one executive officer,
who are members of the team of employees involved in PNM's asset restructuring
effort described below, would receive executive severance benefits if they are
impacted because of the
17
sale, or withdrawal from sale, of assets for which they are responsible. If an
employee is eligible to receive benefits under the Retention Plan, benefits are
not available to that employee under the severance pay plan.
In 1993,
18
the Board entered into a severance agreement with Mr. Eglinton, under which Mr.
Eglinton received severance benefits equal to seven months of base salary plus
one additional week of base salary per each year of service. The total amount
of the severance benefit paid to Mr. Eglinton is shown in the Summary
Compensation Table.
In June 1993, the Board made an offer of employment to Mr. Ben Montoya to
becomebecame President and CEO of PNM. The terms of the offer included a base salary offer,
specification and nature of benefits, and terms for relocation, home sale, and
interim living expenses.PNM in August 1993. Under the terms
of the offer,employment agreements entered into between PNM and Mr. Montoya, wouldMr. Montoya
will be eligible to receive supplemental retirement benefits if he completes
five years of service with PNM. He wouldwill also receive severance benefits
substantially equal to the level of benefits provided to other members of senior
management (which are
discussed(discussed above) in the event that he is terminated by the Board. Formal
agreements regarding Mr. Montoya's retirement and severance benefits were
entered into following his acceptance of the CEO position.
Reference is made to the first footnote in the "OPTION GRANTS IN 19931994 FISCAL
YEAR" table. The options referred to in the table may become exercisable upon
certain events such as change in control (as defined in the Performance Stock
Plan) of PNM.
RELATED TRANSACTION
On January 11, 1993, PNM announced specific actions which were determined to
be necessary in order to accelerate PNM's preparation for the new challenges in
the competitive electric energy market, as well as certain other actions.
Included in themarket. As part of this announcement, was PNM's intention to file a plan with the New
Mexico Public Utility Commission ("NMPUC") designed to lower electric prices by
consolidating certain gas and electric functions, restructuring assets and
reducing operation and maintenance expenses. In its January 11, 1993
announcement, PNM also stated
its intention to dispose of excess electric
generating capacity not needed by New Mexicans including, if possible, some or
all of PNM's share of theattempt to sell its interest in Palo Verde Nuclear Generating
Station.Station ("PVNGS") Unit 3. PNM also announced its intention to dispose of the
Sangre de Cristo Water Company and PNM's natural gas gathering and natural gas
processing assets. Mr. J. E. Sterba was assigned to head the asset restructuring
effort.
The Board approved an incentive plan for a team of employees involved in the
asset restructuring, and Mr. Sterba is one of the participants in the plan. Mr.
Sterba is eligible for incentive payments under the plan upon certain asset
dispositions.
AnOn February 12, 1994, an agreement has beenwas executed with Williams Gas Processing--Blanco,Processing
- - Blanco, Inc., for the sale of substantially all of the natural gas gathering
and processing assets of PNM and two subsidiaries for a cash selling price of
$155 million, subject to certain adjustments. Subject to a number of conditions
and approvals, including NMPUCNew Mexico Public Utility Commission ("NMPUC")
approval, the sale of the gas assets is expected to close inby the end of the
second quarter of 1995. However, PNM cannot predict the ultimate timing or
outcome of the NMPUC action. In addition, on February 28, 1994, PNM has reached
agreement with the City of Santa Fe for the sale of the utility assets of PNM's
water
utility division, the Sangre de Cristo Water Company. The purchase price is
approximately $48 million. PNM would also continue to operateCompany, and operation of the water
utilitysystem by a subsidiary of PNM for up to four years for a fee under a proposed contract withfollowing the City.sale. The
purchase price, as currently adjusted, is approximately $56 million. Closing of
the sale of the water utility is anticipated in the second halfquarter of 1994,1995,
subject to a number of conditions, including NMPUC approval. The agreements for
the saleCertain other
assets of the gas gathering and processing assets and the water utility
assets have been approved by the PNM Board of Directors. Under the terms of the
incentive plan discussed above, Mr. Sterba wouldSangre de Cristo Water Company may also be entitled to incentive
payments if the asset sales occur.sold. Although the specific
amount of the incentive payments
19
is presently unknown, PNM currently estimates
the aggregate of the incentive payments to Mr. Sterba resulting from completing
such asset sales would be approximately $140,000, resulting from closing
of both the gas asset and water utility sales. Mr. Sterba's incentive award
could be increased depending upon the sale of additional water company assets.$171,000.
