7123-03
ORDINANCE NUMBER 7123-03
AN ORDINANCE OF THE CITY OF CLEARWATER,
FLORIDA, RELATING TO THE CITY OF
CLEARWATER MONEY PURCHASE PENSION PLAN;
ADOPTING THE RESTATEMENT OF THE MONEY
PURCHASE PENSION PLAN DOCUMENT AS
APPROVED BY THE IRS AND SUBSEQUENT
AMENDMENT TO SECTION 5.1 - EMPLOYER
CONTRIBUTIONS; AND PROVIDING. FOR
EFFECTIVE DATES.
WHEREAS, the City has established the City of Clearwater Money
Purchase Pension Plan (the "Plan"), as subsequently amended; and,
WHEREAS, the City is granted authority to amend the Plan; and
WHEREAS, the Internal Revenue Service has required all retirement plans
to be updated for changes in the tax laws; and
WHEREAS, the Plan has been updated in proposed form to comply with
changes in the tax laws; and,
WHEREAS, the Internal Revenue Service has approved these changes and
determined that a restated version of the Plan is in compliance with current tax
laws; and
WHEREAS, the City has determined that it is in the best interest of
participants to adopt a restatement of the Plan that includes the required updated
changes to the Plan; now, therefore,
BE IT ORDAINED BY THE CITY COMMISSION OF
THE CITY OF CLEARWATER, FLORIDA:
Section 1. The First Restatement of the City of Clearwater Money Purchase
Pension Plan is hereby adopted to read as indicated in the attached Exhibit Aand
made a part hereof.
Section 2. The provisions of this Ordinance shall take effect retroactively as
provided in the attached Exhibit A.
PASSED ON FIRST READING
.Tuly 17. 7001
Ordinance No. 7123-03
PASSED ON SECOND AND
FINAL READING AND ADOPTED
Approved as to form:
Leslie K. Dougal es
Assistant City Attorney
August 7. 2003
Attest:
~,,~~~~
jJ,v Cynt a . Goudeau . :~ - - (j'
7J City Clerk --
2
Ordinance No. 7123-03
n.~
Exhibit A
CITY OF CLEARWATER
MONEY PURCHASE PENSION PLAN
FIRST RESTATEMENT
"
CITY OF CLEARWATER
MONEY PURCHASE PENSION PLAN
Page
ARTICLE I Definitions................................................................................................... 2
1.1 Account or Accounts.............................................................................................. 2
1.2 Administrator.......................................................................................................... 2
1.3 Anniversary Date. .................................................................................................. 2
1.4 Annual Additions: ................................................................................................... 2
1.5 Code. ........................... .......................................................................................... 2
1.6 Compensation ............................... ......... .... ........... .... ............................ .... .............2
1 .7 Directed Investment Fund. ................... .. .................. ............................ ........ .... .... .. 3
1.8 Effective Date........................................................................................................ 3
1.9 Employee. ................. .............................. ........ ............ ..... ..... ............. ....................3
1 .10 Employer.............................................................................................................. 3
1.11 Employer Contribution Account. ..........................................................................3
1.12 Highly Compons3ted Employee:.......................................................................... 3
1.12 rThis section intentionally left blankl ....................................................................3
1.13 Limitation year................................................................................................... 4~
1.14 Normal Retirement Date....................................................................................4~
1 .15 Participant. ......................................................................................................... 4~
1.16 Plan.................................................................................................................... 4~
1.17 Plan Administrator......... ........... .................. ................. ....... ....... ... ... ................... 4~
1.18 Plan Year. ......... ... .................... ............ ..... .................. ...... ........... ........... ............. 4
1.19 Pooled I nvestment Fund. .....................................................................................4
1.20 Rollover Contribution Account. ............................................................................ 4
1 .21 Section 415 Compensation.................................................................................. 4
1.22 Segregated Investment Fund........................ ................... ...... ........... ......... ..........4
1.23 Trust................................................................................................................... ~
1.24 Trust Agreement. ....................... ................. ......................... ........... .......... ......... ~
1.25 Trustee............................................................................................................... ~
1.26 Trust Fund. .......................................................................................................... 5
1.27 Valuation Date..................................................................................................... 5
1.28 Valuation Period.................................................................................................. 5
ARTICLE II Establishment and Name of the Plan..................................................... 6
2.1 Name of Plan. ........................................................................................................ 6
2.2 Exclusive Benefit.................................................................................................... 6
2.3 Mistake of Fact.. .................................................................................................... 6
2.4 Participants' Rights. ............................................................................................... 6
2.5 Qualified Plan. ....................................................................................................... 6
ARTICLE III Plan Admin istrator ................................................................................... 7
3.1 Administration of the Plan. .....................................................................................7
3.2 Powers and Duties. ............................ ................... ........ ........ .......................... .......7
3.3 Direction of Trustee. .................... .......................................................................... 7
3.4 Conflict in Terms.. ..................................................... .... ....... ...................... ......... ...8
3.5 Final Authority.. ............................ .......................................................................... 8
3.6 Appointment of Advisors and Delegation of Duties................................................ 8
ARTICLE IV Eligibility and Participation..................................................................... 9
4.1 Eligibility and Participation.. ...................................................................................9
4.2 Former Employees................................................................................................. 9
4.3 Change of Eligibility Status. ...................................................................................9
ARTICLE V Contributions to the Trust...................................................................... 10
5.1 Employer Contributions............................. ........................................................... 10
5.2 Form and Timing of Contributions........................................................................10
5.3 Rollover Contributions.......................................................................................... 10
5.4 No Duty to Inquire. .......... ......... .............. ............ ................ .............................. ...10
ARTICLE VI Participants' Accounts and Allocation of Contributions.................... 11
6.1 Common Fund.. ...................................................................................................11
6.2 Establishment of Accounts. .................................................................................11
6.3 Interests of Participants. ...................................................................................... 11
6.4 Adjustments to Accounts.: ................................................................................... 11
6.5 Limitation on Allocation of Contributions. ............................................................. 12
11
ARTICLE VII Benefits Under the Plan .......................................................................15
7.1 Retirement Benefit. .............................................................................................. 15
7.2 T ermi nation of Employment Benefit..................................................................... 15
7.3 Death Benefit ..................................................... ......... ......... ........... ........... ..........15
ARTICLE VIII Form and Payment of Benefits ...........................................................17
8.1 Timing and Form.................................................................................................. 17
8.2 Manner of Payment. ............................................................................................ 17
8.3 Lump Sum Payment. ............................................... ............... ........... ..................17
8.4 Periodic Adjustments. ................................ ........................................ ..................17
8.5 Location of Participant or Beneficiary Unknown. .................................................19
8.6 Transfer to Other Qualified Plans. .......................................................................19
8.7 Direct Rollovers.................................................................................................... 19
8.8 Withdrawals from Rollover Contribution Accounts. ..............................................20
8.9 Withdrawals from Employer Contribution Accounts. ............................................20
ARTICLE IX Trust Fund and Expenses of Administration ......................................21
9.1 Name of Trustee. ............... .......................... .................................... ...... ... ........... 21
9.2 Expenses of Ad min istration. ................................................................................ 21
ARTICLE X Amendment and Termination................................................................ 22
10.1 Restrictions on Amendment and Termination of Plan........................................ 22
10.2 Amendment of Plan. .................. ....................... ........................... ........... ........... 22
10. 3 Termination of Plan............................................................................................ 22
10.4 Termination Procedure.. .... ................................................................................22
10.5 Initial Qualification of Plan.. ...............................................................................22
ARTICLE XI Participant Direction of Account Investment...................................... 24
11.1 Participant Directed Investments.. .....................................................................24
11.2 Election Procedures. ........ ...................................... ................................. ........... 24
11.3 Failure to Designate. .......................................................................................... 24
11.4 Charges and Credits.. ........................................................................................ 24
III
11.5 Procedures......................................................................................................... 25
ARTICLE XII Miscellaneous....................................................................................... 26
12.1 Alienation.. ......................................................................................................... 26
12.2 Governing Law................................................................................................... 26
12.3 Gender. .............................................................................................................. 26
12.4 Forfeiture of Benefits for Specified Offenses. ....................................................26
12.5 Claims Procedures............................................................................................. 26
ARTICLE XIII Loans to Participants... ... ... ... ... ... ... ...... ... ... ... ... ... ... ... ... ... ... ... ... .27
13.1 Availability of Loans........................................................................... 27
13.2 Time and Manner of Repayment... ... ... ... ... ... ... ... ... ...... ... ... ... ... ... ... ... ..... 29
13.3 Default............................................................................................. 29
13.4 Effective Date.................................................................................... 29
IV
CITY OF CLEARWATER
MONEY PURCHASE PENSION PLAN
THE CITY OF CLEARWATER, FLORIDA (the "Employer") hereby
ost3blishesrestates this money purchase pension plan, a tax-qualified defined
contribution plan this day of , 4-997,2003. to provide supplementary
retirement and other benefits for certain eligible employees.
