8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)		February 17, 2006
		(February 13, 2006)
Commission	Name of Registrant, State of Incorporation,		I.R.S. Employer
File Number	Address and Telephone Number		Identification No.
333-32170	PNM Resources, Inc.		85-0468296
	(A New Mexico Corporation)
	Alvarado Square
	Albuquerque, New Mexico 87158
	(505) 241-2700
______________________________
(Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)

[ ] Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c)

Item 1.01 Entry into a Material Definitive Agreement.

PNM Resources, Inc. (the “Company”) has previously disclosed and filed its Amended and Restated Omnibus Performance Equity Plan (the "Plan"), which was approved by the shareholders in May 2005. Under the terms of the Plan, the Human Resources and Compensation Committee of the Board of Directors (the “Board”) of the Company made Long Term Incentive Plan Awards on February 13, 2006. The forms of the award agreements for non-qualified stock options and restricted stock rights are filed herewith as Exhibits 10.1 and 10.2.

On February 14, 2006, the Board approved an amendment in the previously reported Retention Bonus Agreement dated October 31, 2003 with the Company's Chief Executive Officer, J. E. Sterba. Under the terms of the amendment, the only change is in the payout schedule. Rather than having the first of the two equal installments paid at the end of calendar year 2010 and the second equal installment paid 12 months after the first payment, the first equal installment will be paid on March 1, 2010, and the second equal installment will be paid one year thereafter (rather than at the end of calendar year 2011).

Item 5.02 Departure of Directors or Principal Officers; Appointment of Principal Officers.

In connection with the Bylaw amendment declassifying the Board, described herein under Item 5.03, on February 14, 2006, the Class A Board members (C. E. McMahen, A. E. Archuleta, and J. A. Dobson) and Class C Board members (J. E. Sterba, B. S. Reitz and J. B. Woodard) voluntarily waived their rights to terms extending beyond the Annual Meeting in May 2006, so that annual elections of all directors could begin with the 2006 Annual Meeting. In their letters agreeing to stand for election in 2006, the directors stated that their actions were in furtherance of immediately implementing annual elections and were not the result of any disagreements with the Company. The Board views annual election of directors as an important enhancement in corporate governance.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On February 14, 2006, the Board approved an amendment to the Company's Bylaws. The amendment declassifies the Board of Directors so that, instead of three classes of directors with staggered three-year terms, all directors will be elected annually. The Board also approved the submission to the shareholders for approval at the 2006 Annual Meeting of Shareholders an amendment to the Restated Articles of Incorporation, removing the authority of the Board to re-classify itself in the future. The amended bylaws are attached herewith as Exhibit 3.

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Item 9.01 Financial Statements and Exhibits.

(d) Exhibits:

Exhibit Number	Description
3	Bylaws of PNMR Resources, Inc. with all amendments to and including February 14, 2006.
10.1	Form of the award agreement for non-qualified stock options granted under the Amended and Restated Omnibus Performance Equity Plan.
10.2	Form of the award agreement for restricted stock rights granted under the Amended and Restated Omnibus Performance Equity Plan.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PNM RESOURCES, INC.
	(Registrant)
Date: February 17, 2006	/s/ Thomas G. Sategna
	Thomas G. Sategna
	Vice President and Corporate Controller
	(Officer duly authorized to sign this report)

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EX-3

EXHIBIT 3

BYLAWS

OF

PNM RESOURCES, INC.

With all Amendments to and Including February 14, 2006

BYLAWS

OF

PNM RESOURCES, INC.

ARTICLE I

MEETINGS OF SHAREHOLDERS

Section 1. Meetings

The annual meeting of shareholders shall be held at the time and place set by resolution of the Board of Directors for the election of directors and the transaction of such other business as may properly come before the meeting.

Special meetings may be called by a majority of the Board of Directors, the Chairman of the Board, the President or by holders of not less than one-tenth of all the shares entitled to vote at the meeting.

Section 2. Notice

Written notice of any meeting stating the time and place, and if a special meeting, the purpose, of the meeting shall be mailed to each shareholder of record entitled to vote at the meeting at the address of the shareholder as it appears on the stock transfer books of the Corporation, except as otherwise provided by law. Notices of special meetings called by a majority of the Board of Directors, the Chairman of the Board or the President, and of annual meetings shall be mailed not less than ten (10) days nor more than fifty (50) days before the meeting. Notices of other special shareholder meetings shall be mailed not less than forty (40) days nor more than fifty (50) days before the date of the meeting.

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Section 3. Adjournment

Whenever a quorum is not present at any meeting of the shareholders, or whenever it may be deemed desirable, a majority in interest of the shareholders present in person or by proxy may adjourn the meeting from time to time to any future date, without notice other than by announcement at the meeting. At any continuation of the adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting originally scheduled.

Section 4. Order of Business

(a) The Chairman of the Board, or in the absence of the Chairman, the President, or in their absence, a director designated by the Board of Directors, shall call meetings of the shareholders to order and shall act as Chairman of the meeting. The shareholders may appoint any shareholder or the proxy of any shareholder to act as Chairman of any meeting of the shareholders in the absence of the Chairman of the Board, President and a director designated by the Board to serve as Chairman of the meeting. The Secretary, or in the absence of the Secretary, an Assistant Secretary, shall act as Secretary at all meetings of the shareholders, but in the absence of the Secretary and Assistant Secretary at any meetings of the shareholders, the Chairman of the meeting may appoint any person to act as Secretary of the meeting.

(b) The Chairman of the meeting shall have the right to determine the order of business at the meeting, to prescribe the rules and procedures for the conduct of the meeting, and to do all things necessary or desirable for the proper conduct of the meeting, including maintenance of order and safety and limitations on the time allotted to questions or comments on the affairs of the Corporation.

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(c) The only business that may be conducted at an annual meeting of shareholders is that business which has been brought before the meeting: (i) by or at the direction of the Chairman of the meeting; (ii) pursuant to the notice of the meeting; or (iii) by any shareholder who is a holder of record at the time of the giving of the notice of the meeting who is entitled to vote at the meeting and who complies with the procedures set forth in Section 4 (d).

(d) For business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice of the proposal in proper written form to the Secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received at the Secretary’s office at least ninety (90) days before the date on which the proxy materials for the prior year’s annual meeting of shareholders were first mailed. To be in proper written form, a shareholder’s notice to the Secretary shall set forth in writing as to each matter the shareholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting the business at the annual meeting; (ii) the name and address of the shareholder proposing the business and all persons or entities acting in concert with the shareholder; (iii) the class and number of shares of the Corporation which are beneficially owned by the shareholder and all persons or entities acting in concert with the shareholder; and (iv) any material interest of the shareholder in the proposed business. These notice requirements will be satisfied by a shareholder if the shareholder has notified the Secretary of the Corporation of his or her intention to present a proposal at an annual meeting and the proposal has been included in a proxy statement that has been prepared by management of the Corporation to solicit proxies for the annual meeting. If, however, the shareholder does not appear or send a qualified representative to present the proposal at the annual meeting, the proposal shall not be presented for a vote at the meeting, even though proxies regarding that vote have been received by the Corporation.

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Section 5. Inspectors

At each meeting of the shareholders at which a vote by ballot is taken, the polls shall be opened and closed, the proxies and ballots shall be collected, and the validity of proxies and the acceptance or rejection of votes shall be decided by two inspectors. No person who is a candidate for the office of director shall act as inspector of any election for directors. The inspectors shall be appointed by the Board of Directors before the meeting or, if no appointment has been made, then by the Chairman of the meeting. If for any reason any of the inspectors previously appointed fails to attend or refuses or is unable to serve, those inspectors not serving shall be replaced by inspectors appointed by the Chairman of the meeting.

Section 6. Voting

At meetings of shareholders, every shareholder having voting rights as provided for in the Articles of Incorporation shall be entitled to one (1) vote for each share of stock outstanding in the name of the shareholder on the books of the Corporation on the date on which shareholders entitled to vote are determined or as otherwise provided for in the Articles of Incorporation. Each shareholder may be represented and vote by a proxy or proxies appointed by an instrument in writing or other manner authorized by the Board of Directors to the extent permitted by law. If the instrument designates two (2) or more persons to act as proxies, a majority of the proxies present at the meeting may exercise all of the powers conferred by the instrument unless the instrument provides otherwise. No proxy shall be voted at any meeting or continuation of an adjourned meeting other than that for which the proxy is given.

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In all elections for directors, voting shall be by written ballot, or by electronic, telephonic or other process as the Board of Directors may authorize, to the extent permitted by law.

The Board of Directors may fix a date in advance not exceeding fifty (50) days before the date of any meeting of shareholders as a record date for the determination of shareholders entitled to notice of and to vote at the meeting. Only shareholders of record on the date so fixed shall be entitled to notice of and to vote at the meeting.

ARTICLE II

DIRECTORS

Section 1. Number, Election and Terms

The business and property of the Corporation shall be managed under the direction of the Board of Directors. The Board of Directors shall, by resolution, fix the number of directors which shall be no less than five (5) and no more than twelve (12) in number who shall be elected annually.

Section 2. Compensation

Directors shall receive compensation for their services as directors as may be fixed by resolution of the Board of Directors, including reimbursement for expenses for Board related services.

Section 3. Meetings

The meetings of the Board of Directors shall be held at the times and places designated by the Board of Directors. The annual meeting of the Board of Directors for the election of officers and such other business as may properly come before the meeting shall be held immediately following the annual meeting of shareholders. Special meetings of the Board of Directors shall be held whenever called at the direction of the Chairman of the Board, the President, or any two (2) directors if there are less than nine (9) directors on the Board, or any three (3) directors if there are nine (9) or more directors on the Board.

