EX-10.3





 Exhibit 10.3 

PNM RESOURCES, INC. 

OFFICER RETENTION PLAN 

(As Amended and Restated Effective as of October 20, 2020) 












 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	 ARTICLE I
	 	PURPOSE	  	 	1	 
			
	 1.1
	 	General	  	 	1	 
			
	 ARTICLE II
	 	GLOSSARY	  	 	1	 
			
	 2.1
	 	Glossary	  	 	1	 
			
	 ARTICLE III
	 	TERM OF PLAN	  	 	2	 
			
	 3.1
	 	Term of Plan	  	 	2	 
			
	 3.2
	 	Reversion to Provisions of the Prior Plan Document	  	 	2	 
			
	 ARTICLE IV
	 	ELIGIBILITY FOR RETENTION BENEFITS	  	 	2	 
			
	 4.1
	 	Eligibility to Participate	  	 	2	 
			
	 4.2
	 	Eligibility for Benefits	  	 	2	 
			
	 4.3
	 	Release Agreement	  	 	3	 
			
	 4.4
	 	Restrictive Covenant Agreement	  	 	3	 
			
	 4.5
	 	No Duplication of Benefits	  	 	4	 
			
	 ARTICLE V
	 	RETENTION BENEFITS	  	 	4	 
			
	 5.1
	 	Retention Benefits	  	 	4	 
			
	 5.2
	 	Reimbursement of Legal Fees	  	 	6	 
			
	 5.3
	 	Section 409A Compliance	  	 	6	 
			
	 5.4
	 	Benefits from a Subsequent Employer	  	 	9	 
			
	 5.5
	 	No Tax Gross-Up; Cap on Payments	  	 	9	 
			
	 5.6
	 	Additional Benefits Under Other Plans	  	 	11	 
			
	 ARTICLE VI
	 	PLAN ADMINISTRATION	  	 	11	 
			
	 6.1
	 	Plan Administration	  	 	11	 
			
	 6.2
	 	Claims Procedures	  	 	12	 
			
	 ARTICLE VII
	 	SUCCESSORS, BINDING AGREEMENT	  	 	14	 
			
	 7.1
	 	Successors	  	 	14	 
			
	 7.2
	 	Binding Agreement	  	 	14	 
			
	 ARTICLE VIII
	 	NOTICE	  	 	14	 
			
	 8.1
	 	General	  	 	14	 
			
	 ARTICLE IX
	 	AMENDMENT AND TERMINATION	  	 	14	 
			
	 9.1
	 	Amendment and Termination	  	 	14	 
			
	 ARTICLE X
	 	MISCELLANEOUS	  	 	15	 
			
	 10.1
	 	Governing Law	  	 	15	 


  
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	 	 	 	  	Page	 
	 10.2
	 	Withholding	  	 	15	 
			
	 10.3
	 	No Right of Assignment	  	 	15	 
			
	 10.4
	 	Survival of Rights	  	 	15	 
			
	 10.5
	 	No Employment Contract	  	 	15	 
			
	 10.6
	 	Mitigation of Benefits	  	 	16	 
			
	 10.7
	 	Service of Process	  	 	16	 
			
	 10.8
	 	Headings	  	 	16	 
			
	 10.9
	 	Gender and Number	  	 	16	 
			
	 10.10
	 	ERISA Plan	  	 	16	 
			
	 10.11
	 	Validity	  	 	16	 
			
	 10.12
	 	 Adoption by Affiliates
	  	 	16	 

  

  
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 PNM RESOURCES, INC. 

OFFICER RETENTION PLAN 

INTRODUCTION 

Effective December 7, 1998, Public Service Company of New Mexico adopted the Public Service Company of New Mexico First Restated and
Amended Executive Retention Plan (the “Plan”). By an amendment dated November 27, 2002, sponsorship of the Plan was transferred to PNM Resources, Inc. (“PNM Resources”) and the Plan was renamed the “PNM Resources, Inc.
First Restated and Amended Executive Retention Plan.” Effective as of July 13, 2003, PNM Resources amended and restated the Plan in its entirety and changed the name of the Plan to the “PNM Resources, Inc. Officer Retention
Plan.” The Plan has been amended and restated on a number of occasions with the most recent restatement effective as of January 1, 2012. 

By execution of this document, PNM Resources hereby amends and restates the Plan in its entirety, effective as of October 20, 2020 (the
“Effective Date”). 
 ARTICLE I 

PURPOSE 
 1.1
General. PNM Resources considers it essential to its best interests and the best interests of its customers and shareholders to foster the continuous employment of its key management employees. PNM Resources also recognizes that, as is
the case with many publicly held corporations, the possibility of a Change in Control may exist. The possibility of a Change in Control, and the uncertainty and the questions which it may raise among employees, may result in the departure or
distraction of key management employees to the detriment of PNM Resources and its ability to continue to provide efficient and reliable utility services to its customers. 

PNM Resources has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of key
management to their assigned duties and to facilitate recruitment of future employees without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control. PNM Resources also has concluded that
one of the necessary steps is to provide competitive and fair compensation and benefits to employees terminated following a Change in Control. 

The purpose of this Plan is to address these concerns for Officers of PNM Resources and its Affiliates who adopt the Plan. A separate plan,
the PNM Resources, Inc. Employee Retention Plan, provides retention benefits for certain other employees of PNM Resources and its adopting Affiliates. 

ARTICLE II 

GLOSSARY 
 2.1
Glossary. A number of key terms, with specialized meanings, are used throughout the Plan. These key terms are identified by the capitalization of the initial letter of each word or phrase even when the word or phrase does
not begin a sentence. These key terms are defined in various Sections of the Plan or in the attached Glossary, which is incorporated into and is a part of the Plan. All of these key terms are listed in the Glossary. Whenever these key terms are
used, they will be given the defined meaning unless a clearly different meaning is required by the context. 

  
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 ARTICLE III 

TERM OF PLAN 
 3.1
Term of Plan. The Plan is effective as of the Effective Date and shall continue in effect until terminated by the Board, subject to the limitations on termination set forth in Section 9.1 (Amendment and Termination). 

3.2 Reversion to Provisions of the Prior Plan Document. Pursuant to Section 9.1 (Amendment and Termination) of the
Plan document in effect prior to the Effective Date (the “Prior Plan Document”), if a Change in Control occurs within the 24-month period following the later of the adoption of this Plan document or
its Effective Date, the provisions of the Prior Plan Document shall revive and shall control with respect to determining the retention benefits due to a Participant who was a Participant prior to the Effective Date if the benefits provided pursuant
to the Prior Plan Document are greater than the benefits provided pursuant to this amended and restated Plan document. Notwithstanding the foregoing, as provided by Section 9.1 (Amendment and Termination), all changes made in order to
comply with Section 409A of the Code shall remain in effect. 
 ARTICLE IV 

ELIGIBILITY FOR RETENTION BENEFITS 

4.1 Eligibility to Participate. To be eligible for benefits under this Plan, an employee must be an Officer at the beginning of
the Protection Period. If a Participant’s employment with the Company terminates for any reason (whether voluntary or involuntary) before the commencement of the Protection Period, he or she shall not be eligible to receive the benefits
provided by this Plan. In addition, if a Participant voluntarily terminates his or her employment during the Protection Period for reasons other than those that constitute Constructive Termination, or if a Participant dies or becomes Disabled during
the Protection Period, the Participant will not be entitled to receive any benefits under this Plan. 
 4.2 Eligibility for
Benefits. 
 (a) General Rule. A Participant shall be entitled to the benefits described in Article V
(Retention Benefits) if such Participant Separates from Service during the Protection Period due to: (1) a termination of employment by the Company for any reason other than Cause, death or Disability; or (2) a termination of
employment by the Participant due to Constructive Termination following the Participant’s giving of a Notice of Termination to the Company. 

