EXHIBIT 10.52

                               PNM RESOURCES, INC.
                         EXECUTIVE SPENDING ACCOUNT PLAN

                            Effective January 1, 2004



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                                TABLE OF CONTENTS
                                                                           Page



INTRODUCTION............................................................... 1

DEFINED TERMS.............................................................. 2

GENERAL INFORMATION ABOUT THE PLAN......................................... 5

ELIGIBILITY AND PARTICIPATION REQUIREMENTS................................. 6

SUMMARY OF PLAN BENEFITS................................................... 9

HOW THE PLAN IS ADMINISTERED............................................... 10

CLAIMS PROCEDURES.......................................................... 11

AMENDMENT OR TERMINATION OF THE PLAN....................................... 14

NO CONTRACT OF EMPLOYMENT.................................................. 14


                                      -i-

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                                    ARTICLE 1
                                  INTRODUCTION

Public Service Company of New Mexico ("PNM") adopted the "Amended and Restated
Medical Reimbursement Plan of Public Service Company of New Mexico" (the "MERP")
effective January 1, 1980. The MERP was amended and restated in its entirety
effective September 1, 1991 at which time it was renamed the "Second Restated
and Amended Public Service Company of New Mexico Executive Medical Plan."
Effective November 30, 2002, PNM transferred sponsorship of the MERP to PNM
Resources, Inc. ("PNM Resources"). Effective January 1, 2002, PNM Resources
initiated an Executive Spending Account (the "ESA").

From March 1, 2001 through April 30, 2002, the MERP was fully insured and the
benefits were provided by Connecticut General Life Insurance Company ("CIGNA").
Effective May 1, 2002, a decision was made that benefits under the MERP should
again be provided on a self-funded basis. The benefits provided under the ESA
are, and always have been, self-funded.

Effective December 1, 2002, PNM Resources merged the MERP with and into the ESA
and amended and restated both plans in the form of a combined program known as
the "PNM Resources, Inc. Executive Spending Account Plan" (the "Plan").

Effective February 15, 2003, PNM Resources amended and restated the Plan in its
entirety in order to: (1) eliminate the Tier A and Tier B Benefit Limits, and
instead provide for one overall Benefit Limit; (2) eliminate the gross-up
feature that applied to Tier A Covered Expenses; (3) increase the overall
Benefit Limit in order to replace the gross-up feature that applied to Tier A;
and (4) allow long-term care insurance premiums for the Participant and certain
members of the Participant's family to be reimbursed under the Plan.

Effective January 1, 2004, PNM Resources, by this document, intends to amend and
restate the Plan in its entirety in order to make certain provisions of the Plan
more consistent with the other benefits plans and programs sponsored by the
Company.

PNM Resources maintains the Plan to provide a select group of Company executives
with additional remuneration in the form of reimbursements for: (i) medical
benefits beyond the medical benefits available to the executives under any
medical insurance under which they are covered; and (2) other expenses such as
income tax preparation costs, costs for estate planning and financial counseling
services, and insurance premiums for health, accident, disability, life,
dependent life, long-term care, home, auto and personal umbrella insurance. The
benefits provided under the Plan are paid from the general assets of PNM
Resources and those of its affiliates that have adopted the Plan with each
Company bearing the costs and expenses of providing benefits accrued by its
Employee-Participants during periods while they are employed by that Company.
Such costs and expenses are allocated among the Companies in accordance with (i)
agreements entered into between PNM Resources and any participating affiliate,
or (ii) in the absence of such an agreement, procedures adopted by PNM
Resources. Because benefits are paid from the general assets of the Company,
pursuant to Department of Labor regulation Section 2520.104-24 the Plan is
exempt from most of the reporting and disclosure requirements of Part 1 of Title
I of ERISA, including the requirement to provide a summary plan description and
the requirement to file a Form 5500 - Annual Report.

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                                    ARTICLE 2
                                  DEFINED TERMS

Capitalized terms used in the Plan have the following meanings:

Benefit                    Limit: The maximum amount for which you and your
                           Dependents, together, may seek reimbursement each
                           Paycheck Year for Covered Expenses. Shortly before
                           each Paycheck Year, you will be notified of your
                           Benefit Limit for the Paycheck Year. Any portion of
                           the Benefit Limit that remains unused at the end of a
                           Paycheck Year may not be carried over to the
                           following Paycheck Year.

                           Prior to February 15, 2003, the Plan had Tier A and
                           Tier B Benefit Limits. Effective February 15, 2003,
                           the Tier A and Tier B Benefit Limits are eliminated
                           and replaced with one overall Benefit Limit. Due to
                           the elimination of the Tier A Benefit Limit and the
                           gross-up feature that applied to that limit, the
                           Benefit Limit for each Participant who is a
                           vice-president will be increased by $2,000 and the
                           Benefit Limit for all other Participants will be
                           increased by $3,000. The Benefit Limit increase
                           described in the preceding sentence is effective
                           February 15, 2003. On or shortly thereafter, each
                           Participant will be notified of his or her new
                           overall Benefit Limit, which will include the $2,000
                           or $3,000 increase, as applicable.

Benefits Department:       The organizational unit of the Company responsible
                           for administering benefit programs.

Code:                      The Internal Revenue Code of 1986, as amended.

Company:                   PNM  Resources,  Inc. ("PNM  Resources")  and any
                           affiliate that has adopted the Plan with the approval
                           of PNM Resources. Any affiliate that adopted the Plan
                           prior to the assumption of the sponsorship of the
                           Plan by PNM Resources, including Public Service
                           Company of New Mexico, shall continue to participate
                           in the Plan.

Covered Expense:           Expenses  incurred  by the  Participant  or a
                           Dependent during the current or preceding Paycheck
                           Year, while covered by the Plan, for any of the
                           following: (1) medical care as defined in Section
                           213(d) of the Code to the extent that no benefits are
                           payable for such medical care under the Participant's
                           Medical Insurance (by way of example, and not
                           limitation, medical care, dental care, vision care,
                           premiums for medical care and qualified long-term
                           care (whether paid on a pre-tax or after-tax basis),
                           transportation primarily for and essential to medical
                           care, and amounts paid for lodging (not lavish or
                           extraordinary under the circumstances) while away

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                           from home primarily for and essential to medical care
                           would all be treated as Covered Expenses under this
                           item (1)); (2) income tax preparation; (3) estate
                           planning (including preparation of wills and trusts);
                           (4) financial counseling, but excluding brokerage
                           fees or commissions; (5) financial management
                           services (this would include, for example, the
                           services provided by a management firm that manages
                           your real estate investments); (6) premiums covering
                           the Participant and his or her Dependents for
                           accident, disability, life, dependent life, and/or
                           supplemental insurance (similar to AFLAC), whether
                           paid for by the Participant as a private party or
                           deducted from the Participant's salary under a PNM
                           Resources benefit program; (7) premiums for home,
                           auto or personal liability umbrella insurance; or (8)
                           premiums covering the Participant or Family Members
                           for long-term care insurance, whether paid for by the
                           Participant as a private party or deducted from the
                           Participant's salary under a PNM Resources benefit
                           program. An expense that qualifies as a Covered
                           Expense pursuant to item (1) above, is "incurred"
                           when the underlying medical care is provided,
                           regardless of when you are billed or pay for such
                           medical care, unless the medical care for which you
                           are seeking reimbursement is for insurance premiums
                           covering medical care or qualified long-term care, in
                           which case such expense is "incurred" on the date on
                           which you are billed for the premium. An expense that
                           qualifies as a Covered Expense pursuant to items (2),
                           (3), (4), (5), (6), (7) or (8) above, is "incurred"
                           as of the date on which you are billed for the
                           expense or premium.

Dependent:                 A Participant's "Dependents" as defined by the
                           Medical Plan who are eligible to be enrolled in the
                           Medical Plan regardless of whether they are actually
                           enrolled in that plan.

Effective Date:            January 1, 2004.

Employee:                  A full-time  employee of the Company  scheduled  to
                           work at least 32 hours per week, or a regular
                           part-time or job share employee scheduled to work at
                           least 20 hours per week. Employee does not include:
                           leased employees or workers; independent contractors,
                           consultants or similar self-employed workers;
                           temporary employees or workers; interns; co-op
                           employees or workers; seasonal employees or workers,
                           other contingent workers, or any employee of any
                           affiliate or related entity unless specifically
                           approved by the Company.

ERISA:                     The Employee Retirement Income Security Act of 1974,
                           as amended.

Family Members:            Any of the following individuals between the ages of
                           18 and 80:

                                o  the legally married spouse of a Participant;

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                                o  the natural, adoptive or
                                   step-parents/grandparents of a Participant
                                   and their spouse;

                                o  the natural, adoptive or step-siblings of a
                                   Participant and their spouse;

                                o  the natural, adoptive or stepchildren of a
                                   Participant and their spouse.


HIPAA:                     The Health Insurance Portability and Accountability
                           Act of 1996, as amended.

Medical                    Insurance: Medical insurance coverage under any of
                           the following: (1) The PNM Resources, Inc. Benefits
                           My Way Plan, Program 2, Medical Plan, effective
                           January 1, 2003, as amended from time to time, or any
                           successor plan; (2) any other employer maintained
                           medical plan covering the Participant and his or her
                           Dependants; and (3) any other medical insurance
                           covering the participant and/or his or her
                           Dependents.

NMHPA:                     The Newborns' and Mothers' Health Protection Act of
                           1996, as amended.

Participant:               An Employee who is eligible to participate in this
                           Plan pursuant to Article 4.

Paycheck Year:             The Paycheck Year commences on the third
                           Saturday before the final paycheck for a calendar
                           year is paid and ends on the third Friday before the
                           final paycheck for the next calendar year is paid.
                           For example, the final paycheck for the 2003 calendar
                           year will be issued on Wednesday, December 24, 2003.
                           This means that the 2004 Paycheck Year will commence
                           on December 6, 2003 and end on December 3, 2004.

Plan:                      The PNM Resources, Inc. Executive Spending Account
                           Plan, as set forth in this document.

Plan Administrator:        PNM  Resources,  Inc.  Benefits  Governance
                           Committee or other such person or committee
                           designated by the Company as the Plan Administrator.

Plan Sponsor:              PNM Resources.

PNM Resources:             PNM Resources, Inc.

Qualifying Event:          A Participant's termination of employment,
                           reduction in hours, divorce, legal separation, death
                           or becoming eligible for Medicare, and a child
                           ceasing to meet the Plan's definition of Dependent.

WHCRA:                     The Women's Health and Cancer Rights Act of 1998, as
                           amended.

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                                    ARTICLE 3
                       GENERAL INFORMATION ABOUT THE PLAN

Plan Name:                 PNM Resources, Inc. Executive Spending Account Plan.

Plan Year:                 January 1 through December 31

Plan Number:               601

Original Effective Date:   The MERP was originally  effective  January 1, 1980.
                           The ESA was first effective January 1, 2002.

Funding Medium:            The Plan is  self-funded.  This means that the
                           Company pays benefits out of its general assets.
                           Participants are not required to pay a premium in
                           order to participate in the Plan.

Plan Sponsor:              PNM Resources, Inc.
                           Alvarado Square, Mail Stop 3101
                           Albuquerque, NM  87158
                           (505) 241-2700

Plan Sponsor's Employer    85-0468296
Identification Number:

Plan Administrator &       PNM Resources, Inc.
Named Fiduciary:           Alvarado Square, Mail Stop 3101
                           Albuquerque, NM  87158
                           (505) 241-2700
                           Attention: Benefits Governance Committee

                           The Plan is administered by the Benefits Governance
                           Committee or other such person or committee
                           designated by the Company as the Plan Administrator.

Agent for Service of       Patrick Ortiz, General Counsel
Legal Process:             Public Service Company of New Mexico
                           Alvarado Square, Mail Stop 2822
                           Albuquerque, NM  87158
                           (505) 241-2700

Applicable Law:            The validity,  interpretation,  construction and
                           performance of the Plan shall be governed by the laws
                           of the State of New Mexico, unless preempted by
                           ERISA.

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                                    ARTICLE 4
                   ELIGIBILITY AND PARTICIPATION REQUIREMENTS

Eligibility:                 You are  eligible to  participate  in the Plan if
                             you are an Employee of the Company and you are a
                             vice-president or higher-ranking officer of the
                             Company. Your spouse and "Dependents," as defined
                             in Article 2 are eligible to participate in the
                             Plan if you are.

Termination of               Your  participation  in the Plan terminate as of
Participation:               the earliest of: (1) the date you terminate
                             employment with the Company; (2) the date you cease
                             to be a vice-president or higher ranking officer of
                             the Company; (3) the date your coverage under all
                             other Medical Insurance ceases; or (4) the date the
                             Plan is terminated.

                             Coverage for your Dependents (including your
                             spouse) stops when your coverage stops. Their
                             coverage will also stop if they cease being your
                             Dependent.

COBRA:                       If coverage for you or your Dependents (including
                             your spouse) ceases because of certain "Qualifying
                             Events," specified in a federal law called COBRA,
                             then you or your Dependents may have the right to
                             purchase continuing coverage under the Plan for a
                             limited period of time. As permitted by law, the
                             Company may impose an administrative fee (usually
                             2%) for this coverage. This right to continue
                             coverage only applies to the portions of the Plan
                             that reimburse medical care expenses.

Effect of                    If a Participant or Dependent's participation in
Termination of               the Plan terminates, any Covered Expenses incurred
Participation on             by the Participant or Dependent before his or her
Reimbursements:              participation terminated will be eligible for
                             reimbursement even though such reimbursement is not
                             requested or processed before such termination
                             date. Except as required by COBRA, Covered Expenses
                             incurred after such termination date will not be
                             eligible for reimbursement even though the
                             Participant may not have used all or some portion
                             of his or her Benefit Limit. The following examples
                             illustrate how these rules operate:

                             Example 1: Assume that a Participant terminates
                             employment on June 30, and as of such date has been
                             reimbursed $2,500 under the Plan. Before
                             terminating employment, while still covered by the
                             Plan, the Participant incurred an additional $750
                             of Covered Expenses. The Participant is entitled to
                             receive a reimbursement in the amount of $750.

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                             Example 2: Assume that a Participant ceases to be a
                             vice president or higher-ranking officer on
                             September 30, and as of such date has been
                             reimbursed $500 under the Plan. After changing
                             employment status, while no longer covered by the
                             Plan, the Participant incurs an additional $1,750
                             of Covered Expenses. The Participant is not
                             entitled to receive a reimbursement for the amounts
                             incurred after her participation is terminated.

Effect of                    If a Participant is promoted during a Paycheck Year
Promotion or                 and such promotion causes the Participant to be
Demotion on                  subject to a higher Benefit Limit, Covered Expenses
Reimbursements:              incurred before the increased limit takes effect
                             will be eligible for reimbursement as long as they
                             were incurred while the Participant was covered by
                             the Plan. If a Participant is demoted during a
                             Paycheck Year and such demotion causes the
                             Participant to be subject to a lower Benefit Limit,
                             Covered Expenses incurred before the decreased
                             limit takes effect will be subject to reimbursement
                             as long as they were incurred while the Participant
                             was covered by the Plan. The following examples
                             illustrate how these rules operate:

                             Example 1: Assume that a Participant is promoted
                             from vice president to senior vice president on
                             October 1st. Assume further that as vice president,
                             the Participant's Benefit Limit was $13,000 and as
                             senior vice president, the Participant's Benefit
                             Limit is $18,000. Before being promoted, and while
                             covered by the Plan, the Participant incurred
                             $19,000 of Covered Expenses but has only been
                             reimbursed for $13,000. As of October 1st, the
                             Participant is entitled to be reimbursed an
                             additional $5,000 because of the $18,000 Benefit
                             Limit to which the Participant is now subject.

                             Example 2: Assume that a Participant is demoted
                             from senior vice president to vice president on
                             July 1st. Assume further that as senior vice
                             president, the Participant's Benefit Limit was
                             $18,000 and as vice president, the Participant's
                             Benefit Limit is $13,000. Before being demoted, and
                             while covered by the Plan, the Participant incurred
                             $15,000 of Covered Expenses but has only been
                             reimbursed for $13,000. As of October 1st, the
                             Participant is entitled to be reimbursed for the
                             $2,000 of Covered Expenses that were incurred
                             before October 1st, even though the Participant is
                             now subject to a $13,000 Benefit Limit.

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                             Example 3: Assume that a Participant is demoted
                             from senior vice president to vice president on
                             November 1st. Assume further that as senior vice
                             president, the Participant's Benefit Limit was
                             $18,000 and as vice president, the Participant's
                             Benefit Limit is $13,000. Before being demoted, and
                             while covered by the Plan, the Participant incurred
                             $10,000 of Covered Expenses and had been reimbursed
                             for the full $10,000. After being demoted, the
                             Participant incurs an additional $8,000 of Covered
                             Expenses. The Participant is entitled to receive a
                             reimbursement of $3,000 because as of November 1st,
                             the Participant is now subject to a $13,000 Benefit
                             Limit.


Effect of Benefit            Effective February  15,  2003, the  Benefit  Limit
Limit Increase:              for  each  Participant  who  is  a  vice-president
                             will be increased by $2,000 and the Benefit Limit
                             for all other Participants will be increased by
                             $3,000. If a Participant or Dependent's
                             participation in the Plan terminates before such
                             date, he or she will not be eligible to receive the
                             increase. The increased Benefit Limit may be used
                             to pay Covered Expenses incurred before February
                             15, 2003. The following examples illustrate how
                             these rules operate:

                             Example 1: Assume that a Participant terminated
                             employment on February 10, 2003. Assume further
                             that the Participant's Tier A plus Tier B Benefit
                             Limits equaled $10,000. Before terminating
                             employment, and while covered by the Plan, the
                             Participant incurred $14,000 of Covered Expenses,
                             and had been reimbursed for $10,000. Because the
                             Participant's participation in the Plan stopped on
                             February 10, 2003, he is not entitled to receive an
                             additional reimbursement.

                             Example 2: Assume that a Participant's Tier A plus
                             Tier B Benefit Limits equaled $10,000. On February
                             15, 2003, the Participant's overall Benefit Limit
                             is increased by $3,000 for an overall Benefit Limit
                             of $13,000. During January 2003, the Participant,
                             while covered by the Plan, incurred $14,000 of
                             Covered Expenses and was reimbursed in the amount
                             of $10,000. Of the $10,000 reimbursement, $3,000
                             was grossed-up for income taxes so the Participant
                             received a total reimbursement of $12,000. Even
                             though the Participant incurred the Covered
                             Expenses before February 15, 2003, she is entitled
                             to receive an additional reimbursement of $1,000
                             due to the increased Benefit Limit.

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                                    ARTICLE 5
                            SUMMARY OF PLAN BENEFITS

Benefit               If an expense qualifies as a Covered Expense, the Company
Structure:            will reimburse you for 100% of the Covered Expense under
                      the Plan up to the Benefit Limit. Once you and your
                      Dependents, together, reach the Benefit Limit, no benefits
                      will be paid to you under the Plan for the remainder of
                      the Paycheck Year. Before you submit a claim for
                      reimbursement under the Plan, you must first submit it for
                      payment under your Medical Insurance if the underlying
                      expense is for medical care.

Tax Treatment         The expenses reimbursed under the Plan must be included in
of Benefits:          the Participant's taxable income  for the calendar year in
                      which the Participant receives the reimbursement, rather
                      than the calendar year in which the underlying expense is
                      incurred. Reimbursements approved by the Benefits
                      Department will be added to your regular paycheck. The
                      additional income will be reflected on your W-2 for the
                      calendar year in which the additional income is paid to
                      you. Prior to May 1, 2002, the benefits provided under the
                      MERP were not includable in the Participant's taxable
                      income because the benefits provided under the MERP were
                      fully insured by CIGNA. Accordingly, any reimbursements
                      received from CIGNA are not includable in the
                      Participant's taxable income.

Compliance with       The Plan will provide benefits in accordance with the
Federal Laws:         applicable  requirements of federal laws, such as COBRA,
                      HIPAA, NMHPA and the WHRCA. For example, the Plan, as
                      required by the WHCRA provides benefits for
                      mastectomy-related services including reconstruction and
                      surgery to achieve symmetry between breasts, prostheses,
                      and complications from mastectomy (including lymphedema).
                      Call the Benefits Department for more information.

Qualified             The Plan will also provide benefits to an Employee's
Medical               non-custodial Dependent child as required by any qualified
Child                 medical child support order, or "QMCSO" (as defined in
Support               ERISA Section 609(a)). The Plan has detailed procedures
Orders:               for determining whether an order qualifies as a QMCSO.
                      Participants and beneficiaries can obtain, without charge,
                      a copy of such procedures from the Benefits Department.

Benefits for          The Plan will  provide  benefits to  Dependent  children
Adopted Children:     placed with an Employee for adoption under the same terms
                      and conditions as apply in the case of Dependent children
                      who are natural children, in accordance with ERISA Section
                      609(c).

Special               The Plan may not, under Federal law, restrict benefits for
Rights Upon           any hospital length of stay in connection with childbirth
Childbirth:           for the mother or newborn child to less than 48 hours
                      following a normal vaginal delivery, or less than 96 hours
                      following a cesarean section. However, Federal law
                      generally does not prohibit the mother's or newborn's
                      attending provider, after consulting with the mother, from
                      discharging the mother or her newborn earlier than the
                      above periods. In any case, the Plan may not, under
                      Federal law, require that a provider obtain authorization
                      from the Plan for prescribing a length of stay not in
                      excess of the above periods.

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                                    ARTICLE 6
                          HOW THE PLAN IS ADMINISTERED

Plan Administration:      The Plan is administered by the Plan  Administrator.
                          The Plan Administrator may delegate some (or all) of
                          its authority hereunder to the Benefits Department or
                          other person or committee designated by the Company.

                          The Plan Administrator also may engage agents and
                          obtain other assistance from the Company, including
                          Company counsel. The Plan Administrator shall not be
                          responsible for any action taken or not taken on the
                          advice of legal counsel. The Plan Administrator is
                          given specific authority to allocate and revoke
                          responsibilities among its members or designees. When
                          the Plan Administrator has allocated authority
                          pursuant to the foregoing, the Plan Administrator
                          shall not be liable for the acts or omissions of the
                          party to whom such responsibility has been allocated,
                          except to the extent provided by law.

                          The principal duty of the Plan Administrator is to see
                          that the Plan is carried out, in accordance with its
                          terms, for the exclusive benefit of persons entitled
                          to participate in the Plan without discrimination
                          among them. The administrative duties of the Plan
                          Administrator include, but are not limited to,
                          interpreting the Plan, and prescribing applicable
                          procedures. The Plan Administrator is also responsible
                          for determining eligibility for and the amount of any
                          benefits payable under the Plan and prescribing claims
                          procedures to be followed and the claims forms to be
                          used by employees for making claims under the Plan.
                          The Plan Administrator also has the authority to
                          require Employees to furnish it with such information
                          as it determines necessary for the proper
                          administration of the Plan.

                          If you have any questions regarding the Plan, please
                          contact the Benefits Department or the Plan
                          Administrator.

Discretionary             The  Plan   Administrator   shall  have  the
Authority                 discretionary   authority   to  perform  its
to Act:                   administrative  responsibilities  described  in this
                          Plan as necessary or appropriate to enable the Plan
                          Administrator to properly carry out such
                          responsibilities. The decisions of the Plan
                          Administrator upon all matters within the scope of the
                          Plan Administrator's respective authority shall be
                          binding and conclusive upon all persons.


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                                    ARTICLE 7
                                Claims Procedures

Reimbursement             The Benefits Department is responsible for evaluating
Requests:                 all reimbursement requests under the Plan.  You must
                          submit all reimbursement requests to the Benefits
                          Department in accordance with its procedures;
                          provided, however, that each December (or more
                          frequently if you request), the Benefits Department
                          will calculate the insurance deductions that have been
                          taken from your pay during the Paycheck Year, and will
                          submit these for reimbursement on your behalf.

                          Reimbursement requests should be submitted as soon as
                          possible after the underlying expense is "incurred,"
                          although, for repetitive expenses, you may want to
                          submit your request when you have other expenses, or
                          at some fixed interval, such as every three or six
                          months. See the definition "Covered Expense" to
                          determine when an expense is incurred. Please keep in
                          mind that to be reimbursed, an expense must be
                          submitted for reimbursement no later than the end of
                          the Paycheck Year following the Paycheck Year in which
                          the expense was incurred.

                          In order to count against the Benefit Limit for a
                          given Paycheck Year, a properly documented
                          reimbursement request must be sent to the Benefits
                          Department on or before the last day of such Paycheck
                          Year. Any properly submitted reimbursement requests
                          submitted to the Benefits Department during a Paycheck
                          Year will be taxable income to the Participant for the
                          calendar year that commences during the Paycheck Year.
                          For example, the 2004 Paycheck Year will commence on
                          December 6, 2003 and end on December 3, 2004. Thus any
                          requests submitted from December 6, 2003 through
                          December 3, 2004 will be taxable income to the
                          Participant for the 2004 calendar year.

                          To facilitate recordkeeping and reimbursements,
                          expenses submitted at least 3 days before pay period
                          end will be processed and reimbursed during that same
                          payroll period. Expenses submitted after such deadline
                          will be processed and paid during the following
                          payroll period.

                          If a reimbursement request is for medical care, you
                          must first submit the claim for payment to your
                          Medical Insurance, and submit a copy of the resulting
                          explanation of benefits ("EOB") to the Benefits
                          Department as documentation of the expense. On all
                          reimbursement requests, be sure to include the name of
                          the provider, the nature of the service rendered, and
                          your name on the receipt or invoice. If the claim is
                          in the category of health (other than for prescription
                          drugs), the ICD-9 code assigned by the provider will
                          suffice in place of the nature of the service
                          rendered. Cancelled checks and credit card receipts
                          cannot be used as the sole documentation of an expense
                          submitted for reimbursement.

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Dissatisfaction with      If  a  you  are  dissatisfied  with  the
Decision:                 determination  of  your  benefits,   eligibility,
                          participation or any other right or interest under
                          this Plan, you may file a written statement setting
                          forth the basis of the claim with the Benefits
                          Department in a manner prescribed by the Benefits
                          Department. In connection with the determination of a
                          claim, or in connection with the review of a denied
                          claim, you may examine this Plan and any other
                          pertinent documents generally available to
                          Participants relating to the claim and you may submit
                          written comments, documents, records and other
                          information relating to the claim for benefits.

Notice                    A written notice of the disposition of any such claim
of Decision:              will be furnished to you within 90 days after the
                          claim is filed with the Benefits Department, provided
                          that the Benefits Department may have an additional
                          period of up to 90 days to decide the claim if it
                          determines that special circumstances require an
                          extension of time to decide the claim and it advises
                          you in writing of the need for an extension (including
                          an explanation of the special circumstances requiring
                          the extension) and the date on which it expects to
                          decide the claim.

Content of Notice:        The notice of disposition of a claim shall set forth:

                          o        the specific reasons for denial of the claim;

                          o        reference to the specific Plan provisions
                                   upon which the determination is based;

                          o        a  description  of any  additional  material
                                   or information necessary for you to perfect
                                   the claim and an explanation of why such
                                   material or information is necessary; and

                          o        an explanation of the Plan's appeal procedure
                                   and an explanation of the time limits
                                   applicable to the Plan's appeal procedures,
                                   including a statement of your right to bring
                                   a civil action under Section 502(a) of ERISA,
                                   following an adverse benefit determination on
                                   review.

Appeal of                 Within 60 days after receiving the written notice of
Denied Claim:             the Benefits Department's  disposition of the claim,
                          you, or your duly authorized representative, may
                          request in writing that the Plan Administrator review
                          the denied claim. You may submit a written statement
                          of your claim (including any written comments,
                          documents, records and other information relating to
                          the claim) and the reasons for granting the claim. The
                          Plan Administrator shall have the right to request of
                          and receive from a claimant such additional
                          information, documents or other evidence as the Plan
                          Administrator may reasonably require. If you do not
                          request a review of the denied claim within 60 days
                          after receiving written notice of the Plan
                          Administrator's disposition of the claim, you will be
                          deemed to have accepted the Benefits Department's
                          written disposition, unless you have been physically
                          or mentally incapacitated so as to be unable to
                          request review within the 60-day period. The review

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<PAGE>

                          shall take into account all comments, documents,
                          records and other information submitted by you
                          relating to the claim, without regard to whether such
                          documents, records or other information were submitted
                          or considered in the initial benefit determination.

Decision                  A decision on appeal shall be rendered, in writing,
on Appeal:                by the Plan Administrator ordinarily not later than
                          60 days after you request review of a denied claim,
                          and a written copy of such decision shall be delivered
                          to you. If special circumstances require an extension
                          of the ordinary period, the Plan Administrator will
                          notify you of the extension with such notice
                          containing an explanation of the special circumstances
                          requiring the extension and the date by which the Plan
                          Administrator expects to render a decision. Any such
                          extension will not extend beyond 60 days after the end
                          of the ordinary period.

                          The denial notice shall set forth:

                          o        the specific reasons for denial of the claim;

                          o        reference to the specific Plan provisions
                                   upon which the denial is based;

                          o        a statement that you are is entitled to
                                   receive, upon request and free of charge,
                                   reasonable access to, and copies of, all
                                   documents, records, and other information
                                   relevant to the your claim for benefits; and

                          o        a statement of your right to bring a civil
                                   action under Section 502(a) of ERISA.

Right to Examine          In connection with the determination of a claim, or in
Plan Documents            connection with review of a denied claim or appeal,
and to                    you may examine the Plan and any other pertinent
Submit                    documents generally available to Participants relating
Materials:                to the claim and you may submit written comments,
                          documents, records and other information relating to
                          your claim for benefits. Upon request and free of
                          charge, you will be provided reasonable access to, and
                          copies of, all documents, records, and other
                          information relevant to your claim for benefits, with
                          such relevance to be determined as set forth below
                          under "Relevance of Documents."

Relevance                 For purpose of this Article 7, documents, records,
of Documents:             or other information shall be considered "relevant"
                          to your claim for benefits if such documents, records
                          or other information:

                          o        were relied upon in making the benefit
                                   determination;

                          o        were submitted, considered, or generated in
                                   the course of making the benefit
                                   determination, without regard to whether such

                                       13
<PAGE>

                                   documents, records or other information were
                                   relied upon in making the benefit
                                   determination; or

                          o        demonstrate compliance with the
                                   administrative processes and safeguards
                                   required by this Article 7 regarding the
                                   making of the benefit determination.

Decisions Final and       To the extent  permitted  by law, a decision on review
Procedures Mandatory:     by the Plan  Administrator  shall be binding  and
                          conclusive upon all persons whomsoever. To the extent
                          permitted by law, completion of the claims procedures
                          described in this Article shall be a mandatory
                          precondition that must be complied with prior to
                          commencement of a legal or equitable action in
                          connection with the Plan by a person claiming rights
                          under the Plan or by another person claiming rights
                          through such a person. The Plan Administrator may, in
                          its sole discretion, waive these procedures as a
                          mandatory precondition to such an action.

Time for Filing Legal     Any  legal or  equitable  action  filed in  connection
or Equitable Action:      with the Plan by you or by  another person  claiming
                          rights through you must be commenced not later than
                          the earlier of: (1) the shortest applicable statute of
                          limitations provided by law; or (2) two years from the
                          date the written copy of the Plan Administrator's
                          decision on appeal is delivered as described above.


                                    ARTICLE 8
                      AMENDMENT OR TERMINATION OF THE PLAN

PNM Resources, as Plan Sponsor, has the right to amend or terminate the Plan at
any time. The Plan may be amended or terminated by a written instrument duly
adopted by PNM Resources or any of its delegates.


                                    ARTICLE 9
                            NO CONTRACT OF EMPLOYMENT

The Plan is not intended to be, and may not be construed as constituting, a
contract or other arrangement between you and the Company to the effect that you
will be employed for any specific period of time.

         IN WITNESS WHEREOF, PNM Resources, Inc. has caused this Plan to be
executed as of this __9th__ day of December, 2003.

                      PNM RESOURCES, INC.


                      By:      /s/  Alice A. Cobb
                         ------------------------------------------------------
                      Its: Senior Vice President, People Services & Development
                         ------------------------------------------------------

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