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Stock-Based Compensation
9 Months Ended
Sep. 30, 2011
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] 
Stock-Based Compensation
Stock-Based Compensation

Information concerning stock-based compensation plans is contained in Note 13 of Notes to Consolidated Financial Statements in the 2010 Annual Reports on Form 10-K. In 2011, the Company changed its approach to awarding stock-based compensation. As a result, no stock options have been granted in 2011 and awards of restricted stock have increased.

Stock Options

The following table summarizes activity in stock option plans for the nine months ended September 30, 2011:
 
Shares
 
Weighted-
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
 
Weighted-
Average
Remaining
Contract Life
Outstanding at beginning of period
3,948,262

 
$
18.33

 
 
 
 
 
Granted
—

 
$
—

 
 
 
 
 
Exercised
(254,394
)
 
$
10.99

 
 
 
 
 
Forfeited
(10,333
)
 
$
11.26

 
 
 
 
 
Expired
(102,338
)
 
$
24.96

 
 
 
 
 
Outstanding at end of period
3,581,197

 
$
18.68

 
$
8,950,188

(1) 
 
5.12 years
Exercisable at end of period
3,045,556

 
$
21.97

 
$
6,011,541

 
 
4.60 years
Options available for future grant(2)
4,820,656

 
 
 
 
 
 
 

(1) At September 30, 2011, the exercise price of 1,923,608 outstanding stock options is greater than the closing price of PNMR common stock on that date; therefore, those options have no intrinsic value.
(2) Includes shares available for grants of restricted stock.

The following table provides additional information concerning stock option activity:
 
 
Nine Months Ended
September 30,
Options for PNMR Common Stock
 
2011
 
2010
Weighted-average grant date fair value of options granted
 
$
—

 
$
3.05

Total fair value of options that vested (in thousands)
 
$
1,189

 
$
1,027

Total intrinsic value of options exercised (in thousands)
 
$
1,077

 
$
474



Restricted Stock and Performance Shares

The following table summarizes nonvested restricted stock activity for the nine months ended September 30, 2011:

Nonvested Restricted Stock
 
Shares
 
Weighted-
Average
Grant-Date
Fair Value
Nonvested at beginning of period
 
237,021

 
$
9.24

Granted
 
308,985

 
$
13.10

Vested
 
(113,576
)
 
$
9.54

Forfeited
 
(1,000
)
 
$
13.67

Nonvested at end of period
 
431,430

 
$
11.92



Compensation expense for restricted stock and performance stock awards was determined based on the market price of PNMR stock on the date of grant reduced by the present value of future dividends, which will not be received during the vesting period, applied to the total number of shares that were anticipated to fully vest.

The following table provides additional information concerning restricted stock:
 
 
Nine Months Ended
 
 
September 30,
Nonvested Restricted Stock
 
2011
 
2010
Weighted-average grant date fair value of shares granted
 
$
13.10

 
$
9.37

Total fair value of shares that vested (in thousands)
 
$
1,084

 
$
1,365

Expected quarterly dividends per share
 
$
0.125

 
$
0.125

Risk-free interest rate
 
1.20
%
 
1.36
%


Beginning in 2009, the Company issued performance share agreements to certain executives that are based upon the Company achieving specified performance targets over periods of one to three years. The determination of the number of shares ultimately issued depends on the levels at which the performance criteria are achieved and cannot be determined until after the performance periods end. For the targets based only on 2010 performance, near optimal level was attained resulting in 88,913 shares being awarded in 2011, which will vest evenly from 2012 through 2014 and are included in the number of shares granted in the above table. Excluded from the above table is a maximum of 560,461 shares based on performance targets through 2013 that would be issued and vest upon issuance if all performance criteria are achieved and all executives remain eligible.