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AS FILED WITH THERegistration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
ON AUGUST 28, 1996
Registration No. 33-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PUBLIC SERVICE COMPANY OF NEW MEXICO
(Exact Name of Registrant as Specified in Its Charter)
New Mexico Alvarado Square 85-0019030
(State or Other Jurisdiction Albuquerque, New Mexico 87158 (I.R.S. Employer
of Incorporation or Organization) (505) 241-2700 Identification Number)
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
M. H. Maerki
Senior Vice President and Chief Financial Officer
Public Service Company of New Mexico 85-0019030
Alvarado Square
Albuquerque, New Mexico 87158
(505) 241-2700
MAX MAERKI
Senior Vice President(Name, Address, Including Zip Code, and Chief Financial Officer
PUBLIC SERVICE COMPANY OF NEW MEXICO
Alvarado SquareTelephone Number, Including Area Code,
of Agent for Service)
Copies To:
Charles L. Moore, Esq. Michael F. Cusick, Esq.
Keleher & McLeod, P.A. Winthrop, Stimson, Putnam & Roberts
414 Silver Avenue, S.W., 12th Floor One Battery Park Plaza
Albuquerque, New Mexico 8715887102 New York, New York 10004
(505) 241-2700346-4646 (212) 858-1000
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statementthis registration statement becomes effective.
If the only securities being registered on this Formform are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]/ /
If any of the securities being registered on this Formform are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]/X/
If this Formform is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]/ /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering.[ ] / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box.[ ]
The commission is requested to mail signed copies of all orders,
notices and communications to:
C. L. MOORE
KELEHER & McLEOD, P.A.
414 Silver Avenue, S. W.
Albuquerque, New Mexico 87103 / /
CALCULATION OF REGISTRATION FEE
Proposed
Title of Proposed Maximum
Securities Maximum Aggregate Amount of
to be Amount Offering Price Offering Registration
Registered to be Registered Per Share============================ ------------------------- -------------------------- ------------------------- ------------------------
TITLE OF CLASS OF AMOUNT TO BE PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) OFFERING PRICE AGGREGATE OFFERING REGISTRATION FEE
PER UNIT(2) PRICE (1) Price (1) Fee
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Common Stock
$5.00 par value 2,000,000 Shares $ 19.625 $39,250,000 $13,534.48Senior Unsecured Notes $650,000,000 100% $650,000,000 $191,750
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(1) Estimated pursuant to Rule 457Or the equivalent amount of any securities denominated in a foreign currency
or composite currency.
(2) Exclusive of accrued interest, if any, and estimated solely for the purpose
of calculating the registration fee on the basis of the average high and low sale price of the
Registrant's Common Stock on the New York Stock Exchange Composite Transaction
Tape on August 23, 1996.fee.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICHTHAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(A), MAY DETERMINE.
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P R O S P E C T U S
----------------------------------Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
SUBJECT TO COMPLETION DATED MAY 21, 1998
PROSPECTUS
$650,000,000
PUBLIC SERVICE COMPANY OF NEW MEXICO
PNM DIRECT PLAN
COMMON STOCK
($5 PAR VALUE)
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The Public Service Company of New Mexico PNM Direct Plan (the "Plan"),
to be effective as of September __, 1996, is designed to provide investors
with a convenient way to purchase shares of common stock, $5 par value
("Common Stock") ofSENIOR UNSECURED NOTES
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Public Service Company of New Mexico (the "Company") intends to issue
from time to time up to $650,000,000 (or the equivalent in foreign currency or
composite currency) aggregate principal amount of its senior unsecured notes
(the "SUNs"), or if any SUNs are issued at an original issue discount, such
greater amount as shall result in net proceeds to the Company of $650,000,000,
which will be offered to the public on terms determined by market conditions at
the time of sale. The SUNs may be issued in one or more series with the same or
various maturities at par, at a premium or with an original issue discount. When
particular SUNs are offered, a prospectus supplement (a "Prospectus
Supplement"), together with this Prospectus, will be delivered setting forth the
terms of such SUNs, including, where applicable, the specific designation,
aggregate principal amount, denominations, maturity, rate of interest (or manner
of calculation thereof) and to reinvest all or a portiontime of payment thereof, any redemption provisions,
the cash dividends paid oninitial public offering price and any other specific terms in connection
with the Common
Stockoffering and sale of such SUNs. The SUNs will be unsecured and
unsubordinated obligations of the Company ranking equally with all existing and
future unsecured and unsubordinated obligations of the Company. Unless otherwise
specified in shares of Common Stock.
PARTICIPANTS IN THE PLAN MAY:
# Reinvest all orthe applicable Prospectus Supplement, the SUNs will be represented
by global certificates (each, a portion of cash dividends paid on Common Stock"Registered Global SUN") registered in their names or on Common Stock credited to their
Plan accountsthe name
of a nominee of The Depository Trust Company, New York, New York (the
"Depositary"). Beneficial interests in shares of Common Stock.
# Make an initial investment in Common Stock with a cash payment of
at least $50, and additional optional investments thereafter of at
least $50, up to a maximum of $60,000 per calendar year, including
the initial investment.
# Receive, upon written request, certificates for whole shares of
Common Stock credited to their Plan accounts.
# Deposit certificates representing Common Stock into the Plan for
safekeeping.
# Sell shares of Common Stock credited to their Plan accounts
through the Plan.
Shares of Common StockSUNs will be purchased under the Plan, at the option
of the Company, from newly issued shares, or shares purchasedshown on, the open
market. Purchasesand transfers
thereof will be effected only through, an independent agent appointedrecords maintained by the Company. The Common Stock is listed on the New York Stock Exchange.
The closing price of the Common Stock on September __, 1996 on the New York
Stock Exchange was $_____.
The purchase price of newly issued Common Stock purchased under the
Plan for an Investment Date (as definedDepositary
(with respect to participants' interests) and its participants. Except as
described in the Plan) will be the average of
the high and low sales prices of the Common Stock reported on the New York
Stock Exchange Composite Tape as published in The Wall Street Journal or,
for any day on which there is no such publication, in another generally
accepted publication for the first business day of the relevant Investment
Period (as defined in the Plan), provided that the New York Stock Exchange
is open on such day. The price of shares of Common Stock purchased or sold
on the open market will be the weighted average price per share (adjusted
for brokerage commissions, any related service charges, and applicable
taxes) of the aggregate number of shares purchased or sold, respectively,
on the open market during the relevant Investment Period. The Company will
pay the costs of administration of the Plan, except that Plan Participants
will bear the cost of brokerage commissions, any related service charges,
and applicable taxes relating to shares of Common Stock purchased or sold
on the open market.
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To the extent required by applicable law in certain jurisdictions,
shares of Common Stock offered under the Plan to persons not presently
record holders of Common Stock are offered only through a registered
broker/dealer in such jurisdictions.
This Prospectus contains a summary of the material provisions of the
Plan and, therefore, this Prospectus, shouldSUNs in certificated form will not be retained by Participantsissued in
the Plan ("Participants")exchange for future reference.
-------------------------Registered Global SUNs.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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This Prospectus may not be used to consummate sales of SUNs unless
accompanied by a Prospectus Supplement. The Company may sell SUNs through
underwriters, dealers or agents, or directly to one or more purchasers. The
applicable Prospectus Supplement will set forth the names of the underwriters,
dealers or agents, if any, the net proceeds to the Company from any such sale,
and any applicable commissions or discounts. See "Plan of Distribution" for
possible indemnification arrangements for underwriters, dealers, and agents.
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The date of this Prospectus is September __, 1996., 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements, and other information can be obtained at
prescribed rates from the Public Reference Section of the Commission or may
be inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, and at certain of its regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center,
13th Floor, New York, New York 10048. The Common Stock is listed on the
New York Stock Exchange. Reports, proxy material, and other information
concerning the Company can be inspected at the office of this Exchange at
Room 401, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents previously filed with the Commission by the
Company (File No. 1-6986) are hereby incorporated by reference in this
Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (the "1995 Form 10-K").
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1996, and June 30, 1996 (the June 10-Q).
3. The Company's Current Report on Form 8-K dated March 13, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of the June 10-Q
and prior to the filing of a post-effective amendment which indicates that
all securities offered hereby have been sold or which deregisters all
securities then remaining unsold will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of
filing of such documents.
Any statement contained in a document incorporated by reference herein
will be deemed to be modified or superseded for purposes of this Prospectus
to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or
superseded will not be deemed, except as modified or superseded, to
constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus has been delivered, on
the oral or written request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents. Requests
for such copies should be directed to Public Service Company of New Mexico,
Alvarado Square, Albuquerque, New Mexico 87158, or by calling (505)
241-2650 or (800-545-4425) toll-free nationwide.
THE COMPANY
The Company was incorporated in 1917 under the laws of the State of
New Mexico and is a public utility primarily engaged in the generation,
transmission, distribution and sale of electricity and in the transmission,
distribution and sale of natural gas within the State of New Mexico. The
Company is also engaged in the operation and management of the City of
Santa Fe's water system and in the development of new business activities
in the energy and utility related services area. The principal executive
offices of the Company are at Alvarado Square, Albuquerque, New Mexico
87158, and its telephone number is (505) 241-2700.
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The following questions and answers describe the provisions of the
Public Service Company of New Mexico PNM Direct Plan (the "Plan"). For
convenience of reference, the definitions of certain key terms are included
below:
DESCRIPTION OF THE PLAN
DEFINITIONS
Administrator -- Public Service Company of New Mexico (the
"Company" or "PNM"). See also "Plan
Administrator".
Cash Investment -- A payment made subsequent to enrollment in
the Plan. The maximum aggregate Cash
Investment (including the Initial Cash
Investment) is $60,000 per account per
calendar year.
Company -- Public Service Company of New Mexico.
Dividend Payment Date -- The date determined by the Company's
Board of Directors on which Common Stock
dividends are payable.
Dividend Record Date -- The date determined by the Company's
Board of Directors for establishing
shareholders who are entitled to a dividend
which has been declared.
Eligible Investor -- An investor who makes an Initial Cash
Investment of at least $50 or a
Shareholder of Record.
Enrollment Forms -- Forms available through the Company that
the investor must complete to be able to
participate in the Plan.
Ex-Dividend Date -- A date prior to the Dividend Record Date,
based on industry regulations, necessary
to allow for the settlement of traded
securities by the Dividend Record Date.
Common Stock purchased between the
Ex-Dividend Date and the Dividend Record
Date is not entitled to the succeeding
dividend.
Initial Cash Investment -- A payment made to the Company to purchase
shares of Common Stock to open a Plan
account. The minimum initial Cash
Investment is $50.
Investment Date -- The date on which the purchase price for
all shares of Common Stock to be purchased
has been determined. The purchased
shares are credited to a Participant's
account on the Investment Date.
Investment Period -- The period during which Common Stock is
purchased. The Investment Period begins
on the first business day of each month.
Investment Statement -- A statement sent to a Participant after an
Investment Period in which the
Participant's account had investment
activity. The Investment Statement
includes the purchase price and number of
shares of Common Stock purchased.
Plan -- Public Service Company of New Mexico PNM
Direct Plan.
Plan Administrator -- Public Service Company of New Mexico.
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Plan History Statement -- A statement sent to a Participant upon
withdrawal (including by way of the sale of
shares or the issuance of a certificate
for shares) of all or a portion of shares
from the Participant's account.
Shareholder of Record -- An investor whose shares are registered on
the books of the Company.
PURPOSE OF THE PLAN
1. WHATNO PERSON IS THE PURPOSE OF THE PLAN?
The purpose of the Plan is to provide shareholders and interested investors
with a convenient and economical way to purchase shares of Common Stock
with Cash Investments (including an Initial Cash Investment) or reinvested
dividends.
ADVANTAGES AND DISADVANTAGES OF THE PLAN
2. WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF THE PLAN?
THE PLAN OFFERS INVESTORS THE FOLLOWING ADVANTAGES:
A. DIRECT PURCHASE OF STOCK -- Persons not presently owning shares of
Common Stock may become shareholders by making an Initial Cash
Investment of at least $50 (but not more than $60,000 per account per
calendar year). See Question 5.
Participants may invest additional funds at any time to purchase
shares of Common Stock. The maximum annual Cash Investment (including
the Initial Cash Investment) is $60,000 per account.
B. SELL STOCK -- Participants may sell shares held in their Plan
account through the Plan. See Questions 32 and 33.
C. CERTIFICATE SAFEKEEPING -- Participants may deposit their Common
Stock certificates with the Company, whether or not the Common Stock
represented by such certificates was purchased through the Plan, and
have their ownership maintained on the Company's records in their Plan
account. This convenience is provided at no cost to the Participant
and eliminates the possibility of loss, inadvertent destruction, or
theft of certificates. Also, because shares deposited for safekeeping
are treated in the same manner as shares purchased through the Plan,
they may be transferred or sold through the Plan. See Question 31.
D. REINVESTMENT OF DIVIDENDS -- All or a portion of Common Stock
dividends may be reinvested to purchase additional shares of Common
Stock. See Questions 7 through 9.
E. SIMPLIFIED RECORDKEEPING -- An Investment Statement will be
mailed to a Participant after an Investment Period in which the
Participant's account had investment activity. The statement is
cumulative, providing year-to-date Plan account activity. A Plan
History Statement will be sent when shares are sold, transferred or
otherwise withdrawn from the Plan. See Questions 34 and 37.
F. REDUCED BROKER COMMISSIONS -- The broker commissions negotiated by
the Company for buying or selling shares are typically substantially
less than those paid by individual investors for this service. No
commissions are paid for newly issued shares. See Questions 27 and
33.
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G. TRANSFER OF SHARES -- Participants may transfer shares held in
their Plan account to another individual's account at no cost. The
normal transfer requirements will apply. See Questions 30 and 43.
H. FULL INVESTMENT OF FUNDS -- The full amount of reinvested
dividends and Cash Investments can be invested because the Plan
permits fractional shares to be credited to Plan accounts. Dividends
are paid on fractional shares as well as on whole shares. See Question
28.
PLAN PARTICIPATION PRESENTS INVESTORSAUTHORIZED IN CONNECTION WITH THE FOLLOWING DISADVANTAGES:
A. NO INTEREST ON FUNDS PENDING INVESTMENT -- No interest is paid on
dividends or Cash Investments held pending investment or reinvestment.
See Question 17.
B. DELAY IN DETERMINING PURCHASE PRICE -- The number of shares
purchased for an investor's Plan account will not be determined until
all shares for the relevant Investment Period have been purchased.
Therefore, investors will not know the number of shares purchased or
the purchase price until the Investment Date. See Questions 25
through 29.
