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Res 1644 - ICMA 401(a) PW Dir COUNCIL BILL NO. 2335 RESOLUTION NO. 1644 A RESOLUTION AUTHORIZING THE ESTABLISHMENT OF A 401(A) MONEY PURCHASE PLAN AND TRUST IN THE FORM OF THE ICMA RETIREMENT CORPORATION PROTOTYPE MONEY PURCHASE PLAN AND TRUST. WHEREAS, the City of Woodburn has employees rendering valuable services; and WHEREAS, the establishment of a money purchase retirement plan benefits employees by providing funds for retirement and funds for their beneficiaries in the event of death; and WHEREAS, the City of Woodburn desires that its money purchase retirement plan be administered by the ICMA Retirement Corporation and that the funds held under such plan be invested in the ICMA Retirement Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans, now, therefore, THE CITY OF WOODBURN RESOLVES AS FOLLOWS: Section 1. The City of Woodburn hereby establishes a money purchase retirement plan (the "Plan") in the form of the ICMA Retirement Corporation Governmental Money Purchase Plan and Trust, pursuant to the specific provisions of the Adoption Agreement, a copy is attached hereto and, by this reference, incorporated therein. The Plan shall be maintained for the exclusive benefit of eligible employees and their beneficiaries. Section 2. That the City of Woodburn hereby executes the Declaration of Trust of the ICMA Retirement Trust, a copy is attached hereto and, by this reference, incorporated herein, intending this execution to be operative with respect to any retirement or deferred compensation plan subsequently established by the City, if the assets of the plan are to be invested in the ICMA Retirement Trust. Section 3. That the City of W oodbum hereby. agrees to serve as trustee under the Plan and to invest funds held under the Plan in the ICMA Retirement Trust. Page I - COUNCIL BILL NO. 2335 RESOLUTION NO. 1644 Section 4. That the City Administrator shall be the coordinator for the Plan; shall receive necessary reports, notices, etc., from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Employer, any required votes under the ICMA Retirement Trust; may delegate any administrative duties relating to the Plan to appropriate departments, and is authorized to execute all necessary agreements with ICMA Retirement Corporation incidental to the administration of the Plan.. Approved as to form: ?).~ f2f.D City Attorney ,120{7-"01 Dae APPROVED Passed by the Council July 23, 2001 Submitted to the Mayor July 24, 2001 Approved by the Mayor July 24, 2001 Filed in the Office of the Mayor July 24. 2001 ATTEST fY\~ Mary tenrr t, Recorder City of Woodburn, Oregon Page 2 - COUNCIL BILL NO. 2335 RESOLUTION NO. 1644 - ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST ADOPTION AGREEMENT Account Number 10- 7746 , The Employer hereby establishes a Money Purchase Plan and Trust to be known as (the "Plan") in the form of the ICMA Retirement Corporation Governmental Money Purchase Plan and Trust. The Plan shall be known as: Public Works Director Money Purchase Plan {9()() { This Plan is an amendment and restatement of an existing defined contribution money purchase plan. o Yes 9 No If yes, please specify the name of the defined contribution money purchase plan which this Plan hereby amends and restates: I. Employer Name: City of Woodburn, Oregon {902/ II. The Effective Date of the Plan shall be the first day of the Plan Year during which the Employer adopts the Plan, unless an alternate Effective Date is hereby specified: June 26, 2001 III. Plan Year will mean: IX)( The twelve (12) consecutive month period which coincides with the limita- tion year. (See Section 5.04(i) of the Plan.) {803/ o The twelve (12) consecutive month period commencing on and each anniversary thereafter. {803/ IV Normal Retirement Age (not to exceed age 65) shall be age 58 {288/ V ELIGIBILITY REQUIREMENTS: 1. The following group(s) of Employees are eligible to participate in the Plan: -XX- All Employees All Full-Time Employees Salaried Employees Non-union Employees Management Employees Public Safety Employees General Employees Other (specify below): Public Works Director Mill' Adoplion Ab"""nlt'n! 4/3of2(M H I The group specified must correspond to a group of the same designation that is defined in the statutes, ordinances, rules, regulations, personnel manuals or other ~terial in effect in the state or locality of the Employer. 2 The Employer hereby waives or reduces the requirement of a twelve (12) month Period of Service for participation. The requir,ed Period of Service shall be na write N/ A if an Employee is eligible to participate upon employment). [344J If this waiver or reduction is elected, it shall apply to all Employees within the Covered Employment Classification. 3. A minimum age requirement is hereby specified for eligibility to participate. The minimum age requirement is ~ (not to exceed age 21). Write N/ A if no mini- mum age is declared. [341J VI. CONTRIBUTION PROVISIONS 1. The Employer shall contribute as follows (choose one): I!I< Fixed Employer Contributions With Or Without Mandatory Participant Contributions. SEE ATTACHMENT "A" The Employer shall contribute on behalf of each Participant ~ % of earnings or $ for the Plan Year (subject to the limitations of Article V of the Plan). Each Participant is required to contribute _ % of earnings or $ for the Plan Year as a condition of participation in the Plan. (Write "0" if no contribution is required.) If Participant Contributions are required under this option, a Participant shall not have the right to discontinue or vary the rate of such contribu- tions after becoming a Plan Participant. The Employer hereby elects to "pick up" the Mandatory/Required Participant Contribution. )W Yes o No [621J The pick-up provision specifies that the contribution is treated, for federal income tax purposes, as though it is made by the employer. The pick-up provision allows the employee to defer taxes on the employee mandatory contribution. The actual result is the same as if the contribu- tion were a reduction in that employee's salary by the amount of the contribution. Picked up contributions are NOT exempt from Social Security t;>y [Note to Employer: A determination letter issued to an adopting Em- ployer is not a ruling by the Internal Revenue Service that Participant contributions that are picked up by the Employer are not includable in the Participant's gross income for federal income tax purposes. The Employer may seek such a ruling. 2 MPP Adoption Agreement 4/30/2000 ATTACHMENT "A" ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST ADOPTION AGREEMENT Account Number 10-7746 VI. CONTRIBUTION PROVISIONS: 1. The maximum twenty-five percent (25%) of the Participant's compensation for the Limitation Year under the plan, less an eight percent (8%) employer contribution to the Public Works Director Money Purchase Plan, less the employer and employee contribution to the Oregon Public Employees Retirement System. The Participant is required to contribute the remaining percentage to equal the twenty-five (25%) contribution. (picked up contributions are excludable from the Participant's gross income under section 414(h) (2) of the Internal Revenue COde of 1986 only if they meet the requirements of Rev. Rul. 81-35,1981-1 C.B.255. Those requirements are (1) that the Employer must specify that the contributions, although designated as employee contributions, are being paid by the Employer in lieu of contributions by the employee; and (2) the employee must not have the option of receiving the contributed amounts directly instead of having them paid by the Employer to the plan.] o Fixed Employer Match of Participant Contributions. The Employer shall contribute on behalf of each Participant _% of Earnings for the Plan Year (subject to the limitations of Article V of the Plan) for each Plan Year that such Participant has contributed % of Earnings or $ . Under this option, there is a single, fixed rate of Employer contributions, but a Participant may decline to make the required Participant contributions in any Plan Year, in which case no Employer contribution will be made on the Participant's behalf in that Plan Year. o Variable Employer Match Of Participant Contributions. The Employer shall contribute on behalf of each Participant an amount determined as follows (subject to the limitations of Article V of the Plan): % of the contributions made by the Participant for the Plan Year (not including Participant contributions exceeding % of Ear~ngs or $ ); PLUS % of the contributions made by the Participant for the Plan Year in excess of those included in the above paragraph (but not including Participant contributions exceeding in the aggregate % of Earnings or $ ). Employer Contributions on behalf of a Participant for a Plan Year shall not exceed $ or % of Earnings, whichever is less. more or 2 Each Participant may make a voluntary (unmatched), after-tax contribution, subject to the limitations of Section 4.05 and Article V of the Plan. o Yes ~ No MPP Adoption Agreement 4/30/2000 3 3. Employer contributions and Participant contributions shall be contributed to the Trust in accordance with the following payment schedule: (please circle one choice) [611J 0 Bi-Weekly 1 Weekly 2 Semi-Weekly 3 Bi-Monthly @ Monthly 5 Semi-MontWy 6 Bi-Quarterly 7 Quarterly . 8 Semi-Quarterly 9 Bi-Annually 10 Annually 11 Semi-Annually VII. EARNINGS Earnings, as defined under Section 2.09 of the Plan, shall include: (a) Overtime o Yes ra No (b) Bonuses [) Yes o No VIII. LIMITATION ON ALLOCATIONS If the Employer maintains or ever maintained another qualified plan in which any Participant in this Plan is (or was) a participant or could possibly become a participant, the Employer hereby agrees to limit contributions to all such plans as provided herein, if necessary in order to avoid excess contributions (as described in Sections 5.02 and 5.03 of the Plan). 1. If the Participant is covered under another qualified defined contribution plan main- tained by the Employer, the provisions of Section 5.02(a) through (f) of the Plan will apply unless another method has been indicated below. o Other Method. (Provide the method under which the plans will limit total Annual Additions to the Maximum Permissible Amount, and will properly reduce any excess amounts, in a manner that precludes Em- ployer discretion.) 2. If the Participant is or has ever been a participant in a defined benefit plan maintained by the Employer, and if the limitation in Section 5.03 of the Plan would be exceeded, then the Participant's Projected Annual Benefit under the defined benefit plan shall be reduced in accordance with the terms thereof to the extent necessary to satisfy such limitation. If such plan does not provide for such reduction, or if the limitation is still exceeded after the reduction, annual additions shall be reduced to the extent necessary in the manner described in Sections 5.02 and 5.02. The methods of avoiding the limita- tion described in this paragraph will not apply if the Employer indicates another method below. 4 MPP Adoption Agreement 4/3012000 o Other Method. (Note to Employer: Provide below language which will satisfy the 1.0 limitation of section 415(e) of the Code,_ Such language must preclude Employer discretion. See section 1.415-1 of the Regulations for guidance.) _~ ~ 3_ The limitation year is the following 12-consecutive month period: ,1imlJil ry 1 - December 31 IX. VESTING PROVISIONS The Employer hereby specifies the following vesting schedule, subject to (1) the minimum vesting requirements as noted and (2) the concurrence of the Plan Administrator_ Years of Service Completed Percent Vesting Zero One Two Three Four Five Six Seven Eight Nine Ten ~% % % % % % % % % % % X. Loans are permitted under the Plan, as provided in Article XIII: fXl: Yes o No (751) 'r XI. The Employer hereby attests that it is a unit of state or local government or an agency or instrumentality of one or more units of state or local government. .;. XII. The Plan Administrator hereby agrees to inform the Employer of any amendments to the Plan made pursuant to Section 14.05 of the Plan or of the discontinuance or abandonment of the Plan. XIII. The Employer hereby appoints the ICMA Retirement Corporation as the Plan Administra- tor pursuant to the terms and conditions of the ICMA RETIREMENT CORPORA- TION GOVERNMENTAL MONEY PURCHASE PLAN &TRUST. The Employer hereby agrees to the provisions of the Plan and Trust. MPP Adoption Agreement 4/30/2(JO(l 5 XIV The Employer hereby acknowledges it understands that failure to properly fill out this Adoption Agreement may result in disqualification of the Plan. XV An adopting Employer may not rely on a determination letter issued by the National or District Offil of the Internal Revenue Service as evidence that the Plan is qualified under Section 401 of the Inter- nal Revenue Code. In order to obtain reliance with respect to plan qualification, the Employer must apply to the appropriate key district office for a determination letter. _1 ("" +t:- In Witness Whereof, the Employer hereby causes this Agreement to be executed on this ~day of ~{1 ' 200~. EMPLOYER BY~~~ Title: City Administrator Attest: M -T~ '0 ACCEPTED: ICMA RETIREMENT CORPORATION tJIA.i~ Title: Corporate Secretary u,:L~e~~ Attest: (, MPP Adoption Agreement 4/31112, ~~ ~''... ~ ~ ~ .~ ..~ -1 ." ) :;$ ,t l 2 ~ ( , i i , . ..~ << 401 LOAII Guidtlillrs 401 PLAN LOAN GUIDELINES ~ ~ ,ICMA-RC Account #: 10-7746' Name of Employer: City of Woodburn. Oregon I. PURPOSE The purpose of these guidelines is to establish the temlS and conditions under which the Employer will grant loans to participants. This is the only official Loan Program Document of the above named Plan. II. ELIGIBILITY Loans are available to all active employees. Loans will not be granted to participants who have an existing loan in default. Loans are available from the following sources: [select one or both] Iil Employer Contribution Account (vested balances only) [XJ Participant Contribution Accounts (pre- and post-tax, if applicable, including Employee Mandatory, Employee Voluntary, Employer Rollover, and Portable Benefits Accounts, but excluding the Deductible Employee Contribution/Qualified Voluntary Employee Contribu- tion Account) Loans will be pro-rated among all the funds in which the participant is invested at the time the loan is made. Loans are available for the following purposes: [select one] ~ All purposes . ~ . . o Loans shall only be granted in the event of a participant's hardship or for the purpose of enabling a participant to meet certain specified financial situations. The Employer shall deter- mine, based on all relevant facts and circumstances, that the amount of the loan is not in excess of the amount required to relieve the financial need. For this purpose, financial need shall include, but shall not be limited to: unreimbursed medical expenses of the participant or the participant's immediate family, establishing or substantially rehabilitating the principal residence of the participant, or paying for a college education (including graduate studies) for the participant or his/her dependents. III. FREQUENCY OF LOANS [select one] o Participants may receive one loan per calendar year. Moreover, participants may have only one outstanding loan at a time. ~Participants may receive one loan per calendar year. Moreover, no participant may have more than five (5) loans outstanding at one time. 2 ~ ICMA RETIREMENT CORPORATION ". IV. LOAN AMOUNT :~I The minimum loan amount is $1,000. ~ .. .: The maximum amount of all loans to the particip;nt from the Plan and all other plans sponsored by the Employer that are qualified employer plans under Section 72(p) (4) of the Code is the lesser of: (1) $50,O()(), reduced by the excess (if any) of: a. The highest outstanding balance ofloans during the one-year period ending on the day before the date a loan is to be made, over b. The outstanding balance of loans on the date the loan is to be made; or (2) 1/2 of the participant's vested account balance. * If a participant has any loans outstanding at the time a new loan is requested, the new loan will be limited to the maximum amount calculated above reduced by the total of the outstanding loans. A loan cannot be issued for more than the above amount. The participant's requested loan amount is subject to downward adjustment without notice due to changes in account balance between the time of application and the time the loan is made. * The Code & Plan document say "greater of $1 0,000 or 1/2 of vested account balance". V. LENGTH OF LOAN A loan must be repaid in subs9ntially equal installments of principal and interest, at least monthly, over a period that does not exceed five (5) years. Loans for a principal residence-must be repaid in substantially equal installments of principal and interest, at least monthly, over no more than 30 years [state number of years] years (maxi- mum 30 years). i ~ ) ! VI. LOAN REPAYMENT PROCESS Loans for active employees must be repaid through payroll deduction. Repayment will begin as soon as practicable on a date determined by the Employer's payroll cycle. Loans outstanding for former employees who are allowed under Section X to maintain their loans or loans outstanding for employees on a leave of absence must be repaid on the same schedule as if payroll deductions were still being made unless they reamortize their loans and establish a new repayment sched- ule which provides that substantially equal payments are made at least monthly over the remaining period of the loan. All repayments must be made through the Employer. Loan payments, including loan payments from former employees, are allocated to the same investment options designated on the 401 Enrollment Fonl1 or according to the most current 401 ChallJ!.e Form which 3 ~ -~ ..~ :$ :~ j ~ --l ) ( --] oj , 1 1 J 1 j J 401 Loan Guidt/ints specifies contribution allocations. The participant may payoff all or a portion of the principal interest early without penalty ~ additional fee. Extra payments are applied forward to both principiil and interest as specified in the original repay- ment schedule, unless the additional payment is for the balance due. VII. LOAN INTEREST RATE The rate of interest for loans of five (5) years or less will be based on prime plus 0.5%. The rate of interest for loans for a principal residence will be based on the FHA rate. Interest rates are detennined on the last business day of the month preceding the month the loan is disbursed. The interest rate is locked in at the time a loan is approved and remains constant throughout the life of the loan. The prime interest rate is detennined on the last business day of each month using TIle Wall Street JOllmal as the source. The FHA interest rate is also determined on the last business day of each month using a national rateline service as the source. Loan interest rates for new loans may fluctuate upward or downward monthly, depending on the move- ment of the prime and FHA interest rates. VIII. LOAN APPLICATION PROCEDURE All loans must be requested in writing on an application approved by the Plan Administrator. The appli- cation must be signed by the participant. The Employer must review and approve the application. If the participant is married at the ti~e of application, and spousal consent is required by the Plan for the loan, the participant's spouse must consent, in writing, to the loan and the consent must be witnessed by a plan representative or notary public. Such consent must be given within the ninety (90) day period before the time the loan is made. Spousal consent, if required, must accompany the application in order for the application to be considered complete. The participant will be required to sign a promissory note evidencing the loan and a disclosure statement which includes an amortization schedule prior to receiving a loan check. Loan checks will generally be issued two business days following the receipt of a complete loan application received through 12 noon Eastern Time. The loan check, promissory note, disclosure statement and truth-in-lending recision notice will be sent to the Employer, who will obtain the necessary signatures and deliver the check to the participant. All executed documents must be returned to the Plan Administrator within 10 calendar days fr0111 the date the check is issued. 4 ICMA RETIREMENT CORPORATION IX. SECURITY/COLLATERAL That, portion of a participant's vested account balance that is equal to the amount of the'\loan is used as collateral for the loan. The collateral amount may n?t exceed 50 percent of the participant's vested account balance at the time the loan is taken. Only that portion of the vested account balance that corre- sponds to the amount of the outstanding loan balance is used as collateral. X. ACCELERATION [select one] o All loans are due and payable in full upon separation from service. ~ All loans are due and payable when a participant receives a distribution of all of his/her ac- count balance after separation from service. The amount of the outstanding loan balance will be reported as a distribution in addition to the amount of cash distributed from the plan. o All loans are due and payable when a participant receives a distribution of part of his/her account balance after separation from service. The amount of the outstanding loan balance will reported as a distribution in addition to the amount of cash distributed from the plan. XI. REAMORTIZA TION Any outstanding loan may be reamortized. Reamortization means changing the terms of a loan, such as length of repayment period, interest rate, and frequency of repayments. A loan may not be reamortized to extend the length of the loan repayment period to more than five (5) years from the date the loan was originally made, or in the case of a loan to secure a principal residence, beyond the number of years specified by the Employer in S:.-ction V above. A participant must request the reamortization of a loan in writing on a reamortization application accept- able to the Plan Administrator. S-pousal consent must accompany the request for reamortization when such consent is required by the Plan. Upon processing the request, a new disclosure statement will be sent to the Employer for endorsement by the participant and approval by the Employer. The executed disclosure statement must be returned to the Plan Administrator within 10 calendar days from the date it is signed. The new disclosure statement is considered an amendment to the original promissory note, therefore a new promissory note will not be required. A reamortization will not be considered a new loan for purposes of calculating the number of loans outstanding or the one loan per calendar limit. XII. REFINANCING EXISTING LOANS If a participant has one outstanding loan, that loan may be refinanced. If a participant has more than one outstanding loan, no loans may be refinanced. Refinancing means concurrently repaying an existing loan and borrowing an additional amount through a new loan. 5 ~ 401 Loan Guidelines In order to refinance an existing loan, a participant must request a new loan in writing on an application approved by the Plan Administrator. Spousal consent must accompany the application when such consent is required by the Plan. Such request must be made at a time when the participant is eligible to obtain a loan as defined by the Employer in Section III above. The amount of a new loan requested~r the purpose of refinancing is subject to the loan limits specified in Section IV above. { Because refinancing is considered a new loan, only active employees may refinance an outstanding loan. ~ ~ 1 4 1 ! i ~ J ~ 1 I i 1 ! " XIII. REDUCTION OF LOAN If a participant dies and leaves an outstanding loan, the unpaid loan balance(s) will be repaid from the account balance before any distributions are made to a beneficiary(ies). The unpaid loan amount is a taxable distribution and may be subject to early withdrawal penalties. The participant's estate is respon- sible for taxes or penalties on the unpaid loan amount, if any. The beneficiary is responsible for taxes due on the amount he/she receives. A FornI 1099-R will be issued to both the beneficiary and the estate for these purposes, XIV. LOAN DEFAULT If a required payment of principal and interest is not made within 90 days of the date such payment is due, the loan is considered in default. If a loan is in default, the loan will be foreclosed during the calen- dar year in which the participant separates from service. However, the IRS "deems" a default to be a distribution in the year the default occurs. Therefore, the amount of the outstanding loan at the time of the default, will be reported to the IRS as a distribution in the year the default occurs even though the loan may not be foreclosed at that time. The distribution may be subject to taxes and possibly a penalty for early withdrawal. If a participant has separated from service and defaults on a loan, then the loan will be foreclosed during the calendar year in which the defa.uJ.t occurs. The amount of the outstanding loan, will be reported to the IRS as a distribution which may be subject to taxes and possibly a penalty for early withdrawal. If the Employer has elected in Section X and the promissory note so provides, a loan becomes due and payable when the participant separates from service. If the ternlS of the loan contain this provision, the outstanding loan amount is "deemed" in default as of the date of separation from service. The amount of the outstanding loan, will be reported to the IRS as a distribution which may be subject to taxes and possibly a penalty for early withdrawal. If the Employer has so elected in Section X and the promissory note so provides, a loan becomes due and payable when the participant takes a distribution of some or all of the balance in his/her account after separation from service. If the terms of the loan contain such a provision and the outstanding loan balance is not paid prior to the distribution from the account, the outstanding loan amount will be considered in default upon issuance of the distribution check. The amount of the outstanding loan, will be reported to the IRS as a distribution which may be subject to taxes and possibly a penalty for early withdrawal. Participants who have an existing loan in default will not be eligible for additional loans. 