<PAGE>


                                                                     EXHIBIT 4.3

                                     FORM OF
            AMENDED AND RESTATED PNM RESOURCES, INC. PNM DIRECT PLAN

         This is an amendment and restatement of the PNM Resources, Inc. PNM
Direct Plan that became effective on December 21, 2001 to replace and assume the
Public Service Company of New Mexico PNM Direct Plan originally established on
August 28, 1996.

         1. Definitions

         The following terms when used herein shall have the following meanings:

         "Broker" shall mean one or more securities broker-dealers selected from
time to time by the Plan Administrator to act as independent agents for the
Participants in the purchase and sale of shares of the Company's Common Stock
under the Plan.

         "Common Stock" shall mean the Company's common stock, no par value.

         "Company" shall mean PNM Resources, Inc., a New Mexico corporation

         "Dividend Payment Date" shall mean each date on which dividends are
paid on the Company's Common Stock. These dates are usually on or about February
15, May 15, August 15, and November 15 of each year.

         "Enrollment Form" shall mean such enrollment form as the Plan
Administrator or the Company may from time to time, or upon request, furnish to
Shareholders or new investors who are not Shareholders and which shall be
returned to the Plan Administrator together with the Initial Cash Investment to
indicate their election to participate in the Plan.

         "Exchange" shall mean the New York Stock Exchange.


         "Initial Cash Investment" shall mean any initial cash investment made
by a new investor for the purchase of their first shares of the Company's Common
Stock under the Plan. An Initial Cash Investment may not (a) equal less than $50
or (b) total more than $10,000; provided, however, that employees of the Company
and any of its affiliates who elect to invest through payroll deductions (when
and if the Company offers the payroll deduction option to such employees) may
make an initial investment of at least $25.

         "Optional Cash Investment" shall mean any additional cash payment made
by a Participant for the purchase of shares of the Company's Common Stock under
the Plan. Optional Cash Investments may not (a) equal less than $50 each or (b)
total more than $10,000 in any month; provided however, that employees of the
Company and any of its affiliates who elect to invest thorough payroll
deductions (when and if the Company offers the payroll deduction option to such
employees) may make an optional investment of at least $25.


         "Participant" shall mean any Shareholder or new investor who is not a
Shareholder who has enrolled in the Plan on-line over the Internet or has
returned an Enrollment Form to the Plan Administrator indicating election to
participate in the Plan.

         "Plan" shall mean the Amended and Restated PNM Resources, Inc. PNM
Direct Plan.



<PAGE>


         "Plan Administrator" shall mean Mellon Bank, N.A. through its
designated affiliates Mellon Investor Services and FutureShare Financial LLC or
other agent duly appointed by the Company to administer the Plan.


         "Pricing Period" shall have the meaning set forth below in Section 9.

         "Shareholder" shall mean any holder of record of the Company's Common
Stock.

         "Threshold Price" shall have the meaning set forth below in Section 10.

         "Trading Day" shall have the meaning set forth below in Section 9.

         "Waiver Investment Date" shall have the meaning set forth below in
Section 9.

         2. Purpose

         The purpose of this Plan is to provide Shareholders and interested new
investors with a convenient and economical method of investing cash dividends
and making cash investments in shares of the Company's Common Stock. The shares
of the Company's Common Stock purchased under this Plan with reinvested cash
dividends and Initial and Optional Cash Investments will, at the election of the
Company, be newly issued shares purchased directly from the Company, treasury
shares purchased directly from the Company, shares purchased on the open market
by the Broker or a combination thereof.

         3. Eligibility for Participation


         Existing Shareholders and interested new investors who are not
Shareholders are eligible to participate in the Plan and may do so by enrolling
on-line over the Internet through Investor ServiceDirect at
www.melloninvestor.com or by completing the Enrollment Form and returning it to
the Plan Administrator, together with an Initial Cash Investment or an Optional
Cash Investment, as the case may be. Instructions for enrollment on-line over
the Internet are provided by the Plan Administrator. Any Shareholder who owns
less than 100 shares shall be automatically enrolled in the full dividend
reinvestment portion of the Plan, unless the Participant elects to receive cash
dividends.


