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HomeMy WebLinkAboutRES 89-107-ARESOLUTION 89-107A A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR AMENDING RESOLUTION 89-107 ESTABLISHING A DEFERRED COMPENSATION PLAN FOR THE EMPLOYEES OF THE CITY OF DIAMOND BAR WHEREAS, the City of Diamond Bar has employees rendering valuable services; and WHEREAS, the City of Diamond Bar has established a deferred compensation plan for such employees that serves the interest of the City of Diamond Bar by enabling it to provide reasonable retirement security for its employees, by providing increased flexibility in its personnel management system, and by assisting in the attraction and retention of competent personnel; and WHEREAS, the City of Diamond Bar has determined that the continuance of the deferred compensation plan will serve these objectives; and WHEREAS, amendments to the Internal Revenue Service Code have been enacted that require changes to the structure and allow enhancements of the benefits of the deferred compensation plan; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DIAMOND BAR, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The City of Diamond Bar hereby amends and restates the deferred compensation plan ("The Plan") in the form of "The ICMA Retirement Corporation Deferred Compensation Plan and Trust" (Appendix A). SECTION 2. The assets of the Plan shall be held in trust, with the City of Diamond Bar �.... serving as trustee, for the exclusive benefif of the Plan participants and their beneficiaries, and the assets shall not be diverted to any other purpose. The Trustee's beneficial ownership of Plan assets held in the ICMA Retirement Trust shall be held for the further exclusive benefit of the Plan participants and their beneficiaries; SECTION 3. The Plan will not permit loans. SECTION 4. The City of Diamond Bar hereby agrees to serve as trustee under the Plan. PASSED, APPROVED AND ADOPTED this 15th day of December,1998. Mayor I, LYNDA BURGESS, City Clerk of the City of Diamond Bar do hereby certify that the foregoing Resolution was passed, and approved and adopted at a regular meeting of the City Council of the City of Diamond Bar held on the 15th day of December, 1998, by the following vote: AYES: NOES: ABSENT: ABSTAINED: COUNCIL MEMBERS:Ansari, Herrera, Huff, MPT/O'Connor, M/Chang COUNCIL MEMBERS: None COUNCIL MEMBERS: None COUNCIL MEMBERS: None ATTEST: City eT,k of the City of Diamond. Bar 457 Plan Adoption Package Retain Document Deferred Compensation Plan Document and Trust,April 1998 APPENDIX A DEFERRED COMPENSATION PLAN & TRUST Article 1. Purpose The Employer hereby establishes the Employer's deferred Compensation Plan and Trust, hereafter referred to as the "Plan." The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer and the Employees' Beneficiaries in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan shall be an agreement solely between the 3m - plover and participating Employees. The Plan and Trust forming a part hereof are established and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. No part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposed other than the exclusive benefit of Participl ants and their Beneficiaries. Article H. Definitions 2.01 Account: The bookkeeping account maintained for each Parti--ipant reflecting the cumulative amount of the Pamcipant's Deferred Compensation, including any income, gams, loses, or increases or decreases in market valine atmbutabie to t'i,, Employer's investment of the Participant's Deferred Compensation, and further reflecting any (distribu- tions to the Participant or the Participants Beneficiary and any fees or expenses charged against such Participant's Deferred Compensation.�� 2.02 Accounting Date. Each business day that tho New York Stock Exchange is open for trading, as provid d in Section 6.06 for valuing the Trust's assets. 2.03 Administrator: The person or persons named to carry out certain nondiscretionary administrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Em- ployer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. 2.04 Beneficiary: The person or persons designated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Participant's death, unless otherwise provided in the Participant's Joinder Agreement. If no beneficiary is designated in the Joinder Agreements if the Designated Beneficiary predeceases the Participant, or if the designated Beneficiary does not survive the Participant for a period of fifteen (15) days, then the estate of the Participant shall be the Beneficiary. 2.05 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under section 6.09, or any other amount which the Employer agrees to credit to a Participant's Account. 2.06 Employee: Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, and who has been designated by the Employer as eligible to participate in the Plan. 2.07 Includible Compensation: The amount of an Employee's compensation from the Employer for a taxable year that is attributable to services performed for the Employer and that is includible in the Employee's gross income for the taxable year for federal income tax purposes; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income tax purposes. Includ- ible Compensation shall be determined without regard to any community property laws. 2.08 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a prefer- ence among the investment alternatives designated by the Employer, designate the Employee's Beneficiary or Benefi- ciaries, and incorporate the terms, conditions, and provisions of the Plan by reference. 457 Plan Adoption Package R=etain Document Deferred Compensation Plan Document and Trust, April 1998 APPENDIX A DEFERRED COMPENSATION PLAN & TRU'ST Article 1. Purpose The Employer hereby establishes the Employer's deferred Compensation Plan and Trust, hereafter referred to as the "Plan." The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer and the Employees' Beneficiaries in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan shall be an agreement solely between the Em- ployer and participating Employees. The Plan and Trust forming a part hereof are established and shall be maintained for the exclusive benefit of eligible Employees and their Beneficiaries. No part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposed other than the exclusive benefit of Participants and their Beneficiaries. Article Ii. Definitions 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Paftictpant'S Deferred Compensation, including any income, gains, loses, or increases or decreases in market value attributable to Employer's investment of the Participant's Deferred Compensation, and further reflecting any distribu- tions to the Participant or the Participant's Beneficiary and any fees or expenses charged against such Participant's Deferred Compensation. 2.02 Accounting Date: Each business day that the New York Stock Exchange is open for trading, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Administrator: The person or persons named to carry out certain nordiscretionary administrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Em- ployer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. 2.04 Beneficiary: The person or persons designated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Participant's death, unless otherwise provided in the Participant's Joinder Agreement. If no beneficiary is designated in the Joinder Agreements if the Designated Beneficiary predeceases the Participant, or if the designated Beneficiary does not survive the Participant for a period of fifteen (15) days, then the estate of the Participant shall be the Beneficiary. 2.05 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under section 6.09, or any other amount which the Employer agrees to credit to a Participant's Account. 