6 ICMA RETIREMENT CORPORATION xv. DE MINIMIS ACCOUNTS AND OUTSTANDING LOAN BALANCE If a participant separates from service and the participant's total vested account balance, including the outstanding loan balance, is $5,000 or less, the Plan will automatically foreclose the loal The account balance remaining after the loan has been satisfied will be disbursed in accordance with De Minimis provisions of Section 10.04 of the Plan. If this occurs, the amount of the loan, will be reported to the IRS as part of the distribution, which may be subject to taxes and possibly a penalty for early withdrawal. Participants who have an existing loan in default will not be eligible for additional loans. XVI. FEES Fees may be charged for various services associated with the application for and issuance of loans. All applicable fees will be debited from the participant's account balance and/or from the participant's loan repayments prior to crediting the repayment of principal and interest to the participant's account. A schedule of fees applicable to this Plan is available from the Plan Administrator. XVII. OTHER The Employer has the right to set other terms and conditions as it deems necessary for loans from the Plan in order to comply with any legal requirements. All terms and conditions will be administered in a uniform and non-discriminatory manner. In Witness Whereof, the Employer hereby caused these Guidelines to be executed this df; -6. day of Jul' ,2061 EMPLOYER BY=~~~ ACCEPTED: IClv~~etirel11ent Corporation BY: ;/1/ (/ ~!( ./ TITLE: Corporate )Secretary It' ~ ATTEST: .7 /c/fl./,4j -' / ./ TITLE: City Admi ni strator ATTEST: f\\+ "J 7 'MIG 1 7 2. ADMINISTRATIVE SERVICES AGREEMENT Type: 401 Account Number: 7746 Plan # 7746 ADMINISTRATIVE SERVICES AGREEMENT This Agreement, made as of the day of , 2001 (herein referred to as the "Inception Date"), between The International City Management Association Retirement Corporation ("RC"), a nonprofit corporation organized and existing under the laws of the State of Delaware; and the City of Woodburn ("Employer") a City organized and existing under the laws of the State of Oregon with an office at 8326 Carson Court, NE, Woodbum, Oregon 97071. RECITALS Employer acts as a public plan sponsor for a retirement plan ("Plan") with responsibility to obtain investment alternatives and services for employees participating in that Plan; The ICMA Retirement Trust (the "Trust") is a common law trust governed by an elected Board of Trustees for the commingled investment of retirement funds held by state and local governmental units for their employees; RC acts as investment adviser to the Trust; RC has designed, and the Trust offers, a series of separate funds (the "Funds") for the investment of plan assets as referenced in the Trust's principal disclosure document, "Making Sound Investment Decisions: A Retirement Investment Guide." The Funds are available only to public employers and only through the Trust and RC. In addition to serving as investment adviser to the Trust, RC provides a complete offering of services to public employers for the operation of employee retirement plans including, but not limited to, communications concerning investment alternatives, account maintenance, account record-keeping, investment and tax reporting, form processing, benefit disbursement and asset management. AGREEMENTS 1. Appointment of RC Employer hereby designates RC as Administrator of the Plan to perform all non- discretionary functions necessary for the administration of the Plan with respect to assets in the Plan deposited with the Trust. The functions to be performed by RC include: (a) allocation in accordance with participant direction of individual accounts to investment Funds offered by the Trust; (b) maintenance of individual accounts for participants reflecting amounts deferred, income, gain, or loss credited, and amounts disbursed as benefits; (c) provision of periodic reports to the Employer and participants of the status of Plan investments and individual accounts; Plan # 7746 (d) communication to participants of information regarding their rights and elections under the Plan; and (e) disbursement of benefits as agent for the Employer in accordance with terms of the Plan. 2. Adoption of Trust Employer has adopted the Declaration of Trust of the ICMA Retirement Trust and agrees to the commingled investment of assets of the Plan within the Trust. Employer agrees that operation of the Plan and investment, management and disbursement of amounts deposited in the Trust shall be subject to the Declaration of Trust, as it may be amended from time to time and shall also be subject to terms and conditions set forth in disclosure documents (such as the Retirement Investment Guide or Employer Bulletins) as those terms and conditions may be adjusted from time to time. It is understood that the term "Employer Trust" as it is used in the Declaration of Trust shall mean this Administrative Services Agreement. 3. Emplover Dutv to Furnish Information Employer agrees to furnish to RC on a timely basis such information as is necessary for RC to carry out its responsibilities as Administrator of the Plan, including information needed to allocate individual participant accounts to Funds in the Trust, and information as to the employment status of participants, and participant ages, addresses and other identifying information (including tax identification numbers). RC shall be entitled to rely upon the accuracy of any information that is furnished to it by a responsible official of the Employer or any information relating to an individual participant or beneficiary that is fumished by such participant or beneficiary, and RC shall not be responsible for any error arising from its reliance on such information. RC will provide account information in reports, statements or accountings. 4. Certain Representations. Warranties. and Covenants RC represents and warrants to Employer that: (a) RC is a non-profit corporation with full power and authority to enter into this Agreement and to perform its obligations under this Agreement. The ability of RC to serve as investment adviser to the Trust is dependent upon the continued willingness of the Trust for RC to serve in that capacity. (b) RC is an investment adviser registered as such with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC Services, Inc. (a wholly owned subsidiary of RC) is registered as a broker-dealer with the Securities and Exchange Commission (SEC) and is a member in good standing of the National Association of Securities Dealers, Inc. -3- Plan # 7746 RC covenants with employer that: (c) RC shall maintain and administer the Plan in compliance with the requirements for plans which satisfy the qualification requirements of Section 401 of the Internal Revenue Code; provided, however, RC shall not be responsible for the qualified status of the Plan in the event that the Employer directs RC to administer the Plan or disburse assets in a manner inconsistent with the requirements of Section 401 or otherwise causes the Plan not to be carried out in accordance with its terms; provided, further, that if the plan document used by the Employer contains terms that differ from the terms of RC's standardized plan document, RC shall not be responsible for the qualified status of the Plan to the extent affected by the differing terms in the Employer's plan document. Employer represents and warrants to RC that: (d) Employer is organized in the form and manner recited in the opening paragraph of this Agreement with full power and authority to enter into and perform its obligations under this Agreement and to act for the Plan and participants in the manner contemplated in this Agreement. Execution, delivery, and performance of this Agreement will not conflict with any law, rule, regulation or contract by which the Employer is bound or to which it is a party. 5. Participation in Certain ProceedinQs The Employer hereby authorizes RC to act as agent, to appear on its behalf, and to join the Employer as a necessary party in all legal proceedings involving the garnishment of benefits or the transfer of benefits pursuant to the divorce or separation of participants in the Employer Plan. Unless Employer notifies RC otherwise, Employer consents to the disbursement by RC of benefits that have been garnished or transferred to a former spouse, spouse or child pursuant to a domestic relations order. 6. Compensation and Payment (a) Plan Administration Fee. The amount to be paid for plan administration services under this Agreement shall be 0.55% per annum of the amount of Plan assets invested in the Trust. Such fee shall be computed based on average daily net Plan assets in the Trust. (b) Account Maintenance Fee. (i) There shall be an annual account maintenance fee of $25.00. The account maintenance fee is payable in full on January 1 st of each year on each account in existence on that date. For accounts established AFTER January 1 st, the fee is payable on the first day of the calendar quarter following establishment and is prorated by reference to the number of calendar quarters remaining on the day of payment. -4- Plan # 7746 (ii) The account maintenance fee will be waived beginning in the year following the year in which total Plan assets exceed $4 million. (c) Compensation for Management Services to the Trust and Advisory and other Services to the Vantagepoint Funds. Employer acknowledges that in addition to amounts payable under this Agreement, RC receives fees from the Trust for investment management services furnished to the Trust. Employer further acknowledges that certain wholly-owned subsidiaries of RC receive compensation for advisory and other services furnished to the Vantagepoint Funds, which serve as the underlying portfolios of a number of Funds offered through the Trust. The fees referred to in this subsection are disclosed in the Retirement Investment Guide. These fees are not assessed against assets invested in the Trust's Mutual Fund Series. (d) Mutual Fund Services Fee. There is an annual charge of 0.40% assessed against average daily net Plan assets invested in the Trust's Mutual Fund Series. (e) Model Portfolio Fund Fee. There is an annual charge of 0.10% assessed against daily average net Plan assets invested in the Trust's Model Portfolio Funds. (f) Payment Procedures. All payments to RC pursuant to this Section 6 shall be paid out of the Plan assets held by the Trust and shall be paid by the Trust. The amount of Plan assets held in the Trust shall be adjusted by the Trust as required to reflect such payments. 7. Custody Employer understands that amounts invested in the Trust are to be remitted directly to the Trust in accordance with instructions provided to Employer by RC and are not to be remitted to RC. In the event that any check or wire transfer is incorrectly labeled or transferred to RC, RC will return it to Employer with proper instructions. -5- Plan # 7746 8. Responsibilitv RC shall not be responsible for any acts or omissions of any person other than RC in connection with the administration or operation of the Plan. 9. Term This Agreement may be terminated without penalty by either party on sixty days advance notice in writing to the other. 10. Amendments and Adiustments (a) This Agreement may not be amended except by written instrument signed by the parties. (b) The parties agree that compensation for services under this Agreement and administrative and operational arrangements may be adjusted as follows: RC may propose an adjustment by written notice to the Employer given at least 60 days before the effective date of the adjustment and the notice may appear in disclosure documents such as Employer Bulletins and the Retirement Investment Guide. Such adjustment shall become effective unless, within the 60 day period before the effective date the Employer notifies RC in writing that it does not accept such adjustment, in which event the parties will negotiate with respect to the adjustment. (c) No failure to exercise and no delay in exercising any right, remedy, power or privilege hereunder shall operate as a waiver of such right, remedy, power or privilege. 11 . Notices All notices required to be delivered under Section 10 of this Agreement shall be delivered personally or by registered or certified mail, postage prepaid, return receipt requested, to (i) Legal Department, ICMA Retirement Corporation, 777 North Capitol Street, N.E., Suite 600, Washington, D.C, 20002-4240; (ii) Employer at the office set forth in the first paragraph hereof, or to any other address designated by the party to receive the same by written notice similarly given. 12. Complete Aqreement This Agreement shall constitute the sole agreement between RC and Employer relating to the object of this Agreement and correctly sets forth the complete rights, duties and obligations of each party to the other as of its date. Any prior agreements, promises, negotiations or representations, verbal or otherwise, not expressly set forth in this -6- Plan # 7746 Agreement are of no force and effect. 13. Governinq Law This agreement shall be governed by and construed in accordance with the laws of the State of oregon, applicable to contracts made in that jurisdiction without reference to its conflicts of laws provisions. In Witness Whereof, the parties hereto have executed this Agreement as of the Inception Date first above written. CITY OF WOODBURN ~~ 7/zdoJ Signature/Date JOI-t-rJ {1 L5:a0t-.J J {l~ ~/AJ/jT~ Nam and Title (Please Print) INTERNATIONAL CITY MANAGEMENT ASSOCIATION RETIREMENT CORPORATION by: Paul Gallagher Corporate Secretary /U'I.i# -7- GOVERNMENTAL MONEY PURCHASE PLAN & TRUST EMPLOYER PLAN RETAIN BOOKLET ICMA RETIREMENT CORPORATION The public service Vantagepoint@ since 1972 USING THIS DOCUMENT Governmental Money Purchase Plan & Trust Basic Document Internal Revenue Service Determination Letter I and Publication 794 and Declaration of Trust of the leMA Retirement Trust This is one of two booklets containing information relating to your Governmental Money Purchase Plan & Tr st with the ICMA Retirement Corporation. Please read the information and retain it for your files. If you ha e any questions concerning information in this booklet, contact Customer Services toll-free at 1-800-326-72 2. IMPORTANT NOTICE REGARDING YOUR ICMA-RC MONEY PURCHASE PLAN DOCUMENT This Notice applies to all Employers who have adopted and are using an ICMA-RC Money Purchase Plan document, including those Employers who have changed or amended the ICMA-RC Money Purchase Plan document. Additionally, this Notice contains information that may be useful to Employers who have an individually designed plan. REASON FOR TInS NOTICE The ICMA Retirement Corporation ("ICMA-RC") notified you in late 1997 of our intent to amend and restate the prototype plan document for changes in the law as a result of the passage of several signific- cant pieces of legislation including, Taxpayer Relief Act 1997 ("TRA '97"), Uruguay Round Table Trade Agreements (GATT), Uniformed Services Employment and Reemployment Rights Act 1994 (USERRA), and the Small Business Job Protection Act 1996 (SBJPA '96). The resulting model docu- ment was submitted to the Internal Revenue Service ("IRS") and has received a favorable determination later as to its written form. ICMA-RC is pleased to provide you with the recently amended and restated model governmental money purchase plan. Enclosed in this package are the following: · Copy of the Model Governmental Money Purchase plan document · Copy of the Declaration of Trust of the ICMA Retirement Trust · Copy of the IRS favorable determination letter received from the IRS · Copy of IRS Publication 794, which describes the significance and limitations of the favorable determination letter. This notice provides you with background information on why the plan document was changed, de- scribes ICMA-RC's plan document services, and indicates the action required, if any. BACKGROUND ICMA-RC has been the sponsor of a regional prototype money purchase plan that you adopted when ICMA-RC became your plan administrator. As a prototype sponsor, ICMA-RC updated the plan, as needed, in response to changes in the Internal Revenue Code ("Code") and notified you of any amend- ments that we made to the plan. The Taxpayer Relief Act of 1997 had a significant and important impact on governmental qualified plans. This change affected the ICMA-RC prototype plan document. TRA '97 included a permanent morato- rium exempting public sector qualified retirement plans from nondiscrimination testing requirements. With the enactment of this legislation, public sector plans such as yours will not have to comply with the nondiscrimination and participation rules, including the ADP (actual deferral percentage) test and/or ACP (actual contribution percentage) test. Prototype plan documents are required to include nondiscrimination language. Because the nondiscrimi- nation rules are no longer applicable to public sector plans, it is necessary to remove the provisions from the plan. The removal of the nondiscrimination testing language is necessary to eliminate the requirement to perform the tests. If the nondiscrimination testing language remained as part of the plan, it would be necessary to perform the tests, because of the requirement to comply with the written terms of the plan document. The result of the removal of the nondiscrimination testing provisions is that the plan is no longer a prototype plan. The previous prototype plan has been replaced with a simpler model document that serves the same purposes as the prototype. The enclosed model document, which deleted all nondiscrimination testing provisions, has been submit- ted by an individual sponsor to the IRS for approval of the plan in written form. The favorable determi- nation letter is important as it attests to the fact the plan meets all written qualification requirements. A favorable determination letter (unlike an IRS opinion letter issued to a prototype plan) is issued to a specific employer. Therefore, the enclosed favorable determination letter does not attest specifically to the qualified status of your plan. However, provided you have adopted the ICMA-RC model plan without amendment, it should provide you with confidence that your plan would be approved by the IRS in its written form. Though not required, if you were to submit your plan to the IRS, indications are it would also receive a favorable determination letter. ICMA-RC will continue to update the model plan document as needed to comply with changes in the Code and ICMA-RC will continue to notify you of any changes that are made to the model document. In short, there is no substantive difference in the plan document services you receive from ICMA-RC. ACTION & NEXT STEPS ALL EMPLOYERS WHO HAVE ADOPTED A QUALIFIED PLAN USING THE PREVIOUS ICMA-RC PROTOTYPE OR THE NEW MODEL DOCUMENT There are two distinct parts to your plan document, an adoption agreement and a base plan document. The adoption agreement is the portion of the plan whereby certain plan provisions are elected, e.g., plan eligibility, employer and! or employee contribution percentages, and vesting schedules. The adoption agreement portion of the plan has not changed, and therefore is not included in this package. The basic plan document contains the underlying plan provisions which govern the plan in all respects not specifically elected in the adoption agreement and other required IRS language, e.g., various defmi- tions, benefit payment options, and withdrawal provisions. The basic plan document portion of the plan has changed as discussed above and a copy of the new model is included in this package. The enclosed model document replaces the basic prototype document that you currently retain in your plan files. The model document is an important legal document governing your qualified retirement plan. It is impor- tant that you retain a copy of this new document for your files. (You should retain the" old" prototype document in your historical plan flies.) You must retain a signed copy of this model document for your flies along with the plan adoption agree- ment. Unless you notify ICMA-RC in writing within 30 days that you disapprove the docu- ment, it is assumed you have adopted the plan document enclosed. You may send this notice to ICMA-RCs Implementation Unit. If you have made amendments or changes to the base plan document (not the adoption agreement), and you wish to retain those amendments or changes, you must incorporate the changes to the new model document. If you make additional changes or amendments to the document that have not already been reviewed by ICMA-RC, please submit them to ICMA-RCs Implementation Unit for approval prior to implementing. This will ensure ICMA-RC is able to administer the plan correctly. Your legal counsel should assist you with incorporating any amendments or changes made previously. 2 EMPLOYERS WHO HAVE AN INDIVIDUALLY DESIGNED PLAN AND ARE NOT USING THE ICMA-RC PROTOTYPE PLAN If you are currently using an individually designed plan drafted by your own legal counsel or plan consult- ant, you are responsible for ensuring your plan meets the written qualification requirements of the Code as a result of changes in the law. The amendments generally must be implemented December 31, 2000 for a calendar year plan.You may wish to use the enclosed ICMA-RC model document as a guide in amend- ing and restating your plan for compliance with the requirements of the SBJPA '96, TRA '97 and other recent legislation. Alternatively, you may wish to amend and restate your current individually designed plan using the ICMA-RC model governmental plan. Please contact the ICMA-RC Implementation Unit for assistance in obtaining a complete adoption package. STILL HAVE QUESTIONS? If you have questions or unsure of what action you need to take, please contact ICMA-RCs Implementa- tion Unit at 800-326-7272. The Representatives will be happy to assist you. 3 I C ,vl ARE T IRE Nt E N T COR P 0 RAT [ 0 N ' ' GOVERNMENTAL MONEY PURCHASE PLAN & TRUST BASIC DOCUMENT I I Table of Contents I. PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 1 II. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . . . , . . . . .. 