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Section 4. Notice

No notice shall be required of any annual or regular meeting of the Board of Directors unless the place has been changed from that last designated by the Board of Directors. Notice of any annual or regular meeting, when required, or of any special meeting, of the Board of Directors shall be given to each director in writing or by telephone at least twenty-four (24) hours before the time fixed for the meeting. Notice may be waived by any director. Unless otherwise indicated in the notice, any and all business may be transacted at a special meeting. At any meeting at which every director is present, even without notice, any business may be transacted.

Section 5. Adjournments

Any annual, regular or special meeting of the Board of Directors may be adjourned from time to time by the members present whether or not a quorum is present, and no notice shall be required of any continuation of an adjourned meeting beyond the announcement at the adjourned meeting.

Section 6. Indemnification

Each person serving as a director or an officer of the Corporation, or, at the request of the Corporation, as a director or an officer of any other company in which the Corporation has a financial interest and regardless of whether or not the person is then in office, and the heirs, executors, administrators and personal representatives of the person, shall be indemnified by the Corporation to the full extent of the authority of the Corporation to so indemnify as authorized by New Mexico law.

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Section 7. Committees

The Board of Directors may designate from among its members one (1) or more committees, to exercise the power and authority and perform the functions that the Board may determine, except as may be limited by law.

ARTICLE III

CONTRACTS AND NEGOTIABLE INSTRUMENTS

Section 1. Authority to Sign Contracts

Unless the Board of Directors shall otherwise specifically direct, all contracts, instruments, documents or agreements of the Corporation shall be executed in the name of the Corporation by the President, or any Vice President, or any other employee, if approved by the President by either administrative policy letter or specific written designation. It shall not be necessary that the corporate seal be affixed to any contract.

Section 2. Authority to Sign Negotiable Instruments

Except as otherwise authorized by the Board of Directors, all checks, drafts, bills of exchange, promissory notes, electronic funds transfer documents, and other negotiable instruments shall be signed by the Chairman of the Board, President, any Vice President, Secretary or Treasurer. Facsimile signatures shall be sufficient to meet the requirements of this section.

Section 3. Approval by Shareholders

The Board of Directors in its discretion may submit any contract, or act, for approval or ratification at any annual meeting of the shareholders, or at any special meeting of the shareholders called for the purpose of considering the act or contract. Except as provided for in the Articles of Incorporation, any contract or act that shall be approved or ratified by the vote of the holders of a majorityof the capital stock of the Corporation which is represented in person or by proxy at the meeting shall be valid and binding upon the Corporation.

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ARTICLE IV

OFFICERS

Section 1. Number, Election and Term

The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, a Secretary, a Treasurer, and a Controller, who shall be elected annually by the Board of Directors at the annual meeting and who shall hold office until the next annual meeting or until a successor is elected and qualifies. The Board of Directors may designate the Chairman of the Board or the President as Chief Executive Officer. The Board of Directors may elect one person to serve as both Chairman of the Board and President. The Board of Directors may designate one or more Vice Presidents as "Executive" Vice Presidents and one or more Vice Presidents as "Senior" Vice Presidents. The title of any Vice President may include words indicative of the area of responsibility of the Vice President. The Board of Directors shall designate one of the Vice Presidents as the chief financial officer of the Corporation. The Board of Directors may from time to time appoint such additional officers as the interest of the Corporation may require and fix their terms and duties of office. A vacancy occurring in any office may be filled by the Board of Directors. All officers shall hold office at the discretion of the Board of Directors and shall be subject to removal at any time by the affirmative vote of a majority of the whole Board of Directors. Election of any person as an officer of the Corporation shall not of itself create contract rights.

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Section 2. Chairman of the Board of Directors

The Chairman of the Board shall be elected annually by the Board of Directors at the annual meeting and shall hold that office until a successor is elected and qualifies. In the event of the incapacity of the Chairman of the Board, the Board of Directors shall, by a majority vote of the Board of Directors, designate an Acting Chairman who shall, during the incapacity of the Chairman of the Board, assume and perform all functions and duties which the Chairman of the Board is authorized or required by law to do. The Chairman of the Board shall have the power to call special meetings of the shareholders and of the directors for any purpose. The Chairman of the Board shall preside at all meetings of the shareholders and of the Board of Directors unless the Chairman of the Board is absent or incapacitated. The Chairman of the Board, subject to the authority of the Board of Directors, shall generally do and perform all acts incident to the office of the Chairman of the Board and which are authorized or required by law.

