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 judgment or
          negligence on the part of the Executive unless it is demonstrable from
          historical  events that the  Executive's  bad  judgment 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 base 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)  incentive   compensation   under  the  Company's   several   incentive
          compensation  plans in  existence  immediately  prior to the Change in
          Control  for  which  Executive  has been  granted  an award and to the
          extent  an  agreement   exists  between   Executive  and  the  Company
          addressing  a Change in  Control,  such  agreement  shall  control the
          manner  and  amount  of  payment,   otherwise  payments  of  incentive
          compensation  shall be determined  as if the goals  required to be met
          for payment had been  attained at target and shall be made in the same
          manner as payments under paragraph 5)(a) above;

     (c)  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;

     (d)  if the  Executive  is fifty  years  of age or  older  and has at least
          fifteen 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  applicable  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)(c) 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)(d) 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;
          further,  provided that if the  Executive has an employment  agreement
          that  provides for treatment of pension  benefits,  then the amount of
          compensation payable hereunder shall be determined by the terms of the
          employment agreement;

     (e)  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;

     (f)  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 this paragraph 5); and

     (g)  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 related to any incremental payment for excise taxes.
 
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 any  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