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HomeMy WebLinkAboutRes 1517 - Deferred Compensation Plan (DCP) and Insurance (1- ,4-NII L A, 1,y i", to,. t City Washington Resolution No. 1 57 7 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, TO ADOPT THE AMENDED PLAN DOCUMENT FOR THE CITY OF TUKWILA DEFERRED COMPENSATION PLAN; AND ACKNOWLEDGING THE AMENDED GROUP ANNUITY CONTRACT AND THE SIGNING OF A NEW ADMINISTRATIVE AGREEMENT WITH THE HARTFORD LIFE INSURANCE COMPANY. WHEREAS, the City established the City of Tukwila Deferred Compensation Plan (hereinafter "Plan per Resolution 569 on March 7, 1977; and WHEREAS, the City is authorized to sign a new contract with Hartford Life Insurance Company per Resolution 1412 signed on December 7, 1998; and WHEREAS, the City desires to amend the Plan and related documents to conform with changes in the federal law brought about by the Economic and Tax Relief Reconciliation Act of 2001 "EGTRRA and to conform with the technical corrections to EGTRRA contained in the Job Creation and Worker Assistance Act of 2002; and WHEREAS, the City desires to amend the Plan to conform with the final and temporary Treasury regulations under §401(a)(9) of the Internal Revenue Code as published in the Federal Register on April 17, 2002, 74 FR 18987; and WHEREAS, the City received an amended Group Annuity Contract from Hartford Life Insurance Company containing enhancements and lower fees; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The attached amended City of Tukwila Deferred Compensation Plan is hereby adopted, effective as indicated within the Plan Document. Section 2. The City accepts the amended Group Annuity Contract issued by Hartford Life Insurance Company, which offers more fund options, enhanced features, reduced fees, and is in compliance with EGTRRA requirements. Section 3. The City of Tukwila has signed a new Administrative Services Agreement with Hartford Life Insurance Company as required by EGTRRA and authorized by Resolution 1412. PASSED BY THE CITY COUNCIL OFiTHE CIT O TUKWILA, WASHINGTON, at a Regular Meeting thereof this '3 day of 2003. ATTEST/ AUTHENTICATED: J d./..) tea'. —UL- Pam Carter, Council President Jai E. Cantu, CMC, City Clerk 4 PPROV AS T FORM BY: OV Filed with the City Clerk: o' X 0 3 Ili Passed by the City Council: 3 0 3 --0 .3 Office of the Xttorney Resolution Number: /-6-1 ORGN,AL CITY OF T U KW I LA DEFERRED COMPENSATION PLAN L k is f, IV te' I t 0 ,0 Iii ---11, VF 411 t 111IIII •S E tip 1 90E t L PLAN DOCUMENT Adopted pursuant to Resolution 1517 dated March 3, 2003 PREAMBLE established pursuant to Code Sections 403(b), 401(k), 408(k)(6), or 501(c)(18). This Plan has been adopted pursuant to Resolution No. 1517, dated March 3, 2003 and is effective as of such date. "Deferred Compensation" means that portion of an Employee's compensation which said Employee has elected The primary purpose of this Plan is to permit Employees of to defer in accordance with the provisions of this Plan. the Employer to enter into an agreement which will provide for deferral of payment of a portion of their current compensation "Eligible Deferred Compensation Plan" has a plan that until death, retirement, severance from employment, or other satisfies the requirements of Code Section 457(b) and the event, in accordance with the provisions of Section 457 of the regulations thereunder. Internal Revenue Code of 1986, with other applicable provisions of such Code, and in accordance with the General "Eligible Governmental Employer" means a State, political Statutes of the State. subdivision of a State, and any agency or instrumentality of a State or political subdivision of a State. It is intended that the Plan shall qualify as an Eligible Deferred Compensation Plan with in the meaning of Section 457(b) of "Employer" means the City of Tukwila. the Code sponsored by an Eligible Governmental Employer. "Employee" means any full -time employee of the Employer The Employer does not and cannot represent or guarantee who receives Compensation, including any of the following that any particular federal or state income, payroll or other tax individuals selected below; consequence will occur by reason of participation in this Plan. A Participant should consult with his or her own attorney or Q Part -time employees other representative regarding all tax or other consequences of participation in this Plan. Q Elected Officials ARTICLE I "Includible Compensation" means compensation from the DEFINITIONS Employer, within the meaning of Code Section 415(c)(3) and the regulations thereunder. 1.1 Plan Definitions "Participant" means any Employee or former Employee of For purposes of this Plan, the following words and phrases the Employer, who elects to participate in this Plan or who shall have the meaning set forth below, unless a different has unpaid benefits due under the Plan. meaning is plainly required by the context: "Participation Agreement" means an agreement filed by an "Administrator" means the Employer or its duly authorized Employee to elect or modify participation in the Plan. designee for that purpose who shall exercise the discretion or other functions given to the Employer under the terms of "Participant Account" means the account established and the Plan. maintained on behalf of a Participant to reflect the total value of his or her interest under the terms of this Plan. "Contracts" means an insurance contract (fixed and /or variable) issued by Hartford Life Insurance Company. "Plan" means City of Tukwila Deferred Compensation Plan, an Eligible Deferred Compensation Plan. "Beneficiary" means any person designated by the Participant to receive an annuity, death benefit, or other "Plan Year" means the calendar year during which the Plan benefit under the provisions of this Plan, by reason of such becomes effective, and each succeeding year during the Participant's death. existence of this Plan. "Code" means the Internal Revenue Code of 1986, as "State" means the State or Commonwealth that is the amended. Employer or the State or Commonwealth of which the Employer is a political subdivision or an agency or "Compensation" means the total of all wages