W! I N E SSE I H:
WHEREAS, the Employer desires to provide for the retirement of certain
Employees employed by the Employer by establishing a money purchase pension plan
for those Employees who now or may hereafter qualify for participation therein; and
WHEREAS, the Employer is authorized to adopt the Plan.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
1
ARTICLE I
Definitions
1.1 "Account" or "Accounts" shall mean a Participant's Employer Contribution
Account, Rollover Account and/or such other accounts as may be established by the
Plan Administrator.
1.2 "Administrator" shall mean the Plan Administrator.
1.3 "Anniversary Date" shall mean December 31 of each Plan Year.
1.4 "Annual Additions" shall mean, for any Limitation Year, the sum of:
(a) the amount of Employer contributions allocated to the Participant during any
Limitation Year under any qualified defined contribution plan maintained by the
Employer;
(b) the amount of the Employee's contributions (other than rollover contributions, if
any) to any qualified defined contribution plan maintained by the Employer;
(c) any forfeitures allocated to the Participant under any qualified defined
contribution plan maintained by the Employer; or
(d) amounts allocated to an individual medical account, as defined in Section
415(1)(2) of the Code that is part of a pension or annuity plan maintained by the
Employer, and amounts derived from contributions that are attributable to post-
retirement medical benefits allocated to the separate account of a key employee (as
defined in Section 419A(d)(3) of the Code) under a welfare benefit plan (as defined in
Section 419(e) of the Code) maintained by the Employer; provided, however, the
percentage limitation set forth in Section 415 (c)(1 )(B) of the Code shall not apply to:
(A) any contribution for medical benefits (within the meaning of Section 419A(f)(2) of
the Code) after separation from service which is otherwise treated as an "Annual
Addition," or (2) any amount otherwise treated as an "Annual Addition" under Section
415(1)( 1) of the Code.
1.5 "Code" shall mean the Internal Revenue Code of 1986, as amended, or any
successor statute. Reference to a specific section of the Code shall include a reference
to any successor provision.
1.6 "Compensation." sh311 me3n
(a) For Employees employed in 3 position other th3n City M3n3gor"Compensation"
shall mean the regular salaries and wages, bonuses, overtime pay, holiday time,
accrued vacation---aRG~ sick pay. and severance pay paid by the Employer during the
Plan Year reportable as W-2 wages for Federal income tax withholding purposes,
Employee contributions designated as Employoremployer contributions under Section
2
414(h) of the Code, and elective contributions made during the Plan Year on behalf of a
Participant to a plan described in Section 125 or 457 of the Code, but shall not include
any other type of cash or non-cash remuneration, including, but not limited to disability
payments, amounts paid by the Employer to a plan described in Section 125 or 457 of
the Code, credits or benefits under this Plan, any amount contributed to any pension,
employee welfare, life insurance or health insurance plan or arrangement, or any other
fringe benefits, welfare benefits, sever3nco P3Y or deferred compensation.
(b) For 3n employee employed in the position of City M3n3ger,
"Compensation" sh311 m03n 3nnu31 base s313ry, 3S defined in tho employmont
agreement between the City 3nd the City M3n3ger.
(6Q) No Compensation in excess of the limit under Section 401 (a)(17) of the Code
(adjusted under such regulations as may be issued by the Secretary of the Treasury)
shall be taken into account for any Employee. If a Plan Year consists of fewer than 12
months, the Compensation limit will be multiplied by a fraction, the numerator of which
is the number of months in the Plan Year, and the denominator of which is 12.
1.7 "Directed Investment Fund" shall mean an investment fund established
pursuant to Article XI for purposes of investing Participants' Accounts.
1.8 "Effective Date" of this Plan shall mean June 23, 1997,Januarv 1. 2002. except
as may otherwise be noted herein.
1.9 "Employee" shall mean any person actively employed by the Employer in the
position of City Manager, City Attorney, Assistant City Attorney and all management
contract employees, who are not participants in the City of Clearwater Employees'
Pension Fund, a defined benefit pension plan, excluding temporary employees.
1.10 "Employer" shall mean the City of Clearwater, Florida.
1.11 "Employer Contribution Account" and "Employee Contribution Account"
shall mean an account established pursuant to Section 6.2 with respect to Employer
contributions and Employee contributions made pursuant to Article V.
1.12 "Hiahl-; Compensated Emplo',ee" shall me3n 3ny Employee who:rThis section
intentionally left blank.l
(3) (1) during the preceding Plan Ye3r h3d Section 415 Compens3tion in excoss
of $80,000 (adjusted under such regul3tions 3S m3Y be issuod by the Secretary of tho
Tre3sury) 3nd at the election of the Employer, 'N3S 3 member of the "top paid group";
provided, th3t 3S used herein, "top paid group" sh311 mean all Employoes who are in the
top 20% of the Employer's work force on the b3sis of Section 415 Compons3tion p3id
during the ye3r; provided, further, that for purposes of determining the number of
Employees in the top p3id group, Employeos described in Section 414(q)(8) of the
Internal Revenue Code sh311 be excluded; or
(2) 3 five peroont (5%) owner of tho Employor 3t 3ny time during
the ye3r or the preceding year.
3
(b) For purposes of this par3gr3ph, tho determin3tion of Soction 416
Compens3tion sh311 be b3sed only on Section 416 Compens3tion that is actu311y
p3id ~md sh311 be m3de by including olective or salary roduction contributions to
3 pbn describod in Section 125 of the Code, a pl3n described in Section 401 (k)
of the Code or 3 pbn described in Section 403(b) of the Code.
1.13 "Limitation Year" shall mean the Plan Year.
1.14 "Normal Retirement Date" shall mean the date on which a Participant has
reached the age of 55.
1.15 "Participant" shall mean any eligible Employee of the Employer who has
become a Participant under the Plan. Participant shall include any former employee of
the Employer who became a Participant under the Plan and who still has a balance in
an Account under the Plan.
1.16 "Plan" shall mean the City of Clearwater Money Purchase Pension Plan, a tax-
qualified defined contribution plan, as herein set forth, as it may be amended from time
to time.
