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ORDINANCE NO. 3 6 4 4
AN ORDINANCE OF THE CITY OF AUBURN, WASHINGTON, ADOPTING A DEFERRED COMPENSATION
PLAN FOR THE CITY OF AUBURN, AUTHORIZING AND DIRECTING THE EXECUTION
OF THE NECESSARY DOCUMENTS TO IMPLEMENT SUCH PLAN, AND AUTHORIZING
AND DIRECTING THE ESTABLISHMENT OF A FUND THEREFOR.
WHEREAS, the City Council of the City of Auburn, wishes to implement a
deferred compensation plan for its employees; and
WHEREAS, there has been presented to the City a proposed deferred
compensation plan for recognition and approval by the City for participation
therein by qualified employees; and
WHEREAS, the City has reviewed said proposed deferred compensation plan,
a copy of which is attached hereto, labeled Exhibit "A", and by this reference
made a part of this Ordinance; and
WHEREAS, the City has been advised by representatives of Schwarz, Shera
and Associates, Inc., specifically Robert Speer, that said proposed deferred
compensation plan complies in all necessary respects with state and federal
laws and applicable Internal Revenue Service rules, regulations and rulings,
upon which advice and representations the City has relied in reviewing and
considering the acceptability of said proposed plan; and the City has been provided
with adequate documentation verifying such compliance and eligibility; and
WHEREAS, a substantial number of the City's qualified employees have
indicated an interest.in participating in said proposed deferred compensation
plan, after having been given an opportunity to examine, discuss and consider
all of the applicable terms, restrictions, conditions and other provisions
thereof; and
WHEREAS, in order to implement and administer said deferred compensation
plan, there must be executed the necessary documents, there must be a committee
appointed, and there must be a fund established;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON,
DO ORDAIN AS FOLLOWS:
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Ordinance No. 3644
Page One
6-8-81
Section I. That "deferred compensation plan" proposed and sponsored
by the Great-West Life Assurance Company, submitted to the City and attached
hereto, labeled Exhibit "A", is hereby recoginzed and approved as a deferred
compensation plan for the qualified employees of the City of Auburn.
Section 2. The Mayor and City Clerk are hereby authorized and directed
to execute the necessary documents for the establishment and implementation of
such deferred compensation plan:
Section 3. Upon such execution of such plan, establishment and implementation
thereof, such plan shall be made available to qualified City employees of the City
upon their execution of appropriate applications and/or agreements for participation
therein.
Section 4. There is hereby established a "Deferred Compensation Plan
Committee" which shall consist of three persons appointed by the Mayor, which
committee members shall serve for such-periods as shall be determined by the
Mayor and shall be subject to removal and replacement as said Mayor shall
determine from time to time. Said committee shall administer the deferred
compensation plan, and the "Deferred Compensation Plan Fund" hereinafter created,
and shall have the duties as defined in said plan.
Section 5. There is hereby created a special fund which shall be designated
as the "Deferred Compensation Plan Fund" into.which shall be paid all sums deferred
from the compensation of participants in the plan, and from which all authorized
disbursements shall be made.
Section 6. Adoption of this Ordinance does not constitute an endorsement
of this Plan by the City Council.
Section 7. This Ordinance shall take effect and be in force five (5) days
from and after its passage, approval and publication, as provided by law.
INTRODUCED: June 15, 1981
PASSED: June 15, 1981
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Ordinance No. 3644 - Page Two of Two 6-8-81
I k__.
EXHIBIT "A" ORDINANCE NO. 3644
DEFERRED COMPENSATION PLAN
WHEREAS, the Employer established an "eligible State Deferred Compensation
Plan", as defined in Section 457 of the Internal Revenue Code; and
WHEREAS, the Employee desires to participate in said plan.
NOW, THEREFORE, in consideration of the mutual agreement and other covenants
by and between the parties, it is mutually agreed as follows:
I. NAME OF PLAN
The name of this plan is the City of Auburn Deferred Compensation Plan
and hereinafter is referred to as "Plan", and is intended to comply with Section
457 of the Internal Revenue Code.
II. PURPOSE
The purpose of this Plan is to secure the benefit of Employee's future
services, knowledge and experience by permitting the employees, elected
officials and other parties related to the Employer by contract, to participate
in this Plan whereby a portion of their compensation may be deferred to provide
retirement, disability and death benefits.
III. DEFINITIONS
For purposes of this Plan, certain words or phrases used herein will have
the following meanings:
1. "Participant" shall mean those eligible employees
or other parties related to Employer by contract
who have executed a Participation Agreement.
2. "Employer" shall mean the City of Auburn, Washington.
3. "Compensation" shall mean the total amounts of all
payments made by the Employer to an Employee, elected
official or other parties related to Employer by con-
tract, for services rendered to the Employer but shall
exclude bonuses and overtime pay.
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Deferred Compensation Plan
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6-8-81
i a
4. "Deferred Compensation" shall mean:
(a) The amount of compensation not yet earned which.
the Participant and Employer mutually agree shall
be deferred subject to a maximum of 33-1/3Y of
includable compensation or $7,500 annually,
whichever is less, and
(b) Deferred Compensation during the final three years
of employment prior to normal retirement shall be
further defined as the lesser of 33-1/3Y of includable'
compensation subject to a maximum of $15,000. This
provision shall only operate in the case of an employee
who in prior years did not use his entire $7,500 or
maximum.
The maximum contribution in (a) and (b) above shall
be reduced in each plan year by the amount of any
Employer Contribution to a 403B annuity plan.
5. "Disability" shall mean the complete and permanent in-
ability of the Participant, due to injury or sickness,
to perform the important daily duties of his principal
occupation as determined by the Committee.
6. "Normal Retirement" shall mean Participant's retirement
from service with the Employer which. shall be effective
on the first day of the month after the Participant meets
the age and service requirements for normal retirement
specified in the Retirement Plan for the Employees of the
Employer.
7. "Normal Retirement Benefit" shall be a monthly benefit
payable in annuity form over not less than sixty (60)
months. All other benefits will be paid in cash. How-
ever, nothing in the Plan shall be construed to prevent
an employee or beneficiary from making another benefit
form election when appropriate.
8. "Late Retirement" shall mean Participant's retirement
from service with the Employer which becomes effective
after the Participant has exceeded his normal retirement
date specified in the Retirement Plan for the Employees
of the Employer.
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Deferred Compensation Plan
Page Two
6-8-81
9. "Termination of Service" shall mean the severance of
the Participant's contract or employment with the
Employer prior to retirement.
10. "Committee" shall mean an administrative unit con-
sisting of three persons appointed from time to time
by the Employer which shall have the duties defined
in this Plan.
11. "Includable Compensation" shall mean that income
subject to Federal Income tax.
IV. ADMINISTRATION
This Plan shall be administered by a Deferred Compensation Committee,
hereinafter referred to as "Committee", established by Ordinance No. 3644 of the
City of Auburn.
1. Employer shall disburse those amounts which arise from
duly executed Participation Agreements in accordance
with instructions from the Committee. A duly executed
Participation Agreement, in substantially the form as
Exhibit A attached hereto, shall bear the signatures of
both the Participant and a Committee member. Each
participating Employee's Participation Agreement shall
become a part of this Plan and is incorporated herein
by this specific reference thereto.
2. All assets held and invested hereunder shall be held by
and in the name of the Employer. Assets of this Plan
shall at no time be vested in any Participant or bene-
ficiary for whose benefit an account is or may be
maintained.
3. An individual account shall be maintained in the name of
each Participant. The maintenance of such accounts and
the amounts credited to it shall be for the purposes of
accounting only.
4. Account assets hereunder shall be invested in a fixed
insurance annuity. No investments shall be made in
violation of applicable statutes.
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Deferred Compensation Plan
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6-8-81
ti
5. The Committee shall have the authority to appoint such
administrative agents or agencies as it deems advisable
or desirable, to carry out the terms and conditions of
this Plan.
6. Employer shall not be responsible for any loss due to
the investment or failure of investment of funds and
assets in said deferred compensation account nor shall
employer be required to replace any loss whatsoever
which may result from said investments.
7. The Committee shall assume or incur no obligations
hereunder except to exercise due care of respect to
the assets from time to time in their custody here-
under pending application thereof as provided in this
Agreement to exercise due diligence in carrying out
their duties and functions under this Agreement. The
Committee shall not be liable for any loss unless such
loss is caused by a breach of its obligations under this
plan.
V. ELIGIBILITY
Any Employer or other party related to Employer by contract who is
designated by the Employer shall be eligible to participate in the Plan.
VI. PARTICIPATION
The Participant must agree to defer only compensation that is not yet
earned as of the date of the execution of the Participation Agreement subject
to the maximum referred to in Article 3, Paragraph 4, and further subject to
a minimum deferment of not less than twenty-five dollars ($25.00) per month.
An eligible person may only elect to become a Participant beginning July
1, 1981, and each succeeding July 1st and January lst thereafter.
A Participant who terminates contributions may not re-enroll until the
second succeeding enrollment date.
VII. BENEFITS
A. In the event of early, normal, late or disability retirement
or termination, the Committee will apply the then value of the
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Deferred Compensation Plan
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6-8-81
amount credited to the Participant's account in accordance
with the normal retirement benefit or the settlement modes
elected by the Employee at that time.
1. Settlement modes as under a qualified annuity contract
which may be used to measure benefits to the Participant
as elected in the Participation Agreement.
2. Lump sum distribution on the first day of the month
following such retirement or termination.
H. In the event of the Participant's death prior to the commence-
ment of his deferred compensation retirement benefits, the
Employer agrees to pay death.benefits either in a lump sum or
over a period of months not to exceed one hundred twenty (120)
as chosen by the beneficiary.
In the event of the Participant's death after the commencement
of this deferred compensation benefits but prior to the exhaustion
thereof, the Employer agrees to pay the balance of the account to
the Participant's designated beneficiary.
The Participant shall have the right to designate a beneficiary
and from time to time change such designation by written notice
delivered to the Committee.
If there is no designated beneficiary surviving when a payment is
due, payment of any benefits shall be made to his spouse, if living;
if not, to the Participant's estate.
C. The Committee may purchase a group annuity contract issued by Great-
West Assurance Company. The Employer will be the sole owner and
named beneficiary of the annuity contract to the extent that the
account allocable to any participant includes such contracts, and
the mode of benefit payment shall be made provided for by such
contract.