2.06 Employee: Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, and who has been designated by the Employer as eligible to participate in the Plan. 2.07 Includible Compensation: The amount of an Employee's compensation from the Employer for a taxable year that is attributable to services performed for the Employer and that is includible in the Employee's gross income for the taxable year for federal income tax purposes; - such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income tax purposes. Includ- ible Compensation shall be determined without regard to any community property laws. 2.08 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a prefer- ence among the investment alternatives designated by the Employer, designate the Employee's Beneficiary or Benefi- ciaries, and incorporate the terms, conditions, and provisions of the Plan by reference. F ICNIA RbikMENT CORPORATION', _ 2.09 Normal Compensation: The amount of Com- pensation which would be payable to a Participant by the Employer for a taxable year if no Joinder Agreement were in effect to defer compensation under this Plan_ 2.10 Normal Retirement Age: Age 70-1/2, unless the Participant has elected an alternate Normal Retirement Age by written instrument delivered to the Administrator prior to Separation from Service. A Participant's Normal Retire- ment Age determines the period during which a Participant may utilize the catch-up limitation of Section 5.02 hereun- der. -Once a Participant has to any extent utilized the catch- up limitation of Section 5.02, his Normal Retirement Age may not be changed. A Participant's alternate Normal Retirement Age may not be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits under the Employer's basic retirement plan covering the Participant and may not be later than the date the Participant will attain age 70-1/2. If a Participant continues employment after attaining age 70 - 1 /2, not having previ- ously elected alternate Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by the Employer, or the age at which the Participant actually separates from service if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan maintained by the Employer, the Participant's alternate Normal Retirement Age niay not be earlier than age 55 and may not be later than age 70-1/2. 2.11 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article IV. 2.12 Plan Year: The calendar year. 2.13 Retirement: The first date upon which both of the following shall have occurred with respect to a participant: Separation from Service and attainment of age 65. 2.14 Separation From Service: Severance of the Participant's employment with the Employer which consti- tutes a "separation from service" within the meaning of Section 402 (d) (4) (A) (iii) of the Code. In general, a Participant shall be deemed to have severed his employment with the Employer for purposes of this Plan when, in accordance with the established practices of the Employer, the employment relationship is considered to have actually terminated. In the case of a Participant who is an indepen- dent contractor of the Employer, Separation from Service shall be deemed to have occurred when the Participant's contract under which services are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the participant's services, and is not antici- pated that the participant will become an Employee of the Employer. 2.15 Trust: The Trust created under Article VI of the Plan which shall consist of all compensation deferred under the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries. Article 111. Administration 3.01 Duties of the Employer: The Employer shall have the authority to make all discretionary decisions affecting -the rights or benefits of Participants which may be required in the administration of this Plan. The Employer's decisions shall be afforded the maximum deference permitted by applicable law_ 3.02 Duties of Administrator: The Administrator, as agent for the Employer, shall perform nondiscretionary administrative functions in connection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. Article IV. Participation in the Plan 4.01 Initial Participation: An Employee ma}x become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned. 4.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of compensation not yet eared which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restrictions as may result from the nature of terms of any investment made by the Employer)_ Such amendment shall become effective as of the beginning of the calendar month commencing after the date the amendment is executed_ A Participant may at any time amend his Joinder Agreement to change the designated Beneficiary, and such amendment shall become effective immediately. .............................................................................................I............... Two 457 Plan Adoption Package Retain Document Deferred Compensation Plan Document, April 1998 Article V. Limitations on Deferrals 5.01 Normal Limitation: Except as provided in section 5.02, the maximum amount of Deferred Compensation for any Participant for any taxable year shall not exceed the lesser of $7,500.00, as adjusted for the cost -of -living in accordance with Code section 457(e)(15) for taxable years beginning after December 31, 1996 (the "dollar limitation"), or 33-1/3 percent of the participant's Includible Compensa- tion• for the taxable year. This limitation will ordinarily be equivalent to the lesser of the dollar limitation in effect for the taxable year or 25 percent of the Participant's, Normal Compensation. 5.02 Catch -Up Limitation: For each of the last three (3) taxable years of a Participant ending before his attainment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of. (1) $15,000 or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if (i) the Participant was eligible to participate in the Plan for such year (or in any other eligible deferred compensation plan established under Section 457 of the Code which is properly taken into account pursuant to regulations under section 457), and (ii) compensation (if any) deferred under the Plan (or such other plan) was subject to the deferral limitations set forth in Section 5.01 5.03 Other Plans: The amount excludable from a Participant's gross income tinder this Plan or any other eligible deferred compensation plan under section 457 of the Code ,hall not exceed $7,500.00 (or such greater amount allowed under Sections 5.01 or 5.02 of the Plan), less any amount excluded from gross income under section 403(b), 402(a)(8), or 402(h)(1)(B) of the Code, -or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in section 501 (c)(18) of the Code. Article VI. Trust and Investment of Accounts 6.01 Investment of Deferred Compensation: A Trust is hereby created to hold all the assets of the Plan for the . exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trost as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investment Powers: The trustee or the Plan Administrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to investment of Trust assets, except to the extent that the investment of Trust assets is directed by Participants, pursuant to Section 6.05_ (a) To invest and reinvest the Trust without distinction between principal and income in common or preferred stocks, shares of regulated investment companies and other mutual funds, bonds, loans, notes, debentures, certificates of deposit, contracts with insurance companies including but not limited to insurance, individual or group annuity, deposit administration, guaranteed interest contracts, and deposits at reasonable rates of interest at banking institutions including but not limited to savings accounts and certificates of deposit. Assets of the Trust may be invested in securities that involve a higher degree of risk than investments that have demonstrated their investment performance over an extended period of time. (b) To invest and reinvest all or any part of the assets of the Trust in any common, collective or commingled trust fund that is maintained by a bank or other institution and that is available to Em- ployee plans described under sections 457 or 401 of the Code, or any successor provisions thereto, and during the period of time that an investment through any such medium shall exist, to the extent of participation of the Plans the declaration of -trust of such commonly collective, or commingled trust fund shall constitute a part of this