FIRST AMENDMENT TO THE PNM RESOURCES, INC. NON-UNION SEVERANCE PAY PLAN

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

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

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

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

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

A Participant’s employment relationship is treated as continuing while a Participant is