VIII. WITHDRAWALS
Due to unforeseen financial obligations resulting in real emergencies
beyond the Participant's control, and after other sources of financial relief
have been exhausted, a Participant may apply to the Committee for withdrawal from
the Plan prior to retirement or other termination of the Participant's services
with the Employer. If such application for withdrawal is approved by the
e
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Deferred Compensation Plan
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6-8-81
Committee, the withdrawal will be effective at the later of the date specified
in the Participant's application or the date of approval by the Committee. The
Committee may elect to honor a request from the Participant to pay the amount of
money determined as if the Participant has terminated his service; if such request
by the Participant is made and honored by the Committee, the Committee in its
discretion may make payments in a lump sum or in five (5) substantially equal
annual installments thereafter. Withdrawals for foreseeable expenditures normally
budgetable such as down payments on a home or purchase of an auto or college
expenses will not be permitted. Any amount withdrawn shall at no time be greater
than the amount necessary to relieve the unforeseeable financial obligation.
IX. AMENDMENT AND TERMINATION
Employer may amend this Plan at any time, provided, however, that no amendment
shall affect the rights of Participant or his beneficiaries to the extent of any
amount deferred at the time of the amendment, adjusted for investment experience.
Notwithstanding any other provision of this Plan, Employer in its sole discretion,
may terminate this Plan and discharge in full its obligations under Plan to
Participants or a Participant's beneficiaries by distributing to such Participants
or beneficiaries an amount equal to the value of the Participant's account.
X. NON-ASSIGNABILITY
Neither Participant nor his beneficiary.shall have any right to sell, assign,
transfer or otherwise convey the right to receive any payment hereunder, nor shall
any such payments be subject to attachment, garnishment or execution of any kind
in connection with any claim against Participant or his beneficiary.
XI. PROHIBITION AGAINST INTEREST
Any funds or assets, including increment and accumulation thereon, acquired by
Employer as a result of any Participant's deferral hereunder shall be an asset of
the Employer and subject to the Employer's ownership until such time as such funds
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Deferred Compensation Plan
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6-8-81
or assets are actually distributed to the Participant or his designated
beneficiary in accordance with the provisions thereof. It is expressly under-
stood and agreed that neither the Participant nor his beneficiaries shall have
any right in or to such funds or assets and that such funds or assets shall
be subject to the claims of the Employer's creditors. The obligation of the
Employer to the Participants or their designated beneficiaries for the benefits
provided for hereunder is a contractual obligation only. Participants and
their designated beneficiaries have no claim by way of trust, escrow, annuity
or otherwise in or to any specific assets held by the Employer.
XII. APPLICABLE LAW
This Plan shall be construed under the laws of the State of Washington.
IN WITNESS WHEREOF, Employer has caused this Plan to be signed and attested
on this as day of June, 1981, by a duly authorized person.
ATTEST: G
City clerk
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Deferred Compensation Plan
Page Seven of Seven
6-8-81
r TTV AP QIIRI IRN
e
DEFERRED COMPENSATION PLAN
JOINDER AGREEMENT
APPLICATION FOR PARTICIPATION IN CITY OF AUBURN DEFERRED COMPENSATION PLAN
Organization
The undersigned hereby acknowledges receipt of and,agrees to
the terms and conditions of the CITY OF AUBURN Deferred Compensation
Plan as it now exists, and as it may be amended, and applied for
participation thereunder effective as of ' .
Date
The undersigned agrees that the Payroll Department of the Organization
shall have the irrevocable right to reduce his monthly income by $
each month. The election to reduce his monthly income shall continue until
the undersigned terminates or modifies this election.
The undersigned acknowledges that the Organization is under no obligation
to continue this Deferred Compensation Plan and that being a participant there-
under in no way guarantees his employment.
Until further notice, the undersigned requests that any death benefits
that may be payable under this plan are to be paid to:
Address Relationship
i.f living, otherwise to the estate of the last surviving beneficiary.
Date
Date
Signature of Participant
Organization
By
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EXHIBIT "A"
Deferred Compensation Plan
As per Ordinance No. 3644
6-8-81
STATE OF WASHINGTON)
ss.
COUNTY OF KING )
I, Coralee A. McConnehey, the duly appointed, qualified City Clerk
of the City of Auburn, a Municipal Corporation and Code City, situate in
the County of King, State of Washington, do hereby certify that the fore-
going is a full, true and correct copy of Ordinance No. 3644 of the
ordinances of the City of Auburn, entitled "AN ORDINANCE OF THE CITY OF AUBURN,
WASHINGTON, ADOPTING A DEFERRED OOrJPENSATION FLAN FOR THE CITY OF AUBURN,
AUTHORIZING AND DIRECTING THE EXECUTION OF THE NECESSARY DOC[MENTS TO TMPf •FT9F'NP
SUCH FLAN, AND AUTHORIZING AND DIRECTING THE ESTABLISHMEPTT OF A FUND THEREFOR.
I certify that said Ordinance No. 3644 was duly passed by the Council
and approved by the Mayor of the said City of Auburn, on the 15th day of
Jame A.D., 19 81 .
I further certify that said Ordinance No. 3644 was published as provided
by law in the Daily Globe News, a daily newspaper published in the City of
Auburn, and of general circulation therein, on the 26th day of June
A.D., 19 81 .
WITNESS my hand and the offical seal of the City of Auburn,,this 20th
day of Avgust A.D., 19 81
C
CITY CLERK OF THE CITY OF AUB
- `. 0 2� �� ��
: :
ADOPTION AGREEMENT
SECTION 457
DEFERRED COMPENSATION PLAN
8-97
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SECTION 457 DEFERRED COMPENSATION PLAN
The Employer named below hereby establishes (or, as applicable, amends and restates) a Deferred �, w
Compensation Plan for eligible Employees as provided in ttus Adoption Agreement and the '
accompariying Plan.
A. EMPLOYER INFORMATION
1 EMPLOYER'S NAME AND ADDRESS.
City of Auburn
25 West Main
Auburn, WA 98001
2. TELEPHONE NUMBER.
253/931-3000
3 TAX ID NUMBER
91-6001228
4. NAME OF PLAN.
City of Auburn Deferred Compensation Plan
5 NAME OF PLAN ADMINISTRATOR(the Employer unless another person(s) is
appointed as set forth in section 3 02 of the Plan):
City of Auburn
B. EFFECTIVE DATE.Check box 1 OR box 2 and fill in the blank(s).
1 ❑ Ttus is a new Plan having an effective date of.
2. � This is an amended Plan.
The effective date of the original Plan was.
January 1, 1981
The effective date of the amended Plan is
June 30, 1998
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C. CUSTODY OF ASSETS. Check each box that applies.
The trust requirement of Intemal Revenue Code("Code") §457(g) shall be satisfied by
setting aside plan assets for the exclusive benefit of participants and beneficiaries, as follows:
g' r
1 QX No trustee or custodian is being appointed with respect to those plan assets held in
one or more annuity contracts meeting the requirements of Code §401(�. The Employer,
as owner of the annuity conuact shall be the deemed trustee for purposes of Code
§457(g).
2. ❑ All or part of plan assets will be held in uust pursuant to the provisions of Article V of
the Plan. The Employer, or certain e¢iployees (or holders of certain positions with
Employer) as named on page 6 of this Adoption Agreement shall be the Trustee.
3 ❑ All or part of plan assets will be held in a custodial account meeting the requirements
of Code §401(�, pursuant to a separate written agreement with the bank or trqst company
named on page 5 of this Adoption Agreement. The custodian shall be the deemed trustee
of all assets held in the custodial account for purposes of Code §457(g).
4 ❑ All or part of plan assets will be held in trust pursuant to a separate written trust
agreement entered into between the Employer and the bank or trust company named on
page 6 of this Adoption Agreement. The trust provisions of Article V of the Plan shall
NOT apply
D. DEFINITIONS.
1 "Emolovee" shall mean: (Check one or both boxes below)
�X any common law employee
� any independent contractor(including elected or appointed officials)
who performs services for and receives any type of compensation from the Employer (or
any agency, department, subdivision or instrumentality of the Employer) for whom
services are rendered.
2. "Normal Retirement A2e" shall mean: (Fill in blank below)
Age 70 '/x, unless the Participant has elected an altemate Normal Retirbment Age by
written instrument delivered to the Administrator prior to Separation from Service. A
ParticipanYs Normal Retirement Age determines the period during which a Participant
may utilize the catch-up limitation of section 4.03 of the Plan. Once a Participant has to
any extent utilized the catch-up limitation of section 4.03 of the Plan, his Normal
Retirement Age may not be changed.
2
� �
A PazticipanYs altemate Notmal Retirement Age may not be eazlier than the earliest date
the Participant will become eligible to retire under the Employer's basic retirement plan
without the Employer's consent and to receive immediate retirement benefits without
actuazial or similu reductiou because of eazly retirement, and may not be later than age
70'/: s ,
If a Participant continues to be employed by Employer after attaining age?0'/:, 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 ParticipanYs altemate Normal Retirement Age may not
be eazGer than age�_ and may not be later than age 70'/:.
E. DE MINIMIS DISTRIBUTIONS. Check the appropriate boxes.
1 ❑X De Minimis Distributions described in section 7 OS of the Plan SHALL BE allowed
as follows: (If Box 1 is checked, also check one or both boxes below)
� Participants may elect to receive an in-service De Minimis distribution.
❑ The Employer may distribute De Minimis account balances without the
Participant's consent.
2. ❑ De Minimis Distributions described in section? OS of the Plan shall NOT be
allowed.
F UNFORESEEABLE EMERGENCY DISTRIBUTIONS. Check box 1 OR box 2.
1 X❑ Unforeseeable Emergency distributions pursuant to sectiors 2.19 and 7 06 of the
Plan SHALL BE allowed.
2. ❑ Unforeseeable Emergency distributions pursuant to sections 2.19 and 7 06 of the
Plan shall NOT be allowed.
G. PLAN TO PLAN TRANSFERS. Check box 1 OR box 2.
1 � Plan to Plan Transfers described in section 7 12 of the Plan SHALL BE allowed.
2. ❑ Plan to Plan Transfers described in section 7 12 of the Plan shall NOT be allowed.
3
r �
H. PARTICIPANT LOANS. Check box 1 OR box 2.
1. ❑ Paziicipant loans described in Article IX of the Plan SHALL BE allowed. , ,
2. � Participant loans described in Article IX of the Plan shall NOT be allowed.
I. DOMESTIC RELATIONS ORDERS. Check Box 1 OR box 2.
1. � The Plan SHALL couiply with domestic relations orders as provided in section
12.02 ofthe Plan.
2. ❑ The Plan shall NOT comply with domestic relations orders as provided in section
12.02 of the Plan.
