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HomeMy WebLinkAboutRESOLUTIONS-1983-068-R-8310/ 25/ c3 A RESOLUTION • Establishing a Deferred Compensation Program for the Town of the City of Evanston WHEREAS, the Town of the City of Evanston ("Township") has employees rendering valuable services; and WHEREAS, the establishment of a deferred compensation plan for such employees will serve the interests of the Township by enabling it to provide reasonable retirement security for its employees, by providing increased flexibility in its personnel management system, and by assisting in the attraction and retention of competent personnel; and WHEREAS, the Township has determined that the establishment of a deferred compensation plan will serve the above objectives; and WHEREAS, the Township has further determined that the separate plans submitted by the ICMA Retirement Corporation and the Safeco Life Insurance Company, attached hereto as Exhibits A and B respectively, are appropriate and reasonable, and that Township employees should have the option of selecting between the two deferred compensation plans; and WHEREAS, the Township desires that the investment of funds in the ICMA deferred compensation plan be administered by ICMA Retirement Corporation as Trustee, and the investment of funds in the-Safeco deferred compensation plan be administered by Safeco as Trustee, with the understanding that the funds in both plans will be held by the respective companies in a trust established by public employers for the purpose of representing the interests of such employers with respect to the collective investment of funds held under their deferred compensation plans; NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN • OF THE CITY OF EVANSTON: SECTION l: That the Township adopts the deferred compensation plans attached hereto as Exhibits A and B and appoints the 10/25/83 • • ICMA Retirement Corporation and Safeco Life Insurance Company to serve as separate administrators of their respective plans. SECTION 2:, That.the Township hereby authorizes execution and adoption of the ICMA Retirement Trust and trust agreement attached hereto as Exhibits C and D respectively, an.d appoints the ICMA Retire-, ment Corporation as Trustee thereunder, and directs the ICMA Retirement Corporation, as Trustee,, to invest any and all funds held under the deferred compensation plan through the ICMA Retirement Trust as soon as is practicable. SECTION 3: That the Township hereby further authorizes execution and adoption of the Safeco Life Insurance Company's Governmental Deferred Compensation Plan, as.modified by the Township, attached hereto as Exhibit E. SECTION 4: That the Township Supervisor shall be the coordinator for the deferred compensation program and shall receive necessary reports, notices, etc., from both ICMA Retirement Corporation and Safeco Life Insurance Company and shall cast, on behalf of the Township, any required votes under the programs. Administrative duties to carry out the plans may be assigned to the appropriate departments. SECTION 5: This resolution shall be in full force and effect from and after its passage and approval in the manner provided by law. ATTEST: "-�_ > • 'e� 0 L� City Clerk Adopted: z� 1983 r _ 2._ ti #% 041 id v I/ 1 lost • ("EMPLOYER") DEFERRED COMPENSATION PLAN I. INTRODUCTION The Employer hereby establishes the Employer's Deferred Compensation Plan. hereinafter referred to as the "Plan." The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer in accordance with the provisions of section 457 of the Internal Revenue Code of 1954, as amended. This Plan shall be an agreement solely between the Employer and participating Employees. If. DEFINITIONS 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Participant's Deferred Compensation, including any income, • gains. losses, or increases or decreases in market value attributable to the Employer's investment of the Participant's Deferred Compensation, and further reflecting any distribu- tions to the Participant or the Participant's Beneficiary and any tees or expenses charged against such Participant's Deferred Compensation. 2.02 Administrator: The person or persons named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days advance notice in writing to such person, in which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days advance notice in writing to the Employer, in which the case the Employer shall name another person or persons to act as Administrator. 2.03 Beneficiary: The person or persons designated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. 2.04 Deferred Compensation: The amount of Normal Compensa- tion otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under Section 6.03, or any other amount which the Employer agrees to credit to a Participant's Account. 2.05 Employee: Any individual who provides services for the Employer whether as an employee of the Employer or as an independent contractor. and who has been designated by the Empicyer as eligible to participate in the Plan. 2.06 Includible Compensation: The amount of an Employee's comoer,sation from the Employer for a taxable year that is • atirioutable to services performed for the Employer and that is includible in the Employees gross income for the taxable year for federal income tax purposes: such term does not include any amount excludablefrom gross incomeunderthis Plan or any other plan described in section 457(b) of the Internal Revenue Code, any amount excludable from gross income under section 403(b) of the Internal Revenue Code, or any other amount excludable from gross income for federal income tax purposes. Includible Compensation shall be determined without regard to any community property laws. 2.07 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a preference among the investment alternatives designated by the Employer, designate the Employee's Beneficiary or Beneficiaries, and incorporate the terms, conditions, and provisions of the Plan by reference. 2.08 Normal Compensation: The amount of compensation which would be payable to a Participant by the Employer for a taxable year if no Joinder Agreement were in effect to defer compensation under this Plan. 2.09 Normal Retirement Age: Age 70, unless the Participant has elected an alternate Normal Retirement Age by written instrument delivered to the Administrator prior to Separation from Service. A Participant's Normal Retirement Age determines (a) the latest time when benefits may commence under this Plan (unless the Participant continues employ- ment after Normal Retirement Age), and (b) the period during which a Participant may utilize the catch-up limitation of Section 5.02 hereunder. Once a Participant has to any extent utilized the catch-up limitation of Section 5.02, his Normal Retirement Age may not be changed. A Participant's alternate Normal Retirement Age may not be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits under the Employer's basic retirement plan covering the Participant and may not be later than the date the Participant attains age 70. If a Participant continues employment after attaining age 70, not having previously elected an alternate Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age. if any, established by the Employer, or the age at which the Participant actually separates from service if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan maintained by the Employer, the Participant's alternate Normal Retirement Age may not be earlier than attainment of age 55 and may not be later than attainment of age 70. 2.10 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article IV. 2.11 Plan Year: The calendar year. 2.12 Retirement: The first date upon which both of the following shall ,have occurred with respect to a Participant: Separation from Service and attainment of Normal Retirement Age. 2.13 Separation from Service: Severance of the Participant's • employment with the Employer. A Participant shall be deemed to have severed his employment with the Employer for purposes of this Plan when, in accordance with the established practices of the Employer, the employment relationship is considered to have actually terminated In the case of a Participant who is an independent contractor of the Employer. Separation from Service shall be deemed to have occurred when the Participant's contract under which services are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Participant's services, and it is not anticipated that the Participant will become an Employee of the Employer. Ill. ADMINISTRATION 3.01 Duties of Employer. The Employer shall have the authority to make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan. 3.02 Duties of Administrator: The Administrator, as agent for the Employer. shall perform nondiscretionary administrative functions in connection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. IV. PARTICIPATION IN THE PLAN 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned. 40.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of compensation not yet earned which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restric- tions as may result from the nature or terms of any investment made by the Employer). Such amendment shall become effective as of the beginning of the calendar month commencing after the date the amendment is executed. A Participant may at any time amend his Joinder Agreement to change the designated Beneficiary and such amendment shall become effective immediately. V. LIMITATIONS ON DEFERRALS 5.01 Normal Limitation: Except as provided in Section 5.02. the maximum amount of Deferred Compensation for any Far;;c:cart for any taxable year shall not exceed the lesser of 57.500.00 or 33 1/3 percent of the Participant's Includible Compensation for the taxable year. This limitation will ordinarily be equivalent to the lesser of $7.500.00 or 25 percent of the Participant's Normal Compensation. 