Loading...
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 H:\DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 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 H:\DATA\ 40032 \001 \PLN\Restatement2000- 04.wpd (12/5/00) ii 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 H:\ DATA\ 40032\ 001 \PLN\Restatement2000- 04.wpd (12/5/00) 111 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 H:\DATA\ 40032 \001\PLMRestatement2000- 04.wpd (12/5/00) 1V 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 H:\DATA\ 40032 \001 \PLN \Restatement2000- 04.wpd (12/5/00) v 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: H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) vi 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. HADATA\ 40032\ 001 \PLN \Restatement2000- 03.wpd(11 /28/00) 1 -1 §§ 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 H :\40032 \001\PLN\1stAmendPln.wpd (10/22/01) 2 -1 §§ 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" H: \40032 \001\PLN\1stAmendPln.wpd (10/22/01) 2-2 § § 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; H: \40032 \001\PLN\1stAmendPln.wpd (10/22/01) 2-3 § § 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. HADATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 11 -4 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 H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28100) 12 -4 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. H:\DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11 /28/00) 12 -5 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. H:\ DATA\ 40032 \001\PLN\Restatemcnt2000- 03.wpd (11/28/00) 13 -1 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. H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 14 -1 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. H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 14 -2 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. H:\ DATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 14 -3 (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). HADATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 14 -4 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. H:\ DATA\ 40032\ 001 \PLN \Restatelnent2000- 03.wpd (11/28/00) 14 -5 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 H:\ DATA\ 40032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 15 -1 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. H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 16 -1 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. H:\DATAA 0032 \001\PLN\Restatement2000- 03.wpd (11/28/00) 16 -4 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 HADATA\ 40032\ 001 \PLN\Restatement2000- 03.wpd (11/28/00) 17-1 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). H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 17-2 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 HADATA\ 40032 \001 \PLN \Restatement2000- 03.wpd (11/28/00) 17-3 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. H:\ DATA\ 40032 \001 \PLN\Restatement2000- 03.wpd (11/28/00) 17-5 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: