TEXAS-NEW MEXICO POWER COMPANY EXECUTIVE AGREEMENT FOR
                  SEVERANCE COMPENSATION UPON CHANGE IN CONTROL

       This  Texas-New  Mexico Power Company  Executive  Agreement for Severance
Compensation Upon Change in Control ("Agreement") dated ___________________,  is
by and between  Texas-New Mexico Power Company  ("Company") and  _______________
("Executive").
                                Witnesseth That:
         WHEREAS,  the Company  considers the establishment and maintenance of a
sound and vital  management to be essential to protecting and enhancing the best
interests of the Company and its shareholders; and
         WHEREAS, the Company has determined that in order to best establish and
maintain such sound and vital management it is appropriate to establish  certain
means for reinforcing and encouraging the continued  attention and dedication of
the  Executive  as a part of the  management  of the Company  such that they may
continue  their  assigned  duties  in a  proper  and  efficient  manner  without
distraction  because of the  possibility  of a Change in Control of the Company;
and
         WHEREAS,  the Executive is willing to continue to serve the Company but
is concerned about the possible  effects any Change in Control might have on his
duties and responsibility and status as an Executive:
         NOW,  THEREFORE,  in  consideration  of the  promises  and  the  mutual
agreements  herein  contained,  the Company and Executive hereby enter into this
Agreement  setting forth the severance  compensation and extended benefits which
the Company  agrees it will pay to the Executive if the  Executive's  employment
with the Company terminates under the circumstances described herein:
  1)     Company's Right to Terminate
         Prior to a Change in Control of the  Company  as herein  defined,  this
         Agreement   shall   terminate  if  Executive  shall  resign  or  retire
         voluntarily,  become disabled,  or die. Except as provided in paragraph
         3)a)(vi)  hereof,  this  Agreement  shall also terminate if Executive's
         employment by the Company shall be  terminated,  with or without Cause,
         as herein  defined,  prior to any Change in  Control of the  Company by
         action of either the Board of Directors or Chief  Executive  Officer of
         the Company, as applicable.

  2)     Term
         (a)      The term of this  Agreement  (the "Term") shall commence as of
                  the date of this Agreement and shall expire as of the earliest
                  of (i)  the  third  annual  anniversary  of the  date  hereof;
                  provided  that the  Board of  Directors,  by  resolution  duly
                  adopted,  may extend the Term of this  Agreement  from time to
                  time,  or  (ii)  termination  of  the  Executive's  employment
                  because  of  death,   Disability,   voluntary  termination  or
                  retirement  by the  Executive  for other than Good Reason,  or
                  Cause (as those terms may be herein defined);
         (b)      Any  obligation  which  has  vested  under  the  terms  of the
                  Agreement  and  remains  unpaid  as of the date the  Agreement
                  expires or is  terminated  shall  survive such  expiration  or
                  termination  and  be  enforceable   under  the  terms  of  the
                  Agreement.

