FIRST AMENDMENT TO
                              RESTATED AND AMENDED
                      PUBLIC SERVICE COMPANY OF NEW MEXICO
                     ACCELERATED MANAGEMENT PERFORMANCE PLAN
                                     (1988)


         AMENDMENT  made as of the 30th day of August,  1988, by Public  Service
Company of New Mexico (PNM), Meadows Resources,  Inc., Paragon Resources,  Inc.,
Sunbelt Mining Company, Inc.

         WHEREAS,  under section 9.01 of the Restated and Amended Public Service
Company of New Mexico Accelerated  Management Performance Plan (the "Plan", each
Employer Company reserves the right at any time to amend the Plan, and

         WHEREAS, each Employer Company desires to amend the Plan,

         NOW, THEREFORE, each Employer Company does hereby amend the Plan in the
manner to the extent hereinafter set forth:

         1. Article V is amended by redesignating Sections 5.03 and 5.04 as 5.04
and 5.05 and inserting after Section 5.02 the following new sections:

         "5.03 Benefit of Employee Electing 1988 Early Retirement Window.

         5.03.1 A  Participating  Employee  electing Early  Retirement  Benefit,
Deferred Early Retirement  Benefit,  or Normal Retirement  Benefit under Section
6.20A.1.  of the  1988  Early  Retirement  Window  Amendment  to the  Employee's
Retirement  Plan shall receive an annual  benefit for the life of such person in
an amount  equal to two  percent  (2%) times  annual  rate of base  earnings  on
October 1, 1998, or such other amounts as may be designated by the President and
Chairman of PNM, times the total of his Performance Credits on October 31, 1988,
plus  five  additional  Performance  Credits,  not  in  excess  of  the  Maximum
Performance  Credits,  times a fraction the numerator of which is sixty-two (62)
and the  denominator  of which is sixty  (60),  payable in monthly  installments
commencing  the month in which  the Early  Retirement  Benefit,  Deferred  Early
Retirement  Benefit,  or Normal Retirement  Benefit commences and reduced by the
Employee's  Early Retirement  Benefit,  Deferred Early  Retirement  Benefit,  or
Normal Retirement Benefit paid under the Employee's Retirement Plan.




<PAGE>


         5.03.2  A  Participating   Employee   electing  under  the  1988  Early
Retirement  Window  to  receive  an Early  Retirement  Benefit,  Deferred  Early
Retirement  Benefit,  or Normal Retirement Benefit under Section 6.20A.2. of the
Employee's  Retirement  Plan shall  receive an annual  benefit  for life of such
person in an amount  equal to two  percent  (2%) times his  annual  rate of base
earnings on October 1, 1998,  or such other amount as may be  designated  by the
Chairman and President of PNM, 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  the Early  Retirement
Benefit,  Deferred  Early  Retirement  Benefit,  or  Normal  Retirement  Benefit
commences  and  further  reduced by the  Employee's  Early  Retirement  Benefit,
Deferred Early Retirement  Benefit,  or Normal Retirement Benefit paid under the
Employee's Retirement Plan."


                                       2
<PAGE>



         IN WITNESS  WHEREOF,  Public  Service  Company of New  Mexico,  Meadows
Resources, Inc., Paragon Resources, Inc., Sunbelt Mining Company, Inc., Sunterra
Gas  Gathering  Company,  and Sunterra Gas  Processing  Company have caused this
Amendment to be executed by their respective Presidents and Secretaries the date
first above written.

                                       PUBLIC SERVICE COMPANY
                                         OF NEW MEXICO


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



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






                                       3
<PAGE>




                                       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

                                       SUNBELT MINING COMPANY, INC.



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

ATTEST:


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



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