PIan. ..........................................................................................................:.. Three ICMA RETIREMENT CORPORATION (c) To invest and reinvest all or ahy part of the assets of the Trust in any group annuity, deposit administration or guaranteed interest contract issued by an insurance company or other financial institution on a commingled or collective basis with the assets of any other 457 plan or trust qualified under section 401(a) of the Code or any other plan de- scribed in section 401 (a)(24) of the Code, and such con- tract may be held or issued in the name of the Plan Admin- istrator, or such custodian as the Plan Administrator may appoint, as agent and nominee for the Employer. During the period that an investment through any such contract shall exist, to the extent of participation of the Plan, the terms and conditions of such contract shall constitute a part of the Plan. (d) To hold cash awaiting investment and to keep such portion of the Trust in cash or cash balances, without liability for interest, in such amounts as may from time to time be deemed to be reasonable and necessary to meet obligations under the Plan or otherwise to be in the best interests of the Plan. (e) To hold, to authorize the holding of, and to register any investment to the Trust in the name of the Plan, the Employer, or any nominee or agent of any of the foregoing, including the Plan Administrator, or in bearer form, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by any other person, and to organize corporations or trusts under the laws of any jurisdiction for the purpose of acquiring or holding title to any property for the Trust, all with or without the addition of words or other action to indicate that property is held in a fiduciary or representative capacity but the books and records of the Plan shall at all times show that all such investments are part of the Trust. (� Upon such ternis as may be deemed advisable by the Employer or the Plan Administrator, as the case may be, for the protection of the interests of the Plan or for the preser- vation of the value of an investment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation owing to the Plan, to settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plans to exercise and enforce any and all rights of foreclosure, bid for property in foreclosure, and take a deed in lieu of foreclosure with or without paying consideration therefor, to commence or defend suits or other legal proceedings whenever any interest of the Plan requires it, and to represent the Plan in all suits or legal proceedings in any court of law or equity or before any body or tribunal. (g) To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. (h) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Plan Administrator, in any bank or banks. (i) To do any and all other acts that may be deemed neces- sary to carry out any of the powers set forth herein. 6.03 Taxes and Expenses: All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect to the -Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of investment and reinvest- ment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Plan Administrator, as may be agreed upon from time to time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Administrator in performance of its duties hereunder (including but not limited to fees for legal, accounting, investment and custodial services) shall also be paid from the Trust. 6.04 Payment of Benefits: The payment of benefits from the Trust in accordance with the terms of the Plan may be made by the Plan Administrator, or by any custodian or other person so authorized by the Employer to make such disbursement. The Plan Administrator, custodian or other person shall not be liable with respect to any distribution of Trust assets made at the direction of the Employer. 6.05 Investment Funds: In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/her Accounts to be invested in one (1) or more investment funds available under the Plan; provided, however, that the Participant's investment directions shall not violate any investment restrictions established by the Employer. Neither the Employer, the Administrator, nor any other person shall be liable for any losses incurred by virtue of following such directions or with any reasonable administrative delay in implementing such directions. ............................................................................................................ Four 437 Plan Adop'tion Package Retain Document Deferred Compensation Plan Document, April 1998 6.06 Valuation of Accounts: As of each Accounting Date, the Plan assets held in each investment fund offered shall be valued at fair market value and the investment income and gains or losses for each fund shall be determined. Such investment income and gains or losses shall be allocated proportionately among all Account balances on a fund -by - fund basis. The allocation shall be in the proportion that each such Account balance as of the immediately preceding Accounting Date bears to the total of all such Account balances as of that Accounting Date. For purposes of this Article, all Account balances include the Account balances of all Participants and Beneficiaries. 6.07 Participant Loan Accounts: Participant Loan Accounts shall be invested in accordance with Section 8.03 of the Plan. Such Accounts shall not share in any investment income and gains or losses of the investment funds described in Sections 6.05 and 6.06. 6.08 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the investments or other property obtained by the Employer through the investment of the Participant's Deferred Compensation pursuant to Sections 6.05 and 6.06. It is anticipated that the Employer's investments with respect to a Participant will conform to the investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be construed to require the Employer to make any particular investment of a Participant's Deferred Compensation. Each Participant shall receive periodic reports, not less frequently than annually, showing the then current value of his/her Account. 6.09 Transfers: (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and credited to a Participant's Account under the Plan if (I) the Participant has separated from service with that employer and become an Employee of the Employer, and (ii) the other employer's plan provides that such transfer will be made. The Employer may require such documentation from the predecessor plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure that transfers are provided for under such plan. The Employer may refuse to accept a transfer in the form of assets other than cash, unless the Employer and the Administrator agree to hold such other assets under the Plan. Any such transferred amount shall be treated as a deferral subject to the limitations of Article V, except that, for u!: purposes of applying the limitations of Sections 5.01 and 5.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been deferred under this Plan during such taxable year and compensation paid by the transferor employer shall be treated as if it had been paid by the Employer. (b) Outgoing Transfers: An amount may be transferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (i) the Participant has separated from service with the Employer and become an employee of the other employer, (ii) the other employer's plan provides that such transfer will be accepted, and (iii) the Participant and the employers have signed such agreements as are necessary to assure,that the Employer's liability to pay benefits to the Participant has been discharged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred tori pensation plan within the meaning of section 457 of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circumstances as are permitted under section 457 of the Code and the regulations Oj7 thereunder. 