or salaries instrumentality. which are paid by the Employer to, or for the benefit of, an Employee for services rendered, calculated without deduction for any portion thereof deferred under the provisions of this Plan or for any amounts contributed to any program -1- ARTICLE II during each employment year in which the Employee is a OPERATION OF PLAN Participant in the Plan, that portion of his said Compensation which is specified by the Employee in the Participation 2.1 Participation Agreement shall be deferred and paid in accordance with the provisions of this Plan. Any Employee may elect to become a Participant in the Plan and to defer payment of part of his compensation not yet 2.4 Amendment of Participation Agreement earned by executing a written Participation Agreement and filing it with the Employer. The Employer shall defer payment The Participant may revoke his election to participate and of Participant compensation in the amount specified in each may change the amount of Compensation to be deferred, or Participation Agreement filed with the Employer. his investment preference, by signing and filing with the Notwithstanding any provision of this Plan to the contrary, Employer a written revocation or amendment, on a form contributions, benefits, and service credit with respect to approved by the Administrator. Any such revocation or qualified military service will be provided in accordance with amendment shall be effective prospectively only, beginning Code Section 414(u). with the first pay period of the subsequent month. 2.2 Participation Agreement 2.5 Regular Contributions The Administrator shall establish a written Participation The regular contribution is the amount of compensation which Agreement which shall contain, among other provisions, a may be deferred by a Participant subject to the following provision whereby the Participant specifies: limitations: (a) that portion of his /her Compensation which is to be (a) Calendar Year Maximum Except as provided in deferred. section 2.6, the maximum amount a Participant may defer during a calendar year to this and /or any other (b) his /her investment preference; however, the Eligible Deferred Compensation Plan shall not Employer reserves the right to disapprove the exceed the lesser of (i) the applicable dollar amount Participant's selection. as set forth in Section 457(e)(15) of the Code, or (ii) 100% of the Participant's Includible Compensation. (c) a Beneficiary or Beneficiaries, including one or more contingent Beneficiaries, to receive any (b) Pay Period Minimum The minimum amount a benefits which may be payable under this Plan or Participant may defer is $25 per semi monthly pay on the death of the Participant. period. (d) that his salary, wage or other compensation is as 2.6 Pre Retirement Catch -Up Contributions set forth in any salary ordinance or otherwise without deductions for amounts deferred under the A Participant may defer an additional amount under this provisions of this plan. section for one or more of the last three calendar years ending before attaining the Participant's Normal or Deferred (e) that the Participant together with his heirs, Retirement Date, hereinafter referred to as "pre- retirement successors, and assigns, holds harmless the catch -up." The use of pre- retirement catch -up is subject to Employer from any liability hereunder for all acts the following restrictions: performed in good faith, including acts relating to the investment of deferred amounts and /or the (a) The maximum amount a Participant may defer each Employee's investment preference hereunder. calendar year to this or any other Eligible Deferred Compensation Plan shall not exceed the lesser of (f) a payment option and payment frequency if these two amounts: applicable. (1) twice the dollar limit in effect under 2.3 Agreement Effective Date section 2.5(a) hereunder, or If the Participation Agreement is received prior to the 15th of (2) the maximum amount that may be the month, it will take effect on the first pay day of following deferred at section 2.5(a) plus any month. If received on or after the 15th, it will take effect on Employer provided compensation eligible the first pay day of the second month following. Thereafter, for deferral that was not deferred for any -2- prior taxable year which began after Contribution is a Participant contribution or a direct rollover of December 31, 1978. an eligible rollover distribution as defined in Section 402(c)(4) of the Code. The Plan Administrator may require the (b) To use pre- retirement catch -up, a Participant must Employee to certify, either in writing or in any other form declare a retirement age, which may be any age at permitted under rules promulgated by the IRS, that the or after which the Participant qualified for Normal contribution qualifies as a Rollover Contribution under the Retirement eligibility, but no later than age 70 -1/2. applicable provisions of the Code. If it is later determined that This declaration does not compel retirement. all or part of a Rollover Contribution was ineligible to be contributed to the Plan, the Plan Administrator shall direct that (c) The pre- retirement catch -up provision may not be any ineligible amounts, plus earnings or losses attributable used during the calendar year that the Participant thereto (determined in a uniform and nondiscriminatory ceases to be an Employee. manner) be distributed from the Plan to the Employee as soon as administratively feasible. Separate accounting shall (d) The pre- retirement catch -up provision may be used be maintained by the Plan Administrator for any Rollover only once by any Participant, whether under this Contribution not attributable to an Eligible Deferred Plan or any other eligible Deferred Compensation Compensation Plan. Rollover Contributions will be Plan. nonforfeitable at all times. (e) Participants may continue to make regular 2.9 Employer Contributions contributions after they are no longer eligible to use pre- retirement catch -up. Nothing in this Plan prohibits the Employer from making deposits to a Participant Account as additional compensation For purposes of this section, Normal Retirement