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2001-025-Approving A Revised Town Of Los Gatos Deferred Compensation Plan Amending And Restating The 457 Plan And Trust Custodial Document RESOLUTION 2001- 25 RESOLUTION OF THE TOWN OF LOS GATOS APPROVING A REVISED TOWN OF LOS GATOS DEFERRED COMPENSATION PLAN AMENDING AND RESTATING THE 457 PLAN AND TRUST CUSTODIAL DOCUMENT WHEREAS, the Town has employees rendering valuable services; and WHEREAS, the Town has established a .deferred compensation plan for such employees that serves the interests of the Town by enabling it to provide reasonable retirement security for its employees, by providing increased flexibility in its persomnel management system, and ~by assisting in the attraction and retention of competent personnel; and WHEREAS, the Town has determined that the continuance of the deferred compensation plan administered by the ICMA Retirement Corporation serves those objectives.; and RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa Clara, State of California, that the Town of Los Gatos hereby amends and restates the Deferred Compensation. Plan in the form of the ICMA Retirement Corporation Deferred Compensation Plan and Trust, attached hereto as Exhibit A; BE IT FURTHER RESOLVED, that the Town hereby executes the Declaration of Trust of the ICMA Retirement Trust, attached hereto as Appendix B, intending this execution to be operative withrespect to any retirement or deferred compensation plan subsequently established by the Town, if the assets of the plan are to be invested in the ICMA Retirement Trust. BE IT FURTHER RESOLVED, that the assets of the Plan shall be :held in trust, with the Employer serving as trustee, for the exclusive benefit of the Plan participants and their beneficiaries, and the assets shall not be diverted for any other purpose. BE IT FURTHER RESOLVED, that the Plan will not permit loans. BE IT FURTHER RESOLVED, that the Town hereby agrees to serve as trustee under t11e Plan. BE IT FURTHER RESOLVED, that the Town Manager shall be the coordinator for the program; shall receive necessary reports, notices, etc., from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Town, any reduired votes under the ICMA Retirement Trust; and is authorized to execute all necessary agreements with ICMA Retirement Corporation incidental to the administration of the Plan. Administrative duties to carry out the plan may be assigned to the .appropriate departments. PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of Los Gatos, California, held on t11e 19TH day of March, 2001 by the following vote: COUNCIL MEMBERS.: AYES: Randy Attaway, Steven Blanton, Sandy Decker,. Steve Gliclcrnan, Mayor Joe Pirzynslci. NAYS: None ABSENT: None ABSTAIN: None /~' SIGNED: ~'" M R OF THE T OF LOS GATOS LOS GATOS, CALIFORNIA ATTEST: ~..0 CLERl~ OF 'THE TOWN OF S GATOS LOS GATfJS, CALIFORNIA S;\HR0319!08.wpd 4i7 Plan Adoption Pdckagc Rr'tarn(n„rumcnf Dc(eur~' Co rn p r nsaf i o n Plan Darn nr r n f a n d '1 s l, April 11 J 8 APPENDIX A DEFERRED COMPENSATION PLAN TRUST .Article I. 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 ofthe Internal Revenue Code of 1y86, 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 $eneficiaries. 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 11. Definitions 2'.D1 Account: The bookkeeping account maintained for each Participant reflecting the cumulative .amount of the Participant's :Deferred Compensation, :including any income, gains, losses, or .increases or decreases in market value attributable to the 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 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- plover shall name another person or persons to .act as Administrator. The Administrator may resign upon h0 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.Oy, or any other amount which the Employer agrees to credit to a Participant's Account. 2.06 Ernployee: 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 Inclixdible 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(6) ofthe Code or any other amount excludable from .gross income for Federal income tax purposes. Includ- ible Compensation shall be determined without .regard. to any comnumity 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. Onc lCMA RETIREMENT 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 lirriitation 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 xetire 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. Ifa 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 Employerhas no mandatory retirement age. 'If the Participant will-not become eligible to receive benefits ender a basic retirement plan maintained by the Employer, the Participant's alternate Normal Retirement Age may 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 bo a participant: Separation from Service and attainment of age h5. 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 mo 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 participarit will become an Employee ofthe Employer. '2.15 Trust: The Trust created under Article V{ 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 IV. 