1 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 2.10 2.11 2.12 2.13 2.14 2.15 2.16 2.17 2.18 2.19 2.20 2.21 2.22 Account Accounting Date Adoption Agreement Beneficiary Break in Service Code Covered Employment Classification Disability Earnings Effective Date Employee Employer Hour of Service Nonforfeitable Interest Normal Retirement Age Participant Period of Service Period of Severance Plan Plan Administrator Plan Year Trust 1 1 1 1 1 1 2 2 2 3 3 3 3 3 3 3 4 4 4 4 4 4 III. ELIGIBILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 4 3.01 3.02 3.03 3.04 MPP 04/30/2000 Service Age Return to Covered Employment Classification Service Before a Break in Service 4 4 5 5 IV. CONTRIBUTIONS, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , , . .. 5 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 Employer Contributions Forfeitures Mandatory Participant Contributions Matched Participant Contributions Voluntary Participant Contributions Deductible Employee Contributions Military Service Contributions Changes in Participant Election Portability of Benetlts Return of Employer Contributions 5 5 5 5 6 6 6 6 6 7 V. LIMITATIONS ON ALLOCATIONS. . . . . . . . . , . . , . . ., . . . . . . . . . . . . . . . . 7 5.01 5.02 5.03 5.04 Participants Only in This Plan Participants in Another DefIned Contribution Plan Participants in a DetIned Benefit Plan Detlnitions 7 8 10 10 VI. TRUST AND INVESTMENT ACCOUNTS. . . .. , . .. . , , . . . . . . . , .. . . . . . . , .13 6.01 6.02 6.03 6.04 6.05 6.06 6.07 Trust Investment Powers Ta:..:es and Expenses Payment of BenefIts Investment Funds Valuation of Accounts Participant Loan Accounts 13 13 15 15 15 16 16 VII. VESTING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 16 7.01 7.02 7.03 7.04 7.05 7.06 7.07 Vesting Schedule Crediting Periods of Service Service After Break in Service Vesting Upon Normal Retirement Age Vesting Upon Death or Disability Forfeitures Reinstatement of Forfeitures 16 16 16 17 17 17 17 VIII. BENEFITS CLAIM. . . . , , . . . . . . . . . . . . . . . .. ., ., . . . , . . . . . . . . , . . , . , . . .. 18 8.01 8.02 MPP 04/30/2000 Claim of Benefits Appeal Procedure 18 18 ii IX. COMMENCEMENT OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 9.01 9.02 9.03 9.04 9.05 9.06 9.07 Normal and Elective Commencement of Benefits Restrictions on Inmlediate Distributions Transfer to Another Plan De Minimis Accounts Withdrawal of Voluntary Contributions Withdrawal of Deductible Employee Contributions Latest Commencement of Benefits 18 18 19 20 21 21 21 X. DISTRIBUTION REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 21 10.01 General Rules 10.02 Required Beginning Date 10.03 Limits on Distribution Periods 10.04 Determination of Amount to be Distributed Each Year 10.05 Death Distribution Provisions 10.06 Definitions 21 21 21 )') 22 24 XI. MODES OF DISTRIBUTION OF BENEFITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 11.01 Normal Mode of Distribution 11.02 Elective Mode of Distribution 11.03 Election of Mode 11.04 Death Benefits 25 25 25 25 XII. SPOUSAL BENEFIT REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 12.01 Application 12.02 Qualified Joint and Survivor Annuity 12.03 Qualified Preretirement Survivor Annuity 12.04 Notice Requirements 12.05 Definitions 12.06 Annuity Contracts 26 26 26 26 28 29 XIII. LOANS TO PARTICIPANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 29 13.01 Availability of Loans to Participants 13.02 Terms and Conditions of Loans to Participants 13.03 Participant Loan Accounts 29 30 32 MPP 04/3012000 iii XIV. PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS. . . . . . .33 14.01 Amendment by Employer 14.02 Amendment of Vesting Schedule 14.03 Termination by Employer 14.04 Discontinuance of Contributions 14.05 Amendment by Plan Administrator 14.06 Optional Provisions 33 ",., ..J..J 33 34 34 34 Xv. ADMINISTRATION.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 34 15.01 Powers of the Employer 15.02 Duties of the Plan Administrator 15.03 Protection of the Employer 15.04 Protection of the Plan Administrator 15.05 Resignation or Removal of Plan Administrator 15.06 No Termination Penalty 15.07 Decisions of Plan Administrator 34 35 35 35 36 36 36 XVI. MiSCELLANEOUS............................................... 36 16.01 Nonguarantee of Employment 16.02 Rights to Trust Assets 16.03 Nonalienation of Benefits 16.04 Quali6.ed Domestic Relations Order 16.05 Nonforfeitability of Benetlts 16.06 Incompetency of Payee 16.07 Inability to Locate Payee 16.08 Mergers, Consolidations, and Transfer of Assets 16.09 Employer Records 16.10 Gender and Number 16.11 Applicable Law 36 36 36 36 37 37 37 37 38 38 38 MPP 04/3012000 iv ICMA RETIREMENT CORPORATION GOVERNMENTAL MONEY PURCHASE PLAN & TRUST BASIC DOCUMENT I. PURPOSE The Employer hereby adopts this Plan and Trust to provide funds for its Employees' retirement, and to provide funds for their Beneficiaries in the event of death. The benefits provided in this Plan shall be paid from the Trust. The Plan and the Trust forming a part hereof are adopted and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. Except as provided in Sections 4.10 and 14.03, no part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposes other than the exclusive benefit of Partici- pants and their Beneficiaries. II. DEFINITIONS 2.01 Account. A separate record which shall be established and maintained under the Trust for each Participant, and which shall include all Participant subaccounts created pursuant to Article IV, plus any Participant Loan Account created pursuant to Section 13.03. Each subaccount created pursuant to Article IV shall include any earnings of the Trust and adjust- ments for withdrawals, and realized and unrealized gains and losses allocable thereto. The term "Account" Inay also refer to any of such separate subaccounts. 2.02 Accounting Date. Each day that the New York Stock Exchange is open for trading, and such other dates as may be determined by the Plan Administrator, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Adoption Agreement. The separate agreement executed by the Employer through which the Employer adopts the Plan and elects among the various alternatives provided thereunder, and which upon execution, becomes an integral part of the Plan. 2.04 Beneficiary. The person or persons designated by the Participant who, subject to the re- quirements of Article XII, shall receive any benefits payable hereunder in the event of the Participant's death. The designation of such Beneficiary shall be in writing to the Plan Administrator. A Participant may designate prilnary and contingent Beneficiaries. Where no designated Beneficiary survives the Participant, the Participant's Beneficiary shall be his/ her surviving spouse or, if none, his/her estate. 2.05 Break in Service. A Period of Severance of at least twelve (12) consecutive months. In the case of an individual who is absent from work for maternity or paternity reasons, the twelve (12) consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a Break in Service. For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2) by reason of the birth of a child of the individual, (3) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (4) for purposes of caring for such child for a period beginning immediately following such birth or placement. MPP 04/30/2000 2.06 Code. The Internal Revenue Code of 1986, as amended from time to time. 2.07 Covered Employment Classification. The group or groups of Employees eligible to make and/ or have contributions to this Plan made on their behalf, as specified by the Employer in the Adoption Agreement. 2.08 Disability. A physical or mental impairment which is of such pennanence and degree that, as determined by the Employer, a Participant is unable because of such impairment to perform any substantial gainful activity for which he/she is suited by virtue of his/her experience, training, or education and that has lasted, or can be expected to last, for a con- tinuous period of not less than twelve (12) months, or can be expected to result in death. The permanence and degree of such impairment shall be supported by medical evidence. If the Employer maintains a long-term disability plan, the definition of Disability shall be the same as the definition of disability in the long-term disability plan. 2.09 Earnings. (a) General Rule. Earnings, which form the basis for computing Employer Contribu- tions, are all of each Participant's W-2 earnings which are actually paid to the Partici- pant during the Plan Year, plus any contributions made pursuant to a salary reduction agreement which are not includible in the gross income of the Employee under section 125, 402(e)(3), 402(h)(I)(B), 403(b), 414(h)(2), or 457(b) of the Code. Unless the Employer elects otherwise in the Adoption Agreement, Earnings shall exclude overtime compensation and bonuses. (b) Limitation on Earnings. Notwithstanding the foregoing, effective as of the first Plan Year beginning on or after January 1, 1989, and before January 1, 1994, the annual Earnings of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year shall not exceed $200,000. This limitation shall be adjusted by the Secretary of the Treasury at the same time and in the same manner as under section 415(d) of the Code, except that the dollar increase in effect on January 1 of any calendar year is effective for years beginning in such calendar year and the first adjustment to the $200,000 limitation is effective on January 1, 1990. For Plan Years beginning on or after January 1, 1994, the annual Earnings of each Participant taken into account for determining all benefits provided under the Plan for any Plan Year shall not exceed $150,000, as adjusted for increases in the cost-of- living in accordance with section 401 (a) (17) (B) of the Code. The cost-of-living adjustment in effect for a calendar year applies to any determination period begin- ning in such calendar year. If a determination period consists of fewer than twelve (12) months, the annual Earnings limit is an amount equal to the otherwise applicable annual Earnings limit multiplied by a fraction, the numerator of which is the number of months in the short determination period, and the denominator of which is twelve (12). MPP 04/30/2000 2 If Earnings for any prior determination period are taken into account in determin- ing a Participant's allocations for the current Plan Year, the Earnings for such prior determination period are subject to the applicable annual Earnings limit in effect for that prior year. For this purpose, for years beginning on or after January 1, 1989, the applicable annual Earnings limit is $200,000. In addition, in determining allocations in Plan Years beginning on or after January 1, 1994, the annual Earnings limit in effect for determination periods beginning before that date is $150,000. (c) Limitations for Governmental Plans. In the case of an eligible participant in a governmental plan (within the meaning of section 414(d) of the Code), the dollar limitation shall not apply to the extent the Earnings which are allowed to be taken into account under the Plan would be reduced below the amount which was al- lowed to be taken into account under the Plan as in effect on July 1, 1993. For purposes of this Section, an eligible participant is an individual who first became a Participant in the Plan during a Plan Year beginning before the first Plan Year begin- ning after December 31, 1993. 2.10 Effective Date. The first day of the Plan Year during which the Employer adopts the Plan, unless the Employer elects in the Adoption Agreement an alternate date as the Effective Date of the Plan. 2.11 Employee. Any individual who has applied for and been hired in an employment position and who is employed by the Employer as a common law employee; provided, however, that Employee shall not include any individual who is not so recorded on the payroll records of the Employer, including any such person who is subsequently reclassified by a court oflaw or regulatory body as a common law employee of the Employer. For purposes of clarifica- tion only and not to imply that the preceding sentence would otherwise cover such person, the term Employee does not include any individual who performs services for the Employer as an independent contractor, or under any other non-employee classification. 2.12 Employer. The unit of state or local government or an agency or instrumentality of one (1) or more states or local governments that executes the Adoption Agreement. 2.13 Hour of Service. Each hour for which an Employee is paid or entitled to payment for the performance of duties for the Employer. 2.14 Nonforfeitable Interest. The interest of the Participant or his/her Beneficiary (whichever is applicable) in that percentage of his/her Employer Contribution Account balance which has vested pursuant to Article VII. A Participant shall, at all times, have a one hundred percent (100%) Nonforfeitable Interest in his/her Participant Contribution, Portable Benefits, and Voluntary Contribution Accounts. 2.15 Normal Retirement Age. The age which the Employer specifies in the Adoption Agree- ment. If the Employer enforces a mandatory retirement age, the Norma! Retirement Age is the lesser of that mandatory age or the age specified in the Adoption Agreement. 2.16 Participant. An Employee or former Employee for whom contributions have been made under the Plan and who has not yet received all of the payments of benefits to which he/she MPP 04/30/:2000 3 is entitled under the Plan. A Participant is treated as benefiting under the Plan for any Plan Year during which the Participant received or is deemed to receive an allocation in accor- , , dance with Treas. Reg. section 1.41 O(b )-(3) (a). 2.17 Period of Service. For purposes of determining an Employee's initial or continued eligibility to participate in the Plan or the Nonforfeitable Interest in the Participant's Account balance derived from Employer Contributions, an Employee will receive credit for the aggregate of all time period(s) commencing with the Employee's first day of employment or reemploy- ment and ending on the date a Break in Service begins. The first day of employment or reemployment is the first day the Employee performs an Hour of Service. An Employee will also receive credit for any Period of Severance ofless than twelve (12) consecutive months. Fractional periods of a year will be expressed in terms of days. Notwithstanding anything to the contrary herein, if the Plan is an amendment and restate- ment of a plan that previously calculated service under the hours of service method, service shall be credited in a manner that is at least as generous as that provided under Treas. Regs. section 1.410(a)-7(g). 2.18 Period of Severance. A continuous period of time during which the Employee is not employed by the Employer. Such period begins on the date the Employee retires, quits or is discharged, or if earlier, the twelve (12) month anniversary of the date on which the Em- ployee was otherwise first absent from service. 2.19 Plan. This Plan, as established by the Employer, including any elected provisions pursuant to the Adoption Agreement. 2.20 .Plan Administrator. The ICMA Retirement Corporation or any successor Plan Administra- tor. 2.21 Plan Year. The twelve (12) consecutive month period designated by the Employer in the Adoption Agreement. 2.22 Trust. The Trust created under Article VI of the Plan which shall consist of all of the assets of the Plan derived from Employer and Participant contributions under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries. III. ELIGIBILITY 3.01 Service. Except as provided in Sections 3.cl2 and 3.03 of the Plan, an Employee within the Covered Employment Classification who has completed a twelve (12) month Period of Service shall be eligible to participate in the Plan at the beginning of the payroll period next commencing thereafter. The Employer may elect in the Adoption Agreement to waive or reduce the twelve (12) month Period of Service. If the Employer maintains the plan of a predecessor employer, service with such employer shall be treated a Service for the Employer. MPP 04/30/2000 4 3.02 Age. The Employer may designate a minimum age requirement, not to exceed age twenty-one (21), for participation. Such age, if any, shall be declared in the Adoption Agree- ment. 3.03 Return to Covered Employment Classification. In the event a Participant is no longer a member of Covered Employment Classification and becomes ineligible to make contribu- tions and/or have contributions made on his/her behalf, such Employee will become eli- gible for contributions inunediately upon returning to a Covered Employment Classifica- tion. If such Participant incurs a Break in Service, eligibility will be determined under the Break in Service rules of the Plan. In the event an Employee who is not a member of a Covered Employment Classification becomes a member, such Employee will be eligible to participate immediately if such Employee has satisfied the minimum age and service requirements and would have other- wise previously become a Participant. 3.04 Service Before a Break in Service. All Periods of Service with the Employer are counted toward eligibility, including Periods of Service before a Break in Service. IV CO NTRIBUTIONS 4.01 Employer Contributions. For each Pian Year, the Employer will contribute to the Trust an amount as specified in the Adoption Agreement. The Employer's full contribution for any Plan Year shall be due and paid not later than thirty (30) working days after the close of the Plan Year. Each Participant will share in Employer Contributions for the period beginning on the date the Participant commences participation under the Plan and ending on the date on which such Employee severs employment with the Employer or is no longer a member of a Covered Employment Classification, and such contributions shall be accounted for separately in his/her Employer Contribution Account. Notwithstanding anything to the contrary herein, if so elected by the Employer in the Adoption Agreement, an Employee shall be required to make contributions as provided pursuant to Section 4.03 or 4.04 in order to be eligible for Employer Contributions to be made on his/her behalf to the Plan. 4.02 Forfeitures. All amounts forfeited by terminated Participants, pursuant to Section 7.06, shall be allocated to a suspense account and used to reduce dollar for dollar Employer Contribu- tions otherwise required under the Plan for the current Plan Year and succeeding Pian Years, if necessary. Forfeitures may first be used to pay the reasonable administrative expenses of the Plan, with any remainder being applied to reduce Employer Contributions. 4.03 Mandatory Participant Contributions. If the Employer so elects in the Adoption Agreement, each eligible Employee shall make contributions at a prescribed rate as a requirement for his/her participation in the Plan. Once such an eligible Employee becomes a Participant hereunder, he/she shall not thereafter have the right to discontinue or vary the rate of such Mandatory Participant Contributions. Such contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. MPP 04/30/2000 5 4.04 Matched Participant Contributions. If the Employer so elects in the Adoption Agreement, Employer Contributions shall be made on behalf of an eligible Employee for a Plan Year only if the Employee agrees to make Matched Participant Contributions for that Plan Year. The rate of Employer Contributions shall, to the extent specified in the Adoption Agree- ment, be based upon the rate at which Matched Participant Contributions are made for that Plan Year. Matched Participant Contributions shall be accounted for separately in the Participant Contribution Account. Such Account shall be at all times nonforfeitable by the Participant. 4.05 Voluntary Participant Contributions. If the Employer so elects in the Adoption Agreement, an eligible Employee may make voluntary (unmatched) contributions under the Plan for any Plan Year in any amount up to ten percent (lO'}1l) of his/her Earnings for such Plan Year. Such contributions shall be accounted for separately in the Participant's Voluntary Contribu- tion Account. Such Account shall be at all times nonforfeitable by the Participant. 4.06 Deductible Employee Contributions. The Plan will not accept deductible employee contri- butions which are made for a taxable year beginning after December 1986. Contributions made prior to that date will be maintained in a Deductible Employee Contribution Ac- count. The Account will share in the gains and losses under the Plan in the same manner as described in Section 6.06 of the Plan. Such Account shall be at all times nonforfeitable by the Participant. 4.07 Military Service Contributions. Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with section 414(u) of the Code. .If the Employer has elected in the Adoption Agreement to make loans available to Partici- pants, loan repayments will be suspended under the Plan as permitted under section 414(u)(4) of the Code. 4.08 Changes in Participant Election. A Participant may elect to change his/her rate of Matched Participant Contributions or Voluntary Participant Contributions at anytime or during an election period as designated by the Employer. A Participant may discontinue such contri- butions at any time or during an election period as designated by the Employer. 4.09 Portability of Benefits. (a) An Employee within the Covered Employment Classification, whether or not he/ she has satisfied the minimum age and service requirements of Article III, may transfer or roll over his/her interest in a plan qualified under section 401 (a) or 403(a) of the Code to this Plan, provided: (1) The distribution is on account of termination or discontinuance of the plan or the distribution becomes payable on account of the Employee's separation from service, death, disability or after the Employee attains age fifty-nine and one-half (59-1/2); and the form and nature of the distribution from the other plan satisfies the applicable requirements under the Code to make the transfer or rollover a nontaxable transaction to the Employee; MPP U4/3U/2UOO 6 (2) The amount distributed from the plan is transferred to this Plan no later than the sixtieth (60th) day after distribution was made from the plan; and (3) In the case of a rollover, the amount transferred to this Plan does not exceed the amount of the distribution reduced by the Employee contributions (if any) to the plan (other than accumulated deductible voluntary contribu- tions). Such transfer or rollover may also be through an Individual Retirenient Plan quali- fied under section 408 of the Code where the Individual Retirement Plan was used as a conduit from the prior plan and the transfer is made in accordance with the rules provided at (1) through (3) of this paragraph and the transfer does not include any personal contributions or earnings thereon the Participant may have made to the Individual Retirement Plan. The amount transferred shall be deposited in the Trust and shall be credited to a Portable Benefits Account. Such Account shall be one hundred percent (100%) vested in the Employee. The Plan will accept accumulated Deductible Employee Contributions as defined in section 72(0)(5) of the Code that were distributed from a qualified retirement plan and transferred (rolled over) pursuant to section 402(a)(5), 402(a)(7), 403(a) (4), or 408(d)(3) of the Code. Notwithstanding the above, this transferred (rolled over) amount shall be deposited to the Trust and shall be credited to a Deductible Em- ployee Contribution Account. Such Account shall be one hundred percent (100%) vested in the Employee. (b) An Employee within the Covered Employment Classification, whether or not he/ she has satisfied the minimum age and service requirement of Article III, may, upon approval by the Employer and the Plan Administrator, transfer his/her interest in another plan maintained by the Employer that is qualified under section 401 (a) of the Code to this Plan, provided the transfer is effected through a one-time irrevo- cable written election made by the Participant. The amount transferred shall be deposited in the Trust and shall be credited to sources that maintain the same at- tributes as the plan from which they are transferred. Such transfer shall not reduce the accrued years or service credited to the Participant for purposes of vesting or eligibility for any Plan benefits or features. 