         4. Administration

         The Plan Administrator shall maintain records and perform such other
duties as may be required. In addition, the Plan Administrator shall send to
each Participant (a) annual or quarterly (annual if the Participant holds less
than 100 shares and participates only in the dividend reinvestment portion of
the Plan) statements of the Participant's Plan account, and (b) annual and
quarterly reports to Shareholders, proxy statements and income tax information
for reporting dividends. Shares purchased by a Participant through the Plan
shall be held by the Plan Administrator in book-entry form. Unless instructed
otherwise, the dividends on such shares shall be automatically reinvested on
each Dividend Payment Date.

         The Company shall pay all costs of administering the Plan, except as
provided in this paragraph of this Section 4. Participants will pay the trading
fees for any shares purchased on the open market and a fee for plan histories.
No commission will be paid on any newly issued shares purchased directly from
the Company under the Plan. A Participant will incur trading and transaction
fees upon the sale of shares in the Participant's Plan account in connection
with the withdrawal of a Participant from this Plan as described in Section 12.
Additional fees are set forth in the fee schedule attached as Appendix A. The
fee schedule in Appendix A may be amended from time to time by the Company.




                                       2
<PAGE>

         5. Reinvestment of Dividends


         A. Full Dividend Reinvestment. Shareholders may elect to have their
cash dividends automatically reinvested by enrolling on-line over the Internet
through Investor ServiceDirect at www.melloninvestor.com or completing the
Enrollment Form to that effect and returning it to the Plan Administrator. In
such cases, cash dividends on shares held in a Participant's Plan account will
be automatically reinvested until such shares are withdrawn from the
Participant's Plan account or until the Participant changes his or her dividend
reinvestment election by notifying the Plan Administrator. Cash dividends will
be reinvested as promptly as practicable (normally within 5 business days of the
Dividend Payment Date). Reinvestment of cash dividends shall commence with
dividends paid on the next Dividend Payment Date following the Plan
Administrator's receipt of the Enrollment Form or the processing of enrollment
on-line provided the enrollment request is received on or before the record date
established for payment of the dividends. If the Plan Administrator receives the
enrollment request after such record date, then the reinvestment of dividends
shall commence with the Dividend Payment Date following the next established
record date.


         B. Partial Dividend Reinvestment. A Participant may elect to have cash
dividends on a designated number of shares held in the Participant's Plan
account paid directly to the Participant, with the balance being reinvested in
shares of Common Stock, except that Participants owning less than 100 shares of
Common Stock may not elect this partial dividend reinvestment option.

         C. Cash Investment Only. A Participant may elect to have cash dividends
on all shares held in the Participant's Plan account paid directly to the
Participant in lieu of being reinvested.

         D. No Option Chosen. If a Participant does not elect a cash dividend
participation option as described above in Subsections 5A, 5B or 5C, then such
Participant will be deemed to have elected the full divided reinvestment option
described in Subsection 5A above.

         E. Return of Uninvested Cash Dividends. Any cash dividends to be
reinvested under the Plan that are not reinvested in shares of Common Stock
within 30 days of the applicable Dividend Payment Date shall be promptly paid,
without interest, to the Participant at his or her address of record by First
Class Mail.

         6. Initial and Optional Cash Investments


         Shareholders or interested new investors may elect to make an Initial
Cash Investment by enrolling on-line over the Internet through Investor
ServiceDirect at www.melloninvestor.com or by completing the Enrollment Form for
that purpose and returning it to the Plan Administrator. Participants are
eligible to make Optional Cash Investments at any time. Initial and/or Optional
Cash Investments, or any portion thereof, may be accepted or rejected by the
Plan Administrator or Company in their sole discretion. Any Initial or Optional
Cash Investment, or portion thereof, that is rejected by the Plan Administrator
or the Company will be returned to the Participant as promptly as practical
after the Plan Administrator or the Company elects to reject such investments.
Initial Cash Investments and Optional Cash Investments shall be used to purchase
shares of the Company's Common Stock as promptly as practical (normally, at
least once every five business days) after the Plan Administrator receives the
Participant's Initial Cash Investment or Optional Cash Investment in the form of
an electronic bank transfer, check or money order payable to Mellon Bank, N.A.
No Participant's Initial Cash Investment may (a) equal less than $50 or (b)
total more than $10,000. No Participant's Optional Cash Investments may (a)
equal less than $50 each or (b) total more than $10,000 in any month; provided,
however, that employees of the Company and any of its affiliates who elect to
invest through payroll deductions (when and if the payroll deduction option is
offered to such employees) may make an initial or additional







                                       3
<PAGE>

optional investment of at least $25. (The payroll deduction option is currently
available, but will cease to be available upon the implementation of the PNM
Resources, Inc. Employee Stock Purchase Plan. The Company retains discretion to
reinstate and/or remove the payroll deduction option from time-to-time). Any
Initial Cash Investments and Optional Cash Investments that are not invested
within 35 days of receipt by the Plan Administrator or the Company shall be
promptly returned, without interest, to the Participant at his or her address of
record by First Class Mail.


         7. Cash Investments Over the Maximum Monthly Amount


         Interested new investors may make an Initial Cash Investment and/or
Participants may make an Optional Cash Investment in excess of $10,000 per month
with the Company's prior written approval. Approval is obtained by submitting a
"Request for Waiver" form, which may be obtained by contacting the Plan
Administrator's Waiver Department at 1-917-320-6300 (or such other number as the
Plan Administrator or the Company may establish from time to time). Completed
Request For Waiver forms must be sent to the Plan Administrator's Waiver
Department via facsimile no later than three business days prior to the Pricing
Period Start Date provided in Appendix B (which Appendix B may be amended from
time to time by the Plan Administrator and an authorized officer of the Company)
to this Plan for the applicable Pricing Period. If a Request for Waiver is
approved, then the Participant must send to the Plan Administrator its Optional
Cash Investment of greater than $10,000.


         The Plan Administrator must receive the Initial or Optional Cash
Investment in excess of the $10,000 monthly maximum in good funds pursuant to a
Request For Waiver form by the "Optional Cash Investments Must be Received By"
date as set forth on Appendix B. This date is the close of business on the last
day immediately preceding the first day of the applicable Pricing Period Start
Date as set forth in Appendix B. Funds received after this date will be returned
to the Participant without interest.

         The Company has the sole discretion whether to approve any request to
make an Initial or Optional Cash Investment in excess of the $10,000 monthly
maximum. In deciding whether to approve a Request for Waiver, the Company may
consider, among other things, the following factors:

         o        whether, at the time of such request, the Plan Administrator
                  is acquiring shares of Common Stock for the Plan directly from
                  the Company or in the open market or in privately negotiated
                  transactions with third parties;

         o        the Company's need for additional funds;

         o        the Company's desire to obtain additional funds through the
                  sale of Common Stock as compared to other sources of funds;

         o        the purchase price likely to apply to any sale of Common
                  Stock;

         o        the extent and nature of a Participant's prior participation
                  in the Plan;

         o        the number of shares of Common Stock a Participant holds of
                  record; and

         o        the total amount of Initial and Optional Cash Investments in
                  excess of $10,000 per month for which Requests for Waiver have
                  been submitted.

         If Requests for Waivers are submitted for any Pricing Period for an
aggregate amount in excess of the amount the Company is then willing to accept,
the Company may honor such requests in order of receipt, pro rata or by any
other method that the Company determines, in its sole discretion, to be



                                       4
<PAGE>

appropriate. In making this determination, the Company may consider the make-up
of its shareholder base and existing ownership levels.