Tlris Plan and Adoption Agreement aze duly executed on behalf of the Employer
EMPLUYER. •
BY LYUshI�l-1 \Jee�� BY �`CCb'xQ � �__I_ _"'"
Tide: Mayor Title: Finance Director
Date: �"� -1_ rn Date: '� -� -�l �
a
• �� \\\
1
` � 1
SECTION 457
DEFERRED COMPENSATION PLAN
8-97 I
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INTItODUCTION TO SECTION 457
DEFERRED COMPENSATION PLAN
The attached Plan may be used by eligible govemmental employers as a model in prepacing ,
deferred compensation plans intended to satisfy §457 of the Intemal Reveaue Code of 1986, as
amended. In general, under a §457 plan, whibh is also referred to as an "eligible defeaed
compensation plan," a participant may defer amounu of cocnpensation(and income earneii on those
deferrals) and avoid federal income taxation unti those amounts are paid or otherwise made available
to the participant.
The following types of governmental entities may establish elig'ble §457 Plans:
1. The 50 states of the United States and the District of Columbia;
2. A political subdivision of a state (for example a county or municipality); and
3 Any agency or instrumenta(ity of a sfate or a political subdivision of a state.
This Plan contains provisions which maq be included in an eligible deferred compensation plan.
It was prepazed for your convenience. You shoulfl review and, where appropriate, modify the
provisions to meet your particular needs. You should also refer to any applicable state or local laws,
including tax laws and rules for govemmental employee benefit plans (if applicable), in the design of
your plan.
In designing your plan, you should take into account the investment options to be used and tlie
terms of any trust or custodial agreements entered into with respect to the Plan. You should also
ascertain the federal income tax reporting and withholding obligations, FTCA and FUTA obligations
(to the extent applicable), and any comparable state obligations with respect to ybur plan. GeneraIly,
defeaed amoums under a §457 plan aze not reported as income, and federal incoti►e tax is not
withheld, until the amounts are paid or otherwise made available to the participant. Deferied amounts
generally aze included in the FICA and FCJTA wage base when deferred.
This Plan is not intended to provide you with legal advice, nor should it be implemented
without regard to your particular needs or any applicable laws of your stafe. No state or federal
govemment has passed on the legal sufficiency(including tHe conformity with §457) of tlris Plan.
Neither CrrBax-West Life& tlnnuity Insurance Cotripany, nor any of iu affiliated companies assumes
ariy liability to any person or entity with respect to the adequacy of this document for any purpose, or
with respect to any tax or legal ramifications arising from its use. Great-West is not a patty to any
plan which you may adopt and Grbat-West has no responsibility, accountability, or liability to you,
any employer, any participant or any beneficiary with regazd to the operation or ade.quacy of this Plan,
any §457 plan prepazed from this Plan, or any future amendments made to this Plan. You should
c6asult with your legal counsel prior to adopting any plan.
8-97 i
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TABLE OF CONTENTS
SECTION 457 DEFERRED COMPENSATION PLAN
Paae , ,
Introduction i
SECTION 457 DEFERRED COMPENSATION PLAN
I. INTRODUCTION. 1
II. DEFINTITONS 1
2.01 Administrator or Plan Administrator 1
2.02 Beneficiary 1
2.03 Code 1
2.04 Compensation 1
2.05 Custodial Account. 1
2.06 Custodian. 1
2.07 Deferred Gompensation. 1
2.08 Employee 1
2.09 Employer 1
2.10 Includible Compensation .2
2.11 Normal Retirement Age. 2
2.12 Participant. .2
2.13 Participation Agreement 2
2.14 Plan Yeaz 2
2.15 Total Amount Deferred 2
2.16 Sepuation From Service 2
2.17 Trust 2
2.18 Trustee 3
2.19 Unforseeable Emergency 3
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III. ADMIlVISTRATION 3
3.01 Administrator 3
3 02 Appointment and Ternrination of Administrator 3
3.03 Duties of Plan Administrator 3 ,
3 04 Administrative Fees and Expenses 4 �
3 OS Actions of Administrator 4
3 06 Delegation. 4
3 07 Investment and Service Providers 4
N PARTICIPATION IN THE PLAN. 5
4.01 Enrollmeat in the Plan 5
4 02 Deferral Limitations. 5
4.03 Limited Catch-up. 6
4 04 Employer Modification ofDeferral 6
4 OS Participant Modifioation of Defeaal. 7
4.06 Revocation 7
4 07 Re-Enrollment. 7
4 08 Multiple Plans 7
4.09 Custody of Plan Asseu 7
4 10 Qualified Military Service 8
V CREATION OF TRUST AND TRUST FUND 8
5 Ol Establishment of Trust. 8
5 02 Appointment and Termination of Trustee. 9
5 03 Acceptance. 9 �
5 04 Control of Plan Assets 9
5 OS General Duties of the Trustee 9
5.06 Investment Powers of the Trustee. 10
5 07 Trustee Fees and Expenses 11
5 08 Exclusive Benefit Rules 11
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5 09 Trustee Actions 11
5 10 Delegation. 11
5 11 Division of Duties and Indemnification 12
VI. INVESTMENTS 13
6 Ol Employer Investment D'uection 13
6.02 Participant Investment Direction. 13
6.03 Participant Accounts 14
6 04 Distributions from the Trust 14
VII. DISTRIBUTIONS. 14
'7 Ol Conditions for Disuibdtions. 14
7 02 Separation from Service 14
7 03 Deferred Commencement Date at Separation Froin Service 15
7 04 One Additional Deferral of Commencement Date 15
7 OS In-Service De Mm9mis Accounts 15
7 06 Unforeseeable Emergency 15
7 07 Death Benefits. 16
7 O8 Payment Options 17
7 09 Default Distribution Option 18
7 10 Limitations on Distribution Options 18
7 11 Taxation of Distributions 19
7 12 Transfers 19
7 13 Elections 19
�
VIII. LEAVE OF ABSENCE. 19
8.01 Paid Leave of Absence 19
8.02 Unpaid Leave of Absence 20
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IX. PARTTCIPANT LOANS 20
9.01 Authorization ofLoans. Z�
9 02 Maximum Loan Amount. 20
9 03 Repayment of Loan 20 .
9 04 Loan Terms and Conditions. 20
X. AMENDMENT OR TERIIIIINATION OF PLAN 21
10.01 Ternunation Z1
10.02 Amendment. 22
10 03 Copies of Amendments. 22
XI. RELATIONSHIP TO OTHER PLANS 22
XII. NON-ASSIGNABILTII' 22
12.01 Non-Assignability 22
12.02 Conforming Equitable Distriburion Ordeis 22
7�I. DISCLAIl�IER 24
7 I
, XIV EMPLOYER PARTICIPATION 24
XV INTERPRETATTON 24
15 O l Governing Law 24
15 02 §457 24
15 03 Word Usage 24
15.04 Headings 24
15 05 Entire Agreement 24
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SECTION 457 DEFERRED COMPENSATION PLAN
I. INTRODUCTTON
In accordance with the provisions of§457 of the Intemal Revenue Code of 1986, as amended, the
Employer named in the Adoption Agreement hereby establishes this Deferred Compensation Plan
hereinafter referred to as the "Plan." Nothing contained in this Plan shall be deemed to constitute an
employmem agreement between any Participant and Employer and nothing contained herein shall be
deemed to give a Participant any right to be retained in the employ of Employer
II. DEFINITIONS
2.01 "Administrator" or "Plan Administrator" shall mean the person, persons or entity appointed by
the Employer to administer the Plan pursuant to section 3 02, if any, but shall not include any company
which issues policies, contraas, or investment media to the Plan in respect of a Participant, as such.
2.02 "Beneficiarv" shall mean the persons or entities designated by a Participant pursuant to section
4.01(c).
2.03 "Code" shall mean the Internal Revenue Code of 1986, as amended, or any future United
States internal revenue law References herein to specific section numbers shall be deemed to include
Treasury regulations thereunder and to corresponding provisions of any future United States intemal
revenuelaw
2.04 "Compensation" shall mean all payments made to an Employee by ttie Employer as
remuneration for services rendered, including salaries and fees.
2.05 "Custodial Account" shall mean the account established with a bank or trust company meeting
the provisions of Code §401(�, ifthe Employer has elected to satisfy the trust requirement of Code
§457(g)by setting aside plan assets in a custodial account.
2.06 " ustodian" shall mean the bank or trust company selected by the Employer to hold plan assets
� if the Employer has elected to use a custodial account pursuant to Code §457(g) and §401(�.
2.07 "Deferred Compensation" shall mean the amount of Compensation not yet eamed which the
Participant and the Employer mutually agree shall be defeaed.
2.08 "Emnlovee" shall mean those individuals selected in the Adoption Agreement.
2.09 "Em�ver" shall mean the sponsor of the plan as named in the Adoption Agreement.
8-97 1
2.10 "Includible Compensation" shall mea� for purposes of the limitation set forth in section 4 02,
Compensation for services performed for the Employer that is cunently includible in the Participant's
gross income for Federal income tax purposes, detemuned without regard to any community property
laws. Includible Compensation thus does not include Compensation excludable from the Participant's
goss income under §457 of the Code as a resuk of deferrals under this Plan, or any other eligible
deferYed compensation plan described in §457(b) of the Code maintained by the Employer, or undecany;
otHer provision (including, but not.limited to, §§ 125, 402(g)(3), 402(h)(1)(B), 403(b) and 911) of the
Code.
2.11 "Normal Retirement AQe" shall mean the ages described in the Adoption Agreement.
2.12 "Participant" shall mean aay Employee who executes a Participation Agreement assenting to
the provisions of this Plan, once the Participation Agreement has been approved by the Administrator
Ezcept for purposes of Articles IV, VIII, and IX, "Participant" shall include former Participants. The
Administrator, if he or she is otherwise eli�ble, may participate in the Plan.
2.13 "Participation A¢reement" shall mean the agreement executed and filed by an Employee with
the Employer pursuant to section 4.01, in which the Employee elects to become a Plan Participant.
2.14 "Plan Yeaz" shall mean the calendar year
2.15 "Total Amount Defeaed" shall mean, with respect to each Participant, the sum of all
Coiripensation deferred under the Plan, plus income and minus loss thereon(including amounts
determined with reference to life insurance policies) calculated in accordance with section 6.03 by the
method designated in the Participant's Participation Agreement(s)under which such Compensation was
deferred and in any subsequent election(s)to change methods, less the amount of any expenses or
distributions authorized by this Plan.
