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HomeMy WebLinkAbout135-92 RESOLUTIONa . • RESOLUTION NO. 135-99 A RESOLUTION ADOPTING AN AMENDED AND RESTATED DEFERRED COMPENSATION PLAN AND EMPLOYEE RETIREMENT SAVINGS PLAN. 6 WHEREAS, the City of Fayetteville has employees rendering valuable services; and WHEREAS, the adoption of the amended and restated Deferred Compensation Plan and the Employee Retirement Savings Plan serves the interest of the employer by enabling it to provide reasonable retirement security for its employees and by assisting in attracting and retaining competent personnel; and WHEREAS, it is desired that all non Civil Service employees now have the same opportunity and options to provide for their retirement security within the framework of common plans; and WHEREAS, the adoption of the amended and restated Deferred compensation Plan and the Employee Retirement Savings Plan will provide each employee additional flexibility in meeting their individual retirement objectives; and WHEREAS, the City of Fayetteville has determined that the Deferred Compensation Plan and the Employee Retirement Savings Plan satisfies the above objectives; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS; Section 1. That the Board of Directors hereby adopts the Deferred Compensation Plan and Trust and the Retirement Savings Plan and Trust attached hereto as exhibit "A" and made a part hereof, contingent upon employee approval. Section 2. That the Mayor is hereby authorized to execute such other documents as may be necessary to obtain a favorable letter of determination from the Internal Revenue Service. PASSED AND APPROVED this 1st day of September , 199. INTERNI REREREE SERVICE DISTRICT DIRECTOR P. 0. 10X eI1 ATLANTA, CA 30370 Date: —/m; f3 CITY OF FAYETTE'JILLE 113 WEST MOUNTAIN FAYET(TE!!ILIE. AR 72'01 Dear Applicant: MICI O nn.MEc IEPARTNENt It Tilt TIMMY 'JAN 1- 8 193 S7-)1.) csV-t 4170\S- lJ0\.a.t ,� s G� fik (J_ fteGai `• rilF„Employer Identification dumber: ,h.' Qvii. 4..ct'i 6010962 File Folder Number: ( i j5 '10003321 Person to Contact: PATRICK RYAN Contact Telephone Number: '101 331-0913 Plan Name: CITY OF FAYETTE'1ILLE EMPLOYEE RETIREMENT SAVINGS PLAN Plan Number: 002 JAN 15 19°3 FINANCE DEPT• We have tide a favorable determination on your plans identified above, bated on the intonation supplied. Please keep this letter in your permanent recordt. Continued qualification of the plan under its present form will depend on it; effect in operation. (See Lection 1.901-1(b)(3) ot.4ne Income Tom Regulations.) We will review the status of the plan in^ope ntien perlg4icelly The enclosed document eaplaini the iignificance of this fsv•rsbi,.. determination letter, points out. Jose features that say afflasMtlte qu.ti11e4 status of your employee retirement plan, and provides information on tlti reporting ?elution!' for your plan. It also describes some events t t , automatically nullify it. II is very important that you read the pub) ytien.. This letter relates only to the flatus of your plan under the Internal Revenue Code. It ieilii a determination regarding the effect of other federal or local statutes. • .. Thif determination letter is applicable for the amendsent(s) adopted on September 1,1992. In accordance with your request, this letter does not consider whether the n ondiacrisination requirements of sections 901(a)(9)r.101(a)(17), 901(1112 0 101(1), 110(c)(2), 111(r), and 111(s) have been satisfied. This lotto soy not be relied on for plan years beginning on or after the Later of January It Ittit o r 90 days after the.e►lning of the first legislative session beglaninfien 1r after January 1r 1996, •t the governing body with authority to emend till pian, it that body does nit meet continuously. Ne have sent a copy of this letter to you, representative es indiO%. lar - let the power of attorney, Letter 035(00/CC) i -2 - CITY OF FAYETTEVILLE • If .?au have questions concerning this matter, plesae contact the person chose name and telephone flusher are aboun above. Enclosures: Publication 7°I PABA 515 Sincerely yourad .r` -?"'T 4tilliame District Director letter 835(D0%CDI • • • PIM SPONSOR IRM ADMISTRATCOI TRUSTEE TWOS Mal Ilii GUISE Or IMPLOTME Y1DY=CNOICE CF RM/ RiMLlICIMEDY WPM SCHEDULE POtMIED MREIIAVOLE CALCULATED MEW NORM. 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Manny 1% bas ply MOM* No Yr prose NNS tame star..lrhelan b a 401 sobs of are alias stay r sari* Sava IIIA upon Awrana l Earpalr eribaona baba bwlas tormbaa. not SON No TNS a- raw lal.bym Sand SI ha• flew 1 -' CITY OF FAYETTEVILLE EMPLOYEE RETIREMENT SAVINGS PLAN TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ARTICLE 2 ELIGIBILITY 2.01 Initial Eligibility 2.02 Eligibility Requirements 2.03 Termination and Reemployment ARTICLE 3 EMPLOYER CONTRIBUTIONS 3.01 Employer Contribution ARTICLE 4 EMPLOYEE CONTRIBUTIONS 4.01 Additional Voluntary Contribution 4.02 Withdrawal of Employee Contribution Account 4.03 Rollover Contributions ARTICLE 5 ACCOUNTS 5.01 Establishment of Separate Accounts 5.02 Investments 5.03 Allocation of Earnings and Losses 5.04 Statement to Participants 5.05 Unclaimed Account Procedure ARTICLE 6 ARTICLE 7 ARTICLE 8 VESTING OF PARTICIPANTS' INTEREST 6.01 Vesting of Employee Contribution, Rollover and Employer Contribution Accounts RETIREMENT, DISABILITY OR TERMINATION OF EMPLOYMENT 7.01 Normal Retirement 7.02 Later Retirement 7.03 Alternate Retirement Age 7.04 Distribution Upon Retirement 7.05 Disability 7.06 Termination of Employment 7.07 Benefit Amount DEATH BENEFITS 8.01 Death Benefit 8.02 Benefit Amount 8.03 Designation of Beneficiary r i ARTICLE 9 ARTICLE 10 ARTICLE 11 DISTRIBUTION OF BENEFITS 9.01 Effect Of Distribution 9.02 Information To Be Furnished To Plan Administrator 9.03 Optional Payment Forms 9.04 Distribution After Death of Participant INSURANCE, LOANS AND WITHDRAWALS 10.01 Life Insurance 10.02 Loans 10.03 Withdrawals Employer Contribution Account 10.04 Hardship Withdrawals from Employee Contribution Account AMENDMENT, TERMINATION OR MERGER OF PLAN 11.01 Right of Employer to Amend Plan 11.02 Obligation of Employer 11.03 Termination of Plan 11.04 Distribution on Termination of Plan 11.05 Merger of Plan ARTICLE 12 NONASSIGNABILITY 12.01 General 12.02 Domestic Relations Order ARTICLE 13 ARTICLE 14 ARTICLE 15 MISCELLANEOUS PLAN PROVISIONS 13.01 Participant's Rights 13.02 Headings and Subheadings 13.03 Interpretation 13.04 Successors and Assigns 13.05 Successor Employer PLAN ADMINISTRATOR 14.01 Designation and Acceptance 14.02 Resignation and Removal 14.03 Powers 14.04 Actions 14.05 Expenses 14.06 Claim Procedure 14.07 Indemnification of the Plan Administrator REQUIRED CODE PROVISIONS 15.01 Required Limitations on Allocations Pursuant to § 415 of Code 15.02 Required Maximum Payout Time Pursuant to § 401(a)(14) of Code 4 CITY OF FAYETTEVILLE EMPLOYEE RETIREMENT SAVINGS PLAN City of Fayetteville, an Arkansas municipality incorporated under the laws of the State of Arkansas, has amended and restated its Money Purchase Pension Plan, originally established June 1, 1980, under which there exists a Trust Fund to which contribu- tions shall be made and from which benefits shall be paid in accordance with the terms and conditions thereof. The amended and restated Money Purchase Pension Plan and Trust has been approved by the legally constituted authority of Employer for the primary purpose of providing retirement income to Participants and is intended to qualify under $ 401 and $ 501 of the Internal Revenue Code of 1986. The terms and conditions of the Plan and Trust are as follows: ARTICLE 1. DEFINITIONS As used in this document, the following terms shall have the indicated meanings: 1.01. "ACCOUNT" or "ACCRUED BENEFIT" shall mean the market value of the amounts in a Participant's Employer Contribution Account, Employee Contribution Account and Rollover Account. These amounts shall constitute a Participant's entire interest in the Plan, including any income, gains, losses, increases or decreases in market value attributable to the Employer's invest- ment of Employer and Employee Contributions to this Retirement Savings Plan, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expense charged against such Participant's Account. 1.02. "ALTERNATE RETIREMENT AGE" shall mean the age at which the Participant elects to separate from service. This election may not be earlier than age 55 nor later than age 70h. 1-1 r 1.03. "ANNIVERSARY DATE" shall mean the last day of each Plan Year which is coincident with a calendar year. 1.04. "BENEFICIARY" shall mean the person, persons, or other legal entity designated by the Participant who under the Plan becomes entitled to receive a Participant's interest upon his or her death. 1.05. "CODE" shall mean the Internal Revenue Code of 1986, as amended. 1.06. "COMPENSATION" shall mean the base compensation paid to the Employee by the Employer for the Plan Year that is subject to federal income tax withholding, plus elective contributions to any cafeteria plan under Section 125 of the Code or deferred compensation under Section 457 of the Code, excluding overtime pay, bonuses, commissions and expense account allowances. For Plan Years beginning after December 31, 1988, compensation shall not include amounts in excess of $200,000 (or such greater amount as may be determined by the Secretary of the Treasury). 1.07. "DISABILITY" shall mean the total and permanent incapacity of a Participant to engage in any substantial gainful activity, as determined by a qualified physician. • 1.08. "EFFECTIVE DATE" shall mean the 1st day of 1.09. "ELIGIBLE EMPLOYEE" shall mean any Employee classi- fied as regular full time who: (a) has completed one (1) Year of Service and has attained a minimum age of twenty (20) years and (b) is not an ineligible employee. Ineligible employees are (1) Employees who are participants (or would be, if eligibility requirements were met) in any Employer -funded Police Pension Plan or Fire Pension Plan, or (2) Employees whose employment is governed by the terms of a collective bargaining agreement between Employee representatives and the Employer under which retirement benefits were the subject of good faith bargaining between the parties (unless such agreement expressly provides that such employees will be eligible to participate in this Plan). 1.10. "EMPLOYEE" shall mean any person on the payroll of the Employer whose wages from the Employer are subject to with- holding for the purposes of Federal income taxes and the Federal Insurance Contributions Act. A person employed as an independent contractor shall not be an Employee. 1-2 1 1.11. "EMPLOYEE CONTRIBUTION ACCOUNT" shall mean an indi- vidual account maintained to record each Participant's interest in the Trust Fund attributable to mandatory and voluntary employee contributions, and earnings on such account. 1.12. "EMPLOYER" shall mean City of Fayetteville, Arkansas. 1.13. "EMPLOYER CONTRIBUTION ACCOUNT" shall mean an individual account maintained to record each Participant's interest in the Trust Fund attributable to the Employer's contri- bution under this Plan, and earnings on such account. 1.14. "HIGHLY COMPENSATED EMPLOYEE" shall mean any Employee who, during the determination year or the look -back year (A) was at any time a five -percent owner; (B) received compensation from Employer in excess of $75,000 (as adjusted for cost -of -living); (C) received compensation from the Employer in excess of $50,000 (as adjusted for cost -of -living) and was in the top - paid group (generally the top 20% of Employees by pay) of Employees for such Plan Year; or (D) was an officer of the Employer and received com- pensation greater than 50 percent of the amount in effect under Code Section 415(b)(1)(A) for such year. For purposes of applying any nondiscrimination test required under the Plan, any family member of a 5% owner or a Highly Compensated Employee who is in the top 10 Employees by compensa- tion, shall not be treated as a separate Employee; rather, Compensation of the family member will be aggregated with that of the Highly Compensated Employee. For this purpose, "family members" include the Employee's spouse, lineal ascendants and descendants and spouses of such ascendants and descendants. An Employee described in (8), (C) or (D) above shall not be a Highly Compensated Employee for the current year unless he or she meets such requirements in the current year or he met such requirements for the preceding Plan Year and is one of the 100 Employees receiving the most compensation during the current Plan Year. The number of officers is limited to fifty (50) lesser, the greater of three (3) employees or 10% of If no officer satisfies the compensation requirement 1-3 (or, if employees). in (D), the r highest paid officer for such Plan Year shall be treated as a Highly Compensated Employee. A former Employee shall be treated as a Highly Compensated Employee if such Employee separated from service prior to the Plan Year, performs no service for the Employer during the Plan Year and was a Highly Compensated active Employee for either the separation year or any Plan Year ending on or after the Employee's 55th birthday. Employers aggregated under Section 414(b), (c), (m) or (o) are treated as a single employer. The rules of Section 414(q) shall apply in determining who is a Highly Compensated Employee. Any person who is not a Highly Compensated Employee under the Treasury Regulations will not be treated as a Highly Compensated Employee under this Plan. For purposes of determining whether an Employee is a Highly Compensated Employee, the determination year is the Plan Year, and the look -back year is the 12 -month period immediately preced- ing the determination year. However, if the Employer elects, the look -back year may be the calendar year ending with or within the determination year. 1.15. "HOUR OF SERVICE" shall mean an Hour of Service as defined in paragraphs (a), (b), and (c) below. The Employer may round up hours at the end of a computation period or more fre- quently. (a) An Hour of Service is each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer during the applicable computation period. (b) An Hour of Service is 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. Notwith- standing the preceding sentence, (i) no more than 501 Hours of Service shall be credited, under this paragraph (b), to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computa- tion period); (ii) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period 1-4 1 during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable workmen's compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service shall not be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. For purposes of this paragraph (b), a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly or indi- rectly through, among others, a trust fund or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate. (c) An Hour of Service is each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). 1.16. "INVESTMENT OPTIONS" shall mean mutual funds or similar investment vehicles selected by the Plan Administrator into which the Participant directs the investment of his or her Account. 1.17. "MANDATORY EMPLOYEE CONTRIBUTION" shall mean the contribution of three percent (3%) of the Employee's Compensation required to receive an allocation of the Employer contribution. Such contribution shall be directed to either the Non -Qualified Deferred Compensation Plan or this Plan. 1.18. "NONFORFEITABLE" shall mean an unconditional right of a Participant or his Beneficiary to that part of an immediate or deferred benefit under the Plan which arises from the Partici- pant's service and which is legally enforceable against the Plan. 1.19. "NORMAL RETIREMENT AGE" shall mean age 7035. 1.20. "PARTICIPANT" shall mean an Employee who shall have met all requirements for participation in the Plan and who has elected to make contributions to this Plan. Each Participant ceases to be such when he terminates his or her employment with Employer, except where pursuant to this Plan the distribution of benefits shall be deferred to a later date. 1-5 1.21. "PLAN" shall mean this document as now written and any amendments thereto which may be in force from time to time. 1.22. "PLAN ADMINISTRATOR" shall mean the person or persons or corporation named pursuant to Article 14 to administer the Plan. 1.23. "PLAN YEAR" shall mean the twelve (12) month period ending December 31 of each year. 1.24. "RETIREMENT" shall mean the first date upon which both of the following shall have occurred with respect to a Participant: Separation from service at a minimum attainment of age 55. 1.25. "ROLLOVER ACCOUNT" shall mean an individual account maintained to record a Participant's share of the Trust Fund attributable to the Participant's rollover contributions and earnings thereon. 1.26. "SEPARATION FROM SERVICE" shall mean severance of the Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(e)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to have severed his or her employment with the Employer for purposes of this Plan when, in accordance with the estab- lished practices of the Employer, the employment relationship is considered to have actually terminated. 1.27. "TRUST AGREEMENT" shall mean the Agreement between Employer and the Trustee or successor Trustee named under the Trust Agreement executed concurrently herewith which provides for the administration of the Trust Fund. 1.28. "TRUST FUND" shall mean the fund established to hold all assets contributed and accumulated pursuant to this Plan. 1.29. "TRUSTEE" shall mean the person or persons or corpo- ration having trust powers so designated by the Employer to serve as Trustee and who, by execution of the Trust Agreement, signi- fies its acceptance of the Trust, or any person or persons or corporation having trust powers duly appointed as a successor Trustee. 1.30. "VOLUNTARY CONTRIBUTION" shall mean an individual's contributions in addition to his or her mandatory contributions. 1-6 1.31. "YEAR OF SERVICE" shall mean, for purposes of deter- mining an Employee's eligibility to participate in the Plan, any 12 consecutive month period after the date of hire in which the Employee completes 1,000 or more Hours of Service. 1-7 ARTICLE 2. ELIGIBILITY 2.01. INITIAL ELIGIBILITY. All Eligible Employees who meet the requirements of the Plan prior to this amendment shall remain Participants. Other Employees may become Participants at the beginning of the month following the date such Employee first becomes an Eligible Employee. 