Document:

Exhibit 10.27

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AGREEMENT made and entered into and effective this 14th day of February, 2012 by and between BALLANTYNE STRONG, INC., a Delaware corporation (the “Company”), and RAY F. BOEGNER (the “Executive”).

 

RECITALS:

 

This Executive Employment Agreement is made with reference to the following facts and objectives:

 

A.            Executive is a key employee of the Company, and in connection therewith has entered into previous employment agreements with the Company.

 

B.            The Company and Executive desire to enter into a new Executive Employment Agreement (“Agreement”), in accordance with the terms and conditions set forth below.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of mutual promises and covenants herein contained, the parties hereto intending to become legally bound agree as follows:

 

1.             Emp1oyment.

 

The Company hereby agrees to employ the Executive and the Executive hereby agrees to be employed by the Company upon the terms and conditions hereinafter set forth.

 

2.             Duties and Services.

 

2.1          Title and Duties.  The Executive shall serve as Senior Vice President of Sales of the Company and shall perform such services as may be assigned to him from time to time by the President or Board of Directors of the Company (the “Board”), which services may include serving as an officer of a subsidiary of the Company.

 

2.2          Time.  The Executive shall devote his full business time and attention to the business of the Company and to the promotion of the Company’s best interest, subject to vacations, holidays, normal illnesses and a reasonable amount of time for civic, community and industry affairs.  Executive shall at all times comply with Company policies, including, but not limited to the Company’s Code of Ethics.

 

2.3          Travel.  The Executive shall undertake such travel as may be necessary and desirable to promote the business and affairs of the Company, consistent with Executive’s position with the Company.

 

1

 

3.             Term of Agreement.  The term of Executive’s employment under this Agreement shall be for a period of one (1) year commencing on February14, 2012, and ending on February14, 2013.  Thereafter, Executive shall be an employee at will and his employment shall continue, subject to all of the terms and conditions set forth in this Agreement until terminated in accordance with Section 8.

 

4.             Compensation.  For all of the services to be rendered by the Executive under this Agreement, the Company shall pay the Executive a base salary of Two Hundred Thirteen Thousand Two Hundred Ten Dollars ($213,210.00) per year (“Base Salary”).  The compensation paid hereunder to the Executive shall be paid in accordance with the payroll practices conducted by the Company and shall be subject to the customary withholding taxes and other employment taxes as required with respect to compensation paid by a corporation to an employee.  The Base Salary will be subject to annual review and adjustment by the President and Board based upon the Executive’s performance.

 

5.             Expenses and Vacation.

 

5.1          Travel and Entertainment Expense.  The Company shall reimburse the Executive for all reasonable and necessary travel and entertainment expenses incurred by Executive in the performance of the Executive’s duties hereunder upon submission of vouchers and receipts evidencing such expenses in accordance with applicable Company policies.

 

5.2          Vacation.  The Executive shall be entitled to four (4) weeks of vacation during each twelve (12) months of employment.  All vacations shall be in addition to recognized national holidays.  During all vacations, the Executive’s compensation and other benefits as stated herein shall continue to be paid in full.  Such vacations shall be taken only at times convenient for the Company, as approved by the President.

 

6.             Other Benefits.

 

6.1          Company Benefit Programs.  In addition to the compensation and rights provided for elsewhere in this Agreement, the Executive shall be entitled to participate in each plan of the Company now or hereafter adopted and in effect from time to time for the benefit of executive employees of the Company, to the extent permitted by such plans and by applicable law, including, but not limited to:  (a) profit sharing plan, (b) medical expense insurance program, (c) pension plan, and (d) incentive plans.  Nothing in this Agreement shall limit the Company’s right to amend, modify and/or terminate any benefit plan, policies or programs at any time for any reason.

 

6.2          Automobile Allowance.  The Company agrees to furnish Executive an automobile allowance in an amount of $1,000.00 per month during the period in which this Agreement shall continue in full force and effect.

 

7.             Severance.  In the event this Agreement is terminated (a) by the Company without cause in accordance with Section 8.2 or (b) by the Executive for good reason in accordance with Section 8.3, then the Company shall remain liable for the Base Salary payable in accordance with Section 4 of this Agreement for a period equal to three (3) weeks for each year that Executive has been employed by the Company.  Said severance shall commence from the date of such termination.  In

 

2

 

addition, all existing insurance benefits shall remain in force until the last day of the month in which the severance period expires.  The severance benefits provided under this Section 7 shall constitute the sole severance benefits payable to Executive by the Company.  The receipt of such payments by Executive shall be conditioned upon Executive’s continued compliance with the obligations set forth in Section 11 (Restrictive Covenants) and Employee’s execution of the Company’s standard form of general release.  The Executive shall also be entitled to receive any earned and unpaid amounts owed to him under Section 4 and such other accrued benefits as may be provided by Sections 5 and 6 above.

 

8.            Termination.

 

8.1          Termination Due To Death Or Incapacity.  Executive’s employment shall be terminated upon the Executive’s death, or by the Company, at its discretion, because of the Executive’s failure to perform substantially all the material duties of his position for a period of a least 180 consecutive calendar days due to physical or mental illness or injury.

 

8.1.1       If the Company elects to terminate this Agreement because of the Executive’s incapacity, it shall send him written notice thereof, setting forth in reasonable detail the facts and circumstances that provide the basis for its termination.  If the Company and the Executive disagree as to the Executive’s incapacity, each may appoint a medical doctor to certify his opinion as to the Executive’s incapacity, and if the two doctors do not agree as to the Executive’s incapacity, the two doctors will appoint a third medical doctor to certify his or her opinion as to the Executive’s incapacity, and the decision of the majority of the three doctors will prevail.  The Company will bear all expenses for this procedure.

 

8.1.2       In the event of termination by reason of death, the Executive’s estate shall be paid all accrued sums due and .owing under Section 4 above and such other benefits as may be provided by Sections 5 and 6 above.

 

8.1.3       In the event of termination by reason of incapacity, Executive shall continue to receive his full compensation during the 180-day period prior to any notice of termination.  After the termination, Executive shall be entitled to any accrued amounts due and owing him under Section 4 and such other benefits as may be provided by Sections 5 and 6 above.

 

8.2          Termination by Company.

 

8.2.1       The Company may terminate the Executive’s employment at any time with or without cause.  For purposes of this Agreement, circumstances constituting “cause” shall exist if the Executive has:

 

(a)           acted dishonestly or incompetently or engaged in willful misconduct in performance of his executive duties;

 

(b)           breached fiduciary duties owed to the Company;

 

3

 

(c)           intentionally failed to perform reasonably assigned duties;

 

(d)           willfully violated any law, rule or regulation, or court order (other than minor traffic violations or similar offenses), or otherwise committed any act which would have a material adverse impact on the business of the Company; and/or

 

(e)           is in breach of his obligations under this Agreement and such breach is not cured by Executive within thirty (30) days after written notice to him.

 

8.2.2       In order for the Company to terminate the Executive’s employment for “cause”, Executive shall be sent written notice of termination, which specifically sets forth in reasonable detail the facts and circumstances upon which the President believes that the Executive has given the Company cause for termination of Executive’s employment.  For purposes of this subsection, no acts or failures to act on the part of the Executive will be considered willful or willfully done unless done, or failed to be done, by the Executive in bad faith and without belief that the Executive’s action or omission was in the best interest of the Company.

 

8.2.3       Notwithstanding the foregoing, however, any conviction of the Executive for any crime involving violence, dishonesty, fraud or breach of trust or other felonious behavior, shall result in the automatic termination of the Executive’s employment, without notice.

 

8.2.4       In the event the Executive is terminated for cause, he shall be entitled to receive any accrued compensation that may be due and owing to him under Section 4 above, and any accrued vacation due him under Section 5 above, but no other benefits or compensation whatsoever. In the event the Executive is terminated without cause, he shall be eligible to receive severance benefits in accordance with Section 7 above.

 

8.3          Termination by the Executive with or without Good Reason.

 

8.3.1       The Executive may terminate employment by resignation at any time with or without good reason.  For purposes of this Agreement, “good reason” shall arise in the event that the Company materially breaches its obligations to Executive under this Agreement.

 

8.3.2       In order for the Executive to resign for good reason, Executive shall provide the President, Chairman of the Board and Chairman of the Compensation Committee with written notice of his intent to resign for good reason, which notice shall specifically set forth in reasonable detail the facts and circumstances upon which the Executive believes that the Company has materially breached its obligations under this Agreement, and afford the Company the opportunity to cure such breach within 30 days after receipt of such written notice.  In the event the Company fails to cure such breach, Executive’s resignation for good reason shall be effective at the end of such 30 day period.

 

8.3.3       In the event the Executive resigns without good reason, he shall be entitled to receive any accrued compensation that may be due and owing to him under Section 4

 

4

 

above, and any accrued vacation due him under Section 5 above, but no other benefits or compensation whatsoever.  In the event the Executive resigns for good reason, he shall be eligible to receive severance benefits in accordance with Section 7 above.

 

8.4          Date of Termination.  For purposes of this Agreement, the date of the termination of Executive’s employment (“Date of Termination”) will be:

 

(a)           if Executive’s employment is terminated by his death, the end of the month in which his death occurs;

 

(b)           if Executive’s employment is terminated for incapacity, thirty (30) days after a notice of termination is given; or

 

(c)           if Executive’s employment is terminated by Executive or the Company for any other reason, the date specified in the notice of termination, which will not be later than thirty (30) days after the date on which the notice of termination is given.

 

9.             Stock Ownership Requirement.  Executive shall be subject to the Company’s stock ownership and retention policies, as set forth in the Company’s Corporate Governance Principles, as may be in effect from time to time.

 

10.          Employment by a Subsidiary.  Either the Company or a subsidiary may be Executive’s legal employer.  For purposes of this Agreement, any reference to Executive’s termination of employment with the Company means termination of employment with the Company and all its subsidiaries, and does not include a transfer of employment between any of them.  The obligations created under this Agreement are obligations of the Company.  For purposes of this Section, a “subsidiary” means an entity more than 50% of whose equity interests are owned directly or indirectly by the Company.

 

11.          Restrictive Covenants.

 

11.1        Need for Protection.  Executive acknowledges that, because of his senior executive position with the Company, he has or will develop knowledge of the affairs of the Company and relationships with dealers, distributors and customers such that he could do serious damage to the financial welfare of the Company should he compete or assist others in competing with the business of the Company.  Consequently, and in consideration of his employment with the Company, and for the benefits he is to receive under this Agreement, and for other good and valuable consideration, the receipt of which he hereby acknowledges, the Executive agrees as follows:

 

11.2        Confidential Information.

 

11.2.1     Non-disclosure.  Except as the Company may permit or direct in writing, during the term of this Agreement and thereafter, Executive agrees that he will never disclose to any person or entity any confidential or proprietary information, knowledge or data of the Company which he may have obtained while in the employ of the Company, relating to any customers, customer lists, methods, distribution, sales, prices, profits,

 

5

 

costs, contracts, inventories, suppliers, dealers, distributors, business prospects, business methods, manufacturing ideas, formulas, plans or techniques, research, trade secrets, or know-how of the Company.

 

11.2.2     Return of Records.  All records, documents, software, computer disks and any other form of information relating to the business of the Company, which are or were prepared or created by Executive, or which may or did come into his possession during the term of his employment with the Company, including any and all copies thereof shall be returned to or, as the case may be, shall remain in the possession of the Company.

 

11.2.3     Future Employment.  Nothing in this section shall limit Executive’s right to carry the Executive’s accumulated career knowledge and professional skills to any future employment, subject to the specific limitations of the foregoing provisions of this Section and the respective covenants set forth below.

 

11.3        Covenant Not to Solicit.

 

The Executive agrees that he will not, during the period of his employment with the Company and for a period of one (1) year after he ceases to be employed by the Company for any reason:

 

(a)           directly or indirectly, on behalf of himself or any other person or entity, engage in, or assist any other person or entity to engage in, the manufacture, assembly, distribution, or sale to any customer, supplier, distributor or dealer of the Company wherever located, of motion picture equipment, lighting equipment, or any other type of product manufactured, assembled, distributed or sold by the Company, if said customer, distributor or dealer is one with whom Executive had contact or on whose account Executive has worked during the twelve (12) months prior to the termination of his employment; or

 

(b)           directly or indirectly, request or advise any of the aforesaid customers, distributors or dealers referred to in paragraph 11.3(a) above to curtail their business with the Company, or to patronize another business which is in competition with the Company; or

 

(c)           directly or indirectly, on behalf of himself or any other person or entity, request, advise or solicit any employee of the Company to leave that employment in order to engage in, or to assist any other person or entity to engage in competition with the Company.

 

11.4        Judicial Modification.  In the event that any court of law or equity shall consider or hold any aspect of this Section 11 to be unreasonable or otherwise unenforceable, the parties hereto agree that the aspect of this Section so found may be reduced or modified by appropriate order of the court and shall thereafter continue, as so modified, in full force and effect.

 

11.5        Injunctive Relief.  The parties hereto acknowledge that the remedies at law for breach of this Section will be inadequate, and that Company shall be entitled to injunctive relief for violation thereof; provided, however, that nothing herein contained shall be construed as prohibiting the Company from pursuing any other remedies available for such breach or threatened breach, including the recovery of damages from Executive.

 

6

 

12.          Inventions and Discoveries.  The Executive hereby sells, transfers. and assigns to the Company or to any person or entity designated by the Company, all of Executive’s right, title and interest in and to all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material made or conceived by the Executive, solely or jointly, during the term hereof which relate to the products and services provided by the Company or which otherwise relate or pertain to the business, functions or operations of the Company.  The Executive agrees to communicate promptly and to disclose to the Company in such form as the Executive may be required to do so, all information, details and data pertaining to such inventions, ideas, disclosures and improvements and to execute and deliver to the Company such formal transfers and assignments and such other papers and documents as may be required of the Executive to permit the Company or any person or entity designated by the Company to file and prosecute the patent applications, and, as to copyrightable material, to obtain copyrights thereof.

 

13.          Clawback.  In addition to any compensation recovery (clawback) which may be required by law and regulation, Executive acknowledges and agrees that any compensation paid or awarded to Executive in connection with his employment with the Company shall be subject to the Company’s “clawback” requirements as set forth in the Company’s Corporate Governance Principles and to any similar or successor provisions as may be in effect from time to time.

 

14.          Tax Withholding.  All payments made and benefits provided by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

 

15.          Survival of Obligations.  All obligations of the Company and Executive that by their nature involve performance, in any particular, after the termination of Executive’s employment or the term of this Agreement, or that cannot be ascertained to have been fully performed until after the termination of Executive’s employment or the term of this Agreement, will survive the expiration or termination of the term of this Agreement.

 

16.          Miscellaneous.  The following miscellaneous sections apply to this Agreement:

 

16.1        Modifications and Waivers.  No provision of this Agreement may be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing by Executive and the President of the Company.  No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by that other party, shall be deemed a waiver of similar or dissimilar provisions or conditions at the time, or at any prior or subsequent time.

 

16.2        Construction of Agreement.  This Agreement supercedes any oral or written agreements between Executive and the Company and any oral representations by the Company to Executive with respect to the subject matter of this Agreement.

 

16.3        Governing Law.  The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Nebraska.

 

16.4        Severability.  If any one or more of the provisions of this Agreement, including but not limited to Section 11 hereof, or any word, phrase, clause, sentence or other portion of a

 

7

 

provision is deemed illegal or unenforceable for any reason, that provision or portion will be modified or deleted in such a manner as to make this Agreement as modified legal and enforceable to the fullest extent permitted under applicable laws.  The validity and enforceability of the remaining provisions or portions will remain in full force and effect.

 

16.5        Counterparts.  This Agreement may be executed in two or more counterparts, each of which will take effect as an original and all of which will evidence one and the same agreement.

 

16.6        Successors and Assigns.  This Agreement shall be binding upon, and shall inure to the benefit of the parties hereto and their respective heirs, beneficiaries, personal representatives, successors and assigns.

 

16.7        Notices.  Any notice, request or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given when delivered in person, on the next business day after being delivered to a nationally-recognized overnight courier service (for such next-day delivery) or five (5) days after being deposited in the United States mail, certified or registered, postage prepaid, return receipt requested and addressed to the other party at the respective addressees set forth below or to the other addresses of either party may have furnished to the other in writing in accordance with this Section 16.7, provided that all notices to the Company will be directed to the attention of the President of the Company, and except that notice of change of address will be effective only upon receipt.

 

	
If   to Company:
    	
 
    	
Ballantyne   Strong, Inc.
   Attn: President
   4350 McKinley Street
   Omaha, NE 68142
    
	
 
    	
 
    	
 
    
	
If   to Executive:
    	
 
    	
Ray   F. Boegner
   18866 Mayberry Plaza
   Elkhorn, NE 68112
    

 

or at such other address as any party shall have designated by notice in writing to the other party hereunder in the matter set forth in Section 16.7.

 

16.8        Entire Agreement.  This Agreement contains the entire agreement of the parties.  All prior arrangements or understandings, whether written or oral, are merged herein.  This Agreement may not be changed orally, but only by an agreement in writing, signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

 

16.9        Section 409A Compliance.  The intent of the Company is that payments and benefits under this Agreement which are considered “deferred compensation” subject to Code Section 409A and the regulations. and the guidance promulgated thereunder (collectively “Code Section 409A”) comply with Code Section 409A and be made and provided in compliance therewith. Accordingly:

 

8

 

(a)           For purposes of the Agreement, the terms “terminate,” “termination,” “termination of employment,” and variations thereof, are intended to mean a termination of employment that constitutes a “separation from service” under Code Section 409A.

 

(b)           If on the date of “separation from service” Executive is deemed to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit payable or provided because of such separation from service that constitutes “deferred compensation” subject to Code Section 409A, such payment or benefit shall be made or provided at the date which is the earlier of (A) the expiration of the six (6)month period measured from the date of such “separation from service,” and (B) the date of such individual’s death (the “Delay Period”). Upon the expiration of the Delay Period, all  payments and benefits delayed pursuant to this paragraph (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum, and any remaining payments and benefits due shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(c)           The Agreement may be amended in any respect deemed by the Board or the Compensation Committee to be necessary in order to preserve compliance with Code Section 409A.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written.

 

	
 
    	
BALLANTYNE   STRONG, INC., “Company”
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gary Cavey
    
	
 
    	
 
    	
GARY   CAVEY, President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/   Ray F. Boegner
    
	
 
    	
RAY   F. BOEGNER, “Executive”
    

 

9PNM 3.31.2012 EX.10.1

Exhibit 10.1

PNM RESOURCES, INC. 
2012 OFFICER ANNUAL INCENTIVE PLAN

Introduction
PNM Resources, Inc. (the “Company”) has adopted this 2012 Officer Annual Incentive Plan (the “Plan”) for the purpose of providing annual cash-based incentive awards (each an “Award”) to eligible Officers (as defined below).  The Awards payable to Officers under the Plan are intended to qualify as Performance Cash Awards granted pursuant to Section 9.4 of the PNM Resources, Inc. Second Amended and Restated Omnibus Performance Equity Plan (the “PEP”).  In the case of Officers who are Covered Employees as defined in the PEP, the Awards also are intended to qualify as Performance-Based Awards granted pursuant to Section 12 of the PEP.
Capitalized terms used in the PEP and not otherwise defined in this Plan document have the meanings given to them in the PEP.
Eligibility
All Officers of the Company and its Affiliates are eligible to participate in the Plan.  For purposes of the Plan, the term “Officer” means any employee who has the title of Chief Executive Officer, Chief Operating Officer, President, Executive Vice President, Senior Vice President or Vice President and who is in salary grade H18 or higher.
Award Determinations in General
Awards are based on the Incentive Earnings Per Share (“EPS”) levels for the Performance Period as set forth in Table 1 of Attachment A, the weighting between Corporate and Business Area goals as described in Table 2 of Attachment A and Award levels achieved during the Performance Period as described in Table 3 of Attachment A.  The Performance Period began on January 1, 2012 and will end on December 31, 2012.
An Officer's Award will equal the Officer's share of the Incentive EPS Award Pool described below.  If the Officer's share of the appropriate Performance Award Pool described below is less than the Officer's share of the Incentive EPS Award Pool, however, the Officer will receive the smaller amount.
An Officer's share of an Award Pool will be based upon the amount potentially payable to the Officer for the attained level of performance (Threshold, Target or Maximum), as determined in accordance with Table 3 of Attachment A, as compared to the aggregate amounts potentially payable for the attained level of performance to all of the Officers who are entitled to share in that Award Pool.  In determining the amount potentially payable to an Officer, the base salaries will be determined as of January 1, 2012.  In no event will the amount payable to an Officer exceed the indicated percentage of the Officer's base salary for the attained performance level as set forth in Table 3 of Attachment A.  In addition, in no event will the amount payable to one Officer be increased due to a decrease in the amount payable to any other Officer.

Incentive EPS Award Pool
In order for any Awards to be payable to eligible Officers, the Company must achieve the Threshold EPS level set forth in Table 1 of Attachment A.  If the Company does not achieve the Threshold EPS level, no Awards are payable under the Plan to any Officer.

If the Threshold, Target or Maximum EPS levels, as listed in Table 1, are achieved, the aggregate potential Awards payable to the Officers at that level of performance (e.g., the aggregate level of Awards payable at Threshold, Target or Maximum as shown in Table 3  of Attachment A) will make up the “Incentive EPS Award Pool.”  If the actual EPS exceeds the minimum level for a performance level by at least $0.01, but is less than the maximum level for that performance level (e.g., if the actual EPS exceeds $1.20 but is less than $1.26), the EPS Award Pool will be increased by using straight-line interpolation between the size of the EPS Award Pool based on the attained level (e.g., Threshold) and the size of the Incentive EPS Award Pool at the next higher level (e.g., Target).  The Compensation and Human Resources Committee (the “Committee”) of the Company's Board of Directors (the “Board”) has the discretion to increase the Incentive EPS Award Pool by an amount less than the amount determined by using straight-line interpolation.  The EPS Award Pool is capped by the aggregate Maximum Awards shown in Table 3 for all eligible Officers.
Performance Award Pools
A Corporate Goals Scorecard and Business Area Scorecards listing each performance measure established by the Committee will be maintained by the PNM Resources, Inc. Management Systems Group.  As set forth in Table 2 of Attachment A, the performance of the Chief Executive Officer and the Senior Officers (the Chief Operating Officer, the Executive Vice President and the Senior Vice Presidents) are measured 100% on the Corporate Goals Scorecard.  Vice Presidents are measured 60% on the Corporate Goals Scorecard and 40% on the Business Area Goals Scorecard.
The “Performance Award Pool” for each Business Area is the amount that could be paid in the aggregate to the Vice Presidents assigned to that Business Area based on performance alone, determined by using the following multi-step process:
		
	a)
	Select the Scorecard results from the appropriate Corporate Goal and Business Area Scorecards;

		
	b)
	Then multiply each result by the appropriate weighting for the Scorecard as set forth in Table 2 of Attachment A;

		
	c)
	Then multiply the total Vice President salaries for that Business Area by the Target Award Level as set forth in Table 3 of Attachment A;

		
	d)
	Then multiply the result of each Scorecard (Step b), expressed as a percentage of Target, by the aggregate base salaries of the Vice Presidents included in that Business Area (Step c); and

		
	e)
	Sum the results for the Vice President participants.

2

The Performance Award Pool for the CEO and the Senior Officers will be constructed by using the same process but will be based solely upon the Corporate Goals Scorecard.
Award Approval and Payout Timing
In February 2013, the Committee will determine and certify the level of Awards, if any, payable for the Performance Period in the manner described above.  The final Awards calculation and recommendation to the Committee by management will be reviewed and certified by the Director, Human Resources, Director, Audit Services, Director, Management Systems group, and Corporate Controller, respectively.  The Board then will approve the CEO's Award and the Committee will approve the Awards for all other Officers.  To the extent Awards are payable under the Plan, the Company will make the payment on or before March 15, 2013 in a single lump sum cash payment subject to applicable withholding.
The Committee reserves the discretion to reduce the amount payable to any Officer for such reasons as the Committee determines to be appropriate.
Provisions for a Change in Control
If a Change in Control occurs during the Performance Period and the Officer remains employed by the Company or an Affiliate at the end of the Performance Period, the Officer may be entitled to receive an Award for the Performance Period as determined in accordance with the provisions of this Plan.  If the Plan is modified after the occurrence of a Change in Control in a manner that has the effect of reducing the amounts otherwise payable under the Plan, an Officer who remains employed by the Company or an Affiliate at the end of the Performance Period will receive, at a minimum, an Award equal to 50% of the Maximum Award available under this Plan for the Performance Period.
If an Officer terminates employment with the Company or an Affiliate during the Performance Period due to a Qualifying Change in Control Termination, the Officer may be entitled to receive a special payment pursuant to the PNM Resources, Inc. Officer Retention Plan in lieu of any payments under this Plan.
Pro-rata Awards for Partial Service Periods
In certain circumstances (as set forth below) Officers may or may not be eligible for a Pro-rata Award under the Plan.
The following Officers may be eligible for a Pro-rata Award:
–   Officers who are newly hired during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period.

–  Employees or Officers who are promoted, transferred or demoted during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period.

3

–  Officers who are on leave of absence for any full months during the Performance Period and are employed by the Company or an Affiliate on the day on which Awards are distributed for the Performance Period.

–   Officers who terminate employment with the Company or an Affiliate during the Performance Period due to Impaction (as defined in the PNM Resources, Inc. Non-Union Severance Pay Plan), Retirement on or after the Officer's Normal Retirement Date, or Disability (as defined in the PNM Resources Executive Savings Plan II).

–   Officers who die during the Performance Period, in which case the Award will be paid to the spouse of a married Officer, including a same sex spouse, or the estate of an unmarried Officer.

The following Officers are not eligible for any Award, including a Pro-rata Award:
–  Officers who terminate employment with the Company or an Affiliate on or before the date on which Awards are distributed for the Performance Period for any reason other than death, Impaction, Retirement, or Disability.  As noted above, Officers who terminate employment with the Company or an Affiliate during the Performance Period due to a Qualifying Change in Control Termination may be entitled to receive a special payment pursuant to the PNM Resources, Inc. Officer Retention Plan in lieu of any payments under this Plan.
–  Officers who elect voluntary separation or Retirement in lieu of termination for performance or misconduct.
If an Officer is eligible for a Pro-rata Award, it will be calculated based on the number of full months that the Officer was actively employed at each eligibility level during the Performance Period compared to the number of full months included in the Performance Period.  (Note:  Only months in which the Officer is actively employed on the payroll on the first and last day of the month will count as a full month.)  Any Pro-rata Awards to which an Officer becomes eligible pursuant to this paragraph will be paid to the Officer in a single lump sum cash payment subject to applicable withholding on or before March 15, 2013.
Ethics
The purpose of the Plan is to fairly reward performance achievement.  Any Officer who manipulates or attempts to manipulate the Plan for personal gain at the expense of customers, shareholders, other employees, or the Company or its Affiliates will be subject to disciplinary action, up to and including termination of employment, and will forfeit and be ineligible to receive any Award under the Plan.
Continuation of Employment
This Plan does not confer upon any Officer any right to continue in the employment of the Company or any Affiliate and does not limit the right of the Company or any Affiliate, in its sole discretion, to terminate the employment of any Officer at any time, or in accordance with any written employment agreement the Company and Officer may have.

4

Amendments
The Committee, in its sole discretion, reserves the right to adjust, amend or suspend the Plan during the Performance Period.

/s/ Patrick V. Apodaca                
Patrick V. Apodaca,
SVP and General Counsel

Dated:  March 28, 2012

5

ATTACHMENT A

Incentive EPS Table 
(Table 1)
	
		
	 
	PNMR Incentive EPS  

	No Award
	Less than $1.20

	Threshold
	Greater than or equal to $1.20 and less than $1.26

	Target
	Greater than or equal to $1.26 and less than $1.39

	Maximum
	Greater than or equal to $1.39

Scorecard Weighting Table 
(Table 2)
	
			
	Scorecard Results

	Scorecard Level
	Corporate Weighting
	Business Area Weighting

	CEO & Senior Officers
	100%
	0%

	Vice Presidents
	60%
	40%

Award Levels Table 
(Table 3)
	
				
	Award Levels
	Threshold
	Target
	Maximum

	CEO
	36%
	90%
	180%

	 
	 
	 
	 

	Senior Officers (other than SVP for Public Policy)
	22%
	55%
	110%

	 
	 
	 
	 

	SVP for Public Policy
	18%
	45%
	90%

	 
	 
	 
	 

	Vice-Presidents
	14%
	35%
	70%

____________________________
1     Equals PNMR's diluted EPS for the fiscal year ending December 31, 2012 calculated in accordance with Generally Accepted Accounting Principles and reported in the Company's Form 10-K for PNM Resources adjusted for the following items: (1) mark-to-market impact of economic hedges, (2) regulatory disallowances, (3) net change in unrealized impairments of nuclear decommissioning trust securities, (4) gains or losses on reacquired debt, (5) goodwill or other intangible impairments, (6) impacts of acquisition and disposition activities.

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]