2.16 "�aration From Service" shall mean severance of the Participant's employment with the
Einployer which constitutes a "separation from service" within the meaning of§402(d)(4)(A)(in) of the
Code. A Paiticipant shall be deemed to have severed his employment with the Employer for purposes of
this Plan when both parties consider the empioyment relationship to have temrinated and neither parry
anticipate"s any future employment of the Participant by the Employer In the case of a Participant who
is an independent contractor, Separarion from Service shall be deemed to have occurred when the
Participant's contract for services has completely expired and terminated, there is no foreseeable
possibility that the Employer shall renew the contract or enter into a new contract for services to be
performed by the Participant, and it is not anticipated that the Participant shall become an Employee of
the Employer
2.17 "Trust" shall mean the trust created under Article V of the Plan if the Employer or certain
employees aze named as trustee(s)in the Adoption Agreement. "Trust" shall mean a trust created by a
separate written agreement between the Employer and the Trustee if a bank or trust company is named
as trustee in the Adoption Agreement. The Trust shall consist of all plan assets held by the Trustee
named in the Adoption Agreement.
8-97 2
2.18 "Trustee" shall mean the Employer or such other person, persons or entity selected by the
Employer who agrees to act as Trustee hereunder if elected in the Adoption Agreement. This term
(except as used in Article� also refers to the pecson holding the assets of any custodial account or
holding any annuity contract described in section 4.09
2.19 "Unforeseeable Emer ency" shall mean severe financial hazdship to a Participant resulting%frorri•
a sudden and unexpected illness or accident of the Participant or of a dependent (as defined in §152(a)
of the Code) of the Participant, loss of the Participant's property due to casualty, or other similaz
ea�iraordinary and unforeseeable circumstances arising as a result of events beyond the control of the
Participant. The need to send a Participant's child to college or the desire to purchase a home shall not
constitute an Unforeseeable Emergency Whether a hardship constitutes an Unforeseeable Emergency
under section 7 06 shall be deternrined in the sole discretion of the Administrator
III. ADMINISTRATION
3 O1 Administrator The Employer shall be the Administrator unless another person or persons is
appointed by the Employer in the Adoption Agreement as set forth in 3 02.
3 02 Appointment and Termination of Administrator An Administrator may be named in the
Adoption Ageement by the Employer and may be a Partioipant. The Adminisuator shall remain in
o�ce at the will of the Employer and may be removed from office at any time by the Employer, with or
without cause. Such removal shall be effective upon delivery of written notice to the Administrator or at
such later time as may be designated in such notice; provided that any such notice of removal shall take
effect no later than 60 days after the delivery thereof, unless such 60 day period shall be waived. The
Administrator may resign at any time upon giving written notice to the Employer or at such later time as
may be designated in the notice of resigriation; provided that(i) any such notice of resignation shall take
effect no later than 60 days after the delivery thereo� unless such 60 day period shall be waived and (u)
upon such resignation or removal the Employer shall have the power and the duty to designate and
appoint a successor Administrator, and the actual appointment of a successor Administrator is a
condition that must be fulfilled before the resignation or removal of the Administrator shall become
effective. Upon appointment,the successor Administrator shall have all the rights, powers, privileges,
liabilities and duties of the predecessor Administrator. The Administrator so resigned or removed shall
take any and all action necessary to vest the rights, powers, privileges, liabilities and duries of the
Adminisuator in the successor
3 03 Duties-of Plan Administrator Subject to any applicable laws and any approvals recjuired by the
Employer, the Plan Administrator shall have full power and auth6rity to adopt rules and regulations for
the actministration of the Plan, and to interpret, alter, amend, or revoke any rules and regulations so
adopted. The Plan Administrator's duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, custodian or anq other party needed to
administer the Plan or the plan assets,
(b) directing the Trustee with respect to payments &om the plan assets held in Trust.
8-9'7 3
(c) communicating with Employees regazding their participation and benefits under the Plan,
including the administration of all claims procedures.
(d) filing any retums and reports with the Internal Revenue Service or any other governmental
agency
(e) reviewing and approving any financial reports, investment reviews, or other reports prepared
by any party appointed under paragraph (a).
(fl establishing a funding policy and investment objectives consistent with the purposes of the
Plan.
(g) construing and resolving any question of Plan interpretation. The Plan Administrator's
interpretation of Plan provisions including eligibility and benefits under the Pian is final.
3 04 Administrative.Fees and Expenses. All reasonable costs, charges and expenses incurred by the
Plan Administrator in connection with the administration of the Pian(including fees for legal services
rendered to the Plan Administrator) may be paid by the Employer, but if not paid by the Employer when
due, shall be paid from plan assets. Such reasonable compensation to the Plan Administrator as may be
agreed upon from time to time between the Employer and Plan Administrator may be paid by the
Empioyer, but if not paid by the Employer when due shall be paid from plan assets. Notwithstanding the
foregoing, no compensation other than reimbwsement for expenses shall be paid to a Plan Administrator
who is the Employer or a full-rime fimployee of the Employer In the event any part of the assets in the
plan become subject to tax, all taxes incurred shall be paid from the plan assets unless the Plan
Administrator advises the Trustee not to pay such ta�c.
3 OS Actions of Administrator. Every action taken by the Plan Administrator shall be presumed to
be a fair and reasonable exercise of the authority vested in or the duties imposed upon him, her, or it.
The Plan Administrator shall be deemed to have exercised reasonable care, diligence and prudence and
to have acted impartially as to all persons interested, unless the contrary be proven by affinnative
evidence. The Plan Administrator shall not be liable for amounts of Compensarion deferred by
Participants or for other amounts payable under the Plan.
3 06 Delegation. Subject to any applicable laws and any approvals required by the Employer, the
Plan Administrator may delegate any or all of his, her or its powers and duties hereunder to another
person, persons, or entity, and may pay reasonable compensarion for such services as an administrarive
cacpense of the Plan, to the extent such compensation is not otherwise paid.
3 07 Investment and Service Providers. Any company which issues policies, contracts, or
investment media to the Employer or in respect of a Participant is not a party to this Plan and such
company shall have no responsibility, accountability, or liability to the Employer, the Administrator, any
Participant, or any Beneficiary with regard to the operation or adequacy of this Plan, including any
future amendments made thereto.
IV. PARTICIPATION IN THE PLAN
8-97 4
4 O1 Enrollment in the Plan:
(a) An Employee may become a Participant by executing a Participation Agreement.
Compensation will be defened for any calendaz month only if a Participation Agreement providing
for such deferral is executed by the Participant and approved by the Administrator before the
beginning of such month. With respect to a new Employee, Compensation shall be defeaed f6r .
the calendar month during which a Participant first becomes an Employee if a Participation
Agreement providing for such defeaal is executed by the Participant and approved by the
Administrator before the first day on which the Participant becomes an Employee.
(b) In signing the Participation Agreement, the Participant elects to participate in this Plan and
consents to the deferral by the Employer of the amount specified in the Participation Agieement
from the Participant's gross compensation for each pay period. Such deferral-shall continue in
effect until modified, disallowed or revoked in accordance with the terms of this Plan, or until the
Participant ceases employment with the Employer. The Employer retains the right to establish
murimum deferral amounts per pay period and to limit the number and/or timing of enrollments
into the Plan in the Participation Agreement.
(c) Beneficiary Each Participant may designate in the Participation Agreemeat a Beneficiary or
Beneficiaries to receive any amounts which may be disfributed in the event of the death of the
Participant prior to the comptete distribution of benefits. A Participant may change the
designation of Beneficiaries at any time by filing with the Adinuustrator a written notice on a form
approved by the Administrator If no such designation is in effect on the Participant's death, or if
the designated Beneficiary does not survive the Participant by 30 days, his Beneficiary shall be his
surviving spouse, if any, and then his estate.
4.02 Deferral Limitations:
(a) Except as provided in section 4 03, the maximnm that may be deferred under the Plan for any
taxable yeaz of a Participant shall not exceed the lesser of(i) $1,500, as adjusted for cost-of-living
in accordance with Code §457(e)(15) for taxable years beginning after December 31, 1996, or(u)
33 1/3% of the Participant's Includible Compensation, each reduced by any amoant specified in
section 4 02(b)that taxable year.
(b) The defeiral limitation shall be reduced by
(i) For a Participant who also participates in a rpral cooperarive plan(as defined in
§401(k)(7) of the Code)ancl for taxable yeazs of any other Participant beginning before
January 1, 1989, any amount excludable&om the Participant's gross income under §403(b)
of the Code on accourn of Employer contnbutions; or
(ri) In all other cases, any amount excludable from the Participant's gross income
attributable to elective deferrals to another eligible deferred compensation plan described in
§457(b) of the Code, elective deferrals or employer contributions to an annuity program
described in §403(b) of the Code, elective defenal to a qualified cash or deferred
8-97 5
arrangement described in §401(k) of the Code or to any simplified employee pension plan
described in §408(k) of the Code or Simple Retirement Account described in §408(p) of
the Code, or any amoiiat contributed on behalf of the Participant to an organization
described in §501(c)(18) of the Code.
4.03 Limited Catch-un: For one or more of the Participant's last three taxable yeazs ending befote :
the taxable yeaz in which Normal Retirement Age under the Plan is attained, the maximum deferral shall
be the lesser of
(a) $15,000, reduced by any applicable amount specified in section 4 02(b)for that ta�cable year;
or
(b) the sum of
(i) the limitations established for purposes of section 4 02 of the Plan, for such taxable
year (determined without regard to this section 4.03), plus
(u) so much of the limitation established under section 4 02 of the Plan or established in
accoriiance with §457(b)(2) and the regulations thereunder under an eligible deferred
corripensation plan sponsored by an entity other than the Employer and located in the same
state for prior taxable years (beginning after December 31, 1978 and during all or any
portion of which the Participant was eligible to participate in this Plan) as has not
theretofore been used under sections 4.02 or 4.03 hereof or under such other plan(taking
into account the limitations under and participation in other eligible defeaed compensation
plans in accordance with the Code); provided, however, that this section 4.03 shall not
apply with respect to any Participant who has previously utilized in whole or in part the
limited catch-up under this Plan or under any other eligible deferred compensation plan
(within the meaning of§457 of the Code and the regulations thereunder).