2.02. ELIGIBILITY REQUIREMENTS. (a) Participation in this Plan is voluntary. Before the beginning of each Plan Year each Eligible Employee will be given the opportunity whether to make mandatory contributions to this Plan, to have the Employer defer compensation pursuant to a Deferred Compensation Agreement under the City of Fayetteville Nonqualified Deferred Compensation Plan, or to forego making contributions for such Plan Year. Such election, once made, shall be irrevocable for the entire Plan Year. If a change in such election is not made before the following Plan Year, such election shall continue for the following year, when this proce- dure shall be repeated. (b) As a condition for participating in Employer Contribu- tions in this Plan, each Eligible Employee shall agree to contribute at least 3% of his or her Compensation under either this Plan or the City of Fayetteville Nonqualified Deferred Compensation Plan. Such agreement shall fix the amount of the contribution, direct the investment of the Account among the Investment Options, designate the Beneficiary and shall incorpo- rate by reference pertinent provisions of the Plan. (c) At Normal Retirement, or at such other date as the Participant shall be entitled to receive benefits, the Employee Contribution Account shall be used to provide benefits to the Participant pursuant to Article 9. 2.03. TERMINATION AND REEMPLOYMENT. (a) If an Employee who is not an Eligible Employee termi- nates employment and he or she is subsequently reemployed by the Employer, service before such termination shall not be taken into account, and the Employee shall be required to meet the require- ments of Section 1.09 after his or her return. 2-1 1 • • ARTICLE 3. EMPLOYER CONTRIBUTIONS 3.01. EMPLOYER CONTRIBUTION. If the Eligible Employee contributes the required contribu- tion under Section 2.02, the Employer shall pay to the Trustee for each Plan Year an amount equal to nine percent (9%) of each Participant's Compensation. Employer contributions shall be paid monthly to the Trustee no later than 30 days after month end. The Employer Contribution Account of each Participant shall be credited with the amounts contributed by Employer on his or her behalf. 3-1 4 ARTICLE 4. EMPLOYEE CONTRIBUTIONS 4.01. ADDITIONAL VOLUNTARY CONTRIBUTION. In addition to the Mandatory Employee Contribution under Section 2.02, each Participant may at his or her option contribute in cash to the Trust Fund during each Plan Year an amount as a voluntary contribution not to exceed 10% of Compensa- tion. Voluntary contributions after December 31, 1994, shall be limited in accordance with Code $ 401(m). Any and all amounts contributed by a Participant pursuant to this paragraph shall be credited to the Participant's Employee Contribution Account. The Plan Administrator, in its discretion, and in accordance with the rules and procedures adopted by it relating to voluntary contributions, which shall be uniformly applicable to all Parti- cipants, may provide for times within which, or upon which, Participants may alter or terminate the amount of their contribu- tions to be made in accordance with this Article. The contribu- tions shall be paid to the Trustee no later than thirty (30) days after the end of the month in which the contribution is made. The Trustee shall not be responsible for the collection of such contributions. 4.02. WITHDRAWAL OF EMPLOYEE CONTRIBUTION ACCOUNT. A Participant (or his or her Beneficiary) may withdraw his or her Employee Contribution Account in accordance with Sec- tion 10.04. 4.03. ROLLOVER CONTRIBUTIONS. (a) An Employee who is a member of an eligible class of employees may contribute cash to the Trust Fund which is received as a distribution from another qualified plan, or may have amounts transferred directly from other qualified plans, provided that the trust from which such funds are transferred permits the transfer, and provided that the transfer shall not adversely affect the qualification of the Plan. Such transferred amount or contributions contributed by an Employee shall be credited to an Employee's Rollover Account. Such rollover contributions may be delivered to the Plan Administrator for its prompt transmittal to the Trustee. The Trustee shall not be responsible for the collection of such rollover contributions. (b) A Participant, by giving 30 days' written notice to the Trustee, may withdraw or transfer to another qualified trust all 4-1 • • • or part of his or her Rollover Account. At Normal Retirement Age, or such other date when the Participant or his beneficiary shall be entitled to receive benefits, the Participant's Rollover Account shall be used to provide benefits to the Participant under the method as provided by Article 9. If an Employee, prior to satisfying the Plan's eligibility conditions, makes a rollover contribution, distribution shall be made under this Plan as if he or she were a Participant. 4-2 • • ARTICLE 5. ACCOUNTS 5.01. ESTABLISHMENT OF SEPARATE ACCOUNTS. The Plan Administrator shall maintain as separate and distinct accounts, each Participant's Employee Contribution Account, Rollover Account and Employer Contribution Account. The Plan Administrator and the Trustee, through their accounting records, shall segregate clearly each account, and maintain a separate and distinct record of all income and losses attribut- able to each such account. The Plan Administrator shall keep a record of each Partici- pant's pre -1987 employee contributions. 5.02. INVESTMENTS. The Participant, at his or her sole discretion, shall direct the investment of his Account into one or more Investment Options selected by the Plan Administrator and contained in a Trust Fund established exclusively for this Plan, and from time to time may elect to change the amount or redirect such investment pursuant to procedures established by the Plan Administrator. 5.03. ALLOCATION OF EARNINGS AND LOSSES. The regular valuation date of the Plan shall be the last day of each Plan Year. The Plan Administrator may designate other valuation dates as deemed necessary. Such dates shall be referred to as "Valuation Dates." The valuation basis of all assets shall be their fair market value. Accounts will be invested pursuant to the written direction of a Participant and be valued in accordance with this Section. The net earnings, gains or losses of the Plan, and changes in the fair market value of the assets shall be allocated propor- tionately on each Valuation Date to the Participants on the basis of their respective Account balances utilizing a unit accounting valuation. Neither the Employer nor the Plan Administrator guarantees or in any manner protects the Participants or their beneficiaries against conditions of market causing loss or depreciation or fluctuation in the value of the assets comprising the Trust Fund. 5-1 • • • In no event shall the Employer's liability to pay benefits to a Participant exceed the value of the Participant's Account. 5.04. STATEMENT TO PARTICIPANTS. The Plan Administrator shall furnish to each Participant at least annually a statement of each Participant's Account(s) as it from time to time exists. Statements shall contain an adequate explanation of the computation including market valuation, unit values and other allocation factors provided in this Plan. 5.05. UNCLAIMED ACCOUNT PROCEDURE. The Plan Administrator shall not be obliged to search for, or ascertain the whereabouts of, any Participant or Beneficiary. The Plan Administrator, by certified or registered mail addressed to his or her last known address of record with the Plan Adminis- trator or the Employer, shall notify any Participant, or Benefi- ciary, that he or she is entitled to a distribution under this Plan, and the notice shall quote the provisions of this Section. If the Participant, or Beneficiary, fails to claim his or her distributive share or make his or her whereabouts known in writing to the Plan Administrator within six (6) months from the date of mailing of the notice, or before this Plan is terminated or discontinued, whichever should first occur; the unclaimed amount shall be treated as a Forfeiture for the later of the Plan Year in which the six-month period expires or the Plan Year a Forfeiture would otherwise occur if distribution has been made. Pending such Forfeiture, the amount shall be segregated in a segregated interest-bearing account in the name of the Partici- pant or Beneficiary, which shall be entitled to all income it earns and shall bear any expenses incurred. If a Participant or Beneficiary who has incurred such a Forfeiture makes a claim for his or her forfeited Account, the Employer shall contribute such amount, unadjusted for earnings, gains or losses occurring subsequent to the date of the Forfei- ture. 5-2 • • • • ARTICLE 6. VESTING OF PARTICIPANTS' INTEREST 6.01. VESTING OF EMPLOYEE CONTRIBUTION, ROLLOVER ACCOUNT AND EMPLOYER CONTRIBUTION ACCOUNTS. All contributions credited to a Participant's Employee Contribution Account, Rollover Account or Employer Contribution Account shall be at all times one hundred percent (100%) vested and nonforfeitable. 6-1 ARTICLE 7. L DIY o i 5; e l 'K F'*Yt lqm 7.01. NORMAL RETIREMENT. Each Participant shall be entitled to retire at his or her Normal Retirement Age. 7.02. LATER RETIREMENT. Each Participant who does not retire and continues in active service after reaching his Normal Retirement Date shall continue to participate in the Plan and share in Employer contributions. 7.03. ALTERNATE RETIREMENT AGE. There shall be no separate early retirement under the pro- visions of this Plan. Retirement at an Alternate Retirement Age elected by a Participant shall be treated the same as Normal Retirement. 7.04. DISTRIBUTION UPON RETIREMENT. Upon a Participant's Normal, Alternate or Late Retirement, the Participant may receive his or her vested Accrued Benefit subject to Article 9, as soon as administratively possible following his or her actual retirement. 7.05. DISABILITY. In the event that a Participant suffers a Disability which precludes continued employment with the Employer, he or she may elect to receive one hundred percent (100%) of his or her Accrued Benefit as of the date of Disability or any time thereafter. 7.06. TERMINATION OF EMPLOYMENT. If so elected by the Participant, distribution of the Accrued Benefit of a terminated Participant shall be made as soon as administratively possible following termination of employment. A terminated Participant may by written election have his or her Account retained in the Trust until his or her Normal Retirement Age. At that time, the terminated Participant may elect any form of distribution allowed under the Plan, as amended and in effect on such future Retirement Date. 7-1 7.07. BENEFIT AMOUNT. The amount of the Accrued Benefit to be distributed to the Participant under this Article 7 shall be determined as of the valuation date immediately preceding distribution, plus contribu- tions made since such date. 7-2 ARTICLE 8. DEATH BENEFITS 8.01. DEATH BENEFIT. The Beneficiary of a Participant who dies prior to receiving other benefits under the Plan shall be entitled to receive death benefits as provided hereinafter. A Beneficiary shall be one hundred percent (100%) vested in a deceased Participant's Accrued Benefit. 8.02. BENEFIT AMOUNT. The amount of the Accrued Benefit payable to the Beneficiary under this Article 8 shall be determined as of the valuation date immediately preceding distribution, plus contributions made since such date. The benefits shall be distributed in accordance with Article 9. 8.03. DESIGNATION OF BENEFICIARY. Each Participant shall have the right to designate a Benefi- ciary or Beneficiaries to receive his or her interest in the Trust Fund upon his or her death. Such designation shall be made in the form prescribed by the Plan Administrator and shall be effective for all purposes upon the delivery thereof to the Plan Administrator. The Participant shall have the right to change or revoke any such designation from time to time by filing a new designation or notice of revocation with the Plan Administrator. If a Participant shall fail to designate a Beneficiary or the designated Beneficiary shall predecease the Participant, his interest in the Trust Fund shall be paid: (a) To his or her spouse, if living, or (b) If his or her spouse is not then living, to his or her issue, by right of representation, or (c) If neither his or her spouse nor his or her issue are then living, to his or her estate. In the event the Participant names two or more Benefici- aries, each Beneficiary shall be entitled to equal shares of the benefit payable unless otherwise designated by the Participant. 8-1 ARTICLE 9. DISTRIBUTION OF BENEFITS 9.01. EFFECT OF DISTRIBUTION. When a Participant's Accrued Benefit shall have become distributable, such Participant shall cease to have any further interest or participation in the Trust Fund or any subsequent accruals or contributions thereto, except the right to receive payment of his or her Accrued Benefit. 9.02. INFORMATION TO BE FURNISHED TO PLAN ADMINISTRATOR. For the purpose of enabling the Plan Administrator to determine the portion of a Participant's interest in the Trust Fund which is vested and distributable, the Employer shall certify to the Plan Administrator in writing the following information as soon as possible after his or her death, Disability, retirement, or other termination of employment: (a) Participant's name and address; (b) Date on which employment terminated; and (c) The reason for the termination of employment. 9.03. OPTIONAL PAYMENT FORMS. (a) The Account of a Participant will be distributed under the payment option selected by the Participant, under one of the following means: (i) a payment option elected by the Participant which provides for substantially nonincreasing payments for any period less than the joint life expectancy of the Participant or his or her designated Beneficiary which are paid not less frequently than annually; (ii) in the form of a lump sum payment in cash; (iii) in the form of an annuity (with or without a period certain); (iv) in the form of a joint and survivor annuity (with or without a period certain; (v) in any combination of the foregoing. 9-1 If no option is selected, distribution will be made as an annuity with 120 months certain. (b) Any annuity form of distribution shall be purchased from an Insurer or other company selected by the Trustee. (c) In the event that benefits distributable are to be distributed in equal periodic installments, the Trustee may segregate the Participant's nonforfeitable Accrued Benefit from the Trust and deposit it in a separate account. The segregated account shall be entitled to all income it earns and shall bear all expense or loss it incurs. This provision shall be applied consistently in a uniform, non-discriminatory manner. (d) For calendar years beginning before January 1, 1989, if the Participant's spouse is not the designated beneficiary, the method of distribution selected must assure that at least 50% of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after December 31, 1988, the amount distributed shall not be less than the quotient obtained by dividing the Participant's Account by the applicable life expectancy, or if the Participant's spouse is not the designated beneficiary, the applicable divisor determined under the MDIB rules. The minimum distribution required for the Participant's first distribution calendar year must be made on or before the Participant's required beginning date. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which the Participant's required beginning date occurs, must be made on or before December 31 of that distribution calendar year. If the Participant's Account is distributed in the form of an annuity purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of S 401(a)(9) of the Code and the regulations thereunder. (e) (i) The life expectancy (or joint and last survivor expectancy) shall be calculated using the attained age of the Participant in the applicable calendar year reduced by one for each calendar year which has elapsed since the date life expec- tancy was first calculated. If life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy as recalculated. Life expectancy of a nonspouse beneficiary may not be recalculated. Life expectancy of the Participant and the Participant's spouse shall be recalculated annually, unless the Participant (or spouse) elect otherwise. Such election shall be irrevocable and shall apply to all subse- quent years. Life expectancy and joint life survivor expectancy 9-2 are computed by use of the expected return multiples in Tables V and VI of S 1.72-9 of the Income Tax Regulations. (ii) The designated beneficiary is the person desig- nated as Beneficiary under the Plan in accordance with S 401(a)(9) and regulations thereunder. (iii) The required beginning date of a Participant is April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70 1/2 or the calendar year in which the Participant retires. (f) Any distribution to the Beneficiary of a Participant after his death must comply with Section 9.04. 9.04. DISTRIBUTION AFTER DEATH OF PARTICIPANT. (a) If distributions have commenced to a Participant before his or her death, payments, if any, to a Participant's Benefi- ciary will continue under the payment option in effect at death. Such payment must be distributed after the death of the Partici- pant at least as rapidly as under the method of distribution being used as of the date of death. (b) If the Participant dies before distribution of his Account begins, distribution of the Participant's entire Account shall be made under the payment option selected by the Partici- pant; provided that one of the following requirements must be met: (i) A Participant's entire interest will be paid by December 31 of the year containing the 5th anniversary of the Participant's death; (ii) If the Participant's Account is payable to a designated beneficiary, distributions may be made over the life of such beneficiary or over a period certain not greater than the life expectancy of the designated beneficiary commencing on or before December 31 of the calendar year immediately following the calendar year in which the Participant died. If the designated beneficiary is the Participant's surviving spouse, the date distributions are required to begin shall not be earlier than the later of (1) December 31 of the calendar year immediately following the calendar year in which the Participant died and (2) December 31 of the calendar year in which the Participant would have attained age 70-1/2. 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 9-3 to the surviving spouse when the child reaches the age of majority. (iii) If the Participant has not made an election by the time of his or her death, the Participant's designated benefi- ciary must elect the method of distribution no later than the earlier of (1) December 31 of the calendar year in which distri- butions would be required to begin under Section 9.03 or (2) December 31 of the calendar year which contains the fifth anni- versary of the date of death of Participant. (c) In the event the Beneficiary survives the Participant but does not continue to live for the remaining period under the payment option selected, the balance shall be paid to the estate of the Beneficiary. If installments are selected under Sec- tion 9.03(a)(i), the balance shall be paid in a lump sum. If the Participant's estate is the Beneficiary, any remaining payments under Section 9.03(a)(i) shall be paid on the Participant's death in a lump sum. (d) The amount of distributions and life expectancy shall be determined in accordance with Section 9.03. (e) In the event that the benefits distributable are to be distributed in equal periodic installments, the Trustee may segregate the Participant's nonforfeitable Account from the Trust and deposit it in a separate account. The segregated account shall be entitled to all income it earns and shall bear all expense or loss it incurs. This provision shall be consistently applied in a uniform, non-discriminatory manner. (f) In no event shall the Employer, Plan Administrator or Trustee be liable to the Beneficiary for the amount of any payment made in the name of the Participant before the Plan Administrator receives proof of death of the Participant. i• , 10.01. LIFE No life insurance may be purchased on the life of a Partici- pant under this Plan. 10.02. LOANS. No loans shall be made to Participants. 10.03. WITHDRAWALS FROM EMPLOYER CONTRIBUTION ACCOUNT. No withdrawal prior to death, Disability, or other termina- tion of employment by a Participant from a Participant's Employer Contribution Account shall be permitted. 10.04. HARDSHIP WITHDRAWALS FROM EMPLOYEE CONTRIBUTION ACCOUNT. (a) No withdrawal prior to death, Disability or other termination of employment by a Participant from a Participant's Employee Contribution Account shall be permitted, except as provided in (b). (b) For serious financial condition arising from an unfore- seeable emergency, a Participant may apply to the Plan Adminis- trator for a withdrawal from the Plan prior to retirement or separation from service by the Participant. If approved, the withdrawal will be effective at the later of the date specified in the Participant's application or the date of the approval by the Plan Administrator. Any such withdrawal will be limited to the amount determined by the Plan Administrator to be necessary to meet the emergency, but no withdrawal shall be approved to the extent thatthe emergency is or may be relieved through reim- bursement or compensation by insurance, by liquidation of the Participant's assets to the extent that such liquidation will not itself cause severe financial hardship, or by future cessation of deferrals under the Plan. An unforeseeable emergency is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The 10-1 ARTICLE 11. 11.01. RIGHT OF EMPLOYER TO AMEND PLAN. The Employer shall have the right to amend this Plan at any time to any extent that it may deem advisable. Any amendment shall be made pursuant to action of the legally constituted authority of the Employer. A copy of such amendment shall be delivered to the Trustee. All Participants and the Trustee shall be bound by amendments adopted in accordance herewith, subject to the following provisions: (a) No amendment shall increase the duties or liabilities of the Trustee or the Plan Administrator without their respective written consents. (b) No amendment shall have the effect of vesting in the Employer any interest in or control over any property subject to the terms of the Trust Agreement. (c) No amendment may make it possible for any part of the corpus or income of the Trust to be used or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries, except as otherwise provided in this Plan. (d) Except as may be required to maintain the status of the Plan as a qualified plan under Section 401(a) and 501(a) of the Code, no amendment shall have any retroactive effect so as to deprive any Participant of any benefit already accrued or to reduce the nonforfeitable interest of any Participant. 11.02. OBLIGATION OF EMPLOYER. It is the expectation of the Employer that it will continue this Plan indefinitely, but the continuance of this Plan is not assumed as contractual obligation by the Employer, and the right is reserved by the Employer, by action of its legally constituted authority at any time to discontinue the Plan. 11.03. TERMINATION OF PLAN. The Plan may be terminated at any time by a resolution adopted by the Employer upon the giving of written notice to the Trustee and such other notices as may be required by law. Upon termination or partial termination of the Plan or complete discontinuance of contributions, the entire balance in each affected Participant's account shall immediately become fully and irrevocably vested. No part of the Trust Fund shall inure or accrue to the Employer hereunder upon termination of the Plan. 11.04. ON TERMINATION OF PLAN. Upon termination or partial termination of the Plan or complete discontinuance of contributions, the Trustee shall determine whether distribution on behalf of the affected Partici- pants shall be made in cash or shall be in kind based on the then market value. As soon as practicable after termination, or if applied for, receipt by the Employer of notification by the Internal Revenue Service evidencing approval of the proposed distribution of assets upon termination of the Plan, the Trustee shall distribute the amount of each affected Participant's account or shall purchase an annuity to provide future payments in accordance with the election of each Participant. 11.05. MERGER OF PLAN. In case of the merger or consolidation of the Plan with, or the transfer of assets or liabilities to, another qualified plan, each Participant must be entitled to receive a benefit, immedi- ately after such merger, consolidation or transfer (if the Plan then terminated), which is at least equal to the benefit which he would have been entitled to receive immediately before the merger, consolidation or transfer if the Plan had been terminated at that time. 11-2 II NONASSIGNABILITY 12.01. GENERAL. Except as provided in Section 12.02, a Participant or Beneficiary shall not have the right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the Partici- pant's interest in the Plan or the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and non -transferable. 12.02. DOMESTIC RELATIONS ORDER. (a) To the extent required under a final judgment, decree or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse or child. Any amount so set aside for a spouse, former spouse or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to authorize any amount to be distributed under the Plan at a time or in a form that is not permitted under Section 401 of the Code. Any payment made to a person other than the Participant pursuant to this Section shall be reduced by required income tax withholding; the fact that payment is made to a person other than the Participant may not prevent such payment from being included in the gross income of the Participant for withholding and income tax reporting purposes, if appropriate. (b) The Employer's liability to pay benefits to a Partici- pant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse or child pursuant to paragraph (a) of this section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Employer and the Administrator are released from any further claim by this Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Participant has been notified of the pendency 12-1 of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Adminis- trator to the Participant's last known mailing address, and (iii) the Participant fails to obtain an order of the court in the proceeding relieving the Employer or Administrator from the obligation to comply with the judgment, decree or order. (c) The Employer and Administrator shall not be obligated to defend against or set aside any judgment, decree or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action is borne by the Participant, in the event that the Participant's action (or inaction) nonetheless causes the Employer and Administrator to incur such expense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the Participant. In the course of any proceeding relating to divorce, separation or child support, the Employer and Adminis- trator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse or child (including the legal representatives of the spouse, former spouse or child), or to a court. 12-2 a rr 13.01. PARTICIPANT'S RIGHTS. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Employee or Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer or any right or interest in the Trust Fund, or any claim against the Employer for benefits. The Plan may not be construed to modify the terms of any employment contract or agreements between a Participant and the Employer nor may any Participant be divested for cause. 13.02. HEADINGS AND The headings and subheadings in this Agreement are inserted for convenience of reference only and are not to be considered in construction of the provisions hereof. 13.03. INTERPRETATION. This Plan shall be construed, administered and governed in all respects under and by the laws of the State of Arkansas, and is established with the intent that it meets the requirements of a qualified plan under Sections 401(a) and 501(a) of the Code, as amended. The provisions of this Plan shall be interpreted in conformity with the requirements of these Sections. In that connection, wherever appropriate, singular words used in this Agreement may include the plural, the plural may include the singular, and the masculine may include the feminine or neuter gender. 13.04. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto, their beneficiaries, heirs, executors, administrators, and assigns. 13.05. SUCCESSOR EMPLOYER. (a) In the event of a dissolution, merger or consolidation of the Employer, provisions may be made by the successor for the continuance of this Trust, and said successor shall in such event be substituted in the place of the present Employer by an instru- ment authorizing such substitution executed by the Employer and its successor, a copy of which shall be delivered to the Trustee. 13-1 (b) Notwithstanding any other provision contained in this Plan, the Trustee at the direction of the Plan Administrator shall transfer the Accrued Benefit of such Participant to another trust forming part of a pension, profit-sharing, or stock bonus plan maintained by such Participant's new employer and repre- sented by said employer in writing as meeting the requirements of Code S 401(a), provided that the trust to which such transfers are made permits the transfer to be made, and such transfer will not eliminate any optional form of benefit. 13-2 V. ►spa#c@nom s � . 14.01. DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or persons to serve as Plan Administrator who shall signify their acceptance of this responsibility as a named fiduciary of the Plan and Trust. If more than one person is so designated, the committee so formed shall be known as the Administrative Committee and all references in the Plan and Trust to the Plan Administrator shall be deemed to refer to the Administrative Committee. In the absence of designation of a Plan Administrator, the Employer is hereby designated as the Plan Administrator. The Plan Administrator is hereby designated as agent for the service of legal process. The Plan Administrator shall not be required to be a Parti- cipant. 14.02. RESIGNATION AND REMOVAL. (a) The Plan Administrator, or any member of the Adminis- trative Committee, may resign at any time by delivering to the Employer a written notice of resignation to take effect on a date specified therein, which shall not be less than thirty (30) days after the delivery thereof, unless such notice shall be waived. (b) The Plan Administrator, or any member of the Adminis- trative Committee, may be removed with or without cause by the Employer by delivery of written notice of removal, to take effect at a date specified therein, which shall be not less than thirty (30) days after delivery thereof, unless such notice shall be waived. (c) The Employer, upon receipt of or giving notice of the resignation or removal of the Plan Administrator, shall promptly designate a successor Plan Administrator who must signify accep- tance of this position in writing. In the event no successor is appointed, the Employer will function as the Plan Administrator until a new Plan Administrator has been appointed and has accepted such appointment. (d) A simple majority of the members of the Administrative Committee shall constitute a quorum, and any act by such majority, by vote at a meeting, or in writing without a meeting, shall constitute the action of the Administrative Committee. The 14-1 Administrative Committee shall keep minutes of its meetings, and shall appoint and prescribe the duties of a chairman, and a secretary, who may, but need not be, one of its members. 14.03. POWERS. The Plan Administrator shall have full power and discretion to administer the Plan and to construe and apply all of its provisions. The Plan Administrator's powers and duties, unless properly delegated, shall include, but are not limited to: (a) Compiling and maintaining all records necessary for the Plan, including preparing, filing and furnishing reports and other documents required under the provisions of the Internal Revenue Code; (b) Authorizing the Trustee to make payment of all benefits as they become payable under the Plan; (c) Adopting rules and regulations for the administration of the Plan, not inconsistent with the Plan and the Trust Agree- ment; (d) Engaging such legal, administrative, actuarial, invest- ment, accounting and other professional services as are necessary; (e) Approving mortality tables, interest rates, withdrawal or turnover rates, salary scales and other factors required to be taken into account in connection with any actuarial matters arising under the Plan; (f) Giving written directions to the Trustee concerning investments and other matters, or authorizing others to give such written instructions; (g) Providing periodic reports and other information or data to Participants; (h) Doing and performing such other matters as may be provided for in other parts of this Plan or Trust. 14.04. ACTIONS. No power conferred on the Plan Administrator or the Trustee or retained by Employer shall be exercised in such manner as to cause or create discrimination in favor of highly compensated employees or persons whose principal duties consist of supervis- ing the work of other employees. The Plan Administrator, 14-2 a Employer and its legally constituted authority shall be entitled to rely conclusively upon the tables, valuations, certificates and reports furnished by an actuary or accountant employed by the Plan Administrator under this Plan, and/or upon opinions of counsel or other experts; and such members, and each of them, shall be fully protected as to any action taken or allowed by them in good faith and reliance upon any such tables, valuations, certificates, reports or opinions; and all actions taken or allowed by them shall be conclusive upon all persons having or claiming any interest under the Plan. 14.05. EXPENSES. The Employer, or in its absence the Trustee, shall reimburse the Plan Administrator for any necessary or proper expenses incurred in exercising its duties. Except for such reimburse- ment, the Plan Administrator shall not receive any compensation for the administration of the Plan. 14.06. CLAIM PROCEDURE. (a) Any Participant or Beneficiary may file with the Plan Administrator a written statement setting forth a claim for benefits. The written statement shall be signed and set forth the claim in a manner reasonably calculated to bring it to the Plan Administrator's attention. (b) If a claim is wholly or partially denied, notice of the decision shall be furnished by the Plan Administrator to the claimant within ninety (90) days after receipt of the claim. If within such ninety (90) days, the claim has neither been denied in writing nor granted, it shall be deemed denied on the 90th day. (c) Any notice of denial of claim shall be written in a manner calculated to be understood by the claimant and shall include the following: (i) the specific reason or reasons for denial; (ii) specific reference to pertinent plan provisions on which the denial is based; (iii) a description of additional material or informa- tion necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review. 14-3 (d) A claimant may obtain a full and fair review by appeal- ing a denied claim to the Plan Administrator in writing within sixty (60) days after receipt by the claimant of the notice of denial. A claimant may review pertinent documents and may submit issues and comments in writing. The claimant may request review by the Board of Directors of the Employer, in addition to the Plan Administrator. An appeal may be requested or pursued by a duly authorized representative of the claimant. Within sixty (60) days of receipt of a request for review, a written decision shall be rendered. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent provisions of the Plan on which the decision is based. 14.07. INDEMNIFICATION OF THE PLAN ADMINISTRATOR. The Plan Administrator shall be indemnified by the Employer and not from the Trust Fund against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan if the act or failure to act is judicially determined not to be a breach of fiduciary responsibility. The indemnification shall include expenses and attorney's fees reasonably incurred in the defense of any claim relating thereto. 