Document:

exh10-11_123108.htm

    Exhibit
10.11

    

    

    December
8, 2008

    

    

    

    Mr.
Jeffry E. Sterba

    Chief
Executive Officer

    PNM
Resources, Inc.

    Alvarado
Square, MS 2824

    Albuquerque,
NM  87158

    

    Re:           First Amendment to the Retention
Bonus Agreement

     

    Dear
Jeff:

    

    On August
30, 2007, you entered into a Retention Bonus Agreement (the “Agreement”) with
PNM Resources, Inc. (the “Company”) pursuant to which you are entitled to a
payment if you remain employed by the Company until March 1,
2010.  The payment provided under the Agreement is considered
“non-qualified deferred compensation” that is subject to Section 409A of the
Internal Revenue Code of 1986 (“Section 409A”), unless an exception
applies.  The Company has structured the payment to fit within the
short-term deferral exception to Section 409A.

     

    The
Internal Revenue Service has issued informal guidance with respect to payments
on a termination of employment due to disability such as the payment pursuant to
Section 5 of the Agreement.  The Company has determined it is
necessary to amend Section 5 of the Agreement to address the issues raised in
the Internal Revenue Service guidance and to minimize the risk of a Section 409A
violation.  In light of the foregoing, the Company proposes to amend
the Agreement as follows effective as of January 1, 2009:

     

    Section 5
(Payment of
Bonus) of the Agreement is hereby restated in its entirety to read as
follows:

     

    If you
are employed by the Company on March 1, 2010, payment of the Retention
Bonus will be made to you in two equal installments.  The first
installment will be paid to you on March 1, 2010.  The second
installment will be paid to you on March 1, 2011.  If your
employment is terminated by the Company without Cause or you terminate your
employment due to Constructive Termination, the Retention Bonus will be paid to
you within thirty (30) days of your termination and in no event later than two
and one-half (21⁄2) months following the end of the calendar year in 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    which
your termination of employment occurs.  If you die or become Disabled,
the Retention Bonus will be paid to you within thirty (30) days of your death or
the date on which you are deemed to be Disabled and in no event later than two
and one-half (21⁄2) months following the end of the calendar year in which you die
or are deemed to be Disabled.  You will be deemed to be Disabled as of
the last day of the third month following the date on which you commence
receiving income replacement benefits pursuant to the Company’s long-term
disability plan.

     

    This
First Amendment amends only the provisions of the Agreement as set forth herein,
and those provisions not expressly amended by this First Amendment shall
continue in full force and effect.  Notwithstanding the foregoing,
this First Amendment shall supersede the provisions of the Agreement to the
extent those provisions are inconsistent with the provisions and the intent of
this First Amendment.

     

    If you
are in agreement with the terms of this First Amendment, please so indicate by
signing and returning to me the enclosed copy of this letter, which will
constitute our binding agreement.

     

    Very
truly yours,

    

    PNM
RESOURCES, INC.

    

    

    

    By: /s/ Bonnie S.
Reitz                                                                         

          Bonnie S.
Reitz

          Chair of
the Human Resources & Compensation Committee

     

    AGREED:

    

    

    

     

     

    /s/ Jeffry E. Sterba                          
December 8, 2008

    Jeffry E.
Sterba                                                                          
 Date

    Chief
Executive Officer

    
      
        
          76003.9038\MEYERA\SWDMS\9289623.1exh10-12_123108.htm

    Exhibit
10.12

    

    SECOND
AMENDMENT

    TO
THE

    PNM
RESOURCES, INC.

    AMENDED
AND RESTATED

    OMNIBUS
PERFORMANCE EQUITY PLAN

    

    PNM
Resources, Inc. (the “Company”) previously established the “PNM Resources, Inc.
Omnibus Performance Equity Plan” (the “Plan”).  The Plan was amended
and restated, effective as of May 17, 2005, by the adoption of the PNM
Resources, Inc. Amended and Restated Omnibus Performance Equity
Plan.  The Company subsequently amended the Plan on one
occasion.  By this instrument, the Company now desires to amend the
Plan to reflect the treatment of Same-Sex Spouses for various purposes effective
January 1, 2009.

