As Filed Pursuant to Rule 424(b)(3)
Registration No. 333-10993
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P R O S P E C T U S
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PNM RESOURCES, INC.
PNM DIRECT PLAN
COMMON STOCK
(NO PAR VALUE)
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This prospectus relates to shares of common stock, no par value, of PNM
Resources, Inc. that may be offered in connection with the PNM Resources, Inc.
PNM Direct Plan. The plan replaces and assumes the Public Service Company of
New Mexico PNM Direct Plan, or the original plan, initially established on
August 28, 1996 by PNM Resources's wholly owned subsidiary, Public Service
Company of New Mexico. On December 31, 2001, PNM Resources became the parent
of Public Service Company of New Mexico, or PNM, pursuant to a one-for-one
exchange of common stock between the two corporations.
The plan is designed to provide investors with a convenient way to purchase
shares of PNM Resources common stock, and to reinvest all or a portion of the
cash dividends paid on PNM Resources common stock in additional shares of common
stock.
PARTICIPANTS IN THE PLAN MAY:
- Reinvest all or a portion of cash dividends paid on common stock
registered in their names or on common stock credited to their plan
accounts 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; provided, however, that employees of PNM
Resources and any of its affiliates who elect to invest through
payroll deductions may make an initial investment of at least $25,
and additional optional investments thereafter of at least $25.
- Make investments, including initial investments, in the plan by
electronic funds deduction from financial institution accounts.
- Make investments in common stock during two separate investment
periods in each month and not just one investment period per month,
as provided for under the original plan.
- 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 stock will be purchased under the plan, at the option of
PNM Resources, from newly issued shares, shares held in the treasury of PNM
Resources not reserved for any other purposes or shares purchased on the open
market. Purchases will be effected through an independent agent appointed by PNM
Resources. The common stock is listed on the New York Stock Exchange under the
ticker symbol PNM.
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 should be retained by participants in the plan
for future reference.
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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The date of this prospectus is December 31, 2001.
AVAILABLE INFORMATION
PNM Resources is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports,
proxy statements and other information with the Securities and Exchange
Commission. Such reports, proxy statements and other information may be
inspected and copied at the public reference facilities maintained by the SEC at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You may obtain
information on the operation of the public reference facilities by calling the
SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC at http://www.sec.gov. PNM Resources common
stock is listed on the New York Stock Exchange. Reports, proxy material, and
other information concerning PNM Resources 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 SEC by PNM and PNM
Resources, formerly known as Manzano Corporation, are hereby incorporated by
reference in this prospectus:
- PNM Resources's Registration Statement on Form S-4 filed with the SEC on
March 10, 2000, as amended (No. 333-32170);
- PNM's Annual Report on Form 10-K for the year ended December 31, 2000, as
amended;
- PNM's Current Reports on Form 8-K, dated January 18, 2001; January 23,
2001; January 25, 2001 (two); February 26, 2001; February 28, 2001;
March 1, 2001; March 20, 2001; March 27, 2001;
- PNM's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001;
- PNM's Current Reports on Form 8-K, dated April 11, 2001 (two); April 12,
2001; April 16, 2001; April 18, 2001 (two); May 2, 2001 (two); May 18,
2001; May 25, 2001; June 1, 2001; June 14, 2001;
- PNM's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001,
as amended;
- PNM's Current Reports on Form 8-K, dated July 3, 2001 (two); July 13,
2001; July 16, 2001; July 18, 2001 (three); July 24, 2001; July 30, 2001;
August 9, 2001; August 16, 2001; August 17, 2001; September 13, 2001;
September 18, 2001; September 19, 2001;
- PNM's Quarterly Report on Form 10-Q for the quarter ended September 30,
2001; and
- PNM's Current Reports on Form 8-K, dated October 11, 2001; October 16,
2001; October 23, 2001 (two); October 25, 2001; November 2, 2001;
November 15, 2001; November 16, 2001; November 30, 2001; December 12,
2001; December 14, 2001 (two); December 20, 2001.
All documents filed by PNM Resources pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this prospectus 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.
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Any statement so modified or superseded will not be deemed, except as modified
or superseded, to constitute a part of this prospectus.
PNM Resources 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 PNM Resources, Inc., Alvarado Square,
Albuquerque, New Mexico 87158, or by calling (505) 241-2054 or (800) 545-4425
toll-free nationwide.
PNM RESOURCES, INC.
PNM Resources, Inc. was incorporated on March 3, 2000 under the laws of
the State of New Mexico and became the holding company for PNM on December 31,
2001, the date of effectiveness of a share exchange between PNM Resources and
PNM approved by PNM's shareholders on June 6, 2000. As a result of the share
exchange, PNM became a direct wholly-owned subsidiary of PNM Resources and
each share of common stock of PNM, including each share previously issued
under the original plan, was exchanged for one share of common stock of PNM
Resources. At the effective time of the share exchange, the original plan was
replaced and assumed by PNM Resources, with PNM Resources common stock used in
lieu of common stock of PNM whenever after that time stock is to be issued
under the plan. Otherwise, all accounts and all elections, notices,
instructions and authorizations under the original plan automatically continue
under, and all participants in the original plan automatically continue as
participants in, the plan.
PNM is a public utility primarily engaged in the generation, transmission,
distribution, sale and trading of electricity and in the transmission,
distribution and sale of natural gas. The principal executive offices of PNM
Resources and PNM are located at Alvarado Square, Albuquerque, New Mexico 87158,
and the telephone number is (505) 241-2700.
DESCRIPTION OF THE PLAN
The following questions and answers describe the provisions of the plan. For
convenience of reference, the definitions of certain key terms are included
below:
DEFINITIONS
Administrator PNM Resources. 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.
Dividend payment date The date determined by PNM Resources's board of
directors on which common stock dividends are payable.
Dividend record date The date determined by PNM Resources'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 or a
shareholder of record.
Enrollment forms Forms available through PNM Resources 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-
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dividend date and the dividend record date is not
entitled to the succeeding dividend.
Initial cash investment A payment made to PNM Resources to purchase shares of
common stock to open a plan account. The minimum
initial cash investment is $50, except that the minimum
initial cash investment for employees of PNM Resources
or any of its affiliates using payroll deductions
is $25.
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.
Investment periods begin on (1) the first business day
of each month, except that during dividend record date
months, the first investment period begins on the first
business day following the dividend record date; and
(2) the 15th day of each month or the next business day
if the 15th day falls on a weekend or holiday.
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 administrator PNM Resources.
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 PNM Resources.
PURPOSE OF THE PLAN
1. WHAT 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 of PNM Resources by making an initial cash
investment of at least $50, or if you are an employee of PNM Resources or
any of its affiliates, by making an initial cash investment by payroll
deduction of at least $25 (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.
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C. Certificate Safekeeping--Participants may deposit their common stock
certificates with PNM Resources, whether or not the common stock
represented by such certificates was purchased through the plan, and have
their ownership maintained on PNM Resources'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 PNM
Resources 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 or treasury shares. See Questions 27 and
33.
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 INVESTORS 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 business day 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.
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PLAN ADMINISTRATION
3. WHO ADMINISTERS THE PLAN?
PNM Resources 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:
PNM Resources, Inc.
Shareholder Records Department
Alvarado Square, MS 1104
Albuquerque, NM 87158-1104
When writing, please include a day-time telephone number to expedite our
reply. The nationwide toll-free Shareholder Records Department telephone
number is (800) 545-4425. In the Albuquerque area, call 241-2054.
PARTICIPATION IN THE PLAN
4. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any interested investors making the applicable minimum initial cash
investment 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
PNM Resources. Non-shareholder investors must submit an initial cash
investment of at least $50 (but not more than $60,000 per account per
calendar year). Non-shareholder investors who are also employees of PNM
Resources or any of its affiliates and who elect to invest through a
payroll deduction must submit an initial cash investment of at least $25.
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
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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 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. Participants who are also employees of PNM Resources or any of
its affiliates and who elect to use payroll deductions may make cash
investments of at least $25. 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 PNM Resources. The change will be
effective as of the next dividend record date following receipt of the
new enrollment form.
12. MAY PNM RESOURCES RESTRICT PARTICIPATION IN THE PLAN?
Yes. PNM Resources 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 applicable minimum and maximum
contributions. See Question 16.
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15. HOW ARE INITIAL CASH INVESTMENTS AND CASH INVESTMENTS MADE?
Initial cash investments and subsequent cash investments must be made by
check, money order, or electronic funds deduction from a U.S. bank or
other U.S. financial institution, in U.S. dollars, to PNM
Resources, Inc. 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 subsequent
cash investments to ensure credit to the proper account. An employee of
PNM Resources or any of its affiliates may elect to make an initial cash
investment or subsequent cash investments through payroll deductions by
completing and returning a payroll deduction authorization form. PNM
Resources also allows for cash investments to be made by electronic debit
from a specified account by completing and returning an electronic debit
authorization form.