4.10 Return of Employer Contributions. Any contribution made by the Employer because of a mistake of fact must be returned to the Employer within one year of the date of contribu- tion. V. LIMITATION ON ALLOCATIONS 5.cl1 Participants Only in This Plan. (a) If the Participant does not participate in, and has never participated in another qualified plan or a welfare benefit fund, as defined in section 419 ( e) of the Code, MPP 04/30/2000 7 maintained by the Employer, or an individual medical account, as defined by section 415 (1) (2) of the Code, maintained by the Employer, which provides an Annual Addition, the amount of Annual Additions which may be credited to the Participant's Account for any Limitation Year will not exceed the lesser of the Maxi- mum Permissible Amount or any other limitation contained in this Plan. If the Employer Contribution that would otherwise be contributed or allocated to the Participant's Account would cause the Annual Additions for the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants similarly situated. (c) As soon as is administratively feasible after the end of the Limitation Year, the Maxi- mum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (d) If, pursuant to Subsection (c) or as a result of the allocation of forfeitures, there is an Excess Amount, the excess will be disposed of as follows: (1) AnyVoluntary Participant Contributions, to the extent they would reduce the Excess Amount, will be returned to the Participant; (2) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Participant's Account will be used to reduce Employer Contributions (including any allocation of forfeitures) for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (3) If after the application of paragraph (1) an Excess Amount still exists, and the Participant is not covered by the Plan at the end of the Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer Contributions (including allocation of any forfeitures) for all remaining Participants in the next Limita- tion Year, and each succeeding Limitation Year if necessary; (4) If a suspense account is in existence at any time during a particular Limita- tion Year, all amounts in the suspense account must be allocated and reallo- cated to Participants' accounts before any Employer or any Employee contri- butions may be made to the Plan for that Limitation Year. Excess Amounts in a suspense account may not be distributed to Participants or former Partici- pants. MPP 04/30/2000 8 5.02 Participants in Another Defined Contribution Plan. (a) Unless the Employer provides other limitations in the Adoption Agreement, this Section applies if, in addition to this Plan, the Participant is covered under another qualified defined contribution plan maintained by the Employer, or a welfare benefit fund, as defined in section 419 ( e) of the Code, maintained by the Employer, or an individual medical account, as defined by section 415 (1) (2) of the Code, maintained by the Employer, which provides an Annual Addition, during any Limitation Year. The Annual Additions which may be credited to a Participant's Account under this Plan for any such Limitation Year will not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's Account under the other plans and welfare benefit funds for the same Limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Account under this Plan would cause the Annual Addi- tions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed or allocated to the Participant's Account under this Plan for the Limitation Year. (b) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 5.01(b). (c) As soon as is administratively feasible after the end of the Limitation Year, the Maxi- mum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (d) If, pursuant to Subsection (c) or as a result of the allocation of forfeitures, a Participant's Annual Additions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions at- tributable to a welfare benefit fund or individual medical account will be deemed to have been allocated first regardless of the actual allocation date. (e) If an Excess Amount was allocated to a Participant on an allocation date of this Plan which coincides with an allocation date of another plan, the Excess Amount attrib- uted to this Plan will be the product of, (1) The total Excess Amount allocated as of such date, multiplied by (2) The ratio of (i) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to (ii) the total Annual Addi- MPP 04/30/2000 9 tions allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans. (f) Any Excess Amount attributed to this Plan will be disposed in the manner described in Section 5.01(d). 5.03 Participant in Defined Benefit Plan. If the Employer maintains, or at any time ruaintained, a qualified defined benefit plan covering any Participant in this Plan, the sum of the Partici- pant's Defined Benefit Fraction and Defined Contribution Fraction will not exceed 1.0 in any Limitation Year. The Annual Additions which may be credited to the Participant's Account under this Plan for any Limitation Year will be limited in accordance with the Adoption Agreement. This Section will not apply in Limitation Years beginning after December 31, 1999. 5'(l4 Definitions. For the purposes of this Article, the following definitions shall apply: (a) Annual Additions: The sum of the following amounts credited to a Participant's account for the Limitation Year: (1) Employer Contributions; (2) Forfeitures; (3) Employee contributions; and (4) Allocations under a simplified employee pension. Amounts allocated, after March 31, 1984, to an individual medical account, as de- fined in section 415(1)(2) of the Code, which is part ofa pension or annuity plan maintained by the Employer, are treated as Annual Additions to a defined contribu- tion plan. For this purpose, any Excess Amount applied under Sections 5.01(d) or 5.02(f) in the Limitation Year to reduce Eruployer Contributions will be considered Annual Addi- tions for such Limitation Year. (b) Compensation: A Participant's wages, salaries, and fees for professional services and other amounts received (without regard to whether an amount is paid in cash) for personal services actually rendered in the course of employment with the Employer maintaining the Plan to the extent that the amounts are includible in gross income (including, but not limited to, bonuses, fringe benefits, and reimbursements or other expense allowances under a nonaccountable plan (as described in Treas. Reg. section 1.62-2(c))), excluding the following: (1) Employer Contributions to a plan of deferred compensation which are not includible in the Employee's gross income for the taxable year in which contributed, or Employer Contributions under a simplified employee pen- MPP 04/30/2UOO 10 sion plan to the extent such contributions are deductible by the Employee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity contract described in section 403 (b) of the Code (whether or not the amounts are actually excludable from the gross income of the Employee). (3) Notwithstanding the above, for Limitation Years beginning after December 31, 1997, Compensation shall include: (a) any elective deferrals (as defined in section 402(g) (3) of the Code), and (b) any amount which is contributed or deferred by the Employer at the election of the Employee and which is not includible in the gross income of the Employee by reason of sections 125 or 457 of the Code. For purposes of applying the limitations of this Article, Compensation for a Limita- tion Year is the Compensation actually paid or made available during such year. (c) Defined Benefit Fraction: A fraction, the numerator of which is the sum of the Participant's Projected Annual Benefits under all the defined benefit plans (whether or not terminated) maintained by the Employer, and the denominator of which is the lesser of 125 percent of the dollar limitation determined for the Limitation Year under sections 415 (b) and (d) of the Code or 140 percent of the Highest Average Compensation, including any adjustments under section 415 (b) of the Code. Notwithstanding the above, if the Participant was a participant as of the first day of the first Limitation Year beginning after December 31, 1986, in one (1) or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent of the sum of the annual benefits under such plans which the Participant had accrued as of the close of the last Limitation Year beginning before January 1, 1987, disregarding any changes in the terms and conditions of the plan after May 5, 1986. The preceding sentence applies only if the defined benefit plans individually and in the aggregate satisfied the requirements of section 415 of the Code for all Limitation Years begin- ning before January 1, 1987. (d) Defined Contribution Dollar Limitation: $30,000 or, if greater, one-fourth (1/4) of the defined benefit dollar limitation set forth in section 415(b)(1) of the Code, as in effect for the Limitation Year. (e) Defined Contribution Fraction: A fraction, the numerator of which is the sum of the Annual Additions to the Participant's account under all the defined contribution MPP 04/30/2000 11 service if the number of consecutive one (1) year Breaks in Service in such period e uals 0 exceeds the greater of five (5) or the aggregate number of years of service. Such ag regate number of years of service will not include any years of service disregarded under th preceding sentence by reason of prior Breaks in Service. If a Participant's years of service are disregarded pursuant to the preceding paragraph such Participant will be treated as a new Employee for eligibility purposes. If a Participar t's year of service may not be disregarded pursuant to the preceding paragraph, such Partici ant sh; continue to participate in the Plan, or, if terminated, shall participate immediately u reemployment. 7.04 Vesting Upon Normal Retirement Age. Notwithstanding Section 7.01 of the Plan, Par- ticipant shall have a Nonforfeitable Interest in his/her entire Employer Contributio Ac- count, to the extent that the balance of such Account has not previously been forfeit d pursuant to Section 7.06 of the Plan, if he/she is employed on or after his/her Nor al Retirement Age. 7.05 Vesting Upon Death or Disability. Notwithstanding Section 7.01 of the Plan, in the event of Disability or death, a Participant or his/her Beneficiary shall have a N onforfeitabl Inter- est in his/her entire Employer Contribution Account, to the extent that the balance f such Account has not previously been forfeited pursuant to Section 7.06 of the Plan. 7.06 Forfeitures. Except as provided in Sections 7.04 and 7.05 of the Plan or as otherwis pro- vided in this Section 7.06, a Participant who separates from service prior to obtainin full vesting shall forfeit that percentage of his/her Employer Contribution Account bala ce which has not vested as of the date such Participant incurs a Break in Service of five (5) consecutive years or, if earlier, the date such Participant receives, or is deemed under the I provisions of Section 9.04 to have received, distribution of the entire Nonforfeitable Interesr in his/her Employer Contribution Account. If a Participant receives a voluntary dis ribu- tion ofless than the entire vested portion of his/her Employer Contribution Accou t, the part of the nonvested portion that will be treated as a forfeiture is the total nonveste por- tion multiplied by a fraction, the numerator of which is the amount of the distributi n attributable to Employer Contributions and the denominator of which is the total v lue of the vested Employer Contribution Account. No forfeiture will occur solely as a result of a Participant's withdrawal of Employee ontri- butions. Forfeitures shall be allocated in the manner described in Section 4.02. 7.07 Reinstatement of Forfeitures. If the Participant returns to the employment of the E before incurring a Break in Service of five (5) consecutive years, any amounts forfeit pursuant to Section 7.06 shall be reinstated to the Participant's Employer Contributi n Account on the date of repayment by the Participant of the amount distributed to s ch Participant from his/her Employer Contribution Account; provided, however, that if such Participant forfeited his/her Account balance by reason of a deemed distribution, pu suant to Section 9.04, such amounts shall be automatically restored upon the reemployme t of MPP 04/30/2000 7 of service with the Employer is the twelve (12) consecutive month period defined as the Limitation Year in the Adoption Agreement. (i) Limitation Year: A calendar year, or the twelve (12) consecutive month period elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. U) Maximum Permissible Amount: The maximum Annual Addition that may be con- tributed or allocated to a Participant's Account under the Plan for any Limitation Year shall not exceed the lesser of (1) The Defined Contribution Dollar Limitation, or (2) Twenty-five percent (25%) of the Participant's Compensation for the Limita- tion Year. If a short Limitation Year is created because of an amendment changing the Limita- tion Year to a different twelve (12) consecutive month period, the Maximum Permis- sible Amount will not exceed the Defined Contribution Dollar Limitation multi- plied by the following fraction: Number of months in the short Limitation Year 12 (k) Projected Annual Benefit: The annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the Participant would be entitled under the terms of the plan assuming: (1) The Participant will continue employment until Normal Retirement Age under the plan (or current age, iflater), and (2) The Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the plan will remain con- stant for all future Limitation Years. VI. TRUST AND INVESTMENT OF ACCOUNTS 6.01 Trust. A Trust is hereby created to hold all of the assets of the Plan for the exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investtnent Powers. The trustee or the Plan Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, except MPP 04/30/2000 13 6.03 MPP 04/30/2000 (f) Upon such terms as may be deemed advisable by the Employer or the Plan trator, as the case may be, for the protection of the interests of the Plan or fo preservation of the value of an investment, to exercise and enforce by suit fo legal 0 equitable remedies or by other action, or to waive any right or claim on beh If of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to an other modification or change in the terms of any obligation owing to the Plan, to ettle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce any and all rights of foreclosure, bid for pro erty it foreclosure, and take a deed in lieu of foreclosure with or without paying co sid- eration therefor, to commence or defend suits or other legal proceedings wh never any interest of the Plan requires it, and to represent the Plan in all suits or Ie, al proceedings in any court oflaw or equity or before any body or tribunal. (g) To employ suitable consultants, depositories, agents, and legal counsel on be the Plan. (h) ,.t~e I mtstrai ! To open and maintain any bank account or accounts in the name of the PIa Employer, or any nominee or agent of the foregoing, including the Plan Adt tor, in any bank or banks. (i) To do any and all other acts that may be deemed necessary to carry out any f the powers set forth herein. Taxes and Expenses. All taxes of any and all kinds whatsoever that may be levied or sesse under existing or future laws upon, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of inve tment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compen ation the Plan Administrator, as may be agreed upon from time to time by the Employer a d the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Admi - istrator in performance of its duties hereunder (including but not limited to fees for egal, accounting, investment and custodial services) shall also be paid from the Trust. Ho ever, n person who is a fiduciary within the meaning of section 3 (21) (A) of ERISA and reg lation promulgated thereunder, and who receives full-time pay from the Employer may rec compensation from the Trust, except for expenses properly and actually incurred. 6.04 I I I I PaYlnent of Benefits. The paYlnent of benefits from the Trust in accordance with th terms I of the Plan may be made by the Plan Administrator, or by any custodian or other pe son so authorized by the Employer to make such disbursement. The Plan Administrator, custodiant or other person shall not be liable with respect to any distribution of Trust assets ma e at th direction of the Employer. ! I 6.05 , Investment Funds. In accordance with uniform and nondiscriminatory rules establis ed by i the Employer and the Plan Administrator, the Participant may direct his/her Accoun s to bel invested in one (1) or more investment hmds available under the Plan; provided, ho ever, that the Participant's investment directions shall not violate any investment restrictio s established by the Employer and shall not include any investment in collectibles, as d fined in section 408(m) of the Code. 5 (f) Upon such terms as may be deemed advisable by the Employer or the Plan Adminis- trator, as the case may be, for the protection of the interests of the Plan or for the preservation of the value of an investment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation owing to the Plan, to settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce any and all rights of foreclosure, bid for property in foreclosure, and take a deed in lieu of foreclosure with or without paying consid- eration therefor, to commence or defend suits or other legal proceedings whenever any interest of the Plan requires it, and to represent the Plan in all suits or legal proceedings in any court of law or equity or before any body or tribunal. (g) To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. (h) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Plan Administra- tor, in any bank or banks. (i) To do any and all other acts that may be deemed necessary to carry out any of the powers set forth herein. 6.03 Taxes and Expenses. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of investment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Plan Administrator, as may be agreed upon from time to time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Admin- istrator in performance of its duties hereunder (including but not limited to fees for legal, accounting, investment and custodial services) shall also be paid from the Trust. However, no person who is a fiduciary within the meaning of section 3 (21) (A) of ERISA and regulations promulgated thereunder, and who receives full-time pay from the Employer may receive compensation from the Trust, except for expenses properly and actually incurred. 6.04 Payment of Benefits. The payrnent of benefits fron. the Trust in accordance with the terms of the Plan may be made by the Plan Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. The Plan Administrator, custodian or other person shall not be liable with respect to any distribution of Trust assets made at the direction of the Employer. 6.05 Investment Funds. In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer and shall not include any investment in collectibles, as defined in section 408(m) of the Code. MPP 04/30/2000 15 of service with the Employer is the twelve (12) consecutive month period d the Limitation Year in the Adoption Agreement. (i) Limitation Year: A calendar year, or the twelve (12) consecutive month perio elected by the Employer in the Adoption Agreement. All qualified plans mai ltained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different twelve (12) consecutive month period, the new Limit tion Year must begin on a date within the Limitation Year in which the amendm nt is made. U) Maximum Permissible Amount: The maximum Annual Addition that may b con- tributed or allocated to a Participant's Account under the Plan for any Limit, Year shall not exceed the lesser of (1) The Defined Contribution Dollar Limitation, or (2) Twenty-five percent (25%) of the Participant's Compensation for the Limita tion Year. I If a short Limitation Year is created because of an amendment changing the imita-I tion Year to a different twelve (12) consecutive month period, the Maximum Permisi sible Amount will not exceed the Defined Contribution Dollar Limitation ulti- plied by the following fraction: Number of months in the short Limitation Year 12 (k) Projected Annual Benefit: The annual retirement benefit (adjusted to an act arially equivalent straight life annuity if such benefit is expressed in a form other th n a straight life annuity or qualified joint and survivor annuity) to which the Par icipant would be entitled under the terms of the plan assuming: (1) I The Participant will continue employment until Normal Retiremen Age I under the plan (or current age, iflater), and I The Participant's Compensation for the current Limitation Year and 11 othej relevant factors used to determine benefits under the plan will remai con- stant for all future Limitation Years. (2) VI. TRUST AND INVESTMENT OF ACCOUNTS 6.01 Trust. A Trust is hereby created to hold all of the assets of the Plan for the exclusive enefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investment Powers. The trustee or the Plan Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, except MPP 04/30/2000 service if the number of consecutive one (1) year Breaks in Service in such period equals or exceeds the greater of five (5) or the aggregate number of years of service. Such aggregate number of years of service will not include any years of service disregarded under the preceding sentence by reason of prior Breaks in Service. If a Participant's years of service are disregarded pursuant to the preceding paragraph, such Participant will be treated as a new Employee for eligibility purposes. If a Participant's years of service may not be disregarded pursuant to the preceding paragraph, such Participant shall continue to participate in the Plan, or, if terminated, shall participate immediately upon reemployment. 7.04 Vesting Upon Normal Retirement Age. Notwithstanding Section 7.01 of the Plan, a Par- ticipant shall have a Nonforfeitable Interest in his/her entire Employer Contribution Ac- count, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan, if he/she is employed on or after his/her Normal Retirement Age. 7.05 Vesting Upon Death or Disability. Notwithstanding Section 7.01 of the Plan, in the event of Disability or death, a Participant or his/her Beneficiary shall have a Nonforfeitable Inter- est in his/her entire Employer Contribution Account, to the extent that the balance of such Account has not previously been forfeited pursuant to Section 7.06 of the Plan. 7.06 Forfeitures. Except as provided in Sections 7.04 and 7.05 of the Plan or as otherwise pro- vided in this Section 7.06, a Participant who separates from service prior to obtaining full vesting shall forfeit that percentage of his/her Employer Contribution Account balance which has not vested as of the date such Participant incurs a Break in Service of five (5) consecutive years or, if earlier, the date such Participant receives, or is deemed under the provisions of Section 9.04 to have received, distribution of the entire Nonforfeitable Interest in his/her Employer Contribution Account. If a Participant receives a voluntary distribu- tion of less than the entire vested portion of his/her Employer Contribution Account, the part of the nonvested portion that will be treated as a forfeiture is the total nonvested por- tion multiplied by a fraction, the numerator of which is the amount of the distribution attributable to Employer Contributions and the denominator of which is the total value of the vested Employer Contribution Account. No forfeiture will occur solely as a result of a Participant's withdrawal of Employee Contri- butions. Forfeitures shall be allocated in the manner described in Section 4.02. 