Resolution 9890006.900000
WSS /gjz
11/30/00
RESOLUTION NO. 989
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
EDMONDS, WASHINGTON, APPROVING AMENDMENTS
TO THE CITY'S MUNICIPAL EMPLOYEE BENEFIT TRUST
PLAN, AUTHORIZING PICK UP CONTRIBUTIONS IN
ACCORDANCE WITH IRS CODE SECTION 414(h)(2), AND
ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, the City of Edmonds has previously adopted a Municipal Employee
Benefit Trust related plan documents, and
WHEREAS, from time to time, the plan document must be updated in order to
remain in compliance with the provisions of federal law and regulations of the Internal Revenue
Service, and
WHEREAS, the MEBT Committee has recommended adoption of an amended
plan agreement, and
WHEREAS, such plan has been reviewed and approved by an attorney who is a
specialist in employee benefit plans and the IRS regulations attendant thereto, and
WHEREAS, the agreement has been approved as to form by the City Attorney,
now, therefore,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON,
HEREBY RESOLVES AS FOLLOWS:
Section 1. The City's Municipal Employee Benefit Trust is hereby amended
effective January 1, 2001 in the form set forth on the attached Exhibit A. Exhibit A is
incorporated by this reference as fully as if herein set forth.
(WS S460052.DOC;1 /00006.900000/1 - I -
Section 2. The City of Edmonds, in accordance with Code Section 414(h)(2)
hereby elects to assume and pay (pick up) all contributions required by employees under the City
of Edmonds Employees Benefit Plan as of January 1, 2001. Participant Contributions required
under Plan Section 4.1 (other than those designated as Basic Contributions), although designated
as employee contributions, will be paid by the City of Edmonds in lieu of contributions by the
employee. The employees will not have an option to choose to receive these amounts directly
instead of having them paid by the City of Edmonds to the Plan.
Section 3. A certified copy of this Resolution shall be forwarded by the City
Clerk to Paul MacDonald and to Wells Fargo Bank, Trustee.
Section 4. The Mayor is hereby authorized to execute said plan document on
behalf of the City.
RESOLVED this 5th day of December, 2000.
.... 919M
MA OR, G Y HAAKENSON
ATTEST /AUTHENTICATED:
/c 'de &�-'
CITY CLERK, SANDRA S. CHASE
FILED WITH THE CITY CLERK: 12/01/2000
PASSED BY THE CITY COUNCIL: 12/05/2000
RESOLUTION NO. 989
{WSS460052.DOC;1/00006.900000/} - 2 -
.J
CITY OF EDMONDS
EMPLOYEES' BENEFIT PLAN
AMENDED AGREEMENT
ADOPTED EFFECTIVE JANUARY 1, 2001
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TABLE OF CONTENTS
Page
PREFACE......................................... ............................... vi
ARTICLE I
ARTICLE II
NAME OF PLAN ...................... ............................... 1 -1
1.1 Name of Plan .................. ............................... 1 -1
1.2 Effective Date ................. ............................... 1 -1
1.3 Exclusive Benefit .............. ............................... 1 -1
DES' INITIONS ......................... ...............................
2 -1
2.1
Active Participant .............. ...............................
2 -1
2.2
Actual Retirement .............. ......:........................
2 -1
2.3
Administrator or Plan Administrator ..............................
2 -1
2.4
Agent for the Service of Legal Process .............................
2 -1
2.5
Beneficiary ................... ...............................
2 -1
2.6
Compensation ........................... ...................
2 -1
2.7
Dependent Child ............... ...............................
2 -3
2.8
Disability ..................... ...............................
2 -3
2.9
Disabled Participant ............ ...............................
2 -3
2.10
Eligible Employee ..............................................
2 -3
2.11
Employee ..................... ...............................
2 -3
2.12
Employer ............. ............................... ......
2 -3
2.13
Employment .................. ...............................
2 -3
2.14
Highly Compensated Employee ... ...............................
2 -4
2.15
Hourly Employee .............. ...............................
2 -4
2.16
Inactive Participant ............. ...............................
2 -4
2.17
Interchangeable Word Usage ..... ...............................
2 -4
2.18
Layoff ....................... ...............................
2 -4
2.19
Leased 'Employees .............. ...............................
2 -5
2.20
Maximum Compensation ........ ...............................
2 -5
2.21
Normal Retirement Date ......... ...............................
2 -5
2.22
Participant .................... ...............................
2 -5
2.23
Plan ......................... ...............................
2 -5
2.24
Plan Committee ...............................................
2 -5
2.25
Plan Year ..................... ...............................
2 -5
2.26
Spouse ....................... ...............................
2 -6
2.27
Trust ........................ ...............................
2 -6
2.28
Trust Committee ..............................................
2 -6
2.29
Trustee ....................... ...............................
2 -6
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ARTICLE III
ARTICLE IV
2.30 Valuation Date ................ ............................... 2 -6
ELIGIBILITY .......................... ............................... 3 -1
3.1 Eligible Employees ............. ............................... 3 -1
3.2 Mandatory Participation ......... ............................... 3 -1
3.3 Hourly Employees Mandatory Participation ......................... 3 -1
3.4 Designation of Beneficiary ....... ............................... 3 -1
CONTRIBUTIONS ..................... ............................... 4 -1
4.1 Participant Contributions ........ ............................... 4 -1
4.2 Mandatory Contributions by Hourly Employees ...................... 4 -1
4.3 Extra Employee Contributions .... ............................... 4 -2
4.4 Matching Employer Contributions . ............................... 4 -2
4.5 Section 312 1 (b)(7)(F) Minimum Allocation For Hourly Employees ...... 4 -3
4.6 Cessation of Eligibility .......... ............................... 4 -4
4.7 Military Service ................ ............................... 4 -4
4.8 Limitations On Allocations To Participants' Accounts ................. 4 -4
4.9 Definitions - ARTICLE IV ....... ............................... 4 -7
ARTICLEV ....................................... ............................... 5 -1
VALUATION AND ALLOCATION OF THE TRUST FUND .................. 5 -1
5.1 Valuation of the Trust Fund ...... ............................... 5 -1
5.2 Participant's Accounts ........... ............................... 5 -1
5.3 Allocation and Adjustment of Participants' Accounts ................. 5 -2
ARTICLEVI ...................................... ...............................
6 -1
WITHDRAWALS FROM A PARTICIPANT'S ACCOUNT ....................
6 -1
6.1
Hardship Withdrawal ........... ...............................
6 -1
6.2
Financial Hardship ............. ...............................
6 -1
6.3
Withdrawal of Extra Employee Contributions .......................
6 -3
6.4
Effect of Withdrawals ........... ...............................
6 -3
6.5
Withdrawal of a Participant's Rollover Accounts ....................
6 -4
ARTICLE VII ..................................... ............................... 7 -1
RETIREMENT BENEFITS ............... ............................... 7 -1
7.1 Normal Retirement ............. ............................... 7 -1
7.2 Deferred Retirement ............ ............................... 7 -1
7.3 Retirement Benefits ............. ............................... 7 -1
7.4 Normal Form of Benefit ......... ............................... 7 -2
7.5 Optional Forms of Benefit ....... ............................... 7 -2
7.6 Election of Optional Form of Benefit .............................. 7 -3
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7.7 Amount of Retirement Benefit .... ............................... 7 -3
7.8 Maximum Time of Distribution ... ............................... 7 -4
ARTICLEVIII ..................................... ............................... 8 -1
DEATH BENEFITS .................... ............................... 8 -1
8.1 Amount and Timing of Death Benefit .............................. 8 -1
8.2 Payment Upon Failure to Designate ............................... 8 -3
ARTICLEIX ...................................... ............................... 9 -1
DISABILITY BENEFITS ................ ............................... 9 -1
9.1 Basic Disability Benefit .......... ............................... 9 -1
9.2 Deferral of Benefits in the Event of Disability ........................ 9 -1
9.3 Supplemental Disability Benefits ... ............................... 9 -1
9.4 Payment at Normal Retirement Date ............................... 9 -3
9.5 Payment on Earlier Distribution .... ............................... 9 -3
ARTICLEX ...................................... ............................... 10 -1
BENEFITS ON TERMINATION OF EMPLOYMENT ....................... 10 -1
10.1 Ordinary Termination .......... ............................... 10 -1
10.2 Termination by Layoff ......... ............................... 10 -1
10.3 Termination on Death or Disability .............................. 10 -2
10.4 Election to Defer Distribution for Terminating Participants with Fully Vested
Benefits Exceeding $10,000 ..... ............................... 10 -3
ARTICLEXI ..................................... ............................... 11 -1
VESTING AND FORFEITURES ......... ............................... 11 -1
11.1 Vesting Schedule . ............. ............................... 11 -1
11.2 Months of Participation .......................... ! ............ 11 -1
11.3 Disposition of Forfeitures .........................` ............. 11 -2
11.4 Rehire ...................... ............................... 11 -2
11.5 Restoration of Forfeited Account . ............................... 11 -3
11.6 Unclaimed Account Procedure ... ............................... 11 -3
ARTICLE XII .................................... ...............................
12 -1
ADMINISTRATION ................... ...............................
12 -1
12.1
Plan Committee ............... ...............................
12 -1
12.2
Officers and Duties ............ ...............................
12 -2
12.3
Decision - Making Procedure ..... ...............................
12 -2
12.4
Limits of Liability ............. ...............................
12 -2
12.5
Powers of Committee .......... ...............................
12 -3
12.6
Transmittal of Information ...... ...............................
12 -4
12.7
Expenses of Administration ..... ...............................
12 -4
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ARTICLE XIII .................................... ............................... 13 -1
AMENDMENT, TERMINATION AND DISCONTINUANCE OF
CONTRIBUTIONS .................... ............................... 13 -1
13.1 Right of the Employer .......... ............................... 13 -1
13.2 Amendments to Qualify Plan .... ............................... 13 -1
ARTICLEXIV .................................... ............................... 14 -1
MISCELLANEOUS PROVISIONS ....... ............................... 14 -1
14.1 Employee Rights .............. ............................... 14 -1
14.2 No Alienation ................ ............................... 14 -1
14.3 Distributions Under Domestic Relations Orders ..................... 14 -2
14.4 Payments to Alternate Persons; Distribution of Small Accounts ........ 14 -3
14.5 Mergers and Consolidations ..... ............................... 14 -4
14.6 Headings and Subheadings ...... ............................... 14 -5
14.7 Counterparts ................. ............................... 14 -5
14.8 Construction ................. ............................... 14 -5
ARTICLE XV .................................... ............................... 15 -1
BENEFIT APPLICATION AND REVIEW PROCEDURE .................... 15 -1
15.1 Benefit Application ............ ............................... 15 -1
15.2 Benefit Denials ............... ............................... 15 -1
ARTICLE XVI .................................... ............................... 16 -1
ROLLOVER DISTRIBUTION ........... ............................... 16 -1
16.1 Rollover Distribution .......... ............................... 16 -1
16.2 Direct Rollovers .............. ............................... 16 -2
ARTICLE XVII ................................... ............................... 17 -1
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY ... 17 -1
17.1 Insurance Benefit .............. ............................... 17 -1
17.2 Limitation on Life Insurance Protection ........................... 17 -2
17.3 Definitions ................... ............................... 17 -3
17.4 Dividend Plan ............................................... 17 -3
17.5 Insurance Company Not a Party to Agreement ...................... 17 -4
17.6 Insurance Company Not Responsible for Trustee's Actions ............ 17 -4
17.7 Insurance Company Reliance on Trustee's Signature ................. 17 -4
17.8 Acquittance .................. ............................... 17 -4
17.9 Duties of Insurance Company .... ............................... 17 -4
ARTICLE XVIII .................................. ............................... 18 -1
CODE SECTION 401(k) AND CODE SECTION 401(m) ARRANGEMENTS .... 18 -1
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PREFACE
THE CITY OF EDMONDS
EMPLOYEES' BENEFIT PLAN
AMENDED AGREEMENT
THIS AMENDED AGREEMENT is made and entered into by and between the City of
Edmonds, a municipal corporation of the State of Washington, hereinafter called the Employer, and
Wells Fargo Bank, hereinafter called the Trustee.
WITNESSETH:
WHEREAS, the Employer did withdraw from coverage under the Federal Old Age,
Survivors, Disability and Health Insurance Act and, in lieu thereof, did create a Benefit Trust
Agreement, which was made effective on July 1, 1977, and at all times since that date has been in
effect and contained provisions constituting a retirement plan for employees of this Employer; and
WHEREAS, the Agreement has been amended so that it now constitutes a Trust and a
separate Employees' Benefit Plan; and
WHEREAS, the Employer has previously amended the Employee's Benefit Plan; and
WHEREAS, the parties now desire to further amend the Employees' Benefit Plan; and
NOW, THEREFORE, the parties hereto mutually agree as follows:
The City of Edmonds Employees' Benefit Plan previously entered into between these parties,
as previously amended, is hereby amended and restated in its entirety to read as follows:
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ARTICLE I
NAME OF PLAN
1.1 Name of Plan. This Agreement shall be known as the City of Edmonds
Employees' Benefit Plan.
1.2 Effective Date. Unless otherwise stated herein, the provisions of this Amended
Agreement are effective as of January 1, 2001.
Section 4.7, Military Service, is effective December 12, 1994.
Section 4.9(h) is effective January 1, 1995.
Section 7.8(a) is effective January 1, 1997.
Section 4.9(b) is effective January 1, 1998.
Changes to Sections 2.6, 2.14, and 2.19 are effective January 1, 1998.