Section 3. President

The President shall provide active management over all operations of the Corporation subject to control of the Board of Directors. The President shall have the power to appoint and discharge, subject to the general approval or review by the Board of Directors, employees and agents of the Corporation and to fix their compensation, to make and sign contracts and agreements in the name of and on behalf of the Corporation and direct the general management and control of the business and affairs of the Corporation. The President may delegate authority to officers of the Corporation as the President may determine. The President shall have the power to segregate the operations of the Corporation into areas of responsibility. The President shall see that the books, reports, statements and certificates required by law are properly kept, made, and filed, and shall generally do and perform all acts which are authorized or required by law. The President shall designate a Vice President who shall, during the absence or incapacity of the President, assume and perform all functions and duties which the President might lawfully do if present in person and not under any incapacity.

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Section 4. Vice Presidents

Each Vice President designated as "Executive" or "Senior Vice President" shall be responsible for the areas and activities assigned by the President, shall be subject to the authority of the President and shall assist in the general control and management of the business and affairs of the Corporation.

All other Vice Presidents shall be responsible for the areas and activities assigned by the President and shall perform other duties as may be required, including those assigned to an Executive or Senior Vice President during the absence or incapacity of the Executive or Senior Vice President.

Section 5. Secretary

The Secretary shall keep a record in the proper books provided for that purpose of meetings and proceedings of shareholders, the Board of Directors and Committees of the Board of Directors, and shall record all votes of the directors and shareholders in a book to be kept for that purpose. The Secretary shall notify the directors and shareholders of meetings as required by law or by the Bylaws of the Corporation and shall perform other duties as may be required by law or the Bylaws of the Corporation, or which may be assigned from time to time by the Board of Directors, Chairman of the Board or President. The Secretary is authorized to appoint one or more assistants from time to time as the Secretary deems advisable, the assistant or assistants to serve at the pleasure of the Secretary, andto perform the duties that are delegated by the Secretary. An assistant shall not be an officer of the Corporation.

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Section 6. Treasurer

The Treasurer shall have the custody of all the funds and securities of the Corporation, and shall have the power on behalf of the Corporation to sign checks, notes, drafts and other evidences of indebtedness, to borrow money for the current needs of the business of the Corporation and to make short-term investments of surplus funds of the Corporation. The Treasurer shall render to the Board of Directors, the Chairman of the Board or the President, whenever requested, an account of all transactions performed as Treasurer and of the financial condition of the Corporation. The Treasurer shall perform other duties as may be assigned by the Board of Directors, the Chairman of the Board or the President. The Treasurer is authorized to appoint one or more assistants from time to time as the Treasurer deems advisable, the assistant or assistants to serve at the pleasure of the Treasurer, and to perform the duties that are delegated by the Treasurer. An assistant shall not be an officer of the Corporation.

Section 7. Controller

The Controller shall be the chief accounting officer of the Corporation and have full responsibility and control of the accounting practices of the Corporation The Controller shall, subject to the approval of the Board of Directors, the Chairman of the Board or the President, establish accounting policies. The Controller shall standardize and coordinate accounting practices, supervise all accounting records and the presentation of all financial statements and tax returns. The Controller shall have other powers and duties as, from time to time, may be conferred by the Board of Directors, the Chairman of the Board or the President. The Controller is authorized to appoint one or more assistants from time to time as the Controller deems advisable, the assistant or assistants to serve at the pleasure of the Controller, and to perform the duties that are delegated by the Controller. An assistant shall not be an officer of the Corporation.

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Section 8. Form of Appointment

In making any appointments of assistants, the Secretary, Treasurer and Controller shall use the following form:

I, ________________ (Name), the duly elected _______________ (Title) of PNM Resources, Inc. do hereby appoint(Name) to serve as Assistant (Title) for the period of (Date) to (Date), unless this appointment is terminated earlier in writing, to assume or perform all functions and duties which I might require and, in my absence or incapacity, which I might lawfully do if present and not under any incapacity.

Any appointments of assistants by the Secretary, Treasurer or Controller and any terminations of appointments shall be maintained in the records of the Secretary’s office.

ARTICLE V

CAPITAL STOCK

Section 1. Certificates of Stock

The name of the person owning shares of the capital stock of the Corporation, together with the number of shares and the date of issue, shall be entered on the Corporation’s books. All certificates surrendered to the Corporation shall be canceled, and no new certificates shall be issued until a certificate or certificates aggregating the same number of shares of the same class have been surrendered or canceled. The Board of Directors may make proper provision, from time to time, for the issuance of new certificates in place of lost, destroyed or stolencertificates.

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Section 2. Transfer Agents and Registrars

The Corporation shall, if and whenever the Board of Directors determines, maintain one or more transfer offices or agencies, each in charge of a transfer agent designated by the Board of Directors, where the shares of the capital stock of the Corporation will be directly transferable, and also one or more registry offices, each in charge of a registrar designated by the Board of Directors, where shares of stock will be registered, and no certificates for shares of the capital stock of the Corporation, in respect of which one or more transfer agents and registrars shall have been designated, shall be valid unless countersigned by one of such transfer agents and registered by one of such registrars. The Board of Directors may also make additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates for shares of the capital stock of the Corporation.