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 may 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 earned which is to be deferred {including the reduction ofsuch future deferrals. to .zero) or to change his investment preference (subject to such restrictions as may result from the nature ofterms of any investment made by the Employer). Such amendment. shall become effective as ofthe 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. Twn S7 Plan AdoNria,n Parkagc Rc(ain ( umen( D rJ~c rrc d Ca mµc nsa (i o n Plan Doru m c n (, April 1 l J 8 Article 9/. Limitations on Deferrals 5.01 Normal Limitation: Except as provided in section 5.02., the anaximum 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 Gode section 457(e)(15) for taxable years beginning after December 31, 199( {the "dollar limitation"), or 33-1 /3 percent ofthe participant's Includible Compensa- lion 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 O 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 con-tpensation 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 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 Trust as provided in .Section h.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 deraionstrated their investment performance. over an extended .period of time, 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 shall 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)(1S) of the Code.. (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 Employee plans described under sections 457 ar 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 :Plan. .............,.,,Thrcr....,.,,....,.,..,,.......,,..,,...,..,,.,.,....,..... (~ ICMA RETIREMENT CORPORAT1O11s (c) To invest and .reinvest all or any part of the assets ofthe 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) ofthe Code or any other plan de- scribed in section 401 {a){24) of the Code, and such con- tract iay be held or issued in the name of the Plan Admin- istrator, or such custodian as the Plan Administrator tnay 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 artd to keep such .portion of the Trust in cash or cash balances, without liability for interest, in such amounts as tray 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 o£ 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, w$en so deposited, such securities maybe merged and held in bulk in the :name of the nominee ofsuch 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. (i) Upon such terms as may be deemed advisable by the Errtployer 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 he 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 oc without paying considexation therefor, to conultence 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 baulk account or accounts in the name of the Plan, the Employer, or any notaiinee or agent of the foregoing, including the Plan Administrator, in any bank or banks. {i) To do any at~d 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 maybe 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 he Plan Administrator in performance of its duties hereunder (including but not limited to fees for legal, accounting, investt~tent 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 Adtilinistrator, or'by any custodian or other person o 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 tray direct his/.her Accounts to be invested in one (1) or more investment fonds 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, ..,,..F.,ur ...........................................,.....,... 7 Pl n rr ~ Ao p t i a n Patk ag c R„~!a i n ~ to m i n t Dej'rxrrA ConiJrcnsatiurr Plnu Dnremcut, April l %?S 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 ncotlle and gains or losses shall be allocated proportionately among all Ac:countbalances on a fund-by- fund basis. The allocation shall be in the proportion that each such Account Valance 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 C.Oh. 6.08 Crediting of Accounts: Tlie Participant's Account shall reflect the .amount and value of the investments or other property obtained by the Employer through the investment ofthe 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 niay 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 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 he 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 uiiay require such documentation .from the other 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. Such .transfers shall be .made .only under such circumstances as are permitted under section 457 of the Code and the regulations thereunder. 6.10 Employer Liability: In no event shall the 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 EiiZployer nor the Administrator shall be liable .for losses arising.from depreciation or shrinkage in the value of any investments acquired under this .Plan. ICMA RETIREMENT CORPORATIOf~~ Article UI1. 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 anade 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 Ehe foregoing provisions ofthis 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 ofa 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 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, provided (a) such election is made after the 61st day following Separation from Service and before commencement 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 after 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 ofthe Participant's Account distributed in accordance with one of the following payment options, provided that such option is consistent with the imitations 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 miniuiuna 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 anal .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 onincreasing 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 Participant's 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 Prue 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. tiny increase will be made in periodic payment checks beginning the following January. The first cost-of-living increase will be based on ehe rise in the CPI-U from the third .quarter of 199:5 to the third quarter of T996, and will be applied to amounts paid beginning January 1097. 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 ofany installment is not less than $1,200 per year, without the inclusion of acost-of-living increase. ~/ ~ 7 P I n n ,4 rl n p r ~ n rr P n t k n ,q a R r ~ rr i u ~ . rr nr r u r 1J r•, 1rr rn r r n rr u/ Tr us! u( ! h r 1 C r6•I A R rl r rr rn cn I Tru sI , A p rr I I J Y 8 7..03 Limitation on Options: I`1o 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)(1). A cost-of-living increase included as part ofa 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 overa period ofanore than one year can only be anade 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 commencing with the E~1st :day after the Participant's death, unless the Beneficiary elects payment under a different pay- iiient option that is available under Section 7.02 within CO days of the Participant's death. Any different payment option elected'by a Beneficiary under this section must provide for payments at a rate that is at east as .rapid under the payment option that was applicable to the Participant. Tn 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 ofany 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 11e has. begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary contnencing within the 30-day period conunencing on the ~)lst day after the Participant's death, unless the Beneficiary elects a different fixed or determinable benefit commence-- ment 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 year 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. (h) 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 under Section 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 ap- proved 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 itself cause severe financial .hardship. ...... ~ ...................~......~....Scvcy......~....~............................,.......... ICMA RETIREMENT CORPORATIO~~ (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 1.52'(x) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar and exhaordinary unforeseeable circumstances arising as a result of events beyond the .control of the Participant. The need to seed a Participant's 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: In the event that, prior to January 1, 1~~8~~, a Participant or Beneficiary has commenced .receiving benefits under a paytne.nt option or has irrevocably elected a payment option or benefit conunenceinent date, then that payment option or election shall remain in effect notwithstanding any other provision of the Plan. 7.08 De Minimis Accounts: Notwithstanding the forego- ing provisions of this Article., if the value of a Participant's Account does not exceed the .dollar limit under section 411(x) (11) (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.D8, the Participant may elect to receive or the Employer may distribute the participant's entire Account without the consent of the .Participant. Such distribution shall be :made in a lump sum. Article VI11. Loans to Participants 8.01 Availability of Loans to Participants: (a) Effective January 1, 1~)c)7, the Employee niay elect to make 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:U1 of the Plxu shxl'1 satisfy the following requirements: (a) Availability. Loans shall be made available to all Partici- pants on a reasonably equivalent basis. {b) lnterest Rate. Loans 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.. Ian the event of default on any installment payment, the outstanding balance of khe loan shall be a deemed distribution. In such event, an actual distribution of a plan loan offset 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, Uut only if the reduction is used as repayment of the loan. (f).Amount of Loan. At the time E'he 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) $5D,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) Cane-half of the value of the Participant's interest in all of his/her Accounts under this Plan. Plnn AAnplrnn Parka,gc Rrfain Du~ icnf D rrl a ra f i o rt of Tvus r of f h c I C.'41 A R c f i rr nt r• o f Trv+s f, A p r i l 1 J'I X (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 ifan 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 mot 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- sized 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 ofsuch period of suspension. (i) Prepayment. The Participant.shall be permitted to repay the loan in whole or in part at .any time prior to maturity, without penalty. Q) Promissory Note. 'The loan shall be evidenced by a promissory .note executed by the .Participant and delivered to .the Employer, and shall bear interest at a reasonable .rate determined by the Employer. (k) Security. The loan shall be secured by an assignment of the participant's right, title and interest in and to ,his/her Account. 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 ofthe loan shall be 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 fora ..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 h:05 of the Plan, as of the next Accounting Date after payment xhereofto 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. (d) .Assignment or Pledge. For the purposes of paragraphs (f) and (g), assigmnent 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, fio maintain the qualification of the .Plan and Trust .under section 457 of the Code, or to prevent the treatment of the Goan for tax ,purposes as a distribution to the Participant. 