     

    1.           Except
as noted below, this Second Amendment shall be effective as of January 1,
2009.

     

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

     

    3.           Section
2.1  (Definitions) of the
Plan is hereby amended by adding the following new definitions to the end
thereof:

     

    (gg)              “Opposite-Sex
Spouse” – means
an individual of the opposite sex who is legally married to the Participant,
under the laws of the jurisdiction in which the marriage was performed or
occurred.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (hh)              “Same-Sex
Spouse” – means
an individual of the same sex who is legally married to the Participant, under
the laws of the jurisdiction in which the marriage was performed or
occurred.

    

    (ii)              “Spouse” - means the Opposite-Sex
Spouse or Same-Sex Spouse of the Participant.

    

    4.           Section
14  (Non-Transferability)
of the Plan is hereby amended by adding the following sentence to the end
thereof:

     

      
 Effective January 1, 2009, a qualified domestic relations order may be
entered in favor of a Spouse.

     

    

    5.           Section
18.3  (Tax Upon
Disposition of Shares Subject to §422 Restrictions) of the Plan is hereby
amended by inserting the phrase “in favor of a Spouse” immediately following the
words “qualified domestic relations order.”

    

    IN
WITNESS WHEREOF, PNM Resources has caused this Second Amendment to be executed
as of this 10th
day of November,
2008.

     

    PNM
RESOURCES, INC.

     

     

    By: /s/ Alice A.
Cobb                                                                          

     

          Its:
SVP, Chief
Administrative Officer

    

    
      
        
           

        

        2exh10-13_123108.htm

    Exhibit
10.13

    

    THIRD
AMENDMENT

    TO
THE

    PNM
RESOURCES, INC.

    AMENDED
AND RESTATED

    OMNIBUS
PERFORMANCE EQUITY PLAN

    

    PNM
Resources, Inc. (the “Company”) previously established the “PNM Resources, Inc.
Omnibus Performance Equity Plan” (the “Plan”).  The Plan was amended
and restated, effective as of May 17, 2005, by the adoption of the PNM
Resources, Inc. Amended and Restated Omnibus Performance Equity
Plan.  The Plan was subsequently amended on two
occasions.  By this instrument, the Company wishes to amend the Plan
to satisfy the documentation requirements of Section 409A of the Internal
Revenue Code (the “Code”), which became effective as of January 1, 2005, and
which applies to the Plan and certain awards granted pursuant to the
Plan.  The Plan has been and shall continue to be administered in good
faith compliance with the requirements of Code Section 409A from January 1, 2005
through December 31, 2008.

     

    1.      
 This
Third Amendment shall be effective as of January 1, 2009.

     

    2.      
 Section
2.1 (Definitions) of the
Plan is hereby amended by adding the following new definitions to the end
thereof:

     

    (jj)              “Specified Employee” means
certain officers and highly compensated employees of the Company as defined in
Treas. Reg. § 1.409A-1(i).  The identification date for determining
whether any employee is a Specified Employee during any calendar year shall be
the September 1 preceding the commencement of such calendar year.

    

    (kk)              “Termination of Employment”
means, a “Separation from Service” solely for the purpose of any Award that is
subject to the requirements of Code Section 409A.  The term
“Separation from Service” means either (i) the termination of a Participant’s
employment with the Company and all Affiliates due to death, retirement or other
reasons, or (ii) a permanent reduction in the level of bona fide services the
Participant provides

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

    A
Participant’s employment relationship is treated as continuing while the
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 the Participant’s right to reemployment with the Company or an
Affiliate is provided either by statute or contract).  If the
Participant’s period of leave exceeds six months and the Participant’s right to
reemployment is not provided either by statute or by contract, the employment
relationship is deemed to terminate on the first day immediately following the
expiration of such six-month period.  Whether a Termination of
Employment has occurred will be determined based on all of the facts and
circumstances and in accordance with regulations issued by the United States
Treasury Department pursuant to Code Section 409A.

