The URL can be used to link to this page

Home My WebLink About2014-04-08; City Council; 21557; Establishment (Defined Contribution Plan) Money Purchase Retirement Plan City ManagerCITY OF CARLSBAD - AGENDA BILL AB# 21,557 ESTABLISHMENT OF A (DEFINED DEPT.DIRECTDR MTG. 4/8/14 CONTRIBUTION PLAN) MONEY PURCHASE CITY ATTY. DEPT. HR RETIREMENT PLAN FOR THE CITY MANAGER CITY MGR. RECOMMENDED ACTION; Adoption of Resolution No. 2014-060 establishing a (Defined Contribution) Money Purchase Retirement Plan forthe City Manager. ITEM EXPLANATION: By way of Resolution No.2014-040 City Council directed staff to establish a deferred compensation plan for the City Manager beginning April 14, 2014. FISCAL IMPACT; The estimated fiscal impact of this action is $27,000 annually. Sufficient funding has been included in the City Manager's operating budget to cover this expense. ENVIRONMENTAL IMPACT; Pursuant to Public Resources Code section 21065, this action does not constitute a "project" within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonable foreseeable indirect physical change in the environment; and therefore, does not require environmental review. EXHIBITS: 1. 2. 3. 4. 5. 6. Resolution No. 2014-060 401 Governmental Money Purchase Plan & Trust Basic Document ICMA Retirement Corporation Governmental Money Purchase Plan & Trust Adoption Agreement Administrative Services Agreement between ICMA Retirement Corporation and City of Carlsbad 401 Qualified Plan Implementation Data Form ICMA-RCs Vantage Trust Fund Fee Disclosure Data as of December 31, 2013 DEPARTMENT CONTACT: Donna Hernandez 760-602-7533 Donna.Hernandez(5)carlsbadca.gov FOR CLERK USE. COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC • DENIED • CONTINUED TO DATE UNKNOWN • CONTINUED • RETURNED TO STAFF • WITHDRAWN • OTHER - SEE MINUTES • AMENDED • REPORT RECEIVED • EXHIBIT 1 1 RESOLUTION NO. 2014-060 2 ^ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, 4 CALIFORNIA, ESTABLISHING A (DEFINED CONTRIBUTION) MONEY PURCHASE RETIREMENT PLAN FOR THE CITY MANAGER 5 " 6 7 8 9 26 27 28 WHEREAS, the City of Carlsbad (the "City") has a City Manager rendering valuable services; and WHEREAS, the establishment of a money purchase retirement plan benefits the City 2Q Manager by providing funds for retirement; and 11 WHEREAS, the City desires that its money purchase retirement plan be administered by ICMA-RC and that the funds held in such plan be invested in the Vantage Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, 13 14 15 16 J y California, as follows: 18 1. That the above recitations are true and correct. 19 20 21 22 23 attached hereto). 24 3. That the Plan shall be maintained for the exclusive benefit ofthe City Manager; and 25 2. That the City hereby establishes a money purchase retirement plan (the "Plan") in the form of The ICMA Retirement Corporation Governmental Money Purchase Plan & Trust, pursuant to the specific provisions ofthe Plan & Trust Adoption Agreement (executed copy that the City hereby executes the Declaration of Trust of Vantage Trust, intending this execution to be operative with respect to any retirement or deferred compensation plan T 22 23 24 25 26 27 28 Trust. 4. That the City hereby agrees to serve as trustee under the Plan and to invest funds held under the Plan in the Vantage Trust; and 1 subsequently established by the City, if the assets of the plan are to be invested in the Vantage 2 3 4 5 5 5. That the Human Resources Director shall be the coordinator for the Plan; shall 7 receive reports, notices, etc., from the ICMA Retirement Corporation or the Vantage Trust; shal g cast, on behalf ofthe Employer, any required votes under the Vantage Trust; may delegate any 9 administrative duties relating to the Plan to appropriate departments; and 10 ^ ^ 6. That the Human Resources Director is authorized to execute all necessary 22 agreements with the ICMA Retirement Corporation incidental to the administration ofthe Plan 13 // // // // // 14 15 16 17 18 19 // 20 // 21 // // // // 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City of Carlsbad on the 8*"^ day of April, 2014, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood, Schumacher and Blackburn. None. ABSENT: None. ATTEST: JARftARA ENGLESON,(aty Clerk *i, T*r ..V ICMARC Building Retirement Security ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST BASIC DOCUMENT Table of Contents I. PURPOSE 1 II. DEFINITIONS 1 III. ELIGIBILITY 4 IV. CONTRIBUTIONS 5 V. LIMITATION ON ALLOCATIONS 7 VI. TRUST AND INVESTMENT OF ACCOUNTS 11 VIL VESTING 14 VIII. BENEFITS CLAIM 15 IX. COMMENCEMENT OF BENEFITS 15 X. DISTRIBUTION REQUIREMENTS 19 XL MODES OF DISTRIBUTION OF BENEFITS 23 XII. SPOUSAL DEATH BENEFIT REQUIREMENTS 24 XIIL LOANS TO PARTICIPANTS 25 XIV PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 28 XV ADMINISTRATION 30 XVL MISCELLANEOUS 31 XVII. SPOUSAL BENEFIT REQUIREMENTS 33 XVIII. FINAL PAY CONTRIBUTIONS 36 XIX. ACCRUED LEAVE CONTRIBUTIONS 37 DECLARATION OF TRUST 39 ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST I. PURPOSE The Employer hereby adopts this Plan and Trust to provide funds for its Employees' retirement, and to provide funds for their Beneficiaries in the event of death. The benefits provided in this Plan shall be paid from the Trust. The Plan and the Trust forming a part hereof are adopted and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. Except as provided in Sections 4.12 and 14.03, 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 Beneficiaries. II. DEFINITIONS 2.01 Account. A separate record which shall be established and maintained under the Trust for each Participant, and which shall include all Participant subaccounts created pursuant to Article IV, plus any Participant Loan Account created pursuant to Section 13.03. Each subaccount created pursuant to Article IV shall include any earnings of the Trust and adjustments for withdrawals, and realized and unrealized gains and losses allocable thereto. The term "Account" may also refer to any of such separate subaccounts. 2.02 Accounting Date. Each day that the New York Stock Exchange is open for trading, and such other dates as may be determined by the Plan Administrator, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Adoption Agreement. The separate agreement executed by the Employer through which the Employer adopts the Plan and elects among the various alternatives provided thereunder, and which upon execution, becomes an integral part of the Plan. 2.04 Beneficiary. The person or persons (including a trust) designated by the Participant who shall receive any benefits payable hereunder in the event of the Participant's death. The designation of such Beneficiary shall be in writing to the Plan Administrator. A Participant may designate primary and contingent Beneficiaries. Where no designated Beneficiary survives the Participant or no Beneficiary is otherwise designated by the Participant, the Participant's Beneficiary shall be his/her surviving spouse or, if none, his/her estate. Notwithstanding the foregoing, the Beneficiary designation is subject to the requirements of Article XII unless the Employer elects otherwise in the Adoption Agreement. Notwithstanding the foregoing, where elected by the Employer in the Adoption Agreement (the "QJSA Election"), the Beneficiary designation is subject to the requirements of Article XVII. Notwithstanding the foregoing, to the extent permitted by the Employer, a Beneficiary receiving required minimum distributions in accordance with Article X and not in a benefit form elected under Article XI or XII, may designate a Beneficiary to receive the required minimum distributions that would have otherwise been payable to the initial Beneficiary but for his or her death. 2.05 Break in Service. A Period of Severance of at least twelve (12) consecutive months. In the case of an individual who is absent from work for maternity or paternity reasons, the twelve (12) consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a Break in Service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. 2.06 Code. The Internal Revenue Code of 1986, as amended from time to time. 2.07 Covered Employment Classification. The group or groups of Employees eligible to make and/or have contributions to this Plan made on their behalf, as specified by the Employer in the Adoption Agreement. 2.08 Disability. A physical or mental impairment which is of such permanence and degree that, as determined by the Employer, a Participant is unable because of such impairment to perform any substantial gainfijl activity for which he/she is suited by virtue of his/her experience, training, or education and that has lasted, or can be expected to last, for a continuous period of not less than twelve (12) months, or can be expected to result in death. The permanence and degree of such impairment shall be supported by medical evidence. If the Employer maintains a long-term disability plan, the definition of Disability shall be the same as the definition of disability in the long-term disability plan. 2.09 Earnings. (a) General Rule. Earnings, which form the basis for computing Employer Contributions, are all of each Participant's W-2 earnings which are actually paid to the Participant during the Plan Year, plus any contributions made pursuant to a salary reduction agreement which are not includible in the gross income of the Employee under section 125, 402(e)(3), 402(h) (1)(B), 403(b), 414(h)(2), 457(b), or, effective January 1, 2001, 132(f)(4) ofthe Code. Earnings shall include any pre-tax contributions (excluding direct employer contributions) to an integral part trust of the Employer providing retiree health care benefits. Earnings shall also include any other earnings as defined and elected by the Employer in the Adoption Agreement. Unless the Employer elects otherwise in the Adoption Agreement, Earnings shall exclude overtime compensation and bonuses. (b) Limitation on Earnings. For any Plan Year beginning after December 31, 2001, the annual Earnings of each Participant taken into account in determining allocations shall not exceed $200,000, as adjusted for cost-of-living increases in accordance with section 401(a)(17)(B) of the Code. Annual Earnings means Earnings during the Plan Year or such other consecutive 12-month period over which Earnings is otherwise determined under the Plan (the determination period). The cost-of-living adjustment in effect for a calendar year applies to annual Earnings for the determination period that begins with or within such calendar year. If a determination period consists of fewer than twelve (12) months, the annual Earnings limit is an amount equal to the otherwise applicable annual Earnings limit multiplied by the fraction, the numerator of which is the number of months in the short Plan Year and the denominator of which is twelve (12). If Earnings for any prior determination period are taken into account in determining a Participant's allocations for the current Plan Year, the Earnings for such prior year are subject to the applicable annual Earnings limit in effect for that prior year. (c) Limitations for Governmental Plans. In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Code), the dollar limitation shall not apply to the extent the Earnings which are allowed to be taken into account under the Plan would be reduced below the amount which was allowed to be taken into account under the Plan as in effect on July 1, 1993, as adjusted for increases in the cost-of-living in accordance with section 401(a)(17)(B) of the Code. For purposes of this Section, an eligible participant is an individual who first became a Participant in the Plan during a Plan Year beginning before the first Plan Year beginning after December 31, 1993- 2.10 EfTective Date. The first day of the Plan Year during which the Employer adopts the Plan, unless the Employer elects in the Adoption Agreement an alternate date as the Effective Date of the Plan. 2.11 Employee. Any individual who has applied for and been hired in an employment position and who is employed by the Employer as a common law employee; provided, however, that Employee shall not include any individual who is not so recorded on the payroll records of the Employer, including any such person who is subsequently reclassified by a court of law or regulatory body as a common law employee of the Employer. For purposes of clarification only and not to imply that the preceding sentence would otherwise cover such person, the term Employee does not include any individual who performs services for the Employer as an independent contractor, or under any other non- employee classification. 2.12 Employer. The unit of state or local government or an agency or instrumentality of one (I) or more states or local governments that executes the Adoption Agreement. 2.13 Hour of Service. Each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer, 2.14 Nonforfeitable Interest. The nonforfeitable interest of the Participant or his/her Beneficiary (whichever is applicable) is that percentage of his/her Employer Contribution Account balance, which has vested pursuant to Article VIL A Participant shall, at all times, have a one hundred percent (100%) Nonforfeitable Interest in his/her Participant Contribution, Rollover, and Voluntary Contribution Accounts, 2.15 Normal Retirement Age. The age which the Employer specifies in the Adoption Agreement, If the Employer enforces a mandatory retirement age, the Normal Retirement Age is the lesser of that mandatory age or the age specified in the Adoption Agreement, 2.16 Participant. An Employee or former Employee for whom contributions have been made under the Plan and who has not yet received all of the payments of benefits to which he/she is entitled under the Plan. A Participant is treated as benefiting under the Plan for any Plan Year during which the participant received or is deemed to receive an allocation in accordance with Treas, Reg. section l,4l0(b)-3(a). 2.17 Period of Service. For purposes of determining an Employee's initial or continued eligibility to participate in the Plan or the Nonforfeitable Interest in the Participant's Account balance derived from Employer Contributions, an Employee will receive credit for the aggregate of all time period(s) 9 commencing with the Employee's first day of employment or reemployment and ending on the date a Break in Service begins. The first day of employment or reemployment is the first day the Employee performs an Hour of Service. An Employee will also receive credit for any Period of Severance of less than twelve (12) consecutive months. Fractional periods of a year will be expressed in terms of days. Notwithstanding anything to the contrary herein, if the Plan is an amendment and restatement of a plan that previously calculated service under the hours of service method, service shall be credited in a manner that is at least as generous as that provided under Treas. Regs, section 1.4l0(a)-7(g). 2.18 Period of Severance. A continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Employee was otherwise first absent from service. 2.19 Plan. This Plan, as established by the Employer, including any elected provisions pursuant to the Adoption Agreement. 2.20 Plan Administrator. The person(s) or entity named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described, which is the ICMA Retirement Corporation or any successor Plan Administrator, 2.21 Plan Year. The twelve (12) consecutive month period designated by the Employer in the Adoption Agreement, 2.22 Trust. The Trust created under Article VI of the Plan which shall consist of all of the assets of the Plan derived from Employer and Participant contributions under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries, III. ELIGIBILITY 3.01 Service. Except as provided in Sections 3,02 and 3,03 of the Plan, an Employee within the Covered Employment Classification who has completed a twelve (12) month Period of Service shall be eligible to participate in the Plan at the beginning of the payroll period next commencing thereafter. The Employer may elect in the Adoption Agreement to waive or reduce the twelve (12) month Period of Service. If the Employer maintains the plan of a predecessor employer, service with such employer shall be treated as Service for the Employer, 3.02 Age. The Employer may designate a minimum age requirement, not to exceed age twenty-one (21), for participation. Such age, if any, shall be declared in the Adoption Agreement. 3.03 Return to Covered Employment Classification. In the event a Participant is no longer a member of Covered Employment Classification and becomes ineligible to make contributions and/or have contributions made on his/her behalf, such Employee will become eligible for contributions immediately upon returning to a Covered Employment Classification, If such Participant incurs a Break in Service, eligibility will be determined under the Break in Service rules of the Plan. ID In the event an Employee who is not a member of a Covered Employment Classification becomes a member, such Employee will be eligible to participate immediately if such Employee has satisfied the minimum age and service requirements and would have otherwise previously become a Participant. 3.04 Service Before a Break in Service. All Periods of Service with the Employer are counted toward eligibility, including Periods of Service before a Break in Service, IV. CONTRIBUTIONS 4.01 Employer Contributions. For each Plan Year, the Employer will contribute to the Trust an amount as specified in the Adoption Agreement. The Employer's full contribution for any Plan Year shall be due and paid not later than thirty (30) working days after the close of the Plan Year. Each Participant will share in Employer Contributions for the period beginning on the date the Participant commences participation under the Plan and ending on the date on which such Employee severs employment with the Employer or is no longer a member of a Covered Employment Classificadon, and such contributions shall be accounted for separately in his/her Employer Contribution Account, Notwithstanding anything to the contrary herein, if so elected by the Employer in the Adoption Agreement, an Employee shall be required to make contributions as provided pursuant to Section 4,03 or 4,04 in order to be eligible for Employer Contributions to be made on his/her behalf to the Plan, 4.02 Forfeitures. All amounts forfeited by terminated Participants, pursuant to Section 7.06, shall be allocated to a suspense account and used to reduce dollar for dollar Employer Contributions otherwise required under the Plan for the current Plan Year and succeeding Plan Years, if necessary. Forfeitures may first be used to pay the reasonable administrative expenses of the Plan, with any remainder being applied to reduce Employer Contributions, 4.03 Mandatory Participant Contributions. If the Employer so elects in the Adoption Agreement, each eligible Employee shall make contributions at a rate prescribed by the Employer or at any of a range of specified rates, as set forth by the Employer in the Adoption Agreement, as a requirement for his/her participation (1) in the Plan or (2) in this portion of the Plan, Once an eligible Employee becomes a Participant and makes an election hereunder, he/she shall not thereafter have the right to discontinue or vary the rate of such Mandatory Participant Contributions, Such contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the Participant, If the Employer so elects in the Adoption Agreement, the Mandatory Participant Contributions shall be "picked up" by the Employer in accordance with Code section 414(h)(2), Any contribution picked-up under this Section shall be treated as an employer contribution in determining the tax treatment under the Code, and shall not be included as gross income of the Participant until it is distributed. To constitute a Pick-Up Contribution, (1) the Employer must specify that the contributions are being paid by the Employer in Ueu of contributions by the Employee, and (2) the Employee must not be given the option of choosing to receive the contributed amounts directly instead of having them paid by the Employer to the Plan, 4.04 Employer Matching Contributions of Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, Employer Matching Contributions shall be made on behalf of an eligible Employee for a Plan Year only if the Employee agrees to make Voluntary Participant Contributions for that Plan Year. The rate of Employer Contribudons shall, to the extent specified in // the Adoption Agreement, be based upon the rate at which Voluntary Participant Contributions are made for that Plan Year, Employer Matching Contributions shall be accounted for separately in the Employer Contribution Account, 4.05 Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, an eligible Employee may make after-tax voluntary (unmatched) contributions under the Plan for any Plan Year in any amount up to twenty five percent (25%) of his/her Earnings for such Plan Year. Matched and unmatched contributions shall be accounted for separately in the Participant's Voluntary Contribution Account, Such Account shall be at all times nonforfeitable by the Participant, 4.06 Deductible Employee Contributions. The Plan will not accept deductible employee contributions which are made for a taxable year beginning after December 31, 1986, Contributions made prior to that date will be maintained in a Deductible Employee Contribution Account, The Account will share in the gains and losses under the Plan in the same manner as described in Section 6,06 of the Plan. Such Account shall be at all times nonforfeitable by the Participant. 4.07 Final Pay Contributions. If the Employer so elects in the Adoption Agreement, Participants shall be eligible to make or receive Final Pay Contributions under this Plan in accordance with Article XVIII. Notwithstanding the foregoing, this election may only be made if the Employer also elects to make contributions under Section 4.01. 4.08 Accrued Leave Contributions. If the Employer so elects in the Adoption Agreement, eligible Participants shall be eligible to make or receive Accrued Leave Contributions under this Plan in accordance with Article XIX, Notwithstanding the foregoing, this election may only be made if the Employer also elects to make contributions under Section 4.01, 4.09 Military Service Contributions. Notwithstanding any provision of the Plan to the contrary, effective December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 4l4(u) of the Code, Effective December 12, 1994, if the Employer has elected in the Adoption Agreement to make loans available to Participants, loan repayments will be suspended under the Plan as permitted under section 4l4(u)(4) of the Code, 4.10 Changes in Participant Election. A Participant may elect to change his/her rate of Voluntary Participant Contributions at any time or during an election period as designated by the Employer, A Participant may discontinue such contributions at any time or during an election period as designated by the Employer, 4.11 Portability of Benefits. (a) Unless otherwise elected by the Employer in the Adoption Agreement, the Plan will accept Participant (which shall include, for purposes of this subsection, an Employee within the C^overed Employment Classification whether or not he/she has satisfied the minimum age and service requirements of Article III,) rollover contributions and/or direct rollovers of distributions (including after-tax contributions) made after December 31, 2001 that are eligible for rollover in accordance with Secdon 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), or 457(e) (16) of the Code, from all of the following types of plans: (1) A qualified plan described in Section 401 (a) or 403(a) of the Code; 6 (2) An annuity contract described in Section 403(b) of the Code; (3) An eligible plan under Section 457(b) of the Code which is maintained by a state, political subdivision of a state, or any agency or instrumentality of a state or a political subdivision of a state; and (4) An individual retirement account or annuity described in Section 408(a) or 408(b) of the Code (including SEPs, and SIMPLE IRAs after two years of participating in the SIMPLE IRA). (b) Notwithstanding the foregoing, the Employer may reject the rollover contribution if it determines, in its discretion, that the form and nature of the distribution from the other plan does not satisfy the applicable requirements under the Code to make the transfer or rollover a nontaxable transaction to the Participant; (c) For indirect rollover contributions, the amount distributed from such plan must be rolled over to this Plan no later than the sixtieth (60'^) day after the distribution was made from the plan, unless otherwise waived by the IRS pursuant to Section 402(c)(3) of the Code, (d) The amount transferred shall be deposited in the Trust and shall be credited to a Rollover Account. Such Account shall be one hundred percent (100%) vested in the Participant. (e) The Plan will accept accumulated deductible employee contributions as defined in section 72(o)(5) of the Code that were distributed from a qualified retirement plan and transferred (rolled over) pursuant to secdon 402(c), 403(a)(4), 403(b)(8), or 408(d)(3) ofthe Code. Notwithstanding the above, this transferred (rolled over) amount shall be deposited to the Trust and shall be credited to a Deductible Employee Contributions Account. Such Account shall be one-hundred percent (100%) vested in the Participant, (f) A Participant may, upon approval by the Employer and the Plan Administrator, transfer his/her interest in another plan maintained by the Employer that is quaUfied under section 401(a) of the Code to this Plan, provided the transfer is effected through a one-time irrevocable written election made by the Participant, The amount transferred shall be deposited in the Trust and shall be credited to sources that maintain the same attributes as the plan from which they are transferred. Such transfer shall not reduce the accrued years or service credited to the Participant for purposes of vesting or eligibility for any Plan benefits or features, 4.12 Return of Employer Contributions. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the date of contribution. V. LIMITATION ON ALLOCATIONS 5.01 Participants Only in This Plan. (a) If the Participant does not pardcipate in, and has never participated in another qualified plan or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415(1)(2) of the Code, maintained by the Employer, which provides an Annual Addition, the amount of Annual Additions which may be credited to the Participant's Account for any Limitation Year will not /3 exceed the lesser of the Maximum Permissible Amount or any other limitation contained in this Plan. If the Employer Contribution that would otherwise be contributed or allocated to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants similarly situated, (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Partici- pant's actual Compensation for the Limitation Year, (d) If, as a result of an inadvertent reasonable error in estimating the Maximum Permissible Amount for a Participant in accordance with Subsection (b) or pursuant to Subsection (c) or as a result of the allocation of forfeitures, there is an Excess Amount, the excess will be dis- posed of as follows: (1) Any Mandatory Participant Contributions that are not "picked up" by the Employer or Voluntary Participant Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant; (2) If after the application of paragraph (1) an Excess Amount stiU exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Participant's Account will be used to reduce Employer Contributions (including any aUocation of forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (3) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount wiU be held unallocated in a suspense account. The suspense account wiU be applied to reduce future Employer Contributions (including allocation of any forfeitures) for aU remaining Participants in the next Limitation Year, and each suc- ceeding Limitation Year if necessary; (4) If a suspense account is in existence at any time during a particular Limitation Year, all amounts in the suspense account must be allocated and reallocated to Participants' accounts before any Employer or any Employee contributions may be made to the Plan for that Limitation Year. Excess Amounts in a suspense account may not be distributed to Participants or former Participants. 5.02 Participants in Another Defined Contribution Plan. (a) Unless the Employer provides other limitations in the Adoption Agreement, this Section applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, or a welfare benefit fund, as defined in section 419(e) of the Code, maintained by the Employer, or an individual medical account. IP as defined by section 415(1)(2) of the Code, maintained by the Employer, which provides an Annual Addition, during any Limitation Year. The Annual Additions which may be credited to a Participant's Account under this Plan for any such Limitation Year wiU not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's Account under the other plans and welfare benefit funds for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Additions for the Limita- tion Year to exceed this limitation, the amount contributed or allocated wUl be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's Account under this Plan for the Limitation Year. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 5.01(b). (c) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year wiO be determined on the basis of the Partici- pant's actual Compensation for the Limitation Year, (d) If, pursuant to Subsection (c) or as a result of the aUocation of forfeitures, a Participant's An- nual Additions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount wiU be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date, (e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of, (1) The total Excess Amount allocated as of such date, multiplied by (2) The ratio of (i) the Annual Additions allocated to the Participant for the Limita- tion Year as of such date under this Plan to (ii) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other prototype quaUfied defined contribution plans, (f) Any Excess Amount attributed to this Plan wiU be disposed in the manner described in Section 5.01(d), 5.03 Definitions. For the purposes of this Article, the following definitions shall apply; (a) Annual Additions: The sum of the foUowing amounts credited to a Participant's account for the Limitation Year: IS (1) Employer Contributions; (2) Forfeitures; (3) Employee contributions; and (4) Allocations under a simplified employee pension. Amounts allocated, after March 31, 1984, to an individual medical account, as defined in section 415(1) (2) of the Code, which is part of a pension or annuity plan maintained by the Employer, are treated as Annual Additions to a defined contribution plan. For this purpose, any Excess Amount applied under Sections 5.01(d) or 5,02(f) in the Limitation Year to reduce Employer Contributions will be considered Annual Additions for such Limitation Year. (b) Compensation: A Participant's wages, salaries, and fees for professional services and other amounts received (without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Treas. Reg. section 1.62-2(c))), and excluding the foUowing: (1) Employer Contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer Contributions under a simplified employee pension plan to the extent such con- tributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403(b) of the Code (whether or not the amounts are actually excludable from the gross income of the Employee). (3) Notwithstanding the above, Compensation shall include: (a) any elective deferrals (as defined in section 402(g)(3) of the Code), and (b) any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason of sections 125, 132(f)(4) or 457 of the Code. For purposes of applying the limitations of this Article, Compensation for a Limitation Year is the Compensation actually paid or made available during such year. (c) Defined Contribution Dollar Limitation: $40,000, as adjusted for increases in the cost-of- living in accordance with section 415(d) of the Code. (d) Employer: The Employer that adopts this Plan. 10 (e) Excess Amotmt: The excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. Any Excess Amount shall include allocable income. The income allocable to an Excess Amount is equal to the sum of allocable gain or loss for the Plan Year and the allocable gain or loss for the period between the end of the Plan Year and the date of distribution (the gap period). The Plan may use any reasonable method for computing the income allocable to an Excess Amount, provided that the method is used consistently for all Participants and for aU corrective distributions under the Plan for the Plan Year, and is used by the Plan for allocating income to Participants' Accounts. (f) Limitation Year: A calendar year, or the twelve (12) consecutive month period elected by the Employer in the Adoption Agreement, All qualified plans maintained by the Employer must use the same Limitation Year, If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made, (g) Maximum Permissible Amount: The maximum Annual Addition that may be contributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of: (1) The Defined Contribution Dollar Limitation, or (2) One hundred percent (100%) (25% for Limitation Years before January 1, 2002) of the Participant's Compensation for the Limitation Year. The compensation limit referred to in (2) shall not apply to any contribution for medical benefits after separation from service (within the meaning of section 401 (h) or section 4l9A(f)(2) of the Code) which is otherwise treated as an annual addition. If a short Limitation Year is created because of an amendment changing the Limitation Year to a different twelve (12) consecutive month period, the Maximum Permissible Amount wiU not exceed the Defined Contribution Dollar Limitation multiplied by the following fraction: Number of months in the short Limitation Year; 12 VI. TRUST AND INVESTMENT OF ACCOUNTS 6.01 Trust. A Trust is hereby created to hold all of the assets of the Plan for the exclusive benefit of Par- ticipants 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 which agrees to act in that capacity hereunder. 6.02 Investment Powers. The trustee or the Plan Administrator, acting as agent for the trustee, shaU have the powers listed in this Section with respect to investment of Trust assets, except to the extent that the investment of Trust assets is controUed by Participants, pursuant to Section 13.03. (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, notes, debentures, mortgages, certificates of deposit, contracts with insurance 11 17 companies including but not limited to insurance, individual or group annuity, deposit administration, guaranteed interest contracts, and deposits at reasonable rates 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 batik or other institution and that is available to Employee plans qualified under section 401 of the C^ode, 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 Plan, the declaration of trust of such common, collective, or commingled trust fund shaU 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 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 Plan Administrator, or such custodian as the Plan 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 bal- ances, without liabUity for interest, in such amounts as may from time to time be deemed to be reasonable 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 Plan Administrator, 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 Plan Administrator, as the case 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 obUgation 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 Plan, to exercise and enforce any and aU rights 12 1% of foreclosure, bid for property in foreclosure, 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 Plan Administrator, in any bank or banks, (i) To do any and aU other acts that may be deemed necessary to carry out any of the powers set forth herein, 6.03 Taxes and Expenses. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, 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, shaU be paid from the Trust, Such reasonable compensation of the Plan Administrator, as may be agreed upon from time to time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan 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, However, no person who is a fiduciary within the meaning of section 3(21) (A) of ERISA and regulations promulgated thereunder, and who receives full-time pay from the Employer may receive compensation from the Trust, except for expenses properly and actually incurred, 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 Plan Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. Benefits under this Plan shall be paid only if the Plan Administrator, custodian or other person decides in his/her discretion that the applicant is entitled to them. The Plan 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 Fimds. In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer and shaU not include any investment in collectibles, as defined in section 408(m) of the Code. 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 aUocated proportionately among aU Account balances on a fund-by-fund basis. The aUocation shall be in the proportion that each such Account balance as of the immediately preceding Accounting Date bears to the total of aU 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 shaU be invested in accordance with Section 13,03 of the Plan. Such Accounts shaU not share in any investment income and gains or losses of the investment funds described in Section 6.05, 13 VII. VESTING 7.01 Vesting Schedule. The portion of a Participant's Account attributable to Mandatory Participant Contributions and Voluntary Participant Contributions, and the earnings thereon, shall be at all times nonforfeitable by the Participant. A Participant shaU have a Nonforfeitable Interest in the percentage of his/her Employer Contribution Account established under Section 4,01, 4,04, 18,02(a) and 19.02(a) determined pursuant to the schedule elected by the Employer in the Adoption Agreement, 7.02 Crediting Periods of Service. Except as provided in Section 7.03, all of an Employee's Periods of Service with the Employer are counted to determine the nonforfeitable percentage in the Employee's Account balance derived from Employer Contributions. If the Employer maintains the plan of a predecessor employer, service with such employer wiU be treated as service for the Employer. For purposes of determining years of service and Breaks in Service for the purposes of computing a Participant's nonforfeitable right to the Account balance derived from Employer Contributions, the twelve (12) consecutive month period will commence on the date the Employee first performs an hour of service and each subsequent twelve (12) consecutive month period will commence on the anniversary of such date, 7.03 Service After Break in Service. In the case of a Participant who has a Break in Service of at least five (5) years, all Periods of Service after such Breaks in Service will be disregarded for the purpose of determining the nonforfeitable percentage of the Employer-derived Account balance that accrued before such Break, but both pre-Break and post-Break service will count for the purposes of vesting the Employer-derived Account balance that accrues after such Break, Both Accounts will share in the earnings and losses of the fund. In the case of a Participant who does not have a Break in Service of at least five (5) years, both the pre-Break and post-Break service wiU count in vesting both the pre-Break and post-Break Employer-derived Account balance. In the case of a Participant who does not have any nonforfeitable right to the Account balance derived from Employer Contributions, years of service before a period of consecutive one (1) year Breaks in Service will not be taken into account in computing eligibility service if the number of consecutive one (1) year Breaks in Service in such period equals or exceeds the greater of five (5) or the aggregate number of years of service. Such aggregate number of years of service will not include any years of service disregarded under the preceding sentence by reason of prior Breaks in Service, If a Participant's years of service are disregarded pursuant to the preceding paragraph, such Participant will be treated as a new Employee for eligibility purposes. If a Participant's years of service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately upon reemployment, 7.04 Vesting Upon Normal Retirement Age. Notwithstanding Section 7.01 of the Plan, a Participant shall have a Nonforfeitable Interest in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan, if he/she is employed on or after his/her Normal Retirement Age, 7.05 Vesting Upon Death or Disability. Notwithstanding Section 7.01 of the Plan, in the event of Disability or death, a Participant or his/her Beneficiary shall have a Nonforfeitable Interest in his/ 14 her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan. 7.06 Forfeitures. Except as provided in Sections 7.04 and 7.05 of the Plan or as otherwise provided in this Section 7.06, a Participant who separates from service prior to obtaining fuU vesting shall forfeit that percentage of his/her Employer Contribution Account balance which has not vested as of the date such Participant incurs a Break in Service of five (5) consecutive years or, if earlier, the date such Participant receives, or is deemed under the provisions of Section 9.04 to have received, distribution of the entire Nonforfeitable Interest in his/her Employer Contribution Account. No forfeiture wiU occur solely as a result of a Participant's withdrawal of Employee Contributions. Forfeitures shaU be aUocated in the manner described in Section 4,02. 7.07 Reinstatement of Forfeitures. If the Participant returns to the employment of the Employer before incurring a Break in Service of five (5) consecutive years, any amounts forfeited pursuant to Section 7.06 shall be reinstated to the Participant's Employer Contribution Account on the date of repay- ment by the Participant of the amount distributed to such Participant from his/her Employer Contribution Account; provided, however, that if such Participant forfeited his/her Account balance by reason of a deemed distribution, pursuant to Section 9.04, such amounts shaU be automaticaUy restored upon the reemployment of such Participant. Such repayment must be made before the earlier of five (5) years after the first date on which the Participant is subsequently reemployed by the Employer, or the date the Participant incurs a Break in Service of five (5) consecutive years. VIII. BENEFITS CLAIM 8.01 Claim of Benefits. A Participant or Beneficiary shall notify the Plan Administrator in writing of a claim of benefits under the Plan, The Plan Administrator shall take such steps as may be necessary to facilitate the payment of such benefits to the Participant or Beneficiary, 8.02 Appeal Procedure. If any claim for benefits is initially denied by the Plan Administrator, the claimant shall file the appeal with the Employer, whose decision shall be final, to the extent provided by Section 15,07. IX. COMMENCEMENT OF BENEFITS 9.01 Normal and Elective Commencement of Benefits. A Participant who retires, becomes Disabled or incurs a severance from employment (separation from service for Plan Years beginning before 2002) for any other reason may elect by written notice to the Plan Administrator to have his or her vested Account balance benefits commence on any date, provided that such distribution complies with Section 9.02. Such election must be made in writing during the ninety (90) day period ending on the date as of which benefit payments are to commence. A Participant's election shall be revocable and may be amended by the Participant, The failure of a Participant to consent to a distribution while a benefit is immediately distributable, within the meaning of section 9.02 of the Plan, shall be deemed to be an election to defer commencement of payment of any benefit, 9.02 Restrictions on Immediate Distributions. Notwithstanding anything to the contrary in Section 9.01 of the Plan, if the value of a Participant's vested Account balance is at least $1,000, and the 15 Account balance is immediately distributable, the Participant must consent to any distribution of such Account balance. The Participant's consent shaU be obtained in writing during the ninety (90) day period ending on the date as of which benefit payments are to commence. No consent shall be required, however, to the extent that a distribution is required to satisfy section 401(a)(9) or 415 of the Code. The Plan Administrator shall notify the Participant of the right to defer any distribution until the Participant's Account balance is no longer immediately distributable. Such notification shaU include a general description of the material features, and an explanation of the relative values of, the optional forms of benefit available under the Plan in a manner that would satisfy section 417(a)(3) of the Code, and shall be provided no less than thirty (30) and no more than ninety (90) days before the date as of which benefit payments are to commence. However, distribution may commence less than thirty (30) days after the notice described in the preceding sentence is given, provided (i) the distribution is one to which sections 401(a)(l 1) and 417 of the Code do not apply or, if the QJSA Election is made by the Employer in the Adoption Agreement, the waiver requirements of Section 17.04(a) are met; (ii) the Plan Administrator clearly informs the Participant that the Participant has a right to a period of at least thirty (30) days after receiving the notice to consider the decision of whether or not to elect a distribution (and, if applicable, a particular distribution option); and (iii) the Participant, after receiving the notice, affirmatively elects a distribution. In addition, upon termination of this Plan if the Plan does not offer an annuity option (purchased from a commercial provider) and if the Employer does not maintain another 401(a) defined contribution plan, the Participant's Account balance will, without the Participant's consent, be distributed to the Participant in a lump sum. However, if the Employer maintains another 401(a) defined contribution plan, the Participant's Account balance will be transferred, without the Participant's consent, to the other plan if the Participant does not consent to an immediate distribution. An Account balance is immediately distributable if any part of the Account balance could be distributed to the Participant (or surviving spouse) before the Participant attains or would have attained (if not deceased) the later of Normal Retirement Age or age sixty-two (62), For purposes of determining the applicabiUty of the foregoing consent requirements to distributions made before the first day of the first plan year beginning after December 31, 1988, the Participant's vested Account balance shall not include amounts attributable to accumulated deductible employee contributions within the meaning of section 72(o)(5)(B) of the Code, 9.03 Transfer to Another Plan. (a) If a Participant becomes eligible to participate in another plan maintained by the Employer that is qualified under section 401(a) of the Code, the Plan Administrator shall, at the written election of such Participant, transfer all or part of such Participant's Account to such plan, provided the plan administrator for such plan certifies to the Plan Administrator that its plan provides for the acceptance of such a transfer. Such transfers shall include those transfers of the nonforfeitable interest of a Participant's Account made for the purchase of service credit in defined benefit plans maintained by the Employer, For purposes of this Plan, any such transfer shall not be considered a distribution to the Participant subject to spousal consent as described in Section 9.10, 16 (b) 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 Plan Administrator, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover, (c) Definitions. For the purposes of Subsection (b), the following definitions shall apply: (1) Eligible Rollover Distribution. 