RESTATED and AMENDED
                      PUBLIC SERVICE COMPANY OF NEW MEXICO
                     ACCELERATED MANAGEMENT PERFORMANCE PLAN
                                     (1988)

--------------------------------------------------------------------------------

                                    ARTICLE 1

                                TITLE AND PURPOSE

        1.01  Public  Service  Company  of New Mexico  ("PNM" or the  "Company")
established  the Public  Service  Company of New Mexico  Accelerated  Management
Performance Plan (the "Plan") on January 14, 1981. On October 23, 1984, the Plan
was amended and restated,  and  subsequently  the October 23, 1984,  amended and
restated Plan was amended by three amendments. The Company now wishes to further
amend that Plan and with such amendment, to fully restate the Plan as amended.

        1.02 The purpose of the Plan is to encourage personal growth, to improve
productivity  and to  foster  the  acceptance  of  increased  responsibility  by
providing the participating  members of each Company's  Executive Pay Group with
supplemental retirement benefits.

        1.03  Participation  in the Plan by an  Employee  pursuant  to a Joinder
Agreement  does  not and  shall  not be  deemed  to  constitute  a  contract  of
employment  between the Employer  Company and the  Participating  Employee,  nor
shall any provision hereunder,  except as may be expressly stated,  restrict the
right of the  Employer  Company  to  discharge  the  Participating  Employee  or
restrict the right of the Participating Employee to terminate employment.

        1.04  Following  the adoption of the Plan certain  companies  affiliated
with PNM have adopted the Plan.


<PAGE>


                                    ARTICLE 2

                                   DEFINITIONS

        The  following  terms as used herein shall have the  meanings  specified
below unless the context otherwise requires. The masculine pronouns, where used,
shall include the feminine,  and the singular shall, where appropriate,  include
the plural.

        2.01 "Actuarial  Equivalent" shall mean a benefit of equivalent value as
determined by an independent  actuary selected by the Company using  assumptions
of interest and mortality  which reflect his best estimate of future  experience
for the Plans.  Such Actuarial  Equivalents may be different from those utilized
in the Employees'  Retirement  Plan. The Company's good faith  determination  of
actuarial equivalents shall be conclusive for all purposes hereunder.

         2.02 "Authorized Leave of Absence" means a leave of absence approved by
the Plan Administrator.

         2.03  "Average  Earnings"  means  Average  Earnings  as  defined in the
Employees' Retirement Plan.

         2.04 "Board of  Directors"  means the Board of Directors of an Employer
Company.

         2.05  "Company"  means  Public  Service  Company  of New  Mexico or any
successor thereto, and any company affiliated with Public Service Company of New
Mexico which adopts the Plan.

         2.06  "Deferred   Early   Retirement   Benefit"  means  Deferred  Early
Retirement Benefit as defined in the Employees' Retirement Plan.



                                       2
<PAGE>


         2.07  "Early  Retirement  Benefit"  means Early  Retirement  Benefit as
defined in the Employees' Retirement Plan.

         2.08  "Early  Retirement  Date"  means the date upon which an  Employee
retires from the service of a Company pursuant to the provisions of Section 6.03
of the Employees' Retirement Plan.

         2.09  "Effective  Date"  of  the  Plan  as  amended  shall,  as to  all
Participating  Employees,  be August 1, 1988.  The Plan,  as amended,  shall not
adversely or beneficially  affect any person not employed on the Effective Date.

         2.10  "Employee"  shall mean any person  employed  by a Company who has
been designated as a member of such Company's Executive Pay Group.

         2.11  "Employees'  Retirement Plan" means the Public Service Company of
New Mexico Employees' Retirement Plan, as amended from time to time.

         2.12 "Employer Company" means the Company employing the Employee who is
a Participating Employee.

         2.13  "Executive  Pay  Group"  means a  management  group of  employees
designated by the President of the Employer Company.

         2.14 "Joinder  Agreement"  shall mean a signed written  agreement by an
Employee  to   participate  in  the  Plan  in  a  -form  approved  by  the  Plan
Administrator.

         2.15 "Maximum  Performance  Credits"  shall mean a total of thirty (30)
Performance Credits.

         2.16 "Normal Retirement Benefit" means the Normal Retirement Benefit as
defined in the Employees' Retirement Plan.



                                       3
<PAGE>

         2.17  "Normal  Retirement  Date"  means the Normal  Retirement  Date as
defined in the Employees' Retirement Plan.

         2.18 "Participating  Employee" shall mean an Employee who, as of August
1, 1988, had met the eligibility  requirements of Article 3 hereof, had executed
a  Joinder  Agreement  and had  that  Joinder  Agreement  accepted  by the  Plan
Administrator.

         2.19  "Performance  Credit"  means credit  earned  toward  accumulating
Maximum Performance Credits.

         2.20 "Plan means the Public Service  Company of New Mexico  Accelerated
Management Performance Plan as described herein or as hereafter amended.

         2.21 "Plan  Administrator" means the person designated by the President
of PNM as the Plan Administrator of the Plan.

         2.22 "Plan Year" means the fiscal year of the Company.

         2.23  "Service  Bonus  Plan"  means the Public  Service  Company of New
Mexico Service Bonus Plan, as amended from time to time.

         2.24 "Terminated Participant" means a Participating Employee who:

         2.24.1 Before  accumulating  Maximum  Performance Credits and attaining
his Early Retirement Date, ceases to be an employee of the Company.

         2.24.2 Before  accumulating  Maximum  Performance Credits and attaining
his Early Retirement Date,  ceases to be a Participating  Employee pursuant to a
Resolution adopted by the Board of Directors.



                                       4
<PAGE>




         2.24.3 Dies prior to electing Early Retirement Benefit,  Deferred Early
Retirement Benefit or Normal Retirement Benefit under the Plan, or

         2.24.4 After accumulating Maximum Performance  Credits,  fails to elect
an Early Retirement  Benefit or Deferred Early Retirement Benefit for any reason
other than deferral, at the specific invitation of the Board of Directors.

         2.25 "Year means the period of twelve (12) consecutive  calendar months
beginning on the first day of the month  following the date an Employee became a
member of the Executive Pay Group or any anniversary thereof.

         2.26  "Year of  Service"  means  each Year of service as defined in the
Employees' Retirement Plan.

                                    ARTICLE 3

                                   ELIGIBILITY

         3.01  Employees  Eligible to Be Included in Plan.  Only  Employees  now
covered by the Plan are eligible to be  Participating  Employees.  No additional
Employees may be added to the Plan. A List of Eligible Employees now in the Plan
is attached hereto as Exhibit A.

                                    ARTICLE 4

                                  PARTICIPATION

        4.01 Each Participating Employee will receive one (1) Performance Credit
for each Year of Service  plus  additional  Performance  Credit for each Year in
accordance with the following schedule:




                                       5
<PAGE>



Executive Pay
 Group Grade                   Additional Performance Credit for Each
   Level                                 Year of Membership
-------------     -----------------------------------------------------------
                     1985                                             1990
                  and prior    1986     1987     1988      1989     and after
                  ---------    ----     ----     ----      ----     ---------

One                 1.00       .80       .60      .40       .20        .00
Two                  .80       .64       .48      .32       .16        .00
Three                .60       .48       .36      .24       .12        .00
Four                 .40       .32       .24      .16       .08        .00

Performance Credits shall be calculated in monthly  increments,  on the basis of
calendar  months.  For  purposes  of  determining  Years  of  membership  in the
Executive  Pay  Group,  service  for  any  part of a  calendar  month  shall  be
considered one full month's credit.

         4.02 Performance Credits during an Authorized Leave of Absence shall be
determined by the Plan  Administrator,  consistent with the Employee  Retirement
Income Security Act of 1974, as amended.

         4.03  No   additional   Performance   Credits   will  be  earned  by  a
Participating Employee after the occurrence of any of the following events:

         4.03.1 The death of the Participating Employee.

         4.03.2 The Participating Employee becoming a Terminated Participant.

         4.04  A   Participating   Employee  who  has  accumulated  the  Maximum
Performance  Credits  may, the specific  invitation  of the Board of  Directors,
defer  electing  an  Early  Retirement  Benefit.  In such  event,  the  benefits
available under this Plan will become payable under Article 5 upon expiration of
the deferral  period and election of an Early  Retirement  Benefit or a Deferred
Early Retirement Benefit by the Employee.



                                       6
<PAGE>


                                    ARTICLE 5

                                    BENEFITS

         5.01  Benefit of Employee  Prior to  Accumulating  Maximum  Performance
Credits.

         5.01.1 A Participating  Employee,  upon termination of employment after
attaining  his Early  Retirement  Date but  prior to  accumulating  the  Maximum
Performance  Credits,  shall receive an annual benefit for his life in an amount
equal to two  percent  (2%) times his  Average  Earnings  times his  Performance
Credits,  reduced, if he has not attained his Normal Retirement Date, by two and
four-tenths  percent  (2.4) for each  Performance  Credit  less than the Maximum
Performance  Credits,  payable in monthly  installments  commencing the month in
which  his  Early  Retirement  Benefit  or  Deferred  Early  Retirement  Benefit
commences and further  reduced by the  Employees'  Early  Retirement  Benefit or
Deferred Early Retirement Benefit, as the case may be, paid under the Employees'
Retirement Plan.

         5.01.2 A Terminated  Participant  shall not receive a benefit under the
Plan.

         5.02 Benefit of Employee  Accumulating  Maximum Performance  Credits. A
Participating  Employee  electing an Early Retirement  Benefit or Deferred Early
Retirement Benefit upon accumulating Maximum Performance Credits, in lieu of the
benefit under Section 5.01 hereinabove,  shall receive an annual benefit for his
life in an amount equal to the percentage of Average Earnings in accordance with
the following schedule,  payable in monthly installments commencing the month in
which  his  Early  Retirement  Benefit  or  Deferred  Early  Retirement  Benefit
commences:

      Maximum Performance                               Percentage of
    Credits Earned Prior to                           Average Earnings
-------------------------------              ----------------------------------

            01/01/86                                        65%
            01/01/87                                        64%
            01/01/88                                        63%
            01/01/89                                        62%
            01/01/90                                        61%
      On or after 01/01/90                                  60%


                                       7
<PAGE>


      The benefit  hereunder shall be reduced by the Employee's Early Retirement
Benefit  or  Deferred  Early  Retirement   Benefit  paid  under  the  Employee's
Retirement Plan.

         5.03 Method of  Distribution:  Notwithstanding  any other  provision of
this Plan,  the form of payment of benefits  hereunder  shall be the same as the
form of payment of benefits  selected by the  Participant  under the  Employee's
Retirement  Plan.  The  payment  of the  Actuarial  Equivalent  of the life only
benefit under the Plan shall  relieve the Company of further  obligation to such
person under the Plan.

         5.04  Participating   Employees   Receiving   Benefits.   Participating
Employees receiving benefits under the Plan as of the Effective Date of the Plan
as amended, shall continue to receive benefits under the Plan in effect prior to
the Effective Date of the restatement and amendment.

                                    ARTICLE 6

                               SOURCE OF PAYMENTS

         6.01 Unfunded Plan. The Plan is an unfunded, nonqualified plan. It is a
condition of this Plan, and any  Participating  Employee herein expressly agrees
to look solely to the  Employer  Company  for the payment of benefits  under the
Plan. Such payments shall be made from funds provided under a trust  established
by the Employer Company, if any, and the general funds of such Employer Company.
The  Employee  or any other  person or  persons  having or  claiming  a right to
payments  hereunder  shall rely solely on the unsecured  promise of the Employer
Company set forth  herein.  Nothing in this Plan shall be  construed to give the
Employee or any such person any right,  title,  interest,  or claim in or to any
specific asset,  fund,  reserve,  account,  or property of any kind  whatsoever,
owned by the  Employer  Company or in which the  Employer  Company  may have any
right, title or interest now or in the future or against any Company that is not
the Employer  Company.  However,  the Employee or any such person shall have the
right to enforce a claim against the Employer  Company in the same manner as any
other unsecured creditor of the Employer Company.


                                       8
<PAGE>

         6.02 Company  Liability.  Each Employer Company shall create and credit
to a special account on its books such amounts as may be necessary to effectuate
and maintain the Plan on a sound  actuarial  basis.  At its own  discretion,  an
Employer Company may purchase such insurance or annuity contracts or other types
of investments as it deems  desirable in order to accumulate the necessary funds
to provide for the future  benefit  payments under the Plan or may establish one
or more  trusts  for such  purpose.  Notwithstanding  anything  to the  contrary
herein,  an Employer Company shall be under no obligation to fund in advance the
benefits  provided under this Plan nor shall the investment of Employer  Company
funds credited to a special account  established  hereunder be restricted in any
way and such funds shall be available  for any purpose the Employer  Company may
choose,  other  than  funds  contributed  a trust  established  by the  Employer
Company, if any.

                                    ARTICLE 7

                                   FORFEITURES

        7.01  Benefits  Nonforfeitable.  All benefits  under  Article 5 shall be
nonforfeitable, except as provided in Section 7.02.

        7.02  Forfeitures  for  Cause.  No  benefits  shall  be  payable  to the
Participating  Employee if the  Participating  Employee  fails to elect an Early
Retirement  Benefit or Deferred  Early  Retirement  Benefit  under the Plan upon
attaining Maximum Performance  Credits,  except in the event of deferral of such
election at the specific invitation of the Board of Directors.

                                    ARTTCLE 8

                               PLAN ADMINISTRATION

        8.01  Administration  of Plan.  The Board of Directors  hereby vests the
Plan  Administrator  with all powers and authority  necessary to administer  the
Plan as  herein  provided,  and  with  the  authority  to make  such  rules  and
regulations  of  uniform  application  as  deemed  necessary  to  carry  out the
provisions of the Plan. The Plan Administrator shall have the exclusive right to
interpret the  provisions  of the Plan and to determine  any  questions  arising
thereunder or in connection  with the  administration  thereof.  Any decision or
action  of the Plan  Administrator  shall be  conclusive  and  binding  upon all
Participating Employees and Terminated Participants.


                                       9
<PAGE>

         8.02 Reliance on Reports and Certificates.  The Plan  Administrator may
rely  conclusively  upon all  tables,  valuations,  certificates,  opinions  and
reports  furnished  by an actuary,  accountant,  counsel or other person who may
from time to time be employed or engaged for such purposes.

                                    ARTICLE 9

                            AMENDMENT AND TERMINATION

         9.01 General. The Board of Directors may at any time amend or terminate
the Plan as to such  Company,  subject to the  limitations  set forth in section
hereof.  An amendment or termination shall have no effect upon any other Company
until the Board of  Directors  of such other  Company  adopts the  amendment  or
termination.

         9.02 Restrictions on Amendment or Termination.  The Board of Directors,
in  terminating  the Plan or amending the Plan to reduce  benefits shall require
such Company to:

         9.02.1  Continue  to  make  payments  to  each  Participating  Employee
receiving  benefits or who has terminated  employment and is entitled to receive
benefits as if the Plan had not been amended or terminated.