5.02 Catch-up Limitation: For each of the last three (3) taxable years of a Participant ending before his attainment of Normal Retirement Age, the maximum amount of Deferred Comc_nsanon shall be the lesser of: (1) 515,000 or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) that pgrt;cn of the Normal Limitation for each of the prior taxable years of the Participant commencing after 1978 curing v.n!on the Plan was in existence and the Participant was e,icic _ to participate in the Plan (or in any other plan establi=_rec under section 457 of the Internal Revenue Code by ah emcioyer within the same State as the Employer) less •the amount of Deferred Compensation for each such prior taxaoi= year tincluoing amounts deferred under such other plan). For purposes of this Section 5.02, a Participant's Includible Compensation for the current taxable year shall be deemed to include any Deferred Compensation for the taxable year in excess of the amount permitted under the Normal Limitation, and the Participant's Includible Compen- sation for any prior taxable year shall be deemed to exclude any amount that could have been deferred under the Normal Limitation for such prior taxable year. 5.03 Section 403(b) Annuities: For purposes of Sections 5.01 and 5.02, amounts contributed by the Employer on behalf of a Participant for the purchase of an annuity contract described in section 403(b) of the Internal Revenue Code shall be treated as if such amounts constituted Deferred Compensa- tion under this Plan for the taxable year in which the contribution was made and shall thereby reduce the maximum amount that maybe deferred for such taxable year. VI. INVESTMENTS AND ACCOUNT VALUES 6.01 Investment of Deferred Compensation: All investments of Participants' Deferred Compensation made by the Employer, including all property and rights purchased with such amounts and all income attributable thereto, shall be the sole property of the Employer and shall not be held in trust for Participants or as collateral security for the fulfillment of the Employer's obligations under the Plan. Such property shall be subject to the claims of general creditors of the Employer, and no Participant or Beneficiary shall have any vested interest or secured or preferred position with respect to such property or have any claim against the Employer except as a general creditor. 6.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the investments or other property obtained by the Employer through the investment of the Participant's Deferred Compensation. It is anticipated that the Employer's investments with respect to a Participant will conform to the investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be construed to require the Employer to make any particular investment of a Participant's Deferred Compensation. Each Participant shall receive periodic reports, not less frequently than annually, showing the then -current value of his Account. 6.03 Acceptance of Transfers: Pursuant to an appropriate written agreement, the Employer may accept and credit to a Participant's Account amounts transferred from an employer within the same State representing amounts held by such other employer under an eligible State deferred compensation plan described in section 457 of the Internal Revenue Code. Any such transferred amount shall not be treated as a deferral subject to the limitations of Article V, provided however, that the actual amount of any deferral under the plan from which the transfer is made shall be taken into account in computing the catch-up limitation under Section 5.02, 6.04 Employer Liability: In no event shall the Employer's liability to pay benefits to a Participant under Article VI exceed the value of the amounts credited to the Participants Account: the Employer shall not be liable for losses arising from depreciation or shrinkage in the value of any investments acquired under this Plan. VII. BENEFITS 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article VII, the distribution of a Participant's Account shall commence during the second calendar month after the close of the Plan Year of the Participant's Retirement, and the distribution of such Retirement benefits shall be made in accordance with one of the payment options described in Section 7.02. Notwithstanding the foregoing, the Participant may irrevo- cably elect within 60 days following Separation from Service to have the distribution of benefits commence on adate other than that described in the preceding sentence which is at least 60 days after the date such election is delivered in writing to the Employer and forwarded to the Administrator • but not later than 60 days after the close of the Plan Year of the Participant's Retirement. 7.02 Payment Options: As provided in Sections 7.01, 7.05 and 7.06, a Participant may elect to have the value of his Account distributed in accordance with one of the following payment options, provided that such option is consistent with the limitations set forth in Section 7.03: (a) Equal. monthly, quarterly, semi-annual or annual payments in an amount chosen by the Participant, continuing until his Account is exhausted: (b) One lump sum payment (c) Approximately equal monthly, quarterly, semi-annual or annual payments, calculated to continue for a period certain chosen by the Participant: (d) Payments equal to payments made by the issuer of a retirement annuity policy acquired by the Employer: (e) Any other payment option elected by the Participant and agreed to by the Employer. A Participant's election of a payment option must be made at least 30 days before the payment of benefits is to commence. If a Participant fails to make a timely election of a payment option, benefits shall be paid monthly under option (c) above for a period of five years. 7.03 Limitation on Options: No payment option may be selected by the Participant under Section 7.02 unless the present value of the payments to the Participant, determined as of the date benefits commence, exceeds 50 percent of the value of the Participant's Account as of the date benefits commence. Present value determinations under this Section shall be made by the Administrator in accordance with the expected • return multiples set forth in section 1.72-9 of the Federal Income Tax Regulations (or any successor provision to such regulations). 7.04 Post -retirement Death Benefits: Should the Participant die after he has begun to receive benefits under a payment option, the remaining payments, if any, under the payment option shall be payable to the Participant's Beneficiary commencing within 60 days after the Administrator receives proof of the Participant's death, unless the Beneficiary elects payment under a different payment option at least 30 days prior to the date that the first payment becomes payable to the Beneficiary. In no event shall the Employer or Administrator be liable to the Beneficiary for the amount of any payment made in the name of the Participant before the Administrator receives proof of death of the Participant. Notwithstanding the foregoing, payments to a Beneficiary shall not extend over a period longer than (i) the Beneficiary's life expectancy if the Beneficiary is the Participant's spouse or (ii) fifteen (15) years if the Beneficiary is not the Participant s spouse. If no Beneficiary is designated in the Joinder Agreement, or if the designated Beneficiary does not survive the Participant for a period of fifteen (15) days. then the commuted value of any remaining payments under the payment option shall be paid in a lump sum to the estate of the Participant. If the designated Beneficiary survives the Participant for a period of fifteen (15) days, but does not continue to live for the remaining period of payments under the payment option (as modified, if necessary, in conformity v.ith the third sentence of this section), then the commuted value of any remaining payments under the payment option shall be paid in a lump sum to the estate of the Beneficiary. 7.05 Pre -retirement Death Benefits: Should the Participant die is before he has begun to receive the benefits provided by Sections 7.01 or 7.06, a death benefit equal to the value of the Participant's Account shall be payable to the Beneficiary commencing no later than 60 days after the close of the Plan Year in which the Participant would have attained Normal Retirement Age. Such death benefit shall be paid in a lump sum unless the Beneficiary elects a different payment option within 90 days of the Participant's death. A Beneficiary who may elect a payment option pursuant to the provisions of the preceding sentence shall be•treated as if he were a Participant for purposes of determining the payment options available under Section 7.02; provided, however, that the payment option chosen by the Beneficiary must provide for payments to the Beneficiary over a period no longer than the life expectancy of the Beneficiary if the Beneficiary is the Participant's spouse and must provide for payments over a period not in excess of fifteen (15) years if the Beneficiary is not the Participant's spouse. 7.06 Disability: In the event a Participant becomes disabled before the commencement of Retirement benefits under Section 7.01, the Participant may elect to commence benefits under one of the payment options described in Section 7.02 on the last day of the month following a determinatior of disability by the Employer. The Participant's request for such determination must be made within a reasonable time after the impairment which constitutes the disability occurs. A Participant shall be considered disabled for purposes of this Plan if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or be of long -continued and indefinite duration. The disability of any Participant shall be determined in accordance with uniform principles consistently applied and upon the basis of such medical evidence ,as the Employer deems necessary and desirable. 