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: (i) any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten years or more; (ii) any distribution to the extent such distribution is required under section 401 (a)(9) of the Code; and (iii) the portion of any other distribution(s) that is not includible in gross income, A portion of a distribution shaU not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income. However, such portion may be transferred only to an individual retirement account or annuity described in section 408(a) or (b) ofthe Code, or to a qualified defined contribution plan described in section 401(a) or 403(a) of the Code that agrees to separately account for amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible. (2) Eligible Retirement Plan, (i) an individual retirement account described in section 408(a) of the Code or an individual retirement annuity described in section 408(b) of the Code (collectively, an "IRA"); (ii) an annuity plan described in section 403(a) of the Code; (iii) an annuity contract described in section 403(b) of the Code, (iv) an eligible plan under section 457(b) of the Code which is maintained by a state, poUtical subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to separately account for amounts transferred into such plan from this Plan; or (v) a quaUfied plan described in section 401(a) of the Code, that accepts the Distributee's Eligible RoUover Distribution, The definition of Eligible Retirement Plan shall also apply in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee, under a qualified domestic relations order, as defined in section 4l4(p) ofthe Code, (3) Distributee. Participant; in addition, the Participant's surviving spouse and the spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in section 4l4(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover. A payment by the Plan to the Eligible Retirement Plan specified by the Distributee. 17 Z3 9.04 De Minimis Accounts. Notwithstanding the foregoing provisions of this Article, prior to January 1, 2002, if a Participant terminates service, and the value of his/her Nonforfeitable Interest in his/ her Account is not greater than the dollar limit under secrion 411(a) (11) (A) of the Code, the Parricipant's benefit shall be paid (to the extent it consritutes an EUgible RoUover Distriburion) in the form of a direct rollover to the Plan Administrator's designated IRA, unless he/she affirmatively elects to receive a cash payment or a Direct RoUover in accordance with procedures established by the Plan Administrator, On or after January 1, 2002, if a Participant terminates service, and the value of his/her Nonforfeitable Interest in his/her Account is less than $1,000, the Parricipant's benefit shall be paid as soon as practicable to the Participant in a single lump sum distribution. If the value of the Participant's Account is at least $1,000 but not more than the dollar limit under section 411(a) (11) (A) of the Code, the Participant may elect to receive his/her Nonforfeitable Interest in his/her Ac- count, Such distribution shaU be made as soon as practicable following the request, in a lump sum. For purposes of this Section, if a Parricipant's Nonforfeitable Interest in his/her Account is zero, the Participant shall be deemed to have received a distribution of such Nonforfeitable Interest in his/her Account. 9.05 Withdrawal of Voluntary Contributions. A Participant may upon written request withdraw a part of or the full amount of his/her Voluntary Contribution Account, Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal, 9.06 Withdrawal of Deductible Employee Contributions. A Participant may upon written request withdraw a part of or the fuU amount of his/her Deductible Employee Contribution Account. Such withdrawals may be made at any time, provided that no more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. 9.07 In-Service Distribution from Rollover Account. Where elected by the Employer in the Adoption Agreement, a Participant that has a separate account attributable to rollover contributions to the Plan, may at any time elect to receive a distribution of all or any portion of the amount held in the Rollover Account. 9.08 In-Service Distributions. Unless otherwise elected by the Employer in the Adoption Agreement, a Participant who has reached age VOVi regardless of his Nonforfeitable Interest in his/her entire Employer Contribution Account, shall, upon written request, receive a distribution of a part of or the fuU amount of the balance in any or all of his vested Accounts. Such distributions may be requested at any time, provided that no more than two (2) such distributions may be made during any calendar year, 9.09 Latest Commencement of Benefits. Notwithstanding anything to the contrary in this Article, benefits shall begin no later than the Participant's Required Beginning Date, as defined under Section 10,05, or as otherwise provided in Section 10,04, 9.10 Spousal Consent. Notwithstanding the foregoing, if the Employer elected the QJSA Election in the Adoption Agreement, a married Parricipant must first obtain his or her spouse's notarized consent to request a distribution (other than a QuaUfied Joint and Survivor Annuity), withdrawal, or rollover under this Article IX, X. DISTRIBUTION REQUIREMENTS 10.01 General Rules, (a) Subject to the provisions of Arricle XII or XVII if so elected by the Employer in the Adoption Agreement, the requirements of this Article shall apply to any distribution of a Participant's interest and wiU take precedence over any inconsistent provisions of this Plan, Unless otherwise specified, the provisions of this Article X apply to calendar years beginning after December 31, 2002, With respect to distributions under the Plan made in or for Plan Years beginning on or after January 1, 2002 and prior to January 1, 2003, the Plan wiU apply the minimum distribution requirements of section 401(a)(9) of the Code in accordance with the regulations under section 401(a)(9) that were proposed on January 17, 2001, notwithstanding any provision of the Plan to the contrary, (b) All distributions required under this Article shaU be determined and made in accordance with the regulations under section 401(a)(9) of the Code, and the minimum distribution incidental benefit requirement of section 401(a)(9)(G) of the Code. (c) Limits on Distribution Periods, As of the first Distribution Calendar Year, distributions to a Participant, if not made in a single-sum, may only be made over one of the foUowing periods: (1) The life of the Participant, (2) The joint lives of the Participant and a designated Beneficiary, (3) A period certain not extending beyond the life expectancy of the Participant, or (4) A period certain not extending beyond the joint and last survivor expectancy of the Participant and a designated Beneficiary, (d) TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of this Article XVII, distributions may be made under a designation made before January 1, 1984, in accordance with Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and the provisions of the Plan that relate to Section 242(b)(2) of TEFRA. 10.02 Time and Manner of Distribution (a) Required Beginning Date, The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's required beginning date. (b) Death of Participant Before Distributions Begin, If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as foUows: (1) If the Participant's surviving spouse is the Participant's sole designated Beneficiary, then, distributions to the surviving spouse will begin by December 19 JT 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age JOVi, if later. (2) If the Participant's surviving spouse is not the Participant's sole designated Beneficiary, then distributions to the designated Beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (3) If there is no designated Beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (4) If the Participant's surviving spouse is the Participant's sole designated Beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section 10.02(b), other than Section 10,02(b)(1), wiU apply as if the surviving spouse were the Participant. For purposes of this Section 10,02(b) and Section 10,04, unless Section 10,02(b) (4) applies, distributions are considered to begin on the Participant's required beginning date. If Section 10,02(b) (4) applies, distributions are considered to begin on the date distributions are required to begin to the surviving spouse under Section 10.02(b)(1), If distributions under an annuity purchased from an insurance company irrevocably commence to the Participant before the Participant's required beginning date (or to the Participant's surviving spouse before the date distributions are required to begin to the surviving spouse under Section 10,02(b)(1)), the date distributions are considered to begin is the date distributions actually commence, (c) Forms of Distribution, Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the required beginning date, as of the first distribution calendar year distributions will be made in accordance with Sections 10,03 and 10,04, If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Code Section 401 (a)(9) and the Treasury Regulations. 10.03 Required Minimum Distributions During Participant's Lifetime (a) Amount of Required Minimum Distribution For Each Distribution Calendar Year. During the Participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of: (1) the quotient obtained by dividing the Participant's Account Balance by the distribution period set forth in the Uniform Lifetime Table found in Section 1.401(a)(9)-9, Q&A-2, of the Final Income Tax Regulations using the Participant's age as of the Participant's birthday in the distribution calendar year; or (2) if the Participant's sole designated Beneficiary for the distriburion calendar year 20 is the Participant's spouse, the quotient obtained by dividing the Participant's Account Balance by the number in the Joint and Last Survivor Table set forth in Section 1.401 (a) (9)-9, Q&A-3, of the regulations using the Participant's and spouse's attained ages as of the Participant's and spouse's birthdays in the distribution calendar year. (b) Lifetime Required Minimum Distributions Continue Through Year of Participant's Death. Required minimum distributions wiU be determined under this Section 10.03 beginning with the first distribution calendar year and continuing up to, and including, the distribution calendar year that includes the Participant's date of death. 10.04 Required Minimum Distributions After Participant's Death (a) Death On or After Date Distributions Begin. (1) Participant Survived by Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is a designated Beneficiary, the minimum amount that wiU be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated Beneficiary, determined as follows: (a) The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (b) If the Participant's surviving spouse is the Participant's sole designated Beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year. (c) If the Participant's surviving spouse is not the Participant's sole designated Beneficiary, the designated Beneficiary's remaining life expectancy is calculated using the age of the Beneficiary in the year foUowing the year of the Participant's death, reduced by one for each subsequent year. (2) No L")esignated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated Beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year, 21 T>1 (b) Death Before Date Required Distributions Begin. (1) Participant Survived by Designated Beneficiary, If the Participant dies before the date required distributions begin and there is a designated Beneficiary, the minimum amount that wiU be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's Account Balance by the remaining life expectancy of the Participant's designated Beneficiary, determined as provided in Section 10.04(a). (2) No Designated Beneficiary, If the Participant dies before the date distributions begin and there is no designated Beneficiary as of September 30 of the year foUowing the year of the Participant's death, distribution of the Participant's entire interest wiU be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death, (3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin, If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant's sole designated Beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under Section 10,02(b)(1), this Section 10,04(b) wiU apply as if the surviving spouse were the Participant, 10.05 Definitions (a) Designated Beneficiary. The individual who is designated by the Participant (or the Participant's surviving spouse) as the Beneficiary of the Participant's interest under the Plan and who is the designated Beneficiary under Code Section 401(a)(9) and Section 1,401 (a) (9)-4 of the regulations, (b) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date. For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin under Section 10,02(b), The required minimum distribution for the Participant's first distribution calendar year will be made on or before the Participant's required beginning date. The required minimum distribution for other distribution calendar years, including the required minimum distribution for the distribution calendar year in which the Participant's required beginning date occurs, will be made on or before December 31 of that distribution calendar year, (c) Life Expectancy. Life expectancy as computed by use of the Single Life Table in Section 1,401 (a) (9)-9, Q&A-l, of the regulations, (d) Participant's Account Balance. The Account Balance as of the last Accounting Date in the calendar year immediately preceding the distribution calendar year (valuation calendar year) increased by the amount of any contributions made and aUocated or forfeitures aUocated to the Account Balance as of dates in the valuation calendar year after the Accounting Date and decreased by distributions made in the valuation calendar year after the Accounting Date, 22 The Account Balance for the valuation calendar year includes any amounts rolled over or transferred to the Plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in the valuation calendar year, (e) Required Beginning Date. The Required Beginning Date of a Participant is April 1 of the calendar year following the later of the calendar year in which the Participant attains age seventy and one-half (70V2), or the calendar year in which the Participant retires, XI. MODES OF DISTRIBUTION OF BENEFITS 11.01 Normal Mode of Distribution. Unless an elective mode of distribution is elected as provided in Section 11,02, benefits shall be paid to the Participant in the form of a lump sum payment. Notwithstanding the foregoing, where the Employer made the "QJSA Election" in the Adoption Agreement, unless an elective mode of distribution is elected in accordance with Article XVII, benefits shall be paid to the Parricipant in the form provided for in Arricle XVII. 11.02 Elective Mode of Distribution. Subject to the requirements of Articles X, XII and XVII, a Participant may revocably elect to have his/her Account distributed in any one (1) of the following modes in lieu of the mode described in Section 11.01: (a) Equal Payments. Equal monthly, quarterly, semi-annual, or annual payments in an amount chosen by the Participant continuing until the Account is exhausted. (b) Period Certain, Approximately equal monthly, quarterly, semi-annual, or annual payments, calculated to continue for a period certain chosen by the Participant, (c) Other, Any other sequence of payments requested by the Participant, (d) Lump Sum. Where the Employer did make the QJSA Election in the Adoption Agreement, a Participant may also elect a lump sum payment. 11.03 Election of Mode. A Participant's election of a payment option must be made in writing between thirty (30) and ninety (90) days before the payment of benefits is to commence, 11.04 Death Benefits. Subject to Article X (and Article XII or XVII if so elected by the Employer in the Adoption Agreement), (a) In the case of a Participant who dies before he/she has begun receiving benefit payments, the Participant's entire Nonforfeitable Interest shall then be payable to his/her Beneficiary within ninety (90) days of the Participant's death. A Beneficiary who is entitled to receive benefits under this Section may elect to have benefits commence at a later date, subject to the provisions of Article X, The Beneficiary may elect to receive the death benefit in any of the forms available to the Participant under Sections 11,01 and 11.02, If the Beneficiary is the Participant's surviving spouse, and such surviving spouse dies before payment com- mences, then this Section shall apply to the beneficiary of the surviving spouse as though such surviving spouse were the Participant. (b) Should the Participant die after he/she has begun receiving benefit payments, the Beneficiary shaU receive the remaining benefits, if any, that are payable, under the payment 23 schedule elected by the Participant. Notwithstanding the foregoing, the Beneficiary may elect to accelerate payments of the remaining balances, including but not limited to, a lump sum distribution. XII. SPOUSAL DEATH BENEFIT REQUIREMENTS 12.01 Application. Unless otherwise elected by the Employer in the Adoption Agreement, on or after January 1, 2006, the provisions of this Article shall take precedence over any conflicting provision in this Plan. The provisions of this Article, known as the "Beneficiary Spousal Consent Election," shall apply to any Participant who is credited with any Period of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Section 12.04. 12.02 Spousal Death Benefit. (a) On the death of a Participant, the Participant's Vested Account Balance will be paid to the Participant's Surviving Spouse. If there is no Surviving Spouse, or if the Participant has waived the spousal death benefit, as provided in Secrion 12.03, such Vested Account Balance will be paid to the Participant's designated Beneficiary. (b) The Surviving Spouse may elect to have distribution of the Vested Account Balance commence within the ninety (90) day period foUowing the date of the Participant's death, or as otherwise provided under Section 11.04. The Account balance shall be adjusted for gains or losses occur- ring after the Participant's death in accordance with the provisions of the Plan governing the adjustment of Account balances for other types of distributions, 12.03 Waiver of Spousal Death Benefit. The Participant may waive the spousal death benefit described in Section 12,02 at any time; provided that no such waiver shall be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficiaries, which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent); (c) the Spouse's consent acknowledges the effect of the election; and (d) the Spouse's consent is witnessed by a Plan representative or notary public. If it is established to the satisfaction of a Plan representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed to meet the requirements of this Section, Any consent by a Spouse obtained under this provision (or estabUshment that the consent of a Spouse may not be obtained) shall be effective only with respect to such Spouse. A consent that permits designations by the Participant without any requirement of further consent by such Spouse must acknowledge that the Spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where appUcable, and that the Spouse voluntarily elects to relinquish either or both of such rights, A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be limited, 12.04 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant, provided that a 24 30 former Spouse will be treated as the Spouse or Surviving Spouse and a current Spouse will not be treated as the Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as described in section 4l4(p) of the Code. (b) Vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Participant who is vested in amounts attributable to Employer Contributions, Employee contributions (or both) at the time of death or distribution, XIII. LOANS TO PARTICIPANTS 13.01 Availability of Loans to Participants. (a) If the Employer has elected in the Adoption Agreement to make loans available to Participants, a Participant 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 Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reason- ably equivalent basis, 13.02 Terms and Conditions of Loans to Participants. Any loan by the Plan to a Participant under Section 13.01 of the Plan shaU satisfy the following requirements: (a) Availability. Loans shaU be made available to all Participants on a reasonably equivalent basis, (b) Nondiscrimination. Loans shall not be made to highly compensated Employees in an amount greater than the amount made available to other Employees, (c) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (d) Loan Limit. No Participant loan shall exceed the present value of the Participant's Nonforfeitable Interest in his/her Account. (e) Foreclosure. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. (f) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the Participant's vested 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. If less than one hundred percent (100%) of the Participant's nonforfeitable Account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first reducing the nonforfeitable Account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse, 25 Jl (g) Amount of Loan. At the time the loan is made, the principal amount of the loan plus the outstanding balance (principal plus accrued interest) due on any other outstanding loans to the Participant or Beneficiary from the Plan and from all other plans of the Employer that are qualified employer plans imder 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 (Vi) of the value of the Participant's Nonforfeitable Interest in all of his/her Accounts under this Plan (or $10,000, if greater, for loans prior to January 1, 2006), For the purpose of the above limitation, aU loans from all qualified employer plans, including 457(b) plans, under Code section 72(p)(4) of the Code are aggregated. (h) 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 in any calendar year. No loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. (i) Length of Loan. The terms of any loan issued or renegotiated after December 31, 1993, shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least quarterly (except as otherwise provided in Treasury Regulation section l,72(p)-l, Q8^-9 for certain leave of absence and mUitary leave), over a period that does not exceed five (5) years from the date ofthe 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 after the loan is made as the principal residence of the Participant, 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 during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this Subsection (i), with a revised payment schedule (within such term) instituted at the end of such period of suspension. If the Participant fails to make any installment payment, the Plan Administrator may, according to Treasury Regulation 1.72(p)-l, allow a cure period, which cure period cannot continue beyond the last day of the calendar quarter following the calendar quarter in which the required installment payment was due. (j) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. (k) Note. The loan shall be evidenced by a promissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. 26 Unless waived by a Participant, any plan loan that is outstanding on the date that active duty mUitary service begins will accrue interest at a rate of no more than 6% during the period of military service in accordance with the provisions of the Servicemembers Civil Relief Act (SCRA), 50 USC App, § 526 and subject to the notice requirements contained therein. This limitation appUes even if loan payments are suspended during the period of military service as permitted under the Plan and Treasury regulations, (1) Security. The loan shall be secured by an assignment of that portion the Participant's right, title and interest in and to his/her Employer Contribution Account (to the extent vested). Participant Contribution Account, and Rollover Account that is equal to fifty percent (50%) of the Participant's Account (to the extent vested), (m) Assignment or Pledge. For the purposes of paragraphs (h) and (i), 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. (n) Spousal Consent. If the Employer elected the QJSA Election in the Adoption Agreement, the Participant must first obtain his or her spouse's notarized consent to the loan. (o) Other Terms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualifica- tion of the Plan and Trust under section 401 (a) of the Code, or to prevent the treatment of the loan for tax purposes as a distribution to the Participant, The Employer, in its discretion for any reason, may fix other terms and conditions of the loan, not inconsistent with the provisions of this Article. 13.03 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 13.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. No person who is otherwise a fiduciary of the Plan 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 payroU deduction or, where repayment cannot be made by payroU deduction, by check, and shall be invested in one (1) or more other investment fiinds, in accordance with Section 6,05 of the Plan, as of the next Accounting 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, 27 -33 XIV. PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 14.01 Amendment by Employer. The Employer reserves the right, subject to Section 14,02 of the Plan, to amend the Plan from time to time by either: (a) Filing an amended Adoption Agreement to change, delete, or add any optional provision, or (b) Continuing the Plan in the form of an amended and restated Plan and Trust, No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's accrued benefit. Notwithstanding the preceding sentence, a Participant's Account balance may be reduced to the extent permitted under section 412(c)(8) of the Code, For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an ac- crued benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's right to his/her Employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendment. No amendment to the Plan shall be effective to eliminate or restrict an optional form of benefit. The preceding sentence shaU not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of his or her Account balance under a particular optional form of benefit if the amendment provides a single-sum distribution form that is otherwise identical to the optional form of benefit being eliminated or restricted. For this purpose, a single-sum distribution form is otherwise identical only if the single-sum distribution form is identical in all respects to the eliminated or restricted optional form of benefit (or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement. The Employer may (1) change the choice of options in the Adoption Agreement, (2) add overriding language in the Adoption Agreement when such language is necessary to satisfy sections 415 or 416 of the Code because of the required aggregation of multiple plans, (3) amend administrative provisions of the trust or custodial document in the case of a nonstandardized plan and make more limited amendments in the case of a standardized plan such as the name of the plan, employer, trustee or custodian, plan administrator and other fiduciaries, the trust year, and the name of any pooled trust in which the Plan's trust will participate, (4) add certain sample or model amendments published by the Internal Revenue Service or other required good faith amendments which specificaUy provide that their adoption wiU not cause the plan to be treated as individually designed, and (5) add or change provisions permitted under the Plan and/or specify or change the effective date of a provision as permitted under the Plan and correct obvious and unambiguous typographical errors and/ or cross-references that merely correct a reference but that do not in any way change the original intended meaning of the provisions, 14.02 Amendment of Vesting Schedule. If the Plan's vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Participant's nonforfeitable percentage, each Participant may elect, within a reasonable period after the adoption of the amend- 28 ment or change, to have the nonforfeitable percentage computed under the Plan without regard to such amendment or change. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (a) Sixty (60) days after the amendment is adopted; (b) Sixty (60) days after the amendment becomes effective; or (c) Sixty (60) days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator. 14.03 Termination by Employer. The Employer reserves the right to terminate this Plan. However, in the event of such termination no part of the Trust shall be used or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries, except as provided in this Section. Upon Plan termination or partial termination, all Account balances shaU be valued at their fair market value and the Participant's right to his/her Employer Contribution Account shall be one hundred percent (100%) vested and nonforfeitable. Such amount and any other amounts held in the Participant's other Accounts shaU be maintained for the Participant until paid pursuant to the terms of the Plan, Any amounts held in a suspense account, after all liabilities of the Plan to Participants and Beneficiaries have been satisfied or provided for, shall be paid to the Employer in accordance with the Code and regulations thereunder. In the event that the Commissioner of Internal Revenue determines that the Plan is not initially qualified under the Internal Revenue Code, any contribution made by the Employer incident to that initial qualification must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's return for the year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe, 14.04 Discontinuance of Contributions. A permanent discontinuance of contributions to the Plan by the Employer, unless an amended and restated Plan is established, shall constitute a Plan termination. In the event of a complete discontinuance of contributions under the Plan, the Account balance of each affected Participant shall be nonforfeitable. 14.05 Amendment by Plan Administrator. The Plan Administrator may amend this Plan upon thirty (30) days written notificarion to the Employer; provided, however, that any such amendment must be for the express purpose of maintaining compliance with applicable federal laws and regulations of the Internal Revenue Service. 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 shaU be under no obligation to continue acting as Administrator hereunder. 14.06 Optional Provisions. Any provision which is optional under this Plan shall become effective if and only if elected by the Employer and agreed to by the Plan Administrator. 29 XV ADMINISTRATION 15.01 Powers of the Employer. The Employer shall have the foUowing powers and duties: (a) To appoint and remove, with or without cause, the Plan Administrator; (b) To amend or terminate the Plan pursuant to the provisions of Article XIV; (c) To appoint a committee to facilitate administration of the Plan and communications to Participants; (d) To decide all questions of eligibiUty (1) for Plan participarion, and (2) upon appeal by any Par- ticipant, Employee or Beneficiary, for the payment of benefits; (e) To engage an independent qualified public accountant, when required to do so by law, to prepare annually the audited financial statements of the Plan's operation; (f) To take all actions and to communicate to the Plan Administrator in writing all necessary information to carry out the terms of the Plan and Trust; and (g) To notify the Plan Administrator in writing of the termination of the Plan, 15.02 Duties of the Plan Administrator. The Plan Administrator shall have the foUowing powers and duties: (a) To construe and interpret the provisions of the Plan; (b) To maintain and provide such returns, reports, schedules, descriptions, and individual Account statements, as are required by law within the times prescribed by law; and to furnish to the Employer, upon request, copies of any or all such materials, and further, to make copies of such instruments, reports, descriptions, and statements as are required by law available for examination by Participants and such of their Beneficiaries who are or may be entitled to benefits under the Plan in such places and in such manner as required by law; (c) To obtain from the Employer such information as shall be necessary for the proper administration of the Plan; (d) To determine the amount, manner, and time of payment of benefits hereunder; (e) To appoint and retain such agents, counsel, and accountants for the purpose of properly administering the Plan; (f) To distribute assets of the Trust to each Participant and Beneficiary in accordance with Article X of the Plan; (g) To pay expenses from the Trust pursuant to Section 6.03 of the Plan; and (h) To do such other acts reasonably required to administer the Plan in accordance with its provi- sions or as may be provided for or required by law. 30 3^ 15.03 Protection of the Employer. The Employer shall not be liable for the acts or omissions of the Plan Administrator, but only to the extent that such acts or omissions do not result from the Employer's failure to provide accurate or timely information as required or necessary for proper administration of the Plan. 15.04 Protection of the Plan Administrator. The Plan Administrator may rely upon any certificate, notice or direction purporting to have been signed on behalf of the Employer which the Plan Administrator believes to have been signed by a duly designated official of the Employer. 15.05 Resignation or Removal of Plan Administrator. The Plan Administrator may resign at any time effective upon sixty (60) days prior written notice to the Employer, The Plan Administrator may be removed by the Employer at any time upon sixty (60) days prior written notice to the Plan Administrator. Upon the resignation or removal of the Plan Administrator, the Employer may appoint a successor Plan Administrator; failing such appointment, the Employer shall assume the powers and duties of Plan Administrator. Upon the resignation or removal of the Plan Administrator, any Trust assets invested by or held in the name of the Plan Administrator shall be transferred to the trustee in cash or property, at fair market value, except that the return of Trust assets invested in a contract issued by an insurance company shall be governed by the terms of that contract, 15.06 No Termination Penalty. The Plan Administrator shall have no authority or discretion to impose any termination penalty upon its removal, 15.07 Decisions of the Plan Administrator. All constructions, determinations, and interpretations made by the Plan Administrator pursuant to Section 15.02(a) or (d) or by the Employer pursuant to Section 15.01(d) shall be final and binding on all persons participating in the Plan, given deference in all courts of law to the greatest extent allowed by applicable law, and shall not be overturned or set aside by any court of law unless found to be arbitrary or capricious, or made in bad faith, XVI. MISCELLANEOUS 16.01 Nonguarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employment between the Employer and any Employee, or as a right of an Employee to be continued in the employment of the Employer, as a limitation of the right of the Employer to discharge any of its Employees, with or without cause. 16.02 Rights to Trust Assets. No Employee or Beneficiary shall have any right to, or interest in, any assets of the Trust upon termination of his/her employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Employee or Beneficiary out of the assets of the Trust. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust and none of the fiduciaries shall be liable therefor in any manner, 16.03 Nonalienation of Benefits. Except as provided in Sections 16.04 and 16.06 of the Plan, benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either vol- untary or involuntary, prior to actually being received by the person entitled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable hereunder, shall be void. The Trust shall not in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder. 31 2n 16.04 Qualified Domestic Relations Order. Notwithstanding Section 16.03 of the Plan, amounts may be paid with respect to a Participant pursuant to a domestic relations order, but if and only if the order is determined to be a quaUfied domestic relations order within the meaning of section 4l4(p) of the Code or any domestic relations order entered before January 1, 1985. 16.05 Nonforfeitability of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to deprive a Participant of his/her right to the Nonforfeitable Interest to which he/she becomes entitled in accordance with the provisions of the Plan. 16.06 Incompetency of Payee. In the event any benefit is payable to a minor or incompetent, to a person otherwise under legal disability, or to a person who, in the sole judgment of the Employer, is by reason of advanced age, illness, or other physical or mental incapacity incapable of handling the disposition of his/her property, the Employer may apply the whole or any part of such benefit directly to the care, comfort, maintenance, support, education, or use of such person or pay or distribute the whole or any part of such benefit to: (a) The parent of such person; (b) The guardian, committee, or other legal representative, wherever appointed, of such person; (c) The person with whom such person resides; (d) Any person having the care and control of such person; or (e) Such person personally. The receipt of the person to whom any such payment or distribution is so made shall be fuU and complete discharge therefor, 16.07 Inability to Locate Payee. Anything to the contrary herein notwithstanding, if the Employer is unable, after reasonable effort, to locate any Participant or Beneficiary to whom an amount is payable hereunder, such amount shall be forfeited and held in the Trust for application against the next succeeding Employer Contribution or contributions required to be made hereunder. Notwithstanding the foregoing, however, such amount shall be reinstated, by means of an additional Employer contribution, if and when a claim for the forfeited amount is subsequently made by the Participant or Beneficiary or if the Employer receives proof of death of such person, satisfactory to the Employer, To the extent not inconsistent with applicable law, any benefits lost by reason of escheat under applicable state law shall be considered forfeited and shall not be reinstated, 16.08 Mergers, Consolidations, and Transfer of Assets. The Plan shall not be merged into or consolidated with any other plan, nor shall any of its assets or liabilities be transferred into any such other plan, unless each Participant in the Plan would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit he/she would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated), 16.09 Employer Records. Records of the Employer as to an Employee's or Participant's Period of Service, termination of service and the reason therefor, leaves of absence, reemployment. Earnings, and Compensation wiU be conclusive on aU persons, unless determined to be incorrect, 32 2fe 16.10 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, 16.11 Applicable Law. The Plan shall be construed under the laws of the State where the Employer is located, except to the extent superseded by federal law. The Plan is established with the intent that it meets the requirements under the Code, The provisions of this Plan shall be interpreted in conformity with these requirements. In the event of any conflict between the Plan and a policy or contract issued hereunder, the Plan provisions shall control; provided, however, no Plan amendment shall supersede an existing policy or contract unless such amendment is required to maintain qualification under section 401(a) and 414(d) of the Code, XVII. SPOUSAL BENEFIT REQUIREMENTS 17.01 Application. Effective as of January 1, 2006, where elected by the Employer in the Adoption Agreement (the "QJSA Election"), the provisions of this Article shall take precedence over any conflicting provision in this Plan. If elected, the provisions of this Article shall apply to any Par- ticipant who is credited with any Period of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Section 17.05. 17.02 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is selected pursuant to a Qualified Election within the ninety (90) day period ending on the Annuity Starting Date, a married Participant's Vested Account Balance will be paid in the form of a QuaUfied Joint and Survivor Annuity and an unmarried Participant's Vested Account Balance will be paid in the form of a Straight Life Annuity, The Participant may elect to have such annuity distributed upon the attain- ment of the Earliest Retirement Age under the Plan, 17.03 Qualified Preretirement Survivor Annuity. If a Participant dies before the Annuity Starting Date, then fifty percent (50%) of the Participant's Vested Account Balance shaU be applied toward the purchase of an annuity for the life of the Surviving Spouse; the remaining portion shall be paid to such Beneficiaries (which may include such Spouse) designated by the Participant. Notwithstanding the foregoing, the Participant may waive the spousal annuity by designating a different Beneficiary within the Election Period pursuant to a Qualified Election. To the extent that less than one hundred percent (100%) of the vested Account balance is paid to the Surviving Spouse, the amount of the Participant's Account derived from Employee contributions will be allocated to the Surviving Spouse in the same proportion as the amount of the Participant's Account derived from Employee contribu- tions is to the Participant's total Vested Account Balance, The Surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant's death. Further, such Spouse may elect to receive any death benefit payable to him/her hereunder in any of the forms avail- able to the Participant under Section 11,02. 17.04 Notice Requirements. (a) In the case of a Qualified Joint and Survivor Annuity as described in Section 17.02, the Plan Administrator shall, no less than thirty (30) days and no more than ninety (90) days prior to the Annuity Starting Date, provide each Participant a written explanation of: (i) the terms and conditions of a QuaUfied Joint and Survivor Annuity; (ii) the Participant's right to make and the effect of an election to waive the QuaUfied Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant's Spouse; and (iv) the right to make, and the effect 33 of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity. However, if the Participant, after having received the written explanation, affirmatively elects a form of distribution and the Spouse consents to that form of distribution (if necessary), benefit payments may commence less than 30 days after the written explanation was provided to the Participant, provided that the foUowing requirements are met: (1) The Plan Administrator provides information to the Participant clearly indicating that the Participant has a right to at least 30 days to consider whether to waive the Qualified Joint and Survivor Annuity and consent to a form of distribution other than a Qualified Joint and Survivor Annuity; (2) The Participant is permitted to revoke an affirmative distribution election at least until the Annuity Starting Date, or if later, at any time prior to the expiration of the 7-day period that begins the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; (3) The Annuity Starting Date is after the date that the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; and (4) Distribution in accordance with the affirmative election does not commence before the expiration of the 7-day period that begins after the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant. (b) In the case of a Qualified Preretirement Survivor Annuity as described in Section 17.03, the Plan Administrator shall provide each Participant within the applicable period for such Participant a written explanation of the Qualified Preretirement Survivor Annuity in such terms and in such manner as would be comparable to the explanation provided for meeting the requirements of Subsection (a) applicable to a Qualified Joint and Survivor Annuity The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Participant attains age thirty-two (32) and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age thirty-five (35); (ii) a reasonable period ending after the individual becomes a Participant; (iii) a reasonable period ending after Subsection (c) ceases to apply to the Participant; (iv) a reasonable period ending after this Article first applies to the Participant, Notwithstanding the foregoing, notice must be provided within a reasonable period ending after separation from service in the case of a Participant who separates from service before attaining age thirty-five (35). For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii), (iii) and (iv) is the end of the two (2) year period beginning one (1) year prior to the date the applicable event occurs, and ending one (1) year after that date. In the case of a Participant who separates from service before the Plan Year in which age thirty-five (35) is attained, notice shall be provided within the two (2) year period beginning one (1) year prior to separation and ending one (1) year after separation. If such a Participant thereafter returns to employment with the Employer, the applicable period for such Participant shall be redetermined. (c) Notwithstanding the other requirements of this Section, the respective notices prescribed by this Section need not be given to a Participant if (1) the Plan "fully subsidizes" the costs 34 ^0 of a Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity, and (2) the Plan does not allow the Participant to waive the Qualified Joint and Survivor Annuity or Qualified Preretirement Survivor Annuity and does not allow a married Participant to designate a non-Spouse Beneficiary, For purposes of this Subsection (c), a plan fully sub- sidizes the costs of a benefit if no increase in cost or decrease in benefits to the Participant may result from the Participant's failure to elect another benefit, 17.05 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Annuity Starting Date: The first day of the first period for which an amount is paid as an annuity or any other form, (b) Election Period: The period which begins on the first day of the Plan Year in which the Participant attains age thirty-five (35) and ends on the date of the Participant's death. If a Participant separates from service prior to the first day of the Plan Year in which age thirty-five (35) is attained, with respect to the Account balance as of the date of separation, the Election Period shall begin on the date of separation, Pre-age thirty-five (35) waiver: A Participant who will not yet attain age thirty-five (35) as of the end of any current Plan Year may make a special Qualified Election to waive the Qualified Preretirement Survivor Annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age thirty-five (35). Such election shall not be valid unless the Participant receives a written explanation of the Qualified Preretirement Survivor Annuity in such terms as are comparable to the explanation required under Section 17.04(a). Qualified Preretirement Survivor Annuity coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant attains age thirty-five (35). Any new waiver on or after such date shall be subject to the full requirements of this Article. (c) Earliest Retirement Age: The earliest date on which, under the Plan, the Participant could elect to receive retirement benefits. (d) Qualified Election: A waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity, Any waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement Survivor Annuity shall not be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficiaries, which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent); (c) the Spouse's consent acknowledges the effect of the election; and (d) the Spouse's consent is witnessed by a Plan representative or notary public. Additionally, a Participant's waiver of the Qualified Joint and Survivor Annu- ity shall not be effective unless the election designates a form of benefit payment which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further Spousal consent). If it is established to the satisfaction of a Plan representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified Election. Any consent by a Spouse obtained under this provision (or establishment that the consent of a Spouse may not be obtained) shaU be effective only with respect to such Spouse, A consent that permits designations by the Participant without any requirement of further consent by 35 41 such Spouse must acknowledge that the Spouse has