16. IS THERE A MINIMUM AND MAXIMUM CASH INVESTMENT?
Yes. Generally, the minimum initial cash investment is $50 and the
minimum for subsequent cash investments is $50. However, if you are an
employee of PNM Resources or any of its affiliates and you elect to
invest through payroll deductions, the minimum initial cash investment is
$25 and the minimum for subsequent cash investments is $25. 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 SUBSEQUENT CASH
INVESTMENT BE INVESTED?
Initial cash investments and subsequent cash investments will be invested
during the investment period immediately following the investment period
during 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 an investment
period. Funds are considered to be received when delivered, either by
postal service or in person, during business hours to PNM Resources'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.
NOTE: INTEREST IS NOT PAID ON FUNDS HELD PENDING INVESTMENT.
18. WHEN WILL SHARES PURCHASED WITH INITIAL CASH INVESTMENTS OR SUBSEQUENT
CASH INVESTMENTS BE ENTITLED TO RECEIVE DIVIDENDS?
Shares purchased with an initial cash investment or a subsequent 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 SUBSEQUENT
CASH INVESTMENT BE RETURNED?
Yes. A participant may request, in writing, the return of an initial cash
investment or a subsequent cash investment. The funds will be returned if
the request is received by the last business day of PNM Resources prior
to the relevant investment period.
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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
following the investment period in which the dividend is payable.
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.
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 PNM Resources and in accordance with applicable law, either
on the open market or directly from PNM Resources or through a
combination of the foregoing. Shares purchased from PNM Resources may be
either authorized but unissued shares or shares held in the treasury of
PNM Resources not reserved for any other purpose or a combination of
both. PNM Resources currently anticipates that shares will initially be
purchased on the open market.
24. HOW IS COMMON STOCK PURCHASED ON THE OPEN MARKET?
Common stock will be purchased through an independent agent appointed by
PNM Resources. 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 15 days
thereafter. Please see Questions 17 and 21 to determine the relevant
investment period. 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 PNM Resources (newly issued common
stock or treasury shares) 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.
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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 PNM Resources (newly
issued common stock or treasury shares) 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 PNM
Resources, the purchase price will be the weighted average price of such
shares in accordance with the foregoing two paragraphs.
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 preceding investment period 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 "Plan participation presents investors with the following
disadvantages--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
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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 PNM Resources. 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 PNM Resources. PNM Resources's appointed agent will have
full 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 plan 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 "Plan participation presents investors with the
following disadvantages--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 PNM Resources 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.
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The termination of plan participation will be delayed if the request is
received during the dividend processing period. See "Plan participation
presents investors with the following disadvantages--D."
35. MAY PNM RESOURCES 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 PNM
Resources upon written notice to the 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, PNM Resources 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 PNM Resources.
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 PNM RESOURCES 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.
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40. WHAT IS THE RESPONSIBILITY OF PNM RESOURCES AND ITS AGENTS UNDER THE
PLAN?
Neither PNM Resources, in its individual capacity or as administrator,
nor any independent agent appointed by PNM Resources 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 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 PNM RESOURCES 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. PNM Resources reserves the right to suspend, modify, or terminate
the plan at any time. PNM Resources may register additional shares from
time to time. Any suspension, modification, or termination of the plan
will be communicated by PNM Resources 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:
PNM Resources, Inc.
Shareholder Records Department
Alvarado Square, MS 1104
Albuquerque, NM 85158-1104
or by calling PNM Resources at (800) 545-4425 or, in Albuquerque, at
241-2054.
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?
PNM Resources believes the following is an accurate summary of the
material federal income 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.
13
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.
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, PNM Resources 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 PNM Resources or the purchase
of shares held in the treasury of PNM Resources, or (ii) the purchase of
shares of common stock in the open market, the number of shares of newly
issued common stock or treasury shares of common stock, if any, that PNM
Resources ultimately will sell under the plan is not known. If newly issued
shares of common stock or treasury 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 PNM Resources. PNM Resources 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 PNM Resources consists of 10,000,000
shares of preferred stock without par value, issuable in series from time to
time, and 120,000,000 shares of common stock, without par value. The board of
directors of PNM Resources is authorized by PNM Resources's Articles of
Incorporation, at any time or from time to time, to establish and designate
one or more series of preferred stock and to fix the number of shares and the
relative rights, preferences and limitations of each such series. PNM
Resources's Articles of Incorporation limit the board of directors to
designating voting rights only when dividends on the preferred stock are not
paid and when proposed changes to the Articles would adversely affect
preferred shareholders' rights. The affirmative vote of the holders of a
majority of the outstanding capital stock of PNM Resources entitled to vote
shall be required in order to amend, alter, change or repeal any provisions of
the Articles of Incorporation.
