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HomeMy WebLinkAboutHR1997-0301 - Original - ICMA Retirement Corporation - Deferred Compensation Plan #301655 - 11/05/1997 457 Plan Adoption Package Retain Document Deferred Compensation Plat Document and Trust, November 1996 DEFERRED COMPENSATION PLAN 2.04 Beneficiary: The person or persons designated by &TRUST the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of Article 17. Purpose the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall -The Employer hereby establishes the Employer's De- be entitled to equal shares of the benefits payable at the ferred Compensation Plan and Trust, hereafter referred Participant's death, unless otherwise provided in the to as the "Plan." The Plan consists of the provisions set Participant's Joinder Agreement. If no beneficiary is forth in this document. designated in the Joinder Agreement, if the Designated Beneficiary predeceases the Participant, or if the desig- The primary purpose of this Plan is to provide retirement nated Beneficiary does not survive the Participant for a income and other deferred benefits to the Employees of the period of fifteen (15) days, then the estate of the Par- Employer and the Employees' Beneficiaries in accordance ticipant shall be the Beneficiary. with the provisions of Section 457 of the Internal Rev- enue Code of 1986, as amended (the "Code"). 2.05 Deferred Compensation: The amount of Nor- mal Compensation otherwise payable to the Participant This Plan shall be an agreement solely between the which the Participant and the Employer mutually agree Employer and participating Employees. The Plan and to defer hereunder, any amount credited to a Trust forming a part hereof are established and shall be Participant's Account by reason of a transfer under maintained for the exclusive benefit of eligible Employ- section 6.09, or any other amount which the Employer ees and their Beneficiaries. No part of the corpus or agrees to credit to a Participant's Account. income of the Trust shall revert to the Employer or be used for or diverted to purposed other than the exclu- 2.06 Employee: Any individual who provides services sive benefit of Participants and their Beneficiaries. for the Employer, whether as an employee of the Employer or as an independent contractor, and who has Article II. Definitions been designated by the Employer as eligible to partici- pate in the Plan. 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of 2.07 Includible Compensation: The amount of an the Participant's Deferred Compensation, including any Employee's compensation from the Employer for a income, gains, losses, or increases or decreases in market taxable year that is attributable to services performed for value attributable to the Employer's investment of the the Employer and that is includible in the Employee's Participant's Deferred Compensation, and further gross income for the taxable year for federal income tax reflecting any distributions to the Participant or the purposes; such term does not include any amount Participant's Beneficiary and any fees or expenses excludable from gross income under this Plan or any charged against such Participant's Deferred Compensation. other plan described in Section 457(b) of the Code or any other amount excludable from gross income for 2.02 Accounting Date: Each business day that the federal income tax purposes. Includible Compensation New York Stock Exchange is open for trading, as shall be determined without regard to any community provided in Section 6.06 for valuing the Trust's assets. property laws. 2.03 Administrator: The person or persons named to 2.08 Joinder Agreement: An agreement entered into carry out certain nondiscretionary administrative func- between an Employee and the Employer, including any tions under the Plan, as hereinafter described. The amendments or modifications thereof. Such agreement Employer may remove any person as Administrator shall fix the amount of Deferred Compensation, specify upon 60 days' advance notice in writing to such person, a preference among the investment alternatives desig- in which case the Employer shall name another person nated by the Employer, designate the Employee's or persons to act as Administrator. The Administrator Beneficiary or Beneficiaries, and incorporate the terms, may resign upon 60 days' advance notice in writing to conditions, and provisions of the Plan by reference. the Employer, in which case the Employer shall name another person or persons to act as Administrator. EXHIBIT A . ....... ............... ..... .. ..... . . ....................... ... .. . . . . . ...... .. .......... . . ................... .. ICMA RETIREMENT CORPORATION 2.09 Normal'Compensation: The amount of com- to have actually terminated. In the case of a Participant pensation which would be payable to a Participant by who is an independent contractor of the Employer, the Employer for a taxable year if no Joinder Agreement Separation from Service shall be deemed to have oc- were in effect to defer compensation under this Plan. curred when the Participant's contract under which services are performed has completely expired and 2.10 Normal Retirement Age: Age 70-1/2, unless the terminated, there is no foreseeable possibility that the Participant has elected an alternate Normal Retirement Age Employer will renew the contract or enter.into a new by written instrument delivered to the Administrator prior contract for the Participant's services, and is not antici- to Separation from Service. A Participant's Normal Retire- pated that the Participant will become an Employee of ment Age determines the period during which a Participant the Employer. may utilize the catch-up limitation of Section 5.02 hereun- der. Once a Participant has to any extent utilized the catch- 2.15 Trust: The Trust created under Article VI of the up limitation of Section 5.02, his Normal Retirement Age Plan which shall consist of all compensation deferred may not be changed. under the Plan, plus any income and gains thereon; less any losses, expenses and distributions to Participants and A Participant's alternate Normal Retirement Age may Beneficiaries. not.be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced Article 111. Administration retirement benefits under the Employer's basic retire- ment plan covering the Participant and may not be later 3.01 Duties of the Employer: The Employer shall than the date the Participant will attain age 70-1/2. If a have the authority to make all discretionary decisions Participant continues employment after attaining age affecting the rights or benefits of Participants which may 70-1/2, not having previously elected alternate Normal be required in the administration of this Plan. The Retirement Age, the Participant's alternate Normal Employer's decisions shall be afforded the maximum Retirement Age shall not be later than the mandatory deference permitted by applicable law. retirement age, if any, established by the Employer, or the age at which the Participant actually separates from 3.02 Duties of Administrator: The Administrator, as service if the Employer has no mandatory retirement agent for the Employer, shall perform nondiscretionary age. If the Participant will not become eligible to administrative functions in connection with the Plan, receive benefits under a basic retirement plan main- including the maintenance of Participants' Accounts, tained by the Employer, the Participant's alternate the provision of periodic reports of the status -of each Normal Retirement Age may not be earlier than age 55 Account, and the disbursement of benefits on behalf and may not be later than age 70-1/2. of the Employer in accordance with the provisions of this Plan. 2.11 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article IV. Article IV. Participation in the Plan 2.12 Plan Year: The calendar year. 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior 2.13 Retirement: The first date upon which both of the to the beginning of the calendar month in which the following shall have occurred with respect to a participant: Joinder Agreement is to become effective to defer Separation from Service and attainment of age 65. compensation not yet earned. 2.14 Separation From Service: Severance of the 4.02 Amendment of Joinder Agreement: A Partici- Participant's employment with the Employer which pant may amend an executed Joinder Agreement to constitutes a "separation from service" within the change the amount of compensation not yet earned meaning of Section 402(d)(4)(A)(iii) of the Code. In which is to be deferred (including the reduction of such general, a Participant shall be deemed to have severed future deferrals to zero) or to change his investment his employment with the Employer for purposes of this preference (subject to such restrictions as may result Plan when, in accordance with the established practices of from the nature of terms of any investment made by the the Employer, the employment relationship is considered Employer). Such amendment shall become effective as . .......... .... . ....... .... . .. . ... ... . . . . . . . ..... ........... . . . . . . .. . . . ..... . . . .......... ...... . .. .... ... .... Two ICMA RETIREMENT CORPORATION (b) To invest and reinvest all or any part of the otherwise dispose of any such property, without assets of the Trust in any common, collective or regard to restrictions applicable to fiduciaries or commingled trust fund that is maintained by a bank others and without the approval of any court. or other institution and that is available to Em- ployee plans described under sections 457 or 401 of (g) To sell for cash or credit, redeem, exchange for the Code, or any successor provisions thereto, and other property, convey, transfer, or otherwise during the period of time that an investment dispose of any property held in the Trust in any through any such medium shall exist, to the extent manner and at any time, by private contract or at of participation of the Plan, the declaration of trust public auction or otherwise, and no other person of such common, collective, or commingled trust shall be bound to see to the application of the fund shall constitute a part of this Plan. purchase money or to inquire into the validity, expediency, or propriety of any such sale or other (c) To invest and reinvest all or any part of the disposition. assets of the Trust in any group annuity, deposit administration or guaranteed interest contract issued (h) To enter into contracts for or to make commit- by an insurance company or other financial institu- ments either alone or in company with others to tion on a commingled or collective basis with the purchase or sell at any future date any property assets of any other 457 plan or trust qualified under acquired for the Trust. section 401(a) of the Code or any other plan de- scribed in section 401(a)(24) of