the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish either or both of such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. The number of revocations shall not be Umited. No consent obtained under this provision shall be valid unless the Participant has received notice as provided in Section 17,04, (e) Qualified Joint and Survivor Annuity: An immediate annuity for the life of the Participant with a survivor annuity for the life of the Spouse which is fifty percent (50%) of the amount of the annuity which is payable during the joint lives of the Participant and the Spouse and which is the amount of benefit which can be purchased with the Participant's Vested Account Balance, (f) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant, provided that a former Spouse wiU be treated as the Spouse or Surviving Spouse and a current Spouse will not be treated as the Spouse or Surviving Spouse to the extent provided under a qualified domestic relations order as described in section 4l4(p) of the Code, (g) Straight Life Annuity: An annuity payable in equal installments for the life of the Participant that terminates upon the Participant's death, (h) Vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Participant who is vested in amounts attributable to Employer Contributions, Employee contributions (or both) at the time of death or distribution, 17.06 Annuity Contracts. Where benefits are to be paid in the form of a life annuity pursuant to the terms of this Article, a nontransferable annuity contract shall be purchased from a life insurance company and distributed to the Participant or Surviving Spouse, as applicable. The terms of any annuity contract purchased and distributed by the Plan shall comply with the requirements of this Plan and section 417 of the Code, XVIII. FINAL PAY CONTRIBUTIONS 18.01 Eligibility. Effective as of January 1, 2006, if elected by the Employer in the Adoption Agreement, Final Pay Contributions on behalf of each Participant equal to the equivalent of the accrued unpaid final pay, as defined in the Adoption Agreement ("Final Pay"), shall be contributed to the Plan. 18.02 Contribution Amount. At the election of the Employer in the Adoption Agreement, the Final Pay Contributions may be made as either (a) Employer Final Pay Contributions, or (b) Employee Designated Final Pay Contributions, as described below, (a) Employer Final Pay Contributions, The Employer shall contribute to the Plan for each Participant the equivalent of a designated amount of accrued unpaid final pay upon termination of employment of the Participant, as the Employer so elects in the Adoption Agreement, The Employer's contribution for any Plan Year shall be due and paid not later than the time prescribed by applicable law, 36 4P The Employer Final Pay Contributions shall be accounted for in the Employer Contribution Account. (b) Employee Designated Final Pay Contributions. The Employer shaU contribute to the Plan for each Participant all or any portion of a Participant's Final Pay, as elected by the Participant. The Employer may limit the amount of Final Pay to be elected to be contributed to the Plan. Once elected, an Emplyee's election shall remain in force and may not be revised or revoked. The Employee Designated Final Pay Contributions shall be accounted for in the Participant Contribution Account, and are nonforfeitable by the Participant at all times. The Employee Designated Final Pay Contributions shall be "picked up" by the Employer in accordance with Code section 414(h)(2). The contributions shall be treated as an employer contribution in determining the tax treatment under the Code, and shall not be included as gross income of the Participant untU it is distributed, A Participant cannot elect to receive cash in Ueu of any Final Pay Contribution. 18.03 Equivalencies. The Final Pay Contribution shall be determined by multiplying the Participant's current daily rate of pay from the Employer times the amount of accrued unpaid leave being converted, 18.04 Excess Contributions. Final Pay Contributions are limited to the extent of applicable law and any Code limitation. No Final Pay Contribution shall be made to the extent that it would exceed the applicable Code section 415 limitation, as set forth in Article V, Any excess contributions as a result of the Code section 415 limitation shall remain in the Participant's leave bank, XIX. ACCRUED LEAVE CONTRIBUTIONS 19.01 Eligibility. Effective as of January 1, 2006, if elected by the Employer in the Adoption Agreement, Accrued Leave Contributions on behalf of each eligible Participant equal to the equivalent of the accrued unpaid leave, as defined in the Adoption Agreement ("Accrued Leave"), shall be contributed to the Plan, Eligibility for Accrued Leave Contributions is limited to only those Participants or class of Participants that the Employer elects in the Adoption Agreement, 19.02 Contribution Amount. At the election of the Employer in the Adoption Agreement, the Accrued Leave Contributions may be made as either (a) Employer Accrued Leave Contributions, or (b) Employee Designated Accrued Leave Contributions, as described below, (a) Employer Accrued Leave Contributions, The Employer shall contribute to the Plan for each eligible Participant the equivalent of a designated amount of accrued unpaid leave each year, as the Employer so elects in the Adoption Agreement, The Employer's contribution for any Plan Year shall be due and paid not later than the time prescribed by applicable law. The Employer Accrued Leave Contributions shall be accounted for in the Employer Contribution Account, (b) Employee Designated Accrued Leave Contributions, The Employer shaU contribute to the Plan for each eligible Participant aU or any portion of a Participant's Accrued Leave, 37 TT as elected by the Participant, The Employer may limit the amount of Accrued Leave to be elected to be contributed to the Plan, Once elected, an Employee's election shall remain in force and may not be revised or revoked. The Employee Designated Accrued Leave Contributions shall be accounted for in the Participant Contribution Account, and are nonforfeitable by the Participant at all times. The Employee Designated Accrued Leave Contributions shall be "picked up" by the Employer in accordance with Code section 414(h)(2), The contributions shaU be treated as an employer contribution in determining the tax treatment under the Code, and shall not be included as gross income of the Participant until it is distributed, A Participant cannot elect to receive cash in lieu of any Accrued Leave Contribution, 19.03 Equivalencies. The Accrued Leave Contribution shall be determined by multiplying the Participant's current daily rate of pay from the Employer times the amount of accrued unpaid leave being converted. 19.04 Excess Contributions. Accrued Leave Contributions are limited to the extent of applicable law and any Code limitation. No Accrued Leave Contribution shall be made to the extent that it would exceed the applicable Code section 415 limitation, as set forth in Article V, Any excess contributions as a result of the Code section 415 limitation shall remain in the Participant's leave bank. 38 DECLARATION OF TRUST This Declararion of Trust (the "Group Trust Agreement") is made as of the 19th day of May, 2001, by VantageTrust Company, which declares itself to be the 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 Revenue Ruling 81-100, 1981-1 CB, 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 investment 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 QuaUfied 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 foUowing 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 provisions 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 Board of Trustees referenced therein. In this respect, unless the context clearly indicates 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 other 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 obligation of the Group Trust shall run to the ICMA Retirement Trust); and (b) all provisions deaUng 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. 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 QuaUfied 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, 39 (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 purported assignment of such equity or interest shaU 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 appropriate 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 instructions. IN WITNESS WHEREOF, the Trustee has executed this Declaration of Trust as of the day and year first above written. VANTAGETRUST COMPANY By i/A ^' Angela C. Montez Assistant Corporate Secretary 40 ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC, member FINRA/SIPC. ICMARC ATTN.: NEW BUSINESS UNIT P.O. BOX 96220 WASHINGTON, DC 20090-6220 1-800-669-7400 WWW.ICMARCORG EN ESPANOL LLAME AL 1-800-669-8216 BKTOOO-015-200904-452 HI ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST AMENDMENT FOR POST-EGTRRA LEGISLATIVE AND REGULATORY CHANGES Pursuant to Section 14.05 of the ICMA Retirement Corporation Governmental Money-Purchase Plan & Trust (the "Plan") and Section 5.01 of Revenue Procedure 2005-16, 2005-1 CB. 674, ICMA Retirement Corporation, as Plan Administrator, hereby adopts this Amendment on behalf of all adopting Employers to add a new Appendix A as follows, effective as provided therein. Appendix A ARTICLE I PREAMBLE 1.01 Applicability. This Appendix memorializes the operation of the Plan in accordance with the following legislative and regulatory items. (a) Pension Protection Act of 2006; (b) Final Treasury Regulations under Code section 415; (c) Emergency Economic Stabilization Act of 2008; (d) Worker, Retiree, and Employer Recovery Act of 2008; (e) Katrina Emergency Tax Relief Act of 2005; and (f) Gulf Opportunity Zone Act of 2005. 1.02 Superseding of Inconsistent Provisions. This Appendix supersedes the provisions of the Plan and Adoption Agreement to the extent those provisions are inconsistent with the provisions of this Appendix. 1.03 Construction. Except as otherwise provided herein, any reference to "Section" in this Appendix refers only to sections within this Appendix and is not a reference to the Plan. The Article and Section numbering in this Appendix is solely for purposes of this Appendix and does not relate to any Plan article, section, or other numbering designations. ARTICLE II PENSION PROTECTION ACT OF 2006 2.01 Background. On August 17, 2006, the Pension Protection Act, Pub. L. No. 109-280 ("PPA"), became law. It amended the Code to provide for a number of changes with regard to Code section 401(a) plans. This Article incorporates the relevant provisions of PPA into the Plan. 2.02 Required Notice for Participant Distributions. With respect to any distribution notice and election form that is, under the terms of the Plan, to be delivered 90 days before the date as of which a distribution is to be made, the window for giving Participants such distribution notices and election forms shall be extended to 180 days before the date as of which a distribution is to commence. This Section 2.02 shaU be effective for calendar years beginning after December 31, 2006. 2.03 Rollover by a Non-Spouse Designated Beneficiary. (a) Unless otherwise elected by the Employer, for Plan Years beginning after December 31, 2006 but on or before December 31, 2009, a non-spouse Beneficiary who qualifies as a "designated beneficiary" under Code section 401(a)(9)(E) may establish an individual retirement plan that wiU be treated as an Inherited IRA pursuant to the provisions of Code section 402(c) (11) into which all or a portion of a death benefit distribution from this Plan can be transferred directly. A trust maintained for the benefit of one or more designated beneficiaries shall be treated in the same manner as a designated beneficiary. (b) Notwithstanding the election made in subsection (a), for Plan Years beginning after December 31, 2009, a non- spouse Beneficiary who qualifies as a "designated beneficiary" under Code section 401(a)(9)(E) may establish an individual retirement plan that will be treated as an Inherited IRA pursuant to the provisions of Code section 402(c)(l 1) into which aU or a portion of a death benefit distribution from this Plan can be transferred directly. A trust maintained for the benefit of one or more designated beneficiaries shall be treated in the same manner as a designated beneficiary. (c) Notwithstanding anything herein to the contrary, a death benefit distribution shall not be eligible for transfer to an Inherited IRA to the extent such distribution is a required minimum distribution under Code section 401(a) (9). 2.04 In-Service Distributions. If elected by the Employer, in-service distributions may be made beginning after June 1, 2009 to a Participant who has attained normal retirement age or an alternate age elected by the Employer, and who has not yet incurred a severance from employment. Important Note to Employers: The earliest date that a Plan may allow for in-service distributions is the earlier of (i) age 62, and (ii) the Normal Retirement Age for the Plan. 2.05 Normal Retirement Age. The age elected by the Employer in the Adoption Agreement. Important Note to Employers: Normal Retirement Age is significant for determining the earliest date at which the Plan may allow for in-service distributions. Normal Retirement Age also defines the latest date at which a Participant must have a ftilly vested right to his/her Account. There are IRS rules that limit the age that may be specified as the Plan's Normal Retirement Age. The Normal Retirement Age cannot be earlier than what is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. An age under 55 is presumed not to satisfy this requirement, unless the Commissioner of Internal Revenue determines that the facts and circumstances show otherwise. Whether an age between 55 and 62 satisfies this requirement depends on the facts and circumstances, but an Employer's good faith, reasonable determination wiU generally be given deference. A special rule, however, appUes in the case of a plan where substantially all of the participants in the plan are qualified public safety employees within the meaning of section 72(t)(10)(B) of the Code, in which case an age of 50 or later is deemed not to be earlier than the earliest age that is reasonably representative of the typical retirement age for the industry in which the covered workforce is employed. 2.06 Distributions for Health and Long-Term Care Insurance for PubUc Safety Officers. (a) If elected by the Employer, for Plan Years beginning after December 31, 2006, Eligible Retired Public Safety Officers may elect after separation from service to have up to $3,000 distributed tax-free annually from the Plan in order to pay for Qualified Health Insurance Premiums for an accident or health plan (including a self-insured plan) or a qualified long-term care insurance contract. The Plan shall make such distributions directly to the provider of the accident or health plan or qualified long-term care insurance contract. (b) The term "Eligible Retired Public Safety Officer" means an individual who, by reason of disability or attainment of normal retirement age, is separated from service as a Public Safety Officer with the Employer who maintains the eligible retirement plan from which distributions pursuant to this Section are made. The term "Public Safety Officer" has the same meaning given such term by section 1204(9) (A) of the Omnibus Crime Control and Safe Streets Act of 1968. (c) The term "Qualified Health Insurance Premiums" means premiums for coverage for the Eligible Retired Public Safety Officer, his spouse, and dependents, by an accident or health insurance plan or qualified long-term care insurance contract (as defined in Code section 7702(B)). 2.07 Rollovers to Roth IRAs. Effective for distributions after December 31, 2007, a Participant may elect to have any portion of an EUgible Rollover Distribution paid directly to a Roth IRA described in Code section 408A. ARTICLE III FINAL SECTION 415 REGULATIONS 3.01 Background. On April 5, 2007, Treasury issued final regulations under section 415 of the Code. The regulations amend the permitted definitions of Compensation for purposes of determining maximum permitted contributions. This Article incorporates the relevant provisions of the final 415 regulations into the Plan. 3.02 Relationship Between ''Compensation" and "Earnings". One of the limitations on contributions under section 415 of the Code is 100% of Compensation. This Article modifies the definition of Compensation to reflect the final 415 regulations. It does not modify the definition of Earnings, which is the term used under the Plan to determine Plan contributions and is not affected by this Article. 3.03 Effective Date. This Article is effective for Limitation Years that begin more than ninety (90) days after the close of the first regular legislative session of the legislative body with authority to amend the Plan that begins on or after July 1,2007. 3.04 Definition of Compensation. (a) Generally. For purposes of Article V of the Plan, Compensation includes a Participant's wages, salaries, fees for professional services, and other amounts received (without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer, to the extent that the amounts are includible in gross income (or to the extent amounts would have been received and includible in gross income but for an election under Code section 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B), 402(k), or 457(b)). These amounts include, but are not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan as described in Treas. Reg. section 1.62-2(c). (b) Not Included. Notwithstanding the foregoing. Compensation does not include: (i) Contributions (other than elective contributions described in Code section 402(e)(3), 408 (k) (6), 408(p)(2)(A)(i), or 457(b)) made by the Employer to a plan of deferred compensation (including a simplified employee pension described in Code section 408(k) or a simple retirement account described in Code section 408(p), and whether or not qualified) to the extent that the contributions are not includible in the gross income of the Participant for the taxable year in which contributed. In addition, any distributions from a plan of deferred compensation (whether or not qualified) are not considered as Compensation for Code section 415 purposes, regardless ofwhether such amounts are includible in the gross income of the Participant when distributed. (ii) Other amounts that receive special tax benefits, such as premiums for group-term life insurance (but only to the extent that the premiums are not includible in the gross income of the Participant and are not salary reduction amounts that are described in Code section 125). (iii) Other items of remuneration that are similar to the items listed in subparagraph (i) or (ii) of this subsection (b). 3.05 Compensation Paid After Severance from Employment. Compensation shall be adjusted as set forth herein for the following types of compensation paid after a Participant's severance from employment (as determined under section 415 of the Code and the regulations thereunder) with the Employer. Any payment that is not described in subsection (a), (b), (c), or (d) of this Section is not considered Compensation within the meaning of section 415 of the Code if paid after severance from employment with the Employer. (a) Regular Pay. Compensation shall include regular pay after severance of employment if: (i) The payment is regular compensation for services during the Participant's regular working hours, or compensation for services outside the Participant's regiilar working hours (such as overtime or shift differential), commissions, bonuses, or other similar payments; (ii) The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer; and (iii) Such amounts are paid: 1. for Limitation Years beginning before January 1, 2009, within 2V^ months after severance from employment with the Employer maintaining the Plan; and 2. for Limitation Years beginning on or after January 1, 2009, by the later of IVi months after severance from employment with the Employer maintaining the Plan or by the end of the calendar year that includes the date of such severance from employment. (b) Leave Cashouts. (i) For Limitation Years beginning before January 1, 2009, Compensation shall include payment for unused accrued bona fide sick, vacation, or other leave, but only if (i) the Participant would have been able to use the leave if employment had continued, (ii) such amounts are paid within 2Vi months after severance from employment with the Employer maintaining the Plan, and (iii) such amounts would be included in Compensation if the individual had continued to perform services for the Employer. (ii) For Limitation Years beginning on or after January 1, 2009, Compensation shall include payment for unused accrued bona fide sick, vacation, or other leave, but only if (i) the Participant would have been able to use the leave if employment had continued, (ii) such amounts are paid by the later of 2Vi months after severance from employment with the Employer maintaining the Plan or by the end of the calendar year that includes the date of such severance from employment, and (iii) such amounts would be included in Compensation if the individual had continued to perform services for the Employer. (c) Salary Continuation Payments for Military Service Participants. (i) Compensation includes payments to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code section 4l4(u)(l)) to the extent: 1. Those payments do not exceed the amounts the individual would have received if the individual had continued to perform services for the Employer rather than entering qualified military service; and 2. Those payments would be included in Compensation if the individual had continued to perform services for the Employer rather than entering qualified military service. (ii) Notwithstanding the foregoing. Compensation does not include distributions from this Plan to an individual who does not currently perform services for the Employer by reason of qualified military service (as that term is used in Code section 4l4(u)(l)). (d) Salary Continuation Payments for Disabled Participants. (i) Compensation includes amounts paid to a Participant who is permanently and totally disabled (as defined in Code section 22(e)(3)) to the extent: T/ 1. Salary continuation applies to all Participants who are permanently and totally disabled for a fixed or determinable period or the Participant was not a highly compensated employee (as defined in Code section 4l4(q)) immediately before becoming disabled. 2. Those amounts would be included in Compensation if the Participant had continued to perform services for the Employer. (ii) Notwithstanding the foregoing. Compensation does not include distributions from this Plan to a Participant who is permanently and totally disabled (as defined in Code section 22(e)(3)). 3.06 Administrative Delay Rule Does Not Apply. Compensation for a Limitation Year shall not include amounts earned but not paid during the Limitation Year solely because of the timing of pay periods and pay dates. 