Exhibit 10.31

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**PNM RESOURCES, INC.NON-UNION SEVERANCE PAY Plan**

**INTRODUCTION**

Effective January 1, 2002, Public Service Company ofNew Mexico ("PNM") adopted the Public Service Company of New Mexico Benefits MyWay Plan (the "BMW Plan").  EffectiveNovember 27, 2002, sponsorship of the Plan was transferred from PNM to PNMResources, Inc. ("PNM Resources") and the Plan was renamed the "PNM Resources,Inc. Benefits My Way Plan."  The BMWPlan consisted of a number of component programs including Program 12, Non-UnionSeverance Pay Program (the "Non-Union Severance Program"). 

Effective as of January 1, 2004, PNM Resources amended andrestated the BMW Plan to divide it into a number of separate plans that replacethe 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 createdas a successor plan to the Non-Union Severance Program.  Effective as of January 1, 2004 (the"Effective Date"), PNM Resources hereby amends and restates the Plan in theform of this document.

**Article IPURPOSE**

1.1             **General.** The purpose of the Plan is to provide severance benefits to eligibleParticipants.  The Plan provides threeforms of severance benefits:  (a)Regular Severance Benefits; (b) Enhanced Severance Benefits; and (c) SeniorManagement Group Severance Benefits.

**Article IIDEFINITIONS**

2.1             **Definitions.**  When a word or phrase appears in the Plan with the initial lettercapitalized, and the word or phrase does not commence a sentence, the word orphrase shall generally be a term defined in this Article II or in theIntroduction.  The following words andphrases used in the Plan with the initial letter capitalized shall have themeanings set forth below, unless a clearly different meaning is required by thecontext in which the word or phrase is used or the word or phrase is definedfor a limited purpose elsewhere in the Plan document:

**(a)              "Affiliate"** means any member a "controlledgroup of corporations" (within the meaning of Section 414(b) of the Codeas modified by Section 415(h) of the Code) that includes PNM Resources asa member of the group; any member of an "affiliated service group" (within themeaning of Section 414(m)(2) of the Code) that includes PNM Resources as amember of the group; any member of a group of trades or businesses under commoncontrol (within the meaning of Section 414(c) of the Code as modified bySection 415(h) of the Code) that includes PNM Resources as a member of thegroup; and any other entity required to be 

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Exhibit 10.31

**(b)              **aggregated with PNM Resources pursuant to regulationsissued by the United States Treasury Department pursuant to Section 414(o)of the Code.

**(c)               "Base Salary"**means the annual rate of baseearnings of a Participant immediately preceding his or her termination date:

**(1)      **exclusive of overtime pay, bonuses, commission, paymentsfor accrued vacations or other special payments; and 

**(2)      **before any deductions, including, but not limited to, anyfederal, state or other taxes, and salary reduction amounts contributed to benefitplans or programs. 

**(d)              "Benefits Department"**means theorganizational unit of PNM Resources with the responsibility of administeringbenefit programs.  Effective January 1,2005 "Benefits Department' means the organizational unit of PNMR ServicesCompany with responsibility of administering benefit programs sponsored by PNMResources.

**(e)              "Board"**means the Board of Directors of PNMResources.

**(f)                "Cause"**means, for purposes of terminationof a Participant's employment:

**(1)              **The willful and continued failure of a Participant tosubstantially perform his or her duties with the Company after written demandfor substantial performance is delivered to the Participant which specificallyidentifies the manner in which the Participant has not substantially performedhis or her duties;

**(2)              **The willful failure to report to work for more than thirty(30) days; or

**(3)              ** The willful engaging by the Participant in conduct whichis demonstrably and materially injurious to the Company, monetarily orotherwise, including acts of fraud, misappropriation, violence or embezzlementfor personal gain at the expense of the Company, conviction of a felony, orconviction of a misdemeanor involving immoral acts.

Cause shall not be deemed toexist on the basis of clauses (1) or (2) if the failure results from suchParticipant's incapacity due to verifiable physical or Mental Illnesssubstantiated by appropriate medical evidence. An act, or failure to act, by a Participant shall not be deemed"willful" for purposes of clause (1) or (2) if it is an anticipated oractual failure that occurs after the issuance of a Notice of Termination by theParticipant due to Constructive Termination. 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 andwith a reasonable belief that his or her action was in the best interests ofthe Company.