C. RETURN OF CASH INVESTMENTS ON REQUEST -- Cash Investments
(including Initial Cash Investments) sent to the Plan Administrator
will not be returned to the investor unless a written request is
received by the Plan Administrator by the last Company business day of
the month prior to the relevant Investment Period. See Question 19.
D. PERIODIC DELAYS FOR ISSUING CERTIFICATES OR SELLING SHARES --
Requests for issuance of certificates or the sale of shares from a
Plan account will be delayed during the dividend processing period.
This is a 13-15 business day period which begins on the Ex-Dividend
Date. See Questions 30, 33, and 34.
E. BROKER COMMISSIONS -- While the broker commissions negotiated by
the Plan Administrator for buying or selling stock are typically less
than those paid by individual investors for this service, certain
investors may be able to negotiate lower commissions on an individual
basis. Also, the commissions negotiated by the Plan Administrator may
change from time to time. See Questions 27 and 33.
F. PRICE OF SHARES -- Plan Participants cannot designate a specific
price at which to sell or purchase Common Stock. Requests for the
sale of Plan shares are accumulated and the Plan Administrator places
a market order with the appointed agent. Similarly, a market order is
placed with the independent agent to purchase stock with all funds
available for investment. See Questions 24, 27, and 32.
PLAN ADMINISTRATION
3. WHO ADMINISTERS THE PLAN?
The Company administers the Plan. Administration duties include
recordkeeping, sending periodic statements of account, and holding shares
purchased through the Plan or otherwise deposited for safekeeping. See
Question 32. Such shares will be registered in the name of a nominee on
behalf of Plan Participants. Communications about the Plan should be
directed to:
Public Service Company of New Mexico
Shareholder Records Department
Alvarado Square, MS 0802
Albuquerque, NM 87158-0802
When writing, please include a day-time telephone number to expedite our
reply.
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The nationwide toll-free Shareholder Records Department telephone number is
800-545-4425. In the Albuquerque area, call 241-2650.
PARTICIPATION IN THE PLAN
4. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any interested investors making an Initial Cash Investment of at least $50
and all Common Stock Shareholders of Record are eligible to participate.
Citizens or residents of a country other than the United States or its
territories and possessions should determine whether they are subject to
any governmental regulations prohibiting or restricting participation in
the Plan, and must provide evidence satisfactory to the Administrator that
their participation will not violate any such regulations, before enrolling
in the Plan.
Beneficial owners of Common Stock whose shares are held in a name other
than their own (for example, a bank, broker, or trustee) may participate in
the Plan with respect to such shares by transferring those shares into
their own name.
5. HOW DOES AN ELIGIBLE INVESTOR ENROLL IN THE PLAN?
After being furnished with a Plan Prospectus, Eligible Investors may join
the Plan by completing and signing an Enrollment Form and returning it to
the Company. Non-shareholder investors must also submit an Initial Cash
Investment of at least $50 (but not more than $60,000). Once enrolled in
the Plan, Eligible Investors will remain enrolled until they discontinue
their participation or the Plan is terminated. See Questions 34, 35 and
41.
6. WHEN MAY AN ELIGIBLE INVESTOR JOIN THE PLAN?
An Eligible Investor may join the Plan at any time by completing and
returning an Enrollment Form.
PARTICIPATION OPTIONS
7. WHAT PARTICIPATION OPTIONS ARE AVAILABLE IN THE PLAN?
On the Enrollment Form, the investor is offered the following participation
options:
-- Full Dividend Reinvestment
-- Partial Dividend Reinvestment or
-- Cash Investment Only
8. HOW DOES THE "FULL DIVIDEND REINVESTMENT" OPTION OF THE PLAN WORK?
Participants enrolling in the Full Dividend Reinvestment option will have
dividends earned on all Common Stock, both in their Plan account and of
record, reinvested to purchase additional shares of Common Stock. The
reinvestment of dividends will commence with the first dividend to which
the Participant is entitled payable after the next Dividend Record Date
following enrollment. A Participant may also make Cash Investments of up
to $60,000 per account annually to purchase Common Stock.
9. HOW DOES THE "PARTIAL DIVIDEND REINVESTMENT" OPTION OF THE PLAN
WORK?
Participants enrolling in the Partial Dividend Reinvestment option can
designate a specific number of shares on which they wish to receive cash
dividends, with dividends on the balance of shares being reinvested to
purchase Common Stock. Participants may also elect to receive cash
dividends on shares they hold in certificate form, with dividends on shares
held in their Plan account being reinvested. The reinvestment of dividends
will commence with the first dividend to which the Participant is entitled
payable after the next
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Dividend Record Date following enrollment. In addition, a Participant may
make Cash Investments of up to $60,000 per account annually to purchase
Common Stock.
If a Participant has elected this option and subsequently directs that a
portion of his or her shares are to be sold, transferred, or withdrawn,
unless the Participant otherwise directs, all shares on which a Participant
receives reinvested dividends will be sold, transferred, or withdrawn prior
to the sale, transfer, or withdrawal of any shares on which a Participant
receives cash dividends.
10. HOW DOES THE "CASH INVESTMENT ONLY" OPTION OF THE PLAN WORK?
Participants enrolling in the Cash Investment Only option may make Cash
Investments of at least $50, but not more than $60,000 per account
annually. Dividends earned on all Common Stock, both in the Plan account
and of record, will be paid directly to the investor in the manner in which
dividends are normally paid. The Cash Investment will purchase additional
shares of Common Stock.
NOTE: IF PARTICIPANTS DO NOT INDICATE A PARTICIPATION OPTION ON THE
ENROLLMENT FORM, THEIR ACCOUNT WILL AUTOMATICALLY BE ENROLLED INTO THE
"FULL DIVIDEND REINVESTMENT" OPTION.
11. MAY PARTICIPANTS CHANGE THEIR PARTICIPATION OPTION?
Yes. The participation option may be changed by completing and signing a
new Enrollment Form and returning it to the Company. The change will be
effective as of the next Dividend Record Date following receipt of the new
Enrollment Form.
12. MAY THE COMPANY RESTRICT PARTICIPATION IN THE PLAN?
Yes. The Company reserves the right to restrict participation in the Plan
if it believes that such participation may be contrary to the general
intent of the Plan or in violation of applicable law.
INITIAL CASH INVESTMENTS AND CASH INVESTMENTS
13. WHO IS ELIGIBLE TO MAKE CASH INVESTMENTS?
Any Shareholder of Record who has submitted a signed Enrollment Form is
eligible to make Cash Investments regardless of the participation option
chosen, subject to the maximum contribution. See Question 16.
14. WHO IS ELIGIBLE TO MAKE AN INITIAL CASH INVESTMENT?
Any interested investor may submit a signed Enrollment Form and make an
Initial Cash Investment, subject to the minimum and maximum contributions.
See Question 16.
15. HOW ARE INITIAL CASH INVESTMENTS AND CASH INVESTMENTS MADE?
Initial Cash Investments and Cash Investments must be made by check, money
order, or wire transfer payable through a U.S. bank or other financial
institution, in U.S. dollars, to PNM Direct Plan. Do not send cash.
Initial Cash Investments must be accompanied by a completed Enrollment
Form; an Enrollment Form or a Cash Investment form should accompany Cash
Investments to ensure credit to the proper account. An employee of the
Company may elect to make an Initial Cash Investment or Cash Investments
through payroll deductions by completing and returning a Payroll Deduction
Authorization Form. The Company also allows for Cash Investments to be
made by electronic debit from a specified account by completing and
returning an Electronic Debit Authorization Form.
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16. IS THERE A MINIMUM AND MAXIMUM CASH INVESTMENT?
Yes. The minimum Initial Cash Investment is $50. The minimum for
subsequent Cash Investments is $50. The maximum aggregate Cash Investment
(including the Initial Cash Investment) is $60,000 per account per calendar
year.
17. WHEN WILL A PARTICIPANT'S INITIAL CASH INVESTMENT OR CASH
INVESTMENT BE INVESTED?
Initial Cash Investments and Cash Investments will be invested during the
Investment Period of the calendar month immediately following the calendar
month in which the funds are received. Because interest is not paid on
funds pending investment, it is to your benefit to mail your Cash
Investments so they are received shortly before the end of the calendar
month. Funds are considered to be received when delivered, either by
postal service or in person, during Company business hours to the Company's
corporate headquarters (see "Shareholder Information" below for address).
In the event that a check submitted for investment is returned unpaid for
any reason, the Plan Administrator will consider the request for investment
of such funds null and void. Any shares purchased upon the prior credit of
such funds will be immediately removed from the Participant's account. The
Plan Administrator will be entitled to sell those shares to satisfy any
uncollected amounts. If the net proceeds of the sale of such shares are
insufficient to satisfy the balance of such uncollected amounts, the Plan
Administrator will be entitled to sell additional shares from the
Participant's account to satisfy the uncollected balance.
18. WHEN WILL SHARES PURCHASED WITH INITIAL CASH INVESTMENTS OR CASH
INVESTMENTS BE ENTITLED TO RECEIVE DIVIDENDS?
Shares purchased with an Initial Cash Investment or Cash Investment will be
entitled to dividends if the shares were credited to the Participant's
account as of a date preceding the Dividend Record Date for payment of a
dividend.
19. MAY A PARTICIPANT REQUEST THAT AN INITIAL CASH INVESTMENT OR CASH
INVESTMENT BE RETURNED?
Yes. A Participant may request, in writing, the return of an Initial Cash
Investment or Cash Investment. The funds will be returned if the request
is received by the last Company business day of the month prior to the
relevant Investment Period.
NOTE: INTEREST IS NOT PAID ON FUNDS HELD PENDING INVESTMENT.
REINVESTMENT OF DIVIDENDS
20. IS THERE A MINIMUM OR MAXIMUM AMOUNT FOR REINVESTED DIVIDENDS?
No. Dividends designated for reinvestment through the Plan are not subject
to a minimum or maximum.
21. WHEN WILL A PARTICIPANT'S DIVIDENDS BE REINVESTED?
A Participant's dividends will be reinvested during the Investment Period
of the month following the month in which the dividend is payable. For
example, November dividends will be reinvested in December.
22. WHEN WILL SHARES PURCHASED WITH REINVESTED DIVIDENDS BE ENTITLED
TO RECEIVE DIVIDENDS?
Shares purchased with reinvested dividends will be entitled to dividends on
the Dividend Payment Date following the purchase of such shares.
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PURCHASES
23. WHAT IS THE SOURCE OF COMMON STOCK PURCHASED THROUGH THE PLAN?
Common Stock purchased through the Plan will be purchased, at the
discretion of the Company and in accordance with applicable law, either on
the open market or directly from the Company or through a combination of
the foregoing. Shares purchased from the Company will be authorized but
unissued shares of the Company. The Company currently anticipates that
shares will initially be purchased on the open market and not issued by the
Company. Issuance of Common Stock by the Company requires approval by the
New Mexico Public Utility Commission.
24. HOW IS COMMON STOCK PURCHASED ON THE OPEN MARKET?
Common Stock will be purchased through an independent agent appointed by
the Company. The independent agent will have full discretion in all
matters related to such purchases, including the day and time of purchase,
price paid, number of shares purchased, and the markets or persons through
whom the purchases are made.
25. WHEN ARE SHARES PURCHASED FOR THE PLAN?
Purchases of shares on the open market may begin on the first day of the
relevant Investment Period and will be completed no later than 30 days
thereafter. Dividends not invested in Common Stock within 30 days of the
Dividend Payment Date therefor and Cash Investments not invested in Common
Stock within 35 days of receipt will be promptly returned to Participants.
Shares purchased by the Plan from the Company (newly issued Common Stock)
will be acquired as of the first day of the relevant Investment Period,
provided that the New York Stock Exchange is open on such day. See
Question 26.
26. WHEN WILL SHARES BE CREDITED TO A PARTICIPANT'S ACCOUNT?
Participants' shares will be credited to their Plan accounts on the
Investment Date and are considered to be owned by the Participant on that
day. If the Investment Date falls on a date when the New York Stock
Exchange is closed, the first day immediately succeeding such day on which
the New York Stock Exchange is open will be the Investment Date.
27. HOW IS THE PURCHASE PRICE OF THE COMMON STOCK DETERMINED?
The purchase price of Common Stock purchased on the open market will be the
weighted average price, including broker commissions, related service
charges, and applicable taxes, of all shares purchased during the
Investment Period.
The purchase price of Common Stock purchased from the Company (newly issued
Common Stock) will be the average of the high and low prices of the Common
Stock reported on the New York Stock Exchange Composite Tape as published
in The Wall Street Journal or, for any day on which there is no such
publication, in another generally accepted publication for the first
business day of the relevant Investment Period, provided that the New York
Stock Exchange is open on such day.
If the stock is purchased both on the open market and through the Company,
the purchase price will be the weighted average price of such shares in
accordance with the foregoing two paragraphs.
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28. HOW MANY SHARES OF COMMON STOCK WILL BE PURCHASED FOR A
PARTICIPANT?
The number of shares purchased for a Participant will be equal to the
Participant's Cash Investments for the month plus dividends available for
reinvestment (see Question 21) divided by the purchase price of the shares.
The Participant's account will be credited with the whole and fractional
shares on the Investment Date.
29. CAN A PARTICIPANT REQUEST THE PURCHASE OF A SPECIFIC NUMBER OF
SHARES?
No. Since the purchase price of the Common Stock cannot be calculated until
the Common Stock is purchased, a Participant may not purchase a specific
number of shares.
CERTIFICATES
30. WILL CERTIFICATES BE ISSUED FOR SHARES PURCHASED THROUGH THE PLAN?
No. The certificates for shares purchased through the Plan are registered
in the name of a nominee on behalf of Plan Participants. A certificate
will be issued to Participants only upon request.
Participants requesting the issuance of a certificate for their Plan shares
should submit the request in writing to the Plan Administrator, specifying
the number of shares to be issued. Certificates will generally be issued
within five days following the receipt of the request. However, requests
received during the dividend processing period will be delayed. See
"Disadvantages of the Plan -- D." Certificates cannot be issued for
fractional shares.
The certificate will be issued in the name(s) of the Participant(s).
Requests to issue a certificate into another registration must meet the
requirements for transfer of stock. See Question 43.
See Question 9 for information relating to the certification of only a
portion of a Participant's Plan shares when the Participant has elected the
Partial Dividend Reinvestment option for his or her shares.
SAFEKEEPING OF CERTIFICATES
31. CAN CERTIFICATES BE RETURNED TO THE COMPANY TO BE HELD IN THE
PARTICIPANT'S PLAN ACCOUNT?
Yes. Certificates for Common Stock may be returned to the Plan
Administrator to take advantage of the safekeeping feature of the Plan.
THE CERTIFICATES SHOULD NOT BE ENDORSED AND REGISTERED MAIL IS RECOMMENDED.
