Exhibit 10.4
 
SEVENTH AMENDMENT
 
TO THE
 
PNM RESOURCES, INC.
 
ACCELERATED MANAGEMENT PERFORMANCE PLAN
 
Effective as of January 14, 1981, Public Service Company of New Mexico (“PNM”)
established the Public Service Company of New Mexico Accelerated Management
Performance Plan (the “Plan”).  The Plan was subsequently restated, with the
restatement being effective, generally, as of August 1, 1988.  The restated Plan
has been amended on six previous occasions.  The Fifth Amendment to the restated
Plan transferred sponsorship of the Plan from PNM to PNM Resources, Inc. (the
“Company”) and changed the name of the Plan to the “PNM Resources, Inc.
Accelerated Management Performance Plan.”
 
1.           This Amendment amends only the provisions of the Plan as set forth
herein.  Those provisions not expressly amended by this Amendment shall continue
in full force and effect.
 
2.           Article 1 (Title and Purpose) of the Plan is hereby amended by
adding the following new section to the end thereof:
 
1.05           Effective as of January 1, 2005, Section 409A of the Internal
Revenue Code of 1986 (the “Code”) imposed a series of new requirements on
deferred compensation plans such as the Plan.  The requirements of Section 409A,
however, do not apply to “Grandfathered Benefits,” which are benefits that were
accrued and vested as of December 31, 2004.  Most benefits payable pursuant to
this Plan are Grandfathered Benefits.
 
If a Participant accrued benefits under the Plan on or after January 1, 2005,
the portion of the benefit accrued on or after January 1, 2005 is subject to the
requirements of Section 409A.  For administrative ease, in this situation, the
Participant’s entire benefit will be treated as “Non-Grandfathered Benefits” and
will be subjected to the special rules set forth in the Addendum to the
 

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Plan.  The Addendum is intended to comply with the requirements of Section 409A
with respect to the Non-Grandfathered Benefits.  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 with respect to the
Non-Grandfathered Benefits.
 
3.           The Plan is hereby amended by the addition of the Addendum which is
attached to the end of this Seventh Amendment.
 
IN WITNESS WHEREOF, the Company has caused this Seventh Amendment to be executed
as of this 21st day of November, 2008.
PNM RESOURCES, INC.
 
By: /s/ Alice A. Cobb
      Its: SVP, Chief Administrative Officer
 

 
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ADDENDUM
 
This Addendum applies only to a Participant who accrued a benefit under the Plan
on or after January 1, 2005 (a “Non-Grandfathered Participant”).  If a
Non-Grandfathered Participant accrued any benefit under the Plan on or after
January 1, 2005, his entire benefit shall be subject to both the terms of the
Plan and the terms of this Addendum.  In the case of a conflict, the provisions
of this Addendum shall control.
1.           Payment of the benefits hereunder shall commence within ninety (90)
days following the date on which the Non-Grandfathered Participant incurs a
Separation from Service as defined in Treasury Regulation Section
1.409A-1(h)(1).  Notwithstanding the foregoing, if a Non-Grandfathered
Participant is a “Specified Employee,” as defined in the PNM Resources, Inc.
Executive Savings Plan II, at the time of his Separation from Service, such
payment shall be delayed for six months in accordance with Treasury Regulation
Section 1.409A-1(c)(3)(v).  As of January 1, 2009, all Participants have
Separated from Service and commenced benefits under the Plan.
2.           A Non-Grandfathered Participant may receive his benefit in the form
of any annuity available under the Employees’ Retirement Plan at the time
payments are to begin.  All annuity forms shall be actuarially equivalent to a
single life annuity.  The Non-Grandfathered Participant shall be permitted to
select among the available annuities at any time before the first payment is
due.  If no election is made, the payment will be in the form of a single life
annuity if the Non-Grandfathered Participant is not married at the time benefits
commence and in the form of a joint and survivor annuity if the
Non-Grandfathered Participant is married at the time benefits commence.
 
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3.           Section 6.03 of the Plan shall not apply to a Non-Grandfathered
Participant.  If a Change in Control (as defined in the PNM Resources, Inc.
Officer Retention Plan, as it may be amended from time to time) occurs, a
Non-Grandfathered Participant may request that the Company sufficiently fund the
Public Service Company of New Mexico and Paragon Resources, Inc., Deferred
Compensation Trust Agreement and/or the Trust Agreement between PNM Resources,
Inc. and Fiduciary Trust International of Delaware (collectively, the “Rabbi
Trust”) to provide in full for any benefits accrued under this Plan as of the
date of the occurrence of the Change in Control.  If the Non-Grandfathered
Participant’s request is accompanied by an opinion of counsel acceptable to
Company that the funding of the Rabbi Trust will not result in violation of, or
the immediate taxation of the Non-Grandfathered Participant pursuant to
Section 409A of the Code, the Company shall fund the Rabbi Trust as requested.
4.           Notwithstanding any provision of this Plan to the contrary, the
Plan may not be amended or terminated if it will result in a violation of
Section 409A of the Code and any such amendment or termination shall at no time
have any legal validity.
5.           Pursuant to Treasury Regulation Section 1.409A-3(d), if the Company
fails to make a payment due under the Plan, either intentionally or
unintentionally, within the time period specified in the Plan, but the payment
is made within the same calendar year, such payment will be treated as made
within the time period specified in the Plan.  In addition, if a payment is not
made due to a dispute with respect to such payment, the payment may be delayed
in accordance with Treasury Regulation Section 1.409A-3(g).
6.           Under no circumstances may the time or schedule of any payment made
or benefit provided pursuant to this Plan be accelerated or subject to a further
deferral except as otherwise
 
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 permitted or required pursuant to regulations and other guidance issued
pursuant to Section 409A of the Code.
7.           Other than the selection of the form of annuity payment under the
Plan, a Non-Grandfathered Participant does not have any right to make any
election regarding the time or form of any payment due under this Plan.
8.           This Plan shall be operated in compliance with Section 409A and
each provision of this Plan shall be interpreted, to the extent possible, to
comply with Section 409A.

 

                                                          
 
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