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Res 02-357 RESOLUTION NO. 02-1~7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, AMENDING THE CITY'S DEFERRED COMPENSATION PLAN (AMENDS NO.90-28 and 97-241). NAME OF EMPLOYER: CITY OF FEDERAL WAY, WASHINGTON EMPLOYER PLAN NUMBER: 3350 WHEREAS, the City of Federal Way ("City") has employees rendering valuable services; and WHEREAS, pursuant to Resolution No. 90-28 amended by Resolution No. 97-241 the City Council established a deferred compensation plan for such employees that serves the interest of the City by enabling it to provide reasonable retirement security for its employees, by providing increased flexibility in its personnel management system, and by assisting in the attraction and retention of competent personnel; and WHEREAS, the City has determined that the continuance of the deferred compensation plan will serve these objectives; and WHEREAS, amendments to the Internal Revenue Code have been enacted that require changes to the structure of and allow enhancements of the benefits of the deferred compensation plan; Res. ~2-357, Page 1 ORIGINAL NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY HEREBY RESOLVES AS FOLLOWS: Section 1. Plan Form. The Ci ty hereby amends and restates the deferred compensation plan (the "Plan") in the form of the ICMA Retirement Corporation Deferred Compensation Plan and Trust, a copy of which is attached hereto and incorporated herein by this reference. Section 2. Plan Assets. The assets of the Plan shall be held in trust, with the City serving as trustee, for the exclusive benefit of the Plan participants and their beneficiaries, and the assets shall not be diverted to any other purpose. The Trustee's beneficial ownership of Plan assets held in the ICMA Retirement Trust shall be held for the further exclusive benefit of the Plan participants and their beneficiaries. Section 3. Plan Loans. The Plan will not permit loans. Section 4. Plan Trustee. The City hereby agrees to serve as Trustee under the Plan. Section 5. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or Res. #02-357, Page 2 constitutionality of any other section, sentence, clause or phrase of this resolution. Section 6. Ratification. Any act consistent ..with the authority and prior to the effective date of the resolution is hereby ratified and affirmed. Section 7. Effective Date. In accordance with the changes in the Internal Revenue Code, this resolution shall be effective January 1, 2002. RESOLVED BY THE CITY COUNCIL OF THE CITY OF FE~ERAL WAY, WASHINGTON, this ~ day of February , 2002. CITY OF FEDERAL WAY ATTEST: ~~~ Ø- ß.L: ~« CI Y CLERK, N. CHRISTINE GREEN, CMC APPROVED AS TO FORM: ~l ~~N¿~ +IV CITY ATTORNEY, BOB C. STERBANK Res. #02-357, Page 3 FILED WITH THE CITY CLERK:l/28/02 PASSED BY THE CITY COUNCIL: 2/5/02 RESOLUTION NO. 02-357 K, \Resolution\DeferredCMP2002\2002-00S Res. #02-357, Page 4 CITY OF FEDERAL WAY Office of the City Clerk PI. iClHI!MS7f'lINlE i{jj!&JEIEN. iClMIC. CII7I'YI ClLIEH Council Bill No. Ordinance No. ] First Reading: ] SecondÆnactment Reading: Resolution No. 0;),- 351 (effective upon passage/no publication required) SUBJECTMATIER 157 Deferred Cbrnpu18a:/ton Plan cYlOJ1fKS u CONFORM AS TO DA TES/SIGNA TURES [ vf Filed with City Clerk [vi Passed by City Council [ ] Publication Date (ordinances only) [ '-1 Effective Date I / :;).5 1 () ;;J. a/ os / O::l.. 1 1 01 r- / 0:2- FAX ORDINANCE SUMMARY TO FEDERAL WAY MIRROR FOR PUBLICATION [ ] Date faxed / / DISTRIBUTE CONFORMED COPIES TO THE FOLLOWING: [V] City Clerk's Ordinance!Resolution Binders [ vf City Attorney - (ordinances & resolutions) [ vf Federal Way Regional Library - (ordinances & resolutions) [ ] Federal Way District Court - (orllinances only) [ ] Federal Way Municipal Court - (ordinances only) DISTRIBUTE CONFORMED COPIES WHEN APPLICABLE: [ ] Building [ ] Planning [ ] Parks [ ] Public Works [] Code Enforcement [ ] Lakehaven [ ] Mgmnt Services [] Federal Way Fire Dist.[ ] C. D. Admin.(Tina) [ . ] Public Safety [ '-1 Other: iff< - MMj mt.blJK¡Jå1. / DISTRIBUTE CERTIFIED COPIES TO: [ ] Codifier (Code Publishing) - (ordinances only) [ vr: MRSC (Andrew Darby) - (ordinances & resolutions) [ ] King County (LeRoy Knopp) - LAND USE/ZONING ONL Y - (ordinances only) [ ] Other: [ ] Other: RETAIN ANY APPLICABLE CORRESPONDENCE IN FILE ¡;c\CLER¡;\DISTRIUfORM (R,v. 06.22-00) / � v ATTACHMENT A: OVERVIEW OF EGTRRA 457 LAW CHANGES Note: All provisions are effective January l, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 Co answer your questions. a�:.' �' r*;;:. � t r �, �. �.,*��.:P h„ �. ,r 4' � , w. �� .,e�. . .� , „;,n�.x d :;t4a» °'�i+. " � �.s.,� ^t .. �&n a �z � } a 's� � � €;� � < �, �. a�r. "�a "v�` v� �.;�; § �- z �w : � �:� '�. �K. � �� ,��:�,� tf� „ � ; 4`�. �, � q ,, ;,� u �s rii��. -+*`��, � ,a'. � � �" 4,��,� � ,:,:a�, :� �_ 1 ::. w a �� .^ '^ r '' � s�.�" .��' �" �#.r ,�.'�.',�£ � s ; �r ��"�*�a,;. , ��?� '.�C�ve � � �a�� ,� _ � � �` �. �r =� � e �� „��r�,� �-��`�*;,, "� _ ' �� , .� � �. =.. � �` 4 '+i �G £. St y `"�..��,e "'� h �� v��s, �' � ��.� �a n'+��' #�?r.' Q a �';� g c �`t,x � a v� �,� � � .�a� �. � �. a ,- � � ��'.c �,��`�t �x ��c+ y,a � �� :" .�.�x�� s . Contribution Provisions Plan Contribution Contributions under a Effective January 1, 2002, Article 5.01 Allows participants to save Payroll systems may have co be Limits 457 plan are limi�ed to the 457 plan contribution additional funds for retire- modified to: the lesser of (1) 33 1/3 limi� will be raised substan- The ICMA-RC ment. Revision of the percent of taxable �;om- tially. The new limit will be document allows percentage limit helps lower- • Adjusc che dollar amount of pensation after reduction the lesser of (1) 100 percent contributions to the compensated employees save the contribution limit each year for 457 deferrals (or 25 of ta�cable compensation after fullest extent allowed more for retirement. for purposes of cracking when percent of taxable com- reduction for 457 deferrals under the new law. employees have concributed che pensation before 457 deferrals (or 50 percent of Indexing the 457 dollar limit maximum amount inco che 4">7 deferrals) or (2) $8,500 taxable compensation before in $500 increments may plan. (indexed). 457 deferrals) or (2) a dollar resulc in an increase nearly , amount in eFfea that year. every year. • Increase the percentage limic to 100 percent of nec taxable The dollar limit will be Conforms che maximum compensation in testing increased as follows: contribution limit for 457 parameters. In other words, �he plans to the elective deferral percentage should be applied co Contribution limit for 401(k) and 403(6) taxable compensacion aFter che Year I,imit plans, purting public sector reduction for 457 deferrals. employees on a par with This means that 457 contribu- ` 2002 $11,000 privace and education sector tions (Form W-2, Box 12, 2003 $12,000 employees. "Code G") should not exceed 2004 $13 taxable wages (Form W-2, Box 2005 $14,OOU 1 )• 2006 $15,000 � � � ATTACHMENT A(continued): OVERVIEW OF EGTRRA 457 LAW CHANGES Note: All provisions aze effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administracive Casks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. . .. � � �, � ,. , .. < ._r, . � r . . . � w , . a � � �, � �«>�, �u �� £ ;�� r �� . ; N � `"�� r� �� Conuibution Provisions (cont.) "Exiscing" or "Pre- Employees within three The catch-up limit is raised Article 5.02(b) Allows participants close to Adjust the dollar amount of the ca�ch-up reciremenc" years of Normal Retire- to twice the limit in effect retirement co save addi- limic each vear for purposa of cracking w�hen Cacch-Up menc Age may make total for normal contributions The ICMA-RC tional funds for retiremenc employees using che catdi-up provision have Provision contributions of up to (e.g., $22,000 for 2002). document allows these by increasing the amount of contributed the ma�dmum amount inco the $15,000. catch-up contributions catch-up contributions that 457 plan. to the fullest extent can be made. allowed under the new Given che fact that a parricipant's abiliry co ��µ, contribure based on "unused defemals' will increase, more y��us may have to be reseazched ro idenufy more unusad defeaals (co che excent chis assistance is provided ro Participants). "New" Age 50 No provision. Participants age 50 and Article 5.02(a) Allows pazuapancs who could not save Adjust payroll syscems to Catch-Up Provi- older may make additional, in eazlier yea� as well u pameipancs track age 50 catch-up sion annual catch-up contribu- The ICMA-RC who have not fa�used on che amowit contributions to facilicace tions up to a specified dollar document allows age of retirement savings they need unt� contribution limit cesting. limit. 1'he dollar limit will 50 catch-up contribu- �eY near retirement, co "mal:e up for increase as follows: tions to the fullest lost time". extent allowed under � Conrribution the new law. ��Par'6 age 50 or older who have Year Limit not yet reached the poin� of being within t}v�eee years of Normal 2002 $1,000 Retiremenc Age can use [his "new" 2003 $2,000 catch-up provision until they reach � 2004 $3,000 chat point When they reach the t}uee- 2005 $4,000 y�' � ��}' �" �' �`t'g the 2006 $5,000 more generous "pre-retirement' ca[ch- I up pmvision. Indexed in $500 increments � Note: Pamcrpanu �annor rue dx nerc� ngr �0 after 2006. catch-up Provirion during dx same xar(s) dm� � sue dx pmrtiremenr catch-uy p�nexrion. d }uawy�eutl � � u ATTACHMENT A(continued): OVERVIEW OF EGTRRA 457 LAW CHANGES Note: All provisions aze ef�ective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. �� ; � ,, �: a�,..r� r ��:: ,�„ � ,., .�; .p �� ro� � � � . �.� � � �'� :��.4,9 Ad �, 3S �� 9 d �t� `4 a �' M k,. � � s��,; "� �� „y 3,� �� . ��, �� a �,. � �� ,�, °,�� ' �� , ��°� k a �.1Y1�IOyCr L�(�.II11It1S�TSt1VC `-�" �` '"� � � ��:�qy�� ;, xs 's� _��:�n k�;."�� ;� �+ �:� � a�:.�� 's"� . '°+ " ; ,,�a -�;. � �S�{t@ �,^- �� .� , �� '', � � �� J� � ° "� �� a �;. �1}�QS�.' � � � ��e� 1�G'�lOI1S "� .� ��at��m � .�...e ��a ��`�' ��.. � a' ,"'��' �.�re �s�*3.