7.07 Unforeseeable Emergencies: In the event an unforeseeable emergency occurs, a Participant may apply to the Employer to receive that part of the value of his account that is reasonably needed to satisfy the emergency need. If such an application is approved by the Employer, the Participant shall be paid only such amount as the Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself causesevere financial hardship. An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in section 152(a) of the Internal Revenue Code) of the Participant, loss of the Participant's property due to casualty, or other similar and extraordinary unforeseeable circum- stances arising as a result of events beyond the control of the Participant. The need to send a Participant's child to college or to purchase a new home shall not be considered unforeseeable emergencies. The determination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. Vill. NON -ASSIGNABILITY No Participant or Beneficiary shall have any right to commute. sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and nor, transferable. IX. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS This Plan serves in addition to any other retirement, pension, or benefit plan or system presently in existence or hereinafter established for the benefit of the Employer's employees. and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed 'to constitute an employment contract or agreement between any Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer. •Nor shall anything herein be construed to modify the t9rms of any employment contract or agreement between a Participant and the Employer. X. AMENDMENT OR TERMINATION OF PLAN The Employer may at any time amend this Plan provided that it transmits such amendment in writing to the Administrator at least 30 days prior to the effective date of the amendment. The consent of the Administrator shall not be required in order for such amendment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder if it disapproves of such amendment. The Employer may at any time terminate this Plan. The Administrator may at any time propose an amendment to the Plan by an instrument in writing transmitted to the Employer at least. 30 days before the effective date of the amendment. Such amendment shall become effective unless, within such 30-day • period, the Employer notifies the Administrator in writing that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the - Administrator shall be under no obligation to continue acting as Administrator hereunder. No amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation deferred before the date of the amendment or termination. XI. APPLICABLE LAW This Plan shall be construed under the laws of the state where the Employer is located and is established with the ;ntent that it meet the requirements of an "eligible State deferred compensation plan" under section 457 of the Internal Revenue Code of 1954, as amended. The provisions of this Plan shall be interpreted wherever possible in conformity with the requirements of that section. XII. GENDER AND NUMBER The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shah include the plural, except where the context requires otherwise. EXH /a/ T & GENERAL RULES FOR SAFECO LIFE INSURANCE COMPANY GOVERNMENTAL DEFERRED SAFECO PLAZA SEATTLE, WASHINGTON 98185 SAFECOCOMPENSATION PLANS ELIGIBLE: STATE AND LOCAL GOVERNMENTS (including a political subdivision, agency or instrumentality thereof), or a rural electrical cooperative that is tax exempt under Code Sec. 501(c)(12), or Code Sec. 501(cN6). STATE & LOCAL GOVERNMENTAL BODIES (Those NOT eligible for TSA's) Employees can defer annually up to 33-1 /3% of Includable Compensation (25% of Gross Income) or $7,500, whichever is less. The Plan must comply with all regulations by January 1, 1982, but will be considered qualified if it is administered under these rules in the interim. The plan must provide that compensation will be deferred for any month after the agreement to defer (Salary Reduction Agreement) has been signed. The compensation that is deferred, plus all earnings will remain the property of the Employer (State, City, etc.) until available for pay -out at the occasion of separation from service, Retirement, Death, Disability, or Unforseeable Emergency (as determined by Treasury Regs.). Special Catch Up Rules — People close to retirement may use higher deduction limits for the last three years before retirement age. These are the Lesser of: $15,000, or the employee's ceiling for the current year plus any unused ceiling from previous years. This calculation has to be done for each year separately. Employees who participate in more than one plan are subject to an overall 25% or $7,500 limit. Independent contractors who perform services for the state or local government are considered to have Eligible Compensation from that government. • STATE & LOCAL GOVERNMENTAL BODIES (who ALSO qualify for TSA's) Must meet all the above requirements PLUS the TSA plan will be considered as part of the $7,500 or 25% of compensation. This effectively puts a ceiling on TSA's if they participate in both TSA and Deferred Compensation Plans. Also, in calculating the TSA Exclusion Allowance, you must include compensation deferred in prior years. If the person participates only in the TSA, only the TSA rules will apply. PRIVATE TAX-EXEMPT CORPORATIONS (Those not eligible for TSA's) The 1978 Revenue Act does not specifically include or exclude them in the section of the Act that deals with state or local plans; however, it does specifically Exclude them from the section dealing with private Deferred Compensation Plans. Therefore, such plans may eventually be eligible, and it is our opinion that these corporations should not attempt to set up Deferred Compensation Plans until regulations are published. ADMINISTRATION OF GOVERNMENTAL DEFERRED COMPENSATION PLANS Governmental Plans are not, at this time, subject to the reporting and disclosure requirements of ERISA. However, they must file a completed 550OG with IRS annually by the end of the seventh month after the close of the plan year. SAFECO will not be responsible for the filing of this form. We will, however, provide the information necessary to complete the 550OG and furnish the 1099R or W2P report form for distributions made from the plan. SAFECO Life Insurance Company will offer Qualified Pension Annuities for use in State and Local Deferred Compensation Plans. This product is ideal for these plans since it will automatically allocate the correct earnings to each individual participating in the plan. • • 0 ESTABLISHING THE PLAN 1. The Employer must draft a plan, stating the provisions as required by law. A "Specimen Deferred Compensa- tion" plan, (LPS-91), is provided to assist the employers legal counsel in establishing the criteria required by law. Since SAFECO is not administering the plan, we do not require a copy of the plan. We are providing an investment vehicle for the Employer. 2. The Employer must sign the appropriate Qualified Pension Annuity application Series-3 (LPC-27) Series-4 (LPC-30). 3. The Employer should "announce" the plan to the employees in writing. 4. The Employer should complete the Transmittal Form LP-355 to notify SAFECO as to billing modes, authorized persons and their signatures. ADMINISTRATION OF THE -PLAN Duties of Plan Administrator SAFECO's Services and Fee Direct Participant to complete an LP-388 author- ization and forward three copies to SAFECO. One copy will be returned to the Participant with the CPA Certificate. This form can be used by the Employer as the Salary Reduction Agreement; and in that case the Employer keeps the last copy of this form. In many cases the Employer will want a separate Salary Reduction Agreement and form LPS-53 is provided as a Specimen for review with their legal counsel. If the separate form is used, SAFECO does not need a copy of it. 2. The Administrator will forward payroll reduction amounts to SAFECO. 3. Distribute Summary Plan Description prepared by the Employer. 4, In order to change beneficiaries or address, the participant should sign a new LP-388 indicating the change. 1. The Administration fee is $15 per participant at issuance and $15 each anniversary thereafter. SAFECO will establish an individual account for each participant that will provide the Employer with the exact information as to deposits, with- drawals, interest earned to date and total account value. In addition, we will provide the Employer with monthly billings, if desired. 2. SAFECO will allocate the deposits to participant's accounts and provide confirmation of each trans- action. 3. SAFECO will assist the Employer to prepare the Summary Plan Description. 4. SAFECO will change the records to show the new beneficiary or address. 5. For a change of contribution the employer need not 5. SAFECO will change the subsequent billings. file a new document with SAFECO. The Adminis- trator should change the amount on the current billing. 6. File a completed 550OG with IRS annually 7. Request Distributions. 6. SAFECO will supply the information necessary to complete the 5500G. 7. SAFECO will process distribution and furnish the 1099R or W2P report form for any distributions made from the plan. IN DISTRIBUTION OPTIONS Distributions will be processed at the direction of the Administrators and should be requested in writing. No specific form is necessary but we have provided form LP-369 for ease of administration. Since many participants may not want, or need, a fixed annuity at time of distribution, the pension annuities will automatically provide the following options. Most, if not all of these options will be permissable under the Plan and any disbursement request should indicate which option is being utilized. 