The certificates should be submitted with a letter to the Plan
Administrator directing the Plan Administrator to deposit the shares
represented by such certificates into the Plan account of the Participant.
Alternatively, the certificates can be submitted with a safekeeping
authorization form. Investors may submit certificates for safekeeping at
any time while participating in the Plan.
COMMON STOCK SURRENDERED FOR SAFEKEEPING WILL BE TREATED AS SHARES
PURCHASED THROUGH THE PLAN.
SALE OF SHARES
32. HOW MAY PARTICIPANTS SELL THEIR PLAN SHARES OR TRANSFER SHARES?
Participants may sell their Plan shares by submitting a written request to
the Company. The request should indicate the number of shares to be sold
and must be signed by ALL account owners. Shares acquired through and held
in the Plan, as well as shares surrendered for safekeeping, may be sold in
this manner. A request to sell shares is irrevocable after it is received
by the Company. The Company's appointed agent will have full
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discretion in all matters related to the sale, including the time of sale,
sale price, and the markets or persons through whom the shares are sold.
Participants cannot specify a price at which to sell their stock.
Participants may also elect to transfer (whether by gift, private sale, or
otherwise) ownership of all or a portion of their Account Shares to the
Account of another Participant or establish an Account for a Person not
already a Participant by delivering to the Administrator a completed
account action request form to that effect and a stock assignment (stock
power) acceptable to the Administrator along with such other documentation
as may be required by the Administrator. No fraction of a share of Common
Stock credited to the transferor's Account shall be transferred unless the
Transferor's entire Account is transferred. For Participants' convenience a
gift certificate is available to represent a transfer by gift.
Shares held outside the Plan may not be sold through the Plan.
See Question 9 for information relating to the sale of only a portion of a
Participant's Plan shares when the Participant has elected the Partial
Dividend Reinvestment option for his or her shares.
33. WHEN WILL PLAN SHARES BE SOLD?
Plan shares will generally be sold within five business days following
receipt of the sale request. However, sale requests received during the
dividend processing period will be delayed until the dividend processing
period is completed. See "Disadvantages of the Plan -- D."
A check will be issued for the proceeds of the sale minus the broker
commissions, any related service charges, and applicable taxes, and will be
made payable to the registered account owners only.
TERMINATION OF PLAN PARTICIPATION
34. HOW MAY A PARTICIPANT TERMINATE PARTICIPATION IN THE PLAN?
Participants may terminate participation in the Plan either by selling all
the shares in their Plan account or by having a certificate issued for a
specific number of whole shares in their Plan account and selling the
balance of shares. See Questions 30, 32, and 33. Certificates cannot be
issued for fractional shares; fractional shares must be sold when
terminating participation.
Plan Participants must notify the Company in writing of their intention to
terminate participation in the Plan, have all account owners sign the
request, and indicate whether they wish to receive a stock certificate or
sell their shares.
Participants terminating their Plan participation will receive a Plan
History Statement detailing the account history. THIS STATEMENT SHOULD BE
RETAINED FOR TAX PURPOSES.
Cash Investments received prior to the request to terminate Plan
participation will be invested during the next Investment Period unless the
Participant timely requests the return of that Cash Investment. See
Question 19.
The termination of Plan participation will be delayed if the request is
received during the dividend processing period. See "Disadvantages of the
Plan -- D."
35. MAY THE COMPANY TERMINATE A PARTICIPANT'S PLAN PARTICIPATION?
Yes. If a Participant does not maintain at least one whole share of Common
Stock in the Plan account or does not own any Common Stock of record for
which cash dividends are designated for reinvestment pursuant to the Plan,
the Participant's participation may be terminated by the Company upon
written notice to the
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Participant. A Participant whose participation has been terminated will
receive a check for the cash value of any fractional share in the Plan
account.
In addition, the Company may terminate a Participant's participation in the
Plan if it believes that such participation may be contrary to the general
intent of the Plan or in violation of applicable law. The Participant will
receive a certificate for whole shares and a check for the cash value of
the fractional share in the Plan account.
COSTS
36. WHAT COSTS ARE ASSOCIATED WITH PARTICIPATION IN THE PLAN?
The only costs associated with Plan participation are the broker
commissions, related service charges, and applicable taxes for the sale or
purchase of shares for a Participant's account. All other administrative
costs are borne by the Company.
REPORTS TO PARTICIPANTS
37. WHAT REPORTS ARE SENT TO PARTICIPANTS?
Plan Participants will receive an Investment Statement as soon as possible
after each month in which an investment occurs in their Plan account, which
will provide detailed account information for the current calendar year.
THIS STATEMENT SHOULD BE RETAINED FOR TAX PURPOSES.
Participants who have sold, transferred, or withdrawn shares from their
Plan accounts will receive a Plan History Statement detailing the account
history. THIS STATEMENT SHOULD BE RETAINED FOR TAX PURPOSES.
Plan Participants will also receive copies of all shareholder
communications such as annual reports, and notices of shareholder meetings
and proxy materials.
Plan Participants will receive an IRS Form 1099-DIV showing total dividends
reported to the Internal Revenue Service which were paid to the Participant
both on shares of record and Plan account shares. An IRS Form 1099-B will
be provided for reporting the proceeds from the sale of shares through the
Plan. See Question 45 for further information regarding tax reporting.
OTHER INFORMATION
38. WHAT HAPPENS IF THE COMPANY DECLARES A DIVIDEND PAYABLE IN COMMON
STOCK OR A STOCK SPLIT?
Any dividends in the form of shares of Common Stock and any shares
resulting from a Common Stock split on shares held in a Participant's Plan
account will be credited to the Participant's Plan account.
39. HOW WILL A PARTICIPANT'S SHARES BE VOTED AT MEETINGS OF
SHAREHOLDERS?
Participants in the Plan will receive a proxy statement and a proxy card
representing Plan account shares as well as any other Common Stock held of
record. The Participant's shares will be voted in accordance with the
instructions indicated on the proxy card. Shares for which a proxy is not
received will not be voted.
40. WHAT IS THE RESPONSIBILITY OF THE COMPANY AND ITS AGENTS UNDER
THE PLAN?
Neither the Company, in its individual capacity or as Administrator, nor
any independent agent appointed by the Company pursuant to the Plan will be
liable for any act done in good faith or for any good faith omission to act
with respect to the Plan, including, without limitation, any claim of
liability arising out of failure to
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terminate a Participant's account upon such Participant's death prior to
receipt of notice in writing of such death or with respect to the prices or
times at which, or sources from which, shares are purchased or sold for
Participants, or with respect to any fluctuation in market value before or
after any purchase or sale of shares.
PARTICIPANTS MUST RECOGNIZE THAT THE COMPANY CANNOT ASSURE THEM A PROFIT,
OR PROTECT THEM AGAINST LOSSES, ON SHARES PURCHASED PURSUANT TO THE PLAN.
THE MARKET PRICE OF COMMON STOCK CAN FLUCTUATE SUBSTANTIALLY. PARTICIPANTS
ACCEPT THE RISKS AS WELL AS THE BENEFITS OF THE PLAN.
41. MAY THE PLAN BE CHANGED OR DISCONTINUED?
Yes. The Company reserves the right to suspend, modify, or terminate the
Plan at any time. The Company may register additional shares from time to
time. Any suspension, modification, or termination of the Plan will be
communicated by the Company to all Plan Participants.
42. MAY COMMON STOCK HELD IN A PLAN ACCOUNT BE PLEDGED AS COLLATERAL?
No. Common Stock held in a Plan account may not be pledged as collateral.
Participants wishing to use their Common Stock as collateral must have
certificates issued for the shares. The certificates can then be delivered
for collateral.
43. MAY COMMON STOCK HELD IN A PLAN ACCOUNT BE TRANSFERRED OR
ASSIGNED TO ANOTHER PERSON?
Yes. A Participant may transfer or assign Plan shares to another person or
entity by meeting the requirements for transfer of stock. Requests for
stock transfer requirements should be sent to:
Public Service Company of New Mexico
Shareholder Records Department
Alvarado Square, MS 0802
Albuquerque, NM 85158-0802
or by calling the Company at 800-545-4425 or, in Albuquerque, at 241-2650.
See Question 9 for information relating to the transfer of only a portion
of a Participant's Plan shares when the Participant has elected the Partial
Dividend Reinvestment option for his or her shares.
44. HOW MAY INSTRUCTIONS BE GIVEN TO THE ADMINISTRATOR?
Although currently all instructions from a Participant to the Administrator
are required to be in writing, the Administrator may in the future allow
certain instructions to be given by telephone or in any other manner as
agreed to by the Administrator and the Participant.
FEDERAL INCOME TAX INFORMATION
45. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PLAN
PARTICIPATION?
The Company believes the following is an accurate summary of the federal
tax consequences of participation in the Plan. YOU ARE ADVISED TO CONSULT
YOUR TAX OR FINANCIAL ADVISOR WITH RESPECT TO FEDERAL, STATE, LOCAL, AND
OTHER TAX LAWS WHICH APPLY TO YOUR SPECIFIC SITUATION.
In general, the dividends paid on Common Stock, whether the shares are held
in certificate form by the shareholder or held through the Plan, are
considered taxable income, whether received in cash or reinvested through
the Plan. The information return sent to you and the IRS at year-end will
provide the information required to complete your income tax returns.
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The tax basis of shares acquired through the reinvestment of dividends will
be equal to the value of dividends reinvested. The tax basis of shares
purchased with Cash Investments will be equal to the amount of such
investments.
Upon the sale of all or a portion of the shares from the Plan, a
Participant may recognize a capital gain or loss based on the difference
between the sales proceeds and the tax basis in the shares sold, including
any fractional shares. The capital gain or loss will be long-term if the
shares were held for more than one year.
For Participants who are subject to U.S. withholding tax, backup
withholding, or foreign taxes, the Company will withhold the required taxes
from the gross dividends or proceeds from the sale of shares. The
dividends or proceeds received by the Participant, or dividends reinvested
on behalf of the Participant, will be net of the required taxes.
USE OF PROCEEDS
Since purchases of Common Stock under the Plan may be satisfied by (i)
the purchase of new shares of Common Stock issued by the Company, or (ii)
the purchase of shares of Common Stock in the open market, the number of
shares of Common Stock, if any, that the Company ultimately will sell under
the Plan is not known. If newly issued shares of Common Stock are
purchased under the Plan, the proceeds from such sales will be used for
general corporate purposes, including, without limitation, the redemption,
repayment or retirement of outstanding indebtedness of the Company. The
Company will not receive any proceeds when shares of Common Stock are
purchased under the Plan in the open market.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 10,000,000
shares of Cumulative Preferred Stock without par value, issuable in series
from time to time, and 80,000,000 shares of Common Stock, par value $5 per
share. The Board of Directors of the Company is authorized by the
Company's Restated Articles of Incorporation to fix the designation and
number of shares of each series of Cumulative Preferred Stock, the dividend
rate, the redemption price, the voluntary and involuntary liquidation
price, sinking fund provisions, if any, and the conversion provisions, if
any. No amendment to the Restated Articles of Incorporation which would
change the rights of any class of the capital stock of the Company may be
made unless authorized by the holders of two-thirds of the shares of the
particular class affected by the amendment. As of September __, 1996,
there were outstanding: (i) 41,774,083 shares of Common Stock, and (ii)
128,000 shares of the 1965 Series, 4.58% Cumulative Preferred Stock of the
Company, having a stated value (equal to the involuntary liquidation price)
of $100 per share.
The Common Stock is listed on the New York Stock Exchange.
DIVIDEND RESTRICTIONS
Dividends are payable on the Common Stock as declared by the Board of
Directors from funds legally available therefor, but only after payment of
all accumulated dividends for all past and current dividend periods on the
shares of any series of Preferred Stock outstanding.
The Company's Restated Articles of Incorporation restrict the amount of
dividends payable on the Common Stock (other than dividends payable in
Common Stock) so long as any shares of Preferred Stock are outstanding to
(i) not more than 50% of the net income available for dividends on the
Common Stock when the ratio of Common Stock equity to total capitalization
(including outstanding indebtedness of a maturity of one year or more and
earned surplus) is less than 20%, and (ii) not more than 75% of such income
when such ratio is 20% or more but less than 25%. When the ratio is 25% or
more there is no such restriction on the payment of dividends on Common
Stock, except that such a payment shall not itself reduce the ratio below
25%.
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The Indenture of Mortgage and Deed of Trust, under which the Company's
first mortgage bonds are outstanding, and the supplemental indentures
thereto contain provisions which restrict the aggregate amount of dividends
payable on the Common Stock so long as certain presently outstanding bonds
remain outstanding. The Company's existing secured revolving credit
facility and the reimbursement agreement associated with a letter of credit
supporting a series of pollution control revenue bonds also contain certain
restrictions relating to the payment of dividends.
The restrictions discussed above are equally applicable to the repurchase
by the Company of shares of its outstanding Common Stock.
VOTING RIGHTS
Except as hereinafter stated, all voting rights are vested in the holders
of the Common Stock who have one vote per share and have no cumulative
voting rights. Three of the Company's nine directors are elected for
three-year terms at each annual meeting of the Company's stockholders. The
holders of shares of Preferred Stock have no voting rights except as
provided by law or when four quarterly dividends on Preferred Stock have
not been paid, at which time the holders of the Preferred Stock shall have
the following rights until all dividends in arrears have been paid:
(1) Voting as a class, to elect all three directors to be elected
at the next annual meeting, and thereafter, if dividends continue
to be due and unpaid, to elect two of the three directors to be
elected at the next succeeding annual meeting and to continue to
elect a majority of the Board of Directors in such manner; and
(2) To vote on all questions in such manner that holders of
Preferred Stock shall have one vote for each ten dollars of stated
value, or part thereof, for each share of Preferred Stock held.
In addition, the Company must secure the approval of the holders of certain
percentages of Preferred Stock outstanding prior to effecting various
changes in the rights of the Preferred Stock, the issuance of additional
shares of Preferred Stock or the making of certain unsecured borrowings, in
the last two instances, when certain conditions in the Company's capital
structure exist.
LIQUIDATION RIGHTS
After payment to the holders of Preferred Stock of the full preferential
amounts to which they are entitled, the remaining assets, if any, upon
voluntary or involuntary liquidation, are distributable to the holders of
Common Stock.
PRE-EMPTIVE RIGHTS
There are no pre-emptive rights applicable to the Common Stock or Preferred
Stock.
OTHER PROVISIONS
There are no conversion rights, or redemption or sinking fund provisions,
applicable to the Common Stock, and the Common Stock is not liable to
further calls or to assessments by the Company.