4.04 Emplover Modification of Deferral. The Employer or Adminisuator shall have the right to
modify or disallow the periodic deferral of Compensation elected by the Participant:
(a) In excess of the limitations stated in sections 4 02 and 4 03,
(b) In excess of the Participant's net Compensation for any pay period;
(c) Upon any change in the length of pay period utilized by Employer. In such case the periodic
defeaal shall be adjusted so that approximately the same percentage of pay shall be deferred on an
annual basis;
(d) In order to round periodic defeaals to the nearest whole dollar amount;
(e) To reduce the future deferrals in the event that the amount actually deferred for any pay period
exceeds, for any reason whatsoever, the amount elected by the Participant. In the alternative, such
amount of excess deferral may be refunded to the Participant. No adjustment in future deferrals
shall be made if a periodic defesal is missed or is less than the amount elected, for any reason
whatsoever; or
8-97 6
,
(� If the deferral elected for any pay period is less than the minimum amount specified in section
4.01(b);
Provided, however, that the Employer and the Administrator shall have no liability to any Participant or
BeneSciary with respect to the exercise of, or the failure to exercise, the authority provided in this
secrion 4.04 . ;
4.05 Particivant Modification of Defeaal. A Participant may modify the Participation Agreement
once during each enrollment period authorized by the Administrator with respect to Compensation
payable no eazlier than the calendar month after such modification is executed by the Participant and
accepted by the Administrator
4 06 Revocation. A Participant may at any time revoke the agreement to defer Compensation by
filing a written request for revocation to the Administrator on a form approved by the Administrator, at
least 30 days prior to the effective date of the revocation. However, the Total Amount Deferred shall be
distributed only as prbvided in Articles VI and VII and shall be subject to the terms and prbvisions of the
affected investment option. A Participant's request for a distribution in the event of an Unforeseeable
Emergency shall in addition be treated as a request for revocation of deferrals as of a date detetmir►ed by
the Administrator
4 07 Re-Enrollment. A Participant who revokes the Participation Agreement as set forth in section
4 06 above may again become a Participant by exeeuting in an enrollment period authorized by the
Adminisuator a new Participation Agreement to defer Compensation payable no earlier than the
calendar month after such new Participation Agreement is executed by the Participant and accepted by
the Administrator
4.08 Multiple Plans. In the case of a Participant who participates in more than one deferred
compensatioa plan governed by §457 of the Code, the limitations set forth in sections 4.02 and 4.03
shall apply to all such plans considered together For purposes of sections 4.02 and 4 03,
Gompensation deferred shall be takeri into account at its value in the later of the Plan Year in which
deferred or the Plan Yeaz in which such Compensation is no longer subject to a substantial risk of
forfeiture (within the meaning of§457 of the Code).
4 09 Custodv of Plan Assets. All amounts of Compensation deferted under the Plan, all properiy
and rights purchased with such amounu, and all income attributable to such amounts, property or rights
shall be held for the exclusive benefit of participants and their beneficiaries. The uust recjuiremern of
Code §457(g) shall be satisfied as specified in the Adoption Agreement. Depending upon the choices
made in the Adoption Agreement, plan asseu shall be set aside as follows.
(a) Plan assets shall be set aside in one or more annuity contracts described in Code §401(� of the
Code if elected in Box C. 1 of the Adoption Agreemem. The owner of the azinuity conhact is the
"deemed uustee" of the assets invested under the contract for purposes of Code §457(g).
(b) Plan assets shall be set aside in trust pursuant to Article V of this Plan with the Employer or
certain employees of(or holders of certain positions with)the Employer named as trustee if
8-97 7
elected in Box C. 2 of the Adoption Agreement. The Trustee shall be named on page 6 of the
Adoption Agreement and shall accept such appointment by executing same.
(c) Plan assets shall be set aside in one or more custodial accounts described in Code §401(fl if
elected in Box C. 3 of the Adopuon Agreement. The bank or trust company named on page 5 of
the Adoption Agreement shall be the Custodian and"deemed trustee" for pucposes of Code : ;
§457(g) and shall accept such appointment by executing same. The Employer and Custodian
must enter into a separate written custody agreement.
(d) Plan asseu will be set aside in tcust pursuant to a separate written trust agreement entered
into between the Employer and the bank or uust company named as tsustee if elected in Box C. 4
of the Adoption Agreement. The bank or trust company named on page 6 of the Adoprion
Ageement shall be the wstee and shall accept such appoirnment by executing same.
4.10 Oualified Military Service. Notwithstanding any provision of this Plan to the contrary,
contributions and benefits with respect to qualified military service shall be provided in accordance with
§414(u) of the Code.
V. CREATION OF TRUST AND TRUST FUND
5 Ol Establishment of Trust. If elected in Box C. 2 of the Adoption Agreement, the Employer or
named employees ofEmployer(or certain holders of positions with the Employer) shatl serve as Trustee
as evidenced by the trustee's execution of page 6 of the Adoption Agreement. In that everrt, a Trust is
h6reby created to hold all of the assets of the Plan for the exclusive benefit of Participants and
Beneficiaries. The Trust shall consist of all contributions made under the Plan and the investment
thereof and eamings thereon. All conuibutions and the eamings thereon less payments made under the
terms of the Plan, including fees and expenses, shall constitute the Trust. Except to the extem that the
Employer enters into a sepazate written trust agreement with an institutional Trustee, the assets in Trust
shall be administered as provided in this document.
ff elected in Box C. 4 of the Adoption Agreement, the bank or trust company named in the Adoption
A�eement shall serve as Trustee as evidenced by the trustee's execation of page 6 of the Adoption
Agreeriment. In that event, a Trust shall be created to hold all of the assets of the Plan for the exclusive
benefit of Participants and Beneficiaries pursuant to a separate written trust instrument between the
Employer and the Trustee setting out the Trustee's duties, rights, responsibiliries, fees and c�cpenses, the
division of duties and indemnification. The Trust shall consist of all conm'butions made under the Plan
which aze held by the Trustee The provisions of this Article V shall not apply
5 02 Ap�ointment and Termination of Trustee. A Trustee may be named by the Employer and may
be a Participant. The Trustee shall remain in oS'ice at the will of thg Employer and may be removed
from o�ce at any time by the Employer, with or without cause. Such removal shall be effective upon
delivery of written notice to the Trustee or at such later time as may be designated in such notice;
provided that any such norice of removal shall take effect no sooner than 30 days and no latez than 60
days after the deGvery thereo� unless such 30 or 60 day period shall be waived. The Trustee may resign
at any time upon giving written notice to the Employer or at such later time as may be designated in the
8-97 8
�
notice of resignation; provided that (i) any such notice of resignation shall take effect no sooner than 30
days and no later than 60 days after the delivery thereo� unless such 30 day or 60 day period shall be
waived and (ri) upon such resignation or removal the Employer shall have the power and the duty to
designate and appoint a successor Trustee, and the actual appointment of a successor Trustee is a
condition that must be fulSlled before the resignation or removal of the Trustee shall become effective.
iJpon appointment, the successor Trustee shall have all the rights, powers, privileges, liabilities and w
duties of the predecessor Trustee. The Trustee so resigned or removed shall take any and all action
necessary to vest the rights, powers, privileges, liabilities and duties of the Administrator in his, her or its
successor
5 03 Acce�ance. By signing the Adoprion Agreement the Trustee accepts the Trust created under
the Plan and agrees to perform the obligations imposed.
5 04 Control of Plan Assets. The assets of the Trust or evidence of ownership shall be held by the
Trustee, under the terms of the Plan and under either this Article V or under the sepazate written trust
aa eement with a bank or trust company If the assets represent amounts transferred from a fonner
pian, the Trustee shall not be responsible for the propriety of any investment under the former plan.
5 OS General Duties of the Trustee. The Employer or named individuals in the employ of the
Employer named as Trustee(s)in the Adoption Agreement shall be responsible for the administration of
investments held in the Plan. The Trustee's duties shall include:
(a) receiving contributions under the terms of the Plan.
(b) making distributions from plan assets held in trust in accordance with written instructions
received from an authorized representative of the Employer
(c) keeping accarate records reflecting its administration of the Trust assets and making such
records available to the Employer for review and audit. Within 90 days after each Plan Year, and
within 90 days after its removal or resignation, the Trustee shall file with the Employer an
accounting of its adminimation of the Trust assets during such yeaz or from the end of the
preceding Plan Yeaz to the date of removal or resignation. Such accounting shall include a
statement of cash receipts and disbursements since the date of its last accounting and shall contain
an asset list showing the fair mazket value of investments held in the Trust as of the end of the Plan
Year
The value of marketable investments shall be deteimined using the most recent price quoted on a
national securities exchange or over the counter mazket. The value of non-marketable investments
shall be determined in the sole judgment of the Trustee which determination shall be binding and
conclusive. The value of investments in securiries or obligations of the Employer in which there is
no market shall be determined in the sole judgment of the Employer and the Trustee.shall have no
responsibility with respect to the valuation of such assets. The Employer shall review the
Trustee's accounting and norify the Trustee in the event of its disapproval of the report within 90
days, providing the Trustee with a written description of the items in question. The Trustee shall
have 60 days to provide the Employer with a written explanation of the items in question.
8-97 9
(d) employing such agents, attorneys or other professionals as the Trustee may deem necessary or
advisable in the performance of its duties.
The Trustee's duties shall be limited to those described above. The Employer shall be responsible for any
other administrative duties required under the Plan or by applicable law . ;
5 06 Investment Powers of the Trustee. The Trustee shall implement an investment program based
on the Employer's investment objectives. If either the Employer or the Employee fails to issue
investment directions as provided in sections 6.01 and 6.02, the Trustee shall have authority to invest the
Trust assets in its sole discretion. In addirion to powers given by law, the Trustee may
(a) invest the Trust assets in any form of properry, including common and prefeaed stocks,
exchange and trade put and call options, bonds, money market instruments, mutual funds
(including Trust assets for which the Trustee or its affiliates serve as investment advisor), Treasury
bills, deposits at reasonable rates of interest at banking institutions including but not limited to
savings accounts and certificates of deposit, and other forms of securities or investment of any
ldnd, class, or character whatsoever, or in any other property, real or personal, having a ready
market.
(b) invest and reinvest all or any part of the Trust assets in any insurance policies or other
contracts with insurance compapies including but not limited to individual or group annuity,
deposit administration, and guaranteed interest contracts. Such contracts shall be heid in the name
ofthe Trustee.
(c) transfer any assets of the Trust to any group or comcno.� collective or cominingled fund that is
maintained by a bank or other institution that is established to pernut the pooling of Trust assets of
sepazate trusts so long as such Tmst assets are auailable to §457 plans.
(d) hold cash uninvested and deposit same with any banking or savings institution at reasonable
interest.
(e) join in or oppose the reorganization, recapitalization, consolidation, sale or merger of
corporations or properties, including those in which it is interested as a Trustee, upon such terms
as it deems wise.
(fl hoid investments in nominee or bearer form.
(g) to vote or refrain from voting any stocks, bonds, or other securities held in the Trust, to
exercise any other right appurtenant to any securities or other property held in the Trust, to vote
or refrain from voting proxies.
(h) exercise all ownership rights with respect to assets held in the Trust.
8-97 10
(i) do aay and all other acts that may be deemed necessary in the performance of the Trustee's
duties hereunder.
5 07 Trustee Fees and Expgnses. All reasonable costs, chazges and expenses incurred by the
Trustee in connection with the administration of the Trust assets(including fees for legal services
rendered to the Trustee) may be paid by the Employer, but if not paid by the Employer when due, sball :
be paid from the Trust. Such reasonable compensation to an institutional Trustee as may be agreed
upon from time to time between the Employer and the Trustee may be paid by the Employer, but if not
paid by the Employer when due shall be paid by the Tcust. The Trustee shall have the right to liquidaze
trust assets to cover its fees. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to a Trustee who is the Employer or a full-time Employee of
the Employer In the event any part of the Trust assets become subject to tax, all taxes incuaed shall be
paid from the Trust unless the Plan Administrator advises the Trustee not to pay such tax.
5 08 Exclusive Benefit Rules. No part of the Trust assets shall be used for, or diverted to, purposes
other than for the exclusive benefit of Participants, former Participants with a interest in the Plan, and
the beneficiary or beneficiaries of a deceasecl Participant having an interest in the Trust assets at the
death of the Participant.
5 09 Trustee Actions. Every action taken by the Trustee shall be presumed to be a fair and
reasonable exercise of the authority vested in or the duties imposed upon him, her, or it. The Ttustee
shall be deemed to have exercised reasonable care, diligence and prudence and to have acted impartially
as to all persons interested, unless the contrary be proven by a�rmative evidence. The Trustee shall not
be liable for amounts of Compensation defeaed by Participants or for other amounts payable under the
Plan.
5 10 Delegation. Subject to any applicable laws and any approvals required by the Employer,the
Trustee may delegate any or all powers and duties hereunder to another person, persons, or enrity, and
may pay reasonable compensation for such services as an administrative e�cpense of the Plan, to the
extent such compensation is not otherwise paid.
5 11 Division of Duties and Indemnification
(a) The Trustee shall have the authority and discrerioh to manage and govem the Tnist assets to
the extent provided in this instruinent, but does not guaraatee the Trust in any manner against
investmeat loss or depreciation in asset value, or guarantee the adequacy of the Trust assets to
meet and discharge all or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or sale of any investment or
reinvestment made by it, as herein provided, or for any loss to, or diminution of the Trust assets or
for any other loss or damage which may result&om the discharge of its duties hereunder except to
the extent it is judicially deternvned that the Trustee has failed to exercise the care, slpll, pnidence
8-97 11
and diligence under the circumstances then prevailing that a prudent person acting in a like
capacity and familiar with such matters would use in the conduct of an enterprise of a like
character with like aims.
(c) The Employer warrants that all directions issued to the Trustee by it or the Plan Administrator
shall be in accordance with the terms of the Plan and not contrary to the provisions of the Inte+nal ;
Revenue Code and regulations issued thereunder.
(d) The Trustee shall not be answerable for any action taken pursuant to any direction, consent,
certificate, or other paper or document on the belief that the same is genuine and signed by the
proper person. All directions by the Employer or the Plan Administrator shall be in writing from
the authorized individual or individuals named on page 6 of the Adoption Agreement.
(e) The duties and obligations of the Trustee shall be limited to those expressly imposed upon it
by this instrument or subsequently agreed upon by the parties. Responsibility for administrauve
duties required under the Plan or applicable law not expressly imposed upon or agreed to by the
Trustee shall rest solely with the Employer.
(� The Trustee shall be indemnified and held harniless by the Empioyer from and against any and
all liability to which the Trustee may be subjected, including all expenses reasonably incurred in its
defense, for any action or failure to act resulting from compliance with the instructions of the
Employer, the employees or agents of the Employer, the Plan Administrator, or any other fiduciary
to the Plan, and for any liability arising from the actions or nonactions of any predecessor trustee,
custodian or other fiduciaries of the Plan.
(g) The Trustee shall not be responsible in any way for the application of any payments it is
directed to make or for the adequacy of the Trust assets to meet and discharge any and all
liabilities under the Plan.
VI. INVESTMENTS
6.01 Em l�over Investment Direction.
(a) The Employer shall in its sole discretion select certain investment options to be used to
determine income to be accrued on deferrals. These investment options may include specified life
insurance policies, annuity contracts, or investment media issued by an insurance company In any
event, it shall be the sole responsibility of the Employer to ensure that all investments options
offered under the Plan are appropriate and in compliance with any and all state laws pertaining to
such investments.
(b) The Employer shall have the right to direct the Trustee with respect to investments of the
Trust assets, may appoint an investmem manager to direct investments, or may give the Trustee
sole investment management responsibi]ity Any investment directive shall be made in writing by
8-97 12
the Employer or investment manager. In the absence of such written directive, the Trustee shall
automatically invest the available cash in its discretion in an appropriate interim investment until
specific investment directions are received. Such instructions regazding the delegation of
investment responsibility shall remain in force until revoked or amended in writing. The Trustee
shall not be responsible for the propriety of any directed investment made and shall not be required
to consult with or advise the Employer regarding the investment quality of any directed iavestisient;
held hereunder
(c) The Employer may from time to time change the investment options under the Plan. If the
Employer eliminates a certain investment option, all Participants who had chosen that uivesfinent
shall select another option. If no new option is selected by the Participant, money remaining in the
eliminated investment option shall be moved at the direction of the Employer. The Participants
shall have no right to require the Employer to select or retain any investment option. To the extent
pem}itted by and subject to any rules or procedures adopted by the Administrator, a Participant
may from time to time change his choice of investment option. Any change with respect to
investmem oprions made by the Bmployer or a Participant, however, shall be subject to the terms
and conditions (including any rules or procedural requirements) of the affected investment options
and may affect only income to be accrued after that change.
(d) If the Employer fails to designate an investment or an investment manager, the Trustee shall
have full investment authority
6.02 Participant Investment Direction.
(a) Participants shall have the option to direct the investmeat of their personal conuibutions and
their shaze of any Employer contributions among alternative investment options esfablished as part
of the overall Trust, unless otherwise specified by the Employer Such investmedt options shall be
under the full control of the Trustee. A Participant's right to direct the investrnent of any
conuiburion shall apply only to making selections among the options made available under the
Plan.
(b) Each Participant shall designate on his Participation Agreement the investment that.shall be �
used to detemune the income to be accrued on aznounts deferred by him. If the investment chosen
by the Participant experiences a gain, the Participant's benefiu under the Plan likewise shall reflect
income for that period. ffthe investment chosen bq a Participant experiences a loss, or if charges
aze made under such investment, the Participant's benefits under the Plan likewise shall reflect such
loss or chazge for that period.
(c) Neither the Employer, the Administrator, the Trustee nor any other person shall be liable for
any losses incurred by virtue of following the Participant's directions or with any reasonable
administrative delay in implementing such directions.
6.03 Participant Accounts. The Admuustrator shall maintain or cause to be maintained a deferred
compensation ledger account or similar individual account for each Pazticipant. At regalar intervals
established by the Administrator, each Participant's account shall be credited with the amount of any
8-97 13
Deferred Compensation paid into the Trust; debited with any applicable administrative or investment
expense, allocated on a reasonable and consistent basis; credited or debited with investment gain or loss,
as appropriate; and debited with the amount of any distribution. At least once a yeaz each Participant
shall be notified in writing of his T'otal Amount Deferred.
6.04 Distributions from the Trust. The payment of benefits from the Trust in accordance with the :
terms of the Plan may be made by the Trustee, or by any custodian or other person so authorized by the
Employer to make such distribution. Neither the Plan Administrator, the Trustee nor any other pe;son
shall be liable with respect to any distn'bution from the Trust made at the direction of the Employer or a
person authorized by the Employer to give disbursement direction.
VII. DISTRIBUTTONS
7 O1 Conditions for Distributions. Payments from the Plan to the Participant or Beneficiary shall
not be made, or made available, earlier than:
(a) The Participant's sepazation from service or death;
(b) The ParticipanYs account meets all of the requirements for an in-service De Muumis
Distribution pursuant to 7 OS (if so specified in the Adoption Agreement), or
(c) The Participant incurs an approved unforeseeable emergency pursuant to 7 06 (if so specified
in the Adoption Agreement).
7 02 Senaration from Service. Distributions to a Participant shall commence on the 61st day
following his or her sepazation from service (or on the first regular distribution commencement date
thereafter as,the Employer or Administrator may establish from time to time), in a form and manner
detercnined pursuant to sections 7 O8 and 7 09, unless a deferred commencement date is elected in
accordance with section 7 03
7 03 Deferred Commencement Date at Sevazation From Service. No later than sixty(60) days
following the date of the Participant's separarion from service, the Participant may elect a deferred
commencement date for all or a portion of the Participant's account balance. Except as specified in
sectibn 7 04, such election shall be irrevocable. If the Participant elects to defer the entire account
balance, the fature commencement date taay not be later than April 1"of the calendaz year following the
latez of(i)the calendaz yeaz in which the Participant attains age 70'/�, or(u)the calendar year in which
the Participant separates frbm service. If the Participant elects to defer only a portion of the account,
the future date elected to begin receiviag t}ie balance of the account may not be later than the end of the
calendar year following the yeaz a partial distribution was received.
7 04 One Additional Defeaal of Commencement Date. Effective on or after 7anuary 1, 1997, the
Participant may irrevbcably postpone the original deferrbd distn'bution date elected in section 7.03 above
to a later date, but not later than April 1 of the calendaz year following the calendar year the Participant
attains age 70'/�, provided that:
8-97 14
(a) Such election is made prior to the defeaed commencement date elected in section 7 03 above
and before distributions have commenced; and
(b) The Participant may make only one(1) such election.
7.05 In-Service De M'inimis Accounts. If so specified in the Adoption Agreement, the Participant
may elect to receive or the Employer may distn'bute, without the consent of the Participant, the �
Participant's entire account in a lump sum if aIl of the following conditions are met:
(a) The value of a Participant's account does not exceed $3,500;
(b) No amount has been deferred under the Plan with respect to the Participant during the
two-year period ending on the date of the distribution; and
(c) There has been no prior distribution under the Plan to the Participant pursuant to this section.
7 06 Unforeseeable Emer�encies. If so specified in the Adoption Ageement and if the Plan
Adminisuator has detercnined that a Participant has incurred a genuine Unforeseeable Emergency and
that no other resources of financial relief are available, the Plan Administrator may grant, in its sole
discretio� a Participant's request for a payment from the Participant's account. Any payment made
under this provision shall be in a lump sum.
(a) The Plan Administrator shall have the right to request and review all pertinent information
necessary to assure that hazdship withdrawal requests are consistent with the provisions of§457 of
the Code.
(b) In no event, however, shall an Unforeseeable Emergency distribution be made if such hazdship
may be relieved:
(1) through reimbursement or compensation by insurance or otherwise;
(2) by liquidation of the Participant's assets, to the extent the liquidation of the Participant's
assets would not itself cause a severe financial hardship, or
(3) by cessation of defemals under this Plan.