         8. Purchase of Shares

         Shares of the Common Stock purchased under the Plan will, at the
Company's election, be newly issued shares purchased directly from the Company,
treasury shares purchased directly from the Company, shares purchased by a
Broker in the open market, or a combination thereof. The Company has full
discretion as to whether the Common Stock purchased under the Plan will be
purchased on the open market or purchased directly from the Company.


         o        Common Stock purchased in the open market. The investment
                  price of the Common Stock purchased in the open market with
                  reinvested dividends, Initial Cash Investments or with
                  Optional Cash Investments will be the weighted average price,
                  including applicable brokerage trading fees, incurred in
                  connection with the purchase of such shares for the relevant
                  investment date. No interest will be paid on funds held by the
                  Plan Administrator pending investment. The Plan Administrator
                  will normally invest cash dividends within 5 business days of
                  the Dividend Payment Date and will normally invest Initial and
                  Optional Cash Investments at least once every 5 business days.


         o        Common Stock purchased directly from the Company. The price of
                  the Common Stock purchased directly from the Company with
                  reinvested dividends, Initial Cash Investments or Optional
                  Cash Investments will be the average of the high and low sale
                  prices of shares of the Common Stock reported on the Exchange
                  for the Dividend Payment Date, Initial Cash Investment date or
                  Optional Cash Investment date, as the case may be. No interest
                  will be paid on funds held by the Plan Administrator pending
                  investment. The Plan Administrator will normally invest
                  Initial and Optional Cash investments at least once every 5
                  business days.

         The Participants will be credited with that number of shares, including
fractional shares computed to 4 decimal places, equal to the amount invested
with respect to his, her or its Plan account, divided by the price per share of
such shares for all purchases for all Participants during the applicable period.

         9. Purchase of Shares Upon a Request for Waiver

         Shares purchased pursuant to a granted Request for Waiver are purchased
directly from the Company. Initial and Optional Cash Investments made pursuant
to a Request for Waiver will be applied to the purchase of shares of Common
Stock as soon as practicable on or after the "Waiver Investment Date" as set
forth in Appendix B to the Plan (which Appendix B may be amended from time to
time by the Plan Administrator and an authorized officer of the Company).
Initial and Optional Cash Investments made pursuant to a Request for Waiver are
acquired at a price equal to the average of the daily high and low sales prices
computed up to four decimal places, if necessary, of the Common Stock as
reported on the Exchange for the 10 Trading Days (as defined below) immediately
preceding the applicable Waiver Investment Date. A "Trading Day" means a day on
which trades in the Common Stock are reported on the Exchange. The period
encompassing the first 10 Trading Days immediately preceding the next following
Waiver Investment Date constitutes the relevant "Pricing Period." The Plan
Administrator will apply all Initial and Optional Cash Investments for which
good funds are received on or before the first business day before the Pricing
Period to the purchase of shares of common stock as soon as practicable on or
after the next following Waiver Investment Date.





                                       5
<PAGE>

         A discount of up to 3% from the purchase price may be offered, in the
Company's sole discretion, with respect to a particular Waiver Investment Date
to Participants on purchases of the Company's common stock through Initial or
Optional Cash Investments in excess of $10,000 per month.

         Setting a discount from the purchase price for Initial or Optional Cash
Investments in excess of $10,000 per month for a particular Pricing Period will
not affect the setting of a discount for any other Pricing Period. The Company
may increase, decrease, or waive its right to set a discount from the purchase
price for any particular Pricing Period. Neither the Company nor the Plan
Administrator is required to give a new investor or Participant notice of the
discount for any Pricing Period. When setting the discount, if any, the Company
will consider, among other things, capital needs, whether the Company wants to
issue equity to meet capital needs and how quickly the Company desires to close
the investment.

         10. Threshold Price

         The Company may set a minimum purchase price per share (the "Threshold
Price") for Initial or Optional Cash Investments in excess of $10,000 per month
made pursuant to a granted Request for Waiver for any Pricing Period. The
determination of whether to set a Threshold Price will be made at least three
business days before the first day of the Pricing Period.


         The Company will notify the Plan Administrator of the Threshold Price,
if any. In deciding whether to set a Threshold Price, the Company will consider
current market conditions, the level of participation in the Plan and the
current and projected capital needs. Participants and potential new investors
may ascertain whether a Threshold Price has been set or waived for any given
Pricing Period by calling Mellon's Waiver Department at 1-917-320-6300 (or such
other number as the Plan Administrator or the Company may establish from time to
time).


         The Company will fix the Threshold Price for a Pricing Period as a
dollar amount that the average of the high and low sales prices as reported by
the Exchange for each Trading Day of that Pricing Period (not adjusted for
discounts, if any) must equal or exceed. The Company will exclude from the
Pricing Period and from the determination of the purchase price any Trading Day
within the Pricing Period that does not meet the Threshold Price. The Company
also will exclude from the Pricing Period and from the determination of the
purchase price any day in which no trades of Common Stock are made on the
Exchange. Thus, for example, if the Threshold Price is not met or no sales of
Common Stock are reported for 2 of the 10 Trading Days in a Pricing Period, then
the Company will base the purchase price upon the remaining 8 Trading Days in
which the Threshold Price was met.

         In addition, the Company will return a pro rata portion of each Initial
or Optional Cash Investment made pursuant to an approved Request for Waiver for
each Trading Day of a Pricing Period for which the Threshold Price is not met or
for each day in which no trades of common stock are reported on the Exchange as
soon as reasonably practical after the Pricing Period, without interest.

         The returned amount will equal one-tenth (1/10th) of the total amount
of that Initial or Optional Cash Investment (not just the amount exceeding
$10,000) for each Trading Day that the Threshold Price is not met or for each
Trading Day in which sales are not reported. Thus, for example, if the Threshold
Price is not met or no sales of Company Common Stock are reported for 2 of the
10 Trading Days in a Pricing Period, then the Company will return two-tenths
(2/10th or 20%) of the Initial or Optional Cash Investment to the investor
without interest after conclusion of the Pricing Period. This does not
constitute a discount to the purchase price; however, it does reduce the amount
of the offering.

         The establishment of the Threshold Price and the possible return of a
portion of the payment apply only to Initial and/or Optional Cash Investments
exceeding $10,000 per month made pursuant to a





                                       6
<PAGE>

granted Request for Waiver. Setting a Threshold Price for a Pricing Period will
not affect the setting of a Threshold Price for any other Pricing Period. The
Company may waive its right to set a Threshold Price for any particular Pricing
Period. Neither the Company nor the Plan Administrator is required to give an
interested new investor or Participant notice of the Threshold Price for any
Pricing Period. The Company may alter or amend at our sole discretion these
Pricing Periods at any time and from time to time, prior to the commencement of
any Pricing Period and prior to the granting of any waiver with respect to such
period.

         11. Amendment of Investment Option

         A Participant may change the investment option elected under this Plan
by notifying the Plan Administrator in writing, by telephone or on-line over the
Internet. With respect to the dividend reinvestment portion of the Plan, notices
received by the Plan Administrator not later than the record date established
for any Dividend Payment Date shall be effective as of such Dividend Payment
Date and thereafter.

         12. Withdrawal of Purchased Shares and Termination of Account

         A Participant who has purchased shares of the Company's Common Stock
under this Plan may withdraw all or a portion of such shares by notifying the
Plan Administrator, specifying in the notice the number of shares to be
withdrawn. If requested, certificates for whole shares withdrawn shall be issued
to the Participant or transferred to a Participant's brokerage account. In no
case shall certificates or transfers for fractional shares be issued. Any
fractional share withdrawn shall be liquidated as soon as practicable after
receipt of withdrawal notice by the Plan Administrator. The liquidated amount
for any fractional share and certificate(s) for whole shares shall be mailed
directly to the withdrawing Participant by the Plan Administrator.

         If the Participant is terminating participation in this Plan, the
Participant may withdraw all shares and request that a certificate be issued,
that whole shares be transferred to a Participant's brokerage account or that
shares be sold and the cash proceeds be forwarded to the Participant. Such sale
shall be made by the Broker. The Broker will have full discretion as to all
matters relating to sales by the Broker, including the date of any sales and the
prices received for such shares. The proceeds of such sale by the Broker, less
trading and transaction fees, shall be paid to such Participant. Shares that are
to be sold by the Broker may be aggregated with those of other terminating
Participants, in which case the proceeds to each terminating Participant will be
based on the average sales price, less trading and transaction fees.

         13. Common Stock Rights Offering, Stock Split, Stock Dividend

         Participation in any Common Stock rights offering shall be based upon
both the shares registered in the Participant's name and the shares (including
fractional shares) credited to the Participant's Plan account in book-entry
form. Any stock dividend or share resulting from any stock split with respect to
shares credited to the Participant's Plan account shall be added to such
account.

         14. Voting

         All shares credited to a Participant's Plan account in book-entry form
shall be voted as the Participant directs. If on the record date for a meeting
of Shareholders there are shares credited to the Participant's Plan account, the
Participant (whether or not any shares are registered in the Participant's own
name) shall be sent the proxy materials for such meeting. If the Participant
returns an executed proxy, all shares credited to the Participant (including any
fractional shares) shall be voted in accordance with such proxy; otherwise, the
Participant may vote such shares in person at such meeting.




                                       7
<PAGE>

         15. Liability

         In administering this Plan, neither the Company nor the Plan
Administrator nor any Broker shall be liable for any good faith acts or
omissions, including, without limitation, any failure to terminate a
Participant's Plan account upon such Participant's death or adjudicated
incompetence, prior to receiving notice in writing of such death or adjudicated
incompetence, or with respect to the prices at which shares are purchased or
sold for a Participant's account and the times when such purchases and sales are
made, or with respect to any loss or fluctuation in the market value after the
purchase or sale of such shares.

         16. Termination, Suspension or Modification

         The Company reserves the right to modify, suspend or terminate this
Plan at any time. The Company also reserves the right to change the
administrative procedures of the Plan, together with the Plan Administrator. The
Company reserves the right to modify, suspend or terminate participation in the
Plan by otherwise eligible persons to eliminate practices that are inconsistent
with the purpose of the Plan. In such event, the Plan Administrator will notify
the Participant in writing and will continue to keep safe shares of Common Stock
allocated to the Participant, but will no longer accept optional cash
investments or reinvest dividends.

         17. Direct Registration System

         Shares purchased under the Plan (unless requested otherwise by the
Participant) will be in book-entry-form through the use of the Direct
Registration System. Shares may be transferred from the Participant's Plan
account to a Participant's brokerage account and vice versa.

         18. Compliance With Applicable Laws and Regulations

         The Company's obligation to offer, issue or sell shares of the
Company's Common Stock under this Plan shall be subject to (a) the Company's
obtaining any necessary approval, authorization or consent from any regulatory
authority having jurisdiction and from any stock exchange on which shares of the
Company's Common Stock may then be listed and (b) the condition that, at the
time of the offer, issuance or sale, the price at which such shares are being
offered, issued or sold shall be at least equal to the then stated value of such
shares.

         19. Selection of Broker

         Any Broker serving in such capacity pursuant to the Plan shall be
selected by the Company, and the Plan Administrator and the Company, or either
of them, shall, subject to the provisions hereof, make such arrangements and
enter into such agreements with the Broker in connection with the activities
contemplated by the Plan as the Plan Administrator and the Company, or either of
them, deem reasonable and appropriate.

         20. Source of Shares of Common Stock

         The Company shall not change the source of Common Stock purchased by
Participants in the Plan (i.e., either (i) newly issued shares of Common Stock
or shares of Common Stock held in the Company's treasury (not reserved for any
other purpose) purchased from the Company, or (ii) shares of Common Stock
purchased in the open market) more often than every 3 months. The Company shall
not exercise its right to change the source of shares absent a recorded
determination by the Company's Board






                                       8
<PAGE>

of Directors, Chief Financial Officer or Treasurer that the Company's need to
raise additional capital has changed or there is another valid reason for a
change.

         21. Plan of Distribution


         Subject to the discussion below, the Company will distribute newly
issued shares of its Common Stock sold under the Plan. Future Share Financial
LLC, a registered broker/dealer, will assist in the identification of investors
and other related services, but will not be acting as an underwriter with
respect to shares of Common Stock sold under the Plan. There are no brokerage
commissions or service charges allocated to Participants in the Plan in
connection with their purchases of such newly issued shares of Common Stock.


         In connection with the administration of the Plan, the Company may be
requested to approve investments made pursuant to Requests for Waiver by or on
behalf of Participants or other investors who may be engaged in the securities
business. Persons who acquire shares of the Company's Common Sock through the
Plan and resell them shortly after acquiring them, including coverage of short
positions, under certain circumstances, may be participating in a distribution
of securities that would require compliance with Regulation M under the
Securities Exchange Act of 1934, as amended, and may be considered to be
underwriters within the meaning of the Securities Act of 1933, as amended. The
Company will not extend to any such person any rights or privileges other than
those to which it would be entitled as a Participant, nor will the Company enter
into any agreement with any such person regarding the resale or distribution by
any such person of the shares of our Common Stock so purchased. The Company may,
however, accept investments made pursuant to Requests for Waiver by such
persons. From time to time, financial intermediaries, including brokers and
dealers, and other persons may engage in positioning transactions in order to
benefit from any waiver discounts applicable to investments made pursuant to
Requests for Waiver under the Plan. Those transactions may cause fluctuations in
the trading volume of the Common Stock. Financial intermediaries and such other
persons who engage in positioning transactions may be deemed to be underwriters.
The Company has no arrangements or understandings, formal or informal, with any
person relating to the sale of shares of our Common Stock to be received under
the Plan.

         22. Controlling Law

          This Plan shall be construed, regulated and administered under the
laws of the State of New Mexico.

         23. Uncollectible Funds

         If a check or automatic debit submitted for investment is returned
unpaid or rejected for any reason, the Plan Administrator will consider the
request for investment of such funds null and void and will charge the
Participant the applicable fees set forth in Appendix A, as revised from time to
time. Any shares purchased upon the prior credit of such funds will be
immediately removed from the Participant's account. The Plan Administrator will
be entitled to sell those shares to satisfy any uncollected amounts. If the net
proceeds of the sale of such shares are not sufficient to satisfy the balance of
such uncollected amounts, the Plan Administrator may sell additional shares from
the Participant's account to satisfy the uncollected balance.

         24. Acceptance of Terms and Conditions of Plan by Participants

         Each Participant, by completing an Enrollment Form and as a condition
of participation herein, for himself or herself, his or her heirs, executors,
administrators, legal representatives and assigns, approves and agrees to be
bound by the provisions of this Plan and any subsequent amendments hereto, and
all actions of the Company and the Plan Administrator hereunder.






                                       9
<PAGE>




                                   APPENDIX A

                                  FEE SCHEDULE



<Table>
<S>                                                         <C>
ENROLLMENT FEE FOR NEW INVESTORS.....................       NO CHARGE

INITIAL PURCHASE OF SHARES...........................       TRADING FEE INCLUDED IN SHARE PRICE (CURRENTLY $0.06
                                                            PER SHARE), APPLICABLE WHEN SHARES ARE ACQUIRED ON THE
                                                            OPEN MARKET BY THE PLAN ADMINISTRATOR THROUGH ITS
                                                            BROKER

REINVESTMENT OF DIVIDENDS............................       NO CHARGE. THE COMPANY WILL PAY THE APPLICABLE
                                                            TRADING FEE WHEN SHARES ARE ACQUIRED ON THE OPEN
                                                            MARKET BY THE PLAN ADMINISTRATOR THROUGH ITS BROKER

OPTIONAL CASH INVESTMENTS............................       TRADING FEE INCLUDED IN SHARE PRICE (CURRENTLY $0.06
                                                            PER SHARE), APPLICABLE WHEN SHARES ARE ACQUIRED ON THE
                                                            OPEN MARKET BY THE PLAN ADMINISTRATOR THROUGH ITS
                                                            BROKER

SALE OF SHARES (PARTIAL OR FULL):
     TRANSACTION FEE.................................       $15 PER SALE TRANSACTION OR LIQUIDATION
     TRADING FEE.....................................       CURRENTLY $0.06 PER SHARE

GIFT OR TRANSFER OF SHARES...........................       NO CHARGE

SAFEKEEPING OF STOCK CERTIFICATES....................       NO CHARGE

CERTIFICATE ISSUANCE.................................       NO CHARGE

RETURNED CHECKS OR REJECTED AUTOMATIC DEBIT..........       $35 PER CHECK OR TRANSACTION

DUPLICATE STATEMENTS:
     CURRENT YEAR....................................       NO CHARGE
     PRIOR YEAR(S)...................................       $20 FLAT FEE PER REQUEST PER EACH PRIOR YEAR
</Table>



PLAN FEES ARE AT THE DISCRETION OF PNM RESOURCES, INC. INVESTORS SHOULD NOT RELY
SOLELY ON THE ABOVE SCHEDULE AS FEES ARE SUBJECT TO CHANGE. FOR MORE
INFORMATION, PLEASE CONTACT THE PLAN ADMINISTRATOR AT 1-877-663-7775.




<PAGE>




                                   APPENDIX B

"REQUEST FOR WAIVER" INITIAL OR OPTIONAL CASH INVESTMENTS OF MORE THAN $10,000
PER MONTH

<Table>
<Caption>
                        Threshold Price and             Optional Cash
                      Waiver Discount, if any,       Investments Must be        Pricing Period         Waiver
       Year                will be set by                received by              Start Date       Investment Date
       ----           ------------------------       -------------------        --------------     ---------------
<S>                   <C>                            <C>                        <C>                <C>
       2003                   January 13                   January 15              January 16          January 31
                              February 3                   February 5              February 6         February 21
                              February 24                  February 26             February 27          March 13
                               March 14                     March 18                March 19            April 2
                                April 3                      April 7                 April 8            April 23
                               April 24                     April 28                April 29             May 13
                                May 14                       May 16                  May 19              June 3
                                June 4                       June 6                  June 9             June 23
                                June 24                      June 26                 June 27            July 14
                                July 15                      July 17                 July 18            August 1
                               August 4                     August 6                August 7           August 21
                               August 22                    August 26               August 27         September 11
                             September 12                 September 16            September 17         October 1
                               October 2                    October 6               October 7          October 21
                              October 22                   October 24              October 27         November 10
                              November 11                  November 13             November 14         December 1
                              December 2                   December 4              December 5         December 19
                              December 22                  December 24             December 26      January 12, 2004

       2004                   January 13                   January 15              January 16          February 2
                              February 3                   February 5              February 6         February 23
                              February 24                  February 26             February 27          March 12
                               March 15                     March 17                March 18            April 1
                                April 2                      April 6                 April 7            April 22
                               April 23                     April 27                April 28             May 12
                                May 13                       May 17                  May 18              June 2
                                June 3                       June 7                  June 8             June 22
                                June 23                      June 25                 June 28            July 13
                                July 14                      July 16                 July 19           August 14
                               August 3                     August 5                August 6           August 20
                               August 23                    August 25               August 26         September 10
                             September 13                 September 15            September 16        September 30
                               October 1                    October 5               October 6          October 20
                              October 21                   October 25              October 26          November 9
</Table>



PRICING PERIODS ARE AT THE DISCRETION OF PNM RESOURCES, INC. INVESTORS SHOULD
NOT RELY SOLELY ON THE ABOVE SCHEDULE AS PRICING PERIODS AND WAIVER INVESTMENT
DATES MAY VARY. FOR MORE INFORMATION, PLEASE CONTACT THE PLAN ADMINISTRATOR'S
WAIVER DEPARTMENT AT 1-917-320-6300.