Exhibit 10.2
 
EXECUTIVE TRANSITION AGREEMENT
 
This Executive Transition Agreement (the “Agreement”) is entered into on this
28th day of July, 2009, by and between PNMR Services Company (the “Company”),
PNM Resources, Inc. (“PNM Resources”) and Patrick T. Ortiz (the “Executive”).
 
R E C I T A L S:
 
A.           Executive currently is employed by Company and serves as the Senior
Vice President, General Counsel and Secretary of PNM Resources, Company’s parent
organization, and its wholly owned affiliates.
 
B.           Executive has announced his intention to retire and to resign from
his active employment with Company and his position as an officer of PNM
Resources, effective as of the close of business on December 31, 2009 (the
“Resignation Date”), or other such date as may be agreed to by the parties.
 
C.           In order to provide for the smooth transition of Executive’s duties
and responsibilities to a successor, and to secure Executive’s future services
in the capacity described below, Company, PNM Resources and Executive are
entering into this Executive Transition Agreement as of the date first set forth
above.
 
NOW, THEREFORE, Company, PNM Resources and Executive agree as follows:
 
1.        Continued Employment.  Executive shall continue to serve Company and
PNM Resources as the Senior Vice President, General Counsel and Secretary of PNM
Resources until the earlier of (a) the close of business on December 31, 2009 or
(b) the employment effective date of Executive’s successor.  If Executive’s
successor commences employment prior to December 31, 2009, it is anticipated
that Executive’s title will become Senior Vice President and Chief Legal
Officer; provided, however, that upon request of the Company if necessary to
facilitate the hiring of a suitable successor, Executive shall become the Senior
Vice President, Chief Regulatory Counsel of PNM Resources, and suitable office
arrangements shall be made.  Executive’s total compensation shall not be reduced
as a result of a change in title or job responsibilities.  If Executive’s
successor is appointed prior to December 31, 2009, Executive, in his new role,
will work with his successor in order to accomplish a smooth transition of his
duties and responsibilities.
 
2.        Resignation.  Effective as of the close of business on December 31,
2009, Executive hereby resigns as an officer of PNM Resources and from his
employment with Company.  Executive’s resignation applies and extends to any and
all positions he may hold with any subsidiary or division of Company or PNM
Resources and any related boards as well as from any other positions Executive
may hold by virtue of Executive’s employment with Company or his position as an
officer of PNM Resources.  Company and PNM Resources accept Executive’s
resignation.
 

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3.        Retainer Agreement.  Effective as of January 1, 2010, Executive and
Company will enter into a “Retainer Agreement” pursuant to which Executive will
agree to provide legal services to Company during calendar year 2010.  The
Retainer Agreement may be extended from year to year upon the mutual agreement
of Company and Executive.  As provided in Section 6, the Retainer Agreement will
become void if Executive fails to sign the Release Agreement attached hereto as
Exhibit A within the time periods described in Exhibit A.
 
4.        SERP.  Executive and Company have entered into a Supplemental Employee
Retirement Agreement (the “SERP”), which was amended and restated effective as
of January 1, 2009 by a document executed on October 20, 2008.  As provided in
Section 9, the SERP shall continue in full force and effect following the
execution of this Agreement.  Executive does acknowledge, however, that since he
is voluntarily resigning from his employment in connection with his retirement,
and since the new role described in Section 1, above, is solely for the purpose
of his transition into retirement and the Company’s transition to his successor
(and therefore not a Constructive Termination), he is not entitled to receive
any payments pursuant to Sections 6 or 7 of the SERP.  Executive also
acknowledges that since he will continue to provide services to Company as an
independent attorney pursuant to the Retainer Agreement, he will not be
considered to have incurred a “Separation from Service” within the meaning of
Section 9(g)(2) of the SERP.  Since Executive will not be deemed to have
incurred a Separation from Service, he will not be entitled to begin receiving a
supplemental retirement benefit pursuant to Section 9 of the SERP until he is
considered to have incurred a Separation from Service.  Executive also
acknowledges that his payments may be further delayed in accordance with
Section 9 of the SERP if Executive is a “Specified Employee” (as defined in the
SERP) at the time of his Separation from Service.
 
5.        Notice of Executive’s Rights.  Various state and federal laws prohibit
employment discrimination based on age, sex, race, color, national origin,
religion, ancestry, sexual orientation, gender identification, physical or
mental handicap and disability, mental condition or veteran status.  These laws
are enforced through state, federal and local agencies, including the Equal
Employment Opportunity Commission (EEOC) and the Department of Labor.  Pursuant
to Section 6, Executive will be required to release any claims Executive may
have under these laws as well as any other claims Executive may have by
executing the Release Agreement attached hereto as Exhibit A.  Executive should
carefully consider the Release Agreement and thoroughly understand its effect
before signing this Agreement or the Release Agreement.  Executive is strongly
encouraged to consult with his attorney before signing this Agreement or the
Release Agreement.  Executive understands that the decision to consult with an
attorney is solely the decision of Executive.
 
6.        Release.  In consideration of the Retainer Agreement referred to in
Section 3, Executive agrees to execute the Release Agreement attached hereto as
Exhibit A.  The Release Agreement shall be executed by Executive between
January 1 and February 15, 2010.  Executive will have the opportunity to
continue to review and consider the execution of the Release Agreement between
the date of this Agreement and February 15, 2010.  Executive may not sign the
Release Agreement prior to January 1, 2010.  Executive will be allowed to revoke
the Release Agreement within seven (7) days after signing it.  Revocation may be
made by returning a copy of the Release Agreement along with the Employee
Revocation Form attached to the Release Agreement as Exhibit 1.  For any
revocation to be effective, the Release Agreement and
 
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the Employee Revocation Form must be received no later than the close of
business on the seventh (7th) day after Executive signs the Release
Agreement.  If Executive fails to sign the Release Agreement by February 15,
2010, or if Executive revokes the Release Agreement after signing it, the
Retainer Agreement referred to in Section 3 shall be void.
 
7.        Non-Disclosure, Confidentiality And Non-Compete.
 
(a)     Confidential Information and Company Materials.
 
                                          (1)     As an officer of PNM Resources
and an executive level employee of Company, Executive has had access to certain
“Confidential and Proprietary Information” regarding products, services,
marketing, customers, business ideas and strategies and research.  Executive
understands and expressly acknowledges that Company possesses and will continue
to possess Confidential and Proprietary Information which is important to its
business.  For purposes of this Agreement, “Confidential and Proprietary
Information” is information that was or will be developed, created, or
discovered by or on behalf of Company, or which became or will become known by,
or was, is or will be conveyed to Company, which has commercial value in
Company’s business.  The term “Confidential and Proprietary Information”
includes, but is not limited to, any information or materials that Executive is
required to keep confidential pursuant to the  New Mexico Rules of Professional
Conduct applicable to Executive as General Counsel of PNM Resources as well as
any other information about trade secrets, products, services, computer
programs, designs, customers, technology, ideas, marketing and marketing
efforts, know how, processes, compositions, data, techniques, improvements,
inventions (whether patentable or not), works of authorship, business and
product development plans, administration of programs and products, the salaries
and terms of compensation of other employees, customers and other information
concerning Company’s actual or anticipated business, pricing, studies,
information and analyses, Company contracts and fee arrangements, research or
development, and/or any information which is generated or received in confidence
by or for Company from any other person.
 
                                          (2)     Executive acknowledges that
the Confidential and Proprietary Information belongs solely to Company, and that
use of the Confidential and Proprietary Information by any person or entity
other than Company would be damaging to Company.
 
                                          (3)      Executive understands and
expressly acknowledges that Company possesses and will continue to possess
“Company Materials” which are important to its business. For purposes of this
Agreement, “Company Materials” include documents or other media or tangible
items that contain or embody Confidential and Proprietary Information or any
other information concerning the business, operations or future/strategic plans
of Company, whether such documents have been prepared by Executive or by others,
including but not limited to portions of Company’s customer and client lists
which have been specially compiled by Company and includes information not
generally available to the public, such as customer preferences, customer
contacts, prices and the way and means in which Company conducts its business,
sells its products, and administers its programs and business.  “Company
Materials” also include, but are not limited to, blueprints, drawings,
photographs, emails, charts, graphs, notebooks, marketing and program materials,
customer lists, computer disks, tapes or printouts,
 
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sound recordings and other printed, typewritten or handwritten documents or
documents on any medium.
 
