EXHIBIT 10.52
PNM RESOURCES, INC.
EXECUTIVE SPENDING ACCOUNT PLAN
Effective December 1, 2002
TABLE OF CONTENTS
Page
INTRODUCTION................................................................1
DEFINED TERMS...............................................................1
GENERAL INFORMATION ABOUT THE PLAN..........................................5
ELIGIBILITY AND PARTICIPATION REQUIREMENTS..................................6
SUMMARY OF PLAN BENEFITS....................................................8
HOW THE PLAN IS ADMINISTERED...............................................10
CLAIMS PROCEDURES..........................................................10
AMENDMENT OR TERMINATION OF THE PLAN.......................................14
NO CONTRACT OF EMPLOYMENT..................................................14
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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. ("PNMR"). Effective January 1, 2002, PNMR 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.
By this document, effective December 1, 2002, PNMR hereby merges the MERP with
and into the ESA and amends and restates both plans in the form of this combined
program, such program to be known as the "PNM Resources, Inc. Executive Spending
Account Plan" (the "Plan").
PNMR 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 PNMR 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 PNMR and any participating affiliate, or (ii) in the absence of such an
agreement, procedures adopted by PNMR. 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.
ARTICLE 2
DEFINED TERMS
Capitalized terms used in the Plan have the following meanings:
Assumed Tax Rate: The tax rate that the Plan Administrator will use
to gross-up amounts reimbursed under Tier A of the
Plan. Participants will be notified of their
Assumed Tax Rate each Paycheck Year.
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Code: The Internal Revenue Code of 1986, as amended.
Company: PNM Resources, Inc. ("PNMR") and any affiliate that
has adopted the Plan with the approval of PNMR. Any
affiliate that adopted the Plan prior to the
assumption of the sponsorship of the Plan by PNMR,
including Public Service Company of New Mexico, shall
continue to participate in the Plan.
Covered Expense: Tier A Covered Expenses and Tier B Covered Expenses.
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: December 1, 2002.
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; 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.
HIPAA: The Health Insurance Portability and Accountability
Act of 1996, as amended.
Medical Insurance: Medical insurance coverage under any of the
following: (1) The Public Service Company of New
Mexico Benefits My Way Plan, Program 2, Medical Plan,
effective January 1, 2002, 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 2002 calendar
year will be issued on Friday, December 27, 2002.
This means that the 2003 Paycheck Year will commence
on December 7, 2002 and end on December 5, 2003.
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Plan: The PNM Resources, Inc. Executive Spending Account
Plan, as set forth in this document.
Plan Administrator: PNMR.
Plan Sponsor: PNMR.
PNMR: 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.
Tier A: The portion of the Plan under which Tier A Covered
Expenses are reimbursed. With very few exceptions,
expenses that were formerly reimbursed under the MERP
are, as of the Effective Date, reimbursed under Tier
A.
Tier A Benefit Limit: The maximum amount for which you and your Dependents,
together, may seek reimbursement each Paycheck Year
for Tier A Covered Expenses. As of the Effective
Date, the Tier A Benefit Limit is $3,000 per Paycheck
Year. Any portion of the Tier A Benefit Limit that
remains unused at the end of a Paycheck Year may not
be carried over to the following Paycheck Year. Any
amounts reimbursed by CIGNA under the MERP from
January 1, 2002 through April 30, 2002 (while the
MERP was fully-insured), will reduce the Tier A
Benefit Limit for the remainder of the 2002 Paycheck
Year by a corresponding amount.
Tier A Covered Expenses: Expenses incurred by a Participant or Dependent
during the current or preceding Paycheck Year, while
covered by the Plan, for 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 from home primarily for and
essential to medical care would all be treated as
Tier A Covered Expenses.
A Tier A Covered Expense 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.
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Tier B: The portion of the Plan under which Tier B Covered
Expenses are reimbursed. With very few exceptions,
expenses that were formerly reimbursed under the ESA
are, as of the Effective Date, reimbursed under Tier
B.
Tier B Benefit Limit: The maximum amount for which you and your Dependents,
together, may seek reimbursement each Paycheck Year
for Tier B Covered Expenses. Shortly before each
Paycheck Year, you will be notified of your Tier B
Benefit Limit for the Paycheck Year. Any portion of
the Tier B Benefit Limit that remains unused at the
end of a Paycheck Year may not be carried over to the
following Paycheck Year. Any amounts reimbursed by
the Company under the ESA from January 1, 2002
through April 30, 2002, will reduce the Tier B
Benefit Limit for the remainder of the 2002 Paycheck
Year by a corresponding amount.
Tier B Covered Expenses: 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
accident, disability, life, dependent life, long-term
care and or supplemental insurance (similar to
AFLAIC), whether paid for by the Participant as a
private party or deducted from the Participant's
salary under a PNM benefit program; (6) premiums for
home, auto or personal liability umbrella insurance;
or (7) expenses that would qualify as a Tier A
Covered Expense but for the fact that the Tier A
Benefit Limit has already been exceeded for the
Paycheck Year.
A Tier B Covered Expense is "incurred" as of the date
on which you are billed for the underlying expense;
provided, however, that if the expense qualifies as a
Tier A Covered Expense, but for the fact that the
Tier A Benefit Limit has already been exceeded for
the Paycheck Year, the expense 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.
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: Manager-Employee Benefits Department
The Plan is administered by the Company or its
designee.
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 terminates 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 Termination If a Participant or Dependent's participation in the
of Participation on Plan terminates, any Tier A or Tier B Covered
Reimbursements: Expenses incurred by the Participant or Dependent
before his or her 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,
Tier A and Tier B 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 Tier A or
Tier B Benefit Limits. 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 Tier A. Before terminating
employment, while still covered by the Plan, the
Participant incurred an additional $750 of Tier A
Covered Expenses. The Participant is entitled to
receive a Tier A reimbursement in the amount of
$500.
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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 Tier A. After changing
employment status, while no longer covered by the
Plan, the Participant incurs an additional $1,750
of Tier A Covered Expenses. The Participant is not
entitled to receive a Tier A or Tier B
reimbursement for the amounts incurred after her
participation is terminated.
Effect of Promotion If a Participant is promoted during a Paycheck Year
or Demotion on and such promotion causes the Participant to be
Reimbursements: subject to a higher Tier B Benefit Limit, Tier B
Covered Expenses 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 Tier B Benefit
Limit, Tier B 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 Tier B Benefit Limit was $7,000
and as senior vice president, the Participant's
Tier B Benefit Limit is $12,000. Before being
promoted, and while covered by the Plan, the
Participant incurred $13,000 of Tier B Covered
Expenses but has only been reimbursed for $7,000.
As of October 1st, the Participant is entitled to
be reimbursed an additional $5,000 because of the
$12,000 Tier B 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 Tier B Benefit Limit
was $12,000 and as vice president, the
Participant's Tier B Benefit Limit is $7,000.
Before being demoted, and while covered by the
Plan, the Participant incurred $11,000 of Tier B
Covered Expenses but has only been reimbursed for
$9,000. As of October 1st, the Participant is
entitled to be reimbursed for the $2,000 of Tier B
Covered Expenses that were incurred before October
1st, even though the Participant is now subject to
a $7,000 Tier B 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 Tier B Benefit Limit
was $12,000 and as vice president, the
Participant's Tier B Benefit Limit is $7,000.
Before being demoted, and while covered by the
Plan, the Participant incurred $4,000 of Tier B
Covered Expenses and had been reimbursed for the
full $4,000. After being demoted, the Participant
incurs an additional $8,000 of Tier B Covered
Expenses. The Participant is entitled to receive a
Tier B reimbursement of $3,000 because as of
November 1st, the Participant is now subject to a
$7,000 Tier B Benefit Limit.
ARTICLE 5
SUMMARY OF PLAN BENEFITS
Two Tier Benefit The Plan has two tiers, Tier A and Tier B.
Structure:
If an expense qualifies as a Tier A Covered Expense,
the Company will reimburse you for 100% of the Tier A
Covered Expense under Tier A of the Plan up to the
Tier A Benefit Limit (i.e., $3,000 for you and your
Dependents, together, per Paycheck Year). Once you
and your Dependents, together, reach the $3,000 Tier
A Benefit Limit, no benefits will be paid to you
under Tier A for the remainder of the Paycheck Year.
Before you submit a claim for reimbursement under
Tier A, you must first submit it for payment under
your Medical Insurance.
If an expense qualifies as a Tier B Covered Expense,
the Company will pay you for 100% of the Tier B
Covered Expense under Tier B of the Plan up to the
Tier B Benefit Limit. Once you and your Dependents,
together, reach the Tier B Benefit Limit, no benefits
will be paid to you under Tier B for the remainder of
the Paycheck Year. If an expense qualifies as a Tier
A Covered Expense but for the fact that the Tier A
Benefit Limit has been exceeded, the Plan
Administrator will automatically process the expense
under Tier B, and reimbursement will be made under
Tier B, unless the Tier B Benefit Limit has been
exceeded.
Tax Treatment of The expenses reimbursed under Tiers A and B must
Benefits: be included in 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 Plan Administrator
will be added to your regular paycheck unless the
reimbursement is for a Tier A Covered Expense, in
which case it is processed as a separate check
through payroll. Notwithstanding the foregoing,
effective January 1, 2003, all reimbursements
approved by the Plan Administrator will be processed
as a separate check through payroll rather than being
added to your regular paycheck. In all cases 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
8
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 and are not subject to the gross-up rule
described below.
Gross-Up of Tier A Any expense that is reimbursed under Tier A of the
Covered Expenses: Plan will be grossed-up for taxes, using the
Participant's Assumed Tax Rate. For example, if a
Participant receives the maximum reimbursement of
$3,000 under Tier A, and the Participant's Assumed
Tax Rate is 40%, the Participant will be reimbursed
in the amount of $5,000. After paying taxes on the
$5,000, the Participant will be left with $3,000
(i.e., $5,000 x (1-.40) = $3,000). Expenses
reimbursed under Tier B will not be grossed up even
though such amounts must be included 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, did
you know that 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 Plan Administrator for more information.
Qualified Medical The Plan will also provide benefits to an Employee's
Child Support non-custodial Dependent child as required by any
Orders: qualified medical child support order, or "QMCSO"
(as defined in ERISA Section 609(a)). The Plan has
detailed procedures for determining whether an order
qualifies as a QMCSO. Participants and beneficiaries
can obtain, without charge, a copy of such procedures
from the Plan Administrator.
Benefits for The Plan will provide benefits to Dependent
Adopted Children: 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 Rights The Plan may not, under Federal law, restrict
Upon Childbirth: benefits for any hospital length of stay in
connection with 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.
9
ARTICLE 6
HOW THE PLAN IS ADMINISTERED
Plan Administration: The Plan is administered by the Plan Administrator.
The Manager of the Employee Benefits Department of
the Company is the person who has been designated to
act on behalf of the Plan Administrator.
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.
The Plan Administrator may delegate any of these
administrative duties among one or more persons or
entities, provided that such delegation is in
writing, expressly identifies the delegate(s) and
expressly describes the nature and scope of the
delegated responsibility.
If you have any questions regarding the Plan, please
contact the Plan Administrator.
Discretionary The Plan Administrator shall have the
Authority to Act: discretionary authority to perform its 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.
ARTICLE 7
Claims Procedures
Reimbursement Requests: The Plan Administrator is responsible for
evaluating all reimbursement requests under the Plan.
You must submit all reimbursement requests to the Plan
Administrator 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 to the
Plan Administrator.
10
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 definitions of "Tier A Covered
Expense" and "Tier B 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 Tier A or Tier B Benefit
Limit for a given Paycheck Year, a properly documented
reimbursement request must be sent to the Plan
Administrator on or before the last day of such
Paycheck Year. Any properly submitted reimbursement
requests submitted to the Plan Administrator during a
Paycheck Year will be taxable income to the
Participant for the calendar year that commences
during the Paycheck Year. For example, the 2003
Paycheck Year will commence on December 7, 2002 and
end on December 5, 2003. Thus any requests submitted
from December 7, 2002 through December 5, 2003 will be
taxable income to the Participant for the 2003
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 Plan
Administrator 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.
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 Plan
Administrator in a manner prescribed by the Plan
Administrator. 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.
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Notice of Decision: A written notice of the disposition of any such claim
will be furnished to you within 90 days after the
claim is filed with the Plan Administrator, provided
that the Plan Administrator 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 Denied Claim: Within 60 days after receiving the written notice of
the Plan Administrator's disposition of the claim,
your, 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 Plan
Administrator's written disposition, unless you have
been physically or mentally incapacitated so as to be
unable to request review within the 60-day period.
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."
The review 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.
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Decision on Appeal: A decision on appeal shall be rendered, in writing,
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.
Relevance of For purpose of this Article 7, documents, records,
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 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.
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ARTICLE 8
AMENDMENT OR TERMINATION OF THE PLAN
PNMR, 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
PNMR 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 27 day of November, 2002.
PNM RESOURCES, INC.
By: /s/ Alice A. Cobb
Its: Senior Vice President
14