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-eransferable. ...............................Ninc.•...........•...................•.....•...........,.. ICMA RETIREMENT CORPORAT'10( 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 ofsuch 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 Ue 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 ofpayment. 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 permitted 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 deeraied 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 ofsuch proceeding in the manner prescribed by the law ofthe jurisdiction in which the proceeding is pend{ng 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 bhe 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 frill expense ofsuch 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 informatian relating to the Participant's Account to the Participant's spouse, former 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 ofthe 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 ilodify the terms of any employment contract or agreement between a Participant and the Em- ployer. Article XI. Amendment or Termination of Plan The Employer Iiaay 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 ofsuch. amendment. The Employer may at any time termi- Hate .this .Plan. ..........Terr ..............................~.............,...,..,.. 7 Plan Arloplian ParkaXc Retain L~ omen.! Derlnralian of Trrrsf u( (he (CMA Re(irrmen( Trnsl, April 1 )98 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 ofsuch disapproval, the Administrator shall be under no obligation to continue acting as Adnzinis- 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 xo 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 XI1. 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 X111. Gender and Number The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. Eleven ~ 7 Plan A AoP t i o n Package R rf a ivr C(" i ur c n t Declaration n( Tresf of the ICMA Retirrrnent 1'ru.<t, i14ay 19%7 DECLARATION OF TRUST DF THE ICMA RETIREMENT TRUST Article 1. Marne and ®efinitions 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 terns shall 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 $57 of the Internal Revenue Code. (c) Employees. Those employees who participate in Qualified Plans and/or Deferred Compensation Plans. (d) Employer Trust. A tnist createdpursuant to an agreement between ICMA-RC and a Public Employer, or an agreement between ICMA-RC and a Public Employer for adnunistrative services that is not atnist, in either case forthe purpose ofinvesting and adnunistering the .funds set aside by such Employer in .connection with its Deferred Compensation agreements with its employees or in connection with its Qualified Plan. (e) Investment Contract. Anon-negotiable contract entered into by the Retirement Trust with a financial institution that provides fora 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 orfotnt.ermembers ofthe Executive Board of ICMA. (h) ICMA-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 ICMA-RC. (i) Internal Revenue Code. The Internal Revenue Code of 1980, as amended. {1) Public Employee Trustees. Those Tntstees elected by the Public .Employers who, in accordance with the ..provision of Section 3.1 (a) hereof, are frill-time employees ofPublicEmployers. (m) Public Employer Trustees. Public Entp'loyers who serve as trustees of Ehe Qualified Plans or Deferred Compensation Plans. (n) Public Employer. A unit of state or local government, or any agency or instrumentality 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 401 of the Internal Revenue Code.. (p) Public .Employer Trust. A tntst that is established by a Public Etatployer 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) ofthe Internal Revenue Code. (q) ICMA-RC.The International City Management Association Retirement Corporation. (r) Retirement Trust. The Trust created bytlus 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 he amounts so held. (t) Trustees. The Public Employee Trustees, ICMA Trustees andICMA-RC Trustees elected bythe Public Employers to serve as members of the Board ~f Trustees of the Retirement Tntst. Article 11. Creation .and .Purpose of the Trust; Ownership of Trust Property Section 2.1 Creation: (a) The Retirement Trust was created by the execettion of tlus Declaration ofTnist by the initial Trustees and Public Employers and is established with respect to eachparticipatingPublic Employer by adoption ofthis Declaration of Trust. (b) The Retirement Trust is hereby expressly made a part of the appropriate Qualified Plan or Deferred Compensation Plan of eachPublic Employerthat executes or has executed this Declaration of Tnist. (j) 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 conmtingled pools of investment established by the Investment Adviser to the Retirement Trust, underthe supervision ofthe Trustees,. for the purpose ofproviding investments for the Trust Property. Section 2.2 Purpose and Participation: (a) The purpose of the Retirement Trust is o provide for the commingled investment offunds held by the Public Employers in connection with their Deferred Compensation and Qualified Plans, The Trust Property shall be invested in the Portfolios, in Investment Contracts, and in other investments recommended by Twc(ve 7 Plan A:dnpfinn Pnrkn,Qe Rrt,rin 1( arncnt Derl arnrion o(~ Trrrsf n( flrr ICMA Rr~f rrrmrn r Trnsr, .Play 1 9l7 the Investment Adviser under the supervision of the Board of .majority of the voting Public Employers in accordance