Changes to Section 4.8 are effective January 1, 2000.
Section 11.4 is intended as a clarification of "Months of Participation" under 11.2
and not as a substantive change. The Plan Committee will review this application
to rehires since 1994 to ensure uniform and consistent application.
1.3 Exclusive Benefit. This Plan shall at all times be operated for the exclusive benefit
of Participants and their Beneficiaries.
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§§ 2.6 and 2.14, First Amendment
ARTICLE II
DEFINITIONS
The following words and phrases shall have the meanings indicated, unless the context
clearly requires another meaning.
2.1 Active Participant shall mean, as of anytime, a Participant who is then making the
contributions required under Section 4.1 of this Agreement.
2.2 'Actual Retirement shall mean termination of a Participant's Employment with the
Employer at or after the Participant's Normal Retirement Date as defined in Section 2.21 of this
Agreement.
2.3 Administrator or Plan Administrator shall mean the Plan Committee, as defined
in Section 2.24 of this Agreement.
2.4 Aizent for the Service of Legal Process concerning this Agreement or this Plan
shall be the City Attorney.
2.5 Beneficiary shall mean any person designated as such in Section 3.4 of this
Agreement to receive benefits after the death of a Participant hereunder. Whenever the rights of
Participants are defined herein, their beneficiaries, heirs, executors, . and administrators shall be
bound thereby.
2.6 Compensation means the Participant's wages, salaries, fees for professional service
and other amounts received (without regard to whether ornot an amount is paid in cash) for personal
services actually rendered in the course of employment with the Employer maintaining the plan
(including, but not limited to, commissions paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance premiums, tips and bonuses), except
Compensation does not include reimbursements or other expense allowances, fringe benefits (cash
and noncash), moving expenses, and welfare benefits.
Compensation also includes elective contributions made by the Employer on the Employee's
behalf. "Elective contributions" are amounts excludable from the Employee's gross income under
Code §§ 125, 13 2(f)(4), 402(e)(3), 402(h)(2) 403(b), 408(p), and contributed by the Employer, at the
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§§ 2.6 and 2.14, First Amendment
Employee's election, to a cafeteria plan, a qualified transportation fringe benefit plan, a tax- sheltered
annuity or a SIMPLE plan. Notwithstanding the preceding sentence, amounts described in
Section 132(f)(4) are not elective contributions until Plan Years beginning on or after January 1,
2001. In addition, Compensation includes amounts deferred under an eligible deferred compensation
plan within the meaning of Code § 457(b) to an eligible deferred compensation plan and Employee
contributions to any public retirement program under Code § 414(h) that are "picked up" by the
Employer and are therefore treated as Employer contributions. A Compensation payment includes
Compensation by the Employer through another person under the common paymaster provisions in
Code §§ 3121(s) and 3306(p). The term "Compensation" does not include:
(a) Employer contributions (other than elective contributions and amounts
deferred to a § 457 or § 414(h) pick up contributions) to a plan of deferred compensation to the
extent the contributions are not included in the gross income of the Employee for the taxable year
in which contributed, on behalf of an Employee to a Simplified Employee Pension Plan to the extent
such contributions are excludable from the Employee's gross income, and any distributions from a
plan of deferred compensation, regardless of whether such amounts are includable in the gross
income of the Employee when distributed; and
(b) Other amounts which receive special tax benefits, such as premiums for
group term life insurance (but only to the extent that the premiums are not includable in the gross
income of the Employee), or contributions made by an Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in Code §403(b)
(whether or not the contributions are excludable from the gross income of the Employee), other than
"elective contributions."
Any reference in this Plan to Compensation is a reference to the definition in this Section 2.6,
unless the Plan reference specifies a modification to this definition. The Plan Committee will take
into account only Compensation actually paid for the relevant period.
Special definition for salary reduction contributions. For purposes of determining the
Employee's salary reduction contributions under a salary reduction agreement, "Compensation"
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§ § 2.6 and 2.14, First Amendment
means Compensation as defined in this Section 2.6, determined prior to the reduction authorized by
that salary reduction agreement.
(A) Compensation Dollar Limitation. For any Plan Year beginning after December 31, 1993,
the Plan Committee must take into account only the first $150,000 (or such larger amount as the
Commissioner of Internal Revenue may prescribe) of any Participant's Compensation.
2.7 Dependent Child shall mean any child of the Participant who is a dependent of the
Participant as determined under Internal Revenue Code Section 152 as amended.
2.8 Disability shall have the same meaning as contained in the Long -Term Disability
Insurance maintained by the Employer for the benefit of its employees. The Plan Committee may
require a certification from a licensed physician as to any Participant's Disability.
2.9 Disabled Participant shall mean a Participant whose Employment with the
Employer has terminated by reason of Disability as defined in Section 2.8 of this Agreement.
2.10 Eligible Em llooyee shall mean Employees identified in Section 3.1.
2.11 Employe shall mean any person who is employed by the Employer as a Regular
Full -time or Regular Part-time Employee, as those terms are defined in the Employer's Personnel
Manual. An Employee does not include any person identified by the Employer as an independent
contractor or temporary agency employee even if that person is later reclassified as an employee by
the Employer, any governmental agency or court.
Any references in the Plan to Employees includes Hourly Employees unless the Plan
reference specifies otherwise.
2.12 Employer shall mean the City of Edmonds, Washington, a municipal corporation.
2.13 Employment shall mean the period of time during which an Employee is actually
employed by the Employer for Compensation (or by any Employer which is a party to the Municipal
Employees' Benefit Trust Agreement which such period immediately precedes service with this
Employer), and shall also include the following types of absences:
(a) temporary uncompensated leave of absence for sickness, maternity or
extended vacation, not to exceed six (6) months' duration provided that persons under similar
circumstances shall be treated alike;
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§ § 2.6 and 2.14, First Amendment
(b) any compensated absence;
(c) absence for military service, or significant civilian service for the United
States, provided the absent Employee returns to service with the Employer within thirty (30) days
of his release from such active military duty or service or any longer period during which his right
to reemployment is protected by law.
2.14 Highly Compensated Employee means an Employee who, during the preceding
Plan Year, has Compensation in excess of $80,000 (as adjusted by the Commissioner of Internal
Revenue for the relevant year).
For purposes of this Section 2.14, "Compensation" means Compensation as defined in
Section 2.6, except no exclusions from Compensation apply other than the exclusions described in
paragraphs (a) and (b) of Section 2.6 and Compensation must include "elective contributions" (as
defined in Section 2.6). The Plan Committee must make the determination of who is a Highly
Compensated Employee, including the determinations of the number and identity of the top paid
20% group, if applicable, and the relevant Compensation, consistent with Code §414(q) and
regulations issued under that Code section. The Employer may make a calendar year election to
determine the Highly Compensated Employees for the Plan Year, as prescribed by Treasury
regulations or by other guidance published in the Internal Revenue Bulletin. A calendar year election
must apply to all plans and arrangements of the Employer which reference the highly compensated
employee definition in Code § 414(q).
2.15 Hourly Employee shall mean any person employed by the City as an Hourly
Employee as that term is defined in the Employer's Personnel Rules.
2.16 Inactive Participant shall mean a Participant who ceases to be eligible to participate
under Section 3.1 of this Agreement and pursuant to Section 4.6 of this Agreement thereby becomes
no longer eligible to contribute to the Plan.
2.17 Interchangeable Word Usage. Wherever appropriate, masculine pronouns shall
include the feminine and references to singular or plural shall be deemed to include the other.
2.18 Lam shall mean termination of employment, without prejudice to the Employee
"laid off," by reason of a reduction in the work force, or unavailability of funds to compensate such
H: \40032 \001\PLN\1stAmendPln.wpd (10/22/01) 2 -4
§§ 2.6 and 2.14, First Amendment
Employee, or elimination of such employment position, or other Employer - determined reason
unrelated to the Employee's work performance, conduct, or character. A discharge "for cause" is not
included in the term "layoff."
2.19 Leased Employees. The Plan treats a Leased Employee as an Excluded Employee
of the Employer. A Leased Employee is an individual (who otherwise is not an Employee of the
Employer) who, pursuant to a leasing agreement between the Employer and any other person, has
performed services for the Employer (or for the Employer and any persons related to the Employer
within the meaning of Code §144(a)(3)) on a substantially full time basis for at least one year and
who performs such services under the primary direction or control of the Employer.
2.20 Maximum Compensation for purposes of this Plan shall be 100% of those wages
subj ect to taxation at the employer tax rates set forth in Code sections 3111(a), (the OASDI rate) and
3111(b) (the Hospital Insurance rate), as amended. For example, Maximum Compensation is
intended to include both compensation up to the taxable wage base, as determined under Section 230
of the Social Security Act, in effect on the first day of the Plan Year (OASDI wages) and that portion
of wages above the OASDI base which is subject only to Hospital Insurance taxes (Hospital
Insurance wages).
2.21 Normal Retirement Date shall mean the earlier of.
(a) A Participant's sixty -fifth (65th) birthday; or
(b) The earliest service retirement date for such Participant under any other
retirement benefit program to which contributions for such Participant are made by the Employer
whether benefits are actuarially reduced or not.
2.22 Participant shall mean any person for whom an account is maintained pursuant to
Section 5.2 of this Agreement.
2.23 Plan shall mean this Employees' Benefit Plan of the Employer as it now exists or
hereafter may be amended.
2.24 Plan Committee shall mean the group of individuals appointed as such pursuant
to Section 12.1 of this Agreement.
2.25 Plan Year shall mean the twelve -month period ending on December 31.
H: \40032 \001\PLN\1stAmendPIn.wpd (10/22/01) 2 -5
§ § 2.6 and 2.14, First Amendment
2.26 Spouse shall mean a person married to an Employee immediately prior to the
Employee's death. The term "spouse" shall not include a spouse who is legally separated from the
Employee or a spouse who is otherwise separated from the Employee for a period of more than
twelve (12) consecutive months immediately prior to the Employee's death. If any benefits under
this Plan are provided by an insurance contract, then and in, that event, the definition of the term
"spouse" contained in such insurance contract shall govern and control for such benefits.
2.27 Trust shall mean the Municipal Employees' Benefit Trust, a trust agreement
existing between the Employer and the Trustee, to which this Agreement is attached and under the
provisions of which the contributions to this Plan are administered, as such trust agreement now
exists or hereafter may be amended.
2.28 Trust Committee shall mean the Committee appointed and acting under the terms
of the Municipal Employees' Benefit Trust.
2.29 Trustee shall mean Wells Fargo Bank or any successor trustee or trustees who
accepts in writing the position of Trustee.
. 2.30 Valuation Date shall mean last day of each month of each Plan Year and such other
date or dates as may be designated by the Plan Committee.
H: \40032 \001 \PLN \1stAmendPIn.wpd (10/22/01) 2 -6
ARTICLE III
ELIGIBILITY
3.1 Eligible Employees. Every Employee shall be eligible to participate in this Plan
on or after the date on which his Employment with the Employer commenced. Elected City officials
and persons appointed to fill vacant City offices shall be eligible for participation in the Plan.
The term Eligible Employees does not include Hourly Employees.
3.2 Mandatory Participation. Every Eligible Employee shall participate in this Plan.
Every Eligible Employee shall notify the Plan Committee in writing, on a form prescribed and
supplied by the Plan Committee, of his acceptance of the terms and conditions of this Agreement and
the Trust to which it is attached and of his agreement to make contributions as required under
Section 4.1 of this Agreement.
3.3 Hourly Employees Mandatory Participation. Every Hourly Employee shall
participate in this Plan. The Hourly Employee shall notify the Plan Committee in writing, on a form
prescribed and supplied by the Plan Committee, of his acceptance of the terms and conditions of this
Agreement and the Trust to which it is attached and of his Agreement to make contributions as
required under Section 4.2 of this Agreement. Participation shall be effective from the later of the
date of Employment or July 1, 1991.
3.4 Designation of Beneficiary. Any Participant may from time to time designate, in
writing, any person or persons, contingently or successively, to whom the Trustee will pay his
benefits (including any life insurance proceeds payable to the Participant's account) in the event of
his death. The Plan Committee will prescribe the form for the written designation of Beneficiary
HADATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd(11 /28/00) 3-1
and, upon the Participant's filing the form with the Plan Committee, the form effectively revokes all
designations filed prior to that date by the same Participant. The Beneficiary Designation of a
married Participant is not valid unless the Participant's spouse consents to the Beneficiary
Designation. The spousal consent requirement in this paragraph does not apply if the Participant's
spouse is the Participant's sole primary Beneficiary. A married Participant's consent is not valid
unless the Participant's spouse has consented in writing, the spouse's consent acknowledges the
effect of the election, and a Notary Public or the Plan Administrator (or his representative) witnesses
the spouse's consent.
The Plan Committee will accept as valid a consent which does not satisfy the spousal consent
requirements if the Plan Committee establishes that the Participant does not have a spouse, if the
Plan Committee is not able to locate Participant's spouse, if the Participant is legally separated or
has been abandoned (within the meaning of state law) and the Participant has a court order to that
effect, or if other circumstances exist under which the Secretary of the Treasury would excuse the
consent requirements under applicable Tax Code rules. If the Participant's spouse is legally
incompetent to give consent, the spouse's legal guardian, including a spouse acting pursuant to a
valid durable power of attorney, (even if the guardian is the Participant) may give consent.
