Form 424b(3)
Filed
pursuant to Rule 424(b)(3)
SEC
File No. 333-100186
PNM
RESOURCES, INC
DIRECT
PLAN
(a
stock purchase and dividend reinvestment plan)
3,758,251
SHARES
COMMON
STOCK
(no
par value)
PNM
Resources, Inc., a New Mexico corporation, is an investor-owned holding company
of energy and energy-related businesses. With this Prospectus, we are offering
you the opportunity to participate in our PNM Resources, Inc. Direct Plan (the
“Plan” or “PNM Resources Direct”). The Plan provides investors with a convenient
and economical way to purchase shares of our common stock, and to reinvest
cash
dividends in additional shares of our common stock.
PLAN
HIGHLIGHTS
| · |
You
can open your PNM Resources Direct account with an initial investment
of
just $50.
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| · |
Other
than a trading fee (currently 6 cents per share), you will not incur
any
transaction costs or brokerage charges to purchase shares through
PNM
Resources Direct.
|
| · |
Shareholders
who own fewer than 100 shares of our stock are automatically
enrolled in dividend reinvestment, which allows your investment to
grow
with each quarterly dividend distribution. You pay no
trading fee or any other service charge for reinvesting your
dividends.
|
| · |
Interested
new investors and participants may enroll or make changes to their
individual plan options on-line through Investor ServiceDirect® at
www.melloninvestor.com.
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| · |
You
may purchase additional shares of our stock through cash payments
made by
check, on-line through Investor ServiceDirect® or by automatic monthly
withdrawals from a checking or savings
account.
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| · |
Investments
of cash and cash dividends in our common stock will normally be made
within 5 business days of receipt.
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| · |
Under
certain circumstances, PNM Resources may waive the maximum investment
limit of $100,000 per year in order to raise additional capital through
the sale of newly issued shares under the Plan.
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| · |
The
Plan Administrator is Mellon Bank,
N.A.
|
Unlike
an
individual stock brokerage account, the timing of purchases and sales is subject
to the provisions of the Plan. You should carefully read this prospectus to
find
out more about the Plan. If you wish to continue your participation in the
Plan,
you do not need to do anything at this time. If you are currently a participant,
and after reviewing this prospectus, you do not wish to continue participation
in the Plan, you should contact the Plan Administrator. You may terminate your
participation in the Plan at any time.
Investing
in our shares of common stock involves risks. See “RISK FACTORS” on page 1 and
“SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS” on page 4.
The
Plan
does not represent a change in the dividend policy of PNM Resources. The payment
of dividends is at the discretion of our board of directors and will depend
on
future earnings, our financial condition and other factors. Our board may change
the amount and timing of dividends at any time and without notice.
The
common stock of PNM Resources is traded on the New York Stock Exchange under
the
ticker symbol PNM. The closing price of our common stock on August 30,
2006 was $28.55. Our principal executive offices are located at Alvarado Square,
Albuquerque, NM 87158. The telephone number is (505) 241-2700.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR HAS DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date
of this prospectus is August 31, 2006.
TABLE
OF CONTENTS
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Page
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RISK
FACTORS
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1
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WHERE
YOU CAN FIND MORE INFORMATION
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1
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|
PNM
RESOURCES, INC.
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3
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SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
|
4
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|
SUMMARY
OF THE PLAN
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6
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TERMS
AND CONDITIONS OF THE PLAN
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9
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OTHER
PROVISIONS
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15
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USE
OF PROCEEDS
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19
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PLAN
OF DISTRIBUTION
|
19
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|
TRANSFER
AGENT AND REGISTRAR
|
20
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EXPERTS
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20
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LEGAL
OPINION
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20
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APPENDIX
A
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21
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RISK
FACTORS
Before
you invest in our common stock, you should carefully consider the risks set
forth in Part I, Item 1A of our Annual Report on Form 10-K/A for the year ended
December 31, 2005, which is incorporated by reference in this prospectus. See
also “WHERE YOU CAN FIND MORE INFORMATION” about future filings, which we will
make with the Securities and Exchange Commission, or SEC, some of which may
contain additional risk factors, and are incorporated by reference into this
prospectus and “SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS”. If any of
the risks actually occurs, our business, financial condition and results of
operations could be harmed. In that case, the trading price of our common stock
could decline, and you could lose all or part of your investment.
Please
note that you
do
not have control or authority to direct the price or time at which common stock
is purchased or sold for Plan accounts. Therefore, you bear market risk
associated with fluctuations in the price of common stock as the price of common
stock may go up or down before a purchase or sale is made for your
account.
WHERE
YOU CAN FIND MORE INFORMATION
Our
Internet address is www.pnmresources.com. The contents of the website are not
a
part of this Registration Statement. Our filings with the SEC, including annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K and amendments to those reports, filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), are accessible free of charge at http://www.pnmresources.com as soon as
reasonably practicable after we electronically file such material with, or
furnish it to, the SEC. These reports are also available upon request in print
from us free of charge.
In
connection with this offering, we have filed with the SEC a registration
statement on Form S-3 under the Securities Act of 1933, as amended
(“Securities Act”). As permitted by SEC rules, this prospectus omits certain
information included in the registration statement. For a more complete
understanding of the securities we may offer, you should refer to the
registration statement, including its exhibits.
We
are
“incorporating by reference” in this prospectus information we file with the
SEC, which means that we are disclosing important information to you by
referring you to those documents. The information we incorporate by reference
is
considered to be part of this prospectus, unless we update or supersede that
information by the information contained in this prospectus or the information
we file subsequently with the SEC that is incorporated by reference in this
prospectus or a prospectus supplement. We are incorporating by reference the
following documents that we have filed with the SEC, other than any information
in these documents that is deemed not to be “filed” with the SEC:
| · |
Our
Annual Report on Form 10-K/A (Amendment No. 2) for the fiscal year
ended December 31, 2005 as filed on August 8,
2006;
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| · |
Our
Definitive Proxy Statement on Schedule 14A as filed on April 7,
2006;
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| · |
Our
Quarterly Report on Form 10-Q/A (Amendment No. 1) for the quarter
ended
March 31, 2006 as filed on August 8,
2006;
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| · |
Our
Quarterly Report on Form 10-Q for the quarter ended June 30, 2006
as filed
on August 9, 2006;
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| · |
Our
Current Reports on Form 8-K as filed on January 20,
February 17, March 31, April 21, May 26 and July 21, 2006,
August 17, 2006 and August 31, 2006;
and
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| · |
The
description of our common stock contained in our Current Report on
Form 8-K filed on December 31, 2001 and any amendment or report
filed for the purpose of updating such description, including our
Current
Report on Form 8-K filed on August 17,
2006.
|
We
also
incorporate by reference into this prospectus any filings we make with the
SEC
(excluding information furnished under Items 2.02 or 7.01 of Current Reports
on
Form 8-K) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after
the initial filing of the registration statement that contains this prospectus
and before termination of this offering.
