HomeMy WebLinkAboutR-97-0049J-97-55
1/13/97
RESOLUTION NO. 9
A RESOLUTION, WITH ATTACHMENTS, AMENDING AND
RESTATING A CITY OF MIAMI 457 DEFERRED
COMPENSATION PLAN, KNOWN AS THE ICMA
RETIREMENT CORPORATION DEFERRED COMPENSATION
PLAN AND TRUST. (THE "PLAN"), ATTACHED HERETO
AND MADE A PART HEREOF, TO BRING SAID PLAN
INTO COMPLIANCE WITH CERTAIN NEWLY ENACTED
IN.CERNAL REVENUE CODE REGULATIONS;
AUTHORIZING THE CITY MANAGER TO EXECUTE ANY
NECESSARY DOCUMENTS, IN A FORM ACCEPTABLE TO
THE CITY ATTORNEY, TO EFFECTUATE SAID PLAN
AMENDMENTS.
WHEREAS to attract and retain competent personnel and to
provide reasonable retirement security for its employees, the
City of Miami, pursuant to Internal Revenue Code provisions,
established a 457 Deferred Compensation Plan known as the ICMA
Retirement Corporation Deferred Compensation Plan and Trust; and
WHEREAS, Congress enacted the Small Business Job Protection
Act and the Health Insurance Portability and Accountability Act
of 1996 ("Acts"), which Acts amended the Internal Revenue Code to
effect changes to the structure of and allow enhancements to the
benefits of said deferred compensation plan; and
WHEREAS, due to said amendments, it is necessary to amend
and restate the ICMA Retirement Corporation Deferred Compensation
Plan and Trust to bring said Plan into compliance with said newly
enacted Acts;
�TTACM'�-�q�' C�3
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CITY COMMISSION
M ET:€1'7C OF
Resolution No.
97- 49
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are hereby adopted by reference
thereto and incorporated herein as if fully set forth in this
Section.
Section 2. The ICMA Retirement Corporation Deferred
Compensation Plan and Trust (the "Plan"), attached hereto and
made a part hereof, one of the City of Miami's 457 Deferred
Compensation Plans, is hereby amended and restated to bring said
Plan into compliance with certain newly enacted Internal Revenue
Code Regulations.
Section 3. The City of Miami hereby agrees to serve as
Trustee under said Plan and the assets of the Plan are to be held
in trust by said Trustee.
Section 4. The Trustee's beneficial ownership of the
Plan's assets shall be held for the exclusive benefit of the Plan
participants and their beneficiaries and the assets of the Plan
shall not be diverted to or for any other purpose other than as
set forth in said Plan.
Section 5. The Plan shall not permit loans.
Section 6. The City Manager is hereby authorizedll to
execute any necessary documents, in a form acceptable to the City
Attorney, to effectuate said Plan amendments.
The herein authorization is further subject to compliance
with all requirements that may be imposed by the City
Attorney, including but not limited to those prescribed by
applicable City Charter and Code provisions.
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97- 49
0
Section 7. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 23rd day of January 1997.
ATTEST.
ALTER J`-�F'O MAN
CITY CLERK
PREPARED AND REVIEWED BY:
RAFAEL 0. bIAZ /
DEPUTY CITY ATTORNEY
APPROVED AS TO FORM AND CORRECTNESS:
i
A . Q. Ili' JON I I I
CITY ATTO qy
W1379:BSS
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f
97- 49
I C M A RETIREMENT CORPOR ATION
This deferred compensation plan has been submitted
to the Internal Revenue Service by a public employer
for a Private Letter Ruling.
The IRS has not yet issued a Ruling on the plan
and may require changes in this document
prior to issuing a Ruling.
If changes are required in the document,
you will be notified of the changes.
97— 49
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P
mot,
4 S 7 Ue,ferred Compensation Plan and 'Trust Dotumen(
November 1996
DEFERRED COMPENSATION PLAN & TRUST
ARTICLE 1. PURPOSE
The Employer hereby establishes the Employer's De-
ferred 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 Rev-
enue Code of 1986, as amended (the "Code").
This Plan shall be an agreement solely between the
Employer and participating Employees. -The Plan and
Trust forming a part hereof are established and shall be
maintained for the exclusive benefit of eligible Employ-
ees 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 exclu-
sive benefit of Participants and their Beneficiaries.
ARTICLE H. DEFINITIONS
2.01 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 Coinp(.insation, and further
reflecting any distributions to' the Participant or the
Participant's Beneficiary avid 'at,iy fees or expenses
charged against such Participant's Deferred Compensa-
tion,
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 func-
tions 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 Employer 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 Agreement, if the Designated
Beneficiary predeceases the Participant, or if the desig-
nated Beneficiary does not survive the Participant for a
period of fifteen (15) days, then the estate of the Par-
ticipant 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 partici-
pate 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. Includible 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 preference among the investment alternatives desig-
nated by the Emplover, designate the Employee's
Beneficiary or Beneficiaries, and incorporate the terms,
conditions, and provisions of the Plan by reference.
I CM A R ET I R EMENT CO R P O R AT I ON
2.09 Normal Compensation: The amount of compensa-
tion 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 Administra-
tor prior to Separation from Service. A Participant's
Normal Retirement Agc determines the period during
which a Participant may utilize the catch-up limitation
of Section 5.02 hereunder. 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 retire-
ment 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 previously 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 nor become eligible to
receive benefits under a basic retirement plan, shin.
tained by the Employer, the 1'.ir ii:ipant's alternate
Normal Retirement Age may, not I-, carlier tlia►i ale 55'
and may not be later than age 7011�
2.11 Participant: Any Employee arho 1is; Joined, the
Plan pursuant to the regunretcntsbt Aruele IV::
2.12 Plan Year: The cale uda'r:, y�,�r
2.13 Retirement: The first dau ujl i h both cif the
following shall have occurred with 'respect .to ii. E?artci-.
pant: Separation from Service,and attainnienc-of ige 65.
2.14 Separation From Service: Severance of the'
Participant's employment with the Employer a hie h;;
constitutes 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 independent contractor of the Employer,
Separation from Service shall be deemed to have oc-
curred 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 III. ADMINISTRATION
3.01 Duties of the Employer: The Employer shall have
the authority to make all discretionary decisions affect-
ing 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 Adniinnistrator: The Administrator, as
went for the Employer, shall perform nondiscretionary
administrative functions in connection with the Plan,
inncluding 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 txecuted Joinder Agreement to change
the amount of compensation not yet earned 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 Enn-
plover). Such amendment shall become effective as of
.......... ...................................... ........... ................... ......... ............. I.......
Tit rrr r 7
9 49
I&:
457 Deferred Compensation Plan and Trust Document
-I N o v c m b c r 1996
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.