1. An immediate annuity may be in one of the forms below, or other form as offered by SAFECO. The participant's account may be converted to an annuity at the guaranteed annuity purchase rates of the contract, or at SAFECO's current annuity purchase rate if more favorable for the participant. When an account is converted to an immediate annuity with SAFECO, all distribution charges are waived. a. Straight Life — Monthly income guaranteed for the life of the annuitant. b. Life with Period Certain — Monthly income guaranteed for the life of the annuitant, but guaranteed to be no less than a certain period of time (such as 5 or 10 years). c. Joint and Survivor — Monthly income guaranteed for the lifetime of two annuitants. This annuity form is also available with a guaranteed certain period of time. 2. SAFECO's Pension Annuities allow the participant to elect a systematic withdrawal option in lieu of a guaranteed annuity option. In many cases this sytematic withdrawal can be more advantageous to the individual depending on the circumstances at the time of retirement. The key note is flexibility; the decision is made at the time when the need arises. • 3. SAFECO's Pension Annuities allow lump sum withdrawals and also allow the individual to transfer the lump sum to any other company who may provide annuity payments. For instance; someone desirous of having a straight life or variable annuity may find out the " XYZ Insurance Company" has extremely competitive rates for these annuities at the time when the purchase is being made. 4. SAFECO's Pension Annuities allow the participant to defer the decision regarding the type of payout that will be selected until actual retirement. It is unnecessary, and inappropriate, to make an election between the various options until the person reaches retirement age and knows what the personal situation is at that time. For example, a single person may have no need for a joint and survivor annuity. 5. SAFECO's Pension Annuities can be set up to allow the participant to start withdrawals at any time in the future without restrictions, OR the Administrator or Plan may restrict the withdrawals to begin only at the Normal Retirement age, as stated in the Plan. Whichever option is chosen, the participant could always elect to defer the withdrawal until a later date, for example, if the person was still employed at 65 and wished to wait until 70 to start receiving this annuity. If any deferred pay -out under SAFECO's Pension Annuities is selected, the account will continue to earn interest, until such payout is completed. tee. n � a� ♦ a �..c E ARTICLE I. Name and Definitions DECLARATION OF TRUST of ICMA RETIREMENT TRUST SECTION 1.1. Name. The Name of the Trust created hereby is the ICMA Retirement Trust. SECTION 1.2. Definitions. Wherever they are used herein, the following terms shall have the following respective meanings: (a) By -Laws. The By -Laws referred to in Section 4.1 hereof, as amended from time to time. (b) Deferred Compensation Plan. A deferred compensation plan established and maintained by a Public Employer for the purpose of providing retirement income and other deferred benefits to its employees in accordance with the provisions of section 457 of the Internal Revenue Code of 1954. as amended. (c) Guaranteed Investment Contract. A contract entered into by the Retirement Trust with insurance companies that provides for a guaranteed rate of return on investments made pursuant to such contract. (d) ICMA. The International City Management Association. (e) ICMA/'RC Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of -Section 3.1(a) hereof, are also members of the Board of Directors of ICMA isor RC. (f) Investment Adviser. The Investment Adviser that enters into a contract with the Retirement Trust to provide advice with respect to investment of the Trust Property. (g) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer for the purpose of investing and administering the funds set aside by such employer in connection with its deferred compensation agreements with its employees. (h) Portfolios. The Portfolios of investments established by the Investment Adviser to the Retirement Trust, under the supervision of the Trustees, for the purpose of providing investments for the Trust Property. (i) Public Employee Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of Section 3.1(a) hereof, are full-time employees of Public Employers. (I) Public Employer. A unit of state or local government. or any agency or instrumentality thereof, that has adopted a Deferred Compensation Plan and has executed this Declaration of Trust. (k) RC. The International City Management Association Retirement Corporation. (1) Retirement Trust. The Trust created by this Declaration of Trust. (m) Trust Property The amounts held in the Retirement Trust on behalf of the Public Employers. The Trust Property shall include any income resulting from the investment of the amounts so held. (n) Trustees The Public Employee Trustees and ICMA;RC Trustees erected by the Public Employers to serve as members of .1he Board of Trustees of the Retirement Trust. ARTICLE II. Creation and Purpose of the Trust; Ownership of Trust Property SECTION 2.1. Creation. The Retirement Trust is created and established by the execution of this Declaration of Trust by the Trustees and the participating Public Employers. SECTION 2.2. Purpose. The purpose of the Retirement Trust is to provide for the commingled investment of funds held by the Public Employers in connection with their Deferred Compensation Plans. The Trust Property shall be invested in the Portfolios, in Guaranteed Investment Contracts and in other investments recommended by the Investment Adviser under the supervision of the Board of Trustees. SECTION 2.3 Ownership of Trust Property. The Trustees shall have legal title to the Trust Property. The Public Employers shall be the beneficial owners of the Trust Property. ARTICLE 111. Trustees SECTION 3.1. Number and Qualification of Trustees. (a) The Board of Trustees shall consist of nine Trustees. Five of the Trustees shall be full-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The remaining four Trustees shall consist of two persons who, at the time of election to the Board of Trustees, are members of the Board of Directors of ICMA and two persons who. at the time of election. are members of the Board of Directors of RC (the ICMA/RC Trustees) One of the Trustees who is a director of ICMA. and one of the Trustees who is a director of RC, shall, at the time of election. be full-time employees of a Public Employer. (b) No person may serve as a Trustee for more than one term in any ten-year period. SECTION 3.2. Election and Term. (a) Except for the Trustees appointed to fill vacancies pursuant to Section 3.5 hereof. the Trustees shall be elected by a vote of a majority of the Public Employers in accordance with the procedures set forth in the By -Laws. (b) At the first election of Trustees. three Trustees shall be elected for a term of three years. three Trustees shall be elected for a term of two years and three Trustees shall be elected for a . term of one year. At each subsequent election, three Trustees shall be elected for a term of three years and until his or her successor is elected and qualified. SECTION 3.3. Nominations. The Trustees who are full-time employees of Public Employers shall serve as the Nominating Committee for the Public Employee Trustees. The Nominating Committee shall choose candidates for Public Employee Trustees in accordance with the procedures set forth in the By-laws. SECTION 3.4. Resignation and Removal. (a) Any Trustee may resign as Trustee (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the other Trustees arc such resignation shall be effective upon such delivery. or at a later date according �KtF 1 >-r C. to the terms of the instrument. Any of the Trustees may be removed 'for cause, by a vote of a majority of the Public Employers. (b) Each Public Employee Trustee shall resign his or her position as Trustee within sixty days of the date on which he or she ceases to be a full-time employee of a Public Employer. SECTION 3.5. Vacancies. The term of office of a Trustee shall terminate and a vacancy shall occur in the event of the death, resignation, removal, adjudicated incompetence or other incapacity to perform the duties of the office of a Trustee. in the case of a vacancy, the remaining Trustees shall appoint such person as they in their discretion shall see fit (subject to the limitations set forth in this Section), to serve for the unexpired portion of the term of the Trustee who has resigned or otherwise ceased to be a Trustee. The appointment shall be made by a written instrument signed by a majority of the Trustees. The person appointed must be the same type of Trustee (i.e., Public Employee Trustee or ICMAiRC Trustee) as the person who has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation of a vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not becomeeffective prior to such retirement or resignation. Whenever a vacancy in the number of Trustees shall occur, until such vacancy is filled as provided in this Section 3.5. the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration. A written instrument certifying the existence of such vacancy signed by a majority of the Trustees shall be conclusive evidence of the existence of such vacancy. SECTION 3.6. Trustees Serve in Representative Capacity. By executing this Declaration, each Public Employer agrees that the Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collectively. ARTICLE IV. Powers of Trustees SECT ION 4.1. General Powers. The Trustees shall have, the power to concoct the business of the Trust and to carry on its operations. Such pc%her shalt include, out shall not be limited to, the power to: • (a) receive the Trust Property from the Public Employers or from a Trustee of any Employer Trust; (b) enter into a contract with an Investment Adviser providing, among other things, for the establishment and operation of the Portfolios, selection of the Guaranteed Investment Contracts in which the Trust Property may be invested, selection of other investments forthe Trust Property and the payment of reasonable .fees to the Investment Adviser and to any sub -investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contract with such Investment Adviser; (d) invest and reinvest the Trust Property in the Portfolios, the Guaranteed Investment Contracts and in any other investment recommended by the Investment Adviser, provided that if a Pubiic Employer has directed that its monies be invested in specified Portfolios or in a Guaranteed Investment Contract, the Trustees of the Retirement Trust shall invest such monies in accorean.ce witn such directions: (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in the best interest of the Retirement Trust created hereby, without liability for interest thereon; (f) accept and retain for such time as they may deem advisable any securities or other property received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased as investments here- under; (g) cause any