with the Trustees. No part of the Trust Property will be invested in procedures set forth in the By-Laws. securities issued by Public Employers. (b) Participation in the Retirement Tntst is limited to (i) :pension and profit-sharing trusts which are maintainedby Public Employers and that are exempt under section 501(a) of the Internal Revenue Code because the Qualified Plans related .thereto qualify under section 4D1(a) of the .Internal Revenue Code and (ii) deferred conrpensationplansmaintainedbyPublicEmployers under Section 457 ofthe Internal Revenue Code (and tntsts maintainedby 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 Tnist Property. The Trust Property shall be 'held as .follows: (i) for the Public Employer Trustees for the exclusive benefit ofthe Employees; or (ii) in the case of a Deferred Compensation Plan maintained by a Public Employertlrat has tZOt established a Public Employer Trust for the plan, for the Public .Employer as beneficial owner o£ 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 raider such Public Employer Trost. (c) No employer's Public Employer Trust may assign any part of its equity or interest in the Retirement Tnist, and any purported assignment of such .equity or interest shall be void. Article 111. Trustees Section 3.1 Number .and Qualification of Trustees: (a) The Board ofTrustees shall consist of nine Trustees. Five ofthe Trustees shall be frill-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The remaining four Tntstees shall consist of two persons who., at the time of election to .the Board. of Trustees, are .members or fornzer members of the Executive Board of ICMA, and two persoris who, at the time of election, are members or fonnerruernbers ofthe Board of Directors of ICMA- RC. One of the ICMA Trustees and one of the ICMA-RC Trustees shall, at the time of election, be full-time employees of .Public Employers. (b) No person may serve as a Trustee for more than two ternis 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 (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 terna of two years and three Trustees shall be elected for a term of one year. At each subsequent election, three Tntstees shall be elected, :each to serve for a terns of three years and until his or her successor is elected and .qualified. Section 3.3 Nominations: The Tntstees who are frill-time employees of Public Employers shall serve as the Nonunating Conurtittee for the Public Employee Trustees. The Nonunating Committee shall choose candidates .for Public Employee Trustee in accordance with the procedures set forth in the By-Laws. .Section 3.4 .Resignation and Removal: {a) .Any Trustee may resign as Trustee (without need for prior or subsequent accounting) by an instnuuent in writing signed by the Trustee and delivered to the other Trustees and such resignation shall be effective upon such delivery, orat a later date according to the ternrs of the instrument. Any of the Trustees maybe removed for cause, by a vote of a majority of the Puhlc Employers. (b) Each Public Et~rployee Tnistee shall resign his or her position as Trustee within 60 days ofthe date on which lie or she ceases to be a full-time employee of a Public Employer. Section 3.5 Vacancies: The terns of office of a Trustee shall temtinate anda vacancy shall occur in the event ofhis 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 Tntstees shallappointsuch person as they in their discretion shall see fit (subject to the limitations set forth in this Section), to serve for th'e unexpired portion ofthe terns 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 n-rust be the same type of Trustee (i.e„ PublicEmployee Tnistee, ICMA Tnutee or ICMA-RC Trustee) as the person who has ceased to be a Trustee. An appointment. of a Trustee .may be made in anticipation of a vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not become effective prior to 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 all the duties imposed upon the Trustees by tlus Declaration. A written instrument certifying the existence ofa vacancysigned by a majority of the Trustees shall be conclusive evidence of the existence ofsuch 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. T hirtecn 4:S( rlan ArlnNrian Rarkagc Rrlarn Dar Drrlarafinn a.( Trusf ar' flit ICh1A Reiirrrrtracf Trrrsl 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 carryon its operations. Suchpower shall include, but shallnot'be linuted 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, among other things, for the establislunent and operation of the Portfolios, selection of the lnvestment Contracts in which the Trust Property maybe invested, selection ofthe other investments for the Trust Property and the payment of reasonable fees to the Investment Adviser and to anysub-:investment adviser retained by the :Investment .Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contract with such Investment Adviser; (d) invest 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 Employers, provided that if a Public Employer has directed that its .monies be invested in one or more specified .Portfolios or in an Investment Contract, the Trustees of the Retirement Tntst shall .invest such monies in accordance with such directions; (e) keep such portion of the Trust Property in cash or .cash balances as the Trustees, from time to time, .may deem to'be in the best interest 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 invesnnent hereunder; {g) cause any securities or other property held as part ofthe Tnist Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to Bold any investments in bearer form, but the books and records of the Trustees shall at all times show that all such investments area .part of the Trust Property; {h) .make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any .and all other instrtunents that uzay 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 any conversion privileges,subscription rights, or other options, and .make 'any payments .incidental thereto; oppose, or cousetit to, or otherwise participate in, corporate reorganizations or to other changes affecting corporate securities, aucl delegate discrettottary powers and pay any assessments or charges in connection therewith; and generally exercise any ofthe .powers of an owner with respect to stocks, :bonds, securities or other property :held as part of the Trust Property; of A1ay 19%7 (j) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not linuted 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, andupon such teens=uul conditions, as the Trustees shall deem advisable, providedthatthe aggregate amount of such borrowings shall not exceed 30'% of the value ofthe 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 Tntst .and deduct such expenses from of the Trust Property; (tri) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts anddeducC such expenses fromthat portion ofthe TnistPxoperty 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 ofthe Trustees, are properly levied, or assessed under existing or litture 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#enus oftlus Declaration of Tnist; {p) employ persons to make available interests in the Retirement Trust to employers eligibleto maintain a Deferred Compensation Plan under Sectian 4'57 ou`a'Qualified Plan under Section 401 of the Internal Revenue Code; {q) :issue the Annual Report of the Retirement Trust, and the disclosure docutments and other literature usedby the Retirement Trust; (r) in addition to conducting the investment progrvm authorized in Section 4.1(d), make loans, including the purchase of debt obligations, provic{ed that all Bach loans shall bear :interest at tlae current market rate; (s) contract for, attd delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees tnay select, .provided that the Tnistees may not delegate the powers set forEh in paragraphs (b), (c) and (o) of this Section 4.1 and may riot delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indenuufication of the Officers and Trustees of the Retirement Trust and purchase fiduciary :insurance; {u) utaiutain 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 Fourrrcn ~ S/ Pl a rr ,'I r1 u p f i u n ParA a,~r R r f ~r i n Dor(~ r o f Derlnruhion~ Tritsl of the ICib1A Retirrmrnr Tr'1. ,Iluy 1'l l7 {v) doall such acts, take all such proceedings, and exercise allsuch rights and privileges, although not specifically mentioned herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and o carry out the purposes ofthe Retirement Trust.. Section 4.2 Distribution ofTrust Property: Distributions of the Trust property shall be anade to, or on behalf of, the Public Employer or Public Employer Trustee, in accordance with the terms of the .Deferred Compensation Plans, Qualified Plans or Employer Tntsts. 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 ormore ofthe Trustees to execute any instrument or document on behalf o,f all, including but not litiutedto the signing or endorsement ofahy 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 Tntstees, the Tntstees shall perfori 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 perform such acts with the care, skill, prudence and diligence in the circumstances then prevailing that a prudent person acting in a like capacity and fanaliar 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 table for any .mistake of judgment or other action taken in good faith, and for any action taken or omitted in reliance in .good faith upon the books of account or other records ofthe 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 Tntstees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and itr accordance with the standard ofcare set forth insertion 5.1. Article VI. Annual .Report to Shareholders The Trustees shall annually submit to the Public Enrploy- ers and Public Employer Tntstees a written .report of the transac- tons of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees, Article VI1. 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 ofTntstees 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 thefinancial 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 terunatedby the vote ofa majority of the Public Employers, each casting one vote. Upon emanation, all of the Trust Property shall be paid out to the Public Employers, Public Employer Trustees or the trustees or adnanistrators of the Employer Tntsts, as appropriate. Section 7.3 Amendment: The Retirement -Trust n>ay be amended by the vote of a majority ofthe Public Employers, each casting one vote, Section 7.4 Procedure: A resolution to terminate or amend the Retirement Tntst 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 subntted to the Tntstees. Article VIIL'Miscellaneous Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Taut and the Retirerttent Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section'$.2 Counterparts: This Declaration maybe executed by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of wlach together shall constitute one and the same .instrument. Section 5.3 Bond: No Trustee shall be obligated to .give any bond or other security for the perfomrance of any of his or her duties hereunder. Fi(ICCrr