(c) The amount of any financial hardship benefit shall not exceed the lesser of
(1) the amount reasonably necessary, as detemuned by the Plan Administrator, to satisfy the
hazdship; or
(2) the amount of the Participant's account.
(d) The Employer or Administrator may suspend the Participant's salary defeaal election during
the pendency of the Participant's request for a financial hardship distribution. Payment of a
8-97 15
financial hardship distribution shall result in mandatory suspension of deferrals for a minimum of
12 months from the date of payment.
(e) Currently, the following events are not considered unforeseeable emergencies under the Plan:
(1) Enrollment of a child in college; % :
(2) Purchase of a house;
(3) Purchase or repair of an aut6mobile;
(4) Repayment of loans;
(5) Payment of income taxes, back taxes, or fines associated with back taxes;
(6) Unpaid expenses including rent, utility bills, mortgage payments, or medical bills;
(7) Marital sepazation or divorce; or
(8) Bankruptcy except when resulting d'uectly and solely from illness or casualty loss.
7.07 Death Benefifs.
(a) If the Participant dies after the commencement of distributions to the Participant, the
Participant's remaining account shall be distributed to the Beneficiary at least as rapidly as under
the method of distribution in effect on the date of the Participant's death.
(b) If the Participant dies prior to the commencement of distributions to the Participant, and.
(1) If the Beneficiary is the Participant's surviving spouse:
(i) The cominencement date shall be no later than the last day of the calendar year in which
the Participant would have attained age 70'/z (or, if later, the calendar year immediately
following the yeaz of the Participant's death); and
(n) Distribution shall be made to the Beneficiary over a period that does not exceed the life
expectancy of the Beneficiary
(2) If the Beneficiary is not the Participant's surviving spouse:
(i) The entire account balance shall be distributed no later than the last day of the calendar
yeaz which includes the fifth(5`� anniversary of the Participant's death; or
(ri) If distn�butions to the Beneficiary comme,nce by the last day of the ealendar year
immediately following the year of the ParticipanYs death, the entire account balance shap
be distributed over a period not exceeding fifteen (15) years or, if earlier, the Beneficiary's
life expectancy
(3) Subject to the limitations.set forth above, distnbutions shall be made to the Beneficiary
commencing on the 61 st day after the Plap Administrator receives satisfactory proof of the
Participam's death(or on the first regular distribution commencement date thereaRer as the
8-9'7 16
Employer or Administrator may establish from time to time), unless prior to such date the
Beneficiary irrevocably elects a deferred commencement date consistent with this section.
(4) Disuibution shall be made in a form and manner determined under sections 7 08 and 7 09
that is consistent with the limitations set forth above.
(c) If there aze two or more Beneficiaries, the provisions of this section and section 7 10 shall be '
applied to each Beneficiary sepazately with respect to each Beneficiary's share in the Participant's
account.
(d) If the Beneficiary dies after beginning to receive benefits but before the entire account balance
has been distributed, the remaining accdunt balance shall be paid to the estate of the Beneficiary in
a lump sum.
(e) Under no circurimstances shall the Employei be liable to the Beneficiary for the amount of any
payment made in the name of the Participant before the Plan Adminisuator receives satisfactory
proof of the Participant's death.
7 08 Payment Options. A Participant's or Beneficiary's election of a payment option must be made
at least thirty(30) days prior to the date that the payment of benefits is to commence. If a timely
election of a paymedt option is not made, benefiu shall be paid in accordance with seaion 7 09 Subject
to applicable law and the other provisions of ttris Plaq distributions may be made in accordance with one
of the following payment options. Once payments have cotrimenced, the form of payment option may
not be changed.
(a) A single lump-sum payment;
(b) Substantially nonincreasing installment payments for a period of yeazs (payable on a monthly,
quarterly, semi-annual, or annual basis)which extends no longer than the life ezpectanoy of the
Participant or such longer perio8 as pemutted under section 7 07;
(c) Substantially nonincreasing installment payments for a period of yeazs (payable on a monthly,
quarteriy, semi-annual, or annual basis) antomatically adjusted for cost-of-living increases based on
the rise in the Consumer Price Index for All Urban Consumers (CPI-Ln from the thiid quarter of
the last year in which a cost-of-living increase was provided to the third quarter of ttie current
year Any increase shall be made in periodic payment checks beginning the following January
(d) Partiat lump-sum payment of a designated amount, with the balance payable in substantially
nonincreasing installment paymenu for a period of years, as descn'bed in subsection(b), as long as
such installment payments begin prior to the end of the calendar year following the year the partial
lump-sum payment was made;
(e) Annuity payments (payable on a monthly, quarterly, or annual basis)for the lifetirime of the
Participant or for the lifetimes of the Participant and Beneficiary if permitted under section 7 07, or
8-97 17
(� Such other forms of substantially nonincreasing installment payments as may be approved by
the Employer consistent with the limitations of section 7.07
If a Participant has Trust assets with more than one investment provider under the Employer's defecred
compensation plan, funds from each investment provider must be coordinated and distributed in a
mansier that does not violate the "substantially nonincreasing amount" provision in §457(d)as amen�ed :
from time to time.
7 09 Default Distribution Option. If the Participant fails to make a timely election of one of the
payment options described in section 7 08 for distriburions pursuant to section 7 02, payments shall be
made in equal mornhly installments over a period of five years without the inclusion of a cost=of=living
increase. If a Beneficiary fails to make a timely election of one of the payment options descnbed in
section 7 08 for distributions pursuant to section 7 07, distribution shall be made in a lump sum.
7 10 Limitations on Distribution Options. No distribution option may be selected by a Participant
or Beneficiary under this Article VII unless it satisfies the requirements of§401(a)(9) and §457(d) of the
Code, including the requirement that installment payments be made in substantially nonincreasing
amounts and that payments commencing before the death of the Participant satisfy the incidental death
benefits requirement. A cost-of-living increase included as part of a payment option is intended to
comply with written IRS guidance such that the substantially nonincreasing amount rule shall not be
violated.
Unless otherwise elected by the Participant (or spouse, in the cases of certain distributions described in
section 7 07), life expectancies of the Participant and/or spouse shall be recalculated annually in
determining the required minimum distribution amount under §401(a)(9).
An election of non-recalculation must be made as part of the election of a payment option under section
7 08, and shall be irrevocable as to the Participant (or spouse, if applicable) for all subsequent years.
The life expectancy of a nonspouse Beneficiary may not be recalculated. The terms of this Article shall
be construed in accordance with al] applicable Code sections and the regulations thereunder.
7 11 Taxation of Distributions. To the extent required by law, income and other taxes shall be
withheld from each benefit payment, and payments shall be reported to the appropriate governmental
agency or agencies.
7 12 Transfers. If so specified in the Adoption Agreeriment, transfers shall be available as follows.
(a) Transfers to the Plan: If the Participant was formecly a Participant in an eligible deferred
compensation plan maintained by another employer, and if such plan pertnits the direct transfer of
the Participant's interest therein to the Plan, then the Plan shall accept assets representing the value
of such interest; provided, however, that the Participant has separated from service with that
employer and become an Employee of Employer. Such amounu shall be held, accounted for,
administered and otherwise ueated in the same manner as Compensation Deferred by the
Participant except that such amounts shall not be considered Compensation Defeired under the
Plan in the taxable year of such transfer in determining the maximum deferral under section 4.02.
The Employer may require such documentarion from the predecessor plan as it deems necessary to
8-97 18
confirm that such plan is an eligible defeaed compensation plan within the meaning of§457, and
to assure that transfers aze provided under such plan. The Employer may refuse to accept a
transfer in the form of assets other than cash, nnless Eiiiployer and the Committee agree to hold
such other assets under the Plan.
(b) Transfers From the Plan. If a Participant separates&om service prior to his or her requirad :
beginning date, and becomes a Participant in an eligible deferred compensation plan of another
emp(oyer, and provided that payments under this Plan have not begun, such PaRicipant may
request a transfer of his or her account to the eligible deferred compensation plan of the other
employer Recjuests for such transfers must be made in writing to the Plan Administratoi and shall
be granted in the sole discretion of the Plan Administrator If an amount is to be transfeRed
pursuant to this provision, the Plan Administrator shall transfer such amount directly to the eligible
defeaed compensarion plan of the other employer Amounts transferred to another eligible
deferred compensation plan shall be treated as distributed from this Plan and this Plan shall have no
further responsibility to the Participant or any beneficiary with respect to the amount transferred.
7 13 Elections. Elections under this Article shall be made in such form and manner as the Plan
Administrator may specify from time to time.
VIII. LEAVE OF ABSENCE
8.01 Eaid Leave of Absence. If a Participant is on an approved leave of absence from ttie Employer
with compensation, or on approved leave of absence without compensation that does not constitute a
separation&om service within the meaning of§402(d)(4)(A)(iri) of the Code, which under the
Employer's current practices is generally a leave of absence without compensation for a period of one
year or less, said Participant's participation in the Plan may continue.
8.02 Unpaid Leave of Absence. If a Participant is on an approved leave of absence without
compensation and such leave of absence c6ntinues to such an eactent that it becoines a.sepazation from
service within the meaning of§402(e)(4)(A)(ui) of the Code, said Participant shall have separated from
service with the Employer for purposes of this Plan; provided, however, that pursuant to section 7 03,
said Participant may elect to postpone commenceiaent of benefit payments until a future date. Upon
ternvnation of leave withont pay and retum to active status, the Participant rriay execufe a new
Participation Ageement to be effective when permitted by section 4.01 of the Plan.
IX. PARTICIPANT LOANS
9 Ol Authorization of Loans. If so specified in the Adoption Agreement, the Employer may
authorize the Trustee to make loans to Participants pursuant to the terms of this Article. Such loans
shall be made on the written application of the Participant and on such terms and conditions as are (i) set
forth in this Article or by the Administrator or(u) appropriate and desirable to comply with applicable
law In making such loans, the Administrator shall follow uniform policies and shall not disci�iminate in
favor of or against any Participant or group of Participants.
8-97 19
, , .
9 02 Maximum Loan Amount. In no event shall any loan made to a Participant be in an aznount
which shall cause the outstanding aggregate balance of all loans made to such Participant under this Plan
exceed the lesser of:
(a) $50,000, reduced by the excess (if any) of (i)the highest outstanding balance of loans from
the Plan to the Participant during the one-year period ending on the day before the date on whith ;
the loan is made; over(ri)the ouutanding balance of loans from the Plan to the Participant or the
Beneficiary on the date on which the loan is made; or
(b) One-half of the Participant's Total Amount Deferred.