 (b)     Non-Disclosure Of Confidential And Proprietary Information.  Executive
hereby agrees as follows:
 
                                           (1)     Assignment of Rights in
Confidential and Proprietary Information and Non-Disclosure Agreement.  All
Confidential and Proprietary Information and all title, patents, patent rights,
copyrights, customer lists, maskwork rights and trade secret rights, and other
intellectual property and rights (collectively “Rights”) in connection therewith
will be and remain the sole property of Company.  Executive hereby assigns to
Company any Rights Executive may have in such Confidential and Proprietary
Information.  After Executive’s Resignation Date, Executive will keep in
confidence and trust and will not use or disclose any Confidential and
Proprietary Information or anything relating to it without the prior written
consent of an officer of Company.
 
                                           (2)     Non-Disclosure of Company
Materials and Return of Company Property.  All Company Materials are the sole
property of Company.  Executive agrees that Executive will return all Company
Materials, apparatus, equipment, materials, writings, data (on any medium) and
other physical property, or any reproduction of such property, excepting only
(i) Executive’s personal copies of records relating to Executive’s compensation;
(ii) Executive’s copy of this Agreement; and (iii) legal, regulatory and other
Company Materials that may be required by or helpful to Executive in providing
services under the Retainer Agreement.
 
                                           (3)     Copies.  Executive will not
copy any Confidential and Proprietary Information or Company Materials onto
diskettes or other electronic media, nor create documents or files containing
Confidential and Proprietary Information or Company Materials except as provided
in Section 7(b)(2)(iii), above.
 
                                 (c)     Non-Solicitation of Company
Employees.  For two years following the Resignation Date, Executive also agrees
that he will not encourage or solicit any employee or consultant of Company to
leave Company for any reason; provided, however, that this provision does not
apply to prevent Executive from hiring an employee or consultant of Company if
the employee or consultant of Company responds to a general solicitation for
applications.
 
                                (d)     Enforcement.  Executive acknowledges
that the obligations imposed on Executive are legally binding and enforceable,
and that Executive’s violation of those obligations will result in irreparable
harm and damage to Company.  In the event that Company brings any action or
proceeding to enforce the provisions of Section 7(b) or Section 7(c), Executive
waives, and agrees that Executive will not assert in such action, the claim or
defense that an adequate remedy at law is available to Company.  The remedies
available to Company for any breach of this Section by Executive shall be
cumulative, and an award of injunctive relief shall not preclude an award to
Company of monetary damages or other relief.
 
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(e)     Disclosure to Other Parties.  Executive agrees that Company has the
right to disclose the obligations imposed upon Executive by this Agreement to
Executive’s future or prospective employers and/or business associates.
 
(f)     Special Definition of “Company.”  For purposes of this Section, the term
“Company” includes PNMR Services Company, PNM Resources, Inc. and each and every
one of their Affiliates (as the term “Affiliates” is defined in the Release
Agreement).
 
8.        Non-Disparagement.  Executive agrees not to disparage or speak ill of
Company, PNM Resources, or any Affiliate of either or of any past or present
employee, officer or director of Company, PNM Resources or any Affiliate of
either.  Similarly, Company agrees that no officer or director of Company, PNM
Resources or any Affiliate of either shall, while employed by or while serving
on the Board of Directors of Company, PNM Resources or any Affiliate of either,
disparage or speak ill of Executive to any third person.
 
9.        Other Documents.  This Agreement shall not have any impact on any
other agreement entered into between Company, PNM Resources or any Affiliate of
either, on the one hand, and Executive, on the other, all of which shall
continue in full force and effect in accordance with their terms.
 
10.      Enforcement Expenses.  If Executive breaches any provision of this
Agreement, Company will be entitled to recover from Executive all reasonable
expenses, including attorneys’ fees, incurred by Company in seeking to enforce
this Agreement or in seeking damages for breach of this Agreement, regardless of
whether a lawsuit is actually filed.  If Company claims a breach of any
provision of this Agreement and it is determined that no such breach occurred,
Executive will be entitled to recover from Company all reasonable expenses,
including attorneys’ fees, incurred by Executive in defending against the claim
that a breach has occurred.
 
11.       Controlling Laws.  This Agreement shall be interpreted under the laws
of the State of New Mexico without reference to principles of conflict of laws.
 