1.17 "Plan Administrator" shall mean the Employer or the person or persons
appointed by the Employer pursuant to Article III hereof.
1.18 "Plan Year" shall mean the period beginning June 23, 1997 and ending
December 31, 1997; thereafter, the 12-month period beginning on January 1 and
ending on the following December 31 of each year.
1.19 "Pooled Investment Fund" shall mean a Directed Investment Fund established
under Article XI, the combined assets of which shall consist of the common investments
of all Participants selecting the Directed Investment Fund.
1.20 "Rollover Contribution Account" shall mean an account established pursuant
to Section 6.2 with respect to rollover contributions made pursuant to Article V.
1.21 "Section 415 Compensation" shall mean all compensation as described in
Section 1.415-2(d)(2) and Section 1.415-2(d)(3) of the Income Tax Regulations.
1.22 "Seareaated Investment Fund" shall mean a Directed Investment Fund
established under Article XI, in which the assets of each Participant selecting the
Directed Investment Fund shall be separately invested, and for which the earnings
attributable to such assets shall be separately accounted.
1.23 "Trust" shall mean the trust established by the Trust Agreement.
1.24 "Trust Aareement" shall mean the agreement providing for the Trust Fund, as it
may be amended from time to time.
1.25 "Trustee" shall mean the individual, individuals or corporation designated as
trustee under the Trust Agreement.
4
1.26 "Trust Fund" shall mean the trust fund established under the Trust Agreement
from which the benefits provided for by the Plan are to be paid or funded.
1.27 "Valuation Date" shall mean December 31 of each year and each day securities
are traded on a national stock exchange, except regularly scheduled holidays of the
Employer or the Trustee, or such other date as may be selected by the Plan
Administrator.
1.28 "Valuation Period" shall mean the period beginning with the first day after a
Valuation Date and ending with the next Valuation Date; provided, however, that the
first Valuation Period shall begin on the Effective Date of the Plan.
5
ARTICLE II
Establishment and Name of the Plan
2.1 Name of Plan. A tax-qualified defined contribution plan is hereby established in
accordance with the terms hereof and shall be known as the "CITY OF CLEARWATER
MONEY PURCHASE PENSION PLAN."
2.2 Exclusive Benefit. This Plan is created for the sole purpose of providing
benefits to the Participants. Except as otherwise permitted by law, in no event shall any
part of the principal or income of the Trust be paid to or reinvested in the Employer or
be used for or diverted to any purpose whatsoever other than for the exclusive benefit
of the Participants and their beneficiaries.
2.3 Mistake of Fact. Notwithstanding the foregoing provisions of Section 2.2, any
contribution made by the Employer to this Plan by a mistake of fact may be returned to
the Employer within one year after the payment of the contribution.
2.4 Participants' Riahts. The establishment of this Plan shall not be considered as
giving any Employee, or any other person, any legal or equitable right against the
Employer, the Trustee or the principal or the income of the Trust, except to the extent
otherwise provided by law. The establishment of this Plan shall not be considered as
giving any Employee, or any other person, the right to be retained in the employ of the
Employer.
2.5 Qualified Plan. This Plan and the Trust are intended to qualify under the Code
as a tax-qualified employees' plan and trust, and the provisions of this Plan and the
Trust are to be interpreted accordingly.
6
ARTICLE III
Plan Administrator
3.1 Administration of the Plan.
(a) The Plan Administrator shall control and manage the operation and
administration of the Plan, except with respect to investments. The Plan Administrator
shall have no duty with respect to the investments to be made of the funds in the Trust
except as may be expressly assigned to it by the terms of the Trust Agreement and
except to the extent that the Administrator determines the investment funds which will
be made available under the Plan in accordance with Article XI hereof.
(b) (1) The Employer may appoint a committee to assist in the administration of
the Plan, which shall serve at the pleasure of the Employer. All usual and reasonable
expenses of the committee may be paid in whole or part by the Employer, and any
expenses not paid by the Employer shall be paid from the Trust Fund. Any members of
the committee who are employees of the City shall not receive compensation with
respect to their services for the committee.
(2) The committee must act at a publicly noticed meeting. The committee may elect
one of its members as chairman, appoint a secretary, who mayor may not be a
committee member, and advise the Trustee of its actions in writing. The secretary shall
keep a record of all meetings and forward necessary communications to the Employer
or the Trustee. The committee may adopt such by-laws and regulations as it deems
desirable for the conduct of its affairs. All decisions of the committee shall be made by
a vote of the majority, including actions taken in writing without a meeting.
(3) The committee and the individual members thereof shall be indemnified by the
Employer (and not from the Trust Fund) against any and all liabilities arising by reason
of any act or failure to act made in good faith pursuant to the provisions of the Plan,
including expenses reasonably incurred in the defense of any claim relating thereto.
3.2 Powers and Duties.
(a) The Plan Administrator shall have complete control over the administration of the
Plan herein embodied, with all powers necessary to enable it to carry out its duties in
that respect. Not in limitation, but in amplification of the foregoing, the Plan
Administrator shall have the power and discretion to interpret or construe this Plan and
to determine all questions that may arise as to the status and rights of the Participants
and others hereunder.
(b) The Plan Administrator may promulgate such policies and make such rules and
regulations for the proper administration of the Plan as it deems necessary.
3.3 Direction of Trustee. It shall be the duty of the Plan Administrator to direct the
Trustee with regard to the distribution of benefits to the Participants and others
hereunder.
7
3.4 Conflict in Terms. The Administrator shall notify each Employee, in writing, as
to the existence of the Plan and Trust and the basic provisions thereof. In the event of
any conflict between the terms of this Plan and the Trust Agreement and as set forth in
any explanatory booklet, this Plan and the Trust Agreement shall control.
3.5 Final Authoritv. Except to the extent otherwise required by law, the decision of
the Plan Administrator in matters within its jurisdiction shall be final, binding and
conclusive upon each Employee and beneficiary and every other interested or
concerned person or party.
3.6 Appointment of Advisors and DeleQation of Duties.
(a) The Plan Administrator may appoint such accountants, counsel, specialists and
other persons that it deems necessary and desirable in connection with the
administration of this Plan.
(b) The Plan Administrator may designate one or more of its employees to perform
the duties required of the Plan Administrator hereunder.
8
ARTICLE IV
Eliaibilitv and Participation
4.1 EIiQibilitv and Participation. Any Employee employed by the Employer
in the position of City Manager or City Attorney shall become a Participant in the Plan
on the Effective Date. Each other eligible Employee employed by the Employer before
October 1, 1997 shall become a Participant in the Plan on October 1, 1997. For an
eligible Employee whose date of employment is after October 1, 1997, such eligible
Employee shall enter the Plan as a Participant on his date of employment.
4.2 Former Employees. An Employee who ceases to be a Participant,
terminates employment and is reemployed by the Employer shall be eligible again to
become a Participant on the date of his reemployment.
4.3 ChanQe of EliQibility Status. In the event a change of job classification
results in a Participant no longer qualifying as an eligible Employee, such Employee
shall cease to be an active Participant as of the effective date of such change of job
classification but the Employee shall not be deemed to have terminated employment
with the Employer for purposes of this Plan.
4.4 Military Service. Notwithstandinq 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 Section 414(u) of the Code.
9
ARTICLE V
Contributions to the Trust
5.1 Employer Contributions.
(a) Employer Contributions. For each Plan Year, the Employer shall contribute to
the Trust on behalf of each Participant employed by the Employer an amount equal to:
15% of Compensation on behalf of the City Manager and the City Attorney; 14% of
Compensation on behalf of the Chief of Police; and 8% of Compensation on behalf of
Management Contract Employees (excluding the Chief of Police) and Assistant City
Attorneys. The Employer will make bi-weekly contributions to the Trust throughout the
Plan Year to meet its funding obligations under the Plan.
(b) Employee Mandatory Contributions. For each Plan Year, the City Manager and
the City Attorney shall contribute an amount equal to 2% of compensation and the Chief
of Police shall contribute an amount equal to 6% of compensation bi-weekly to the
Trust. The mandatory contributions made by employees under the Plan shall be
designated as employer contributions pursuant to Section 414(h) of the Code. Such
designation is contingent upon the contributions being excluded from the employees'
gross income for federal income tax purposes. For all other purposes of the Plan, such
contributions shall be considered employee contributions. Employee mandatory
contributions to the Plan shall be fully vested at all times.
(c) Effective Date. This amended version of Section 5.1 is effective for all purposes
as of October 1,2002.
(d) Participants shall be immediately 100% vested in all contributions made
pursuant to this Section 5.1.
5.2 Form and Timin<<:l of Contributions. Payments on account of the contributions
due from the Employer for any Plan Year shall be made in cash. Such payments may
be made by the Employer at any time.
5.3 Rollover Contributions. With the consent of the Plan Administrator and in such
manner as prescribed by the Plan Administrator, the Trustee may accept a rollover
contribution (as defined in the applicable sections of the Code, except that for this
purpose "rollover contribution" shall be deemed to include both a direct payment from
an Employee and a direct transfer from a trustee of another qualified plan in which an
Employee is or was a participant). Rollover amounts shall be allocated to the
Employee's Rollover Contribution Account and invested in accordance with the
provisions of Article XI. The Trustee shall not accept a rollover contribution that is
subject to the requirements of Sections 401 (a)(11) and 417 of the Code.
5.4 No Duty to Inauire. The Trustee shall have no right or duty to inquire into the
amount of any contribution made by the Employer or the method used in determining
the amount of any such contribution, or to collect the same, but the Trustee shall be
accountable only for funds actually received by it.
10
ARTICLE VI
Participants' Accounts and Allocation of Contributions
6.1 Common Fund. The assets of the Trust shall constitute a common fund in
which each Participant shall have an undivided interest.
6.2 Establishment of Accounts. The Plan Administrator shall establish and
maintain with respect to each Participant 3n 3ccount, designated 3S the Employor
Contribution /\ccount, th3t shallsuch accounts as necessarv to reflect the Participant's
interest in the Trust Fund with respect to contributions made by the Employer, the
Employee and a Rollover Contribution Account to reflect the participant's interest in the
Trust Fund with respect to Rollover Contributions. The Plan Administrator may
establish such additional accounts as are necessary to reflect a Participant's interest in
the Trust Fund.
6.3 Interests of Participants. The interest of a Participant in the Trust Fund shall
be the balance remaining from time to time in his Account after making the adjustments
required in Section 6.4.
6.4 Adiustments to Accounts. Subject to the provisions of Section 6.5, a
Participant's Account shall be adjusted from time to time as follows:
(a) As of each Valuation Date, each of a Participant's Accounts shall be credited or
charged, as the case may be, with a share of the earnings of the Trust Fund for the
Valuation Period ending with such current Valuation Date as follows:
(1) As of each Valuation Date, any portion of the Participant's Accounts that is
invested in a Pooled Investment Fund established under Article XI shall be credited or
charged, as the case may be, with a share of the earnings of such Pooled Investment
Fund for the Valuation Period ending with such current Valuation Date. Each
Participant's share of the earnings of a Pooled Investment Fund for any Valuation
Period shall be determined by the Plan Administrator on a weighted average basis, so
that each Participant with a balance in such Pooled Investment Fund shall receive a
pro-rata share of the earnings of such Pooled Investment Fund, taking into account the
period of time that each dollar invested in such Pooled Investment Fund has been so
invested.
(2) As of each Valuation Date, the portion of the Participant's Accounts that is
invested in each Segregated Investment Fund established under Article XI shall be
credited or charged, as the case may be, with the earnings attributable to the
Participant's investment in such Segregated Investment Fund for the Valuation Period
ending with such current Valuation Date.
(b) Each Participant's Accounts shall be credited with contributions made during the
Plan Year, as follows:
11
(1) As of each Valuation Date that is the last day of the Plan Year, or at such other
times as determined by the Employer, the Employer Contribution Account of a
Participant shall be credited with his share of the contribution made by the Employer
with respect to the Plan Year ending with such Valuation Date. A Participant's share of
the amount of the contribution for the Plan Year shall be determined pursuant to the
provisions of Article V.
(2) As of each Valuation Date, the Rollover Contribution Account of a Participant
shall be credited with the Rollover Contributions, if any, made by the Participant
pursuant Article V.
(c) As of each Valuation Date, each Account of a Participant shall be charged with
the amount of any distribution made to the Participant or his beneficiary from such
Account during the Valuation Period ending with such Valuation Date.
(d) For purposes of all computations required by this Article VI, the cash method of
accounting shall be used, and the Trust Fund and the assets thereof shall be valued at
their fair market value as of each Valuation Date.
(e) The Plan Administrator may adopt such additional accounting procedures as are
necessary to accurately reflect each Participant's interest in the Trust Fund, which
procedures shall be effective upon approval by the Employer. All such procedures shall
be applied in a consistent, nondiscriminatory manner.
6.5 Limitation on Allocation of Contributions.
(a) Notwithst3ndingEffective January 1. 2002. notwithstandinq anything contained in
this Plan to the contrary, the aggregate Annual Additions to a Participant's Accounts
under this Plan and under any other defined contribution plans maintained by the
Employer for any Limitation Year shall not exceed the lesser of $30,000-10.000 or
2a100% of the Participant's Section 415 Compensation for such Plan Year. This
limitation is subiect to independent cost-of-Iivinq adiustments for post-1994 limitation
years as announced by the Internal Revenue Service.
(b) In the event that the Annual Additions, under the normal administration of the
Plan, would otherwise exceed the limits set forth above for any Participant, or in the
event that any Participant participates in both a defined behefit plan and a defined
contribution plan maintained by the Employer and the aggregate annual additions to
and projected benefits under all of such plans, under the normal administration of such
plans, would otherwise exceed the limits provided by law, then the Administrator shall
take such actions, applied in a uniform and nondiscriminatory manner, as will keep the
annual additions and projected benefits for such Participant from exceeding the
applicable limits provided by law. Excess Annual Additions shall be disposed of as
provided in Section 6.5(c). Adjustments shall be made to other plans, if necessary to
comply with such limits, before any adjustments may be made to this Plan.
(c) If as a result of a reasonable error in estimating a Participant's Section 415
Compensation or other circumstances permitted under Section 415 of the Code, the
Annual Additions attributable to Employer contributions for a particular Participant would
12
cause the limitations set forth in this subsection (c) to be exceeded, the excess shall be
allocated and reallocated to other Participants in the Plan. However, if the allocation or
reallocation of the excess amounts causes the limitations of this subsection (c) to be
exceeded with respect to each Participant for the Limitation Year, then these amounts
must be held unallocated in a suspense account. If a suspense account is in existence
at any time during a particular Limitation Year, other than the Limitation Year described
in the preceding sentence, all amounts must be allocated and reallocated to the
Participants (subject to the limitations of this subsection (c)) before any contributions
that constitute Annual Additions may be made to the Plan for that Limitation Year. The
suspense account shall be credited or charged, as the case may be, with a share of the
income, losses, appreciation and depreciation attributable thereto as if it were an
Account of a Participant.
(d) Effective f-or Pkm Years beginning prior to Janu3ry 1, 2000, in the
event th3t any Participant participates in both 3 definod benefit pl3n 3nd a
defined contribution pl:::tn maint3ined by his Employer thereof, then tho sum of
the Defined Benefit Pl:::tn Fraction 3nd the Defined Contribution PI3n Fr3otion for
3ny Limit3tion Year sh311 not exceed 1.0.
(1) The Defined Benefit Pl:::tn Fr3ction is a fr3ction, the
numer3tor of ,,.,hioh is the projeotod annu31 benefit of tho Particip3nt under
tho defined bonefit plan determined as of the c1oso of the Limit3tion Year
and the denominator of which is the lesser of (^) the product of 1.25 times
the dollar limitation in effect under Section 415(b)(1 )(^) of the Code for
such Limitation Year or (B) the product of 1.4 times the 3mount th3t m3Y
be taken into account under Section 415(b)(1 )(B) of the Code '/Jith respect
to such Participant for such Limitation Ye3r.
(2) The Defined Contribution Pl:::tn Fr3ction is 3 fraction, the
numer3tor of whioh is the sum of the ^nnu31 ^dditions to the P3rticip3nt's
^ooounts 3S of the close of the Limit3tion Ye3r (less 3ny amount th3t may
be subtr30ted from the numer3tor in 3ccord3nce '#ith 3ny 3pplic3ble
statutes, notices or rulings) and the denominator of '#hich is the sum of
the lesser of the follO'.r:ing 3mounts detormined for such ye3r 3nd for e3ch
prior ye3r of servioe with the Employer: (^) the product of 1.25 times the
doll3r limit3tion in eff-oct under Section 415(c)(1 )(^) of tho Code for such
Limit3tion Year (determinod '....ithout regard to Seotion 415(c)(6) of the
Code) or (B) the produot of 1.4 times the amount th3t m3Y be t3ken into
3ccount under Section 415(0)(1 )(B) of tho Code 'I.'ith respeot to such
P3rticip3nt for suoh Limit3tion Year.
(/\) If 3n Employee was a P3rticip3nt 3S of the end of tho
first d3Y of the first Limit3tion Ye3r beginning 3fter December 31,
1986, in one or more defined oontribution pl:::tns m3int3ined by tho
Employor th3t was in existence on M3Y 6, 1986, the numerator of
the Defined Contribution Plan Fr3ction will be 3djusted if the sum of
the Defined Contribution PI3n Fraction 3nd the Definod Benefit
Pl:::tn Fr3ction ,,',ould otherwise exceed 1.0 under the terms of this
P13n. Under tho adjustmont, an 3mount oqu31 to the product of (1)
13
the excess of the sum of the fr3ctions over 1.0 times (2) the
donomin3tor of the Defined Contribution Pkm F'r3ction, will be
perm3nently subtr3cted from the numer3tor of the Defined
Contribution PI::m F'r3ction.
(B) The 3djustment undor subp3r3gr3ph (/\) is caloul3ted
using the fr3ctions 3S they would be computed 3S of tho end of the
13St Limit3tion Ye3r beginning bofore J3nu31)' 1, 1987, 3nd
disreg3rding 3ny ch3ngos in the terms 3nd conditions of the Pbn
m3de 3fter M3Y 5, 1986, but using the limit3tion under Section 415
of the Code th3t is applic3ble to the first Limit3tion Ye3r beginning
on or 3fter J3nu3ry 1, 1987.
14
ARTICLE VII
Benefits Under the Plan
7.1 Retirement Benefit.
(a) A Participant shall be entitled to a normal retirement benefit upon such
Participant's Normal Retirement Date.
(b) Except as provided in Sections 8.8 and 8.9 of this Plan, until a Participant
actually terminates from the employ of the Employer, he shall not receive a distribution
and he shall continue to be treated in all respects as a Participant.
(c) Upon the retirement of a Participant as provided in subsection (a) and subject to
adjustment as provided in Section 8.4, such Participant shall be entitled to receive, at
the time and in the manner described in Article VIII, a retirement benefit in an amount
equal to 100% of the balance in his Accounts as of the Valuation Date concurring with
or preceding the date of his retirement, plus the amount of any contributions allocated
subsequent to such Valuation Date.
7.2 Termination of Employment Benefit In the event a Participant's employment
with his Employer is terminated for reasons other than retirement, and subject to
adjustment as provided in Section 8.4, such Participant shall be entitled to receive, at
the time and in the manner described in Article VIII, a termination of employment
benefit in an amount equal to the balance in his Account as of the Valuation Date
concurring with or preceding the date of the distribution, plus the amount of any
contributions allocated subsequent to such Valuation Date.
7.3 Death Benefit
(a) In the event of the death of a Participant and subject to adjustment as provided
in Section 8.4, his beneficiary shall be entitled to receive, at the time and in the manner
described in Article VIII, a death Benefit in an amount equal to 100% of the balance in
his Account as of the Valuation Date concurring with or preceding the date of his death,
plus the amount of any contributions allocated subsequent to such Valuation Date.
(b) At any time and from time to time, each Participant shall have the unrestricted
right to designate a beneficiary to receive his death benefit and to revoke any such
designation. Each designation or revocation shall be evidenced by written instrument
filed with the Plan Administrator, signed by the Participant and bearing the signature of
a witness to his signature. In the event that a Participant has not designated a
beneficiary or beneficiaries, or if for any reason such designation shall be legally
ineffective, or if such beneficiary or beneficiaries shall predecease the Participant, then
the personal representative of the estate of such Participant shall be deemed to be the
beneficiary designated to receive such death benefit, or if no personal representative is
appointed for the estate of such Participant, then his next of kin under the statute of
descent and distribution of the state of such Participant's domicile at the date of his
15
death shall be deemed to be the beneficiary or beneficiaries to receive such death
benefit.
16
ARTICLE VIII
Form and Payment of Benefits
8.1 TiminQ and Form.
(a) (1) Except as otherwise provided in this Article VIII, the amount of the
retirement or death benefit to which a Participant is entitled under Sections 7.1 and 7.3
shall be paid to him or, in the case of a death benefit, shall be paid to said Participant's
beneficiary or beneficiaries as soon as practicable following the Participant's actual
retirement following his Normal Retirement Date or death, as the case may be.
(2) The amount of the termination of employment benefit to which a Participant is
entitled under Section 7.2 shall be paid to him as soon as practicable following his
termination of employment.
(3) Notwithstanding paragraphs (a)(1) and (a)(2), above, a Participant may elect to
defer the distribution of his benefit until any subsequent date elected by the Participant
in writing pursuant to such procedures as the Administrator may adopt, but in no event
later than the date described in subsection 8.1 (b).
(b) Notwithstanding anything contained herein to the contrary, any distribution paid
to a Participant (or, in the case of a death benefit, to his beneficiary or beneficiaries)
pursuant to paragraph (a) (1) shall commence not later than the last to occur of:
(1) April 1 of the year following the calendar year in which the Participant retires on
or after his Normal Retirement Date; or
(2) April 1 of the year immediately following the calendar year in which the
Participant reaches age 70-1/2.
