HomeMy WebLinkAbout129-85 RESOLUTIONA RESOLUTION ADOPTING AN EMPLOYEE RETIREMENT PLAN
AND TRUST FOR THE CITY OF FAYEITEVILLE.
-taEREAS, the City of Fayetteville, Arkansas, -a governmental unit, .
(hereinafter referred to as "Employer") desires to continue the qualified
status of .its employee pension plan which satisfies the requirement
;.for qualification under S401(a) of the Internal Revenue Code of 1954,
;as amended, and rules and regulations promulgated thereunder.
THEREFORE. FE TT RESOLVED BY THE BOARD OF DIRECTORS OF THE
CITY OF FAYETKENUILE, ARKANSAS:
Section 1. That the Board of Directors hereby authorizes
.the Mayor and City Clerk to execute an Amended and Restated Money
;.Purchase Pension Plan and Trust Agreement of the City's Retirement
Plan and Trust with the effective date of the restated plan to be
:January 1, 1984. - A copy of the Amended and .Restated Retirement Plan
>'and Trust authorized for execution hereby are attached hereto marked
;;Exhibits "A" and "B" and made a part hereof.
"Section 2. The Board of Directors hereby declares that the
attached plan and trust agreement are hereby adopted in the form pre-
sented.
;:Section 3. The City Clerk is hereby authorized and directed
to deliver to the trustee one or more counterparts of the executed
plan and trust agreement authorized hereby.
Section 4. The Employer shall act as soon as possible to
notify all employees of the amended and restated plan and trust.
PASSED AND APPROVED this
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3rd day of
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By . �G
Mayor
December , 1985.
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CITY OF FA ET EVILLE
MONEY PURCHASE PENSION PLAN
(Amended and Restated)
Original Effective Date - June i, 1980
Effective Pate of this Amended and Restated Flan - January 1, 1984
(with some amendments atlective January 1, 198S)
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10.04
CI;Y OF FAYET EVIT.1 F:
MONEY PURCHASE PENSION PLAN
(Amended and Restated)
The CITY 0F' FAYET MLLE, Arkansas, (hereinafter called Employer), a governmental unit
with its principal offices located in Fayetteville, -Arkansas, does hereby agree to amend
their pension plan and to continue said pension plan, as amended and restated, upon the
following terms and conditions.
1.0 -NAMES AND DATES
1.1 EMPLOYER AND PLAN ADMINISTRATOR:
CITY OF FAYETI'EVILLE
P.O. DRAWER F
FAYETPEVILLE , AR 12702
1.2 TRUSTEE:
McIlroy Bank and Trust, Fayetteville, AR, or any successor 'trustee appointed by the City
of Fayetteville to perform as specified in the Trust Agreement with such trust being
necessary to carry out the provisions of the City of Fayetteville Money Purchase Pension
Plan and Trust.
1.3 PLAN NAME:
City of Fayetteville Money Purchase Pension Plan (hereinafter referred to as "Plan'.').
1.4 EFFECTIVE DATE:
The effective date of this plan was June 1, 1980. The effective date of this amended
and restated plan is January 1, 1984. There are some amendmentments contained herein
that will become effective -January 1, 1985.
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1.5 PLAN YEAR:
The plan year is the calendar year. The plan anniversary date is January 1.
2.0 DEFINITIONS -
2.1 Employee:
The term PSuployee shall mean any person employed by the Employer maintaining the Plan or
of any other employer aggregated under section 414(b), (c), or (in) of the internal
Revenue Code (hereinafter referred to as "Code"). The definition of employee shall also
include any individual deemed under section 414(n) of the Code to be an employee of any
employer described in the previous sentence.
2.2 Leased Employees:
Any leased employee shall be treated as an employee of the recipient employer, however,
contributions or benefits provided by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as provided by the
recipient employer. The preceding sentence shall not apply to any leased employee if
such employee is covered by a money purchase pension plan providing:
A. A non-integrated employer contribution rate of at least 7 1/2 percent of
compensation;
B. Irmnediate participation; and
C. Full and immediate vesting.
For puposes of this paragraph, the term "leased employee" means any person who, pursuant
to an agreement between the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the employer and related persons determined
in accordance with Section 414(n)(6) of the Code) on a substantially full time basis for
a period of at least one year and such services are of a type historically performed by
employees in the business field of the recipient employer.
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2.3 Participant:
An employee who is a participant in the Plan.
2.4 Compensation:
The amount of base compensation, during a Plan Year, paid to an Employee, excluding
overtime pay, bonuses, commissions, expense account allowances and excluding Employer
contributions to this or any other retirement plan sponsored by the Employer.
2.5 Computation Period:
Years of Service and Breaks in Service will be measured on the sane computation period
as defined below.
2.6 Computation Period for Eligibility and Vesting:
A. For purposes of determining years of service and breaks in service tor purposes
of eligibility and vesting, the initial computation period is the
12 -consecutive month period beginning on the date the employee first perform;
an hour of service for the employer. The succeeding 12 -consecutive month
periods commence with the tirst plan year which commences prior to the first
anniversary of the employee's initial computation period regardless of whether
the employee is entitled to be credited with 1,000 hours of service during the
initial computation period. An employee who is credited with 1,000 hours of
service in both the initial computation period and the first plan year which
commences prior to the first anniversary of the employee's initial computation
period will be credited with two years of sevice tor purposes of eligibility to
participate.
B. In the case of any participant who has a 1 -year break in service, years of
eligibility service before such break will not be taken into account until the
employee has completed a year of service atter returning to employment.
Such year of service will be measured by the 12 -consecutive month period
beginning on an employee's reemployment commencement date and, it necessary,
plan years beginning with the plan year which includes the first anniversary of
the reemployment commencement date.
The reemployment commencement date is the tirst day on which the employee is
credit with an hour of service for the performance of duties after the first
computation period in which the employee incurs a one year break in service.
If a former participant completes a year of service in accordance with this
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provision, his or her participation will be reinstated as of the reemployment
commencement date.
2.7 Break in Service:
Shall mean a 12 -consecutive month period (Computation Period) during which the
participant does not complete more than S00 hours of service with the employer.
2.8 Hour of Service:
A. Each hour for which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours shall be credited to the
Employee for the computation period in which the duties are performed, and
B. Each hour for which an Employee is paid, or entitled to payment, by the
Employer on'account of a period of time during which no duties are performed
(irrespective of whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty or leave of absence. No more than 501 Hours ot Service
shall be credited under this paragraph tor any single continuous period whether
or not such period occurs in a single computation period}. Hours wider this
paragraph shall be calculated and credited pursuant to Section 2530 200(b)(2)
of the Department of Labor Regulations which are incorporated hereby by this
reference; and
C. Each hour for which back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hours ot Service shall not be
credited both under Paragraph (a) or Paragraph (b) as the case may be, and
under this Paragraph (c). These hours shall be credited to the Employee for
the computation period or periods to which the award or agreement pertains
rather than the computation period in which the award, agreement or payment is.
made.
Hours of Service will be credited for employment with other members of an affiliated
service group (under Section 414(m)), a controlled group of corporations (under Section
414(b)), or a group of trades or businesses under common control (under Section 414(c)),
of whichthe employer is a member.
Hours of Service will also he credited for any individual considered an employee for
purposes of this plan under Section 414(n).
Solely for purposes.of determining whether a break in service for participation and
vesting purposes has occurred in a computation period, an individual who is absent from
work for maternity or paternity reasons shall receive credit for the hours of service
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which would otherwise have been credited to such individual but for such absence, or in
any case in which such hours cannot be determined, 8 hours of service per day ot such
absence. For purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of a birth of a child of the individual, (3) by reason of the placement ot a
child with the individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a period beginning
immediately following such birth or placement. The hours of service credited under this
paragraph shall be credited: (1) In the computation period in which the absence begins
if the crediting is necessary to prevent a break in service in that period; or (2) in
all other cases,.in the following computation period. '
Hours of service will be determined on the basis.of months worked. An employee will be
credited with one -hundred -ninety (190) hours of service if, under the definition of hour
of service, as provided herein, such employee -would be credited with at least one (1)
hour of service during the month.
2.9 Year of Service:
A Year of Service is a 12 -consecutive month period (computation period) during which the
employee completes at least 1,000 hours of service.
2.10 Disability:
Disability means inability to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment that can be expected to result
in death or which has lasted, or can be expected to be permanent. The permanence and
degree of such impairment shall be supported by medical evidence.
2.11 Forfeitures:
Upon the termination of a participant that is not fully vested, the non -vested portion
of his account balance will be a forfeiture.
2.12 Fiduciary:
The term Fiduciary shall mean and include the Trustee, Plan Administrator, Employer,
Investment Manager, and any other person who:
A. Exercises any discretionary authority or discretionary control respecting
management of the Plan or exercises any authority or control respecting
management or disposition of its assets;
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B. Renders Investment advice for a fee or other compensation direct or indirect,
with respect to any monies or other property of the Plan, or has any authority
or responsibility to do so;
C. Has any discretionary authority or discretionary responsibility in the
administration of the Plan; or
D. Is described as a "Fiduciary" in Section 3 (14) or (21) of ERISA or is
designated to carry out fiduciary responsibilities pursuant to this Agreement
to the extent permitted by Section 405(c)(B) of ERISA.
2.13 Named Fiduciary - Employer:
The Employer shall be the "Named Fiduciary," with delegative authority, within the
meaning of Section 402 of the Employee Retirement Income Security Act of 1974 and shall
be in charge of the operation and administration of the Plan. The employer shall have
the power to delegate specific fiduciary responsibilities (other than those accepted by
prescribed Trustee with respect to the control of the assets of the Plan). Such
delegations may be to officers or employees of the Employer, without compensation. Any
such person may resign by delivering a written resignation to Employer. Vacancies
created by resignation, death, or other causes may be filled by the Employer or the
responsibilities may be reabsorbed or redelegated by the biployer.
2.14 Qualified Joint and Survivor Annuity:
An annuity for'the life of the partcipant with a survivor annuity tor the life of the
participant's spouse which is not less than one-half, nor greater than the amount of the
annuity payable during the joint lives of the participant and the participant's spouse
The joint and survivor annuity will be the amount of benefit which can be purchased with
the participants account balance. The percentage of the survivor annuity shall 50%.
3.0 TOP HEAVY PROVISIONS
If the plan is or becomes top-heavy in any plan year beginning after December 31, 1983,
the provisions of the following section will supersede any conflicting provision in the
plan.
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3.1 Top -Heavy Definitions:
A. Key Employee: Any employee or former employee (and the beneficiaries of such
employee) who at any time during the determination period was*
1. An officer of the Employer having annual compensation greater than $45,000
or one and one half times the dollar limitation of the maximum annual
addition in effect under Code Section 415(a)(1)(A), whichever is greater;
2. One of the ten employees owning, directly or indirectly, the largest
ownership interests in the Employer and having annual Compensation greater
than $30,000 or the dollar limitation of the maximum annual addition in
effect under Code Section 415(c)(1)(A), whichever is greater;
3. A 5% or larger owner of the Employer; or
4. A 1% or larger owner of the Employer having an annual Compensation from the
Employer of more than $150,000.
B. Top -Heavy Plan: For any plan year beginning after December 31, 1983, this
plan is top-heavy if any of the following conditions exists:
1. If the top-heavy ratio for this plan exceeds 60 percent and this plan is
not part of any required aggregation group or permissive aggregation group
of plans.
2. If this plan is a part of a required aggregation group of plans but not
part of a permissive aggregation group and the top-heavy ratio for the
group of plans exceeds 60 percent.
If this plan is apart of a required aggregation group and part of a
permissive aggregation group of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60 percent.
C. Top -Heavy Ratio:
1. If the employer maintains one or more defined contribution plans (including
any Simplified Employee Pension Plan) and the employer has never maintained
any defined benefit plan which has covered or could cover a participant in
this plan, the top-heavy ratio is a fraction, the numerator of which is the
sum of the account balances of all key employees as of the determination
date (including any part of any account balance distributed in the 5 -year
period ending on the determination date), and the denominator of which is
the sum of all account balances (including any part of any account balance
distributed in the 5 -year period ending on the determination date) of all
participants as of the determination date. Both the numerator and
denominator of the top-heavy ratio are adjusted to reflect any contribution
which is due but unpaid as of the determination date.
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2. If the employer maintains one or more defined contribution plans (including
any Simplified Employee Pension Plan) and the employer maintains or has
maintained one or more defined benefit plans which have covered or could •
cover a participant in this plan, the top-heavy ratio is a fraction, the
numerator of which is the sum of account balances under the defined
contribution plans for all key employees and the present value of accrued
benefits under the defined benefit plans for all key employees, and the
denominator of which is the sum of the account balances under the defined
contribution plans for all participants and the present value of accrued
benefits under the defined benefit plans for all participants. Both the
numerator and denominator of the top-heavy ratio are adjusted for any
distribution of an account balance or an accrued benefit made in the
five-year period ending on the determination date and any contribution due
but unpaid as of the determination date.
3. For purposes of (1) and (2) above, the value of account balances and the
present value of accrued benefits will be determined as of the most recent.
valuation date that falls within or ends with the 12 -month period ending on
the determination date. The account balances and accrued benefits of a
participant who is not a key employee but who was a key employee in a prior
year will be disregarded. The calculation of the top-heavy ratio, and the
extent to which distributions, rollovers, and transfers are taken into
account will be made in accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee contributions will not be
taken into account for purposes of computing the top-heavy ratio. When
aggregating plans, the value of account balances and accrued benefits will
be calculated with reference to the determination dates that fall within
the same calendar year.
D . Permissive Aggregation Group. The required aggregation group of plans plus
any other plan or plans of the employer which, when considered as a group with
the required aggregation group, would continue to satisfy the requirements of
Sections 401(a)(4) and 410 of the Code.
E . Required Aggregation Group:
A. Each qualified plan of the employer in which at least one key employee
participates; and
B. Any other qualified plan of the employer which enables a plan described in
(A) to meet the requirements of Sections 401(a)(4) and 410 of the Code.
F. Determination Date: For any plan year subsequent to the first plan year, the
last day of the preceding plan year. For the first plan year of the plan, the
last day of that year.
G . Valuation Date: The plan anniversary date at the beginning of each plan year
as of which account balances or accrued benefits are valued for purposes of
calculating the top-heavy ratio.
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Present Value: Present value shall be based only on the interest of 7% and
mortality rates using the GAM 1971.
3.2 Minimum Allocation:
A. Required:
1. Except as otherwise provided in A(3) and A(4) below, the employer
contributions and forfeitures allocated on behalf of any participant who is
not a key employee shall not be less than the lesser of three percent of
such participant's compensation, or in the case where the employer has no •
defined benefit plan, which designates this plan to satisfy Section 401 of
the Code, the largestpercentage of employer contributions and forfeitures,
as a percentage of the first $200,000 of the key employee's compensation,
allocated on behalf of any key employee for that year. The minimum
allocation is determined without regard to any Social Security
Contribution. This minimum allocation shall be made even though, under
other plan provisions, the participant would not otherwise be entitled to
receive an allocation or would have received a lesser allocation of the
year because of:
a. The participants failure to complete 1,000 hours of service (or any
equivalent provided in the plan); or
b. The participants failure to make mandatory employee contributions to
the plan; or
c. Compensation less than a stated amount.
2. For purposes of computing the minimum allocation, compensation will mean
compensation as defined in the definitions section.
3. The provision in (1) above shall not apply to any participant who was not
employed by the employer on the last day of the plan year.
4. The provision in (1) above shall not apply to any participant to the extent
the participant is covered under any other plan or plans of the employer
and the employer has provided that the minimum allocation or benefit
requirement applicable to top-heavy plans will be met in the other plan or
plans.
B. Top -Heavy - Minimum Contribution Where Paired Defined Contribution Plans are
Involved - Non -Duplication of Minimum Contribution:
For each plan year in which the paired plans are top-heavy,' the employer will
provide a minimum contribution equal to 5% of total compensation for each
non -key employee who is entitled to a minimum contribution under this Plan Said
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minimum contribution shall not be duplicated for a participant in more than one
paired plan.
3:3 Vesting Schedule:
If the plan"ever becomes top heavy the following vesting schedule will
YEARS OF PERCENT
SERVICE VESTED
Less than 2 08
2 20%
3 40%
4 60%
5 80%
6 or more 100%
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3.4 Limit on Compensation:
apply:
In any plan year that this plan is deemed top heavy, compensation for any participant in
excess of $200,000 shall be disregarded.
4.0 PLAN ADMINISTRATOR
4.1 Appointment:
Plan shall be administered by a Plan Administrator (or Administrators) appointed by
Employer. In the event Employer does not appoint a Plan Administrator, Employer shall
serve as Plan Administrator. A Plan Administrator may resign at any time upon delivery
of a written resignation to Employer.
4.2 Authority:
The Plan Administrator may make rules and regulations for the administration of the Plan
and shall have the necessary or appropriate authority to enable it to discharge its •
duties under the Plan.
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4.3 Interpretation:
Plan Administrator may construe or interpret the Plan whenever necessary to carry out
its intention and purpose.
4.4 Records•
Plan Administrator shall keep accurate and detailed records of its administration of
Plan and shall make available to each Participant for examination at reasonable times
during business hours such of its records as pertain to him and such other information
and records as prescribed by ERISA and the Regulations.
4.5 Operation of Plan:
Plan Administrator shall supervise and control the operation of the Plan as specified
herein:
A. Be responsible for keeping accurate books and records with respect to
Participants, -their compensation and allocations of contributions to
Participants Accounts.
B . Determine eligibility of any Participant:'
C. Determine the manner in which the funds of the Plan shall be disbursed in
accordance with the provisions of the Plan and Trust, including vested
interests.
D . Notify each Participant annually following receipt from the Trustee
annual accounting and after notification by Employer of the current
contribution, of the value of each Participant's account, including
allocation to his accounts of Employer contributions if applicable.
of its
the
E . Shall have the right to direct the Trustee in writing as to investment policy.
Trustee shall be under no liability for any loss arising from any action taken
or omitted to be taken by the Trustee at the direction of the Plan
Administrator
F. The Trustee may request instructions in writing from the Plan Administrator on
any matters affecting the Trust and may rely and act thereon.
G . Hire a service provider to assist the Plan Administrator in recordkeeping and
other administrative duties:
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4.6 Designation:
The Plan Administrator shall serve until his resignation or dismissal by the Board of
Directors of the Employer and a vacancy shall be filled in the same manner as the
original appointment. The Plan Administrator shall keep a permanent record of his
actions with respect to the Plan which shall be available for inspection by appropriate
parties as provided in the Code and ERISA.
4.7 Rules and Regulations:
Subject to the limitations of the Plan, the Plan Administrator shall, from time to time,
establish rules for the administration of the Plan and transaction of its business. The
records of the employer, as certified to the Plan Administrator, shall be conclusive
with respect to any and all factual matters dealing with the employment of a
Participant. The Plan Administrator shall interpret the Plan and shall determine all
questions arising in the administration, interpretation and application of the Plan, and
all such determinations by the Plan Administrator shall be conclusive and binding on all
persons subject, however, to the provisions of the Code and ERISA.
5.0 PARTICIPATION
5.1 Eligibility Requirements -
A. All full time employees of the Employer are eligible to participate in the plan
if:
i. They complete 1,000 -hours or more in a plan year:
ii. Are at least age 20;
iii. Have completed at least two (2) years of service; and
iv. Agree to make the mandatory contributions of 3% of base compensation.
B. A Participant whose employment is terminated before the end of a Plan Year
shall not share in Employer Contributions for such Plan Year. A participant
whose employment is terminated by reason of reaching normal retirement age,
death, or disability, shall share in Employer Contributions for such plan year.
C. Employees who reach their Normal Retirment Age and are still in the employ of
the Employer will continue to participate in the plan and receive
contributions, forfeitures, and gains and losses just as any other participant
who has not reached thier normal retirement age.
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D. Once an employee agrees to participate, he or she will not be allowed to
rescind the decision or change the rate of contribution until any anniversary
date of the plan (Jan.1), except for termination of employment, retirement,
death or disability.
E. An employee who ceases to participate, shall not be able to participate again
until the anniversary date one year later. During that time, the employer will
make no contributions of Employer matching contributions, nor will the year(s)
of non -participation count toward vesting.
5.2 -Entry Date:
Employees shall enter the plan on the January 1 Anniversary Date following completion of
the eligibility requirements. The first allocation to a participant account shall be at
the end of their first year of participation.
5.3 Leaves of Absence:
Leaves of absence may be granted by Employer on a uniform non-discriminatory manner to
Participants for reasons of illness, vacation, vocational training or military service,
provided that leaves of absence for military service shall not be for more than two
years. The Participant shall be considered to be an Employee during such leave of
absence and Employer shall continue to make contributions on his behalf (based on his
compensation, if any) to Trustee. If a Participant fails to return to the employ of
Employer at the expiration of such leave of absence, he shall be deemed to have
terminated employment as of such expiration.
5.4 Rights and Privileges:
All Participants shall be bound by the terms of the Plan, including all amendments
hereto made in the manner authorized herein. Participants shall also be entitled to all
the rights and privileges afforded thereby including those granted specifically by the
Code and ERISA which are hereby adopted by references as part of said Plan.
5.5 Eligibility Computation Period:
A. For purposes of determining years of service and breaks in service for purposes
of eligibility, the initial eligibility computation period is the
12 -consecutive month period beginning on the date the employee first performs
an hour of service for the employer. The succeeding 12 -consecutive month
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periods commence with the first plan year which commences prior to the first
aniversary of the employee's initial eligibility computation period regardless
of whether the employee is entitled to be credited with 1,000 hours of service
during the initial eligibility computation period. An employee who is credited
with 1,000 hours of service in both the initial eligibility computation period
and the first plan year which commences prior to the first anniversary of the
employee's initial eligibility computation period will be credited with two
years of service for purposes of eligibility to participate.