12.       Arbitration.  All disputes, controversies, or claims arising from or
relating to this Agreement which are not resolved by good faith negotiation
within twenty (20) days after notice to the other party shall be determined by
final binding arbitration without appeal with a single arbitrator administered
by the American Arbitration Association under its Commercial Arbitration
Rules.  The arbitration shall be governed by the Federal Arbitration Act,
9 U.S.C. § 1-16, and judgment on the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof.  The place of arbitration
shall be Albuquerque, New Mexico.  The parties shall bear their own costs and
attorneys’ fees for the arbitration, and share equally the cost of the
arbitrator.
 
13.       Severability.  If any part or parts of this Agreement are found to be
unenforceable, the remaining portions of this Agreement shall remain in effect.
 
14.       Entire Agreement.  EXECUTIVE HAS CAREFULLY READ AND FULLY UNDERSTANDS
ALL OF THE PROVISIONS OF THIS AGREEMENT, WHICH ALONG WITH THE RELEASE AGREEMENT
ATTACHED HERETO AS EXHIBIT A SETS FORTH
 
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THE ENTIRE AGREEMENT BETWEEN THE PARTIES WITH REGARD TO EXECUTIVE’S RESIGNATION,
AND ACKNOWLEDGES THAT EXECUTIVE HAS NOT RELIED UPON ANY REPRESENTATION OR
STATEMENTS, WRITTEN OR ORAL, NOT SET FORTH IN THIS DOCUMENT.
 
15.       Other Representations of Executive.  Executive hereby represents that
Executive (a) has carefully read all of this Agreement; (b) understands the
provisions of this Agreement; (c) had decided whether to consult with his
attorney regarding this Agreement; (d) has determined that it is in his best
interest to enter into this Agreement; (e) has not been influenced to enter into
this Agreement by any statement, representation or coercive act of Company or
its counsel not contained in this Agreement; and (f) is entering into this
Agreement knowingly, willingly and voluntarily.
 
16.       Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.  This Agreement also may be executed by facsimile
signature or by a signature sent from one party to the other on a scanned
document.
 
IN WITNESS WHEREOF, the parties hereto, personally or by their authorized
representatives, have signed this Agreement as of the day and year first above
written.
 
PNM RESOURCES,
INC.                                                                                                PNMR
SERVICES COMPANY

By    /s/  Jeffry E.
Sterba                                                                                          
By       /s/  Jeffry E. Sterba                                         

Title     Chairman and Chief Executive
Officer                                                       Title     
Chairman and Chief Executive Officer      

 
     /s/ Patrick T. Ortiz         
                                                                
Patrick T. Ortiz

 
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EXHIBIT A
 
RELEASE AGREEMENT
 
This Release Agreement is executed pursuant to the Executive Transition
Agreement entered into between the undersigned, Patrick T. Ortiz, and PNMR
Services Company (the “Company”) and PNM Resources, Inc. (“PNM Resources”).
 
By signing this Release Agreement, I, Patrick T. Ortiz, hereby release and
discharge Company, PNM Resources and the other “Released Parties” noted below
from any and all claims which I have or may have arising out of or related to my
employment or termination of employment (the “Claims”).
 
For this purpose, the “Released Parties” include Company; PNM Resources; the
“Affiliates” (as that term is defined below) of either; and the current and
former directors, officers, agents, supervisors, employees and successors of
Company and any other Released Party, in their corporate and individual
capacities.
 
For purposes of this Release Agreement, the term “Affiliate” means (i) any
member of a “controlled group of corporations” (within the meaning of
Section 414(b) of the Code as modified by Section 415(h) of the Code) that
includes Company and/or PNM Resources as a member of the group, and (ii) any
member of a group of trades or businesses under common control (within the
meaning of Section 414(c) of the Code as modified by Section 415(h) of the Code)
that includes Company and/or PNM Resources as a member of the group.  A complete
list of Affiliates is available on request.
 