**(g)              "Code"**means the Internal Revenue Code of1986, as amended.

**(h)              "Committee"**means PNM Resources' BenefitsGovernance Committee.

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Exhibit 10.31

**(i)              "Company"**means PNM Resources or anyAffiliate of PNM Resources 

**(j)                **that is authorized by the Board to adopt the Plan andwhich has adopted the Plan pursuant to Article IX (Adoption by Affiliates).

**(k)             "Constructive Termination" or "ConstructivelyTerminated"**means a Participant who receives a Notice of Impaction andhas his or her employment terminated by the Company if the Participant isoffered a transfer to a location but declines the offer because the newlocation to which the Participant would be required to report is more thanfifty (50) miles from the Participant's previous location.  An Employee who is asked to transfer but isnot Impacted because his or her position is not eliminated, is notConstructively Terminated for purposes of the Plan.

**(l)               "Effective Date"**means January 1, 2004.

**(m)            "Employee"**means a common law employee whois a full-time employee of the Company scheduled to work at least thirty‐two(32) hours per week, or a regular part‐time or job share employeescheduled to work at least twenty (20) hours per week.  Examples of individuals who are not Employeesof the Company include:  (1)consultants; (2) leased employees or workers; (3) individuals providingservices to the Company pursuant to a contract with a third party; (4)temporary employees or workers; (5) independent contractors; (6) employeesof independent contractors; (7) interns; and (8) co-op employees.

**(n)              "Enhanced Severance Benefits"**means thebenefits described in Section 4.2 (Enhanced Severance Benefits).

**(o)              "ERISA"**means the Employee Retirement IncomeSecurity Act of 1974, as amended.

**(p)              "Health Plan"**means the PNM Resources, Inc.Comprehensive Health Plan as it may be amended or restated from time to time orany successor plan or plans that provide the benefits currently provided undersuch plan.

**(q)              "Impaction"**means the elimination of aParticipant's position by the Company as approved by the President of theCompany or his or her authorized designee, followed by the Company giving aNotice of Impaction to the Participant and the Participant's subsequent terminationof employment.

**(r)               "Management Group"**means any Participant whois salary grade P15 or higher.  

**(s)               "Mental Illness"**means any disorder, otherthan a disorder induced by alcohol or drug abuse, which impairs the behavior,emotional reaction or thought process of a person. 

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Exhibit 10.31

**(t)               ****"Notice of Impaction"** means the writtennotice issued by the Company to the Participant stating that his or herposition with the Company has been selected for Impaction.

**(u)              ****"Notice of Termination"** means a notice fromeither the Company or a Participant, as applicable.  In the event the Termination is for Cause or based onConstructive Termination, the notice shall indicate the specific terminationprovision in the Plan relied upon and shall set forth in reasonable detail thefacts and circumstances claimed to provide a basis for termination of theParticipant's employment.  The Companyretains its rights as an at will employer to terminate any Employee at any timeand for any reason.

**(v)              "Participant"** means any Employee who hassatisfied the eligibility requirements for participation in the Plan.

**(w)             ****"Plan"**means the PNM Resources, Inc.Non-Union Severance Pay Plan.

**(x)              "Plan Year"** means a twelve (12) month periodcommencing on each January 1 and ending on each following December 31.

**(y)              "PNM Resources"** means PNM Resources,Inc.  As used in the Plan, "PNMResources" also means any successor in interest to PNM Resources resulting frommerger, consolidation, or transfer of substantially all of PNM Resources'assets.

**(z)               "Regular Severance Benefits"** means thebenefits described in Section 4.1 (Regular Severance Benefits).

**(aa)          ****"ReleaseAgreement"** means theEmployment Termination and Release Agreement to be executed by a Participant inorder to be eligible for and receive Enhanced Severance Benefits pursuant toSection 4.2 (Enhanced Severance Benefits) or Senior Management GroupSeverance Benefits pursuant to Section 4.3 (Senior Management GroupSeverance Benefits).  The ReleaseAgreement shall be prepared only by the Company.