Date means for services rendered, subject to the Participant's regular the date a Participant retires pursuant to the Employer's contribution limits. Retirement Plan without reduced benefits. Deferred Retirement Date means the date beyond the Normal ARTICLE III Retirement Date designated by the Participant. Such date INVESTMENT RESPONSIBILITIES shall not exceed the earlier of (i) the Employer's mandatory retirement age (if applicable), or (ii) the date on which the 3.1 Investment of the Deferred Amount Participant incurs a severance from employment. Amounts deferred or contributed pursuant to Article II shall be 2.7 Age 50+ Catch -Up Contributions held for the exclusive benefit of Participants and their Beneficiaries in trust or under one or more Contracts. All Effective on or after January 1, 2002, all Participants who amounts so held will be allocated to the appropriate have attained age 50 before the close of the plan year shall Participant Accounts. Each Participant shall direct the be eligible to make catch -up contributions in accordance with, investment of amounts held in his or her Participant Account and subject to the limitations of, Section 414(v) of the Code. under the plan. The investment of amounts segregated on Such contribution shall not, with respect to the year in which behalf of an alternate payee pursuant to a Plan Approved the contribution is made, be subject to any otherwise Domestic Relations Order may be directed by such alternate applicable limitation contained in Section 457 of the Code, or payee to the extent provided in such order. In the absence of be taken into account in applying such limitations to other such direction, such amounts shall be invested in the same contributions or benefits under this Plan or any other plan. manner as they were immediately before such segregation The maximum amount that may be deferred under this Plan was made on account of such order. Each Participant for any calendar year by a Participant eligible for both the pre- Account shall share in any gains or losses of the retirement catch up contribution at section 2.6 and this age investment(s) in which such account is invested. 50+ catch -up contribution is the greater of: (i) the maximum amount that may be deferred under section 2.5(a), plus any 3.2 Amendment of Investment Election age 50+ catch -up contribution allowed under this section; or (ii) the maximum amount that may be deferred under section A Participant may amend his statement of investment election 2.6(a). at such times and by such manner and form as prescribed by the Administrator. Such amendment will, unless specifically 2.8 Rollover Contributions stated otherwise, apply only to future amounts deferred under the Plan. Effective on or after January 1, 2002, an Employee may contribute a Rollover Contribution to the Plan. A Rollover -3- 3.3 Investment Changes exist that were not foreseeable and are beyond the Employee's control; A Participant may elect to transfer amounts in his or her Participation Account among and between those investments (b) The unforeseeable emergency event involves the available under trust and /or Contract at such times and by Participant, or his /her spouse or any dependent such manner and form prescribed by the Administrator, who qualifies under Section 152(a) of the Code; subject further to any restrictions or limitations placed on any investment by the Administrator to be uniformly applied to all (c) The financial burden created must be the legal Participants. obligation of the Participant; 3.4 Investment Responsibility (d) All other financial sources, such as insurance payments and attempts to obtain loans, have been Where a Participant exercises control over the investment of exhausted; amounts credited to his /her Participation Account, the Employer and any other fiduciary of the Plan shall not be (e) All assets must be liquidated except where liable for any loss which results from such Participant's liquidation would itself cause severe financial exercise of control. hardship; 3.5 Statements (f) The amount of the requested withdrawal is limited to the amount necessary to meet the financial The Employer will cause to be issued statements periodically emergency; and to reflect the actual earnings, gains, contributions and losses posted to the Participation Accounts. (g) Great financial hardship will occur if the withdrawal is not permitted. ARTICLE IV DISTRIBUTIONS Examples of hardship circumstances include major property loss and catastrophic illness of spouse or dependents. 4.1 Eligibility Withdrawals are not authorized for expenses related to the death or illness of any other family member, or for budgetable Distribution may be taken under any of the following expenses such as automobile or college costs, a home down circumstances, subject further to the provisions of this Article payment, or expenses relative to divorce proceedings. IV: Any remaining benefits shall be paid upon retirement, (a) On account of an unforeseeable emergency; severance from employment, or death in accordance with this Article IV. (b) Non participation; The decision of the Employer concerning Emergency (c) Attainment of age 70 -1/2, whether or not still Withdrawals shall be final as to all Participants. employed; 4.3 Distribution for Certain Non Participating (d) Severance from employment; or Participants (e) Participant's death. If the total amount of a Participant's Account under the Plan, excluding amounts attributable to Rollover Contributions, 4.2 Unforeseeable Emergency Distribution does not exceed the dollar limit under Code Section 411(a)(11)(A), the Participant may elect to receive (or the A Participant may apply for a lump sum withdrawal of funds Employer may elect to pay to the Participant without the from the Plan under certain emergency conditions. The Participant s consent) the total amount in a single sum Employer will evaluate the request for conformity with its payment within 60 days of such election; provided, however, interpretation of the applicable regulations. such amount may be distributed pursuant to this section 4.3 only if: (a) no amount has been deferred under the Plan with The Participant