Exhibit
10.3


FIRST
AMENDMENT


TO
THE


PNM
RESOURCES, INC.


NON-UNION
SEVERANCE PAY PLAN




Effective
January 1, 2002, Public Service Company of New Mexico (“PNM”) adopted the Public
Service Company of New Mexico Benefits My Way Plan (the “BMW
Plan”).  Effective November 27, 2002, sponsorship of the BMW Plan was
transferred from PNM to PNM Resources, Inc. (the “Company”) and the Plan was
renamed the “PNM Resources, Inc. Benefits My Way Plan.”  The BMW Plan
consisted of a number of component programs including Program 12, Non-Union
Severance Pay Program (the “Non-Union Severance Program”).  Effective
as of January 1, 2004, PNM Resources amended and restated the BMW Plan to divide
it into a number of separate plans that replaced several of the component
programs in effect on December 31, 2003.  As part of the
amendment and restatement, the PNM Resources, Inc. Non-Union Severance Pay Plan
(the “Plan”) was created as a successor plan to the Non-Union Severance Program,
effective as of January 1, 2004.  The Plan was most recently amended
and restated effective August 1, 2007.  Section 409A of the Code
became applicable to the Plan as of January 1, 2005.  The Plan
has been and shall continue to be administered in good faith compliance with the
requirements of Section 409A from January 1, 2005 through December 31,
2008.  By this instrument, PNM Resources now desires to amend the Plan
as set forth below.




1. Except as
otherwise provided, this First Amendment shall be effective as of
January 1, 2009.




2. Section
2.1(z) (Separation
from Service) of the Plan is hereby amended and restated in its entirety
to read as follows:




(z)           “Separation
from Service”
means either (1) the termination of a Participant’s employment with the Company
and









all
Affiliates and 50% Affiliates due to death, retirement, or other reasons, or (2)
a permanent reduction in the level of bona fide services the Participant
provides to the Company and all Affiliates and 50% Affiliates to an amount that
is 20% or less of the average level of bona fide services the Participant
provided to the Company and all Affiliates and 50% Affiliates in the immediately
preceding 36 months, with the level of bona fide service calculated in
accordance with Treas. Reg. § 1.409A-1(h)(1)(ii).




A
Participant’s employment relationship is treated as continuing while a
Participant is on military leave, sick leave, or other bona fide leave of
absence (if the period of such leave does not exceed six months, or if longer,
so long as a Participant’s right to reemployment with the Company or an
Affiliate or 50% Affiliate is provided either by statute or
contract).  If a Participant’s period of leave exceeds six months and
a Participant’s right to reemployment is not provided either by statute or by
contract, the employment relationship is deemed to terminate on the first day
immediately following the expiration of such six-month
period.  Whether a termination of employment has occurred will be
determined based on all of the facts and circumstances and in accordance with
regulations issued by the United States Treasury Department pursuant to
Section 409A of the Code.




3. Section
3.6(a) (Release
Agreement – General) of the Plan is hereby amended and restated in its
entirety to read as follows:




(a)           General.  The
Release Agreement shall contain such terms and conditions as are satisfactory to
the Company, including, but not limited to, the release of any and all claims
that the Participant may then have, as of the signing of such release, against
the Company, its employees, officers and directors.  The Participant
shall generally receive the Release Agreement on the date of the Participant’s
Separation from Service and in no event more than five (5) days following the
Participant’s Separation from Service and shall have up to forty-five (45)
unpaid days following the date the Release Agreement is given to the Participant
to sign and return the Release Agreement to the Company.




4. Section
4.6 (No Duplication of
Benefits) of the Plan is hereby amended and restated in its entirety to
read as follows:




4.6           No
Duplication of Benefits.  Notwithstanding anything herein to
the contrary, the right to receive any benefits under the




2
 Plan by any Participant is specifically conditioned upon the Participant either
waiving or being ineligible for any and all benefits under:




(a)           the
PNM Resources, Inc. Employee Retention Plan, as it may be amended or restated
from time to time;




(b)           the
PNM Resources, Inc. Union Severance Pay Plan, as it may be amended or restated
from time to time;




(c)           the
PNM Resources, Inc. Officer Retention Plan, as it may be amended or restated
from time to time; or




(d)           any
successor or other severance, retention or change in control plan, program or
agreement sponsored by the Company.




Section
4.6(d) shall not apply to any individual agreement that provides a Participant
with a special payment in order to induce the Participant to remain employed by
the Company unless the agreement specifically states otherwise.  The
Company also may override the provisions of this Section 4.6 by expressly
stating in the other change in control, severance, retention or other plan or
agreement that some or all of the benefits provided by the other change in
control, severance, retention or other plan or agreement are intended to
supplement the benefits provided by this Plan.




5. This
First Amendment amends only the provisions of the Plan as noted above, and those
provisions not expressly amended shall be considered in full force and
effect.  Notwithstanding the foregoing, this First Amendment shall
supersede the provisions of the Plan to the extent those provisions are
inconsistent with the provisions and intent of this FirstAmendment.




IN
WITNESS WHEREOF, PNM Resources has caused this First Amendment to be executed as
of this 20th
day of November,
2008.




PNM
RESOURCES, INC.






By:  /s/ Alice A.
Cobb


Its: SVP, Chief
Administrative Officer


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