         9.02.2  Pay all  benefits  theretofore  accrued  by each  Participating
Employee  who has  attained  his Early  Retirement  Date at the date the Plan is
terminated or amended to reduce  benefits,  when such Employee retires as if the
Plan had not been amended or terminated, and

         9.02.3 Pay each Participating  Employee, who has not attained his Early
Retirement  Date at the  date  the  Plan is  terminated  or  amended  to  reduce
benefits,  a benefit,  payable  when he  retires,  equal to his  Deferred  Early
Retirement Benefit or Normal Retirement Benefit, for a period of months prior to
his Deferred Early  Retirement Date or Normal  Retirement  Date, as the case may
be,  equal to his  Performance  Credits in excess of his Years of Service at the
date the Plan is terminated or amended to reduce  benefits  multiplied by twelve
(12).


                                       10
<PAGE>


         9.03  Successors to Business of Company.  The obligation of an Employer
Company  under the Plan shall be binding  upon any  successor to the business of
such  Employer  Company  whether  upon sale of all or  substantially  all of the
assets   of  such   Employer   Company,   merger,   consolidation   or   similar
reorganization.  A Company shall not sell all or substantially all of its assets
or  participate in any merger,  consolidation  or similar  reorganization  as to
which it is not the  surviving  entity  unless the  successor to the business of
such Company or other surviving  entity,  by whatever form or manner  resulting,
shall  continue  the Plan as to it by  executing  an  appropriate  supplementary
agreement; and such successor or surviving entity shall thereupon succeed to all
the rights,  powers and duties of such Company hereunder.  The employment of any
Employee who has continued in the employ of such  successor or surviving  entity
shall  not be  deemed  to have  been  terminated  or  severed  for  any  purpose
hereunder.

         9.04 Dissolution of a Company. In the event that a Company is dissolved
or liquidated  by reason of  bankruptcy,  insolvency  or otherwise,  without any
provision  being made for the  continuance  of this Plan by a  successor  to the
business of such Company, the Plan shall be treated as terminated subject to the
rights of Participating  Employees of such Company to receive benefits hereunder
as provided in Section 9.02, and the Actuarial  Equivalent of such benefits,  at
the option of the person entitled thereto, shall be paid immediately in one lump
sum, to the extent permitted by law.

                                   ARTICLE 10

                                  MISCELLANEOUS

         10.01 No  Alienation.  The  benefits  provided  hereunder  shall not be
subject   to   alienation,   assignment,   pledge,   anticipation,   attachment,
garnishment,  receivership,  execution or levy of any kind,  including liability
for alimony or support  payments,  and any attempt to cause such  benefits to be
subjected  shall not be  recognized,  except to the extent as may be required by
law.

         10.02 Appointment of Person to Receive Payment. If, within one (1) year
after written notice from the Employer Company or the Plan Administrator  mailed
to any  person  entitled  to a payment  hereunder  at such  person's  last known
address  as shown on the  Employer  Company's  records,  such  person or a legal
representative  shall  not have  notified  the Plan  administrator  in person or
writing of his or her address,  then the Plan  Administrator  may appoint one or
more of the spouse,  the blood  relatives  or the legal  representative  of such
person to receive such amount,  including any amount thereafter  becoming due to
such person (or such person's estate), in the proportions determined by the Plan
Administrator.  Any action of the Plan  Administrator  taken  hereunder  in good
faith shall be conclusive and binding upon all persons.



                                       11
<PAGE>

        10.03 Incapacity of Payee. If the Plan Administrator determines that any
person  to  whom a  benefit  is  payable  is  legally  incapacitated,  the  Plan
Administrator  may direct that any payment  becoming due to such person  (unless
claim shall have been made therefor by a duly appointed legal representative) be
applied  for such  person' s benefit,  or paid to or applied  for the benefit of
such person's spouse,  children, a parent or other blood relative,  or paid to a
person  with whom such  incompetent  person  resides,  and any such  payment  or
application  so made shall be a complete  discharge  of the  Employer  Company's
obligations.