@
(gl With respect to distributions under the Plan made for calendar years beqinninq
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 requlations
under section 401(a)(9) that were proposed on January 17. 2001, notwithstandinQ any
provision of the Plan to the contrary. This amendment shall continue in effect until the
end of the last calendar year beqinninq before the effective date of final reQulations
under section 401 (a)(9) or such other date as may be specified in Quidance published
by the Internal Revenue Service.
8.2 Manner of Payment.
(a) A Participant's retirement, death or termination of employment benefit may be
paid in one of the following optional forms as elected by the Participant, or in the case
of a death benefit, by the Participant's beneficiary or beneficiaries. The optional forms
are as follows:
(1) A lump sum payment.
17
(2) Monthly, quarterly or annual installments over a fixed period of time, not
exceeding the life of the Participant or the joint life and last survivor expectancy of the
Participant and his designated beneficiary.
(b) A Participant or his beneficiary may elect to receive the payment of any part or
all of the unpaid installments under paragraph 8.2(a)(2) above in a lump sum, in
accordance with rules and regulations promulgated by the Plan Administrator (and in
accordance with the Code).
(c) Each Participant shall have the right to designate a beneficiary for purposes of
the optional form of benefit payment described in paragraph 8.2(a)(2) above and to
revoke any such designation. Each designation or revocation shall be evidenced by
written instrument filed with the Employer and shall be effective upon filing with the
Employer.
(d) In the case of a retirement or termination of employment benefit, in no event
shall payment extend beyond the life or life expectancy of the Participant or the joint
lives or life expectancies of the Participant and his designated beneficiary. If the
Participant dies before receiving the entire amount payable to him, the balance shall be
distributed to his designated beneficiary at least as rapidly as under the method being
used prior to the Participant's death.
(e) I n the case of a death benefit, payment
(1) to the designated beneficiary shall begin within one year following the
Participant's death (unless the designated beneficiary is the Participant's spouse, in
which case such benefit shall begin no later than the date the Participant would have
reached 70-1/2) and shall not, in any event, extend beyond the life or life expectancy of
the designated beneficiary; or
(2) to any other beneficiary shall be totally distributed within five years from the date
of the Participant's death.
(f) The Participant (or his spouse) shall be permitted to elect whether life
expectancies will be recalculated for purposes of distributions hereunder.
(g) Notwithstanding the foregoing, payments under the Plan shall satisfy the
incidental death benefit requirements and all other applicable provisions of Section
401 (a)(9) of the Internal Revenue Code, the regulations issued thereunder (including
Prop. Reg. Section 1.401 (a)(9)-2, and such other rules thereunder as may be
prescribed by the Secretary of the Treasury).
8.3 Lump Sum Payment. NotvJithst3ndingFor Plan Years beginninQ on or after
January 1. 2002. notwithstandinq anything contained in this Plan to the contrary, any
benefit payable under the Plan, which is not more than $3,500,5.000. shall be paid in a
lump sum as soon as practicable following the Participant's termination of employment.
8.4 Periodic Adiustments. To the extent the balance of a Participant's Accounts
has not been distributed and remains in the Plan, and notwithstanding anything
18
contained in the Plan to the contrary, the value of such remaining balance shall share in
allocations of the income (or loss) of the Trust Fund pursuant to the provisions of Article
VI.
8.5 Location of Participant or Beneficiary Unknown. In the event that all, or any
portion of the distribution payable to a Participant or his beneficiary, hereunder shall
remain unpaid after five (5) Plan Years solely by reason of the inability of the
Administrator, after ending a registered letter, return receipt requested, to the last
known address, and after further diligent effort, to ascertain the whereabouts of such
Participant or his beneficiary, the amount so distributable shall be treated as a
forfeiture. In the event a Participant or beneficiary of such Participant is located
subsequent to his benefit being reallocated, such benefit shall be restored by an
additional contribution by the Employer.
8.6 Transfer to Other Qualified Plans. The Trustee, upon written direction by the
Plan Administrator, shall transfer some or all of the assets held under the Trust to
another plan or trust meeting the requirements of the Code relating to qualified plans
and trust, whether such transfer is made pursuant to a merger or consolidation of this
Plan with such other plan or trust or for any other allowable purpose.
8.7 Direct Rollovers.
(a) Notwithstanding any provisions of the Plan to the contrary that would otherwise
limit a distributee's (as defined below) election under this paragraph, 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 (as defined below) paid directly to an eligible
retirement plan (as defined below) specified by the distributee in a direct rollover (as
defined below).
(b) For purposes of this paragraph, the following terms shall have the following
meanings:
(1) 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 life expectancies) of the distributee and the
distributee's designated beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Code Section 401 (a)(9), and
the portion of any distribution that is not included in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
secu rities).
(2) An "eligible retirement plan" is an individual retirement account described in
Code Section 408(a), an individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a)., or 403(b). a deferred
compensation plan under Code Section 457 (b) or a qualified trust described in Code
Section 401 (a), that accepts the distributee's eligible rollover distribution. However, in
19
the case of an eligible rollover distribution to the surviving spouse, an eligible retirement
plan is an individual retirement account or individual retirement annuity.
(3) 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, as defined in Code Section 414(p), are distributees with regard to
the interest of the spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the eligible retirement plan
specified by the distributee.
8.8 Withdrawals from Rollover Contribution Accounts. A Participant, while still
employed, may request a withdrawal of all or a portion of his Rollover Contribution
Account at any time.
8.9 Withdrawals from Employer Contribution Accounts. A Participant who has
reached age 59% may request a withdrawal of all or a portion of his Employer or
Employee Contributions Accounts at any time. This section. as it relates to Employee
Contributions, is effective as of June 1. 1999.
20
ARTICLE IX
Trust Fund and Expenses of Administration
9.1 Name of Trustee. The Trust Fund shall be held by the Trustee, or by a
successor trustee or trustees, for use in accordance with the Plan under the Trust
Agreement. The Trust Agreement may from time to time be amended in the manner
therein provided. Similarly, the Trustee may be changed from time to time in the
manner provided in the Trust Agreement.
9.2 Expenses of Administration.
(a) (1) The assets of the Trust Fund may be used to pay all expenses of the
administration of the Plan and the Trust Fund, including the Trustee's compensation,
the compensation of any investment manager, the expense incurred by the Plan
Administrator in discharging its duties, all income or other taxes of any kind whatsoever
that may be levied or assessed under existing or future laws upon or in respect of the
Trust Fund, and any interest that may be payable on money borrowed by the Trustee
for the purpose of the Trust.
(2) The Employer may pay the expenses of the Plan and the Trust Fund. Any such
payment by the Employer shall not be deemed a contribution to this Plan.
(b) Notwithstanding anything contained herein to the contrary, no excise tax or other
liability imposed upon the Trustee, the Plan Administrator or any other person for failure
to comply with the provisions of any federal law shall be subject to payment or
reimbursement from the assets of the Trust.
(c) For its services, any corporate trustee shall be entitled to receive reasonable
compensation in accordance with its rate schedule in effect from time to time for the
handling of a retirement trust. Any individual trustee shall be entitled to such
compensation as shall be arranged between the Employer and the Trustee by separate
instrument; provided, however, that no person who is already receiving full-time pay
from the Employer shall receive compensation from the Trust Fund (except for the
reimbursement of expenses properly and actually incurred).
21
ARTICLE X
Amendment and Termination
10.1 Restrictions on Amendment and Termination of Plan. It is the present
intention of the Employer to maintain the Plan set forth herein indefinitely.
Nevertheless, the Employer specifically reserves to itself the right at any time, and from
time to time, to amend or terminate this Plan in whole or in part; provided, however, that
no such amendment:
(a) shall have the effect of vesting in the Employer, directly or indirectly, any interest,
ownership or control in any of the present or subsequent funds held subject to the
terms of the Trust Agreement;
(b) shall cause or permit any property held subject to the terms of the Trust
Agreement to be diverted to purposes other than the exclusive benefit of the
Participants and their beneficiaries or for the administrative expenses of the Plan
Administrator and the Trust;
(c) shall reduce the then vested interest of a Participant;
(d) shall reduce the Account of any Participant; or
(e) shall increase the duties or liabilities of the Trustee without its written consent.
10.2 Amendment of Plan. Subject to the limitations stated in Section 10.1, the
Employer shall have the power to amend this Plan in any manner that it deems
desirable, and, not in limitation but in amplification of the foregoing, it shall have the
right to change or modify the method of allocation of contributions hereunder, to change
any provision relating to the administration of this Plan and to change any provision
relating to the distribution or payment, or both, of any of the assets of the Trust.
10.3 Termination of Plan. The Employer, in its sole and absolute discretion, may
terminate this Plan and the Trust, completely or partially, at any time without any liability
whatsoever for such complete or partial termination. In any of such events, the affected
Participants, notwithstanding any other provisions of this Plan, shall have fully vested
interests in the amounts credited to their respective Accounts at the time of such
complete or partial termination of this Plan and the Trust. All such vested interests shall
be nonforfeitable.
10.4 Termination Procedure. In the event the Employer decides to terminate this
Plan and the Trust, after payment of all expenses and proportional adjustments of
individual Accounts to reflect such expenses and other changes in the value of the
Trust Fund as of the date of termination, each affected Participant (or the beneficiary of
any such Participant) shall then be entitled to receive any amount then credited to his
Account in accordance with the form of payment prescribed by Article VIII.
10.5 Initial Qualification of Plan. Notwithstanding the provisions of Section 10.1, if it
is finally determined that the Plan does not qualify under the Code, then, in that event,
22
the Plan shall terminate as of the date of such final determination and the Plan
Administrator shall direct the Trustee to pay the then aggregate of the balances in the
Employer Contribution Accounts to the Employer and the Rollover Contribution
Accounts to the appropriate Participants (provided such payment is made within one
year after the date of the final determination). The Participants and their beneficiaries
shall have no further rights under the Plan, the Trust or the Trust Fund, and the Trustee
shall be discharged of all obligations and duties under the Trust.
23
ARTICLE XI
Participant Direction of Account Investment
11.1 Participant Directed Investments. On the commencement of his participation
in the Plan, each Participant shall direct the Trustee to invest his Accounts in one or
more Directed Investment Funds made available by the Plan Administrator from time to
time. The Plan Administrator may provide each of the Directed Investment Funds
made available to Participants through shares of one or more investment companies or
mutual funds, segregated accounts invested in one or more of savings or notice
accounts, deposits in or certificates issued by a bank, insurance, annuity or other
investment contracts, or other appropriate investment vehicles.
11.2 Election Procedures. Except as may be otherwise provided by the Trust
Agreement or by any contract entered into by the Trustee or the Plan Administrator with
an investment manager appointed to manage all or any portion of the assets of the
Plan, each Participant's directed investment elections shall be made in writing upon his
commencement of participation in the Plan.
(a) A Participant shall designate the percentage of the balances of his Accounts and
future contributions to his Accounts to be allocated to any Directed Investment Fund.
(b) Subject to section 11.2(c), a Participant may revise his election effective as of
the first day of each Valuation Period. The Participant's revised election shall be
effective for contributions made to the Plan after the effective date of such revision, and
may be effective for the investment of balances previously allocated and remaining
credited to a Participant's Accounts. Any revised election with respect to future
contributions shall be subject to the percentage limitations established by the Plan
Administrator pursuant to section 11.2(a). If required by the Plan Administrator, any
revised election with respect to existing Account balances shall specify the specific
percentage, or dollar amount, of each Account to be transferred between Directed
Investment Funds.
(c) The Trustee shall make requested investments on behalf of each Participant
within a reasonable period after the receipt of directions from the Plan Administrator or
the Participant.
11.3 Failure to Desianate. If a Participant does not specifically designate the initial
investments for all of his Accounts at the time he becomes a Participant in the Plan, his
Accounts shall be invested in a stable value fund offered as one of the Directed
Investment Funds available to Participants until such time as he makes his initial
designation regarding his investments.
11.4 Charaes and Credits. A Participant's Accounts shall be divided into
sub-accounts to properly account for the Directed Investment Funds in which such
Accounts are invested. Each sub-account shall be adjusted as of each Valuation Date
in accordance with Article VI for purposes of (a) crediting dividends, interest, and other
income on the investments in a particular Directed Investment Fund, as well as all
24
realized and unrealized gains credited to that fund, and (b) charging individually
allocable expenses in connection with the investments in a particular Directed
Investment Fund, as well as all realized and unrealized losses charged to that fund.
Other charges or fees separately incurred and not charged to a Directed Investment
Fund, and incurred as a result of an election made by a Participant associated with the
investment of his Accounts, shall be charged against his Accounts in accordance with
Article VI.
11.5 Procedures. The Plan Administrator shall establish procedures regarding
Participant investment direction as are necessary, which procedures shall be
communicated to all Participants and applied in a uniform, nondiscriminatory manner.
25
ARTICLE XII
Miscellaneous
12.1 Alienation. No Participant or beneficiary of a Participant shall have any right to
assign, transfer, appropriate, encumber, commute, anticipate or otherwise alienate his
interest in this Plan or the Trust or any payments to be made thereunder; no benefits,
payments, rights or interests of a Participant or beneficiary of a Participant of any kind
or nature shall be in any way subject to legal process to levy upon, garnish or attach the
same for payment of any claim against the Participant or beneficiary of a Participant;
and no Participant or beneficiary of a Participant shall have any right of any kind
whatsoever with respect to the Trust, or any estate or interest therein, or with respect to
any other property or right, other than the right to receive such distributions as are
lawfully made out of the Trust, as and when the same respectively are due and payable
under the terms of this Plan and the Trust.
12.2 GoverninQ Law. This Plan shall be administered, construed and enforced
according to the laws of the State of Florida, except to the extent such laws have been
expressly preempted by federal law.
12.3 Gender. Throughout this Plan, and whenever appropriate, the masculine gender
shall be deemed to include the feminine and neuter; the singular, the plural; and vice
versa.
12.4 Forfeiture of Benefits for Specified Offenses.
(a) Notwithstanding anything to the contrary, any Participant who is convicted of the
following offenses committed prior to retirement, or whose employment is terminated by
reason of his admitted commission, aid or abetment of the following specified offenses,
shall forfeit all rights and benefits under this Plan, except for the return of his Employee
Rollover Contribution Account as of the date of termination. Specified offenses are as
follows:
(1) The committing, aiding or abetting of an embezzlement of public funds;
(2) The committing, aiding or abetting of any theft from the Employer;
(3) Bribery in connection with the employment of a public officer or employee;
(4) Any felony specified in Chapter 838, Florida Statutes (except ~838.15 and
~838.16);
(5) The committing of an impeachable offense;
(6) The committing of any felony by a public officer or employee who willfully and
with intent to defraud the public or the public agency, for which he acts or in which he is
employed, of the right to receive the faithful performance of his duty as a public officer
or employee, realizes or obtains or attempts to obtain a profit, gain, or advantage for
26
himself or for some other person through the use or attempted use of the power, rights,
privileges, duties or position of his public office or employment position.