(b) Exceptions. A Participant shall not be entitled to receive the retention benefits offered by the Plan even if the Participant
meets the requirements of paragraph (a), in the following circumstances: 

  
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 (1) If a Participant’s employment is terminated or Constructively Terminated during
the Protection Period, but such Participant is re-employed by the surviving entity or the party acquiring the assets of PNM Resources in connection with the Change in Control before any payments are made in
accordance with Section 5.1 (Retention Benefits), then such Participant shall not be entitled to the benefits under this Plan. 

(2) Any Participant who without express authority actively participates in advancing a Change in Control, whether on his or her own behalf or
on behalf of someone else, shall not be eligible for the benefits provided by this Plan. Participants who, by virtue of their position and duties with the Company, are involved in facilitating an orderly transition to a successor company shall
remain eligible to receive benefits. 
 (3) If a Participant’s employment is terminated or Constructively Terminated as a result of the
acquisition of PNM Resources by a holding company formed in connection with a corporate restructuring initiated by PNM Resources, and the Participant is immediately re-employed by PNM Resources or any
Affiliate, then the Participant shall not be entitled to benefits under the Plan. 
 (4) Transfers between and within PNM Resources and
Affiliates shall not be considered to be a termination of employment or result in the payment of benefits under this Plan unless the transfer results in a Constructive Termination. 

4.3 Release Agreement. 

(a) General. In order to receive any retention benefits under this Plan, within the time periods described below, the Participant
must sign, deliver and not revoke a general release (the “Release Agreement”) in substantially the same form as the form attached as Exhibit A. 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 date of the Participant’s Separation from Service and shall have up to forty-five (45) days following the date the Release Agreement is
given to the Participant to sign and return the Release Agreement to the Company. 
 (b) Revocation of the Release Agreement.
Within seven calendar days after delivery of the Release Agreement to the Company by the Participant, the Participant shall be entitled to revoke the Release Agreement by following the revocation procedure described in the Release Agreement. 

(c) Impact of Revocation. The revocation of a previously signed and delivered Release Agreement pursuant to the above paragraph
shall be deemed to constitute an irrevocable forfeiture of retention benefits under the Plan. 
 4.4 Restrictive Covenant
Agreement. 
 (a) General. In addition to the general eligibility requirements described in this Article IV, in order
to become eligible for benefits under this Plan, Tier I and Tier II Officers must, within the time periods described below, execute a noncompetition, nonsolicitation and confidential information agreement (the “Restrictive Covenant
Agreement”) in substantially the same form as the form attached hereto as Exhibit B. A Tier I or Tier II Officer must execute a Restrictive Covenant Agreement within 90 days of being notified of his or her eligibility to


  
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participate in the Plan or within 90 days of the date on which the Tier I or Tier II Officer is notified of his or her eligibility as a Tier I or Tier II Officer. A Tier II Officer who previously
signed a Restrictive Covenant Agreement and subsequently becomes a Tier I officer must sign a new Restrictive Covenant Agreement within 90 days of being notified of his or her eligibility as a Tier I Officer. A Tier I or Tier II Officer who
otherwise meets the eligibility requirements of this Article IV and who timely executes a Restrictive Covenant Agreement shall become a Participant in the Plan on the date on which he or she signs the Restrictive Covenant Agreement. 

(b) Failure to Execute the Restrictive Covenant Agreement. Tier I and Tier II Officers who fail to timely execute the
Restrictive Covenant Agreement shall not be entitled to benefits pursuant to this Plan. 
 4.5 No Duplication of Benefits. The
right to receive any benefits under this Plan by any Participant is specifically conditioned upon such Participant either waiving or being ineligible for any and all benefits under the PNM Resources, Inc. Employee Retention Plan, the PNM Resources,
Inc. Non-Union Severance Pay Plan, as either such plan may be amended from time to time, or any benefits due to a Change in Control or similar event under any successor or other change in control, severance,
retention or other plan or agreement otherwise available to the Participant. The Company does not intend to provide any Participant with benefits under both this Plan and benefits under any other severance, retention, change in control or other plan
or agreement sponsored by the Company or any Affiliate. If the Company concludes that a payment or benefit due pursuant to the Plan is subject to Section 409A of the Code (rather than fitting within an exception to Section 409A), the
Participant may not elect to receive a payment or benefit under another plan or agreement in lieu of such payment or benefit. This Section 4.5 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 or any Affiliate unless the agreement specifically states otherwise. The Company also may override this provision 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. 

ARTICLE V 

RETENTION BENEFITS 

5.1 Retention Benefits. Participants satisfying all of the eligibility requirements set forth in Article IV (Eligibility for
Retention Benefits) shall be entitled to the following retention benefits: 
 (a) Severance Pay. The Company shall pay the
Participant, as a retention benefit, a severance payment in the amount set forth below based upon the Participant’s highest position held with the Company during the Protection Period: 

 

			
	 POSITION
	  	 SEVERANCE PAY

	Tier I Officer	  	2.0 times Eligible Compensation
	Tier II Officer	  	1.5 times Eligible Compensation
	Tier III Officer	  	1.5 times Eligible Compensation


  
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 The severance payment shall be paid in a lump sum within 10 days following the last day on which a
Participant may revoke a previously executed and timely delivered Release Agreement. 
 (b) Officer Annual Incentive Plan. In
lieu of any payment under the Officer Annual Incentive Plan for the calendar year in which the Participant’s employment is terminated, the Participant will receive the special payment described in this Section 5.1(b). The special payment
will equal the target award to which the Participant would have been entitled under the Officer Annual Incentive Plan for the calendar year in which the Participant terminates employment, multiplied by a fraction, the numerator of which is the
number of full months that have elapsed in that calendar year as of the date of the Participant’s Separation from Service and the denominator of which is 12. The special payment shall be paid in a lump sum within 10 days following the last day
on which a Participant may revoke a previously executed and timely delivered Release Agreement. Notwithstanding the foregoing, if a Participant has received or will receive an Officer Annual Incentive Plan payment for the calendar year in which the
Participant’s employment is terminated, or any payment in lieu thereof, the Participant shall not be entitled to the benefit provided under this Section 5.1(b). 

(c) Medical, Dental and Vision Coverage. Medical, dental and vision coverage under the Health Plan, as the Participant had
elected prior to the Participant’s Separation from Service, shall be provided for a period of 24 months for Tier I Officers and a period of 12 months for Tier II and Tier III Officers immediately following the Participant’s
Separation from Service. The cost of such coverage shall be shared by the Company and the Participant on the same basis as in effect prior to the Participant’s Separation from Service. Participant contributions that were required for
participation in the Health Plan will continue to be required during the continuation period. If a Participant fails to pay such contributions in a timely manner, the coverage shall be discontinued. No Participant may elect to receive cash or any
other allowance in lieu of medical, dental or vision coverage under the Health Plan. 
 (d) COBRA Continuation Coverage.
Continuation of coverage under the Health Plan pursuant to Section 4980B of the Code will become effective upon the completion of the 24-month or 12-month period
referred to in Section 5.1(c). 
 (e) Life and Accidental Death and Dismemberment Insurance Benefits. The Company shall
provide life and accidental death and dismemberment insurance benefits substantially similar to those the Participant was receiving prior to the Participant’s Separation from Service. For Participants hired before September 25, 2011, the
life and accidental death and dismemberment insurance benefits provided by this Section shall include benefits provided pursuant to the PNM Resources, Inc. Officer Life Insurance Plan. As a general rule, such coverage shall continue for a period of
24 months for Tier I Officers and a period of 12 months for Tier II Officers and Tier III Officers. No Participant may elect to receive cash or any other allowance in lieu of the benefits provided by this Section. 

(f) Payment For Restrictive Covenant Agreement. In consideration for the post-employment restrictions placed on the Participant
by the Restrictive Covenant Agreement, the Company also shall pay a Tier I Officer an amount equal to the Participant’s Eligible Compensation and a Tier II Officer an amount equal to 50% of the Participant’s Eligible Compensation. Such
payments shall be paid over a 12-month period for a Tier I Officer and a 6-month period for a Tier II Officer in substantially equal installments in accordance with the


  
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Company’s regular payroll practices. Subject to the requirements of Section 5.3 (Section 409A Compliance), payments shall begin following the Participant’s Separation from
Service, with the first payment due for the payroll period beginning on the day following the expiration of the revocation period described in Section 4.3(b) (Release Agreement – Revocation of Release Agreement). 

5.2 Reimbursement of Legal Fees. The Company also shall pay to a Participant who is entitled to receive benefits pursuant to
Article IV (Eligibility for Retention Benefits) reasonable legal fees and expenses incurred as a result of a termination or Constructive Termination under the terms of this Plan (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or Constructive Termination or in seeking to obtain or enforce any right or benefit provided by this Plan or in connection with any tax audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment or benefit provided hereunder). 
 5.3 Section 409A Compliance. All payments due
pursuant to Section 5.1 (Retention Benefits) shall be made in accordance with this Section 5.3. 
 (a) General Rule
Regarding Time of Payments. Notwithstanding any other provision of this Plan to the contrary, no payment that is subject to Section 409A of the Code shall be made prior to the Participant’s Separation from Service. 

(b) Code Section 409A Compliance Strategy. Certain of the payments and benefits provided by this
Plan are subject to the requirements of Section 409A of the Code. The purpose of this Section 5.3(b) is to summarize the treatment of each such payment or benefit for purposes of Section 409A and to comply, as needed, with the
requirements of Section 409A. 
 (1) Compliance Strategy for Lump Sum Payments. The Company believes that the severance
pay due pursuant to Section 5.1(a) (Retention Benefits – Severance Pay) and the payment due pursuant to Section 5.1(b) (Retention Benefits – Officer Annual Incentive Plan) qualify for the short-term
deferral exception to Section 409A as described in Treasury Regulation Section 1.409A-1(b)(4). If the Company later determines that the severance pay due pursuant to Section 5.1(a) (Retention
Benefits – Severance Pay) or the payment due pursuant to Section 5.1(b) (Retention Benefits – Officer Annual Incentive Plan) do not qualify for the short-term deferral exception to Section 409A, the
following provisions shall apply: 
 (i) If the release consideration period described in the Release Agreement, plus the 7-day revocation period described in the Release Agreement, spans two calendar years, the payments provided pursuant to Section 5.1(a) (Retention Benefits – Severance Pay) and the payment due
pursuant to Section 5.1(b) (Retention Benefits – Officer Annual Incentive Plan) shall not begin until the second calendar year. A Participant may not elect the taxable year of the distribution. 

(ii) If at the time of the Participant’s Separation from Service, the Participant is a Specified Employee, any payments provided pursuant
to Section 5.1(a) (Retention Benefits – Severance Pay) and Section 5.1(b) (Retention Benefits – Officer Annual Incentive Plan) shall be delayed until the first day of the seventh month following the
Participant’s Separation from Service. 

  
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 (2) Compliance Strategy for Medical, Dental and Vision Coverage. The first 18
months of the continued benefits provided by Section 5.1(c) (Retention Benefits – Medical, Dental and Vision Coverage) should be exempt from Section 409A pursuant to the medical benefits reimbursement exception set forth
in Treasury Regulation Section 1.409A-1(b)(9)(v)(B). The continued benefits provided by Section 5.1(c) (Retention Benefits – Medical, Dental and Vision Coverage) after the period
of time during which the Participant would be entitled to continuation coverage pursuant to Section 4980B of the Code if the Participant elected the coverage and paid the premiums (the “Excess Medical Benefits”) may be considered to
be “deferred compensation” subject to the requirements of Section 409A of the Code. In order to assure compliance with the requirements of Section 409A and avoid adverse tax consequences to the Participant, the only Excess
Medical Benefits that will be subject to reimbursement under such plans will be expenses for medical care within the meaning of Section 105(b) of the Code. In addition, all reimbursements of Excess Medical Benefits under such plans shall be
made on or before the last day of the calendar year following the calendar year in which the expense was incurred and the right to reimbursement for such Excess Medical Benefits will not be subject to liquidation or exchange for another benefit.

 (3) Compliance Strategy for Life and Accidental Death and Dismemberment Insurance Benefits. The continued insurance
coverage provided by Section 5.1(e) (Retention Benefits – Life and Accidental Death and Dismemberment Insurance Benefits) should be excepted from Section 409A pursuant to Treasury Regulation Section 1.409A-1(a)(5). 
 (4) Compliance Strategy for Restrictive Covenant Agreement
Payments. The Company believes that the payments provided pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement) comply with the separation pay exception and/or the short-term
deferral exception to Section 409A as described in Treasury Regulation Section 1.409A-1(b)(9) for most Participants. Notwithstanding anything in this Plan to the contrary, if the Company concludes,
in the exercise of its discretion, that all or a portion of the payments described in Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement) are subject to Section 409A of the Code, the
following provisions shall apply to such payments: 
 (i) If the release consideration period described in the Release Agreement, plus the 7-day revocation period described in the Release Agreement, spans two calendar years, the payments provided pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant
Agreement) shall not begin until the second calendar year. A Participant may not elect the taxable year of the distribution. 
 (ii) If
the Company concludes that only a portion of the payments comply with the separation pay exception to Section 409A and such payments do not comply with the short-term deferral exception to Section 409A, any such payments made to a
Specified Employee during the first six months following such Specified Employee’s Separation from Service shall not exceed the “Cap” described in the next sentence. The “Cap” shall equal two times the lesser of (1) the
Specified Employee’s annualized compensation based upon the annual rate of pay for services provided to the Company for the taxable year of the Specified Employee preceding the taxable year in which the Specified Employee’s Separation from
Service occurs (adjusted for any increase during that year that was expected to continue indefinitely if the 

  
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Specified Employee had not Separated from Service) or (2) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the
year in which the Participant’s Separation from Service occurs. For Separations from Service occurring in 2020, the maximum amount that may be taken into account for qualified plan purposes is $285,000. If the total amount that would be payable
to a Specified Employee during the first six months following the Specified Employee’s Separation from Service would exceed the Cap and such amounts do not fit within an exception to Section 409A, the excess shall be subtracted, in equal
installments, from the amounts that would otherwise be due pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement). In any event, the excess will then be paid, in one lump sum payment, on
the first day of the seventh month following the day on which the Participant’s Separation from Service occurs. 
 (iii) If the Company
concludes that none of the payments due pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement) comply with the separation pay exception to Section 409A, and if at the time of the
Participant’s Separation from Service the Participant is a Specified Employee, any payments provided pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement) shall be delayed until the
first day of the seventh month following the Participant’s Separation from Service. Any payments that would have been paid during the first six months following the Participant’s Separation from Service shall be paid in a single lump sum
on the first day of the seventh month following the Participant’s Separation from Service. 
 (5) Compliance Strategy for
Reimbursement of Legal Fees. Pursuant to Section 5.2 (Reimbursement of Legal Fees), the Company will provide an eligible Participant with reimbursement for reasonable legal fees and expenses incurred as a result of a Separation
from Service or Constructive Termination under the terms of the Plan. The amount of legal expenses incurred in one calendar year will not affect the expenses eligible for reimbursement in any other calendar year. All expenses incurred in one
calendar year must be reimbursed no later than the last day of the next calendar year. The right to reimbursement is not subject to liquidation or exchange for any other benefit. 

(c) Payment Disputes. 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). 
 (d) Ban on Acceleration or
Deferral. 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 permitted or required pursuant to regulations and
other guidance issued pursuant to Section 409A of the Code. 
 (e) No Elections. No Participant has any right to make any
election regarding the time or form of any payment due under this Plan. 
 (f) Distributions Treated as Made Upon a Designated
Event. If the Company fails to make any payment under this 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 pursuant to Treasury Regulation Section 1.409A-3(d). 

  
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 (g) Installments Treated as Separate Payments. For purposes of
Section 409A, the right to a series of installment payments under this Plan shall be treated as a right to a series of separate payments under Treasury Regulation Section 1.409A-2(b)(2)(iii). 

(h) Compliant Operation and Interpretation. This Plan shall be administered in accordance with Section 409A of the Code or
an exception thereto, and each provision of the Plan shall be interpreted, to the extent possible, to comply with Section 409A of the Code or an exception thereto. Although this Plan has been designed to comply with Section 409A of the
Code or to fit within an exception to the requirements of Section 409A of the Code, the Company specifically does not warrant such compliance. Each Participant is fully responsible for any and all taxes or other amounts imposed by
Section 409A or any other provision of the Code, and the Company shall not be liable to the Participant if any payment or benefit hereunder fails to be exempt from, or to comply with, Section 409A of the Code. 

5.4 Benefits from a Subsequent Employer. The continued medical, dental and vision coverage under the Health Plan that is provided
to a Participant pursuant to Sections 5.1(c) (Retention Benefits – Medical, Dental and Vision Coverage) and the continued life insurance and accidental death and dismemberment benefits provided to a Participant pursuant to
Section 5.1(e) (Retention Benefits – Life and Accidental Death and Dismemberment Insurance Benefits) will be discontinued if a Participant becomes employed by any other employer that provides health insurance coverage,
regardless of whether such coverage is comparable to the coverage provided under the Health Plan (and regardless of whether the other employer’s coverage includes dental, vision, life and accidental death and dismemberment coverage). By
accepting the benefits provided by this Plan, each Participant agrees to promptly notify the Company if the Participant becomes so employed while continued coverage is being provided by this Plan. 

5.5 No Tax Gross-Up; Cap on Payments. 

(a) General Rule; Cap on Benefits. Section 4999 of the Code imposes an excise tax (currently 20%) on a Participant if the
total payments and certain other benefits received by the Participant due to a “change in control” (which, for this purpose, has the meaning ascribed to it in Section 280G of the Code and the related regulations) exceed prescribed
limits. In order to avoid this excise tax and the related adverse tax consequences for the Company and the Participant, the payments and benefits to which a Participant will be entitled pursuant to Article V or any other arrangement between the
Company and the Participant will be limited so that the sum of such payments and benefits, when combined with all other “payments in the nature of compensation” (as that term is defined in Section 280G of the Code and related
regulations), the receipt of which is contingent on a change in control, will not exceed an amount equal to the maximum amount that can be payable without the imposition of the Section 4999 excise tax (which maximum amount is referred to below
as the “Capped Benefit”). 
 (b) Exception. The limitation described in Section 5.5(a) will not apply if the
Participant’s “Uncapped Benefit” minus the Section 4999 excise taxes exceeds the Participant’s Capped Benefit. For this purpose, a Participant’s “Uncapped Benefit” is equal to the total payments to which the
Participant will be entitled pursuant to this Plan, or otherwise, without regard to the limitation described in Section 5.5(a). 

  
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 (c) Calculating the Capped and Uncapped Benefits. If the Company believes that
Section 5.5(a) may result in a reduction of the payments to which a Participant is entitled under this Plan or any other applicable arrangement, it will so notify such Participant as soon as possible. The Company will then, at its expense,
retain a “Consultant” (which shall be a certified public accounting firm and/or a firm of recognized executive compensation consultants working with a law firm or certified public accounting firm) to provide a determination concerning
whether the Participant’s total payments and benefits under this Plan or any other applicable arrangement will result in the imposition of the Section 4999 excise tax and, if so, whether the Participant is subject to the limitations of
Section 5.5(a) or, alternatively, whether the exception described in Section 5.5(b) applies. 
 If the Consultant determines that
the limitations of Section 5.5(a) apply, then the payments and benefits to which the Participant is entitled pursuant to this Article V and any other applicable arrangement will be reduced to the extent necessary to eliminate the excess. In
making such reduction, the Company first will reduce the amount of the Participant’s payments under this Plan and, if necessary, any other payments to which the Participant is entitled under any other applicable arrangement that do not
constitute “non-qualified deferred compensation” that is subject to Section 409A of the Code (with the reductions to be applied against the amounts payable latest in time and on a proportional
basis against the amounts payable at the same time). The Company will reduce the amount of any payments or benefits payable to the Participant that are subject to Section 409A of the Code (including the portion, if any, of the payments made
pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement)) only to the extent reductions in addition to those described in the preceding sentence are necessary to avoid the Section 4999
excise tax. If the reduction of any payments or benefits which are subject to Section 409A of the Code becomes necessary to avoid the imposition of the excise tax, the Company first will reduce the
non-equity based payments or benefits on a proportional basis. To the extent additional reductions are necessary to avoid the excise tax, the Company will then reduce the benefits on a proportional basis and
then any equity based payments (with the reduction to be applied to the extent necessary to maximize the amounts the Participant otherwise will receive after the reduction). 

If the Consultant so requests, a firm of recognized executive compensation consultants selected by the Company (which may, but is not required
to be, the Consultant) shall provide an opinion, upon which such Consultant may rely, as to the reasonableness of any item of compensation as reasonable compensation for services rendered before or after the change in control (including the payments
provided pursuant to Section 5.1(f) (Retention Benefits – Payment for Restrictive Covenant Agreement)). 
 If the
Company believes that the limitations of Section 5.5(a) are applicable, it will nonetheless make payments to the Participant, at the times described in Section 5.1 (Retention Benefits), in the maximum amount that it believes may be
paid without exceeding such limitations. The balance, if any, will then be paid if due after the opinions called for above have been received. 

If the amount paid to the Participant by the Company is ultimately determined by the Internal Revenue Service to have exceeded the limitations
of this Section 5.5, the Participant must repay the excess promptly on demand of the Company. If it is ultimately determined by the Consultant or the Internal Revenue Service that a greater payment should have been made to the Participant, the
Company shall pay the Participant the amount of the deficiency, together with 

  
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interest thereon from the date such amount should have been paid to the date of such payment so that the Participant will have received or be entitled to receive the maximum amount to which the
Participant is entitled under the Plan. For purposes of this Section 5.5, the applicable interest rate shall be the prime rate published by the Wall Street Journal from the date the amounts described in the preceding sentence should have been
paid to the Participant. 
 As a general rule, the Consultant’s determination shall be binding on the Participant and the Company.
Section 280G and the excise tax rules of Section 4999, however, are complex and uncertain and, as a result, the Internal Revenue Service may disagree with the Consultant’s conclusions. If the Internal Revenue Service determines that
the Capped Benefit is actually lower than calculated by the Consultant, the Capped Benefit will be recalculated by the Consultant. Any payment over that revised Capped Benefit will then be repaid by the Participant to Company. If the Internal
Revenue Service determines that the actual Capped Benefit exceeds the amount calculated by the Consultant, the Company shall pay the Participant any shortage. 

The Company has the right to challenge any determinations made by the Internal Revenue Service. If the Company agrees to indemnify a
Participant from any taxes, interest and penalties that may be imposed upon the Participant (including any taxes, interest and penalties on the amounts paid pursuant to the Company’s indemnification agreement), the Participant must cooperate
fully with the Company in connection with any such challenge. The Company shall bear all costs associated with the challenge of any determination made by the Internal Revenue Service and the Company shall control all such challenges. 

A Participant must notify the Company in writing of any claim or determination by the Internal Revenue Service that, if upheld, would result in
the payment of excise taxes. Such notice shall be given as soon as possible but in no event later than 15 days following the Participant’s receipt of notice of the Internal Revenue Service’s position. 

(d) Effect of Repeal or Inapplicability. In the event that the provisions of Sections 280G and 4999 of the Code are repealed
without succession, this Section 5.5 shall be of no further force or effect. Moreover, if the provisions of Sections 280G and 4999 of the Code do not apply to impose the excise tax on payments under this Plan, then the provisions of this
Section 5.5 shall not apply. 
 5.6 Additional Benefits Under Other Plans. Additional benefits may be provided to
Participants upon a Change in Control through other programs sponsored by the Company. 
 ARTICLE VI 

PLAN ADMINISTRATION 

6.1 Plan Administration. The Committee shall administer the Plan. The Committee shall be the “Named Fiduciary” for
purposes of ERISA and shall have the authority to control, interpret and construe the Plan and manage the operations thereof. Any such interpretation and construction of any provisions of this Plan by the Committee shall be final. The Committee
shall, in addition to the foregoing, exercise such other powers and perform such other duties as it may deem advisable in the administration of the Plan except to the extent such powers and duties are assigned to the Compensation Committee. The
Committee may delegate some (or all) of its authority hereunder to the PNMR Services Company Benefits Department. The Committee also 

  
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may engage agents and obtain other assistance from the Company, including Company counsel. The Committee shall not be responsible for any action taken or not taken on the advice of legal counsel.
The Committee is given specific authority to allocate and revoke responsibilities among its members or designees. When the Committee has allocated authority pursuant to the foregoing, the Committee shall not be liable for the acts or omissions of
the party to whom such responsibility has been allocated, except to the extent provided by law. 
 6.2 Claims Procedures. 

(a) Initial Claim. A claim for benefits under this Plan must be submitted to the senior human resources officer of PNM Resources
(the “Human Resources Officer”). If the claimant is the Human Resources Officer, a claim for benefits under this Plan must be submitted to the Chief Executive Officer of PNM Resources and the term “Human Resources Officer” as
used in paragraph (1) below shall be replaced with the term “Chief Executive Officer.” 
 (1) Notice of
Decision. Written notice of the disposition of the claim shall be furnished to the claimant within a reasonable period of time, but not later than 90 days after receipt of the claim by the Human Resources Officer, unless the Human Resources
Officer determines that special circumstances require an extension of time for processing the claim. If the Human Resources Officer determines that an extension is required, written notice (including an explanation of the special circumstances
requiring an extension and the date by which the Human Resources Officer expects to render the benefits determination) shall be furnished to the claimant prior to the termination of the original 90-day period.
In no event shall such extension exceed a period of 90 days from the end of the initial 90-day period. If the claim is denied, the notice required pursuant to this Section shall set forth the following: 

(i) The specific reason or reasons for the adverse determination; 

(ii) Special reference to the specific Plan provisions upon which the determination is based; 

(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and 
 (iv) An explanation of the Plan’s appeal procedure and the time limits applicable to an
appeal, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA. 
 (b) Appeal
Procedures. Every claimant shall have the right to appeal an adverse benefits determination to the Committee (including, but not limited to, whether the Participant’s termination was for Cause). Such appeal may be accomplished by a
written notice of appeal filed with the Committee within 60 days after receipt by the claimant of written notification of the adverse benefits determination. Claimants shall have the opportunity to submit written comments, documents, records, and
other information relating to the claim for benefits. Claimants will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits,
such relevance to be determined in accordance with Section 6.2(c) below. The appeal shall take into account all comments, documents, records, and other information submitted by claimant relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination. 

  
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 (1) Notice of Decision. Notice of a decision on appeal shall be furnished to
the claimant within a reasonable period of time, but not later than 60 days after receipt of the appeal by the Committee unless the Committee determines that special circumstances (such as the need to hold a hearing if the Committee determines that
a hearing is required) require an extension of time for processing the claim. If the Committee determines that an extension is required, written notice (including an explanation of the special circumstances requiring an extension and the date by
which the Committee expects to render the benefits determination) shall be furnished to the claimant prior to the termination of the original 60-day period. In no event shall such extension exceed a period of
60 days from the end of the initial 60-day period. The notice required by the first sentence of this Section shall be in writing, shall be set forth in a manner calculated to be understood by the claimant and,
in the case of an adverse benefit determination, shall set forth the following: 
 (i) The specific reason or reasons for the adverse
determination; 
 (ii) Reference to the specific Plan provisions upon which the determination is based; 

(iii) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant’s claim for benefits, such relevance to be determined in accordance with Section 6.2(c), below; and 

(iv) An explanation of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit
determination on appeal. 
 (c) Definition of Relevant. For purposes of this Section, a document, or other information shall be
considered “relevant” to the claimant’s claim if such document, record or other information: 
 (1) Was relied upon in making
the benefit determination; 
 (2) Was submitted, considered or generated in the course of making the benefit determination, without regard
to whether such document, record or other information was relied upon in making the benefit determination; or 
 (3) Demonstrates compliance
with the administrative processes and safeguards required pursuant to this Section 6.2 on making the benefit determination. 
 (d)
Decisions Final; Procedures Mandatory. To the extent permitted by law, a decision on review or appeal shall be binding and conclusive upon all persons whomsoever. To the extent permitted by law, completion of the claims procedures
described in this Section shall be a mandatory precondition that must be complied with prior to commencement of a legal or equitable action in connection with the Plan by a person claiming rights under the Plan. The Committee may, in its sole
discretion, waive these procedures as a mandatory precondition to such an action. 

  
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 (e) Time For Filing Legal Or Equitable Action. Any legal or equitable action
filed in connection with the Plan by a person claiming rights under the Plan must be commenced not later than the earlier of: (1) the shortest applicable statute of limitations provided by law; or (2) two (2) years from the date the
written copy of the Committee’s decision on review is delivered to the claimant in accordance with Section 6.2(b)(1). 

ARTICLE VII 

SUCCESSORS, BINDING AGREEMENT 

7.1 Successors. PNM Resources will negotiate to require any independent successor to all or substantially all of the assets of
PNM Resources to provide written confirmation, within thirty (30) days of the effective date of the Change in Control, of its agreement to assume and perform the Company’s obligations pursuant to this Plan. The failure of a successor to
assume and perform the Company’s obligations pursuant to the Plan shall constitute a material breach of the Plan by the Company. 
 7.2
Binding Agreement. Subject to the right of PNM Resources to amend or terminate this Plan, and the Committee’s right to interpret this Plan, this Plan shall be for the benefit of and be enforceable by, a Participant’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 
 ARTICLE VIII

 NOTICE 

8.1 General. For the purpose of this Plan, and except as specifically set forth herein, notices and all other communications
provided for in the Plan shall be in writing and shall be deemed to have been duly given when hand-delivered or mailed by United States certified mail, return receipt requested, postage prepaid, addressed to the Participant at his or her last known
address, and to the Company at 414 Silver Ave. SW, Albuquerque, New Mexico, 87102, provided that all notices to the Company shall be directed to the attention of the Secretary of PNM Resources, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt. 

ARTICLE IX 

AMENDMENT AND TERMINATION 

9.1 Amendment and Termination. The Plan may be amended, in whole or in part, or terminated at any time, by PNM Resources,
subject to the following exceptions: 
 (a) No amendment or termination of this Plan shall impair or abridge the obligations of the Company
already incurred. 
 (b) No amendment or termination of this Plan shall affect the rights of a Participant who terminated employment before
the effective date of such amendment or termination and who subsequently satisfied the eligibility provisions of this Plan. 

  
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 (c) If a Change in Control occurs within 24 months following the later of the adoption or
effective date of the amendment or termination of the Plan, or during the Protection Period triggered by that Change in Control, the amendment or termination shall be disregarded and this Plan will revive and continue for the Protection Period to
the extent that such amendment or termination impairs or abridges the rights or benefits of an employee of the Company who was a Participant upon the effective date of such Plan amendment or termination. Notwithstanding the foregoing, all changes
made in order to comply with Section 409A of the Code shall remain in effect. 
 (d) If the Protection Period has begun, the Plan shall
continue and may not be terminated during the Protection Period. 
 (e) Notwithstanding the foregoing, the Plan may be amended at will at any
time and from time to time by PNM Resources to reflect changes necessary due to revisions to, or interpretations of: (1) ERISA, as amended; (2) Sections 280G, 409A or 4999 of the Code; or (3) any other provision of applicable state or
federal law. 
 (f) Notwithstanding any provision of this Plan to the contrary, no amendment may be made if it will result in a violation of
Section 409A of the Code and any such amendment shall at no time have any legal validity. 
 ARTICLE X 

MISCELLANEOUS 
 10.1
Governing Law. The laws of the State of New Mexico shall govern the validity, interpretation, construction and performance of this Plan, except to the extent preempted by federal law. 

10.2 Withholding. Any payments provided for hereunder shall be paid subject to any applicable withholding required under federal,
state or local law. 
 10.3 No Right of Assignment. Neither a Participant nor any person taking on behalf of a Participant may
anticipate, assign or alienate (either by law or equity) any benefit provided under the Plan and the Company shall not recognize any such anticipation, assignment or alienation. Furthermore, to the extent permitted by law, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or other legal or equitable process. 
 10.4 Survival of Rights. In
addition to the limitations on termination of this Plan set forth in Section 9.1 (Amendment and Termination), any obligations of the Company to make payments that have been due to Participants who have, at the time of expiration of the
Plan, satisfied the eligibility requirements pursuant to Articles IV (Eligibility for Retention Benefits) and V (Retention Benefits) above during the term hereof, shall survive the termination of this Plan. 

10.5 No Employment Contract. Notwithstanding anything to the contrary contained in this Plan, by the execution of this Plan the
Company does not intend to change the employment-at-will relationship with any of its employees. Instead, the Company retains its absolute right to terminate any
employee at any time, for any or no reason and without notice. 

  
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 10.6 Mitigation of Benefits. A Participant shall not be required to mitigate
the amount of payment provided for in Article V (Retention Benefits) by seeking other employment or otherwise, nor, except as specifically provided in Article V (Retention Benefits), shall the amount of any payment or benefit
provided for in Article V (Retention Benefits) be reduced by: (a) any compensation earned by the Participant as the result of employment by another employer; (b) by retirement benefits; or (c) offsets against any amount
claimed to be owed by the Participant to the Company. 
 10.7 Service of Process. The Secretary of PNM Resources shall be the
agent for service of process in matters relating to this Plan. 
 10.8 Headings. The headings and subheadings in this Plan are
inserted for convenience and reference only and are not to be used in construing this Plan or any provision hereof. 
 10.9 Gender and
Number. Where the context so requires, words in the masculine gender shall include the feminine and neutral genders, the plural shall include the singular, and the singular shall include the plural. 

10.10 ERISA Plan. This Plan shall be interpreted as, and is intended to qualify as, a severance pay plan under ERISA, and
therefore does not constitute an employee pension benefit plan pursuant to Section 3(2) of ERISA. 
 10.11 Validity. The
invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect. 

10.12 Adoption by Affiliates. 

(a) An Affiliate, by action of its board of directors, may adopt the Plan with respect to its Officers only with the approval of the Board.

 (b) Except as otherwise clearly indicated by the context (such as in the definitions of Affiliate, Board, Change in Control and Committee)
the term “Company” as used herein shall include each Affiliate that has adopted this Plan in accordance with this Section 10.12 but not any Affiliate that has not adopted this Plan. 

(c) By adopting the Plan, the Affiliate shall be deemed to have agreed to: 

(1) Assume the obligations and liabilities imposed upon it by the Plan with respect to the its Officers; 

(2) Comply with all of the terms and provisions of the Plan; 

(3) Delegate to the Committee the power and responsibility to administer the Plan with respect to the Affiliate’s Officers; 

(4) Delegate to PNM Resources the full power to amend or terminate the Plan with respect to the Affiliate’s Officers; and 

  
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 (5) Be bound by any action taken by PNM Resources pursuant to the terms and provisions of
the Plan, regardless of whether such action is taken with or without the consent of the Affiliate. 
 (d) Any Affiliate that has adopted this
Plan for the benefit of its Officers may terminate its adoption of the Plan by action of its board of directors and timely providing notice to PNM Resources of such termination. 

(e) PNM Resources and each participating Affiliate shall bear the costs and expenses of providing benefits to their respective Officers who are
Participants. Such costs and expenses shall be allocated among PNM Resources and participating Affiliates in accordance with agreements entered into between PNM Resources and any participating Affiliate, or in the absence of such an agreement,
procedures adopted by PNM Resources. 
 IN WITNESS WHEREOF, the Company has caused this Plan document to be executed by its duly authorized
representative on this 20th day of October, 2020. 
  

			
	PNM RESOURCES, INC.
		
	By:	 	 /s/ Patrick V. Apodaca

		 	Its: Senior Vice President, General Counsel and Secretary



  
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 GLOSSARY 

(f) “Affiliate” means (1) 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 PNM Resources as a member of the group; and (2) 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 PNM Resources as a member of the group. 
 (g)
“Base Salary” means the Participant’s highest annual salary from the Company in effect during the Protection Period. 

(h) “Board” or “Board of Directors” means the Board of Directors of PNM Resources. The Board
may delegate its responsibilities in accordance with its standard practices and procedures. 
 (i) “Cause” means, for
purposes of termination of a Participant’s employment: 
 (1) The willful and continued failure of a Participant to substantially
perform his or her duties with PNM Resources or any Affiliate after written demand for substantial performance is delivered to the Participant which specifically identifies the manner in which the Participant has not substantially performed his or
her duties; 
 (2) The willful failure to report to work for more than 30 days; 

(3) The willful engaging by the Participant in conduct which is demonstrably and materially injurious to PNM Resources or any Affiliate,
monetarily or otherwise, including acts of fraud, misappropriation, violence or embezzlement for personal gain at the expense of PNM Resources or any Affiliate, conviction of a felony, or conviction of a misdemeanor involving immoral acts; or 

(4) For a Tier I or Tier II Officer, the violation of any provision of the Restrictive Covenant Agreement described in Section 4.4
(Restrictive Covenant Agreement). 
 Cause shall not be deemed to exist on the basis of paragraph (1) or (2) if the
failure results from such Participant’s incapacity due to verifiable physical or Mental Illness substantiated by appropriate medical evidence. After the issuance of a Notice of Termination by the Participant due to Constructive Termination, an
act, or failure to act, by a Participant shall not be deemed “willful” for purposes of paragraph (1) or (2) and shall not give rise to Cause pursuant to this Section. An act, or failure to act, by a Participant shall not be
deemed “willful” if done or omitted to be done by the Participant in good faith and with a reasonable belief that his or her action was in the best interests of PNM Resources and its Affiliates. 

(j) “Change in Control” means any of the following: 

(1) Any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 becoming directly or
indirectly the “beneficial owner” as defined in Rule 13d-3 under the Securities Exchange Act, of securities of PNM Resources representing 20% or more of the combined voting power of PNM
Resources’ then outstanding 

  
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securities unless such person is, or shall be, a trustee or other fiduciary holding securities under an employee benefit plan of PNM Resources, or a corporation owned, directly or indirectly, by
the shareholders of PNM Resources in substantially the same proportion as their ownership of stock of PNM Resources; 
 (2) During any
period of two consecutive years, excluding any period prior to the Effective Date of this Plan, the following individuals ceasing, for any reason, to constitute a majority of the Board of Directors: 

(i) directors who were directors at the beginning of such period; and 

(ii) any new directors whose election by the Board or nomination for election by PNM Resources’ shareholders was approved by a vote of at
least two-thirds (2/3rds) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, such new
directors being referred to as “Approved New Directors.” 
 For purposes of determining whether a Change in Control has occurred
pursuant to this paragraph (2), a director designated by a person who has entered into an agreement with PNM Resources to effect a transaction described in paragraphs (1), (3) or (4) of this Section (j) shall not be considered to
be an “Approved New Director.” 
 (3) The shareholders of PNM Resources approving a merger or consolidation of PNM Resources with
another company, corporation or subsidiary that is not affiliated with PNM Resources immediately before the Change in Control; provided, however, that if the merger or consolidation would result in the voting securities of PNM Resources outstanding
immediately prior thereto continuing to represent, either by remaining outstanding or by being converted into voting securities of the surviving entity, at least 60% of the combined voting power of the voting securities of PNM Resources or such
surviving entity outstanding immediately after such merger or consolidation, the merger or consolidation will be disregarded; or 
 (4) The
adoption of a plan of complete liquidation of PNM Resources or an agreement for the sale or disposition by PNM Resources of all or substantially all of PNM Resources’ assets. 

Notwithstanding the foregoing, a Change in Control will not be deemed to have occurred until: (1) any required regulatory approval,
including any final non-appealable regulatory order, has been obtained and (2) the transaction that would otherwise be considered a Change in Control closes. 

(k) “Code” means the Internal Revenue Code of 1986, as amended. 

(l) “Committee” means the Benefits Governance Committee appointed by PNM Resources. 

(m) “Company” means, collectively, PNM Resources and any Affiliate of PNM Resources that has adopted this Plan in
accordance with Section 10.12 (Adoption by Affiliates). As used in this Plan, “Company” also means any successor to the assets of PNM Resources that assumes and agrees to perform PNM Resources’ obligations
hereunder, by operation of law or otherwise. 

  
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 (n) “Compensation Committee” means the Compensation and Human
Resources Committee of the Board. 
 (o) “Constructive Termination” means, without a Participant’s express
written consent, the occurrence during the Protection Period of any of the following circumstances, subject to the exceptions and modifications noted below: 

(1) The failure to elect or reelect or otherwise to maintain the Officer in the office or the position, or a substantially equivalent or
better office or position, of or with the Company and/or an Affiliate, as the case may be, which the Officer held immediately prior to a Change in Control, or the removal of the Officer as a member of the Board of Directors of the Company (or any
successor thereto) if the Officer was a Director of the Company immediately prior to the Change in Control; 
 (2) A significant adverse
change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Affiliate which the Officer held immediately prior to the Change in Control; 

(3) A fifteen percent (15%) or more reduction in the aggregate of the Officer’s Base Salary and Officer Annual Incentive Plan award
opportunity (calculated at the target level of performance) received from the Company and any Affiliate; 
 (4) A requirement that the
Officer’s principal location of work be changed to any location that is in excess of 35 miles from the location thereof immediately prior to the Change in Control; 

(5) Without limiting the generality or effect of the foregoing, any material breach of the terms of this Plan by the Company or any successor
thereto. 
 A Participant must provide a written Notice of Termination to the Company of the existence of the Constructive Termination
condition described in paragraphs (1)-(5) above within 90 days of the initial existence of the condition. 
 Notwithstanding anything to the
contrary, an event described in paragraphs (1)-(5) above will not constitute Constructive Termination if, within 30 days after the Participant gives the Company the Notice of Termination specifying the occurrence or existence of an event that the
Participant believes constitutes Constructive Termination, the Company has fully corrected (or reversed) such event. 
 (p)
“Disability” and “Disabled” shall have the same meaning as provided in the Company’s long-term disability plan for the provision of long-term disability benefits. 

(q) “Eligible Compensation” means the sum of the (1) Participant’s Base Salary, (2) any cash award paid
as a merit increase in lieu of an increase in Base Salary received 

  
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during the 12-month period immediately preceding the Participant’s Separation from Service, and (3) the average of the awards actually received
by the Participant pursuant to the Officer Annual Incentive Plan for services performed during the three calendar years immediately preceding the calendar year in which the Change in Control occurs. If the Participant did not participate in the
Officer Annual Incentive Plan for all three of the calendar years immediately preceding the calendar year in which the Change in Control occurs, the average of the awards actually received during the two calendar years immediately preceding the
calendar year in which the Change in Control occurs (or the calendar year immediately preceding the calendar year in which the Change in Control occurs, if the Participant only participated during that year) will be used. If the Participant did not
participate in the Officer Annual Incentive Plan prior to the calendar year in which the Change in Control occurs, the Participant’s “target award” for the calendar year in which the Change in Control occurs will be used instead of
the average. Unless otherwise stated pursuant to the Officer Annual Incentive Plan, the “target award” is 50% of the Participant’s highest maximum award opportunity under the Officer Annual Incentive Plan for the year in which the
Change in Control occurs. 
 (r) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. 

(s) “Health Plan” means the PNM Resources, Inc. Comprehensive Health Plan as it may be amended or restated from time to
time or any successor plan or plans that provide the benefits currently provided under such plan. 
 (t) “Mental
Illness” means any disorder, other than a disorder induced by alcohol or drug abuse, which impairs the behavior, emotional reaction or thought process of a person. 

(u) “Notice of Termination” means a notice from either the Company or a Participant, as applicable. If the termination
is for Cause or based on Constructive Termination, the notice shall indicate the specific termination provision in this Plan relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination
of the Participant’s employment. If a Participant is providing a Notice of Termination based on Constructive Termination, the Notice of Termination must be provided to the Company’s General Counsel no more than 90 days following the
occurrence of the condition giving rise to Constructive Termination and the Notice of Termination must be given at least 30 days prior to the date of the Participant’s Separation from Service. However, the Company retains its rights as an at
will employer to terminate any employee at any time and for any reason. 
 (v) “Officer” means any officer of PNM
Resources (1) with the title Chief Executive Officer (CEO), Chief Operating Officer (COO), Executive Vice President (EVP), Senior Vice President (SVP), or Vice President (VP) or any other title that describes a position of higher authority than
that of a Vice President, and (2) who is classified and coded as an Officer pursuant to PNM Resources’ compensation system. 
 (w)
“Officer Annual Incentive Plan” means the annual incentive compensation plan maintained by the Company for Officers. 

  
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 (x) “Participant” means any Officer who has satisfied the
eligibility requirements of this Plan. 
 (y) “Plan” means the PNM Resources, Inc. Officer Retention Plan, as
amended. 
 (z) “PNM Resources” means PNM Resources, Inc. As used in the Plan, “PNM Resources” also means
any successor in interest resulting from merger, consolidation, or transfer of substantially all of PNM Resources’ assets. 
 (aa)
“Prior Plan Document” means the Plan document in effect prior to the Effective Date. 
 (bb) “Protection
Period” means the period beginning with the date on which a transaction closes, or an event occurs which results in a Change in Control and ending 24 months thereafter. 

(cc) “Restrictive Covenant Agreement” means the agreement described in Section 4.4 (Restrictive Covenant
Agreement). 
 (dd) “Separation from Service” means either (1) the termination of a Participant’s
employment with Company and all Affiliates due to death, retirement or other reasons, or (2) a permanent reduction in the level of bona fide services the Participant provides to Company and all Affiliates to an amount that is 20% or less of the
average level of bona fide services the Participant provided to Company and all Affiliates in the immediately proceeding 36 months, with the level of bona fide service calculated in accordance with Treasury Regulation Section 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 Company or an 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 6-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. 
 Generally, the date of a
Participant’s Separation from Service will be specified in the Notice of Termination. In the case of a termination for Cause, the date of Separation from Service shall be immediately upon receipt of the Notice of Termination. In the case of an
involuntary termination of employment by the Company for any reason other than Cause, death or Disability, the date of Separation from Service shall not be less than 15 days from the date the Notice of Termination is given. In the case of
Constructive Termination, the date of Separation from Service shall be not less than 30 days from the date the Notice of Termination is given. 

  
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 (ee) “Specified Employee” means certain officers and highly
compensated employees of the Company as defined in Treasury Regulation Section 1.409A-1(i). The identification date for determining whether a Participant is a Specified Employee during any calendar year
shall be the September 1 preceding the commencement of such year. 
 (ff) “Tier I Officer” means the Chief
Executive Officer of PNM Resources, any Executive Vice President or Senior Vice President of PNM Resources, and any other officer of PNM Resources who is designated as a Tier I Officer by the Compensation Committee. The designation must be made in
the minutes of a meeting of the Compensation Committee or in a unanimous written consent signed by all the members of the Compensation Committee. A designation by the Compensation Committee shall override the classification (i.e., Tier I, Tier II,
or Tier III) that would otherwise apply based on the Officer’s title. 
 (gg) “Tier II Officer” means the
Treasurer, the Controller and the Vice President of Regulatory Affairs of PNM Resources, and any other officer of PNM Resources who is designated as a Tier II Officer by the Compensation Committee. The designation must be made in the minutes of a
meeting of the Compensation Committee or in a unanimous written consent signed by all the members of the Compensation Committee. A designation by the Compensation Committee shall override the classification (i.e., Tier I, Tier II, or Tier III) that
would otherwise apply based on the Officer’s title. 
 (hh) “Tier III Officer” means all other Vice Presidents
of PNM Resources, and any other officer of PNM Resources who is designated a Tier III Officer by the Compensation Committee. The designation must be made in the minutes of a meeting of the Compensation Committee or in a unanimous written consent
signed by all the members of the Compensation Committee. A designation by the Compensation Committee shall override the classification (i.e., Tier I, Tier II, or Tier III) that would otherwise apply based on the Officer’s title. 

  
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 EXHIBIT A 

RELEASE AGREEMENT 

  
 A-1 













 EXHIBIT B 

RESTRICTIVE COVENANT AGREEMENT 

  
 B-1