**(bb)          ****"Senior Management Group"** means theEmployees who are designated as such by the President of the Company from timeto time.

**(cc)           ****"Senior Management Group Severance Benefits"**means the benefits described in Section 4.3 (Senior Management GroupSeverance Benefits).

**(dd)          ****"Year of Service"** means a twelve (12) monthperiod during which a Participant performs services for the Company, countingeach month as one-twelfth (1/12th) of a year if the Participant was employed bythe Company on any day of that calendar month. If the Participant's employment with the Company includes a break inemployment, then only the Years of Service in the last period of employmentwill be considered Years of Service.  

**2.2             ****Construction**.  The masculine gender, when appearing in the Plan, shall includethe feminine gender (and vice versa), and the singular shall include theplural, unless the Plan clearly states to the contrary.  Headings and subheadings are for the purposeof reference only 

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Exhibit10.31

and are not to beconsidered in the construction of the Plan. If any provision of the Plan is determined to be for any reason invalidor unenforceable, the remaining provisions shall continue in full force andeffect.  All of the provisions of thePlan shall be construed and enforced according to the laws of the State of NewMexico and shall be administered according to the laws of such state, except asotherwise required by ERISA, the Code, or other applicable Federal law.

**Article IIIELIGIBILITY**

**3.1             ****Eligibility for Regular Severance Benefits**.  To be eligible for Regular SeveranceBenefits hereunder, a Participant must: (1) have his or her employment terminated by the Company, or beConstructively Terminated, due to the elimination of his or her job position;(2) receive a Notice of Impaction; and (3) not be ineligible to receivebenefits under Section 3.5 (Certain Employees Ineligible For Benefits).

**3.2             ****Eligibility for Enhanced Severance Benefits**.  In order to be eligible for EnhancedSeverance Benefits hereunder, a Participant must:  (1) have his or her employment terminated by the Company, or be ConstructivelyTerminated, due to the elimination of his or her job position; (2) receive aNotice of Impaction; (3) not be ineligible to receive benefits under Section3.5 (Certain Employees Ineligible For Benefits); and (4) sign anddeliver a Release Agreement pursuant to Section 3.4 (Release Agreement)below.  If a Participant elects toreceive Enhanced Severance Benefits by signing and delivering a ReleaseAgreement, Participant may not bring any claim in any forum whatsoever.

**3.3             ****Eligibility for Senior Management Group SeveranceBenefits**.  In order to beeligible for Senior Management Group Severance Benefits, a Participant must:(1) have his or her employment terminated by the Company, or be ConstructivelyTerminated, due to the elimination of his or her job position; (2) be a memberof the Senior Management Group; (3) not be ineligible to receive benefits underSection 3.5 (Certain Employees Ineligible for Benefits); and (4) signand deliver a Release Agreement pursuant to Section 3.4 (Release Agreement)below.  A Participant who is eligiblefor Senior Management Group Severance Benefits is not required to receive aNotice of Impaction.  If a Participantelects to receive Senior Management Group Severance Benefits by signing anddelivering a Release Agreement, Participant may not bring any claim in anyforum whatsoever.

**3.4             ****Release Agreement**.  The Release Agreement required by Section 3.2 (EnhancedSeverance Benefits) and 3.3 (Senior Management Group Severance Benefits)shall comply with the requirements of this Section.

**(a)              ****General**. The Release Agreement shall contain such terms and conditions as aresatisfactory to the Company, including, but not limited to, the release of anyand all claims that the Participant may then have, as of the signing of suchrelease, against the Company, its employees, officers and directors. TheParticipant shall generally have up to forty-five (45) days following the datethe Release Agreement are given to the Participant to sign and return theRelease Agreement to the Company.

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Exhibit 10.31

**(b)              ****Revocation of the Release Agreement**.  Within seven (7) calendar days afterdelivery of the Release Agreement to the Company by the Participant, theParticipant shall be entitled to revoke them by returning the signed copy orcounterpart original of the Release Agreement to the Company, which includesthe Participant's written signature in a space provided thereon, indicating hisor her decision to revoke the Release Agreement.

**(c)               ****Impact of Revocation**.  The revocation of a previously signed anddelivered Release Agreement pursuant to the above shall be deemed to constitutean irrevocable election by the Participant to have declined the election ofEnhanced Severance Benefits and Senior Management Group SeveranceBenefits.  If a Senior ManagementParticipant revokes an executed Release Agreement, the Senior ManagementParticipant may receive Regular Severance Benefits described in Section 4.1 (RegularSeverance Benefits), provided the Participant satisfies all the eligibilityrequirements of Section 3.1 (Regular Severance Benefits), except therequirement for receipt of the Notice of Impaction.

**3.5             ****Certain Employees Ineligible For Benefits.**  The following Employees shall be ineligibleto receive Regular, Enhanced, or Senior Management Severance Benefits hereunder:

**(a)              **Employees who have not completed their introductoryservice period of six months;

**(b)              **Employees whose terms and conditions of employment aresubject to collective bargaining;

**(c)               **Employees whose employment with the Company is terminatedfor Cause; and

**(d)              **Employees who voluntarily resign from employment with theCompany for reasons other than those that constitute Constructive Termination.

**Article IVBENEFITS**

**4.1             ****Regular Severance Benefits**.  Participants satisfying the eligibilityrequirements set forth in Section 3.1 (Eligibility for Regular SeveranceBenefits) shall be entitled to the following benefits:

**(a)              Severance Pay. **Severance pay shall be in a lump-sum amountequal to two (2) months of Base Salary, plus****one (1) additional week of Base Salary for eachYear of Service.

**(b)              ****Medical, Dental and Vision Coverage**.  Medical, dental and vision coverage underthe Health Plan, as the Participant had elected prior to Notice of Termination,shall be provided for the three (3) months immediately following the Employee'stermination date to the same extent as the Company and the Participant werepaying for the coverage prior to termination. Participant contributions that were required for participation in theHealth Plan will continue to be required during the three (3) monthcontinuation period.

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Exhibit 10.31

**(c)               ****COBRA Continuation Coverage**.  Continuation of coverage under the HealthPlan pursuant to Section 4980B of the Code will become effective uponcompletion of the three (3) month period.

**(d)              ****Life Insurance**.  Term life insurance coverage in the face amount of Ten ThousandDollars ($10,000) will be Company-paid for the three (3) month period followingthe Participant's termination date.

**(e)              ****Placement Assistance**.  The Company, at its sole option, will:

**(1)              **provide the Participant with placement assistance for upto six (6) months, either internally or through an outside consultant; or 

**(2)              **pay the Participant a lump-sum amount equal to fivepercent (5%) of the Participant's annual Base Salary.

**4.2             ****Enhanced Severance Benefits**.  Participants satisfying the eligibility requirementsset forth in Section 3.2 (Eligibility for Enhanced Severance Benefits)shall be entitled to the following benefits:

**(a)              ****Severance Pay**.  Severance pay shall be in a lump-sum amount equal to four (4)months of Base Salary, plus one (1) additional week of Base Salary for eachYear of Service.

**(b)              ****Medical, Dental and Vision Coverage**.  Medical, dental and vision coverage underthe Health Plan, as the Participant had elected prior to Notice of Termination,shall be provided for the six (6) months immediately following the Employee'stermination date to the same extent as the Company and the Participant werepaying for the coverage prior to termination. Participant contributions thatwere required for participation in the Health Plan will continue to be requiredduring the six (6) month continuation period.

**(c)               ****COBRA Continuation Coverage**.  Continuation of coverage under the HealthPlan pursuant to Section 4980B of the Code will become effective uponcompletion of the six (6) month period.

**(d)              ****Life Insurance**.  Term life insurance coverage in the face amount of Ten ThousandDollars ($10,000) will be Company-paid for the six (6) months following theParticipant's termination date.

**(e)              ****Placement Assistance for Employees who are notMembers of the Management Group**. For Participants who are not members of the Management Group, theCompany, at its sole option, will:

**(1)              **provide the Participant with placement assistance for upto six (6) months, either internally or through an outside consultant; and/or

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Exhibit 10.31

**(2)              **pay the Participant a lump sum amount equal to ten percent(10%) of the Participant's annual Base Salary.