EXPERTS
The consolidated financial statements of the Company as of December
31, 1995 and 1994 and for each of the three years in the period ended
December 31, 1995 included in the Company's 1995 Form 10-K incorporated by
reference in this Prospectus and elsewhere in the Registration Statement
have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and
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are incorporated herein in reliance upon the authority of said firm as
experts in accounting and auditing in giving said report.
LEGAL OPINIONS
Certain legal matters in connection with the Common Stock offered
hereby have been passed on for the Company by Keleher & McLeod, P. A.,
P. O. Drawer AA, Albuquerque, NM 87103.
SHAREHOLDER INFORMATION
PUBLIC SERVICE COMPANY OF NEW MEXICO
Corporate Headquarters: Alvarado Square, MS 0802
Albuquerque, NM 87158-0802
Mailing Address: P.O. Box 1047
Albuquerque, NM 87103-9937
Telephone Numbers: 505-241-2650 In Albuquerque
800-545-4425 Nationwide Toll-free
Shareholder Account Information
-- Stock Transfer Requirements: P.O. Box 1047
Albuquerque, NM 87103-9937
-- Plan and Account Information: P.O. Box 1047
Albuquerque, NM 87103-9937
Stock Listing Information
-- Ticker Symbol: PSvNM on the New York Stock Exchange
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================================================================================
NO PERSON HAS BEEN AUTHORIZEDOFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONSREPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANYAN OFFER TO BUY ANY OFSECURITY
OTHER THAN THE SECURITIESSUNS OFFERED HEREBY OR TO ANY PERSON IN ANY JURISDICTION TO ANY PERSON TO WHOMIN WHICH
IT IS UNLAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION.SOLICITATION TO SUCH PERSON. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDERHEREBY SHALL UNDER ANY
CIRCUMSTANCES CREATE AN
IMPLICATIONIMPLY THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRSINFORMATION CONTAINED HEREIN IS CORRECT AS OF THE COMPANY
SINCEANY
DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
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Available Information . . . . . . . . . . . . . . . . . . . . . 1
IncorporationAVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (together with all amendments thereto,
the "Registration Statement") on Form S-3 under the Securities Act of 1933 (the
"Securities Act"), with respect to the SUNs offered hereby. This Prospectus,
filed as a part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
In addition, certain documents filed by the Company with the Commission have
been incorporated herein by reference. See "Incorporation of Certain DocumentsInformation
by Reference. . . . . . . . . . . . . . . . . . . . 1" For further information regarding the Company and the SUNs
offered hereby, reference is made to the Registration Statement, including the
exhibits and schedules thereto and the documents incorporated herein by
reference. The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purposeis subject to the informational requirements of the
Plan . . . . . . . . . . . . . . . . . . . . . . 3
AdvantagesSecurities Exchange Act of 1934 (the "Exchange Act"), and Disadvantagesin accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission, at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549;
and at the regional offices of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan Administration . . . . . . . . . . . . . . . . . . . . . .Commission at Northwestern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at 7 World
Trade Center, 13th Floor, New York, New York 10048. Copies of such materials can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding reporting companies under the Exchange Act,
including the Company, at http://www.sec.gov. The Common Stock of the Company is
listed on the New York Stock Exchange. Reports, proxy statements and other
information concerning the Company can be inspected and copied at the offices of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 and the Company's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 are hereby incorporated by reference.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
and prior to the termination of the offering of the SUNs shall be deemed to be
incorporated by reference in this Prospectus and be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated by reference in this Prospectus shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained in this Prospectus, or in any other subsequently filed
document that also is or is deemed to be incorporated by reference, modifies or
replaces such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified, to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to whom
a copy of this Prospectus has been delivered, upon written or oral request of
any such person, a copy of any or all of the documents incorporated by reference
herein, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates. Written or oral requests for such copies should be directed to:
Barbara Barsky, Vice President of Strategy, Analysis and Investor Relations,
Public Service Company of New Mexico, Alvarado Square, Albuquerque, New Mexico
87158, or by telephone at (505) 241-2477.
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ParticipationTHE COMPANY
Public Service Company of New Mexico (the "Company") was incorporated
in the Plan State of New Mexico in 1917 and has its principal offices at Alvarado
Square, Albuquerque, New Mexico 87158 (telephone number 505-241-2700). The
Company is a public utility primarily engaged in the generation, transmission,
distribution and sale of electricity and in the transmission, distribution and
sale of natural gas within the State of New Mexico. In addition, in pursuing new
business opportunities, the Company is focusing on energy and utility related
activities under its Energy Services Business Unit. The Company is also
operating the City of Santa Fe's water system.
The total population of the area served by one or more of the Company's
utility services is estimated to be approximately 1.3 million, of which 52.1%
live in the greater Albuquerque area.
For the year ended December 31, 1997, the Company derived 63.6% of its
operating revenues from electric operations, 26.0% from natural gas operations
and 10.4% from energy services operations.
As of December 31, 1997, the Company employed 2,789 persons.
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SUMMARY FINANCIAL AND OPERATING INFORMATION
The following material is qualified in its entirety by reference to the
information incorporated herein by reference (as specified above). The selected
data presented below under the caption "Selected Earnings Statement Data" as of
the end of and for each of the years in the five year period ended December 31,
1997, are derived from the consolidated financial statements of Public Service
Company of New Mexico and subsidiaries, which financial statements have been
audited by Arthur Andersen LLP, independent public accountants. The
consolidated financial statements as of December 31, 1997 and 1996, and for each
of the years in the three-year period ended December 31, 1997, and the report
thereon, are incorporated by reference elsewhere in this Prospectus. The
selected unaudited data presented below under the caption "Selected Earnings
Statement Data" and "Capitalization" for the three-month periods ended March 31,
1997 and 1998, and as of March 31, 1998, are derived from the unaudited
consolidated financial statements of Public Service Company of New Mexico and
its subsidiaries, which Arthur Andersen LLP have reviewed in accordance with
professional standards for a review of such interim financial information.
Three Months Ended
March 31, Year Ended December 31,
--------- -----------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(Unaudited) (Unaudited) (Dollars in thousands)
SELECTED EARNINGS
STATEMENT DATA:
Electric, Gas, Water,
Energy Services Revenues $ 329,764 $ 298,822 $ 1,135,267 $ 883,386 $ 808,465 $ 904,711 $ 873,878
Operating Expenses ........ 297,485 262,129 1,011,222 757,367 695,077 753,633 740,594
Earnings (Loss) Before
Interest Charges and
Income Taxes ............ 47,681 53,924 183,927 167,781 184,289 191,776 (32,741)
Interest Charges, Net ..... 13,787 14,234 56,214 54,707 57,934 70,587 85,823
Income Taxes (Benefit)(1) . 12,680 14,794 46,718 40,494 50,793 40,871 (57,078)
Net Income (Loss) from
Continuing Operations ... 21,214 24,896 80,995 72,580 75,562 80,318 (61,486)
ELECTRIC SALES (MWH) ......... 3,383,876 2,858,554 13,320,542 10,981,516 8,619,878 9,315,084 8,822,004
GAS THROUGHPUT -
DECATHERMS (000'S)(2) ...... 32,540 32,099 84,610 100,096 109,594 132,071 135,332
RATIO OF EARNINGS TO FIXED
CHARGES(3) ................. 2.14 2.30 2.05 1.94 1.99 1.83 0.27(4)
As of March 31, 1998
--------------------
Amount Percent
------ -------
CAPITALIZATION: (in thousands)
Short-Term Debt........................................................... $ 243,860 14.8%
Long-Term Debt............................................................ 574,344 34.7
Cumulative Preferred Stock, without
Mandatory Redemption Requirements....................................... 12,800 0.8
Common Shareholders' Equity............................................... 822,112 49.7
---------- -----
Total Capitalization(5)......................................... $1,653,116 100.0%
========== =====
- ------------
(1) Income Taxes (Benefit) calculated on earnings (loss) from continuing
operations.
(2) On June 30, 1995, the Company sold substantially all of the gas gathering
and processing assets. Gas Throughput data for 1995, 1996, 1997 and the
first three months of 1997 and 1998 reflect the effects of such sale.
(3) For purposes of computing the Ratio of Earnings to Fixed Charges, earnings
have been calculated by adding back the provision for income taxes and
fixed charges. Fixed charges include total interest charges (without
reduction for the allowance for borrowed funds used during construction),
the interest portion of all rents and certain payments under a purchase
power contract.
(4) The less than 1:1 ratio for 1993 was primarily the result of the write-down
of certain assets resulting from the stipulation filed with the New Mexico
Public Utility Commission recommending that electric retail rates be
reduced by $30 million. The fixed charge coverage deficiency aggregated
approximately $119 million for 1993.
(5) Total capitalization does not include the present value of the Company's
lease obligations for Palo Verde Nuclear Generating Station ("PVNGS") Units
1 and 2 and Eastern Interconnection Project as debt.
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USE OF PROCEEDS
On April 27, 1998, the Company requested the New Mexico Public Utility
Commission ("NMPUC") approval to issue up to $435 million principal amount of
SUNs to provide funds to refinance the lease debt associated with the sale and
leaseback portions of the Company's interests in PVNGS Units 1 and 2 ("Lease
Debt"). As of May 1, 1998, the Company held $277 million principal amount of
Lease Debt as an investment with the remaining $151 million principal amount of
Lease Debt held by the public in the form of Lease Obligation Bonds. The net
proceeds from such $435 million principal amount of SUNs would be applied in
accordance with NMPUC authorization, including the repayment of short-term debt.
Issuance of additional SUNs would require additional regulatory approval, and
the net proceeds from the issuance of any additional SUNs are expected to be
applied to general corporate purposes, except as may be set forth in the
applicable Prospectus Supplement.
DESCRIPTION OF SUNS
The SUNs will be issued under an Indenture (the "Indenture") between
the Company and The Chase Manhattan Bank, as trustee (the "Trustee"). The
following description of certain provisions of the Indenture and the SUNs
summarizes the material terms thereof but does not purport to be complete, and
such summaries are subject to the detailed provisions of the Indenture to which
reference is hereby made, including the definition of certain terms used herein
and those terms made a part of the Indenture by reference to the Trust Indenture
Act of 1939 (the "Trust Indenture Act"), and for other information regarding the
SUNs. The Indenture is filed as an exhibit to the Registration Statement of
which this Prospectus is a part. Numerical references in parentheses below are
to sections in the Indenture. Wherever particular sections or defined terms of
the Indenture are referred to, such sections or defined terms are incorporated
herein by reference as part of the statement made, and the statement is
qualified in its entirety by such reference. Capitalized terms that are used and
not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
GENERAL
The Indenture provides for the issuance from time to time of SUNs by
the Company in an unlimited aggregate principal amount by specification in an
indenture supplemental to the Indenture or in a Board Resolution, or in an
Officer's Certificate pursuant to one or more indentures supplemental to the
Indenture or a Board Resolution. (Section 3.01) The SUNs may be issued in one or
more series, each of which series may be issued in one or more Tranches.
Reference is made to the applicable Prospectus Supplement relating to the
particular series of SUNs offered thereby for the following terms of the SUNs:
(i) the title of the SUNs of the series, which shall distinguish the SUNs of
such series from the SUNs of all other series; (ii) any limit upon the aggregate
principal amount of the SUNs of such series that may be authenticated and
delivered under the Indenture; (iii) the Person or Persons (without specific
identification) to whom interest on SUNs of such series, or any Tranche thereof,
shall be payable on any Interest Payment Date, if other than the Persons in
whose names such SUNs (or one or more Predecessor SUNs) are registered at the
close of business on the Regular Record Date for such interest; (iv) the date or
dates on which the principal of the SUNs of such series, or any Tranche thereof,
is payable or any formula or other method or other means by which such date or
dates shall be determined, by reference to an index or other fact or event
ascertainable outside of the Indenture or otherwise (without regard to any
provisions for redemption, prepayment, acceleration, purchase or extension); (v)
the rate or rates at which the SUNs of such series, or any Tranche thereof,
shall bear interest, if any (including the rate or rates at which overdue
principal shall bear interest, if different from the rate or rates at which such
SUNs shall bear interest prior to Maturity, and, if applicable, the rate or
rates at which overdue premium or interest shall bear interest, if any), or any
formula or other method or other means by which such rate or rates shall be
determined, by reference to an index or other fact or event ascertainable
outside of the Indenture or otherwise; the date or dates from which such
interest shall accrue; and the Interest Payment Dates on which such interest
shall be payable and the Regular Record Date, if any, for the interest payable
on such SUNs on any Interest Payment Date; (vi) the right, if any, to extend the
interest payment periods and the duration of such extension; (vii) the place or
places at which or methods by which (A) the principal of and premium, if any,
and interest, if any, on SUNs of such series, or any Tranche thereof, shall be
payable, (B) registration of transfer of SUNs of such series, or any Tranche
thereof, may be effected, (C) exchanges of SUNs of such series, or any Tranche
thereof, may be effected and (D) notices and demands to or upon the Company in
respect of the SUNs of such series, or any Tranche thereof, and the Indenture
may be served; the SUN Registrar and any Paying Agent or Agents for such series
or any Tranche thereof; and if such is the case, that the principal of such SUNs
shall be
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payable without presentment or surrender thereof; (viii) the period or periods
within which, the price or prices at which and the terms and conditions upon
which any SUNs of such series, or any Tranche thereof, may be redeemed, in whole
or in part, at the option of the Company and, if other than by a Board
Resolution, the manner in which any election by the Company to redeem such SUNs
shall be evidenced; (ix) the obligation, if any, of the Company to redeem or
purchase any SUNs of such series, or any Tranche thereof, pursuant to any
sinking fund or analogous provisions or at the option of the Holder (as defined
herein) thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which any SUNs of such series, or any
Tranche thereof, shall be redeemed or purchased, in whole or in part, pursuant
to such obligation; (x) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which SUNs of such series, or any Tranche
thereof, shall be issuable; (xi) if the amount of principal of or any premium or
interest on any SUNs of such series, or any Tranche thereof, may be determined
with reference to an index or pursuant to a formula, the manner in which such
amounts shall be determined to the extent not established pursuant to clause (v)
of this paragraph; (xii) if other than the currency of the United States of
America, the currency, currencies or currency units in which the principal of or
any premium or interest on any SUNs of such series, or any Tranche thereof,
shall be payable and the manner of determining the equivalent thereof in the
currency of the United States of America for any purpose; (xiii) if the
principal of or any premium or interest on any SUNs of such series, or any
Tranche thereof, is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those in
which such SUNs are stated to be payable, the currency, currencies or currency
units in which the principal of or any premium or interest on such SUNs as to
which such election is made shall be payable, the periods within which and the
terms and conditions upon which such election is to be made and the amount so
payable (or the manner in which such amount shall be determined); (xiv) if other
than the entire principal amount thereof, the portion of the principal amount of
any SUNs of such series, or any Tranche thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof; (xv) if the principal
amount payable at the Stated Maturity of any SUNs of such series, or any Tranche
thereof, will not be determinable as of any one or more dates prior to the
Stated Maturity, the amount which shall be deemed to be the principal amount of
such SUNs as of any such date for any purpose under the Indenture or under such
SUNs, including the principal amount thereof which shall be due and payable upon
any Maturity other than the Stated Maturity or which shall be deemed to be
Outstanding (as defined herein) as of any date prior to the Stated Maturity (or,
in any such case, the manner in which such amount deemed to be the principal
amount shall be determined); (xvi) if applicable, that the SUNs of such series,
or any Tranche thereof, in whole or any specified part, shall be defeasible
pursuant to the Defeasance provisions of the Indenture or that the SUNs of such
series, but not Tranches thereof alone, shall be defeasible pursuant to the
Covenant Defeasance provisions of the Indenture or both such sections and, if
other than by a Board Resolution, the manner in which any election by the
Company to defease such SUNs shall be evidenced; (xvii) if applicable, that any
SUNs of such series, or any Tranche thereof, shall be issuable in whole or in
part in the form of one or more Global SUNs and, in such case, the respective
Depositaries for such Global SUNs, the form of any legend or legends which
shall be borne by any such Global SUN and any circumstances in which any such
Global SUN may be exchanged in whole or in part for SUNs registered, and any
transfer of such Global SUN in whole or in part may be registered, in the name
or names of Persons other than the Depositary for such Global SUN or a nominee
thereof; (xviii) any addition to or change in the Events of Default which
applies to any SUNs of such series, or any Tranche thereof, and any change in
the right of the Trustee or the requisite Holders of such SUNs to declare the
principal amount thereof due and payable pursuant to the Indenture; (xix) any
addition to or change in the covenants set forth in the Indenture which applies
to SUNs of such series, or any Tranche thereof; and (xx) any other terms of
such series, or any Tranche thereof (which terms shall not be inconsistent with
the provisions of the Indenture). (Section 3.01)
All SUNs of any one series, or, if issued in Tranches thereof, any such
Tranche, shall be substantially identical except as to denomination and except
as may otherwise be determined in the manner provided for in the Indenture. With
respect to SUNs of a series subject to a Periodic Offering, the indenture
supplemental to the Indenture or the Board Resolution which establishes such
series, or the Officer's Certificate pursuant to such supplemental indenture or
Board Resolution, as the case may be, may provide general terms or parameters
for SUNs of such series and provide either that the specific terms of SUNs of
such series, or any Tranche thereof, shall be specified in a Company Order or
that such terms shall be determined by the Company or its agents in accordance
with procedures specified in a Company Order as contemplated by the Indenture.