7.07 Reinstatement of Forfeitures. If the Participant returns to the employment of the Employer before incurring a Break in Service of five (5) consecutive years, any amounts forfeited pursuant to Section 7.06 shall be reinstated to the Participant's Employer Contribution Account on the date of repayment by the Participant of the amount distributed to such Participant from his/her Employer Contribution Account; provided, however, that if such Participant forfeited his/her Account balance by reason of a deemed distribution, pursuant to Section 9.04, such amounts shall be automatically restored upon the reemployment of MPP 04/30/2000 17 sion plan to the extent such contributions are deductible by the Emp oyee, or any distributions from a plan of deferred compensation; and (2) Other amounts which received special tax benefits, or contributions the Employer (whether or not under a salary reduction agreement) t the purchase of an annuity contract described in section 403 (b) of th (whether or not the amounts are actually excludable from the gross i of the Employee). (a) any elective deferrals (as defined in section 402(g)(3) of the and (3) Notwithstanding the above, for Limitation Years beginning after Dec 31, 1997, Compensation shall include: (b) any amount which is contributed or deferred by the Emplo er at the election of the Employee and which is not includible in the gross income of the Employee by reason of sections 125 or 57 of the Code. For purposes of applying the limitations of this Article, Compensation for a imita- tion Year is the Compensation actually paid or made available during such ye r. (c) Defined Benefit Fraction: A fraction, the numerator of which is the sum oft e Participant's Projected Annual Benefits under all the defined benefit plans (wether or not terminated) maintained by the Employer, and the denominator of wh ch is the lesser of 125 percent of the dollar limitation determined for the Limitati n Year under sections 415(b) and (d) of the Code or 140 percent of the HighestAv rage Compensation, including any adjustments under section 415(b) of the Code. Notwithstanding the above, if the Participant was a participant as of the first ay of the first Limitation Year beginning after December 31, 1986, in one (1) or m re I defined benefit plans maintained by the Employer which were in existence on May 6, 1986, the denominator of this fraction will not be less than 125 percent 0 the surP of the annual benefits under such plans which the Participant had accrued as of the I close of the last Limitation Year beginning before January 1, 1987, disregardi g any changes in the terms and conditions of the plan after May 5, 1986. The prec ding sentence applies only if the defined benefit plans individually and in the aggr gate satisfied the requirements of section 415 of the Code for all Limitation Years egin- ning before January 1, 1987. (d) Defined Contribution Dollar Limitation: $30,000 or, if greater, one-fourth (1/4) o~ the defined benefit dollar limitation set forth in section 415(b) (1) of the Co e, as in I I effect for the Limitation Year. I (e) Defined Contribution Fraction: A fraction, the numerator of which is the s m of the Annual Additions to the Participant's account under all the defined contr butionl I I MPP 04/30/2000 111 payments are to commence. However, distribution may commence less than thirty (pO) day~ after the notice described in the preceding sentence is given, provided (i) the distrib . tion is i one to which sections 401 (a) (11) and 417 of the Code do not apply or, if sections 4( 1 (a(ll) and 417 of the Code do apply, the waiver requirements of Section 12.04(a) are met; (ii) th Plan Administrator clearly informs the Participant that the Participant has a right to perio of at least thirty (30) days after receiving the notice to consider the decision of whet er or not ~o. elect a distributi~n (and, if applicable, a. particular dist~ib~tio~ option); and (iiir the PartICIpant, after reCeIVll1g the notICe, affirmatIvely elects a dIstnbutIOn. 1 I Notwithstanding the foregoing, only the Participant need consent to the commence lent 0 a distribution in the form of the Qualified Joint and Survivor Annuity while the Ac ount balance is immediately distributable. (Furthermore, if payment in the form of a Qu' ified Joint and Survivor Annuity is not required with respect to the Participant pursuant t section 12.02 of the Plan, only the Participant need consent to the distribution of a Ac- I count balance that is immediately distributable.) Neither the consent of the Particip;int nor the Participant's Spouse shall be required for any form of distribution to the extent t~at a distribution is required to satisfy section 401 (a) (9) or 415 of the Code. I In addition, upon termination of this Plan if the Plan does not offer an annuity optiqn (purchased from a commercial provider) and if the Employer does not maintain anot:!her defined contribution plan, the Participant's Account balance will, without the Parti~ipant's consent, be distributed to the Participant. An Account balance is immediately distributable if any part of the Account balance qould b~ distributed to the Participant (or Surviving Spouse) before the Participant attains or would have attained (if not deceased) the later of Normal Retirement Age or age sixty-two (62). For purposes of determining the applicability of the foregoing consent requirements, to distributions made before the first day of the first plan year beginning after Decembdr 31, 1988, the Participant's vested Account balance shall not include amounts attributable' to accumulated deductible employee contributions within the meaning of section 72(0 }(5) (B) of the Code. 9.03 Transfer to Another Plan. (a) If a Participant becomes eligible to participate in another plan maintained by, the Employer that is qualified under section 401 (a) of the Code, the Plan Admin~strator . shall, at the written election of such Participant, transfer all or part of such Participant's Account to such plan, provided the plan administrator for such plan certifies to the Plan Administrator that its plan provides for the acceptance ot such a transfer. For purposes of this Plan, any such transfer shall not be considered ~ distri-. bution to the Participant subject to spousal consent as described in Section 91.02 and Article XII. (b) Notwithstanding any provision of the Plan to the contrary that would othe~ise limit a Distributee's election under this Section, a Distributee may elect, at tlie time and in the manner prescribed by the Plan Administrator, to have any portioni of an MPP 04/30/2000 19 , ' Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For purposes of this Plan, any such Eligible Rollover Distribution shall be considered a distribution to the Participant subject to spousal consent as described in Section 9.02 and Article XII. (c) Definitions. For the purposes of Subsection (b), the following definitions shall apply: (1) Eligible Rollover Distribution. Any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life or life expectancy of the Distributee or the joint lives or joint life expectancies of the Distributee and the Distributee's designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under section 401 (a) (9) of the Code; the portion of any distribution that is not includible in gross income; and any other distribution(s) that is reasonably expected to total less than $200 during a year. (2) Eligible Retirement Plan. An individual retirement account described in section 408(a) of the Code, an individual retirement annuity described in section 408(b) of the Code, an annuity plan described in section 403(a) of the Code, or a qualified trust described in section 401 (a) of the Code, that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the Surviving Spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. (3) Distributee. Participant; in addition, the Participant's surviving spouse and the Participant's spouse who is the alternate payee under a qualified domestic relations order, as defined in section 414(p) of the Code, are Distributees with regard to the interest of the spouse or former spouse. (4) Direct Rollover. A payment by the Plan to the Eligible Retirement Plan specified by the Distributee. 9.04 De Minimis Accounts. Notwithstanding the foregoing provisions of this Article, if a Partici- pant terminates service, and the value of his/her Nonforfeitable Interest in his/her Account is not greater than the dollar limit under section 411 (a) (11) (A) of the Code, the Participant shall be paid his/her benefits as soon as practicable after such termination, but, in no event, later than the second Plan Year following the Plan Year in which the Participant terminated employment. For purposes of this Section, if a Participant's Nonforfeitable Interest in his/ her Account is zero, the Participant shall be deemed to have received a distribution of such Nonforfeitable Interest in his/her Account. A Participant's Nonforfeitable Interest in his/her Account shall not include accumulated Deductible Employee Contributions within the meaning of Section 72(0)(5)(B) of the Code for Plan Years beginning prior to January 1, 1989. MPP 04!30/2000 20 9.05 Withdrawal ofVoluntary Contributions. A Participant may make a written election, or if married, a Qualified Election, to withdraw a part of or the full amount ofhis/herVo untarYI Contribution Account. Such withdrawals may be made at any time, provided that n more than two (2) such withdrawals may be made during any calendar year. No forfeiture will occur solely as the result of any such withdrawal. 9.06 Withdrawal of Deductible Employee Contributions. A Participant may make a writ en election, or if married, a Qualified Election, to withdraw a part of or the full amoun of his her Deductible Employee Contribution Account. Such withdrawals may be made a any time, provided that no more than two (2) such withdrawals may be made during an calen- dar year. No forfeiture will occur solely as the result of any such withdrawal. 9.07 Latest Commencement of Benefits. Notwithstanding anything to the contrary in th s Article, benefits shall begin no later than the Participant's Required Beginning Date, as defined under Section 10.06, or as otherwise provided in Section 10.05. X. DISTRIBUTION REQUIREMENTS 10.01 General Rules. (a) I I . ~' : Subject to the provisions of Article XII, the requirements of this Article shall apply t any di",ibution of a Participant's inte",st and will talce precedence ave' any i consisf tent provisions of this Plan. i I All distributions required under this Article shall be determined and made in accor-I dance with the proposed regulations under section 401 (a) (9) of the Code, in luding l the minimum distribution incidental benefit requirement of section 1.401 (a) 9)-2 o~ the proposed regulations. (b) 10.03 i Required Beginning Date. The entire Nonforfeitable Interest of a Participant mus~ be distributed or begin to be distributed no later than the Participant's Required Begipning D~. I i I Limits on Distribution Periods. As of the first Distribution Calendar Year, distributtons, if not made in a single-sum, may only be made over one of the following periods (o~ a combination thereof): 10.02 (a) The life of the Participant, (b) The life of the Participant and a Designated Beneficiary, (c) A period certain not extending beyond the Life Expectancy of the Participa*t, or (d) A period certain not extending beyond the Joint and Last Survivor Expectancy of the Participant and a Designated Beneficiary. MPP 04/30/2000 21 , ' 10.04 Determination of Amount to Be Distributed Each Year. If the Participant's Nonforfeitable Interest is to be distributed in other than a single sum, the following minimum distribution rules shall apply on or after the Required Beginning Date: (a) Individual Account. (1) If a Participant's Benefit is to be distributed over (i) a period not extending beyond the Life Expectancy of the Participant or the Joint Life and Last Survivor Expectancy of the Participant and the Participant's Designated Beneficiary, or (ii) a period not extending beyond the Life Expectancy of the Designated Beneficiary, the amount required to be distributed for each calendar year, beginning with distributions for the first Distribution Calendar Year, must at least equal the quotient obtained by dividing the Participant's Benefit by the Applicable Life Expectancy. (2) For calendar years beginning before January 1, 1989, if the Participant's spouse is not the Designated Beneficiary, the method of distribution selected must assure that at least fifty percent (50%) of the present value of the amount available for distribution is paid within the Life Expectancy of the Participant. (3) For calendar years beginning after December 31, 1988, the amount to be distributed each year, beginning with distributions for the first Distribution Calendar Year shall not be less than the quotient obtained by dividing the Participant's Benefit by the lesser of (i) the Applicable Life Expectancy, or (ii) if the Participant's spouse is not the Designated Beneficiary, the applicable divisor determined from the table set forth in Q&A-4 of section 1.401 (a) (9)-2 of the proposed regulations. Distributions after the death of the Participant shall be distributed using the Applicable Life Expectancy in Subsection (1) as the relevant divisor without regard to Proposed Regulations section 1.401 (a) (9)-2. (4) The minimum distribution required for the Participant's first Distribution Calendar Year must be made on or before the Participant's Required Begin- ning Date. The minimum distribution for other calendar years, including the minimum distribution for the Distribution Calendar Year in which the Eluployee's required beginning date occurs, IuUSt be ulade on or before December 31 of that Distribution Calendar Year. (b) Other forms. If the Participant's Benefit is distributed in the form of an annuity purchased from an insurance cOlupany, distributions thereunder shall be made in accordance with the requirements of section 401 (a)(9) of the Code and the proposed regulations thereunder. 10.05 Death Distribution Provisions. Upon the death of the Participant, the following distribution provisions shall take effect: MPP 04/30/200() 22 (a) If the Participant dies after distribution of his/her interest has commenced, tqe remaining portion of such interest will continue to be distributed at least as r pidly as under the method of distribution being used prior to the Participant's dea h. (b) If the Participant dies before distribution of his/her interest commences, the Participant's entire interest will be distributed no later than December 31 of he calendar year containing the fifth (5th) anniversary of the Participant's death xcept to the extent that an election is made to receive distributions in accordance ith (1) or (2) below: I (1) If any portion of the Participant's interest is payable to a Designated enefi- ciary, distributions may be made over the life or over a period certain not greater than the Life Expectancy of the Designated Beneficiary com encin$ on or before December 31 of the calendar year inmlediately followin the i calendar year in which the Participant died; (2) If the Designated Beneficiary is the Participant's surviving spouse, the date distributions are required to begin in accordance with Subsection (1) shall not be earlier than the later of (i) December 31 of the calendar year i 'lmedi- ately following the calendar year in which the Participant died, and (i.) December 31 of the calendar year in which the Participant would ha e attained age seventy and one-half (70-112). If the Participant has not made an election pursuant to this Subsection by tht time of his/her death, the Participant's Designated Beneficiary must elect the met. od of distribution no later than the earlier of (i) December 31 of the calendar year. n which distributions would be required to begin under this Section, or (ii) D cember 31 of the calendar year which contains the fifth (5th) anniversary of the date of death of the Participant. If the Participant has no Designated Beneficiary, or if the esig- i nated Beneficiary does not elect a method of distribution, distribution of the Participant's entire interest must be completed by December 31 of the calen ar year containing the fifth (5th) anniversary of the Participant's death. (c) For purposes of Subsection (b), if the surviving spouse dies after the Particip~nt, but before payments to such spouse begin, the provisions of Subsection (b), with ithe exception of paragraph (2) therein, shall be applied as if the surviving spouse :were the Participant. (d) For purposes of this Section, any amount paid to a child of the Participant w~ll be treated as if it had been paid to the surviving spouse if the amount becomes payable to the surviving spouse when the child reaches the age of majority. . (e) For the purposes of this Section, distribution of a Participant's interest is con~idered to begin on the Participant's Required Beginning Date (or, if Subsection (c) lis applicable, the date distribution is required to begin to the surviving spouse pursuant to Subsection (b)). If distribution in the form of an annuity irrevocably commences to the participant before the Required Beginning Date, the date distribution! is considered to begin is the date distribution actually commences. MPP 04/30/2000 23 , ' 10.06 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Applicable Life Expectancy. The Life Expectancy (or Joint and Last Survivor Expect- ancy) calculated using the attained age of the Participant (or Designated Beneficiary) as of the Participant's (or Designated Beneficiary's) birthday in the applicable calendar year reduced by one (1) for each calendar year which has elapsed since the date Life Expectancy was first calculated. If Life Expectancy is being recalculated, the Appli- cable Life Expectancy shall be the Life Expectancy as so recalculated. The applicable calendar year shall be the first Distribution Calendar Year, and if Life Expectancy is being recalculated such succeeding calendar year. (b) Designated Beneficiary. The individual who is designated as the Beneficiary under the Plan in accordance with section 401 (a) (9) of the Code and the proposed regula- tions thereunder. (c) Distribution Calendar Year. A calendar year for which a minimum distribution is required. For distributions beginning before the Participant's death, the first Distri- bution Calendar Year is the calendar year immediately preceding the calendar year which contains the Participant's Required Beginning Date. For distributions begin- ning after the Participant's death, the first Distribution Calendar Year is the calendar year in which distributions are required to begin pursuant to Section 10.05 above. (d) Life Expectancy. The Life Expectancy and joint and last survivor expectancy, respec- tively, as computed by use of the expected return multiples in Tables V and VI of section 1.72-9 of the income tax regulations. Unless otherwise elected by the Participant (or spouse, in the case of distributions described in Section 10.05(b)(2) above) by the time distributions are required to begin, Life Expectancies shall be recalculated annually. Such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The Life Expectancy of a nonspouse Beneficiary may not be recalculated. ( e) Participant's Benefit. (1) The Account balance as of the last Accounting Date in the calendar year immediately preceding the Distribution Calendar Year (valuation calendar year) increased by the amount of any contributions or forfeitures allocated to the Account balance as of dates in the valuation calendar year after such Accounting Date and decreased by distributions made in the valuation calendar year after such Accounting Date. (2) For purposes of paragraph (1) above, if any portion of the minimum distribu- tion for the first Distribution Calendar Year is made in the second Distribu- tion Calendar Year on or before the Required Beginning Date, the amount of the minimum distribution made in the second Distribution Calendar Year shall be treated as if it had been made in the immediately preceding Distribu- tion Calendar Year. MPP 04/30/2000 24 (f) Required Beginning Date. The Required Beginning Date of a Participant i the first day of April of the calendar year following the calendar year in which t e Participant attains age seventy and one-half (70-1/2), or such later date as p rmit- ted under this Section or section 401 (a) (9) of the Code. XI. MODES OF DISTRIBUTION OF BENEFITS 11.Cll Normal Mode of Distribution. Unless an elective mode of distribution is elected i accordance with Article XII, benefits shall be paid to the Participant in the form pr vided for in Article XII. 11.02 Elective Mode of Distribution. Subject to the requirements of Articles X and XII, Participant may revocably elect to have his/her Account distributed in anyone (1) f the following modes in lieu of the mode described in Section 11.01: (a) Equal Payments. Equal monthly, quarterly, semi-annual, or annual payments n an amount chosen by the Participant continuing until the Account is exhausted. (b) Lump Sum. A lump sum payment. (c) Period Certain. Approximately equal monthly, quarterly, semi-annual, or ann al payments, calculated to continue for a period certain chosen by the Participa It. (d) Other. Any other sequence of payments requested by the Participant. 11.03 Election of Mode. A Participant's election of a payment option must be made in \~riting between thirty (30) and ninety (90) days before the payment of benefits is to commence. I I 11.Cl4 Death Benefits. Subject to Articles X and XII, (a) In the case of a Participant who dies before he/she has begun receiving beneftt payments, the Participant's entire Nonforfeitable Interest shall then be payabl~ to his/ her Beneficiary within ninety (90) days of the Participant's death. A Benefici~ry who is entitled to receive benefits under this Section may elect to have benefits co!m- mence at a later date, subject to the provisions of Section 10.05. The Benefidiary may elect to receive the death benefit in any of the forms available to the Pat1ticipant under Section 11.02. If the Beneficiary is the Participant's Surviving Spouse" and such Surviving Spouse dies before payment commences, then this Section sh~ll apply to the beneficiary of the Surviving Spouse as though such Surviving Spouse were the Participant. (b) Should the Participant die after he/she has begun receiving benefit payments:, the Beneficiary shall receive the remaining benefits, if any, that are payable, underl the payment schedule elected by the Participant. Notwithstanding the foregoin~, the Beneficiary may elect to accelerate payments of the remaining balances, incl~ding but not limited to, a lump sum distribution. MPP 04/30/2000 25 r , ' XII. SPOUSAL BENEFIT REQUIREMENTS 12.01 Application. The provisions of this Article shall take precedence over any conflicting provision in this Plan. The provisions of this Article shall apply to any Participant who is credited with any Period of Service with the Employer on or after August 23, 1984, and such other Participants as provided in Section 12.05. 12.02 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is selected pursuant to a Qualified Election within the ninety (90) day period ending on the Annuity Starting Date, a married Participant's Vested Account Balance will be paid in the form of a Qualified Joint and Survivor Annuity and an unmarried Participant's Vested Account Balance will be paid in the form of a Straight Life Annuity. The Participant may elect to have such annuity distributed upon the attainment of the Earliest Retirement Age under the Plan. 12.03 Qualified Preretirement Survivor Annuity. If a Participant dies before the Annuity Starting Date, then fifty percent (5CY!1)) of the Participant's Vested Account Balance shall be applied toward the purchase of an annuity for the life of the Surviving Spouse; the remaining portion shall be paid to such Beneficiaries (which may include such Spouse) designated by the Participant. Notwithstanding the foregoing, the Participant may waive the spousal annuity by designating a different Beneficiary within the Election Period pursuant to a Qualified Election. To the extent that less than one hundred percent (100%) of the vested Account balance is paid to the Surviving Spouse, the amount of the Participant's Account derived from Employee contributions will be allocated to the Surviving Spouse in the same proportion as the amount of the Participant's Account derived from Employee contributions is to the Participant's total Vested Account Balance. The Surviving Spouse may elect to have such annuity distributed within a reasonable period after the Participant's death. Further, such Spouse may elect to receive any death benefit payable to him/her hereunder in any of the forms available to the Participant under Section 11.02. 12.04 Notice Requirements. (a) In the case of a Qualified Joint and Survivor Annuity as described in Section 12.02, the Plan Adluinistrator shall, no less than thirty (30) days and no more than ninety (90) days prior to the Annuity Starting Date, provide each Participant a written explanation of (i) the terms and conditions of a Qualified Joint and Survivor Annu- ity; (ii) the Participant's right to make and the effect of an election to waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a Participant's Spouse; and (iv) the right to make, and the effect of, a revocation of a previous election to waive the Qualified Joint and Survivor Annuity. However, if the Partici- pant, after having received the written explanation , affirmatively elects a form of distribution and the Spouse consents to that form of distribution (if necessary), benefit payments may commence less than 30 days after the written explanation was provided to the Participant, provided that the following requirements are met: (1) The Plan Administrator provides information to the Participant clearly indicating that the Participant has a right to at least 30 days to consider MPP 04/30/2000 26 MPP 04130/2000 whether to waive the Qualified Joint and Survivor Annuity and consent to a form of distribution other than a Qualified Joint and Survivor Annuity; (2) The Participant is permitted to revoke an affirmative distribution election at least until the Annuity Starting Date, or iflater, at any time prior to the expiration of the 7 -day period that begins the day after the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; (3) The Annuity Starting Date is after the date that the explanation of the Qualified Joint and Survivor Annuity is provided to the Participant; and (4) Distribution in accordance with the affirmative election does not com- mence before the expiration of the 7 -day period that begins after the day after the explanation of the Qualified Joint and Survivor Annuity is pro- vided to the Participant. (b) In the case of a qualified preretirement survivor annuity as described in Section 12.03, the Plan Administrator shall provide each Participant within the applicable period for such Participant a written explanation of the qualified preretirement survivor annuity in such terms and in such manner as would be comparable to the explanation provided for meeting the requirements of Subsection (a) applicable to a Qualified Joint and Survivor Annuity. The applicable period for a Participant is whichever of the following periods ends last: (i) the period beginning with the first day of the Plan Year in which the Partici- pant attains age thirty-two (32) and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age thirty-five (35); (ii) a reasonable period ending after the individual becomes a Participant; (iii) a reasonable period ending after Subsection (c) ceases to apply to the Participant; (iv) a reasonable period ending after this Article first applies to the Participant. Notwithstanding the forego- ing, notice must be provided within a reasonable period ending after separation from service in the case of a Participant who separates from service before attaining age thirty-five (35). For purposes of applying the preceding paragraph, a reasonable period ending after the enumerated events described in (ii), (iii) and (iv) is the end of the two (2) year period beginning one (1) year prior to the date the applicable event occurs, and ending one (1) year after that date. In the case of a Participant who separates from service before the Plan Year in which age thirty-five (35) is attained, notice shall be provided within the two (2) year period beginning one (1) year prior to separation and ending one (1) year after separation. If such a Participant thereafter returns to employment with the Employer, the applicable period for such Participant shall be redetermined. (c) Notwithstanding the other requirements of this Section, the respective notices prescribed by this Section need not be given to a Participant if (1) the Plan "fully subsidizes" the costs of a Qualified Joint and Survivor Annuity or qualified prere- tirement survivor annuity, and (2) the Plan does not allow the Participant to waive 27 , ' the Qualified Joint and Survivor Annuity or qualified preretirement survivor annuity and does not allow a married Participant to designate a non-Spouse Beneficiary. Fo purposes of this Subsection (c), a plan fully subsidizes the costs of a benefit if no increase in cost or decrease in benefits to the Participant may result from the Participant's failure to elect another benefit. 12.05 Definitions. For the purposes of this Section, the following definitions shall apply: (a) Annuity Starting Date: The first day of the first period for which an amount is paid as an annuity or any other form. (b) Election Period: The period which begins on the first day of the Plan Year in which the Participant attains age thirty-five (35) and ends on the date of the Participant's death. If a Participant separates from service prior to the first day of the Plan Year in which age thirty-five (35) is attained, with respect to the Account balance as of the date of separation, the Election Period shall begin on the date of separation. Pre-age thirty-five (35) waiver: A Participant who will not yet attain age thirty-five (35) as of the end of any current Plan Year may make a special Qualified Election to waive the qualified preretirement survivor annuity for the period beginning on the date of such election and ending on the first day of the Plan Year in which the Participant will attain age thirty-five (35). Such election shall not be valid unless the Participant receives a written explanation of the qualified preretirement survivor annuity in such terms as are comparable to the explanation required under Section 13.04(a). Qualified preretirement survivor annuity coverage will be automatically reinstated as of the first day of the Plan Year in which the Participant attains age thirty-five .(35). Any new waiver on or after such date shall be subject to the full requirements of this Article. (c) Earliest Retirement Age: The earliest date on which, under the Plan, the Participant could elect to receive retirement benefits. (d) Qualified Election: A waiver of a Qualified Joint and Survivor Annuity or a qualifie preretirement survivor annuity. Any waiver of a Qualified Joint and Survivor Annui or a qualified preretirement survivor annuity shall not be effective unless: (a) the Participant's Spouse consents in writing to the election; (b) the election designates a specific Beneficiary, including any class of Beneficiaries or any contingent Beneficia- ries, which may not be changed without spousal consent (or the Spouse expressly permits designations by the Participant without any further spousal consent); (c) th Spouse's consent acknowledges the effect of the election; and (d) the Spouse's con- sent is witnessed by a Plan representative or notary public. Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity shall not be effective unless the election designates a form of benefit payment which may not be changed without spousal consent (or the Spouse expressly permits designations by the Partici- pant without any further Spousal consent). If it is established to the satisfaction of a Plan representative that there is no Spouse or that the Spouse cannot be located, a waiver will be deemed a Qualified Election. MPP 0413012000 2 (e) Any consent by a Spouse obtained under this provision (or establishment that the consent of a Spouse may not be obtained) shall be effective only with respect to such Spouse. A consent that permits designations by the Participant without any r~quire- ment of further consent by such Spouse must acknowledge that the Spouse l~as the right to limit consent to a specific Beneficiary, and a specific form of benefit where applicable, and that the Spouse voluntarily elects to relinquish either or both pf such rights. A revocation of a prior waiver may be made by a Participant without the consent of the Spouse at any time before the commencement of benefits. Tt number of revocations shall not be liluited. No consent obtained under this rovi- sion shall be valid unless the Participant has received notice as provided in Se. tion 12.04. : ! ! Qualified Joint and Survivor Annuity: An immediate annuity for the life of tie Participant with a survivor annuity for the life of the Spouse which is not les~ than fifty percent (50<;11) and not more than one hundred percent (100%) of the amount of the annuity which is payable during the joint lives of the Participant and the ~pouse and which is the amount of benefit which can be purchased with the Participant's Vested Account Balance. The percentage of the survivor annuity shall be fifty per- cent (50%). (f) Spouse (Surviving Spouse): The Spouse or Surviving Spouse of the Participant, provided that a former Spouse will be treated as the Spouse or Surviving Spo~se and a current Spouse will not be treated as the Spouse or Surviving Spouse to the: extent provided under a qualified domestic relations order as described in section 414(p) of the Code. (g) Straight Life Annuity: An annuity payable in equal installments for the life of'the Participant that terminates upon the Participant's death. (h) Vested Account Balance: The aggregate value of the Participant's vested Account balances derived from Employer and Employee contributions (including rollovers), whether vested before or upon death, including the proceeds of insurance contracts, if any, on the Participant's life. The provisions of this Article shall apply to a Partici- pant who is vested in amounts attributable to Employer Contributions, Employee contributions (or both) at the time of death or distribution. 12.06 Annuity Contracts. Where benefits are to be paid in the form of a life annuity pursuant to the terms of this Article, a nontransferable annuity contract shall be purchased from a life insurance company and distributed to the Participant or Surviving Spouse, as applicable. The terms of any annuity contract purchased and distributed by the Plan shall comply with the requirements of this Plan and section 417 of the Code. MPP 04/30/2000 29 , . XIII. LOANS TO PARTICIPANTS 13.01 Availability of Loans to Participants. (a) If the Employer has elected in the Adoption Agreement to make loans available to Participants, a Participant may apply for a loan from the Plan subject to the limita- tions and other provisions of this Article. (b) The Employer shall establish written guidelines governing the granting ofloans, provided that such guidelines are approved by the Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to al Participants on a reasonably equivalent basis. 13.02 Terms and Conditions of Loans to Participants. Any loan by the Plan to a Participant under Section 13.01 of the Plan shall satisfY the following requirements: (a) Availability. Loans shall be made available to all Participants on a reasonably equiva- lent basis. (b) Nondiscrimination. Loans shall not be made to highly compensated Employees in an amount greater than the amount made available to other Employees. (c) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (d) Loan Limit. No Participant loan shall exceed the present value of the Participant's Nonforfeitable Interest in his/her Account. (e) Spousal Consent. A Participant must obtain the consent of his/her Spouse, as de- fined under Section 12.05 if any, within the ninety (90) day period before the time the Account balance is used as security for the loan. Spousal consent shall be ob- tained no earlier than the beginning of the ninety (90) day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the con- senting Spouse or any subsequent Spouse with respect to that loan. A new consent shall be required if the Account balance is used for renegotiation, extension, renewal, or other revision of the loan. (~ Foreclosure. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. (g) Reduction of Account. If a valid spousal consent has been obtained in accordance with Subsection (e), then, notwithstanding any other provision of this Plan, the portion of the Participant's vested Account balance used as a security interest held b the Plan by reason of a loan outstanding to the Participant shall be taken into ac- count for purposes of determining the amount of the Account balance payable at th time of death or distribution, but only if the reduction is used as repayment of the MPP 04/30/2000 3 MPP 04/3012000 loan. Ifless than one hundred percent (100%) of the Participant's nonforfeitable Account balance (determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first refIucing the nonforfeitable Account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. (h) Amount of Loan. At the time the loan is made, the principal alIlOunt of the loan plus the outstanding balance (principal plus accrued interest) due on any oth~r outstanding loans to the Participant or Beneficiary from the Plan and from all other plans of the Employer that are qualified employer plans under section 72(p) (4) of the Code shall not exceed the least of: (1) $50,000, reduced by the excess (if any) of (a) The highest outstanding balance ofloans from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over (b) The outstanding balance ofloans from the Plan on the date on which such loan is made; or (2) The greater of (a) $10,000, or (b) One-half (1/2) of the value of the Participant's Nonforfeitable Inter- est in all of his/her Accounts under this Plan. For the purpose of the above limitation, all loans from all qualified employer plans under section 72(p)(4) of the Code are aggregated. (i) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant in any calendar year. No loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. G) Length of Loan. The terms of any loan issued or renegotiated after December 31, 1993, shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time (determined at the time the loan is made) after the loan is made as the principal residence of the Participant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments and interest payments otherwise due may be suspended during an authorized leave of absence, if the promissory note so provides, 31 , ' but not beyond the original term permitted under this Subsection 0), with a revised payment schedule (within such term) instituted at the end of such period of suspen- SIon. (k) Prepayment. The Participant shall be permitted to repay the loan in whole or in par at any time prior to maturity, without penalty. (1) Note. The loan shall be evidenced by a prOlIlissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determine by the Employer. (m) Security. The loan shall be secured by an assignment of that portion the Participant's right, title and interest in and to his/her Employer Contribution Account (to the extent vested), Participant Contribution Account, and Portable Benefits Account tha is equal to fifty percent (50'X)) of the Participant's Account (to the extent vested). (n) Assignment or Pledge. For the purposes of paragraphs (h) and (i), assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. (0) Other Terms and Conditions. The Employer shall fix such other terms and condi- tions of the loan as it deems necessary to comply with legal requirements, to main- tain the qualification of the Plan and Trust under section 401 (a) of the Code, or to prevent the treatment of the loan for tax purposes as a distribution to the Participant The Employer, in its discretion for any reason, may fix other terms and conditions 0 the loan, not inconsistent with the provisions of this Article. 13.03 Participant Loan Accounts. (a) Upon approval of a loan to a Participant by the Employer, an amount not in excess of the loan shall be transferred from the Participant's other investment fund(s), described in Section 6.05 of the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 13.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. No person who is otherwise a fiduciary of the Plan shall be liable for any loss, or by reason of any breach, that results frOlIl the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repayment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other investment funds, in accordance with Section 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant's Loan Account. MPP 04/30/2000 3 (d) The Employer shall have the authority to establish other reasonable rules, not in- consistent with the provisions of the Plan, governing the establishment and niainte- nance of Participant Loan Accounts. XIV PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 14.01 Amendment by Employer. The Employer reserves the right, subject to Section 14.02 of the Plan, to amend the Plan from time to time by either: i (a) Filin?an amended Adoption Agreement to change, delete, or add any optionrl provlSlon, or I I i (b) Continuing the Plan in the form of an amended and restated Plan and Trust. I I No amendment to the Plan shall be effective to the extent that it has the effect of decreas- ing a Participant's accrued benefit. Notwithstanding the preceding sentence, a Pardcipant'~ Account balance may be reduced to the extent permitted under section 412(c)(8) qfthe Code. For purposes of this paragraph, a Plan amendment which has the effect of d~creas- ing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee's right to his/her Employer-derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendlnent. The Employer may (1) change the choice of options in the Adoption Agreement, (2) add overriding language in the Adoption Agreement when such language is necessary to satisty sections 415 or 416 of the Code because of the required aggregation of multiple plans, and (3) add certain model amendments published by the Internal Revenue Service. 14.02 Amendment otVesting Schedule. If the Plan's vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Participant's nonforfeitable percentage, each Participant may elect, within a reasonable period after the adoption of the amendment or change, to have the nonforfeitable percentage computed under the Plan without regard to such amendment or change. The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of: (a) Sixty (60) days after the amendment is adopted; (b) Sixty (60) days after the amendment becomes effective; or (c) Sixty (60) days after the Participant is issued written notice of the amendment by the Employer or Plan Administrator. MPP 04/30/2000 33 , ' 14.03 Termination by Employer. The Employer reserves the right to terminate this Plan. How- ever, in the event of such termination no part of the Trust shall be used or diverted to any purpose other than for the exclusive benefit of the Participants or their Beneficiaries, except as provided in this Section. Upon Plan termination or partial termination, all Account balances shall be valued at their [;lir market value and the Participant's right to his/her Employer Contribution Account shall be one hundred percent (100'}{)) vested and nonforfeitable. Such amount and any other amounts held in the Participant's other Accounts shall be maintained for the Par- ticipant until paid pursuant to the terms of the Plan. Any amounts held in a suspense account, after all liabilities of the Plan to Participants and Beneficiaries have been satisfied or provided for, shall be paid to the Employer in accor- dance with the Code and regulations thereunder. In the event that the Conmlissioner of Internal Revenue determines that the Plan is not initially qualified under the Internal Revenue Code, any contribution made by the Em- ployer incident to that initial qualification must be returned to the Employer within one year after the date the initial qualification is denied, but only if the application for the qualification is made by the time prescribed by law for filing the Employer's return for the year in which the Plan is adopted, or such later date as the Secretary of the Treasury may prescribe. 14.04 Discontinuance of Contributions. A permanent discontinuance of contributions to the Plan by the Employer, unless an amended and restated Plan is established, shall constitute a Plan termination. 14.05 Amendment by Plan Administrator. The Plan Administrator may amend this Plan upon thirty (30) days written notification to the Employer; provided, however, that any such amendment must be for the express purpose of maintaining compliance with applicable federal laws and regulations of the Internal Revenue Service. Such amendment shall become effective unless, within such 30-day period, the Employer notifies the Administra- tor, in writing, that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under n obligation to continue acting as Administrator hereunder. 14.06 Optional Provisions. Any provision which is optional under this Plan shall become effec- tive if and only if elected by the Employer and agreed to by the Plan Administrator. XV ADMINISTRATION 15.01 Powers of the Employer. The Employer shall have the following powers and duties: (a) To appoint and remove, with or without cause, the Plan Administrator; (b) To amend or terminate the Plan pursuant to the provisions of Article XIV; MPP 04/30/2000 3 (c) To appoint a committee to facilitate administration of the Plan and communications! I to Participants; (d) To decide all questions of eligibility (1) for Plan participation, and (2) upon appeal by any Participant, Employee or Beneficiary, for the payment ofbenefits; (e) To engage an independent qualified public accountant, when required to do so by law, to prepare annually the audited financial statements of the Plan's operation; (f) To take all actions and to communicate to the Plan Administrator in writing all necessary information to carry out the terms of the Plan and Trust; and (g) To notity the Plan Administrator in writing of the termination of the Plan. 15.02 Duties of the Plan Administrator. The Plan Administrator shall have the following powers and duties: (a) To construe and interpret the provisions of the Plan; (b) To maintain and provide such returns, reports, schedules, descriptions, and individua~ Account statements, as are required by law within the times prescribed by law; and to furnish to the Employer, upon request, copies of any or all such materials, and further, to make copies of such instruments, reports, descriptions, and statements as are required by law available for examination by Participants and such of their Beneficiaries who are or may be entitled to benefits under the Plan in such places and in such manner as required by law; (c) To obtain from the Employer such information as shall be necessary for the proper administration of the Plan; (d) To determine the amount, manner, and time of payment of benefits hereunder; (e) To appoint and retain such agents, counsel, and accountants for the purpose of properly administering the Plan; (f) To distribute assets of the Trust to each Participant and Beneficiary in accordance with Article X of the Plan; (g) To pay expenses from the Trust pursuant to Section 6.03 of the Plan; and (h) To do such other acts reasonably required to administer the Plan in accordance with! its provisions or as may be provided for or required by law. 15.03 Protection of the Employer. The Employer shall not be liable for the acts or omissions of the Plan Administrator, but only to the extent that such acts or omissions do not result from the Employer's failure to provide accurate or timely information as required or necessary for proper administration of the Plan. MPP 04/30/2000 35 , ' 15.04 Protection of the Plan Administrator. The Plan Administrator may rely upon any certifi- cate, notice or direction purporting to have been signed on behalf of the Employer which the Plan Adruinistrator believes to have been signed by a duly designated official of the Employer. 