Section 3. Shares Held for Account

The Board of Directors may adopt by resolution a procedure whereby a shareholder of the Corporation may certify in writing to the Corporation that all or a portion of the shares registered in the name of the shareholder are held for the account of a specified person or persons as provided for by New Mexico law.

Section 4. Transfer of Shares

Transfers of shares shall be made only upon the books of the Corporation by the holderor by the holder’s attorney in fact upon surrender of certificates for a like number of shares.

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Section 5. Lost, Destroyed or Stolen Certificates

A new certificate of stock may be issued in the place of any certificate previously issued by the Corporation, or any predecessor of the Corporation, alleged to have been lost, destroyed or stolen. The Board of Directors may, in its discretion, require the owner of the lost, destroyed or stolen certificate to give to the Corporation satisfactory evidence that the certificate was lost, destroyed or stolen. The Board of Directors may also require a bond sufficient to indemnify it and its transfer agent, against any claim that may be made on account of the alleged loss of the certificate or the issuance of any new certificate.

Section 6. Fixing of Record Dates

For the purpose of determining shareholders entitled to notice of any meeting of shareholders, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the Board of Directors may, by resolution, provide that the stock transfer books be closed for a stated period not to exceed fifty (50) days. If the stock transfer books are closed for the purpose of determining shareholders entitled to notice of a meeting of shareholders, the books shall be closed for at least ten (10) days immediately prior to the meeting.

In lieu of closing the stock transfer books, the Board of Directors may, by resolution, fix in advance a date as the record date for any determination of shareholders, the date to be not more than fifty (50)days and, in case of a meeting of shareholders, not less than ten (10)days prior to the date on which the action requiring the determination of shareholders is to be taken.

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Section 7. Uncertificated Shares

The Corporation and each transfer agent designated by the Board of Directors are authorized to issue, register and transfer shares of capital stock of the Corporation (including fractional shares) in uncertificated book-entry form, provided that, within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send, or cause the transfer agent to send, to the registered owner thereof a written notice containing the information required by applicable law.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 1. Books

The books of the Corporation, except as otherwise provided by law, may be kept outside of the State of New Mexico, at such place or places as may be designated by the Board of Directors. The Board of Directors shall determine whether and to what extent, and at what time and places, and under what conditions and regulations, the accounts and the books of the Corporation, or any of them, shall be open to the inspection of shareholders; and no shareholder shall have any right to inspect any book or account or document of the Corporation except as conferred by the statutes of New Mexico, or authorized by the Board of Directors.

Section 2. Corporate Seal

The common corporate seal is, and until otherwise ordered by the Board of Directors shall be, an impression circular in form upon paper or wax bearing the words “PNM Resources, Inc.Incorporated 2000.” The seal shall be in the charge of the Secretary. If and when directed by the Board of Directors, a duplicate of the seal may be kept and used by the Treasurer or by an Assistant Secretary or Assistant Treasurer.

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Section 3. Fiscal Year

The fiscal year of the Corporation shall be as determined by the Board of Directors.

Section 4. Principal Office

The principal office shall be established and maintained at a place designated by the Board of Directors.

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EX-10.1

EXHIBIT 10.1

STOCK OPTION AWARD AGREEMENT

PNM RESOURCES, INC.

OMNIBUS PERFORMANCE EQUITY PLAN

PNM Resources, Inc., a New Mexico corporation (“PNM” or the “Company”), hereby awards to «Name» (the “Optionee”), an employee of the Company and a Participant in the PNM Resources, Inc. Omnibus Performance Equity Plan (the “Plan”), as it may be amended, a non-qualified stock option (“Option” or “Options”) to purchase up to, but not to exceed in the aggregate «NonQualified_Stock_Options_» shares of Common Stock of the Company (“Stock”), at an Exercise Price of $27.52 per share, subject to the following terms and conditions. The grant is given effective as of the 17^th day of May, 2005 (the “Grant Date”).

Capitalized terms used in this Stock Option Award Agreement (the “Agreement”) and not otherwise defined herein shall have the meanings given to such terms in the Plan.

1.Grant. This Option is granted pursuant to the Plan, the terms of which are hereby incorporated by reference.

2.Vesting.

(a)Except as set forth herein below, these Options shall vest in the following manner: (i) at the end of the first anniversary of the Grant Date, 33%; (ii) at the end of the second anniversary of the Grant Date, 66%; and, (iii) at the end of the third anniversary of the Grant Date, 100%.

(b)Upon (i) the death, Disability or Retirement of the Optionee, (ii) a Change in Control of the Company, or (iii) events resulting in full vesting as otherwise described in Section 13.1 of the Plan, the Option, if not previously vested, shall be 100% vested.

(c)Upon the involuntary or voluntary termination of employment of an Optionee for reasons other than those set forth in Subparagraph (b) above, the Option, if not previously vested, shall be canceled.

(d)Upon termination of employment with the Company for Cause, all Options (vested and nonvested) shall be terminated and forfeited immediately.

3.Exercise of Options.

(a)Timing of Exercise. Generally, the vested Options shall be exercisable at any time following the vesting thereof, on or before the earlier of (i) three (3) months following an Optionee’s voluntary termination or involuntary termination of employment with the Company for reasons other than Impaction or Cause; (ii) three (3) years following an Optionee’s termination due to Death, Disability, Retirement, Impaction or Change In Control of the Company; or (iii) the tenth anniversary date of the Grant Date of the Options.

Optionee is responsible for ascertaining the times and conditions applicable to the exercise of each Grant of Options awarded under the Plan.

(b)Time and Method of Payment. The Options shall be exercised by the Optionee giving written notice to the Company of his or her intent to exercise Options, along with the tendering of cash in full payment of the Exercise Price of the Options being exercised, times the number of such Options being exercised. Alternatively, in lieu of cash, the Exercise Price may be paid, in full or in part by the Optionee, by delivery to the Company (through actual tender or by attestation), of Stock of the Company owned by the Optionee for more than six months. The amount credited against the Exercise Price for Stock being assigned and delivered to the Company shall equal the Fair Market Value of the Stock on the date of transfer times the number of shares being assigned and delivered. For Optionees subject to Section 16 of the Exchange Act and key employees as specified in the Insider Trading Policy, pre-clearance for sales of stock (including a “cashless exercise”) shall be obtained from the Senior Vice President and General Counsel at PNM Resources, Inc., Alvarado Square, Albuquerque, New Mexico 87158, or his/her successor.

(c)Exercise Following Optionee’s Death. If an Optionee dies, whether or not the Optionee is an employee of the Company at the date of such death, without having fully exercised his or her vested Options, the personal representative or the person receiving such Options from the Optionee or his or her estate shall have the right to exercise the Options pursuant to the timing and methods set forth in Subparagraphs (a) and (b) above.

(d)Delivery of Shares. Within an administratively reasonable period of time after the exercise of an Option and the payment of the full Exercise Price, and after satisfaction of all applicable withholding requirements, the Optionee shall receive a Stock certificate evidencing his or her ownership of such Stock. An Optionee shall have none of the rights of a shareholder with respect to Options until the date a Stock certificate is issued in the Optionee’s name. No adjustment will be made for dividends or other rights for which the record date is prior to the date such Stock certificate is dated.

(e)Holding Period. The shares of Stock obtained upon the exercise of any Option granted hereunder may not, if necessary to meet Rule 16b-3 requirements, be sold by an Optionee subject to Section 16 of the Exchange Act until six (6) months after the delivery to the Participant of the Stock Option Award Agreement.

4.Adjustments. Neither the existence of the Plan nor this Option shall affect, in any way, the right or power of the Company to make or authorize: any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business; or any merger or consolidation of the Company; or the dissolution or liquidation of the Company; or any sale or transfer of all or any part of its assets or business; or any corporate act or proceeding, whether of a similar character or otherwise; all of which, and the resulting adjustments in, or impact on, the Option are more fully defined in Section 5.3 of the Plan.

5.Withholding and Deductions. The Company shall have the right to deduct from any payments made by the Company to the Optionee, any federal, state or local taxes of any kind

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as are required by law to be withheld with respect to the exercise of Options granted hereunder, or to take such other actions as may be necessary in the opinion of the Company to satisfy all obligations for withholding and payment of such taxes, including, in its sole discretion, and subject to the provisions of applicable law and to any conditions the Committee may determine to be necessary in order to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act, to permit the Optionee to satisfy, in whole or in part, any tax withholding obligation which may arise in connection with the exercise of Options by electing to have the Company withhold shares of Stock having a Fair Market Value of the Stock equal to the amount of the income tax withholding. Any potential payment to the Optionee under the terms of this Agreement is also subject to withholdings and deductions by the Company, and the Optionee hereby authorizes the Company, to apply such withholdings and deductions to liquidate and reduce any outstanding debt or unpaid sums owed by the Optionee to the Company or its successor.

6.Compliance with Exchange Act. With respect to Optionees subject to Section 16 of the Exchange Act, Options granted or exercised pursuant to this Award are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act.

7.Non-Assignability. Options shall not be transferable other than by will or by the laws of descent and distribution, and during Optionee’s lifetime shall be exercisable only by the Optionee. The Options are otherwise non-assignable. (See Section 13 of the Plan).