(Section 3.01)
The Indenture does not contain any restriction on the payment of
dividends or, except as set forth under " -- Certain Covenants, - Restriction on
Liens and - Restrictions on Sale and Lease-Back Transactions," any financial
covenants. The SUNs will be unsubordinated and unsecured obligations of the
Company ranking equally with all existing and future unsubordinated and
unsecured obligations of the Company. Claims of Holders of SUNs will be
effectively subordinated to the claims of holders of secured debt of the Company
with respect to the collateral securing
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such claims. Currently the Company has outstanding $111,000,000 of first
mortgage bonds secured by the Company's owned interest in PVNGS; no future bonds
may be issued under the mortgage securing such bonds.
REGISTERED GLOBAL SUNS
Unless otherwise specified in the applicable Prospectus Supplement, the
Depositary will act as securities depository for the SUNs and the SUNs will be
issued only as Registered Global SUNs registered in the name of Cede & Co. (the
Depositary's partnership nominee). Unless otherwise specified in the applicable
Prospectus Supplement, one or more Registered Global SUNs will be issued for the
SUNs representing the aggregate principal amount of such series of SUNs and will
be deposited with the Depositary. If, however, the aggregate principal amount of
any issue exceeds $200 million, one certificate will be issued with respect to
each $200 million of principal amount and an additional certificate will be
issued with respect to any remaining principal amount of such issue.
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary holds securities that its participants (the "Direct
Participants") deposit with the Depositary. The Depositary also facilitates the
settlement among Direct Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in Direct Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. The Depositary is owned by a
number of its Direct Participants and by The New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the Depositary's system is also available to others such
as securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either directly
or indirectly (the "Indirect Participants," and together with the Direct
Participants, the "Participants"). The rules applicable to the Depositary and
its Participants are on file with the Commission.
Purchases of SUNs within the Depositary's system must be made by or
through Direct Participants, which will receive a credit for the SUNs on the
Depositary's records. The ownership interest of each actual purchaser of each
SUN (a "Beneficial Owner") is in turn to be recorded on the Direct and Indirect
Participants' respective records. Beneficial Owners will not receive written
confirmation from the Depositary of their purchase, but Beneficial Owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interest in the SUNs are to be accomplished by entries
made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interest in SUNs except in the event that use of the book-entry system for the
SUNs is discontinued.
To facilitate subsequent transfers, all SUNs deposited by Direct
Participants with the Depositary are registered in the name of Cede & Co. The
deposit of the SUNs with the Depositary and their registration in the name of
Cede & Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the SUNs; the Depositary's records
reflect only the identity of the Direct Participants to whose accounts such SUNs
are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their
customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
SUNs of a series or Tranche are being redeemed, the Depositary's practice is to
determine by lot the amount of the interest of each Direct Participant in such
series or Tranche to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the SUNs. Under its usual procedures, the Depositary mails an omnibus proxy
(an "Omnibus Proxy") to the Participants as soon as possible after
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the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting
rights to those Direct Participants to whose accounts the SUNs are credited on
the record date (identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the SUNs will be
made to Cede & Co., as nominee of the Depositary. The Depositary's practice is
to credit Direct Participants' accounts on the relevant payment date in
accordance with their respective holdings shown on the Depositary's records
unless the Depositary has reason to believe that it will not receive payment on
such payment date. Payments by participants to Beneficial Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers held in bearer form or registered
in "street-name," and will be the responsibility of such Participant and not of
the Depositary or the Company, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal,
redemption premium, if any, and interest, if any, to Cede & Co., as nominee of
the Depositary, is the responsibility of the Company or the respective trustees
(with funds furnished by the Company). Disbursement of such payments to Direct
Participants is the responsibility of the Depositary, and disbursement of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants. Registered Global SUNs will settle in immediately available funds
in the secondary trading market. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
SUNs.
The Depositary may discontinue providing its services as securities
depository with respect to the SUNs at any time by giving reasonable notice to
the Company. Under such circumstances and in the event that a successor
securities depository is not obtained, SUNs certificates are required to be
printed and delivered. In addition, the Company may decide to discontinue use of
the system of book-entry transfers through the Depositary (or a successor
securities depository). . . . . . . . . . 5
Participation Options . . . . . . . . . . . . . . . . . . . . . 5
Initial Cash InvestmentsIn that event, SUNs certificates will be printed and
Cash Investments. . . . . . . . . . . . . . . . . . . . . 6
Reinvestment of Dividends . . . . . . . . . . . . . . . . . . . 7
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Safekeeping of Certificates . . . . . . . . . . . . . . . . . . 9
Sale of Shares. . . . . . . . . . . . . . . . . . . . . . . . . 9
Termination of Plan Participation . . . . . . . . . . . . . . . 10
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Reportsdelivered.
The Company will not have any responsibility or obligation to
Participants or the persons for whom they act as nominees with respect to the
accuracy of the records of the Depositary, its nominee or any Direct or Indirect
Participant with respect to any ownership interest in the SUNs, or with respect
to payments to or providing of notice for the Direct Participants, the Indirect
Participants or the Beneficial Owners.
So long as Cede & Co. is the registered owner of the SUNs, as nominee
of the Depositary, references herein to Holders of the SUNs shall mean Cede &
Co. or the Depositary and shall not mean the Beneficial Owners of the SUNs.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from the Depositary. Neither
the Company, the Trustee nor the underwriters, dealers or agents takes
responsibility for the accuracy or completeness thereof.
CERTAIN COVENANTS
The following covenants apply to all series, or any Tranches thereof,
of SUNs:
Restrictions on Liens. The Indenture provides that so long as any SUNs
are outstanding, the Company will not issue, assume, or guarantee any Debt (as
defined herein) secured by any mortgage, security interest, pledge, or lien
(herein referred to as a "mortgage") of or upon any Operating Property (as
defined herein) of the Company, whether owned at the date of the Indenture or
thereafter acquired, without in any such case effectively securing the
Outstanding SUNs (as defined herein) (together with, if the Company shall so
determine, any other Debt of or guaranteed by the Company ranking senior to, or
equally with, the SUNs) equally and ratably with such Debt. This covenant shall
not apply in the case of any Debt secured by: (i) mortgages on any property
existing at the time of acquisition thereof; (ii) mortgages on property of a
corporation existing at the time such corporation is merged into or consolidated
with the Company, or at the time of a sale, lease, or other disposition of the
properties of such corporation or a division thereof as an entirety or
substantially as an entirety to the Company, provided that such mortgage as a
result of such merger, consolidation, sale, lease, or other disposition is not
extended to property owned by the Company immediately prior thereto; (iii)
mortgages on property to secure all or part of the cost of acquiring,
constructing, developing, or substantially repairing, altering, or improving
such property, or to secure indebtedness incurred to provide funds for any such
purpose or for reimbursement of funds previously expended for any such purpose,
provided such mortgages are created or assumed contemporaneously with, or within
eighteen (18) months after, such acquisition or completion of construction,
development, or substantial repair, alteration, or improvement or within six (6)
months thereafter pursuant
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to a commitment for financing arranged with a lender or investor within such
eighteen (18) month period; (iv) mortgages in favor of the United States of
America or any State thereof, or any department, agency, or instrumentality or
political subdivision of the United States of America or any State thereof, or
for the benefit of holders of securities issued by any such entity, to secure
any Debt incurred for the purpose of financing all or any part of the purchase
price or the cost of constructing, developing or substantially repairing,
altering, or improving the property subject to such mortgages; (v) mortgages on
any property (x) which, at any time subsequent to January 1, 1985 through the
date of the Indenture, was leased to the Company, or, (y) pursuant to the terms
of any lease to the Company in effect at any time subsequent to January 1, 1985
through the date of the Indenture, title to which would not have been vested in
the Company (assuming such lease remained in effect on the date of determination
as such lease was in effect immediately prior to the date of the Indenture); or
(vi) any extension, renewal or replacement (or successive extensions, renewals,
or replacements), in whole or in part, of any mortgage referred to in the
foregoing clauses (i) to (v), inclusive; provided, however, that the principal
amount of Debt secured thereby and not otherwise authorized by said clauses (i)
to (v), inclusive, shall not exceed the principal amount of Debt, plus any
premium or fee payable in connection with any such extension, renewal, or
replacement, so secured at the time of such extension, renewal, or replacement.
(Section 10.05(a)) Notwithstanding the foregoing, so long as any SUNs are
Outstanding, the Company may issue, assume, or guarantee Debt, or permit to
exist Debt, secured by mortgages which would otherwise be subject to the
foregoing restrictions up to an aggregate principal amount that, together with
the principal amount of all other Debt of the Company secured by mortgages
(other than mortgages permitted by the Indenture that would otherwise be subject
to the foregoing restrictions) and the Value of all Sale and Lease-Back
Transactions in existence at such time (other than certain Sale and Lease-Back
Transactions specified in the Indenture), does not exceed at the time the
greater of ten percent (10%) of Net Tangible Assets (as defined herein) or ten
percent (10%) of Capitalization. (Section 10.05(b)). Taking into account the
$111,000,000 of outstanding first mortgage bonds, the Company currently could
secure debt of up to approximately $102,000,000 without also equally and ratably
securing the SUNs.