B. In the case of any participant who has a 1 -year break in service, years of
eligibility service before such break will not be taken into account until the
employee has completed a year of service after returning to employment.
Such year of service will be measured by the 12 -consecutive month period
beginning on an employee's -reemployment connnencement date and, if necessary,
plan years beginning with the plan year which includes the first anniversary of
the reemployment commencement date.
The reemployment commencement date is the first day on which the employee is
credited with an hour of service for the performance of duties after the first
eligibility computation period in which the employee incurs a one year break in
service.
If a former participant completes a year of service in accordance with this
provision, his or her participation will be reinstated as of the reemployment
commencement date.
C. All years of service with the employer are counted toward eligibility except
the following:
1. A former participant will become a participant immediately upon returning
to the employ of the employer if such former participant has a
nonforfeitable right to all or a portion of the account balance derived
from employer contributions at the time of termination.
2. A former participant who did not have a nonforfeitable right to any portion
of the account balance derived from employer contributions at the time of
termination will be considered a new employee, for eligibility purposes, if
the number of consecutive one year breaks in service equals or exceeds the
aggregate number of years of service equal or exceed the greater of:
1. Five years; or
2. The aggregate number of years of service before the consecutive one
year breaks in service.
If such former participant's number of consecutive one year breaks in
service are less than the greater of:
1. Five years; or
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2. The aggregate number of years of service before the consecutive one
year breaks in service.
Such participant shall participate immediately.
3. The year during which an Employee was eligible to participate but elected
to not participate, shall not count toward vesting purposes.
4. If the employer maintains the plan of a predecessor employer, service with
such employer will be treated as service for the employer.
6.0 CONTRIBUTIONS AND FORFEITURES
6.1 Employer Contributions:
For each plan year, the employer will contribute an amount equal to 6% of each
participant's compensation when the participant contributes the 3% mandatory
contribution. For any plan year an otherwise eligible participant elects to not make
the 3% mandatory contribution, the Employer will not make the 6% contribution.
6.2 Forfeitures:
Forfeitures shall be held in a suspense account until the terminated participant has
incurred a break in service at which time they will be used to reduce the employer's
required contribution.
6.3 Mandatory Employee Contributions:
As a requirement of participantion, an employee must contribute 3% of their compensation
each plan year.
6.4 Voluntary Employee Contributions:
A. Employee Contributions made hereunder and earnings thereon will be
nonforfeitable at all times.
No forfeitures :•rill occur solely as a result of an employees withdrawal of
employee contributions.
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C. Non -Deductible Voluntary Contributions: The participant may make non-
deductible contributions up to 10% of an employees compensation.
D. Deductible Voluntary Employee Contributions: The participant may make
deductible contributions, and the following provisions will apply:
In any taxable year, a participant may make deductible cash contributions to
the trust not to exceed the lesser of:
1. $2,000; or
2. The participant's compensation for the taxble year for which the
contribution is made.
Compensation for this purpose means all wages, salaries, earned income and
other amounts received or derived from personal sesrvices actually rendered and
includible in gross income, but does not include amounts derived from or
received as earnings or profits from property or amounts received as a pension
or annuity or as deferred compensation. This limitation applies to all
deductible employee contributions made for any taxable year to all qualified
retirement plans maintained by the employer. A separate account will be
established for such contributions which will be nonforfeitable at all times.
This account will share in the gains and losses of the trust
E. The following conditions also apply to such deductible contributions:
1. A deductible voluntary contribution will be considered contributed forthe
calendar year in which it is actually made. However, if the participant
makes the contribution on or before April 1Sth, he or she may notify the
plan administrator at the time the contribution is made that it is made for
the preceding calendar year. A deductible voluntary contribution may only
be made for a calendar year in which the participant was employed by the
emloyer.
2. The plan administrator will not accept deductible employee contributions
which exceed the limitation described above.
3. Any voluntary contribution made by the participant will be treated as a
deductible employee contribution unless the participant has designated (by
notifying the Plan Administrator) by the earlier of: (a) April 15 of the
calendar year following the year for which the contribution is made; or
(b) the date prescribed by the Plan Administrator that it is nondeductible.
4. No contributions will be accepted for the deductible voluntary contribution
account if the employee will have attained age 70 1/2 by the end of the
taxable year for which the contribution is made, and for later tax years.
5. No part of the deductible voluntary contributions account will be used to
purchase life insurance. In the event said contributions are used to
purchase life Insurance, such purchase will be counted as a distribution.
10.20
Page 17
6. The plan will accept accumulated deductible employee contributions (as
defined in Section 72(o)(5) of the Internal Revenue Code) that were
distributed from a qualified retirement plan and rolled over pursuant to
Sections 402(a)(5), 402(x)(7), 403(a)(4), or 408(d)(3) of the Code. The
rolled over amount will be added to the deductible voluntary contributions
account but will not be taken into account in applying the limitations on
deductible voluntary contributions to this plan. The plan will not accept
rollovers of accumulated deductible employee contributions from a plan
under which the employee was covered as a self-employed individual as
described in Section 401(c)(1) of the Code.
The participant may withdraw any part of the deductible voluntary
contributions account by making a written application to the plan
administrator. However, if at the time the distribution is received the
participant has not attained age 59 1/2 and is not disabled, the
participant will be subject to a federal income tax penalty unless the
distribution is rolled over to a qualified plan or individual retirement
plan within 60 days of the date of distribution.
F. The Plan Administrator shall maintain separate accounts for employee
contributions and earnings thereon.
G. Administrative Matters:
1. Withdrawal of voluntary contributions, either deductible or nondeductible,
requires that the participant give the Plan Administrator 30 days prior
written notice.
2. Voluntary Contributions may be withdrawn, but any earnings or gains on such
contributions can not be withdrawn until termination, death, disability, or
retirement. -
3. Participants shall have the right to discontinue or change the amount of
their voluntary contributions only on any January 1, except that, following
any such discontinuance or change, a participant may not resume voluntary
contributions or make another change for three (3) years.
7.0 ALLOCATIONS
7.1 Timing:
Allocations will be performed as of the last day of the plan year.
10.21
PageS. is
-
7.2 Allocation to Accounts:
The Plan Administrator shall
bredit each
eligible participant's
account balance with
their share of the Employee
and Employer
contributions each plan
year.
7.3 Allocation of Investment Gains and Losses:
The Plan Administrator shall calculate each participants share of the investment income
for each plan year by the following methods:
A. Employer Contribution Accounts - Those account balances derived excuusively
from employer contributions and interest thereon. Such gains and losses will
be allocated by multiplying the net investment. income by a ratio, the
numberator of which is (1) and the denominator of which is (2);
1. An amount equal to the Participants account balance as of, the preceding
anniversary date.
2. The sum of all account balances computed in accordance with (1) for all
Participants account balances whose share is being determined.
B. Voluntary Contribution Accounts - Those account balances derived exclusively
from periodic employee contributions an interest thereon. Such gains and
losses will be allocated using weighted account balances. The amount of
investment gains and losses will first be determined for these accounts and
then the net will be allocated to the employer contribution accounts..
7.4 Limitation on Allocations:
A.
1. If the Participant does not participate in, and has never participated in,
another qualified plan or a lfare benefit fund, as defined in Section
419(e) of the Code, maintained by the employer, the amount of Annual
Additions which may be credited to a participants account for any
Limitation Year will not exceed the lesser of the Maximum Permissible
Amount or any other limitation in this plan. If the employer contibution
that would otherwise be contributed or allocated to the participants
account would cause the annual additions for the limitation year to exceed
the maximum permissible amount, the amount contributed or allocated will be
reduced so that the annual additions for the limitation year will equal the
maximum permissible amount.
2. Prior to determining the participants actual compensation for the
Limitation Year, the Employer may determine the Maximum Permissible Amount
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10.22
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on the basis of a reasonable estimation of the participants annual
compensation for the Limitation Year, uniformly determined for all
participants similarly situated.
3. As soon as is administratively feasible after the end of the Limitation
Year, the Maximum Permissible Amount for the Limitation Year will be
determined on the basis of the participants actual compensation for the
Limitation Year.
4. Excess Amounts:
If there is an Excess Amount with respect to a participant for the
Limitation Year, such Excess Amount will be disposed of as follows:
a. Any nondeductible
voluntary employee
contributions,
to
the extent they
would reduce the
Excess Amount, will
be returned to
the
participant;
b. If, after the application of paragraph (a), an excess amount still
exists, and the participant is covered by the plan at the end of the
Limitation Year, the Excess Amount in the participants account will be
used to reduce employer contributions (including any allocation of
forfeitures) for such participant in the next Limitation Year, and each
succeeding Limitation Year it necessary;
c. If, after the application of paragraph (a), an excess amount still
exists, and any participant is not covered by the plan at the end of
the Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future employer contributions (including allocation of any forfeitures)
for all remaining participants in the next Limitation Year, and each
succeeding Limitation Year, if necessary;
d. If a suspense account is in existence at any time during the Limitation
Year pursuant to this Section, it will not participate in the
allocation of the trusts investment gains and losses.
B. Definitions:
1. Annual Additions: The sum of the following amounts credited to a
participants account for the limitation year:
a. Employer Contributions;
b. Forfeitures; and
c. The lesser of: (i) One-half of. the nondeductible employee
contributions; or (ii) the nondeductible employee contributions in
excess of six percent (6%) of the participants actual compensation for
the Limitation Year.
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2. Compensation: A participants earned income, wages, salaries, fees for
professional service and other amounts received for personal services
actually rendered in the course of employment with the employer maintaining
the plan (including, but not limited to, commissions paid salesmen,
• compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips, and bonuses) and excluding the
• following:
a. Employer contributions to a plan of a deferred compensation which are
not included in gross income of the employee for the taxable year in
which contributed, or employer contributions under a simplified
employee pension plan to the extent such contributions are deductible
by the employee, or any distributions from a plan of deferred
compensation;
b. Amounts realized from the exercise of a nonqualified stock option, or
when restricted stock (or property) held by an employee becomes freely
transferable or is no longer subject to a substantial risk of
forfeiture;
c. Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
• d. Other amounts which receive special tax benefits, or contributions made
by an employer (whether or not under a salary reduction agreement) .
towards the purchase of a 403(b) annuity contract (whether or not the
contributions are excludable from the gross income of the employee).
`_ For purposes of applying the limitations in this article, compensation. for
a limitation year is the compenstion actually paid or includible in gross
income during such year.
Notwithstanding the preceding sentence, compensation for a participant who
is permanently and totally disabled (as defined in Section 37(e)(3) of the
Internal Revenue Code) is the compensation such participant would have
received for the limitation yer if the participant had been paid at the
rate of compensation paid immediately before becoming permanently and
totally disabled; such imputed compensation for the disabled participant
may be taken into account only if the participant is not an officer, an
owner, or highly compensated, and contributions made on behalf of such
participant are nonforfeitable when made.
3. Defined Benefit Fraction: A fraction, the numerator of which is the sum
of the participants projected annual benefits under all the defined benefit
plans (whether or not terminated) maintained by the employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
in effect for the limitation year under Section 415(b)(1)(A) of the
Internal Revenue Code or 140 percent of the highest average compensation.
Notwithstanding the above if the participant was a participant in one or
more defined benefit plans maintained by the employer which were in
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existence on July 1, 1982, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under such plans
which the participant had accrued as of the later of September 30, 1983, or
the end of the last limitation year beginning before January 1, 1983. The
preceding sentence applies only if the defined benefit plans individually
in the aggregate, satisfied the requirements of Section 415 as in effect at
the end of the 1982 Limitation Year. For purposes of this paragraph, a
master or prototype plan with an opinion letter issued before January 1,
1983, which was adopted by the employer on or before September 30, 1983, is
treated as a plan in existence on July 1, 1982.
4. Defined Contribution Fraction: A fraction, the numerator of which is the
sum of the annual additions to the participants account under all the
defined contribution plans (whether or not terminated) maintained by the
employer for the current and all prior limitation years (including the
annual additions attributable to the participants nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior limitation years of
service with the employer (regardless of whether a defined contribution
plan was maintained by the employer). The maximum aggregate amount in any
limitation year is the lesser of 125 percent of the dollar limitation in
effect under Section 415(c)(1)(A) of the Code or 35 percent of the
participants compensation for such year.
If the employee was a participant in one or more defined contribution plans
maintained by the employer which were in existence on July 1, 1982, the
C numerator of this fraction will be adjusted if the sum of this fraction and
the defined benefit fraction would otherwise exceed 1.0 under the terms of
this plan. Under the adjustment, an amount equal to the product of: (1)
the excess of the sum of the fractions over 1.0, times (2) the denominator
of this fraction, will be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the fractions as they would
be computed as of the later of September 30, 1983, or the end of the last
limitation year beginning before January 1, 1983. This adjustment also
will be made if at the end of the last limitation year beginning before
January 1, 1984, the stmt of the fractions exceeds 1.0 because of accruals
or additions that were made before the limitations of this article became
effective, to any plans of the employer in existence on July 1, 1982. For
purposes of this paragraph, a master or prototype plan with an opinion
letter issued before January 1, 1983, which is adopted by the employer on
or before September 30, 1983, is treated as plan in existence on July 1,
1982.
S. Employer: All members of a controlled group of corporations (as defined in
Section 414(b) as modified by Section 414(h) of the Code), all trades or
business under common control (as defined in Section 414(c) as modified by
Section 415(h)), or all members of an affiliated service group (as defined
in Section 414(m)) will be considered a single employer for purpose of
applying the limitations of this article.
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re
6. Excess Amount: The excess of the Annual Additions credited to the
participants account for the Limitation Year over the Maximum Permissible
Amount.
7. Highest Average Compensation: The average compensation for the three
consecutive years of service with the employer that produces the highest
average. A year of service with the employer is the 12 -consecutive month
eligibility computation period.
8. Limitation Year: The calendar year. All qualified plans maintained by the
employer must use the same limitation year. If the limitation year is
amended to a different 12 -consecutive month period, the new limitation year
must begin on a date within the limitation year in which the amendment is
made.
9. Master or Prototype Plan: A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
10. Maximum Permissible Amount: For a Limitation Year, the lesser of: (a)
$30,000 (or, beginning January 1, 1986, such larger amount determined by
the Commissioner for the Limitation Year); or (b) 25% of the participants
compensation for the Limitation Year. If a short limitation year is
created because of an amendment changing the limitation year to a different
12 -consecutive month period, the maximum permissible amount will not exceed
530,000 multiplied by the following fraction:
Number of. months in the short limitation year.
---------------------------------------------
C . 12
11. Projected Annual Benefit: The annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed
in a form other than a straight life annuity or qualified joint and
survivor annuity) to which the participant would be entitled under the
terms of the plan assuming:
a. The participant will continue employment until normal retirement age
under the plan (or current age, if later); and
b. The participants compensation for the current limitation year and all
other relevant factors used to determine benefits under the Plan will
remain constant for all future limitation years.
Le
10.28
rage
1. The life of the participant;
-2. The lives of the participant and spouse;
3. A period not extending beyond the life expectancy of the participant; or
4. A period not extending beyond the joint life and last survivor expectancy
of the participant and spouse.
C. Other forms of annuities may be purchased
8.6 Required Commencement of Benefits:
Unless the Participant elects otherwise as provided in this paragraph, payment of
benefits, will commence not later than the 60th day after the latest of the close of the
Plan Year in which:
A. The Participant attains age 65;
B. Occurs the 10th Anniversary of the Year in which the Participant commenced
Participation under the Plan; or
C. The Participant terminates his service with the Employer.
C
8.7 Distribution Requirements:
A. Minimum Amounts to be Distributed: If the participants entire interest is to
be distributed in other than a lump -sum, then the amount to be distributed each
year must be at least an amount equal to the quotient obtained by dividing the
participant's entire interest by the life expectancy of the participant or
joint and last survivor expectancy of the participant and designated
beneficiary. Life expectancy and joint and last survivor expectancy are
computed by the use of the return multiples contained in section 1.72-9 of the
Income Tax Regulations. For purposes of this computation, a participant's life
expectancy may be recalculated no more frequently than annually, however; the
life expectancy of a nonspouse beneficiary may not be recalculated. If the
participant's spouse is not the designated beneficiary, the method of
distribution selected must assure that at least 50 percent of the present value
of the amount available for distribution is paid within the life expectancy of
the participant.
B. Commencement of Benefits:
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10.29
• Page 2b
1. Distributions to 5 -percent Owners. The account balance of a 5 -percent
owner (as described in Section 416(1) of the Code determined with respect
to the plan year ending in the calendar year in which such individual
attains age 70 1/2) must be distributed or commence to be distributed, no
later than the first day of April following the calendar year in which such
individual attains age 70 1/2.
2. Distributions to Non -5 -percent Owners. Distribution to a participant other
than a 5 -percent owner must commence no later than the first day of April
following the calendar year in which the later of termination of employment
or age 70 1/2 occurs.
C. Death Distribution Provisions: Upon the death of the participant, the following
distribution provisions shall take effect:
1. If the participant dies after distribution of his or her interest has
commenced, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution being
used prior to the participant's death.
2. If the participant dies before distribution of his or her interest
commences, the participant's entire interest will be distributed no later
than 5 years after the participant's death except to the extent that an
election is made to receive distributions in accordance with (a) or (b)
below:
a. If any portion of the participant's interest is payable to a designated
beneficiary, distributions may be made in substantially equal
installments over the life or life expectancy of the designated
beneficiary commencing no later than 1 year after the participant 's
death.
b. If the designated beneficiary is the participant's surviving spouse,
the dates distributions are required to begin in accordance with (a)
above shall not be earlier than the date on which the participantwould
have attained age 70 1/2, and, if the spouse dies before payments
begin, subsequent distributions shall be made as if the spouse had been
the participant.
3. For purposes of the Section above, payments will be calculated by use of
the return multiples specified in Section 1.72-9 of the regulations. Life
expectancy of a surviving spouse may be recalculated annually, however, in
the case of any other designated beneficiary, such life expectancy will be
calculated at the time payment first commences without further
recalculation.
4. For purposes of this section, any amount paid to.a child of the participant
will be treated as if it had been paid to the surviving spouse if the
amount becomes payable to the surviving spouse when the child reaches the
age of majority.
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8.8 Timing of Payments:
Ck Payment of benefits within 60 days after:
A. The participant completes the required forms for the Plan Administrator; and
B. The distributable event occurs (Retirement, Death, Disability, or Termination).
8.9 Cash -Out Provisions:
A. If an employee terminates service, and the value of the employee's account
balance derived from employer contributions is not greater than $3,500, the
employee will receive a distribution of the value of the entire vested portion
of such account balance in a lump sum and the non -vested portion will be
treated as a forfeiture.
B. A partial or total cash -out of any benefits may not be made when the present
value of the qualified joint and survivor annuity or qualified preretirement
survivor annuity exceeds $3,500, unless the cash -out is consented to in writing
by the participant and participant's spouse, if any, or shere the participant
is dead, the surviving spouse.
C. A partial or total cash -out of any benefits may not be made after the annuity
starting date, when the present value of the qualified joint and survivor
annuity or qualified preretirement survivor annuity exceeds $3,500, unless the
cash -out is consented to in writing by the participant and participant's
spouse, if any, or where the participant is dead, the surviving spouse.
D. After October 1, 1985, an employee participant shall not be permitted to
withdraw his or her mandatory contributions nor any of the vested Employer
portion except for termination of employment, retirement, death or disability.
8.10 Buy Back Provision:
If a terminated employee receives a distribution pursuant to this section which is less
than the value of the employee's account balance derived from employer contributions,
and resumes employment covered under this plan, the employee's account will be restored
to the amount on the date of distribution if the employee repays to the plan the full
amount of the distribution on or before the earlier of:
A. The end of the 2 -year period beginning with the employee's resumption of
employment covered by the plan,
A
10.31
Page lb
B. The end of the.5-year period beginning with the date of withdrawal.
9.0 VESTING UPON TERMINATION, RETIREMENT, DEATH OR DISABILITY
9.1 Termination:
If a Participants employment terminates during his lifetime and prior to his becoming
eligible for normal retirement, his share of his account balance will be determined
using the following vesting schedule:
YEARS OF
PERCENT
SERVICE
VESTED
-----------
Less than 5
----------
0%
5
25%
6
30%
7
3S%
8
40%
9
45%
10
50%
11
60%
12
70%
13
80%
14
90%
15
100%
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9.2 Years of Service for vesting:
All years of service with the employer are counted toward vesting except the following:
A. A former participant who had a nonforfeitable right to
account balance derived from employer contributions at
participant's termination will receive credit for all
a break in service if the participant completes a year
returning to the employ of the employer.
all or a portion of the
the time of the
(ears of service prior to
of service after
B. A former participant who did not have a nonforfeitable right to any portion of
the account balance derived from employer contributions at the time of
termination will receive credit for years of service prior to a break in
service if:
10.32
Page 29
1. The participant completes a year of service after returning to the employ
of the employer; and
2. The number
of consecutive
one
year breaks in
service is less than the
aggregate
number of
years
of
service before
such break.
3. Any year for which the employee was eligible to participate but elected to
not participate, shall not be counted toward vesting.
9.3 Retirement:
Upon reaching normal retirement age a participant will become 100% vested.
9.4 Death Benefits:
Upon the death of a Participant prior to retirement, the Participants account balance
will become 100% vested and shall be paid to the beneficiary named in a written
designation filed by the Participant with the Plan Administrator. If no beneficiary has
been designated, or the designated beneficiary has predeceased the Participant, then the
Participant will be deemed to have designated the spouse and, if none, to the
participants estate. In the event a participant (or surviving spouse) dies before the
entire interest has been distributed, distribution of the entire remaining interest will
be made within five years after such employee (or surviving spouse) dies.