    

    For
purposes of the Plan, if a Participant performs services in more than one
capacity, the Participant must have a Termination of Employment or Service in
all capacities as an employee, member of the Board, independent contractor or
consultant to have a Separation from Service.  Notwithstanding the
foregoing, if a Participant provides services both as an employee and a
non-employee, (1) the services provided as a non-employee are not taken into
account in determining whether the Participant has a Separation from Service as
an employee under a nonqualified deferred compensation plan in which the
Participant participates as an employee and that is not aggregated under Code
Section 409A with any plan in which the Participant participates as a
non-employee, and (2) the services provided as an employee are not taken into
account in determining whether the Participant has a Termination of Employment
as a non-employee under a nonqualified deferred compensation plan in which the
Participant participates as a non-employee and that is not aggregated under Code
Section 409A with any plan in which the Participant participates as an
employee.

     

    If, at
the time of a Participant’s Separation from Service, the Company has any stock
which is publicly traded on an established securities market or otherwise, and
if the Participant is considered to be a Specified Employee, to the extent any
payment for any Award is subject to the requirements of Code Section 409A and is
payable upon the Participant’s Separation from Service, such payment shall not
commence prior to the first business day 

     

    
      
        
        

      

      
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    following
the date which is six months after the Participant’s Separation from Service (or
if earlier than the end of the six-month period, the date of the Participant’s
death).  Any amounts that would have been distributed during such
six-month period will be distributed on the day following the expiration of the
six-month period.

    

    (ll)              “Termination of Service” means
a “Separation from Service,” solely for the purpose of any Award that is subject
to the requirements of Code Section 409A.  The term “Separation from
Service” means that the Nonemployee Director has ceased to be a member of the
Board.

    

    3.      
 Section
5.3 (Stock Subject to
Plan – Adjustment in Capitalization) of the Plan is hereby amended by
adding the following sentence to the end thereof:

     

    Further,
with respect to any Option or Stock Appreciation Right that otherwise satisfies
the requirements of the stock rights exception to Code Section 409A, any
adjustment pursuant to this Section 5.3 shall be made consistent with the
requirements of the final regulations promulgated pursuant to Code Section
409A.

     

    4.      
 Section
8.4 (Restricted Stock
Rights – Form and Timing of Payment) of the Plan is hereby amended in its
entirety to read as follows:

     

    8.4           Form and Timing
of Payment.

     

    (a)           Form of Payment.

     

       
Payment for any vested Restricted Stock Rights Award issued pursuant to this
Section shall be made in a lump sum payment of shares of Stock.

     

    (b)           Timing of
Payment.

     

       
(i)           General
Rule.  The shares payable under any Restricted Stock Rights
Award will be issued to the Participant within 90 days following the date on
which the Restricted Stock Rights vest.  Such payment is intended to
be made at a specified time or pursuant to a fixed schedule under Treas. Reg. §
1.409A-3(a)(4).

     

      
(ii)           Restricted Stock
Rights that Vest under Section 13.1(a)(ii)(1) or Section
13.1(a)(ii)(2).  Notwithstanding any provision of the Plan to
the contrary, if any Restricted Stock Rights Award, or any portion thereof,
vests due to a Participant’s Termination of Employment as described in Section
13.1(a)(ii)(1), 

     

    
      
        
        

      

      
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    the
Shares payable under such Award will be issued to the Participant within 90 days
following the date of the Participant’s Termination of
Employment.  Such payment is intended to be made upon the
Participant’s Separation from Service pursuant to Treas. Reg. §
1.409A-3(a)(1).  Accordingly, if the Participant is a Specified
Employee on the date on which any Restricted Stock Rights become payable
pursuant to Section 13.1(a)(ii)(1), the six-month delay described in Section
2.1(kk) shall apply.  If any Restricted Stock Rights Award, or any
portion thereof, vests due to a Participant’s Termination of Employment as
described in Section 13.1(a)(ii)(2), the Shares payable under such Restricted
Stock Rights Award will be issued to the Participant within 90 days following
the termination of the Performance Period described therein.  Such
payment is intended to be made at a specified time or pursuant to a fixed
schedule under Treas. Reg. § 1.409A-3(a)(4).