securities or other property held as part of the Trust Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to hold any investments in •bearer form. but the books and records of the Trustees shall at all times show that all such investments are a part of the Trust Property; (h) make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) vote upon any stock, bonds, or other securities; give general or special proxies or powers of attorney with or without power of substitution; exercise any conversion privileges, subscription rights, or other options, and make any payments incidental thereto; oppose, or consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and delegate discretionary powers, and pay any assessments or charges in connection therewith: and generally exercise any of the powers of an owner with respect to stocks; bonds, securities or other property held as part of the Trust Property; (j) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contracts for the provision of administrative -services; (k) borrow or raise money for the purpose of the Retirement Trust in such amount, and upon such terms and conditions, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30% of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety of any such borrowing; (1) incur reasonable expenses as required for the operation of the Retirement Trust and deduct such expenses from the Trust Property; (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans or the Employer Trusts and deduct such expenses from that portion of the Trust Property beneficially owned by the Public Employer to whom such expenses are properly allocable; (n) pay out of the Trust Property all real and personal property taxes, income taxes and other taxes of any and all kinds which, in the opinion of the Trustees, are properly levied, or assessed under existing or future laws upon, or in respect of, the Trust Property and allocate any such taxes to the appropriate accounts; (o) adopt, amend and repeal the By -Laws, provided that such By - Laws are at all times consistent with the terms of this Declaration of Trust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a deferred ccmpensation plan under section 457 of the Internal Revenue Code, as amended; (q) issue the Annual Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) make loans, including the purchase of debt obligations, provided that all such loans shall bear interest at the current market rate; (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set forth in paragraphs (b), (c) and (o) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indemnification of the officers and Trustees of the Retirement Trust and purchase fiduciary insurance; (u) maintain books and records, including separate accounts for each Public Employer or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation Plan of each Public Employer; and (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mentioned •herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. SECTION 4.2. Distribution of Trust Property. Distributions of the Trust Property shall be made to, or on behalf of, the Public Employer, in accordance with the terms of the Deferred Compensation Plans or Employer Trusts. The Trustees of the Retirement Trust shall be fully protected in making payments in accordance with the directions of the Public Employers or the Trustees of the Employer Trusts without ascertaining whetner such payments are in compliance with the provisions of the Deferred Compensation Plans or the agreements creating the Employer Trusts. SECTION 4.3. Execution of Instruments. The Trustees.* may unanimously designate any one or more of the Trustees to execute any instrument or document on behalf of all, including but not limited to the signing or endorsement of any check and the signing of any applications, insurance and other contracts, and the action of such designated Trustee or Trustees shall have the same force and effect as if taken by all the Trustees. ARTICLE V. Duty of Care and Liability of Trustees SECTION 5.1. Duty of Care. In exercising the powers hereinbefore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits for the Public Employers, and shalt perform such acts with the care, skill, prudence and diligence in the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the concoct of an enterprise of a like character and with like aims. SECTION 5.2. Liability. The Trustees shall not be liable for any mistake of judgment or other action taken in good faith, and for any action taken or ornitted in reliance in good faith upon the books of account or other records of the Retirement Trust, upon the opinion of counsel. or upon reports made to the Retirement Trust by any of its Ors. emplovees or agents or by the Investment Adviser or any sub- tment adviser, accountants, appraisers or other experts or consul'ants selec!ed with reasonable care by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for any !oss sustained by the Trust Property by reason of any investment made in good faith and in accordance with the standard of care set forth in Section 5.1. 0 SECTION 5.3. Bond. No Trustee shall be obligated to give any bond or other security for the performance of any of his or her duties hereunder. ARTICLE VI. Annual Report to Shareholders The Trustees shall annually submit to the Public Employers a written report of the transactions of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees. ARTICLE VII. Duration or Amendment of Retirement Trust SECTION 7.1. Withdrawal. A Public Employer may, at anytime, with- draw from this Retirement Trust by delivering to the Board of Trustees a statement to that effect. The withdrawing Public Employer's beneficial interest in the Retirement Trust shall be paid out to the Public Employer or to the Trustee of the Employer Trust, as appropriate. SECTION 7.2. Duration. The Retirement Trust shall continue until terminated by the vote of a majority of the Public Employers, each casting one vote. Upon termination, all of the Trust Property shall be paid out to the Public Employers or the Trustees of the Employer Trusts, as appropriate. SECTION 7.3. Amendment. The Retirement Trust may be amended by the vote of a majority of the Public Employers. each casting one vote. SECTION 7.4. Procedure. A resolution to terminate or amend the Retirement Trust or to remove a Trustee shall be submitted to a vote of the Public Employers if: (a) a majority of the Trustees so direct, or (b) a petition requesting a vote, signed by not less than 25% of the Public Employers, is submitted to the Trustees. ARTICLE Vill. Miscellaneous SECTION 8.1. Governing Law. Except as otherwise required by state or local law. this Declaration of Trust and the Retirement Trust hereby created shall be construed and regulated by the laws of the District of Columbia. SECTION 8.2. Counterparts. This Declaration may be executed by the Public Employers and Trustees in two or more counterparts. each of which shall be deemed an original but all of which together shall constitute one and the same instrument. GR �ir!1� 9 • TRUST AGREEMENT WITH THE ICMA RETIREMENT CORPORATION AGREEMENT made by and between the Employer named in the attached resolution and the International City Management Association Retirement Corporation (hereinafter the "Trustee" or "Retirement Corporation"), a nonprofit corporation organized and existing under the laws of the State of Delaware. forthe purpose of investing and otherwise administering the funds set aside by Employers in connection with deferred compensation plans established under section 457 of the Internal Revenue Code of 1954 (the" Code"). This Agreement shall take effect upon acceptance by the Trustee of its appointment by the - Employer to serve as Trustee in accordance herewith as set forth in the attached resolution. WHEREAS. the Employer has established a deferred compensation plan under section 457 of the Code (the "Plan"); WHEREAS, in orcer that there will be sufficient funds available to discharge the Emclover s contractual obligations under the Plan, the Employer desires to set aside periodically amounts equal to the amount of compensation deferred: WHER E.AS, the fu nos set aside, together with any and all assets derived from the investment thereof, are to be exclusively within the dominion, control, and ownership of the Employer, and subject to the Employer's absolute right of withdrawal, no employees having any interest whatsoever therein: HEREFORE. this Agreement witnesseth that (a) the Employer a, Tomes to 'he Trustee to be placed in deferred compensation ac..cunts for the Er ployer (b) the Trustee covenants that it will hold said sums, and any other funds which it may receive hereunder, in trust for the uses anc purposes and upon the terms and conditions hereina,4-r state,,: and (c) the parties hereto agree as follows: ARTICLE 1. General Duties of the Parties. Section 1.1 General uuty of the Employer. The Employer shall make regular periodic payments equal to the amounts of its employees' compensa:icn v.