Restrictions on Sale and Lease-Back Transactions. The Indenture
provides that so long as any SUNs are Outstanding, the Company will not enter
into any Sale and Lease-Back Transaction with respect to any Operating Property
if, in any case, the commitment by or on behalf of the purchaser is or was
obtained more than eighteen (18) months after the later of (i) the completion of
the acquisition, construction, or development of such Operating Property or (ii)
the placing in operation of such Operating Property or of such Operating
Property as constructed, developed, or substantially repaired, altered, or
improved, unless (x) the Company would be entitled pursuant to the Indenture to
issue, assume, or guarantee Debt secured by a mortgage on such Operating
Property without equally and ratably securing the SUNs or (y) the Company would
be entitled pursuant to the Indenture, after giving effect to such Sale and
Lease-Back Transaction, to incur $1.00 of additional Debt secured by mortgages
or (z) the Company shall apply or cause to be applied, in the case of a sale or
transfer for cash, an amount equal to the net proceeds thereof (but not in
excess of the net book value of such Operating Property at the date of such sale
or transfer) and, in the case of a sale or transfer otherwise than for cash, an
amount equal to the fair value (as determined by the Board of Directors) of the
Operating Property so leased, to the retirement, within one hundred eighty (180)
days after the effective date of such Sale and Lease-Back Transaction, of Debt
of the Company ranking senior to, or equally with, the SUNs; provided, however,
that the amount to be applied to such retirement of Debt shall be reduced by an
amount equal to the principal amount, plus any premium or fee paid in connection
with any redemption in accordance with the terms of Debt voluntarily retired by
the Company within such one hundred eighty (180) day period, excluding
retirement pursuant to mandatory sinking fund or prepayment provisions and
payments at maturity. (Section 10.10) The Company's existing sale and lease-back
transactions regarding Units 1 and 2 of PVNGS and certain transmission
facilities, office buildings and other equipment are excluded from this
provision of the Indenture.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
Under the Indenture, the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless: (i) the Person formed by
such consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties and assets
of the Company substantially as an entirety shall be a Person organized and
validly existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an indenture
supplemental to the Indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of
and any premium, and interest on all the SUNs and the performance or observance
of every covenant of the Indenture on the part of the Company to be
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performed or observed; (ii) immediately after giving effect to such transaction
and treating any indebtedness which becomes an obligation of the Company as a
result of such transaction as having been incurred by the Company at the time of
such transaction, no Event of Default, and no event which, after notice or lapse
of time or both, would become an Event of Default, shall have happened and be
continuing; and (iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and such supplemental
indenture comply with the Indenture and that all conditions precedent therein
provided for relating to such transaction have been complied with. (Section
8.01)
EVENTS OF DEFAULT
Events of Default defined in the Indenture with respect to the SUNs of
any series are: (i) the Company defaults in the payment of any interest upon any
SUN of that series when it becomes due and payable, and continuance of such
default for a period of 60 days; (ii) the Company defaults in the payment of the
principal of or any premium on any SUN of that series at its Maturity; (iii) the
Company defaults in the deposit of any sinking fund payment, when and as due by
the terms of a SUN of that series; (iv) the Company defaults in the performance
of or breaches any covenant or warranty of the Company in the Indenture (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this paragraph specifically dealt with or which has expressly been
included in the Indenture solely for the benefit of series of SUNs other than
that series), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of a majority in
principal amount of the Outstanding SUNs of that series a written notice
specifying such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default" under the Indenture, unless the
Trustee, or the Trustee and Holders of a principal amount of SUNs of such series
not less than the principal amount of SUNs the Holders of which gave such
notice, as the case may be, shall agree in writing to an extension of such
period prior to its expiration; provided, however, that the Trustee, or the
Trustee and the Holders of such principal amount of SUNs, as the case may be,
shall be deemed to have agreed to an extension of such period if corrective
action is initiated by the Company within such period and is being diligently
pursued; (v) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition by
one or more persons other than the Company seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90 consecutive
days; (vi) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the authorization of such action by the Board
of Directors; or (vii) any other Event of Default provided with respect to SUNs
of that series. (Section 5.01)
The Indenture provides that if an Event of Default with respect to SUNs
of any series at the time Outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of a majority in principal amount of the
Outstanding SUNs of that series may declare the principal amount of all the SUNs
of that series (or, if any SUNs of that series are Original Issue Discount SUNs,
such portion of the principal amount of such SUNs as may be specified by the
terms thereof) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified amount) shall become immediately due and
payable; provided, however, that if an Event of Default shall have occurred and
be continuing with respect to more than one series of SUNs, the Trustee or the
Holders of not less than a majority in
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principal amount of the Outstanding SUNs of all such series, considered as one
class (and not the Holders of the SUNs of any one of such series), may make such
declaration of acceleration. (Section 5.02)
At any time after such a declaration of acceleration with respect to
SUNs of any series has been made and before a judgment or decree for payment of
the money due has been obtained by the Trustee, the related Event of Default and
its consequences will be automatically waived, resulting in an automatic
rescission and annulment of the acceleration of the SUNs if (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay (A) all overdue
interest on all SUNs of that series, (B) the principal of (and premium, if any,
on) any SUNs of that series which have become due otherwise than by such
declaration of acceleration and any interest thereon at the rate or rates
prescribed therefor in such SUNs, (C) to the extent that payment of such
interest is lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such SUNs, and (D) all amounts due to the Trustee as
provided in the Indenture; and (ii) any other Event of Default with respect to
SUNs of that series, other than the non-payment of the principal of SUNs of that
series which have become due solely by such declaration of acceleration, has
been cured or waived as provided in the Indenture. No such rescission shall
affect any subsequent Event of Default or impair any right consequent thereon.
(Section 5.02)
The Holders of not less than a majority in principal amount of the
Outstanding SUNs of any series may on behalf of the Holders of all the SUNs of
such series waive any past default under the Indenture with respect to such
series and its consequences, except a default (i) in the payment of the
principal of or any premium or interest on any SUN of such series, or (ii) in
respect of a covenant or provision of the Indenture which cannot be modified or
amended by supplemental Indenture without the consent of the Holder of each
Outstanding SUN of such series affected, provided, however, that if any such
default shall have occurred and be continuing with respect to more than one such
series of SUNs, the Holders of a majority in aggregate principal amount of the
Outstanding SUNs of all such series, considered as one class, shall have the
right to waive such default, and not the Holders of the SUNs of any one such
series. Upon any such waiver, such default shall cease to exist, and any and all
Events of Default arising therefrom shall be deemed to have been cured, for
every purpose of the Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. (Section
5.13)
If an Event of Default shall have occurred and be continuing in respect
of a series of SUNs, the Holders of a majority in principal amount of the
Outstanding SUNs of such series shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to the
SUNs of such series; provided, however, that if an Event of Default shall have
occurred and be continuing with respect to more than one series of SUNs, the
Holders of a majority in aggregate principal amount of the Outstanding SUNs of
all such series, considered as one class, shall have the right to make such
direction, and not the Holders of the SUNs of any one of such series; and
provided, further, that (i) such direction shall not be in conflict with any
rule of law or with the Indenture; (ii) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction, and
(iii) subject to the provisions of the Indenture the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability. (Section
5.12)
The Indenture provides that no Holder of any SUN of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to the Indenture, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (i) such Holder has previously given written
notice to the Trustee of a continuing Event of Default with respect to the SUNs
of that series; (ii) the Holders of not less than a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class,
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee under the Indenture;
(iii) such Holder or Holders have offered to the Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in compliance with
such request; (iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(v) no direction inconsistent with such written request has been given to the
Trustee during such 60-day period by the Holders of a majority in aggregate
principal amount of the Outstanding SUNs of all series in respect of which an
Event of Default shall have occurred and be continuing, considered as one class.
(Section 5.07)
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DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Indenture provides that upon Company Request the Indenture shall
cease to be of further effect (except as to any surviving rights of registration
of transfer or exchange of SUNs therein expressly provided for), and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of the Indenture, when (i) either (A)
all SUNs theretofore authenticated and delivered (other than (x) SUNs which have
been destroyed, lost or stolen and which have been replaced or paid and (y) SUNs
for whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for cancellation;
or (B) all such SUNs not theretofore delivered to the Trustee for cancellation
(x) have become due and payable, or (y) will become due and payable at their
Stated Maturity within one year, or (z) are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company,
and the Company, in the case of (B)(x), (y) or (z) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
of making the following payment, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such SUNs, money in an amount
sufficient to pay and discharge the entire indebtedness on such SUNs not
theretofore delivered to the Trustee for cancellation, for principal and any
premium and interest to the date of such deposit (in the case of SUNs which have
become due and payable) or to the Stated Maturity or Redemption Date, as the
case may be; (ii) the Company has paid or caused to be paid all other sums
payable under the Indenture by the Company; and (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that all conditions precedent therein provided for relating to the satisfaction
and discharge of the Indenture have been complied with. Notwithstanding the
satisfaction and discharge of the Indenture, the obligations of the Company to
compensate and reimburse the Trustee, the obligations of the Company to any
Authenticating Agent and the obligations under the Indenture of the Trustee to
apply the trust money and make repayments, shall survive. If the Company shall
have paid or caused to be paid the principal of and premium, if any, and
interest on any SUN, as and when the same shall have become due and payable or
the Company shall have delivered to the Trustee for cancellation any outstanding
SUN, such SUN shall cease to be entitled to any benefit under the Indenture.
(Section 4.01)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Defeasance) applied to any SUNs or the SUNs of any
series, or any Tranche thereof, as the case may be, the Company shall be deemed
to have been discharged from its obligations with respect to such SUNs as
described in this paragraph on and after the date the conditions as described in
the second paragraph below are satisfied (hereinafter called "Defeasance"). For
this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such SUNs and to have
satisfied all its other obligations under such SUNs and the Indenture insofar as
such SUNs are concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), subject to the following
provisions which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of such SUNs to receive, solely from the
trust fund described in the second paragraph below and as more fully set forth
in the Indenture, payments in respect of the principal of and any premium and
interest on such SUNs when payments are due, (ii) the Company's obligations with
respect to such SUNs under the sections of the Indenture dealing with temporary
notes; registration and registration of transfer and exchange; mutilated,
destroyed, lost and stolen notes; maintenance of office or agency; or money for
notes payments to be held in trust, and with respect to compensation and
reimbursement of the Trustee, (iii) the rights, powers, trusts, duties and
immunities of the Trustee under the Indenture and (iv) the provisions described
in this paragraph. Subject to compliance with the Article in the Indenture
regarding Defeasance and Covenant Defeasance, the Company may exercise its
option to have the provisions described in this paragraph (Defeasance) applied
to any SUNs notwithstanding the prior exercise of its option to have the
provisions described in the paragraph below (Covenant Defeasance) applied to
such SUNs. (Section 13.02)
Upon the Company's exercise of its option to have the provisions
described in this paragraph (Covenant Defeasance) applied to the SUNs or the
SUNs of any series, but not to Tranches thereof alone, as the case may be, (i)
the Company shall be released from its obligations under the sections of the
Indenture dealing with restrictions on liens, maintenance of properties and
restrictions on sale and lease-back transactions, and any covenants for the
benefit of the Holders of such SUNs provided pursuant to the Article of the
Indenture setting forth covenants and the sections of the Indenture dealing with
entering into supplemental indentures without the consent of Holders for the
purpose of adding covenants, securing the SUNs and establishing the form or
terms of SUNs of any series or Tranche and the section of the Indenture
specifying Events of Default and (ii) the occurrence of any event specified in
the section of the Indenture
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dealing with default in the performance, or breach, of any covenant or warranty
of the Company (with respect to specified sections of the Indenture) shall be
deemed not to be or result in an Event of Default with respect to such SUNs as
provided in the Indenture and described in this paragraph on and after the date
the conditions described in the paragraph below are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such SUNs, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such specified section of the Indenture (to the extent so specified in the
case of default in the performance or breach of any covenant or warranty of the
Company), whether directly or indirectly by reason of any reference elsewhere
therein to any such section or by reason of any reference in any such section to
any other provision in the Indenture or in any other document, but the remainder
of the Indenture and such SUNs shall be unaffected thereby. (Section 13.03)
The Indenture provides that the following shall be the conditions to
the application of the Defeasance and Covenant Defeasance provisions, as the
case may be: (i) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such SUNs, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will provide, not
later than one day before the due date of any payment, money in an amount, or
(C) a combination of (A) and (B), in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee to pay and discharge, the principal of
and any premium and interest on such SUNs on the respective Stated Maturities or
on any Redemption Date established as described in clause (ix) below, in
accordance with the terms of the Indenture and such SUNs. As used in this
paragraph, "U.S. Government Obligation" means (x) any security which is (1) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (2) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (1) or (2), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt; (ii) in the event of an election to have the
provisions of the Indenture relating to Defeasance apply to any SUNs or the SUNs
of any series, or any Tranche thereof, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (B) since the date of the Indenture, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the effect that,
and based thereon such opinion shall confirm that, the Holders of such SUNs will
not recognize gain or loss for Federal income tax purposes as a result of the
deposit, Defeasance and discharge to be effected with respect to such SUNs and
will be subject to Federal income tax on the same amount, in the same manner and
at the same times as would be the case if such deposit, Defeasance and discharge
were not to occur; (iii) in the event of an election to have the provision of
the Indenture relating to Covenant Defeasance apply to the SUNs or the SUNs of
any series, but not Tranches thereof alone, as the case may be, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such SUNs will not recognize gain or loss for Federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected with
respect to such SUNs and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would be the case if such
deposit and Covenant Defeasance were not to occur; (iv) the Company shall have
delivered to the Trustee an Officers' Certificate to the effect that neither
such SUNs nor any other SUNs of the same series, as the case may be, if then
listed on any securities exchange, will be delisted as a result of such deposit;
(v) no event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to such SUNs or any other SUNs shall have occurred
and be continuing at the time of such deposit or, with regard to certain
bankruptcy Events of Default, at any time on or prior to the 90th day after the
date of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day); (vi) such Defeasance or Covenant
Defeasance shall not cause the Trustee to have a conflicting interest within the
meaning of the Trust Indenture Act (assuming all SUNs are in default within the
meaning of such Act); (vii) such Defeasance or
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Covenant Defeasance shall not result in a breach or violation of, or constitute
a default under, any other agreement or instrument to which the Company is a
party or by which it is bound; (viii) such Defeasance or Covenant Defeasance
shall not result in the trust arising from such deposit constituting an
investment company within the meaning of the Investment Company Act of 1940
unless such trust shall be registered under such Act or exempt from registration
thereunder; (ix) if the SUNs are to be redeemed prior to Stated Maturity (other
than from mandatory sinking fund payments or analogous payments), notice of such
redemption shall have been duly given pursuant to the Indenture or provision
therefor satisfactory to the Trustee shall have been made; and (x) the Company
shall have delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent with respect to such
Defeasance or Covenant Defeasance have been complied with. (Section 13.04)
MODIFICATION OF THE INDENTURE
The Indenture provides that without the consent of any Holders, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental to the
Indenture, in form satisfactory to the Trustee, for any of the following
purposes: (i) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company in the
Indenture and in the SUNs; or (ii) to add to the covenants of the Company or
other provisions for the benefit of the Holders of all or any series of SUNs, or
any Tranche thereof, (and if such covenants are to be for the benefit of less
than all series of SUNs or Tranches thereof, stating that such covenants are
expressly being included solely for the benefit of such series or Tranche or
Tranches) or to surrender any right or power conferred in the Indenture upon the
Company; or (iii) to add any additional Events of Default for the benefit of the
Holders of all or any series of SUNs, or any Tranche or Tranches thereof (and if
such additional Events of Default are to be for the benefit of less than all
series of SUNs or any Tranches thereof, stating that such additional Events of
Default are expressly being included solely for the benefit of such series or
Tranche or Tranches); or (iv) to add to or change any of the provisions of the
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of SUNs in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance of
SUNs in uncertificated form; or (v) to change or eliminate any provision of the
Indenture or to add any new provision to the Indenture; provided, however, that
if such change, elimination or addition shall adversely affect the interests of
the Holders of SUNs of any series, or a Tranche thereof, Outstanding on the date
of such indenture supplemental to the Indenture in any material respect, such
change, elimination or addition shall become effective (a) with respect to such
series or Tranche only pursuant to the provisions described in the succeeding
paragraph or (b) when no SUN of such series or Tranche remains Outstanding; or
(vi) to secure the SUNs; or (vii) to establish the form or terms of SUNs of any
series or Tranche as permitted by the Indenture; or (viii) to evidence and
provide for the acceptance of appointment under the Indenture of a successor
Trustee with respect to the SUNs of one or more series and to add to or change
any of the provisions of the Indenture as shall be necessary to provide for or
facilitate the administration of the trusts thereunder by more than one Trustee;
or (ix) to cure any ambiguity, to correct or supplement any provision in the
Indenture which may be defective or inconsistent with any other provision
thereof, or to make any other changes to the provisions of the Indenture or to
add other provisions with respect to matters or questions arising under the
Indenture, provided that such other changes or additions shall not adversely
affect the interests of the Holders of SUNs of any series in any material
respect. Without limiting the generality of the foregoing, if the Trust
Indenture Act as in effect at the date of the Indenture or at any time
thereafter shall be amended and (A) if any such amendment shall require one or
more changes to any provisions of the Indenture or the inclusion therein of any
additional provisions, or shall by operation of law be deemed to effect such
changes or incorporate such provisions by reference or otherwise, the Indenture
shall be deemed to have been amended so as to conform to such amendment to the
Trust Indenture Act, and the Company and the Trustee may, without the consent of
any Holders, enter into an indenture supplemental thereto to effect or evidence
such changes or additional provisions; or (B) if any such amendment shall permit
one or more changes to, or the elimination of, any provisions of the Indenture
which, at the date of the execution and delivery of the Indenture or at any time
thereafter, are required by the Trust Indenture Act to be contained therein, the
Indenture shall be deemed to have been amended to effect such changes or
elimination, and the Company and the Trustee may, without the consent of any
Holders, enter into an indenture supplemental thereto to evidence such amendment
thereof. (Section 9.01)
The Indenture also contains provisions providing that with the consent
of the Holders of not less than a majority in aggregate principal amount of the
SUNs of all series then Outstanding, considered as one class, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution,
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and the Trustee may enter into one or more indentures supplemental to the
Indenture for the purpose of adding any provisions to, or changing in any manner
or eliminating any of the provisions of, the Indenture; provided, however, that
if there shall be SUNs of more than one series Outstanding under the Indenture
and if a proposed supplemental indenture shall directly affect the rights of the
Holders of SUNs of one or more, but less than all, of such series, then the
consent only of the Holders of a majority in aggregate principal amount of the
Outstanding SUNs of all series so directly affected, considered as one class,
shall be required; and provided further, that if the SUNs of any series shall
have been issued in more than one Tranche and if the proposed supplemental
indenture shall directly affect the rights of the Holders of SUNs of one or
more, but less than all, of such Tranches, then the consent only of the Holders
of a majority in aggregate principal amount of the Outstanding SUNs of all
Tranches so directly affected, considered as one class, shall be required; and
provided, further, that no such supplemental indenture shall: (i) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any SUN, or reduce the principal amount thereof or the rate of
interest thereon (or the amount of any installment of interest thereon) or
change the method of calculating such rate or reduce any premium payable upon
the redemption thereof, or reduce the amount of the principal of an Original
Issue Discount SUN or any other SUN which would be due and payable upon a
declaration of acceleration of the Maturity thereof, or change the coin or
currency (or other property) in which any SUN or any premium or interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), without, in any such case, the
consent of the Holder of such SUN, or (ii) reduce the percentage in principal
amount of the Outstanding SUNs of any series or Tranche, the consent of whose
Holders is required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver of compliance with any provision of the
Indenture or of any default thereunder and its consequences, or reduce the
requirements for quorum or voting, without, in any such case, the consent of the
Holder of such SUN, or (iii) modify any of the provisions described in this
paragraph and the sections of the Indenture regarding waiver of past defaults
and waiver of certain covenants with respect to the SUNs of any series or any
Tranche thereof, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding SUN affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to the "Trustee". (Section
9.02)
A supplemental indenture which changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of SUNs or one or more Tranches
thereof, or which modifies the rights of the Holders of SUNs of such series or
Tranches with respect to such covenant or other provision, shall be deemed not
to affect the rights under the Indenture of the Holders of SUNs of any other
series or Tranche. It shall not be necessary for any Act of Holders under the
section of the Indenture described in this paragraph to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient if such
Act shall approve the substance thereof. A waiver by a Holder of such Holder's
right to consent described in the preceding paragraph shall be deemed to be a
consent of such Holder. (Section 9.02)
INFORMATION CONCERNING THE TRUSTEE
The Trustee under the Indenture will be The Chase Manhattan Bank. The
Company maintains normal banking arrangements with The Chase Manhattan Bank. The
Chase Manhattan Bank also serves as trustee under an indenture for the holders
of certain other senior unsecured notes of the Company, (ii) serves as trustee
for the holders of two series of bonds secured by, among other things, the
Company's payments under its PVNGS leases (these bonds were issued by a party
unaffiliated with the Company), as well as trustee under the lease indentures
related to such leases, and (iii) has a commitment to lend the Company up to $50
million under a revolving credit agreement. The Chase Manhattan Bank also acts
as administrative agent and a letter of credit issuing bank under the revolving
credit agreement, and an affiliate of The Chase Manhattan Bank acted as arranger
under such revolving credit agreement. In addition, affiliates of The Chase
Manhattan Bank are the lessors with respect to three leases with the Company
relating to the sale and leaseback of portions of Unit 1 and Unit 2 of PVNGS.