6.10 Employer Liability: In no event shall thel Employer's liability to pay benefits to a Participant under this Plan exceed the value of the amounts credited to the Participant's Account; neither the Employer nor the Administrator shall be liable for losses arising from depreciation or shrinkage in the value of any investments acquired under this Plan. .............................................................................................................. Five ICMA RETIREMENT CORPORATION Article VII. Benefits 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article Vll, the distribution of a Participant's Account shall com- mence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, and the distribution of such Retirement benefits shall be made in accordance with one of the payment options described in Section 7.02. Notwith- standing the foregoing, but subject to -the following para- graph of this Section 7.01, the Participant may irrevocably elect within 60 days following Separation from Service to have the distribution of benefits commence on a fixed determinable date other than that described in the preceding sentence which is at least 61 days after Separation from Service, but not later than April 1 of the year following the year of the Participant's Retirement or attainment of age 70- 1/2, whichever is later. Notwithstanding the foregoing provisions of this Section 7.01, no election to defer the commencement of benefits after a separation from service shall operate to defer the distribution of any amount in the Participant's Loan Account in the event of a default of the Participant's loan. Effective on or after January 1, 1997, the Participant may elect to defer the commencement of distribution of benefits to a fixed determinable date later than the date described above, but not Iater than April 1 of the year following the year of the Participant's retirement or attainment of age 70- 1/2, whichever is later, provided (a) such election is made after the 61st day following Separation from Service and before conimencenrent of distributions and (b) the Partici- pant may make only one (1) such election. Notwithstanding the foregoing, the Administrator, in order to ensure the orderly administration of this provision, may establish a deadline atter which such election to defer the commence- ment of distribution of benefits shall not be allowed. 7.02 Payment Options: As provided in Sections 7.01, 7.04 and 7.05, a Participant or Beneficiary may elect to have value of the Participant's Account distributed in accordance with one of the following payment options, provided that such option is consistent with the limitations set forth in Section 7.03. (a) Equal monthly, quarterly, semi-annual or annual pay- ments in an amount chosen by the Participant, continuing until his/her Account is exhausted; (b) One lump -sum- payment; (c) Approximately equal monthly, quarterly, semi-annual or annual payments, calculated to continue for a period certain chosen by the Participant. (d) Annual Payments equal to the minimum distributions required under Section 401(a)(9) of the Code over the life expectancy of the Participant or over the life expectancies of the Participant and his"Beneficiary. (e) Payments equal to payments made by the issuer of a retirement annuity policy acquired by the Employer. (f) A split distribution under which payments under options (a), (b), (c) or (e) continence or are made at the same time, as elected by the Participant under Section 7.01, provided that all payments commence (or are made) by the latest benefit commencement date under Section 7.01 and that once a payment is made subsequent payments will be made in substantially nonincreasing amounts. (g) Any payment option elected by the Participant and agreed to by the Employer and Administrator, provided that such option must provide for substantially nonincreasing payments for any period after the benefit commencement date under Section 7.01. A Participants or Beneficiary's selection of a payment option made after December 31, 1995, under Subsections (a); (c), or (g) above may include the selection of an automatic annual cost -of -living increase. Such increase will be based on the rise in the Consumer Price Index for All Urban Consumers (CPI -U) from the third quarter of the last year in which a cost -of -living increase was provided to the third quarter of the current year. Any increase will be made in periodic payment checks beginning the following January. The first cost -of -living increase will be based on the rise in the CPI -U from the third quarter of 1995 to the third quarter of 1996, and will be applied to amounts paid beginning January 1997. A Participant's or Beneficiary's election of a payment option must be made at least 30 days before the payment of benefits is to commence. If a Participant or Beneficiary fails to make a timely election of a payment option, benefits shall be paid monthly under option (c) above for a period of five years or such shorter period of time necessary to ensure that the amount of any installment is not less than $1,200 per year, without the inclusion of a cost -of -living increase. .............................................................................................................. Six 457 Plan Adoption Package Retain Document Declaration of Trust of the ICMA Retirement Trust, April 1998 7.03 Limitation on Options: No payment option may be selected by a Participant under subsections 7.02(a) or (c) unless the amount of any installment is not less than $1,200 per year. No payment option may be selected by a Partici- pant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of Sections 401(a) (9) and " 457(d)(2) of the Code, including that payments commencing before the death of the Participant shall satisfy the incidental death benefits requirement under section 457(d)(2)(B)(i)(]). A cost -of -living increase included as part of a payment option selected under Section 7.02 shall not be considered to fail to satisfy the requirement under section 457(d)(2)(b) that any distribution made over a period of more than one year can only be made in substantially nonincreasing amounts. Unless otherwise elected by the Participant (or spouse, in the case of distributions described in Section 7.05 below) by the time distributions are required to begin, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The life expectancy of a nonspouse Beneficiary may not be recalculated. 7.04 Post-retirement Death Benefits: (a) Should the Participant die after he/she has begun to receive benefits under a payment option, the remaining payments, if any, under the payment option shall be payable to the participant's Beneficiary within the 30 -day period counnencing with the 61st day after the Participant's death, unless the Beneficiary- elects payment under a different pay- inent opnnri tii.,t is available under Section 7.02 within 60 days ot'd, Participant's death. Any different payment option elected lav a Beneficiary under this section must provide for paynient� at a rate that is at least as rapid under the payment option that -,vas applicable to the Participant. In no event shall the Employer or Administrator be liable to the Benefi- ciary for the amount of any payment made in the name of the Participant before the Administrator receives proof of death of the Participant. (b) If the designated Beneficiary does not continue to live for the remaining period of payments under the payment option, then the commuted value of any remaining pay- ments under the payment option shall be paid in a lump sum to the estate of the Beneficiary. In the event that the Participant's estate is the Beneficiary, the commuted value of any remaining payments under the payment option shall be paid to the estate in a lump sum. 7.05 Pre -retirement Death Benefits: (a) Should the Participant die before he has begun to receive the benefits provided by Section 7.01, the value of the ilu�;jjlk Participant's Account shall be payable to the Beneficiary commencing within the 30 -day period commencing on the 91st day after the Participants death, unless the B'eueficiary elects a different fixed or determinable benefit continence -- merit date within. 90 days of the Participant's death. Such benefit commencement date shall be not later than the later of (i) December 31 of the year following the yea of the participant's death, or (ii) if the Beneficiary is the Participant's spouse, December 31 of the year in which the Participant would have attained age 70-1/2. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be paid in approximately equal annual installments over five years, or over such shorter period as may be necessary to assure that the amount of any annual installment is not less than $3,500. A Beneficiary shall be treated as if he/she were a Participant for purposes of determining the payment options available underlSection 7.02, provided, however, that the payment option chosen by the Beneficiary must provide for payments to the Beneficiary over a period no longer than the life expectancy of the Beneficiary, and provided that such period may not exceed (15) years if the Beneficiary is not the Participant's spouse. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant's Account shall be paid to the estate of the Beneficiary in a lump sum. In the event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. 7.06 Unforeseeable Emergencies: (a) In the event an unforeseeable emergency occurs, a Participant may apply to the Employer to receive that part of the value of his/her Account that is reasonably needed to satisfy the emergency need. If such an application is approved by the Employer, the Participant shall be paid only such amount as the Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itselfcause severe financial hardship. ............................................................................................................. Sever, L.— ICIVIA RETIREMENT CORPORATION (b) An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden unexpected illness, accident, or disability of the Participant or of a dependent (as defined in section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar and extraordinary unforeseeable circumstances arising as a result of events beyond the control of the Participant. The need to send a Participants child to college or to purchase a new home shall not be considered unforeseeable emergencies. The determination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. 7.07 Transitional Rule for Pre -1989 Benefit Elections: ]n the event that, prior to January 1, 1989, a Participant or Benefician, has commenced receiving benefits under a payintin option or has irrevocably elected a payment option or bei -f- commencement date, then that payment option or election shat remain in effect notwithstanding anv other provision of the Plan. 7.08 De Minimis Accounts: Notwithstanding the forego- ing provisions of this :'.nide, if the value of a Participant's Account does not exceed the dollar limit under section 411(a) (1 1) (A) of the Code and (a) no amount has been deferred under the Plan with respect to the Participant during the 2 -year period ending on the date of the distribu- tion and (b) there has been no prior distribution under the Plan to the Participant pursuant to this Section 7.08, the Participant inay elect to receive or the Employer may distribute the participants entire Account without the consent of the Participant. Such distribution shall be made in a lump sum. Article VIII. Loans to Participants 8.01 Availability of Loans to Participants: (a) Effective January 1, 1997,.the Employer may elect to inake loans available to Participants in this Plan. if the Employer has elected to make loans available to Participants, a Participant may apply for a loan from the Plan subject to the limitations and other provisions of this Article. (b) The Employer shall establish written guidelines govern- ing the granting of loans, provided that such guidelines are approved by the Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reasonably equivalent basis. 8.02 Terms and Conditions of Loans to Participants: Any loan by the Plan to a Participant under Section 8.01 of the Plan shall satisfy the following requirements: (a) Availability. Loans shall be made available to all Partici- pants on a reasonably equivalent basis. (b) Interest Rate. Loabs must be adequately secured and bear a reasonable interest rate. (c) Loan Limit. No Participant loan shall exceed the present value of the Participant's Account. (d) Foreclosure. In the event of default on any installment payment, the outstanding balance of the loan shall be a deemed distribution. In such event, an actual distribution of a plan loan onset amount will not occur until a distributable event occurs in the Plan. (e) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the Participant's Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. (� Amount of Loan. At the time the loan is made, the principal amount of the loan plus the outstanding balance (principal plus accrued interest) due on any other outstanding loans to the Participant from the Plan and from all other plans of the Employer that are qualified employer plans under section 72(p)(4) of the Code shall not exceed the least of: 1) 550,000, reduced by the excess (if any) of (a) The highest outstanding balance of loans from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over (b) The outstanding balance of loans from the Plan on the date on which such loan is made; or (2) One-half of the value of the Participant's interest in all of his/her Accounts under this Plan. ............................................................................................................. Ei,�hr 437 Plan AdoptionPackage Rrfa'in Document Declaration of Trust of the ICMA Retirement Trust, April 1998 (g) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant's in any calendar year. No loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. (h) Length of Loan. Any loan issued shall require the Participant to repay the loan in substantially equal install- ments of principal and interest, at least monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time (determined at the time of the loan is made) after the loan is made as the principal residence of the Participant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments and interest payments otherwise due may be suspended for up to one (1) year during an autho- rized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this subsection(h), with a revised payment schedule (within such term) instituted at the end of such period of suspension. (i) Prepayment. The Participant shall be permitted to repay the loan in whole or to pan at any time prior to maturity, without penalty. 0) Prommory Note. The loan shall be evidenced by a pronimory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. (k) Secmraty. The loan shall be secured by an assignment of the participant's right, title and interest in and to his/her Account. (I) Assignment or Pledge. For the purposes of paragraphs (f) and (y). assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. (m) Other Terms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualification of the Plan and Trust under section 457 of the Code, or to prevent the treatment of the loan for tax purposes as a distribution to the Participant. The Employer, in its discretion for any reason, may fix other terms and conditions of the loan, not inconsistent'with the provisions of this Article and section 72(p) of the Code. 8.03 Participant Loan Accounts: (a) Upon approval of a loan to a'Participant by the Em- ployer, an amount not in excess of the loan shall bIIe trans- ferred from the Participant's other investment fund(s), described in Section 6.05 of the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 8.01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. Neither the Employer, the Administrator, nor any other person shall be liable for any loss, or by reason of any breach, that results from the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repayment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other investment funds, in accordance with Section 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant's Loan Account. (d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the provisions of the Plan, governing the establishment and maintenance of Participant Loan Accounts. Article IX. Non -assignability 9.01 In General: Except as provided in Article VIII and Section 