` cn are deferred in accordance with the terms and conditions of the P!an to the extent that such amounts are to be invested under the Trust. Section 1.2. General Duties of the Trustee. The Trustee shall hold all funds receiver by it hereunder, which, together with the income therefrom. shall constitute the Trust Funds. It shall administer the Trust Funds, collect rcome thereof, and make payments therefrom, all as hereinafter provicec. The Trustee shall also hold all Trust Funds which are trars`e,red :r is as successor Trustee by the Employer from existing referred corn. ensa.ion arrangements with its Employees under plans described in =_ec:,cn 457 of the Code. Such Trust Funds shall be subject to all of the terms and, provisions of this Agreement. ARTICLE II. Powers and Duties of the Trustee in Investment, Administration, and Disbursement of the Trust Funds. Section 2.1. Investment Powers and Duties of the Trustee. The Trustee steal! gave 'he power to invest and reinvest the principal and income of the Trust Funcs and keep the Trust Funds invested, without distinction bet ue:- principal and income, in securities or in other property. real or personal. wherever situated, including, but not limited to, stocks. cc,=,^ n,. or preferred. bonds. retirement annuity and insurance co!.cies .mor:cages, and other evidences of indebtedness or ownersnlo. inves-,meet companies. common or group trust funds, or Isa:e and differ-nt tapes of funds (including equity, fixed income) fuifill requirements of state and local governmental laws, provided, however, that the Employer may direct investment by the Trustee among available investment alternatives in such proportions as the Employer authorizes in connection with its deferred compensation agreements with its employees. For these purposes, these Trust Funds may be commingled with Trust Funds set aside by other Employers pursuant to the terms of the ICMA Retirement Trust. Investment powers vested in the Trustee by the Section may be delegated by the Trustee to any bank, insurance or trust company, or any investment advisor, manager or agent selected by it. Section 2.2. Administrative Powers of the Trustee. The Trustee shall have the power in its discretion: (a) To purchase, or subscribe for, any securities or other property and to retain the same in trust. (b) To sell, exchange, convey, transfer or otherwise dispose of any securities or other property held by it, by private contract, or at public auction. No person dealing with the Trustee shall be bound to see the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition. (c) To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution: to exercise any conversion privileges, subscription rights. or other options, and to make any payments incidental thereto: to oppose, or to consent to. or otherwise participate in, corporate reorganizations or other changes affecting corporate securities. and to delegate discretionary powers, and to pay any assessments or charges in connection therewith: and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held as part of the Trust Funds. (d) To cause any securities or other property held as part of the Trust Funds to be registered in its own name, and to hold any investments in bearer form, but the books and records of the Trustee shall at'all times show that all such investments are a part of the Trust Funds. (e) To borrow or raise money for the purpose of the Trust in such amount, and upon such terms and conditions, as the Trustee shall deem advisable; and. for any sum so borrowed. to issue its promissory note as Trustee. and to secure the repayment thereof by pledging all, or any part. of the Trust Funds. No person lending money to the Trustee shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety of any such borrowing. (f) To keep such portion of the Trust Funds in cash or cash balances as the Trustee. from time to time, may deem to be in the best interest of the Trust created hereby, without liability for interest thereon. (g) To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investment hereunder. (h) To make. execute, acknowledge. and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein grantee. (i) To settle. compromise, or submit to arbitration any claims, •debts, or damages due or owing to or from the Trust Funds: to commence or defend suits or legal or administrative proceedings: and to represent the Trust Funds in all suits and legal and administrative proceedings. (I) To do all such acts. take all such proceedings, and exercise all such rights and privileges. although not specifically mentioned herein, as the Trustee may deem necessary to administer the Trust Funds and to carry out the purposes of this Trust. Section 2.3. Distributions from the Trust Funds. The Employer hereby appoints the Trustee as its. agent for the purpose of making distributions from the Trust Funds. In this regard the terms and conditions set forth in the Plan are to guide and control the Trustee's power. Section 2.4. Valuation of Trust Funds.. At least once a year as of Valuation Dates designated by the Trustee, the Trustee shall determine the value of the Trust Funds. Assets of the Trust Funds shall be valued at their market values at the close of business on the Valuation Date, or, in the absence of readily ascertainable market values as the Trustee shall determine, in accordance with methods consistently followed and uniformly applied. ARTICLE Ill. For Protection of Trustee. Section 3.1. Evidence of Action by Employer. The Trustee may rely upon any certificate, notice or direction purporting to have been signed on behalf of the Employer which the Trustee believes to have been signed by a duly designated official of the Employer. No communication shall be binding upon any of the Trust Funds or Trustee until they are received by the Trustee. Section 3.2. Advice of Counsel. The Trustee may consult with any legal counsel with respect to the construction of this Agreement, its duties hereunder, or any act. which it proposes to take or omit, and shall not be liable for any action taken or omitted in good faith pursuant to such advice. � tton 3.3. Miscellaneous. The Trustee shall use ordinary care and r_ nable diligence. but shall not be liable for any mistake of judgment or otner action taken in good faith. The Trustee shall not be iiable for any loss sustained by the Trust Funds by reasons of any investment made in good faith and in accordance with the provisions of this Agreement. The Trustees duties and obligations shall be limited to those expressly imposed upon it by this Agreement. ARTICLE IV. Taxes, Expenses and Compensation of Trustee. Section 4.1. Taxes. The Trustee shall deduct from and charge against the Trust Funds any taxes on the Trust Funds or the income thereof or which the Trustee is required to pay with respect to the interest of any person therein. Section 4.2. Expenses. The Trustee shall deduct from and charge against the Trust Funds all reasonable expenses incurred by the Trustee in the administration of the Trust Funds, including counsel, agency, investment advisory. and other necessary fees. ARTICLE V. Settlement of Accounts. The Trustee shall keep accurate and oetaited accounts of all investments, receipts, disbursements, and otner transactions hereunder. Within ninety (90) days after the close of each fiscal year, the Trustee shall render in duplicate to the Employer an account of its acts and transactions as Trustee hereunder. If any part of the Trust Fund shall be invested through the medium of any common, collective or commingled Trust Funds, the last annual report of such Trust Funds shall be submitted with and incorporated in the account. If within ninety t9J) days after the mailing of the account or any amended account the Employer has not filed with the Trustee notice of any objection to any act or transaction of the Trustee, the account or amenced account snail become an account stated. If any objection has been Bled. ano if the Employer is satisfied that it should be withdrawn or i`'he account is aclusted to the Employer's satisfaction, the Employer s`,Obecome writing`ileCwith the Trustee signifyapprovalofthe account and it an account stated. When an account becomes an account stated, such account shall be finally settled, and the Trustee shall be completely discharged and released, as if such account had beensettled and allowed by a judgment or decree of a court of competent jurisdiction in an action or proceeding in which the Trustee and the Employer were parties. The Trustee shall have the right to apply at any time to a court of competent jurisdiction for the judicial settlement of its account. ARTICLE VI. Resignation and Removal of Trustee. Section 6.1. Resignation of Trustee. The Trustee may resign at any time by filing with the Employer its written resignation. Such resignation shall take effect sixty (60) days from the date of such filing and upon appointment of a successorpursuant to Section 6.3., whichever shall first occur. Section 6.2. Removal of Trustee. The Employer may remove the Trustee at any time by delivering to the Trustee a written notice of its removal and an appointment of a successor pursuant to Section 6.3. Such removal shall not take effect prior to sixty (60) days from such delivery unless the Trustee agrees to an earlier effective date. Section 6.3. Appointment of Successor Trustee. The appointment of a successor to the Trustee shall take effect upon the delivery to the Trustee of (a) an instrument in writing executed by the Employer appointing such successor, and exonerating such successor from liability for the acts and omissions of its predecessor, and (b) an acceptance in writing, executed by such successor. All of the provisions set forth herein with respect to the Trustee shall relate to each successor with the same force and effect as if such successor had been originally named as Trustee hereunder. If a successor is not appointed with sixty (60) days after the Trustee gives notice of its resignation pursuant to Section6.1., the Trustee may apply to any court of competent jurisdiction for appointment of a successor. Section 6.4. Transfer of Funds to Successor. Upon the resignation or removal of the Trustee and appointment of a successor, and after the final account of the Trustee has been properly settled, the Trustee shall transfer and deliver any of the Trust Funds involved to such successor. ARTICLE VII. Duration and Revocation of Trust Agreement. Section 7.1. Duration and Revocation. This Trust shall continue for such time as may be necessary to accomplish the purpose for which it was created but may be terminated or revoked at any time by the Employer as it relates to any and for all related participating Employees. Written notice of such termination or revocation shall be given to the Trustee by the Employer. Upon termination or revocation of the Trust, all of the assets thereof shall return to and revert to the Employer. Termination of this Trust shall not, however, relieve the Employer of the Employer's continuing obligation to pay deferred compensation to Employees in accordance with the terms of the Plan. Section 7.2. Amendment. The Employer shall have the right to amend this Agreement in whole and in part but only with the Trustee's written consent. Any such amendment shall become effective upon (a) delivery to the Trustee of a written