Subject to the provisions in the Indenture and the applicable
provisions of the Trust Indenture Act: (i) the Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties; (ii) any request or direction of the Company
mentioned in the Indenture
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shall be sufficiently evidenced by a Company Request or Company Order, or as
otherwise expressly provided in the Indenture, and any resolution of the Board
of Directors shall be sufficiently evidenced by a Board Resolution; (iii)
whenever in the administration of the Indenture the Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action under the Indenture, the Trustee (unless other evidence be
specifically prescribed in the Indenture) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate; (iv) the Trustee may consult with
counsel of its selection, and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it under the Indenture in good faith
and in reliance thereon; (v) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by the Indenture at the
request or direction of any Holder pursuant to the Indenture, unless such Holder
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction; (vi) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall (subject
to applicable legal requirements) be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; (vii) the Trustee
may execute any of the trusts or powers under the Indenture or perform any
duties thereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it under the Indenture; and
(viii) except as otherwise provided in the Indenture the Trustee shall not be
charged with knowledge of any Event of Default with respect to the SUNs of any
series for which it is acting as Trustee unless either (A) a Responsible Officer
of the Trustee shall have actual knowledge of the Event of Default, or (B)
written notice of such Event of Default shall have been given to the Trustee by
the Company, any other obligor on the SUNs or by any Holder of such SUNs.
(Section 6.03)
The Indenture contains a covenant that the Company will file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such information, documents and
reports to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants thereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates). (Section
7.04)
CERTAIN DEFINITIONS
The term "Debt" as defined in the Indenture means any outstanding debt
for money borrowed evidenced by notes, debentures, bonds or other securities.
The term "Net Tangible Assets" as defined in the Indenture means the
amount shown as total assets on the consolidated balance sheet of the Company,
less the following: (i) intangible assets including, but without limitation,
such items as goodwill, trademarks, trade names, patents, and unamortized debt
discount and expense and other regulatory assets carried as an asset on the
Company's consolidated balance sheet; and (ii) appropriate adjustments, if any,
on account of minority interests. Net Tangible Assets shall be determined in
accordance with generally accepted accounting principles and practices
applicable to the type of business in which the Company is engaged and that are
approved by the independent accountants regularly retained by the Company, and
may be determined as of a date not more than sixty (60) days prior to the
happening of the event for which such determination is being made.
The term "Operating Property" as defined in the Indenture means (i) any
interest in real property owned by the Company and (ii) any asset owned by the
Company that is depreciable in accordance with generally accepted accounting
principles.
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The term "Original Issue Discount SUN" as defined in the Indenture
means any SUN which provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration of the Maturity
thereof.
The term "Outstanding" as defined in the Indenture when used with
respect to SUNs, means, as of the date of determination, all SUNs theretofore
authenticated and delivered under the Indenture, except: (i) SUNs theretofore
cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) SUNs
for whose payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of such SUNs;
provided that, if such SUNs are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture or provision therefor satisfactory to
the Trustee has been made; (iii) SUNs as to which Defeasance has been effected
pursuant to Section 13.02 of the Indenture; and (iv) SUNs which have been paid
pursuant to Section 3.06 of the Indenture or in exchange for or in lieu of which
other SUNs have been authenticated and delivered pursuant to the Indenture,
other than any such SUNs in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such SUNs are held by a bona fide
purchaser in whose hands such SUNs are valid obligations of the Company;
provided, however, that in determining whether or not the Holders of the
requisite principal amount of the SUNs Outstanding under the Indenture, or the
Outstanding SUNs of any series or Tranche, have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action under the Indenture as of any date or whether or not a quorum is present
at a meeting of Holders, (A) the principal amount of an Original Issue Discount
SUN (as defined herein) which shall be deemed to be Outstanding shall be the
amount of the principal thereof which would be due and payable as of such date
upon acceleration of the Maturity thereof to such date pursuant to Section 5.02
of the Indenture, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a SUN is not determinable, the principal amount of such SUN
which shall be deemed to be Outstanding shall be the amount as specified or
determined as contemplated by Section 3.01 of the Indenture, (C) the principal
amount of a SUN denominated in one or more foreign currencies or currency units
which shall be deemed to be Outstanding shall be the U.S. dollar equivalent,
determined as of such date in the manner provided as contemplated by Section
3.01 of the Indenture, of the principal amount of such SUN (or, in the case of a
SUN described in clause (A) or (B) above, of the amount determined as provided
in such clause), and (D) SUNs owned by the Company or any other obligor upon the
SUNs or any Affiliate of the Company or of such other obligor (unless the
Company, such Affiliate or such obligor owns all SUNs Outstanding under the
Indenture, or all Outstanding SUNs of each such series and each such Tranche, as
the case may be, determined without regard to this clause (D)) shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, waiver or other action, or
upon such determination as to the presence of a quorum, only SUNs which the
Trustee actually knows to be so owned shall be so disregarded. SUNs so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to such SUNs and that the pledgee is not the Company or any
other obligor upon the SUNs or any Affiliate of the Company or of such other
obligor.
The term "Sale and Lease-Back Transaction" as defined in the Indenture
means any arrangement with any Person providing for the leasing to the Company
of any Operating Property (except for temporary leases for a term, including any
renewal thereof, of not more than forty-eight (48) months), which Operating
Property has been or is to be sold or transferred by the Company to such person;
provided, however, Sale and Lease-back Transaction shall not include any
arrangement (i) first entered into prior to the date of the Indenture and (ii)
involving the exchange of any Operating Property for any property subject to an
arrangement specified in the preceding clause (i).
. . . . . . . . . . . . . . 11
Other Information . . . . . . . . . . . . . . . . . . . . . . . 11
Federal Income Tax Information. . . . . . . . . . . . . . . . . 12
UsePLAN OF DISTRIBUTION
GENERAL
The Company may sell the SUNs being offered hereby: (i) directly to
purchasers; (ii) through agents; (iii) through dealers; (iv) through
underwriters; or (v) through a combination of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 13
Descriptionany such methods of Capital Stock. . . . . . . . . . . . . . . . . . 13
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legal Opinions. . . . . . . . . . . . . . . . . . . . . . . . . 15
Shareholder Information . . . . . . . . . . . . . . . . . . . . 15
================================================================================
[LOGO]
PUBLIC SERVICE COMPANY
OF NEW MEXICO
COMMON STOCK
($5 PAR VALUE)
PNM DIRECT PLAN
--------------------------
PROSPECTUS
--------------------------
SEPTEMBER __,sale.
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The distribution of the SUNs may be effected from time to time in one
or more transactions either: (i) at a fixed price or prices which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase the SUNs may be solicited directly by the Company.
Offers to purchase SUNs may also be solicited by agents designated by the
Company from time to time. Any such agent, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, involved in the
offer or sale of the SUNs in respect of which this Prospectus is delivered will
be named, and any commissions payable by the Company to such agent will be set
forth, in the applicable Prospectus Supplement.
If a dealer is utilized in the sale of the SUNs in respect of which
this Prospectus is delivered, the Company will sell such SUNs to the dealer, as
principal. The dealer, who may be deemed to be an "underwriter" as that term is
defined in the Securities Act, may then resell such SUNs to the public at
varying prices to be determined by such dealer at the time of resale.
If an underwriter or underwriters are utilized in the sales of the
SUNs, the Company will execute an underwriting agreement with such underwriters
at the time of such sale and the name of the underwriters will be set forth in
the applicable Prospectus Supplement, which will be used by the underwriters to
make resales of the SUNs in respect of which this Prospectus is delivered to the
public. In connection with the sale of SUNs, such underwriters may be deemed to
have received compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of
SUNs for whom they may act as agents. Underwriters may also sell SUNs to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Any underwriting
compensation paid by the Company to underwriters in connection with the offering
and sale of SUNs, and any discounts, concessions or commissions allowed by
underwriters to participating dealers, will be set forth in the applicable
Prospectus Supplement.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that may be entered into with the Company, to indemnification by the
Company against certain civil liabilities, including liabilities under the
Securities Act. Underwriters and agents may engage in transactions with, or
perform services for, the Company in the ordinary course of business.
LEGAL OPINIONS
The validity of the SUNs offered hereby will be passed upon for the
Company by Keleher & McLeod, P.A., Albuquerque, New Mexico, and, it is currently
anticipated, for any underwriters of SUNs by Winthrop, Stimson, Putnam &
Roberts, New York, New York. In giving their opinions, Winthrop, Stimson, Putnam
& Roberts and Keleher & McLeod, P.A. may rely as to matters of Arizona law upon
the opinion of Snell & Wilmer L.L.P., Phoenix, Arizona. Winthrop, Stimson,
Putnam & Roberts may rely as to all matters of New Mexico law upon the opinion
of Keleher & McLeod, P.A., and Keleher & McLeod, PA. may relay as to all matters
of New York law upon the opinion of Winthrop, Stimson, Putnam & Roberts.
Winthrop, Stimson, Putnam & Roberts has rendered, and may in the future render,
legal services to the Company.
EXPERTS
The consolidated financial statements of the Company at December 31,
1997 and 1996, 19and for each of the three years in the period ended December 31,
1997, appearing in its Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, have been audited by Arthur Andersen LLP, independent public
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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PART II
- INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. Other ExpensesOTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following is a list of Issuancethe expenses the Registrant expects to pay
in connection with the issuance and Distributiondistribution of the SUNs registered hereby:
ESTIMATED
AMOUNT
CATEGORY OF EXPENSE OF EXPENSE
- ------------------- ----------
*SecuritiesFiling and Exchange Commission registration fee $13,534
Printing, engravingRegistration Fees......................................................... $ 191,750
Legal Fees and postage expenses 50,000
Legal fees 7,000Expenses*............................................................. 200,000
Cost of Printing*.................................................................... 40,000
Accounting fees 4,000Fees and Expenses*........................................................ 40,000
Rating Agency Fees................................................................... 150,000
Blue Sky Fees and Expenses*.......................................................... 3,000
NASD Filing Fee...................................................................... 65,500
Miscellaneous 10,000
-------
Total Expenses $84,534
=======Expenses*.............................................................. 20,000
-----------
*Total...................................................................... $ 710,250
===========
---------------
*Actual, others estimated- ------------------------
* Estimated.