must satisfy the Employer that all of the respect to such Participant during the two -year period ending following conditions are met before the Employer may on the date of the distribution, and (b) there has been no prior authorize the emergency withdrawal: distribution under the Plan to such Participant to which this (a) Major unexpected and unreimburseable expenses section 4.3 applied. -4- 4.4 Distribution On or After Age 70 -112 or Severance Except in the event of the Participants death, all or a portion From Employment of the amount credited to the Participants Account shall be distributed, as instructed by the Participant, under one of the Upon becoming eligible in accordance with section 4.1(c) or following payment options: (d) hereof, a Participant may elect to commence distribution in accordance with the payment options set forth at section 4.6 (a) A single sum payment; hereof. (b) Payments for a specified period where amounts are 4.5 Distribution On Account of the Participant's paid in installments not in excess of the Participant's Death allowable life expectancy or joint life expectancy of the Participant and his /her Beneficiary; In the event of the Participants death, the full amount credited to the Participant's Account (including earnings and net gain (c) Annuity for a period certain of five (5) to thirty (30) or loss), less any federal or State income tax required to be years, but not in excess of the Participant's withheld, shall be distributed according to the following allowable life expectancy requirements: (d) A life annuity; (a) If distribution has commenced prior to the death of the Participant, the balance of a Participants (e) A life annuity with period certain guaranteed, with Account shall be paid to the Beneficiary in the guarantee that if at the annuitant's death accordance with the payment option already payments have not been made for the guaranteed selected by the Participant so that the remaining period as elected, payments will continue to the distribution will be effected at least as rapidly as Beneficiary. The guaranteed period to be elected under the payment option used before the may be either ten (10), fifteen (15) or twenty (20) Participant's death. years but may not exceed the life expectancy of the Participant and his or her Beneficiary; or (b) If the distribution has not commenced prior to the death of the Participant; (f) A joint and survivor annuity payable during the lifetime of the Participant and his /her Beneficiary. (1) a non spousal beneficiary must either; 4.7 Minimum Distribution Requirements (A) elect a distribution payable over a period not extending beyond his or her own life (a) General Rules expectancy, commencing no later than the end of the calendar year following the (i) Effective Date. Unless an earlier effective date is calendar year in which the Participant specified in Part II below, the provisions of this article will died; OR apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 (B) elect a single -sum payment by the end of calendar year. the calendar year which contains the fifth anniversary of the date of death of the (ii) Coordination with Minimum Distribution employee, otherwise, such single -sum Requirements Previously in Effect. If the Plan specifies an payment shall be made by the end of effective date of this article that is earlier than calendar years such calendar year. beginning with the 2003 calendar year, required minimum (2) a spousal beneficiary may elect either a single- distributions for 2002 under this article will be determined as sum payment or a distribution payable over a follows. If the total amount of 2002 required minimum period not exceeding his /her own life distributions under the plan made to the distributee prior to expectancy. Distribution to the spousal the effective date of this article equals or exceeds the beneficiary must commence no later than the required minimum distributions determined under this article, year the deceased Participant would have then no additional distributions will be required to be made for reached age 70 -1/2. 2002 on or after such date to the distributee. If the total amount of 2002 required minimum distributions under the plan made to the distributee prior to the effective date of this 4.6 Forms of Payment article is less than the amount determined under this article, -5- then required minimum distributions for 2002 on and after spouse dies after the participant but before distributions to the such date will be determined so that the total amount of surviving spouse begin, this section 4.7(b)(ii), other than required minimum distributions for 2002 made to the section 4.7(b)(ii)(1 will apply as if the surviving spouse were distributee will be the amount determined under this article. the participant. (iii) Precedence. The requirements of this article will take For purposes of this section 4.7(b)(ii) and section 4.7(d), precedence over any inconsistent provisions of the plan. unless section 4.7(b)(ii)(4) applies, distributions are considered to begin on the participants required beginning (iv) Requirements of Treasury Regulations Incorporated. All date. If section 4.7(b)(ii)(4) applies, distributions are distributions required under this article will be determined and considered to begin on the date distributions are required to made in accordance with the Treasury regulations under begin to the surviving spouse under section 4.7(b)(ii)(1 If section 401 (a)(9) of the Internal Revenue Code. distributions under an annuity purchased from an insurance company irrevocably commence to the participant before the (v) TEFRA Section 242(b)(2) Elections. Notwithstanding the participant's required beginning date (or to the participant's other provisions of this article, distributions may be made surviving spouse before the date distributions are required to under a designation made before January 1 1 984, in begin to the surviving spouse under section 4.7(b)(ii)(1 the accordance with section 242(b)(2) of the Tax Equity and date distributions are considered to begin is the date Fiscal Responsibility Act (TEFRA) and the provisions of the distributions actually commence. plan that relate to section 242(b)(2) of TEFRA. (iii) Forms of Distribution. Unless the participant's (b) Time and Manner of Distribution. interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the (i) Required Beginning Date. The participant's entire required beginning date, as of the first distribution calendar interest will be distributed, or begin to be distributed, to the year distributions will be made in accordance with sections participant no later than the participant's required beginning 4.7(c) and 4.7(d) of this article. If the participant's interest is date. distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in (ii) Death of Participant Before Distributions Begin. If the accordance with the requirements of section 401 (a)(9) of the participant dies before distributions begin, the participant's Code and the Treasury regulations. entire interest will be distributed, or begin to be distributed, no later than as follows: (c) Required Minimum Distributions During Participant's Lifetime. (1) If the participant's surviving spouse is the participant's sole designated beneficiary, then, except as (i) Amount of Required Minimum Distribution For Each provided in the adoption agreement, distributions to the Distribution Calendar Year. During the participant's lifetime, surviving spouse will begin by December 31 of the calendar the minimum amount that will be distributed for each year immediately following the calendar year in which the distribution calendar year is the lesser of: participant died, or by December 31 of the calendar year in which the participant would have attained age 70Y2, if later. (1) the quotient obtained by dividing the participant's account balance by the distribution period in the Uniform (2) If the participants surviving spouse is not the Lifetime Table set forth in section 1 .401 (a)(9) -9 of the participant's sole designated beneficiary, then, except as Treasury regulations, using the participant's age as of the provided in the adoption agreement, distributions to the participant's birthday in the distribution calendar year; or designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in (2) if the participant's sole designated beneficiary for which the participant died. the distribution calendar year is the participant's spouse, the quotient obtained by dividing the participant's account (3) If there is no designated beneficiary as of balance by the number in the Joint and Last Survivor Table September 30 of the year following the year of the set forth in section 1 .401 (a)(9) -9 of the Treasury regulations, participant's death, the participant's entire interest will be using the participants and spouse's attained ages as of the distributed by December 31 of the calendar year containing participant's and spouse's birthdays in the distribution the fifth anniversary of the participant's death. calendar year. (4) If the participant's surviving spouse is the (ii) Lifetime Required Minimum Distributions Continue participant's sole designated beneficiary and the surviving Through Year of Participant's Death. Required minimum -6- distributions will be determined under this section 4.7(c) (1) Participant Survived by Designated Beneficiary. beginning with the first distribution calendar year and up to Except as provided in this section 4.7, if the participant dies and including the distribution calendar year that includes the before the date distributions begin and there is a designated participant's date of death beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the (d) Required Minimum Distributions After Participant's participant's death is the quotient obtained by dividing the Death. participant's account balance by the remaining life expectancy of the participant's designated beneficiary, determined as (i) Death On or After Date Distributions Begin. provided in section 4.7(d)(i). (1) Participant Survived by Designated Beneficiary. If (2) No Designated Beneficiary. If the participant the participant dies on or after the date distributions begin and dies before the date distributions begin and there is no there is a designated beneficiary, the minimum amount that designated beneficiary as of September 30 of the year will be distributed for each distribution calendar year after the following the year of the participant's death, distribution of the year of the participant's death is the quotient obtained by participant's entire interest will be completed by December 31 dividing the participant's account balance by the longer of the of the calendar year containing the fifth anniversary of the remaining life expectancy of the participant or the remaining participant's death. life expectancy of the participant's designated beneficiary, determined as follows: (3) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the participant (I) The participant's remaining life expectancy is dies before the date distributions begin, the participant's calculated using the age of the participant in the year of surviving spouse is the participant's sole designated death, reduced by one for each subsequent year. beneficiary, and the surviving spouse dies before distributions are required to begin to the surviving spouse under section (II) If the participant's surviving spouse is the 4.7(b)(ii)(1 this section 4.7(d)(ii) will apply as if the surviving participant's sole designated beneficiary, the remaining life spouse were the participant. expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the participant's (e) 5 -Year Rule death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the (i) If the participant dies before distributions begin and year of the surviving spouse's death, the remaining life there is a designated beneficiary, distribution to the expectancy of the surviving spouse is calculated using the designated beneficiary is not required to begin by the date age of the surviving spouse as of the spouse's birthday in the specified in section 4.7(b)(ii) of the plan, but the participant's calendar year of the spouse's death, reduced by one for each entire interest will be distributed to the designated beneficiary subsequent calendar year. by December 31 of the calendar year containing the fifth anniversary of the participant's death. If the participant's (III) If the participant's surviving spouse is not the surviving spouse is the participant's sole designated participant's sole designated beneficiary, the designated beneficiary and the surviving spouse dies after the participant beneficiary's remaining life expectancy is calculated using the but before distributions to either the participant or the age of the beneficiary in the year following the year of the surviving spouse begin, this section will apply as if the participant's death, reduced by one for each subsequent year. surviving spouse were the participant. (2) No Designated Beneficiary. If the participant dies on (ii) Participants or beneficiaries may elect on an individual or after the date distributions begin and there is no basis whether the 5 -year rule in section 4.7(e)(i) or the life designated beneficiary as of September 30 of the year after expectancy rule in sections 4.7(b)(ii) and 4.7(d)(ii) of the plan the year of the participant's death, the minimum amount that applies to distributions after the death of a participant who has will be distributed for each distribution calendar year after the a designated beneficiary. The election must be made no later year of the participant's death is the quotient obtained by than the earlier of September 30 of the calendar year in which dividing the participant's account balance by the participant's distribution would be required to begin under section 4.7(b)(ii) remaining life expectancy calculated using the age of the of the plan, or by September 30 of the calendar year which participant in the year of death, reduced by one for each contains the fifth anniversary of the participant's (or, if subsequent year. applicable, surviving spouse's) death. If neither the participant nor beneficiary makes an election under this paragraph, (ii) Death Before Date Distributions Begin. distributions will be made in accordance with sections 4.7(b)(ii), 4.7(d)(ii) and 4.7(e)(i) of the plan. -7- date means the April 1st following the later of (i) the calendar (iii) A designated beneficiary who is receiving payments under year in which the Participant attains age 70 -1/2 or (ii) the the 5 -year rule in section 4.7(e)(i) may make a new election to calendar year in which the Participant retires. receive payments under the life expectancy rule until December 31, 2003, provided that all amounts that would have been required to be distributed under the life expectancy rule for all distribution calendar years before 2004 are ARTICLE V distributed by the earlier of December 31 2003 or the end of BENEFICIARY the 5 -year period. 5.1 Designation (f) Definitions. Each Participant has the right, by written notice filed with the (i) Designated beneficiary. The individual who is Employer, to designate one or more beneficiaries to receive designated as the beneficiary under section 5.1 of the plan any benefits payable under this Plan in the event of the and is the designated beneficiary under section 401 (a)(9) of Participant's death prior to the complete distribution of the Internal Revenue Code and section 1 .401 (a)(9) -1 Q &A- benefits. The Participant accepts and acknowledges that he 4, of the Treasury regulations. has the burden for executing and filing, with the Employer, a proper beneficiary designation form. (ii) Distribution calendar year. A calendar year for which a minimum distribution is required. For distributions The form for this purpose shall be provided by the Employer. beginning /before the participant's death, the first distribution It is not binding on the Employer until it is signed, filed with calendar year is the calendar year immediately preceding the Employer by the Participant, and accepted by the the calendar year which contains the participant's required Employer. beginning date. For distributions beginning after the participant's death, the first distribution calendar year is the If no such designation is in effect upon the Participant's death, calendar year in which distributions are required to begin or if no designated beneficiary survives the Participant, the under section 4.7(b)(ii). The required minimum distribution for beneficiary shall be the Participant's estate. If no estate the participant's first distribution calendar year will be made executor or administrator is appointed and qualified within one on or before the participant's required beginning date. The hundred twenty (120) days after the Participant's death, the required minimum distribution for other distribution calendar payment may be made first, to a surviving spouse, second, to years, including the required minimum distribution for the a surviving child or children, and third, to a surviving parent or distribution calendar year in which the participant's required parents. beginning date occurs, wit be made on or before December 31 of that distribution calendar year. ARTICLE VI NON- ASSIGNABILITY (iii) Life expectancy. Life expectancy as computed by use of the Single Life Table in section I .401 (a)(9) -9 of the Treasury 6.1 Non Assignability regulations. Neither the Participant nor the Participant's beneficiary, nor (iv) Participant's account balance. The account balance as of any other designee, shall have any right to commute, sell, the last valuation date in the calendar year immediately assign, pledge, hypothecate, transfer, or otherwise convey preceding the distribution calendar year (valuation calendar the right to receive any payments hereunder, which payments year) and right thereto are expressly declared to be non assignable and nontransferable. increased by the amount of any contributions made and allocated or forfeitures allocated to the account balance as of Except to the extent otherwise provided by law, no payments dates in the valuation calendar year after the valuation date shall be subject to attachment, garnishment or execution, or and decreased by distributions made in the valuation calendar be transferable in the event of bankruptcy or insolvency. year after the valuation date. The account balance for the valuation calendar year includes any amounts rolled over or 6.2 Domestic Relations Orders transferred to the plan either in the valuation calendar year or in the distribution calendar year if distributed or transferred in No benefit or interest available hereunder will be subject to the valuation calendar year. assignment or alienation, either voluntarily or involuntarily pursuant to a domestic relations order, unless such order is (v) Required beginning date. The require beginning determined to be a qualified domestic relations order, as -8- defined in Section 414(p) of the Code. All or a portion of an Employee's benefit may be transferred ARTICLE VII from another Eligible Deferred Compensation Plan ROLLOVERS AND PLAN TRANSFERS maintained by the Employer or another employer and credited to the Participant's Account under this Plan, if: 7.1 Direct Rollovers (a) the transferor plan provides that such transfer can Effective on or after January 1, 2002, a distributee may elect be made; and to have all or any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the (b) where the transfer is from a plan of another distributee. employer, the Employee has severed employment with such other employer. For purposes of this section an Eligible Rollover Distribution means any distribution of all or any portion of the balance to As it deems necessary, the Employer may require such the credit of the distributee, except that an Eligible Rollover documentation from the transferor plan to effect the transfer, Distribution does not include: any distribution that is one of a to confirm that such plan is an Eligible Deferred series of substantially equal periodic payments (not less Compensation Plan within the meaning of Code Section frequently than annually) made for the life (or life expectancy) 457(b) and to assure that transfers are provided for under of the distributee or the joint lives (or joint life expectancies) of such plan. the distributee and the distributee's designated Beneficiary, or The Employer may refuse to accept a transfer in the form of for a specified period of ten years or more; any distribution to assets other than cash, unless the Employer agrees to hold the extent such distribution is required under Section such other assets in trust under the Plan. 401(a)(9) of the Code; or any amount that is distributed on account of hardship. Any amounts transferred that have been deferred during the current calendar years will be considered deferrals subject to For purposes of this section an Eligible Retirement Plan current calendar year deferral limitations. means an eligible retirement plan that is an individual retirement account described in Section 408(a) of the Code, If a transfer, occurring on or after January 1, 2002, is an individual retirement annuity described in Section 408(b) of associated with a distributable event and the Employee is the Code, an eligible deferred compensation plan described in eligible to receive an eligible rollover distribution as defined Section 457(b) of the Code which is maintained by an eligible Section 402(c)(4) of the Code, such transfer will be employer described in Section 457(e)(1)(A) of the Code, an considered a Rollover Contribution subject to the provisions of annuity plan described in Section 403(a) of the Code, an Section 2.8. annuity contract described in section 403(b) of the Code, or a qualified trust described in Section 401(a) of the Code, that 7.3 Transfers Out accepts the distributee's eligible rollover distribution. The definition of eligible retirement plan shall also apply in the All or a portion of a Participant Account may be transferred to case of a distribution to a surviving spouse, or to a spouse or another Eligible Deferred Compensation Plan maintained by former spouse who is the alternate payee under a qualified another employer, if: domestic relation order, as defined in section 414(p) of the Code. (a) the transferee plan provides that such transfer can be made; and For purposes of this section, a distributee includes an Employee or former Employee. In addition, the Employee's (b) where the transfer is to a plan of another employer, or former Employee's surviving spouse and the Employee's or the Employee has severed employment. former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as Upon the completion of such transfer, the Plan and Employer defined in Section 414(p) of the Code, are distributees with are discharged of any liability to the Participant to pay regard to the interest of the spouse or former spouse. amounts so transferred. For purposes of this section a Direct Rollover is a payment by As it deems necessary, the Employer may require such the Plan to the Eligible Retirement Plan specified by the documentation from the other plan to effect the transfer, to distributee. confirm that such plan is an Eligible Deferred Compensation Plan within the meaning of Code Section 457(b) and to 7.2 Transfers In assure that transfers are provided for under such plan. Such -9- transfers shall be made only under such circumstances as are To the extent permitted by law, regulation or other guidance permitted under Code Section 457 and the applicable from an appropriate regulatory agency, the Plan regulations. Administrator, Trustee, Employer or any other party may provide any notice or disclosure, obtain any authorization or If a transfer, occurring on or after January 1, 2002, is consent, or satisfy any other obligation under this Plan associated with a distributable event and the distribution is an through the use of media other than paper. Such alternative eligible rollover distribution as defined Section 402(c)(4) of media may include, but is not necessarily limited to, electronic the Code, such transfer will be considered a Direct Rollover or telephonic media. subject to the provisions of Section 7.1. 8.3 Administrative Costs 7.4 Trustee to Trustee Transfers to Purchase Permissive Service Credit The Employer shall determine, in a manner deemed fair and equitable, the administrative costs associated with the Effective on or after January 1, 2002, a Participant may elect withholding of Deferred Compensation amounts pursuant to to have all or a portion of a his/her Participant Account directly this plan or in making investments or otherwise administering transferred to a defined benefit governmental plan (as defined or implementing the Plan. The Employer may withhold or in Section 414(d) of the Code) if such transfer is: collect, or have withheld or collected, such costs, in such manner as he deems equitable either (1) from the (a) for the purchase of permissive service credit (as compensation deferred pursuant to the Plan, the income defined in Section 415(n)(3)(A) of the Code) under produced from the compensation deferred pursuant to the such plan; or Plan, the income produced from any investment, whether or not augmented, or (2) from the organization receiving such (b) a repayment to which Section 415 of the Code does investment where required by law to collect therefrom or, if not apply by reason of subsection (k)(3) thereof. not so required, where mutually satisfactory to such organization and the Administrator. The Administrator may ARTICLE VIII remit or direct the remission of appropriate amounts so ADMINISTRATION AND ACCOUNTING withheld or collected to the Employer. 8.1 Administration by Employer ARTICLE IX AMENDMENTS This Plan shall be administered by the Employer, which shall prescribe such forms, and adopt such rules and regulations 9.1 Right to Amend, Modify and Terminate as are necessary to carry out the purposes of the Plan. The Employer may employ investment counsel to provide advice The Employer may at any time modify or terminate the Plan concerning categories of investment, investment guidelines by notifying Participants of such action. The Employer shall and investment policy, provided, however, that the advice or not have the right to reduce or affect the value of any recommendations of any such investment counsel shall not Participant's account or any rights accrued under the Plan be binding on the Employer, which shall make the final prior to modification or termination. determination concerning investment categories, investment guidelines and policies. 9.2 Conformation The Employer may contract with a financially responsible The Employer shall amend and interpret the Plan to the independent contractor to administer and coordinate the Plan extent necessary to conform to the requirements of Code under the direction of the Employer. The Administrator shall Section 457 and any other applicable law, regulation or ruling, have the right to designate a Plan Coordinator or other party including amendments that are retroactive. In the event the of its choice to perform such services under this agreement Plan is deemed by the Internal Revenue Service to be as may be mutually agreed to between the Administrator and administered in a manner inconsistent with Code Section 457, the Plan Coordinator or other party. Notwithstanding any the Employer shall correct such inconsistency within the other provisions to the contrary, the Administrator agrees that period provided in Code Section 457(b). it shall be solely responsible to the Employer for any and all services performed by a subcontractor, assignee, or designee 9.3 Plan Termination under this agreement. In the event of the termination of the Plan, distribution of 8.2 Paperless Administration benefits shall be made to Participants and Beneficiaries pursuant to the distribution guidelines in section 4 or the -10- rollover /transfer provisions of section 7. the total agreement or contract between the Employer and the Participant regarding the Plan. No oral statement ARTICLE X regarding the Plan may be relied upon by the Participant. EXCLUSIVE BENEFIT 11.6 Gender 10.1 Exclusive Benefit All amounts of compensation deferred under the Plan, all As used herein the masculine shall include the neuter and the property and rights purchased with such amounts, and all feminine where appropriate. income attributable to such amounts, property or rights shall be held in trust or under one or more insurance contracts 11.7 Controlling Law described in Section 401(f) of the Code. Except as may otherwise be permitted or required by law, no assets or This Plan is created and shall be construed, administered and income of the Plan shall be used for, or diverted to, purposes interpreted in accordance with Section 457 of the Code and other than for the exclusive purpose of providing benefits for the regulations thereunder and under the laws of the State of Participants and their Beneficiaries or defraying reasonable domicile of the Employer as the same shall be at the time any expenses of administration of the Plan. dispute or issue is raised. If any portion of this Plan is held illegal, invalid or unenforceable, the legality, validity and ARTICLE XI enforceability of the remainder shall be unaffected. MISCELLANEOUS 11.1 Retirement System Integration Benefits payable by, and deductions for Employee IN WITNESS WHEREOF, the Employer executed this contributions to, any retirement system of the Employer shall S t be computed without reference to amounts deferred pursuant Plan document this o2 day of to this Plan. ce) o3. 11.2 Employment Neither the establishment of the Plan nor any modification thereof, nor the establishment of any account, nor the Seal payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Employer except as herein provided; and, in no event, shall the terms or employment of any Employee be modified or in any way affected hereby. 11.3 Successors and Assigns �f (Nan'of Employer) j The Plan shall be binding upon and shall inure to the benefit 'le U N1 LAldli. of the Employer, its successors and assigns, all Participants by 1 and Beneficiaries and their heirs and legal representatives. 11.4 Written Notice Its (Title)/ Any notice or other communication required or permitted under the Plan shall be in writing, and if directed to the Attest: Employer shall be sent to the designated office of the Employer, and, if directed to a Participant or to a Beneficiary, C ie shall be sent to such Participant or Beneficiary at his last known address as it appears on the Employer's record. JJ -4/ C:1---/ -ter( 11.5 Total Agreement (Witness) This Plan and the Participation Agreement, and any subsequently adopted amendment thereof, shall constitute -11-