FIRST AMENDMENT TO THE PNM RESOURCES, INC. EXECUTIVE SPENDING ACCOUNT PLAN

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) income tax preparation; (2) estate planning (including preparation of wills and trusts); (3) financial counseling, but excluding brokerage fees or commissions; (4) financial management services (this would include, for example, the services provided by a management firm that manages your real estate investments); (5) premiums covering the Participant and his or her Dependents for health care, 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; (6) premiums for home, auto, title or personal liability umbrella insurance; (7)  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; or (8) reasonable transportation, meals and lodging expenses in connection with the Participant’s health care, financial planning and real estate management, including estate planning, financial counseling and financial management services as described in items (2), (3) and (4). An expense that qualifies as a Covered Expense pursuant to items (1) through (8) above, is “incurred” as of the date on which you are billed for the expense or premium.

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 and you are classified and coded as an officer pursuant to the Company’s compensation system. Your Spouse and “Dependents,” as defined in Article 2 are eligible to participate in the Plan if you are.