3.07 Definition of Annual Additions. The Plan's definition of "Annual Additions" is modified as follows: (a) Restorative Payments. Annual Additions for purposes of Code section 415 shall not include restorative payments. For this purpose, restorative payments are payments made to restore losses to a plan resulting from actions by a fiduciary for which there is reasonable risk of liability for breach of a fiduciary duty under applicable federal or state law, where Participants who are similarly situated are treated similarly with respect to the payments. Generally, payments to a defined contribution plan are restorative payments only if the payments are made in order to restore some or all of the plan's losses due to an action (or a failure to act) that creates a reasonable risk of liability for such a breach of fiduciary duty (other than a breach of fiduciary duty arising from failure to remit contributions to the plan). This includes payments to a plan made pursuant to a court-approved settlement to restore losses to a qualified defined contribution plan on account of the breach of fiduciary duty (other than a breach of fiduciary duty arising from failure to remit contributions to the plan). Payments made to a plan to make up for losses due merely to market fluctuations and other payments that are not made on account of a reasonable risk of liability for breach of a fiduciary duty are not restorative payments and generally constitute contributions that give rise to Annual Additions. (b) Other Amounts. Annual Additions for purposes of Code section 415 shall not include (i) the direct transfer of a benefit or employee contributions from a qualified plan to this Plan; (ii) rollover contributions (as described in Code sections 401(a)(31), 402(c)(1), 403(a)(4), 403(b)(8), 408(d)(3), and 457(e)(16)); (iii) repayments of loans made to a Participant from the Plan; (iv) repayments of amounts described in Code section 411(a)(7)(B) (in accordance with Code sections 411(a)(7)(C)) and 411(a)(3)(D) or repayment of contributions to a governmental plan (as defined in Code section 414(d)) as described in Code section 4l5(k) (3), as well as Employer restorations of benefits that are required pursuant to such repayments; (v) Employee Contributions to a qualified cost of living arrangement within the meaning of Code section 4l5(k)(2)(B); (vi) catch-up contributions made in accordance with section 4l4(v) and §1.4l4(v)-l and (vii) excess deferrals that are distributed in accordance with § 1.402(g)-1(e) (2) or (3). (c) Date of Employer Contributions. Notwithstanding anything in the Plan to the contrary, Employer Contributions are treated as credited to a Participant's account for a particular Limitation Year only if the contributions are actually made to the plan no later than the 15* day of the tenth calendar month foUowing the end of the calendar year or fiscal year (as applicable, depending on the basis on which the Employer keeps its books) with or within which the particular Limitation Year ends. 3.08 Change of Limitation Year. The Limitation Year may only be changed by a Plan amendment. Furthermore, if the Plan is terminated effective as of a date other than the last day of the Plan's Limitation Year, then the Plan is treated as if the Plan had been amended to change its Limitation Year. 3.09 Excess Annual Additions. Notwithstanding any provision of the Plan to the contrary, if the Annual Additions (within the meaning of Code section 415) are exceeded for any Participant, then the Plan may only correct such excess in accordance with the Employee Plans Compliance Resolution System ("EPCRS") as set forth in Revenue Procedure 2008-50, 2008-35 I.R.B. 464, or any superseding guidance, including, but not limited to, the preamble of the final Code section 415 regulations. 3.10 Aggregation and Disaggregation of Plans. (a) For purposes of applying the limitations of Code section 415, all defined contribution plans (without regard to whether a plan has been terminated) ever maintained by the Employer (or a "predecessor employer") under which the Participant receives Annual Additions are treated as one defined contribution plan. The "Employer" means the Employer that adopts this Plan and any other entity which the Employer determines, based on a reasonable, good faith interpretation of existing law in accordance with Notice 89-23, 1989-1 CB. 654, as modified by Notice 96-64, 1996-2 CB. 229, should be aggregated for purposes of applying the limitations of Code section 415. For purposes of this Section: (i) A former employer is a "predecessor employer" with respect to a Participant if the Employer maintains a plan under which the Participant had accrued a benefit while performing services for the former employer, but only if that benefit is provided under the plan maintained by the Employer. For this purpose, the formerly affiliated plan rules in Treas. Reg. section 1.415(f)-1(b) (2) apply as if the Employer and predecessor employer constituted a single employer under the rules described in Treas. Reg. section 1.415(a)-l (f)(1) and (2) immediately prior to the cessation of affihation (and as if they constituted two, unrelated employers under the rules described in Treas. Reg. section 1.415(a)-1(f) (1) and (2) immediately after the cessation of affiliation) and cessation of affiliation was the event that gives rise to the predecessor employer relationship, such as a transfer of benefits or plan sponsorship. (ii) With respect to an Employer, a former entity that antedates the Employer is a "predecessor employer" with respect to a Participant if, under the facts and circumstances, the Employer constitutes a continuation of all or a portion of the trade or business of the former entity. (b) Midyear Aggregation, Two or more defined contribution plans that are not required to be aggregated pursuant to Code section 415(f) and the Treasury Regulations thereunder as of the first day of a Limitation Year do not fail to satisfy the requirements of Code section 415 with respect to a Participant for the Limitation Year merely because they are aggregated later in that Limitation Year, provided that no Annual Additions are credited to the Participant's account after the date on which the plans are required to be aggregated. ARTICLE IV DEFINITION OF EARNINGS 4.01 Earnings Paid After Severance from Employment. Earnings for purposes of allocations under the Plan shall not include amounts paid after a Participant's severance from Employment with the Employer except as provided in this Section. (a) Leave Cashouts. Earnings shall include payment for unused accrued bona fide sick, vacation, or other leave, but only if (i) the Participant would have been able to use the leave if employment had continued, and (ii) such amounts are paid by the later of 7T/2 months after severance from employment with the Employer maintaining the Plan or by the end of the calendar year that includes the date of such severance from employment. (b) Regular Pay. Earnings shall include regular pay after severance from employment if: (i) The payment is included in the Participant's W-2 earnings; (ii) The payment would have been paid to the Participant prior to a severance from employment if the Participant had continued in employment with the Employer; and 65 (iii) Such amounts are paid by the later of IT/i months after severance from employment with the Employer maintaining the Plan or by the end of the calendar year that includes the date of such severance from employment. Notwithstanding anything to the contrary in this subsection (b), unless the Employer has specifically elected to include overtime compensation and bonuses in Earnings, Earnings shall exclude overtime compensation and bonuses paid after severance from employment. (c) Effective Date. This Article is effective for Plan Years beginning on or after January 1, 2009. Notwithstanding anything to the contrary in this Article, for Plan Years beginning before January 1, 2009, the amounts specified in subsections (a) and (b) of this Section must be paid within 2^2 months after severance from employment with the Employer maintaining the Plan. ARTICLE V EMERGENCY ECONOMIC STABILIZATION ACT OF 2008 5.01 Background. On October 3, 2008, the Emergency Economic Stabilizarion Act of 2008, Pub. L. No. 110-343 ("EESA"), became law. With regard to retirement plans, EESA generally permits plans to allow repayments of certain prior qualified distributions for home purchases for participants affected by certain 2008 Midwestern severe storms, tornadoes, and flooding and to permit repayments of prior qualified distributions for home purchases. This Article incorporates the relevant provisions of EESA into the Plan. 5.02 Qualified Disaster Recovery Assistance Distributions and Repayment Thereof. The provisions relating to qualified disaster recovery assistance distributions and repayment thereof set forth in section 702 of EESA shall apply to the Plan. 5.03 Repayment of Prior Qualified Distributions for Home Purchases to Plan. The provisions relating to repayment of prior qualified distributions for home purchases set forth in section 702 of EESA shall apply to the Plan. ARTICLE VI WORKER, RETIREE, AND EMPLOYER RECOVERY ACT OF 2008 6.01 Backgroimd. On December 23, 2008, the Worker, Retiree, and Employer Recovery Act of 2008, Pub. L. No. 110- 458 ("WRERA"), became law. WRERA amended Code section 401(a)(9) to suspend required minimum distributions for 2009. It is also possible that legislation will be enacted in the future that suspends required minimum distributions for 2010 or a later year. This Article incorporates the relevant provisions of WRERA into the Plan and describes the Plan terms that will apply in the event that required minimum distributions are suspended in a year subsequent to 2009. 6.02 Application of Minimum Distribution Requirements. The minimum distribution requirements of section 401 (a) (9) of the Code shall only apply to the Plan to the extent that such requirements are applicable by law for a year. 6.03 Special Rule for Scheduled Installment Payments. All installment payments scheduled to be distributed to a Participant prior to the effective date of a suspension of the required minimum distribution provisions of Code section 401(a)(9) shall be distributed as scheduled unless the Participant affirmatively elects to have the payments stopped. Notwithstanding the foregoing, for purposes of this Section 6.03, the effective date of the suspension of the required minimum distribution provisions for 2009 shall be deemed January 6, 2009. 6^ ARTICLE VII KATRINA EMERGENCY TAX RELIEF ACT OF 2005 AND GULF OPPORTUNITY ZONE ACT OF 2005 7.01 Background. On September 23, 2005, the Katrina Emergency Tax Relief Act of 2005, Pub. L. No. 109-73 ("KETRA"), became law, and on December 21, 2005, the Gulf Opportunity Zone Act of 2005, Pub. L. No. 109-135 ("GOZA"), became law. Generally, KETRA and GOZA permit plans to allow repayments of certain prior qualified distributions for home purchases for participants affected by Hurricanes Katrina, Rita, and/or Wilma. This Article incorporates the relevant provisions of KETRA and GOZA into the Plan. 7.02 Qualified Hurricane Distributions and Repayment Thereof The provisions relating to qualified hurricane distributions and repayment thereof set forth in section l400Q(a) of the Code shall apply to the Plan. 7.03 Repayment of Prior Qualified Distributions for Home Purchases to Plan. The provisions relating to repayment of prior qualified distributions for home purchases set forth in Code section l400Q(b) shall apply to the Plan. 65 EXHIBIT 3 ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST ADOPTION AGREEMENT PLAN NUMBER 10-7924 The Employer hereby establishes a Money Purchase Plan and Trust to be known as City of Carlsbad Money Purchase Plan (the "Plan") in the form of the ICMA Retirement Corporation Governmental Money Purchase Plan and Trust (MPP 01/01/06). This Plan is an amendment and restatement of an existing defined contribution money purchase plan. • Yes SI No If yes, please specify the name of the defined contribution money purchase plan which this Plan hereby amends and restates: I. Employer: City of Carlsbad [902] II. The Effective Date of the Plan shall be the first day of the Plan Year during which the Employer adopts the Plan, unless an alternate Effective Date is hereby specified: April 14,2014 (e_g_^ January 1, 2006 for the MPP 01/01/06 Plan) III. Plan Year will mean: l2I The twelve (12) consecutive month period which coincides with the limitation year. (See Section 5.03(f) of the Plan.) • The twelve (12) consecutive month period commencing on and each anniversary thereof IV. Normal Retirement Age shall be age (not to exceed age 65). [288] V. ELIGIBILITY REQUIREMENTS: 1. The following group or groups of Employees are eligible to participate in the Plan: All Employees AH Full Time Employees Salaried Employees Non union Employees Management Employees Public Safety Employees General Employees Other Employees (specify describe the group(s) of eligible employees below) City Manager The group specified must correspond to a group of the same designation that is defined in the statutes, ordinances, rules, regulations, personnel manuals or other material in effect in the state or locality of the Employer. Also, the eligibility requirements for participation in the Plan cannot be such that Employees become Participants only in the Plan Year in which the Employees terminate employment (i.e., stand-alone final pay plans). Money Purchase Plan Adoption Agreement 2. The Employer hereby waives or reduces the requirement of a twelve (12) month Period of Service for participation. The required Period of Service shall be (write N/A if an Employee is eligible to participate upon employment) ]^ . If this waiver or reduction is elected, it shall apply to all Employees within the Covered Employment Classification. 3. A minimum age requirement is hereby specified for eligibility to participate. The minimum age requirement is N/A (not to exceed age 21. Write N/A if no minimum age is declared.) VI. CONTRIBUTION PROVISIONS 1. The Employer shall contribute as follows: (Choose all that apply, but at least one of Options A, B or C. If Option A is noi selected, Employer must pick up Participant Contributions under Option B or Option C.) Fixed Employer Contributions With or Without Mandatory Participant Contributions. (If Option B or C is chosen, please complete section D.) [7) A. Employer Contributions. The Employer shall contribute on behalf of each Participant % of Earnings or $ 27,000 for the Plan Year (subject to the limitations of Article V of the Plan). Mandatory Participant Contributions O are required 2! are not required to be eligible for this Employer Contribution. d B. Mandatory Participant Contributions for Plan Participation. A Participant is required to contribute (subject to the limitations of Article V of the Plan) (i) % of Earnings, (ii) $ , or (iii) a whole percentage of Earnings between the range of (insert range of percentages between 0% and20% (e.g., 3%, 6%, or 20%; 5% to 7%)), as designated by the Employee in accordance with guidelines and procedures established by the Employer for the Plan Year as a condition of participation in the Plan. A Participant shall not have the right to discontinue or vary the rate of such contributions after becoming a Plan Participant. The Employer hereby elects to "pick up" the Mandatory Participant Contributions '(pick up is required if neither Option A nor Option C is selected). • Yes • No O C. Mandatory Participant Contributions for this Portion of the Plan. Each Employee eligible to participate in the Plan shall be given the opportunity to irrevocably elect to participate in the Mandatory Participant Contribution portion of the Plan by electing to contribute (insert range of percentages between 0% and 20% (e.g., 3%, 6%, or 20%; 5% to 7%)) of the Employee's Earnings to the Plan for each Plan Year (subject to the limitations of Article V of the Plan). [621] ' Neither an IRS advisory letter nor a determination letter issued to an adopting Employer is a ruling by the Internal Revenue Service that Participant contributions that are picked up by the Employer are not includable in the Participant's gross income for federal income tax purposes. Pick-up contributions are not mandated to receive private letter rulings; however, if an adopting employer wishes to receive a ruling on pick-up contributions they may request one in accordance with Revenue Procedure 2011-4 (or subsequent guidance). Money Purchase Plan Adoption Agreement 2 57 A Participant shall not have the right to discontinue or vary the rate of such contributions after becoming a Participant in this portion of the Plan. The Employer hereby elects to "pick up" the Mandatory Participant Contributions (pick up is required if neither Option A nor Option B is selected).-^ [621 ] • Yes • No D. Electipn Window (Complete if Option B or Option C is selected): Newly eligible Employees shall be provided an election window of 60 calendar days) from the date of initial eligibility during which they may make the election to participate in the Mandatory Participant Contribution portion of the Plan. Participation in the Mandatory Participant Contribution portion of the Plan shall begin the first of the month following the end of the election window. days (no more than An Employee's election is irrevocable and shall remain in force until the Employee terminates employment or ceases to be eligible to participate in the Plan. In the event of re-employment to an eligible position, the Employee's original election will resume. In no event does the Employee have the option of receiving the pick-up contribution amount directly. 2. The Employee may also elect to contribute as follows: • A. • B. Fixed Employer Match of Voluntary Participant Contributions. The Employer shall contribute on behalf of each Participant % of Earnings for the Plan Year (subject to the limitations of Article V of the Plan) for each Plan Year that such Participant has contributed % of Earnings or $ . Under this option, there is a single, fixed rate of Employer contributions, but a Participant may decline to make the required Participant contributions in any Plan Year, in which case no Employer contribution will be made on the Participant's behalf in that Plan Year. Variable Employer Match of Voluntary Participant Contributions. The Employer shall contribute on behalf of each Participant an amount determined as follows (subject to the limitations of Article V of the Plan): % of the Voluntary Participant Contributions made by the Participant for the Plan Year (not including Participant contributions exceeding % of Earnings or $ ); PLUS % of the contributions made by the Participant for the Plan Year in excess of those included in the above paragraph (but not including Voluntary Participant Contributions exceeding in the aggregate % of Earnings or $ ). Employer Matching Contributions on behalf of a Participant for a Plan Year shall not exceed $ or % of Earnings, whichever is more or less. 3. Each Participant may make a voluntary (unmatched), after tax contribution, subject to the limitations of Section 4.05 and Article V of the Plan. • Yes [3 No 4. Employer contributions for a Plan Year shall be contributed to the Trust in accordance with the following payment schedule (no later than the 15th day of the tenth calendar month following the end of the calendar year or fiscal year (as applicable depending on the basis on which the Employer keeps its books) with or within which the particular Limitation year ends, or in accordance with applicable law): ' See footnote 1 on the previous page. Money Purchase Plan Adoption Agreement 5. Participant contributions for a Plan Year shall be contributed to the Trust in accordance with the following payment schedule (no later than the 15th day of the tenth calendar month following the end of the calendar year or fiscal year (as applicable depending on the basis on which the Employer keeps its books) with or within which the particular Limitation year ends, or in accordance with applicable law): VII. EARNINGS Earnings, as defined under Section 2.09 of the Plan, shall include: (a) Overtime • Yes 3 No (b) Bonuses • Yes 17) No (c) Other Pay (specifically describe any other types of pay to be included below) VIII. The Employer will permit rollover contributions in accordance with Section 4.11 of the Plan. 21 Yes • No IX. LIMITATION ON ALLOCATIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could possibly become a participant, the Employer hereby agrees to limit contributions to all such plans as provided herein, if necessary in order to avoid excess contributions (as described in Sections 5.02 of the Plan). 1. If the Participant is covered under another qualified defined contribution plan maintained by the Employer, the provisions of Section 5.02(a) through (0 of the Plan will apply unless another method has been indicated below. O Other Method. (Provide the method under which the plans will limit total Annual Additions to the Maximum Permissible Amount, and will properly reduce any excess amounts, in a manner that precludes Employer discretion.) 2. The limitation year is the following 12 consecutive month period: Money Purchase Plan Adoption Agreement 4 5=? X. VESTING PROVISIONS The Employer hereby specifies the following vesting schedule, subject to (1) the minimum vesting requirements and (2) the concurrence of the Plan Administrator, (For the blanks below, enter the applicable percent - from 0 to 100 (with no entry after the year in which 100% is entered), in ascending order.) Period of Service Percent Completed Vested Zero % One 100 % Two % Three % Four % Five % Six % Seven % Eight % Nine % Ten % XI. Loans are permitted under the Plan, as provided in Article XIII of the Plan: • Yes 2) No [751] XII. 1. In-service distributions are permitted under the Plan after a participant attains (select one of the below options): [3 Normal Retirement Age • Age 701/2 in Not permitted at any age 2. Tax-free distributions of up to $3,000 for the payment of qualifying insurance premiums for eligible retired public safety officers are available under the Plan. • Yes • No (Default) XIII. In-service distributions of the Rollover Account are permitted under the Plan as provided in Section 9.07. 21 Yes • No (Default) XIV. SPOUSAL PROTECTION [646:8] [646:3] [646:7] The Plan will provide the following level of spousal protection (select one): A. C3 Participant Directed Election. The normal form of payment of benefits under the Plan is a lump sum. [646.6] The Participant can name any person(s) as the Beneficiary of the Plan, with no spousal consent required. B. 3 Beneficiary Spousal Consent Election (Article XII). The normal form of payment of benefits under [646:6] the Plan is a lump sum. Upon death, the surviving spouse is the Beneficiary, unless he or she consents to the Participant's naming another Beneficiary. (This is the default provision under the Plan if no selection is made.) C. O QJSA Election (Article XVII), The normal form of payment of benefits under the Plan is a 50% qualified [642:8] joint and survivor annuity with the spouse (or life annuity, if single). In the event of the Participant's death prior to commencing payments, the spouse will receive an annuity for his or her lifetime. [646:6] Money Purchase Plan Adoption Agreement 00 XV. FINAL PAY CONTRIBUTIONS The Plan will provide for Final Pay Contributions if either 1 or 2 below is selected. Final Pay shall be defined as (select one): A. O Accrued unpaid vacation B. (3 Accrued unpaid sick leave C. d Accrued unpaid vacation and sick leave D. Other (insert definition of final pay): that would otherwise be payable to the Employee in cash upon termination. 1, Employer Final Pay Contribution. The Employer shall contribute on behalf of each Participant % of Final Pay to the Plan (subject to the limitations of Article V of the Plan). 