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 (tile "dollar
limitation"), or 33-1 /3 percent of the Participant's
Includible Compensation 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 attain-
ment of Normal Retirement Age, the maximum amount
of Deferred Compensation shall be the lesser of: (1)
S 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 Nvas eli-
gible to participate in the Plan for such year (or in any
other eligible deferred compensation plan established
under Section 457 of the Codr•-,vhich 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 limita-
tions set forth in Section 5.01
5.03 Other Plans: The amount excludable from a
Participant's gross income under this Plan or any other
eligible deferred compensation plan under section 457
of the Code shall nor exceed S7,500.00 (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)(13) of the
Code, or any amount with respect to which a deduction
is allowable by reason of a contribution to an organiza-
tion described in section 501(c)(18) of the Code.
ARTICLE V1. 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 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 Ad-
ministrator, acting as agent for the trustee, shall have
the powers listed in this Section with respect to invest-
ment 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 dis-
tinction between principal and income in any form
of tangible or intangible property, real, personal, or
mixed, and wherever situated, including, but not by
way of limitation, common or preferred stocks,
shares of regulated investment companies.and other
mutual funds, bonds, loans, notes, debentures,
mortgages, certificates of deposit, interest, or par-
ticipation, equipment trust certificates, commercial
paper including but not limited to participation in
pooled commercial paper accounts, contracts with
insurance companies including but not limited to
insurance, individual or group annuity, deposit
administration, and guaranteed interest contracts,
deposits at reasonable rates of interest at banking
institutions includin- but not limited to savings
accounts and certificates of deposit, and other forms
of securities or investments of any kind, class, or
character whatsoever and representing interests in
any form of enterprise, wherever it may be located,
organized or operated within or without the United
States of America, whether such investments are
income producing or not, without being limited in
any respect by statute or court rule or decision of
any jurisdiction now or hereafter in force purport-
ing to limit or otherwise affect such investments.
Assets of the Trust may be invested in securities or
new ventures that involve a higher degree of risk
than investments that have demonstrated their
investment performance over an extended period
of time.
..............................................................................................................
8 Fa.., 97- 49
I C M A RE T I R E ME N T CC) R P O R AT I ON
(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 Plan, the declaration of trust
of such common, collective, or commingled trust
fund shall constitute a part of this Plan.
(c) To invest and reinvest all or any 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 institu-
tion 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
contract may be held or issued in the name of the
Plan Administrator, or such custodian as the Plan
Administrator may appoint, as igent and nominee
for the Employer. During the period that an invest-
ment through any such contract shall exist, to the
extent of participation of the flan, the terms and
conditions of such contract shall constitute a part of
the Plan.
otherwise dispose of any such property, without
regard to restrictions applicable to fiduciaries or
others and without the approval of any court.
(g) To sell for cash or credit, redeem, exchange for
other property, convey, transfer, or otherwise
dispose of any property held in the Trust in any
manner and at any time, by private contract or at
public auction or otherwise, and no other person
shall be bound to see to the application of the
purchase money or to inquire into the validity,
expediency, or propriety of any such sale or ocher
disposition.
(h) To enter into contracts for or to make commit-
ments either alone or in company with others to
purchase or sell at any future date any property
acquired for the Trust.
(i) To vote or to refrain from voting any stocks,
bonds, or other securities held in the Trust, to
exercise any other right appurtenant co any securi-
ties or other property held in the Trust, to give
general or special proxies or powers of attorney with
or without power of substitution with respect to
such securities and ocher property, to exercise any
conversion privileges, subscription rights, or other
options or privileges with respect ro such securities
ai'd other property and make any payments inciden-
(d) To purchase parr interests in real property or in cal thereto, and generally to exercise, personally or
mortgages on real property, wherever such real by general or 1snticcd po��cr of attorney, any of the
property may be situated, and to delegate to a ;` powers of an owner with respect to stocks, bonds,
property manager or the holder or holders.,() 1,,.'` securities, or other property held in the Trust at
majority interest in such rcal'prapercv or.;mort�;:�gt any time.
on real property-tlic mvt cntenrand operacJo1i of..
any part interest in,iuc,h ro;I hrqEicrt) ac.inortl;ages
(e) To hold cash aw itim—mves'tm nc;ant to keep
such poruo'u'o.f tha, Truer ii'.c.1sh or eaxh balances,
Without liability for. interest; to :such amounts as may
from time to time be deenied to he reasonable and
necessary to nieer obligatioiiis under the Plan or
otherwise to be in the best interests of the Plan.
(f) To retain, manage, operate, administer, divide,
subdivide, partition, mortgage, pledge, improve,
alter, demolish, remodel, repair, and develop in any
manner any property, or any part of or partial
interest in any property, real or personal, held in the
Trust, to lease such property for any period of time,
and to grant options to sell, exchange, lease, or
0) To oppose or to consent to and participate in
any organization, reorganization, consolidation,
merger, combination, readjustment of finances, or
similar arrangement xvich respect to any corporation,
company, or association, any of the securities of
which are held in the Trust, to do any act with
reference thereto, includinIg the exercise of options,
the making of agreements or subscriptions and the
payment of expenses, assessments, or subscriptions
that may be deemed necessary or advisable in
connection therewith, and to accept, hold, and
retain any securities or other property that may be
so acquired.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . .
r 9'7-- 49 9.
457 Deferred ComPensation Plan and Trust Document
"t November 1996
(k) To deposit any property held in the Trust with
any protective, reorganization, or similar commit-
tee, and to delegate discretionary power thereto and
to pay and agree to pay part of its expenses and
compensation and any assessments levied with
respect to any such property so deposited.
(1) 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 Administra-
tor, 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 purposd bf acquiring or holding
title to any property for the Trust, all with or
without Elie addition of words or other action to
indicate chat 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 invest-
ments are part of the Trust.
(m) Upon such terms 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 preservation 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 Plan, 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.
(n) To employ suitable: consultants, depositories,
agents, and legal counsel oil behalf of the Plan.
(o) To make, execute, acknowledge, and deliver
any and all deeds, leases, mortgages, conveyances,
contracts, waivers, releases, or other instruments in
writing necessary or proper for the accomplishment
of any of the foregoing powers.
(p) 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.
(q) To do any and all other acts that may be
deemed necessary 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 invest-
ment and reinvestment 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 hereun-
der (including but not limited to fees for legal, account-
ing, investment and custodial services) shall also be paid
from the Trust.
6.04 Payment of Benefits: The payment of benefits
from the, Tr. usrtti' accordance with the terms of the Plan
may be niade by the flan Administrator, or by any
custodiaii.ii'r.ocifer,person so authorized by the Em-
plover to bake. sitcli. 'disbursement. The Plan Adminis-
trator. custodian: or other person shall not be liable with
respect to.any `distribution of Trust assets made at the
direction. of chc'`Einployer.
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 invest-
ment funds available under the Plan; provided, how-
ever, 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.
............................................................................................I.......... I....