If the Participant fails to name a Beneficiary in accordance with the above procedures, or if
the Beneficiary named by Participant predeceases him, then the Trustee will pay the Participant's
benefit in the following order of priority:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted children, in equal
shares;
H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 3 -2
(c) The Participant's surviving parents, in equal shares;
(d) The Participant's surviving brothers and sisters, in equal shares; or
(e) The Participant's estate.
H:\DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 3 -3
ARTICLE IV
CONTRIBUTIONS
4.1 Participant Contributions. Every Eligible Employee shall be required to
contribute, on his own behalf, an amount equal to such Participant's Compensation (not to exceed,
however, in total, "Maximum Compensation" as that term is defined in Section 2.20 of this
Agreement) multiplied by one hundred percent (100 %) of the then current Employee's tax rate under
the Federal Insurance Contributions Act, as amended; provided that, the amount of Participant
Contributions shall be reduced as to any Participant by the amount of any Medicare contribution
required of such Participant by Code Section 3101(b)(6), or any other relevant statute.
(a) Basic Contributions shall be deducted from the Participant's pay by the
Employer. Basic Contributions shall be the amount which is necessary to pay the insurance
premiums covering the Participant's life under Article XVII. These Basic Contributions shall
continue to be deducted notwithstanding the fact that the Participant's Compensation exceeds
Maximum Compensation as defined in Section 2.20.
(b) The remaining amount after subtracting Basic Contributions shall be
Pickup Contributions. Pickup Contributions will be assumed and contributed (picked up) by the
Employer in the manner described in Code § 414(h)(2).
4.2 Mandatory Contributions by Hourly Employees. Every Hourly Employee shall
be required to contribute, on his own behalf, a Mandatory Contribution equal to such Participant's
Compensation (not to exceed however, in total, "Maximum Compensation" as that term is defined
in Section 2.20 of this Agreement), multiplied by one hundred percent (100 %) of the minimum
H: \DATA\ 40032 \001 \Pln \Restatement2000- 04.wpd (12/5/00) 4-1
§ 4.3, EGTRRA Amendment
in Section 2.20 of this Agreement), multiplied by one hundred percent (100 %) of the minimum
requirement under Code § 3121(b)(7)(F) of the Federal Insurance Contributions Act, as amended.
Mandatory Contributions shall be deducted from the Participant's pay by the Employer.
4.3 Extra Employee Contributions. When the maximum allowable aggregate amount
of Basic Contributions provided for under Section 4.1 this Agreement are being made by or on behalf
of a Participant, such Participant may contribute on his own behalf Extra Employee Contributions
in such additional amounts as he may elect. See Section 4.9(a) for the Annual Additions limitation
for Extra Employee Contributions. Such contributions shall be made at the Participant's election in
the form of payroll deductions.
This provision shall not apply to Hourly Employees.
4.4 Matching Employer Contributions. The Employer shall contribute from time to
time the sum of the following amounts:
(a) An amount determined as follows:
(1) The amount determined by multiplying each Eligible Employee's
Compensation up to "Maximum Compensation," as that term is defined in Section 2.20 of this
Agreement, by one hundred percent (100 %) of the then current Employer's tax rate under the Federal
Insurance Contributions Act (Code sections 3111(a) and (b)), as amended, (for this purpose, this
calculation shall be made as if the Employer had not withdrawn from the Federal Old Age,
Survivors, Disability and Health Insurance Act), minus
(2) The amount of insurance premiums necessary to fund the
Employer's disability insurance programs for the then current year; and
H:\ 40032\ 001 \PL"estatement2000- EGIRRA.wpd (11/21/01) 4-2
REVISED
(3) On behalf of each Disabled Participant, an amount determined as
provided in Section 9.3 of this Agreement.
Notwithstanding the foregoing provisions of this Section 4.4, for any Active Participant for
which Medicare contribution is required by Code § 3111(b)(6), or any other relevant statute, the
amount of the Matching Employer's Contribution for such Active Participant shall be reduced by the
amount of the City's required Medicare contribution on behalf of such individual. Further, the City's
aggregate contributions to this Plan shall be reduced by the required Medicare contributions on
behalf of all Employees on account of whom a contribution would otherwise be made to this Plan.
The Employer's contribution, as determined above, shall be paid into the Trust and held in
an unallocated account. From such account, all administrative expenses of the Plan and Trust, net
of asset management fees, shall be paid. Next, the Plan Committee shall allocate the amount
required under Section 4.5 to the account of all Hourly Employees to the extent required by Sec-
tion 4.5. The remaining amounts, together with investment earnings, or less investment losses, shall
be allocated as of the last day of each month among those Eligible Employees who contributed
during such month. Such amounts shall be allocated in the same proportion that the Contributions
for each such Participant for such month bears to the total of all Participant Contributions for such
month. Participant Contributions shall be reduced by any amount determined under Section 4.8
"Disposition of Excess Amount" in determining an Employee's allocation.
(b) Employer contributions under subsection (a) of this Section 4.4 shall be
made not less frequently than monthly.
4.5 Section 3 121 (b)(7)(F) Minimum Allocation For Hourly Employees. Each Hourly
Employee shall receive a minimum allocation that is equal to the minimum requirement under
H:\DATA\ 40032\ 001 \PLN\Restatement2000- 04.wpd (12/5/00) 4 -3
§ 3121(b)(7)(F), as amended. For purposes of determining whether an Hourly Employee has
received the § 3121(b)(7)(F) minimum allocation the employer shall calculate the Hourly Employee's
contribution rate by dividing the sum of all Mandatory Contributions by his Compensation. If the
contribution rate is less than the minimum allocation, the Hourly Employee shall be allocated an
additional amount necessary to increase the Hourly Employee's contribution rate to the 3 12 1 (b)(7)(F)
minimum allocation. The Plan Committee shall allocate that additional contribution to the account
of the participant. The amount so allocated shall be nonforfeitable.
4.6 Cessation of Eli ibility. An Active Participant who ceases to meet the
requirements for eligibility to participate as set forth in Section 3.1 of this Agreement, shall become
an Inactive Participant and shall not be entitled to make further contributions on account of this Plan
until such time as such Participant again satisfies the eligibility requirements. The Plan Committee
shall continue to maintain the accounts of such Inactive Participant until such time as the
Participant's Employment with the Employer terminates. A Participant who becomes an Inactive
Participant by reason of Cessation of Eligibility as provided in this Section 4.6 shall continue to
receive credit for Months of Participation for vesting purposes in accordance with Article XI of this
Agreement.
4.7 Military Service. Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to qualified military service will be provided
in accordance with Code § 414(u).
4.8 Limitations On Allocations To Participants' Accounts. The amount of Annual
Additions which the Plan Committee may allocate under this Plan on a Participant's behalf for a
Limitation Year shall not exceed the Maximum Permissible Amount. If the amount the Employer
H:\ DATA\ 40032 \001 \PLN \Restatement2000- 04.wpd (12/5/00) 4 -4
would otherwise contribute to the Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the Employer shall reduce the amount
of its contribution so that the Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount. If an allocation of Employer contributions, pursuant to Section 5.3, would
result in an Excess Amount (other than an Excess Amount resulting from circumstances described
below under "Disposition of Excess Amount ") to the Participant's Account, the Plan Committee shall
reallocate the Excess Amount to their remaining Participants who are eligible for an allocation of
Employer contributions for the Plan Year in which the Limitation Year ends. The Plan Committee
shall make this reallocation on the basis of the allocation method under Plan as if the Participant
whose Account otherwise would receive the Excess Amount is not eligible for an allocation of
Employer contributions.
Estimation of Compensation
Prior to the determination of the Participant's actual Compensation for a Limitation Year, the
Plan Committee may determine the Maximum Permissible Amount on the basis of the Participant's
estimated annual Compensation for such Limitation Year. The Plan Committee shall make this
determination on a uniform and reasonable basis for all Participants similarly situated. The Plan
Committee shall reduce any Employer Contributions (including any allocation of forfeitures) based
on estimated annual Compensation by any Excess Amount carried over from prior years. As soon
as is administratively feasible after the end of the Limitation Year, the Plan Committee shall
determine the Maximum Permissible Amount for the Limitation Year on the basis of the Participant's
actual Compensation for the Limitation Year.
H:\ DATA\ 40032 \001\PLN\Restatement2000- 04.wpd (12/5/00) 4 -5
Disposition of Excess Amount
If, pursuant to the above provisions of Section 4.8 (Estimation of Compensation) or because
of the allocation of forfeitures, there is an Excess Amount with respect to a Participant for a
Limitation Year, the Plan Committee shall dispose of the Excess Amount as follows:
(a) The Plan Committee shall first return any Extra Employee Contributions
(as adjusted for allocable income) to the Participant to the extent that the return would reduce the
Excess Amount.
(b) If, after the application ofparagraph (a), an Excess Amount still exists, and
the Plan covers the Participant at the end of the Limitation Year, then the Plan Committee shall use
the Excess Amount(s) to reduce future matching Employer contributions (including any allocation
of forfeitures) under the Plan for the next Limitation Year and for each succeeding Limitation Year,
as is necessary, for the Participant as provided in Section 4.4(a).
(c) If, after the application of paragraph (a), an Excess Amount still exists, and
the Plan does not cover the Participant at the end of the Limitation Year, then the Plan Committee
shall hold the Excess Amount unallocated in a suspense account. The Plan Committee shall apply
the suspense account to reduce Employer Contributions (including allocation of forfeitures) for all
remaining Participants in the next Limitation Year, and in each succeeding Limitation Year if
necessary as provided in paragraph (b).
(d) If a suspense account is in existence at any time during a limitation year
as a result of this section, it will not participate in the allocation of investment gains and losses. The
Plan Committee shall not distribute any Excess Amount(s) to Participants or to former Participants.
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 04.wpd (12/5/00) 4 -6
Defined Benefit Plan Limitation
If the Participant presently participates, or has ever participated under a defined benefit plan
maintained by the Employer, then the sum of the defined benefit plan fraction and the defined
contribution plan fraction for the Participant for that Limitation Year shall not exceed 1.0. If in any
Limitation Year the sum of the defined benefit plan fraction and the defined contribution plan
fraction on behalf of a Participant exceeds 1.0, then the Employer shall reduce its contribution or
allocation on behalf of the Participant to the defined contribution plan under which the Participant
participates and then, if necessary, the Participant's projected annual benefit under the defined benefit
plan under which the Participant participates. For Plan Years beginning after December 31, 1999,
this paragraph shall not apply.
4.9 Definitions - ARTICLE IV. For purposes of Sections 4.8 and 4.9, the following
terms shall apply:
(a) Annual Addition shall mean the sum of the following amounts allocated
on behalf of a Participant for a Limitation Year: (i) all Employer contributions; (ii) all forfeitures;
and (iii) all Employee contributions. Except to the extent provided in Treasury regulations, Annual
Additions include excess contributions described in Code § 401(k), excess aggregate contributions
described in Code § 401(m) and excess deferrals described in Code § 402(g), irrespective of whether
the plan distributes or forfeits such excess amounts. Annual Additions shall also include Excess
Amounts reapplied to reduce Employer contributions under Section 4.8, "Disposition of Excess
Amount" and amounts allocated after March 31, 1984, to an individual medical account (as defined
in Code § 415(1)(2)) included as part of a defined benefit plan maintained by the Employer.
Furthermore, Annual Additions include contributions paid or accrued after December 31, 1985, for
H:\DATA\ 40032\ 001 \PLN\Restatement2000- 04.wpd (12/5/00) 4 -7
taxable years ending after December 31, 1985, attributable to post- retirement medical benefits
allocated to the separate account of a key employee (as defined in Code § 419A(d)(3)) under a
Welfare Benefit Fund maintained by the Employer, but only for purposes of the dollar limitation
applicable to the Maximum Permissible Amount.
(b) Compensation shall mean Compensation as defined in Section 2.6 except
Compensation includes elective contributions (as defined in Section 2.6), if any, and any other
exclusion from Compensation (other than the exclusions described in paragraphs (a) and (b) of
Section 2.6) does not apply. In addition, Compensation includes any amount contributed or deferred
by the Employer at the Employee's election and not includable in the Employee's gross income
under Code § 457, irrespective of whether the Employer has elected to include these amounts as
Compensation under Section 2.6. Compensation does not include Employee contributions to any
retirement program under Code § 414(h) that are "picked up" by the Employer and are therefore
treated as Employer contributions.
(c) Defined benefit plan shall mean a retirement plan which does not provide
for individual accounts for Employer contributions. The Plan Committee shall treat all defined
benefit plans (whether or not terminated) maintained by the Employer as a single plan.
(d) Defined benefit plan fraction shall mean:
Projected annual benefit of the
Participant under the defined benefit plan(s)
The lesser of
(i) 125% of the dollar limitation in effect under Code
§ 415(b)(1)(A) for the Limitation Year, or
(ii) 140% of the Participant's average Compensation for his
three high consecutive Years of Service
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 04.wpd (12/5/00) 4 -8
To determine the denominator of this fraction, the Plan Committee shall make any
adjustment required under Code § 415(b) and will determine a Year of Service as a Plan Year in
which the Employee completed at least 1,000 Hours of Service. The "Projected Annual Benefit" is
the annual retirement benefit (adjusted to an actuarially equivalent straight life annuity if the Plan
expresses such benefit in a form other than a straight life annuity or qualified joint and survivor
annuity) of the Participant under the terms of the defined benefit plan on the assumptions that he
continues employment until his Normal Retirement Age (or current age, if later) as stated in the
defined benefit plan, his compensation continues at the same rate as in effect in the Limitation Year
under consideration until the date of his Normal Retirement Age and all other relevant factors used
in determining benefits under the defined benefit plan remain constant as of the current Limitation
year for all future Limitation Years.
Current Accrued Benefit. If the Employee was a Participant in one or more defined benefit
plans maintained by the Employer which were in existence on May 5, 1986, the denominator of this
fraction will not be less than the Participant's Current Accrued Benefit. A Participant's Current
Accrued Benefit is the sum of the annual benefits under such defined benefit plans which the
Participant had accrued as of the end of the 1986 Limitation Year (the last Limitation Year beginning
before January 1, 1987), determined without regard to any change in the terms or conditions of the
Plan made after May 5, 1986, and without regard to any cost of living adjustment occurring after
May 5, 1986. The preceding sentence shall apply only if the defined benefit plans individually and
in the aggregate satisfy the requirements of Code § 415 as in effect at the end of the 1986 Limitation
Year.
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 04.wpd (12/5/00) 4 -9
§ 4.9(e) and (h), First Amendment
(e) Defined Contribution Plan shall mean a retirement plan which provides for
an individual account for each Participant and for benefits based solely on the amount contributed
to the Participant's Account, and any income, expenses, gains and losses, and any forfeitures of
accounts of other Participants which the Plan may allocate to such Participant's Account. The Plan
shall treat all defined contribution plans (whether or not terminated) maintained by the Employer as
a single plan. For purposes of the limitations Sections 4.8 and 4.9 only, the Plan Committee shall
treat employee contributions made to a defined benefit plan maintained by the Employer as a
separate defined contribution plan. Employee contributions do not include contributions that are
picked up pursuant to Code § 414(h)(2) and treated as Employer contributions. The Plan Committee
shall treat as a defined contribution plan an individual medical account (as defined in Code
§ 415(1)(2)) included as part of a defined benefit plan maintained by the Employer and, for taxable
years ending after December 31, 1985, a welfare benefit fund under Code § 419(e) maintained by
the Employer to the extent there are post - retirement medical benefits allocated to the separate
account of a key employee (as defined in Code § 419A(d)(3)).
(f) Excess Amount shall mean the excess of the Participant's Annual Additions
for the Limitation Year over the Maximum Permissible Amount.
(g) Limitation Year shall mean the Plan Year. If the Employer amends the
Limitation Year to a different 12 consecutive month period, the new Limitation Year must begin on
a date within the Limitation Year for which the Employer makes the amendment, creating a short
Limitation Year.
(h) Maximum Permissible Amount shall mean the lesser of (i) $30,000 (or,
if greater, the $30,000 amount as adjusted under Code § 415(d), or (ii) twenty -five percent (25 %)
H: \40032 \001\PLN \1stAmendP(n.wpd (10/22/01) 4 -10
§ 4.9(e) and (h), First Amendment
ofthe Participant's Compensation for the Limitation Year. If there is a short Limitation Year because
of a change in Limitation Year, the Plan Committee will multiply the $30,000 limitation (or larger
limitation) by the following fraction:
Number of months in the short Limitation Year
12.
(i) Defined contribution plan fraction shall mean:
The sum of the Annual Additions to the Participant's Account
under the defined contribution plan(s) as of
the close of the Limitation Year
The sum of the lesser of the following amounts
determined for the Limitation Year and
for each prior Year of Service with the Employer:
(i) 125 % of the dollar limitation in effect under
Code § 415(c)(1)(A) for the Limitation Year
(determined without regard to the special dollar limitations
for employee stock ownership plans), or
(ii) 35% of the Participant's Compensation for the
Limitation Year.
For purposes of determining the defined contribution plan fraction, the Plan Committee shall
not recompute Annual Additions in Limitation Years beginning prior to January 1, 1987, to treat all
Employee contributions as Annual Additions. If the Plan satisfied Code § 415 for Limitation Years
beginning prior to January 1, 1987, the Plan Committee will redetermine the defined contribution
plan fraction and the defined benefit plan fraction as of the end of the 1986 Limitation Year in
accordance with this Section 4.9. If the sum of the redetermined fractions exceeds 1.0, the Plan
Committee will subtract permanently from the numerator of the defined contribution plan fraction
an amount equal to the product of (1) the excess of the sum of the fractions over 1.0, times (2) the
denominator of the defined contribution plan fraction. In making the adjustment, the Plan
Committee shall disregard any accrued benefit under the defined benefit plan which is in excess of
H: \40032 \001 \PLN\IstAmendPln.wpd (10/22/01) 4-11
§ 4.9(e) and (h), First Amendment
the Current Accrued Benefit. This Plan shall continue any transitional rules applicable to the
determination of the defined contribution plan fraction under the Employer's Plan as of the end of
the 1986 Limitation Year.
H: \40032 \001 \PLN\IstAmendPln.wpd (10/22/01) 4 -12
ARTICLE V
VALUATION AND ALLOCATION OF THE TRUST FUND
5.1 Valuation of the Trust Fund. As of each Valuation Date, the Trustee shall revalue
the net assets of the Trust and determine the then current fair market value of such assets. After
completing such valuation, the Trustee shall report the fair market value of all Trust assets to the
Trust Committee and the Plan Committee.
5.2 Participant's Accounts.
(a) Eligible Employ. The Plan Committee shall establish for each Eligible
Employee under Section 3.1 of this Agreement a separately allocated account, which shall be the
Participant's Account, and which shall consist of several sub - accounts:
(1) an Extra Employee Contribution Account, to which all Extra
Contributions made by such Participant shall be credited.
(2) a Basic Contribution Account, to which all Basic Contributions
made by such Participant shall be credited.
(3) A Pickup Contribution Account, to which all Pickup Contributions
made by the Employer on behalf of such Participant shall be credited.
(4) an Employer Contribution Account, to which all Matching
Employer Contributions made by the Employer on behalf of such Participant shall be credited.
(5) A Rollover Contribution Account to which all rollover
contributions made by the Participant shall be credited; and
HADATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 5 -1
(6) Such other accounts as the Plan Committee deems necessary to
properly administer the Plan.
(b) Hourly Employees. The Plan Committee shall establish for each Hourly
Employee under Section 3.3 of this Agreement a separately allocated account, which shall be the
Participant's Mandatory Contribution Account. All Mandatory Contributions and Employer
3 121 (b)(7)(F) minimum contributions shall be credited to the Mandatory Contribution Account.
5.3 Allocation and Adjustment of Participants' Accounts.
(a) As of each Valuation Date, each Participant's Account shall be adjusted
to reflect income received, distributions, adjustments, withdrawals, unrealized market value
appreciation or depreciation and expenses charged to the Trust Fund, in the ratio that such
Participant's Account bears to the total of all Participants' Accounts, provided that, such adjustments
shall be determined separately for funds segregated pursuant to subsection (b) hereof. As of such
date, each Participant's sub - accounts, and all portions thereof, shall be likewise adjusted to reflect
the above factors in the ratio that such sub - accounts or portions thereof bear to the Participant's
Account or sub - account, as the case may be, immediately prior to such adjustments. In making such
allocation, contributions received and distributions made during the period shall be credited with a
proportional share of such allocation based on the assumption that all contributions are received and
distributions made uniformly throughout the period.
(b) Any Participant may direct the Plan Committee to segregate any part or a
stated percentage of his Account into a segregated fund in accordance with this subsection (b). The
segregated fund shall consist of such investments and investment media designed to preserve
principal and to reduce volatility as shall be elected by the Plan Committee and Trustee. In order to
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 5 -2
direct the segregation of his Account, a Participant must file a written election with the Plan
Committee on a form to be supplied by the Plan Committee. In addition to the stated percentage of
the Participant's Account to be segregated, the election shall specify a stated percentage of the
Participant's future Participant Contributions and Matching Employer Contributions to be segregated
pursuant thereto. A Participant shall have the right to so direct the Plan Committee not more than
three (3) times prior to the payment of the Participant's entire Account with the earliest such direction
not given sooner than the date which is three (3) years prior to the Participant's Normal Retirement
Date. The Participant shall give any such direction at least thirty (30) days in advance and such
segregation shall take effect as of the first day of the Valuation Period next following such notice.
Once made, an election is irrevocable and shall control the investment of the elected amounts,
together with accretions thereon, but shall not govern subsequent contributions to the Participant's
Account. Any such election shall include a prorated portion of each of the Participant's subaccounts.
The allocation and adjustments listed in subsection (a) above shall be made to the segregated
accounts in the ratio that each Participant's Account and subaccounts in the segregated fund bear to
the total of all such Participants' Accounts and subaccounts, respectively. Notwithstanding the
foregoing, the Plan Committee may in its discretion adopt rules to supplement the foregoing
(including, without limitation, the allowance of more than three (3) elections), provided such rules
are applied on a uniform and consistent basis.
(c) Notwithstanding the above, the Mandatory Contribution Accounts of any
Hourly Employees shall be treated in accordance with subsection (b) above, as if the Participant
elected to segregate his entire Account. Therefore, while any Participant is an Hourly Employee, the
Mandatory Contribution Account shall be placed in a segregated fund. However, in the event an
HADATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 5 -3
Hourly Employee becomes an Employee eligible to participate under Section 3.1 without a break in
service, the Employee and the Employer will no longer contribute to the Mandatory Contribution
Account. The Mandatory Contribution Account, however, will remain in the Trust until the
Employee terminates. However, the Mandatory Contribution Account need no longer'be invested
as a segregated account under Subsection (b) above. At the Employer's option the Mandatory
Contribution Account may be merged into the Basic Contribution Account to ease administration.
H:\ DATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 5 -4
ARTICLE VI
WITHDRAWALS FROM A PARTICIPANT'S ACCOUNT
6.1 Hardship Withdrawal.
(a) Withdrawal from Account. Notwithstanding any other provision of this
Article VI, a Participant may, for reasons of Financial Hardship as defined in Section 6.2, request
the withdrawal from his Participant Contribution Account of a sum not exceeding the entire balance
of such Accounts.
(b) Committee Discretion. The Plan Committee may, in its sole discretion,
approve a request made under Subsection (a) above upon satisfactory evidence of Financial Hardship
as provided in Section 6.2.
6.2 Financial Hardship.
(a) General. The Plan Committee shall establish rules governing the Financial
Hardship, and any other facet applicable, in its discretion, to Hardship Withdrawal. In exercising
its discretion hereunder, the Plan Committee shall be guided by the following rules:
(1) the distribution must be made on account of the immediate and
heavy financial need of the Participant;
(2) the distribution must be necessary to satisfy such immediate and
heavy financial need.
(b) Immediate and Heavy Financial Need. For purposes of a withdrawal from
a Participant's Contribution Account pursuant to Section 6. 1, the following is the exclusive list of
events which shall be deemed to constitute an immediate and heavy financial need:
H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 6 -1
(i) Expenses for medical care described in Section 213(d)
previously incurred by the Participant, the Participant's spouse, or any Dependent Child or Children
of the Participant (as defined in Code Section 152) or necessary for these persons to obtain medical
care described in Code Section 213(d);
(ii) Purchase of a principal residence for the Participant,
substantial improvement, alteration or reconstruction of the Participant's principal residence, or the
need to repay a loan incurred for either of the foregoing purposes, provided that such loan repayment
does not include regular mortgage or contract payments except as provided in Subsection (iv) below;
(iii) Payment of any educational expense for the Participant, the
Participant's spouse, or the Participant's Dependent Child or Children;
(iv) to prevent eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's principal residence.
(c) Distribution to Satisfy Need. For purposes of a withdrawal from a
Participant's Contribution Account pursuant to Section 6. 1, a distribution will be deemed necessary
to satisfy the immediate and heavy financial need if the amount of the distribution does not exceed
the amount required to relieve such need.
(d) Limits. Except for withdrawals pursuant to Section 6.2(b)(i) or (iii) a
Participant shall not be granted more than one (1) Hardship Withdrawal pursuant to this Article VI
in any twelve (12) month period, and in no event shall a Participant be granted approval of more than
one (1) Hardship Withdrawal relative to purchase of a principal residence, substantial improvement,
alteration or reconstruction of a principal residence or the need to repay a loan incurred for either of
the foregoing purposes.
H:\ DATA\ 40032 \001 \PLNaestatement2000- 03.wpd (11/28/00) 6 -2
(e) Uniform Treatment. In determining the existence of an immediate and
heavy financial need and whether the distribution is necessary to satisfy such need, the Plan
Committee shall act in a uniform and non - discriminatory manner in accordance with the standards
set forth in this Section 6.2.
6.3 Withdrawal of Extra Employee Contributions. A Participant may elect in writing,
on a form prescribed and supplied by the Plan Committee, to withdraw from his Extra Employee
Contribution Account such amount as he may elect, but not more than the lesser of:
(a) the sum of his aggregate Extra Employee Contributions, reduced by the
sum of all of his prior withdrawals of Extra Employee Contributions; or
(b) the then current value of the balance of such account. A Participant shall
not be granted more than one (1) withdrawal pursuant to this Section 6.3 in any twelve (12) month
period.
6.4 Effect of Withdrawals. A Participant who makes a withdrawal under Section 6.1
or 6.3 shall continue as an Active Participant and shall continue to make contributions. The adjusted
balance of such Participant's Employer Contribution Account, together with future Matching
Employer Contributions on behalf of such Participant, shall continue to vest in accordance with the
vesting schedule set forth in Article XI of this Agreement. No adjustment shall be made to a
Participant's Employer Contribution Account as a result of a Hardship Withdrawal pursuant to these
provisions.