PNM Resources common stock is listed on the New York Stock Exchange
under the ticker symbol PNM.
DIVIDENDS
After giving effect to any prior rights of the PNM Resources preferred
stock, if any should become outstanding, PNM Resources will pay dividends on
its common stock as determined by its board of directors out of legally
available funds.
VOTING RIGHTS
Holders of common stock are entitled to one vote for each share held by them
on all matters submitted to the shareholders of PNM Resources. Holders of PNM
Resources common stock do not have cumulative voting rights in the election of
directors. The New Mexico Business Corporation Act and PNM Resources's Articles
of Incorporation and Bylaws generally require the affirmative vote of a majority
of the shares represented at the annual meeting and entitled to vote for
shareholder action, including the election of directors. Under the New Mexico
14
Business Corporation Act and PNM Resources's Articles of Incorporation, some
corporate actions, including amending the Articles and approving a plan of
merger, consolidation or share exchange, require the affirmative vote of a
majority of the outstanding shares entitled to vote.
LIQUIDATION
In the event PNM Resources is liquidated or dissolved, either voluntarily
or involuntarily, the holders of any PNM Resources preferred stock established
by its board of directors would have priority (after any creditors of PNM
Resources) with respect to the distribution of assets. After the holders of
any such preferred stock are paid their aggregate liquidation preference, the
holders of common stock would be entitled, to the exclusion of the holders of
preferred stock, to share ratably (according to the number of shares held by
them) in all remaining assets of PNM Resources available for distribution.
PREEMPTIVE AND OTHER RIGHTS
Holders of PNM Resources's capital stock do not automatically have any
preemptive rights to purchase shares of PNM Resources's common or preferred
stock (or their equivalents). PNM Resources common stock is not subject to
redemption or to any further calls or assessments and is not entitled to the
benefit of any sinking fund provisions. The shares of PNM Resources common
stock to be issued to PNM common shareholders in connection with the share
exchange will be fully paid and non-assessable once the share exchange is
completed.
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in this registration statement of which this
prospectus is a part have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and
are incorporated by reference herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
LEGAL OPINIONS
Certain legal matters in connection with the common stock offered hereby
have been passed on for PNM Resources by Keleher & McLeod, P.A., Albuquerque,
New Mexico.
SHAREHOLDER INFORMATION
PNM RESOURCES, INC.
Corporate Headquarters: Alvarado Square, MS 1104
Albuquerque, NM 87158-1104
Mailing Address: P.O. Box 1047
Albuquerque, NM 87103-1047
Telephone Numbers: 505-241-2054 in Albuquerque
800-545-4425 nationwide toll-free
Shareholder Account Information
--Stock Transfer Requirements: P.O. Box 1047
Albuquerque, NM 87103-1047
--Plan and Account Information: P.O. Box 1047
Albuquerque, NM 87103-1047
Stock Listing Information
--Ticker Symbol: PNM on the New York Stock Exchange
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No person has been authorized to give any information or to make any
representations not contained in this prospectus and, if given or made, such
information or representation must not be relied upon as having been
authorized by PNM Resources, Inc. This prospectus does not constitute an offer
to sell, or a solicitation of any offer to buy, any of the securities offered
hereby in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. Neither the delivery of this prospectus nor any sale
made hereunder shall, under any circumstances, create an implication that
there has been no change in the affairs of the company since the date hereof.
TABLE OF CONTENTS
PAGE
AVAILABLE INFORMATION ................................................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE ....................... 2
PNM RESOURCES, INC. ................................................... 3
DESCRIPTION OF THE PLAN ............................................... 3
USE OF PROCEEDS .......................................................14
DESCRIPTION OF CAPITAL STOCK ..........................................14
EXPERTS ...............................................................15
LEGAL OPINIONS ........................................................15
SHAREHOLDER INFORMATION PNM RESOURCES, INC. ...........................15
[LOGO]
PNM RESOURCES, INC.
COMMON STOCK
(NO PAR VALUE)
PNM RESOURCES, INC.
PNM DIRECT PLAN
PROSPECTUS
December 31, 2001