the Code, and such (i) To vote or to refrain from voting any stocks, contract may be held or issued in the name of the bonds, or other securities held in the Trust, to Plan Administrator, or such custodian as the Plan exercise any other right appurtenant to any securi- Administrator may appoint, as agent and nominee ties or other property held in the Trust, to give for the Employer. During the period that an invest- general or special proxies or powers of attorney with ment through any such contract shall exist, to the or without power of substitution with-respect to extent of participation of the Plan, the terms and such securities and other property, to exercise any conditions of such contract shall constitute a part of conversion privileges, subscription rights, or other the Plan. options or privileges with respect to such securities and other property and-make any payments inciden- (d) To purchase part interests in real property or in tal thereto, and generally to exercise, personally or mortgages on real property, wherever such real by general or limited power of attorney, any of the property may be situated, and to delegate to a powers of an owner with respect to stocks, bonds, property manager or the holder or holders of a securities, or other property held in the Trust at majority interest in such real property or mortgage any time. on real property the management and operation of any part interest in such real property or mortgages. (j) To oppose or to consent to and participate in any organization, reorganization, consolidation, (e) To hold cash awaiting investment and to keep merger, combination, readjustment of finances, or such portion of the Trust in cash or cash balances, similar arrangement with respect to any corporation, without liability for interest, in such amounts as may company, or association, any of the securities of from time to time be deemed to be reasonable and which are held in the Trust, to do any act with necessary to meet obligations under the Plan or reference thereto, including the exercise of options, otherwise to be in the best interests of the Plan. the making of agreements or subscriptions and the payment of expenses, assessments, or subscriptions (f) To retain, manage, operate, administer, divide, that may be deemed necessary or advisable in subdivide, partition, mortgage, pledge, improve, connection therewith, and to accept, hold, and alter, demolish, remodel, repair, and develop in any retain any securities or other property that may be manner any property, or any part of or partial so acquired. interest in any property, real*or personal, held in the Trust, to lease such property for any period of time, and to grant options to sell, exchange, lease, or .. ........... . . . .... ... . . ..... . . . . .. .. .. ..... ...... .. ..... . . ........ ................... ............. ...... ... Four J- - 45 i Plait Adoprion Package Retain Document Deferred Compensation Plan Document and Trust, November 1996 (k) To deposit any property held in the Trust with (o) To make, execute, acknowledge, and deliver any protective, reorganization, or similar commit- any and all deeds, leases, mortgages, conveyances, tee; and to delegate discretionary power thereto and contracts, waivers, releases, or other instruments in to pay and agree to pay part of its expenses and writing necessary or proper for the accomplishment compensation and any assessments levied with of any of the foregoing powers. respect to any such property so deposited. (p) To open and maintain any bank account or (1) To hold, to authorize the holding of, and to accounts in the name of the Plan, the Employer,or register any investment to the Trust in the name of any nominee or agent of the foregoing, including the Plan, the Employer, or any nominee or agent of the Plan Administrator, in any bank or banks. any of the foregoing, including the Plan Administra- tor, or in bearer form, to deposit or arrange for the (q) To do any and all other acts that may be deposit of securities in a qualified central depository deemed necessary to carry out any of the powers set even though, when so deposited, such securities may forth herein. be merged and held in bulk in the name of the nominee of such depository with other securities 6.03 Taxes and Expenses: All taxes of any and all deposited therein by any other person, and to kinds whatsoever that may be levied or assessed under organize corporations or trusts under the laws of any existing or future laws upon, or in respect to the Trust, jurisdiction for the purpose of acquiring or holding or the income thereof, and all commissions or acquisi- title to any property for the Trust, all with or tions or dispositions of securities and similar expenses of without the addition of words or other action to investment and reinvestment of the Trust, shall be paid indicate that property is held in a fiduciary or from the Trust. Such reasonable compensation of the representative capacity but the books and records of Plan Administrator, as may be agreed upon from time-to the Plan shall at all times show that all such invest- time by the Employer and the Plan Administrator, and ments are part of the Trust. reimbursement for reasonable expenses incurred by the Plan Administrator in performance of its dunes hereun- (m) Upon such terms as may be deemed advisable der (including but not limited to fees for legal, account- by the Employer or the Plan Administrator, as the ing, investment and custodial services) shall also be paid case may be, for the protection of the interests of from the Trust. the Plan or for the preservation of the value of an investment, to exercise and enforce by suit for legal 6.04 Payment of Benefits: The payment of benefits or equitable remedies or by other action, or to from the Trust in accordance with the terms of the Plan waive any right or claim on behalf of the Plan or may be made by the Plan Administrator, or by any any default in any obligation owing to the Plan, to custodian or other person so authorized by the Em- renew, extend the time for payment of, agree to a ployer to make such disbursement. The Plan Adminis- reduction in the rate of interest on, or agree to any trator, custodian or other person shall not be liable with other modification or change in the terms of any respect to any distribution of Trust assets made at the obligation owing to the Plan, to settle, compromise, direction of the Employer. adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce 6.05 Investment Funds: In accordance with uniform any and all rights of foreclosure, bid for property in and nondiscriminatory rules established by the Employer foreclosure, and take a deed in lieu of foreclosure and the Plan Administrator, the Participant may direct with or without paying consideration therefor, to his/her Accounts to be invested in one (1) or more commence or defend suits or other legal proceedings investment funds available under the Plan; provided, whenever any interest of the Plan requires it, and to however, that the Participant's investment directions represent the Plan in all suits or legal proceedings in shall not violate any investment restrictions established any court of la,%v or equity or before any body or by the Employer. Neither the Employer, the Adminis- tribunal. trator, nor any other person shall be liable for any losses incurred by virtue of following such directions or with (n) To employ suitable consultants, depositories, any reasonable administrative delay in implementing agents, and legal counsel on behalf of the Plan. such directions. ........ . ...... . .. . . . .. ..... ....... . .. ..... .. . . . . . . . . . . . . . ...... . ...... . .. . ..... .... . ... . . ...... Five ICNIA RETIREMENT CORPORATION 6.06 Valuation of Accounts: As of each Accounting than cash, unless the Employer and the Administra- Date, the Plan assets held in each investment fund for agree to hold such other assets under the Plan. offered shall be valued at fair_market value and the Any such transferred amount shall be treated as a investment income and gains or losses for each fund deferral subject to the limitations of Article V, shall be determined. Such investment income and gains except that, for purposes of applying the limitations or losses shall be allocated proportionately among all of Sections 5.01 and 5.02, an amount deferred Account balances on a fund-by-fund basis. The alloca- during any taxable year under the plan from which tion shall be in the proportion that each such Account the transfer is accepted shall be treated as if it has balance as of the immediately preceding Accounting been deferred under this Plan during such taxable Date bears to the total of all such Account balances as of year and compensation paid by the transferor em- that Accounting Date. For purposes of this Article, all ployer shall be treated as if it had been paid by the Account balances include the Account balances of all Employer. Participants and Beneficiaries. (b) Outgoing Transfers: An amount may be 6.07 Participant.Loan Accounts: Participant Loan transferred to an eligible deferred compensation plan Accounts shall be invested in accordance with Section maintained by another employer, and charged to a 8.03 of the Plan. Such Accounts shall not share in any Participant's Account under this Plan, if(I) the investment income and gains or losses of the investment Participant has separated from service with the funds described in Sections 6.05 and 6.06. Employer and become an employee of the other employer, (ii) the other employer's plan provides 6.08 Crediting of Accounts: The Participant's Account that such transfer will be accepted, and (iii) the shall reflect the amount and value of the investments or Participant and the employers have signed such other property obtained by the Employer through the agreements as are necessary to assure that the investment of the Participant's Deferred Compensation Employer's liability to pay benefits to the Partici- pursuant to Sections 6.05 and 6.06. It is anticipated that the pant has been.discharged and assumed by the other Employer's investments with respect to a Participant will employer. The Employer may require such docu- conform to the investment preference specified in the mentation from the other plan as it deems necessary Participant's Joinder Agreement, but nothing herein shall to effectuate the transfer, to confirm that such plan be construed to require the Employer to make any particu- is an eligible deferred compensation plan within the lar investment of a Participant's Deferred Compensation. meaning of section 457 of the Code, and to assure Each Participant shall receive periodic reports, not less that transfers are provided for under such plan. Such frequently than annually, showing the then current transfers shall be made only under such circum- value of his/her Account. stances as are permitted under section 457 of the Code and the regulations thereunder. 6.09 Transfers: 6.10 Employer Liability: In no event shall the (a) Incoming Transfers: A transfer may be ac- Employer's liability to pay benefits to a Participant' cepted from an eligible deferred compensation plan under this Plan exceed the value of the amounts cred- maintained by another employer and credited to a ited to the Participant's Account; neither the Employer Participant's Account under the Plan if(I) the nor the Administrator shall be liable for losses arising Participant has separated from service with that from depreciation or shrinkage in the value of any employer and become an Employee of the Em- investments acquired under this Plan. ployer, 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, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the 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 ......... . . ....... .. . .. .... . . .. . ..... . . . . ...... ........... ... . . . . .. . . ..... . . . . . . ..... ..... .... . .............. Six 457 Plan Adoption Package Retain Document Deferred Compensation Plan Document and Trust, November 1996 Article VII. Benefits (b) One lump-sum payment; 7.01 Retirement Benefits and Election on Separa- (c) Approximately equal monthly, quarterly, semi- tion from Service: Except is otherwise provided in annual or annual payments, calculated to continue this Article VII, the distribution of a Participant's for a period certain chosen by the Participant. Account shall commence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, (d) Annual Payments equal to the minimum distri- and the distribution of such Retirement benefits shall be butions required under Section 401(a)(9) of the made in accordance with one of the payment options Code over the life expectancy of the Participant or described in Section 7.02. Notwithstanding the forego- over the life expectancies of the Participant and his ing, but subject to the following paragraph of this Beneficiary. Section 7.01, the Participant may irrevocably elect within 60 days following Separation from Service to (e) Payments equal to payments made by the issuer have the distribution of benefits commence on a fixed of a retirement annuity policy acquired by the determinable date other than that described in the Employer. preceding sentence which is at least 61 days after Separa- tion from Service,but not later than April 1 of the year (f) A split distribution under which.payments under following the year of the Participant's Retirement or options (a), (b), (c) or (e) commence or are made at attainment of age 70-1/2, whichever is later. Notwith- the same time, as elected by the Participant under standing the foregoing provisions of this Section 7.01, no Section 7.01, provided that all payments commence election to defer the commencement of benefits after a (or are made) by the latest benefit commencement separation from service shall operate to defer the distribu- date under Section 7.01 and that once a payment is don of any amount in the Participant's Loan Account in made subsequent payments will be made in substan- the event of a default of the Participant's loan. tially nonincreasing amounts. Effective on or after January 1, 1997, the Participant (g) Any payment option elected by the Participant may elect to defer the commencement of distribution of and agreed to by the Employer and Administrator, benefits to a fixed determinable date later than the date provided that such option must provide for substan- described above, but not later than April 1 of the year tially nonincreasing payments for any period after following the year of the Participant's retirement or the benefit commencement date under Section 7.01. attainment of age 70-1/2, whichever is later, provided (a) such election is made after the 61st day following A Participant's or Beneficiary's selection of a payment Separation from Service and before commencement of option made after December 31, 1995, under Subsec- distributions and (b) the Participant may make only one tions (a), (c), or (g) above may include the selection of (1) such election. Notwithstanding the foregoing, the an automatic annual cost-of-living increase. Such Administrator, in order to ensure the orderly adminis- increase will be based on the rise in the Consumer Price tration of this provision, may establish a deadline after Index for All Urban Consumers (CPI-U) from the third which such election to defer the commencement of quarter of the last year in which a cost-of-living in- distribution of benefits shall not be allowed. crease was provided to the third quarter of the current year. Any increase will be made in periodic payment 7.02 Payment Options: As provided in Sections 7.01, checks beginning the following January. The first cost- 7.04 and 7.05, a Participant or Beneficiary may elect to of-living increase will be based on the rise in the CPI-U have value of the Participant's Account distributed in from the third quarter of 1995 to the third quarter of accordance with one of the following payment options, 1996, and will be applied to amounts paid beginning provided that such option is consistent with the limita- January 1997. tions set forth in Section 7.03. A Participant's or Beneficiary's election of a payment (a) Equal monthly, quarterly, semi-annual or annual option must be made at least 30 days before the pay- payments in an amount chosen by the Participant, ment of benefits is to commence. If a Participant or continuing until his/her Account is exhausted; Beneficiary fails to make a timely election of a payment option, benefits shall be paid monthly under option (c) .... ..... . .. ........ .... .. . . . . . .. .... .. .... . .. ..... ..... .. .. ...... . . ....... . ........... ........ . ..... . ....... Seven ICMA RETIREMENT CORPORATION above for a period of five years or such shorter period of (b) If the designated Beneficiary does not continue time necessary to ensure that the amount of any install- to live for the remaining period of payments under ment is not less than $1,200 per year, without the the payment option, then the commuted value of inclusion of a cost-of-living increase. any remaining payments under the payment option shall be paid in a lump sum to the estate of the 7.03 Limitation on Options: No payment option may Beneficiary. In the event that the Participant's estate be selected by a Participant under subsections 7.02(a) or is the Beneficiary, the commuted value of any (c) unless the amount of any installment is not less than remaining payments under the payment option shall $1,200 per year. No payment option may be selected be paid to the estate in a lump sum. by a Participant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of 7.05 Pre-retirement Death Benefits: Sections 401(a)(9) and 457(d)(2) of the Code, including that payments commencing before the death of the (a) Should the Participant die before he has begun Participant shall satisfy the incidental death benefits to receive the benefits provided by Section 7.01, the requirement under section 457(d)(2)(B)(i)(1). A cost-of- value of the Participant's Account shall be payable living increase included as part of a payment option to the Beneficiary commencing within the 30-day selected under Section 7.02 shall not be considered to period commencing on the 91st day after the fail to satisfy the requirement under section 457(d)(2)(b) Participant's death, unless the Beneficiary elects a that any distribution made over a period of more than 1 different fixed or determinable benefit commence- year can only be made in substantially nonincreasing ment date within 90 days of the Participant's death. amounts. Unless otherwise elected by the Participant Such benefit commencement date shall be not later (or spouse, in the case of distributions described in than the later of(I) December 31 of the year fol- Section 7.05 below) by the time distributions are lowing the year of the Participant's death, or (ii) if required to begin, life expectancies shall be recalculated the Beneficiary is the Participant's spouse, Decem- annually. Such election shall be irrevocable as.to the ber 31 of the year in which the Participant would Participant (or spouse) and shall apply to all subsequent have attained age 70-1/2. years. The life expectancy of a nonspouse Beneficiary may not be recalculated. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be.paid in 7.04 Post-retirement Death Benefits: approximately equal annual installments over five years, or over such shorter period as may be neces- (a) Should the Participant die after he/she has sary to assure that the amount of any annual install- begun to receive benefits under a payment option, ment is not less than $3,500. A Beneficiary shall be the remaining payments, if any, under the payment treated as if he/she were a Participant for purposes option shall be payable to the Participant's Benefi- of determining the payment options available under ciary within the 30-day period commencing with Section 7.02, provided, however, that the payment the 61st day after the Participant's death, unless the option chosen by the Beneficiary must provide for Beneficiary elects payment under a different pay- payments to the Beneficiary over a period no longer ment option that is available under Section 7.02 than the life expectancy of the Beneficiary, and within 60 days of the Participant's death. Any provided that such period may not exceed (15) years different payment option elected by a Beneficiary if the Beneficiary is not the Participant's spouse. under this section must provide for payments at a rate that is at least as rapid under the payment (c) In the event that the Beneficiary dies before the option that was applicable to the Participant. In no payment of death benefits has commenced or been event shall the Employer or Administrator be liable completed, the remaining value of the Participant's to the Beneficiary for the amount of any payment Account shall be paid to the estate of the Benefi- made in the name of the Participant before ciary in a lump sum. In the event that the the Administrator receives proof of death of the Participant's estate is the Beneficiary, payment shall Participant. be made to the estate in a lump sum. ........... . ....... ..... ... . .. . .... . .. .. . ... .. ........ ... . . . . ... . .. . . . . ... .. . . .. .. . ... . . . . ............. ...... Eight 437 Plan Adoption Package Retain Document Deferred Compensation Plan Document and Trust, November 1996 7.06 Unforeseeable Emergencies: Article Vill. Loans to Participants (a) In the event an unforeseeable emergency occurs, 8.01 Availability of Loans to Participants: a Participant may apply-to the Employer to receive that part of the value of his/her Account that is (a) Effective January 1, 1997, the Employer may reasonably needed to satisfy the emergency need. If elect to make loans available to Participants in this such an application is approved by the Employer, Plan. If the Employer has elected to make loans the Participant shall be paid only such amount as the available to Participants, a Participant may apply for Employer deems necessary to meet the emergency a loan from the Plan subject to the limitations and need, but payment shall not be made to the extent other provisions of this Article. that the financial hardship may be relieved through cessation of deferral under the Plan, insurance or (b) The Employer shall establish written guidelines other reimbursement, or liquidation of other assets governing the granting of loans, provided that such to the extent such liquidation would not itself cause guidelines are approved by the Plan Administrator severe financial hardship. and are not inconsistent with the provisions of this Article, and that loans are made available to all (b) An unforeseeable emergency shall be deemed to Participants on a reasonably equivalent basis. involve only circumstances of severe financial hardship to the Participant resulting from a sudden 8.02 Terms and Conditions of Loans to Participants: unexpected illness, accident, or disability of the Any loan by the Plan to a Participant under Section 8.01 of the Participant or of a dependent (as defined in section Plan shall satisfy the following requirements: 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other (a) Availability. Loans shall be made available to similar and extraordinary unforeseeable circum- all Participants on a reasonably equivalent basis. stances arising as a result of events beyond the control of the Participant. The need to send a (b) Interest Rate. Loans must be adequately Participant's child to college or to purchase a new secured and bear a reasonable interest rate. home shall not be considered unforeseeable emer- gencies. The determination as to whether such an (c) Loan Limit. No Participant loan shall exceed unforeseeable emergency exists shall be based on the the present value of the Participant's Account. merits of each individual case. (d) Foreclosure. In the event of default on any 7.07 Transitional Rule for Pre-1989 Benefit Elec- installment payment, the outstanding balance of the tions: In the event that, prior to January 1, 1989, a loan shall be a deemed distribution. In such event, Participant or Beneficiary has commenced receiving an actual distribution of a plan loan offset amount . benefits under a payment option or has irrevocably elected will not occur until a distributable event occurs in a payment option or benefit commencement date, then that the Plan. payment option or election shall remain in effect notwith- standing any other provision of the Plan. (e) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the 7.08 De Minimis Accounts: Notwithstanding the, Participant's Account balance used as a security foregoing provisions of this Article, if the value of a interest held by the Plan by reason of a loan out- Participant's Account does not exceed 33,500 and (a) no standing to the Participant shall be taken into amount has been deferred under the Plan with respect account for purposes of determining the amount of to the Participant during the 2-year period ending on the Account balance payable at the time of death or the date of the distribution and (b) there has been no distribution, but only if the reduction is used as prior distribution under the Plan to the Participant repayment of the loan. pursuant to this Section 7.08, the Participant may elect to receive or the Employer may distribute the Participant's entire Account without the consent of the Participant. Such distribution shall be made in a lump sum. . .. . ..... .. . . . . ...... ...... . . . ...... . . . . . ...... ..... . . . . ..... ..... .. . . .......... Nine ICMA RETIREMENT CORPORATION (f) Amount of Loan. At the time the loan is made, (within such term) instituted at the end of such the principal amount of the loan plus the outstanding period of suspension. balance (principal plus accrued interest) due on any other outstanding loans to the Participant from the Plan (i) Prepayment. The Participant shall be permitted and from all other plans of the Employer that are to repay the loan in whole or in part at any time qualified employer plans under section 72(p)(4) of the prior to maturity, without penalty. Code shall not exceed the least of: (j) Promissory Note. The loan shall be evidenced (1) $50,000, reduced by the excess (if any) of by a promissory note executed by the Participant and delivered to the Employer, and shall bear (a) The highest outstanding balance of loans interest at a reasonable rate determined by the from the Plan during the one (1) year Employer. period ending on the day before the date on which the loan is made, over (k) Security. The loan shall be secured by an assignment of the Participant's right, title and (b) The outstanding balance of loans from the interest in and to his/her Account. Plan on the date on which such loan is made; or (1) Assignment or Pledge. For the purposes of paragraphs (0 and (g), assignment or pledge of any (2) One-half of the value of the Participant's portion of the Participant's interest in the Plan and a interest in all of his/her Accounts under loan, pledge, or assignment with respect to any this Plan. insurance contract purchased under the Plan, will be treated as a loan. (g) Application for Loan. The Participant must give the Employer adequate written notice, as (m) Other Terms and Conditions. The Employer determined by the Employer, of the amount and shall fix such other terms and conditions of the loan desired time for receiving a loan. No more than as it deems necessary to comply with legal require- one (1) loan may be made by the Plan to a Partici- ments, to maintain the qualification of the Plan and pant in any calendar year. No loan shall be ap- Trust under section 457 of the Code, or to prevent proved if an existing loan from the Plan to the the treatment of the loan for tax purposes as a Participant is in default to any extent. distribution to the Participant. The Employer, in its discretion for any reason, may fix other terms (h) Length of Loan. Any loan issued shall require and conditions of the loan, not inconsistent with the Participant to repay the loan in substantially the provisions of this Article and section 72(p) of equal installments of principal and interest, at least the Code. monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, 8.03 Participant Loan Accounts: that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be (a) Upon approval of a loan to a Participant by the used within a reasonable time (determined at the Employer, an amount not in excess of the loan shall time the loan is made) after the loan is made as the be transferred from the Participant's other invest- principal residence of the Participant, the five (5) ment fund(s), described in Section 6.05 of the Plan, year limit shall not apply. In this event, the period to the Participant's Loan Account as of the Account- of repayment shall not exceed a reasonable period ing Date immediately preceding the agreed upon determined by'the Employer. Principal installments date on which the loan is to be made. and interest payments otherwise due may be sus- pended for up to one (1) year during an authorized (b) The assets of a Participant's Loan Account may leave of absence, if the promissory note so provides, be invested and reinvested only in promissory notes but not beyond the original term permitted under received by the Plan from the Participant as consid- this Subsection (h), with a revised payment schedule eration for a loan permitted by Section 8.01 of the Plan or in cash. Uninvested cash balances in a .. ........ ........... . . .. .... . ..... . ... .. . ........ . .......... .... . . . . . .............. . ..... . ..... ....... ...... Ten 457 Plan Adoption Package Retain Document Deferred Compensation Plan Document and Trust, November 1996 Participant's Loan Account shall not bear interest. payment. Nothing in this Section shall be construed Neither the Employer, the Administrator, nor any to authorize any amount to be distributed under the other person shall be liable for any loss, or by reason Plan at a time or in a form that is not permitted of any breach, that results from the Participant's under Section 457 of the Code. Any Payment made exercise of such control. to a person other than the Participant pursuant to this Section shall be reduced by required income tax (c) Repayment of principal and payment of interest withholding; the fact that payment is made to a shall be made by payroll deduction or, where person other than the Participant may not prevent repayment cannot be made by payroll deduction, by such payment from being includible in the gross check, and shall be invested in one (1) or more income of the Participant for withholding and other investment funds, in accordance with Section income tax reporting purposes. 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so (b) Release from Liability to Participant: The invested shall be deducted from the Participant's Employer's liability to pay benefits to a Participant Loan Account. shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, (d) The Employer shall have the authority to former spouse, or child pursuant to paragraph (a) of establish other reasonable rules, not inconsistent the Section. No such transfer shall be effectuated with the provisions of the Plan, governing the unless the Employer or Administrator has been establishment and maintenance of Participant Loan provided with satisfactory evidence that the Em- Accounts. ployer and the Administrator are released from any further claim by the Participant with respect to such Article IX. Non-assignability amounts. The Participant shall be deemed to have released the Employer and the Administrator from 9.01 In General: Except as provided in Article VIII any claim with respect to such amounts, in any case and Section 9.02, no Participant or Beneficiary shall in which (i) the Employer or Administrator.has been have any right to commute, sell, assign, pledge, transfer served with legal process or otherwise joined in a or otherwise convey or encumber the right to receive proceeding relating to such transfer, (ii) the Partici- any payments hereunder, which payments and rights pant has been notified of the pendency of such are expressly declared to be non-assignable and proceeding in the manner prescribed by the law of non-transferable. the jurisdiction in which the proceeding is pending for service of process in such action or by mail from 9.02 Domestic Relations Orders: the Employer or Administrator to the Participant's last known mailing address, and (iii) the Participant (a) Allowance of Transfers: To the extent re- fails to obtain an order of the court in the proceed- quired under final judgement, decree, or order ing relieving the Employer or Administrator from (including approval of a property settlement agree- the obligation to comply with the judgment, decree, ment) made pursuant to a state domestic relations or order. law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former (c) Participation in Legal Proceedings: The spouse, or child of the Participant. Where necessary Employer and Administrator shall not be obligated to carry out the terms of such an order, a separate to defend against or set aside any judgement, decree, Account shall be established with respect to the or order described in paragraph (a) any legal order spouse, former spouse, or child who shall be en- relating to the garnishment of a Participant's ben- titled to make investment selections with respect efits, unless the full expense of such legal action is thereto in the same manner as the Participant; any borne by the Participant. In the event that the amount so set aside for a spouse, former spouse, or Participant's action (or inaction) nonetheless causes child shall be paid out in a lump sum at the earliest the Employer or Administrator to incur such ex- date that benefits may be paid to the Participant, pense, the amount of the expense may be charged unless the order directs a different time or form of against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the ........ .. ............. . . .. .. . . . .. .. .... . .............. . . . . . . . . . .. ... . . . . . . . .. . . . .. ............. .. . Eleven ICMA RETIREMENT CORPORATION Participant. In the course of any proceeding relating Except as may be required to maintain the status of the to divorce, separation, or child support, the Em- Plan as an eligible deferred compensation plan under ployer and Administrator shall be authorized to section 457 of the Code or to comply with other disclose information relating to the Participant's applicable laws, no amendment or termination of the Account to the Participant's spouse, former spouse, Plan shall divest any Participant of any rights with or child (including the legal representatives of the respect to compensation deferred before the date of the spouse, former spouse, or child), or to a court. amendment or termination. Article X. Relationship to other Plans Article XI1. Applicable Law and Employment Agreements . This Plan and Trust shall be construed under the laws of This Plan serves in addition to any other retirement, the state where the Employer is located and is estab- pension, or benefit plan or system presently in existence lished with the intent that it meet the requirements of or hereinafter established for the benefit of the an "eligible deferred compensation plan" under Section Employer's employees, and participation hereunder shall 457 of the Code, as amended. The provisions of this not affect benefits receivable under any such plan or Plan and Trust shall be interpreted wherever possible in system. Nothing contained in this Plan shall be deemed conformity with the requirements of that section. to constitute an employment contract or agreement between any Participant and the Employer or to give Article XI11. Gender and Number any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed The masculine pronoun, whenever used herein, shall to modify the terms of any employment contract or include the feminine pronoun, and the singular shall agreement between a Participant and the Employer. include the plural, except where the context requires otherwise. Article XI. Amendment or Termination of Plan The Employer may at any time amend this Plan pro- vided 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 Administrator shall not be required in order for such amendment 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 amend- ment to the Plan by an instrument in writing transmit- ted 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 Em- ployer 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 hereunder. ......... .. .............. . .. .... . ..... . ...................... ..... . . . . . .. ..... ... ..... .. ........ .. ........... Twelve 457 Plan Adoption Package Retain Document Declaration of Trust of the 1C,11A Retirement Trutt, January 1995 DECLARATION OF TRUST (k) Public Employer Trustees. Public Employers who serve OF ICMA RETIREMENT TRUST as trustees of the Qualified Plans. Article 1. Name and Definitions (1) Public Employer.A unit of state or local government,or any agency or instrumentality thereof, that has adopted a Section 1.1 Name: The Name of the Trust created hereby is Deferred Compensation Plan or a Qualified Plan and has the ICMA Retirement Trust. executed this Declaration of Trust. Section 1.2 Definitions:Wherever they are used herein, the (m) Qualified Plan.A plan sponsored by a Public Employer following terms shall have the following respective meanings: for the purpose of providing retirement income to its (a) By-laws.The By-lases referred to in Section 4.1 hereof, as employees which satisfies the qualification requirements of amended from time to time. Section 401 of the Internal Revenue Code,as amended. (b) Deferred Compensation Plan. A deferred (n) RC. The International City Management Association compensation plan established and maintained by a Public Retirement Corporation. Employer for the purpose of providing retirement income and (o) Retirement Trust.The Trust created by this Declaration other deferred benefits to its employees in accordance with the of Trust. provision of section 457 of the Internal Revenue Code of (p) Trust Property.The amounts held in the Retirement Trust 1986, as amended. on behalf of the Public Employers in connection with Deferred (c) Employees. Those employees who participate in Compensation Plans and on behalf of the Public Employer Qualified Plans. Trustees for the exclusive benefit of Employees pursuant to (d) Employer Trust. A trust created pursuant to an Qualified Plans. The Trust Property shall include any income agreement between RC and a Public Employer, or an resulting from the investment to the amounts so held. agreement between RC and a Public Employer for (q) Trustees. The Public Employee Trustees and ICMA/RC administrative services that is not a trust,in either case for the Trustees elected by the Public Employers to serve as members purpose of investing and administering the funds set aside by of the Board of Trustees of the Retirement Trust. such Employer in connection with its Deferred Compensation agreements with its employees or in connection with its Qualified Plan. Article 11. Creation and Purpose of the Trust; (e) Investment Contract. A non-negotiable contract Ownership of Trust Property entered into by the Retirement Trust with a financial Section 2.1 Creation: The Retirement Trust was created by institution that provides for a fixed rate of return on the execution of this Declaration of Trust by the initial investment. Trustees and Public Employers and is established with respect (f) ICMA.The International Ciry/County Management to each participating Public Employer by adoption of this Association. Declaration of Trust. (g) ICMA/RC Trustees. Those Trustees elected by the Section 2.2 Purpose: The purpose of the Retirement Trust Public Employers who, in accordance with the provisions of is to provide for the commingled investment of funds held by Section 3.1(a) hereof, are also members of the Board of the Public Employers in connection with their Deferred Directors of ICMA or RC (or in the case of RC, former Compensation and Qualified Plans. The Trust Property shall members of the RC Board). be invested in the Portfolios, in Investment Contracts, and in (h) Investment Adviser. The Investment Adviser that enters other investments recommended by the Investment Adviser into a contract NN ith the Retirement Trust to provide advice under the supervision of the Board of Trustees. No part of the with respect to investment of the Trust Property. Trust Property will be invested in securities issued by Public (i) Portfolios.The separate commingled accounts of Employers. investment established by the Investment Adviser to the Section 2.3 Ownership of Trust Property: The Trustees Retirement Trust,under the supervision of the Trustees, for shall have legal title to the Trust Property. The Public Em- the purpose of providing investments for the Trust Property. ployers shall be the beneficial owners of the portion of the 0) Public Employee Trustees. Those Trustees elected by Trust Property allocable to the Deferred Compensation Plans. the Public Employers who,in accordance with the provision The portion of the Trust Property allocable to the Qualified of Section 3.1(a) hereof, are full-time employees of Public Plans shall be held for the Public Employer Trustees for the Employers. exclusive benefit of the Employees. .. . .... . . ... . . . . ... ... . . . ..... . . ......:.................. . ... .. . .... .. . ...... . ..... Thirteen ICh1A RETIREMENT CORPORATION Article Ill. Trustees unexpired portion of the term of the Trustee who has resigned Section 3.1 Number and Qualification of Trustees: or otherwise ceased to be a Trustee. The appointment shall be (a)The Board of Trustees shall consist of nine Trustees.Five of made by a written instrument signed by a majority of the the Trustees shall be full-time employees of a Public Employer Trustees. The person appointed must be the same type of (the Public Employee Trustees) who are authorized by such Trustee (i.e.,Public Employee Trustee or ICMA/RC Trustee) Public Employer to serve as Trustee.The remaining four as the person who has ceased to be a Trustee. An appointment Trustees shall consist of two persons who, at the time of of a Trustee may be made in anticipation of a vacancy to occur election to the Board of Trustees, are members of the Board of at a later date by reason of retirement or resignation,provided Directors of ICMA and two persons who, at the time of that such appointment shall not become effective prior to such election,are members or former members of the Board of retirement or resignation. Whenever a vacancy shall occur, Directors of RC (the ICMA/RC Trustees). One of the until such vacancy is filled as provided in this Section 3.5, the Trustees who is a director of ICMA, and one of the Trustees Trustees in office,regardless of their number,shall have all the who is a director of RC,shall,at the time of election,be full- powers granted to the Trustees and shall discharge all the duties time employees of Public Employers. (b) No person may unposed upon the Trustees by this Declaration. A written serve as a Trustee for more than two terms in any ten-year instrument certifying the existence of a vacancy signed by a period. majority of the Trustees shall be conclusive evidence of the Section 3.2 Election and Term: (a) Except for the Trust- existence of such vacancy. ees appointed to fill vacancies pursuant to Section 3.5 hereof, Section 