Exhibit 10.3
FIRST AMENDMENT
TO THE
PNM RESOURCES, INC.
NON-UNION SEVERANCE PAY PLAN
 
Effective January 1, 2002, Public Service Company of New Mexico (“PNM”) adopted
the Public Service Company of New Mexico Benefits My Way Plan (the “BMW
Plan”).  Effective November 27, 2002, sponsorship of the BMW Plan was
transferred from PNM to PNM Resources, Inc. (the “Company”) and the Plan was
renamed the “PNM Resources, Inc. Benefits My Way Plan.”  The BMW Plan consisted
of a number of component programs including Program 12, Non-Union Severance Pay
Program (the “Non-Union Severance Program”).  Effective as of January 1, 2004,
PNM Resources amended and restated the BMW Plan to divide it into a number of
separate plans that replaced several of the component programs in effect on
December 31, 2003.  As part of the amendment and restatement, the PNM Resources,
Inc. Non-Union Severance Pay Plan (the “Plan”) was created as a successor plan
to the Non-Union Severance Program, effective as of January 1, 2004.  The Plan
was most recently amended and restated effective August 1, 2007.  Section 409A
of the Code became applicable to the Plan as of January 1, 2005.  The Plan has
been and shall continue to be administered in good faith compliance with the
requirements of Section 409A from January 1, 2005 through December 31, 2008.  By
this instrument, PNM Resources now desires to amend the Plan as set forth below.
 
1.        Except as otherwise provided, this First Amendment shall be effective
as of January 1, 2009.
 
2.        Section 2.1(z) (Separation from Service) of the Plan is hereby amended
and restated in its entirety to read as follows:
 
(z)           “Separation from Service” means either (1) the termination of a
Participant’s employment with the Company and
 

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all Affiliates and 50% Affiliates due to death, retirement, or other reasons, or
(2) a permanent reduction in the level of bona fide services the Participant
provides to the Company and all Affiliates and 50% Affiliates to an amount that
is 20% or less of the average level of bona fide services the Participant
provided to the Company and all Affiliates and 50% Affiliates in the immediately
preceding 36 months, with the level of bona fide service calculated in
accordance with Treas. Reg. § 1.409A-1(h)(1)(ii).
 
A Participant’s employment relationship is treated as continuing while a
Participant is on military leave, sick leave, or other bona fide leave of
absence (if the period of such leave does not exceed six months, or if longer,
so long as a Participant’s right to reemployment with the Company or an
Affiliate or 50% Affiliate is provided either by statute or contract).  If a
Participant’s period of leave exceeds six months and a Participant’s right to
reemployment is not provided either by statute or by contract, the employment
relationship is deemed to terminate on the first day immediately following the
expiration of such six-month period.  Whether a termination of employment has
occurred will be determined based on all of the facts and circumstances and in
accordance with regulations issued by the United States Treasury Department
pursuant to Section 409A of the Code.
 
3.        Section 3.6(a) (Release Agreement – General) of the Plan is hereby
amended and restated in its entirety to read as follows:
 
(a)           General.  The Release Agreement shall contain such terms and
conditions as are satisfactory to the Company, including, but not limited to,
the release of any and all claims that the Participant may then have, as of the
signing of such release, against the Company, its employees, officers and
directors.  The Participant shall generally receive the Release Agreement on the
date of the Participant’s Separation from Service and in no event more than five
(5) days following the Participant’s Separation from Service and shall have up
to forty-five (45) unpaid days following the date the Release Agreement is given
to the Participant to sign and return the Release Agreement to the Company.
 
4.        Section 4.6 (No Duplication of Benefits) of the Plan is hereby amended
and restated in its entirety to read as follows:
 
4.6           No Duplication of Benefits.  Notwithstanding anything herein to
the contrary, the right to receive any benefits under the
 
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                                  Plan by any Participant is specifically
conditioned upon the Participant either waiving or being ineligible for any and
all benefits under:
 
(a)           the PNM Resources, Inc. Employee Retention Plan, as it may be
amended or restated from time to time;
 
(b)           the PNM Resources, Inc. Union Severance Pay Plan, as it may be
amended or restated from time to time;
 
(c)           the PNM Resources, Inc. Officer Retention Plan, as it may be
amended or restated from time to time; or
 
(d)           any successor or other severance, retention or change in control
plan, program or agreement sponsored by the Company.
 
Section 4.6(d) shall not apply to any individual agreement that provides a
Participant with a special payment in order to induce the Participant to remain
employed by the Company unless the agreement specifically states otherwise.  The
Company also may override the provisions of this Section 4.6 by expressly
stating in the other change in control, severance, retention or other plan or
agreement that some or all of the benefits provided by the other change in
control, severance, retention or other plan or agreement are intended to
supplement the benefits provided by this Plan.
 
5.        This First Amendment amends only the provisions of the Plan as noted
above, and those provisions not expressly amended shall be considered in full
force and effect.  Notwithstanding the foregoing, this First Amendment shall
supersede the provisions of the Plan to the extent those provisions are
inconsistent with the provisions and intent of this First Amendment.
 
IN WITNESS WHEREOF, PNM Resources has caused this First Amendment to be executed
as of this 20th day of November, 2008.
 
PNM RESOURCES, INC.
 
 
By:  /s/ Alice A.
Cobb                                                                       
                                                                                                           
Its: SVP, Chief Administrative Officer

 
 
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