exh41_060608.htm


     

    EXHIBIT
4.1

     

    AMENDED
PNM RESOURCES, INC. EMPLOYEE STOCK PURCHASE PLAN

    


    PNM
RESOURCES, INC.

    EMPLOYEE
STOCK PURCHASE PLAN

     

    Effective
as of May 13, 2003, PNM Resources, Inc. (the “Company”) adopted the PNM
Resources, Inc. Employee Stock Purchase Plan (the “Plan”).  The Company
now wishes to amend and restate the Plan to authorize additional shares under
the Plan, effective as of May 28, 2008 (the “Effective Date”).

     

    1.           Purpose of the
Plan.  The Company believes that ownership of shares of its
common stock by employees of the Company and its Participating Subsidiaries (as
defined below) is desirable as an incentive to better performance and
improvement of profits, and as a means by which employees may share in the
rewards of growth and success.  The purpose of the Plan is to provide
a convenient means by which employees of the Company and Participating
Subsidiaries may purchase the Company’s shares through payroll deductions and a
method by which the Company may assist and encourage such employees to become
share owners.  It is the intention of the Company to have the plan
qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal
Revenue Code of 1986 (the “Code”), as
amended.  The provisions of the Plan, accordingly, shall be
constructed so as to extend and limit participation in a manner consistent with
the requirements of that section of the Code.

     

    2.           Shares Reserved for the
Plan.  Effective as of May 13, 2003, there were 250,000 shares
of the Company’s authorized but unissued or reacquired common stock reserved for
purposes of the Plan.  In 2004, the Company completed a 3-for-2 stock
split that resulted in 375,000 shares being reserved under the
Plan.  As of the Effective Date, an additional 180,000 shares of the
Company’s authorized but unissued or reacquired common stock were reserved for
purposes of the Plan and results in a total of 555,000 shares reserved for
purposes of the Plan.  The number of shares reserved for the Plan is
subject to adjustment in the event of any stock dividend, stock split,
combination of shares, recapitalization or other change in the outstanding
common stock of the Company.  The determination of whether an
adjustment shall be made and the manner of any such adjustment shall be made by
the Board of Directors of the Company (the “Board”), which determination
shall be conclusive.  The shares to be delivered under the Plan will,
at the election of the Company, be newly issued shares purchased directly from
the Company, shares purchased on the open market, or treasury shares not
reserved for any other purpose, or a combination thereof.  Ordinarily,
shares purchased in an Offering (defined below) will be newly issued shares or
treasury shares and shares acquired through reinvestment of a participant’s cash
dividends will be shares purchased on the open market.

     

    3.           Administration of the
Plan.  The Plan shall be administered by or under the direction
of the Human Resources and Compensation Committee (the “Committee”) of the Board,
which may delegate some or all of its duties and authority to one or more
employees of PNMR Services Company.  The Committee may promulgate
rules and regulations for the operation of the Plan, adopt forms for use in
connection with the Plan, and decide any question of interpretation of the Plan
or rights arising thereunder.  The Committee may consult with counsel
for the Company on any matter arising under the Plan.  All
determinations and decisions of the Committee shall be conclusive.

     

    4.           Eligible
Employees.  All Eligible Employees (as defined below) of the
Company and all Eligible Employees of each corporate subsidiary of the Company
(as defined in Code Section 424(f)) that is designated by the Board of Directors
of the Company as a participant in the Plan (such participating subsidiary being
hereinafter called a “Participating Subsidiary”) are
eligible to participate in the Plan.  An “Eligible Employee” is an
employee who is in the active service of the Company or a Participating
Subsidiary on the applicable Subscription Deadline (as defined below) excluding,
however, (a) any employee whose customary employment is less than 20 hours per
week and less than 5 months per calendar year, and (b) any employee who has
not completed 6 months of service, and (c) any employee who would, after a
purchase of shares under the Plan, own or be deemed (under Section 424(d) of the
Internal Revenue Code of 1986, as amended) to own stock (including stock subject
to any outstanding options held by the employee) possessing 5 percent or more of
the total combined voting power or value of all classes of stock of the Company
or any parent or subsidiary of the Company.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    5.           Offerings.

     

    (a)              Offering.  The
Plan shall be implemented by a series of six-month offerings (the “Offerings”), with a new
Offering commencing on January 1 and July 1 of each year, except that the
initial Offering shall begin on July 1, 2003.  Each Offering
commencing on January 1 of any year shall end on June 30 of that year, and
each Offering commencing on July 1 of any year shall end on the December 31
of that year.  The first business day of each Offering is the “Offering Date” for that
Offering.

     

    (b)              Purchase
Dates.  The following dates are the respective two “Purchase Dates” for each
Offering:

     

    (i)      March
31 and June 30 for the Offering beginning January 1 of each year;
and

     

    (ii)    
September 30 and December 31 for the Offering beginning July 1 of each
year.