10 Six 97 - 49
ICMA RETIREMENT CORi'ORATION
6.06 Valuation of Accounts: As of each Accounting
Date, the Plan assets lield 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 oil a fund -by -fund basis. The alloca-
tion 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
sliall 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
Elie Participant's Joinder Agreement, but nothing herein
shall be construed to require the Employer to make any
particular investment of a Participant's Deferred Coni-
pensation. 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 ,all 'eligible deferred compensation plan main-
tained 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 Eni-
ployer, 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 chat 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 Administra-
tor 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 em-
ployer shall be treated as if it had been paid by the
Employer.
(b) Outgoing Transfers: An amount may be trans-
ferred 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 Partici-
pant has been discharged and assumed by the other
employer. The Employer may require such docu-
mcntation 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
iiicaning of section 457 of the Code, and to assure
that transfers are provided for under such plan. Such
transfer: shall be made only under such circuni-
..stances 1s are permitted under section 457 of the
code'and the regulations thereunder.
6.10 E'ntplover Liability: In no event. shall the
Employer's liability to pay benefits to a Participant
under this Plan exceed the value of the amounts cred-
ited 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.
..................................................................... f............ I...............��..
97- 49
457 Deferred Compensation Ilan and Trns1 Doewmeni
N01'e1116er 1 99 (,
ARTICLE V11. BENEFITS
7.01 Retirement Benefits and Election on Separation
from Service: Except as otherwise provided in this
Article VII, the distribution of a Participant's Account
shall commence 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 de-
scribed in Section 7.02. Notwithstanding the foregoing,
but subject to the following paragraph of this Section
7.01, the Participannt may irrevocably elect within 60
days following Separation from Service to have the
distribution of benefits commence on a fixed determin-
able 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 th-e
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 later than April 1 of the year
foliowin.g, 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 Participant may make only one
(1) such election. Notwithstanding the foregoing, the
Adnihiistrator, in order to ensure the orderly adminis-
tration of this provision, may establish a deadline after
which such election to defer the commencement of
distribution of benefits shall not be allowed.
7.02 Pavment Options: As provided in Sections 7,01,
7,04 and 7.05, n Participant or Beneficiary may elect to
have value of the Participant's Account distributed in
accordance with one, of the following payment options,
provided chat such option is consistent with the limica-
tions set forth in Section 7.03.
(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 distri-
burions 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) commence 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 substan-
tially 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 substan-
tially 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 Subsec-
tions (a), (c), or (g) above may include the selection of
an aucom3uc annual cost -of -living increase. Such
increase: Xvlll tic based oti the rise in the Consumer Price
Index for.-%lJ Urba' h Consumers (CPI-U) from the third
quarter.,6f.fl'c; last year in which a cost -of -living in-
crease,w: s provided to the third quarter of the current
year: 'Anij. 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
froth 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
(a) Equal monthly, quarterly, semi-annual or annual option must be Made at least 30 days before the pay-
INayments in an amount chosen by the Participant, ment of benefits is to commence. If a Participant or
eontinuin11-1 until his/her Account is exhausted; Beneficiary fails to make a timely election of a payment
option, benefits shall be paid monthly under option (c)
.2................................................ ...................,...............................
E;g1,1 9 7 - 49
01
0
iCMA RISTIItEMENT C0It PORATi0N
above for a period of five years or such shorter period of
tinge necessary to ensure that the amount of any install-
ment is not less than S1,200 per year, without the
inclusion of a cost -of -living increase.
7.03 Limitation on Options: No payment option inay be
selected by a Participant tinder subsections 7.02(a) or (c)
unless the amount of any installment is not less than
S1,200 per year. No payment option may be selected
by a Participant or Beneficiary under Sections 7.02,
7.04, or 7.05 unless it satisfies the requireinents of
Sections 401(a)(9) and 457(d)(2) of the Code, hicluding
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 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 1
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 tinge distributions are
required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to tile,
Participant (or Spouse) and shall apply to all subsequent
years. The life expectancy of a nonspouse Bencfiri,ary
may not be recalculated.
T04 Vo.sr-retirement Death. Beue`tits
(a) Sliould the: P ircii pantElie attcr. hc/ -lie Ila% br kiln
to iccive beiehtti uindei 1.payincut option,,thc
re m iiuiine pay'nlc ntti ;1f 1ii.y udder the payment
option;sh ill be p 1ya le ten,tile; l'artieipant's 13cncfi-
c iuv si>itluu Elie 30 ilay perlgii conunencing with
the 0;1stday sifter the Participant's death; unless the
Beneficiary elec.ts'p ynleiit. under a different pay -
option, :`that is ;available under Section 7.02
withiii'o0 days of tile harticipaut's death. Any
different p yiucut.op,cioii'cicctcd by a Beneficiary
under.ttiis'section must provide for payments at .1,
rate that is at least as rapid under the payinellt
option that was applicable to Ehe Participant. In, no.
event shall the ]niployer or Administrator be liable
tin the Beneficiary for the amount of any payment
made in the (ionic of the ParticipanE before
the Administrator receives proof of death of rile
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
ail\, remaining payments 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-redrenient Death Benefits:
(a) ,Should.:the Participant die before he has begun
to receive the benefits provided by Section 7.01, the
value of the Participant's Account shall be payable
to the Beneficiary commencing within the 30-day
period commencing oil the 91st day after the
Participant's death, unless the Beneficiary elects a
different Fixed or determinable benefit commence-
nient date within 90 days of the Participant's death.
Such benefit commencement date shall be not later
than the later of (1) December 31 of the year fol-
lowing the year of the Participant's death, or (h) if
Elie Beneficiary is the Participant's spousei-Deccrli-
ber .31 of Elie year in which the Participantt.would
have attained age 70-1 /2.
(b) Unless a Beneficiary elects a different payment
option prior to the bcnefit.coniniencement date,
death' be netits tinder this Section shall be. paid in .
npproxiivarely equal annual installnients over five
ye lr+,:cii over such shorter period as may be'neces-
sary tin assure that the aniount of any annual install-
niviit is not less than S3,500. A Beneficiary shall be
treated ;is if he/she were a Parricipant for purposes
elf determining the payment options available under
Section 7,02, provided, however, that the payment
option chosen by Elie Beneficiary must provide for
haynle•nts tci the Beneficiary over a period no longer
ihaii the life expectancy of the Beneficiary, and
provided that such period may not exceed (15) years
if the:B'eneticiary is not the Participant's spouse.
(c) In Elie event that the Beneficiary dies before rile
paymenr of death benefits has commenced or been
completed. the remaining value of the Participant's
Aecoutit;shall be paid to the estate of the Benefi-
ciary in a lump skim. In the event that Elie
Particip;int's estate is the Beneficiary, payment shrill
be ill.
dc,tc� the estate in a lump Sum.
........................................\r,�;................. .........� ��........ .....�.3 ...
457 Deferred Catnpertaatialt plait and '1'ru_s( Dorunteut
-� NovrinIfer t99•6
7.06 Unforeseeable Emergencies:
(a) In the event an unforeseeable emergency occurs,
n Participant may apply to the Employer to receive
that part of the value of his/her Account [liar 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 noc be made to the extent
that the financial hardship may be relieved through
cessation of deferral under the Plan, insurance or
other reinhbursenlent, or liquidation of other assets
to the extent such liquidation would not itself cause
severe financial hardship.
(b) An unforeseeable emergency shall be deemed to
involve only circumstances of severe financial
hardship to the Participant resulting front a sudden
unexpected illness, accident, or disability of Elie
Participant or of a dependent (as defined in section
152(a) of the Code) of the Participant, loss of Elie
Participant's property due to casualty, or other
similar and extraordinary unforeseeable circum-
stances arising as a result of events beyond the
control of tie Plrticipant. The need co send a
Participant's child to college or to 'purchase a new
hoine shall noc be considered unforeseeable enier-
hencies. The determination as to whether such all
unforeseeable emergency exists shall be based on the
merits of cacti individual case.
7.07 Transitional Ikule for Pre-1989 Benefit Elections:
In the cvcnc'tliat; prior to January 1. 1989, a Participant
or Beneficiary has. coninhetiecd receiving benefits under
a p•lynient option'oc hay irrevocably elected a payment
option < r bOle it commencement date, then that pay-
lucili opnou'cir election s11a11 rciilaln `ii1 effect uotwith-
stauditi any other provtSton of the Plaii.
7.08 Inc Mininhis Ac_counis: Notwithstanding the fore-
7oing provisions of this Article, if the value of a
Participant's Account does not exceed $3,500 and (a) t10
anio11nt has been deferred under the Plan with respect
to the Participant during the 2-year period ending on
the date of the distribution and (b) there has been no
prior distribution under the Plan to the Participant
pursuant to this Section 7.08, the Participant /nay elect
to receive or Ellie Emplover may distribute the Participant's
entire Account without the consent of the Participant.
Such distribution shall be made in a lump sum.
ARTICLE Vill. LOANS TO PARTICIPANTS
8.01 Availability of Loans to Participants:
(a) Effective January 1, 1997, the Employer may
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
governing 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 1 reasonably equivalent basis.
3.02 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
Participants on a reasonably equivalent basis.
(b) Interest Rate. Loans must be adequately secured
and bear a reasonable interest rate.
(c) 1-6in'Limlt. No Participant loan shall exceed the
presetit <valtIc of the Participant's Account.
(d) Fordclosure. it, the event of default on any
installulcht`payment, the outstanding balance of the
loan shall be a deemed distribution. In such event,
an actual distribution of a plan loall offset 1111ou11C
will not occur until a distributable event occurs in
Elie 111111.
(c) Reduction of Account. Notwithstanding an\
other provision of this Plan, the portion of the
Participant's Account balance used as a security
interest held by the Platt by reason of a 10a11 ouE-
standing to the Participant shall be taken into
account for purposes of determining the amount of
Elie Account balance payable at the time of death or
distribution, but only if the reduction is used'as
repayment of the loan.
...................................................... ............ .........4 .....................
..
14
97- 49
I_CMA RETIREMENT CORPOR..A,T10N
(f) Amount of Loan. At the time the loan is made,
the principal amount of the loan plus the outstand-
ing balance (principal plus accrued interest) due on
any other outstanding loans to the Participant front
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:
(I). 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 oil the, date on which such loan is
made; or,
.(2) Oitc-11aIf;'of-the' value of the Participant's
• interest in all :Of his/her Accounts under
Ellis Plan
(g) Application for Loan. The Participant inust
give the Employer adequate written notice, as
determined by the Employer, of the amount and
desired time for receiviner n loan. No more than
one (1) loan may be made by the Plan to a Partici-
pant in any calendar yea7r. No loan shall be 1p—
proved if an existing loan from the Plau to the
Participant. is in default to airy extent.
(h) Length of Loan. - Any loin -issued shall require
the Participant to re a% .the loan in ttibctancially
equal installments of principal and niterest, at least
monthly, over a per iod'thar 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 tinic (determined at the
time the loan is made) after the loan is made as the
principal residence of the Participant, Elie 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 sus-
pended for up to one (1) year during an authorized
leave of absence, if cite promissory note so provides,
but not bevond the original terns permitted under
this Subsection (h), with a revised paynteut 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 its part at any time
prior to maturity, without penalty.
0) Promissory Note. The loan shall be evidenced
by a promissory note executed by the Participant
and delivered to tite Employer, and shall bear
interest at a reasonable rate determined by the
Employer.
(k) Security. The loan shall be secured by all
assignment of the Participant's right, title and
interest in and to his/her Account.
(1) Assignment or Pledge. For the purposes of
paragraphs (f) and (g), assignment or pledge of any
portion of the Participant's interest in the Plan and a
loan, pledge, or issignnicnt with respect to any
insurance contract purchased under the Plan, will be
treated as a loan.
(m) Other Terms and Conditions. The Eiitployer
shall fix such other terms and conditions of the loan
as it deems necessary to comply with legal require-
ments, to maintain the qualification of the Plan and
Trust under section 457 of the Code, or to prevenr
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 loin. not inconsistent with
the provisions of this Article. and section 72(p) of
rile Code.
8.03 Participant Loan Accounts:
(a) Upon approval of a loan to a Participant by the
Employer, an amount not in excess of the loan shall
be transferred front the Participant's other invest-
ment fintd(s), described in Section 6.05 of the Plan,
to the Participant's Loan Account as of the AcCOUtIr-
inDate immediately preceding the agreed upon
date on which the loan is to be made.
(b) The assets of a Participant's Loan Account ntay
be invested and reinvested only in promissory nores
.eceived by the Plan from the Participant as consid-
eration for a loan permitted by Section 8.01 of Elie
Plan or in cash. Uninvested cash balances in a
4i rd C:nnlpensnlintt lllau and Trntt Uornlnrnr
Nnvrm6rr 199(1
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.
9.02 Domestic Relations Orders::'.
(a) Allowance ofTransfer5 Tp'the extent required
under final judgenlrtlE, decree, qr order (including
approval of a property settlenneut agreement) made
pursuant to a state domestic relations law, an),
portion of a Particlpatlt's Account nnay be paid or
set aside for payment to a spouse, former spouse, or
child of Elie 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 %vho shall be entitled to
make itivestnlent 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 Iu111p 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 autho-
rize 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 Em-
ployer 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 Elie Administraro`r-from
any claim with respect to such aniounts, 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 Partici-
pant has been notified of the pendency of such
proceeding in the manner prescribed by the law of
the jurisdiction in %vhich the proceeding is pending
for service of process in such action or by mail from
the Employer or Adnlititstrator to the Participant's
last known mailing addressend (iii) the Participant
fails to obtain an order of thc''court in the proceed-
ing relieving; the En1ployc r or', Administrator from
the obligation to comply with Elie judgment, decree,
or order.
(c) Participation in Legal Proceedings: The Em-
ployer and Administrator shall not be obligated to
defcud against or set aside any judgenient, decree, or
order described in paragraph (a) any legal order
relating to the garnishment of a Participant's ben-
efits, 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 ex-
pense, the amount of Elie expense may be charged
against the Participant's Account and thereby reduce
the Employer's obligation to pay benefits to the
.1.6......................................................................... ....................
T14,rlvr
97- 49
I CM A R ET I R EMENT C O R P OR AT I ON
Participant. In the course of any proceeding relating
to divorce, separation, or child support, the Em-
ployer and Administrator shall be authorized to
disclose information 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,
pension, 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 Employer.
ARTICLE X1. AMENDMENT OR TERMINATION
OF PLAN
The Employer may at any time aniend this Plan pro-
vided that it transmits such aniendnient in writing to the
Administrator at least 30 days prior to the effective date
of the anieridnient. The consent of the Administrator
shall not be requires{ 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 amendnicnt. The
Employer may at any timr,`iernUllate this Plan.
The Administrator may at an,,- tinie propose an amend-
ment to the Plan by an instrument in writing transmit-
ted 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 Em-
ployer notifies the Administrator in writing that it
disapproves such amendment, 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 Administrator
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 XI1. APPLICABLE LAW
This Plan and Trust shall be construed under the laws of
the state where the Employer is located and is estab-
lished 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 masculine pronoun, whenever used herein, shall
include the feminine pronoun, andthe singular shall
include the plural, except where the context requires
otherwise.
............................................................... .............. 9.7:-:....4 9�.. .
CITY OF MIAMI, FLORIDA
" INTER -OFFICE MEMORANDUM
TO:
FROM
Honorable Mayor and Members
of the City Commission
Lti 04G
Edward Mar u
City Manager
RECOMMENDATION:
DATE: IAN 16 1997 FILE
SUBJECT: Amendment to ICMA Retire-
ment Corporation Deferred
Compensation Plan -and Trust
REFERENCES:
ENCLOSURES:
It is recommended that the City Commission adopt the attached Resolution
authorizing the City Manager or his designee to execute the necessary documents
amending the City of Miami's 457 Deferred Compensation Plan in the form of the
ICMA Retirement Corporation's Deferred Compensation Plan and Trust for City
employees.
The adoption of this Resolution will authorize the execution of appropriate
amendments to the ICMA Retirement Corporation's Deferred Compensation Plan
and Trust thereby bringing the Deferred Compensation Plan into compliance with
the Small Business Job Protection Act and the Health Insurance Portability and
Accountability Act of 1996.
BACKGROUND:
In 1996 Congress passed several bills that included substantial tax law changes
that require changes to the structure of and allow enhancements of the benefits of
the deferred compensation plan.
Under the new law, the state or local government employer is required to establish
a trust or use an annuity contract or custodial account so that deferred
compensation will be funded and not merely an unsecured promise by the employer.
Under the new law, all § 457(b) plan amounts are required to be held in trust (or a
custodial account or annuity contract) for the exclusive benefit of plan participants
and beneficiaries. Therefore, the plan assets will not be subject to the claims of the
employer's creditors. Any trust or custodial account maintained for this purpose
will be exempt from federal income tax. Although the law does not require a trust
to be established prior to January 1, 1999, until the trust is established, assets
remain unprotected.
97- 491
2
Honorable Mayor and Members
of the City Commission
RE: ICMA Retirement Corporation Deferred Compensation Plan and Trust
Page 2
Other provisions of the law which are effective January 1, 1997 include providing
for: indexed maximum contribution amounts, one-time forward changes, small
balance distributions, and participant loans without tax consequences, if elected by
the employer. The Resolution specifies that loans will not be permitted
The adoption of this Resolution will enable the City, through the deferred
compensation plans offered to its employees, 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. The City will incur no cost by the adoption of the attached Resolution
amending the deferred compensation plan.
97-- 49
49
I C M A R ET I Ik EM E NT C 0 R P 0 R A T1 0 N
This deferred compensation plan has been submitted
to the Internal Revenue Service by a public employer
for a Private Letter Ruling.
The IRS has not yet issued a Ruling on the plan
and may require changes in this document
prior to issuing a Ruling.
If changes are required in the clocumentf
you will be notified of the changes.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97. . . . . . . . . .
- 49
457 Deterred Compensation Plan and Trust Document
November 1996
DEFERRED COMPENSATION PLAN & TRUST
ARTICLE I. PURPOSE
The Employer hereby establishes the Employer's De-
ferred 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 Rev-
enue Code of 1986, as amended (the "Code").
This Plan shall be all agreement solely between the
Employer and participating Employees. -The Plan and
Trust forming a part hereof are established and shall be
maintained for the exclusive benefit of eligible Employ-
ees 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 exclu-
sive benefit of Participants and their Beneficiaries.
ARTICLE 11. DEFINITIONS
2.01 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 distributions to the Participant or the
Participant's Beneficiary and any fees or expenses
charged against such Participarit's;Deferred Compensa-
tion.
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 funs-,
C1orrS 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 Employer 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 Agreement, if the Designated
Beneficiary predeceases the Participant, or if the desig-
nated Beneficiary does not survive the Participant for a
period of fifteen (15) days, then the estate of the Par-
ticipant 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 partici-
pate 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. Includible Compensation
shall be determined without regard to any community
property laws.
2.03 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 preference among the investment alternatives desig-
nated by the Employer, designate the Employee's
Beneficiary or Beneficiaries, and incorporate the terms,
conditions, and provisions of the Plan by reference.
... ..........................I........................... .... .................. .I.......................
97- 49
1CMA RETIREMENT CORPORATION
2.09 Normal Compensation: The amount of compensa-
tion 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 Administra-
tor prior to Separation from Service. A Participant's
Normal Retirement Age determines the period during
which a Participant may utilize the catch-up limitation
of Section 5.02 hereunder. 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 retire-
ment 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 previously 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 main-
tained by the Employer, the Participant's alternate
Norma I Retirement Age may not be earlier than age; 55
and may not be later rh�tn ale 7U-1/2.
2.11 Participant Any Employee w-110 has:; jom(id the
Plan pursuant.to 'of Article IV,
2.12 Plan Year :,Thy cale.ndlr yelr
2:13 Retireinci t Tlieffirst d�u uplin ��hi h both nf`>he
folloWing, shallhave oe.e.urrc:ci �t itli arc spe t',to a, partici:
giant: Sepaiation' front Service tud,.attai iment of age 65.
2.14 Separation From Service: Severance of the
Participant's employment with the Employer which
constitutes 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 Participant
who is an independent contractor of the Employer,
Separation from Service shall be deemed to have oc-
curred 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 III. ADMINISTRATION
3.01 Duties of the Employer: The Employer shall have
the authority to wake all discretionary decisions affect-
ing the rights or benefits of Participants which may be
required in the adininistratio n 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,
hicluding 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 beainnin;, of the calendar nionth in which the
Joinder Agreement is to become effective to defer
-compensation not yet earned.
4.02 Ametidtnetit:of joinder Agreement: A Participant
may.aniend an. executed Joinder Agreement to change
the:aiitount.,of compensation not yet earned 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 Eni-
ployer). Such amendment shall become effective as of
Tbrt,..... ...........................................
97- 49
457 Deferred Cnn►pensation Plan and Trust Doeumer►r
Notcn►be► 1996 �.
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.
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 ally taxable year shall not exceed
the lesser of S7,500.00, 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 Compensation 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 attain-
ment 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 eli-
gible 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.limita-
Lions set forth in Section 5.01
5.03 Other Plans: The amount e xcludable'fro►ir a'
Participant's gross income under this Plan or anv other
eligible deferred compensation plan Under section 457
of the Code shall not exceed S7,500.00 (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 organiza-
tion 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
Trust 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 Ad-
ministrator, acting as agent for the trustee, shall have
the powers listed in this Section with respect to invest-
ment 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 dis-
tinction between principal and income in any form
of tangible or intangible property, real, personal, or
mixed, and wherever situated, including, but not by
way of limitation, common or preferred stocks,
shares of regulated investment companies and other
mutual funds, bonds, loans, notes, debentures,
mortgages, certificates of deposit, interest, or par-
ticipation, equipment trust certificates, commercial
paper including but not limited to participation in
pooled commercial paper accounts, contracts with
insurance companies including but not limited to
insurance, individual or group annuity,.deposit.
administration, and guaranteed interest contracts,
deposits at reasonable rates of interest at banking
institutions including but not limited to savings
accounts and certificates of'dep'osit,' and other forms
of securities or investments of any kind, class, or
character whatsoever and representing interests in
any form of enterprise, wherever it may be located,
organized or operated within or without the United
States of America, whether such investments are
income producing or not, without being limited in
any respect by statute or court rule or decision of
any jurisdiction now or hereafter in force purport-
ing to limit or otherwise affect such investments.
Assets of the Trust may be invested in securities or
new ventures that involve a higher degree of risk
than investments that have demonstrated their
investment performance over an extended period
of time.
I ............... .................... ..,.... ...................... I .............. I ...........
..
9 7 -- 49
ICMA RETIREMENT CORPORATION
(b) To invest and reinvest all or any part of, the
assets of the Trust in any conlnlon, 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 Plan, the declaration of trust
of such common, collective, or commingled trust
fund shall constitute a part of this Plan.
(c) To invest and reinvest all or any part of the.
assets of the Trust in any group annuity; deposit
administration or guarantced interest contract issued
by an insurance company or other financial institu-
tion 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
contract may be held or issued in the name of the
Plan Administrator, or such custodian as the Plan
Administrator may appoint, as went and nominee
for the Employer, During the period that an invest-
ment 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 purchase part interests in re.11 property or in
mortgages on real. property. Ny-herever such real
property,may be situatrd'antl.tq.drlcatc to a
property manager or the: holde'i car holders of a
majority,interest in suca,, IV:d property: or mortgage
on real property the {naiipc,u�cut:and operation of
any part intcrest.,in s,t ch.. r tl;property: or ntortgiges.
(e) To hold cash awairitft; hi esEment and,to keep
such portion of the Tru'St in cash or cash balances,
without liability for ini r tj iir,� 16 ai»ounts as nlay
from tithe to time be dyenleld'to. be. reasonable and
necessary to meet obli,-,.l ,.ittuier the;Plan:or
otherwise to be in the best interests, of the Plan. .
(f) To retain, manage, operate,. adulinister,.divide,
subdivide, partition, mortgage, pledge, improve,
alter, demolish, remodel, repair,,and develop in any
manner any property, or any,part of or partial
interest in any property, real or personal, held in the
Trust, to lease such property for any period of time,
and to grant options to sell, exchange, lease, or.:
otherwise dispose of any such property, without
regard to restrictions applicable to fiduciaries or
others and without the approval of any court.
(g) To sell for cash or credit, redeem, exchange for
other property, convey, transfer, or otherwise
dispose of any property held in the Trust in any
manner and at any time, by private contract or at
public auction or otherwise, and no other person
shall be bound to see to the application of the
purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other
disposition.
(h) To enter into contracts for or to make;* commit-
ments, either alone or in company with 01 ihers' to
purchase or sell at any future date'any property
acquired for the Trust:
(i) To vote or to refrain from voting any stocks,
bonds, or other securities held in the Trust, to
exercise any other right appurtenant to any securi-
ties or other property held in the Trust, to give
general or special proxies or powers of attorney with
or without power of substitution with respect to
such securities and other property, to exercise any
conversion privileges, subscription riglits, or other.
options or privileges -,vith respect to such securities
and other property and make any payments inciden-
tal thereto, and generally to exercise, personally or
by general or limited power of attorney, any of the
powers of an owner with respect to stocks, bonds,
securities, or other property: held in the Trust at
any'tiule. ,. .
To..oppose or to'cousent to and participate in
any organization,. reorganization, consolidation.
nlerger;.combination, readjustment of finances," or
-sinlilar arrangement with respect to any corporation,
company, or association, any of the securities of
which are held in the Trust, to do any act with
reference thereto, including the exercise of options,
the making of agreentents or subscriptions and the
payment of expenses, assessments, or subscriptions
that may be deemed necessary or advisable in
connection therewith, and to accept, hold, and
retain any securities or other property that may be
so acquired.
.............................................................................................................
9�- 49
FM
457 Deferred Compensation Plan and Trust Document
November 1996
I
(k) To deposit any property held in the Trust with
any protective, reorganization, or similar commit-
tee, and to delegate discretionary power thereto and
to pay and agree to pay part'of its expenses and
compensation and any assessments levied with
respect to any such property so deposited.
(1) 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 Administra-
tor, 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 chat 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 invest-
ments are part of the Trust.
(m) Upon such terms 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 preservation of the value of an
investment, .to exercise and enforce by suit for legal
or equitable,reniedics or by other action, ,or to
waive any right or claim oil behalf of the. Plan or'
anv default in any obligation oxving to: the Plan, to
renew, extend the time for payment of, agree to a
reduction in the rate of interest: oil,. or.agree to any
other modification or change iii the.terms of any
obligation owing to the Plan;",to settle, compromise,
adjust, or submit to arbitration any claim or right in
favor of of against the Plan, 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.
(n) To employ suitable consultants, depositories,
agents, and legal couluyl on behalf of the Plan.
(o) To make, execute, acknowledge, and deliver
any and all deeds, leases, mortgages, conveyances,
contracts, waivers, releases, or other instruments in
writing necessary or proper for the accomplishment
of any of the foregoing powers.
(p) 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.
(q) To do any and all other acts that may be
deemed necessary 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 ftiture.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 invest-
ment and reinvestment 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 hereun-
der (including but not limited to fees for legal, account-
ing, investment and custodial services) shall also be paid
from the Trust.
6.04 Payinenrof liencfits:, The payment of benefits
frorh. the'.Trdsr'iii aecordaric,e with the terms of the Plan
may be. made by the Plan -'Administrator, or by any
custodian or other-porsont so authorized by the Em-
plover to ninke such. "disbursement. The Plan Adminis-
trator, custodian or, otherperson 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 invest-
ment funds available under the Plan; provided, how-
ever, 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 reasonably administrative delay in implementing
such directions.
....0.......................................................................................I...............
97 - 49
i C M A RETIREMENT COR P O R A T I O N
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 alloca-
tion 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.invesanent of a Participant's Deferred Com-
pensation, Each Participant shall receive periodic
reports, not.less fretiPently.than annually, showing the
then current value of his/her, Account,
6.09 Transfers:.
(a). Incoming Transfers: A .transfer may be accepted
froin.an eligible deferred compensation plan main-
tained by another employer and credited to a
Participant's ACCOnnt tinder the Plan if (1) the
Participant has separated from service with that
employer and become an Employee of the Em-
ployer, 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 Administra-
tor 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 em-
ployer shall be treated as if it had been paid by the
Employer,
(b) Outgoing Transfers: An amount may be trans-
ferred 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 Partici-
pant h:is been discharged and assumed by the other
employer. The Employer may require such docu-
mentation 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
nicanin- of section 457 of the Code, and to assure
thar transfers are provided for under such plan. Such
transfers shall be made only under such.circuni-
srances as are permitted tinder section 457, of the
Code .ind the regulations thereunder.
6.10 ` Eniployer, Liability: In no event shall the
Eiiiployer`s, liability, to pay benefits' to a Participant
under'ihjs�lllan e\eced the,value of the amounts cred-
ited to tine participant's Account; neither the Employer
nor.tlie'Adniinistrator shall be liable for losses arising
from depreciation or shrinkage in the value of any
invcs nienrsacquired tinder this Plan.
..........................................S.c;'%(it
..,.....,.. ....................9 7--. .. fbl'
457 Deferred Cotit pcesafiou hlaa aitd TrissI Doeitit, elli
Novrtit ber 1996
ARTICLE VII. BENEFITS
7.01 Retirement Benefits and Election on Separation
from Service: Except as otherwise provided in this
Article VII, the distribution of a Participant's Account
shall commence 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 de-
scribed in Section 7.02. Notwithstanding the foregoing,
but subject to the following paragraph 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 determin-
able 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, %vhichever 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 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 front. Service and before commencement of
distributions and (b) the Participant may make only one
(1) such election. Notwithstanding the foregoing, the
Adnlinistrator,,in order to ensure the orderly adminis-
tration of this provision, .may establish a deadline after
which such election to defer the commencement of
distribution:of.benefits shall .riot be allowed.
7.02 I?avmeiit. Options: Asrprovided in Sections 7.01,
7.04 and 7.05, aParticipant;or,Beneftciary may elect to
have value of the Parti6z't's Account distributed in
accordance "with one of the'following payment options,
provided that such option `as'consistent with the limita-
tions set forth ni Sectlotf:'7..03,
(a) Lqu`al`nlollthly quarterly, ;semi-annual or annual
payments` ltl aw`arnount chosen: by the Participant,
continuing until his/her Account is exhausted;
(b) One Pump-suln 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 distri-
butions 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) commence 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
elate under Section 7.01 and that once a payment is
made subsequent payments will be made in substan-
tially 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 substan-
tially 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 Subsec-
tions (a), (c), or' (9) above may include the selection of
an aUtOnlatlC atlllual 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 in-
crease 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 pay-
ment 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)
12........... .................................
97- 49
lr.
,�i,aa,
ICMA RETIR E M ENT COR PORATION
1
above for a period of five years or such shorter period of
time necessary to ensure that the amount of any install-
ment is not less than $1,200 per year, without the
inclusion of a cost -of -living increase.
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
b1,200 per year. No payment option may be selected
by a Participant 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)(13)(i)(1). 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 1
year can only be made in substantially nonincrcasing
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-retiretllelil death Benefits:
(a) :Should the P trEtcpant die after he/shc.,h;ts begun
to under I,paytlicut option,,the
rem iiuingpayment~, if any, under the payment
option eliill.bc payable to the Participant's Benefi-
C1.11r ytEhiti Elie,.30-clay period couiniencin" with
Elie (Ost day after the Participant's death, unless the
Beneficiary elects payment under,a different hay-
ntentoption that is available under Section 7.02
\yiEliin' h0 days of the Participant's death. Any
different payment option elected by a Beneficiary
under this section must provide for payments of a
rate Eliat is at least as rapid under the payment. . ,
option that was applicable to the Participant. In no,
event shall the Employer or Administrator b4 Aiible
to the Beneficiary 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 payments 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, Elie 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 Participant's Account shall be payable
to the Beneficiary commencing within the 30-day
period commencing on the 91st 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 coniniencenicnt date shall be not later
than the later of (1) December 31 of the year fol-
lowing the year of the Participant's death, or (ii) if
the Beneficiary is the Participant's spouse, Deceni-
ber 31 of the year in which the Participant.would
have attained a-e 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,iri .
approximately equal annual installments over five
years, or over such shorter period as niay be neces-
sary to assure that the aniount of any annual install-
n,eiit is licit less than S3,500. A Beneficiary shall be
treated :is iflie/she were a Participant for purposes
cif deterinining 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 loo-er
Ehan the life expectancy of the Beneficiary, and
provided that such' period niay not exceed (15) years
if the Beneficiary is not the Pa'rtteipaiit's spouse.
(c) In the event that the Bite iciary ,dies before the
payment of death be neftts has'comtnenc.ed or been
completed. the renmimit; valu'e'of the Participant's
Account shall be paid`tci the csfatc of the `Benefi-
ciary in :i lurtlp sum: In the eVdnt that the
Participant's estate is the he ieficiary, payment shall
be made to the estate in a lamp sum.
....................... ..................................................... ........ I ...................
......
NiN 13
9'7- 49
457 Drf e r red CA oil eIt t a l i oit plait and 7'rust Daru III rttf
NourIII Grr 199.6
7.06 Unforeseeable Emergencies: ARTICLE Vill. LOANS TO PARTICIPANTS
(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 itself cause
severe financial hardship.
(b) An unforeseeable emergency shall be decllled 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 circum-
stances arlsin as a result of events beyond the
control of the Participant. The need to send a
Participant's child to college or to'purchase a new
honle shall not be considcred unforeseeable enler-
gencies. The determination as to whether such all
unforeseeable emergency exists shall be based. on the
merits of each individual ease.
7.07 Transitional Rule for I're-1989 Benefit Elections::'
In the event that, prior to January 1, 1989, 1 I?articipant
or Beneficiary has 'coiiinienced receiviiig benefits udder
a paynietit_ option�6r has irrcyocably.elcc,tcd-a payment
option or'beuefit commencement date, then that pay-
iiient option ofelection shall.re,inain in effect notwith-
staildiu;; wily other prgvision of the Plan.
7.08 ID c Milli Ili i S
i liIiiis Aerounts: Notwithstanding thefore-
going provisions of this Article, if the value of a
Participant's`Account does not exceed S3,500 and (a) no
inioullt has been deferred under the Plan with respect
to the Participant during the 2-year period ending on
the date of the distribution and (b) there has been no
prior distribution under the Plan to the Participant
pursuant to this Section 7.08, 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 stun.
8.01 Availability of Loans to Participants:
(a) Effective January 1, 1997, the Employer may
elect to make loans available to Participants in this
Plan. If the Employer has elected to !Hake 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
governing 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 loads are made available to all
Participants on a reasonably equivalent basis.
8.02 Ternls 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
Participants on a reasonably equivalent basis.
(b) Interest Rite, 'Loan's must be adequately secured
and bear a reaso'talilei interest rate:
(c) Loa❑ Lli ilt No Participant loaii,shall `exceed the
preseiit valic of the, Participant's Account
(d),Foreclosure,. f i the event of defatilt'on any
in:ctallmult`plynict tlie'outstaiidiilg bal:irice of the
loan sh1ll`be, al dccnie:d;'distribution. In such event,
an :actual distribution of a plan loan offset amount
Will not occur until a distributable event occurs in
the Plall.
(e) Reduction of Account. Notwithstanding all\'
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 out-
standing 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.
14..............................................7.....................
..................... 9 7._.... 4 9
I C M A RETIREMENT CORP0R..ATION
(0 Amount of Loan. At the time the loan is made,
the principal amount of the loan plus the outstand-
ing balance (principal plus accrued interest) due on
any other outstanding loans to the Participant front
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). $50,000, 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'loan1s:nlade °over
(b)The outstindingg balance of loans`fronl, the
Plan oil the date',on which such' loin is
made; oe
(2) One-half o ,the vilue of the'Participant's
'-interest in ill' of his/her Accounts under
this Plan.
(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' in part at'any time
prior to maturity, without penalty.
0) Promissory Note. The ]ban 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 tie secure;d,by an
assignment of the Participant's righf, title and'
interest in and to his/her Account.
(1) 'Assnnnient or Pledge. For the purposes -of
paragraphs (f) and (g); assignnicnt 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 is a loan.
(g) Application for Loan. The Participant must
give the Employer adequate written notice, as
(in) Other Terms and, Conditions: The Elilployer
determined by the Employer, of the amount and
sh111 fix such other tc,rn�s v1d`coudifio�is`of the` loan
desired tinge for receiving a loan. No more than :
as It deeIlls necessary to' coiiiply with']cgal require -
one (1) loan may be made by the Plan to a'Plrtici-'
.111ellCs.'to, 1111i11t1111 the`.qulllfi(:atioil of';the Plan alld
Pant in ally calendar year. No loan shall b'c''"ap-=
Trust ulitier scuion 457,,o the'--Code;-or'fo prevent
proved if an existing loan front the Pllli to the
the' creatMent of the loaii for m purposes as a
Participant is in default to any extent.
distribution to the. hilrti�ipant.', The Lnlployer, in
its �i,iccrcti<iil'fo'r any reason, I v Fig other tcrnls
(h) Length of Loan; Any loin lssued`shall require
and conditions of t witli
the Participant to reply the 'loan ill suh�t,lilrially
the prop ltiions of -this Article 1 )d section 72(p) of
Cgti11 1IlSLalll]7e1I[S%of'pi'11]Clpal alld`11lteIt�t;rlt'1C1Si
C17C.cot
monthly, dyer:'a period that does not exceed' five (S)
'
years from the date of the loan; provided," lio,,k.cyer.
A9.03 Parnc ipant Loan Aecotnitti "
that if the proceeds of the loan..arc appllc,�i'hy the.
Participant to acquire any dwelling unir'tllat'19 to be
(1) `.Upon. approval' ofa loll] CU a Participant by the
used within a reasonable time (detern)ined`at the
"Employer; an amount not in excess of the loan shall
tinge the loan is Made) after the loan is midc as rice. ' ',
',,,.::,be transferred from the Participant's other invest -
principal residence of the Participant, tlie,fivel" (5)
`nienc fund(s), described ill Section 6.05 of the Plan,
year limit shall not apply. In this event; the period`'
to the Participant's Loan Account as of the Account -
of repayment shall'not exceed 1 reasonable period;
ing Date immediately preceding the agreed upon
determined by the Employer. Principal installments
date on v,,hich the loan is to be made.
and interest payments otherwise due may' be sus-
pended for up to one (1) year during all authorized
(b) The assets of a Participant's Loan Account may
leave of absence, if the promissory note so provides,
be invested and reinvested only in promissory notes
but not beyond the original term permitted under
received by the Plan front the Participant as consid-
this Subsection (h), with a revised payment schedule
eration for a loan permitted by Section 8.01 of the
PlaIl or in cash. Uninvested cash balances Ill a
............. ... .................. I ........ ........................................................1 5...
97- 49
457 1)rjrerrred Coit) 1)cittaIioe 11laa.aitd TritSf D (iruniritt
NovriaGrr 1990
i
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 audtority 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.
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 Account 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 chile{ 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 autho-
rize 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 Em-
ployer 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 Partici-
pant 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 Participant
fails to obtain, an order .of the. court in the proceed-
ing relievin r the Employer or Administrator from
the obligation to comply with. the judgment, decree,
or order.
(c) Participation in Legal Proceedings: The Em-
ployer and Administrator shall not be obligated to
defend against or set aside any judgenient, decree, or
order described in paragraph (a) any legal order
relating to the garnishment of a Participant's ben-
efits, 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 ex-
pense, the amount of the expense niav be charged
against the Participant's Account and thereby reduce
the Employer's obligation to pay benefits to the
1.6 ...................................................................................I.................
0 :149
-
k
1 C M A RETIREMENT C O R P O R A T I O N
Participant. In the course of any proceeding relating
to divorce, separation, or child support, the Em-
ployer and Administrator shall be authorized to
disclose information 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,
pension, 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 Employer.
ARTICLE X1. AMENDMENT OR TERMINATION
OF PLAN
The Employer may at any tulle amend this Plan pro-
vided that it transmits such anwndnlent in writing to the
Administrator 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 actio-is ?administrator.
hereunder if it disapproves of suctl';.inlcndiiieut;,The
Employer may at any time: rerniinmte this !'eau..:
The Administrator may it at i% tinve, propose. al ',inmid-,
mcnt to the [']an by an 111struiile 1LC,In writing trallsmlt-
ted to the Employer at 1Last, 30 day` be.ford the effective
date of the amendnlellt. SLICII ,aliiCildi.liciit.sllall become
effective unless, within such; 30-diy'`period, the Et11-
ployer notifies the Administrator, that it
disapproves such ai11Ciidnient, in wliicli case such
amendment shall not beconic effective. In the event
Of such disapproval, the Administrator shall be, under
no obligation to continue artiu�; a,; Administratoi
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 estab-
Iished with the intent that it meet the requirements of
all "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.
...........................................'7�r f .....r,..�......................, .....
17
9'7-- 49
H3
4�
1 -117
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