9.5 Disability Benefits:
Upon the disability (as defined previously) of a Participant prior to retirement, the
Participants account balance will become 100% vested.
9.6 Nonforfeitability - Employee Contributions:
The Participant will have, at all times, a 100% non -forfeitable interst in his/her own
contributions and earnings thereon.
9.7 Amendment of Vesting Schedule:
If the plan's vesting schedule is amended, or the plan is amended in any way that
directly or indirectly affects the computation of the participant's nonforfeitable
percentage or if the plan is deemed amended by an automatic a change to or from a
top-heavy vesting schedule, each participant with at least 5 years of service with the
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Page 30
employer may elect, within a reasonable period after the adoption of the amendment or
change, to have the nonforfeitable percentage computed under the plan without regard to
such amendment or change.
The period during which the election may be made shall commence with the amendment is
adopted or deemed to be made and shall end on the latest of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the participant is issued written notice of the amendment by the
employer or plan administrator.
9.8 Amendments Affecting Vested and/or Accrued Benefits:
No amendment to the plan shall decrease a participant's account balance.
Notwithstanding the preceding sentence, a participant's account balance may be reduced
to the extent permitted under section 412(c)(8) of, the Code. Furthermore no amendment
to the plan shall have the effect of decreasing a participant's vested interest
determined without regard to such amendment as of the later of the date such amendment
is adopted or the date it becomes effective.
10.0 PROHIBITION AGAINST DIVERSION:
10.1 Exclusive Benefit:
Nothing in this agreement or any amendment thereto shall be construed so as to permit
any part of the contributions to the Plan or the principal of income thereunder to be
used for, or diverted to, any purpose other than for the exclusive benefit of
Participants hereunder and their beneficiaries.
10.2 Mistake of Fact or Initial Qualification:
Any Contribution made by the employer because of a mistake of fact must be returned to
the employer within one year of the contribution.
In the event that the Commissioner of Internal Revenue determines that the plan is not
initially qualified under the Internal Revenue Code, any contribution made incident to
that initial qualification by the employer must be returned to the employer within one
year after the date the initial qualification is denied.
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Page 31
r 10.34
In the event that a contribution is made to
the plan as amended, such contribution must
Cdetermination that the amended plan fails ti
provided that:
A. The plan amendment is submitted to
qualification within one year from
C
the plan conditioned upon qualification of
be returned to employer upon the
qualify under Internal Revenue Code,
the Internal Revenue Service for
the date amendment is adopted;
B. Such contribution that was made conditioned upon plan requalification is
returned to the employer within one year after the date the plan's
requalification is denied.
11.0 AMENDMENT OF PLAN:
11.1 Power to Amend:
The employer, may amend any part of the Plan to any extent it deems appropriate,
including amendment of the Plan to the extent necessary to preserve its qualified
status.
12.0 TERMINATION OF PLAN:
12.1 Employer May Terminate Plan:
Employer establishes its Plan voluntarily and, although it intends to continue the Plan,
it shall be wider no obligation to do so. Employer reserves the right to terminate the
Plan at any time when business necessity or expediency requires by giving written notice
to the Trustee.
12.2 Employer Bankrupt or Insolvent:
Employers Plan shall terminate in the event Employer at any time is judicially declared
bankrupt or insolvent or in the event of dissolution, merger or consolidation of
Employer without any provision being made for continuance of Plan.
10.35
Page 32
12.3 Nonforfeitability on Plan Termination:
Upon complete or partial termination of Employers Plan, each affected Participants
accounts shall be nonforfeitable.
13.0 CLAIMS PROCEDURE:
13.1 Participant or Beneficiary May Make Claim:
A Plan Participant or Beneficiary shall make a claim for Plan Benefits by filing a
written request with the Plan Administrator upon a form to be furnished to him for such
purpose.
13.2 Provisions if Claim is Denied:
If a claim is wholly or partially denied, the Plan Administrator shall furnish the
Participant or Beneficiary with written notice of the denial within sixty (60) days of
the date the original claim was filed. This notice of denial shall provide:
A. The reason for denial;
1z B. Specific reference to pertinent plan provisions on which the denial is based;
C. A description of any additional information needed to review the claim and an
explanation of why such information is necessary; and
D. An explanation of the Plan's Claim Procedure.
13.3 Review of Denial:
The Participant or Beneficiary shall have sixty (60) days from receipt of denial notice
in which to make written application for review by the Plan Administrator. The
Participant or Beneficiary may request that the review be in the nature of a hearing.
The Participant or Beneficiary shall have the rights:
A. To representation;
B.
To
review
pertinent
documents; and
C.
To
submit
comments
in writing.
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Page 33
13.4 Plan Administrator - Decision:
The Plan Administrator shall issue a decision on such review within sixty (60) days
after receipt of an application for review.
14.0 THE TRUST FUND AND TRUSTEE:
14.1 Trust Records:
A. Trustee shall keep separate records consisting of balance sheets and income and
expense statements as well as any other statements the Trustee deems prudent
and necessary.
B. The assets of the Trust will be valued annually at fair market value of the
Investment Account as of the last day of the Plan Year.
14.2 Trust Income and Expenses:
• As of each Valuation Date, Trustee shall determine and notify Plan Administrator the sum
of:
A. The Net Investment Income (on a consistent cash or accrual basis) earned by the
Trust Fund since the preceding Valuation Date.
B. The net profit or loss realized on the disposition of assets of the Trust Fund
since the preceding Valuation Date.
C. The net unrealized profit or loss resulting from changes in the fair market
value of assets of the Trust Fund since the preceding Valuation Date or since
the date of acquisition, if later.
D. The Investment Account portion of the Trust Fund shall be reduced by any
expenses paid or incurred but not yet paid by the Trustee.
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14.3 Trust Agreement:
The Employer has entered into a Trust Agreement with the Trustee to hold the funds
necessary to provide the benefits set forth in this Plan.
14.4 Trust Fund:
The Trust Fund shall be received, held in Trust, and invested by the Trustee in
accordance with the provisions of the Trust Agreement and this Plan. No part of the
Trust Fund shall be used for or diverted to purposes other than for the exclusive
benefit of Participants, retired Participants, disabled Participants, their
Beneficiaries or Contingent Beneficiaries under this Plan. No person shall have any
interest in, or right to, the Trust Fund or any part thereof, except as specifically
provided for in this Plan and/or the Trust Agreement.
14.5 Trustee Powers - Investment:
The Trustee shall have such powers to hold, invest, reinvest, or purchase annuities on
the lives of Participants, or to control and disburse the funds as at that time shall be
set forth in the Trust Agreement or this Plan.
14.6 Trust Agreement - Part of the Plan:
The Trust Agreement shall be deemed to be part of this Plan and all rights of
Participants or others under this Plan shall be subject to the provisions of the Trust
Agreement.
15.0 MISCELLANEOUS PROVISIONS:
15.1 Employee Rights:
No Employee shall have the right under this agreement to be retained in the employ of
Employer, and all Employees shall remain subject to discharge to the same extent as if
this agreement had not been executed.
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Page 3S
15.2 Plan Merger - Maintenance of Benefit:
In the event of a merger or. consolidation with, or transfer of assets. to any other plan,
each participant will receive a benefit immediately after such merger, etc. (if the plan
then terminated), which is at least equal to the benefit the participant was entitled to
immediately before such merger, etc. (if the plan had terminated).
15.3 Invalid Provisions:
If any provision of this agreement is held to be invalid or unenforceable, such
determination shall not affect the other provisions of this agreement. In such event,
this- agreement shall be construed and enforced as if such provision had not been
included herein. _
15.4 Binding on Parties:
This agreement shall be binding upon all Participants and their beneficiaries and upon
the heirs, executors, administrators, successors and assigns of all persons having an
interest herein.
15.5 Inalienability of Benefits:
(_ No benefit or interest available hereunder will be subject to assignment or alienation,
whether voluntarily or involuntarily: This does not preclude the Trustee from complying
with a court order requiring deduction from the benefits of a participant in pay status
for alimony or support payments.
15.6 Spendthrift Provision:
If a Participant has so directed in writing in his beneficiary designation, Trustee
shall arrange that any amounts payable to the Participants beneficiary may not be
assigned or encumbered and, to the extent permitted by law, shall not be subject to
levy, attachment or other judicial process for the payment of the beneficiary's debts or
obligations.
15.7 Controlled Group of Employers:
Except as provided in Section 6.6, all employees of all corporations (as defined in
Section 414(b) of the Code) and all employees of all trades or businesses (whether or
not incorporated) which are under common control (as defined in Section 414(c)) shall be
treated as employed by a single employer.
U
10.39
Page J6
15.8 Affiliated Service Groups:
All employees of all members of an affiliated service group (as defined in Section
414(m) of the Code) will be treated as employed by a single employer.
15.9 Responsibilities of the Parties:
The Employer shall be responsible for the administration and management of the Plan
except for those duties specifically allocated to the Trustee or Plan Administrator.
The Trustee shall have, subject to any directions of Plan Administrator or Employer,
exclusive responsibility for the management and control of the assets of the Plan. The
Plan Administrator or Employer shall have exclusive responsibility for the management
and control of the assets of the Plan. The Plan Administrator shall have exclusive
responsibility for all matters specifically delegated to him by the Employer in the
Plan.
15.10 Reports Furnished Participants:
The Plan Administrator shall furnish to each Plan Participant, and to each Beneficiary
receiving benefits under the Plan, within the time limits specified in the Code and
ERISA, each of the following:
A. A Summary Plan Description and periodic revisions;
B. Notification of Amendments to the Plan;
C. A Summary Annual Report which s�mmnarizes the Annual Report filed with the
Department of Labor; and
D. An annual status report of his Individual Account.
15.11 Reports Available to Participants:
The Plan
Administrator
shall make
copies of the
following documents available at the
principal
office of the
Employer
for- examination
by any Plan Participant or Beneficiary:
A. The Plan and Trust;
B. The Plan Description;
C. The latest annual report;
D. Other reports designated by the Department of Labor.
L
io.vo
Page 37
tc
15.12 Notification of Interested Parties:
The Employer agrees to notify all intersted parties of the filing of aforementioned Plan
and any amendments for qualification as to how the Plan and/or amendment will affect the
parties interests and other information as prescribed by the Secretary of Labor.
15.13 Governing Law:
This Plan shall be administered in the United States of America, and its validity,
construction and all rights hereunder shall be governed by the laws of the United States
under ERISA. To the extent that ERISA shall not be held to have preempted local law,
the Plan shall be administered under the laws of the State of Arkansas. If any
provisions of the Plan shall be held invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
15.14 Indemnification:
The Employer hereby agrees to indemnify the Sponsoring Organization as Trustee and
agrees to indemnify the Plan Administrator, to the full extent of any expenses,
penalties, damages or other pecuniary loss which the Sponsoring Organization or the Plan
Administrator suffer as a result of the performance of responsibilities, obligations or
duties in connection with the Plan or fiduciary activities actually performed in
connection with the Plan. Such indemnification shall be paid by the Employer to the
C Party to
the extent that fiduciary liability
insurance
is
not available to
cover the
payment
of such items, but in no event shall
such items
be
paid out of Plan
assets.