OTHER BUSINESS
The management of PNM knows of no other business which is likely to be
brought before the meeting. If other matters not now known to management come
before the Annual Meeting, the persons named in the accompanying proxy expect to
vote in accordance with their judgment on such matters.
18
REQUESTS FOR REPORTS
A COPY OF THE 19931994 FORM 10-K IS INCLUDED AS PART OF PNM'S ANNUAL REPORT TO
SHAREHOLDERS MAILED ON MARCH 23, 1994.22, 1995. ADDITIONAL COPIES OF THE REPORT ARE
AVAILABLE UPON WRITTEN REQUEST TO PATRICK T. ORTIZ, SENIOR VICE PRESIDENT,
REGULATORY POLICY,
GENERAL COUNSEL AND SECRETARY, ALVARADO SQUARE, ALBUQUERQUE, NEW MEXICO 87158.
DEADLINE FOR PROPOSALS BY STOCKHOLDERS
In order to be considered for inclusion in PNM's Proxy Statement for the
19951996 Annual Meeting of Stockholders, proposals from stockholders must be
received by PNM at Alvarado Square, Mail Stop 2828, Albuquerque, New Mexico
87158, on or before November 23, 1994.1995.
By Order of the Board of Directors
Patrick T. Ortiz
Corporate Secretary
20CORPORATE SECRETARY
19
P
R
O
X
Y
PUBLIC SERVICE COMPANY OF NEW MEXICO
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby constitute and appoint J.A. Godwin, L.H. LattmanR.G. Armstrong,
R.U. Ortiz and R.M. Price,P.F. Roth, and each or any of them, the true and lawful
attorney-in-fact and proxy for the undersigned, with full power of
substitution, to represent and vote the common stock of the
undersigned at the Annual Meeting of Stockholders of Public Service
P Company of New Mexico to be held in the auditorium of the
UNM Continuing Education Conference Center at 1634 University
Boulevard, N.E., Albuquerque, New Mexico, at 9:30 a.m., Mountain
Daylight Time, on April 27, 1994,25, 1995, and at any adjournments thereof, on
all matters coming before said meeting.
R
A voteVOTE FOR the following proposals is recommended by the Board of Directors.THE FOLLOWING PROPOSALS IS RECOMMENDED BY THE BOARD OF
DIRECTORS.
O
1. Election of Directors (Robert G. Armstrong, Reynaldo U. Ortiz(John T. 2. Selection of Arthur Andersen LLP
Ackerman, Joyce A. Godwin and Paul F.
Roth)as independent auditors for the
Manuel Lujan, Jr.). current year.
X
Mark one:_____ FOR all nominees
listed above. _____/ / FOR / / AGAINST / / ABSTAIN
FOR all nominees listed above except
______________________________ .
_____ WITHHOLD AUTHORITY to vote for all nominees listed above.
2. Selection of Arthur Andersen & Co. as independent auditors for the current
year.
[_] FOR [_] AGAINST [_] ABSTAIN 3. In their discretion, the proxies
listed above except are authorized to vote upon
Y . such other matters as may
WITHHOLD AUTHORITY to properly come before this
vote for all nominees listed meeting, or any adjournment or
above. adjournments thereof.
(Please turn over)
P
R
O
X
Y
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE COMMON STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND
2.
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN, ETC., GIVE FULL
TITLE. IF STOCK IS HELD JOINTLY, EACH JOINT OWNER SHOULD SIGN. IF
P STOCK IS OWNED BY A CORPORATION, PLEASE SIGN FULL CORPORATE NAME BY
DULY AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN PARTNERSHIP
NAME BY AUTHORIZED PERSON.
- - -
- - -
- --------------------------------------------------------------------------------R
Signature
- --------------------------------------------------------------------------------O
Signature
X
Dated: ___________________________________________________________________, 1994, 1995
Y
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD
PROMPTLY, USING THE ENCLOSED
ENVELOPE