14-4 15.01. REQUIRED LIMITATIONS ON ALLOCATIONS PURSUANT TO S 415 OF CODE. (a) Maximum Annual Addition: The "annual addition" to a Participant's Account shall not exceed the lesser of $30,000 (or such greater amount as may be determined by the Secretary of the Treasury) or twenty-five percent (25%) of the Participant's compensation (as defined in paragraph (c)) for that Plan Year. The limitation year shall be the same as the Plan Year. Annual addition means the sum for any Plan Year of (i) Employer contri- butions, (ii) Employee contributions, (iii) Forfeitures, and (iv) amounts described in Section 415(1)(1) and 419A(d)(2) of the Code. However, the annual additions for any Plan Year beginning before January 1, 1987, shall not be recomputed to treat all Employee contributions as annual additions. If there is a short limitation year because of a change in such year, the maximum annual addition will be multiplied by the following fraction: (b) If as a result of a reasonable error in estimating a Participant's annual compensation, or other facts and circumstances to which Section 1.415-6(b)(6) of the Income Tax Regulations, as amended, or as replaced from time to time, shall be applicable, the "annual addition" to a Participant's account shall exceed the maximum provided in this Section, the Adminis- trator shall treat the excess as follows: (i) if the Participant shall have made a Voluntary Contribution to the Plan, the Administrator shall, pursuant to the provisions of Section 1.415-6(b)(6)(iv) of the Regulations, return such contribution to the extent the return reduces the excess amount in the Participant's account. (ii) if the amounts required to be returned to the Participant pursuant to (i) above shall not fully eliminate the excess amounts in the Participant's account, the Administrator shall, pursuant to Section 1.415-6(b)(6)(ii) of the Regulations, hold such excess amounts unallocated in a suspense account (herein called "Section 415 Suspense Account") and allocate and reallocate such excess in the next Plan Year to all of the Participants in the Plan before any Employer contributions and Employee Voluntary Contributions (if any) which would constitute "annual additions" to the Plan for that year. Furthermore, the 15-1 excess amount in the Section 415 Suspense Account must be used to reduce Employer contributions for the next Plan Year (and suc- • ceeding Plan Years, as necessary) for all of the Participants in the Plan. In no event shall any excess amounts in the Section 415 Suspense Account be distributed to a Participant or Former Participant. (c) For purposes of this Section, compensation shall mean a Participant's earned income, wages, salaries, and fees for professional services 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 salesman, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips and bonuses), and excluding the following: (i) Employer contributions to a plan of deferred compensation which are not includible in the employee's gross income 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; (ii) Amounts realized from the exercise of a non -quali- fied stock option, or when restricted stock (or property) held by the Employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; (iii) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option; and (iv) Other amounts which received special tax benefits, or contributions made by the Employer (whether or not under a salary reduction agreement) towards the purchase of an annuity described in section 403(b) of the Internal Revenue Code (whether or not the amounts are actually excludible from the gross income of the Employee). For purposes of applying the limitations of this section, compensation for a limitation year is the compensation actually paid or includible in gross income during such year. For limita- tion years beginning after December 31, 1988, such compensation shall be limited to $200,000 (unless adjusted under Section 415(d)). (d) For purposes of the limitations of this Section, all defined contribution plans of the Employer are to be treated as one defined contribution plan and all defined benefit plans of the Employer are to be treated as one defined benefit plan. 15-2 (e) A qualified rollover contribution described in Sec- tion 4.03 of the Plan shall not be considered as an annual addition of a Participant. (f) This Section shall be effective for Plan Years begin- ning after December 31, 1986. 15.02. REQUIRED MAXIMUM PAYOUT TIME PURSUANT TO S 401(a)(14) OF CODE. Unless a Participant elects to defer in writing, payment of benefits under the Plan to the Participant shall begin not later than the 60th day after the latest of the following: (i) the end of the Plan Year in which the Participant attains age 65, (ii) the end of the Plan Year in which the Participant attains the Normal Retirement Age, (iii) the end of the Plan Year which includes the 10th anniversary of the year in which the Participant commenced participation in the Plan, or (iv) the end of the Plan Year in which the Participant terminates employment with the Employer. An election shall be made by submitting to the Plan Adminis- trator a written statement, signed by the Participant, which describes the benefit and the date on which the payment of such benefit may commence. The failure of a Participant to make an election or consent to a distribution while a benefit is immedi- ately distributable shall be deemed to be an election sufficient to satisfy this Section. IN WITNESS WHEREOF, the Employer has signed this Plan as amended and restated on , 1992. CITY OF FAYETTEVILLE M Its cwnn#527- 15-3 I + CITY OF FAYETTEVILLE TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ARTICLE 2 PLAN ADMINISTRATOR 2.01 Designation and Acceptance 2.02 Resignation and Removal 2.03 Powers 2.04 Actions 2.05 Expenses 2.06 Claim Procedure 2.07 Indemnification of the Plan Administrator ARTICLE 3 CONTRIBUTIONS 3.01 Duties of Trustee Regarding Contributions 3.02 Right of Employer to Trust Assets 3.03 Mistake in Contribution ARTICLE 4 GENERAL DUTIES OF THE PARTIES CONCERNING TRUST 4.01 Duties of Employer 4.02 Duties of Trustee ARTICLE 5 POWERS AND SPECIFIC DUTIES OF THE TRUSTEE 5.01 Powers 5.02 Restriction on Exercise of Powers 5.03 Third Parties 5.04 Plan Administrator Instructions to the Trustee 5.05 Distributions to Participants 5.06 Investments 5.07 Investment Manager 5.08 Participant Direction of Investments ARTICLE 6 SETTLEMENT OF TRUST ACCOUNTS 6.01 General Records 6.02 Annual Account ARTICLE 7 DURATION AND TERMINATION OF TRUST AGREEMENT; AMENDMENTS 7.01 Duration 7.02 Amendments ARTICLE 8 RESIGNATION OR REMOVAL OF TRUSTEE 8.01 Method T 1 5 ARTICLE 9 TAXES, EXPENSES AND COMPENSATION TO TRUSTEE 9.01 Manner of Payment ARTICLE 10 MISCELLANEOUS TRUST PROVISIONS 10.01 Governing Law 10.02 Spendthrift Clause 10.03 Binding Effect 10.04 Prohibition Against Reversion 10.05 Litigation 10.06 Headings 10.07 Definitions � I C_�411.1 tbuisst1&aII w� �! The City of Fayetteville, an Arkansas municipality incorpo- rated under the laws of the State of Arkansas, has previously established the City of Fayetteville Employee Retirement Savings Plan and accompanying Trust Agreement. The Employer's contributions, as invested from time to time, and the earnings and proceeds thereof shall be held in trust by Trustee in the Fund, for the purposes, upon the terms and condi- tions, and subject to the powers conferred on Trustee as set forth in this agreement. The Trustee shall have full power and authority to do all acts necessary to carry out its duties hereunder. Employer intends that the trust shall qualify under Sec- tion 401(a) of the Internal Revenue Code for tax-exempt status under Section 501(a) of the Internal Revenue Code. The Trustee shall make payments of benefits from the assets of the Trust, if and to the extent such assets are available for distribution, in accordance with the terms of the Plan. DEFINITIONS As used in this document, the following terms shall have the indicated meanings: 1.01. "ACCOUNT" or "ACCRUED BENEFIT" shall mean the market value of the amounts in a Participant's Employer Contribution Account, Employee Contribution Account and Rollover Account. These amounts shall constitute a Participant's entire interest in the Plan, including any income, gains, losses, increases or decreases in market value attributable to the Employer's invest- ment of Employer and Employee Contributions to this Retirement Savings Plan, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expense charged against such Participant's Account. 1-1 1.02. "ANNIVERSARY DATE" shall mean the last day of each Plan Year. 1.03. "BENEFICIARY" shall mean the person, persons, or other legal entity designated by the Participant who under the Plan becomes entitled to receive a Participant's interest upon his or her death. 1.04. "CODE" shall mean the Internal Revenue Code of 1986, as amended. 1.05. "EMPLOYEE" shall mean any person on the payroll of the Employer whose wages from the Employer are subject to with- holding for the purposes of Federal income taxes and the Federal Insurance Contributions Act. A person employed as an independent contractor shall not be an Employee. 1.06. "EMPLOYEE CONTRIBUTION ACCOUNT" shall mean an indi- vidual account maintained to record each Participant's interest in the Trust Fund attributable to mandatory and voluntary employee contributions, and earnings on such account. 1.07. "EMPLOYER" shall mean City of Fayetteville, Arkansas. 1.08. "EMPLOYER CONTRIBUTION ACCOUNT" shall mean an individual account maintained to record each Participant's interest in the Trust Fund attributable to the Employer's contri- bution under this Plan, and earnings on such account. 1.09. "FUND" OR "TRUST FUND" shall mean all monies, securi- ties and assets held by the Trustee under the Trust established pursuant to this Plan. 1.10. "INVESTMENT OPTIONS" shall mean mutual funds or similar investment vehicles selected by the Plan Administrator into which the Participant directs the investment of his or her Account. 1.11. "PARTICIPANT" shall mean an Employee who shall have met all requirements for participation in the Plan and who has elected to make contributions to this Plan. Each Participant ceases to be such when he or she terminates employment with the Employer, except where pursuant to this Plan the distribution of benefits shall be deferred to a later date. 1.12. "PLAN" shall mean the City of Fayetteville Employee Retirement Savings Plan, as it may be amended from time to time. 1-2 1.13. "PLAN ADMINISTRATOR" shall mean the person or persons or corporation named pursuant to Article 2 to administer the Plan. 1.14. "PLAN YEAR" shall mean the twelve (12) month period ending December 31 of each year. 1.15. "ROLLOVER ACCOUNT" shall mean an individual account maintained to record a Participant's share of the Trust Fund attributable to the Participant's rollover contributions and earnings thereon. 1.16. "TRUST AGREEMENT" shall mean the Agreement between Employer and the Trustee or successor Trustee named under this Trust Agreement. 1.17. "TRUSTEE" shall mean the person or persons or corpo- ration having trust powers so designated by the Employer to serve as Trustee and who, by joining in the execution of this Trust Agreement, signifies his acceptance of this Trust, or any person or persons or corporation having trust powers duly appointed as a successor Trustee. 1-3 ARTICLE 2. 2.01. DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or persons to serve as Plan Administrator who shall signify their acceptance of this responsibility as a named fiduciary of the Plan and Trust. If more than one person is so designated, the committee so formed shall be known as the Administrative Committee and all references in the Plan and Trust to the Plan Administrator shall be deemed to refer to the Administrative Committee. In the absence of designation of a Plan Administrator, the Employer is hereby designated as the Plan Administrator. The Plan Administrator is hereby designated as agent for the service of legal process. The Plan Administrator shall not be required to be a Parti- cipant. 2.02. (a) The Plan Administrator, or any member of the Adminis- trative Committee, may resign at any time by delivering to the Employer a written notice of resignation to take effect on a date specified therein, which shall not be less than thirty (30) days after the delivery thereof, unless such notice shall be waived. (b) The Plan Administrator, or any member of the Adminis- trative Committee, may be removed with or without cause by the Employer by delivery of written notice of removal, to take effect at a date specified therein, which shall be not less than thirty (30) days after delivery thereof, unless such notice shall be waived. (c) The Employer, upon receipt of or giving notice of the resignation or removal of the Plan Administrator, shall promptly designate a successor Plan Administrator who must signify accep- tance of this position in writing. In the event no successor is appointed, the Employer will function as the Plan Administrator until a new Plan Administrator has been appointed and has accepted such appointment. (d) A simple majority of the members of the Administrative Committee shall constitute a quorum, and any act by such majority, by vote at a meeting, or in writing without a meeting, shall constitute the action of the Administrative Committee. The 2-1 Administrative Committee shall keep minutes of its meetings, and shall appoint and prescribe the duties of a chairman, and a secretary, who may, but need not be, one of its members. 2.03. POWERS. The Plan Administrator shall have full power and discretion to administer the Plan and to construe and apply all of its provisions. The Plan Administrator's powers and duties, unless properly delegated, shall include, but are not limited to: (a) Compiling and maintaining all records necessary for the Plan, including preparing, filing and furnishing reports and other documents required under the provisions of the Internal Revenue Code; (b) Authorizing the Trustee to make payment of all benefits as they become payable under the Plan; (c) Adopting rules and regulations for the administration of the Plan, not inconsistent with the Plan and the Trust Agree- ment; (d) Engaging such legal, administrative, actuarial, invest- ment, accounting and other professional services as are necessary; (e) Approving mortality tables, interest rates, withdrawal or turnover rates, salary scales and other factors required to be taken into account in connection with any actuarial matters arising under the Plan; (f) Giving written directions to the Trustee concerning investments and other matters, or authorizing others to give such written instructions; (g) Providing periodic reports and other information or data to Participants; (h) Doing and performing such other matters as may be provided for in other parts of this Plan or Trust. 2.04. ACTIONS. No power conferred on the Plan Administrator or the Trustee or retained by Employer shall be exercised in such manner as to cause or create discrimination in favor of highly compensated employees or persons whose principal duties consist of supervis- ing the work of other employees. The Plan Administrator, 2-2 y Employer and its legally constituted authority shall be entitled to rely conclusively upon the tables, valuations, certificates and reports furnished by an actuary or accountant employed by the Plan Administrator under this Plan, and/or upon opinions of counsel or other experts; and such members, and each of them, shall be fully protected as to any action taken or allowed by them in good faith and reliance upon any such tables, valuations, certificates, reports or opinions; and all actions taken or allowed by them shall be conclusive upon all persons having or claiming any interest under the Plan. 2.05. EXPENSES. The Employer, or in its absence the Trustee, shall reimburse the Plan Administrator for any necessary or proper expenses incurred in exercising its duties. Except for such reimburse- ment, the Plan Administrator shall not receive any compensation for the administration of the Plan. 2.06. CLAIM PROCEDURE. (a) Any Participant or Beneficiary may file with the Plan Administrator a written statement setting forth a claim for benefits. The written statement shall be signed and set forth the claim in a manner reasonably calculated to bring it to the Plan Administrator's attention. (b) If a claim is wholly or partially denied, notice of the decision shall be furnished by the Plan Administrator to the claimant within ninety (90) days after receipt of the claim. If within such ninety (90) days, the claim has neither been denied in writing nor granted, it shall be deemed denied on the 90th day. (c) Any notice of denial of claim shall be written in a manner calculated to be understood by the claimant and shall include the following: (i) the specific reason or reasons for denial; (ii) specific reference to pertinent plan provisions on which the denial is based; (iii) a description of additional material or informa- tion necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review. 2-3 Ip� (d) A claimant may obtain a full and fair review by appeal- ing a denied claim to the Plan Administrator in writing within sixty (60) days after receipt by the claimant of the notice of denial. A claimant may review pertinent documents and may submit issues and comments in writing. The claimant may request review by the Board of Directors of the Employer, in addition to the Plan Administrator. An appeal may be requested or pursued by a duly authorized representative of the claimant. Within sixty (60) days of receipt of a request for review, a written decision shall be rendered. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent provisions of the Plan on which the decision is based. 2.07. INDEMNIFICATION OF THE PLAN ADMINISTRATOR. The Plan Administrator shall be indemnified by the Employer and not from the Trust Fund against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan if the act or failure to act is judicially determined not to be a breach of fiduciary responsibility. The indemnification shall include expenses and attorney's fees reasonably incurred in the defense of any claim relating thereto. 2-4 ARTICLE 3. 