Document:

Exhibit

Exhibit 10.3

FIRST AMENDMENT
TO THE
PNM RESOURCES, INC.
2016 LONG-TERM INCENTIVE PLAN
The 2016 Long-Term Incentive Plan (the “Plan”) was adopted pursuant to the PNM Resources, Inc. 2014 Performance Equity Plan (the “PEP”).  By this instrument, the Company desires to amend the Plan as set forth below.  
1.    The definition of FFO/Debt Ratio as set forth in footnote 4 of the Plan is hereby amended and restated in its entirety to read as follows:
4 Equals PNMR’s funds from operations for the fiscal year ending December 31, 2018, divided by PNMR’s total debt outstanding (including any long-term leases and unfunded pension plan obligations and reducing debt by amount determined in (6) below) as of December 31, 2018.  Funds from operations are equal to the amount of PNMR’s net cash flow from operating activities (as reflected on the Consolidated Statement of Cash Flows) as reported in the Company’s Form 10-K for PNM Resources adjusted by the following items: (1) including amounts attributable to principal payments on imputed debt from long-term leases, (2) excluding changes in PNMR’s working capital, including bad debt expense, (3) excluding the impacts of any consolidation required by the Variable Interest Entities accounting rules and regulations, (4) subtracting the amount of capitalized interest, (5) excluding any contributions to the PNMR or TNMP qualified pension plans, (6) excluding the change in revenues associated with the 2017 Tax Cuts and Jobs Act based on cost of service studies filed before regulatory bodies between the effective date of when those revenues were returned back to customers and December 31, 2018, and (7) by making the same adjustments associated with the Westmoreland transaction as Moody’s to calculate funds from operations or total debt outstanding for the fiscal year ending December 31, 2018.  The calculation is intended to be consistent with Moody’s calculation of FFO/Debt (which Moody’s refers to as “CFO Pre-WC/Debt”) and if Moody’s modifies its calculation methodology prior to December 31, 2018 and communicates such changes in writing to Company representatives or the general public prior to December 31, 2018, the Moody’s calculation methodology in effect as of December 31, 2018 will be utilized.

2.    This First Amendment amends only the provisions of the Plan as noted above, and those provisions not expressly amended shall be considered in full force and effect.  Notwithstanding the foregoing, this First Amendment shall superseded the provisions of the Plan to the extent those provisions are inconsistent with the provisions and intent of this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative on this 27th day of February, 2019.

PNM RESOURCES, INC.

	
		
	By:
	/s/ Patrick V. Apodaca

Patrick V. Apodaca
Its:  Senior Vice President, General Counsel 

2Exhibit

Exhibit 10.4

FIRST AMENDMENT
TO THE
PNM RESOURCES, INC.
2017 LONG-TERM INCENTIVE PLAN
The 2017 Long-Term Incentive Plan (the “Plan”) was adopted pursuant to the PNM Resources, Inc. 2014 Performance Equity Plan (the “PEP”).  By this instrument, the Company desires to amend the Plan as set forth below.  
1.    The definition of FFO/Debt Ratio as set forth in footnote 5 of the Plan is hereby amended and restated in its entirety to read as follows:

5 The FFO/Debt Goal equals PNMR’s funds from operations for the fiscal year ending December 31, 2019, divided by PNMR’s total debt outstanding (including any long-term leases and unfunded pension plan obligations and reducing debt by the sum of amount determined in (6) below) as of December 31, 2019 plus the amount excluded pursuant item (6) in the definition of FFO/Debt Ratio under the 2016 Long-Term Incentive Plan, as amended) as of December 31, 2019.  Funds from operations are equal to the amount of PNMR’s net cash flow from operating activities (as reflected on the Consolidated Statement of Cash Flows) as reported in the Company’s Form 10-K for PNM Resources adjusted by the following items: (1) including amounts attributable to principal payments on imputed debt from long-term leases, (2) excluding changes in PNMR’s working capital, including bad debt expense, (3) excluding the impacts of any consolidation required by the Variable Interest Entities accounting rules and regulations, (4) subtracting the amount of capitalized interest, (5) excluding any contributions to the PNMR or TNMP qualified pension plans, and (6) excluding the change in revenues associated with the 2017 Tax Cuts and Jobs Act based on cost of service studies filed before regulatory bodies.  The calculation is intended to be consistent with Moody’s calculation of FFO/Debt (which Moody’s refers to as “CFO Pre-WC/Debt”) and if Moody’s modifies its calculation methodology prior to December 31, 2019 and communicates such changes in writing to Company representatives or the general public prior to December 31, 2019, said changes in Moody’s methodology in effect as of December 31, 2019 will be incorporated into the calculation outlined above.

2.    This First Amendment amends only the provisions of the Plan as noted above, and those provisions not expressly amended shall be considered in full force and effect.  Notwithstanding the foregoing, this First Amendment shall superseded the provisions of the Plan to the extent those provisions are inconsistent with the provisions and intent of this First Amendment.
IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed by its duly authorized representative on this 27th day of February, 2019.

PNM RESOURCES, INC.