     

      
(iii)           Restricted Stock
Rights that Vest under Section 13.1(b)(iii) or Section 13.2(b)(ii).  Notwithstanding
any provision of the Plan to the contrary, if any vested Restricted Stock Rights
Award that is subject to a deferral period becomes payable due to a
Participant’s Termination of Employment as described in Section 13.1(b)(iii) or
Section 13.2(b)(ii), the Shares payable under such Restricted Stock Rights Award
will be issued to the Participant within 90 days following such Termination of
Employment.  Such payment is intended to be made upon the
Participant’s Separation from Service pursuant to Treas. Reg. §
1.409A-3(a)(1).  Accordingly, if the Participant is a Specified
Employee on the date on which any Restricted Stock Rights become payable
pursuant to Section 13.1(b)(iii) or Section 13.2(b)(ii), the six-month delay
described in Section 2.1(kk) shall apply.

     

    (c)           Conforming
Amendment to Existing Restricted Stock Rights Award
Agreements.  The Award Agreement for any Restricted Stock
Rights Award that is outstanding as of January 1, 2009 is hereby amended to the
extent necessary to provide for payment as described in this Section 8.4 without
any further action by the Company or the Participant.

     

    5.       
Section
9.3 (Performance
Shares and Performance Units – Form and Timing of Payment) of the Plan is
hereby restated in its entirety to read as follows:

     

    9.3           Form and Timing of
Payment.

     

    (a)           Form of
Payment. Payment
for vested Performance Shares shall be made in Stock.  Payment for
vested Performance Units shall be made in cash, Stock or a combination thereof
as 

     

    
      
        
        

      

      
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    determined
by the Committee.  All payments for Performance Shares and Performance
Units shall be made in a lump sum.

     

    (b)           Timing of
Payment.

     

       
(i)           General
Rule.  Payment for any
vested Performance Shares or Performance Units (including Performance Shares or
Performance Units that vest pursuant to Section 13.1(a)(ii)(1) or Section
13.1(a)(ii)(2)) shall be made on or before March 15 of the calendar year
following the calendar year in which the Performance Period applicable to such
Performance Shares or Performance Units ends.

     

      
(ii)           Payment for
Vested Performance Shares or Units that are Subject to a Deferral Period.
Payment for any vested Performance Shares or Performance Units that are
subject to a deferral period and that become payable pursuant to Section
13.1(b)(iii) or Section 13.2(b)(ii) shall be made within 90 days following the
Participant’s Termination of Employment for the reasons described in such
Sections.  Such payment is intended to be made upon the Participant’s
Separation from Service pursuant to Treas. Reg. §
1.409A-3(a)(1).  Accordingly, if the Participant is a Specified
Employee on the date on which any Performance Shares or Performance Units become
payable pursuant to Section 13.1(b)(iii) or Section 13.2(b)(ii), the six-month
delay described in Section 2.1(kk) shall apply.

     

    (c)           Conforming
Amendment to Existing Performance Share or Performance Unit Award
Agreements.  The Award Agreement for any Performance Share or
Performance Unit Award that is outstanding as of January 1, 2009 is hereby
amended to the extent necessary to provide for payment as described in this
Section 9.3 without any further action by the Company or the
Participant.

     

    6.      
 Section
10.3 (Stock
Appreciation Rights – Exercise of SARs) of the Plan is hereby restated in
its entirety to read as follows:

     

    10.3           Exercise of
SARs.  Upon exercise of the SAR or at a fixed date after all or
part of the SAR becomes exercisable, the Participant shall be entitled to
receive payment of an amount determined by multiplying:

     

    (a)           The
difference between the Fair Market Value of a share of Stock at the date of
exercise over the price fixed by the Committee at the Grant Date, which shall
not be less than the Fair Market Value of a share of Stock at the Grant Date,
by

     

    
      
        
        

      

      
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    (b)           The
number of shares with respect to which the SAR is exercised.

     

    7.      
 Section
11.1  (Nonemployee Director
Retainer Grants – Payment of  Retainer) is hereby amended by
adding the following sentence to the end thereof:

    To the
extent the Retainer payable to any Nonemployee Director under this Section 11 is
considered “non-qualified deferred compensation” that is subject to the
requirements of Code Section 409A, the Retainer shall be paid in accordance with
the provisions of Code Section 409A and any regulations promulgated thereunder
or an exception thereto.

     

    8.      
 Section
13.1(a)  (Termination of Employee’s
Employment Due to Death, Disability, Retirement, Impaction or Change in Control
– Nonvested Awards) of the Plan is hereby amended by restating paragraph
(ii) (Restricted Stock
Rights, Performance Shares and Performance Units) in its entirety to read
as follows:

     

    (ii)           Restricted Stock
Rights, Performance Shares and Performance Units.  If a Participant
holds any nonvested Restricted Stock Rights, Performance Shares or Performance
Units upon a Termination of Employment due to death, Disability, Retirement,
Impaction or Change in Control, all such nonvested Restricted Stock Rights,
Performance Shares or Performance Units shall vest as follows:

     

    (1)           If
the restriction is based on meeting certain service requirements, the Restricted
Stock Rights, Performance Shares or Performance Units shall become one hundred
percent (100%) vested at Termination of Employment.

     

    (2)           If
the restriction is based on meeting certain performance requirements, the
Restricted Stock Right, Performance Share or Performance Unit shall vest at the
end of the Performance Period.  The Participant shall receive pro rata shares and/or a cash
payment based on the target award level of achievement prorated for the number
of full months of service during the Performance Period, provided that the
Company meets the performance requirements necessary for payment of such
Award.

     

       
(3)           Payment
for the Participant’s Restricted Stock Rights that vest pursuant to this Section
13.1(a) shall be made in accordance with Section 8.4.  Payment for the
Participant’s Performance Shares or Performance Units that vest

     

    
      
        
        

      

      
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    pursuant
to this Section 13.1(a) shall be made in accordance with Section
9.3.

     

    9.      
 Section
13.1(b)  (Termination of Employee’s
Employment Due to Death, Disability, Retirement, Impaction or Change in Control
– Vested Awards) of the Plan is hereby amended by restating paragraph
(iii) (Restricted
Stock Rights, Performance Shares and Performance Units) in its entirety
to read as follows:

     

    (iii)           Restricted Stock
Rights, Performance Shares and Performance Units.  If a
Participant holds any vested Restricted Stock Rights Awards subject to a
deferral period, payment for such Awards shall be made in accordance with
Section 8.4.  If a Participant holds any vested Performance Shares or
Performance Units subject to a deferral period, payment for such Awards shall be
made in accordance with Section 9.3.

     

    10.   
  Section
13.2(b)  (Voluntary Termination or
Involuntary Termination of Employment for Reasons Other Than Impaction or Cause
– Vested Awards) of the Plan is hereby amended by restating paragraph
(ii) (Restricted Stock
Rights, Performance Shares and Performance Units) in its entirety to read
as follows:

     

    (ii)           Restricted Stock
Rights, Performance Shares and Performance Units.  If a Participant
holds any vested Restricted Stock Rights Awards which are subject to a deferral
period upon voluntary Termination of Employment or involuntary Termination of
Employment for reasons other than Impaction or Cause, payment for such Awards
shall be made in accordance with Section 8.4.  If a Participant holds
any vested Performance Shares or Performance Units subject to a deferral period
upon voluntary Termination of Employment or involuntary Termination of
Employment for reasons other than Impaction or Cause, payment for such Awards
shall be made in accordance with Section 9.3.