The Plan Committee may establish nondiscriminatory rules governing withdrawals and other
administrative details. The Plan Committee may impose a fee for the withdrawal to be assessed
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 6 -3
against the Participant's account as further set forth in the Plan Committee Administrative Rules
under Article VI.
6.5 Withdrawal of a Participant's Rollover Accounts. Not more than once in any
twelve (12) month period, a Participant may elect in writing, on a form prescribed and supplied by
the Plan Committee, to withdraw from his Rollover Contribution Account such amount as he or she
may elect, up to the then current value of his/her Rollover Contribution Account, determined as of
the last Valuation Date preceding such withdrawal.
This provision is not applicable to Hourly Employees.
H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 6 -4
ARTICLE VII
RETIREMENT BENEFITS
7.1 Normal Retirement. A Participant shall be eligible for retirement on his Normal
Retirement Date. A Participant whose Actual Retirement occurs on his Normal Retirement Date
shall receive retirement benefits as provided in Section 7.3 of this Agreement.
7.2 Deferred Retirement. Any Participant whose employment with the Employer
continues beyond his Normal Retirement Date shall continue as a Participant in this Plan and shall
be subject to all requirements thereof, and no Retirement Benefits hereunder shall be payable to such
Participant until his Actual Retirement. Upon Actual Retirement, such Participant shall be entitled
to receive Retirement Benefits as provided in Section 7.3 of this Agreement.
7.3 Retirement Benefits. Upon Actual Retirement, a Participant shall be paid the
entire value of his Participant's Account as provided in Section 7.4 or Section 7.5 of this Agreement.
A retiring Participant (other than an Hourly Employee) may elect, in writing, to defer the
commencement of all or any part of his retirement benefits to a different time which shall not be later
than the maximum time for distributions specified in Section 7.8. A Participant shall make this
election by filing a written election with the Plan Committee to defer payment. A Participant may
later request to commence distribution as of any subsequent distribution date. In the event a
Participant elects to defer the commencement of less than all of his retirement benefits in such
written election, he shall specify the proportion of his Account to be deferred and the proportion as
to which the distribution shall commence. The Plan Committee may establish rules governing such
matters as it deems necessary to effectuate this Section 7.3.
H:\DATA\ 40032\ 001 \PLN \Restatement2000- 03.wpd (11 /28/00) 7-1
7.4 Normal Form of Benefit. The normal form of benefit is a single sum in cash.
7.5 Optional Forms of Benefit. At the election of a retiring Participant, benefits may
be paid in lieu of the normal form of benefit, benefits may be paid in any of the following forms:
(a) In monthly, quarterly or annual installments, as nearly equal as possible.
(b) In the form of a non - forfeitable and non - transferable annuity contract(s)
issued by an insurance company of the Participant's choice authorized to issue such contract in the
State of Washington. Such contract may provide for any series of life, period certain, joint and/or
joint and contingent survivor payments so long as such term is not greater than the anticipated lives
of the Participant and his Spouse.
(c) Withdrawals Under Article VI. The Participant shall continue to be
allowed to withdraw from his accounts as provided in Article VI.
(d) In Partial Distributions. The Participant shall be allowed to elect a partial
distribution from the accounts as he designates. To the extent permitted under Code Section 72, he
may designate the contract from which the Plan Committee should make his distribution (the after-
tax contributions and earnings contract or all other contributions and earnings contract). He may
take partial distributions from any of his available Plan Accounts under Article V.
Under an installment distribution, the Participant or Beneficiary, at any time, may elect to
accelerate the payment of all, or any portion of, the Participant's unpaid benefits. In addition, subj ect
to Section 7.8, the Participant or Beneficiary may elect to defer the payment of remaining benefits
or reduce the amount of current installments. Such elections to defer or reduce installments will
become effective as of the first day of the calendar quarter next following such election.
Notwithstanding the foregoing, the Plan Committee may in its discretion adopt rules to supplement
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 7 -2
the foregoing, including placing limitations on the number and frequency of elections to modify
installments and imposing a fee for making elections, provided such rules are applied on a uniform
and consistent basis. The Plan Committee may establish rules governing such other matters as it
deems necessary to effectuate this Section 7.5.
This provision is not applicable to Hourly Employees.
7.6 Election of Optional Form of Benefit. The Plan Committee shall furnish the
Participant with a complete written explanation of the terms, conditions, and form of payments from
the Plan prior to the commencement of the scheduled payment of benefits.
A retiring Participant desiring to elect an Optional Form of Benefit shall notify the Trustee
of such election in writing on a form prescribed and supplied by the Plan Committee.
This provision shall not apply to Hourly Employees.
7.7 Amount of Retirement Benefit. The value of a Participant's Account for purposes
of determining the amount of his Retirement Benefits shall be determined as of the Valuation Date
immediately preceding the date of the distribution. The Account of a Participant electing to defer
the commencement of benefits under Section 7.3 or electing to receive an Optional Form of Benefit
under Section 7.5(a) shall continue to share in the allocation and adjustment of Participant Accounts
as set forth in Section 5.3.
Any distribution on or after January 1, 1999, (other than a distribution from a segregated
Account) made to a participant (or to his Beneficiary) after the most recent Valuation Date may
include interest on the amount of the distribution as an expense of the Trust Fund. The interest, if
any, accrues from such Valuation Date to the date of calculation of the Participant's distribution at
the money market rate as further set forth in Rules established by the Plan Committee.
H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 7-3
7.8 Maximum Time of Distribution.
(a) Required Time of Distribution. Notwithstanding any provision of this
Article VII, a Participant's benefit payments must commence by the April l immediately following
the calendar year in which the Participant attains age seventy and one -half (70 -1/2), or if later, the
April 1 immediately following the calendar year in which the Participant terminates service.
If any distribution commencement date described under Paragraph (a) of this Section 7.8,
either by Plan provision or by Participant election (or nonelection), is later than the Participant's
Required Beginning Date, the Plan Committee instead must direct the Trustee to make distribution
on the Participant's Required Beginning Date. A Participant's Required Beginning Date is the April
1 following the close of the calendar year in which the Participant incurs a Separation from Service
or, if later, the April 1 following the close of the calendar year in which the Participant attains age
701/2.
(b) Required Amount of Distribution. If a Participant's benefits are paid in
installments pursuant to Section 7.5(a), beginning in the year the distributions must commence to
the Participant pursuant to Section 7.8(a) above, a minimum annual distribution must be made. The
minimum distribution for a calendar year equals the Participant's vested Account balance as of the
latest Valuation Date preceding the beginning of the calendar year divided by the Participant's life
expectancy or, if applicable, the joint and last survivor life expectancy of the Participant and his
spouse. The Participant's vested Account Balance shall be increased for contributions or forfeitures
allocated after the Valuation Date and by December 31 of the valuation calendar year. For purposes
of this valuation, any portion of the minimum distribution for the first distribution calendar year
made after the close of that year will be treated as a distribution occurring in the first calendar year.
HADATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 7 -4
§ 7.8(d), First Amendment
Life expectancy shall be calculated by using the unisex life 'expectancy multiples under Treas. Reg.
§ 1.72 -9. The minimum distribution for a calendar year subsequent to the first calendar year for
which the Plan requires a minimum distribution shall be calculated by redetermining the applicable
life expectancy. However, the applicable joint life and last survivor expectancy of the Participant
and a non - spouse designated beneficiary shall not be recalculated in a manner which takes into
account any adjustment to a life expectancy other than the Participant's life expectancy.
Notwithstanding the above paragraph, no distribution need be made in any year, or a lesser
amount may be distributed, if beginning with the year in which distributions must commence to the
Participant pursuant to Section 7.8(a) above, the aggregate amounts distributed by the end of any
year are at least equal to the aggregate of the minimum amounts required by the above paragraph to
have been distributed by the end of such year.
(c) Distribution of Annuity Contract. If a Participant's benefits are paid by
distribution of an annuity contract, pursuant to Section 7.5(b), the distribution of such contract must
take place by the maximum time specified in Section 7.8(b) and the contract must provide for a rate
of payment which satisfies the rules of Section 7.8(b) above and complies with the requirements of
Code Section 401(a)(9) and the applicable Treasury regulations.
(d) Minimum Distributions under the January 17, 2001 Proposed Regulations.
With respect to distributions under the Plan made for calendar years beginning on or after January 1,
2002, the Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Internal
Revenue Code in accordance with the regulations under Section 401(a)(9) that were proposed on
January 17, 2001, notwithstanding any provision of the Plan to the contrary. This Amendment shall
continue in effect until the end of the last calendar year beginning before the effective date of final
HA40032 \001 \PLM1stAmendP1n.wpd (10/22/01) 7-5
§ 7.8(d), First Amendment
regulations under Section 401(a)(9), or such other date as may be specified in guidance published
by the Internal Revenue Service.
H: \40032 \001\PLN\1stAmendPln.wpd (10/22/01) 7 -6
ARTICLE VIII
DEATH BENEFITS
8.1 Amount and Timing of Death Benefit.
(a) Eligible Employees. Upon the death of the Participant, benefits shall be
paid in accordance with this Section 8.1(a). If the Participant's death occurs after benefit payments
have commenced, the remaining part of the Participant's benefit, if any, shall be paid over a period
which does not exceed the payment period which had commenced. If the Participant's death occurs
prior to the time benefit payments have commenced, the remaining part of the Participant's benefit,
if any, shall be paid to the Beneficiary over a period which does not exceed (1) five (5) years after
the date of the Participant's death, or (2) if the beneficiary is a designated beneficiary, over the
designated beneficiary's life expectancy. No payment shall be made over a period described in (2)
unless payment will commence to the designated beneficiary no later than December 31 of the
calendar year after the close of the calendar year of the Participant's death or, if later, and the
designated beneficiary is the Participant's spouse, the date the Participant would have attained age
seventy and one -half (70 -1/2). If the distribution is according to clause (2), the minimum
distribution for a calendar year equals the Participant's vested Account Balance as of the latest
Valuation Date preceding the beginning of the calendar year divided by the designated beneficiary's
life expectancy. The life expectancy multiples of Treas. Reg. § 1.72 -9 shall apply for purposes of
this Section 8.1. The life expectancy of the Participant's surviving spouse may be recalculated not
more frequently than annually, but the life expectancy of a non - spouse designated beneficiary may
not be recalculated after the commencement of payments to the designated beneficiary. Any amount
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 8 -1
paid to the Participant's child, which becomes payable to the Participant's surviving spouse upon
the child's attaining the age of majority, shall be treated as paid to the Participant's surviving spouse.
Upon the beneficiary's written request, the Plan Committee, in its sole discretion, may accelerate
payment of all, or any portion, of the Participant's unpaid benefit.
In the event payments are to be made over a period of five (5) years from the date of the
Participant's death, the Participant's beneficiary shall have the right to elect to receive the
Participant's remaining benefits in a single sum in cash or in monthly or annual installments over
a period not exceeding five (5) years from the date of the Participant's death. The beneficiary
desiring installment payments shall notify the Trustee of such election in writing on a form
prescribed and supplied by the Plan Committee.
The value of the Participant's Account shall be determined as of the Valuation Date
immediately preceding the date of the distribution. Any amount remaining in such deceased
Participant's Account on the death of a beneficiary shall be paid to the next succeeding beneficiary
or beneficiaries in a single sum in cash.
Any distribution on or after January 1, 1999, (other than a distribution from a segregated
Account) made to a participant (or to his Beneficiary) after the most recent Valuation Date may
include interest on the amount of the distribution as an expense of the Trust Fund. The interest, if
any, accrues from such Valuation Date to the date of calculation of the Participant's distribution at
the money market rate as further set forth in Rules established by the Plan Committee.
(b) Hourly Employ. Upon the death of the Participant, benefits shall be
paid in accordance with this Section 8.1(b). If the Participant's death occurs after benefit payments
have commenced, the remaining part of the Participant's benefit, if any, shall be paid over a period
H:\DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 8 "2
§ 8.1(c), First Amendment
which does not exceed the payment period which had commenced. If the Participant's death occurs
prior to the time benefit payments have commenced, the remaining part of the Participant's benefit,
if any, shall be paid to the Participant's beneficiary in a lump sum no later than December 31 of the
calendar year after the close of the calendar year of the Participant's death.
(c) Minimum_ Distributions under the January 17 2001 Proposed Regulations.
With respect to distributions under the Plan made for calendar years beginning on or after January 1,
2002, the Plan will apply the minimum distribution requirements of Section 401(a)(9) of the Internal
Revenue Code in accordance with the regulations under Section 441(a)(9) that were proposed on
January 17,200 1, notwithstanding any provision of the Plan to the contrary. This Amendment shall
continue in effect until the end of the last calendar year beginning before the effective date of final
regulations under Section 401(a)(9), or such other date as may be specified in guidance published
by the Internal Revenue Service.
8.2 Payment Upon Failure to Designate. Any amount payable from a Participant's
Account which is undisposed of as the result of a failure by the Participant to designate a beneficiary
shall be paid in accordance with Section 3.4 of this Agreement.
H: \40032 \001\PLN \1stAmendPln.wpd (10/22/01) 8 -3
ARTICLE IX
DISABILITY BENEFITS
9.1 Basic Disability Benefit. A Disabled Participant, as defined in Section 2.9 of this
Agreement, shall be entitled, upon receipt of certification of Disability by the Plan Committee and
termination of employment, to be paid the entire value of his Participant's Account as provided in
either Section 7.4 or Section 7.5 ofthis Agreement; provided that, any such payment shall be subject
to the provisions of Section 7.8. A Disabled Participant desiring to elect an Optional Form of
Benefit shall notify the Trustee of such election in writing on a form prescribed and supplied by the
Plan Committee. The value of such Participant's Account shall be determined as of the Valuation
Date immediately preceding receipt by the Plan Committee of the Participant's election.
