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

         AMENDMENT  made as of the 29th day of December,  1989 by Public Service
Company of New Mexico ("PNM"),  Meadows  Resources,  Inc.  ("Meadows"),  Paragon
Resources,  Inc.  ("Paragon"),  and Sunbelt Mining  Company,  Inc.  ("Sunbelt").
(Meadows,  Paragon  and  Sunbelt  are  referred  to herein  collectively  as the
"Affiliates" and singly as "Affiliate").

                                    RECITALS:


     A. PNM  established  the Public Service  Company of New Mexico  Accelerated
Management  Performance  Plan (the "Plan") on January 14, 1981.  The  Affiliates
have adopted the Plan.

     B. PNM and the Affiliates restated and amended the Plan on October 23, 1984
and again as of August 16,  1988.  On August 30,  1988,  PNM and the  Affiliates
amended the August 16, 1988 restated and amended Plan by redesignating  Sections
5.03 and 5.04 as Sections 5.04 and 5.05 and by adding a new Section 5.03.

     C. PNM and the Affiliates  desire to amend the August 16, 1988 restated and
amended Plan as permitted by Section 9.01 thereof.

     D.  Capitalized  terms used herein and not defined  shall have the meanings
ascribed to them under the August 16, 1988 restated and amended Plan.

      NOW,  THEREFORE,  PNM and the Affiliates  hereby amend the August 16, 1988
restated and amended Plan as follows:

     1. Section 5.04 (formerly Section 5.03) is amended to provide as follows:

        "5.04 Method of  Distribution.  Notwithstanding  any other  provision on
        this Plan, the form of payment of benefits  hereunder  shall be the same
        as the form of annuity  benefit  selected by the  Participant  under the
        Employees'  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."



<PAGE>


       IN WITNESS  WHEREOF,  PNM and the Affiliates have executed this Amendment
on the day and year first above written.


                                       PUBLIC SERVICE COMPANY OF
                                       NEW MEXICO


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

ATTEST:

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

                                       MEADOWS RESOURCES, INC.


                                       By:  /s/ James F. Jennings, Jr.
                                       -----------------------------------------
                                       Title:  President
                                       -----------------------------------------

ATTEST:

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

                                       PARAGON RESOURCES, INC.


                                       By:  /s/ J. B. Mulcock, Jr.
                                       -----------------------------------------
                                       Title:  President
                                       -----------------------------------------

ATTEST:

/s/ K. A. Knight
----------------------------------
Secretary



                                       2
<PAGE>



                                       SUNBELT MINING COMPANY, INC.


                                       By:  /s/ Robert B. Rountree
                                       -----------------------------------------
                                       Title:  Chairman
                                       -----------------------------------------

ATTEST:

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

1263T




SUBSCRIBED AND SWORN TO before me this 29th day of December, 1989.


                                       /s/ Marion H. Lowrey
                                       -----------------------------------------
                                       NOTARY PUBLIC


My Commission Expires:
April 21, 1990
----------------------------------




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