	
		
	By:
	/s/ Patrick V. Apodaca

Patrick V. Apodaca
Its:  Senior Vice President, General Counsel 

2Exhibit

Exhibit 10.5

DISCRETIONARY CREDIT AWARD AGREEMENT
Effective as of February 21, 2019, this Discretionary Credit Award Agreement (the “Agreement”) is entered into by and between PNM Resources, Inc. (“PNMR”) and Charles N. Eldred (“Employee”) (collectively, the “Parties”).
1.Purpose.  Section 3.5 of the PNM Resources, Inc. Executive Savings Plan II (the “Plan”) permits the Compensation Committee and Human Resources Committee (the “Committee”) to allocate Discretionary Credits in such amounts and subject to such terms and conditions as the Committee deems appropriate.  The purpose of this Agreement is to award a Discretionary Credit to Employee subject to the terms and conditions set forth below.    Except as otherwise set forth in this document, the provisions of the Plan shall apply in determining the rights of Employee and the administration of Employee’s Discretionary Credit Account.  Capitalized terms used in but not otherwise defined in this Agreement shall have the meanings given to them in the Plan.  In cases of conflict, this Agreement controls over any conflicting provisions of Plan, except as may be required by Section 409A of the Code or the provisions of any other applicable law or regulation.
2.    Discretionary Credit.  PNMR shall allocate a Discretionary Credit equal to $434,137 to the Employee’s Discretionary Credit Account in the Plan as of December 31, 2019, provided Employee remains employed by the Company or its Affiliates on such date. 
3.    Termination of Employment.
(a)    Termination by Company without Cause.  Company may terminate Employee’s employment without “Cause” prior to December 31, 2019 (including following a Change in Control).  For purposes of this Agreement, “Cause” shall have the meaning set forth in the PNM Resources, Inc. Officer Retention Plan.  If Company terminates Employee’s employment without Cause pursuant to this Section, Employee will receive the Discretionary Credit described in Section 3, which shall be allocated to Employee’s Discretionary Credit Account as of the date of his termination of employment.  In such instance, Employee also may be entitled to receive severance or retention benefits pursuant to the PNM Resources, Inc. Non-Union Severance Pay Plan or the PNM Resources, Inc. Officer Retention Plan if the requirements of the plans are met.
(b)    Termination by Company for Cause.  If Company terminates Employee’s employment for Cause prior to December 31, 2019, Employee will not be entitled to receive the Discretionary Credit provided for by this Agreement.   
(c)    Termination by Employee.  If Employee terminates employment for any reason prior to December 31, 2019, Employee will not be entitled to receive the Discretionary Credit provided for by this Agreement.
4.      Disability.  If Employee becomes Disabled prior to December 31, 2019, Employee will receive the Discretionary Credit described in Section 3, which shall be allocated to Employee’s Discretionary Credit Account as of the date of Employee’s Disability.  

    

5.    Death.  If Employee dies prior to December 31, 2019, Employee will receive the Discretionary Credit described in Section 3, which shall be allocated to Employee’s Discretionary Credit Account as of the date of Employee’s death.  
6.    Payment of Discretionary Credit.  The Discretionary Credit provided for by this Agreement shall be paid in the form of equal annual installments over five (5) years in accordance with the terms of the Plan.  If Employee dies before the expiration of the installment period, the remaining installment distributions will be paid in a single lump sum payment to Employee’s designated beneficiary.  Distribution of the Discretionary Credit will begin on the earliest of Employee’s Separation from Service, death or Disability.  If Employee is a Specified Employee on the date of his Separation from Service, the payment of Employee’s Discretionary Credit shall not begin until the date which is six (6) months after the Employee’s Separation from Service in accordance with the terms of the Plan.  Employee hereby agrees to the terms and provisions of the Plan.  Employee does not have the right to select the time and form of payment of the Discretionary Credit.  
7.    Amendment or Waiver.  No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in a writing signed by Employee and an authorized officer of PNMR.  
8.    Section 409A Compliance.  This Agreement shall be administered in accordance with Section 409A or an exception thereto, and each provision of this Agreement shall be interpreted, to the extent possible, to comply with Section 409A or to qualify for an exception thereto.  Although this Agreement has been designed to comply with Section 409A or to fit within an exception to the requirements of Section 409A, PNMR specifically does not warrant such compliance.  Employee remains solely responsible for any adverse tax consequences imposed upon him by Section 409A.
9.    Scope of Agreement; At Will Employment.  All terms and conditions of Employee’s employment with PNMR Services Company (the “Company”) are unchanged and are determined pursuant to Company’s employment policies and practices unless otherwise specifically modified by this Agreement.  Employee acknowledges that Employee’s employment by Company remains “at-will” and that Employee or Company may terminate the employment relationship at any time for any reason.  If the employment relationship ends during the term of this Agreement, this Agreement will only govern the terms of the payment of the Discretionary Credit.

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IN WITNESS WHEREOF, PNMR and Employee have caused this Agreement to be executed as of the date set forth below.
PNM RESOURCES, INC
	
		
	By:
	/s/ Patrick V. Apodaca

Patrick V. Apodaca
Its:  Senior Vice President, General Counsel 
EMPLOYEE
	
	
	Charles N. Eldred

Employee’s Name (printed)
	
	
	/s/ Charles N. Eldred

Employee’s Signature

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