3.01. DUTIES OF TRUSTEE REGARDING CONTRIBUTIONS. All contributions made under the Plan shall be delivered to the Trustee. The Trustee shall be accountable for all contribu- tions received by it, but shall have no duty to require any contributions to be made to it, or to determine whether contribu- tions received comply with the Plan. 3.02. RIGHT OF EMPLOYER TO TRUST ASSETS. The Employer shall not have a right or claim of any nature in or to the Trust Fund except to require the Trustee to hold, invest, apply and pay such assets in the Trust in accordance with the Trust Agreement for the benefit of the Participants and beneficiaries and for defraying reasonable expense of administer- ing the Plan and Trust as provided for in Section 9.01. Assets of the Trust shall not be subject to claims of Employer's creditors. 3.03. MISTAKE IN CONTRIBUTION. Upon written request from the Employer the amount of a contribution made by reason of a mistake of fact shall be credited to the Employer as an offset to future Employer Contri- butions. The amount to be credited to the Employer is the excess of the amount contributed over the amount which would have been contributed had there not occurred a mistake of fact. The credit to the Employer of the amount involved must be made within one year of the mistake in payment of the contribution, as the case may be. Earnings attributable to the excess contribution may not be credited to the Employer, but losses attributable thereto must reduce the amount to be so credited. If the withdrawal of the amount attributable to the mistake in contribution will cause the balance of the individual account of any Participant to be reduced to less than the balance which would have been in the account had the mistaken amount not been contributed, then the amount to be credited to the Employer shall be reduced so as to avoid such reduction. 3-1 i.] 4.01. DUTIES OF EMPLOYER. The Employer shall appoint a Plan Administrator to adminis- ter the Plan and shall certify to the Trustee the names and specimen signature of the Plan Administrator or signatures of members of the Administrative Committee acting from time to time. The Employer shall make monetary contributions to the Trust Fund as the same may be appropriate by due action. The Employer shall keep accurate books and records with respect to its Employees, their service with the Employer, and their annual compensation. 4.02. DUTIES OF TRUSTEE. The Trustee shall hold and invest all monetary contributions received from the Employer (whether from the Employer or withheld from Employees) by the Trustee, and all Trust Funds which are transferred to it as a successor Trustee by the Employer from any other plan qualified under the Code, all of which, together with the income therefrom, shall constitute the Trust Fund. The Trustee shall manage and administer the Trust Fund pursuant to the terms of this Trust Agreement without distinction between principal and income and without liability for the payment of interest thereon. The Trustee shall not have a duty or authority to compute any amount to be paid to the Trustee by the Employer nor shall the Trustee be responsible for the collection of any contribution. The powers, duties and responsibilities of the Trustee shall be limited to those set forth in this Trust Agreement; and nothing contained in the Plan either expressly or by implication, shall be deemed to impose any additional powers, duties or responsibilities on the Trustee. POWERS AND SPECIFIC DUTIES OF THE TRUSTEE 5.01. POWERS. The Trustee shall have full power and authority to invest and reinvest the Trust Fund in any investments permitted by law for the investment of trust funds in the State of Arkansas. The Trustee shall also have full power with respect to any and all assets at any time received or held in the Trust Fund, 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, without in any way limiting or impairing the generality of the foregoing, the following powers and authority: (a) To retain the same for such period of time as it deems appropriate. (b) To sell the same, at either public or private sale, at such time or times and on such terms and conditions as to credit or otherwise as it may deem appropriate. (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 Fund, and to pay any and all calls and assessments imposed upon the owners of such securi- ties as a condition of their participating therein; and to consent to any contract, lease, mortgage, purchase or sale of property, by or between such corporation and any other corpora- tion or person. (d) To exercise or dispose of any right it 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 it may deem advisable. (e) To deposit any security with any protective or reorga- nization committee, and to delegate to such committee such power and authority with relation thereto as it may deem proper, and to agree to pay and to pay out of the Trust Fund 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 obliga- tion due or becoming due. 5-1 (g) To grant options to purchase any asset, including common stocks held in the Trust Fund. (h) To compromise, arbitrate or otherwise adjust or settle claims in favor of or against the Trust Fund, and to deliver or accept in either total or partial satisfaction of any indebted- ness or other obligation any asset, and to continue to hold for such period of time as the Trustee may deem appropriate any asset so received. (i) To exchange any asset for other asset upon such terms and conditions as the Trustee may deem proper, and to give and receive money to effect equality in price. (j) To vote proxies, execute powers of attorney and deliver same to such person or persons as the Trustee may deem proper, granting to such person such power and authority with relation to any securities at any time held for the Trust Fund as it may deem proper. (k) To foreclose any obligation by judicial proceeding or otherwise. (1) To sue or defend in connection with any and all securi- ties or other assets at any time received or held for the Trust Fund with all costs and attorneys' fees in connection therewith to be charged against the Trust Fund. (m) To borrow money, with or without giving security. (n) To cause any securities held for the Trust Fund to be registered and to carry any such securities in the name of a nominee or nominees. (o) To hold such portion of the Trust Fund as the Trustee may deem necessary for the ordinary administration of the Trust Fund in short-term cash equivalents having ready marketability or by depositing the same in a passbook savings account in any bank subject to the rules and regulations governing such deposits, and without regard to the amount of any such deposit. (p) To transfer all or part of the Trust Fund to be commin- gled with other funds in a common trust, mutual fund, similar fund administered by the Trustee or other open-end investment companies. (q) To invest in savings accounts, money market accounts or certificates of deposit of the Trustee or the Employer, if the Trustee or Employer is a bank. 5-2 5.02. RESTRICTION ON EXERCISE OF POWERS. The powers granted to the Trustee shall be exercised by the Trustee in its sole discretion. The Plan Administrator may, however, at any time and from time to time, by written direction to the Trustee, require the Trustee to obtain the written approval of the Plan Administrator before exercising any such powers. 5.03. 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. 5.04. PLAN ADMINISTRATOR INSTRUCTIONS TO THE TRUSTEE. The Trustee shall from time to time receive written direc- tions, orders, requests or instructions from the Plan Administrator or by any such person or persons as may from time to time be designated therefor by the Plan Administrator. The Trustee shall act and shall be fully protected in acting in accordance with such directions, orders, requests and instructions except as otherwise provided under federal or state law. In directing the Trustee to make payments, the Plan Administrator shall follow the provisions of the related Plan and shall not direct that any payment be made, either during the existence or upon discontinuance of the related 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 Employees of the employer or their Beneficiaries, pursuant to the provisions of such Plan. The Trustee shall be under no liability for any distribution made 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. The Trustee shall not be liable for the proper application of any part of the Trust Fund 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 Fund to meet and discharge any and all payments and liabilities under the related Plan. 5.05. DISTRIBUTIONS TO PARTICIPANTS. The Trustee may make any payment required to be made here- under, by mailing a check for the amount thereof to the person to 5-3 whom such payment is to be made, at such address as may have last been furnished the Trustee, or if no such address shall have been so furnished, to such person in care of the Employer at its principal office. The Trustee shall not have an obligation to search for or ascertain the whereabouts of any payee or distributes of the Trust Fund, however, if any payment or distribution to be made from the Trust Fund is not claimed, the Trustee shall notify the plan Administrator of that fact promptly. 5.06. INVESTMENTS. The Plan Administrator shall exercise the power to direct the Trustee with regard to the type and number of investment options available to Participants including the prudent selection of specific pooled investments meeting the requirements of the Code, the category of options including but not limited to such funds as equities, mixed assets, fixed income and money market, the risk or beta associated with each option and the continued suitability of such investments based on financial performance or other criteria related solely to the exclusive benefit of the Participants and beneficiaries. - All orders, requests and instructions to the Trustee pursuant to this article shall be in writing and signed by the designee(s) of the Plan Administrator. The Trustee shall act and shall be fully protected in acting in accordance with such orders, requests and instructions except as otherwise provided under state or federal law. 5.07. INVESTMENT MANAGER. The Plan Administrator shall have the right, but shall be under no obligation, to appoint an investment manager or managers to direct the investment of all or of any portion of the assets of the trust fund. The investment manager or managers shall be (a) Registered as an investment advisor under the Invest- ment Advisor's Act of 1940, (b) A bank as defined in that Act, or (c) An insurance company qualified to manage, acquire or dispose of assets of the Plan under the laws of more than one State. Upon appointment, the investment manager shall certify and acknowledge to the Trustee receipt of a copy of the Plan and Trust, that the investment manager is fiduciary with respect to 5-4 such Plan and Trust, and that the investment manager has assumed the duties and responsibilities conferred by the Plan Administrator. 5.08. PARTICIPANT DIRECTION OF INVESTMENTS. (a) Notwithstanding any other provision of this Plan and Trust, the Plan Administrator shall allow a Participant to direct the Trustee in writing to invest the amount credited to the Participant's Account in any one or more investment options from the options established by the Plan Administrator. (b) The Plan Administrator shall adopt rules concerning the number of investment options which a Participant may elect, the percentage of his/her Account which may be invested in each investment option, and procedures for changing investment options. (c) Any investment direction shall be made by the Participant to the Trustee in writing on a form adopted for this purpose by the Plan Administrator. The Trustee shall carry out the Participant's directions in accordance with uniform procedures established by the Plan Administrator. Any direction by the Participant regarding the investment of assets shall remain in effect until another valid written direction has been made by the Participant. (d) The Trustee shall not, at any time after December 31, 1981, invest any portion of a Directed Investment Account in "collectibles" within the meaning of that term as employed in Internal Revenue Code S 408(m). (e) The Trustee shall keep separate records of investments made pursuant to a Participant's direction under this Section. Any gains or losses arising from an investment made pursuant to a Participant's direction shall be allocated solely to such Parti- cipant's Account. (f) The interest of each Participant or beneficiary in their self -directed Account(s) shall be deemed to be personalty only and each Participant or beneficiary shall not have any individual ownership interest in any trust asset. 5-5 I � 71y • �i�f�� 6.01. GENERAL RECORDS. The Trustee shall maintain accurate records and detailed accounts of all investments, receipts, disbursements, and other transactions hereunder, and such records shall be available at all reasonable times to inspection by the Plan Administrator, the Employer (or any authorized representative), Participants or Beneficiaries. The Trustee shall maintain a unit accounting valuation system with which to administer the trust and each Participant's Account and shall, at the direction of the Plan Administrator, submit to the Plan Administrator such valuations, reports or other information as the Plan Administrator may reasonably require. In the absence of fraud or bad faith, the valuation of the Trust Fund by the Trustee shall be conclusive. 6.02. ANNUAL ACCOUNT. Within sixty (60) days following the close of each Plan Year (or following the close of any period as may be agreed upon by the Trustee and the Plan Administrator) the Trustee shall file with the Plan Administrator a written account setting forth a description and fair market value of all securities and other assets purchased and sold, all receipts, disbursements, and other transactions effected by it during such period, listing the fair market value of securities and other assets held by it at the end of such period. The fair market value of the Trust Fund shall be the fair market value of all securities and other assets then held including any cash balance and all income accrued or received during the valuation period. In determining the fair market value, the Trustee may rely upon any data or information it believes to be reliable and which it can obtain with reasonable diligence. The Plan Administrator may approve such account by written notice of approval delivered to the Trustee or by failure to object in writing to the Trustee within sixty (60) days from the date upon which the account was delivered to the Plan Administrator. Upon receipt of written approval of the account, or upon the passage of said period of time, without written objections having been delivered to the Trustee, such account shall be deemed to be approved, and the Trustee shall be released and discharged as to all items, matters and things set forth in such account, as if such account had been settled and allowed by a decree of a court of competent jurisdiction. 6-1 ARTICLE 7. 7.01. DURATION. It is the intention of the Employer that this Trust Agree- ment shall be permanently administered for the benefit of its Employees, and this Trust Agreement is, accordingly, irrevocable. If conditions change, however, this Trust Agreement and the Trust Fund created hereunder may be terminated upon sixty days written notice by the Employer, and upon such termination the Trust Fund shall be distributed by the Trustee as and when directed by the Plan Administrator. From and after the date of termination of this Trust Agreement and the Trust, and until final distribution of the Trust Funds, the Trustee shall continue to have all the powers provided under this Trust Agreement as are necessary and expedient for the orderly administration, liquidation and distri- bution of the Trust Fund. 7.02. AMENDMENTS. This Trust Agreement may be amended at any time by written agreement of the Employer and the Trustee; provided, however, that such Amendment shall not operate to: (a) Subject to Section 3.03, revest the Trust Fund or any part thereof in the Employer; (b) Reduce the then Accrued Benefit or the amount then held for the benefit of any Participant in the Plan, or (c) 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 and their Beneficiaries. 7-1 ARTICLE 8. 8.01. METHOD. The Trustee may resign or may be removed by the Employer. Such resignation or removal may be accomplished at any time upon giving sixty (60) days' written notice. Termination of the Trustee shall not, however, relieve the Employer of the Employer's continuing obligation to make Employer Contributions in accordance with the terms of the Plan. Upon such resignation or removal, the Employer shall appoint a successor Trustee to whom the then Trustee shall transfer all assets of the Trust Fund then held by it. Such successor Trustee shall thereupon succeed to all of the powers and duties given to the Trustee by this Trust Agreement. Within sixty (60) days of such transfer of the trust assets, the resigning or removed Trustee shall render to the Employer an account in the form and manner prescribed for the annual account by Section 6.02. Unless the Employer shall within sixty (60) days after the rendition of such account file with the Trustee written objections thereto, the account shall be deemed to have been approved, and the Trustee shall be released and discharged as to all items, matters and things set forth in such account, as if such account had been settled and allowed by a decree of a court of competent jurisdiction. 8-1 ARTICLE 9. TAXES EXPENSES AND COMPENSATION TO TRUSTEE 9.01. MANNER OF PAYMENT. The Trustee shall deduct from and charge against the Trust Fund any taxes paid by it which may be imposed upon the Trust Fund or the income thereof or which the Trustee is required to pay with respect to the interest of any person therein. The Employer shall pay to the Trustee in a mutually agreed timely manner its expenses in administering the Trust Fund and, if the Trustee is not an Employee, a reasonable compensation for its services as Trustee hereunder, at a rate to be agreed upon from time to time. The Trustee shall have a lien on the Trust Fund for such compensation and for any reasonable expenses, including counsel fees, and the same may be withdrawn from the Trust Fund, unless paid by the Employer. Expenses which are directly related to investment transactions such as broker's commission and contract loadings shall be paid out of the assets of the Trust or from a specific investment option account when an expense item is specifically related to that account. e� MISCELLANEOUS TRUST PROVISIONS 10.01. GOVERNING LAW. The Trust Agreement shall be administered in the State of Arkansas, and its validity, construction and all rights hereunder shall be governed by the laws of that State. If any provisions of this Agreement shall be invalid or unenforceable, the remain- ing provisions thereof shall continue to be fully effective. 