     

    11.     
Section
13.5  (Discretion
of Committee) of the Plan is hereby amended in its entirety to read as
follows:

     

    13.5              Discretion of
Committee.  Notwithstanding the above, the Committee may, at
any time and in its sole discretion, alter the vesting and exercise provisions
for all or part of the Awards which have been or will be granted to
Participants, subject to Section 17 of the Plan; provided that the Committee
will not 

     

    
      
        
        

      

      
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    take any
action pursuant to this Section 13.5 that will cause payment of any Award to
violate the provisions of Code Section 409A.

    

    12.    
 Section
17  (Amendment,
Modification, and Termination of Plan) of the Plan is hereby amended by
adding the following sentence to the end thereof:

     

    Additional
rules relating to amendments to the Plan or any Award Agreement to assure
compliance with Code Section 409A are set forth in Section 20.4.

    

    13.    
 Section
20.4  (Code
Section 409A) of the Plan is hereby restated in its entirety to read as
follows:

     

    20.4              Code Section
409A.  Some of the
Awards that may be granted pursuant to the Plan (including, but not necessarily
limited to, Restricted Stock Rights Awards, Performance Share Awards and
Performance Unit Awards) may be considered to be “non-qualified deferred
compensation” subject to Code Section 409A.  If an Award is subject to
Code Section 409A, the Award Agreement and this Plan are intended to comply
fully with and meet all of the requirements of Code Section 409A or an exception
thereto and the Award Agreement shall include such provisions, in addition to
the provisions of this Plan, as may be necessary to assure compliance with Code
Section 409A or an exception thereto.  An Award subject to Code
Section 409A also shall be administered in good faith compliance with the
provisions of Code Section 409A as well as applicable guidance issued by the
Internal Revenue Service and the Department of Treasury.  To the
extent necessary to comply with Code Section 409A, any Award that is subject to
Code Section 409A may be modified, replaced or terminated in the discretion of
the Committee.  Notwithstanding any provision of this Plan or any
Award Agreement to the contrary, in the event that the Committee determines that
any Award is or may become subject to Code Section 409A, the Company may adopt
such amendments to the Plan and the related Award Agreements, without the
consent of the Participant, or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effective dates), or take
any other action that the Committee determines to be necessary or appropriate to
either comply with Code Section 409A or to exclude or exempt the Plan or any
Award from the requirements of Code Section 409A.

    

    Under no
circumstances may the time or schedule of any payment for any Award that is
subject to the requirements of Code 

     

    
      
        
        

      

      
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    Section
409A be accelerated or subject to further deferral except as otherwise permitted
or required pursuant to regulations and other guidance issued pursuant to Code
Section 409A.  If the Company fails to make any payment pursuant to
the payment provisions applicable to an Award that is subject to Code Section
409A, either intentionally or unintentionally, within the time period specified
in such provisions, but the payment is made within the same calendar year, such
payment will be treated as made within the time period specified in the
provisions.  In addition, in the event of a dispute with respect to
any payment, such payment may be delayed in accordance with the regulations and
other guidance issued pursuant to Code Section 409A.

     

    14.    
 This
Third Amendment amends only the provisions of the Plan as noted above, and those
provisions not expressly amended shall be considered in full force and
effect.  Notwithstanding the foregoing, this Third Amendment shall
supersede the provisions of the Plan to the extent those provisions are
inconsistent with the provisions and intent of this Third
Amendment.

     

    IN
WITNESS WHEREOF, PNM Resources has caused this Third Amendment to be executed as
of this 15th
day of December,
2008.

     

    PNM
RESOURCES, INC.

     

     

     

    By: /s/ Alice A. Cobb   

     

          Its:
SVP, Chief
Administrative Officer

    

    
      
        
           

        

         

      

      
        9

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