SECOND RESTATED AND AMENDED
PUBLIC SERVICE COMPANY OF NEW MEXICO
EXECUTIVE MEDICAL PLAN
RECITALS
WHEREAS, the Amended and Restated Medical Reimbursement Plan of Public
Service Company of New Mexico was adopted effective January 1, 1980 (the
"Medical Reimbursement Plan").
WHEREAS, Public Service Company of New Mexico (the "Company") reserved
the right, pursuant to Section 12 of the Medical Reimbursement Plan, to amend,
modify or terminate the Medical Reimbursement Plan at anytime; and
WHEREAS, the Company desires to amend, restate and rename the Medical
Reimbursement Plan as hereinafter set forth.
I. PURPOSE
The Company adopts the Second Restated and Amended Public Service
Company of New Mexico Executive Medical Plan (the "Plan") to provide a select
group of executives of the Company with additional remuneration in the form of
additional medical benefits beyond such benefits otherwise available to such
executives pursuant to other Company provided health benefits.
II. TERM
The Plan, as restated and amended, shall commence on September 1, 1991,
and shall remain in effect until such time as the same is modified, amended or
terminated by the Board of Directors of the Company, pursuant to Article VIII
hereof.
III. ELIGIBILITY
The Plan shall apply only to an executive employee of the Company whose
position with the Company is President of the Company or designated as part of
the Management Committee (a "Participant"). Participation shall continue so long
as the Participant continues to satisfy the eligibility requirements as set
forth in this Article III.
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IV. COVERED CHARGES
Subject to the Annual Limitation, the Company shall reimburse or pay on
behalf of a Participant for all covered charges incurred while this Plan is in
effect. Covered charges ("Covered Charges") shall include all expenses incurred
by the Participant, his or her spouse or Dependents, for medical care (as
defined in Section 213(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), which are not otherwise paid for or reimbursed by a health plan
maintained by the Company or any other employer maintained health plan, covering
the Participant and his or her spouse or Dependents. For purposes hereof, a
"health plan" shall include any employer sponsored health and medical plan,
including, but not limited to, insured or self-insured health, medical, dental
or mental health plans, health maintenance organizations or preferred provider
organizations. Notwithstanding the foregoing, Covered Charges shall not include
expenses for transportation pursuant to Code Section 213(d)(1)(B), for insurance
pursuant to Code Section 213(d)(1)(C) and lodging pursuant to Code Section
213(d)(2). For purposes hereof, Dependents shall mean anyone who qualifies as a
Dependent of the Participant pursuant to Code section 152. Any Covered Charges
reimbursable hereunder shall be determined assuming the Participant elected the
option under the Benefit Trust having the smallest annual deductible amount.
V. ANNUAL LIMITATION
The maximum annual amount of Covered Charges incurred during a calendar
year subject to reimbursement hereunder shall not exceed twenty-five hundred
dollars ($2,500) paid to or on limitation for the Participant, his or her spouse
and Dependents. The Annual Limitation shall be determined on a calendar basis,
based upon the date the Covered Charge is incurred (i.e., when the medical
service is provided).
VI. ADMINISTRATION
The Plan shall be administered by the Company or its designee (the
"Plan Administrator") who shall be the "Named Fiduciary" for purposes of the
Employee Retirement Income Security Act of 1974 ("ERISA"). Subject to the
provisions of the Plan, the Plan Administrator shall have sole and exclusive
power, discretion and authority to:
(i) conclusively interpret the provisions of this Plan and decide all
questions of fact arising in its application, including but not limited to, the
right to determine whether an individual satisfies the eligibility requirements
hereunder and the right of a participant to receive benefits and the amount of
those benefits hereunder;
(ii) adopt, amend and rescind rules and regulations relating to this
Plan including the appointment or third party administrators to assist in claims
administration; and
(iii) make any other determinations it deems necessary or advisable.