2. O Employee Designated Final Pay Contribution. Each Employee eligible to participate in the Plan shall be given the opportunity at enrollment to irrevocably elect to contribute % (insert fixed percentage of final pay to be contributed) or up to % (insert maximum percentage of final pay to be contributed) of Final Pay to the Plan (subject to the limitations of Article V of the Plan). Once elected, an Employee's election shall remain in force and may not be revised or revoked. If the employer elects to "pick up" these amounts, in no event does the Employee have the option of receiving the pick-up contribution amount directly. The Employer hereby elects to "pick up" the Employee Designated Final Pay Contribution thereby treating such contributions as Employer-made contributions for federal income tax purposes. • Yes • No [621] XVI. ACCRUED LEAVE CONTRIBUTIONS The Plan will provide for accrued unpaid leave contributions if either 1 or 2 is selected below. Accrued Leave shall be defined as (select one): A. • B. • C. • D. • 1. • that would otherwise be payable to the Employee in cash. following options): d For each Plan Year, the Employer shall contribute on behalf of each Eligible Participant the unused Accrued Leave in excess of (insert number of hours/days/weeks) to the Plan (subject to the limitations of Article V of the Plan). O For each Plan Year, the Employer shall contribute on behalf of each Eligible Participant % of unused Accrued Leave to the Plan (subject to the limitations of Article V of the Plan). Money Purchase Plan Adoption Agreement Pl d 2. Employee Designated Accrued Leave Contribution. Each eligible Participant shall be given the opportunity at enrollment to irrevocably elect to contribute % (insert fixed percentage of accrued unpaid leave to be contributed) or up to % (insert maximum percentage of accrued unpaid leave to be contributed) of Accrued Leave to the Plan (subject to the limitations of Article V of the Plan). Once elected, an Employee's election shall remain in force and may not be revised or revoked. If the employer elects to "pick up" these amounts, in no event does the Employee have the option of teceiving the pick-up contribution amount directly. The Employer hereby elects to "pick up" the Employee Designated Final Pay Contribution thereby treating such contributions as Employer-made contributions for federal income tax purposes. • Yes • No [621] XVII. In order to allow for Final Pay Contributions and/or Accrued Leave Contributions, as defined in sections XV and XVI above, the Plan must also include additional sources of ongoing contributions, such as Fixed Employer Contributions or Mandatory Participant Contributions. In accordance with IRS Guidance, ICMA-RC will not process Final Pay Contribution or Accrued Leave Contribution Features as part of a "Stand Alone" Final Pay Plan. The Employer hereby attests that it is a unit of state or local government or an agency or instrumentality of one or more units of state or local government. XVIII. The Plan Administrator hereby agrees to inform the Employer of any amendments to the Plan made pursuant to Section 14.05 of the Plan ot of the discontinuance or abandonment of the Plan. XIX. The Employer hereby appoints the ICMA Retirement Corporation as the Plan Administrator pursuant to the terms and conditions ofthe ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST. The Employer hereby agrees to the provisions of the Plan and Trust. XX. The Employer hereby acknowledges it understands that failute to properly fill out this Adoption Agreement may result in disqualification of the Plan. XXI. An adopting Employer may rely on an advisory letter issued by the Internal Revenue Service as evidence that the Plan is qualified under section 401 of the Internal Revenue Code to the extent provided in applicable IRS revenue procedures and other official guidance. In Witness Whereof, the Employer hereby causes this Agreement to be executed on this day of March 20 1" EMPLOYER Print Name: Clark Title: Human Resources Director Attest: Ooma Hernandez ICMA RETIREMENT CORPORATION 777 Nofth Capitol St., NE Washington, DC 20002-4240 202-962-«096 3,, 0! Print Name Title; Attest: AS TO FORM PAULG. EDMONSON Assistant City Attomey City of Carisbad Money Purchase Plan Adoption Agreement RECEIVED APR 2 3 2014 EXHIBIT 4 ADMINISTRATIVE SERVICES AGREEMENT Between ICMA Retirement Corporation and City of Carlsbad Type: 401 Account#:107924 RS Plan number 107924 ADMINISTRATIVE SERVICES AGREEMENT This Administrative Services Agreement ("Agreement"), made as of the day of ,2014 (herein referred to as the "Inception Date"), between the Intemational City Management Association Retirement Corporation ("ICMA-RC"), a nonprofit corporation organized and existing under the laws of the State of Delaware, and the City of Carlsbad ("Employer"), a City organized and existing under the laws of the State of Califomia with an office at 1635 Faraday Avenue, Carlsbad, Califomia 92008-7314. RECITALS Employer acts as public pian sponsor of a retirement plan ("Plan"), and in that capacity, has responsibility to obtain administrative services and investment altematives for the Plan; VantageTrust (the "Tmst") is a group trust established and maintained in accordance with New Hampshire Revised Statutes Annotated section 391:1 and Intemal Revenue Service Revenue Ruling 81-100, 1981-1 CB. 326, which provides for the commingled investment of rerirement funds held by various state and local govemmental units for their employees; ICMA-RC acts as investment adviser to VantageTrust Company, LLC, the Tmstee of the Trust; ICMA-RC has designed, and the Tmst offers, a series of separate funds (the "Funds") for the investment of plan assets as referenced in the Tmst's principal disclosure document, "Making Sound Investment Decisions: A Retirement Investment Guide" and the accompanying VantageTmst Fund Fees and Expenses document ("Retirement Investment Guide"). The Funds are available only to public employers and only through the Trust and ICMA-RC. In addition to serving as investment adviser to the Trust, ICMA-RC provides a range of services to public employers for the operation of employee retirement plans including, but not limited to, communications conceming investment altematives, account maintenance, account recordkeeping, investment and tax reporting, transaction processing, benefit disbursement, and asset management. Plan number 107924 AGREEMENTS 1. Appointment of ICMA-RC Employer hereby appoints ICMA-RC as Administrator of the Plan to perform all nondiscretionary functions necessary for the administration of the Plan. The functions to be performed by ICMA-RC shall be those set forth in Exhibit A to this Agreement. 2. Adoption of Tmst Employer has adopted the Declararion of Trust of VantageTrust Company and agrees to the commingled investment of assets of the Plan within the Tmst. Employer agrees that operation of the Plan and the investment, management, and distribution of amounts deposited in the Tmst shall be subject to the Declaration of Tmst, as it may be amended from time to time and shall also be subject to terms and conditions set forth in disclosure documents (such as the Retirement Investment Guide or Employer Bulletins) as those terms and conditions may be adjusted from time to time. 3. Employer Duty to Fumish Information Employer agrees to fumish to ICMA-RC on a timely basis such information as is necessary for ICMA-RC to carry out its responsibilities as Administrator of the Plan, including information needed to allocate individual participant accounts to Funds in the Tmst, and information as to the employment status of participants, and participant ages, addresses, and other identifying information (including tax identification numbers). Employer also agrees that it will notify ICMA-RC in a timely manner regarding changes in staff as it relates to various roles. This is to be completed through the online EZLink employer contact options. ICMA-RC shall be entitled to rely upon the accuracy of any information that is fumished to it by a responsible official of the Employer or any information relating to an individual participant or beneficiary that is fumished by such participant or beneficiary, and ICMA-RC shall not be responsible for any error arising from its reliance on such information. ICMA-RC will provide reports, statements and account information to the Employer through EZLink, the online plan administrative tool. Employer is required to send in contributions through EZLink, the online plan administration tool provided by ICMA-RC. Altemative electronic methods may be allowed, but must be approved by ICMA-RC for use. Contributions may not be sent through paper submittal documents. To the extent Employer selects third-party funds that do not have fund profile information provided to ICMA-RC through our electronic data feeds from extemal sources (such as Momingstar) or third party fund providers, the Employer is responsible for providing to ICMA-RC timely fund investment updates for disclosure to Plan participants. Such updates may be provided to ICMA-RC through the Employer's investment consultant or other designated representative. ^5 Plan number 107924 Failure to provide timely fund profile update information, including the source of the information, may result in a lack of fund information for participants, as ICMA-RC will remove outdated fund profile information from the systems that provide fund information to Plan participants. 4. Certain Representations and Warranties ICMA-RC represents and warrants to Employer that: (a) ICMA-RC is a non-profit corporation with full power and authority to enter into this Agreement and to perform its obligations under this Agreement. The ability of ICMA-RC to serve as investment adviser to the Tmst is dependent upon the continued willingness of the Trust for ICMA- RC to serve in that capacity. (b) ICMA-RC is an investment adviser registered as such with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC Services, LLC (a wholly owned subsidiary of ICMA-RC) is registered as a broker-dealer with the U.S. Securifies and Exchange Commission ("SEC") and is a member in good standing with Financial Industry Regulatory Authority ("FfNRA") and the Securities Investor Protection Corporation ("SIPC"), (c) ICMA-RC shall maintain and administer the Plan in compliance with the requirements for plans which satisfy the qualification requirements of Section 401 of the Intemal Revenue Code and other applicable federal law; proyided, however, ICMA-RC shall not be responsible for the qualified status of the Plan in the event that the Employer directs ICMA- RC to administer the Plan or disburse assets in a manner inconsistent with the requirements of Section 401 or otherwise causes the Plan not to be carried out in accordance with its terms; provided, further, that if the plan document used by the Employer contains terms that differ from the terms of ICMA-RC's standardized plan document, ICMA-RC shall not be responsible for the qualified status of the Plan to the extent affected by the differing terms in the Employer's plan document. ICMA-RC shall not be responsible for monitoring state or local law or for administering the Plan in compliance with local or state requirements unless Employer notifies ICMA-RC of any such local or state requirements. Employer represents and warrants to ICMA-RC that: (d) Employer is organized in the form and manner recited in the opening . paragraph of this Agreement with full power and authority to enter into and perform its obligations under this Agreement and to act for the Plan and participants in the manner contemplated in this Agreement. Execution, delivery, and performance of this Agreement will not conflict with any 6 Co Plan number 107924 law, rule, regulation or contract by which the Employer is bound or to which it is a party. (e) Employer understands and agrees that ICMA-RC's sole function under this Agreement is to act as recordkeeper and to provide administrative, investment or other services at the direction of Plan participants, the Employer, its agents or designees in accordance with the terms of this Agreement. Under the terms of this Agreement, ICMA-RC does not render investment advice, is not the Plan Administrator or Plan Sponsor as those terms are defined under applicable federal, state, or local law, and does not provide legal, tax or accounting advice with respect to the creation, adoption or operation of the Plan and the Tmst. ICMA-RC does not perform any service under this Agreement that might cause ICMA-RC to be treated as a "fiduciary" of the Plan under applicable law. (f) Employer acknowledges and agrees that ICMA-RC does not assume any responsibility with respect to the selection or retention of the Plan's investment options. Employer shall have exclusive responsibility for the Plan's investment options, including the selection of the applicable mutual fund share class. Where applicable. Employer understands that the VT Retirement Income Advantage Fund is an investment option for the Plan and that the fund invests in a separate account available through a group variable annuity contract. By entering into this Agreement, Employer acknowledges that it has received the Important Considerations document and the Retirement Investment Guide and that it has read the information therein conceming the VT Retirement Income Advantage Fund. (g) Employer acknowledges that certain such services to be performed by ICMA-RC under this Agreement may be performed by an affiliate or agent of ICMA-RC pursuant to one or more other contractual arrangements or relationships, and that ICMA-RC reserves the right to change vendors with which it has contracted to provide services in connection with this Agreement without prior notice to Employer. (h) Employer acknowledges that it has received ICMA-RC's Fee Disclosure Statement, prepared in substantial conformance with ERISA regulations regarding the disclosure of fees to plan sponsors. (i) Employer approves the use of its Plan in ICMA-RC extemal media, publications and materials. Examples include press releases announcements and inclusion of the general plan information in request for proposal responses. Plan number 107924 5. Participation in Certain Proceedings The Employer hereby authorizes ICMA-RC to act as agent, to appear on its behalf, and to join the Employer as a necessary party in all legal proceedings involving the gamishment of benefits or the transfer of benefits pursuant to the divorce or separation of participants in the Plan. Unless Employer notifies ICMA-RC otherwise, Employer consents to the disbursement by ICMA-RC of benefits that have been gamished or transferred to a former spouse, current spouse, or child pursuant to a domestic relations order or child support order. 6. Compensation and Payment (a) ICMA-RC's compensation under this Agreement shall be as set forth in subsecfion (b) below. (b) Compensation for Management Services to the Trust, Compensation for Advisory and other Services to The Vantagepoint Funds and Payments from Third-Party Mutual Funds. Employer acknowledges that in addition to amounts payable under this Agreement, ICMA-RC receives fees from the Trust for investment advisory services and plan and participant services fumished to the Trust. Employer further acknowledges that certain wholly owned subsidiaries of ICMA-RC receive compensation for advisory and other services fumished to The Vantagepoint Funds, which serve as the underlying portfolios of a number of Funds offered through the Trust. For a Trust fund that invests substantially all of its assets in a third-party mutual fund not affiliated with ICMA-RC, ICMA- RC or its wholly owned subsidiary receives payments from the third-party mutual fund families or their service providers in the form of 12b-l fees, service fees, compensation for sub-accounting and other services provided based on assets in the underlying third-party mutual fund. These fees are described in the Retirement Investment Guide and ICMA-RC's Fee Disclosure Statement. In addition, to the extent that third party mutual funds are included in the investment line-up for the Plan, ICMA-RC receives administrative fees from its third party mutual fund settlement and clearing agent for providing administrative and other services based on assets invested in third party mutual funds; such administrative fees come from payments made by third party mutual funds to the settlement and clearing agent. (c) Redemption Fees. Redemption fees imposed by outside mutual funds in which Plan assets are invested are collected and paid to the mutual fund by ICMA-RC. ICMA-RC remits 100% of redemption fees back to the specific mutual fund to which redemption fees apply. These redemption fees and the individual mutual fund's policy with respect to redemption fees are specified in the prospectus for the individual mutual fund and referenced in the Retirement Investment Guide. Plan number 107924 (d) Payment Procedures. All payments to ICMA-RC pursuant to this Section 6 shall be made from Plan assets held by the Tmst or received from third party mutual funds or their service providers in connection with Plan assets invested in such third party mutual funds, to the extent not paid by the Employer. The amount of Plan assets held through the Trust shall be adjusted by the Trust as required to reflect any such payments as are made from Plan assets invested in the Trust. In the event that the Employer agrees to pay amounts owed pursuant to this section 6 directly, any amounts unpaid and outstanding after 30 days of invoice to the Employer shall be withdrawn from Plan assets held by the Trust. The compensation and payment set forth in this section 6 is contingent upon the Employer's use of ICMA-RC's EZLink system for contribution processing and submitting contribution funds by ACH or wire transfer on a consistent basis over the term of this Agreement. Employer further acknowledges and agrees that compensation and payment under this Agreement shall be subject to re-negotiation in the event that the Employer chooses to implement additional funds not on ICMA-RC's mutual fund platform. 7. Contribution Remittance Employer understands that amounts invested through the Trust are to be remitted directly to the Tmst in accordance with instmctions provided to Employer by ICMA-RC and are not to be remitted to ICMA-RC. In the event that any check or wire transfer is incorrecfiy labeled or transferred to ICMA-RC, ICMA-RC may retum it to Employer with proper instructions. 8. Indemnification ICMA-RC shall not be responsible for any acts or omissions of any person with respect to the Plan or related Trust, other than ICMA-RC in connection with the administrafion or operation of the Plan. Employer shall indemnify ICMA-RC against, and hold ICMA- RC harmless from, any and all loss, damage, penalty, liability, cost, and expense, including without limitation, reasonable attomey's fees, that may be incurred by, imposed upon, or asserted against ICMA-RC by reason of any claim, regulatory proceeding, or litigafion arising from any act done or omitted to be done by any individual or person with respect to the Plan or related Trust, excepting only any and all loss, damage, penalty, liability, cost or expense resulting from ICMA-RC's negligence, bad faith, or willful misconduct. 9. Term This Agreement shall be in effect and commence on the date all parties have signed and executed this Agreement ("Inception Date"). This Agreement will be renewed automatically for each succeeding year unless written notice of termination is provided by either party to the other no less than 60 days before the end of such Agreement year. '62=? Plan number 107924 The Employer understands and agrees that, in the event the Employer terminates this Agreement (or replaces the VT PLUS Fund as an investment option in its investment line-up), ICMA-RC retains full discrefion to release Plan assets invested in the VT PLUS Fund in an orderly manner over a period of up to 12 months from the date ICMA-RC receives written notification from the Employer that it has made a final and binding selection of a replacement for ICMA-RC as administrator of the Plan (or a replacement investment option for the VT PLUS Fund). 10. Amendments and Adiustments (a) This Agreement may be amended by written instrument signed by the parties. (b) ICMA-RC may amend this agreement by providing 60 days' advance written notice to the Employer prior to the effective date of such proposed amendment. Such amendment shall become effective unless, within the 60-day notice period, the Employer notifies ICMA-RC in writing that it objects to such amendment. (c) The parties agree that enhancements may be made to administrative and operations services under this Agreement. The Employer will be notified of enhancements through the Employer Bulletin, quarterly statements, electronic messages or special mailings. Likewise, if there are any reductions in fees, these will be announced through the Employer Bulletin, quarterly statement, electronic or special mailing. 11. Notices All notices required to be delivered under this Agreement shall be in writing and shall be delivered, mailed, e-mailed or faxed to the location of the relevant party set forth below or to such other address or to the attention of such other persons as such party may hereafter specify by notice to the other party. ICMA-RC: Legal Department, ICMA Retirement Corporation, 777 North Capitol Street, N.E., Suite 600, Washington, D.C, 20002-4240 Facsimile; (202) 962-4601 Employer: at the office set forth in the first paragraph hereof, or to any other address, facsimile number or e-mail address designated by the Employer to receive the same by written notice similarly given. Each such notice, request or other communication shall be effective: (i) if given by facsimile, when transmitted to the applicable facsimile number and there is appropriate confirmation of receipt; (ii) if given by mail or e-mail, upon transmission to the designated address with no indication that such address is invalid or incorrect; or (iii) if given by any other means, when actually delivered at the aforesaid address. 10 Plan number 107924 12. Complete Agreement This Agreement shall constitute the complete and full understanding and sole agreement between ICMA-RC and Employer relating to the object of this Agreement and correctly sets forth the complete rights, duties and obligations of each party to the other as of its date. This Agreement supersedes all written and oral agreements, communications or negotiations among the parties. Any prior agreements, promises, negotiations or representations, verbal or otherwise, not expressly set forth in this Agreement are of no force and effect. 13. Titles The headings of Sections of this Agreement and the headings for each of the attached schedules are for convenience only and do not define or limit the contents thereof 14. Incorporation of Schedules All Schedules (and any subsequent amendments thereto), attached hereto, and referenced herein, are hereby incorporated within this Agreement as if set forth fully herein. 15. Goveming Law This Agreement shall be govemed by and constmed in accordance with the laws of the State of Califomia, applicable to contracts made in that jurisdiction without reference to its conflicts of laws provisions. 7/ Plan number 107924 In Witness Whereof, the parties hereto certify that they have read and understand this Agreement and all Schedules attached hereto and have caused this Agreement to be executed by their duly authorized officers as of the Inception Date first above written. CITY OF CARLSBAD Date Signature J a\(c'^ ^^^^ •ffu^K^^^'^"^ ^ 1^'^ Name and Title (Please F*rint) INTERNATIONAL CITY MANAGEMENT ASSOCIATION RETIREMENT CORPORATION Angela C. Montez ^7 Assistant Corporate Secretary Please retum fully executed contract to: New Business Unit ICMA-RC 777 North Capitol Street NE Suite 600 Washington DC 20002-4240 PAiiL G. EDMONSON Assistant City Attomey Cityof Carlsbad 10 7P Plan number 107924 Exhibit A Administrative Services The administrative services to be performed by ICMA-RC under this Agreement shall be as follows: (a) Participant enrollment services, including providing a welcome package and enrollment kit containing instmctions and nofices necessary to implement the Plan's administrafion. Employees will enroll online or through form. ICMA-RC will provide an enrollment link through the general ICMA-RC web site. Plan sponsor will also make available the online enrollment link in their Intranet site or via email to new employees. Employer can also enroll employees through EZLink. (b) Establishment of participant accounts for each employee participating in the Plan for whom ICMA-RC receives appropriate enrollment instmctions. ICMA-RC is not responsible for determining if such Plan participants are eligible under the terms of the Plan. (c) Allocation in accordance with participant directions received in good order of individual participant accounts to investment funds offered under the Plan. Participants can complete allocations through Investor Services, Voice Response System or through Account Access, the secure participant online system provided by ICMA-RC. (d) Maintenance of individual accounts for participants reflecting amounts deferred, income, gain or loss credited, and amounts distributed as benefits. (e) Maintenance of records for all participants for whom participant accounts have been established. These files shall include enrollment instmcfions (provided to ICMA-RC through Account Access, EZLink or form), beneficiary designation instmctions and all other documents conceming each participant's account, and if applicable, records of any transaction conducted through the Voice Response Unit ("VRU"), Account Access or other electronic means. (f) Provision of periodic reports to the Employer through EZLink. Participants will have access to account information through Investor Services, Voice Response System, Account Access and through quarterly statements that can be delivered electronically through Account Access or by postal service. (g) Communication to participants of information regarding their rights and elections under the Plan. (h) Making available Investor Services Representatives through a toll-free telephone number from 8:30 a.m. to 9:00 p.m. Eastem Time, Monday through Friday (excluding holidays and days on which the securities 11 73 Plan number 107924 markets or ICMA-RC are closed for business (including emergency closings), to assist participants. (i) Making available a toll-free number and access to VantageLine, ICMA- RC's interactive VRU, and ICMA-RC's web site, to allow participants to access certain account information and initiate plan transactions at any time. Account access and VantageLine are normally available 24 hours a day, seven days a week except during scheduled maintenance periods designed to ensure high-quality performance. The scheduled maintenance window is outlined at https ://harpcr 1.icmarc.org/login.isp (j) Distribution of benefits as agent for the Employer in accordance with terms of the Plan. Participants who have separated from service can request distributions through Account Access or via form. (k) Upon approval by the Employer that a domestic relations order is an acceptable qualified domestic relations order under the terms of the Plan, ICMA-RC will establish a separate account record for the altemate payee and provide for the investment and distribution of assets held thereunder. (1) Loans may be made available on the terms specified in the Loan Guidelines, if loans are adopted by the Employer. Participants can request loans through Investor Services or Account Access. (m) Guided Pathways - Participant Advice and Guidance may be made available through a third party vendor on the terms specified on ICMA- RC's website. (n) ICMA-RC will determine appropriate delivery method (electronic and/or print) for plan sponsor/participant communications and education based on a number of factors (audience, effectiveness, etc.) 12 7H ICMARC Building Retirement Security EXHIBIT 5 401 Qualified Plan Implementation Data Form | Page 1 of 4 Instructions to Employer: Provide necessary information to establish your plan properly. Please contact your New Business Unit Analyst at 1-800-326-7272 if you have any questions. ICMA-RC Use Only: Employer # 10 ^^^^ General Information (902) Employer's Full Name: ^'^V Carlsbad 2. (924) Street Address: 1635 Faraday Avenue (925) 3. (918) City . Carlsbad (919) state: California 4. (633) Primary Contact: PQ'^^Q Hernandez 5. (634) Primary Contact Title: Human Resoufces Manager (920) Zip Code: ^^QQ^ 6. (631) Primary Contact Telephone #:(Z?9 ) 602-7533 7. (632) Fax#: 760 602-8554 8. (882) Employer's Federal Tax Identification Number: 956004793 Plan Implementation Information Instructions - Use tbe Vantagepoint Funds Brochure or sheet to complete this section. 9. (611) Contribution information (See "Important Contribution Information" later in this book) a. Frequency: (check one) 1^ (0) Bi-weekly G (4) Monthly • (1) Weekly • (5) Semi-monthly • (2) Semi-weekly • (6) Bi-quorterly • (3) Bi-monthly • (7) Quarterly b. Deposit Medium: (624) ^ Wire • ACH 10. First Contribution Date Following Implementation: May 1, 2014 • (8) Semi-quarterly • (9) Bi-annually • (10) Annually • (11) Semi-annually 11. Number of Eligible Employee: 1 Expected Number of Participants: Default Investment Option Default Fund for Investment Allocations: The default fund will be used if a participant does not provide valid allocation instructions (i.e., no allocation is provided, the allocation percentages do not total 100%, or one or more funds that ore not available to the plan are selected). If you do not make an election in this section, the Milestone Fund with the target date closest to a participant's 60'*' birthday will be used as your plan's default option. You may select the "Custom Default" option if you would like to use a fund (or funds) other than the Milestone Funds as your plan's default option. Please see ICMA-RC's Standard Plan Fund Lineup at www.icmarc.org to complete this section. Note: Prior to selecting the ^Custom Default" option, employers should carefully review the Department of Labor's final regulations on quolified default investment alternatives (QDIAs). More information is available online at www.dol.gov or www.lcmarc.org/ppa. 12. Default Fund for Investment Allocations (Select one option): ^ The Milestone Funds (Default) with a target retirement age of: • Age 60 (Defauh) • Age (input the Target Retirement Age to be used for your plan) (continued on tlie following page] 75 ICMARC 401 Qualified Plan Implementation Data Form | Page 2 of 4 Instructions to Employer: Provide necessary information to establish your plan properly. Please contact your New Business Unit Analyst at 1-800-326-7272 if you have any questions. BuiUing Retirement Security ICMA-RC USB Only: EmployCr # 1 0 ^^^^ Default Investment Option continued • Custom Default (List the fund name(s) and percentages that will be used as the plan's default investment option): Fund Name Percentage Online Services 13. Below are ICMA-RC's online services offered for your retirement plan administration and account management for participants. Please see instructions for further information about these standard and optional services. a. Standard Online Services These standard services will be applied to your plan. • Online Beneficiary information (Note: Beneficiary information will be displayed on porticipant statements.) • Online withdrawals b. Optional Online Services These ore optional services you elect or decline. Note: If an option is not selected, the default options will be utilized. Electronic Delivery for statements and confirmations Electronic delivery for all participant statements and transaction confirmations. iZI Yes (Default) • No Primary Contact Information PUN CONTAQS 14. PTOO (200) Primary Contoct Name: Donna Hernanciez (210) Title: Human Resources IVIanager (420) Telephone: (760 ) 602-7533 (421) Fax:(760 ) 602-8554 (422) Email Address: donna.hernanclez@carlsbadca.gov Disbursement/ Loan Contact Information Please indicate alternate addresses in Comments Section on Page 3 15. PTOl Contact Signature: Donna Hernandez (200) Contact Name: Do""^ Hernandez (210) Title: same as above (420) Telephone: ( (422) Email Address:. ). (421) Fax:( 16. PT08 Contact Signature: (200) Contact Nome: (210) Title: (420) Telephone: ( (422) Email Address:. (421) Fax:i 17.PT09 Contact Signature: (200) Contact Nome: (210) litle: (420) Telephone: ( (422) Email Address:. (421) Fax:( 401 Qualified Plan Implementation Data Form I Poge3of4 ICMARC BuiUing Retirement Security ICMA-RC UsB Only: Employer # 10 7924 Contribution/ EZLink Contact Information 18. PT02 (200) Contact Nome: Do""^ Hemandez (210) Title: same as above (420) Telephone: ( (422) Email Address:. ). (421) Fax:( Does the EZLink Contact initiate ACH/wire for payroll? Name/litle: Michele Tackett 1^ Yes G No If No, please provide ACH/wire contact information: Telephone: ( ) EZLink is KMA-RCs standard nntributhn detaS summary format. Please complete aad retum the EZUnk Access Form. You must rAso complete a successful EZLink test before your first contribution can be submitted. Quarterly Statement Contact Information 19. PT04 (200) Contact Nome: Donna Hemandez (210) Title: sarne as above (420) Telephone: ( (422) Email Address:. ). (421) Fax:( // this section is not completed, the Primary Contact wBI receive mdSngs. Plan Coordinator Contact Information 20. PT05 (200) Contact Name: Ju'ie dark (210) Title: Human Resources Director (420) Telephone: (760 ) 602-2438 (421) Fax:( 760 ) 602-8554 (422) Email Address: j"''e o'a''k@carlsbadca.gov Note: Changing this title requires an amendment to your resolution. Billing (Fees) Contact Information 21. PT06 (200) Contact Name: Do""^ Hemandez (210) Title: same as above (420) Telephone: ( (422) Email Address:. (421) Fax:( Comments: Alternative Addresses for 22. 11 y^^^^^ 401 Qualified Plan Implementation Data Form I Page 4 of 4 ICMARC Building Retirement Security ICMA-RC UsB Only: Employcr # 10_l.^z_ Co-Provider Information 23. Does your plan have a co-provider relationship*? • Yes • No If yes, please provide the co-provider information: Name of Co-Provider(s): Co-Provider 1: Street Address: City: PhoneNumber: . Co-Provider 2:. Street Address: _ City: State: Zip Code: State: Zip Code: Internal Use Only 621 = Y/N 641 = 912 = 75 ICMA-RC's VantageTrust Fund Fee Disclosure Data as of December 31,2013 EXHIBIT 6 FUIKJ Name Asset Category Gross Expense Waive! Net Expense Waiver Expiration Date Redemption Fee- Trading Restnrtion Stable Value/Cash r\/laiiagenient VantageTrust PLUS Fund" Stable Value 0.82% 0.00% 0.82% ... ... 90-day Wash VantageTrust Casti Management Fund * Money Market 0.61% 0.00% 0.61% ... -... Bond Funds VT Vantagepoint Low Duration Bond Short-Term Bond 0.63% 0.00% 0.63% -... ... VT Vantagepoint Core Bond Index Fund Intennediate-Term Bond 0.25% 0.05% 0.20% April 30,2014 ... ... VT PIIVICO Total Retum Fund Intemiediate-Term Bond 0.71% 0.00% 0.71% -... ... VT Vantagepoint Inflation Prot. Securities Fund Inflation-Protected Bond 0.63% 0.00% 0.63% ... -... VT PIMCO Higti Yield Fund' " High Yield Bond 0.80% 0.00% 0.80% ... -... Guaranteed Lifetime Income Funds VT Retirement IncomeAdvantage Fund ^ [N/A 1.72% 1 0.00% 1.72% --90-day Wash 1 Asset Allocation/Balanced Funds VT Vantagepoint Milestone Retirement Income Fund Retirement Income 0.83% 0.00% 0.83% ... ... ... VT Vantagepoint Milestone 2010 Fund ^" ^ Target Date 2000-2010 0.87% 0.00% 0,87% --... VT Vantagepoint Milestone 2015 Fund" Target Date 2011-2015 0.85% 0.00% 0.85% ... ... ... VT Vantagepoint Milestone 2020 Fund Target Date 2016-2020 0.84% 0.00% 0.84% -... ... VT Vantagepoint Milestone 2025 Fund Target Date 2021-2025 0.85% 0.00% 0.85% ... ... ... VT Vantagepoint Milestone 2030 Fund Target Date 2026-2030 0.86% 0.00% 0.86% ... -... VT Vantagepoint Milestone 2035 Fund" Target Date 2031-2035 0.87% 0.00% 0.87% ... -... VT Vantagepoint Milestone 2040 Fund" Target Date 2036-2040 0.88% 0.00% 0.88% ... ... ... VT Vantagepoint Milestone 2045 Fund" Target Date 2041-2045 0.97% 0.00% 0.97% ... ... ... VT Vantagepoint Milestone 2050 Fund ^ Target Date 2046-2050 10.70% 9.60% 1.10% April 30,2014 ... ... VT Vantagepoint Model Port Conser Growrth Fund ™ Conservative Allocation 0.84% 0.00% 0.84% ... ... ... VT Vantagepoint Model Port Tradit Growth Fund ^" Moderate Allocation 0.86% 0.00% 0.86% ... ... ... VT Vantagepoint Model Port Long-Temi Growth Fund ^" Aggressive Allocation 0.89% 0.00% 0.89% ... ... ... VT Vantagepoint Model Port All-Eqty Growth Fund ^" Large Blend 0.97% 0.00% 0.97% ... ... ... VT Fidelity Puritan® Fund Moderate Allocation 0.58% 0.00% 0.58% ... -- U.S. stock Funds VT Vantagepoint Equity Income Fund Large Value 0.82% 0.00% 0.82% ... ... ... VT Invesco Diversified Dividend Large Value 0.67% 0.00% 0.67% ... ... 31 days, any $ VT AllianzGl NFJ Dividend Value Fund ''''^ Large Value 0.96% 0.00% 0.96% — -... VT Vantagepoint 500 Stock Index Fund Large Blend 0.26% 0.05% 0.21% April 30, 2014 ... ... VT Vantagepoint Broad Market Index Fund Large Blend 0.27% 0.05% 0.22% April 30, 2014 ... ... VT Vantagepoint Growth & Income Fund Large Blend 0.78% 0.00% 0.78% ... ... ... VT Oppenheimer Main Street Fund ' Large Blend 0.54% 0.00% 0.54% ... ... - VT Vantagepoint Growth Fund Large Growth 0.79% 0.00% 0.79% -... ... VT Fidelity Contrafund® ''''^ Large Growth 0.74% 0.00% 0.74% ... ... ... VT Calvert Equity Fund Large Growth 1.22% 0.00% 1.22% ... 2%, 30 days ... VT T. Rowe Price® Growth Stock Fund ''^^ ^ Large Growth 0.93% 0.00% 0.93% ... ... 30 days, any $ VT Vantagepoint Select Value Fund Mid-Cap Value 0.99% 0.00% 0.99% ... ... ... VT Gold. Sachs Mid Cap Value Fund Mid-Cap Value 0.90% 0.00% 0.90% ... ... ... VT Vantagepoint Mid /Small Co Inx Fund Mid-Cap Blend 0.27% 0.05% 0.22% April 30,2014 ... ... VT CRM Small/Mid Cap Value Fund ^'^^ Mid-Cap Blend 1.09% 0.00% 1.09% ... ... ... VT Vantagepoint Aggressive Opportunities Fund ^^'^^ Mid-Cap Growth 0.85% 0.00% 0.85% ... ... ... VT TimesSquare Mid Cap Grov/th Mid-Cap Growth 1.27% 0.00% 1.27% ... -... VT Harbor Mid Cap Growth Fund ' '^ '^ Mid-Cap Growth 1.10% 0.00% 1.10% ... ... ... VT AllianzGl NFJ Small Cap Value Fund ^'^^'^^ Small Value 1.11% 0.09% 1.02% ... ... - VT Vantagepoint Discovery Fund Small Blend 0.97% 0.00% 0.97% -... ... Pagel of3 T? ICMA-RC's VantageTrust Fund Fee Disclosure Data as of December 31,2013 Fund Name Asset Category Gross Expense Waiver Net Expense Waiver Expiration Date Redemption Fee- Trading Restriction VT T. Rowe Price® Small Cap Val Fund Small Blend 1.24% 0.00% 1.24% ... 1%, 90 days 30 days, any $ VT Oppenheimer Discovery Fund ''^^'^^ Small Growth 0.90% 0.00% 0.90% ... International/Global Stock Funds VT Vantagepoint Intemational Fund '^^ Foreign Large Blend 0.98% 0.00% 0.98% -... 91 days, any $ VT Vantagepoint Overseas Index Fund Foreign Large Blend 0.37% 0.05% 0.32% April 30,2014 -91 days, any $ VT Fidelity Diversified Int1 Fund Foreign Large Blend 0.95% 0.00% 0.95% ... • 1%, 30 days ... VT Harbor Intemational Fund ^'^^ Foreign Large Blend 1.03% 0.01% 1.02% February 28,2014 2%, 60 days ~ Specialty VT Nuveen Real Estate Sees Fund Real Estate 1.03% 0.00% 1.03% ~ ... ... Piease read Making Sound Investment Decisions: A Retirement Investment Guide ("Guide") carefully for a complete summary of all fees, expenses, investment objectives and strategies, and risks. Investors sfiould carefully consider tfiis infonnation before investing. For a current Guide, contact ICMA-RC by calling 800-669-7400 or log into your account at m/w.icmarc.org. ICMA-RC's identified fund line-up is a commitment to administer these funds for ttie plan, not advice to ttie plan sponsor on the composition ofthe plan's fund line-up. ICMA-RC provides plan sponsors fund infonnation to assist them in meeting their fiduciary responsibilrty in managing the plan. The plan sponsor retains the obligation to prudently select and monitor the investment funds it offers to plan participants. ICMA-RC may adjust fees commensurate wrth changes in revenue from alternative funds selected by the plan sponsor from ICMA-RC's mutual fund platfonn. Fund expenses are subject to change. ^ Momingstar places registered mutual funds in certain categories based on the mutual fund's historical portfolio holdings. Placement of a registered mutual fund in a particular Momingstar category does not mean that the mutual fund will remain in that category or that it will invest primarily in securities consistent with its Momingstar category. A registered mutual fund's investment strategy and portfolio holdings are govemed by its prospectus, not its Momingstar category. VantageTrust funds are not assigned Momingstar categories and, therefore a Momingstar category listed for a VantageTrust fund has been assigned to the underlying registered mutual fund in which the VantageTrust fund invests. The source for this infonnation is Momingstar, Inc. Copyright © 2013 Momingstar, Inc.® All Rights Reserved. The information contained herein: (1) is proprietary to Momingstar and/or its content providers; (2) may not be copied or distributed; and (3) is not wan-anted to be accurate, complete or timely. Neither Momingstar nor its content providers are responsible for any damages or losses arising from any use of this information. Momingstar, Inc. is a global investment research firm that is not affiliated with ICMA-RC. ICMA-RC does not independently verify Momingstar data. ^ Certain funds or underiying funds may charge a redemption fee. Current infomiation about redemption fee, if any, will be contained in the fund's or underiying ftjnd's prospectus. You may contact us to obtain a prospectus or to answer questions by calling 800-669-7400, emailing investorservices@icmarc.org, or visiting www.icmarc.org. ^ Frequent trading rules are designed to detect and discourage trading activities that may increase costs to all investors. All fijnds or underiying funds are monitored for frequent trading. Certain ftinds or underiying ftjnds may impose fees or restrictions to deter frequent trading. Current information about these fees or restrictions can be found in a ftjnd's or underiying fund's prospectus. You may contact us to obtain a prospectus or to answer questions by calling 800-669-7400, emailing investorservices@icmarc.org, or visiting www.icmarc.org. You can obtain informafion about ICMA-RC's Frequent Trading Policy at www.icmarc.org/ft-equenttrading. ^ Direct transfers from a stable value fund to competing ftjnds are restricted. Competing ftjnds may include, but are not limited to money maricet mutual funds, certificates of deposit, stable value funds, investment options that offer guarantees of principal or income, certain short-term bond ftjnds and self-directed brokerage accounts. Certain restricfions may apply when you want to transfer money from a stable value ftjnd to a competing ftjnd. These restiictions generally include waiting periods beftjre ti-ansfers can be made back into a stable ualiio fiinrl ^The VantageTmst Cash Management Fund is invested in a single registered mutual ftjnd, the Dreyftjs Cash Management Fund. Investments in the VantageTrust Cash Management Fund are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Dreyftjs Cash Management Fund seeks to preserve the value of ttie ftjnd at $1.00 per share, it is possible to lose money by investing in tiie Fund. The 7-Day Yield more closely reflects the Fund's curent eamings iv,^.. n,^ .... ^ A flxed income fund is subject to credit risk and interest rate risk. Credit risk is when an issuer of a flxed income security may be unable or unwilling to make payments of principal or interest to the holders of ttiese securities or may declare bankruptcy. Fixed income securities fluctuate in value as interest rates change. When interest rates rise, the maricet prices of fixed income securities will usually decrease; when interest rates fall, ttie maricet prices of fixed income securities usually will increase. ^ The source for ttiis infomiation is Momingstar, Inc. Copyright © 2013 Momingstar, Inc.® All Rights Reserved. The infonnation contained herein: (1) is proprietary to Momingstar and/or its content providers; (2) may not be copied or distiibuted; and (3) is not warranted to be accurate, complete or timely. Neittier Momingstar nor its content providers are responsible for any damages or losses arising from any use of this infonnation. Momingstar, Inc. is a global investment research fimn that is not affiliated with ICMA-RC. ICMA-RC does not independentiy verify Momingstar data. ® Funds that invest primarily In high yield bonds (bonds ttiat are rated below investment grade and also known as "junk bonds") are subject to additional risk as these high yield bonds are considered speculative and involve a greater risk of default than "invesfanent grade" securities. The values of ttiese securities are partlculariy sensitive to changes in interest rates, issuer creditworthiness, and economic and political conditions. The maricet prices of these securities may decline significantiy in periods of general economic difficulty, may be harder to value, and may be less liquid ttian higher rated securities. Page 2 of 3 ?0 ICMA-RC's VantageTrust Fund Fee Disclosure Data as of December 31,2013 ^ Prudential Retirement insurance and Annuity Company (Prudentiai), CA COA #08003, Hartford, CT. Neither Pmdential nor ICMA-RC guarantees ttie invesbnent pertonnance or retum on contiibutions to Prudential's Separate Account. You should carefully consider the objectives, risks, charges, expenses and underiying guarantee features before purchasing this product. Prudential may increase the Guarantee Fee in ttie ftjture, from 1.00% up to a maximum of 1.50%. Like all variable investtnents, this Fund may lose value. Availability and tenns may vary by jurisdiction; subject to regulatory approvals. Annuity conti-acts contain exclusions, limitations, reductions of benefits and tenns for keeping them in force. Guarantees are based on Pmdential's claims-paying ability. This annuity is issued under Conti-act form # GA-2020-TGWB4-0805-RC. ICMA-RC provides recordkeeping services to your Plan and is ttie invesbnent manager of ttie underiying Pmdential separate account. Pmdential or its affiliates may compensate ICMA-RC hr providing these and related administi-ative services in connection with ttie Fund. Before electing the Spousal Benefit (if available) on behalf of any beneficiary not recognized as your spouse under Federal law (a civil union partner), be aware that provisions of your plan or the Intemal Revenue Code might prevent, limit or ottienwise affect ttie ability of ttie beneficiary to receive the Spousal Benefit. Variable annuities are suitable for long-temi investing, partlculariy retirement savings. ©2014 Prudentiai, ttie Prudential logo, and tlie Rock symbol and Bring Your Challenges are service marks ofthe Prudential insurance Company of America, Newark, NJ, and its related entities, registered in many jurisdictions worldwide. Note: Participants who are interested in the VT Retirement IncomeAdvantage Fund must first receive and read the VT Retirement IncomeAdvantage Fund Important Considerations document, before investing. ^°The expense ratio for a "fund of funds" includes acquired fund fees and expenses, which are expenses incun-ed indirectiy by ttie ftjnd through its ownership in ottier mutual ftjnds. The ftjnd is not a complete solution for all of your retirement savings needs. An invesbnent in ttie ftjnd includes the risk of loss, including near, at or after ttie target date of the fund. There is no guarantee ttiat the fund will provide adequate income at and ttirough an investor's retirement. Selecting tiie ftjnd does not guarantee ttiat you will have adequate savings £ i: i. Certain funds may be subject to style risk, which is tiie possibility that ttie investment style of its invesbnent adviser will trail the retums of the overall maricet. In ttie past, different types of securities have experienced cycles of outperfomnance and underperformance in comparison to ttie maricet in general. For example, growth stocks have perfonned best during the later stages of economic expansion and value stocks have performed best during periods of economic recovery. Botti styles may go in and out of favor. When ttie investing ch/lo iiceH hu a fiiniH ic nut nf faunr that fiinH ic lilfolu tn iinrlornorfnrm nttiorfiinHc that iico inuectinn ctubc that aro in faunr " T. Rowe Price is a registered trademark of T. Rowe Price Group, Inc. - all rights reserved. Funds ttiat invest primarily in mid-capitalization companies involve greater risk tiian is customarily associated witti investtnents in larger, more established companies. Equity securities of mid-capitalization companies generally bade in lower volume and are generally subject to greater and less predictable price changes ttian the securities of larger Funds that invest primarily in small-capitalization companies involve greater risk than is customarily associated with investtnents in larger, more established companies. Equity securities of small-capitalization companies are generally subject to greater price volatility ttian those of larger companies due to less certain growth prospects, the lower degree of liquidity in tiie maricets for tiieir securities, and the greater sensitivity of smaller companies to changing economic conditions. Also, small-capitalization companies may have more limited product lines, fewer capital resources and less experienced management ttian larger companies. ^® Funds ttiat Invests in foreign securities are exposed to the risk of loss due to political, economic, legal, regulatory, and operational uncertainties; differing accounting and financial reporting standards; limited availability of information; cun-ency fluctuations; and higher transaction costs. Investinents in foreign cun-encies or securities denominated in foreign currencies (including derivative instilments that provide exposure to foreign currencies) may experience gains or losses solely based on changes in the exchange rate between foreign currencies and the U.S. dollar. The risk of investing in foreign securities may be greater with respect to securities of companies located in emerging market countries. The value of developing or emerging maricet currencies may fluctuate more than the cun-encies of companies with more mature maricets. Sector funds tend to be riskier and more volatile ttian the broad maricet because ttiey are generally less diversified and more volatile than other mutual ftjnds. Page 3 of 3 S.I