10.02. SPENDTHRIFT CLAUSE. Prior to the time of distribution specified herein, a person entitled to any benefits under this Trust Agreement shall not have right to assign, transfer, hypothecate, encumber, commute or anticipate his or her interest in any benefits under this Trust Agreement, and such benefits shall not in any way be subject to any legal process or levy of execution upon, or attachment or garnishment proceedings against, the same for the payment of any claim against any such person. In no event shall the Trustee pay over any part of the interest in the trust of any Participant or beneficiary to any assignee or creditor of such person. Any attempted assignment or other disposition of interest in the trust shall not be merely voidable but absolutely void. The above paragraph shall not apply to the creation, assign- ment or recognition of any benefit payable with respect to a Participant pursuant to a qualified domestic relations order (as that term is defined in section 414(p) of the Internal Revenue Code). If such order requires, the Plan Administrator shall pay benefits to the alternate payee immediately if the amount payable to the alternate payee is less than $3,500. 10.03. BINDING EFFECT. This agreement shall be binding upon persons who are enti- tled to any benefits hereunder, their heirs and legal representa- tives, and upon the Employer, the Trustee and the respective successors and assigns. 10.04. PROHIBITION AGAINST REVERSION. The Employer shall have no beneficial interest in the Trust Fund or any part thereof, and no part of the Trust Fund shall ever revert or be repaid to the Employer, either directly or 10-1 • indirectly, except as set forth in the Plan. The corpus or income of the trust may not be diverted to or used for other than the exclusive benefit of the Participants and their Benefici- aries. 10.05. LITIGATION. Necessary parties to any accounting, litigation, or other proceedings shall include only the Trustee and the Employer. Settlement or judgment in any such cases in which the Employer is duly served or cited shall be binding upon all Participants, Beneficiaries, and their beneficiaries and estate, and upon all persons claiming by, through or under them, to the extent permitted by law. 10.06. HEADINGS. The headings of articles and sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Trust Agreement, the text shall control. 10.07. DEFINITIONS. When used herein in their capitalized form, unless otherwise specified, terms shall have the same definitions as provided in the city of Fayetteville Employee Retirement Savings Plan. IN WITNESS WHEREOF, the Employer and Trustee have signed this Plan and Trust as amended and restated on , 1992. CITY OF FAYETTEVILLE By Its TRUSTEE: By Trust Officer CWfi.116214 10-2 * Y s y CITY OF FAYETTEVILLE TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ARTICLE 2 ELIGIBILITY 2.01 Eligibility 2.02 Election to Participate 2.03 No Employer Contributions Made 2.03 Termination and Reemployment ARTICLE 3 LIMITATIONS ON CONTRIBUTIONS 3.01 General Limitation 3.02 Catch -Up Limitation ARTICLE 4 ACCO 4.01 4.02 4.03 4.04 4.05 LINTS Establishment of Separate Accounts Allocation of Earnings and Losses Investments Statement to Participants Unclaimed Account Procedure ARTICLE 5 VESTING OF PARTICIPANTS' INTEREST ARTICLE 6 RETIREMENT OR TERMINATION OF EMPLOYMENT 6.01 Retirement Age 6.02 Time of Distribution 6.03 Distribution Amount ARTICLE 7 DEATH BENEFITS 7.01 Death Benefit 7.02 Benefit Amount 7.03 Designation of Beneficiary ARTICLE 8 DISTRIBUTION OF BENEFITS 8.01 Effect Of Distribution 8.02 Information To Be Furnished To Plan Administrator 8.03 Optional Payment Forms 8.04 Distributions After Death of Participant ARTICLE 9 INSURANCE, LOANS AND WITHDRAWALS 9.01 Life Insurance 9.02 Loans 9.03 Hardship Withdrawals F i v ARTICLE 10 AMENDMENT, TERMINATION OR MERGER OF PLAN 10.01 Right of Employer to Amend Plan 10.02 obligation of Employer 10.03 Termination of Plan 10.04 Distribution on Termination of Plan ARTICLE 11 NONASSIGNABILITY 11.01 General 11.02 Domestic Relations Orders ARTICLE 12 MISCELLANEOUS PLAN PROVISIONS 12.01 Participant's Rights 12.02 Headings and Subheadings 12.03 Interpretation 12.04 Successors and Assigns 12.05 Successor Employer 12.06 Service for Predecessor Employer 12.07 Transfer of Interest ARTICLE 13 PLAN ADMINISTRATOR 13.01 Designation and Acceptance 13.02 Resignation and Removal 13.03 Powers 13.04 Actions 13.05 Expenses 13.06 Claim Procedure 13.07 Indemnification of the Plan Administrator 1 1 1 1 1 IIU4 1►�1'� M 1� '_' City of Fayetteville, an Arkansas municipality incorporated under the laws of the State of Arkansas, has established this City of Fayetteville Nonqualified Deferred Compensation Plan, under which there shall exist a Trust Fund to which contributions may be made and from which benefits shall be paid in accordance with the terms and conditions thereof. This Plan is an agreement solely between the Employer and participating Employees. The Plan has been approved by the legally constituted authority of Employer for the primary purpose of providing retirement income to Participants and is intended to be an "eligible deferred compensation plan" as defined in Section 457 of the Internal Revenue Code of 1986. The terms and conditions of the Plan and Trust are as follows: As used in this document, the following terms shall have the indicated meanings: 1.01. "ACCOUNT" shall mean an individual account maintained to record each Participant's interest in the Plan attributable to elective contributions under Section 2.02 and income, gains, losses or increases or decreases in market value thereon. The Account, as adjusted for distributions and any fees or expenses charged thereto, shall constitute a Participant's entire interest in the Plan. 1.02. "ALTERNATE RETIREMENT AGE" shall mean the age at which the Participant elects to separate from service. This election may not be earlier than age 55 nor later than age 70½. 1.03. "ANNIVERSARY DATE" shall mean the last day of each Plan Year. 1-1 1.04. "BENEFICIARY" shall mean the person, persons, or other legal entity designated by the Participant who under the Plan becomes entitled to receive a Participant's interest upon his or her death. 1.05. "CODE" shall mean the Internal Revenue Code of 1986, as amended. 1.06. "COMPENSATION" shall mean the base compensation paid to the Employee by the Employer for the Plan Year that is subject to federal income tax withholding, plus elective contributions to this Plan and any cafeteria plan under Code S 125, excluding overtime pay, bonuses, commissions and expense account allowances. 1.07. "DEFERRED COMPENSATION" shall mean the amount of Compensation otherwise payable to the Participant which the Participant and Employer mutually agree to defer hereunder, or any amount credited to a Participant's Account by reason of a transfer under Section 12.07. 1.08. "DISABILITY" shall mean the total and permanent incapacity of a Participant to engage in any substantial gainful activity, as determined by a qualified physician. 1.09. "EFFECTIVE DATE" shall mean the 1st day of , 1.10. "ELIGIBLE EMPLOYEE" shall mean any Employee classi- fied as regular full time who: (a) has completed one (1) Year of Service and has attained a minimum age of twenty (20) years and (b) is not an ineligible employee. Ineligible employees are (1) Employees who are participants (orwouldbe if eligibility requirements were met) in the Employer -funded Police Pension Plan or Fire Pension Plan, or (2) Employees whose employment is governed by the terms of a collective bargaining agreement between Employee representatives and the Employer under which retirement benefits were the subject of good faith bargaining between the parties (unless such agreement expressly provides that such employees will be eligible to participate in this Plan). 1.11. "EMPLOYEE" shall mean any person on the payroll of the Employer whose wages from the Employer are subject to with- holding for the purposes of Federal income taxes and the Federal Insurance Contributions Act. A person employed as an independent contractor shall not be an Employee. 1.12. "EMPLOYER" shall mean City of Fayetteville, Arkansas. 1-2 1.13. "HOUR OF SERVICE" shall mean an Hour of Service as defined in paragraphs (a), (b), and (c) below. The Employer may round up hours at the end of a computation period or more fre- quently. (a) An Hour of Service is each hour for which an Employee is paid, or entitled to payment, for the performance of duties for the Employer during the applicable computation period. (b) An Hour of Service is 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. Notwith- standing the preceding sentence, (i) no more than 501 Hours of Service shall be credited, under this paragraph (b), to an Employee on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computa- tion period); (ii) an hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed is not required to be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applica- ble workmen's compensation, or unemployment compensation or disability insurance laws; and (iii) Hours of Service shall not be credited for a payment which solely reimburses an Employee for medical or medically related expenses incurred by the Employee. For purposes of this paragraph (b), a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly or indi- rectly through, among others, a trust fund or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer, or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate. (c) An Hour of Service is each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer. The same Hours of Service shall not be credited both under paragraph (a) or paragraph (b), as the case may be, and under this paragraph (c). 1-3 1.14. "INVESTMENT OPTIONS" shall mean mutual funds or similar investment vehicles selected by the Plan Administrator into which the Participant directs the investment of his or her Account. 1.15. "NORMAL RETIREMENT AGE" shall mean age 70½. 1.16. "PARTICIPANT" shall mean an Employee who shall have met all requirements for participation in the Plan and who has elected to have amounts deferred under this Plan. Each Parti- cipant ceases to be such when he terminates his or her employment with Employer, except where pursuant to this Plan the distribu- tion of benefits is deferred to a later date. 1.17. "PLAN" shall mean this document as now written and any amendments thereto which may be in force from time to time. 1.18. "PLAN ADMINISTRATOR" shall mean the person or persons or corporation named pursuant to Article 13 to administer the Plan. 1.19. "PLAN YEAR" shall mean the twelve (12) month period ending December 31 of each year. 1.20. "RETIREMENT" shall mean the first date upon which both of the following shall have occurred with respect to a Participant: Separation from service at a minimum attainment of age 55. 1.21. "SEPARATION FROM SERVICE" shall mean severance of the Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(e)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to have severed his or her employment with the Employer for purposes of this Plan when; in accordance with the estab- lished practices of the Employer, the employment relationship is considered to have actually terminated. 1.22. "TRUST AGREEMENT" shall mean the Agreement between Employer and the Trustee or successor Trustee named under the Trust Agreement executed concurrently herewith which provides for the administration of the Trust Fund. 1.23. "TRUST FUND" shall mean the fund established to hold all assets contributed and accumulated pursuant to this Plan. 1.24. "TRUSTEE" shall mean the person or persons or corpo- ration having trust powers so designated by the Employer to serve as Trustee and who, by execution of the Trust Agreement, 1-4 signifies acceptance of the Trust, or any person or persons or corporation having trust powers duly appointed as a successor Trustee. 1.25. "YEAR OF SERVICE" shall mean, for purposes of deter- mining an Employee's eligibility to participate in the Plan, any 12 consecutive month period after the date of hire in which the Employee completes 1,000 or more Hours of Service. 1-5 2.01. ELIGIBILITY. All Eligible Employees who meet the requirements of the Plan prior to the Effective Date may become Participants in the Plan under Section 2.02 on the Effective Date. Other Employees may become Participants at the beginning of the month following the date such Employee first becomes an Eligible Employee. 2.02. ELECTION TO PARTICIPATE. (a) Participation in this Plan is voluntary on the part of an Eligible Employee. Before the beginning of each Plan Year, each Eligible Employee will be given the opportunity whether to have the Employer defer compensation under this Plan, to make contributions to the Employer's qualified plan or to forego making contributions for such Plan Year. Such election, once made, shall be irrevocable for the entire Plan Year. If a change in such election is not made before the following Plan Year, such election shall continue for the following year, when this proce- dure shall be repeated. As a condition for participation in this Plan, each Eligible Employee shall agree to have the Employer defer at least three percent (3%) of his or her Compensation. A Deferred Compensation agreement must be entered into between an Eligible Employee and the Employer to commence participation. Such agreement shall fix the amount of Deferred Compensation, direct the investment of the Deferred Compensation among the Investment Options, designate the Beneficiary and shall incorporate by reference pertinent provisions of the Plan. Such deferrals shall be on a salary reduction basis and shall be credited to his or her Account. (b) A Participant may elect at any time during the Plan Year to change his or her Investment Options. Such amendment shall become effective as of the beginning of the month commenc- ing after the date the executed amendment is delivered to the Plan Administrator. A Participant may at any time change in writing the Beneficiary and such amendment shall become effective immediately upon delivery to the Plan Administrator. (c) At Normal Retirement, or at such other date when the Participant shall be entitled to receive benefits, the Account shall be used to provide benefits to the Participant pursuant to Article 8. 2-1 2.03. NO EMPLOYER CONTRIBUTIONS MADE. No Employer contributions shall be made to this Plan. 2.04. TERMINATION AND REEMPLOYMENT. (a) If an Employee who is not an Eligible Employee termi- nates employment and he or she is subsequently reemployed by the Employer, service before such termination shall not be taken into account, and the Employee shall be required to meet the require- ments of Section 1.10 after his or her return. (b) If an Eligible Employee terminates employment and is subsequently reemployed, he or she may participate immediately upon reemployment, irrespective of whether he or she previously participated. 2-2 ARTICLE 3. LIMITATIONS ON CONTRIBUTIONS 3.01. GENERAL LIMITATION. (a) Except as provided in Section 3.02, the maximum amount of contributions to this Plan which may be made on behalf of any Participant in a Plan Year to his or her Account shall not exceed the lesser of: (i) $7,500, or (ii) 33-1/3% of the Participant's "includible compensa- tion" (as defined in paragraph (b), reduced by any amount excludible from the Participant's gross income for the taxable year under Section 403(b), 402(a)(8) or 402(h)(1)(B) of the Code on account of contributions made by the Employer. (b) For purposes of this section, "includible compensation" means compensation for services performed for the Employer which, taking into account the provisions of the Plan and any other tax - deferred contributions under the Code, is currently includible in the Participant's gross income for federal income tax purposes. 3.02. CATCH-UP LIMITATION. For any one or more of the Participant's last three calendar years of employment which end before the Participant reaches Normal Retirement Age or the Participant's designated Alternate Retirement Age, the maximum amount which may be deferred shall not exceed the lesser of: (i) $15,000, or (ii) The sum or (A) the normal limitation for the taxable year and (B) the normal limitation for each prior taxable year of the Participant less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if the Participant was an Eligible Employee for such year (or eligible in any other eligible deferred compensa- tion plan under Section 457 of the Code which is properly taken into account) and if Deferred Compensation was subject to the limitations of Section 3.01. 3-1 A Participant may elect to have the catch-up deferral provisions of this section apply only once notwithstanding that the Partici- pant may have caused the catch-up provision in less than all of three years or that the Participant rejoins the Plan after retirement. 3-2 ACCOUNTS 4.01. ESTABLISHMENT OF SEPARATE ACCOUNTS. The Trustee shall maintain as separate and distinct accounts, each Participant's Account. The Trustee, through its accounting records, shall segregate clearly each Account, and maintain a separate and distinct record of all income and losses attributable to each such account. Neither the Employer, the Trustee nor the Plan Administrator guarantees or in any manner protects the Participants or their beneficiaries against conditions of market causing loss or depreciation or fluctuation in the value of the assets comprising the Trust Fund. In no event shall the Employer's liability to pay benefits to a Participant exceed the value of the Participant's Account. 