15.05 Resignation or Removal of Plan Administrator. The Plan Administrator may resign at any time effective upon sixty (60) days prior written notice to the Employer. The Plan Admin istrator may be removed by the Employer at any time upon sixty (60) days prior written notice to the Plan Administrator. Upon the resignation or removal of the Plan Administra tor, the Employer may appoint a successor Plan Administrator; failing such appointment, the Employer shall assume the powers and duties of Plan Administrator. Upon the resigna tion or removal of the Plan Administrator, any Trust assets invested by or held in the name of the Plan Administrator shall be transferred to the trustee in cash or property, at fair market value, except that the return of Trust assets invested in a contract issued by an insurance company shall be governed by the terms of that contract. 15.06 No Termination Penalty. The Plan Administrator shall have no authority or discretion to impose any termination penalty upon its removal. 15.07 Decisions of the Plan Administrator. All constructions, determinations, and interpretations made by the Plan Administrator pursuant to Section 15.02(a) or (d) shall be final and binding on all persons participating in the Plan, given deference in all courts oflaw to the greatest extent allowed by applicable law, and shall not be overturned or set aside by any court oflaw unless found to be arbitrary or capricious, or made in bad faith. XVI. MISCELLANEOUS 16.01 Nonguarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employment between the Employer and any Employee, or as a right of an Employee to be continued in the employment of the Employer, as a limitation of the right of the Employer to discharge any of its Employees, with or without cause. 16.02 Rights to Trust Assets. No Employee or Beneficiary shall have any right to, or interest in, any assets of the Trust upon termination of his/her employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable under the Plan to such Employee or Beneficiary out of the assets of the Trust. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust and none of the fiduciaries shall be liable therefor in any manner. 16.03 Nonalienation of Benefits. Except as provided in Section 16.04 of the Plan, benefits payable under this Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind, either voluntary or involuntary, prior to actually being received by the person en- titled to the benefit under the terms of the Plan; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or othenvise dispose of any right to benefits MPP 04/30/2000 3 , I payable hereunder, shall be void. The Trust shall not in any manner be liable for, or subjec, to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder. 16.04 Qualified Domestic Relations Order. Notwithstanding Section 16.03 of the Plan, amoun s may be paid with respect to a Participant pursuant to a domestic relations order, but if and only if the order is determined to be a qualified domestic relations order within the mean ing of section 414(p) of the Code or any domestic relations order entered before January 1, 1985. 16.05 Nonforfeitability of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to deprive a Participant of his/her right to the Nonforfeitable Interest to which he/she becomes entitled in accordance with the provisions of the Plan. 16.06 Incompetency of Payee. In the event any benefit is payable to a minor or incompetent, to a person otherwise under legal disability, or to a person who, in the sole judgment of the Employer, is by reason of advanced age, illness, or other physical or mental incapacity incapable of handling the disposition of his/her property, the Employer may apply the whole or any part of such benefit directly to the care, comfort, maintenance, support, . education, or use of such person or payor distribute the whole or any part of such benefit! to: i (a) The parent of such person; (b) The guardian, committee, or other legal representative, wherever appointed, of such person; (c) The person with whom such person resides; (d) Any person having the care and control of such person; or (e) Such person personally. The receipt of the person to whom any such payment or distribution is so made shall be full and complete discharge therefore. 16.07 Inability to Locate Payee. Anything to the contrary herein notwithstanding, if the Em- ployer is unable, after reasonable effort, to locate any Participant or Beneficiary to whom an amount is payable hereunder, such amount shall be forfeited and held in the Trust for application against the next succeeding Employer Contribution or contributions required to be made hereunder. Notwithstanding the foregoing, however, such amount shall be reinstated, by means of an additional Employer contribution, if and when a claim for the forfeited amount is subsequently made by the Participant or Beneficiary or if the Employer receives proof of death of such person, satisfactory to the Employer. To the extent not inconsistent with applicable law, any benefits lost by reason of escheat under applicable state law shall be considered forfeited and shall not be reinstated. MPP 04/30/2000 37 r' 16.08 Mergers, Consolidations, and Transfer of Assets. The Plan shall not be merged into or consolidated with any other plan, nor shall any of its assets or liabilities be transferred into any such other plan, unless each Participant in the Plan would (if the Plan then terminate receive a benefit immediately after the merger, consolidation, or transfer that is equal to or greater than the benefit he/she would have been entitled to receive immediately before th merger, consolidation, or transfer (if the Plan had then terminated). 16.09 Employer Records. Records of the Employer as to an Employee's or Participant's Period of Service, termination of service and the reason therefor, leaves of absence, reemployment, Earnings, and Compensation will be conclusive on all persons, unless determined to be incorrect. 16.10 Gender and Number. The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. 16.11 Applicable Law. The Plan shall be construed under the laws of the State where the Em- ployer is located, except to the extent superseded by federal law. The Plan is established with the intent that it meets the requirements under the Code. The provisions' of this Plan shall be interpreted in conformity with these requirements. In the event of any conflict between the Plan and a policy or contract issued hereunder, the Plan provisions shall control; provided, however, no Plan amendment shall supersede a existing policy or contract unless such amendment is required to maintain qualification under section 401 of the Code. MPP 04/30/2000 . I I 1 rCMA RETrREMENf CORPORATlON INTERNAL REVENUE SERVICE DETERMINATION LETTER INTERNAL REVENUE SERVICE DISTRICT DIRECTOR P. O. BOX 2508 CINCINNATI, OH 45201 Date: DEe n,2 199iJ DEPARTMENT OF THE TREASURY Employer Identification Number: DLN: 17007257030028 Person to Contact: DONALD G KRULCZYK Contact Telephone Number: (877) 829-5500 Plan Name: ID# 31255 Dear Applicant: We have made a favorable determination on your plan, identified above, based on the information supplied. Please keep this letter in your permanent records. Continued qualification of the plan under its present form will depend on its effect in operation. (See section 1.401-1 (b) (3) of the Income Tax Regulations.) We will review the status of the plan in operation periodically. The enclosed document explains the significance of this favorable determination letter, points out some events that may affect the qualified status of your employee retirement plan, and provides information on the reporting requirements for your plan. It also describes some events that automatically nullify it. It is very important that you read the publication. This letter relates only to the status of your plan under the Internal Revenue Code. It is not a determination regarding the effect of other federal or local statutes. This determination is subject to your adoption of the proposed amendments submitted in your letter dated December 1, 1999. The proposed amendments should be adopted on or before the date prescribed by the regulations under Code section 401 (b) . This determination letter is applicable for the plan adopted on March 5, 1998. This letter considers the changes in the qualifications requirements made by the Uruguay Round Agreements Act (GATT), Pub. L. 103-465, and the Taxpayer Relief Act of 1997, Pub. L. 105-34, and the changes in the qualifications requirements made by the Small Business Job Protection. Act of 1996, Pub. L. 104-188, that are effective before the first day of the first plan year beginning after December 31, 1998. The information on the enclosed Publication 794 is an integral part of this determination. Please be sure to read and keep it with this letter. The requirement for employee benefits plans to file summary plan descriptions (SPD) with the U.S. Department of Labor was eliminated effective Letter 835 (DO/CG) -2- WASHINGTON CONVENTION CENTER August 5, 1997. For more details, call 1-800-998-7542 for a free copy of the SPD card. The information on the enclosed addendum is an integral part of this determination. Please be sure to read and keep it with this letter. We have sent a copy of this letter to your representative as indicated in the power of attorney. If you have questions concerning this matter, please contact the person whose name and telephone number are shown above. Sincerely yours, r:( ~i?!::dL Enclosures: Publication 794 Addendum Letter 835 (DO!CG) . ' Department of the Treasury Internal Revenue Service Favorable Determination Letter Introduction I This publication explains the significa ce of your favorable determination letter, p~ints out some features that may affect the quali- fied status of your employee retireme t plan and nullify your determination Ie er without specific notice from us, and provic!es general information on the reporting requirements for your plan. fj), Publication 794 (Rev. December 1998) Catalog Number 20630M Significance of a ~avor ble Determination Let1er An employee retirement planqualifie under Internal Revenue Coda section 401 (a) (qualified plan) is enti~led to fa or- able tax treatment. For exarl1ple, con ri- butions made in accordance with the Ian document are generally currently deductible. However, participants will not include these contributions into inca e until the time they receive a qistributi n from the plan, at which time special i come averaging rates for lump sum distribu ions may serve to reduce the tax liability. n some cases, taxation may be further deferred by rollover to another qualifi d plan or individual retirement arrange ent. (See Publication 575, Pension and A nuity Income, for further details.) Finally, pan earnings may accumulate free of tax. Employee retirement plans that f il to satisfy the requirements under Code section 401 (a) are not entitled to favo ble tax treatment. Therefore, many empl yers desire advance assurance that the ter s of their plans satisfy the qualification req ire- ments. The Internal Revenue Service provides such advance assurance by means of the determination letter pro ram. A favorable determination letter indica es that, in the opinion of the Service, the~terms of the plan conform to the requiremen s of Internal Revenue Code section 401 (a. In addition, a favorable determination Ie er may indicate that, on the basis of oth~r information provided in your applicatiqn, it has been demonstrated that the Plan~atis- fies certain nondiscrimination require ents of Code section 401 (a). See the folio ing topic, Limitations of a Favorable I Determination Letter, for more details.. I Limitations of a Favora~le Determination Letter ! A favorable determination letter is limited in scope and may also have a limited u~eful life. A determination letter generally I applies to qualification requirements ! regarding the form of the plan. A det~rmi- l nation letter may also apply to other qualifi- cation requirements pertaining to the prohi- bition against discrimination in favor of highly compensated employees. These requirements are generally referred to as the coverage and nondiscrimination requirements. They include the nondiscrim- ination requirements of section 401 (a)(4) of the Code, the minimum coverage require- ments of section 41 O(b), and certain related requirements. The extent to which a determination letter applies to the coverage and nondis- crimination requirements depends on the terms of the plan, the scope of the determi- nation you requested, and the additional information you supplied with your applica- tion. Your determination letter will contain specific statements that will describe the scope of reliance represented by the letter. In addition, the following apply gener- ally to all determination letters: · The determination letter may not include a statement regarding the minimum coverage requirements of Code section 41 O(b); this means that you have demon- strated that the plan satisfies these require- ments by satisfying the ratio-percentage test. . A favorable determination letter means that you have demonstrated that the plan satisfies the minimum participation requirements of Code section 401 (a)(26). · If you maintain two or more retire- ment plans some of which were either not submitted to the Service for determination or not disclosed on each application, certain limitations and requirements will not have been considered on an aggregate basis. Therefore, you may not rely on the determination letter regarding the plans when considered as a total package. · A determination letter does not consider the special requirements relating to: (a) affiliated service groups, (b) leased employees, or (c) plan assets or liabilities involved in a merger, consolidation, spin-off or transfer of assets with another plan unless the letter includes a statement that the requirements of Internal Revenue Code section 414(m) (affiliated service groups), or 414(n) (leased employees) or 414(1) (mergers, consolidations, spin-offs, or transfers) have been considered. . For plans that are not amended to comply with the final nondiscrimination regulations retroactively to the 1989 plan year, a determination letter may not be relied upon as to whether plan provisions satisfy a good faith interpretation of the requirements of section 401 (a)(4) and related sections of the Code. . No determination letter may be relied on with respect to the effective availability of benefits, rights, or features under the plan. (See section 1.401 (a)(4)-4(c) of the Income Tax Regulations.) Reliance on whether benefits, rights, or features are currently available to a non-discriminatory group of employees is provided to the extent specified in the letter. · A determination letter does not consider whether actuarial assumptions are reasonable for funding or deduction purposes or whether a specific contribution is deductible. · A determination letter does not consider and may not be relied on with respect to certain other matters described in section 5.07 of Rev. Proc. 98-6, 1998-1 I.R.s. 183 (i.e., whether a plan amendment is part of a pattern of amendments that significantly discriminates in favor of highly compensated employees; the use of the substantiation guidelines contained in Rev. Proc. 93-42, 1993-31 I.R.B. 32; and certain qualified separate lines of business require- ments of section 414(r) of the Code). . The determination letter applies only to the employer and its participants on whose behalf the determination letter was issued. · A determination letter does not express an opinion whether disability bene- fits or medical care benefits are acceptable as accident or health plan benefits deductible under I RC section 105 or 106. Become familiar with the terms of the determination letter. Please call the contact person listed on the determination letter if you do not understand any terms in your determination letter. Retention of Information. Whether a plan meets the qualification requirements is determined from the information in the written plan document, the application form and the supporting information submitted by the employer. Therefore, you must retain copies of any demonstrations or other information submitted with your applica- tion. Such demonstrations determine the extent of reliance provided by your determination letter. Failure to retain such information may limit the scope of reliance on issues for which demonstra- tions were provided. We have not verified this information. The determination letter will not provide reliance if: (1) there has been a misstatement or omission of material facts, (for example, the application indicated that plan was a governmental plan and it was not a govern- mental plan). (2) the facts subsequently developed are materially different than the facts on which the determination was made, or (3) there is a change in applicable law. Law changes affecting the plan. In I general, a determination letter is ,iSSl,llild ! \ based on the law in effect at the time th, application is received. For termination plans, a determination letter is based onl the law in effect at the time of the plan's, termination. However, your letter may include a statement indicating an excep ion to this rule. Amendments to the plan. A favorable determination letter may no longer appl if there is a change in a statute, regulatio ,or revenue ruling applicable to the qualific - tion of the plan. However, the determin - tion letter will continue to apply for year before the effective date of the statute, regulation, or revenue ruling. If the lette no longer applies to the plan, the plan ust be amended to comply with the new requirements to maintain its qualified status. Generally, if a regulation changes, t e amendment must be adopted by the en of the first plan year beginning after the ad p- tion date of the regulation. Generally, if revenue ruling changes, the amend men must be adopted by the end of the first Ian year beginning after the publication dat of the revenue ruling. Generally, the amen - ment must be effective not later than th first day of such plan year. Extended Reliance. In general, individ ally designed plans (not master or prototype plans) submitted for a determination lett r before July 1, 1994 need not be amend d for, or comply in operation with subsequ nt Treasury regulations or other guidance ( or example, revenue rulings, notices, etc.) 1 issued by the Service after the date of t11le plan determination letter until the last d~y of the last plan year commencing prior to January 1, 1999, unless specifically stat~d otherwise. ! However, plans must be amended ~y any date(s) established for plan amend-! ment by subsequent legislation. If the ! determination letter is dated after June ~o, 1994, this extended reliance will apply olnly if so stated in the determination letter. ' Similar reliance applies to master and prototype or regional prototype plan$ if the plan sponsor requested a notificatiortl or opinion letter before April 1, 1991. Plan Must Qualify in Operation I Generally, a plan qualifies in operation ii it continues to satisfy the coverage and n1n- discrimination requirements and is main~ tained according to the terms on which ~he favorable determination letter was issue . Changes in facts and other bases on w ich the determination letter was issued may, mean that the determination letter may no IQnger. be. relied upon. Some examples of the effect of a plan's operation on a favorable determina- tion are: Not meeting nondiscrimination in amount requirement. If the determination letter states that the plan satisfies the non- discrimination in amount requirement of section 1.401(a)(4)-1(b)(2) of the regula- tions on the basis of a design-based safe harbor, the plan will generally continue to satisfy this requirement in operation if the plan is maintained according to its terms. If the determination letter states that the plan satisfies the nondiscrimination in amount requirement on the basis of a nondesign- based safe harbor or a general test, and the plan subsequently fails to meet this requirement in operation, the letter may no longer be relied upon with respect to this requirement. Not meeting minimum coverage require- ments. If the determination letter does not include a statement regarding the minimum coverage requirements of Code section 41 O(b), this means that the plan satisfies these requirements by satisfying the ratio-percentage test. However, if the plan subsequently fails to satisfy the ratio- percentage test in operation, the letter may no longer be relied upon with respect to the coverage requirements. Likewise, if the determination letter states the plan satisfies the average benefit test, the letter may no longer be relied on with respect to the coverage requirements once the plan fails to satisfy the average benefit test in operation. Changes in testing methods. If the deter- mination letter is based in part on a demonstration that a coverage or nondis- crimination requirement is satisfied, and, in the operation of the plan, the method used to test that this requirement continues to be satisfied is changed (or is required to be changed because the facts have changed) from the method employed in the demon- stration, the letter may no longer be relied upon with respect to this requirement. Contributions or benefits in excess of the limitations under Code section 415. A retirement plan may not provide retire- ment benefits or, in the case of a defined contribution plan, contributions and other additions, that exceed the limitations speci- fied in Internal Revenue Code section 415. Your plan contains provisions designed to provide benefits within these limitations. Please become familiar with these limita- tions for your ;.'I~n will be disqualified if these limitations are exceeded. Top heavy minimums. If this plan primarily benefits employees who are highly compensated, it may be a top heavy plan and must provide certain minimum benefits and vesting for lower compensated employees. If your plan provides the accel- erated benefits and vesting only for years during which the plan is top heavy, failure to identify such years and to provide the accelerated vesting and benefits will disqualify the plan. Actual deferral percentage or contribu- tion percentage tests. If this plan provides for cash or deferred arrange- ments, employer matching contributions, or employee contributions, the determination letter does not consider whether special discrimination tests described in Code section 401 (k)(3) or 401 (m)(2) have been satisfied in operation. However, the letter considers whether the terms of the plan satisfy the requirements specified in Code section 401 (k)(3) or 401 (m)(2). Reporting Requirements Most plan administrators or employers who maintain an employee benefit plan must file an annual return/report with the Internal Revenue Service, or, for years after 1998, with the Department of Labor. The following is a general discussion of the forms to be used for this purpose. See the instructions to each form for specific information: Form 5500-EZ, Annual Return of One- Participant (Owners and their Spouses) Pension Benefit Plans - generally for a "One-participant Plan", which is a plan that covers only: (1) an individual, or an individual and his or her spouse who wholly own a busi- ness, whether incorporated or not; or (2) partner(s) in a partnership or the partner(s} and the partner's spouse. If Form 5500-EZ cannot be used, the one-participant plan should use Form 5500-C/R, Return/Report of Employee Benefit Plan. Note. A "one-participant" plan that has no more than $100,000 in assets at the end of the plan year is not required to file a return. However, Form 5500-EZ must be filed for any subsequent year in which plan assets exceed $100,000. (This amount may have increased after publication of this docu- ment.) If two or more one-participant plans have more than $100,000 in assets, a separate Form 5500-EZ must be filed for each plan. A "Final" Form 5500-EZ must be filed if the plan is terminated or if assets drop below $100,000 and you wish to stop filing Form 5500-EZ. Form 5500, Annual Return/Report of Employee Benefit Plan - for a pension benefit plan with 100 or more participants at the beginning of the plan year. Form 5500-C/R, Return/Report of Employee Benefit Plan - for each pen ion benefit plan with more than