**(f)                ****Placement Assistance for Employees who are Membersof the Management Group**.  ForParticipants who are members of the Management Group, the Company, at its soleoption, will:

**(1)              **provide the Participant with placement assistance for upto six (6) months, either internally or through an outside consultant; and/or

**(2)              **pay the Participant a lump sum amount equal to ten percent(10%) of the Participant's Base Salary plus an additional amount equal to one(1) month's Base Salary.

**4.3             ****Senior Management Group Severance Benefits**.  Participants satisfying the eligibilityrequirements of Section 3.3 (Eligibility for Senior Management GroupSeverance Benefits) shall be entitled to receive the following benefits:

**(a)              ****Severance****Pay**.  Severance pay shall be in a lump-sum amountequal to fourteen (14) month's Base Salary (with no additional cost-of-livingallowance, promotion, merit or other increases), plus one (1) additional weekof Base Salary for each Year of Service.

**(b)              ****Medical, Dental and Vision Coverage**.  Medical, dental and vision coverage underthe Health Plan, as the Participant had elected prior to Notice of Termination,shall be provided for the twelve (12) months immediately following the Employee'stermination date to the same extent as the Company and the Participant werepaying for the coverage prior to termination. Participant contributions thatwere required for participation in the Health Plan will continue to be requiredduring the twelve (12) month continuation period.

**(c)               ****COBRA Continuation Coverage**.  Continuation of coverage under the HealthPlan pursuant to Section 4980B of the Code will becomes effective uponcompletion of the twelve (12) month period.

**(d)              ****Life insurance and Accidental Death &Dismemberment Insurance**.  Termlife insurance coverage and accidental death and dismemberment insurancecoverage in the face amount of one (1) times Base Salary will be Company-paidfor the twelve (12) months following the Participant's termination date.

**(e)              ****Placement Assistance**.  The Company will reimburse the Participanthis or her placement assistance expenses, up to a maximum of five percent (5%)of the Participant's Base Salary. Placement assistance for Participants shall include, but not be limitedto, any of the following types of expenses:

**(1)              **out-of-town travel (*i.e.*, airfare, mileage, rentalcars, lodging and meals;

**(2)              **services for outplacement;

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Exhibit 10.31

**(3)              **resume preparation and mailing; and

**(4)              **recruitment or employment agencies' fees.

**4.4             ****Payment Date**.  Severance pay due a Participant shall be paid not later than thelater of the fifth (5th) business day following the later of his orher termination date, or the date of delivery by the Participant of an executedand unrevoked Release Agreement. Provided, however, that if the amount of such payment cannot be finallydetermined on or before such day, the Company shall pay to the Participant onsuch day an estimate, as determined in good faith by the Company, of theminimum amount of such payment and shall pay the remainder of such payments,together with interest at the rate provided in Code Section 1274(b)(2)(B)compounded semiannually (the "Semiannual AFR") as soon as the amount thereofcan be determined but in no event later than one (1) month after the Participant'stermination date.  In the event that theamount of the estimated payments exceeds the amount subsequently determined tohave been due, such excess shall constitute a loan by the Company to theParticipant.  This loan shall be payableon the tenth (10th) day after demand by the Company, together withinterest at the rate equal to the Semiannual AFR.  Notwithstanding the foregoing, to the extent that Section 402(a)of the Sarbanes-Oxley Act of 2002 ("Sarbanes-Oxley") applies and to the extentthat the loan described in the previous two sentences would violate Section 402of Sarbanes-Oxley, the Company shall not make the estimated payment provided inthis Section 4.4.

**4.5             ****Suspension of Benefits**.  Medical, dental, vision, and life insuranceand accidental death and dismemberment insurance benefits being received by aParticipant pursuant to the terms and conditions of this Article 4 shallterminate in the event, and at the time that, the Participant is subsequentlyrehired as an Employee of the Company.