8.Optionee Representation. As a condition to the exercise of any Option, the Company may require a representation from the person exercising the Option that the Stock is being acquired only for investment purposes and without any present intention to sell or distribute such shares.

9.Employment Agreement. Notwithstanding anything to the contrary herein contained in this Agreement, (a) neither the Plan nor this Agreement is intended to create an express or implied contract of employment for a specified term between the Optionee and the Company and (b) unless otherwise expressed or provided, in writing, by an authorized officer, the employment relationship between the Optionee and the Company shall be defined as “employment at will” wherein either party, without prior notice, may terminate the relationship with or without cause.

10.Regulatory Approvals and Listing. The Company shall not be required to issue any certificate for shares of Stock upon the exercise of an Option granted under the Agreement prior to satisfying any regulatory or registration approval, qualification or ruling from the Securities and Exchange Commission, the Internal Revenue Service or any other governmental agency which the Committee, in its sole discretion, shall determine to be necessary or advisable. (See Section 19.1 of the Plan).

11.Nonstatutory Stock Option. The Options granted hereunder are nonstatutory (non-qualified) stock options, and are not “incentive stock options” pursuant to the Code.

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12.Administration. This Agreement shall at all times be subject to the terms and conditions of the Plan and the Plan shall in all respects be administered by the Committee in accordance with the terms of and as provided in the Plan. The Committee shall have the sole and complete discretion with respect to the interpretation of this Agreement and the Plan, and all matters reserved to it by the Plan. The decisions of the majority of the Committee with respect thereto and to this Agreement shall be final and binding upon Optionee and the Company. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control

13.Waiver and Modification. The provisions of this Agreement may not be waived or modified unless such waiver or modification is in writing signed by the Company.

14.Validity and Construction. The validity and construction of this Option shall be governed by the laws of the state of New Mexico.

MANY OF THE PROVISIONS OF THIS AWARD AGREEMENT ARE SUMMARIES OF SIMILAR PERTINENT PROVISIONS OF THE PLAN. TO THE EXTENT THIS AGREEMENT IS SILENT ON AN ISSUE OR THERE IS A CONFLICT BETWEEN THE PLAN AND THIS AGREEMENT, THE PLAN PROVISIONS SHALL CONTROL.

IN WITNESS WHEREOF, the Company has caused this Stock Option Award Agreement to be executed, effective as of May 17, 2005.

PNM RESOURCES, INC.

By   /s/ JEFFRY E. STERBA

JEFFRY E. STERBA

Chairman, President and Chief Executive

Officer

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EX-10.2

EXHIBIT 10.2 

RESTRICTED STOCK RIGHTS AWARD AGREEMENT

PNM RESOURCES, INC.

OMNIBUS PERFORMANCE EQUITY PLAN

PNM Resources, Inc., a New Mexico corporation, (“PNMR” or the “Company”) hereby awards to «Name» (the “Grantee”), a Participant in the PNM Resources, Inc. Omnibus Performance Equity Plan (the “Plan”), as it may be amended, a Restricted Stock Rights Award (the “Award”) for the number of shares of Common Stock of the Company (“Stock”) noted below. The grant is made effective as of the 14th day of February, 20056 (the “Grant Date”).

Capitalized terms used in this Restricted Stock Rights Award Agreement (the “Agreement”) and not otherwise defined herein shall have the meanings given to such terms in the Plan.

1.Grant. Grantee is hereby granted a Restricted Stock Rights Award for «Restricted_Stock_Rights_» shares of Stock. This Award is granted pursuant to the Plan, the terms of which are hereby incorporated by reference.

2.Vesting.

(a)Except as set forth below, these Restricted Stock Rights shall vest in the following manner: (i) on the first anniversary of the Grant Date, 33%; (ii) on the second anniversary of the Grant Date, 67%; and (ii) on the third anniversary of the Grant Date, 100%.

(b)Upon the termination of the Grantee’s employment due to death, Disability, Retirement, or Impaction, the Grantee’s nonvested Restricted Stock Rights shall vest as described in Section 12.1(a)(ii) of the Plan.

(c)Upon a Change in Control, the Grantee’s nonvested Restricted Stock Rights shall fully vest.

(d)Upon the involuntary or voluntary termination of employment of Grantee for any reason other than those set forth in Subparagraphs (b) and (c) above, the Restricted Stock Rights, if not previously vested, shall be canceled and forfeited immediately.

(e)Upon termination of employment with the Company for Cause, all nonvested Restricted Stock Rights shall be terminated and forfeited immediately.

3.Form and Timing of Delivery of Certificate. Within an administratively reasonable period of time following the lapse of restrictions and after satisfaction of all applicable withholding requirements, the Grantee shall receive a stock certificate evidencing Grantee’s ownership of the shares.