This provision is not applicable to Hourly Employees, except to the extent it establishes the
right to receive a lump sum payment in accordance with 10.1 of this Agreement.
9.2 Deferral of Benefits in the Event of Disability. Upon termination of employment,
a Disabled Participant may elect to defer receipt of his Participant's Account until his Normal
Retirement Date. In the event of such election, such Disabled Participant shall be entitled to receive
Supplemental Disability Benefits in accordance with Section 9.3 of this Agreement.
This provision is not applicable to Hourly Employees.
9.3 Supplemental Disability Benefits. The Employer shall contribute each month to
the Participant's Account of a Disabled Participant who has elected to defer benefits in accordance
with Section 9.2 of this Agreement, an amount equal to one hundred sixty percent (160 %) of the
Participant Contributions (Basic and Pickup Contributions) actually made by or on behalf of such
H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 9 -1
Participant in the calendar month immediately preceding the date on which the illness or condition
resulting in Disability commenced. However, if a change in pay status, work hours or other similar
change occurs in the month of the disability which is unrelated to the disability, then the month in
which the disability occurs shall determine the amount of the contribution. Such contributions by
the Employer shall commence as of the date of termination of employment and shall continue until
the earlier of:
(a) Such Participant's Normal Retirement Date,
(b) The date on which such Participant receives a distribution under
Section 9.5 below from his Participant's Account subsequent to becoming disabled, or
(c) The Employee's ceasing to be disabled as defined below.
However, for purposes of determining Normal Retirement Date for this Section 9.3,
contributions shall continue until the earlier of a Participant's sixty -fifth (65th) birthday; or the
earliest service retirement date for such Participant under any other retirement benefit program to
which contributions for such Participant are made by the Employer where the Participant is entitled
to receive full benefits (i.e., not actuarially reduced).
All contributions made pursuant to this Section 9.3 shall be fully vested in the Participant's
Account. The limitations of Section 4.8 of this Agreement shall not apply to contributions made
pursuant to this Section 9.3. Payments under this Section 9.3 may be provided by any applicable
insurance policy.
For purposes of this Section 9.3, disability shall mean, in addition to any requirement under
Section 2.8, the inability of any Participant to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be expected to result in
H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 9 -2
death or which has lasted or can be expected to last for a continuous period of not less than twelve
(12) months.
This provision is not applicable to Hourly Employees.
9.4 Payment at Normal Retirement Date. Upon reaching his Normal Retirement Date,
a Disabled Participant who has elected to defer receipt of his Participant's Account until his Normal
Retirement Date pursuant to Section 9.2 of this Agreement shall be paid the entire value of his
Participant's Account as provided in either Section 7.4 or Section 7.5 of this Agreement; provided
that, any such payment shall be subject to the provisions of Section 7.8. Any such Participant shall
be entitled to make the deferral election under Section 7.3 by filing a written election with the Plan
Committee at least thirty (3 0) days but not more than ninety (90) days prior to his Normal Retirement
Date. Any such Participant desiring to elect an Optional Form of Benefit shall notify the Trustee of
such election in writing on a form prescribed and supplied by the Plan Committee. The value of
such Participant's Account shall be determined as of the Valuation Date immediately preceding the
date of the distribution.
This provision is not applicable to Hourly Employees.
9.5 Payment on Earlier Distribution. If a Disabled Participant, after having elected
to defer receipt of his Participant's Account pursuant to Section 9.2 of this Agreement, elects to
receive a distribution from such Account prior to his Normal Retirement Date, he shall be paid the
entire value of his Participant's Account as provided in either Section 7.4 or Section 7.5 of this
Agreement; provided that, any such payment shall be subject to the provisions of Section 7.8. Any
such Participant desiring to elect an Optional Form of Benefit shall notify the Trustee of such
election in writing on a form prescribed and supplied by the Plan Committee. The value of such
H:\DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 9 -3
Participant's Account shall be determined as of the Valuation Date immediately preceding the date
of the distribution.
This provision is not applicable to Hourly Employees.
H:\DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 9 -4
ARTICLE X
BENEFITS ON TERMINATION OF EMPLOYMENT
10.1 Ordinary Termination. If a Participant's Employment with the Employer
terminates for any reason other than Actual Retirement, Death, Disability or Layoff, the Plan
Committee shall certify such termination to the Trustee, and the Trustee shall pay to such terminated
employee, in a single sum in cash, an amount equal to the sum of his Participant's Accounts under
Article V. The value of a Participant's fully vested Accounts for purposes of determining his benefit
shall be determined as of the Valuation Date immediately preceding the date of the distribution.
Upon distribution, the non - vested portion of such terminated employee's Employer
Contribution Account shall be immediately forfeited. Any payment under this Section 10.1 shall be
made no later than the time specified in Section 7.8(a) of this Agreement; provided that, the Plan
Committee shall establish non - discriminatory rules governing the timing of payments following
termination which may include allowing Participants to defer receipt for a period of time.
Any distribution on or after January 1, 1999, (other than a distribution from a segregated
Account) made to a participant (or to his Beneficiary) after the most recent Valuation Date may
include interest on the amount of the distribution as an expense of the Trust Fund. The interest, if
any, accrues from such Valuation Date to the date of calculation of the Participant's distribution at
the money market rate as further set forth in Rules established by the Plan Committee.
10.2 Termination by Layoff. If a Participant's Employment with the Employer is
involuntarily terminated by Layoff, the Plan Committee shall certify such termination to the Trustee
who shall pay to such terminated employee, in a single sum in cash, an amount equal to the full value
H:\ DATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11 /28/00) 10 -1
of his Participant's Account, determined as of the Valuation Date immediately preceding the date of
the distribution. Any payment under this Section 10.2 shall be made no later than the time specified
in Section 7.8(a) of this Agreement.
10.3 Termination on Death or Disability. When a Participant terminates employment
due to death or disability he shall become fully vested. The Participant, or his beneficiary, shall have
the right to choose the optional forms of benefit specified in Section 7.5, in lieu of the normal form
of a cash payment. A Disabled Participant may elect to defer receipt of his Participant's Account
until his Normal Retirement Date. In the event of such election, such Disabled Participant, assuming
he or she can meet the additional requirements of Section 9.3, shall be entitled to receive
Supplemental Disability Benefits in accordance with Section 9.3 of this Agreement. Upon such
Disabled Participant's attainment of his Normal Retirement Date, the Disabled Participant's Account
shall be paid to him, and he may choose the optional forms of benefit specified in Section 7.5; the
value of the Participant's Account shall be determined as of the Valuation Date immediately
preceding the date of the distribution. Any such Participant shall be entitled to make the deferral
election under Section 7.3 by filing a written election with the Plan Committee at least thirty (30)
days but not more than ninety (90) days prior to his Normal Retirement Date. In the event a Disabled
Participant, after having elected to defer receipt of his Participant's Account pursuant to this
Section 10.3, elects to receive a distribution of such Account prior to his Normal Retirement Date,
he shall be paid his Participant's Account and may choose the optional forms of benefit specified in
Section 7.5; the value of this Participant's Account shall be determined as of the Valuation Date
immediately preceding the date of the distribution.
H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 10-2
§ 10.5, First Amendment
This provision shall not apply to Hourly Employees except to the extent it establishes the
right to receive a lump sum payment in accordance with Section 10.1 of this Agreement.
10.4 Election to Defer Distribution for Terminating Participants with Fully Vested
Benefits Exceeding $10,000. If the amount to be distributed under Section 10.1 is more than Ten
Thousand Dollars ($10,000) and/or the Participant is fully vested in his Employer Contribution
Account balance under Section 11. 1, the terminating Participant may elect to defer the commence-
ment of all or any part of his retirement benefits to a different time which shall not be later than the
maximum time for distributions specified in Section 7.8. Notwithstanding the Participant's election
to defer, the non - vested portion of such terminating Participant's Employer Contribution Account
shall still be forfeited. The Participant shall make this election by filing a written election with the
Plan Committee to defer payment. A Participant may later request to commence distribution as of
any subsequent distribution date. However, if the Participant is under age 59 %2, such distribution
must be a lump sum distribution. Once the Participant attains age 59 '/2, the Participant shall have
the right to choose the optional forms of benefits specified in Section 7.5, in lieu of the normal form
of a cash payment. Participants electing to defer distribution under this Section 10.4 may have their
accounts assessed a periodic maintenance fee (assessed at each valuation) to defray the administra-
tive costs of maintaining their account. The Plan Committee may establish rules governing such
matters as it deems necessary to effectuate this Section 10.4, including establishing the amount of
the periodic maintenance fee and methods of assessing such fee.
10.5 Distribution Options for Rehired Participants. A participant that has terminated
employment and is subsequently rehired may continue to receive distributions according to a proper
election made as a result of the termination but may not alter his or her election after the participant
H: \40032 \001\PLN\1stAmendPln.wpd (10/22/01) 10 -3
§ 10.5, First Amendment
has been rehired. However, if the participant has attained age 59 -1/2, until he or she retires, he or
she has a continuing election to receive all or a portion of his or her accounts. The Participant shall
make this election by filing a written election by the Plan Committee an d the participant shall have
the right to choose any of the optional forms of benefits available under Section 7.5 in lieu of the
nonnal form of cash payment. The Plan Committee may establish rules governing such matters as
it deems necessary to effectuate this Section 10.5.
HA40032 \001 \PLN\1stAmendPln.wpd (10/22/01) 10 -4
ARTICLE XI
VESTING AND FORFEITURES
11.1 Vesting Schedule. Participants shall be one hundred percent (100 %) vested
immediately on Death, Disability and attainment of Normal Retirement Date. The balances in a
Participant's Employer Contribution Account shall vest according to the following schedule:
Months of Continuous Participation Percentage Vested
Less than twelve months 0%
Twelve months 10%
For each additional month 1.25%
84 or more months 100%
No Participant shall receive a reduction in the Participant's position on the vesting schedule
as a result of the change in the vesting schedule.
This provision shall not apply to Hourly Employees.
11.2 Months of Participation. For purposes of this Article XI, Months of Participation
shall mean each calendar month during any part of which a Participant was an Active Participant as
defined in Section 2.1 of this Agreement for at least 15 days and each calendar month during any part
of which a Participant was an Inactive Participant by reason of Cessation of Eligibility to participate
pursuant to Section 4.6 of this Agreement. Participants shall also be given credit for months of
continuance participation with other employers who are parties to the Municipal Employees Benefit
Trust Agreement provided (i) the Employee was an active participant under the terms of such plan
as is maintained by the other employer immediately prior to his employment with this employer, and
H:\ DATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd(11 /28/00) 11 -1
(ii) the Employee becomes an Active Participant hereunder as of the date of employment and makes
a full rollover of all of his permissible benefits from the other employer plan as soon as practicable,
or a direct transfer of such amounts is made between the two relevant plans.
This provision shall not apply to Hourly Employees.
11.3 Disposition of Forfeitures. Employer Contribution Account balances forfeited
pursuant to Article X of this Agreement shall be allocated as part of, and in the same manner as, the
Employer Contribution pursuant to Section 4.4(a).
This provision shall not apply to Hourly Employees.
11.4 Rehire. The Plan takes into account all "Months of Continuous Participation" an
Eligible Employee completes with the Employer. As such, any Eligible Employee that is rehired will
receive credit for all prior "Months of Continuous Participation." This credit will apply to all new
contributions to the Employer Account. It would not allow the Participant to increase vesting in a
prior Employer Account because the nonvested amount, if any, was immediately forfeited at the time
of termination. Note, any event which resulted in fully vesting the Participant in his prior Employer
Account (such as layoff) does not result in adding additional "Months of Continuous Participation."
The rehired Participant will still begin employment with the actual "Months of Continuous
Participation" he or she was credited with as a result of prior employment. For example, if a
Participant had sixty "Months of Continuous Participation" (70% vested) at the time of termination
due to Layoff (which resulted in 100% vesting) and was later rehired, the Participant begins
Participation in new Employer contributions at 70% vesting not 100 %. This is a clarification of the
definition of Months of Participation under Section 11.2.
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 11 -2
11.5 Restoration of Forfeited Account. No restoration of a prior forfeited Employer
Contribution Account upon re- employment is permitted.
11.6 Unclaimed Account Procedure. The Plan does not require either the Trustee or
the Plan Committee to search for, or to ascertain the whereabouts of, any Participant or Beneficiary.
At the time the Participant's or Beneficiary's benefit becomes distributable, the Plan Committee, by .
certified or registered mail addressed to his last known address of record with the Plan Committee
or the Employer, must notify any Participant, or Beneficiary, that he is entitled to a distribution under
this Plan. The notice must quote the provisions of this Section 11.6.
If the Participant, or Beneficiary, fails to claim his distributive share or make his whereabouts
known in writing to the Plan Committee within 3 months from the date of mailing of the notice, the
Plan Committee will attempt to locate the Participant or Beneficiary through available methods,
including but not limited to, utilizing the Internal Revenue Service Letter Forwarding procedure as
outlined in Revenue Procedures 94 -22 and the Social Security Administration Letter Forwarding
service. In addition, the Plan Committee will search the Employer's internal records and inquire of
any plan beneficiaries (including alternate payees) of the missing Participant or Beneficiary whose
names and addresses are known to the Plan Committee.