        10.04  Construction and Governing Law. In any question or interpretation
or other matter of doubt,  the Plan  Administrator  and the Employer Company may
rely  upon  the  opinion  of  counsel  for the  Employer  Company  or any  other
attorney-at-law  in the State of New Mexico  designated by the Employer  Company
with the approval of the Board of Directors.  The  provisions of this Plan shall
be construed,  administered  and enforced as a contract in  accordance  with the
laws of the State of New Mexico.

        10.05  Entire  Plan.  The Plan  established  on January  14,  1981,  and
subsequently amended,  restated and further amended, is now set forth herein and
incorporated  in one document  with all  changes,  revisions  and  modifications
merged herein.






                                       12
<PAGE>



       IN WITNESS WHEREOF, the Company has caused this amended and restated Plan
to be adopted as of this 16th day of August 1988.

                                       PUBLIC SERVICE COMPANY OF
                                            NEW MEXICO


                                       By  /s/ J. D. Geist
                                       ----------------------------------------
                                             Jerry D. Geist
                                             Chairman and President

ATTEST:


/s/  J. B. Mulcock, Jr.
-----------------------------------
Secretary

                                       MEADOWS RESOURCES, INC.


                                       By  /s/ James F. Jennings, Jr.
                                       ----------------------------------------
                                             James F. Jennings, Jr.
                                             President and
                                             Chief Executive Officer

ATTEST:


-----------------------------------
Secretary
                                       PARAGON RESOURCES, INC.


                                       By  /s/ J. L. Wilkins
                                       ----------------------------------------
                                       Its  President
                                       ----------------------------------------

ATTEST:


/s/  J. B. Mulcock, Jr.
-----------------------------------
Secretary



                                       13
<PAGE>




                                       SUNBELT MINING COMPANY, INC.


                                       By  /s/ A. J. Robison
                                       ----------------------------------------

                                       Its  President
                                       ----------------------------------------

ATTEST:


/s/ J. B. Mulcock, Jr.
-----------------------------------
Secretary




                                       14
<PAGE>



                                    EXHIBIT A

                                  COMPANY: ESBU

Donald A. Begley
Garth Boyce
Larry Edwards
William M. Eglinton
Eugene W. Fisher
Jerry L. Godwin
Patrick J. Goodman
George W. Gorman
Ronald H. Hallford
Dennis E. Hines
Edward A. Jeffers
Olin A. Kane
Edward L. King
Edward D. Kist
Edwin A. Kraft
Robert E. Lowry
Alfonso R. Lujan
Jack D. Maddox
Richard L. Martinez
Martha A. McDonald
Ronald F. Mershon
William J. Moye
John P. Ortiz
Terry L. Othick
Daniel J. Peck
Don Pierce
Billy H. Ransdell
Lawrence D. Ratliff
Gary R. Sloman
Michael C. Slota
Jeffry E. Sterba
Dale E. Stolz
Larry D. Sullivan
David K. Summers
Charles Thompson
Frank M. Van Gundy
William R. Watson
Jack L. Wilkins
Ellen A. Wilson
Robert M. Wilson
William C. Wygant
Ely Yao

                                       15
<PAGE>


                                COMPANY: PARAGON
Alfred C. Underwood

                                COMPANY: SUNBELT
Terry Bauer
Martin A. Clifton
Charles E. Hunter


                                COMPANY: MEADOWS

Bruno E. Carrara
James F. Jennings, Jr.
Charlie R. Mollo
Roger C. Rankin
John H. Von Rusten


                                  COMPANY: GCNM

John T. Ackerman
Richard A. Jordan
Ted H. Morse
Henry 0. Pocock

                               COMPANY: CORPORATE

John P. Bundrant
Jerry D. Geist
Billy D. Lackey
Mitchell J. Marzec
James B. Mulcock, Jr.
Joellyn K. Murphy
Robert S. Murray
Fred L. O'Cheskey
Albert J. Robison
David P. Rusk
John H. Smalley
Robert B. Starnes
Tom C. Wray


                                       16