4.02. ALLOCATION OF EARNINGS AND LOSSES. The regular valuation date of the Plan shall be the last day of each Plan Year. The Plan Administrator may designate other valuation dates as deemed necessary. Such dates shall be referred to as "Valuation Dates." The valuation basis of all assets shall be their fair market value. Accounts will be invested pursuant to the written direction of a Participant and be valued in accordance with this Section. The net earnings, gains or losses of the Plan, and changes in the fair market value of the assets shall be allocated propor- tionately on each Valuation Date to the Participants on the basis of their respective Account balances utilizing a unit accounting valuation. 4.03. INVESTMENTS. (a) The Employer shall pay to the Trustee at the close of each month all Compensation deferred during the month by each Participant. (b) The Participant, at his or her sole discretion, shall direct the investment of his or her Deferred Compensation into one or more Investment Options selected by the Plan Administrator and contained in a Trust Fund established exclusively for this Plan, and from time to time may select to change the amount or 4-1 redirect such investment pursuant to procedure established by the Plan Administrator. (c) Notwithstanding any other provision of this Plan, pursuant to Code Section 457(b)(6)(C), all Accounts and all accumulated income attributed thereto (including any such amounts in any trust) shall at all times be subject to the claims of general creditors of the Employer until such time as distributed to Participants or Beneficiaries. No Participant or Beneficiary shall have any vested interest or secured or preferred position with respect to the Trust or have any claim against the Employer except as a general creditor. 4.04. STATEMENT TO PARTICIPANTS. The Plan Administrator shall furnish to each Participant at least annually a statement of each Participant's Account as it from time to time exists. Statements shall contain an adequate explanation of the computation including market valuation, unit values and other allocation factors provided in this Plan. 4.05. UNCLAIMED ACCOUNT PROCEDURE. The Plan Administrator shall not be obliged to search for, or ascertain the whereabouts of, any Participant or Beneficiary. The Plan Administrator, by certified or registered mail addressed to his or her last known address of record with the Plan Adminis- trator or the Employer, shall notify any Participant, or Benefi- ciary, that he or she is entitled to a distribution under this Plan, and the notice shall quote the provisions of this Section. If the Participant, or Beneficiary, fails to claim his or her distributive share or make his or her whereabouts known in writing to the Plan Administrator within six (6) months from the date of mailing of the notice, or before this Plan is terminated or discontinued, whichever should first occur; the unclaimed amount shall be treated as a Forfeiture for the later of the Plan Year in which the six-month period expires or the Plan Year a Forfeiture would otherwise occur if distribution has been made. Pending such Forfeiture, the amount shall be segregated in a segregated interest -bearing account in the name of the Partici- pant or Beneficiary, which shall be entitled to all income it earns and shall bear any expenses incurred. If a Participant or Beneficiary who has incurred such a Forfeiture makes a claim for his or her forfeited Account, the Employer shall contribute such amount, unadjusted for earnings, gains or losses occurring subsequent to the date of the Forfei- ture. 4-2 ARTICLE 6. RETIREMENT OR TERMINATION OF EMPLOYMENT 6.01. RETIREMENT AGE. Age 70½ is designated as the Normal Retirement Age unless the Participant has elected an Alternate Retirement Age by written instrument delivered to the Plan Administrator prior to Separation from Service. A Participant's Normal or designated Alternate Retirement Age determines the period during which a Participant may utilize the catch-up limitation of Section 3.03 hereunder. Once a Participant has to any extent utilized the catch-up limitation of Section 3.02 his or her retirement age may not be changed. If a Participant continues employment after attaining age 70', not having previously elected his or her retirement age, the Participant's Normal Retirement Age shall not be later than a mandatory retirement age designated by the Employer. A Participant's Alternate Retirement Age may not be earlier than age 55 and may not be later than age 70½. 6.02. TIME OF DISTRIBUTION. Payment to a Participant under this Plan may not begin earlier than one of the following events: (a) sixty (60) days after the Retirement of the Partici- pant; or (b) when the Participant faces an "unforeseeable emergency" as defined in Section 9.04; or (c) upon Separation from Service before Retirement. In this event, the Account is payable to the Participant in a single lump sum payment ninety (90) days after separation. The Partici- pant may, however, elect not to receive a lump sum on such date by filing with the Plan Administrator an irrevocable election prior to sixty (60) days after the date of separation. If the Participant makes such election, he or she shall irrevocably designate a subsequent date, not later than the Normal Retirement Age, on which payment may begin. 6.03. DISTRIBUTION AMOUNT. The amount of the Account to be distributed to a Participant under this Article 6 shall be determined as of the valuation date immediately preceding distribution, plus contributions made since 6-1 ARTICLE 7. 7.01. DEATH BENEFIT. The Beneficiary of a Participant who dies prior to receiving other benefits under the Plan shall be entitled to receive death benefits as provided hereinafter. A Beneficiary shall be one hundred percent (100%) vested in a deceased Participant's Accrued Benefit. 7.02. BENEFIT AMOUNT. The amount of the Accrued Benefit payable to the Beneficiary under this Article 7 shall be determined as of the valuation date immediately preceding distribution, plus contributions made since such date. The benefits shall be distributed in accordance with Section 6.02 and Article 8. 7.03. DESIGNATION OF BENEFICIARY. Each Participant shall have the right to designate a Benefi- ciary or Beneficiaries to receive his or her interest in the Plan upon his or her death. Such designation shall be made in the form prescribed by the Plan Administrator and shall be effective for all purposes upon the delivery thereof to the Plan Adminis- trator. The Participant shall have the right to change or revoke any such designation from time to time by filing a new designa- tion or notice of revocation with the Plan Administrator. If a Participant shall fail to designate a Beneficiary or the desig- nated Beneficiary shall predecease the Participant, his or her interest in the Plan shall be paid: (a) To his or her spouse, if living, or (b) If his or her spouse is not then living, to his or her issue, by right of representation, or (c) If neither his or her spouse nor his or her issue are then living, to his or her estate. In the event the Participant names Beneficiaries, each Beneficiary shall be of the benefit payable unless otherwise Participant. 7-1 two or more entitled to equal shares designated by the ARTICLE 8. DISTRIBUTION OF BENEFITS EFFECT OF When a Participant's Account shall have become distributable, such Participant shall cease to have any further interest or participation in the Plan or any subsequent accruals or contributions thereto, except the right to receive payment of his or her Account. INFORMATION TO BE ADMINISTRATOR. For the purpose of enabling the Plan Administrator to determine the portion of a Participant's interest in the Plan which is vested and distributable, the Employer shall certify to the Plan Administrator in writing the following information as soon as possible after his death, Disability, retirement, or other termination of employment: Participant's name and address; Date on which employment terminated; termination of employment. OPTIONAL PAYMENT (a) The Account of a Participant will be distributed under the payment option selected by the Participant at least 30 days prior to commencement of benefits under one of the following means: (i) a payment option elected by the Participant which provides for substantially nonincreasing payments for any period less than the joint life expectancy of the Participant or his or her designated Beneficiary which are paid not less frequently than annually; (iii) in period certain); (iv) in the form of or without a period certain; (with or without and survivor combination of the foregoing. If no option is selected, distribution will be made as an annuity with 120 months certain. (b) Any annuity form of distribution shall be purchased from an Insurer. Any annuity purchased shall continue to be subject to Article 4.03(c). (c) In the event that benefits distributable are to be distributed in equal periodic installments, the Trustee may segregate the Participant's nonforfeitable Accrued Benefit from the Trust and deposit it in a separate account. The segregated account shall be entitled to all income it earns and shall bear all expense or loss it incurs. This provision shall be applied consistently in a uniform, non-discriminatory manner. (d) For calendar years beginning before January 1, 1989, if the Participant's spouse is not the designated beneficiary, the method of distribution selected must assure that at least 50% of the present value of the amount available for distribution is paid within the life expectancy of the Participant. For calendar years beginning after December 31, 1988, the amount distributed shall not be less than the quotient obtained by dividing the Participant's Account by the applicable life expectancy, or if the Participant's spouse is not the designated beneficiary, the applicable divisor determined under the MDIB rules. The minimum distribution required for the Participant's first distribution calendar year must be made on or before the Participant's required beginning date. The minimum distribution for other calendar years, including the minimum distribution for the distribution calendar year in which the Participant's required beginning date occurs, must be made on or before December 31 of that distribution calendar year. If the Participant's Account is distributed in the form of an annuity purchased from an insurance company, distributions thereunder shall be made in accordance with the requirements of S 401(a)(9) of the Code and the regulations thereunder. (e) (i) The life expectancy (or joint and last survivor expectancy) shall be calculated using the attained age of the Participant in the applicable calendar year reduced by one for each calendar year which has elapsed since the date life expec- tancy was first calculated. If life expectancy is being recalculated, the applicable life expectancy shall be the life expectancy as recalculated. Life expectancy of a nonspouse beneficiary may not be recalculated. Life expectancy of the Participant and the Participant's spouse shall be recalculated annually, unless the Participant (or spouse) elect otherwise. Such election shall be irrevocable and shall apply to all 8-2 subsequent years. Life expectancy and joint life survivor expectancy are computed by use of the expected return multiples in Tables V and VI of S 1.72-9 of the Income Tax Regulations. (ii) The designated beneficiary is the person desig- nated as Beneficiary under the Plan in accordance with S 401(a)(9) and regulations thereunder. (iii) The required beginning date of a Participant is April 1 of the calendar year following the later of the calendar year in which the Participant attains age 70 1/2 or the calendar year in which the Participant retires. (f) Any distribution to the Beneficiary of a Participant after his death must comply with Section 8.04. 8.04. DISTRIBUTIONS AFTER DEATH OF PARTICIPANT. (a) If distributions have commenced to a Participant before his or her death, payments, if any, to a Participant's Benefi- ciary will continue under the payment option in effect at death. Such payment must be distributed after the death of the Partici- pant at least as rapidly as under the method of distribution being used as of the date of death. (b) In the case of a distribution which does not begin before the death of the Participant, payments to a Beneficiary shall be made under the payment option selected by the Partici- pant; provided that one of the following requirements must be met: (i) A Participant's entire interest will be paid by December 31 of the year containing the 5th anniversary of the Participant's death; or (ii) If the Participant's interest is payable to a designated Beneficiary, the interest must be distributed over the life of the Beneficiary or a period that does not exceed the life expectancy of the designated Beneficiary. However, if the designated Beneficiary is not the surviving spouse, distribution must be paid over a period not to exceed fifteen (15) years. (c) Any distribution payable over a period of more than one (1) year must be paid in substantially nonincreasing amounts (paid not less frequently than annually). (d) In the event the Beneficiary survives the Participant but does not continue to live for the remaining period under the payment option selected, the balance shall be paid to the estate 8-3 of the Beneficiary. If installments are selected under Section 8.03(a)(i), the balance shall be paid in a lump sum. If the Participant's estate is the Beneficiary, any remaining payments under Section 8.03(a)(i) shall be paid on the Partici- pant's death in a lump sum. (e) In no event shall the Employer, Plan Administrator or Trustee be liable to the Beneficiary for the amount of any payment made in the name of the participant before the Plan Administrator receives proof of death of the Participant. 8-4 9.01. LIFE INSURANCE. No life insurance may be purchased on the life of a Partici- pant under this Plan. 9.02. LOANS. No loans shall be made to Participants. 9.03. HARDSHIP WITHDRAWALS. (a) No withdrawals prior to Separation from Service shall be permitted, except as provided in (b). (b) For serious financial condition arising from an unfore- seeable emergency, a Participant may apply to the Plan Adminis- trator for a withdrawal from the Plan prior to retirement or separation from service by the Participant. If approved, the withdrawal will be effective at the later of the date specified in the Participant's application or the date of the approval by the Plan Administrator. Any such withdrawal will be limited to the amount determined by the Plan Administrator to be necessary to meet the emergency, but no withdrawal shall be approved to the extent that the emergency is or may be relieved through reim- bursement or compensation by insurance, by liquidation of the Participant's assets to the extent that such liquidation will not itself cause severe financial hardship, or by future cessation of deferrals under the Plan. An unforeseeable emergency is a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of a dependent of the Participant, loss of the Participant's property due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The need to send a child to college or the desire to purchase a new home are not unforeseeable emergencies. 9-1 10.01. RIGHT OF EMPLOYER TO AMEND PLAN. The Employer shall have t time to any extent that it may shall be made pursuant to acti authority of the Employer. A delivered to the Trustee. All be bound by amendments adopted the following provisions: he right to amend this Plan at any deem advisable. Any amendment on of the legally constituted copy of such amendment shall be Participants and the Trustee shall in accordance herewith, subject to (a) No amendment shall increase the duties or liabilities of the Trustee or the Plan Administrator without their respective written consents. (b) No amendment shall have the effect of vesting in the Employer any interest in or control over any property subject to the terms of the Trust Agreement. (c) No amendment may make it possible for any part of the corpus or income of the Trust to be used or diverted to purposes other than for the exclusive benefit of the Participants or their Beneficiaries, except as otherwise provided in this Plan. (d) Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under Section 457 of the Code or to comply with other applicable laws, no amendment shall have any retroactive effect so as to deprive any Partici- pant of any benefit already accrued or to reduce the interest of any Participant. 10.02. OBLIGATION OF EMPLOYER. It is the expectation of the Employer that it will continue this Plan indefinitely, but the continuance of this Plan is not assumed as contractual obligation by the Employer, and the right is reserved by the Employer, by action of its legally constituted authority at any time to discontinue the Plan. 10.03. TERMINATION OF PLAN. The Plan may be terminated at any time by a resolution adopted by the Employer upon the giving of such notices as may be required by law. No part of the Trust Fund shall inure or accrue to the Employer in the event of termination of this Plan, subject to Section 4.03(c). 10-1 10.04. DISTRIBUTION ON TERMINATION OF PLAN. As soon as practicable after termination, if permitted by law, the Trustee shall distribute the amount of each affected Participant's Account, or shall hold such amounts for future payment in accordance with this Plan pursuant to the election made by each Participant. 10-2 ARTICLE 11. NONASSIGNABILITY 11.01. GENERAL. Except as provided in Section 11.02, a Participant or Beneficiary shall not have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the Partici- pant's interest in the Plan or the right to receive any payments hereunder. The interest of a Participant in the Plan and the right to receive payments may not be attached, garnished or transferred. 