If the Participant, or Beneficiary, fails to claim his distributive share or make his whereabouts
known in writing to the Plan Committee within 18 months from the date of the last notification
method described above, (submission of the request to the IRS or the S SA for letter forwarding), the
Plan Committee will treat the Participant's or Beneficiary's unclaimed payable Accrued Benefit as
forfeited and will reallocate the unclaimed payable Accrued Benefit as part of, and in the same
manner as, the Employer Contribution pursuant to Section 4.4. Prior to forfeiting accounts greater
H:\ DATA\ 40032\ 001 \PLNaestatement2000- 03.wpd(11 /28/00) 11 -3
than $2,000, the Plan Committee will review the matter to determine if additional steps are
warranted. A forfeiture under this paragraph will occur at the end of the notice period or, if later,
the earliest date applicable Treasury regulations would permit the forfeiture. Pending forfeiture, the
Plan Committee, following the expiration of the notice period, may direct the Trustee to segregate
the Nonforfeitable Accrued Benefit in a segregated Account and to invest that segregated Account
in federally insured interest bearing savings accounts or time deposits (or in a combination of both),
or in other fixed income investments.
If a Participant or Beneficiary who has incurred a forfeiture of his Accrued Benefit under the
provisions of this Section 11.6 makes a claim, at any time, for his forfeited Accrued Benefit, the Plan
Committee must restore the Participant's or Beneficiary's forfeited Accrued Benefit to the same
dollar amount as the dollar amount of the Accrued Benefit forfeited, unadjusted for any gains or
losses occurring subsequent to the date of the forfeiture. The Plan Committee will make the
restoration during the calendar quarter in which the Participant or Beneficiary makes the claim from
the unallocated account established pursuant to Section 4.4. If the unallocated account is insufficient
to enable the Plan Committee to make the required restoration, the Plan Committee shall continue
to allocate amounts from the unallocated account as of each calendar quarter until the entire amount
is restored. The Plan Committee must direct the Trustee to distribute the Participant's or
Beneficiary's restored Accrued Benefit to him not later than 60 days after the close of the calendar
quarter in which the Plan Committee restores the forfeited Accrued Benefit.
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ARTICLE XII
ADMINISTRATION
12.1 Plan Committee. The Mayor, with the confirmation of the City Council, shall
appoint to the Plan Committee two (2) members who shall hold office at the pleasure of the Mayor.
The Employees who contribute to the Plan under the provisions of Article IV, Section 4. 1, shall elect
five (5) members who are Plan Participants to the Plan Committee, provided however, that of the
elected representatives, two (2) Employees shall be elected from the Public Safety Department, one
(1) from the Executive and Administrative departments and two (2) from all other departments. The
following are and shall be designated as "departments" for the purpose of determining representation
under the preceding sentence: The Public Safety Department shall consist of the Fire Department
and Police Department; the Executive Department shall consist of all Employees who serve directly
under the Mayor and City Council; and the Administrative Services Department shall consist of all
Employees under the direction of the Administrative Services Director and all other Employees of
the City; all other departments shall consist of Parks & Recreation, Public Works and Development
Services.
Members elected by the Employee shall serve for a term of two (2) years and may be
re- elected for an additional two (2) year term. In order to provide for the continuity of administra-
tion, the new Employee members of the Plan appointed by the amendment of February 21, 1988,
shall be elected after such date and shall serve for initial terms of two (2) and three (3) years
respectively as selected by lot. In alternating years, two (2) Employee members shall stand for
election one year and three (3) Employee members shall be elected the next. Any member of the
H: \DATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 12 -1
committee may resign by notice in writing filed with the Trustee or with the Employer. Any vacancy
among the members of the Committee shall promptly be filled by appointment of the Mayor so that
the number of members of the Committee shall be as herein prescribed. Provided, however, that if
a vacancy occurs among the members of the Plan Committee elected by the Employees, the Mayor
shall select and appoint a replacement member for the remainder of the unexpired term from a list
of Employees presented by the Plan Committee. Any vacancies unfilled for ninety (90) days shall
be filled by the majority vote of the remaining voters of the Committee.
12.2 Officers and Duties. The Plan Committee shall choose from among its members
a Chairman and a Secretary. The Secretary shall keep minutes of the Committee's proceedings and
all dates, records and documents pertaining to the Committee's supervision of the Plan. The
Committee shall adopt rules for the conduct of its meetings. The Committee may employ, and
suitably compensate, such attorneys, actuaries, physicians, advisory, clerical or other employees as
it may deem necessary for the performance of its duties.
12.3 Decision - Making Procedure. All actions of the Committee shall be determined
by vote of a majority of its members. Either the Chairman or the Secretary may execute any
certificate or other written direction on behalf of the Committee. A member of the Committee shall
not vote on any question relating exclusively to himself or his relatives; in the determination of any
such question, the decision of a majority of the remaining members of the Committee shall govern.
The members of the Committee shall serve without bond and without compensation for their services
as such.
12.4 Limits of Liability. No member of the Committee shall be liable for any act or
omission of any other member of the Committee, nor for any act or omission on his own part, except
H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 12 -2
his own willful misconduct. The Employer shall indemnify and save harmless each member of the
Committee from any and all liabilities arising out of his membership on the Committee, except
liabilities arising out of his own willful misconduct. The Committee shall make available to
Participants and Beneficiaries, for examination during reasonable business hours, such records as
pertain to the person wishing to examine the same.
12.5 Powers of Committee. The Committee shall administer and enforce the Plan in
accordance with its terms and shall have all the powers convenient or necessary to accomplish that
purpose including, but not limited to, the following powers:
(a) To determine all questions relating to the rights to benefits of Participants
or the eligibility of Employees to become Participants;
(b) To certify to the Trustee the fact of Actual Retirement, Death, Disability,
termination of Employment or of participation of any Participant;
(c) To interpret, construe and enforce the terms of the Plan and the rules and
regulations it adopts, including interpretation of the Plan documents and documents related to the
Plan's operation;
(d) To make and publish such rules for the administration of the Plan as are
convenient and not inconsistent with the terms of this Agreement and the Trust;
(e) To engage the service of agents whom it may deem advisable to assist it
with the performance of its duties;
(f) To review and render decisions respecting a claim (or denial of a claim for)
a benefit under the Plan; and
H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 12-3
(g) To adopt amendments to the Plan on behalf of the Employer (without the
approval of any other body), which in the opinion of the Committee (1) are necessary to either (A)
maintain the Plan and/or the Trust in tax - qualified status under Internal Revenue Code Section
401(a), 501(a) as amended, and any other relevant Internal Revenue Code section, or (B) conform
to any other law; and (2) do not increase the Employer's contributions under this Plan;
All decisions of the Plan Committee in matters properly coming before it according to the
terms of this Plan, and all actions taken by the Plan Committee in the proper exercise of its adminis-
trative powers, duties and responsibilities, will be final and binding upon all Employees, Participants
and Beneficiaries and upon any person having or claiming any rights or interest in this Plan unless
it can be shown that the decision, action, interpretation or determination was arbitrary and capricious.
The Employer and the Plan Committee will make and receive any reports and information, and retain
any records necessary or appropriate to the administration of this Plan or to the performance of duties
hereunder, or satisfying any requirements imposed by law. In the performance of its duties, the Plan
Committee will be entitled to rely on information furnished by an Employee, Participant or
Beneficiary or by the Employer or Trustee.
12.6 Transmittal of Information. To enable the Committee to perform its functions, the
Employer shall supply full and timely information concerning the compensation of Participants, their
Actual Retirement, Death, Disability, termination of Employment or of participation, and such other
pertinent facts as the Committee may require. The Committee shall advise the Trustee of such facts
as may be pertinent to the Trustee's administration of the Trust.
12.7 Expenses of Administration. All expenses of administering the Plan and Trust
shall be paid out of the Trust fund, unless otherwise provided for by the Employer. The Employer
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may, but shall not be obligated to, pay to the Trustee, in addition to the sums contributed by the
Employer under Section 4.4 of this Agreement, such sums as the Employer, in its discretion, may
determine in order to defray all or a portion of the expenses of administering the Plan and Trust.
Notwithstanding the above, the Employer shall pay directly all expenses of Administering
the provisions of the Plan and Trust with respect to Hourly Employees.
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ARTICLE XIII
AMENDMENT TERMINATION AND DISCONTINUANCE OF CONTRIBUTIONS
13.1 Right of the Employer. The Employer shall have the right at any time to reduce,
suspend or completely discontinue its contributions hereunder and to terminate or partially terminate
this Agreement by delivering to the Trustee written notice of such discontinuance or termination;
provided that, such notice shall not be effective until a majority of the then Active Participants vote
in favor.
Upon complete discontinuance of the Employer's contributions, or full or partial termination
of the Trust, all affected Participants' Accounts and rights to benefits shall become fully vested, and
shall not thereafter be subject to forfeiture except to the extent the law or regulations may preclude
such vesting in order to prevent discrimination in favor of officers or highly- compensated employees.
Upon final termination of the Trust, the Employer shall direct the Trustee to distribute all assets
remaining in the Trust, after payment of any expenses properly chargeable against the Trust, to the
Participants in accordance with the value credited to such Participants as of the date of such
termination, in cash or in kind and in such manner as the Trustee shall determine. The Employer
may amend provisions of the Plan, provided that no such amendment shall enlarge the duties or
liabilities of the Trustee without its consent.
13.2 Amendments to Qualify Plan. The Employer may at any time amend the Plan, in
the event such amendment is necessary to qualify the Plan for tax exemption notwithstanding that
such amendment may have the effect of depriving a Participant or Beneficiary of a right or benefit
which has accrued.
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ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Employee ee Rights. The Plan shall not confer upon an employee any right to be
continued as such nor give any Participant, or any other person whomsoever, any legal or equitable
rights against the Employer or the Trustee, unless the same shall be specifically provided for in this
Plan and Trust or conferred by affirmative action of the Employer in accordance with the Plan and
Trust.
14.2 No Alienation.
(a) Except as provided in subsection (b) and Section 13.3 below, no
Participant, former Participant, Disabled Participant or Beneficiary shall have any power to alienate,
dispose of, pledge or encumber his interest in the Plan and Trust while the same shall be in the
possession or control of the Trustee nor shall the Trustee recognize any assignment thereof either
in whole or in part, nor shall any such interest be subject to attachment, garnishment, execution
following judgment or other legal process while in the hands of the Trustee.
(b) If a Participant, former Participant or Disabled Participant is indebted in
any way to the Employer, and such indebtedness has not been paid in full by the time of any distribu-
tion of benefits to such person under this Plan, then the Employer shall have the right to direct that
payment shall first be made to the Employer in the full amount of such indebtedness and the balance
distributed to such person. The Plan Committee shall direct the Trustee to make payments in
accordance with this provision. This provision shall take precedence over any other provision of the
Plan relating to Plan distributions.
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14.3 Distributions Under Domestic Relations Orders. Nothing contained in this Plan
prevents.the Trustee, in accordance with the direction of the Plan Committee, from complying with
the provisions of a qualified domestic relations order (as defined in Code § 414(p)). This Plan
specifically permits distribution to an alternate payee under a qualified domestic relations order at
any time, irrespective of whether the Participant has attained age fifty (50). A distribution to an
alternate payee prior to the Participant's attainment of age fifty (50) is available if the order specifies
distribution at that time or permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution. Payment may be made to the Alternate Payee, in the absence of
specific instructions, as though the Participant had terminated employment under Section 10.1 on
the date of the order or the date the order requires payment to begin. Nothing in this Section 14.3
gives a Participant a right to receive distribution at a time otherwise not permitted under the Plan nor
does it permit the alternate payee to receive a form of payment not otherwise permitted under the
Plan.
The Plan Committee shall establish reasonable procedures to determine the qualified status
of a domestic relations order. Upon receiving a domestic relations order the Plan Committee shall
promptly notify the Participant and any alternate payee named in the order, in writing, of the receipt
of the order and the Plan's procedures for determining the qualified status of the order. Within a
reasonable period of time after receiving a domestic relations order, the Plan Committee shall
determine the qualified status of the order and must notify the Participant and each alternate payee,
in writing, of its determination. The Plan Committee shall provide notice under this paragraph by
mailing to the individual's address specified in the domestic relations order, or in a manner consistent
with Department of Labor regulations.
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If any portion of the Participant's benefits under this Plan are payable during the period the
Plan Committee is making its determination of the qualified status of the domestic relations order,
the Plan Committee must make a separate accounting of the amounts payable. If the Plan Committee
determines the order is a qualified domestic relations order within 18 months of the date amounts
first are payable following receipt of the order, the Plan Committee will direct the Trustee to
distribute the payable amounts in accordance with the order. If the Plan Committee does not make
its determination of the qualified status of the order within the 18 month determination period, the
Plan Committee will direct the Trustee to distribute the payable amount in the manner the Plan
would distribute if the order did not exist and will apply the order prospectively if the Plan
Committee later determines the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of the qualified domestic relations
order, the Plan Committee may direct the Trustee to invest any partitioned amount in a segregated
subaccount or separate account and to invest the account in federally insured, interest - bearing
savings account(s) or time deposit(s) (or a combination of both), or in other fixed income
investments. A segregated subaccount remains a part of the Trust, but it alone shares in any income
it earns and it alone bears any expense or loss it incurs. The Trustee will make any payments or
distributions required under this Section 14.3 by separate benefit checks or other separate distribution
to the alternate payee(s).