     

    (c)              Grants;
Limitations.  On each Offering Date, each Eligible Employee
shall be granted an option under the Plan to purchase shares of common stock on
the Purchase Dates for the Offering for the price determined under paragraph 7
of the Plan exclusively through payroll deductions authorized under paragraph 6
of the Plan; provided, however, that no option may be granted under the Plan
that would allow an employee’s right to purchase shares under all stock purchase
plans of the Company and its parents and subsidiaries to which Section 423 of
the Code applies to accrue at a rate that exceeds $25,000 of fair market value
of shares (determined at the date of grant) for each calendar year in which such
option is outstanding.

     

    6.           Participation in the
Plan.

     

    (a)              Initiating
Participation.  An Eligible Employee may elect to participate
in an Offering under the Plan by completing a subscription agreement authorizing
payroll deductions.  The subscription and payroll deduction
authorization must be filed no later than the “Subscription Deadline,” which
shall be a number of days prior to the Offering Date with the exact number of
days being established from time to time by the Committee by written notice to
Eligible Employees.  Once filed, a subscription and payroll deduction
authorization shall remain in effect unless amended or terminated, and upon the
expiration of an Offering the participants in that Offering will be
automatically enrolled in the new Offering starting the following
day.  The payroll deduction authorization will authorize the employing
corporation to make payroll deductions in an amount designated by the
participant from each of the participant’s paychecks during the
Offering.  The designated amount to be deducted from each paycheck may
not be less than 1% or more than 10% of the participant’s Compensation (as
defined below) for the period covered by the paycheck.  If payroll
deductions are made by a Participating Subsidiary, that corporation will
promptly remit the amount of the deductions to the Company.

     

    (b)              Definition of
Compensation.  “Compensation” means the
participant’s pay reportable on IRS Form W-2 (under Section 3401(a) of the
Code), adjusted as follows:

     

    (i)         Before-tax
contributions to a non-qualified deferred compensation arrangement,
contributions to a plan qualified under Section 401(k) of the Code, and any
amounts set aside by the participant from otherwise taxable pay under a welfare
benefit plan qualified under Section 125 of the Code shall be
included.

     

    (ii)         Expense
reimbursements, disability benefits, payments from a nonqualified deferred
compensation arrangement, stock option income, and adjustments for overseas
employment (other than any transfer premium) shall be excluded.

     

    (iii)         Any
payment representing excess vacation or paid time-off accruals (where such
excess represents vacation or time-off not taken) shall be
excluded.

     

    
      
         

      

      
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    (iv)         Any
payment representing bonus payments shall be excluded.

     

    (c)              Amending
Participation.  After a participant has begun participating in
the Plan by initiating payroll deductions, the participant may amend the payroll
deduction authorization (i) once only at any time during any Offering to
decrease the amount of payroll deductions, and (ii) effective for the first
paycheck of a new Offering to either increase or decrease the amount of payroll
deductions.  A permitted change in payroll deductions shall be
effective for any pay period only if notice is received by the Company at least
some number of days prior to the payday for that pay period, with the exact
number of days being established from time to time by the Committee by written
notice to participants.  Notwithstanding the foregoing, if the amount
of payroll deductions from any participant during an Offering exceeds the
maximum amount that can be applied to purchase shares in that Offering under the
limitations set forth in paragraph 5(c) above, then (x) a participant’s payroll
deductions may be decreased during any Offering scheduled to end during the
current calendar year to 0%, and (y) payroll deductions shall recommence at the
rate provided in such participant’s then effective payroll deduction
authorization at the beginning of the first Offering that is scheduled to end in
the following calendar year, unless terminated by the participant as provided in
paragraph 6(d).

     

    (d)              Terminating
Participation.  After a participant has begun participating in
the Plan by initiating payroll deductions, the participant may terminate
participation in the Plan by submitting a “Notice of Termination” form to the
PNMR Services Company Benefits Department or electronically completing the
required documentation provided by the PNMR Services Company Benefits Department
through the Custodian at least some number of days prior to a Purchase Date,
with the exact number of days being established from time to time by the
Committee by written notice to participants.  A participant may not
reinstate participation in the Plan with respect to a particular Offering after
once terminating participation in the Plan with respect to that
Offering.  Upon termination of a participant’s participation in the
Plan, (1) all amounts deducted from the participant’s Compensation and not
previously used to purchase shares under the Plan shall be paid without interest
to the participant after receipt of the participant’s Notice of Termination and
no further payroll deductions will be made during the Offering or until the
applicable Eligible Employee initiates participation again in accordance with
paragraph 6(a) above, and (2) the participant’s option for the current Offering
period will be automatically terminated.  Participation in the Plan
shall also terminate when a participant ceases to be an Eligible Employee for
any reason, including death or retirement.

     

    7.           Option Price.  The
price at which shares shall be purchased in an Offering shall be 95% of the fair
market value of a share of common stock on the Purchase Date of the
Offering.  The fair market value of a share of common stock on any
date shall be the closing price of the common stock for such date (or, in the
event that the common stock is not traded on such date, the immediately
preceding trading day) as reported on the New York Stock Exchange or, if the
common stock is not traded on the New York Stock Exchange, such other reported
value of the common stock as shall be specified by the Board.

     

    8.           Purchase of
Shares.  All amounts withheld from the Compensation of a
participant shall be credited to his or her account under the
Plan.  No interest will be paid on such accounts.  Unless a
participant terminates participation in the Plan pursuant to paragraph 6(d)
above, on each Purchase Date, the amount of the account of each participant will
be applied to the purchase of shares (including fractional shares) by such
participant from the Company at the price determined under paragraph 7
above.  Any cash balance remaining in a participant’s account after a
Purchase Date as a result of the limitations set forth in paragraph 5(c) above
shall be retained and used during a subsequent Purchase Date in the following
calendar year unless the participant requests that such excess amounts be paid
to the participant or unless the participant terminates participation in the
Plan pursuant to paragraph 6(d).

     

    9.           Delivery and Custody of
Shares.  Shares purchased by participants pursuant to the Plan
will be delivered to and held in the custody of such investment or financial
firm (the “Custodian”)
as shall be appointed by the Committee.  The Custodian may hold in
nominee or street name certificates for shares purchased pursuant to the Plan,
and may commingle shares in its custody pursuant to the Plan in a single account
without identification as to individual participants.  By appropriate
instructions to the Custodian, a participant may from time to time sell all or
part of the shares held by the Custodian for the participant’s account at the
market price at the time the order is executed.  If a participant
desires to sell all of the shares in his or her account, the Custodian or the
Company will purchase any fraction of a share in the account at the same price
per share that the whole shares are sold on the market.  By
appropriate instructions to the Custodian, a participant may obtain a transfer
into the participant’s own name of all or part of the whole shares held by the
Custodian for the participant’s account and delivery of such whole shares to the
participant; however no shares may be transferred until two years after the
Offering Date of the Offering in which the shares were purchased.

     

    
      
         

      

      
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    10.           Records and
Statements.  The Custodian will maintain the records of the
Plan.  As soon as practicable after each Purchase Date each
participant will receive a statement showing the activity of his or her account
since the preceding Purchase Date and the balance on the Purchase Date as to
both cash and shares.  Participants will be furnished such other
reports and statements, and at such intervals, as the Committee shall determine
from time to time.

     

    11.           Expense of the
Plan.  The Company will pay all expenses incident to operation
of the Plan, including costs of record keeping, accounting fees, legal fees,
commissions and issue or transfer taxes on purchases pursuant to the Plan, on
dividend reinvestments and on delivery of shares to a participant or into his or
her brokerage account.  The Company will not pay expenses, commissions
or taxes incurred in connection with sales of shares by the Custodian at the
request of a participant.  Expenses to be paid by a participant will
be deducted from the proceeds of sale prior to remittance.

     

    12.           Transferability.  The
right to purchase shares under this Plan is not transferable by a participant,
and such right is exercisable during the participant’s lifetime only by the
participant.  Upon the death of a participant, any cash withheld and
not previously applied to purchase shares, together with any shares held by the
Custodian for the participant’s account shall be transferred to the persons
entitled thereto under the laws of the state of domicile of the participant upon
a proper showing of authority.

     

    13.           Dividends and Other Distributions;
Reinvestment.  Stock dividends and other distributions in
shares of common stock of the Company on shares held by the Custodian shall be
issued to the Custodian and held by it for the account of the respective
participants entitled thereto.  Cash distributions other than
dividends, if any, on shares held by the Custodian will be paid currently to the
participants entitled thereto.  Cash dividends, if any, on shares held
by the Custodian will be reinvested in common stock on behalf of the
participants entitled thereto.  The Custodian shall establish a
separate account for each participant for the purpose of holding shares acquired
through reinvestment of the participant’s dividends.  Shares acquired
through reinvestment of the participant’s dividends will not be acquired at any
discount from the purchase price.  Prior to each dividend payment
date, the Company shall advise the Custodian whether to acquire shares for
reinvestment of cash dividends from newly issued shares purchased directly from
the Company, treasury shares purchased directly from the Company, shares
purchased in the open market, or a combination thereof.  The purchase
price of newly-issued or treasury shares purchased directly from the Company
will be the average of the high and low sales price of shares reported on the
New York Stock Exchange on the dividend payment date.  The purchase
price of shares purchased in the open market with reinvested dividends will be
the weighted average price, including trading fees, incurred in connection with
the purchase of such shares.  On each dividend payment date, the
Custodian shall receive from the Company the aggregate amount of cash dividends
payable with respect to all shares held by the Custodian for participants’
accounts under the Plan.  As soon as practicable thereafter, the
Custodian shall use all of the funds so received to purchase shares of common
stock directly from the Company or in the public market, as the case may be, and
shall then allocate such shares (including fractional shares) among the dividend
reinvestment accounts of the participants pro rata based on the amount of
dividends reinvested for each participant.  A participant may sell or
transfer shares in the participant’s dividend reinvestment account in accordance
with paragraph 9 above, except that there shall be no holding period required
for a transfer from a dividend reinvestment account.