9.02, no Participant or Beneficiary shall have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and non -transferable. ........................................................... ICMA RETIREMENT CORPORATION 9.02 Domestic Relations Orders: (a) Allowance of Transfers: To the extent required under final judgement, decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Ac- count may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto in the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to authorize any amount to be distributed under the Plan at a time or in a form that is not pennitted under Section 457 of the Code. Any payment made to a person other than the Participant pursuant to this Section shall be reduced by required income tax withholding; the fact that payment is made to a person other than the Participant may not prevent such payment from being includible in the gross income of the Participant for withholding and income tax reporting purposes. (b) Release from Liability to Participant. The Employer's liability to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of the Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Employer and the Administrator are released from any further claim by the Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Participant has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Administrator to the Participant's last known mailing address, and (iii) the Partici- pant fails to obtain an order of the court in the proceeding relieving the Employer or Administrator from the obligation to comply with the judgment, decree, or order. (c) Participation in Legal Proceedings: The Employer and Administrator shall not be obligated to defend against or set aside any judgement, decree, or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action is borne by the Participant. In the event that the Participant's action (or inaction) nonetheless causes the Employer or Administrator to incur such expense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the Participant. In the course of any proceeding relating to divorce, separation, or child - support, the Employer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, fornier spouse, or child (including the legal representatives of the spouse, former spouse, or child), or to a court. Article X. Relationship to other Plans and Employment Agreements This Plan serves in addition to any other retirement, pen- sion, or benefit plan or system presently in existence or hereinafter established for the benefit of the Employer's employees, and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Em- ployer. Article XI. Amendment or Termination of Plan The Employer may at any time amend this Plan provided that it transmits such amendment in writing to the Adminis- trator at least 30 days prior to the effective date of the amendment. The consent of the Administrator shall not be required in order for such amendment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder if it disapproves of such amendment. The Employer may at any time termi- nate this Plan. ............................................................................................................ Tri ' 457 Plan Adoption Package Retain Document i Declaration of Trust of the ICMA Retirement Trust, April 1998 l I� S The Administrator may at any time propose an amendment to the Plan by an instrument in writing transmitted to the Employer at least 30 days before the effective date of the amendment. Such amendment shall become effective unless, within such 30 -day period, the Employer notifies the Administrator in writing that it disapproves such amend- ment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Adminis- trator hereunder. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under section 457 of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation deferred before the date of the amendment or termination. Article X11. Applicable Law This Plan and Trust shall be construed under the laws of the state where the Employer is located and is established with the intent that it meet the requirements of an "eligible deferred compensation plan" under Section 457 of the Code, as amended. The provisions of this Plan and Trust shall be interpreted wherever possible in conformity with the requirements of that section. Article XIII. Gender and Number The mascuhnc pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. .............................................................................................. ............ Eleven r 437 Plan Adoption Package Retain Docuni enI Declaration of Trust of rlhr ICMA Retirement Trust, %14p 1997 APPENDIX B DECLARATION OF TRUST OF THE ICMA RETIREMENT TRUST Article 1. Name and Definitions Section 1.1 Name: The name of the trust created hereby is the ICMA Retirement Trust. Section 1.2 Definitions: Wherever they are used herein. the following terms shalt have the following respective meanings: (a) Bylaws. The bylaws referred to in Section 4.1 hereof, as amended from time to time. (b) Deferred Compensation Plan. A deferred compensation plan established and maintained by a Public Employer for the purpose of providing retirement income and other deferred benefits to its employees in accordance with the provision of section 4;7 of the Internal Revenue Code. (c) Employees. Those employees who participate in Qualified Plans and; or Deterred Compensation Plans. (d) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer, or an agreement between RC and a Public Employer for acinuiiistrative services that is not a trust, in either case forthe purpose of investi ng and 2ch unistering the fiends set aside by such Employer in connection with its Deferred Compensation agreements �xrth its employees or in connection with its Qualified Plan, (e) Investment Contract. A non-negotiable contract entered into by the Retirement Trust with a financial institution that provides for a fixed rate of return on investment. (f) ICMA. The International City/County Management Association. (g) ICMA Trustees. Those Trustees elected by the Public Employers in accordance with the provisions of Section 3.1(a) hereof. who are also members or fommermembers of the Executive Board of ICMA. (h) RC Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of Section 3.1(a) hereof, are also members or former members of the Board of Directors of RC. (i) Internal Revenue Code. The Internal Revenue Code of 1986, as amended. 6) Investment Adviser. The Investment Adviser that enters into a contract with the Retirement Trust to provide advice with respect to investment of the Trust Property. (k) Portfolios. The separate commingled pools of investment established by the Investment Adviser to the Retirement Trust, under the supervision ofthe Trustees, for the purpose ofproviding investments for the Trust Property. (1) Public Employee Trustees. Those Trustees elected by the Public Employers who, in accordance with the provision of Section 3.1 (a) hereof, arefull-time employees ofPubltcEmployers. (m) Public Employer Trustees. Public Employers who serve as trustees of the Qualified Plans or Deferred Compensation Plans. (n) Public Employer. A unit of state or local government, or any agency or tnstrumentalm thereof, that has adopted a Deferred Compensation Plan or a Qualified Plan and has executed this Declaration of Trust. (o) .Qualified Plan. A plan that is sponsored by a Public Employer for the purpose of providing retirement income to its employees and that satisfies the qualification requirements of Section 101 of the Internal Revenue Code. (p) Public Employer Trust. A trust that is established by a Public Employer in connection with its Qualified Plan and that satisfies the requirements of Section 501 of the Internal Revenue Code, or a trust established by a Public Employer in connection with its Deferred Compensation Plan and that satisfies the requirements of Section 457(b) of the Internal Revenue Code. (q) RC. The International City Management Association Retirement Corporation. (r) Retirement Trust. The Trust created by this Declaration of Trust. (s) Trust Property. The amounts held in the Retirement Trust as provided