  3)              Change in Control of the Company

          (a)  For the  purposes of this  Agreement,  a Change in Control of the
               Company is defined as the  occurrence of any one of the following
               events:  (i) there  shall be  consummated  any  consolidation  or
               merger of the Company into or with another  corporation  or other
               legal  person,  and as a result of such  consolidation  or merger
               less  than  a  majority  of  the  combined  voting  power  of the
               then-outstanding   securities  of  such   corporation  or  person
               immediately  after such transactions are held in the aggregate by
               holders  of Voting  Stock,  as  herein  defined,  of the  Company
               immediately prior to such transactions;  or (ii) any sale, lease,
               exchange or other  transfer,  whether in one  transaction  or any
               series of related transactions, of all or significant portions of
               the assets of the Company to any other corporation or other legal
               person,  less than a majority of the combined voting power of the
               then-outstanding   securities  of  such   corporation  or  person
               immediately after such sale, lease, exchange, or transfer is held
               in the  aggregate  by the holders of Voting  Stock of the Company
               immediately prior to such sale, lease,  exchange, or transfer; or
               (iii) the  shareholders  of the Company  approve any plan for the
               liquidation or dissolution of the Company; or (iv) any person (as
               such  term  is  used  in  Sections  13(d)  and  14(d)(2)  of  the
               Securities  Exchange  Act of  1934,  as  amended  (the  "Exchange
               Act")),  becomes,  either directly or indirectly,  the beneficial
               owner  (within the meaning of Rule 13d-3 under the Exchange  Act)
               of  securities  representing  15% or more of the combined  voting
               power  of  the  then-outstanding   securities  entitled  to  vote
               generally in the  election of  directors of the Company  ("Voting
               Stock");  provided  that the Trustee of the Thrift Plan shall not
               be deemed such a person for the purposes of this  Section  3(iv);
               or (v) if at any  time  during a fiscal  year a  majority  of the
               Board of  Directors  of the Company  shall be replaced by persons
               who  were  not  recommended  for  those  positions  by  at  least
               two-thirds of the directors of the Company who were  directors of
               the  Company at the  beginning  of the fiscal  year;  or (vi) the
               Executive's  employment is terminated for other than Cause or the
               Executive is removed from office or position  with the Company in
               either case following commencement by one or more representatives
               of  the  Company  of  discussions  (authorized  by the  Board  of
               Directors or Chief Executive Officer of the Company) with a third
               party  that  ultimately  results  in the  occurrence  of an event
               described  in clauses  (i),  (ii),  (iii),  (iv),  or (v) herein,
               regardless  of  whether  such  third  party  is a  party  to such
               occurrence,  in which event,  for the purposes of this Agreement,
               the date of the authorization of such discussions is deemed to be
               the date of the  Change in Control  of the  Company;  (b) For all
               purposes of this  paragraph 3), the term  Company,  as previously
               defined herein,  shall include TNP Enterprises,  Inc., the parent
               of  Texas-New  Mexico Power  Company.  4)  Termination  Following
               Change in Control of the Company (a)  Termination  If a Change in
               Control of the Company shall have occurred while the Executive is
               still an employee of the Company, the Executive shall be entitled
               to the  compensation  provided in paragraph 5 upon the subsequent
               termination of the Executive's employment with the Company by the
               Executive or by the Company unless such termination is the result
               of (i) the Executive's  death,  (ii) the Executive's  Disability,
               (iii) the  Executive's  decision  voluntarily  to  terminate  his
               employment or retire,  but only if Good Reason does not exist, or
               (iv)  the  Executive's  termination  for  Cause.  Notwithstanding
               anything in this  Agreement to the contrary,  termination  of the
               Executive  shall not have been for Cause if termination  occurred
               because of (i) bad  judgement  or  negligence  on the part of the
               Executive unless it is demonstrable  from historical  events that
               the  Executive's  bad judgement or negligence  shall have been of
               such  an  extensive  and  ongoing  nature  that it  rendered  the
               Executive unable adequately to perform his duties; or (ii) an act
               or omission  believed by the Executive in good faith to have been
               in, or at least not opposed to, the Company's best interests. For
               the  purposes  of this  paragraph  a), no act, or failure to act,
               shall be considered "willful" unless done, or omitted to be done,
               by the  Executive  without good faith.  Good faith shall be based
               upon a  reasonable  belief that the action or omission was in, or
               at least not opposed to, the best  interests of the Company.  (b)
               Disability For the purposes of this Agreement,  Disability  shall
               mean that the  Executive  is  incapacitated  due to  physical  or
               mental  illness or injury  and shall have been  unable to perform
               his  duties  for the  Company on a full time basis for six months
               and,  within  30 days  after  written  Notice of  Termination  is
               thereafter  given by the Company,  the  Executive  shall not have
               returned to the full time  performance  of his duties.  (c) Cause
               For the  purposes  of this  Agreement,  Cause  shall mean (i) the
               willful and continued  failure by the Executive  substantially to
               perform  his  duties  with the  Company  (excluding  any  failure
               resulting   from   Disability),   after  a  written   demand  for
               substantial  performance  is  delivered  to the  Executive by the
               Chief  Executive  Officer of the Company setting forth the manner
               in which the Executive has not been substantially  performing his
               duties and  providing  the  Executive  an  opportunity  to appear
               before the Board of  Directors  of the  Company  with  counsel in
               order to  respond to such  notice;  (ii) the  performance  by the
               Executive  of any act or acts  constituting  a  felony  involving
               moral  turpitude  and which  results or is  intended to result in
               damage or harm to the Company,  whether monetary or otherwise, or
               which  results in or is intended  to result in  improper  gain or
               personal  enrichment;  and  (iii)  violations  of  the  Company's
               Personnel  Policy  Manual,  as constituted at any time prior to a
               Change in Control,  concerning personal conduct;  provided,  that
               the Company must follow its disciplinary  procedures as set forth
               therein.   (d)  Good  Reason  The  Executive  may  terminate  the
               Executive's  employment with the Company and retain his rights to
               benefits  hereunder if Good Reason exists at any time following a
               Change  in  Control  of the  Company.  For the  purposes  of this
               Agreement,  Good Reason shall mean any of the  following,  unless
               the Executive has expressly  consented in writing otherwise:  (i)
               within  six  months  after a Change  in  Control  of the  Company
               occurs, the Executive, at his discretion, determines that he will
               not be able to work in a harmonious  and effective  manner in the
               performance  of his  duties on behalf  of the  Company;  provided
               that, notwithstanding anything in this Agreement to the contrary,
               the six month period set forth above does not commence  until the
               satisfaction  of all  conditions  precedent to and the closing of
               the transactions contemplated in paragraph 3)a) (i), (ii), (iii),
               (iv), or (v) of this Agreement; (ii) the Executive is assigned by
               the Company to a position or duties which are  inconsistent  with
               or materially  different from the Executive's  duties or position
               with the  Company  immediately  prior to the Change in Control of
               the  Company;  (iii) the Company  removes the  Executive  from or
               fails to re-elect the  Executive to any positions or offices held
               by the  Executive  immediately  prior to the Change in Control of
               the Company,  unless such action is for  Disability,  Cause,  the
               Executive's  death or the  Executive's  voluntary  termination or
               retirement   if  Good   Reason  does  not  exist  prior  to  such
               termination or retirement;  (iv) the  Executive's  base salary or
               total  compensation in effect  immediately prior to the Change in
               Control of the Company is reduced by the Company; (v) the Company
               fails  to  increase  the   Executive's   base  salary  and  total
               compensation  after the Change in  Control of the  Company by the
               average percentage increase in base salary and total compensation
               of other persons holding similar  positions and titles within the
               Company;  (vi) any  failure by the  Company to continue in effect
               any benefit plan or  arrangement,  or related trust, in which the
               Executive is  participating or in which he may participate at the
               time  of  a  Change  in  Control  of  the  Company.  Such  plans,
               arrangements,  or related trusts (collectively "Plans"), include,
               but are not limited to,  Texas-New  Mexico Power Company's Thrift
               Plan for Employees and Trust Agreement ("Thrift Plan"), Texas-New
               Mexico Power  Company's  Pension Plan  ("Pension  Plan"),  Excess
               Benefit  Plan,  group  life  insurance  plan,  medical,   dental,
               accident  and  disability  plans and any other  plans and related
               trusts  which  might  exist at the time of a Change in Control of
               the Company;  the Company's  obligation  hereunder to continue in
               effect any benefit plan or arrangement includes the obligation to
               irrevocably  fund such Plans to the fullest extent allowed by any
               applicable  rules  and   regulations,   within  90  days  of  the
               occurrence of a Change in Control of the Company, and to maintain
               such  funding  thereafter;  (vii) any action taken by the Company
               which would adversely affect the Executive's  participation in or
               reduce the Executive's  benefits  received from any Plan;  (viii)
               any action requiring the Executive to relocate outside the county
               in which he was  officed  prior to the  Change in  Control of the
               Company,  except for travel  required in the  performance  of his
               duties for the Company to an extent substantially consistent with
               the Executive's travel obligations  immediately prior to a Change
               in Control of the  Company;  (ix) any  failure by the  Company to
               provide an automobile of similar style,  class and size which was
               provided to the Executive by the Company  immediately  prior to a
               Change in Control of the Company;  (x) any failure by the Company
               to provide the Executive with the number of paid vacation days to
               which the Executive was entitled immediately prior to a Change in
               Control of the Company;  (xi) any material  breach by the Company
               of any provision of this Agreement  following a Change in Control
               of the  Company;  (xii) any  failure by the Company to obtain the
               assumption  of this  Agreement by any  successor or assign of the
               Company;  (xiii) any purported  termination by the Company not in
               compliance with the Notice of Termination  provision in paragraph
               4)e) below  following  a Change in Control  of the  Company;  and
               (xiv) after a Change in Control of the Company, the Company gives
               notice to the Executive that the term of this Agreement shall not
               be  extended  as provided  in  paragraph  2)a)(i).  (e) Notice of
               Termination  Any  termination  of the  Executive  by the  Company
               pursuant to paragraphs 4)b) or 4)c) for Disability or Cause shall
               be  communicated  by  a  Notice  of  Termination  in  substantial
               compliance  with the  provisions of paragraph 8). For the purpose
               of this Agreement,  a Notice of Termination  shall mean a written
               notice  which shall  indicate  the  specific  provisions  in this
               Agreement  relied upon for termination of Executive's  employment
               and  which  sets  forth  in  reasonable   detail  the  facts  and
               circumstances  claimed to  provide a basis for such  termination.
               For the purposes of this Agreement,  no purported  termination by
               the  Company   shall  be   effective   without   such  Notice  of
               Termination. (f) Effective Date of Termination Any termination of
               the Executive for Disability or Cause pursuant to paragraphs 4)b)
               or 4)c) shall be effective  30 calendar  days after the Notice of
               Termination is delivered to the Executive;  provided that, in the
               event the  termination  is for Disability as set out in paragraph
               4)b), the Executive has not returned to full time  performance of
               his  duties  within  the 30-day  period.  All other  terminations
               subject to the terms of this Agreement, whether by the Company or
               the Executive,  shall be effective immediately upon the giving of
               the  Notice  of  Termination.   5)  Severance  Compensation  upon
               Termination of Employment If, during the period commencing upon a
               Change in Control of the Company  and ending two years  following
               the satisfaction of all conditions  precedent to and consummation
               of an event described in clauses (i), (ii),  (iii),  (iv), or (v)
               of paragraph  3), the Company  shall  terminate  the  Executive's
               employment  for  any  reason  other  than  as  a  result  of  the
               Executive's  death or the reasons set out in  paragraphs  4)b) or
               4)c) in full compliance of the requirements for notice set out in
               paragraph 4)e) or if the Executive shall terminate his employment
               with the Company when Good Reason exists,  then the Company shall
               provide for and pay to the Executive the following  compensation:
               (a) severance pay in a lump sum, in cash, no later than the fifth
               calendar day following the date of  termination,  an amount equal
               to three times the annual  salary as  calculated  by reference to
               the  Executive's  rate of pay set forth in the Company's  payroll
               records and in effect for the  Executive  immediately  prior to a
               Change in Control of the Company; (b) medical, dental, disability
               and life  insurance  and other  employee  benefits  upon the same
               terms and  conditions  and at the same cost to the Executive that
               existed immediately prior to the Change in Control of the Company
               for the  lesser  of three  years or until  substantially  similar
               employee benefits are available through other employment;  (c) if
               the  Executive  is fifty  years of age or older  and has at least
               twenty  years  of  service  with the  Company,  the  Company,  in
               addition to the foregoing  benefits,  shall pay to the Executive,
               as an early retirement  incentive,  an amount, on a monthly basis
               for the  remainder  of his  life,  that  is  equal  to  what  the
               Executive's retirement pay would be, calculated using the formula
               set forth in the Company's  Pension Plan as  supplemented  by the
               Excess  Benefit  Plan  based upon the base  salary  earned by the
               Executive for the necessary number of years  immediately prior to
               the Change in Control  of the  Company  and the number of service
               credits that the Executive  would  accumulate if he continued his
               employment  until age 62;  provided  that to the extent  that the
               Executive  would be entitled to retire on the date of termination
               or upon his  achieving  an age upon  which  the  Executive  could
               retire pursuant to the Company's  Pension Plan as supplemented by
               the Excess  Benefit Plan, and receive  payments  pursuant to said
               Pension Plan and Excess Benefit Plan, the Company's obligation to
               make monthly  payments shall be equal to the  difference  between
               the amount  actually  received by the Executive under the Pension
               Plan as  supplemented  by the Excess  Benefit Plan and the amount
               required to be paid by the Company as set forth  above;  provided
               further  that if the  Executive  becomes  entitled  to any of the
               benefits  set  forth in  paragraph  5)b) as a  retiree  under the
               Company's Pension Plan on or after the date of termination,  then
               the benefits  provided under said Pension Plan and Excess Benefit
               Plan shall be substituted  for and take the place of the benefits
               that the Company  would  otherwise  be  required to provide;  and
               further  provided that to the extent any payment or obligation to
               pay under  this  paragraph  5)c) is  determined  by the  Internal
               Revenue  Service to be subject to  taxation  upon the net present
               value  of the  stream  of  payments  for  which  the  Company  is
               obligated  to pay,  then the Company  shall pay to the  Executive
               within  30 days of such  determination,  a lump sum  equal to the
               amount  determined by the Internal  Revenue Service to be subject
               to taxation; (d) without limiting the generality or effect of any
               other provision hereof,  employee benefit plan,  arrangement,  or
               related  trust  referred to in  paragraph  4)d)(vi),  the Company
               shall  fully  fund  each  Plan  in  which  the   Executive  is  a
               participant  or is  otherwise  entitled  to  payments or benefits
               within 5  calendar  days of the  termination  of the  Executive's
               employment;  (e) any excise tax payable  pursuant to Section 4999
               of the Internal Revenue Code of 1986, as amended (the "Code"), as
               a result of the payment of the amounts described in subparagraphs
               a), b), and c); and (f) any additional  federal,  state, or local
               income tax liability  (calculated  at the highest  effective rate
               applicable  to  individuals)  and  excise  tax  liability  (under
               Section 4999 of the Code)  attributable to payments made pursuant
               to  this  paragraph  5)  hereof.  6) No  Obligation  to  Mitigate
               Damages;  No Effect on Other  Contractual  Rights (a) The Company
               hereby  acknowledges  that  it  will  be  difficult,  and  may be
               impossible,  for  the  Executive  to find  reasonably  comparable
               employment  following the date of termination.  In addition,  the
               Company  acknowledges  that its severance pay plans applicable in
               general to its salaried  employees do not provide for mitigation,
               offset,   or  reduction  of  any   severance   payment   received
               thereunder.  Accordingly, the parties hereto expressly agree that
               the payment of the severance  compensation  by the Company to the
               Executive in accordance  with the terms of this Agreement will be
               liquidated damages,  and that the Executive shall not be required
               to  mitigate  the  amount  of any  payment  provided  for in this
               Agreement by seeking other employment or otherwise, nor shall any
               profits,  income,  earnings,  or other  benefits  from any source
               whatsoever create any mitigation, offset, reduction, or any other
               obligation on the part of the  Executive  hereunder or otherwise;
               (b) The provisions of this  Agreement,  and any payment  provided
               for hereunder, shall not reduce any amounts otherwise payable, or
               in any way diminish the Executive's  existing  rights,  or rights
               which  would  accrue  solely as a result of the  passage of time,
               under  any  benefit  plan,  incentive  plan or  securities  plan,
               employment agreement or other contract,  plan or arrangement.  7)
               Successor  to the  Company  (a)  The  Company  will  require  any
               successor or assign  (whether  direct or  indirect,  by purchase,
               merger,  consolidation or otherwise) to all or substantially  all
               of the business  and/or  assets of the  Company,  by agreement in
               form and  substance  satisfactory  to the  Executive,  expressly,
               absolutely  and  unconditionally  to assume  and agree to perform
               this Agreement in the same manner and to the same extent that the
               Company would be required to perform it if no such  succession or
               assignment had taken place.  Any failure of the Company to obtain
               such agreement prior to the  effectiveness of any such succession
               or assignment  shall be a material  breach of this  Agreement and
               shall  entitle  the   Executive  to  terminate  the   Executive's
               employment for Good Reason.  As used in this paragraph 7, Company
               shall have the same  meaning as  hereinbefore  defined  and shall
               include any successor or assign to its business  and/or assets as
               aforesaid which executes and delivers the agreement  provided for
               in this paragraph 7 or which  otherwise  becomes bound by all the
               terms and provisions of this Agreement by operation of law. If at
               any time  during the term of this  Agreement,  the  Executive  is
               employed by any  corporation a majority of the voting  securities
               of which is then  owned by the  Company,  the  Company as used in
               paragraphs  3, 4, 5, 12, and 13 hereof shall in addition  include
               such  employer.  In such event,  the  Company  shall pay or shall
               cause  such  employer  to pay any  amount  owed to the  Executive
               pursuant to paragraph 5 hereof; (b) This Agreement shall inure to
               the benefit of and be enforceable by the Executive's personal and
               legal  representatives,  executors,  administrators,  successors,
               heirs,  distributees,  devisees and  legatees.  If the  Executive
               should die while any amounts are still payable to him  hereunder,
               all such amounts, unless otherwise provided herein, shall be paid
               in accordance with the terms of this Agreement to the Executive's
               devisee,  legatee,  or  other  designee  or,  if there be no such
               designee,  to the  Executive's  estate;  (c)  This  Agreement  is
               personal  in nature and  neither  of the  parties  hereto  shall,
               without the consent of the other, assign,  transfer,  or delegate
               this Agreement or any rights or obligations  hereunder  except as
               expressly provided in paragraph 7)a) above.  Without limiting the
               generality of the  foregoing,  the  Executive's  right to receive
               payments  hereunder  shall not be  assignable,  transferable,  or
               delegable, whether by pledge, creation of a security interest, or
               otherwise,  other than by a transfer by his or her will or by the
               laws  of  descent  and  distribution  and,  in the  event  of any
               attempted assignment or transfer contrary to this paragraph 7)c),
               the  Company  shall  have  no  liability  to pay  any  amount  so
               attempted  to be assigned,  transferred,  or  delegated;  (d) The
               Company and the Executive  recognize that each party will have no
               adequate  remedy  at law for  breach  by the  other of any of the
               agreements contained herein and, in the event of any such breach,
               the Company and the  Executive  hereby agree and consent that the
               other  shall be  entitled  to a decree of  specific  performance,
               mandamus,  or other appropriate remedy to enforce  performance of
               this Agreement. 8) Notice For purposes of this Agreement, notices
               and all other communications  provided for in the Agreement shall
               be in  writing  and shall be deemed to have been duly  given when
               delivered  or mailed by United  States  registered  mail,  return
               receipt  requested,  postage  prepaid,  as  follows:  If  to  the
               Company: Texas-New Mexico Power Company 4100 International Plaza,
               Tower  II  Fort  Worth,   Texas   76109  If  to  the   Executive:
               =================================================  or such  other
               address  as  either  party  may have  furnished  to the  other in
               writing in accordance herewith,  except that notices of change of
               address shall be effective only upon receipt. 9) Miscellaneous No
               provisions  of  this   Agreement  may  be  modified,   waived  or
               discharged  unless such  waiver,  modification  or  discharge  is
               agreed to in writing signed by the Executive and the Company.  No
               waiver by either  party  hereto at any time of any  breach by the
               other party  hereto of, or  compliance  with,  any  condition  or
               provision  of this  Agreement to be performed by such other party
               shall be deemed a waiver of similar or  dissimilar  provisions or
               conditions  at the same or at any prior or  subsequent  time.  No
               agreements  or  representations,  oral or  otherwise,  express or
               implied, with respect to the subject matter hereof have been made
               by  either  party  which  are not  set  forth  expressly  in this
               Agreement.  This Agreement  shall be governed by and construed in
               accordance with the laws of the State of Texas.  10) Validity The
               invalidity or  unenforceability  of any provision or ny part of a
               provision  of this  Agreement  shall not affect the  validity  or
               enforceability  of the remaining  provisions  of this  Agreement,
               which  shall  remain in full force and effect.  11)  Counterparts
               This Agreement may be executed in one or more counterparts,  each
               of  which  shall be  deemed  to be an  original  but all of which
               together will constitute one and the same  instrument.  12) Legal
               Fees  and  Expenses  The  Company  is  aware  that  the  Board of
               Directors or a shareholder of the Company or the Company's parent
               may then  cause or  attempt  to cause  the  Company  to refuse to
               comply with its obligations under this Agreement, or may cause or
               attempt  to  cause  the  Company  or  the  Company's   parent  to
               institute,  or may  institute,  litigation  seeking  to have this
               Agreement declared unenforceable, or may take, or attempt to take
               other action to deny the  Executive the benefits  intended  under
               this  Agreement.  In these  circumstances,  the  purpose  of this
               Agreement  could be  frustrated.  It is the intent of the Company
               that  the  Executive  not  be  required  to  incur  the  expenses
               associated   with  the  enforcement  of  his  rights  under  this
               Agreement by  litigation  or other legal action  because the cost
               and expense thereof would substantially detract from the benefits
               intended to be extended to the Executive hereunder,  nor be bound
               to negotiate any settlement of his rights  hereunder under threat
               of incurring such expenses.  Accordingly,  if it should appear to
               the  Executive  that the Company has failed to comply with any of
               its  obligations  under this  Agreement  or in the event that the
               Company or any other  person  takes any  action to  declare  this
               Agreement void or unenforceable,  or institutes any litigation or
               other legal action designed to deny,  diminish or to recover from
               the  Executive  the  benefits  intended  to be  provided  to  the
               Executive  hereunder,  the  Company  irrevocably  authorizes  the
               Executive  from time to time to retain  counsel  of his choice at
               the expense of the Company as provided in this  paragraph  12, to
               represent  the  Executive in  connection  with the  initiation or
               defense of any  litigation or other legal  action,  whether by or
               against  the Company or any  Director,  officer,  shareholder  or
               other person  affiliated with the Company,  in any  jurisdiction.
               Notwithstanding    any   existing   or   prior    attorney-client
               relationship  between the Company and such  counsel,  the Company
               irrevocably   consents  to  the   Executive   entering   into  an
               attorney-client  relationship  with  such  counsel,  and in  that
               connection  the Company and Executive  agree that a  confidential
               relationship  shall exist between the Executive and such counsel.
               The  Company  shall  pay or cause to be paid and  shall be solely
               responsible  for any and all  attorneys'  and  related  fees  and
               expenses  incurred by the  Executive as a result of the Company's
               failure to perform this Agreement or any provision hereof or as a
               result of the Company or any person  contesting  the  validity or
               enforceability  of this Agreement or any provision  hereof.  Such
               fees and expenses shall be paid or reimbursed to the Executive by
               the  Company on a regular,  periodic  basis,  within  thirty days
               following receipt by the Company of statements of such counsel in
               accordance with such counsel's  customary  practice.  In no event
               shall the  Executive  be  required to  reimburse  the Company for
               attorneys'  fees or  expenses  previously  paid on  behalf of the
               Executive or reimbursed to the  Executive,  or for any attorneys'
               fees or expenses  incurred by the Company in connection  with any
               contest of validity or  enforceability  of this  Agreement or any
               provisions hereof; provided,  however, that any litigation by the
               Executive,  whether as plaintiff or  defendant,  shall be in good
               faith.  13)   Confidentiality   The  Executive  shall  retain  in
               confidence  any and all  confidential  information  known  to the
               Executive concerning the Company and its business so long as such
               information  is not  otherwise  publicly  disclosed.  IN  WITNESS
               WHEREOF,  the parties have executed this Agreement as of the date
               first above written.

                           TEXAS-NEW MEXICO POWER COMPANY

                           By:___________________________
                           Name:   Kevern R. Joyce
                           Title:  Chairman, President & Chief
                                     Executive Officer


                           By:___________________________
                                      Name:
                                     Title:

ATTEST:
----------------------------------
            Secretary



<PAGE>




                           SCHEDULE TO EXHIBIT 10(qq)

         1996 Employees with Executive Severance Compensation Contracts

Contracts Extended by Board on 11-7-95 to 12-1-96:

Kevern Joyce
Jack Chambers
Manjit Cheema
Larry Dillon
Allan Davis
Douglas Hobbs
Mike Blanchard
Randy Ownby
Dennis Cash
Ralph Johnson
Pat Bridges
Melissa Davis
John Montgomery (Provided effective 12-4-95)
*Monte Smith




*will expire 12-1-98