�, a��,.,�' x �,� Contribution Provisions (cont.) Coordination Contributions to a 401(k) The coordination require- Article 5.03 Allow individuals participat- Remove any payroll system Requirements or 403(b) plan reduce ment is repealed. ing in a 457 plan to also rescrictions for employees who dollar-for-dollar the amounc The coordination require- participate fully in a section coneribute to boch a 457 plan of contribucions the ment has been eliminated 403(b) and/or seccion 401(k) and a 401(k) or 403(6) plan. participant can make to a from the ICMA-RC plan, and potentially tnake 457 plan (and vice versa). model document. the ma�cimum contribution to each plan. "Sidecar" or No provision. Allows employer to permit Article 6.13 Provision provides employers Determine whether Sidecar IRA will be "lleemed" IRAs participants to contribute to an attractive employee made available to employees. Again, �his a Traditional or Roth IRA The ICMA-RC model benefit that cou(d enhance provision will be effeccive on January 1, Note: This chat is a"Sidecar" to the document includes a the employer's abiliry to 2003. provision is 457 E�lan. C:ontributions to Sidecar IRA provision. recruit and retain qualified effecCive 1/ 1/03, if the Sidecar IRA do not However, adoption of personnel. Note: The Sidecar IRA provisions are implemented by impact the limits on 457 the model document included in the ICMA-RC 457 model plan document so that employers who the employer plan contributions. IRA does not mean the Allows participancs to make adopt the model document will be • limits apply to Sidecar IRA employer is choosing to contributions to the 457 adopting the Sidecar IRA provisions. contributions. implement a Sidecar IRA plan and an IRA in a more However, despice che Eaa chac you adopt feature. (See "Employer efficient manner (i.e., via �he Sidecar IRA provisions, if you do noc Administrative Actions" Payroll deduction to one wish to make chis feacure available to your column.) Additional provider). IRA and 457 employees, you do not have to imPlemen� information will be plan information may be chem. ICMA-RC will provide informa- provided prior to 2003 combined on one easy-to- cion during 2002 that will help you decide regarding this feature. read statement. Familiar Whecher to implemen� chis provision. funds will be available for jf rhe Sidecar provision is implemenced, investment. make necessary changu ro payroll syscems and procedures, collea Sidecar IRA contributions from paychecks, and remit �o ICMA-RC. � ATTACHMENT A(continued) : OVERVIEW OF EGTRRA 457 LAW CHANGFS Note: All provisions aze effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. �` t�� g� � .a.� '�' .� � , ' q "�,., t m ��k�� , , � �'. �e "a ,�3"� w 2�',� � ,�sa J..xa � �?�3 � �'' , � �� pray�,�� °� � � �°`� �� ' � � �� "� .; * *. � � ��'��Ti�� OS� � a � �".� �� ''� � ACC1bt1S � r � . . . � , w „ �. � .�.� � > w . �. .. ,._� ,x� _.> .�� ,.... „�vr?. � , w ..�� F x � � �� s � � . , �. . . S�a.,..`� , . .. e ..�- --� : Contribution Provisions (cont.) Tax Credit for Low- No provision. A tax credit of as much as Not Applicable. (No Provision provides an incen- No plan amendment is required. and Middle-Income $1,000 will be provided to plan amendment is tive for qualifying low- to Provide infornlacion to employ- Savers qualifying low- and required.) middle-income individuals to ees regarding the availabiliry of middle-income savers who contribute to recirement plans the credit. Note: che IRS has Note: The tax credi� is make salary reduction such as 457 plans. p released a sam le document that available from 2002 - contributions to retirement may be used for this purpose. 2006. plans such as 457 plans. Portability Provisions Rollovers Out of Amounts paid from a 457 A11ows portability of retirement Article 6.10 Expanding the rollover Approve rollover requests. assecs between (co and from) 457 Pians Into plan may not be rolled into options for individuals in Various Types of a Traditional IRA or other retirement plans (401, 403(b), The ICMA-RC model employer-sponsored retire- Provide educational ma�erials to 1'lans type of retiremenc plan. govemmental457 plansand document allows ment plans and IRA owners participancs and new hires They may only be trans- 1rad�aonal IRAs). unrestricted rollovers provides them (1) che regarding the benefits of rolling ferred to another 457 plan. out of the 457 plan into opportunity to consolidate assets between plans. ICMA- Participants may roll 457 assets to . another plan orTraditional IRA another plan or Tradi- retirement savings and (2) RC will assisc you in this regard. when chey are eligible to take a tional IRA. further incentives for distr�huaon from the 457 plan accumulating funds on a cax- • (generally upon separation from deferred basis for re�iremenc. service), and only if the distribu- cion is an "eGgible rollover distribuuon" (ERD). Rollovers Into Amouncs paid from a 401 or Allows portability of Article 6.10 and 6.12 Provision provides employers an Approve rollover requesu. 457 Plans From 403(b) plan may only be rolled retirement assets becween attractive plan feanue rhac allows Various Types of over co che same rype of plan or a (to and from) retirement The ICMA-RC model ��ment asse� consoGdadon and Provide educadonal macerials co Plans Tradicional IRA. plans (401, 403(b), document allows rollovers ��d enhance the employer's abiliry co parricipants and new hires reganiing che overnmenta1457 lans into the 457 lan from all ��'� ar'd retain qualified personnel. benefies of rolling assecs inco a 457 plan. Amoun�s may not be rolled over g P p ICMA-RC will assut you in this regard. from a 1�adicional IRA (o�her and Traditional IRAs). plan rypes and Traditional ��owing rollovers into a plan chan a"conduit" IRA) ro any rype I�• wuld hdp of�set rollovers out thus ICMA-RC will handle the majority oF of employer plan. benefiting the plan from an economic che administrauon associated wirh persrpective. rollove�s into your 457 plan. I �1 � ATTACHMENT A(continued) : OVERVIEW OF EGTRRA 457 LAW CHANGES Note: All provisions are effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. w r.., : � ,� � � ffa ; , _ „-� �� ° �,- �r -a�,� �� :, �� `�sf a . ' ,' �`�� ` ,�,r ` � �O� �1LS�t'SLIYC � s;�� , . �^ �> � �u� $ ,� �� °� d �. � � ��Q� R �°� �� C��`'`tr `�"^"r��t . . . a,� S � , � a � � � . a . a �� .. ..,�x ,`� ,� �3"�n , RA.h s;'�,-�,°ta.�"'3 �k � :� �c�, e *, 6 ti� � �" ±�c�� , . ,.� :�., 3.,. , �a , ��t '�.� � .. - _ ' a .�° � � Portability Provisions (cont.) Purchase of Amounts under 457 plans �lows participants to Article 6.11 Many employees work for Determine whether defined Service Credits in cannoc be transferred or transfer 457 assets, on a multiple scace or local govern- benefit pension plan permics the Governrnental used to purchase service pre-tax basis, to purchase The ICMA-RC model ment employers during their use of 457 assets to purchase Defined Benefic uedits under defined service credits in a document allows careers. Gives parcicipan�s che service credics or the repaymenc � defined benefit ension artici ants to transfer flexibility to use all or a por�ion o f a prior refund of employee 1 lans benefit pension plans. P P P plan or to repay the assets to a defined benefit of their 457 account balances to contributions. Approve increase their benefit under �heir artici ant cransfer re uests. defined benefit pension Plan as long as the defined benefic pension plan. P p `� plan a prior refund of defined benefit plan will employee contribu�ions. accept the vansfer. Availabilin� of dlis featurr ma�� ICMA-RC will provide mareri- encourage employees �o cuntrib- als to accomplish these transfzr�. ure more co cheir 457 plans. Nore: the receiving defined benefit pension plan �locument or appropria�e authorizing statute may reyuire amendmen� to accept transfers from 457 plans before such a transfer can be made. v � L'xpansion of Unlike surviving spouscs of Allows surviving spouses to Article 6.IU F�xpandcd rollovcr options Approve initial distribution Spousal 401 plan participancs, roll over distributions from places the surviving spouse on requests. In order to ensure that Rollovers surviving spouses of de- the plan in which the The ICMA-RC model a par with the particip discributions are made only co ceased 457 plan participants deceased spouse partici document allows surviv surviving spouses who are eligible may not roll distributions pated to a 40l , 403(6) or ing spouses the same for disbursement, 1CMA-RC will into any othcr retirement 457 plan in which the flexibility as participancs continue to request thac employers approve initial distribution plan ar IRA. surviving spouse partici- with respect to rollovers. tequests from the surviving spouse. pates. Distributions may also be rolled into a However, co minimize employer Traditional IRA. administration, [CNIA-RC will not request employer approvals of subsequenc distribution requests � from surviving �pouses. � C� u ATTACHMENT A(continued): OVERVIEW OF EGTRRA 457 LAW CHANGES Note: All provisions are effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. .?. �a �. � �„� s r �: ' m�, a � 2 ` ' � � � O � � ��IS�d�V� j� Y } ,� .. y t a S� . �,. i SL . -j�.. �y{. 'r . + r 7 �',�,.� �Ka��','�a��st � ��o�.� � �a,.."�` 4 ,��, � � $ `� s: �� ,.k �, °r f��..� ri� � . y �, ,"�. ,�.,�, s .. �r��-�� , �'.� , ��'��„"'o' �� r�, „ r �s 13J1TC d�(� � �r�'z�� : r ��i� � �� u`n � ° a, . .a` � „�.� ., �. .. {, ,� .. z,, � <� tR r , a'� �at��tQ� „ z � X-. R =` �� N «°' .d� t >w�;-?' � °. �.�p r:5; � �''°„��., �, �r":m, '� J�x.=.. � r �`.:� � � �"' '��' `" °�. �':�.�_,,, � �,� + �*�� Distribution Provisions More Flexible 457 plan assets are �aacable The "made available" rules Articles 7.01 and 7.02 The rules for timing of Provide educational macerial co 4�7 Dis�ribucion when paid or "made no longer apply to 457 taxation of benefits are plan participants abouc che taY Rules available" to the participant. plans. It is hoped that The ICMA-RC model conformed to the rules for implications of distribucions from 457 distribution rules are regulations will be issued document allows participants 401 plans, appearing to give the 457 plan. Notify exiscing restrictive. For example, by the U.S. Department of tocal �lexibiliry with respecr to 457 participants the same recirees of che availabiliry of che participants must elect a Treasury by the end of the naming or revising payment level of flexibiliry in planning new flexibiliry. ICMA-RC will beginning payment date year that will provide da�es and schedules. the timing and amount ot provide assistance in chis regard. within a limited period after guidance on how much The 60-day and "substantially distribucions as 401 partici- leaving employment. In additional flexibiliry this nonincreasing amounts�� pants currently enjoy. It Approve initial distribucion addition, once discributions law change will provide to provisions have been eliini- appears thac beginning reques�s. begin, payment schedules 457 participants. However, nated. payment date elections and may not be changed. it appears that 457 plan payment schedules will no In order to ensure thac distribu- participanes will have the ICMA-RC will respect existing longer be irrevocable. tions are made only to parcicipancs Distributions must generally same flexibiliry as partici- beginning payment dates for who are eligible for disbursemenc, be made at least annually in pants under other plans participants that named their This provision negates the ICMA-RC will con�inue co requesc "substantially nonincreasing such as 401(k) plans. This date prior to January 1, 2002, need for participants to selecc chat employers approve initiai amounts." means parcicipants would or that have been defaulted to a beginning payment date distribution requests from • be able to stop and restart an age-65 payment date under within 60 days of separation terminated participants. For che � their payments as well as to the old law. However, these from service. In fact, it is same reason, employer signatures increase and decrease them. participants will be able to ICMA-RCs interpretation will continue to be requested for all modify their dates or sched- �hat such restrictions are no in-service requests [i.e. emergenry ules. longer acceptable. withdrawal and inactive ("small balance account" or "de minimis") Participants who do not choose account distribucions] as well. a specific payment schedule will be deFaulted to a payment However, co minimize employer schedule of $100 per year, until adminiscration, ICIvi;1-RC will noc age 70 1/2, at which time the require emp(oyer approvals of Minimum Required Disttibu- subsequent distribution requests tion rules will be followed. from cerminared employees. �� ATTACHMENT A(continued) : OVERVIEW OF EGTRRA 457 LAW CHANGFS Note: All provisions aze effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. �� , p, � �. '� �a�.�� ' . � � ��'�"" w�, s � �� '�� '` � ` � �'�� . �� ; .,; " *�'� �. �€�, a. �. � �, ' ' , , '?t�� ; �.. .•: Distribution Provisions (cont.) Simplification of 457 plans are subject to The additional distribution Articles 7.02 and 7.03 457 participants can now revise their See More Flexible Discri- 457 Discribution various distribution rules rules that apply to 457 plans payment schedules co meec their bucion Rules above. Requirements regarding when and how are eliminated, including the See More Flexible changing needs (see also benefits must be paid, in "substantially Distribution Rules above. More Flexible Distribution Rules addition to the standard nonincreasing" rule. above). minimum distribution rules (see Revision of Minimum 457 plans are now subject to the same Distribution Rules below). minimum distribution rules applica- Distributions must generally ble to 401 plans (see Revision of be made at least annually, in Minimum Distribution Rules below). "substantially nonincreasing This places 457 participants on a par amounts. with 401 participants. Revision of 457 plan participants must The Treasury is direcced to Articles 7.04 and 7.05 The distributions a participant None anticipated. Minimum Distri- begin distributing benefits revise the life expectanry is required to take after bution Rules no later than April 1 of the tables used to determine ICMA-RC will use the reaching age 70 1/2 will be calendar year following the minimum required distribu- new life expectanry table reduced in most cases, more year in which the participant tions to reflect current life for Minimum Distribu- accurately reflecting increased retires or reaches age 70t/2. expectancies. tions made after the release life expectancies. dates of the new tables. ICMA-RC has also revised its beneficiary payment rules in accordance with proposed Minimum Required Distribucion regulations currently pending. � !d u ATTACHMENT A(continued): OVERVIEW OF EGTRRA 457 LAW CHANGFS Note: All provisions aze effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative tasks associated with the law changes. Our Employer Services Unit is available at 1-800-326-7272 to answer your questions. ,. . , . , ; � : � � � ,�, ` �� nistratii � � t � r � � � �� " _ � ',�� €� § s �� '� *"�� , � ,• �. � : �, � " < <.� � � '�`�� s� �' � � ��+ ��. �� , :.. � � � � e..,��.. ..� �r � ��. ar, , y� ��.� � �> , . Distribution Provisions (cont.) Withholding and In general, distributions 457 distributions will be Not applicable. (No plan Tax reporting and withhold- No employer action antici- Reporting of 457 from 457 plans are treated subject to the same withhold- amendment required.) ing for all recirement plans paced. ICMA-RC will obtain Distributions as W-2 wages and reported ing and reporting rules to will be consistent. Due co appropriate tax withholding as such. which 401 plans are subject. the portabiliry provisions of inscructions from partici- Distributions will be reported the new law, this will alleviate pants, and make the necessary Participants specify with- on a 1099-R instead of a W-2. the confusion that might changes to ics annual ca�c E(igible rollover distributions holding instructions on a that are not rolled over will be have existed For employers, reporting syscems. Form W-4. subject to mandatory 20 participants, and administra- percent income tax wichhold- tors if the rules were different ing and withholding on non- for different plans. eligible rollover distributions will be done as directed by the participant on a Form W-4P. Division of 457 Current law does not address The iules which currently Article 9.02 Places participants and if applicable, modify model Benefits Upon che tax treatment of distribu- apply to 401 plan Qualified "alternate payees" of both Domestic Relations Order Divorce tions made pursuant to a Domestic Relations Orders ICMA-RC will follow the 401 and 457 plans on a level language and other materials Domestic Relations Order (QDROs) will apply to 457 new rules for domestic playing field in divorce to reflect the new law. (DRO); i.e. how benefits DROs. This will allow ,.p�„ �,ap,.� ;��„pa „� �,�.,,,�,,,,,� � � -- y �uawy�e;;y �1 u ATTACHMENT A(continued): OVERVIEW OF EGTRRA 457 LAW CHANGES � Note: All provisions are effective January 1, 2002, unless otherwise noted. As your 457 deferred compensation plan provider, ICMA-RC will take care of most additional administrative casks associated with the law changes. Our Employer Services Unit is available at 1-800'326-7272 to answer your questions. �' � "" �' � ,r °t t�r.� e "`- `•s � i ,.�,��'�� tt'� 7� '��:�* Is ^h d � a - '. e, e �,s ".� ��"a�, €�'�^ ��,�. y''�""�.� : . ��`;�°' �'� s.`�, .� ��. 4� k �� .�""^��I�� t11IS�UY4: �, �. ��,x s � `��`* � y .w -d° � x �e r �,. y s '.. y '�"i�t �, ,�», » fy . � 5 � .°; �'",r � , K ` 1 �""�,�#� 5��y�. +�F�3,�,° . . ..s, �� a r , 3 � ` � �.. � ^ � _ ' �° . , s �,� +a .°r `` . � . O�(' � " S �"� s z�OII$ � + . 4 , , # ✓=r �. s��*e�� '",> � , �� .; � � � ,�.�,. �.. �" �,��. a�t� "'�� ;�'�.., ��F °`."�:, _ . .. .., .,_:.. � . k F 7 , . , w h . . a. . .. _ . ,.; .1 � E � v `xi X' Y � -. t �: w. s . , � � . .. .. _2"c, -. . -, Distribution Provisions (cont.) Aucomatic Rollover 457 plans may automatically cash Plans providing for mandatory Article 7.07 Requiring mandatory cashouts of None anticipa�ed. of Mandatory De out parcicipants with account cashouts will be required to small accoun�s benetits your Minimis llistribu- balances of $5,000 or less, as long transfer such discributions to The ICMA-RC model documenc plan's economics. cions as �he accounc has been inactive an IRA or other recirement provides For mandatory cash outs for 2 years. vehicie, unless the participanc of accounts of less than $1,000. Note: Effective upon affirmatively elects otherwise. Accounts between $1,000 and issuance of regula- The plan is not required ro roll Applies only to discributions $5,000 will remain in the plan tions, which are over such amoun�s to anocher between $],000 and $5,000. uncil the parcicipanc reques,s a required ro be issued recirement savings vehicfe. discribution. No auromatic no la�er than 617/04. Written notice must be rollover ro an IRt1 will be provided to the participant required. Note: [t still musc be regarding this requirement, as definicely determined well as notification thac the ICMA-RC will proactively notify whether this distribution may be transferred participants with small balances provision applies ro governmental 457 without cost to another IRA. of their withdrawal options. pians. Rollovers Disre- 457 plans may automatically cash Rollovers may be disregarded Article 7.07 None ancicipared. garded for Purposes out participants with account in determining whether the of Small Balance balances of $5,000 or less, as long $5,000 limit is exceeded. ICMA-RC will not disregard ("De Minimis") as the account has been inactive rollovers - the entire account Accounts for 2 years. All amounts, balance will be taken into including rollins are taken into consideration in determining account in determining che whether an accounc is de minimis. $5,000 limit. Kelaxacion of An employee who transfers The "same desk rule" is Ar�icle 2.20 Participancs �hat cease working . None ancicipated. "Same Desk Rule" employmenc ro another eliminated for 457 plans. for the employer cha� maintains employer but continues to work The requirement for The ICMA-RC model the 457 plan, even iEthey begin a� the same job (e.g., an distribution becomes document allows dis�ributions working for a separa�e, although independent governmencal "severance from employ- co be made upon "severance perhaps relaced employer may agenry is absorbed by a ment" rather than "separation from employment". take a discribution from their 4�7 Counry) is not considered ro from service". accounc as long as cheir account have "separated from service" is noc cransferred co a successor and therefore is not eligible for 457 plan. a distribution from a 457 plan. • t� • • Defe�d Com ensation p �, PLAN & TRUST DOCUMErTT ICMA RETIREMENT CORPORATION The public service Vantagepoint� since 1972 �� ,�� • DEFERRED COMPENSATION PLAN & TRUST As Amended and Restated Effective January 1, 2001 Article I. Purpose The Employer hereby establishes the Employer's Deferred Compensation Plan and Trust, hereafter referred to as the "Plan." The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employ- ees of the Employer and the Employees' Beneficiaries in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan shall be an agreement solely between the Employer and participating Employees. The Plan and Trust forming a part hereof are established and shall be maintained for the exclusive benefit of Participants and their Beneficiazies. No part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposes other than the exclusive benefit of Participants and their Beneficiaxies. Article II. Definitions 2.01 Accoun� The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Participant s Deferred Compensation, including any income, gains, losses, or increases or decreases in market value attributable to the Employer's investment of the Pazticipant's Deferred Compensation, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expenses charged against such Participant's Deferred Compensation. 2.02 Accounting Date: Each business day that the New York Stock Exchange is open for trading, as pro- vided in Section 6.06 for valuing the Trust's assets. 2.03 Administrator. The person or persons named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Admin- istrator. 2.0% Automatic Distrilbution Date: Prior to January 1, 2002, "Automatic Distribution Date" means the 60th day of the calendax year after the Plan Year of the Participant s Retirement or any other date permitted under the regulations promulgated under Code section 457. On and after January 1, 2002, "Automatic Distribution Date" means April 1 of the calendar year after the Plan Year the Participant attains age 70-1/2 or, if later, has a Severance Event. 2.05 Beneficiazy: The person or persons designated by the Participant in his or her Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entided to equal shazes of the benefits payable at the Participant's death, unless otherwise provided in the Participant s Joinder Agreement. If no beneficiary is designated in the Joinder Agreements if the Designated Beneficiary predeceases the Participant, or if the designated Beneficiary does not survive the Participant for a period of fifteen (15) days, then the C �� ' • • estate of the Participant shall be the Beneficiary. If a married Participant resides in a community or marital property state, the Participant shall be responsible for obtaining appropriate consent of his or her spouse in the event the Participant designates someone other than his or her spouse as Beneficiary. 2.06 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Partici- pant's Account by reason of a transfer under Section 6.09, a rollover under Section 6.10, or any other amount which the Employer agrees to credit to a Participant's Account. 2.07 Dollar Limitation: The applicable dollar amount within the meaning of Section 457(b)(2)(A) of the Code, as adjusted for the cost-of-living in accordance with Section 457(e)(15) of the Code. 2.08 Employee: Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, and who has been designated by the Employer as eligible to participate in the Plan. 2.09 Employer: , which is a political subdivision, agenry or instrumentality of the [State/Commonwealth] of , within the meaning of Section 414(d) of the Code and Section 3(32) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). 2.10 457 Catch-Up Dollar Limitation: Prior to January 1, 2002, "457 Catch-Up Dollar Limitation" means $15,000. On and after January 1, 2002, "457 Catch-Up Dollar Limitation" means twice the Dollar Limitation. 2.11 Includible Compensation The amount of an Employee's compensation from the Employer for a. taxable year that is attributable to services performed for the Employer and that is includible in the Employ- ee's gross income for the taxable year for federal income tax purposes as defined in Section 457(e)(5) of the Code; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income tax purposes. Includible Compensation shall be determined without regard to any community property laws. 2.12 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a preference among the investment alternatives designated by the Employer, designate the Employee's Beneficiary or Beneficiaries, and incorporate the terms, conditions, and provisions of the Plan by reference. 2.13 Normal Compensation: The amount of Compensation which would be payable to a Participant by the Employer for a taxable year if no Joinder Agreement were in effect to defer compensation under this Plan. 2.14 Normal Limitation: The maximum amount of Deferred Compensation for any Participant for any taxable year (other than amounts referred to in Sections 6.09 and 6.10). 2.15 Normal Retirement A.ge: Age 70-1/2, unless the Participant has elected an alternate Normal Retire- ment Age by written instrument delivered to the Administrator prior to a Severance Event. A Participant s C �Q� � i � Normal Retirement Age determines the period during which a Participant may utilize the 457 Catch-Up Dollar Limitation of Section 5.02(b) hereunder. Once a Participant has to any extent utilized the catch-up limitation of Section 5.02(b), his Normal Retirement Age may not be changed. A Participant's alternate Normal Retirement Age may not be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits under the Employer's basic retire- ment plan covering the Participant and may not be later than the date the Participant will attain age 70-1/2. If a Participant continues employment after attaining age 70-1/2, not having previously elected alternate Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by the Employer, or the age at which the Participant actually has a Severance Event if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan maintained by the Employer, the Participant's alternate Normal Retirement Age may not be earlier than age 55 and may not be later than age 70-1/2. 2.16 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article N 2.17 Percentage Limitation: Prior to January 1, 2002, the Percentage Limitation means 33 1/3 percent of the participant s Includible Compensation for the taxable year, which will ordinazily be equivalent to the lesser of the Dollar Limitation in effect for the ta�cable year or 25 percent of the Participant s Normal Com- pensation. After December 31, 2001, the Percentage Limitation means 100 percent of the participant s Includible Compensation for the taxable year, which will ordinarily be equivalent to the lesser of the Dollar Limitation in effect for the taxable year or 50 percent of the Participant's Normal Compensation. 2.18 Plan Year: The calendar year. 2.19 Retiremen� The first date upon which both of the following shall have occurred with respect to a participant: Severance Event and attainment of age 65. 2.20 Severance Event Prior to January 1, 2002, severance of the Participant's employment with the Em- ployer that constitutes a"separation from service" within the meaning of Section 402(e)(4)(D)(iii) of the Code. After December 31, 2001, a Severance Event means a severance of the Participant s employment with the Employer within the meaning of Section 457(d)(1)(A)(ii) of the Code. In general, a Participant shall be deemed to have experienced a Severance Event for purposes of this Plan when, in accordance with the established practices of the Employer, the employment relationship is consid- ered to have actually terminated. In the case of a Participant who is an independent contractor of the Em- ployer, a Severance Event shall be deemed to have occurred when the Participant's contract under which services are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Participant's services, and it is not anticipated that the Participant will become an Employee of the Employer, or such other events as may be permitted under the Code. 2.21 Trust The Trust created under Article VI of the Plan which shall consist of all compensation deferred under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries. C �� Article III. Administration 3.01 Duties of the Employer: The Employer shall have the authority to make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan. The Employer's decisions shall be afforded the maximum deference permitted by applicable law 3.02 Duties of Administrator: The Administrator, as agent for the Employer, shall perform nondiscretionary administrative functions in connection with the Plan, including the maintenance of Par- ticipants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. Article N Participation in the Plan 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned, or such other date as may be permitted under the Code. 4.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of Normal Compensation not yet earned which is to be deferred (including the reduc- tion of such future deferrals to zero). Such amendment shall become effective as of the beginning of the calendar month commencing after the date the amendment is executed, or such other date as may be per- mitted under the Code. A Participant may at any time amend his or her Joinder Agreement to change the designated Beneficiary, and such amendment shall become effective immediately. Article V Limitations on Deferrals 5.01 Normal Limitation: Except as provided in Section 5.02, the maximum amount of Deferred Com- pensation for any Participant for any taxable year, shall not exceed the lesser of the Dollar Limitation or the Percentage I�imitation. 5.02 Caxch-Up Limitations: (a) • Catch-up Contributions for Participants Age 50 and Over: A Participant who has attained the age of 50 before the close of the Plan Year, and with respect to whom no other elective deferrals may be made to the Plan for the Plan Year by reason of the Normal Limitation of Section 5.01, may enter into a Joinder Agreement to make elective deferrals in addition to those permitted by the Normal Limitation in an amount not to exceed the lesser of (1) the applicable dollar amount as defined in Section 414(v)(2)(B) of the Code, as adjusted for the cost-of-living in accordance with Section 414(v)(2)(C) of the Code, or (2) the excess (if any) of (i) the Participant s compen- sation (as defined in Section 415(c)(3) of the Code) for the year, over (ii) any other elective deferrals of the Participant for such year which are made without regard to this Section 5.02(a). An additional contribution made pursuant to this Section 5.02(a) shall not, with respect to the year in which the contribution is made, be subject to any otherwise applicable limitation con- tained in Section S.O1 above, or be taken into account in applying such limitation to other contributions or benefits under the Plan or any other plan. This Section 5.02(a) shall not apply in any year to which Section 5.02(b) applies. The provisions of this Section 5.02(a) of the Plan . shall only apply on and after January 1, 2002. � �$j • • • �:; �w_ (b) Last Three Years Catch-up Contribution: For each of the last three (3) taxable years for a Partici- pant ending before his or her attainment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of: (1) the 457 Catch-Up Dollar Limitation, or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Partici- pant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if (x) the Participant was eligible to participate in the Plan for such year (or in any other eligible deferred compensation plan established under Section 457(b) of the Code which is properly taken into account pursuant to regulations under Section 457), and (y) compensation (if any) deferred under the Plan (or such other plan) was subject to the Normal Limitation. 5.03 Other Plans: Notwithstanding any provision of the Plan to the contrary, the amount excludible from a Participant's gross income under this Plan or any other eligible deferred compensation plan under Section 457(b) of the Code shall not exceed the limits set forth in Sections 457(b) and 414(v) of the Code. Prior to January 1, 2002, the limits under Section 457(b) of the Code described in the first sentence of this Section 5.03 shall be further reduced by any amount excluded from gross income under Sections 401(k), 402(e)(3), 402(h)(1)(B), and 403(b) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in Section 501(c) (18) of the Code. Article VI. Trust and Investment of Accounts 6.01 Investment of Deferred Compensation: A Trust is hereby created to hold all the assets of the Plan for the exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person that agrees to act in that capacity hereunder. 6.02 Investment Powers: The trustee or the Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, except to the extent that the invest- ment of Trust assets is directed by Participants, pursuant to Section 6.05. (a) To invest and reinvest the Trust without distinction between principal and income in common or preferred stocks, shares of regulated investment companies and other mutual funds, bonds, loans, notes, debentures, certificates of deposit, contracts with insurance companies including but not limited to insurance, individual or group annuiry, deposit administration, guaranteed interest contracts, and deposits at reasonablexates of interest at banking institutions including but not limited to savings accounts and certificates of deposit. Assets of the Trust may be invested in securities that involve a higher degree of risk than investments that have demonstrated their investment performance over an extended period of time. � �', ��., (b) To invest and reinvest all or any part of the assets of the Trust in any common, collective or commingled trust fund that is maintained by a bank or other institution and that is available to Employee plans described under Sections 457 or 401 of the Code, or any successor provisions thereto, and during the period of time that an investment through any such medium shall exist, to the extent of participation of the Plans the declaration of trust of such commonly collective, or commingled trust fund shall constitute a part of this Plan. � �`�� • • (c) To invest and reinvest all or any part of the assets of the Trust in any group annuity, deposit administration or guaranteed interest contract issued by an insurance company or other financial institution on a commingled or collective basis with the assets of any other 457 plan or trust qualified under Section 401(a) of the Code or any other plan described in Section 401(a) (24) of the Code, and such contract may be held or issued in the name of the Administrator, or such custodian as the Administrator may appoint, as agent and nominee for the Employer. During the period that an investment through any such contract shall exist, to the extent of participation of the Plan, the terms and conditions of such contract shall constitute a part of the Plan. (d) To hold cash awaiting investment and to keep such portion of the Trust in cash or cash balances, without liability for interest, in such amounts as may from time to time be deemed to be reason- able and necessary to meet obligations under the Plan or otherwise to be in the best interests of the Plan. (e) To hold, to authorize the holding of, and to register any investment to the Trust in the name of the Plan, the Employer, or any nominee or agent of any of the foregoing, including the Adminis- trator, or in bearer form, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by any other person, and to organize corporations or trusts under the laws of any jurisdiction for the purpose of acquiring or holding title to any property for the Trust, all with or without the addition of words or other action to indicate that property is held in a fiduciary or representative capacity but the books and records of the Plan shall at all times show that all such investments are part of the Trust. (f) Upon such terms as may be deemed advisable by the Employer or the Administrator, as the case I may be, for the protection of the interests of the Plan or for the preservation of the value of an investment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation owing to the Plan, to �- settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plans to exercise and enforce any and all rights of foreclosure, bid for property in foreelosure, and take a deed in lieu of foreclosure with or without paying consideration therefor, to commence or defend suits or other legal proceedings whenever any interest of the Plan requires it, and to represent the Plan in all suits or legal proceedings in any court of law or equity or before any body or tribunal. (g� To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. (h) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Administrator, in any bank or banks. (i) To do any and all other acts that may be deemed necessary to carry out any of the powers set forth herein. C2°7 v �: � • 6.03 Taa�es and Expenses: All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon the Plan, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of investment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Administrator, as may be agreed upon from time to time by the Employer and the Administrator, and reimbursement for reasonable expenses incurred by the Administrator in performance of its duties hereunder (including but not limited to fees for legal, accounting, investment and custodial services) shall also be paid from the Trust. 6.04 Payment of Benefits: The payment of benefits from the Trust in accordance with the terms of the Plan may be made by the Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. The Administrator, custodian or other person shall not be liable with respect to any distribution of Trust assets made at the direction of the Employer. 6.05 Investment Funds: In accordance with uniform and nondiscriminatory rules established by the Employer and the Administrator, the Participant may direct his or her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment direc- tions shall not violate any investment restrictions established by the Employer. Neither the Employer, the Administrator, nor any other person shall be liable for any losses incurred by virtue of following such direc- tions or with any reasonable administrative delay in implementing such directions. 6.06 Valuation of Accounts: As of each Accounting Date, the Plan assets held in each investment fund offered shall be valued at fair market value and the investment income and gains or losses for each fund shall be determined. Such investment income and gains or losses shall be allocated proportionately among all Account balances on a fund-by-fund basis. The allocation shall be in the proportion that each such Account balance as of the immediately preceding Accounting Date bears to the total of all such Account balances as of that Accounting Date. For purposes of this Article, all Account balances include the Account balances of all Participants and Beneficiaries. 6.07 Participant Loan Accounts: Participant Loan Accounts shall be invested in accordance with Section 8.03 of the Plan. Such Accounts shall not share in any investment income and gains or losses of the invest- ment funds described in Sections 6.05 and 6.06. 6.08 Crediting of Accounts: The Participant's Account shall reflect the amounc and value of the invest- ments or other property obtained by the Employer through the investment of the Participant s Deferred Compensation pursuant to Sections 6.05 and 6.06. It is anticipated that the Employer's investments with respect to a Participant will conform to the investment preference specified in the Participant s Joinder Agreement, but nothing herein shall be construea to require the Employer to make any particular invest- ment of a Participant's Deferred Compensation. Each Participant shall receive periodic reports, not less frequently than annually, showing the then current value of his or her Account. 6.09 Transfers: � (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and credited to a Paxticipant's Account under the Plan if (i) the Participant has had a Severance Event with that employer and become an Employee of the Employer, and (ii) the other employer's plan provides that such transfer will be made. The Employer may require such documentation from the predecessor plan as it deems necessary to effectuate the transfer in accordance with Section 457(e)(10) of the Code, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457(b) of the C ��> � • Code, and to assure that transfers are provided for under such plan. The Employer may refuse to accept a transfer in the form of assets other than cash, unless the Employer and the Administra- tor agree to hold such other assets under the Plan. Any such transferred amount shall not be treated as a deferral subject to the limitations of Article V, except that, for purposes of applying the limitations of Sections 5.01 and 5.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been deferred under this Plan during such taxable year and compensation paid by the transferor employer shall be treated as if it had been paid by the Employer. (b) Outgoing Transfers: An amount may be transferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (i) the Participant has a Severance Event with the Employer and becomes an employee of the other employer, (ii) the other employer's plan provides that such transfer will be accepted, and (iii) the Participant and the employers have signed such agreements as are necessary to assure that the Employer's liability to pay benefits to the Participant has been discharged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457(b) of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circumstances as are permit- ted under Section 457 of the Code and the regulations thereunder. 6.10 Eligible Rollover Distributions: (a) Effective Date: This Section 6.10 is effective January 1, 2002. (b) Incoming Rollovers: An eligible rollover distribution may be accepted from an eligible retire- ment plan maintained by another employer and credited to a Participant's Account under the Plan. The Employer may require such documentation from the distributing plan as it deems necessary to effectuate the rollover in accordance with Section 402 of the Code and to confirm that such plan is an eligible retirement plan within the meaning of Section 402(c)(8)(B) of the _. Code. The Plan shall separately account for eligible rollover distributions from any eligible retirement plan that is not an eligible deferred compensation plan described in Section 457(b) of the Code maintained by an eligible governmental employer described in Section 457(e)(1)(A) of Code. (c) Outgoing Rollovers: Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Administrator, to have any portion o� an eligible rollover distri- bution paid directly to an eligible retirement plan specified by the distributee in a direct rollover. (d) Definitions: (1) Eligible Rollover Distribution: An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include: any distribution that is one of a series of sub- stantially equal periodic payments (not less frequently than annually) made for the life (or life expectanry) of the distributee or the joint lives (or joint life expectancies) of the �z$� � • distributee and the distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Sec- tions 401(a)(9) and 457(d)(2) of the Code; and any distribution made as a result of an unforeseeable emergency of the employee. For purposes of distributions from other eligible retirement plans rolled over into this Plan, the term eligible rollover distribu- tion shall not include the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (2) Eligible Retirement Plan: An eligible retirement plan is an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuiry plan described in Sections 403(a) or 403(b) of the Code, a qualified trust described in Section 401(a) of the Code, or an eligible deferred compensation plan described in Section 457(b) of the Code which is maintained by an eligible governmental employer described in Section 457(e)(1)(A) of the Code, that accepts the distributee's eligible rollover distribution. (3) Distributee: A distributee includes an employee or former employee. In addition, the employee's or former employee's surviving spouse and the employee's or former em- ployee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, are distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover: A direct rollover is a payment by the plan to the eligible retiremenc plan specified by the distributee. 6.11 Trustee-to-Trustee Transfers to Purchase Permissive Service Credit: All or a portion of a Partici- pant s Account may be transferred directly to the trustee of a defined benefit governmental plan (as defined in Section 414(d) of the Code) if such transfer is (A) for the purchase of permissive service credit (as defined in Section 415 (n) (3) (A) of the Code) under such plan, or (B) a repayment to which Section 415 of the Code does not apply by reason of subsection (k)(3) thereof, within the meaning of Section 457(e)(17) of the Code. 6.12 Treatment of Distributions of Amounts Previously Rolled Over From 401(a) and 403(b) Plans and IRAs. For purposes of Section 72(t) of the Code, a distribution from this Plan shall be treated as a distribution from a qualified retirement plan described in Section 4974(c)(1) of the Code to the extent that such distribution is attributable to an amount transferred to an eligible deferred compensation plan from a qualified retirement plan (as defined in Section 4974(c) of the Code). 6.13 Deemed IRAs: Effective for Plan Years beginning after December 31, 2002, the Employer may elect to allow Employees to make voluntary employee contributions to a separate account or annuity established under the Plan that complies with the requirements of Code section 408(q) and any regulations promul- gated thereunder. Such accounts or annuities sha11 meet the applicable requirements of Code sections 408 or 408A and shall be treated as an individual retirement plan that is not part of the Plan. 6.14 Employer Liability: In no event shall the Employer's liabiliry to pay benefits to a Participant under this Plan exceed the value of the amounts credited to. the Participant's Account; neither the Employer nor the Administrator shall be liable for losses arising from depreciation or shrinkage in the value of any invest- ments acquired under this Plan. �2�5� • Article VII. Benefits 7.01 Retirement Benefits and Election on Severance Event: . (a) General Rule: Except as otherwise provided in this Article VII, the distribution of a Participant s Account shall commence as of a Participant's Automatic Distribution Date, and the distribution of such benefits shall be made in accordance with one of the payment options described in Section 7.02. Notwithstanding the foregoing, but subject to the following paragraphs of this Section 7.01, the Participant may elect following a Severance Event to have the distribution of benefits commence on a fixed determinable date other than that described in the preceding sentence, but not later than April 1 of the year following the year of the Participant s Retirement or attainment of age 70-1/2, whichever is later. Prior to January 1, 2002, an election made pursuant to the preceding sentence shall not be valid unless such election is made not less than 30 days prior to the date that the distribution of a Participant s Account would otherwise com- mence. (b) Additional Delay in Distribution: Prior to January 1, 2002, the Participant may elect to defer the commencement of distribution of benefits to a fixed determinable date later than the date provided in Section 7.01(a), but not later than April 1 of the year following the year of the Participant's retirement or attainment of age 70 1/2, whichever is later, provided, however, that (a) such election is made after the 61 st day following the Participant's Severance Event and before commencement of distributions, (b) the Participant may make only one (1) such election, and (c) such election is made not less than 30 days prior to the date the distribution of a Participant's Account would otherwise commence. On or after January 1, 2002, the Participant's right to change his or her election with respect to commencement of the distribution of benefits shall not be restrained by this Section 7.01. Notwithstanding the foregoing, the Administrator, in order to ensure the orderly administration of this provision, may establish a deadline after which such election to defer the commencement of distribution of benefits shall not be allowed. (c) Loans: Notwithstanding the foregoing provisions of this Section 7.01, no election to defer the commencement of benefits after a Severance Event shall operate to defer the distribution of any amount�in the Participant's Loan Account in the event of a default of the Participant's loan. 7.02 Payment Options: As provided in Sections 7.01, 7.04 and 7.05, a Participant may elect to have value of the Participant s Account distributed in accordance with one of the following payment options, provided thar such option is consistent with the limitations set forth in Section 7.03. (a) Equal monthly, quarterly, semi-annual or annual payments in an amount chosen by the Partici- pant, continuing until his or her Account is exhausted; (b) One lump-sum payment; (c) Approximately equal monthly, quarterly, semi-annual or annual payments, calculated to con- tinue for a period certain chosen by the Participant. (d) Annual Payments equal to the minimum distributions required under Section 401(a)(9) of the Code, including the incidental death benefit requirements of Section 401(a)(9)(G), over the life expectancy of the Participant or over the life expectancies of the Participant and his or her Beneficiary. C �� . s (e) Payments equal to payments made by the issuer of a retirement annuity poliry acquired by the Employer. (f) A split distribution under which payments under options (a), (b), (c) or (e) commence or are made at the same time, as elected by the Participant under Section 7.01, provided that all payments commence (or are made) by the latest benefit commencement date under Section 7.01. (g) Any other payment option elected by the Participant and agreed to by the Employer and Ad- ministrator. A Participant's selection of a payment option made after December 31, 1995, under Subsections (a), (c), or (� above may include the selection of an automatic annual cost-of-living increase. Such increase will be based on the rise in the Consumer Price Index for All Urban Consumers (CPI-U) from the third quarter of the last year in which a cost-of-living increase was provided to the third quarter of the current year. Any increase will be made in periodic payment checks beginning the following January. If, prior to January l, 2002, a Participant made a timely election of a payment date but failed to specify a payment option or failed to make a timely election of both payment date and option, and as a result, was defaulted to benefit commencement at age 65, or such other date as the Participant may have specified, benefits shall be paid annually in the amount of $100 per year commencing at age 65 or the date specified by thc Participant until the Participant reaches age 70-1/2. When the Participant reaches age 70-1/2, payments shall be made in accordance with Code section 401(a)(9) and the regulations thereunder. 7.03 L'unitation on Options: No payment option may be selected by a Participant under subsections 7.02(a) or (c) unless the amount of any installment is not less than $100. No payment option may be selected by a Participant under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of Sections 401(a)(9) and 457(d)(2) of the Code, including that payments commencing before the death of the Partici- pant shall satisfy the incidental deazh benefit requirements under Section 401(a)(9)(G). 7.04 Post-Retirement Death Benefits: (a) Should the Participant die after he/she has begun to receive benefits under a payment option, the remaining payments, if any, under the payment option shall continue until the Administrator receives notice of the Participant's death. Upon notification of the Participant's death, benefits shall be payable to the Participant's Beneficiary commencing not later than December 31 of the year following the year of the Participant's death, provided that the Beneficiary may elect to begin benefits earlier than that date. (b) If the Beneficiary has not attained age 80 at the time payments commence, he or she may elect to receive payments in a single lump-sum payment or in equal or approximately equal monthly, quarterly, semi-annual or annual payments continuing over a period not to exceed ten years from the first payment. The Beneficiary also may elect to receive a partial lump-sum payment fol- lowed by monthly, quarterly, semi-annual or annual installments, provided that all payments are made within a period of ten years from the initial payment. In the event that the Beneficiary is age 80 or over, the remaining balance in the Participant's account will be paid to the Beneficiary in a single lump sum. C� • • (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant's Account shall be paid to the estate of the Beneficiary in a lump sum. In the event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. 7.05 Pre-Retirement Death Benefits: (a) Should the Participant die before he or she has begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary commencing not later than December 31 of the year following the yeaz of the Participant's death, provided that the Beneficiary may elect to begin benefits earlier than that date. (b) If the Beneficiary has not attained age 80 at the time payments commence, he or she may elect to receive payments in a single lump-sum payment or in equal or approximately equal monthly, quarterly, semi-annual or annual payments continuing over a period not to exceed ten years from the first payment. The Beneficiary also may elect to receive a partial lump-sum payment followed by monthly, quarterly, semi-annual or annual installments, provided that all payments are made within a period of ten years from the initial payment. In the event that the Beneficiary is age 80 or over, the remaining balance in the Participant's account will be paid to the Beneficiary in a single lump sum. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant s Account shall be paid to the estate of the Beneficiary in a lump sum. In the event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. 7.06 Unforeseeable Emergencies: (a) In the event an unforeseeable emergenry occurs, a Participant may apply to the Employer to receive that pazt of the value of his or her Account that is reasonably needed to satisfy the emer- genty need. If such an application is approved by the Employer, the Participant shall be paid only such amount as the Employer deems necessary to meet the emergenry need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. (b) An unforeseeable emergenry shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden unexpected illness, accident, or disability of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar and extraordinary unforeseeable circumstances arising as a result of events beyond the control of the Participant. The need to send a Participant's child to college or to purchase a new home shall not be considered unforesee- able emergencies. The determination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. 7.07 De Minimis Accounts: Notwithstanding the foregoing provisions of this Article, prior to January 1, 2002, if the value of a Participant s Account does not exceed the dollar limit under Section 411(a)(11)(A) of the Code as described in Section 457(e)(9)(A) of the Code and (a) no amount has been deferred under the ��J • • Plan with respect to the Participant during the 2-year period ending on the date of the distribution and (b) rhere has been no prior distribution under the Plan to the Participant pursuant to this Section 7.07, the Participant may elect to receive or the Employer may involuntarily distribute the Participant's entire Account without the consent of the Participant. Such distribution shall be made in a lump sum. On or after January 1, 2002, if the value of a Participant's Account is less than $1,000, the Participant's Account shall be paid to the Participant in a single lump sum distribution, provided that (a) no amount has been deferred under the Plan with respect to the Participant during the 2-year period ending on the date of che distribution and (b) there has been no prior distribution under the Plan to the Participant pursuant to chis Section 7.07. If the value of the Participant's Account is at least $1,000 but not more than the dollar limit under Code Section 411(a)(11)(A) and (a) no amount has been deferred under the Plan with respect to che Participant during the 2-year period ending on the date of the distribution and (b) there has been no prior distribution under the Plan to the Participant pursuant to this Section 7.07, the Participant may elect ro receive his or her entire Account. Such distribution shall be made in a lump sum. Article VIII. Loans to Participants 8.01 Availability of Loans to Participants: (a) The Employer may elect to make loans available to Participants in this Plan. If the Employer has elected to make loans available to Participants, a Paxticipant may apply for a loan from the Plan subject to the limitations and other provisions of this Article. (b) The Employer shall establish written guidelines governing the granting of loans, provided that such guidelines are approved by the Administrator and aze not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reasonably equivalent basis. 8.02 Terms and Conditions of Loans to Participants: Any loan by the Plan to a Participant under Section 8.01 of the Plan shall satisfy the following requirements: (a) Availability. Loans shall be made available to all Participants on a reasonably equivalent basis. (b) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (c) Loan Limit. No Participant loan shall exceed the present value of the Participant s Account. (d) Foreclosure. In the event of default on any installment payment, the outstanding balance of che loan shall be a deemed distribution. In such event, an actual distribution of a plan loan offsec amount will not occur until a distributable event occurs in the Plan. (e) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the Participant's Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. C �� f Amount of Loan.•the time the loan is made, the principal•ount of the loan plus the out- �) standing balance (principal plus accrued interest) due on any other outstanding loans to the Participant from the Plan and from all other plans of the Employer that are qualified employer plans under Section 72(p)(4) of the Code shall not exceed the lesser of: (1) $50,000, reduced by the excess (if any) of (a) The highest outstanding balance of loans from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over (b) The outstanding balance of loans from the Plan on the date on which such loan is made; or (2) One-half of the value of the Participant s interest in all of his or her Accounts under this Plan. (g) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant s in any calendar yeaz. No loan shall be approved if an e�:isting loan from the Plan to the Participant is in default to any extent. (h) Length of Loan. Any loan issued shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time (determined at the time of the loan is made) after the loan is made as the principal residence of the Pazticipant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments and interest payments otherwise due may be suspended for up to one (1) year during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this subsection (h), with a revised payment schedule (within such term) instituted at the end of such period of suspension. (i) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. (j) Promissory Note. The loan shall be evi�enced by a promissory note executed by the Pazticipant ; and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. (k) Security. The loan shall be secured by an assignment of the participant's right, tide and interest in and to his or her Account. (1) Assignment or Pledge. For the purposes of paragraphs (� and (�, assignment or pledge of any portion of the Participant s interest in the Plan and a loan, pledge, or assignment with respect to � any insurance contract purchased under the Plan, will be treated as a loan. µ� C�� A � _, �� (m) Other T�s and Condi�ions. The Employer shall �uch other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualification of the Plan and Trust under Section 457 of the Code, or to prevent the treatment of the loan for taa� purposes as a distribution to the Participant. The Employer, in its discretion for any reason, may also fix other terms and conditions of the loan, includ- ing, but not limited to, the provision of grace periods following an event of default, not inconsistent with the provisions of this Article and Section 72(p) of the Code, and any applicable regulations thereunder. 8.03 Participant Loan Accounts: (a) Upon approval of a loan to a Participant by the Employer, an amount not in excess of the loan shall be transferred from the Participant's other investment fund(s), described in Section 6.05 of �`+ the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 8.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. Neither the Employer, the Administrator, nor any other person shall be liable for any loss, or by reason of any breach, that results from the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repayment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other investment funds, in accordance with Section 6.05 of the Plan, as of the next Ac- counting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant's Loan Account. (d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the provisions of the Plan, governing the establishment and maintenance of Participant Loan Accounts. Article IX. Non-Assignability 9.01 In General: Except as provided in Article VIII and Section 9.02, no Participant or Beneficiary shall have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and ri�hts are expressly declared to be non-assignable and non- cransferable. 9.02 Domestic Relations Orders: (a) Allowance of Transfers: To the extent required under a final judgment, decree, or order (includ- ing approval of a property settlement agreement) that (i) relates to the provision of child support, alimony payments, or marital property rights and (ii) is made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, child, or other dependent of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto C�� • • in the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Partici- pant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to authorize any amount be distributed under the Plan at a time or in a form that is not permitted under Section 457(b) of the Code. Any payment made to a person pursu- ant to this Section shall be reduced by any required income ta�c withholding. (b) Release from Liability to Participant: The Employer's liabiliry to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of the Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Employer and the Administrator are released from any further claim by the Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceed- ing relating to such transfer, (ii) the Participant has been notified of the pendency of such pro- ceeding in the manner prescribed by the law of the jurisdiction inwhich the proceeding is pend- ing for service of process in such action or by mail from the Employer or Administrator to the Participant's last known mailing address, and (iii) the Participant fails to obtain an order of the court in the proceeding relieving the Employer or Administrator from the obligation to comply with the judgment, decree, or order. (c) Participation in Legal Proceedings: The Employer and Administrator shall not be obligated to defend against or set aside any judgement, decree, or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action is borne by the Participant. In the event that the Participant s action (or inaction) nonetheless causes the Employer or Administrator to incur such expense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the Participant. In the course of any proceeding relating to divorce, separation, or child support, the Employer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse, dependent, or child (including the legal representatives of the spouse, former spouse, or child), or to a court. Article X. Relationship to other Plans and Employment Agreements This Plan serves in addition to any other retirement, pension, or benefit plan or system presendy in eacistence or hereinafter established for the benefit of the Employer's employees, and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Employer. C�) Artic e XI. Amendment or Termination of• The Employer may at any time amend this Plan provided that it transmits such amendment in writing to the Administrator at least 30 days prior to the effective date of the amendment. The consent of the Admin- istrator shall not be required in order for such amen�ment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder if it disapproves of such amendment. The Employer may at any time terminate this Plan. The Administrator may at any time propose an amendment to the Plan by an instrument in writing trans- mitted to the Employer at least 30 days before the effective date of the amendment. Such amendment shall become effective unless, within such 30-day period, the Employer notifies the Administrator in writing that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Administrator here- under. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under Section 457(b) of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation deferred before the date of the amendment or termination. Article XII. Applica.ble Law This Plan and Trust shall be construed under the laws of the state where the Employer is located and is established with the intent that it meet the requirements of an "eligible deferred compensation plan" under Section 457(b) of the Code, as amended. The provisions of this Plan and Trust shall be interpreted wherever possible in conformiry with the requirements of that Section of the Code. In addition, notwithstanding any provision of the Plan to the contrary, the Plan shall be administered in compliance with the requirements of Code Section 414(u). Article XIII. Gender and Number The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. _ � �� ICMA RETIREMENT CORPORATION . . • DECLARATION OF TRUST ICMA RETIREMENT CORPORATION The public service Vantagepoint� since 1972 C32� � DECLARATION OF TRUST • This Declaration of Trust (the "Group Trust Agreement") is made as of the 19th day of May, 2001, by VantageTrust Company, which declares itself to be fhe sole Trustee of the trust hereby created. WHEREAS, the ICMA Retirement Trust was created as a vehicle for the commingling of the assets of governmental plans and governmental units described in Section 818(a)(6) of the Internal Revenue Code of 1986, as amended, pursuant to a Declaration of Trust dated October 4, 1982, as subsequently amended, a copy of which is attached hereto and incorporated by reference as set out below (the "ICMA Declaration ); and WHEREAS, the trust created hereunder (the "Group Trust") is intended to meet the requirements of Rev- enue Ruling 81-100, 1981-1 C.B. 326, and is established as a common trust fund within the meaning of Section 391:1 of Title 35 of the New Hampshire Revised Statutes Annotated, to accept and hold for invest- ment purposes the assets of the Deferred Compensation and Qualified Plans held by and through the ICMA Retirement Trust. NOW, THEREFORE, the Group Trust is created by the execution of this Declaration of Trust by the Trustee and is established with respect to each Deferred Compensation and Qualified Plan by the transfer to the Trustee of such Plan's assets in the ICMA Retirement Trust, by the Trustees thereof, in accord with the following provisions: 1. Incorporation of ICMA Declaration by Reference; ICMA By-Laws. Except as otherwise provided in this Group Trust Agreement, and to the extent not inconsistent herewith, all provi- sions of the ICMA Declaration are incorporated herein by reference and made a part hereof, to be read by substituting the Group Trust for the Retirement Trust and the Trustee for the Boaxd of Trustees referenced therein. In this respect, unless the context clearly indica.tes otherwise, all capitalized terms used herein and defined in the ICMA Declaration have the meanings assigned to them in the ICMA Declaration. In addition, the By-Laws of the ICMA Retirement Trust, as the same may be amended from time-to-time, are adopted as the By-Laws of the Group Trust to the extent not inconsistent with the terms of this Group Trust Agreement. Notwithstanding the foregoing, the terms of the ICMA Declaration and By-Laws are further modified with respect to the Group Trust created hereunder, as follows: (a) any reporting, distribution, or ather obligation of the Group Trust vis-a-vis any Deferred Compensation Plan, Qualified Plan, Public Employer, Public Employer Trustee, or Employer Trust shall be deemed satisfied to the extent that such obligation is undertaken by the ICMA Retirement Trust (in which case the obliga.tion of the Group Trust shall run to the ICMA Retirement Trust); and (b) all provisions dealing with the number, qualification, election, term and nomination of Trustees shall not apply, and all other provisions relating to trustees (including, but not limited to, resignation and removal) shall be interpreted in a manner consistent with the appointment of a single corporate trustee. C� i • 2. Compliance with Revenue Procedure 81-100. The requirements of Revenue Procedure 81- 100 are applicable to the Group Trust as follows: (a) Pursuant to the terms of this Group Trust Agreement and Article X of the By-Laws, investment in the Group Trust is limited to assets of Deferred Compensation and Qualified Plans, investing through the ICMA Retirement Trust. (b) Pursuant to the By-Laws, the Group Trust is adopted as a part of each Qualified Plan that invests herein through the ICMA Retirement Trust. (c) In accord with the By-Laws, that part of the Group Trust's corpus or income which equitably belongs to any Deferred Compensation and Qualified Plan may not be used for or diverted to any purposes other than for the exclusive benefit of the Plan's employees or their beneficiaries who are entitled to benefits under such Plan. (d) In accord with the By-Laws, no Deferred Compensation Plan or Qualified Plan may assign any or part of its equity or interest in the Group Trust, and any purponed assignment of such equity or interest shall be void. 3. Governing Law, Except as otherwise required by federal, state or local law, this Declaration of Trust (including the ICMA Declaration to the extent incorporated herein) and the Group Trust created hereunder shall be construed and determined in accordance with applicable laws of the State of New Hampshire. 4. Judicial Proceedings. The Trustee may at any time initiate an action or proceeding in the appro- priate state or federal courts within or outside the state of New Hampshire for the settlement of its accounts or for the determination of any question of construction which may arise or for insuuctions. IN WI1'NFSS WHEREOF, the Trustee has executed this Declaration of Trust as of the day and year first above written. VANTAGETRUST COMPANY �� B Name: Paul F. Gallagher Tide: Assistant Secretary ; ya .:� (3�+)