4.Adjustments. Neither the existence of the Plan nor this Award shall affect, in any way, the right or power of the Company to make or authorize: any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its

business; or any merger or consolidation of the Company; or the dissolution or liquidation of the Company; or any sale or transfer of all or any part of its assets or business; or any corporate act or proceeding, whether of a similar character or otherwise; all of which, and the resulting adjustments in, or impact on, the Award are more fully defined in Section 5.3 of the Plan.

5.Withholding and Deductions. In accordance with Sections 17.1 and 17.2 of the Plan, the Company may withhold, or require Grantee to remit to the Company, an amount sufficient to satisfy any federal, state or local withholding tax requirements.

6.Dividend Equivalents. During the Restricted Period, the Grantee will be entitled to receive a dividend equivalent for each nonvested Restricted Stock Right. The dividend equivalent will be paid in cash at the same time as cash dividends are paid to shareholders of record and will be subject to all applicable withholding requirements. The amount of the dividend equivalent for each nonvested Restricted Stock Right will equal the cash dividend paid on one share of Stock.

7.Compliance with Exchange Act. If the Grantee is subject to Section 16 of the Exchange Act, Restricted Stock Rights granted pursuant to this Award are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act.

8.Non-Assignability. The Award and Grantee’s rights under this Agreement shall not be transferable other than by will or by the laws of descent and distribution. The Restricted Stock Rights are otherwise non-assignable. (See Section 13 of the Plan). The terms hereof shall be binding on the executors, administrators, heirs and successors of the Grantee.

9.Voting Rights. During the Restricted Period, the Grantee will have no voting rights with respect to nonvested Restricted Stock Rights.

10.Grantee Representation. As a condition to the receipt of any shares of Stock hereunder, the Company may require a representation from the Grantee that the Stock is being acquired only for investment purposes and without any present intention to sell or distribute such shares.

11.Tax Issues. Pursuant to Section 83 of the Internal Revenue Code of 1986 (the “Code”) the value of the shares of Stock received by Grantee will be taxed as ordinary income as of the date the restrictions lapse (i.e., as they vest). Grantee understands that Grantee may elect to be taxed as of the Grant Date, rather than as the Restricted Stock Rights vest, by filing an election under Section 83(b) of the Code with the Internal Revenue Service within 30 days of the Grant Date. The Grantee acknowledges that Grantee should consult a tax advisor regarding the consequences of this Award and whether or not to file an election under Section 83(b) of the Code. The Grantee also acknowledges that the dividend equivalents represent taxable compensation income and are subject to applicable withholding and employment taxes.

12.Employment Agreement. Notwithstanding anything to the contrary contained in this Agreement, (a) neither the Plan nor this Agreement is intended to create an express or implied contract of employment for a specified term between the Grantee and the Company and

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(b) unless otherwise expressed or provided, in writing, by an authorized officer, the employment relationship between the Grantee and the Company shall be defined as “employment at will” wherein either party, without prior notice, may terminate the relationship with or without cause.

13.Regulatory Approvals and Listing. The Company shall not be required to issue any certificate for shares of Stock upon the vesting of Restricted Stock Rights granted under this Agreement prior to satisfying any regulatory approval, registration, qualification or other requirements of the Securities and Exchange Commission, the Internal Revenue Service or any other governmental agency which the Committee, in its sole discretion, shall determine to be necessary or advisable. (See Section 19.1 of the Plan).

14.Administration. This Agreement shall at all times be subject to the terms and conditions of the Plan and the Plan shall in all respects be administered by the Committee in accordance with the terms of and as provided in the Plan. The Committee shall have the sole and complete discretion with respect to the interpretation of this Agreement and the Plan, and all matters reserved to it by the Plan. The decisions of the majority of the Committee with respect thereto and to this Agreement shall be final and binding upon Grantee and the Company. In the event of any conflict between the terms and conditions of this Agreement and the Plan, the provisions of the Plan shall control

15.Waiver and Modification. The provisions of this Agreement may not be waived or modified unless such waiver or modification is in writing signed by the Company.

16.Validity and Construction. The validity and construction of this Award shall be governed by the laws of the State of New Mexico.

MANY OF THE PROVISIONS OF THIS AWARD AGREEMENT ARE SUMMARIES OF SIMILAR PERTINENT PROVISIONS OF THE PLAN. TO THE EXTENT THIS AGREEMENT IS SILENT ON AN ISSUE OR THERE IS A CONFLICT BETWEEN THE PLAN AND THIS AGREEMENT, THE PLAN PROVISIONS SHALL CONTROL.

IN WITNESS WHEREOF, the Company has caused this Restricted Stock Rights Award Agreement to be executed, effective as of February 14, 20056.

PNM RESOURCES, INC.

By:   /s/ JEFFRY E. STERBA

JEFFRY E. STERBA

Chairman, President and Chief Executive Officer

Grantee

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