one but fe er than 100 participants at the beginning of the plan year. Form 5500-C/R takes t e place of separate Forms 5500-C and 5500-R. Filing only the first two page of Form 5500-CIR constitutes the filing f Form 5500-R for plan years for which Form 5500-C is not filed. Note. Keogh (H.R. 10) plans having 0 er $100,000 in as~ets are required to fil an annual return even if the only particip nts are owner-employees. The term "own r- employee" includes a partner who ow s more than 10% interest in either the c pital or profits of the partnership. This app ies to both defined contribution and defined benefit plans. When to file. Forms 5500 and 5500- must be filed annually. Form 5500-C ust be filed for (i) the initial plan year, (ii) t e year a final return/report would be file and (iii) at three-year intervals. Form 500- R (pages 1 and 2 of Form 5500-C/R) ust be filed in the years when 5500-C is not filed. However, 5500-C will be accept d in place of 5500-R. Form 5330 for prohibited transactio s- Transactions between a plan and som one having a relationship to the plan (disq ali- fied person) are prohibited, unless sp cifi- cally exempted from this requirement. I A few examples are loans, sales and , exchanges of property, leasing of pro~erty, furnishing goods or services, and use lof plan assets by the disqualified person)' Disqualified persons who engage in a prohibited transaction for which there is no exception must file Form 5330 by the ast day of the seventh month after the en of the tax year of the disqualified person Form 5330 for tax on nondeductibh~ employer contributions to qualifiedl plans - If contributions are made to thj plan in excess of the amount deductib e, a tax is imposed upon the excess contri u- tion. Form 5330 must be filed by the I st day of the seventh month after the en of the employer's tax year. ! Form 5330 for tax on excess contrj , u- tions to cash or deferred arran gem nts or excess employee contributions r employer matching contributions - f a plan includes a cash or deferred arran e- ment (Code section 401 (k)) or provide for employee contributions or employer I matching contributions (Code section 401 (m)), then excess contributions th t would cause the plan to fail the actual deferral percentage or the actual cont ibu- tion percentage test are subject to a t x unless the excess is eliminated within 2V2 months after the end of the plan year. Form 5330 must be filed by the due d te of the employer's tax return for the plan year in which the tax was incurred. Form 5330 for tax on reversions of plan assets - Under Code section 4980, a tax is payable on the amount of almost any employer reversion of plan assets. Form 5330 must be filed by the last day of the month following the month in which the reversion occurred. Form 5310-A for certain transactions - Under Code section 6058(b), an actuarial statement is required at least 30 days before a merger, consolidation, or transfers (including spin-offs) of assets to another plan. This statement is required for all plans. However, penalties for non-filing will not apply to defined contribution plans for which: (1) The sum of the account balances in each plan equals the fair market value of all plan assets, (2) The assets of each plan are combined to form the assets of the plan as merged, (3) Immediately after a merger, the account balance of each participant is equal to the sum of the account balances of the participant immediately before the merger, and (4) The plans must not have an unamortized waiver or unallocated suspense account. Penalties will also not apply if the assets transferred are less than three percent of the assets of the plan involved in the transfer (spinoff), and the transaction is ! not one of a series of two or more trans~rs (spinoff transactions) that are, in. " i. substance, one transaction. ' The purpose of the above discussio s is to illustrate some of the principal filing requirements that apply to pension plan . This filing is not an exclusive listing of al returns and schedules that must be filed Disclosure. The Internal Revenue Se ce will process the returns and provide the Department of Labor and the Pension Benefit Guaranty Corporation with the necessary information and copies of the returns on microfilm for disclosure purposes. ltu.S. GPO:1998-455-262/91~03 . I. ) ICMA RET[R.EMENT COR.PORATION DECLARATION OF TRUST OF THE ICMA RETIREMENT TRUST .' . DECLARATION OF TRUST OF ICMA RETIREMENT TRUST ARTICLE I. NAME AND DEFINITIONS Section 1.1 Name: The name of the trust created hereby is the I CMA Retirement Trust. G) Investment AdviserThe Investment Adviser that enters into a contract ',,',:ith the Retirement Trust to provide advice \V'ith respect to investment of the Trust Property. Section 1.2 Definitions: Wherever they are used herein. the toUo\ving terms shall have the toUowing respective meamngs: (a) By-laws. The by-Iavvs referred to in Section 4.1 hereof, as amended trom time to time: (k) Portfolios. The separJte commingled pools of in vesm1ent established by the Investment Adviser to the Retirement Trust, under the supervision of the Trustees, for the purpose of providing invest- ments for the Trust Property. (b) Deferred Compensation Plan. i\ deterred compensation plan established and maintained by a Public Employer tor the purpose of providing retirement income and other deferred benefits to its employees in accord;ll1ce with the provision of section 457 of the Internal Revenue Code. (I) Public Employee Trustees. Those Trustees elected by the Public Employers \vho, in accor dance \v1th the prov1sion of Section 3.1 (;1) hereof are tllll-time employees of Public Employers. (m) Public Employer Trustees. Public Employers who serve ;IS trustees of the Qualified Plans or Deterred Compensdtion Plans. (c) Employees.Those employees who p;lrticipate in Qualified Plans and/ or Deferred Compensd- tion Plans. (n) Public Employer.i\ unit of state or local government, or any agency or instrumentality thereof, thdt has adopted a Deterred Compensa- tion Plan or a Qualified Plan and has executed this Declaration ot- Trust. (d) Employer Trust. A. trust created pursuallt to an agreement between RC ;llld a Public Employer, or an agreement between RC and a Public Employer tor administrative services that is not a trust, in either case for the purpose ot- investing and administering the funds set aside by such Employer in connection with its Deferred Compensation agreements with its employees or in connection w1th its Qualified Plan. (0) Qualified Plan. i\ plan that is sponsored by a Public Employer for the purpose of providing retirement income to its employees and that satisfies the qualification requirements of Section 401 of the Internal Revenue Code. (e) Investment Contract. A non-negotiable contract entered into by the Retirement Trust \\<;th a financial institution that provides for a f fixed rate of return on investment. (p) Public Employer Trusu\ trust that is established by a Public Employer in connection with its Qualified PLlll and thdt satisfies the requirements of Section 501 of the Internal Revenue Code, or a trust established by-a Public Employer in cOlmection with its De- terred Compensation Plan and that satisfies the requirements of Section 457(b) of the Internal Revenue Code. (f) ICMA. The International City/County Management Association. (g) leMA Trustees. Those Trustees elected by the Public Employers in accordance \,,;th the provisions of Section 3.1 (a) hereoL who are also members or former members of the Executive Board of ICMA. (q) RC. The International City Management Association Retirement Corporation. (r) Retirement Trust. The Trust created by this DedarJrion of Trust. (h) RC Trustees. Those Trustees elected by the Public Employers who, in accordance w-ith the provisions of Section 3.1 (a) hereof, are also members or former members of the Board of Directors of RC. (s) Trust Property. The amounts held in the Retirement Trust as prm..-i.ded in Section 2.3. The Trust Property shall include any income resultingfTom the investment to the amounts so held. (i) Internal Revenue Code. The Internal Rev- enue Code of 1986, as amended. (t) Trustees. The Public Employee Trustees, 1 CMA Trustees and RC Trustees elected by the Public Employers to serve as members of the Board of Trustees of the Retirement Trust. MPP 04/30/2000 , . ARTICLE II. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPERTY Section 2.1 Creation: (a) The Retirement Trust was created by the execu- tion of this Declaration of Trust by the initial Trustees and Public Employers and is established \ovith respect to each participating Public Employer by adoption of this Declaration ot Trust. (b) The Retirement Trust is hereby expressly nude a part of the appropriate Qualified Plan or Deterred Compensation Phn of each Public Employer that executes or has executed this Declaration of Trust. Section 2.2 Purpose and Participation: (a) The purpose of the Retirement Trust is to pro- vide for the commingled investment offunds held by the Public Employers in connection with their Deferred Compensation and Qualified Plans. The Trust Property shall be invested in the Porttolios, in Investment Contracts, and in other investments recommended by the Investment Adviser under the supervision of l' he Board of Trustees. No part of the Trust Property will be invested in securities issued by Public Employers. (h) Participation in the RetirementTrust is limited to M pension ,md protit-sharing trusts which are maintained by Public Employers and that are ex- empt under section 501 (a) of the Internal Rev- enue Code because the Qualified Plans related thereto qualifY under section 401 (a) of the Inter- nal Revenue Code and (ii) deterred compensa- tion plans maintained by Public Employers under Section 457 of the Internal Revenue Code (and trusts maintained by such Public Employers in con- nection with such 457 plans). Section 2.3 Ownership of Trust Property: (a) The Trustees shall have legal title to the Trust Prop- erty. The Trust Property shall be held as follows: (i) for the Public Employer Trustees for the ex- clusive benefit of the Employees; or (il) in the case of a Deferred Compensation Plan maintained by a Public Employer that has not established a Public Employer Trust tor the plan, for the Public Employer as beneficial owner of the plan's assets. (h) The portion of the corpus and income of the Re- tirementTrust that equitably belongs to any Pub- li.c Employer Trust may not.be used tor or di- verted to any purpose other than for the exclu- sive benefit of the Employees (or their beneficia- MPP 03/31/2000 ries) who are entitled to benefits under such Pub- lic EmployerTrust. (c) No employer's- Public Employer Trust may assign any part of its equity or interest in the Retirement Trust, and any purported assignment of such equity or interest shall be void. ARTICLE III. TRUSTEES Section 3.1 Number and Qualification of Trustees: (a) The Board of Trustees shall consist of nine Trustees. Five of the Trustees shall be full-rime employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The re- maining four 1rustees shall consist of two per- sons who, at the rime of election to the Board of Trustees, are members or former members of the Executive Board OfIClvL'\, and two persollS who, at the time of election, are members or former members of the Board of Directors oC RC. One of the lCMA Trustees and one of the RC Trustees shall, at the time of election, be tlIll-time employees ofPubhc Employers. (b) No person may serve as a Tnmee fOr more than two terms in any ten-year period. Section 3.2 Election and Term; (a) Except tar the Trustees appointed to 611 vacancies pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of a majority of the voting Public Employers in accordance with the procedures set forth in the By-Laws. (b) At the first election ofrrustees, three Trustees shall be elected tor a term of three years, three Trustees shall be elected for a term of two years a.nd three Trustees shall be elected for a term of one year. At each subsequent election, three Trustees shall be elected each to serve for a term of three years and until his or her successor is elected and qualified. Section 3.3 Nominations:The Trustees \ovho are full-time employees of Public Employers shall serve as the Nominating Committee for the Public Employee Trustees. The Nominating Comm-ittee shall choose candidates for Public Employee Trustee in accordance ",,'ith the procedures set forth in the By-Laws. Section 3.4 Resignation and Removal: (a) Any Trustee may resign as Trustee (\.vlthout need for prior or subsequent Kcounting) by an instrument in 'Wtiting signet! by the Trustee and delivered to the other Trustees and such 2 .' ~ resigmcion shall be ctTective upon such delivery, or at a later date ~lccording to theterms of the instrument. Any of the Trustees may be removed for cause, by a vote of a m~~ority of the Public Employers. ment and operation of the Porttl)lios, selection of the Investment Contracts in which the Trust Property may be invested, selection of the ocher investments tor the Trust Property and the p,lyment of reasonable tees to the Investment Adviser and to any sub-investment adviser retained by the Investment Adviser; (b) Each Public Employee Trustee shall resign his or her position as Trustee within sixty days of the date on \Nhich he or she ceases to be a full-time employee of a Public Employer. (c) review annually the performance of the Investment Adviser and approve annullly the contract with such Investment Adviser: Section 3.5 Vacancies: The term of office of a Trustee shall terminate and a vacancy shall occur in the event of his or her death, resignacion, removal, a(~udicated incompetence or other incapacity to pertorm the ducies of the otti.ce of a Trustee. In the case of a vaCl1lcy, the rernainingTrustees shall appoint such person as they in their discretion shall see fit (subject to the limitations set forth in this Section). to serve tor the unexpired portion ot'the term of the Trustee who has resigned or othenvise ceased to be a Trustee.The appointment shall be made by a written instrument signed by a majority of the Trustees. The person appointed must be the same type oITrustee (i.e., Public Employee Trustee, IC1\iL!\ Trustee or RC Trustee) as the person w'ho has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation of a vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not become etTective prior to such retirement or resignation. Whenever a vacancy shall occur, until such vacancy is filled as provided in this Section 3..3, the Trustees in office, regardless of their number, shall have al! the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration. A \,vritten instrument certitying the existence of a vacancy signed by a majority of the Trustees Shell! be conclu- sive evidence of the existence of such vacancy. (d) invest and reinvest the Trust Property in the Porctolios, the Investment Contracts lnd in any other investment recommended by the Invest- ment Adviser. but not inclucting securities issued by Public Employers, provided that if a Public Employer has directed that its monies be invested in one or more specified Portfolios or in an Investment Contract. the Trustees of the Recirement Trust shall invest such monies in accordance with such directions; (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in the best interest ot' the Retirement Trust created hereby without liability tor interest thereon; (D accept and retain for such time as they may deem advisable any securities or other property received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased lS investment hereunder; Section 3.6 Trustees Serve in Representative Capacity: By executing this Declaration, each Public Employer agrees that the' Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collectively. (g) cause any securities or other property held ~lS part of the Trust Property to be registered in the name of the Retirement Trust or in the nJme of a nominee, and to hold any investments in bearer form. but the books and records ot'the Trustees shall at all times show that ;lll such investments are a P;lrt of the Trust Property; ARTICLE IV. POWERS OF TRUSTEES (h) make, execute, acknowledge, and deliver any and all documents of transfer and convey,ulCe and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (a) receive the Trust Property from the Public Employers, Public Employer Trustees or the trustee or administrator under any Employer Trust; (i) vote upon any stock, bonds, or other securities; give general or special proxies or powers of attorney \'vithor v,rithout power of substitution; exercise any conversion privileges, subscription rights, or other options, and make any payments incidental thereto; oppose, or consent to, or othen.,,-ise participate in, corporate reorganiza- tions or to other changes affecting corporate securities, and delegate discretionary powers and pay any assessments or charges in connection therewith; and generally exercise any of the powers of an owner with respect to stocks, Section 4.1 General Powers: The Trustees shall have the power to conduct the business of the Trust and to carryon its operations. Such power shall include, but shall not be limited to, the power to: (b) enter into a contract with an [uvestment Adviser providing, among other things, for the establish- MPP 04/3012000 3 . .. ..... bonds, securities or other property held as part of the Trust Property: G) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contracts for the provision of administrative serVICes; (k) borrow or raise money tor the purposes of the RetirernentTrust in such amount, and upon such terms and conditions, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30% of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety or any such borrowing; (I) incur reasonable expenses as required for the operation of the Retirement Trust and deduct suchexpenses from of the Trust Property: (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts and deduct such expenses fi'Olll that portion of the Trust Prop- erty to which such expenses are properly allocable; (n) payout of the Trust Property all real and personal property t;Lxes, income taxes and other taxes of any and all kinds which, in the opinion of the Trustees, are properly levied, or assessed under existing or future Ll\vS upon, or in respect of, the Trust Property and allocate any such taxes to the appropriateaccouIlts; (0) adopt, amend and repeal the By-laws, provided that such By-Ltws are at all times consistent with the terms of this Declaration oIT rust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deferred Compensation Plan under Section 457 or a Qualified Plan under Section 401 of the Internal Revenue Code; (q) issue the AlUlUal Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) in addition to conducting the investment program authorized in Section 4.1 (d), make loans, including the purchase of debt obliga- tions, provided that all such loans slull bear interest at the current market rate; MPP 03/31/2000 (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set torth in paragraphs (b), (c) and (0) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide tor the indemnification of the Officers and Trustees of the Retirement Trust and purchase fiduciary insurance; (u) maintain books and records, including separate accounts for each Public Employer, Public EmployerTrustee or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation or Qualified Plan of each Public Employer; and (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the RetirementTrust. Section 4.2 Distribution of Trust Property: Distri- butions of the Trust property shall be made to, or on behalf of, the Public Employer or Public Employer Trustee, in accordance "'lith the terms of the Deferred Compensation Plans, Qualified Plans or Employer Trusts. The Trustees of the Retirement Trust shall be fully protected in making payments in accordance with the directions of the Public Employers, Public EmployerTrustees or trustees or administrators of any Employer Trust without ascertaining whether such payments ,Ire in compli- ance with the provisions of the applicable Deterred Compensation or Qualified Plan or Employer Trust. Section 4.3 Execution of Instruments: The Trustees may unanimously designate ,my one or more of the Tnlstees to execute any instrument or docwnent on behalf of all, including but not limited to the signing or endorsement of any check and the signing of any applications, insurance and other contracts, and the action of such desigrutedTrustee or Trustees shall have the same force and etfect as if tiken by all the Trustees. ARTICLE V. DUTY OF CARE AND LIABILITY OF TRUSTEES Section 5.1 Duty of Care: In exercising the powers hereinbetore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits tor the Public Employers in connection 'With non-trusted 4 Deterred Compensation Plans and for the Public Employer Trustees. and shall perform such acts ,vith the Clre, skill, prudence and diligence in the circum- stances then prevailing that a prudent person acting in a like capacity and bmiliar with such matters would use in the conduct of an enterprise of a like charKter and with like aims. Section 5.2 Liability:The Trustees shall not be liable for any mistake of judgment or other action taken in good faith, and for any action taken or omitted in reliance in good faith upon the books of account or other recorcL> of the Retirement Trust, upon the opinion of couIlSel, or upon reports made to the Retirement Trust by any of its officers, employ- ees or agent'i or by the Investment Adviser or any sub-investment adviser, accountant, ap- praiser or other expert or consultant selected with reasonable care by the Trustees, officers or employees ot" the Retirement Trust. The Trustees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and in accordance ""ith the st:mdard of care set torth in Section 5.1. Section 5.3 Bond: No Trustee shall be obligated to give any bond or other security tor the performance of any of his or her duties hereunder. ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS The Trustees shall annually submit to the Public Employ- ers and Public Employer Trustees a written report of the transactions of the Retirement Trust, including finaIlci~ll statements which shall be certified by independent public accountants chosen by the Trustees. ARTICLE VIII. DURATION OR AMENDMENT OF RETIREMENT TRUST Section 7.1 WithdrawaL!\ Public Employer or Public EmployerTrustee nuy, at any time, withdraw from this Retirement Trust by delivering to the Board of Trustees a written statement of withdrawal. In such statement, the Public Employer or Public Employer Trustee shall acknowledge that the Trust Property allocable to the Public Employer is derived from compensation deferred by employees of such Public Employer pursuant to its Deferred Compensation Plan or from contributions to the accounts of Employees pursuant to a Qualified Plan. and shall designate the financial ill5titution to which such property shall be transferred by the Trustees of the Retirement Trust or by the trustee or administrator under an Employer Trust. Section 7.2 Duration:The Retirement Trust shall continue until terminated by the vote of a majority of the Public Employers, each casting one vote. MPP 04/3012000 ,. . I ... Upon termination, all of the Trust Property shall be paid out to the Public Employers, Public Employer Trustees or the trustees or administrators of the EmployerTrusrs. as appropriate. Section 7.3 Amendment:The Retirement Trust may be amended by the vote of a m,uority of the Public Employers, each casting one vote. Section 7.4 Procedure: A resolution to terminate or amend the RetirementTrust or to remove a Trustee shall be submitted to a vote of the Public Employers if: (i) a majority of the Trustees so direct. or; (ii) a petition requesting a vote signed by not less than 25 percent of the Public Employers, is submitted to the Trustees. ARTICLE VIII. MISCELLANEOUS Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Trust and the RetirementTrust hereby created shall be construed and regulated by the laws of the District 0 f Co lUIllbia. Section 8.2 Counterparts:This Declaration may be executed by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitutc one and the same instrumcllt. 5