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Page 38
This amended and restated plan is effective as of January 1, 1984, except as otherwise
set forth.
IN WITNESS WEREDF, THE CITY OF FAYnTEVITJ.r has caused this amended and restated Plan
to be executed 3 day of nf'i c, 1985.
Witness:
CITY OF FAYETTEVILLE
(Employer and Plan Administrator)
By:
Title:
McILROY BANK & TRUST
,cJt By: By
Title: a VC -PRESIDENT and TRUST OFFICER
J
10.42
C•'
CITY OF FAYEPTEVILLE
MONEY PURCHASE PENSION PLAN
(Amended and Restated)
TRUST AGREEMENT
C
Original Effective Date - June 1, 1980
Effective Date of this Amended and Restated Plan - January 1, 1984
(with some amendments effective January 1, 1985)
C
10.43
CITY OF FAYETTEVILLE
MONEY PURCHASE PENSION PLAN
TRUST AGREEMENT
STATE OF ARKANSAS
County of WASHINGTON
THE CITY OF FAYETTEVILLE, Arkansas, (hereinafter called Employer), a governmental unit,
with an office and place of business located in Fayetteville, Arkansas, does hereby
establish the following Trust to be used in connection with the City of Fayetteville
Money Purchase Pension Plan.
1.0 GENERAL DUTIES OF THE PARTIES
C1.1 General Duties of Employer:
Employer shall make contributions to the Trust Fund in cash or property acceptable to
the Trustee. Such contributions shall be valued at fair market value at the time of
contribution. The Trustee shall notify Employer in writing of the unacceptability of a
contribution within three (3) days after receipt by the Trustee. Employer shall keep
accurate books and records with respect to its Employees, their service with the -
Employer and their Compensation. The Employer shall be responsible for delegating
fiduciary responsibilities.
1.2 Duties of Trustee:
The Trustee shall hold all acceptable property received by it. Such property, together
with the income therefrom, shall constitute the Trust Fund. The Trustee shall manage
and administer the Trust pursuant to the terms of this Trust Agreement without
distinction between principle and income and without liability for the payment of
interest thereon. The Trustee shall have no duty or authority to compute any amount to
be paid to it by the Employer. The Trustee shall not be responsible for the collection
of any contributions to the Trust Fwid.
Trustee shall discharge it duties solely in the interest of all Participants and
10.44
Page 2
beneficiaries under the Plan and except as required by law shall not be liable tor any
loss to the Trust wider the Plan, or for any act or omission, unless due to its own
negligence or willful misconduct.
Plan Administrator shall have the right to direct the Trustee as to the investments to
be made pursuant to Section 2. Such direction shall be in writing and may be of a
continuing nature or changed by the Plan Administrator by written notification to
Trustee. Trustee shall not be liable for investments made or actions taken under the
provisions of this Section in accordance with the written direction of the Plan
Administrator of Employer.
1.3 Named Fiduciaries:
The Employer identifies the Employer and the Plan Administrator as "Named Fiduciaries."
The Employer delegates to the Plan Administrator sole and exclusive responsibility
(other than that herein specifically conferred upon the Trustee) for establishing and
carrying out the funding policy and the methods of funding as. set forth in the Plan,
this Trust Agreement, and the rules and regulations, if any, adopted by the Plan
Administrator, all of which shall be consistent with ERISA and all regulations
promulgated thereunder. The Employer delegates to the Plan Administrator sole
discretion to allocate and to delegate, by written communications directed to the
Employer, the Trustee, and each Participant and Beneficiary of the Plan, any or all of
his fiduciary responsibilities, to persons designated by him. An Investment Manager may
be named by the Plan Administrator as provided in FRISA Section 401(c)(3) other than the
Trustee without necessity of an amendment to the Trust Agreement and after prior written
notice to the Employer, Trustee, to the Participants and Beneficiaries of the Plan, and
to all Named Fiduciaries of the Plan. By executing this Trust Agreement each Named
Fiduciary specifically consents to be a Named Fiduciary within the meaning of ER1SA.
Any person designated as a Fiduciary herein may serve in more than one fiduciary
capacity with respect to the Plan and may employ persons to render advice with regard to
any responsibility such Named Fiduciary has under the Plan.
1.4 Foreign Assets:
Except as otherwise authorized by regulations promulgated by the Secretary of Labor, the
Trustee may not maintain any indicia of ownership of any asset outside the jurisdiction
of the District Courts of the United States.
1.5 Records and Reports:
Trustee shall maintain such records as may be necessary for the proper administration of
the Plan.
Plan Administrator and Employer shall furnish the Trustee such information as is
necessary for completion of such records and reports.
10.45
Page 3
Trustee shall file an accounting with employer after the close of each taxable year of
employer and shall file such information as shall be required by the Secretary of the
Treasury and the Department of Labor. Trustee shall not be required to file any other
or further account with any court or otherwise.
2.0 INVESTMENT AND ADMINISTRATION
2.1 Investment Powers of Trustee:
The Trustee shall have no duty or obligation to identify or otherwise mark the
particular funds or investments and reinvestments thereof as the contribution of any
particular Employer or Participant, it being intended that all contributions shall be
pooled for the purpose of investment or reinvestment, The Plan Administrator shall
direct the Trustee in writing, from time to time, to retain any investment at any time
held by it hereunder or to direct the sale or exchange of any such investment and to
designate the stocks, bonds or other property, real or personal, in which the Trust
Funds or any reinvestment thereof shall be invested, or to direct the issuance of voting
proxies under any stock held hereunder; provided, however, that the Trustee shall be
under no liability for any loss arising from any action taken by the Trustee at the
direction of the Plan Administrator. Subject to the above directions, or it the Plan
Administrator fails or refuses to deliver in writing investment instructions within ten
(10) days after a request to do so by the Trustee, the Trustee shall have the power to
invest and reinvest the Trust Fund and shall serve as "Investment Manager" of the Plan
as provided in ISA, but subject to the appointment and direction of the Plan
Administrator in writing.
Such investments and reinvestments may include, but not necessarily limited to, common
stocks or preferred stocks; open-end or closed -end mutual funds; corporate bonds,
debentures, convertible debentures; commercial paper; bankers acceptances certificates
of deposit, including those of Trustee banks; U.S. Treasury bills, notes and bonds;
improved or unimproved real estate located in the United States; to lend the funds of
the Trust to others, except as prohibited by ERISA or the provisions of the Plan, upon
receipt of adequate security, including chattel mortgages, first and second loan deeds,
at a reasonable rate of interest.
Trustee shall have full power to do all such acts, take all such proceedings and
exercise all such rights and privileges whether herein specifically referred to or not,
as could be done, taken or exercised by the absolute owner thereof, including, but
without in any way limiting or impairing the generality of the foregoing, the following
powers and authority unless revoked in writing by Plan Administrator.
A. To retain the same for such period of time as the Trustee in its sole
discretion shall deem prudent;
B. To sell the same, at either public or private sale, at such time or times and
on such terms and conditions as the Trustee shall deem prudent;
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10.46
Page 4
C. To consent to or participate in any Plan for the reorganization, consolidation
or merger of any corporation, the security of which is held in the Trust, and
C• to pay any and all calls and assessments imposed upon the owners of such
securities as a condition of their participating therein. In connection
.therewith, to consent to any contract, lease, mortgage, purchase or sale of
property, by or between such corporation and any other corporation or person.
D. To exercise or dispose of any right the Trustee may have as the holder of any
security to convert the same into another or other securities, or to acquire
any additional security or securities, to make any payments, to exchange any
security or to do any other act with reference thereto which the Trustee may
deem prudent;
E. To deposit any security with any protective or reorganization committee, and to
delegate to such committee such power and authority with relation thereto as
the Trustee may deem prudent, and to agree to pay and to pay out of the Trust
such portion of the expenses and compensation of such committee as the Trustee
may deem proper;
F. To renew or extend the time of payment of any obligation due or becoming due;
G. To invest in Certificates of Deposit, Savings Accounts, Money Market Funds, or
other types of deposits;
H. To grant options to purchase any property;
I. To compromise, arbitrate or otherwise adjust or settle claims in favor of or
C against the Trust, and to deliver or accept in either total or partial'
satisfaction of any indebtedness or other obligation any property, and to
continue to hold same for such period of time as the Trustee may deem
appropriate;
J. To exchange any property for other property upon such terms and conditions as
the Trustee may deem proper, and to give and receive money to effect quality in
price;
K. To execute and deliver any proxies or powers of attorney to such person or
persons as the Trustee may deem proper, granting to such person such power and
authority with relation to any property or securities at any time held for the
Trust as the Trustee may deem proper;
L. To invest in any common or pooled investment fund, provided such investment is
limited to common trust funds exempted under Section 584 of the Internal
Revenue Code;
M. To foreclose any obligation by judicial proceeding or otherwise;
N. To sue or defend in connection with any and all securities or property at any
time received or held for Trust, all costs and attorney's fees in conncetion
therewith to be charged against the Trust;
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10.47
Page 5
O. To manage any real property in the same manner as if the Trustee were the
absolute owner thereof;
P. To borrow money or raise money for purposes of the Trust with or without giving
security;
Q. To cause any securities or other property held for the Trust to he registered
in its own name or in the name of a nominee or nominees, and to hold any
investments in bearer form, but the books and records of the Trustee shall at
all times show such investments as part of the Trust Fund;
R. To hold such portion of the Trust as the Trustee may deem necessary for the
ordinary administration of the Trust and disbursement of funds as directed in
Section 2.2 in cash, without liability for interest, by depositing the same in
any bank including the Trustees Bank, subject to the rules and regulations
governing such deposits, and without regard to the amount of any such deposits;
2.2 Dealings with Plan Administrator:
The Trustee shall, from time to time, on the written directions of the Plan
Administrator, make distribution from the Trust to such persons, in such manner, in such
amounts and for such purposes as may be specified in such directions. The Trustee shall
be under no liability for any distribution made by it pursuant to the directions of the
Plan Administrator and shall be under no duty to make inquiry as to whether any
distribution directed by the Plan Administrator is made pursuant to the provisions of
the related Plan and this Section, except to the extent required of a prudent
Co -Fiduciary under ERISA. The Trustee shall not be liable for the proper application of
any part of the Trust if distributions are made in accordance with the written
directions of the Plan Administrator as herein provided, nor shall the Trustee be
responsible for the adequacy of the Trust to meet and discharge any and all payments and
liabilities under the related Plan.
2.3 Claims, Employment of Agents and Counsel:
The Employer or the Plan Administrator, or both, at any time may employ any person or -
entity as an agent to perform any act, keep any records or accounts, or make
computations which are required of them under the Code or ERISA. Such employment shall
not be deemed to be contrary to or inconsistent with the provisions of this Trust
Agreement. Nothing done by such person or corporation as agent for the Employer or the
Plan Administrator shall change or increase in any manner the responsibility or
liability of the Trustee hereunder, unless such agent shall be deemed to be a Fiduciry
with respect to the Plan, and the Trustee shall have failed to meet the standards
imposed by this Agreement and ERISA.