9 03 R�e avment-of Loan. Each loan shall mature and be payable, in full and with interest, within five
years from the date such loan is made, unless
(a) The loan is used to acqu'ue any dwelling unit that within a reasonable time (detemuned at the
time the loan is made)will be used as the principal residence of the Participant; or
(b) Loan repayments aze, at the Employer's election, suspended as permitted by §414(u)(4) of the
Code(with respect to qualified military service).
9 04 Loan-Terms.and Conditions. In addition to such rules and regulations as the Administntor
may adopt, all loans to Participants shall comply with the following terms and conditions:
(a) Loans shall be available to all Participants on a reasonably equivalent basis.
(b) Loans shall bear interest at a reasonable rate to be fixed by the Administrator based on interest
rates currenfly being charged by commercial lenders for similaz loans. The Administrator shall not
discriminate among Participants in the matter of inferest rates, but loans granted at different times
may bear different interest rates based on prevailing rates at the time.
(c) Each loan shall be made against collateral, including the assignment of no more than one-half
of the present value of the Participant's Total Amount Deferred as security for the aggregate
amount of all loans made to such Participant, supported by the Participant's collateral promissory
note fbr the amount of the loan, including interest.
(d) Payments of principal and interest must be made at least quarterly and such payments shall be
sufficient to amortize the principal and interest payable pursuant to the loan on a substantially level
basis. The Administrator may require that loan repaymerns be made by payroll deduction.
(e) A loan to a Participant or Beneficiary shall be considered a directed investment option for such
Participant's account balance.
(� No distribution shall be made to any Participant, or to a Beneficiary of any such Participant,
unless and until all unpaid loans, inclucling accrued interest thereo� have been satisfied. If a
Participant temunates employment with the Employer for any reason, the ontstanding balance of
s-97 20
.. • ��
all loans made to him shall become fully payabie and, if not paid within thirty days, any unpaid
balance shall be deducted&om any benefit payable to the Participant or his Beneficiary In the
event of default in repayment of a loan or the bankruptcy of a Participant who has received a loan,
the note will become immediately due and payable, foreclosure on the note and attachment of
security will occur, the amount of the outstanding balance of the loan will be treated as a
distribution to the Participant, and the defaulting Participant's Accumulated Deferrals shall be = :
reduced by the amount of the outstanding balance of the loan(or so much thereof as may be
treated as a distribution without violating the requiremeats of the Code).
(g) The loan program under the Plan shaIl be administered by the Adminisfrator in a uniform and
nondiscriminatory manner The Adminisuator shall establish procedures for loans, including
procedures for applying for loans, guidelines goveming the basis on which]oans shall be approved,
procedures for detem�ining the appropriate interest rate, the types of collateral which shall be
accepted as security, any limitations on the types and amount of loans offered, and the events
which shall constitute default and actions to be taken to collect loans in default.
X. AMENDMENT OR TERMINATTON OF PLAN
10 O1 Termination. The Employer may at any time tersninate this Plan; provided, however, that no
termination shall affect the amount of benefits which at the time of such termination shall have accrued
fo.r Participants or Beneficiaries. Such accrued benefit shall include any Compensation defecred before
the time of the termination and income thereon accrued to the date of the termination.
Such amount shall be calculated in accordance with section 6.02(b) and the tezins and conditions of
the affected investment option. Upon such terminatio� each Participant in the Plan shall be deemed to
have revoked his agreement to defer future compensati6n as provided in section 4.06 as of the date of
such temunation. Each Participant's full Compensation on a nondefened basis shall be restored.
10 02 Amendment. The Employer may also amend the prbvisions of this Plan at any time;provided,
however, that no amendment shall affect the amount of benefits which at the time of such amendment
shall have accrued for Participants or Beneficiaries, to the extent of and Compensation deferred before
the time of the amendment and income thereon accrued to the date of the amendment, calculated in
accordance with secdon 6.03 and the terms and condirions of the investment options hereund@r; and
provided further, that no amendment shall affect the duties and rbsponsibiliries of the Trustee unless
executed by the Trustee.
10.03 �onies of Amendments. The Administrator shall provide a copy of any plan amendment to any
Trustee or custodian and to the issuers of any imestment options selected pursuant to section 6.01
XL TAX TREATMENT OF AMOUNTS CONTRIBUTED
It is intended that pursuant to §457 of the Code, the amoum of Deferred Comgensatioa shall not be
considered current compensation for pu.rposes of Federal income taxation. This rule shall also apply to
State income t�ation unless applicable state laws provide otherwise. Such amounu shall, however, be
included as compensation to the extent required under the Federal Insurance Contdbutions Act (FICA). I
8-97 21
.� � �� �
Payments under this Plan shall supplement ret'vement and death benefits payable under the Employer's
groap insurance and retirement plans, if any
XII. NON-ASSIGNABILITY
12.01 Non-Assi an� bilitv It is agreed that neither the Participant, nor any Beneficiary, nor any o�er :
designee shall have any right to comiaute, sell, assign, transfer, or otherwise convey the rigtit to receive
any payments hereunder, which paymeats and right thereto are expressly declared to be non-assignable
and non-transferable; and in the event of atteinpt to assign or fransfer, the Employer shall have no
further liability hereunder, nor shal] any unpaid amoiidts be subject to attachment, gamishment or
execution, or be transferable by operation of law in evedt of bankruptcy, insolvency, except to the extent
otherwise requued by law
12.02 Confomun�E�uitable Distritution Orders. If so specified in the Adoption Agreement,
domestic relations orders approved by the Plan Administrafor shall be administered as follows.
(a) To the extent required under a Snal judgment, decree, or order made pursuant to a state
domestic relations law, herein referied to as a Conforming Equitable Distribution Order(CEDO),
which is duly filed upon the Einployer, any portion of a Participant's Account may be paid or set
aside for payment to a spouse, former spouse, or a child of the Participant. Where necessary to
carry out the ferms of such a CEDO, a sepazate accouat shall be established with respect to the
spouse, former spouse, or child, and such peison shall be entitled to make investment selections
with respect thereto in the same manner as the Participant. All costs and chazges incurred in
carrying out the investment selection shall be deducted from the account created for the spouse,
former spouse, or child making the investment selection.
Any amounts so set aside for a.spouse, former spouse or a child shall be paid out in a lump sum at
the earliest date that benefits may be paid to the Participant, unless the CEDO directs a different
form of payment oi later payment date. In no eveflt is the spouse, former spouse or child entitled
to receive a distribution froia the Plan prior to the time that the Participant sepazates from service
with the Employer or becomes age 70 Y2. Nothing ia this section shall be construed to authorize
any amounts to be distributed under the Employer's plan at a time or in a foan that is not pernritted
under §457 of the Intemal Revenue Code. Any payment made to a person other than the
Participant pursuant to this section shall be reduced by required income tax withholding. The fact
that payment is made to a person other than the Participant may not prevent such payment from
being includible in the gross income of the Participant for withholding and income taic reporting
purposes. Such withholding and income tax reporting shall be done under the terms of ttie Intemal
Revenue Code as amended from time to time.
(b) The Employer's Gability to pay benefits to a Participant shal] be reduced to the extent that
amounts have been paid or set aside for payment to a spouse, former spouse or child pursuant to
this section. No amount shall be paid or set aside unless the Employer, or its agents or assigns, has
been provided with satisfactory evidence releasing them from any further claim by the Participant
with respect to these amounts. The Participant shall be deemed to have released the Employer
from any claim with respect to such amounts in any case in which the Employer has been notified
8-97 22
�� ! t + • r
of or otherwise joined in a proceeding relating to a CEDO which sets aside a portion of the
Participant's Account for a spouse, former spouse or child, and the Participant fails to obtain an
order of the court in the proceeding relieving the Employer from the obligation to comply with the
CEDO
(c) The Employer shall not be obligated to comply with any judgment, decree or order which% ;
attempts to require the Plan to violate any plan provision or any prbvision of§457 of the Intemal
Revenue Code. Neither the Employer nor its agenu or assigns shall be obligated to defend against
or set aside aziy judgment, decree, or order described herein or any legal order relating to the
division of a Participant's benefits under the plan unless the full expense of such legal action is
bome by the Participant. In the event that the Participant's action (or inaction) nonetheless causes
the Employer, iu ageats or assigns to incur such expense, the amount of the expense may be
charged against the Participant's account and thereby reduce Employer's obligation to pay benefits
to the Participant. In the course of any proceediag relating to divorce, separation, or child
support, the Employer, its agents and assigns shall be authorized to disclose information relating to
Participant's individual account to the Participant's spouse, former spouse or child (including the
legal representatives of the spouse, former spouse or child), or to a court.
XIII. DISCI.AIlbIER
The Employer and the Admuustrator make no endorsement, guarantee or any other representation and
shall not be liable to the Plan or to any Participant, Beneficiary, or any other person with respect to (a)
the financial soundness, investment performance, fitness, or suitability(for meeting a Participant's
objedives, future obligations under the Plan, or any other purpose) of any investment option offered
pursuant to section 6.01 or any investment vehicle in which amounts deferred under the Plan aze actually
invested, or(b)the tax consequences of the Plan to any Participant, BeneSciary or any other person.
XIV EMPLOYER PARTICIPATION
Notwithstanding any other provisions of this Plan, the Employei may add to the amounts payable to any
Participant under the Plan additional Deferred Compensation for services to b6 rendered by the
Participant to the Employer during a calendar month, provided (a) the Participant has elected to haue
such additional Compensation deferred, invested, and distributed pursuant to this Plan, prior to the
calendar month in which the Compensation is eamed, and (b) such additional Compensation deferred,
when added to all other Compensation deferred under the Plan, does not exceed the maximum deferral
permitted by Article N
I{V. INTERPRETATION
15 O 1 Governine Law This Plan shall be construed under the laws of the state in which the
Employer is located.
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e • • •
� � M
13 02 §457 This Plan is intended to be an eligible defeaed compensation plan within the meaning of
§457 of the Code, and shall be interpreted so as to be consistent with such section and all regulations
promulgated thereunder
15 03 Word Usaee. Words used herein in the singulaz shall include the plural and the plural the
singular where applicable, and one gender shall include the other genders where appropriate. . ;
15 04 Headines. The headings of articles, sections or other subdivisions hereof aze included solely
for convenience of reference, and if there is any conflict between such headings and the text of the Plan,
the text shall control.
15 OS Entire A�eement. This Plan, the Adoption Agreement and any properly 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. This
Plan and any properly adopted amendment, shall be binding on the parties hereto and their respective
heus, administrators, trustees, successors, and assigns and on all designated Beneficiaries ofthe
Participant.
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