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VII. NOTICE
For the purpose of this Plan, notices and all other communications
provided for in the Plan shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the Participant at his or her
last known address and to the Company at Alvarado Square, Albuquerque, New
Mexico 87158, provided that all notices to the Company shall be directed to the
attention of the Manager of the Employee Benefits Department, or to such other
address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
VIII. AMENDMENT AND TERMINATION
The Company expects to continue the benefits provided hereunder
indefinitely, but reserves the right to amend or modify the Plan including, but
not limited to the right to decrease, increase or discontinue the benefits, and
the Company specifically reserves the right to terminate the Plan at any time,
for any reason, and without prior notice.
XI. MISCELLANEOUS
A. Governing Law. The validity, interpretation, construction and
performance of this Plan shall be governed by the laws of the State of New
Mexico.
B. Withholding. Any payments provided for hereunder shall be paid
subject to any applicable withholding required under federal, state or local
law.
C. No Employment Contract. Notwithstanding anything to the contrary
contained in the Plan, (1) the execution of the Plan shall not create an express
or implied contract of employment for a specified term between the Participant
and the Company and (2) unless otherwise expressly provided in writing, by such
officer as may be specifically designated by the President, the employment
relationship between the a Participant and the Company shall be defined as
"employment at will", where either party, without notice, may terminate the
relationship with or without cause.
D. No Right of Assignment. Neither a Participant nor any person taking
on behalf of a Participant may anticipate, assign or alienate (either at law or
in equity) any benefit provided under the Plan and the Plan Administrator shall
not recognize any such anticipation, assignment or alienation. Furthermore, a
benefit under the Plan is not subject to attachment, garnishment, levy,
execution or other legal or equitable process.
E. Service of Process. The Secretary of the Company shall be an agent
for service of process in matters relating to this Plan.
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F. Headings. The headings and subheadings in this Plan are inserted for
convenience and reference only and are not to be used in construing this
instrument or any provision hereof.
G. Gender and Number. Where the context so requires, words in the
masculine gender shall include the feminine and neuter genders, the plural shall
include the singular, and the singular shall include the plural.
H. Validity. The invalidity or unenforceability of any provision of
this Plan shall not affect the validity or enforceability of any other provision
of this Plan, which shall remain in full force and effect.
X. CONTINUATION COVERAGE
A. Continuation Coverage after Termination of Normal Participation.
Each person who is a Qualified Beneficiary shall have the right to elect to
continue coverage under this Plan upon the occurrence of a Qualifying Event that
would otherwise result in such person losing coverage hereunder. Such extended
coverage under the plan is known as "Continuation Coverage."
B. Qualified Beneficiary. A "Qualified Beneficiary" is any person who,
as of the day before a Qualifying event, is (a) an employee of the Company
covered under the Plan as of such day (such persons are Called "Covered
Employees"), (b) the spouse of the Covered Employee, or (c) a dependent of a
Covered Employee. A Covered Employee can be a Qualified Beneficiary only if the
Qualifying Event consists of termination of employment (for any reason other
than gross misconduct). A retiree or other former employee actively
participating in the Plan be reason of a previous period of employment will be
treated as a "Qualified Beneficiary." A person is not a Qualified Beneficiary
if, as of such day, either the individual is covered under the Plan by virtue of
the election of continuation coverage by another person and is not already a
Qualified Beneficiary by reason of a prior Qualifying Event, or is entitled to
Medicare coverage under Title XVIII of the Social Security Act. Furthermore, an
individual who fails to elect Continuation Coverage within the election period
provided in Section F, below, shall not be considered to be a Qualified
Beneficiary.
C. Qualifying Event. Any of the following shall be considered as a
"Qualifying Event":
(i) death of a Covered Employee;
(ii) termination (other than by reason of gross misconduct) of the
Covered Employee's employment;
(iii) divorce or legal separation of a Covered Employee from the
employee's spouse;
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(iv) a Covered Employee's becoming eligible to receive Medicare
benefits under title XVIII of the Social Security Act; or
(v) a dependent child of a Covered Employee ceasing to be a
dependent.
In the case of any person treated as a Covered Employee but who is not
a common-law employee, termination of "employment" means termination of the
relationship that originally gave rise to eligibility to participate in the
Plan.
D. Available Benefit. Each person who is eligible to elect to continue
coverage under Article X shall have the right to continue the level of coverage
in effect for the Covered Employee on the day before the Qualifying Event or a
lesser level of coverage than the amount set out in Article V above. If a
Qualified Beneficiary of another group health plan maintained by the Employer is
prevented from receiving a previous level of benefits due to change in plan
benefits or plan termination, such individual will be entitled to elect any
available level of coverage under this Plan.
E. Notice Requirements.
(i) When a Participant becomes covered under this Plan, the Plan
Administrator must inform the Participant (and spouse, if any) in writing of the
rights to continued coverage, as described in Article VII.
(ii) The Company shall give the Plan Administrator written notice
of a Qualifying Event within thirty (30) days of the occurrence thereof.
(iii) Within fourteen (14) days of receipt of the Company's notice,
the Plan Administrator shall furnish each Qualifying Beneficiary with written
notification of the termination of regular coverage under the Plan, as well a
recital of the rights of any such Beneficiary to elect Continuation Coverage, as
required by Code Section 4980B and ERISA Section 601, in accordance with the
terms of this Plan.
(iv) In the case of a Qualifying Event described in Section C.(iii)
or (v) above, a Covered Employee or a Qualified Beneficiary who is a spouse or
dependent of such Participant must notify the Plan Administrator within sixty
(60) days of the occurrence thereof. The Plan Administrator shall give written
notification of Continuation Coverage rights to any Qualified Beneficiary within
fourteen (14) days of receipt of the notice described in this Section E. (iv).
Each Qualified Beneficiary who is determined, under Title II or XVI of
the Social Security Act, to have been disabled at the time of a Qualifying event
described in Section C. (ii) must notify the Plan Administrator of such
determination within 60 days after the date of the determination and within 30
days after the date of any final determination under such title or titles that
the Qualified Beneficiary is no longer disabled.
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Notwithstanding any of the foregoing, notification to a Qualified
Beneficiary who is a spouse of a Covered Employee is treated as notification to
all other Qualified Beneficiaries residing with that person at the time
notification is made.
F. Election Period. Any Qualified Beneficiary entitled to Continuation
Coverage shall have 45 days from the date of the Notice required by Section E.,
in the case of occurrence of a Qualifying Event, in which to return a signed
election to the Plan Administrator indicating the choice to continue benefits
under the Plan.
G. Duration of Continuation Coverage
(i) Continuation Coverage shall extend for a period of 18 months
after the date that regular coverage ceased due to occurrence of a Qualifying
Event.
(ii) If a Qualifying Event occurs during the 18 months after the
date of a Qualifying Event described in Section C. (ii) above, the Continuation
Coverage shall extend to the date which is 36 months after the date of the
qualifying event described in Section C. (ii).
(iii) In the case of an event described in Section C. (iv) above
(without regard to whether such event is a Qualifying Event), Continuation
Coverage for Qualified Beneficiaries other than the Covered Employee for such
event or any subsequent Qualifying Event shall not terminate before the close of
the 36-month period beginning on the date the Covered Employee becomes entitled
to benefits under Title XCIII of the Social Security Act.
(iv) In the case of an individual who is determined, under Title II
or XVI of the Social Security Act, to have been disabled at the time of the
Qualifying Event described in Section C. (ii) above, any references in (i) or
(ii) of this Section G to 18 months with respect to such event shall be deemed a
reference to 29 months, but only if the Qualified Beneficiary has provided
notice of such determination in accordance with Section E. (iv) above before the
end of such 18 months.
(v) In no event, however, shall Continuation Coverage extend more
than 36 months beyond the date of the original Qualifying Event.
H. Automatic Termination of Continuation Coverage. Continuation
Coverage shall automatically cease if (i) the Company no longer offers group
health coverage to any of its employees, (ii) the required premium for
continuation coverage is not paid within 30 days of the date due, (iii) an
electing Beneficiary becomes covered under another group health plan, (iv) an
electing Beneficiary becomes eligible to receive benefits under Medicare, or (v)
in the case of a Qualified Beneficiary who is disabled at the time of a
Qualifying Event described in Section C. (ii), the month that begins more than
30 days after the date of the final determination under Title II or XVI of the
Social Security Act that the Qualified Beneficiary is no longer disabled.
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I. Premium Requirements
(i) A Qualified Beneficiary who has elected Continuation Coverage
under This Article X must pay a premium of 102% of the applicable premium for
the period of coverage. In the case of an individual described in Section B.
(iv) above, the required premium shall be 105% of the applicable premium for any
month after the 18th month of Continuation Coverage described in Section G. (i)
or (ii). The applicable premium shall be determined by the Plan Administrator,
pursuant to applicable law.
(ii) The required premium for Continuation Coverage may, at the
Qualified Beneficiary's election, be paid in monthly installments.
(iii) Premiums for Continuation Coverage become payable 45 days
after the date on which the Qualified beneficiary makes the initial election for
Continuation Coverage.
XI. CLAIMS PROCEDURES
The Plan Administrator shall make all determinations as to a
Participant's right to a benefit pursuant to the Plan. The Plan Administrator,
within ninety (90) days after receipt of notice of objection to benefits payable
or claim for benefits, shall render a written decision on the objection to the
benefits payable or the claim for benefits. If the objection to benefits payable
or the claim for benefits is denied, either in whole or in part, the decision
shall include:
(i) The specific reason or reasons for the denial;
(ii) An indication of the specific Plan provisions on which the
denial is based;
(iii) A description of any additional material or information
necessary for the claimant to perfect the claim and any explanation of why such
material or information is necessary; and
(iv) An explanation of the Plan's appeal procedure, indicating that
the appeal of the adverse determination must be in writing addressed to the Plan
Administrator, and received within sixty (60) days after the receipt by the
claimant of the Plan Administrator's written denial of benefits. Failure to
perfect an appeal within the 60-day period shall make the decision conclusive.
If the claimant should appeal to the Plan Administrator, he or she, or
his or her duly authorized representative, must do so in writing and may submit,
in writing, whatever issues and comments he or she, or his or her duly
authorized representative, feel are pertinent. The claimant, or his or her duly
authorized representative, may review pertinent Plan documents. The Plan
Administrator shall render a written decision on the question of the benefits
payable or the claim for benefit, setting forth the specific reasons for its
decision including a reference to the plan's provision within sixty (60) days
after receipt of the request for review, unless special circumstances (such as a
hearing) would make the rendering of a decision within the sixty (60) day limit
unfeasible, but in no event shall the Plan Administrator render a decision
respecting a denial for a claim for benefits later than one hundred twenty (120)
days after its receipt of a request for a review.
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Any denial by the Plan Administrator of a Participant's claim for
benefits under the Plan shall be stated in writing and such notice shall be
written in a manner that may be understood without legal or actuarial counsel.
XII. RIGHTS OF PERSONS ADVERSELY AFFECTED
The right any PNM employee adversely affected who has incurred charges
for medical expenses between September 1, 1991 and April 30, 1992, which would
have been paid or reimbursed hereunder, but for this Second and Restated
Amendment, shall not have such medical expenses reduced or unpaid and the
Company shall pay any obligation that would have been paid but for this Second
Restated and Amended Plan document. Effective as of May 1, 1992, no employee,
spouse of such employee or dependent of such employee shall have any right to
any medical expense paid or reimbursed pursuant to this Plan unless provided for
in this Second Restated and Amended Plan document.
Date: 28 Dec 1995
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PUBLIC SERVICE COMPANY
OF NEW MEXICO
By /s/ Benjamin F. Montoya
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Chief Executive Officer
65226
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