Trustee may settle or prosecute claims
relating
to
the
administration of the Plan and
Trust and employ agents and counsel in
carrying
out
its
duties.
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10.48
Page 6
s .
2.4 Payments:
A. Payments from Trust Fund: The Trustee shall make such payments (and shall
stop such payments) from the respective Participants accounts in the Trust Fund
at such time or times and in such amounts and to such persons as the Plan
Administrator shall direct in writing. In no event shall any such payment
exceed the amount then credited to the respective account. In directing the
Trustee to make such payments (or stop payments) such Plan Administrator shall
follow the provisions of the Employers Plan, and shall not direct that any
payment be made, either during the existence or upon the discontinuance on such
Plan, which would cause any part of the Trust Fund to be used for or diverted
to purposes other than for the exclusive benefit of the Participants of such -
Employers Plan or their Beneficiaries, pursuant to the provisions of such Plan.
The Trustee shall be fully-protectd in acting upon any such written direction
of such Plan Administrator without investigation and shall have no duty to
determine the right or benefits of any person in the Trust Fund or under such
Plan or to inquire into the right or power of such Plan Administrator to direct
such payments.
B. Trustee as Plan Administrator: In the event the Trustee is designated as Plan
Administrator, the Plan Administrator shall look to the Employer for directions
specified in this Plan and Trust.
The Trustee shall make any payment required to be made by it provided that
there are sufficient assets for such payments and subject further to the
ability of the Trustee to liquidate the account from which such distribution is
C to be made hereunder by mailing its check for the amount thereof to the person
to whom such payment is to be made at such address as shall have been last
furnished to the Trustee. If no such address shall have been so furnished,
such check shall be mailed to such person in care of the Employer.
2.5 Restriction on Exercise of Powers: Prudent Man Rule:
The Trustee, the Plan Administrator, and all other Fiduciaries with respect to the Plan,
are required to discharge their duties solely in the interests of Participants and
Beneficiaries and for the exclusive purpose of providing benefits to Participants and
Beneficiaries and defraying reasonable expenses of administration; with the care, skill,
prudence, and diligence, under the circumstances then prevailing, that a prudent man
acting in a like capacity and familiar with such matters would use in the conduct of an
enterprise of like character and with like aims; by diversifying the investments so as
to minimize the risk of large losses unless under circumstances it is clearly prudent
not to do so; and in accordance with the Plan, this Trust Agreement, the rules aiid
directions of the Plan Administrator and the provisions of Title I of ERISA.
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10.49
Page 7
2.6 Co -Fiduciaries:
Anything in. the Trust Agreement or the Plan to the contrary notwithstanding, each
Fiduciary with respect to the Plan acknowledges, by participating in the execution of
this Trust Agreement or by consenting directly or indirectly, orally, or in writing, to
act as a Fiduciary with respect to the Plan, that he is responsible for carrying out his
own duties in accordance with the standards set forth under ERISA and all regulations
promulgated thereunder. Each Fiduciary shall be responsible for the actions or failure
to act of all other Fiduciaries with respect to the Plan if he participates, approves,
acquiesces in or conceals a breach committed by another such Fiduciary; or if his
failure to exercise reasonable care in the administration of his own duties enables the
breach to be committed. Each Fiduciary is required to act prudently in the delegation
or allocation of responsibilities to other persons. In the event that there are
Co -Fiduciaries acting hereunder, each Fiduciary will be responsible for participating in
the administration of the Plan and for exercising reasonable care to prevent the other
from committing a breach. If the Plan or the Trust Agreement or any written rule or
direction of the Plan Administrator shall by agreement allocate responsibilities among
Co -Fiduciaries only the Fiduciary to whom the responsibilities are delegated will be
responsible for the breach unless the other Fiduciary or Fiduciaries knowingly
participate therein. Nothing herein shall relieve any Fiduciary from his duty to
conduct a periodic review to assure that delegated duties and responsibilities are being
properly carried out by all persons acting as Fiduciaries with respect to the Plan and
by all persons to whom any such duties and responsibilities have been delegated. In the
event that an Investment Manager other than the Trustee is appointed, pursuant to this
Trust, Trustee shall not be liable for the acts or ommissions of such Investment
Manager, or be under any obligation to invest or manage the assets of the Plan which are
subject to management by an Investment Manager as such term is defined in ERISA Section
C 3(38). Nothing in the Plan or the Trust Agreement shall be deemed to enlarge the
responsibilities or liabilities of any Trustee or Co -Fiduciary or any other Fiduciary
with respect to the Plan beyond those imposed by ERISA and all regulations promulgated
thereunder.
2.7 Liabilities of Trustee:
The Trustee shall not be liable for any losses incurred by the Trust by reason of any
lawful direction to invest communicated to the Trustee by the Plan Administrator, except
with respect to any transaction entered into by the Trustee which is prohibited by ERISA
and as to which the Trustee is a Fiduciary, party -in -interest or disqualified person as
defined by ERISA. Nothing herein shall exculpate or relieve the Trustee from liability
for any losses to the Trust incurred by its negligence, bad faith, or knowing
participation in a breach of Trust. The Trustee warrants and represents that it is not
prohibited from serving as Trustee hereof because of certain disabilities provided in
ERISA, Section 411.
10.50
Page 8
3.0 INDEMNIFICATION
() The Employer hereby agrees to indemnify the Trustee and the Plan Administrator, to the
full extent of any expenses, penalties, damages or other pecuniary loss which Trustee or
the Plan Administrator suffer as a result of the performance of responsibilities,
obligations or duties in connection with the Plan or fiduciary activities actually
• performed in connection with the Plan. Such indemnification shall be paid by the
Employer to the Party to the extent that fiduciary liability insurance is not available
to cover the payment of such items, but in no event shall such items be paid out of Plan
assets.
Notwithstanding the foregoing, this indemnification agreement shall not relieve the
Trustees or Plan Administrator from:
A. Serving in a fiduciary capacity for the carrying out the fiduciary
responsibilities; and
B: Liabilities to the Plan for breaches of fiduciary obligations;
Nor shall this agreement violate any provision of Part 4 of Title I of ERISA as it may
be interpreted from time to time by the U.S. Department of Labor and any courts of
competent jurisdiction.
4.0 EXPENSES AND COMPENSATION OF TRUSTEE :
4.1 Expenses and Compensation of Trustee:
The Employer shall pay to the Trustee such compensation as from time to time may be
agreed upon between the and the Trustee. All other expenses incurred by the Trustee in
the performance of its duties hereunder, and all real and personal property taxes,
income taxes, transfer taxes and other taxes of any and all kinds whatsoever that must
be levied or assessed under existing or future laws or any jurisdiction upon or in
respect to the Trust hereby created or upon or in respect of any money, property or
securities forming part thereof shall be paid from the Trust Fund.
5.0 RESIGNATION AND REMOVAL OF TRUSTEE :
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•
10.51
rage y
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5.1 Resignation:
The Trustee may resign at any time upon 60 days notice in writing to the Employer. The
Trustee may be removed at any time by the Employer upon 60 days notice in writing to the
Trustee.
5.2 Successor Trusstee:
Upon the resignation or removal of the Trustee, the Employer shall appoint a successor
and shall file written notice thereof with the Trustee. Upon receipt by the Trustee of
written acceptance of such appointment of the successor, the Trustee shall transfer and
pay to such successor the assets of the Trust and records pertaining thereto; provided,
however, the Trustee is authorized to reserve such sum of money as it may deem advisable
for payment of all its fees, compensation, costs and expenses, or for payment of any
other liabilities constituting a charge on or against the assets of the Trust or on or
against the Trustee, with any balance of such reserve remaining after the payment of all
such items to be paid over to the successor.
The receipt of the successor Trustee for such records and accounts shall be full and
complete acquittance and discharge all responsibilities and liability therefore of
retiring Trustee. All rights, title and interest of the Trustee in the assets of the
Trust, and all powers, rights and duties under this Master Trust heretofore vested in
the Trustee shall vest in such successor Trustee immediately upon its appointment and
acceptance and thereupon all further duties and liabilities of the Trustee which has
been succeeded shall terminate.
All of the provisions set forth herein shall relate to each successor Trustee with the
same force and effect as if such successor had been originally named as Trustee
hereunder.
5.3 Terminate Agreement:
The Trustee may elect to terminate this Agreement and the Trust created hereby if within
60 days after its resignation or removal purusant to this section.
6.0 AMENDMENT AND TERMINATION :
10.52
Page 10
6.1 Amendment by Sponsor:
The Employer may amend this Trust to any extent it deems appropriate including amendment
and retroactive amendments of the Trust to the extent necessary to preserve its
qualified status. Provided, however, such amendment shall not operate to cause any part
of the Trust Fund, other than such part as is required to pay taxes and administration
expenses to be used for or diverted to purposes other than for the exclusive benefit of
the Participants or their beneficiaries or cause or permit any portion of the Trust Fund
to revert to or become the property of the Employer.
6.2 Termination by Employer:
This Agreement and the Trust created hereby may be terminated at any time by the
Employer, and upon such termination or upon the dissolution or liquidation of the
Employer or in the event that a successor to the Employer by operation of law or by
acquisition of its business.interests shall not elect to continue the the Plan.
7.0 PROHIBITED TRANSACTIONS :
The Trustee shall not accept or act upon direction from the Plan Administrator or any
other person to engage in a transaction known by the Trustee to be a "Prohibited
• Transaction" under ERISA. In the event of any uncertainty or dispute respecting any
such proposed transaction, the Trustee shall not be required to act or be liable to any
person for failing so to act on such direction unless and until a final administrative
or judicial determination shall be obtained by any person interested in such transaction
and duly served upon the Trustee and the Trustee shall thereafter have had a reasonable
opportunity to comply with such direction if it is determined to be lawful under the
terms of the Plan and ERISA in the opinion of legal counsel. The Trustee is hereby
expressly authorized to engage in any transactions not expressly prohibited by ERISA or
the terms of this Trust Agreement or the Plan, and properly directed by a Fiduciary with
respect to the Plan or a Participant in :•,citing and communicated to the Trustee as
provided in Section 2.2 hereof.
8.0 PROHIBITION AGAINST DIVERSION :
8.1 Exclusive Benefit:
The corpus or income of the trust may not be diverted to or used for other than the
exclusive benefit of the participnts or their beneficiaries.
10.53
Page 11
8.2 Contribution - Mistake of Fact:
Any contribution made by the employer because of a mistake of fact must be returned to
the employer within one year of the contribution.
8.3 Failure of Qualification:
In the event the Employers Plan does not initially meet the qualification requirements
of Section 401(a) of the Internal Revenue Code and as a result thereof the Internal
Revenue Service makes an adverse determination, and if the Employer is unable or
unwilling to amend his Plan in such manner as to qualify his Plan, it shall terminate.
Upon such termination, Trustee shall return to Employer, within one year, Contributions
made by Employe. Such termination of Employers Plan under this Section shall be without
further liability to any party thereto. The operation of this Section is conditioned
upon Employer having requested a Favorable Internal Revenue Service Determination Letter
within a reasonable period after establishment of its Plan.
9.0 SEITLE.ENT OF ACCOUNTS
9.1 General Records:
The Trustee shall maintain accurate records and detailed accounts of all investments,
receipts, disbursements, and other transactions hereunder. Such records shall be
available at all reasonable times for inspection by the Plan Administrator, the
Employer, or any Fiduciary, Participant or Beneficiary or authorized representative of
such persons. The Trustee shall submit, or cause to be submitted, in a timely manner to
the Plan Administrator such information as the Plan Administrator may reasonably require
in connection with the preparation of the various reports required to be made by ERISA
to various regulatory agencies and to Plan Participants and Beneficiaries. In the
absence of fraud or bad faith, the valuation of the Trust by the Trustee shall be
conclusive on all parties affected by this Trust.
9.2 Annual Valuation of Assets:
Allocation
of Trust Earnings
and
Losses:
The assets of
the
trust will be valued
annually at
fair market value
as
of the
last day of the
Plan
Year.
Io.54
Page 12
10.0 MISCELLANEOUS :
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10.1 General Fiduciary Duties:
Trustee shall carry out its duties with the care, skill, prudence and diligence which a
prudent man acting in like capacity would use under conditions prevailing at the time,
including diversification of investments so that the risk of loss will be minimized
unless this is clearly not prudent under the circumstances.
10.2 Ambiguity:
This Trust and the Plan adopted in connection herewith are
the requirements for qualification under the provisions of
it has been amended by the Employee Retirement Income Secu
if any provision of this Trust is subject to more than one
ambiguity will be resolved in favor of that interpretation
with the Trust and the Plan being so qualified.
10.3 Reliance:
intended to comply with all
the Internal Revenue Code as
city Act of 1974; therefore,
interpretation, such
which shall be consistent
The Trustee shall be fully protected in acting upon any instrument, certificate or
paper, including the statements referred to in Section 2.2 above, believed by it to be
genuine and to be signed or presented by the Plan Administrator or Employer, and the
Trustee shall be under no duty to make any investigation or inquiry as to any statement
contained in such writing but may accept same as conclusive evidence of the Truth and
accuracy therein contained.
10.4 Inadequacy of Assets for Liabilities:
The
Trustee shall
not
be
responsible for
the
adequacy of
the
assets of the Trust to meet
and
discharge any
and
all
distributions
and
liabilities
under
the Plan.
10.5 Third Parties:
All persons dealing with the Trustee are released from inquiring into the decision or
authority of the Trustee and from seeing to the application of any moneys, securities or
other property paid or delivered to the Trustee.
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10.55
Page .J
10.6 Inalienability of Benefits:
No benefit or interest available hereunder will be subject to assignment or alienation,
whether voluntarily or involuntarily. This does not preclude the Trustee from complying
with a court order requiring deduction from the benefits of a participant in pay status
for alimony or support payments.
10.7 Governing Law:
This Trust shall be administered in the United States of America, and its validity,
construction and all rights hereunder shall be governed by the laws of the United States
under ERISA. To the extent that ERISA shall not be held to have preempted local law,
the Trust shall be administered under the laws of the State of Arkansas. If any
provision of this Agreement shall be held invalid or unenforceable, the remaining
provisions hereof shall continue to be fully effective.
10.8 Notification of Interested Parties:
The Employer agrees to notify all interested parties of the filing of aforementioned
Plan and any amendments for qualification and provide the interested parties with
information as to how the Plan and/or amendment will affect the parties interests and
other information as prescribed by the Secretary of Labor.
L
last',
2r'
IN WITNESS IWIE REOF, the CITY OF FAYETPEVILLE has caused this Trust Agreement to be
executed this rday of JG`i�mf+t c �, 1985.
Witness:
(7
Wi tyes v
CITY OF FAYETPEVILLE, ARKANSAS
By:(/
Title:
McILROY BANK & TRUST
By: By
Title:_ VICE-PRESIDENT and TRUST OFFICE;
Accepted by Trustees:
Tr us to e :
Trustee:
Tr us tee :
:! 1, r.
December 3, 1985
:c was noted by .7„h,,.,,+n ,liar there were a great number of applicants
`or the positi,nr,,. ntrnrtor Martin commented that incumbents had
been chosen by i h,. , ,Immittee who had served well and had earned the
chance to serve
?IF. Upon roll call, the, sution passed, 7-0.
Johnson reported l,;,t additional nominations would be made at the
next Board mo,•tialt for vacant positions on the Northwest Arkansas
regional Planniutt C.,mmissfon, the Parks and Recreation Advisory Board
tad the Plannin); C,,,,;,,,ILsian.
:.;SIT0RIAL CrRAI'l'
�'•�
The `favor intrrnlu,•,',(
resolution authorizing
the Mayor and
City Clerk
execute a new ,1,,,lrart
for janitorial service at City
Hall with
_ r
i^ony 3uiidttig FL,lnten;,nce at a rate of
$1487.50 per month. The
: vor noted a )o-,i ean,.ellation
clause was
included in the
contract,
:s vel' as a ftvc-yv.,r
option for extension.
�
Director Johnson, .,econded by Orton, taade
a motion to approve the
�
`�
�i:
resolution. Ur.,t
Upon [
call, the motion passed, 7-0.
SCLcTIC\ 1'0• i _'ti a,
APPEARS ON PACE
OF ORDINANCE &
RESOLUTION
::ini.T PERPORMANCi nt) NC
:':e savor introdu,',,,I consideration of a proposal regarding the city's
trticipation in :, sl;tte blanket performance bonding program.
'i�" Purchasing Off teor t;rtmnn Mackey reported the State Insurance Department
3d no bids to ,ep,•„ ,,rr a state contract. Mackey stated he was advised
'ha State in.ur.,,,,.,, Department that the city stay with its three-year
?aid bond which ,-avers 55 employees.
T1.
Director Johnson, neronded by Hess, moved to table the matter indefi-
nitely. Upon roll (n11, the motion passed, 7-0.
a, .w
:"'•. t"' e`'or intr,,,l,•,.,i ;, resolution adopting an amended employee retirement
elan and tn,st ,tr,.,.„,eat for the City of Fayetteville.
=trance Director t;,•„tt Linebaugh explained that in 1982 and 1984 new
'tSwere p;, s..,i ,,1„ting to pension plans - and that the Internal
r
�.a
ue Serrir,• h.,., just now ruled that changes be made in current
y•:
December 3, 1985
pension plans to reflect the new laws. Linebaugh pointed out there 399.1
would be no additional cost to the city as a result of the changes
and he summarized them as follows:
i. Limit on allocations for any one participant in a plan year,
of $30,000.
2. Leased employees have to be included.
3. Qualified Joint and- Survivor Annuity: Benefits will be
paid on a J & S Annuity basis unless the participant elects
a lump sum or some other basis in writing.
4. "Top Heavy" rules do not apply to governmental units but
are included in the event Congress applies them at a later
date.
5. The Retirement Equity Act deals with distributions and requires
a spouse to also sign the election form for lump sum distribu-
tions, either at retirement or on termination.
Also, if a beneficiary is other than the spouse, the spouse
has to sign the beneficiary form.
6. Required Commencement of Retirement Benefits: Retirement
benefits have to begin to be paid out (principal and interest)
by April 15 of the year following the participant attaining
age 70 1/2.
7. Break in Service extended from one year to five years, and
participant can elect to "buy back in" to the plan if re -hired
in that break.
8. Minimum Age reduced from 25 to 21, which does not affect
the city as the eligible age is 20.
Director Bumpass, seconded by Martin, made a motion to approve a reso- 399.2
lution. Upon roll call, the motion passed, 7-0.
RESOLUTION NO. 129-85 APPEARS ON PAGE OF ORDINANCE & RESOLUTION
BOOK
Bob Hall, of Hall Consulting, Inc., told the Directors a new booklet 399.3
would be published for the benefit of employees.
10.26
Page 23
8.0 SETTLEMENT OPTIONS AND COMMENCEMENT DATES:.
H
8.1 Normal Retirement Age:
Normal Retirement Age will be age 65.
8.2 Normal Retirement Date:
The Normal Retirment Date will be the end of the plan year following attainment of
Normal Retirement Age.
8.3 Qualified Early Retirement Age:
The Qualified Early Retirement Age is any age at which an employee either terminates,
retires, becomes disabled, or dies with a vested interest in the employer contributions
and interest thereon.
8.4 Normal Form of Benefit:
C
A. The provisions of this section shall apply:
1. For each vested participant with an hour of service after the encatment of
the Retirement Equity Act of 1984; or
2. In the case of participants who performed no service after the enactment,
for those qualified to elect such an annuity.
B. Automatic Joint and Survivor Annuity: A Participant who is married and:
1. Begins to receive payments under the plan on or after Normal Retirment Age;
or
2. Dies on or after Normal Retirment Age while still working for the Employer;
or
3. Begins to receive payments on or after the Qualified Early Retirement Age;
or
4. Seperates from service on or after attaining Normal Retirment Age (or the
Qualified Early Retirement Age) and after satisfying the eligibility
requirements for the payment of benefits under the plan and thereafter dies
C
a.
10.27
a. Page 24
J: Y
before beginning to receive such benefits;
Shall receive payment under the plan in the form of a Joint and 50% Survivor
Annuity, unless the Participant and spouse of the participant has elected
otherwise during the election period as specified below.
• C. If the participant dies prior to the annuity starting date the amount of the
annuity shall be as defined in section 417(c)(2) of the Code.
D. A vested participant may elect not to be covered by a qualified preretirement
survivor annuity only with the spouse's consent, as provided in section
417(a)(2) of the Code.
E. A vested participant may:
1. Elect, with consent of his or her spouse, not to take the qualified
preretirement survivor annuity; and
2. Revoke an election not to take the qualified preretirement survivor
annuity, or choose again any number of times, within the applicable
election period.
F. Elecion Period is defined in section 417(a)(5) of the Code as from the first
day of the first plan year in which the participant attains age 35 until the
participant's death.
G. If a vested participant dies prior to the annuity starting date, the surviving
spouse must begin receiving the qualified preretirement survivor annuity
immediately upon the death of the participant.
H. The marriage requirement for the participant and surviving spouse will be
limited to no more than one year prior to the pariticpants death. the date of
death shall be measured as the end of the year in which the death occurred.
This one year marriage rule is subject to the qualified domestic relations
order.
8.5 Optional Forms of Benefit Payments:
The other optional forms of benefit payments are as follows:
A. Lump Sum.
B. Installment payments from trust, which the remaining balance will be credited
with investment gains and losses as any other account would be. The
installment payments may not exceed one of the following periods (or a
combination thereof):
I