EXHIBIT 10.52
PNM RESOURCES, INC.
EXECUTIVE SPENDING ACCOUNT PLAN
Effective January 1, 2004
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TABLE OF CONTENTS
Page
INTRODUCTION...............................................................
1
DEFINED
TERMS..............................................................
2
GENERAL INFORMATION ABOUT THE
PLAN......................................... 5
ELIGIBILITY AND PARTICIPATION
REQUIREMENTS................................. 6
SUMMARY OF PLAN
BENEFITS................................................... 9
HOW THE PLAN IS
ADMINISTERED............................................... 10
CLAIMS
PROCEDURES..........................................................
11
AMENDMENT OR TERMINATION OF THE
PLAN....................................... 14
NO CONTRACT OF
EMPLOYMENT.................................................. 14
-i-
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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. ("PNM Resources").
Effective January 1, 2002, PNM Resources
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.
Effective December 1, 2002, PNM Resources
merged the MERP with and into the ESA
and amended and restated both plans in the
form of a combined program known as
the "PNM Resources, Inc. Executive Spending
Account Plan" (the "Plan").
Effective February 15, 2003, PNM Resources
amended and restated the Plan in its
entirety in order to: (1) eliminate the
Tier A and Tier B Benefit Limits, and
instead provide for one overall Benefit
Limit; (2) eliminate the gross-up
feature that applied to Tier A Covered
Expenses; (3) increase the overall
Benefit Limit in order to replace the
gross-up feature that applied to Tier A;
and (4) allow long-term care insurance
premiums for the Participant and certain
members of the Participant's family to be
reimbursed under the Plan.
Effective January 1, 2004, PNM Resources,
by this document, intends to amend and
restate the Plan in its entirety in order
to make certain provisions of the Plan
more consistent with the other benefits
plans and programs sponsored by the
Company.
PNM Resources 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 PNM
Resources 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 PNM
Resources and any participating affiliate,
or (ii) in the absence of such an
agreement, procedures adopted by PNM
Resources. 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.
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ARTICLE 2
DEFINED TERMS
Capitalized terms used in the Plan have the
following meanings:
Benefit
Limit: The maximum amount for which you and your
Dependents, together, may seek reimbursement each
Paycheck Year for Covered Expenses. Shortly before
each Paycheck Year, you will be notified of your
Benefit Limit for the Paycheck Year. Any portion of
the Benefit Limit that remains unused at the end of a
Paycheck Year may not be carried over to the
following Paycheck Year.
Prior to February 15, 2003, the Plan had Tier A and
Tier B Benefit Limits. Effective February 15, 2003,
the Tier A and Tier B Benefit Limits are eliminated
and replaced with one overall Benefit Limit. Due to
the elimination of the Tier A Benefit Limit and the
gross-up feature that
applied to that limit, the
Benefit Limit for each Participant who is a
vice-president will be increased by $2,000 and the
Benefit Limit for all other Participants will be
increased by $3,000. The Benefit Limit increase
described in the preceding sentence is effective
February 15, 2003. On or shortly thereafter, each
Participant will be notified of his or her new
overall Benefit Limit, which will include the $2,000
or $3,000 increase, as applicable.
Benefits Department: The
organizational unit of the Company responsible
for administering benefit programs.
Code:
The Internal Revenue Code of 1986, as amended.
Company:
PNM Resources,
Inc. ("PNM
Resources")
and any
affiliate that has adopted the Plan with the approval
of PNM Resources. Any affiliate that adopted the Plan
prior to the assumption of the sponsorship of the
Plan by PNM
Resources, including Public Service
Company of New Mexico, shall continue to participate
in the Plan.
Covered Expense:
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) 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
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from home primarily for and essential to medical care
would all be treated as Covered Expenses under this
item (1)); (2) income tax preparation; (3) estate
planning (including preparation of wills and trusts);
(4) financial counseling, but excluding brokerage
fees or commissions; (5) financial management
services (this would include, for example, the
services provided by a management firm that manages
your real estate investments); (6) premiums covering
the Participant and his or her Dependents for
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; (7) premiums for home,
auto or personal liability umbrella insurance; or (8)
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. An
expense that qualifies as a Covered
Expense pursuant to item (1) above, 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. An expense that
qualifies as a Covered Expense pursuant to items (2),
(3), (4), (5), (6), (7) or (8) above, is "incurred"
as of the date on which you are billed for the
expense or premium.
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:
January 1, 2004.
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; interns; co-op
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.
Family Members:
Any of the following individuals between the ages of
18 and 80:
o the legally married
spouse of a Participant;
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o the natural,
adoptive or
step-parents/grandparents of a Participant
and their spouse;
o the natural,
adoptive or step-siblings of a
Participant and their spouse;
o the natural,
adoptive or stepchildren of a
Participant and their spouse.
HIPAA:
The Health Insurance Portability and Accountability
Act of 1996, as amended.
Medical
Insurance: Medical insurance coverage under any of
the following: (1) The PNM Resources, Inc. Benefits
My Way Plan, Program 2, Medical Plan, effective
January 1, 2003, 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 2003 calendar
year will be issued on Wednesday, December 24, 2003.
This means that the 2004 Paycheck Year will commence
on December 6, 2003 and end on December 3, 2004.
Plan:
The PNM Resources, Inc. Executive Spending Account
Plan, as set forth in this document.
Plan Administrator:
PNM Resources,
Inc. Benefits Governance
Committee or other such person or committee
designated by the Company as the Plan Administrator.
Plan Sponsor:
PNM Resources.
PNM Resources:
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.
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: Benefits Governance Committee
The Plan is administered by the Benefits Governance
Committee
or other such person or committee
designated by the Company as the Plan Administrator.
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 terminate
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
If a Participant or Dependent's participation in
Termination of
the Plan terminates, any Covered Expenses incurred
Participation on
by the Participant or Dependent before his or h