**4.6             ****No Duplication of Benefits**.  Notwithstanding anything herein to thecontrary, the right to receive any benefits under the Plan by any Participantis specifically conditioned upon the Participant either waiving or beingineligible for any and all benefits under:

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

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

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

**(d)              **any successor or change in control or severance benefitplans otherwise available to the Participant; or

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

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Exhibit 10.31

**4.7             ****Effect of Rehire**.  Notwithstanding any provision to the contrary, the Company mayrequire a Participant to repay some or all of the benefits received under thePlan as a condition of reemployment.

**ArticleV****PLAN ADMINISTRATION**

**5.1             ****Plan Administration**.  The Committee shall administer thePlan.  The Committee shall be the "NamedFiduciary" 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 ofany provisions of the Plan by the Committee shall be final.  The Committee shall, in addition to theforegoing, exercise such other powers and perform such other duties as it maydeem advisable in the administration of the Plan.  The Committee may delegate some (or all) of its authorityhereunder to the Benefits Department. The Committee also may engage agents and obtain other assistance fromthe Company, including Company counsel. The Committee shall not be responsible for any action taken or not takenon the advice of legal counsel.  TheCommittee is given specific authority to allocate and revoke responsibilitiesamong its members or designees.  Whenthe Committee has allocated authority pursuant to the foregoing, the Committeeshall not be liable for the acts or omissions of the party to whom suchresponsibility has been allocated, except to the extent provided by law.

**5.2             ****Claims Procedures**.

**(a)              ****Initial Claim**.  A claim for benefits under the Plan must be submitted to theBenefits Department.

**(1)              ****Notice of Decision**.  Written notice of the disposition of theclaim shall be furnished to the claimant within a reasonable period of time,but not later than ninety (90) days after receipt of the claim by the BenefitsDepartment, unless the Benefits Department determines that specialcircumstances require an extension of time for processing the claim.  If the Benefits Department determines thatan extension is required, written notice (including an explanation of thespecial circumstances requiring an extension and the date by which the BenefitsDepartment expects to render the benefits determination) shall be furnished tothe claimant prior to the termination of the original ninety (90) dayperiod.  In no event shall such extensionexceed a period of ninety (90) days from the end of the initial ninety (90) dayperiod.  If the claim is denied, thenotice required pursuant to this Section shall set forth the following:

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

(B)             Special reference to the specific Plan provisions upon whichthe determination is based;

(C)             A description of any additional material or informationnecessary for the claimant to perfect the claim and an explanation of why suchmaterial or information is necessary; and

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Exhibit 10.31

(D)             An explanation of the Plan's appeal procedure and the timelimits applicable to an appeal, including a statement of the claimant's rightto bring a civil action under Section 502(a) of ERISA.

**(b)              ****Appeal Procedures**.  Every claimant shall have the right to appeal an adverse benefitsdetermination to the Committee (including, but not limited to, whether theParticipant's termination was for Cause). Such an appeal may be accomplished by a written notice of appeal filedwith the Committee within sixty (60) days after receipt by the claimant ofwritten notification of the adverse benefits determination.  Claimants shall have the opportunity tosubmit written comments, documents, records, and other information relating tothe claim for benefits.  Claimants willbe provided, upon request and free of charge, reasonable access to, and copiesof, all documents, records and other information relevant to the claimant'sclaim for benefits, such relevance to be determined in accordance with Section5.2(c) (Claims Procedures - Definition of Relevant) below.  The appeal shall take into account allcomments, documents, records, and other information submitted by claimantrelating to the claim, without regard to whether such information was submittedor considered in the initial benefit determination.

**(1)              ****Notice of Decision**.  Notice of a decision on appeal shall befurnished to the claimant within a reasonable period of time, but not laterthan sixty (60) days after receipt of the appeal by the Committee unless theCommittee determines that special circumstances (such as the need to hold ahearing if the Committee determines that a hearing is required) require anextension of time for processing the claim. If the Committee determines that an extension is required, writtennotice (including an explanation of the special circumstances requiring anextension and the date by which the Committee expects to render the benefitsdetermination) shall be furnished to the claimant prior to the termination ofthe original sixty (60) day period.  Inno event shall such extension exceed a period of sixty (60) days from the endof the initial sixty (60) day period. The notice required by the first sentence of this Section shall be inwriting, shall be set forth in a manner calculated to be understood by theclaimant and, in the case of an adverse benefit determination, shall set forththe following:

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

(B)             Reference to the specific Plan provisions upon which thedetermination is based; 

(C)             A statement that the claimant is entitled to receive, uponrequest 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 5.2(c) (ClaimsProcedures - Definition of Relevant), below; and

(D)             An explanation of the claimant's right to bring a civil actionunder Section 502(a) of ERISA following an adverse benefit determination onappeal.