You
may
obtain without charge a copy of any of the documents we incorporate by
reference, except for exhibits to such documents which are not specifically
incorporated by reference into such documents, by contacting us at PNM
Resources, Inc., Alvarado Square, Albuquerque, New Mexico, 87158, Attention:
Investor Relations. You may also telephone your request at (505)
241-2477.
PNM
RESOURCES, INC.
PNM
Resources, Inc. is an investor-owned holding company of energy and
energy-related businesses. Our primary subsidiaries are Public Service Company
of New Mexico, or PNM, Texas-New Mexico Power Company, or TNMP, First Choice
Power, L.P., or First Choice, and Altura Power L.P., or Altura Power.
PNM
is an
integrated public utility with (a) regulated operations primarily engaged in
(i)
the generation, transmission, distribution and sale of electricity for retail
customers in New Mexico and the sale of transmission to third parties as well
as
to affiliated operations and (ii) transmission, distribution and sale of natural
gas within the State of New Mexico, and (b) unregulated operations primarily
focused on the sale and marketing of electricity into the wholesale market
in
the western United States. With our June 2005 acquisition of TNP Enterprises,
Inc. (“TNP”), PNM Resources acquired the operations of both of TNP’s wholly
owned subsidiaries, TNMP and First Choice. TNMP is a regulated utility operating
in Texas and New Mexico. In Texas, TNMP provides regulated transmission and
distribution services. In New Mexico, TNMP provides regulated integrated
electric services that include the transmission, distribution, purchase and
sale
of electricity. First Choice is a competitive retail electric provider operating
in Texas. On April 18, 2006, our indirect subsidiary, Altura Power, completed
the acquisition of the Twin Oaks business, which included a 305-megawatt coal
fired Twin Oaks power plant facility located 150 miles south of Dallas,
Texas.
Our
executive office is located at Alvarado Square, Albuquerque, New Mexico 87158,
and our telephone number is (505) 241-2700.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements
made in this prospectus
and other documents that we file with the SEC that
relate to future events or our
expectations, projections, estimates, intentions, goals, targets and strategies,
are made pursuant to the Private Securities Litigation Reform Act of
1995.
Forward-looking statements often can be identified by the words “believe”,
“expect”, “anticipate”, “estimate” or similar expressions.
Readers
are cautioned that all forward-looking statements are based upon current
expectations and estimates and
we
assume no obligation or
duty
to
update or
revise
any forward-looking statements, whether as a result of new
information,
future
events or otherwise.
Since
actual results may differ materially from those expressed or implied by these
forward-looking statements, we
caution
readers not to place undue reliance on these statements.
Our
business, financial condition, cash flow and operating results are influenced
by
many factors, which are often beyond our
control,
that can cause actual results to differ from those expressed or implied by
the
forward-looking statements. These factors include:
| · |
The
potential unavailability of cash from PNM Resources’ subsidiaries due to
regulatory, statutory and contractual
restrictions,
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| · |
The
outcome of any appeals of the Public Utility Commission of Texas
order in
the stranded cost true-up
proceeding,
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| · |
The
ability of First Choice to attract and retain
customers,
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| · |
Changes
in Electric Reliability Council of Texas
protocols,
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| · |
Changes
in the cost of power acquired by First
Choice,
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| · |
Collections
experience,
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| · |
Insurance
coverage available for claims made in
litigation,
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| · |
Fluctuations
in interest rates,
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| · |
The
risk that the Twin Oaks power plant will not be successfully integrated
into PNM Resources,
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| · |
Conditions
in the financial markets affecting PNM Resources’ permanent financing for
the Twin Oaks power plant
acquisition,
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| · |
Weather,
including impacts on PNM Resources and its subsidiaries of hurricanes
in
the Gulf Coast region,
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| · |
Availability
of fuel supplies,
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| · |
The
effectiveness of risk management and commodity risk
transactions,
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| · |
Seasonality
and other changes in supply and demand in the market for electric
power,
|
| · |
Variability
of wholesale power prices and natural gas
prices,
|
| · |
Volatility
and liquidity in the wholesale power markets and the natural gas
markets,
|
| · |
Changes
in the competitive environment in the electric and natural gas
industries,
|
| · |
The
performance of generating units, including Palo Verde Nuclear Generating
Station, and transmission systems,
|
| · |
The
market for electrical generating
equipment,
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| · |
The
ability to secure long-term power
sales,
|
| · |
The
risks associated with completion of generation, transmission, distribution
and other projects, including construction delays and unanticipated
cost
overruns,
|
| · |
State
and federal regulatory and legislative decisions and
actions,
|
| · |
The
outcome of legal proceedings,
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| · |
Changes
in applicable accounting principles,
and
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| · |
The
performance of state, regional and national
economies.
|
SUMMARY
OF THE PLAN
The
following summary of the Plan may omit certain information that may be important
to you. If you wish to receive a copy of the actual text of the Plan as filed
with the Securities and Exchange Commission, please contact: PNM Resources,
Inc., Investor Relations, Alvarado Square, Albuquerque, New Mexico 87158,
telephone (505) 241-2477.
Purpose
The
purpose of the Plan is to provide new and existing shareholders with a
convenient and economical method of investing cash and cash dividends in shares
of our common stock. Since new shares of our common stock, or shares held in
our
treasury, may be purchased directly from us, we may receive additional funds
for
general corporate purposes.
Nothing
in this prospectus or other Plan information represents a recommendation by
PNM
Resources or anyone else that any person buy or sell PNM Resources common stock.
We urge you to read this prospectus thoroughly before you make your own
independent decision regarding whether or not to invest in PNM Resources common
stock through this Plan.
The
value
of shares of PNM Resources common stock may increase or decrease from time
to
time. A Plan participant, like the owner of directly held shares, bears all
risk
of loss that may result from market fluctuations in the price of our common
stock. Unlike an individual stock brokerage account, however, a Plan participant
does not have control or authority to direct the price or time at which common
stock held under the Plan for the Participant is purchased or sold. We cannot
guarantee that shares purchased under the Plan will, at any particular time,
be
worth more than their purchase price. The Securities Investor Protection
Corporation, the Federal Deposit Insurance Corporation, or any other entity
does
not insure Plan accounts.
Participation—How
to Join
First
time investors:
After
you
have read this prospectus, you may complete the Enrollment Form
included, or,
you
may enroll on-line through Investor ServiceDirect® at www.melloninvestor.com.
Click
the "Stock Purchase Plans" button, at the "easy search" screen select the ticker
symbol button and enter PNM, then follow the instructions for authorizing your
initial investment and indicate whether you want to participate in the full
or
partial dividend reinvestment portion of the Plan.
If
you
purchase or currently own less than 100 shares, you will automatically be
enrolled in the dividend reinvestment portion of the Plan, unless you request
to
receive cash dividends. All investments must be made in U.S. dollars and drawn
on a U.S. bank.
You
may
make your initial investment by:
| |
1.
|
authorizing
an electronic debit of at least $50 but not more than $100,000
from your
U.S. bank account. This alternative is available to on-line investors
only; or
|
| |
2.
|
mailing
a check for at least $50 but not more than $100,000 drawn on a
U.S. bank
account to the Plan administrator along with your Enrollment Form.
|
Follow
the instructions on the on-line Enrollment Wizard to indicate your selection
and, if paying by check, print out the instruction sheet and submit the sheet
as
indicated with your check, together with your Enrollment Form. You can then
make
an election to have your dividends reinvested and/or make optional cash
investments as described more fully below.
The
Plan
Administrator may confirm certain transactions affecting the amount of shares
in
your Plan account and produce Plan statements in paper form from time to time
and will mail these to you at the address you give when you enroll in the
Plan.
Current
shareholders:
Our
shareholders whose common stock is registered with us are automatically eligible
to participate in the dividend reinvestment portion of the Plan, and may make
optional cash investments and sell shares through the Plan. If you are a
shareholder of record holding less than 100 shares, you will automatically
be
enrolled in the
full dividend reinvestment portion
of the
Plan and your quarterly PNM Resources dividend will be applied to purchasing
additional shares of stock. If you own fewer than 100 shares but would prefer
to
have your dividend paid to you in cash, you must contact the Plan Administrator
and request a cash payment. As a shareholder participating in the Plan with
less
than 100 shares, you will have access to your account on-line through
Investor ServiceDirect® at www.melloninvestor.com
and by
telephone at 1-877-663-7775 and you will receive annual account statements,
but
you may no longer elect the partial dividend reinvestment option.
If
you
are a shareholder of record owning 100 shares or more you may elect to reinvest
all or part of your dividends pursuant to the Plan. As a shareholder
participating in the Plan with more than 100 shares, you will have access
to your account on-line through Investor ServiceDirect® at www.melloninvestor.com
and by
telephone at 1-877-663-7775 and you will receive quarterly account
statements.
Dividend
payments not reinvested will be paid to you in the usual manner.
For
current shareholders and new investors:
You
may
sign up for automatic monthly investments, change your investment amount or
make
additional investments at any time by accessing your account on-line through
Investor ServiceDirect® at www.melloninvestor.com
and
using the account management feature or by telephone at
1-877-663-7775.
You
may
establish additional investment accounts for children or dependents by following
the instructions on the on-line Enrollment Wizard applicable to custodial or
trust accounts or by telephone at 1-877-663-7775.
How
the Optional Cash Investments
Work
In
addition to having your dividend payments reinvested in our common stock, you
may buy additional shares by investing a minimum of $50 at any one time not
to
exceed the "maximum" of $100,000 per year. You may submit your optional cash
investments by check, money order or by authorizing electronic transfers. Do
not
send cash. You can make individual automatic deductions from your bank account
through Investor ServiceDirect® by accessing your account on-line through the
Plan Administrator's website www.melloninvestor.com.
Upon
receipt of the funds, the Plan Administrator will normally invest initial and
optional cash investments at least once every five (5) business
days.
Optional
cash investments of more than $100,000 per year by any current participant
and
any initial cash investment by a new investor in excess of $100,000 may only
be
made pursuant to a request for waiver that has been granted by us as described
in more detail on page 16 of this prospectus. Investors may make individual
cash
investments or invest regularly over a period of time.
Your
Funds Will Be Fully Invested
Funds
invested pursuant to the Plan are fully invested in whole and fractional shares
(computed to four decimal places) of our common stock either through the
purchase of shares directly from us or the purchase of shares in the open market
(or through a combination of these methods). We pay dividends on both whole
shares and fractions of shares.
Share
Safekeeping
For
your
convenience, shares purchased through the Plan will be maintained by the Plan
Administrator in non-certificated (book-entry) form. Additionally, the Plan
offers a "safekeeping" service whereby you may deposit, free of any service
charges, certificates representing your shares of common stock and have your
ownership of such common stock maintained on the Plan Administrator's records
as
part of your account. This feature protects against loss, theft or destruction
of stock certificates. A share certificate will be delivered to you free of
charge, upon request.
You
May Sell, Withdraw or Transfer Your Shares at Any Time
You
may
sell or withdraw shares of our common stock credited to your account, including
those shares deposited into the Plan for safekeeping, through the Plan.
Currently there is a $15.00 processing fee, plus a trading fee of $0.06 per
share, for sale transactions and liquidations. A statement will be mailed to
you
for each transaction that takes place. Additionally, you may transfer or make
gifts to others of our common stock by contacting the Plan Administrator. There
is no fee for this service.
Plan
Administrator
Mellon
Bank N.A. will administer the Plan and act as agent for the participants. Mellon
Bank N.A. has designated its affiliates, Mellon Investor Services and Mellon
Securities LLC, and other agents to perform certain services for the Plan.
You
may
contact the Plan Administrator as directed below:
Call
Mellon Investor Services 1-877-663-7775
On-line
over the Internet
at:
www.melloninvestor.com
You
may
write the Plan Administrator at the following address:
Mellon
Investor Services
P.O.
Box
3338
South
Hackensack, NJ 07606-1938
Please
include your daytime telephone number, your social security or tax I.D. number
and a reference to PNM Resources, Inc. on all correspondence.
TERMS
AND CONDITIONS OF THE PLAN
Am
I Eligible to Participate in the Plan?
You
are
eligible to participate in the Plan if you meet the requirements outlined
below.
| · |
If
you do not currently own our stock.
If
you do not currently own any of our stock you may join the Plan,
after
receiving a copy of this prospectus, by making an initial investment
of at
least $50, but not more than $100,000. All U.S. citizens, U.S. residents
and non-U.S. residents are eligible to participate in the Plan, whether
they are current shareholders or not. In all cases, however, investments
must be made in U.S. currency drawn on a U.S. bank. Prior to investing
in
our common stock, each participant is responsible for reviewing the
applicable laws of his or her country of residence to determine if
there
are any restrictions on investment.
|
You
can
get started in the Plan by enrolling on-line through Investor ServiceDirect® at
www.melloninvestor.com
(see
Participation - How to Join) or by returning a completed Enrollment Form to
the
Plan Administrator, along with your check or money order payable to PNM
Resources Direct. Do not send cash. The Plan Administrator will arrange for
the
purchase of shares for your account but will not pay interest on amounts held
pending investment. Please allow two (2) weeks for your account to be
established, initial shares to be purchased and a statement to be mailed to
you.
| · |
If
you currently own our stock.