3.6 Trustees Serve in Representative Capacity: the Trustees shall be elected by a vote of a majority of the By executing this Declaration, each Public Employer agrees voting Public Employers in accordance with the procedures set that the Public Employee Trustees elected by the Public forth in the By-Laws. (b) At the first election of Trustees, Employers are authorized to act as agents and representatives of three Trustees shall be elected for a term of three years, three the Public Employers collectively. Trustees shall be elected for a term of two years and three Trustees shall be elected for a term of one year.At each subsequent election,three Trustees shall be elected, each to Article IV. Powers of Trustees serve for a term of three years and until his or her successor is Section 4.1 General Powers: The Trustees shall have the elected and qualified. power to conduct the business of the Trust and to carry on its Section 3.3 Nominations: The Trustees who are full-time operations. Such power shall include,but shall not be limited employees of Public Employers shall serve as the Nominating to, the power to: Committee for the Public Employee Trustees.The Nominating (a) receive the Trust Property from the Public Employers, Committee shall choose candidates for Public Employee Trustee Public Employer Trustees or the trustee or administrator in accordance with the procedures set forth in the By-Laws. under any Employer Trust; Section 3.4 Resignation and Removal: (a) Any Trustee (b) enter into a contract with an Investment Adviser may resign as Trustee (without need for prior or subsequent providing, among other things,for the establishment and accounting) by an instrument in writing signed by the Trustee operation of the Portfolios,selection of the Investment and delivered to the other Trustees and such resignation shall Contracts in which the Trust Property may be invested, be effective upon such delivery, or at a later date according to selection of the other investments for the Trust Property the terms of the instrument. Any of the Trustees may be and the payment of reasonable fees to the Investment removed for cause,by a vote of a majority of the Public Adviser and to any sub-investment adviser retained by Employers. (b) Each Public Employee Trustee shall resign his the Investment Adviser, or her position as Trustee within sixty days of the date on (c) review annually the performance of the Investment which he or she ceases to be a full-time employee of a Public Adviser and approve annually the contract with such Employer. Investment Adviser, Section 3.5 Vacancies: The term of office of a Trustee shall (d) invest and reinvest the Trust Property in the Portfolios, terminate and a vacancy shall occur in the event his or her the Investment Contracts and in any other investment death,resignation, removal, adjudicated incompetence or other recommended by the Investment Adviser,but not incapacity to perform the duties of the office of a Trustee. In including securities issued by Public Employers, the case of a vacancy, the remaining Trustees shall appoint provided that if a Public Employer has directed that its ;uch person as they in their discretion shall see fit(subject to, monies be invested in one or more specified Portfolios the limitations set forth in this Section), to serve for the or in an Investment Contract, the Trustees of the .. ...... . . ........... . ..... . . . . . ... ..... ........... . .. . ......... . . .. ... . ... . . . . ..... .. .............. .... .... Fourteen 45 7 Plan Adoption Package Retain Document Declaration of Trust of the ICMA Retirement Trust, January 1995 Retirement Trust shall invest such monies in accordance expenses from of the Trust Property; with such directions; (m)pay expenses properly allocable to the Trust Property (e) keep such portion of the Trust Property in cash or cash incurred in connection with the Deferred balances as the Trustees,from time to time, may deem Compensation Plans, Qualified Plans, or the Employer to be in the best interest of the Retirement Trust created Trusts and deduct such expenses from that portion of hereby«zthout liability for interest thereon; the Trust Property to which such expenses are properly (f) accept and retain for such time as they may deem allocable; advisable any securities or other property received or (n) pay out of the Trust Property all real and personal acquired by them as Trustees hereunder, whether or not property taxes, income taxes and other taxes of any and such securities or other property would normally be all kinds which, in the opinion of the Trustees, are purchased as investment hereunder; properly levied, or assessed under existing or future laws (g) cause any securities or other property held as part of the upon,or in respect of, the Trust Property and allocate Trust Property to be registered in the name of the any such taxes to the appropriate accounts; Retirement Trust or in the name of a nominee,and to (o) adopt, amend and repeal the By-laws,provided that hold any investments in bearer form, but the books and such By-laws are at all times consistent with the terms of records of the Trustees shall at all times show that all this Declaration of Trust; such investments are a part of the Trust Property; (p) employ persons to make available interests in the (h) make, execute,acknowledge, and deliver any and all Retirement Trust to employers eligible to maintain a documents of transfer and conveyance and any and all Deferred Compensation Plan under Section 457 or a other instruments that may be necessary or appropriate Qualified Plan under Section 401 of the Internal to carry out the powers herein granted; Revenue Code, as amended; (i) vote upon any stock,bonds, or other securities; give (q) issue the Annual Report of the Retirement Trust,and general or special proxies or powers of attorney with or the disclosure documents and other literature used by without power of substitution; exercise any conversion the Retirement Trust; privileges,subscription rights,or other options, and (r) in addition to conducting the investment program make any payments incidental thereto; oppose, or authorized in Section 4.1(d), make loans,including the consent to, or otherwise participate in, corporate purchase of debt obligations,provided that all such loans reorganizations or to other changes affecting corporate shall bear interest at the current market rate; securities, and delegate discretionary powers and pay any (s) contract for,and delegate any powers granted hereunder assessments or charges in connection therewith; and to,such officers, agents, employees, auditors and generally exercise any of the powers of an owner with attorneys as the Trustees may select,provided that the respect to stocks,bonds, securities or other property Trustees may not delegate the powers set forth in held as part of the Trust Property; paragraphs (b), (c) and(o) of this Section 4.1 and may. (j) enter into contracts or arrangements for goods or not delegate any powers if such delegation would violate services required in connection with the operation of their fiduciary dudes; the Retirement Trust, including,but not limited to, (t) provide for the indemnification of the Officers and contracts with custodians and contracts for the provision Trustees of the Retirement Trust and purchase fiduciary of administrative services; insurance; (k) borrow or raise money for the purposes of the (u) maintain books and records,including separate accounts Retirement Trust in such amount, and upon such terms for each Public Employer,Public Employer Trustee or and conditions, as the Trustees shall deem advisable, Employer Trust and such additional separate accounts as provided that the aggregate amount of such borrowings are required under,and consistent with, the Deferred shall not exceed 30%of the value of the Trust Property. Compensation or Qualified Plan of each Public No person lending money to the Trustees shall be Employer; and bound to see the application of the money lent or to inquire into its validity, expediency or propriety or any (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically such borrowing; incur reasonable expenses as required for the mentioned herein, as the Trustees may deem necessary (1) operation of the Retirement Trust and deduct such or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. .......... . ..... ... . ... . . ... .. . . . .... .. . ... .. . ...... ..... . . .. ..... ...... ........... . ................ ........ . Fifteen ICNIA RETIREMENT CORPORATION Section 4.2 Distribution of Trust Property:Distributions Article VI. Annual Report to Shareholders of the Trust property shall be made to, or on behalf of, the The Trustees shall annually submit to the Public Employers Public Employer or Public Employer Trustee,in accordance and Public Employer Trustees a written report of the transac- with the terms of the Deferred Compensation Plans, Qualified lions of the Retirement Trust,including financial statements Plans or Employer Trusts. The Trustees of the Retirement which shall be certified by independent public accountants Trust shall be fully protected in making payments in actor- chosen by the Trustees. dance with the directions of the Public Employers,Public Employer Trustees or trustees or administrators of any Em- Article VII. Duration or Amendment ployer Trust without ascertaining whether such payments are of Retirement Trust in compliance with the provisions of the applicable Deferred Section 7.1 Withdrawal: A Public Employer or Public Compensation or Qualified Plan or Employer Trust_ Section 4.3 Execution of Instruments: The Employer Trustee may,at any time,withdraw from this Trustees may unanimously designate any one or more of the Trustees to Retirement Trust by delivering to the Board of Trustees a written statement of withdrawal. In such statement,the Public execute any instrument or document on behalf of all,including Employer or Public Employer Trustee shall acknowledge that but not limited to the signing or endorsement of any check and the signing of any applications, insurance and ocher the Trust Property allocable to the Public Employer is derived from compensation deferred by employees of such Public contracts, and the action of such designated Trustee or Trust- Employer pursuant to its Deferred Compensation Plan or from ees shall have the same force and effect asif taken by all the contributions to the accounts of Employees pursuant to a Trustees. Qualified Plan, and shall designate the financial institution to Article V. Duty of Care and Liability of Trustees which such property shall be transferred by the Trustees of the Section 5.1 Duty'of Care: In exercising the powers herein Retirement Trust or by the trustee or administrator under an before granted to the Trustees, the Trustees shall perform all Employer Trust. acts within their authority for the exclusive purpose of provid- Section 7.2 Duration: The Retirement Trust shall continue ing benefits for the Public Employers in connection with until terminated by the vote of a majority of the Public Deferred Compensation Plans and Public Employer Trustees Employers, each casting one vote. Upon termination, all of pursuant to Qualified Plans, and shall perform such acts with the Trust Property shall be paid out to the Public Employers, the care,skill,prudence and diligence in the circumstances Public Employer Trustees or the trustees or administrators of then prevailing that a prudent person acting in a like capacity the Employer Trusts, as appropriate. and familiar with such matters would use in the conduct of an Section 7.3 Amendment:The Retirement Trust may be enterprise of a like character and with like aims. amended by the vote of a majority of the Public Employers, Section 5.2 Liability: The Trustees shall not be liable for any each casting one vote. mistake of judgment or other action taken in good faith,and Section 7.4 Procedure: A resolution to terminate or amend for any action taken or omitted in reliance in good faith upon the Retirement Trust or to remove a Trustee shall be submit- the books of account or other records of the Retirement Trust, ted to a vote of the Public Employers if: (i) a majority of the upon the opinion of counsel, or upon reports made to the 'Trustees so direct, or; (ii) a petition requesting a vote signed by Retirement Trust by any of its officers, employees or agents or not less that 25 percent of the Public Employers,is submitted by the Investment Adviser or any sub-investment adviser, to the Trustees. accountant,appraiser or other expert or consultant selected with reasonable care by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for Article Vlll. Miscellaneous any loss sustained by the Trust Property by reason of any Section 8.1 Governing Law: Except as otherwise required investment made in good faith and in accordance with the by state or local law, this Declaration of Trust and the Retire- standard of care set forth in Section 5.1. ment Trust hereby created shall be construed and regulated by Section 5.3 Bond: No Trustee shall be obligated to give any the laws of the District of Columbia. bond or other security for the performance of any of his or her Section 8.2 Counterparts:This Declaration may be dudes hereunder. executed by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. . . . . .................. ....... .... . ...... . ............. ........... .... ..... ...... .. . .. ... ..... .. . ....... Sixteen 457 Plan Loan _Guidelines Name of Plan: City of Kent. Washinatnn 1. Purpose T The purpose of these guidelines is to establish the terms and conditions under which the employer will grant loans to participants.This is the only official Loan Program Document of the above named Plan. Il. Eligibility Loans are available to all active employees.Loans will not be granted to participants who have an existing loan in default. Loans will be pro-rated among all the funds in which the participant is invested at the time the loan is made. Loans are available for the following purposes:- [select one] fgl All purposes 0 Loans shall only be granted in the event of a participant's hardship or for the purpose of enabling a participant to meet certain specified financial situations.The employer shall deter- mine,based on all relevant facts and circumstances,that the amount of the loan is not in excess of the amount required to relieve the financial need.For this purpose,financial need shall include,but not be limited to:unreimbursed medical expenses of the participant or members of the participant's immediate family,establishing or substantially rehabilitating the principal residence of the participant,or paying for a college education (including graduate studies) for the participant or his/her dependents. Ill. Frequency of loans [select one] �l Participants may receive one loan per calendar year.Moreover,participants may have only one outstanding loan at a time. 0 Participants may receive one loan per calendar year.Moreover,no participant may have more than five (5) loans outstanding at one time. EXHIBIT . ............ ........ ......... . ................ . ........ ...... ..... . . ...... ... ... ............. ... 0ne l ICMA RETIREMENT CORPORATION IV. Loan amount _ The minimum loan amount is $1,000. The maximum amount of all loans to the participant from the plan and all other plans sponsored by the employer that are qualified employer plans undei section 72(p)(4) of the Code is the lesser of- (1) $50,000,reduced by the excess (if any) of- a. The highest outstanding balance of loans during the one-year period ending on the day before the date a loan is to be made,over b. The outstanding balance of loans on the date the loan is to be made; or (2) one half of the participant's vested account balance. If a participant has any loans outstanding at the time a new loan is requested,the new loan will be limited to the maximum amount calculated above reduced by the total of the outstanding loans. A loan cannot be issued for more than the above amount.The participant's requested loan amount is subject to downward adjustment without notice due to market fluctuation between the time of appli catiow and the time the loan is made. V. Length of loan A loan must be repaid in substantially equal installments of principal and interest,at least monthly,over a period that does not exceed five (5)years. Loans for a principal residence must be repaid in substantially equal installments of principal and interest,at least monthly,over no more than 15 [state number of years] years (maximum 30 years). VI. Loan repayment process Loans for active employees must be repaid through payroll deduction.Repayment will begin as soon as practicable on a date determined by the employer's payroll cycle. Loans outstanding for former employees or employees on a leave of absence must be repaid on the same schedule as if payroll deductions were still being made unless they reamortize their loans and establish a new repayment schedule that provides that substantially equal payments are made at least monthly over the remain- ing period of the loan.All repayments must be made through the employer. Loan payments,including loan payments from former employees,are allocated to the participant's current election of investment options on file with RC. The participant may pay off all or a portion of the principal and interest early without penalty or additional fee.Extra payments are applied forward to both principal and interest as specified in the original repayment schedule,unless the additional payment is for the balance due. .................... . .... ... ........ ........ ............ .. . ...... ...... .. ........................ . two 457 Plan Loan Guidelines Vll. Loan interest rate _ The rate of interest for loans of five-(5) years or less will be based on prime plus 0.5%. The rate of interest for loans for a principal residence will be based on the FHA/VA rate. Interest rates are determined on the last business day of the month preceding the month the loan is disbursed.The interest rate is locked in at the time a loan is approved and remains constant throughout the life of the loan. The prime interest rate is determined on the last business day of each month using the WaII Street Journal as the source.The FHA/VA interest rate is also determined on the last business day of each month using the Telerate Information Service as the source. Loan interest rates for new loans may fluctuate upward or downward monthly,depending on the movement of the prime and FHA/VA interest rates. The employer may modify the manner in which loan interest rates will be determined,but only with respect to future loans. V111. Loan application procedure All loans must be requested in writing on an application approved by the plan administrator.The application must be signed by the participant.The employer must review and approve the application. The participant will be required to sign a promissory note evidencing the loan and a disclosure statement that includes an amortization schedule prior to receiving a loan check.Loan checks will generally be issued on the Friday following the receipt of a complete loan application.The loan check,promissory note,disclosure statement and truth-in-lending recision notice will be sent to the employer,who will obtain the necessary signatures and deliver the check to the participant.All executed documents must be returned to the plan administrator within 10 calendar days from the date the check is issued. IX. Security/Collateral That portion of a participant's account balance that is equal to the amount of the loan is used as collateral for the loan.The collateral amount may not exceed 50 percent of the participant's account balance at the time the loan is taken.Only that portion of the account balance that corresponds to the amount of the outstanding loan balance is used as collateral. X. Acceleration [select one] P All loans are due and payable in full upon separation from service. ❑ All loans are due and payable when a participant receives a distribution of all of his/her account balance after separation from service.The amount of the outstanding loan balance will be reported as a distribution in addition to the amount of cash distributed from the plan. ❑ All loans are due and payable when a participant receives a distribution of part of his/her account balance after separation from service.The amount of the outstanding loan balance will be reported as a distribution in addition to the amount of cash distributed from the plan. .... ................. . . ..... .. ....... ...... ...... ..... ...... ............ ............. .... three ICMA RETIREMENT CORPORATION XI. Reamortization - Any outstanding loan may be reamortized.Reamortization means changing the terms of a loan,such as length of repayment period,interest rate,and frequency of repayments.A loan may not be reamortized to extend the length of the loan repayment period to more than five (5) years from the date the loan was originally made,or in the cue of a loan to secure a principal residence,beyond the number of years specified by the employer in Section V above. A participant must request the reamortization of a loan in writing on a reamortization application acceptable to the plan administrator.Upon processing the request,a new disclosure statement will be sent to the em- ployer for endorsement by the participant and approval by the employer.The executed disclosure statement must be returned to the plan administrator within 10 calendar days from the date it is signed.The new disclo- sure statement is considered an amendment to the original promissory note,therefore a new promissory note will not be required. A reamortization will not be considered a new loan for purposes of calculating the number of loans outstand- ing or the one loan per calendar year limit. XII. Refinancing existing loans If a participant has one outstanding loan,that loan may be refinanced.If a participant has more than one outstanding loan,no loans may be refinanced.Refinancing means concurrently repaying an existing loan and borrowing an additional amount through a new loan.A participant may not refinance a residential loan. In order to refinance an existing loan,a participant must request a new loan in writing on an application approved by the plan administrator.Such request must be made at a time when the participant is eligible to obtain a loan as defined by the employer in Section III above.The amount of a new loan requested for the purpose of refinancing is subject to the loan limits specified in Section IV above. Because a refinancing is considered a new loan,only active employees may refinance an outstanding loan. XI11. Reduction of Loan If a participant dies prior to full repayment of the outstanding loan(s),the outstanding loan balance(s) will be deducted from the account prior to distribution to the beneficiary(ies).The unpaid loan amount is a taxable distribution and may be subject to early withdrawal penalties.The participant's estate is responsible for taxes or penalties on the unpaid loan amount,if any.The beneficiary is responsible for taxes due on the amount he/she receives.A Form 1099 will be issued to both the beneficiary and the estate for these purposes. . ................. ...... .... ... .................... . .. ... ... ... ...... . .. ..... . .. . . ............ ... f o u r 457 Plan Loan Guidelines XIV. Loan default If a required payment of principal and interest is not made within 90 days of the date such payment is due,the loan is considered in default.If a loan is in default,the loan will be foreclosed during the calendar year in which the participant_separates from service.If a participant has separated from service and defaults on a loan, then the loan will be foreclosed during the calendar year in which the default occurs. If the employer has elected in Section X.and the promissory note so provides,a loan becomes due and payable when the participant separates from service.If the terms of the loan contain this provision,the outstanding loan amount is"deemed"in default as of the date of separation from service.The amount of the outstanding loan,including accrued interest,will be reported to the IRS as a distribution that may be subject to taxes. If the employer has so elected in Section X,and the promissory note so provides,a loan becomes due and payable when the participant takes a distribution of some or all of the balance in his/her account after separa- tion from service.If the terms of the loans contain such a provision and the outstanding loan balance is not paid prior to the distribution from the account,the outstanding loan amount will be considered in default upon issuance of the distribution check.The amount of the outstanding loan,including accrued interest,will be reported to the IRS as a distribution that may be subject to taxes.Participants who have an existing loan in default will not be eligible for additional loans. XV. Fees Fees may be charged for various services associated with the application for and issuance of loans.All appli- cable fees will be debited from the participant's account balance and/or from the participant's loan repayments. prior to crediting the repayment of principal and interest to the participant's account.A schedule of fees applicable to this plan is available from the plan administrator. XVI. Other The employer has the right to set other terms and conditions as it deems necessary for loans from the plan in order to comply with any legal requirements.All terms and conditions will be administered in a uniform and non-discriminatory manner. In Witness Whereof, the employer hereby caused these Guidelines to be executed this day of , 19 EMPLO ER c Accepted: ICMA RETIREMENT CORPORATION By: BY: Title: Title: Attest: Attest: . ................. .... ................... . . ... .. .. . . ...... ........ . .. . ...... .. . ...... ..... . ... five EXIMIT D AFFIRMATIVE STATEMENT FOR AMENDING A DEFERRED COMPENSATION PLAN . Name of Employer: CITY OF KENT State: WASMNGTON 3 /0/ 1 /6/5 15 / Employer Plan Number As a duly authorized agent of the above named Employer,I hereby amend and restate the Employer's Deferred Compensation Plan("the Plan")in the form of the ICMA Retirement Corporation Deferred Compensation Plan and Trust. Specifically,the assets of the Plan shall be held in trust,with the Employer 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 Employer's beneficial ownership of the Plan assets held in the ICMA Retirement Trust shall be held for the further exclusive benefit of the Plan participants and their beneficiaries; The above named employer stipulates that the Plan will permit loans;and affirms that the Employer hereby agrees to serve as trustee under the Plan. (Signatur aJ+� (Title oYbe4patcd A ent) (Date) EXHIBIT.. ORDINANCE NO. 3365 AN ORDINANCE of the City Council of the City of Kent, Washington, amending and restating the City's ar� I.R.C. Section 457Deferred Compensation Plan with ICMA Retirement Corporation,confirming a Declaration of Trust, A 3 6 , 1 establishing the City of Kent as trustee, implementing plan and trust program loan guidelines, amending Ordinance 2541 relating to administration of the City's Internal Revenue Code Section 457 Plan and Trust Programs, and authorizing small balance account distributions. WHEREAS, the employees of the City of Kent ("City") render valuable services; and WHEREAS, the City has established a deferred compensation plan administered by ICMA Retirement Corporation("ICMA")for the benefit of its employees by providing increased flexibiltiy 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 ("I.R.C.") require changes to the structure of the deferred compensation plan and allow enhancements of the benefits of the deferred compensation plan; and L§457 Plan Amendments WHEREAS, ICMA has provided updated plan and trust documents that include participant loan features; and WHEREAS,the City desires to make participant loans available under the plan and trust. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,WASHINGTON,DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Plan and Trust Amended The City adopts the Deferred Compensation Plan and Trust Document(the"Plan"), attached and incorporated as Exhibit A, as the amendment and restatement of its existing deferred compensation program administered by ICMA, and confirms the continuing appointment of ICMA to serve as Administrator under the Plan. SECTION 2. Dec argdon Qf Trust Adopted The City confirms the Declaration of Trust of ICMA Retirement Trust(the "Trust"), attached and incorporated as Exhibit B, for its existing deferred compensation program administered by ICMA. SECTION 3. Plan Assets to be Held in Trust City as Trustee. The assets of the Plan shall be held in trust,with the City serving as Trustee,for the exclusive benefit of the Plan and its 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. The City confirms and agrees to serve as Trustee under the Plan. SECTION4. Plan Executed The City hereby executes the Plan. �CMA§457 Plan Amendments 2 SF.rTION 5, Participant Loan Program Established As of the effective date of this ordinance and acceptance of this ordinance, including all exhibits,by ICMA, the City elects to make loans available to participants pursuant to Article VIH of the Plan and adopts the 457 Plan Loan guidelines attached and incorporated as Exhibit C, subject to approval of those guidelines by the Plan Administrator. 4ECTION 6. Mayor Authorized to Execute Necessary Documents. The Mayor is authorized to sign the Affirmative Statement,attached and incorporated as Exhibit D, as well as all other documents necessary to implement the Plan under this ordinance. CF.('T70N 7. City Plan and Trust Administrator. Section One of Ordinance 2541,which amends Section Four of Ordinance 2361, is amended as follows: 'Rtere is hereby bi C I L' L Lell_ A < f < I37H se a fat perie4s as 7 whieh Se The Employee Services Division Director, or hear_or designate, shall administer the C&'s participation in the Deferred Compensation Plan, m 4 the Deferred Compensation Plan Investments hereafter created, and The Deferred Com=sation plan and Trost emvloyee loan program. and shall have the duties as defined in said Plan. The �eferrett e The Employee members of Services Division Director,or her or his designates shall have the authority to sell, assign, and transfer units held under annuity contracts in the name of the City of Kent Deferred Compensation 457 Plan and Trust and to deliver any and all written instruments necessary or proper to effectuate such transactions. CMA§457 Plan Amendments 3 SECTION 9. Authorizatxon to Change Loan Program Guidelines The Employee Services Division Director, under the authority established in Section 8 of this ordinance, is authorized to effect changes to the Plan Loan Guidelines as are reasonably requested by ICMA or that the Employee Services Division Director determines appropriate to further the purposes of this ordinance. SECTION 10. Small Balance Account Distributions The Employee Services Division Director, under the authority established in Section 8 of this ordinance, is authorized to execute the necessary documents to implement Section 457 Small Balance Account Distributions under the ICMA Plan, including the documents attached and incorporated as Exhibit E. SECTION 11. Plan and its Investments not Endorsed The City's continuance of the Plan does not constitute an endorsement of the Plan or of any investment options offered through the Plan. SEC770NIZ Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is ratified and confirmed. SECTION 13. Savin All previous ordinances relating to the City's participation in the ICMA 457 Plan that are amended by this ordinance shall remain in full force and effect until the effective date of this ordinance. SECTION 14. Severability. If any one or more sections, subsections, or sentences of this ordinance are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this ordinance and the same shall remain in full force and effect. MA §457 Plan Amendments 4 SECTION 15. E fective Date. This ordinance shall take effect and be in force five(5)days from its passage, approval and publication as provided by law. JIM TE, MAYOR. ATTEST: BRENDA JACOBE , C CLERK APPROVED AS TO FORM: OGER A. LUBOVICH, Y ATTO PASSED: a / day of Q� . 1997. APPROVED: da- day of &2 1997. PUBLISHED: a day of 0 . 1997. I hereby certify that this is a true copy of Ordinance No.3 3 d.s. passed by the City Council of the City of Kent, Washington, and approved by the Mayor of the City of Kent as hereon indicated.. Q. ) BRENDA JACOB TY CLERK r:v.nwwxnrt�ri►ru�asno�,.v.oass CNIA §457PIan Amendments 5