ITEM 15. Indemnification of Directors and Officers.INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 8 of Article II of the Company's By-Laws contains the following
provisionsprovision with respect to indemnification of directors and officers:
Each person who shall have served as a director or an officer of the
Company, or, at the request of the Company, as a director or an officer
of any other corporation, partnership or joint venture, whether profit
or not profit,nonprofit, in which the Company (a) owns shares of capital stock,
(b) has an ownership interest, (c) is a member, or (d) is a creditor,
and regardless of whether or not such person is then in office, and the
heirs, executors, administrators and personal representatives of any
such person shall be indemnified by the Company to the full extent of
the authority of the Company to so indemnify as authorized by the law
of New Mexico.
Section 53-11-4.1 of the Business Corporation Act of the State of New
Mexico provides that a corporation shall have power to indemnify any person made
(or threatened to be made) a party to any proceeding (whether threatened,
pending or completed) by reason of the fact that the person is or was a director
(or, while a director, is or was serving in any of certain other capacities) if:
(1) the person acted in good faith; (2) the person reasonably believed: (a) in
the case of conduct in the person's official capacity with the corporation, that
the person's conduct was in its best interests; and (b) in all other cases, that
the person's conduct was at least not opposed to its best interests; and (3) in
the case of any criminal proceeding, the person had no reasonable cause to
believe the person's conduct was unlawful. Indemnification may be made against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by the person in connection with the proceeding, but may be limited or
unavailable with respect to certain proceedings. In some instances,
indemnification of a director may be mandatory or, upon the application of a
director, may be ordered by a court. Reasonable expenses incurred by a director
may, under certain circumstances, be paid or reimbursed in advance of a final
disposition of a proceeding. Unless limited by its articles of incorporation, a
corporation may (or, as the case may be, shall) indemnify and advance expenses
to an officer of the corporation to the same extent as to a director under
Section 53-11-4.1. Also, unless limited by its articles of incorporation, a
corporation has (1) the power to indemnify and to advance expenses to an
employee or agent of the corporation to the same extent that it may indemnify
and advance expenses to directors under the statute and (2) additional power to
indemnify and to
II-1
21
advance reasonable expenses to an officer, employee or agent who is not a
director to such further extent, consistent with law, as may be provided by its
articles of incorporation, bylaws, general or specific action of its Boardboard of
Directors,directors, or contract.
Section 53-11-4.1 was amended in 1987 to provide that the
indemnification authorized thereunder shall not be deemed exclusive of any
rights to which those seeking indemnification may be entitled under the articles
of incorporation, the by-laws, an agreement, a resolution of shareholders or
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directors or otherwise. At the Company's 1987 Annual Meeting of Stockholders,
the stockholders approved certain agreements with the Company's directors and
officers relating to indemnification of directors and officers. Such agreements
have been entered into with each director and officer. The agreements provide
for indemnification of directors and officers to the fullest extent permitted by
law, including advancement of litigation expenses where appropriate. The
agreements provide for the appointment of a reviewing party by the Board of
Directors to make a determination whether claimed indemnification is permitted
under applicable law.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or arising on
the part of the Company out of its foregoing indemnification provisions, subject
to certain exclusions and to the policy limits.
ITEM 16. Exhibits.
Exhibit No. Description
----------- ------------
4.1 Restated Articles of Incorporation of the Company as amended through May
10, 1985 (incorporated by reference to Exhibit 4-(b) to Registration
Statement No. 2-99990 of the Company).
4.2 Bylaws of the Company as amended through December 6, 1994 (incorporated by
reference to Exhibit 3.2 to Annual Report of the Registrant on Form 10-K
for fiscal year ended December 31, 1994).
4.3 Indenture of Mortgage and Deed of Trust dated as of June 1, 1947, between
the Company and The Bank of New York (formerly Irving Trust Company), as
Trustee, together with the Ninth Supplemental Indenture dated as January 1,
1976, the Twelfth Supplemental Indenture dated as of September 15, 1971,
the Fourteenth Supplemental Indenture dated as of December 1, 1974, and the
Twenty-second Supplemental Indenture dated as of October 1, 1979 thereto
relating to First Mortgage Bonds of the Company (incorporated by reference
to Exhibit 4-(d) to Registration Statement No,. 2-99990 of the Company).
4.4 Portions of sixteen supplemental indentures to the Indenture of Mortgage
and Deed of Trust dated as of June 1, 1947, between the Company and The
Bank of New York (formerly Irving Trust Company), as Trustee, relevant to
the declaration or payment of dividends or the making of other
distributions on or the purchase by the Company of shares of the Company's
Common Stock (incorporated by reference to Exhibit 4-(e) to Registration
Statement No 2-99990 of the Company).
4.5 U. S. $100,000,000 Revolving Credit Agreement dated as of December 14, 1993
among the Company and the banks and co-agents named therein (incorporated
by reference to Exhibit 10.57 to Annual Report of the Registrant on Form
10-K for fiscal year ended December 31, 1993).
4.5.1 Amendment No. 1, dated June 7, 1995 to the U. S. $100,000,000 Revolving
Credit Agreement dated as of December 14, 1993 among the Company and the
banks and co-agents named therein (incorporated by reference to Exhibit
10.57.1 to the Quarterly Report of the Registrant on Form 10-Q for the
quarter ended June 30, 1995).
4.6 Reimbursement Agreement, dated as November 1, 1992 between Public Service
Company of New Mexico and Canadian Imperial Bank of Commerce, New York
Agency (incorporated by reference to Exhibit 4.5 to Registration Statement
No. 33-65418 of the Company).
4.6.1 Amendment No. 1 dated as of July 1, 1994, to the Reimbursement Agreement
dated as of November 1, 1992 between Public Service Company of New Mexico
and Canadian Imperial Bank of Commerce, New York agency (incorporated by
reference to Exhibit 10.60.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994).
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4.6.2 Amendment No. 2 dated as of October 1, 1995, to the Reimbursement Agreement
dated as of November 1, 1992 between Public Service Company of New Mexico
and Canadian Imperial of Commerce, New York Agency (incorporated by
reference to Exhibit 10.60.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995).
4.7 Form of PNM Direct Plan
5 Opinion of Keleher & McLeod, P.A.
15 Letter re unaudited interim financial information
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Keleher & McLeod, P. A. (included in Exhibit 5)
24 Power of attorney (See Signatures page in Part II)
EXHIBITS.
See Exhibit Index.
ITEM 17. Undertakings.UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers ofor sales are
being made, a post-effective amendment to this registration statement:Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statementRegistration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration statement. Notwithstanding the foregoing,Registration
Statement; provided, however, that any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration
statement;Registration Statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statementRegistration Statement or any material change to such
information in the registration
statement;
provided,Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in registration statement.the Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post- effectivepost-effective amendment shall be
deemed to be a new registration statementRegistration Statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-2
22
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) If the(b) The undersigned registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of Regulation S-X at the start
of any delayed offering or throughout a continuous offering.
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(5) That,hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statementRegistration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions described under Item 15, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
II-3
23
24
SIGNATURES
Pursuant to the requirements of the Securities Act ofPURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on FormTHE
REGISTRANT CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL
OF THE REQUIREMENTS FOR FILING ON FORM S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Albuquerque, State of New Mexico, on August 28,
1996.AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF ALBUQUERQUE, STATE OF NEW MEXICO, ON THIS MAY 21,
1998.
PUBLIC SERVICE COMPANY OF NEW MEXICO
By: /s/Benjamin B. F. Montoya
-----------------------------------------
(Benjamin-------------------------------------
B. F. Montoya
President and Chief Executive Officer)
Pursuant to the requirements of the Securities Act ofOfficer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH OFFICER OR DIRECTOR OF PUBLIC
SERVICE COMPANY OF NEW MEXICO WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND
APPOINTS B. F. MONTOYA AND M. H. MAERKI EACH OF THEM SINGLY, HIS OR HER TRUE AND
LAWFUL ATTORNEY-IN-FACT AND AGENT, WITH FULL AND SEVERAL POWER OF SUBSTITUTION,
FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN ANY AND ALL
CAPACITIES, TO SIGN ANY OR ALL AMENDMENTS, INCLUDING POST-EFFECTIVE AMENDMENTS,
AND SUPPLEMENTS TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEY-IN-FACT AND
AGENT FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND EVERY ACT AND THING
REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY TO ALL
INTENTS AND PURPOSES AS THEY OR HE OR SHE MIGHT OR COULD DO IN PERSON, HEREBY
RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEY-IN-FACT AND AGENT OR HIS OR HER
OR THEIR SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE THEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, this registration statement has been signed below by the following persons in
the capacities and on the date indicated. Each person whose signature appears
below hereby authorizes Benjamin F. Montoya, Max Maerki, and Donna Burnett, and
each of them, as attorneys-in fact, to sign in his or her name and behalf,
individually and in each capacity designated below, and to file any amendments,
including post-effective amendments, to this registration statement.THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signature CapacityTitle Date
--------- ----- ----
/s/ B. F. Montoya Principal Executive Officer August 28, 1996May 21, 1998
- -------------------------------------------------------------------------------------------- and Director
B. F. Montoya
President and Chief Executive Officer
/s/ M. H. Maerki Principal Financial Officer August 28, 1996May 21, 1998
- --------------------------------------------------------------------------------------------
M. H. Maerki
Senior Vice President and
Chief Financial Officer
/s/ D. M. Burnett Principal Accounting Officer August 28, 1996May 21, 1998
- ------------------------------------------------------------------------------------------- and Controller
D. M. Burnett
Corporate Controller and
Chief Accounting Officer
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Signature Title Date
--------- ----- ----
/s/ J. T. Ackerman Director August 28, 1996Chairman of the Board May 21, 1998
- -------------------------------------------------------------------------------------------
J. T. Ackerman
/s/ R. G. Armstrong Director August 28, 1996May 21, 1998
- ------------------------------------------------------------------------------------------
R. G. Armstrong
/s/ J.A.J. A. Godwin Director August 28, 1996May 21, 1998
- ---------------------------------------------------------------------------------------------
J. A. Godwin
/s/ L. H. LattmanLatterman Director August 28, 1996May 21, 1998
- --------------------------------------------------------------------------------------------
L. H. Lattman
/s/ M. Lujan Jr. Director August 28, 1996May 21, 1998
- ----------------------------------------------------------------------------------------------
M. Lujan Jr.
/s/ R. U. Ortiz Director August 28, 1996May 21, 1998
- -----------------------------------------------------------------------------------------------
R. U. Ortiz
/s/ R. M. Price Director August 28, 1996May 21, 1998
- ----------------------------------------------------------------------------------------------
R. M. Price
/s/ P. F. Roth Director August 28, 1996May 21, 1998
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P. F. Roth
24II-5
25
FORM S-3
PUBLIC SERVICE COMPANY OF NEW MEXICO
EXHIBIT INDEX TO EXHIBITS
Sequentially
Exhibit No. ExhibitNumbered
Number Description Pages
- ------ ----------- -------------
4.1
1 Form of Underwriting Agreement*
3.1 Restated Articles of Incorporation of the Company, as amended through
May 10, 1985 (incorporated by reference to Exhibit 4-(b) to the
Company's Registration Statement, File No. 2-99990 of the Company).
4.2 Bylaws2-99990)
3.2 By-Laws of the Company as amended throughWith All Amendments to and including December
6,5, 1994 (incorporated by reference to Exhibit 3.2 to the Company's
Annual Report of the Registrant on Form 10-K for fiscalthe year ended December 31, 1994).
4.31994, File
No. 1-6986)
4.1 Form of Indenture, of Mortgage and Deed of Trust dated as of June 1, 1947,July __, 1998 between the Company and
The Chase Manhattan Bank, of New York (formerly Irving Trust Company), as Trustee
together with the Ninth4.2 Form of SUN Security (included in Exhibit 4.1 above)
4.3 Form(s) of Supplemental Indenture dated as January 1,
1976, the Twelfth Supplemental Indenture dated as of September 15, 1971,
the Fourteenth Supplemental Indenture dated as of December 1, 1974, and the
Twenty-second Supplemental Indenture dated as of October 1, 1979 thereto
relatingRelating to First Mortgage Bonds of the Company (incorporated by reference
to Exhibit 4-(d) to Registration Statement No,. 2-99990 of the Company).
4.4 Portions of sixteen supplemental indentures to the Indenture of Mortgage
and Deed of Trust dated as of June 1, 1947, between the Company and The
Bank of New York (formerly Irving Trust Company), as Trustee, relevant to
the declaration or payment of dividends or the making of other
distributions on or the purchase by the Company of shares of the Company's
Common Stock (incorporated by reference to Exhibit 4-(e) to Registration
Statement No 2-99990 of the Company).
4.5 U. S. $100,000,000 Revolving Credit Agreement dated as of December 14, 1993
among the Company and the banks and co-agents named therein (incorporated
by reference to Exhibit 10.57 to Annual Report of the Registrant on Form
10-K for fiscal year ended December 31, 1993).
4.5.1 Amendment No. 1, dated June 7, 1995 to the U. S. $100,000,000 Revolving
Credit Agreement dated as of December 14, 1993 among the Company and the
banks and co-agents named therein (incorporated by reference to Exhibit
10.57.1 to the Quarterly Report of the Registrant on Form 10-Q for the
quarter ended June 30, 1995).
4.6 Reimbursement Agreement, dated as November 1, 1992 between Public Service
Company of New Mexico and Canadian Imperial Bank of Commerce, New York
Agency (incorporated by reference to Exhibit 4.5 to Registration Statement
No. 33-65418 of the Company).
4.6.1 Amendment No. 1 dated as of July 1, 1994, to the Reimbursement Agreement
dated as of November 1, 1992 between Public Service Company of New Mexico
and Canadian Imperial Bank of Commerce, New York agency (incorporated by
reference to Exhibit 10.60.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1994).
25
26
4.6.2 Amendment No. 2 dated as of October 1, 1995, to the Reimbursement Agreement
dated as of November 1, 1992 between Public Service Company of New Mexico
and Canadian Imperial of Commerce, New York Agency (incorporated by
reference to Exhibit 10.60.2 to the Company's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1995).
4.7 Form of PNM Direct PlanSUNs*
5 Opinion of Keleher & McLeod, P.A.
12 Statements Regarding Computation of Ratio of Earnings to Fixed Charges
15 Letter re unaudited interim financial informationFrom Arthur Andersen LLP Regarding Unaudited Interim
Financial Information
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Keleher & McLeod, P. A.P.A. (included in Exhibit 5)5 above)
24 Power of attorney (See SignaturesAttorney (see page in Part II)II-4)
25 Statement of Eligibility under the Trust Indenture Act of 1939 of The
Chase Manhattan Bank, as Trustee under the Indenture between the
Company and The Chase Manhattan Bank, on Form T-1
26* To be filed as an Exhibit by means of Form 8-K.
II-6