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Exhibit 10.31

**(c)               ****Definition of Relevant**.  For purposes of this Section, a document, orother information shall be considered "relevant" to the claimant's claim ifsuch document, record or other information:

**(1)              **Was relied upon in making the benefit determination;

**(2)              **Was submitted, considered or generated in the course ofmaking the benefit determination, without regard to whether such document,record or other information was relied upon in making the benefitdetermination; or

**(3)              **Demonstrates compliance with the administrative processesand safeguards required pursuant to this Section 5.2 on making the benefitdetermination.

**(d)              ****Decisions Final; Procedures Mandatory**.  To the extent permitted by law, a decisionon review or appeal shall be binding and conclusive upon all personswhomsoever.  To the extent permitted bylaw, completion of the claims procedures described in this Section shall be amandatory precondition that must be complied with prior to commencement of alegal or equitable action in connection with the Plan by a person claimingrights under the Plan.  The Committeemay, in its sole discretion, waive these procedures as a mandatory preconditionto such an action.

**(e)              ****Time For Filing Legal Or Equitable Action**.  Any legal or equitable action filed inconnection with the Plan by a person claiming rights under the Plan must becommenced not later than the earlier of: (1) the shortest applicable statute of limitations provided by law; or(2) two (2) years of the date the written copy of the Committee's decision onreview is delivered to the claimant in accordance with Section 5.2(b)(1) (ClaimsProcedures - Appeal Procedures - Notice of Decision).

**ArticleVI****BINDING AGREEMENT**

**6.1             ****General**. Subject to the right of the Company to amend or terminate the Plan, andthe Committee's right to interpret the Plan, the Plan shall be for the benefit ofand be enforceable by, a Participant's personal or legal representatives,executors, administrators, successors, heirs, distributees, devisees andlegatees.  If a Participant should dieafter satisfying the requirements for the receipt of benefits hereunder, anyamount remaining unpaid to him or her, unless otherwise provided herein, shallbe paid in accordance with the terms of the Plan to the Participant's designeeor, if there is no such designee, to the Participant's estate.

**Article VII****NOTICE**

**7.1             ****General**. For the purpose of the Plan, and except as specifically set forthherein, notices and all other communications provided for in the Plan shall bein writing and shall be deemed to have been duly given when hand-delivered ormailed by United States certified mail, return receipt requested, postageprepaid, addressed to the Participant at his or her last known address, and tothe Company at Alvarado Square, Albuquerque, New Mexico, 87158, provided 

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Exhibit10.31

that all notices to theCompany shall be directed to the attention of the Secretary of the Company; orto such other address as either party may have furnished to the other inwriting in accordance herewith, except that notice of change of address shallbe effective only upon receipt.

**ArticleVIII****AMENDMENT AND TERMINATION**

**8.1             ****General**. 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 the Plan shall impair orabridge the obligations of the Company already incurred.

**(b)              **No amendment or termination of the Plan shall affect therights of a Participant who terminated employment before the effective date ofsuch amendment or termination and who subsequently satisfied the eligibilityprovisions of the Plan.

**(c)               **Notwithstanding the foregoing, the Plan may be amended atwill at any time and from time to time by PNM Resources to reflect changesnecessary due to revisions to, or interpretations of: (a) ERISA; (b) the Code;or (c) any other provision of applicable state or federal law.