     

    14.           Voting and Shareholder
Communications.  In connection with voting on any matter
submitted to the shareholders of the Company, the Custodian will furnish to the
participant a proxy authorizing the participant to vote the shares held by the
Custodian for his or her accounts.  Copies of all general
communications to shareholders of the Company will be sent to participants in
the Plan.

     

    15.           Tax Withholding.  In
the event that the Company or any Subsidiary is required to withhold any
Federal, state, local or foreign taxes in respect of any compensation or other
income realized by the Participant, the Company or Such Subsidiary may deduct
from any payments of any kind otherwise due to such Participant, including
without limitation the proceeds of any sale of Common Stock for the account of
the Participant, the aggregate amount of such Federal, state, local or foreign
taxes required to be withheld or, if such payments are insufficient to satisfy
such Federal, state, local or foreign taxes, the Participant will be required to
pay to the Company or such Subsidiary, or make other arrangement satisfactory to
the Company or such Subsidiary regarding payment to the Company or such
Subsidiary of, the aggregate amount of any such taxes.

     

    
      
         

      

      
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    16.           Responsibility and
Indemnity.  Neither the Company, the Board, the Committee, the
Custodian, any Participating Subsidiary, nor any member, officer, agent, or
employee of any of them, shall be liable to any participant under the Plan for
any mistake of judgment or for any omission or wrongful act unless resulting
from gross negligence, willful misconduct or intentional
misfeasance.  The Company will indemnify and save harmless the Board,
the Committee and any such member, officer, agent or employee against any claim,
loss, liability or expense arising out of the Plan as permitted under the
Company’s By-laws or otherwise.

     

    17.           Conditions and
Approvals.  The obligations of the Company under the Plan shall
be subject to compliance with all applicable state and federal laws and
regulations, compliance with the rules of any stock exchange on which the
Company’s securities may be listed, and approval of such federal and state
authorities or agencies as may have jurisdiction over the Plan or the
Company.  The Company will use its best effort to comply with such
laws, regulations and rules and to obtain such approvals.

     

    18.           Amendment and Termination of the
Plan.  Except as provided below, the Committee may, in its
discretion, amend or terminate the Plan without the consent of the Company’s
shareholders or Plan participants except that:  (a) any such Committee
action must be approved by the Company’s shareholders within one year after such
Committee action if shareholder approval is required by any federal or state law
or regulation or the rules of any automated quotation system or stock exchange
on which the Company’s stock is then quoted or listed, or if shareholder
approval is needed for the Plan to continue to meet the requirements of Section
423 of the Code; and (b) the Committee must obtain the affected participant’s
consent if the Plan is amended to materially and adversely affects the rights of
such participant with respect to outstanding purchase rights relating to any
Offering that has been completed prior to such Committee action.  The
foregoing notwithstanding, upon termination of the Plan the Committee may
(i) elect to terminate all outstanding purchase rights at such time as the
Committee may designate, and all cash contributed to the Plan that remains in a
participant’s account will be returned to the participant (without interest) as
promptly as practicable, or (ii) shorten the Offering or Purchase Dates to
such period determined by the Committee and use amounts credited to a
participant’s account to purchase common stock.

     

    19.           Additional Restrictions of Rule
16b-3.  The terms and conditions of options granted under this
Plan, and the purchase of shares of common stock of the Company by persons
subject to Section 16 of the Securities and Exchange Act of 1934, as amended
(the “Act”), shall
comply with the applicable provisions of Rule 16b-3.  This Plan shall
be deemed to contain, and such options shall contain, and the shares issued upon
the exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum
exemption from Section 16 of the Act with respect to Plan
transactions.

     

    IN WITNESS WHEREOF, the
Company has caused this PNM Resources, Inc. Employee Stock Purchase Plan to be
executed and to become effective as of May 28, 2008.

     

    PNM
RESOURCES, INC.

    


    


    


    By:           /s/ Alice A.
Cobb                                           

    Its: SVP & Chief
Administrative Officer

    


    



    
      
         


      

      
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