instrument of amendment. and (b) the endorsement by the Trustee on such instrument of its consent thereto. ARTICLE Vlll. Miscellaneous. Section 8.1. Laws of the District of Columbia to Govern. This Agreement and the Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section 8.2. Successor Employers. The 'Employer" shall include any person who succeeds the Employer and who thereby becomes subject to the obligations of the Employer under the Plan. Section 8.3. Withdrawals. The Employer may, at any time, and from time to time, withdraw a portion or all of Trust Funds created by this Agreement. Section 8.4. Gender and Number. The masculine includes the feminine and the singular includes the plural unless the context requires another meaning. • GOVERNMENTAL DEFERRED COMPENSATION PLAN They , hereby establishes the (Employer) Employees Deferred Compensation Plan, (hereinafter called "The Plan") . The Plan consists of the provisions set forth in this document, and is applicable to each employee who participates in The Plan. The Plan is effective as to each such employee upon the date a Participation Authorization/Salary Reduction Agreement is signed. ARTICLE Definitions 1.01. A definition of words and terms used in this Plan is attached, entitled Exhibit "A" and by this reference is made a part of The Plan. ARTICLE II Election to Defer Unearned Compensation 2.01. Upon signing the Participation Authorization/Salary Reduction Agreement, the PARTICIPANT elects to participate in this Plan and consents to a deferral of the amount specified in the Participation Authorization/Salary Reduction Agreement from the PARTICIPANT'S gross compensation for each (month, pay periods) The minimum dollar amount deferred shall not be less than per month. The maximum dollar amount deferred for any taxable year shall not be more than the lesser of: 33 1/3% of includable compensation (25% of Gross Compensation), or $7,500. Includable compensation is the amount currently includable in a PARTICIPANT'S income after subtracting the exclusion under this Plan and deferrals under Sec. 403(b) plans. The following higher deduction limits may apply to any = Page 2 of the last three years before Normal Retirement age; the lesser of $15,000, or the PARTICIPANT'S ceiling for the current year plus any unused ceiling from prior taxable years of PARTICIPANT commencing after January 1, 1979. 2.02. The PARTICIPANT may revoke the election to participate and may amend the amount of compensation to be deferred by signing.and filing with the ADMINISTRATOR a written revocation or amendment, on a form approved by the ADMINISTRATOR. Any such revocation or amendment shall be effective prospectively only, beginning with the first pay period commencing on or after the next following and must be completed and filed (month, pay period) with the ADMINISTRATOR at least '-'- days prior to the effective date. 2.03. (a) When The Plan is first made available, the employee shall have days.from the date participation in The Plan is offered to effect an election to participate. Such election shall be effective for pay periods commencing after the date on which the Participation Authorization/Salary Reduction Agreement is filed with the ADMIN IS TRATOR . (b) Any person who becomes an employee after this Plan is first made available shall have the option, within days after becoming employed, to effect an initial election to participate under this Plan for pay periods commencing after the date on which the Participation Authorization/Salary Reduction Agreement is ;filed with the ADMINISTRATOR. (c) Any employee who does not file an initial election, pursuant to sub -paragraph (a) or (b) above, may participate under this Plan only for pay periods commencing on or after the first day following the next (month, quarter, year) Such participation may be effected only by signing and filing with the ADMINISTRATOR a Participation Authorization/Salary Reduction Agreement on or before of the preceding (day or date) (month, quarter, year) _,. ARTICLE III Investment, Amount and Report Page 3 3.01. The EMPLOYER shall remit the deferred amounts promptly to the ADMINISTRATOR of The Plan. The ADMINISTRATOR shall not have the responsibility to determine whether the funds paid by the EMPLOYER are correct, or to collect,,or enforce such payment. 3.02. For convenience and to facilitate an orderly administration of The Plan the ADMINISTRATOR shall maintain a deferred account with respect to each PARTICIPANT. 3.03. The PARTICIPANT'S deferred account shall be credited with all amounts deferred. A written report of the status of the. PARTICIPANT'S deferred account shall be furnished at least annually and within ninety (90) days after the end of each calendar year. 3.04. All assets of this Plan, including all deferred amounts, shall be the property solely of the EMPLOYER and shall be subject to ` all the claims and creditors of the EMPLOYER without protection or preference. The rights of the PARTICIPANT created by this Plan shall be that of a general creditor of the EMPLOYER only, and in an amount equal to the fair market value of the deferred account maintained with respect to the PARTICIPANT. The EMPLOYER acknowledges that the ADMINISTRATOR of The Plan is the agent of the EMPLOYER and that the EMPLOYER is the creator and beneficiary of this Plan. ARTICLE IV Investment of Deferred Amounts and Credit Balance 4.01. The deferred amount shall be delivered or credited by the EMPLOYER to the ADMINISTRATOR who shall invest such amounts as specified by the PARTICIPANT in the Participation Authorization/ Salary Reduction Agreement. ARTICLE V Benefits 5.01. The PARTICIPANT is entitled to the benefits created by participating in this Deferred Compensation Plan, in accordance with the provisions of this Article. (a) Normal Retirement. Upon attaining NORMAL RETIREMENT AGE, the PARTICIPANT may retire and receive the benefits provided under this Plan. Such benefits shall be paid in accordance with the Page 4 payment option selected by the PARTICIPANT pursuant to Paragraph 5.01(h) of this Plan. (b) Early Retirement. The PARTICIPANT may select early retirement pursuant to Exhibit A attached. Such benefits shall be paid in accordance with the payment option selected by the PARTICIPANT pursuant to Paragraph 5.01(h) of this Plan. (c) Late Retirement. If the PARTICIPANT continues employment with the EMPLOYER after attaining NORMAL RETIREMENT AGE, all benefits payable under this Plan will be deferred, whether or not the PARTICIPANT continues to defer additional sums under this Plan, until the PARTICIPANT retires. At such time such benefits shall be paid in accordance with the payment option selected by the PARTICIPANT pursuant to Paragraph 5.01(h) of this Plan. (d) Disability. If, prior to retiring, the PARTICIPANT becomes permanently disabled, as defined in Exhibit A, the ADMINISTRATOR shall pay the benefits in the PARTICIPANT'S deferred account as if the PARTICIPANT had elected Normal Retirement pursuant to Paragraph 5.01(a). (e) Termination of Employment. If the PARTICIPANT terminates employment with the EMPLOYER, other than by disability or retirement, the benefits shall be paid in accordance with the payment option elected by the PARTICIPANT pursuant to Paragraph 5.01(h). (f) Death. (1) . Before Benefit Payments Have Commenced. If the PARTICIPANT dies while employed with the EMPLOYER,- the benefits otherwise payable under this Plan shall be paid to the designated beneficiary pursuant to the PARTICIPANT'S settlement election. (2) . After Benefit Payments Have Commenced. If the PARTICIPANT dies while benefits are being paid under this Plan and before such benefits have been exhausted, then any remaining benefits payable shall be paid pursuant to the PARTICIPANT's settlement election. (3). Designated Beneficiary. The PARTICIPANT has the right to name and file with the ADMINISTRATOR a written beneficiary or change of beneficiary form, designating the person or persons who shall receive the benefits payable under this Plan in the event of the PARTICIPANT'S death. The form for this purpose shall be provided by the ADMINISTRATOR. It is not binding on the ADMLNISTRATOR -or the EMPLOYER until it is signed, filed with the ADMINISTRATOR by the PARTICIPANT and accepted by the ADMINISTRATOR. • If the PARTICIPANT dies without having a beneficiary form completed Page 5 and on file,, the payment will be made first to the surviving spouse, if any, second, to a surviving child or children, if any, and third, to the surviving parent or parents, if any; otherwise, to the Personal Representative of the PARTICIPANT'S estate. The PARTICIPANT accepts and acknowledges the responsibility to execute and file with the ADMINISTRATOR, a proper beneficiary designation form. (g) Method of Payment. The payment of benefits.to the PARTICIPANT or beneficiary shall begin as soon as possible but in no event later than the first day of the month next following days after the occurrence of the event that gives rise to the beginning of the payment of benefits. (h) Payment and Settlement Options. The following methods of payment, and settlement options are available and must be selected at the time of the PARTICIPANT'S entitlement of distribution. If the PARTICIPANT fails to select a payment option within the number of days identified in (g) above, the benefits will be payable in approximately equal monthly payments over a period of ten years. (A) PAYMENT OPTIONS. The PARTICIPANT may elect: Option 1. - Lump sus. payment. The total benefits payable in one cash payment. Option 2. - Annuity Option. (a) Life Annuity - An annuity payable during the lifetime of the PARTICIPANT. (b) Joint and Survivor Annuity - An annuity payable during the lifetimes of the PARTICIPANT and another person selected by the PARTICIPANT. The survivor option to be' elected may be 50%, 66.6% or 100%. (c) Life Annuity with Period Certain Guaranteed - An annuity payable during the lifetime of the PARTICIPANT with the guarantee that if, at death, payments have not been made for the guaranteed period as elected, payments will continue to the beneficiary. The guaranteed period to be elected must be either 5, 10, or 20 years. Option 3. - Systematic Liquidation of the Deferred Account. The benefits payable liquidated by approximately equal payments over any specified period of time, any specified amount, or by formula, as long as the liquidation will be expected to deplete the account during the lifetime of the PARTICIPANT or the PARTICIPANT and another person selected by the PARTICIPANT. These systematic payments may be made either monthly, quarterly, semi-annually or • annually. Page 6. (B) DEFERRED PAYMENT. The PARTICIPANT may elect, in the event of termination prior to Normal Retirement Age to have payment of benefits begin at the time of termination or deferred until the PARTICIPANT reaches Normal Retirement Age. (i) Notwithstanding anything in this Article to the contrary, if at any time the amounts held under this plan in the account maintained for the PARTICIPANT, or beneficiary, would develop a monthly income of less than $ r per month, the ADMINISTRATOR is authorized to deviate from the restrictions imposed by this Article, and effect a lump sum settlement or adjust the payment mode. 5.02. Notwithstanding any other provisions herein, for "financial hardship," a PARTICIPANT may apply to the ADMINISTRATOR to distribute a portion of the deferred account prior to retirement or termination of employment with the EMPLOYER. If the application for withdrawal is approved by the ADMINISTRATOR, the withdrawal shall be made within the month next following such approval. The amount paid would be limited to that amount necessary to meet the emergency situation. Any remaining benefits would be paid in accordance with Paragraph 5.01. ARTICLE VI Administration of Plan 6.01. The E1IPLOYER may at any time amend, modify or terminate this Plan with or _without the consent of the PARTICIPANT (or any beneficiary thereof) . However: (a) All amendments shall become effective on the first day of the month following the giving of not less than ? r days prior notice of the amendment. Notice shall be deemed given when the amendment is posted in the office of the ADMINISTRATOR. To the extent it is possible to do so, the ADMINISTRATOR shall mail a copy of all amendments that become effective during the quarter to the PARTICIPANT. No amendments shall deprive the PARTICIPANT of any of the benefits to which entitled under this Plan with respect to deferred credits accrued to the account prior to the effective date of the amendments; and (b) If the Plan is curtailed, terminated, or the acceptance of additional deferred amounts suspended permanently, the ADMINISTRATOR shall nonetheless be responsible for the supervision 0 and the payment of benefits in accordance with Article V hereof. Page 7 6.02. Any companies that may issue the policies, contracts or other investment media used by the EMPLOYER or specified by the PARTICIPANT are not parties to The Plan and such companies shall have no responsibility or accountability to the PARTICIPANT or the ' beneficiary with regard to the operation of The Plan. 6.03. Any agreement regarding this Plan between the EMPLOYER and the PARTICIPANT shall not be construed to give a contract of employment to the PARTICIPANT or to alter or amend an existing employment contract of the PARTICIPANT, if in fact one exists, nor shall anything in this Plan be construed as affording to the PARTICIPANT any representation or guarantee regarding continued employment. 6.04. The EMPLOYER and the ADMINISTRATOR do not and cannot represent or guarantee that any particular Federal or State income, payroll, personal property or other tax consequence or result will occur because of participation in this Plan. The PARTICIPANT should consult with legal or tax counsel regarding all questions of any Federal or State income, payroll, personal property or other tax consequences arising from the adoption or participation in this Plan. 6.05. The laws of the State of shall apply in determining the construction and validity of this Plan and all rights and obligations under it. 6.06. Except as otherwise required by law, the rights of the PARTICIPANT (including any compensation deferred or benefits paid) under this Plan shall not be subject to the rights of creditors of the PARTICIPANT or any beneficiary, and shall be exempt from execution, attachment, garnishment, prior assignment, transfer by operation of law in the event of bankruptcy or insolvency, or any other judicial relief or order for creditors or other third persons. 6.07. This Plan alone, and the Participation Authorization/Salary Reduction Agreement executed pursuant to it, and any subsequently adopted amendment thereof, shall constitute the total agreement or contract between the EMPLOYER and the PARTICIPANT.regarding The Plan. No oral statement regarding The Plan may be relied upon by the PARTICIPANT. 6.08. This Agreement and any properly adopted amendment, shall be binding on the parties hereto and their respective heirs, administrators, trustees, successors and assigns and on all designated beneficiaries of the PARTICIPANT. Page 8 ARTICLE VII NOTICE TO ALL PARTICIPANTS TO READ THESE PROVISIONS PROVIDING BROAD POWERS AND ABSOLUTE SAFEGUARDS TO THE EMPLOYER 7.01. The EMPLOYER, or its authorized agents, may decide or resolve any questions of facts regarding the PARTICIPANT'S rights under this Plan and such decision is final and binding on the PARTICIPANT and any beneficiary thereof. 7.02. The EMPLOYER, or its authorized agents, may construe The Plan and to resolve by its decision any ambiguity in The Plan providing that all such decisions are applied thereafter uniformly to all other Participants in The Plan until The Plan is subsequently amended or unless the facts and.circumstances applicable to another PARTICIPANT are substantially different. 7.03. The PARTICIPANT, by signing the Participation Authorization/ Salary Reduction Agreement, accepts all investment risk of loss. 7.04. The PARTICIPANT specifically agrees not to seek recovery against the EMPLOYER, the ADMINISTRATOR or any other PARTICIPANT, contractee or agent of the EMPLOYER, for non-performance of their duties, negligence, or any other misconduct of the above -named persons, except that this paragraph shall not excuse fraud or wrongful taking by any person. 7.05. The EMPLOYER or its authorized agents, including the ADMINISTRATOR, if in doubt concerning the correctness of their action in making a payment of a benefit, may suspend the payment until satisfied as to the correctness of the payment or the person to receive the payment, or to allow the filing in any State court of competent jurisdiction, a suit in such form as they deem appropriate, including an interpleader action, for a legal determination of the benefits to be paid and the persons to receive them. The EMPLOYER shall comply with the final orders of the Court in any such suit, subject to its right to seek appellate review, and the PARTICIPANT, for the PARTICIPANT and beneficiary, consents to be similarly bound as such orders affect the benefits payable under this Plan or the method or manner of payment. 7.06. The EMPLOYER, or its authorized agents, is hereby held harmless from all court costs and all claims for attorneys' fees arising from any action brought by the PARTICIPANT or any beneficiary thereof under this Agreement or to enforce the rights under this • Plan, including any amendments hereof. • Page 9 7.07. Neither the PARTICIPANT nor a beneficiary nor any other designee shall have any right to commute,_, sell, assign encumber, hypothecate, transfer or otherwise convey the right to receive any payments hereunder which payments and right thereto are expressly declared to be nonassignable and nontransferable; and, any such assignment or transfer shall not be recognized by the EMPLOYER, and if made by the PARTICIPANT in writing shall be deemed to constitute discontinuance of participation and constructive receipt of the account balance by the PARTICIPANT. IN WITNESS WHEREOF, the EMPLOYER has caused this agreement to be signed by its duly authorized agent the day of , 19 ATTEST: EMPLOYER By Title Administrators: Name Signature Date Name Signature Date Name Signature Date • • Page 10 EXHIBIT "A" DEFINITIONS The following terms shall, for purposes of this Plan, have the meanings set forth in this Exhibit. 1. EMPLOYER means, 2. EMPLOYEE means, a person holding an office or position of employment with the employer. "Employee" shall not include emergency, temporary, seasonal, part time, or probationary appointments. 3. PLAN YEAR means, the calendar year in which The Plan becomes effective, and each succeeding calendar year during the existence of this Plan. 4. NORMAL RETIREMENT AGE is, 5. EARLY RETIREMENT AGE is, 6. BENEFICIARY means, the person properly designated by a Participant to receive the Participant's benefits created by this Plan. 7. PARTICIPANT means, any employee that participates under this Plan by.signing the Participation Authorization/Salary Reduction Agreement. 8. PARTICIPATION AUTHORIZATION/SALARY REDUCTION AGREEMENT means, the Application to the Administrator and Employer to Participate in this Deferred Compensation Plan. 9. DISABILITY means , �:: • .. r: (e.g. same as qualifies for Social Security, or as determined by X physicians, committee, etc.) 10. ADMINISTRATOR means, the person or persons designated by the employer as responsible for the administration of this Plan as identified in this Plan document. 11. FINANCIAL HARDSHIP shall mean real emergencies which are beyond the Participant's control and which would cause the Participant great hardship if early distribution were not permitted. For example, "financial hardship" could include the following: Page11 impending personal bankruptcy; unexpected and unreimbursed major expenses resulting from illness or accident of the Participant or any dependent thereof; major property loss or any other type of unexpected or unreimbursed personal expense of a major nature that would not normally by budgetable. Foreseeable personal expenditures normally budgetable, such as a down payment for a home, the purchase of an automobile, college or other schooling expenses, etc., will not constitute a "financial hardship." The decision of the Administrator concerning "financial hardship" shall be final as to all.