(b) Conviction shall be defined as an adjudication of guilt by a court of competent
jurisdiction; a plea of guilty or a nolo contendere; a jury verdict of guilty when
adjudication of guilt is withheld and the accused is placed on probation; or a conviction
by the Senate of an impeachable offense. Court shall be defined as any state or federal
court of competent jurisdiction which is exercising its jurisdiction to consider a
proceeding involving the alleged commission of a specified offense.
(c) Prior to forfeiture, the Administrator shall hold a hearing on which notice shall be
given to the Participant whose benefits are being considered for forfeiture. Said
Participant shall be afforded the right to have an attorney present. No formal rules of
evidence shall apply, but the Participant shall be afforded a full opportunity to present
his case against forfeiture.
(d) Amounts forfeited from a Participant's Account under this Section 12.4 shall be
used to reduce future Employer contributions.
12.5 Claims Procedures.
(a) Claims for benefits under the Plan may be made by a Participant or a beneficiary
of a Participant on forms supplied by the Plan Administrator. Written notice of the
disposition of a claim shall be furnished to the claimant by the Administrator within
ninety (90) days after the application is filed with the Administrator, unless special
circumstances require an extension of time for processing, in which event action shall
be taken as soon as possible, but not later than one hundred eighty (180) days after the
application is filed with the Administrator; and, in the event that no action has been
taken within such ninety (90) or one hundred eighty (180) day period, the claim shall be
deemed to be denied for the purposes of subsection 12.5(b). In the event that the
claim is denied, the denial shall be written in a manner calculated to be understood by
the claimant and shall include the specific reasons for the denial, specific references to
pertinent Plan provisions on which the denial is based, a description of the material
information, if any, necessary for the claimant to perfect the claim, an explanation of
why such material information is necessary and an explanation of the claim review
procedure.
(b) If a claim is denied (either in the form of a written denial or by the failure of the
Plan Administrator, within the required time period, to notify the claimant of the action
taken), a claimant or his duly authorized representative shall have sixty (60) days after
the receipt of such denial to petition the Plan Administrator in writing for a full and fair
review of the denial, during which time the claimant or his duly authorized
representative shall have the right to review pertinent documents and to submit issues
and comments in writing. The Plan Administrator shall promptly review the claim and
shall make a decision not later than sixty (60) days after receipt of the request for
review, unless special circumstances require an extension of time for processing, in
which event a decision shall be rendered as soon as possible, but not later than one
hundred twenty (120) days after the receipt of the request for review. If such an
extension is required because of special circumstances, written notice of the extension
27
shall be furnished to the claimant prior to the commencement of the extension. The
decision of the review shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, with specific
references to the Plan provisions on which the decision is based.
28
ARTICLE XIII
Loans to Participants
13.1 Availability of Loans.
(a) The Plan Administrator, in accordance with its uniform
nondiscriminatory policy, may direct the Trustee, upon application of a
Participant who is actively employed by the Employer, to make a loan to
such Participant out of his vested Accounts upon application of the
Participant based upon the Participant's immediate and heavy financial
need (which shall be limited to the criteria set forth in paragraph (e) below).
Any such loan to a Participant shall be considered a Participant directed
investment under Article XI and without limitation shall be subject to the
provisions of Article XI.
(b) All loans must be requested in writing on an application
approved by the Plan Administrator and signed by the Participant. The
Employer must review and approve the application.
(c) The amount advanced, when added to the outstanding
balance of all other loans to the Participant from this Plan or any other
qualified retirement plan adopted by the Employer, may not exceed the
lesser of:
(1) $50,000, reduced by the excess, if any, of:
(A) the Participant's highest aggregate outstanding
balance of all loans from the Plan (or any other qualified
retirement plan adopted by the Participant's Employer) during
the one (1) year period ending on the day before the date on
which the loan is made, over
(8) the aggregate outstanding balance of all loans
from the Plan (or any other qualified retirement plan adopted
by the Participant's Employer) on the date on which the loan is
made; or
(2) 50% of the vested balance of the Participant's Accounts.
(d) The minimum amount that may be borrowed by the Participant
shall be $1,000.00.
(e) A loan will be authorized only in the event of an immediate and
29
heavy financial need. An immediate and heavy financial need shall be
deemed to include
(1) expenses of medical care (as defined in Section 213(d)
of the Code) incurred by the Participant or his spouse or
other dependents (as defined in Section 152 of the
Code) or necessary for such persons to obtain such
medical care,
(2) payments (other than mortgage payments) directly
related to the purchase of the Participant's principal
residence,
(3) payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant or his spouse, children or other dependents,
(4) payments necessary to prevent the eviction of the
Participant from his principal residence or the
foreclosure on the mortgage of such residence, or
(5) such other events as may be prescribed by the
Commissioner of the Internal Revenue Service in
revenue rulings, notices and other documents of general
applicability.
(f) A single loan may be outstanding at any time. After a loan has
been fully repaid, a new loan may not be made to the borrower for at least 30
days after the final payment has been made with respect to the prior loan.
(g) Notwithstanding the foregoing, no Participant shall be entitled
to borrow an amount that the Plan Administrator determines could not be
adequately secured by the portion of such Participant's Accounts that is
permitted to be held as security pursuant to applicable Department of
Labor Regulations.
(h) Any out-of-pocket legal and administrative costs incurred by
the Trustee as a result of a loan, or application for a loan, shall be paid by
the Participant who received or applied for such loan.
13.2 Time and Manner of Repayment. Any loan made under this Article
XIII shall be repayable to the Trust at such times and in such manner as may be
provided by the Administrator, subject to the following limitations:
(a) Each loan shall be secured by 50% of the vested interest of
the Participant in his Accounts. The Administrator shall not accept any
other form of security. Each Participant shall agree to have each required
30
loan payment deducted from his pay and remitted to the Trustee.
(b) Each loan shall bear interest at a reasonable rate and shall
provide for substantially level amortization of principal and interest no less
frequently than quarterly. The interest rate charged shall be comparable to
the rate charged by commercial lending institutions in the region in which
the Employer is located for comparable loans as determined by the Plan
Administrator at the time the loan is approved.
(c) Each loan shall be repaid within a specified period of time.
Such period shall not be less than twelve (12) months, nor shall such
period exceed five (5) years, unless the loan is used to acquire the
principal residence of the Participant.
13.3 Default. In the event of default, the Trustee, at the direction of the
Administrator, may proceed to collect said loan with any legal remedy available,
including reducing the amount of any distribution permitted under Article VIII by
the amount of any such loan that may be due and owing as of the date of
distribution or any other action that may be permitted by law. "Events of Default"
shall include any failure to make a payment of principal or interest attributable to
the loan when due; failure to perform or to comply with any obligations imposed
by any agreement executed by the Borrower securing his loan obligation; and any
other conditions or requirements set forth within a promissory note or security
agreement that may be required in order to ensure that the terms of the loan are
consistent with Commercially reasonable practices.
13.4 Effective Date. This article is effective for all purposes as of
November 1, 1999.
IN WITNESS WHEREOF, this Plan has been executed this
, ~2003.
day of
Countersigned:
CITY OF CLEARWATER, FLORIDA
By:
Brian J. Aungst
Mayor-Commissioner
William B. Horne II
City Manager
Attest:
Cynthia E. Goudeau
City Clerk
31