The release provided by this Release Agreement includes, but is not limited to,
any Claims arising under Title VII of the Civil Rights Act, as amended, which
prohibits discrimination based on race, color, national origin, or sex; the Age
Discrimination in Employment Act, which prohibits discrimination based on age;
the Equal Pay Act, which prohibits paying men and women unequal pay for equal
work; the Rehabilitation Act of 1973, which prohibits discrimination based on
handicap; the Americans with Disabilities Act, which prohibits discrimination
based on disability; the Vietnam Era Veterans Readjustment Act of 1974, which
prohibits discrimination against veterans; the Workers’ Adjustment Retraining
Notification Act, which provides for notice of mass layoffs and plant closings;
the Employee Retirement Income Security Act of 1974 (ERISA), which governs
rights in employee benefit plans; the New Mexico Human Rights Act and the Texas
Commission on Human Rights Act, which prohibit discrimination based on race,
color, national origin, religion, ancestry, sex, sexual orientation, gender
identity, disability or mental or physical handicap; the Family and Medical
Leave Act of 1993, which provides certain reinstatement rights for employees
taking medical leave; or any other federal, state or local laws or regulations
prohibiting discrimination.  This Release also includes a release of any Claims
arising from state or federal common law or statute, including any Claims
relating to Company’s or any other Released Party’s right to terminate me,
including, but not limited to, any Claims for wrongful discharge, retaliatory
discharge, breach of a covenant of good faith and fair dealing, or breach of
employment contract.  
 

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I agree not to file any lawsuit or assert any claim, without limitation, based
upon the foregoing state or federal common law or statutes.
 
This Release does not release Company for any amounts or benefits due pursuant
to the Supplemental Employee Retirement Agreement entered into between me and
Company, PNM Resources and the Public Service Company of New Mexico, which was
amended and restated effective as of January 1, 2009 by a document executed on
October 20, 2008 (the “SERP”).  This Release also does not apply to any amounts
to which I may be entitled under the PNM Resources, Inc. Employees’ Retirement
Plan, Retirement Savings Plan, Executive Savings Plan II, Officer Incentive
Plan, Performance Equity Plan, nor to any benefits to which I might otherwise be
entitled pursuant to any other Company sponsored pension or welfare benefit plan
(as that term is defined in Section 3(2)(A) or Section (3)(1) of ERISA) other
than the PNM Resources, Inc. Non-Union Severance Pay Plan or the PNM Resources,
Inc. Officer Retention Plan.  Pursuant to 29 U.S.C. § 626, this Release does not
extend to any Claims or rights that may arise out of the actions of Company or
any other Released Party after the date of this Release.
 
As provided in the Executive Transition Agreement, I understand that I may sign
and return this Release Agreement at any time on or after January 1, 2010 and on
or before February 15, 2010 and that I may use the entire period of time between
the date of execution of the Executive Transition Agreement and February 15,
2010 to review and consider this Release Agreement before signing it.  I also
acknowledge that I may revoke this Release Agreement within seven (7) days after
signing it.  As a result, this Release Agreement shall become effective and
enforceable only if this Release Agreement is not revoked during this revocation
period.  I acknowledge that revocation may be made by returning a copy of this
Release Agreement along with the Employee Revocation Form attached as
Exhibit 1.  Further, I acknowledge that for any revocation to be effective this
Release Agreement and the Employee Revocation Form must be received no later
than the close of business on the seventh (7th) day after I sign this
Agreement.  If I revoke this Agreement, I acknowledge that the Retainer
Agreement entered into between Company and me pursuant to the Executive
Transition Agreement shall be void.
 
I hereby represent that I (a) have carefully read all of the provisions of this
Release Agreement; (b) understand the provisions of this Release Agreement;
(c) have decided whether to consult with an attorney regarding this Release
Agreement; (d) have determined that it is in my best interest to enter into this
Release Agreement; (e) have not been influenced to enter into this Release
Agreement by any statement, representation or coercive act of Company, PNM
Resources, any Affiliate or representative of Company or PNM Resources, or its
counsel not contained in this Release Agreement; and (f) am entering into this
Release Agreement knowingly, willingly and voluntarily.
 
IN WITNESS WHEREOF, I, Patrick T. Ortiz, have signed this Release Agreement as
of this ____ day of __________, 2010.
 
 
                                                                                        ______________________________________
                                                                                               Patrick
T. Ortiz

 
 
 
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EXHIBIT 1
 
EMPLOYEE REVOCATION FORM
 
 
To:           Alice A. Cobb, Senior Vice President and Chief Administrative
Officer
 
 

 
I hereby revoke my acceptance of the foregoing Release Agreement.  I acknowledge
that by revoking this Release Agreement the related Retainer Agreement is void
 

____________________________                  _____________________________________
Date                                                                           Executive
 

FOR OFFICE USE ONLY

Received by the Designated Representative on _________________, ________, by
_______________________________________.
 

                                                                  
 
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