If
you already own less than 100 shares of our stock and the shares are
registered in your name, you are automatically enrolled in the full
dividend reinvestment portion of the Plan. If you already own
100 shares or more of our stock and the shares are registered in your
name, you may join the dividend reinvestment portion of the Plan
by
enrolling on-line (see Participation - How to Join) or by returning
a
completed Enrollment Form to the Plan Administrator. In either case,
participants are eligible for the optional purchase portion of the
Plan.
|
If
your
shares are held in a brokerage, bank or other intermediary account, and you
wish
to participate directly in the Plan, you should instruct your broker, bank
or
trustee to register some or all of your shares of our common stock directly
in
your name.
| · |
If
you are already enrolled.
If
you are currently enrolled in the PNM Resources Direct Plan, and
do not
want to change your participation, no further action is required
for your
continued participation. However, if you wish to change your participation
in any way (e.g., from partial to full reinvestment), you must submit
a
new Enrollment Form or access the account management feature on-line
through Investor ServiceDirect® at or
by telephone at 1-877-663-7775. If you own less than 100 shares of
our
stock, partial reinvestment of cash dividends is not
available.
|
What
are my investment options?
Once
enrolled in the Plan, you may purchase additional shares of common stock through
reinvestment of your dividends and/or by cash investments as described
below:
| · |
Dividend
reinvestment.
If
you are a shareholder of record and you own less than 100 shares, you
will automatically be enrolled in the Plan and will have your dividends
reinvested in additional shares (unless you contact the Plan Administrator
as directed on page 8 of this prospectus to request cash dividends).
In
addition, you will receive an annual statement and will have electronic
access to your account on-line through Investor ServiceDirect® at
or
by telephone at 1-877-663-7775. If you are a shareholder of record
owning
100 shares or more, you may choose to reinvest all or a portion of
the regular cash dividends paid on your shares held in the Plan toward
the
purchase of additional shares of our common stock. In addition, you
will
receive a quarterly account statement and have electronic access
to your
account on-line through Investor ServiceDirect® at or
by telephone at 1-877-663-7775.
|
You
may
change your dividend reinvestment election at any time by notifying the Plan
Administrator. For a particular dividend to be reinvested, your notification
must be received before the record date for that dividend. (The record date
is
approximately 14 days before the dividend payment date.)
You
may,
of course, choose not to reinvest any of your dividends, in which case the
Plan
Administrator will remit any dividends to you by check or automatic deposit
to a
bank account you designate.
If
you
elect to reinvest your dividends, you must choose one of the
following:
| · |
Full
dividend reinvestment.
This means you will purchase additional shares through the Plan by
investing all your cash dividends.
|
| · |
Partial
dividend reinvestment.
If
you own 100 shares or more and choose to reinvest less than all your
dividends, you may receive a cash dividend payment based on the number
of
full shares you specify and reinvest the dividends on all remaining
shares. This allows you to receive a fixed amount of cash each quarter
(assuming the dividend stays the
same).
|
| · |
Optional
cash investments.
You may purchase additional shares of our common stock by using the
Plan's
optional cash investment feature. You must invest at least $50 at
any one
time but not more than $100,000 per year. Upon receipt of your funds,
the
Plan Administrator will invest initial and additional cash investments
as
promptly as practicable, normally at least once every 5 business
days.
|
Shares
will be posted to your account in whole and fractional shares immediately upon
settlement, usually within 3 business days. You will receive a confirmation
of
your transaction by paper statement at the postal address you give us when
you
enroll in the plan.
In
the
unlikely event that, due to unusual market conditions, the Plan Administrator
is
unable to invest your funds within 35 days, the Plan Administrator will
return the funds to you by check. No
interest will be paid on funds held by the Plan Administrator pending
investment.
For
automatic monthly purchases, the amounts you have authorized will be withdrawn
from your banking account on the 24th
day of
each month, or the next succeeding business day if the 24th
falls on
a weekend or holiday. The funds will be credited to your account and invested
within 5 business days of receipt by the Plan Administrator.
The
Plan
Administrator will use your investment to purchase as many full and fractional
shares as possible. Fractional share amounts will be computed to four decimal
places.
You
may
make optional cash investments by sending a check or money order (not cash)
to
the Plan Administrator payable to PNM Resources Direct, or by authorizing
individual electronic transfers from your bank account by accessing your account
on-line through Investor ServiceDirect® at www.melloninvestor.com.
To
facilitate processing of your investment when you send a check or money order,
please use the transaction stub attached to your Plan statement. Mail your
investment and transaction stub to the address specified on the statement.
A $35
fee will be assessed for a check or electronic debit that is returned for
insufficient funds. Please see the fee schedule attached as
Appendix A.
How
are my shares typically purchased and how is the purchase price for the shares
determined?
Shares
of
our common stock purchased under the Plan will, at our election, be newly issued
shares purchased directly from us, treasury shares purchased directly from
us,
shares purchased by a broker, or a combination thereof. If shares are purchased
under the Plan directly from us and by the Plan Administrator through its
broker, each participant's Plan account will be credited with its pro rata
portion of the number of shares purchased directly from us and by the broker.
We
have full discretion as to whether the common stock purchased under the Plan
will be purchased on the open market or purchased directly from us, based on
our
need for capital.
| · |
Common
Stock purchased in the open market.
The investment price of our common stock purchased in the open market
with
reinvested dividends, with initial cash investments or with optional
cash
investments will be the weighted average price, including applicable
brokerage trading fees, incurred in connection with the purchase
of such
shares for the relevant investment date. No interest will be paid
on funds
held by the Plan Administrator pending investment. The Plan Administrator
will normally invest cash dividends within 5 business days of the
dividend
payment date and will normally invest initial and optional cash
investments at least once every 5 business days. The brokerage trading
fee
is currently 6 cents per share. We will pay this fee for shares purchased
with reinvested dividends and so the weighed average price for such
shares
will not include this trading fee. See Appendix
A.
|
| · |
Common
Stock purchased directly from us. The
price of our common stock purchased directly from us with reinvested
dividends, initial cash investments or optional cash investments
will be
the average of the high and low sale prices of shares of our common
stock
reported on the NYSE on the dividend payment date, initial cash investment
date or optional cash investment date, as the case may be. No interest
will be paid on funds held by the Plan Administrator pending investment.
The Plan Administrator will normally invest initial and optional
cash
investments at least once every 5 business
days.
|
The
“weighted average price” used to calculate the investment price of open market
purchases assumes the use of multiple open market purchases to invest plan
participant investments. For example, if plan investments required the
acquisition of 5,000 shares for allocation to 100 investors and the plan needed
the following three separate purchases in the open market to acquire the 5,000
shares, the weighted average would be calculated as follows:
1,000
shares @ $21.00 = $21,000
3,000
shares @ $21.25 = $63,750
1,000
shares @ $21.125 = $21,125
$105,875
/ 5,000 = $21.175
The
same
computational method, however, is not used for shares purchased directly from
us
because shares purchased in the open market are based upon specific open market
transactions that need to be allocated to participants at actual cost. Newly
issued shares issued by the Company are not based on specific transactions
that
need to be allocated but are based on the market, for that day, which is best
represented by an average of the low and the high prices of the common stock
for
the entire day.
Thus,
for
shares purchased directly from the Company, the issuance price of those shares
will be based on the average of the high and low prices of stock trades during
the day. If, for example, there were only three trades on a day, at prices
indicated in the previous example for market purchases, the average of the
high
and low prices would be $21.125 per share ((21.00+21.25)/2).
Your
account will be credited with that number of shares, including fractional shares
computed to four decimal places, equal to the amount invested with respect
to
your Plan account, divided by the price per share of such shares for all
purchases for all Plan participants during the applicable period.
You
do not have control or authority to direct the price or time at which common
stock is purchased or sold for Plan accounts. Therefore, you bear market risk
associated with fluctuations in the price of common stock as the price of common
stock may go up or down before a purchase or sale is made for your
account.
Unless
you request one, certificates for shares of common stock purchased under the
Plan will not be issued. The number of shares purchased for your account under
the Plan will be shown on your statement of account in book-entry
form.
Certificates
for any number of whole shares credited to your account under the Plan will
be
issued upon your request. Any remaining full shares and fractions of a share
will continue to be credited to your account. Certificates for fractions of
shares will not be issued.
How
do I sell my shares out of the Plan?
You
may
sell any number of shares held in book-entry form by notifying the Plan
Administrator by phone at 1-877-663-7775, by accessing your account on-line
through Investor ServiceDirect® at www.melloninvestor.com,
or
in
writing. Your sale request will be processed and your shares will, subject
to
market conditions and other factors, generally be sold by the close of the
trading day for requests received by the Plan Administrator by 1:00 p.m.
eastern time. The sale price will be the weighted average price of all shares
sold for Plan participants during the period. Please note that the Plan
Administrator cannot and does not guarantee the actual sale date or price,
nor
can it stop or cancel any outstanding sales or issuance requests. All requests
are final. The Plan Administrator will mail a check to you (less applicable
sales fees) on the settlement date, which is 3 business days after your shares
have been sold. Please allow an additional 5 to 7 business days from the
settlement date for the post office to deliver your check.
Currently,
there is a $15.00 processing fee, plus a trading fee of $0.06 per share, for
sale transactions and liquidations.
Alternatively,
you may choose to sell your shares through a stockbroker of your choice, in
which case you would have to request a certificate for your shares from the
Plan
Administrator prior to such sale.
What is
Safekeeping?
Shares
of
our common stock that you buy under the Plan will be maintained in your Plan
account for safekeeping. You will receive a periodic Plan statement detailing
the status of your holdings. Safekeeping protects your shares against loss,
theft or accidental destruction. Safekeeping also provides a convenient way
for
you to keep track of your shares. Only shares held in safekeeping may be sold
through the Plan.
If
you
own additional shares of our common stock in certificated form, you may deposit
your certificates into your Plan account, free of charge. To use this service,
send your certificates to Mellon Investor Services by registered mail with
written instructions to deposit them into your Plan account for safekeeping.
The
Plan Administrator will provide loss insurance coverage for your certificates
with a value not exceeding $100,000 in any one shipping package that is mailed
to its address at 480 Washington Boulevard, Jersey City, New Jersey 07310 by
USPS registered mail or by any of the following overnight couriers:
Airborne, DHL, Emery, Express Mail, FedEx, Purolator, TNT and UPS. Do not
endorse the certificates or complete the assignment section.
Note:
Mail loss insurance covers only the replacement of shares of stock and in no
way
protects against any loss resulting from fluctuations in the value of such
shares.
May
I gift my shares out of the Plan?
You
may
gift or transfer your shares to any recipient you choose by:
| · |
making
an initial $50 cash investment to establish an account in the recipient's
name or
|
| · |
transferring
shares from your account to the
recipient.
|
You
must
transfer a whole number of shares unless you transfer your entire account.
You
may transfer shares to new or existing shareholders. The Plan Administrator
will
automatically place such new accounts in full dividend reinvestment status.
New
participants, at their discretion, may elect another option. If you participate
in the dividend
reinvestment portion of
the
Plan and your request to either transfer all your shares or make a partial
sale
and transfer the balance of your shares is received between the ex-dividend
date
(the day after the last day during the quarter on which stock can be transferred
with the new owner receiving that quarter’s dividend payout), and the dividend
record date, the processing of your request may be held until after your account
is credited with reinvested dividends.
You
must
have your signature guaranteed by a financial institution participating in
the
Medallion Guarantee program. The Medallion Guarantee program ensures that the
individual signing the certificate or transfer instructions is in fact the
registered owner as the name appears on the stock certificate or stock
power.
If
you
need additional assistance, please contact the Plan Administrator.
How
do I get my stock certificates?
You
may
withdraw all or some of the shares from your Plan account by notifying the
Plan
Administrator. Certificates will be issued for whole shares only. If your
request involves a fractional share, a check (less any applicable fees) for
the
value of the fractional share will be mailed to you.
Certificates
will be issued in the name(s) in which the account is registered, unless
otherwise instructed. If the certificate is issued in a name other than that
on
your Plan account registration form, the signature on the instructions or stock
power must be guaranteed by a financial institution participating in the
Medallion Guarantee program, as described above.
What
are the fees relating to participation in the Plan?
The
current fees are described in Appendix A. The Plan Administrator will
deduct the applicable fees from the investment amount or proceeds from a
sale.
How
is my investment tracked?
If
you
participate in the dividend reinvestment portion of the Plan and you hold 100
shares or more, the Plan Administrator will mail you a quarterly Plan statement
showing all transactions (shares, amounts invested, purchase prices) for your
account, including year-to-date and other account information. If you own less
than 100 shares, you will receive an annual statement.
Supplemental
statements or notices will be sent when you make an initial or optional cash
investment or a deposit, transfer or withdrawal of shares.
Please
retain your Plan statements to establish the cost basis of shares purchased
under the Plan for income tax and other purposes.
You
should notify the Plan Administrator promptly of any change in address since
all
notices, statements and reports will be mailed to your address of
record.
How
do I terminate participation in the dividend reinvestment portion of the
Plan?
You
may
discontinue the reinvestment of your dividends at any time by giving notice
to
the Plan Administrator. The Plan Administrator must receive such notice before
the close of business on the record date for any dividend payment in order
to
terminate your dividend reinvestment participation prior to such dividend
payment date. The Plan Administrator will continue to hold your shares unless
you request a certificate for any full shares and a check for any fractional
share. You may also request the sale of all or part of any such shares or have
the Plan Administrator electronically transfer your shares to your brokerage
account.
After
you
terminate your participation in the dividend reinvestment portion of the Plan,
you may rejoin at any time by re-enrolling with the Plan Administrator. However,
the Plan Administrator has the right to reject such enrollment if you repeatedly
join and withdraw from the Plan, or for any other reason. The Plan
Administrator's exercise of such right is intended to minimize unnecessary
administrative expenses and to encourage use of the Plan as a long-term
shareholder investment service.
What
are the material federal income tax consequences of my participation in the
Plan?
Your
reinvested dividends will be treated for federal income tax purposes in the
same
manner they would have been treated had you received such dividends in cash
on
the applicable dividend payment date. Your tax basis in the shares purchased
will be equal to the amount of the cash dividends and optional cash investments
applied to the purchases of such shares. Your holding period for the shares
acquired pursuant to the Plan will begin on the day after the date the shares
are purchased. You may recognize gain or loss when your shares (including
fractional shares) are sold or otherwise disposed of in a taxable exchange,
whether by the Administrator on your behalf or by you upon withdrawal of your
shares
from the Plan. The amount of such gain or loss will be the difference between
the amount you receive for the shares and your tax basis in such shares. YOU
SHOULD CONSULT WITH YOUR OWN TAX ADVISER TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES THAT MAY RESULT FROM YOUR PARTICIPATION IN THE PLAN AND THE
SUBSEQUENT SALE OR OTHER DISPOSITION OF SHARES ACQUIRED UNDER THE PLAN,
INCLUDING THE EFFECT OF ANY APPLICABLE STATE, LOCAL AND FOREIGN TAX LAWS.
OTHER
PROVISIONS
How
do I view the status of my account?
You
can
view the status of your account at any time by logging onto Investor
ServiceDirect® at www.melloninvestor.com
or by
telephoning 1-877-663-7775. New investors establish a Personal Identification
Number (PIN) when setting up their account. For existing shareholders to gain
access, use the 12-digit Investor Identification Number (which can be found
in a
bolded box on your dividend check stub) to establish a PIN.
How
do I change or stop the automatic investment feature?
Simply
access your account through Investor ServiceDirect® on www.melloninvestor.com
or by
telephoning 1-877-663-7775, choose the "Purchase/Sell" menu and indicate your
change in the "Periodic Purchase" selection. Your request must be received
at
least three business days before the 24th
day of
the month.
Plan
modification or termination
We
reserve the right to suspend, modify or terminate the Plan at any time. You
will
receive notice of any such suspension, modification or termination. We, together
with the Plan Administrator, also reserve the right to change any administrative
procedures of the Plan.
Suspension
or termination
We
reserve the right to deny, suspend or terminate participation by a shareholder
who is using the Plan for purposes inconsistent with the intended purpose of
the
Plan. In such event, the Plan Administrator will notify you in writing and
will
continue to keep your shares safe but will no longer accept optional cash
investments or reinvest your dividends. The Plan Administrator will issue a
certificate to you upon request.
Limitation
of liability
The
Plan
provides that neither we nor the Plan Administrator in administering the Plan
nor any independent agent will be liable for any act done in good faith or
for
the good faith omission to act in connection with the Plan. This includes,
without limitation, any claims of liability:
| · |
for
failure to terminate your account upon your death or adjudicated
incompetence prior to receiving written notice of such death or
adjudicated incompetence; or
|
| · |
relating
to purchase or sale prices reflected in your Plan account or the
dates of
purchases or sales of your Plan shares;
or
|
| · |
for
any loss or fluctuation in the market value after purchase or sale
of such
shares. The foregoing does not represent a waiver of any rights you
may
have under applicable securities
laws.
|
How
do I make an initial or optional cash investment over the maximum yearly
amount?
If
you
wish to make an initial or optional cash investment in excess of $100,000 and
be
eligible for a potential discount from the market price, you must obtain our
prior written approval. To obtain our approval, you must submit a request for
waiver. To make this request, you should obtain a "Request For Waiver" form
by
contacting Mellon's Waiver Department at 1-201-680-5300. Completed Request
For
Waiver forms should be sent to Mellon's Waiver Department via facsimile at
1-201-680-4688.
If
we
approve your request, Mellon will notify you via return facsimile or e-mail.
You
must then send the authorized amount to the Plan Administrator in the form
of a
certified check, money order or electronic funds transfer drawn on a U.S. bank.
The Plan Administrator must receive your investment no later than the close
of
business on the last day before the applicable pricing period start date. Any
funds received by the Plan Administrator after the applicable date will be
returned to the investor without interest.
We
have
the sole discretion whether to approve any request to make an initial or
optional cash investment in excess of the $100,000 yearly maximum. We may grant
those requests for waiver in order of receipt or by any other method that we
determine to be appropriate. We also may determine the amount that you may
invest pursuant to a waiver. In deciding whether to approve your request for
waiver, we may consider the following material factors:
| · |
whether,
at the time of your request, the Plan Administrator is acquiring
shares of
common stock for the Plan directly from us or in the open market
or in
privately negotiated transactions with third
parties;
|
| · |
whether
we need cash to fund a specific project at the current time, at some
time
in the foreseeable future, or whether funds can be used for a general
operational purpose;
|
| · |
if
we decide that there is a need for additional funds, then we would
consider whether this Plan was the most beneficial means of raising
additional cash compared to an underwritten offering or the issuance
of
new debt or the use of current
debt;
|
| · |
whether
the potential issue price is above or below book value, the general
stock
market trends at the time of consideration, the general utility trends
regarding stock prices at the time of consideration, and our recent
stock
price trend;
|
| · |
whether
you have participated in the Plan in the past, your current level
of
participation and whether you are known as a short seller of
stock;
|
| · |
whether
granting the waiver request will facilitate obtaining new, diversified
and
long-term investment in PNM Resources through the Plan;
and
|
| · |
whether
the total amount of waiver requests exceeds our cash-raising goal
and if
so we may adjust potential investments down if the requests are greater
than required to meet our goal.
|
We
will
probably not grant waiver requests when the Plan Administrator is acquiring
shares in the open market or through privately negotiated transactions. In
addition, if, at the time of your request, we do not need additional funds,
determine that issuing new shares is not the most beneficial means of obtaining
additional funds, or determine that the purchase price is below book value,
then
we may not grant your waiver request.
If
you do
not receive a response from us within 3 business days of submitting your waiver
request, you should assume that we have denied your request.
If
requests for a waiver are submitted for any pricing period for an aggregate
amount in excess of the amount we are then willing to accept, we may honor
these
requests in order of receipt, or by any other method that we determine, in
our
sole discretion, to be appropriate.
We
reserve the right to modify, suspend or terminate participation in the Plan
by
otherwise eligible registered holders or beneficial owners of our common stock
for any reason whatsoever including eliminating practices that are inconsistent
with the purposes of the Plan, which are to provide a convenient and economical
method of investing in our stock and to encourage long-term investment. If
it
becomes apparent that an individual is buying and immediately selling our common
stock to take advantage of the discount provision, we will take action to
prevent that type of activity, e.g., by not granting any future waiver requests
for that person.
Once
a waiver request for a cash investment over $100,000 has been granted, how
are
shares priced and purchased?
Shares
purchased pursuant to a granted waiver request will be purchased directly from
us. If a request for waiver is approved, the price of shares purchased from
us
pursuant to the request for waiver will be determined using a pricing period
of
not less than one but not more than 10 trading days as determined by us
commencing on a date set by us. Initial and optional
cash investments made pursuant to a request for waiver will be applied to the
purchase of shares of common stock as soon as practicable on or after the
business day following the last day of the pricing period. This date is referred
to as the "Waiver Investment Date".
Initial
and optional cash investments made pursuant to a request for waiver will be
acquired at a price equal to the average of the daily high and low sales prices
computed up to 7 decimal places, if necessary, of our common stock as reported
on the New York Stock Exchange, or NYSE, only, and not a Composite Average,
for
the applicable trading days immediately preceding the Waiver Investment Date
(assuming
that we do not set a threshold price for the pricing period or offer a discount
from the purchase price as discussed further below).
A
“trading day” is any day on which our stock is reported as bought or sold over
the NYSE. All funds properly received by the Plan Administrator up to the close
of business on the last business day before the pricing period begins will
be
invested by the Plan Administrator in shares of PNM Resources common stock
as
soon as practicable on or after the Waiver Investment Date. Funds received
after
this date will be returned to you without interest. Setting a particular 1-10
trading day pricing period for a particular Waiver Investment Date will not
affect the setting or a pricing period for any other Waiver Investment
Date.
For
purposes of determining the price per share for investments made pursuant to
a
request for waiver, we may set a minimum purchase price per share or Threshold
Price, for any
pricing period. This Threshold Price is a minimum price that would be used
under
an alternative method for setting the per share purchase price that is described
in the next paragraph. We will determine whether to set a Threshold Price,
and,
if so, its amount, at least 3 business days before the first day of the pricing
period. We will notify the Plan Administrator of the Threshold Price, if any.
In
deciding whether to set a Threshold Price, we will consider one, all or a
combination of the following factors:
| · |
the
general trend of the stock market as a whole, the general trend of
the
utility sector of the stock market, and the general trend of our
stock.
|
| · |
whether
any previous offerings under the waiver provisions of the Plan been
over
or under subscribed.
|
| · |
do
we have an immediate need for the cash, do we foresee an upcoming
transaction that will require new cash and are there external events
affecting the decision.
|
Participants
may ascertain whether a Threshold Price has been set or waived for any given
pricing period by calling Mellon's Waiver Department at 1-201-680-5300 or such
other number as we may establish from time to time.
We
will
fix the Threshold Price for a pricing period as a dollar amount that the average
of the high and low sales prices as reported by the NYSE for
each
trading day of that pricing period (not adjusted for discounts, if any) must
equal or exceed. We will exclude from the pricing period and from the
determination of the purchase price any trading day within the pricing period
that does not meet the Threshold Price. Thus, for example, if we choose to
use a
10 day pricing period and the Threshold Price is not met for 2 of the 10 trading
days in a pricing period, then we will base the purchase price upon the
remaining 8 trading days in which the Threshold Price was met.
In
addition, we will return a pro rata portion of each cash investment made
pursuant to an approved request for waiver for each trading day of a pricing
period for which the Threshold Price is not met as soon as reasonably practical
after the pricing period, without interest. The returned amount will be a
percentage of the cash investment corresponding to the percentage of trading
days below the Threshold Price. Thus, for example, if we chose a 10 day trading
period and the Threshold Price is not met for two (2) of the ten (10) trading
days in a pricing period, then we will return two-tenths (2/10th or 20%) of
the
initial or optional cash investment to you without interest after conclusion
of
the pricing period. This does not constitute a discount to the purchase price;
however, it does reduce the total number of shares that you may purchase with
respect to a Waiver Investment Date.
The
establishment of the Threshold Price and the possible return of a portion of
the
payment apply only to initial or optional cash investments exceeding $100,000
per year made pursuant to a granted request for waiver. Setting a Threshold
Price for a pricing period will not affect the setting of a
Threshold
Price
for any other pricing period. We may waive our right to set a Threshold Price
for any particular pricing period. Neither we nor the Plan Administrator are
required to give you notice of the Threshold Price for any pricing period.
We
may alter or amend at our sole discretion these pricing periods at any time
and
from time to time, prior to the commencement of any pricing period and prior
to
the granting of any waiver with respect to such period.
At
our
sole discretion, we may offer participants making a cash investment in excess
of
$100,000 a discount of up to 3% from the regular purchase price on any
particular Waiver Investment Date. The maximum discount rate, if any, on initial
or optional cash investments in excess of $100,000 per year may be obtained
at
least 3 business days before the first day of the applicable pricing period
by
calling Mellon's Waiver Department at 1-201-680-5300.
Setting
a
discount from the purchase price for initial and optional cash investments
in
excess of $100,000 per year for a particular pricing period will not affect
the
setting of a discount for any other pricing period. We may increase, decrease,
or waive our right to set a discount from the purchase price for any particular
pricing period. Neither we nor the Plan Administrator is required to give you
notice of the discount for any pricing period. When setting the discount, if
any, we will consider our capital needs, whether we want to issue equity to
meet
our capital needs and how quickly we desire to close the investment. For
example, to the extent we desire to issue equity in a particular pricing period
to meet our capital needs, we are more likely to establish a discount to
encourage participants to make cash investments.
USE
OF PROCEEDS
We
expect
to use the net proceeds received from the issuance and sale of common stock
offered hereby to refinance term loans outstanding under the bridge loan
facility we entered into to finance our acquisition of the Twin Oaks power
plant
facility and for general corporate purposes, including capital expenditures.
At
August 31, 2006, the maturity date for our $448.5 million of outstanding
borrowings under the bridge loan facility was April 17, 2007, and the weighted
average interest rate was approximately 5.95%.
PLAN
OF DISTRIBUTION
Subject
to the discussion below, we will distribute newly issued shares of our common
stock sold under the Plan. Mellon Securities LLC, a registered broker/dealer,
will assist in the identification of investors and other related services,
but
will not be acting as an underwriter with respect to shares of our common stock
sold under the Plan. There are no brokerage commissions or service charges
allocated to participants in the Plan in connection with their purchases of
such
newly issued shares of common stock.
In
connection with the administration of the Plan, we may be requested to approve
investments made pursuant to waiver requests by or on behalf of participants
or
other investors who may be engaged in the securities business.
Persons
who acquire shares of our common stock through the Plan and resell them shortly
after acquiring them, including coverage of short positions, under certain
circumstances, may be participating in a distribution of securities that would
require compliance with Regulation M under the Exchange Act, and may be
considered to be underwriters within the meaning of the Securities Act. We
will
not extend to any such person any rights or privileges other than those to
which
it would be entitled as a participant, nor will we enter into any agreement
with
any such person regarding the resale or distribution by any such person of
the
shares of our common stock so purchased. We may, however, accept investments
made pursuant to Requests for Waiver by such persons.
From
time
to time, financial intermediaries, including brokers and dealers, and other
persons may engage in positioning transactions in order to benefit from any
waiver discounts applicable to investments made pursuant to waiver requests
under the Plan. Those transactions may cause fluctuations in the trading volume
of our common stock. Financial intermediaries and such other persons who engage
in positioning transactions may be deemed to be underwriters. We have no
arrangements or understandings, formal or informal, with any person relating
to
the sale of shares of our common stock to be received under the Plan. We reserve
the right to modify, suspend or terminate participation in the Plan by otherwise
eligible persons to eliminate practices that are inconsistent with the purpose
of the Plan.
We
will
pay any and all brokerage commissions and related expenses incurred in
connection with purchases of our common stock under the Plan, except that a
trading fee (currently $.06 per share) is included in the share price for open
market purchases. Upon withdrawal by a participant from the Plan by the sale
of
shares of our common stock held under the Plan, the participant will receive
the
proceeds of that sale less a transaction and trading fee and any required tax
withholdings or transfer taxes.
You
will
not incur fees, commissions or expenses in connection with purchases made under
the Plan, other than the current trading fee included in the open market share
price of $.06 per share. This trading fee will not be charged to you for shares
purchased with reinvested dividends. If you direct the Plan Administrator to
sell shares of common stock credited to your account, however, the Administrator
will deduct from the sales proceeds: (1) any applicable service fee
(currently $15.00 per sale transaction) plus (2) the applicable trading fee
(currently $.06 per share) and (3) if a wire request is made, a wire fee
(currently $25 per wire request). The current fees are set forth in Appendix
A.
TRANSFER
AGENT AND REGISTRAR
Our
Transfer Agent and Registrar is Mellon Investor Services, 480 Washington
Boulevard, Jersey City, NJ 07310.
EXPERTS
The
consolidated financial statements, the related financial statement schedules,
and management’s report on the effectiveness of internal control over financial
reporting incorporated in this prospectus by reference to PNM Resources, Inc.’s
Annual Report on Form 10K/A for the year ended December 31, 2005, filed
August 8, 2006 have been audited by Deloitte & Touche LLP, an
independent registered public accounting firm, as stated in their reports,
which
are incorporated herein by reference (which reports (1) express an unqualified
opinion on the financial statements and financial statement schedules and
include explanatory paragraphs regarding the adoption of Statement of Financial
Accounting Standards No. 143, Accounting for Asset Retirement Obligations,
effective January 1, 2003, and Financial Accounting Standards Board Financial
Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations
in 2005, the change in actuarial valuation measurement date for the pension
plan
and other post-retirement benefits from September 30 to December 31 during
2003,
PNMResources, Inc.’s acquisition of TNP Enterprises, Inc. in 2005, and the
disclosures regarding the allocation of goodwill among the acquired entities
being restated, (2) express an unqualified opinion on management’s assessment
regarding the effectiveness of internal control over financial reporting but
note the exclusion from Management’s Annual Report on Internal Control Over
Financial Reporting of an assessment of the internal control over financial
reporting at TNP Enterprises, Inc., and its subsidiaries, which were acquired
on
June 6, 2005, and (3) express an unqualified opinion on the effectiveness
of internal control over financial reporting), and have been so incorporated
in
reliance upon the reports of such firm given upon their authority as experts
in
accounting and auditing.
LEGAL
OPINION
Certain
legal matters in connection with the common stock offered hereby have been
passed upon for PNM Resources by Keleher & McLeod, P.A., Albuquerque, New
Mexico.
APPENDIX
A
FEE
SCHEDULE
|
Enrollment
fee for new investors
|
No
charge
|
|
Initial
purchase of shares
|
Trading
fee included in share price (currently $0.06 per share), applicable
when
shares are acquired by the Plan Administrator through its
broker
|
|
Reinvestment
of dividends
|
No
charge. We will pay the applicable trading fee when shares are acquired
by
the Plan Administrator through its broker
|
|
Optional
cash investments
|
Trading
fee included in share price (currently $0.06 per share), applicable
when
shares are acquired by the Plan Administrator through its
broker
|
|
Sale
of shares (partial or full):
|
|
|
Transaction
fee
|
$15
per sale transaction or liquidation
|
|
Trading
fee
|
Currently
$0.06 per share
|
|
Wire
fee (optional)
|
Currently
$25 per wire request
|
|
Gift
or transfer of shares
|
No
charge
|
|
Safekeeping
of stock certificates
|
No
charge
|
|
Certificate
issuance
|
No
charge
|
|
Returned
checks or rejected automatic debit
|
$35
per check or transaction
|
|
Duplicate
statements:
|
|
|
Current
year
|
No
charge
|
|
Prior
year(s)
|
$20
flat fee per request per each prior
year
|
PLAN
FEES ARE AT THE DISCRETION OF PNM RESOURCES, INC. INVESTORS SHOULD NOT RELY
SOLELY ON THE ABOVE SCHEDULE AS FEES ARE SUBJECT TO CHANGE. FOR MORE
INFORMATION, PLEASE CONTACT THE PLAN ADMINISTRATOR AT
1-877-663-7775.
[LOGO]
PNM
RESOURCES, INC.
COMMON
STOCK
(NO
PAR
VALUE)
PNM
RESOURCES, INC.
PNM
RESOURCES DIRECT PLAN
PROSPECTUS
August
31, 2006