Notwithstanding any other provision in this Plan, the Participant's Account subject to a
domestic relations order shall alone bear any expenses in connection with processing the domestic
relations order and determination of its qualified status.
14.4 Payments to Alternate Persons; Distribution of Small Accounts.
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(a) If the Trustee deems any person incapable of receiving benefits to which
he is entitled by reason of minority, illness, infirmity, or other incapacity, he may make payment
directly for the benefit of such person to any person selected by the Administrator to receive such
payment. Such payments shall, to the extent thereof, discharge all liability of the Trustee, and the
Fund.
(b) Any payment to any Participant, Retired or Disabled Participant or legal
representative or Beneficiary, in accordance with the provisions of this Agreement, shall to the extent
thereof be in full satisfaction of all claims hereunder against the Trustee, the Administrator, the Plan
Committee and the Employer, any of whom may require such Participant, Retired or Disabled
Participant, legal representative or Beneficiary, as a condition precedent to such payment, to execute
a receipt and release therefore in such form as shall be determined by the Trustee, the Plan
Committee or the Employer as the case may be.
(c) The Trustee may, in its sole discretion, distribute the entire interest of any
Participant, Retired or Disabled Participant, or legal representative or Beneficiary, to such person
in a single sum if the amount to be distributed is less than Five Thousand Dollars ($5,000).
14.5 Mergers and Consolidations. This Plan and Trust may not merge or consolidate
with, or transfer its assets or liabilities to, any other plan unless each Participant in the Plan would
(if the Plan subsequently terminated) receive a benefit of equal or greater value immediately after
the merger or consolidation than the benefit he would have received immediately before such merger
or consolidation (if the Plan had then terminated).
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14.6 Headings and Subheadings. The headings and subheadings in this Agreement are
inserted for convenience of reference only and are not to be considered in construction of the
provisions hereof.
14.7 Counterparts. This Agreement has been executed in counterparts each of which
shall be deemed an original.
14.8 Construction. This Agreement and the Trust to which it is attached shall be
construed, administered and governed in all respects by the laws of the State of Washington.
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ARTICLE XV
BENEFIT APPLICATION AND REVIEW PROCEDURE
15.1 Benefit Application. All applications for Plan benefits shall be sent to the Plan
Committee on forms prescribed by it, signed by the Participant, or, if for a death benefit, by the
Participant's Beneficiary. Such application shall be acted on within thirty (30) days after receipt.
If any application is denied in whole or in part, the Plan Committee, within a reasonable time after
receipt of the application, (based upon the Plan Committee's customary procedures in processing
such claims) shall notify the applicant, advise him of his right to review, and set forth, in a manner
calculated to be understood by the applicant, specific reasons for such denial, specific references to
the Plan provisions on which the denial is based, a description of any additional information or
material necessary for him to perfect his application, an explanation of why such material is
necessary, and an explanation of the Plan's review procedure.
15.2 Benefit Denials. In the event a Participant's application for benefits is denied in
whole or in part, he or his duly authorized representative may appeal such denial to the Plan
Committee for a full and fair review thereof by sending to the Plan Committee a written request for
review within ninety (90) days after receiving notice of denial. The Plan Committee shall give the
applicant an opportunity to review pertinent documents in preparing his request for review. The
request shall set forth all grounds on which it is based, supporting facts and other matters which the
applicant deems pertinent. The Plan Committee may require the applicant to submit such additional
facts, documents, or other material as it deems necessary or advisable in making its review and shall
act upon such request within sixty (60) days after receipt thereof unless special circumstances require
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further time. If the Plan Committee confirms the denial in whole or in part, the Plan Committee shall
notify the applicant, setting forth in a manner calculated to be understood by him, specific reasons
for denial and specific references to Plan provisions on which the decision was based.
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 15 -2
F.11 ' us] 40:4ill
ROLLOVER DISTRIBUTION
16.1 Rollover Distribution Subject to approval of the Plan Committee, an Employee
who is eligible under Section 3.1 of this Agreement to become a Participant in this Plan, and who
has had distributed to him his interest in a plan which meets the requirements of Section 401(a) of
the Internal Revenue Code and is exempt from tax under Section 501(a) of the Internal Revenue
Code (the "Other Plan"), may, in accordance with procedures established by the Plan Committee and
approved by the Trustee, transfer the distribution received from the Other Plan to the Trust Fund
provided the following conditions are met:
(a) the transfer occurs on or before the sixtieth (60th) day following his receipt of the
distribution from the Other Plan, or if such distribution had previously been in an individual retire-
ment account (as defined in Code Section 408), the transfer occurs on or before the sixtieth (60th)
day following his receipt of such distribution from the individual retirement account;
(b) the distribution from the Other Plan qualifies as an eligible rollover distribution
within the meaning of Code Section 402, as amended; and
(c) the amount transferred does not exceed the total distribution he received from the
Other Plan less the amount, if any, considered contributed by him in accordance with code Sec-
tion 402, plus any earnings, on such sum accrued during the period, if any, in which such sum was
held in an individual retirement account.
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Any direct transfer from the Trustee of a plan maintained by an Employer which is a parry
to the Municipal Employee's Benefit Trust Agreement as to such plan and which meets all of the
above requirements of this Section 16.1 may be transferred to the Trust Fund.
The Plan Committee shall develop such procedures, and may require such information from
an employee desiring to make such a transfer, as it deems necessary or desirable to determine that
the proposed transfer will meet the requirements of this paragraph. Upon approval by the Trustee,
the amount transferred shall be deposited in the Trust fund. Such amount shall be 100% vested in
the Employee and shall share proportionally in the profits and income and in the losses and expenses
of the Trust fund. Upon termination of Employment, the rollover amount, increased and/or
decreased as hereinabove provided, shall be distributed in accordance with Article X of this
Agreement. Upon the transfer of a rollover amount by an Employee who is otherwise eligible to
participate in the Plan, but who has not yet completed the participation requirements of Section 3.2
of this Agreement, the vested rollover amount shall represent his sole interest in the Plan until he
becomes a Participant.
This provision shall not apply to Hourly Employees.
16.2 Direct Rollovers. This Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Article, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributee in a direct rollover. The Plan
Committee may develop procedures as it deems necessary or desirable to comply with the
H:\ DATA\ 40032 \001\PLN \Restatement2000- 03.wpd (11/28/00) 16 -2
requirements applicable to direct transfers, including any exceptions to the requirements and
subsequent changes made by law or Treasury regulations.
Definitions.
(a) "Eligible rollover distribution." An eligible rollover distribution is 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 expectancies) of the distributee or the joint lives (or joint
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 Code
§ 401(a)(9); and the portion of any distribution that is not includible in gross income (determined
without regard to the exclusion of net unrealized appreciation with respect to employer securities).
(b) "Eligible retirement plan." An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual retirement annuity described in
Code § 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in
Code Section 401(a), 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.
(c) "Distributee." A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations
14:\DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 16 -3
order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse
or former spouse.
(d) "Direct rollover." A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
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ARTICLE XVII
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
17.1 Insurance Benefit. The Plan Committee may elect to provide Incidental Life
Insurance Benefits for insurable Participants, in its sole discretion, in place of the current Survivor
Life coverage provided outside of the Plan. The Trustee or Plan Committee will not purchase any
incidental life insurance benefit for any Participant prior to an allocation to the Participant's Account.
The Plan Committee will direct the Trustee to, or the Plan Committee will directly, use all or any
portion of the Participant's mandatory after tax contributions under Section 4.1(a) to pay insurance
premiums covering the Participant's life. No Employer contributions (including picked up
contributions) or earnings will be used to pay for insurance premiums.
The Plan Committee will direct the Trustee as to the insurance company and insurance agent
through which the Trustee or Plan Committee is to purchase the insurance contracts, the amount of
the coverage and the applicable dividend plan. Each application for a policy, and the policies
themselves, must designate the Trustee as sole owner, with the_ right reserved to the Trustee to
exercise any right or option contained in the policies, subject to the terms and provisions of this
Agreement. The Trustee must be the named beneficiary for the Account of the insured Participant.
Proceeds of insurance contracts paid to the Participant's Employee Contribution Account under this
Article XVII are subj ect to the distribution requirements of Articles VII, VIII, IX and X. The Trustee
will not retain any such proceeds for the benefit of the Trust.
The Plan Committee is specifically authorized to pay insurance premiums from the
Participant's mandatory after tax contributions withheld and remit the remainder to the Trustee for
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allocation according to the Plan. The Plan Committee will charge the premiums on any incidental
benefit insurance contract covering the life of a Participant against the Employee Basic Contribution
Account of that Participant. The Trustee will hold all incidental benefit insurance contracts issued
under the Plan as assets of the Trust created under the Plan. However, such contracts and the cash
or reserve values shall not be deemed part of the Trust Fund for purposes of the allocation of profit
and loss of the Trust under Section 5.3.
(a) Incidental insurance benefits. The aggregate of life insurance premiums
paid for the benefit of a Participant, at all times, may not exceed the following percentages of the
aggregate of the Employer's contributions allocated to any Participant's Account: (i) 49% in the case
of the purchase of ordinary life insurance contracts; or (ii) 25% in the case of the purchase of term
life insurance or universal life insurance contracts. If the Trustee purchases a combination of
ordinary life insurance contract(s) and term life insurance or universal life insurance contract(s), then
the sum of one -half of the premiums paid for the ordinary life insurance contract(s) and the
premiums paid for the term life insurance or universal life insurance contract(s) may not exceed 25%
of the Employer contributions allocated to any Participant's Account.
(b) Exception for certain insurance benefits. The incidental insurance benefits
requirement does not apply to the Plan if the Plan purchases life insurance benefits only from
Employee mandatory after tax contributions under Section 4.1(a). It is intended that the Plan
Committee will not use any Employer contributions (including picked up contributions) or earnings
to purchase life insurance.
17.2 Limitation on Life Insurance Protection. The Trustee will not continue any life
insurance protection for any Participant beyond his actual retirement date (as defined in Article VII).
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If the Trustee holds any incidental benefit insurance contract(s) for the benefit of a Participant when
he terminates his employment (other than by reason of death), the Trustee will transfer the contract(s)
to the Participant endorsed so as to vest in the transferee all right, title and interest to the contract(s),
free and clear of the Trust; subject however, to restrictions as to surrender or payment of benefits as
the issuing insurance company may permit and as the Plan Committee directs. In accordance with
the written direction of the Plan Committee, the Trustee will make any transfer of contract(s) under
this Section 17.2 on the Participant's distribution date (or as soon as administratively practicable after
that date).
17.3 Definitions. For purposes of this Article XVII:
(a) Polic means an ordinary life insurance contract or a Term Life Insurance
Contract issued by an insurer on the life of a Participant.
(b) Issuing Insurance CoMp is any life insurance company which has issued
a policy upon application by the Plan Committee under the terms of this Agreement.
(c) Contract or Contracts means a policy of insurance. In the event of any
conflict between the provisions of this Plan and the terms of any contract or policy of insurance
issued in accordance with this Article XVII, the provisions of the Plan control.
(d) Insurable Participant means a Participant to whom an insurance company,
upon an application being submitted in accordance with the Plan, will issue insurance coverage,
either as a standard risk or as a risk in an extra mortality classification.
17.4 Dividend Plan. The dividend plan is premium reduction unless the Plan
Committee directs the Trustee to the contrary. The Trustee must use all dividends for a contract to
purchase insurance benefits for the Participant on whose life the insurance company has issued the
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contract. Furthermore, the Trustee must arrange, where possible, for all policies issued on the lives
of Participants under the Plan to have the same premium due date and all ordinary life insurance
contracts to contain guaranteed cash values with as uniform basic options as are possible to obtain.
The term "dividends" includes policy dividends, refunds of premiums and other credits. To the
extent dividends are not used to purchase insurance benefits, they shall be credited to the insured
Participant's Employee Contribution Account as applicable.
17.5 Insurance Company Not a Party to Agreement. No insurance company, solely in
its capacity as an issuing insurance company, is a party to this Agreement nor is the company
responsible for its validity.
17.6 Insurance Company Not Responsible for Trustee's Actions. No insurance
company, solely in its capacity as an issuing insurance company, need examine the terms of this
Agreement nor is responsible for any action taken by the Plan Committee or Trustee.
17.7 Insurance Company Reliance on Trustee's Signature. For the purpose of making
application to an insurance company and in the exercise of any right or option contained in any
policy, the insurance company may rely upon the signature of the Trustee and is saved harmless and
completely discharged in acting at the direction and authorization of the Trustee.
17.8 Acquittance. An insurance company is discharged from all liability for any amount
paid to the Trustee or paid in accordance with the direction of the Trustee, and is not obliged to see
to the distribution or further application of any moneys it so pays.
17.9 Duties of Insurance Company. Each insurance company must keep such records,
make such identification of contracts, funds and accounts within funds, and supply such information
H:\ DATA\ 40032 \001\PLN \Restatement2000- 03.wpd (11/28/00) 17-4
as may be necessary for the proper administration of the Plan under which it is carrying insurance
benefits.
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ARTICLE XVIII
CODE SECTION 401(U AND CODE SECTION 401(m) ARRANGEMENTS
[Reserved]
IN WITNESS WHEREOF, the parties hereto have caused this City of Edmonds Employees'
Retirement Benefit Plan Amended Agreement to be executed this ;�' 6 day of 0&0A&V1-
2000.
CITY OF EDMONDS, WASHINGTON
Employer
By:
Its: o
H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 18-1
WELLS FARGO BANK
Trustee
an
Its: