FIRST AMENDMENT TO THE EXECUTIVE RETENTION AGREEMENT FOR BENJAMIN F. MONTOYA This FIRST AMENDMENT TO THE EXECUTIVE RETENTION AGREEMENT FOR BENJAMIN F. MONTOYA (the "Agreement"), by and between Public Service Company of New Mexico, a New Mexico...

                             FIRST AMENDMENT TO THE
                        EXECUTIVE RETENTION AGREEMENT FOR
                               XXXXXXXX X. XXXXXXX

         This FIRST AMENDMENT TO THE EXECUTIVE  RETENTION AGREEMENT FOR XXXXXXXX
X. XXXXXXX  (the  "Agreement"),  by and between  Public  Service  Company of New
Mexico,  a New Mexico  corporation  ("PNM" or the  "Company")  and  Xxxxxxxx  X.
Xxxxxxx  ("Xxxxxxx"),  is effective as of the date Xxxxxxxx X. Xxxxxxx'x name is
added to the Executive  Retention  Plan roster and approved by the  Compensation
and Human Resources Committee of the PNM Board of Directors, pursuant to Section
2.13 of the Public  Service  Company of New Mexico  First  Restated  and Amended
Executive Retention Plan, effective December 7, 1998.

         WHEREAS,  Xxxxxxx was newly  elected as President  and Chief  Executive
Officer of PNM when the Agreement was entered into effective November 15, 1993;

         WHEREAS,  the Company reserved the right to amend,  modify or terminate
this Agreement  pursuant to paragraph B of the Agreement  without the consent of
Xxxxxxx;

         WHEREAS,  on December 7, 1998,  the  Compensation  and Human  Resources
Committee of the PNM Board of Directors  approved certain benefits upon a Change
in Control (as defined in the First  Restated  and Amended  Executive  Retention
Plan) and  authorized  certain  amendments  to affected  plans,  including  this
Agreement; and

         WHEREAS, the Company desires to amend this Agreement to incorporate the
approved Change in Control benefits. The Company hereby amends this Agreement to
provide that the retention benefits otherwise provided herein to Xxxxxxx, in the
event Xxxxxxx'x  employment is involuntarily or  constructively  terminated with
PNM  following  a Change in Control,  shall be  provided  pursuant to the Public
Service  Company of New Mexico First  Restated and Amended  Executive  Retention
Plan.

         NOW THEREFORE, the Company hereby amends the Agreement as follows:

         ITEM 1. A new  paragraph  D shall be added to amend and  terminate  the
Agreement, as follows:

         D. Notwithstanding anything to the contrary in this Agreement, benefits
         under this Agreement  shall be provided  pursuant to the Public Service
         Company of New Mexico First  Restated and Amended  Executive  Retention
         Plan,  effective  December  7, 1998,  and this  Agreement  shall  cease
         providing such benefits and shall be terminated as of the date Xxxxxxxx
         X. Xxxxxxx'x  name is added to the Executive  Retention Plan roster and
         approved by the Compensation  and Human Resources  Committee of the PNM
         Board of Directors, or its successor committee.

         ITEM 2. Except as herein above amended,  the Company hereby  supersedes
this Agreement  with the provisions of the First Restated and Amended  Executive
Retention Plan.


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         IN WITNESS  WHEREOF,  the Company  caused this First  Amendment  to the
Executive Retention Agreement For Xxxxxxxx X. Xxxxxxx to be executed.


                                    PUBLIC SERVICE COMPANY OF NEW MEXICO


Date:_________________              By_______________________________________
                                        XXXX X. XXXXXXXX
                                        Chairman of the Board of Directors




Date:_________________              _________________________________________
                                            XXXXXXXX X. XXXXXXX










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