in Section 2.3. The Trust Property shall include any income resulting from the investment to the amounts so held. (t) Trustees. The Public Employee Trustees, ICMA Trustees and RC Trustees elected by the Public Employers to serve as members of the Board of Trustees of the Retirement Trust. Article 11. Creation and Purpose of the Trust; Ownership of Trust Property Section 2.1 Creation: (a) The Retirement Trust was created by the execution of this Declaration of Trust by the initial Trustees and Public Employers and is established with respect to each participating Public Employer by adoption of this Declaration of Trust. (b) The Retirement Trust is hereby expressly made a part of the appropriate Qualified Plan or Deferred Compensation Plan of each Public Employerthat executes orhas executed this Declaration of Trust. Section 2.2 Purpose and Participation: (a) The purpose of the Retirement Trust is to provide for the commnmingled investment of funds held by the Public Employers in connectionwith their Deferred Compensation and Qualified Plans. Tire Trust Property shall be invested in the Portfolios, in Investment Contracts, and in other investments recommended by ............................................................................................................ Twrivc — --- - _ _- - - 4 5 7 Plan Adoption Package Retain Document Declaration of Trust of the ICMA Retirement Trust, May 1997 the Investment Adviser under the supervision of the Board of procedures set forth in the By -Laws. Trustees. No part of the Trust Property will be invested in securities issued by Public Employers. (b) Participation in the Retirement Trust is limited to (i) pension and profit-sharing trusts which are maintained by Public Employers and that are exempt under section 501(a) of the Internal Revenue Code because the Qualified Plans related thereto qualify under section 401(a) of the Internal Revenue Code and (ii) deferred compensation plans maintained by Public Employers under Section 457 of the Internal Revenue Code (and trusts maintained by such Public Employers in connection with such 457 plans). Section 2.3 Ownership of Trust Property: (a) The Trustees shall have legal title to the Trust Property. The Trust Property shall be held as follows: (i) for the Public Employer Trustees for the exclusive benefit of the Employees; or (ii) in the case of a Deferred Compensation Plan maintained by a Public Employer that has not established a Public Employer Trust for the plan, for the Public Employer as beneficial owner of the plan's assets. (b) The portion ofthe corpus and income ofthe Retirement Trust that equitably belongs to any Public Employer Trust may not be used for or diverted to any purpose other than for the exclusive benefit of the Employees (or their beneficiaries) who are entitled to benefits under such Public Employer Trust. (c) No employer's Public Employer Trust may assign any part of its equity or interest in the Retirement Trust, and any purported assignment of such equity or interest shall be void. Article III. Trustees Section 3.1 Number and Qualification of Trustees: (a) The Board ofTrustees shall consist ofnine Trustees. Five ofthe Trustees shall be full-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The remaining four Trustees shall consist of two persons who, at the time of election to the Board of Trustees, are members or former members of the Executive Board of ICMA, and two persons who, at the time of election, are members or former members of the Board of Directors of RC. One of the ICMA Trustees and one of the RC Trustees shall, at the time of electron, be full-time employees of Public Employers. (b) No person may serve as a Trustee for more than two terms in any ten-year period. Section 3.2 Election and Term: (a) Except for the Trustees appointed to fill vacancies pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of a majority of the voting Public Employers in accordance with the (b) At the first election of Trustees, three Trustees shall be elected for a term of three years, three Trustees shall be elected for a term of two years and three Trustees shall be elected for a term of one year. At each subsequent election, three Trustees shall be elected, each to serve for a term of three years and until his or her successor is elected and qualified. Section 3.3 Nominations: The Trustees who are full-time employees of Public Employers shall serve as the Nominating Committee for the Public Employee Trustees. The Nominating Committee shall choose candidates for Public Employee Trustee in accordance with the procedures set forth in the By -Laws. Laws. Section 3.4 Resignation and Removal: (a) Any Trustee may resign as Trustee (without need for prior or subsequent accounting) by an instrument in writing signed by the Trustee and delivered to the other Trustees and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instrument. Any of the Trustees may be removed for cause, by a vote of a majority of the Public Employers. (b) Each Public Employee Trustee shall resign his or her position as Trustee within 60 days of the date on which he or she ceases to be a full-time employee of a Public Employer. Section 3.5 Vacancies: The term of office of a Trustee shall terminate and a vacancy shall occur in the event of his or her death, resignation, removal, adjudicated incompetence or other incapac- ity to perform the duties of the office of a Trustee. In'the case of a vacancy, the remaining Trustees shall appoint such peas they hey in their discretion shall see fit (subject to the limitations;et forth in this Section), to serve for the unexpired portion of the term of the Trustee who has resigned or otherwise ceased to be a Trustee. The appointment shall be made by a written instrument signed by a majority of the Trustees. The person appointed must be the same type of Trustee (i.e., Public Employee Trustee, ICMA (Trustee or RC Trustee) as the person who has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation ofa vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not become effective priorto such retirement or resignation. Whenever a vacancy shall occur, until such vacancy is filled as provided in this Section 3.5, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge allithe duties imposed upon the Trustees by this Declaration. A written instru- ment certifying the existence of a vacancy signed by a majority of the Trustees shall be conclusive evidence of the existence of such vacancy. Section 3.6 Trustees Serve in Representative Capacity: By executing this Declaration, each Public Employer agrees that the Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collectively. 11, li, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I . . . . . . . . . . . Thirteen 457 Plan Adoption Package Retai-n Document Declaration of Trust of the ICMA Retirement Trust, May 1997 Article IV. Powers of Trustees Section 4.1 General Powers: The Trustees shall have the power to conduct the business of the Trust and to carry on its operations. Such power shall include, but shall not be limited to, the power to: (a) receive the Trust Property from the Public Employers. Public Employer Trustees or the trustee or administrator under any Employer Trust; (b) enter into a contract with an Investment Adviser providing, anmong other things, for the esrablishment and operation of the Portfolios, selection of the Investment Contracts in which the Trust Property may be invested, selection of the other investments for the Trust Property and the payment of reasonable fees to the Investment Adviser and to any sub -investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investinent Adviser and apprr ; e annually the contract with such Investment Adviser; (d) ii -n esc and reinvest the Trust Property in the Portfolios, the Investment Contracts and in any other investment recommended by the Investment Adviser, but not including securities issued by.. Public Employeri, provided that ifa Public Employer has directed that its monies be invested in one or more specified Portfolios or in an Investnment Conn— t. the Tnistees of the Retirement Trust shall invest such nnonies in accordance with such directions; (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in time best interest of the Retirement Trust created hereby without liability for interest thereon: (f) accept and retain for such time as they may deem advisable any securities or other property received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased as investment hereunder; (g) cause any securities or other property held as part of the Trust Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to hold any investments in bearer form, but the books and records of the Trustees shall at all tines show that all such investments are a part of the Trust Property; (h) make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) vote upon any stock, bonds, or other securities; give general or special proxies or powers of attorney with or without power of substitution; exercise anv conversion privileges, subscription rights, or other options, and make any payments incidental thereto: oppose, or consent to, or otherwise participate in, corporate reorganizations or to other changes affecting corporate securities, and delegate discretionary powers and pay any assessments or charges in connection therewith; and generally exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held as part of the Trust Property: (j) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contracts for the provision of administrative services; (k) borrow or raise money for the purposes of the Retirement Trust in such amount, and upon such terms and condinons, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30"x, of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety or any such borrowing; (I) incur reasonable expenses as required for the operation ofthe Retirement Trust and deduct such expenses from of the Trust Property; (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts and deduct such expenses from that portion ofthe Trust Property to which such expenses are properly allocable; (n) pay out of the Trust Property all real and personal property taxes, income taxes and other taxes of any and all kinds which, in the opinion of the Trustees, are properly levied, or assessed under existing or future laws upon, or in respect of, the Trust Property and allocate any such taxes to the appropriate accounts; (o) adopt, amend and repeal the Bylaws, provided that such Bylaws are at all times consistent with the terms of this Declaration of Trust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deferred Compensation Plan under Section 457 or a Qualified Plan under Section 401 of the Internal Revenue Code; (q) issue the Annual Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) in addition to conducting the investment program authorized in Section 4.1(d), make loans, including the purchase of debt obligations, provided that all such loans shall bear interest at the current market rate; (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set forth in paragraphs (b), (c) and (o) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indemnification of the Officers and Trustees of the Retirement Trust and purchase fiduciary insurance; (u) maintain books and records, including separate accounts for each Public Employer, Public Employer Trustee or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation or Qualified Plan of each Public Employer, and ............................................................................................................. Fourit en 457 Plan Adoption Package Retain Document' Declaration of Trust of the ICMA Retirement Trust, May 1997 (v) 'do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. Section 4.2 Distribution of Trust Property: Distributions of the Trust property shall be made to, or on behalf of, the Public Eniployer or Public Employer Trustee, in accordance with the terns of the Deferred Compensation Plans, Qualified Plans or Employer Trusts. The Trustees of the Retirement Trust shall be fully protected in making payments in accordance with the directions of the Public Employers, Public Employer Trustees or trustees or administrators of any Employer Trust without ascer- taining whether such payments are in compliance with the provisions of the applicable Deferred Compensation or Qualified Plan or Employer Trust. Section 4.3 Execution of Instruments: The Trustees may unanimously designate any one or more of the Trustees to execute any instrument or document on behalf of all, including but not limited to the signing or endorsement ofany check and the signing of any applications, insurance and other contracts, and the action of such designated Trustee or Trustees shall have the same force and effect as if taken by all the Trustees. Article V. Duty of Care and Liability of Trustees Section 5.1 Duty of Care: In exercising the powers hereinbe- fore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits for the Public Employers in connection with non -trusteed Deferred Compensation Plans and for the Public Employer Trust- ees, and shall perforin such acts with the care, skill, prudence and diligence in the circumstances then prevailing that a prudespt person acting um a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Section 5.2 Liability: The Trustees shall not be liable for any nustake of judgment or other action taken in good faith, and for any action taken or onutted in reliance in good faith upon the books of account or other records of the Retirement Trust, upon the opinion of counsel, or upon reports made to the Retirement Trust by any of its officers, employees or agents or by the Investment Adviser or any sub -investment adviser, accountant, appraiser or other expert or consultant selected with reasonable care by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and in accordance with the standard ofcare set forth in Section 5.1. Section 5.3 Bond: No Trustee shall be obligated to give any bond or other security for the performance of any of his or her duties hereunder. Article VI. Annual Report to Shareholders i The Trustees shall annually submit to the Public Employ- ers and Public Employer Trustees a written report of the trans"_ tions of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees. Article VII. Duration or Amendment of Retirement Trust Section 7.1 Withdrawal: A Public Employer or Public Em- ployer Trustee may, at any time, withdraw from this, Retirement Trust by delivering to the Board ofTrustees a written statement of withdrawal. In such statement, the Public Employer or Public Employer Trustee shall acknowledge that the Trust Property allocable to the Public Employer is derived from compensation deferred by employees of such Public Employer pursuant to its Deferred Compensation Plan or from contributions to the ac- counts of Employees pursuant to a Qualified Plan, and shall designate the financial institution to which such property shall be transferred by the Trustees of the Retirement Trust or by the trustee or administrator under an Employer Trust. -Section 7.2 Duration: The Retirement Trust shall continue until terminated by the vote of a majority ofthe Public Employers, each casting one vote. Upon termination, all of the Trust Property shall be paid out to the Public Employers, Public Employer Trustees or the trustees or administrators of the Employer Trusts, as appropriate. Section 7.3 Amendment: The Retirement Trust may be amended by the vote of a majority of the Public Employers, each casting one vote. Section 7.4 Procedure: A resolution to terminate or amend the Retirement Trust or to remove a Trustee shall be submitted to a vote of the Public Employers if: (i) a majority of the Trustees so direct, or; (ii) a petition requesting a vote signed by not less than 25 percent of the Public Employers, is submitted to the Trustees. Article Vlll. Miscellaneous Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Trust and the Retirement Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section 8.2 Counterparts: This Declarationmay be, executedby the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. ............................................................................................................. Fifteen