**ArticleIX****ADOPTION BY AFFILIATES**

**9.1             ****General**. An Affiliate may adopt the Plan only with the approval of theBoard.  By adopting the Plan, theAffiliate shall be deemed to have agreed to: (a) assume the obligations and liabilitiesimposed upon it by the Plan; (b) comply with all of the other terms andprovisions of the Plan; (c) delegate to the Benefits Department the power andresponsibility to administer the Plan with respect to the Affiliate'semployees; and (d) delegate to PNM Resources the full power to amend or terminatethe Plan with respect to the Affiliate's employees.

**ArticleX****MISCELLANEOUS**

**10.1         ****Withholding**.  Any payments provided for hereunder shall be paid subject to anyapplicable withholding required under federal, state or local law.

**10.2         ****No Right of Assignment**.  Neither a Participant nor any person takingon behalf of a Participant may anticipate, assign or alienate (either by law orequity) any benefit provided under the Plan and the Company shall not recognizeany such anticipation, assignment or alienation.  Furthermore, to the extent permitted by law, a benefit under thePlan is not subject to attachment, garnishment, levy, execution or other legalor equitable process.

**10.3         ****No Employment Contract**.  Notwithstanding anything to the contrarycontained in the Plan, by the execution of the Plan, the Company does notintend to change the 

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Exhibit10.31

employment-at-willrelationship with any of its employees. Instead, the Company retains its absolute right to terminate anyemployee at any time.

**10.4         ****Mitigation of Benefits**.  The Participant shall not be required tomitigate the amount of payment provided for in the Plan by seeking otheremployment or otherwise, and except as set forth in the Plan, the amount of anypayment or benefit provided for shall not be reduced by any compensation earnedby the Participant as the result of employment by another employer, or byretirement benefits received.

**10.5         ****Service of Process**.  The Secretary of PNM Resources shall be theagent for service of process in matters relating to the Plan.

**10.6         ****ERISA Plan**. The Plan shall be interpreted as, and is intended to qualify as, aseverance pay plan under ERISA, and therefore does not constitute an employeepension benefit plan pursuant to Section 3(2) of ERISA.

**IN** WITNESS WHEREOF, the Company has caused this Plandocument to be executed by its duly authorized representative on this _19__day of __November___, 2004.

**PNM RESOURCES, INC.**

By:       /s/Alice A. Cobb                                                        

Its:       Sr. Vice President, People Services& Development 

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Article IPURPOSE

1.1       General................................................................................................................................ 1

Article IIDEFINITIONS

2.1       Definitions............................................................................................................................ 12.2       Construction......................................................................................................................... 4

Article IIIELIGIBILITY

3.1       Eligibilityfor Regular Severance Benefits............................................................................... 53.2       Eligibilityfor Enhanced Severance Benefits............................................................................ 53.3       Eligibilityfor Senior Management Group Severance Benefits.................................................. 53.4       ReleaseAgreement............................................................................................................... 53.5       CertainEmployees Ineligible For Benefits.............................................................................. 6

Article IVBENEFITS

4.1       RegularSeverance Benefits.................................................................................................. 64.2       EnhancedSeverance Benefits............................................................................................... 74.3       SeniorManagement Group Severance Benefits..................................................................... 84.4       PaymentDate....................................................................................................................... 84.5       Suspensionof Benefits.......................................................................................................... 94.6       NoDuplication of Benefits.................................................................................................... 94.7       Effectof Rehire.................................................................................................................... 9

Article VPLAN ADMINISTRATION

5.1       PlanAdministration............................................................................................................... 95.2       ClaimsProcedures............................................................................................................. 10

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Article VIBINDING AGREEMENT

6.1       General.............................................................................................................................. 12

Article VIINOTICE

7.1       General.............................................................................................................................. 12

Article VIIIAMENDMENT AND TERMINATION

8.1       General.............................................................................................................................. 12

Article IXADOPTION BY AFFILIATES

9.1       General.............................................................................................................................. 13

Article XMISCELLANEOUS

10.1     Withholding........................................................................................................................ 1310.2     No Rightof Assignment...................................................................................................... 1310.3     NoEmployment Contract................................................................................................... 1310.4     Mitigationof Benefits.......................................................................................................... 1310.5     Serviceof Process.............................................................................................................. 1310.6     ERISAPlan........................................................................................................................ 13