11.02. DOMESTIC RELATIONS ORDERS. (a) To the extent required under a final judgment, decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse,, former spouse, or child. Any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a later time or form of payment. Nothing in this Section shall be construed to authorize any amount to be distrib- uted under the Plan at a time or in a form that is not permitted under Section 457 of the Code. Any payment made to a person other than the Participant pursuant to this Section shall be reduced by required income tax withholding; the fact that payment is made to a person other than a Participant may not prevent such payment from being included in the gross income of the Partici- pant for withholding and income tax reporting purposes. (b) The Employer's liability to pay benefits to a Partici- pant under this Plan shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph(a) of this Section. No such transfer or distribution shall be effectuated unless the Plan Administrator has been provided with satisfactory evidence that the Employer and the Plan Administrator are released from any further claim by this Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Plan Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Plan Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Participant has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Plan Administrator to the Partic- ipant's last known mailing address, and (iii) the Participant fails to obtain an order of the court in the proceeding relieving the Employer or Plan Administrator from the obligation to comply with the judgment, decree or order. (c) The Employer and Plan Administrator shall not be obligated to defend against or set aside any judgment, decree, or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense .f such legal action is borne by the Participant. In the event that the Participant's action (or inaction) nonetheless causes the Employer or Plan Administrator to incur such expense, the amount of the expense may be charged against the Partici- pant's Account and thereby reduce the Employer's obligation to pay benefits to the Participant. In the course of any proceeding relating to divorce, separation, or child support, the Employer and Plan Administrator shall be authorized to disclose informa- tion relating to the Participant's Account to the Participant's spouse, former spouse, or child (including the legal representa- tives of the spouse, former spouse, or child), or to a court. 11-2 12.01. PARTICIPANT'S RIGHTS. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Employee or Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer or any right or interest in the Trust Fund, or any claim against the Employer for benefits. The Plan may not .be construed to modify the terms of any employment contract or agreements between a Participant and the Employer nor may any Participant be divested for cause. 12.02. HEADINGS AND The headings and subheadings in this Agreement are inserted for convenience of reference only and are not to be considered in construction of the provisions hereof. 12.03. INTERPRETATION. This Plan shall be construed, administered and governed in all respects under and by the laws of the State of Arkansas. The Plan is established with the intent that it meet the requirements of an "eligible deferred compensation plan" under section 457 of the Code, as amended. The provisions of this Plan shall be interpreted in conformity with the requirements of that section. Wherever appropriate, singular words used in this Agreement may include the plural, the plural may include the singular, and the masculine may include the feminine or neuter gender. 12.04. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto, their beneficiaries, heirs, executors, administrators, and assigns. 12.05. SUCCESSOR EMPLOYER. In the event of a dissolution, merger or consolidation of the Employer, provisions may be made by the successor for the continuance of this Trust, and said successor shall in such event be substituted in the place of the present Employer by an instru- ment authorizing such substitution executed by the Employer and its successor, a copy of which shall be delivered to the Trustee. 12-1 12.06. SERVICE FOR PREDECESSOR EMPLOYER. For all purposes of this Plan, if the Employer is maintain- ing the plan of a predecessor employer, service for such prede- cessor shall be treated as service for the Employer. 12.07. TRANSFER OF INTEREST. (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and credited to a Participant's Account under this Plan if (i) the Participant has separated from service with that employer and become an Employee of the Employer, and (ii) the other employer's plan provides that such transfer will be made. The Employer may require such documentation from the predecessor plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure that transfers are provided for under such plan. The Employer may refuse to accept a transfer in the form of assets other than cash. Any such transferred amount shall not be treated as a deferral subject to the limitations of Section 3.01, except that, for purposes of applying the limitations of Section 3.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been paid by the Employer. (b) Outgoing Transfers: An amount may be transferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (i) the Participant has Separated from Service with the Employer and becomes an employee of the other employer, (ii) the other employer's plan provides that such transfer will be accepted, and (iii) the Participant and the employers have signed such agreements as are necessary to assure that the Employer's liability to pay benefits to the Participant has been discharged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circum- stances as are permitted under Section 457 of the Code and the regulations thereunder. 12-2 MZ41PC4+r4"In 13.01. DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or persons to serve as Plan Administrator who shall signify their acceptance of this responsibility as a named fiduciary of the Plan and Trust. If more than one person is so designated, the committee so formed shall be known as the Administrative Committee and all references in the Plan and Trust to the Plan Administrator shall be deemed to refer to the Administrative Committee. In the absence of designation of a Plan Administrator, the Employer is hereby designated as the Plan Administrator. The Plan Administrator is hereby designated as agent for the service of legal process. The Plan Administrator shall not be required to be a Parti- cipant. 13.02. RESIGNATION AND REMOVAL. (a) The Plan Administrator, or any member of the Adminis- trative Committee, may resign at any time by delivering to the Employer a written notice of resignation to take effect on a date specified therein, which shall not be less than thirty (30) days after the delivery thereof, unless such notice shall be waived. (b) The Plan Administrator, or any member of the Adminis- trative Committee, may be removed with or without cause by the Employer by delivery of written notice of removal, to take effect at a date specified therein, which shall be not less than thirty (30) days after delivery thereof, unless such notice shall be waived. (c) The Employer, upon receipt of or giving notice of the resignation or removal of the Plan Administrator, shall promptly designate a successor Plan Administrator who must signify accep- tance of this position in writing. In the event no successor is appointed, the Employer will function as the Plan Administrator until a new Plan Administrator has been appointed and has accepted such appointment. (d) A simple majority of the members of the Administrative Committee shall constitute a quorum, and any act by such majority, by vote at a meeting, or in writing without a meeting, shall constitute the action of the Administrative Committee. The 13-1 I U. S Administrative Committee shall keep minutes of its meetings, and shall appoint and prescribe the duties of a chairman, and a secretary, who may, but need not be, one of its members. 13.03. POWERS. The Plan Administrator shall have full power and discretion to administer the Plan and to construe and apply all of its provisions. The Plan Administrator's powers and duties, unless properly delegated, shall include, but are not limited to: (a) Compiling and maintaining all records necessary for the Plan, including preparing, filing and furnishing reports and other documents required under the provisions of the Internal Revenue Code; (b) Authorizing the Trustee to make payment of all benefits as they become payable under the Plan; (c) Adopting rules and regulations for the administration of the Plan, not inconsistent with the Plan and the Trust Agree- ment; (d) Engaging such legal, administrative, actuarial, invest- ment, accounting and other professional services as are necessary; (e) Approving mortality tables, interest rates, withdrawal or turnover rates, salary scales and other factors required to be taken into account in connection with any actuarial matters arising under the Plan; (f) Giving written directions to the Trustee concerning investments and other matters, or authorizing others to give such written instructions; (g) Providing periodic reports and other information or data to Participants; (h) Doing and performing such other matters as may be provided for in other parts of this Plan or Trust. 13.04. ACTIONS. No power conferred on the Plan Administrator or the Trustee or retained by Employer shall be exercised in such manner as to cause or create discrimination in favor of highly compensated employees or persons whose principal duties consist of supervis- ing the work of other employees. The Plan Administrator, 13-2 Employer and its legally constituted authority shall be entitled to rely conclusively upon the tables, valuations, certificates and reports furnished by an actuary or accountant employed by the Plan Administrator under this Plan, and/or upon opinions of counsel or other experts; and such members, and each of them, shall be fully protected as to any action taken or allowed by them in good faith and reliance upon any such tables, valuations, certificates, reports or opinions; and all actions taken or allowed by them shall be conclusive upon all persons having or claiming any interest under the Plan. 13.05. EXPENSES. The Employer, or in its absence the Trustee, shall reimburse the Plan Administrator for any necessary or proper expenses incurred in exercising its duties. Except for such reimburse- ment, the Plan Administrator shall not receive any compensation for the administration of the Plan. 13.06. CLAIM (a) Any Participant or Beneficiary may file with the Plan Administrator a written statement setting forth a claim for benefits. The written statement shall be signed and set forth the claim in a manner reasonably calculated to bring it to the Plan Administrator's attention. (b) If a claim is wholly or partially denied, notice of the decision shall be furnished by the Plan Administrator to the claimant within ninety (90) days after receipt of the claim. If within such ninety (90) days, the claim has neither been denied in writing nor granted, it shall be deemed denied on the 90th day. (c) Any notice of denial•of claim shall be written in a manner calculated to be understood by the claimant and shall include the following: (i) the specific reason or reasons for denial; (ii) specific reference to pertinent plan provisions on which the denial is based; (iii) a description of additional material or informa- tion necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and (iv) appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review. 13-3 (d) A claimant may obtain a full and fair review by appeal- ing a denied claim to the Plan Administrator in writing within sixty (60) days after receipt by the claimant of the notice of denial. A claimant may review pertinent documents and may submit issues and comments in writing. The claimant may request review by the Board of Directors of the Employer, in addition to the Plan Administrator. An appeal may be requested or pursued by a duly authorized representative of the claimant. Within sixty (60) days of receipt of a request for review, a written decision shall be rendered. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent provisions of the Plan on which the decision is based. 13.07. INDEMNIFICATION OF THE PLAN ADMINISTRATOR. The Plan Administrator shall be indemnified by the Employer and not from the Trust Fund against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan if the act or failure to act is judicially determined not to be a breach of fiduciary responsibility. The indemnification shall include expenses and attorney's fees reasonably incurred in the defense of any claim relating thereto. CITY OF FAYETTEVILLE By Its Cwn.rwn4 MOCAN 13-4 t a CITY OF FAYETTEVILLE TABLE OF CONTENTS ARTICLE 1 DEFINITIONS ARTICLE 2 PLAN 2.01 2.02 2.03 2.04 2.05 2.06 2.07 ARTICLE 3 ADMINISTRATOR Designation and Acceptance Resignation and Removal Powers Actions Expenses Claim Procedure Indemnification of the Plan Administrator 3.01 Duties of Trustee Regarding Contributions 3.02 Creditors' Rights 3.03 Right of Employer to Trust Assets 3.04 Mistake in Contribution ARTICLE 4 GENERAL DUTIES OF THE PARTIES CONCERNING TRUST 4.01 Duties of Employer 4.02 Duties of Trustee 4.03 Responsibility of Trustee Regarding Payments When Employer is Insolvent ARTICLE 5 POWERS 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 AND SPECIFIC DUTIES OF THE TRUSTEE Powers Restriction on Exercise of Powers Third Parties Plan Administrator Instructions to the Trustee Distributions to Participants Investments Investment Manager Participant Direction of Investments ARTICLE 6 SETTLEMENT OF TRUST ACCOUNTS 6.01 General Records 6.02 Annual Account ARTICLE 7 DURATION AND TERMINATION OF TRUST AGREEMENT; AMENDMENTS 7.01 Duration 7.02 Amendments ARTICLE 8 RESIGNATION OR REMOVAL OF TRUSTEE 8.01 Method ARTICLE 9 TAXES, EXPENSES AND COMPENSATION TO TRUSTEE 9.01 Manner of Payment ARTICLE 10 MISCE 10.01 10.02 10.03 10.04 10.05 LLANEOUS TRUST PROVISIONS Governing Law Spendthrift Clause Binding Effect Litigation Headings 'f I The City of Fayetteville, an Arkansas municipality incorpo- rated under the laws of the State of Arkansas, has previously established the city of Fayetteville Nonqualified Deferred Compensation Plan and, by execution of this Trust Agreement, hereby establishes the city of Fayetteville Nonqualified Deferred Compensation Trust, effective . The Employer's contributions, as invested from time to time, and the earnings and proceeds thereof shall be held in trust by Trustee in the Fund, for the purposes, upon the terms and condi- tions, and subject to the powers conferred on Trustee as set forth in this agreement. The Trustee shall have full power and authority to do all acts necessary to carry out its duties hereunder. The Trust is intended to be a grantor trust, within the meaning of S 671 of the Code, and shall be construed accordingly. The Trustee shall make payments of benefits from the assets of the Trust, if and to the extent such assets are available for distribution, in accordance with the terms of the Plan. As used in this document, the following terms shall have the indicated meanings: 1.01. "ACCOUNT" shall mean the amounts in a Participant's Account maintained to record each Participant's interestin the Plan attributable to elective contributions and income, gains, losses or increases or decreases in market value thereon. The Account, as adjusted for distributions and any fees or expenses charged thereto, shall constitute a Participant's entire interest in the Plan. 1-1 I •' 1.02. "ANNIVERSARY DATE" shall mean the last day of each Plan Year. 1.03. "BENEFICIARY" shall mean the person, persons, or other legal entity designated by the participant who under the Plan becomes entitled to receive a Participant's interest upon his or her death. 1.04. "CODE" shall mean the Internal Revenue Code of 1986, as amended. 1.05. "EFFECTIVE DATE" shall mean the 1st day of 1.06. "EMPLOYER" shall mean city of Fayetteville, Arkansas. 1.07. "INVESTMENT OPTIONS" shall mean mutual funds or similar investment vehicles selected by the Plan Administrator into which the Participant directs the investment of his or her Account. 1.08. "PARTICIPANT" shall mean an Employee who shall have met all requirements for participation in the Plan and who has elected to have amounts deferred under this Plan. Each Parti- cipant ceases to be such when he or she terminates his or her employment with Employer, except where pursuant to this Plan the distribution of benefits is deferred to a later date. 1.09. "PLAN" shall mean the city of Fayetteville Nonqualifed Deferred Compensation Plan, as it may be amended from time to time. 1.10. "PLAN ADMINISTRATOR" shall mean the person or persons or corporation named pursuant to Article 2 to administer the Plan. 1.11. "PLAN YEAR" shall mean the twelve (12) month period ending December 31 of each year. 1.12. "TRUST AGREEMENT" shall mean the Agreement between Employer and the Trustee or successor Trustee named under this Trust Agreement. 1.13. "TRUSTEE" shall mean the person or ration having trust powers so designated by th as Trustee and who, by execution of this Trust fies acceptance of the Trust, or any person or corporation having trust powers duly appointed Trustee. 1-2 persons or corpo- e Employer to serve Agreement, signi- persons or as a successor S. f otWHWM 2.01. DESIGNATION AND ACCEPTANCE. The Employer shall designate a person or persons to serve as Plan Administrator who shall signify their acceptance of this responsibility. If more than one person is so designated, the committee so formed shall be known as the Administrative Committee and all references in the Plan and Trust to the Plan Administrator shall be deemed to refer to the Administrative Committee. In the absence of designation of a Plan Administrator, the Employer is hereby designated as the Plan Administrator. The Plan Administrator is hereby designated as agent for the service of legal process. The Plan Administrator shall not be required to be a Parti- cipant. 2.02. RESIGNATION AND REMOVAL. (a) The Plan Administrator, or any member of the Adminis- trative Committee, may resign at any time by delivering to the Employer a written notice of resignation to take effect on a date specified therein, which shall not be less than thirty (30) days after the delivery thereof, unless such notice shall be waived. (b) The Plan Administrator, or any member of the Adminis- trative Committee, may be removed with or without cause by the Employer by delivery of written notice of removal, to take effect at a date specified therein, which shall be not less than thirty (30) days after delivery thereof, unless such notice shall be waived. (c) The Employer, upon receipt of or giving notice of the resignation or removal of the Plan Administrator, shall promptly designate a successor Plan Administrator who must signify accep- tance of this position in writing. In the event no successor is appointed, the Employer will function as the Plan Administrator until a new Plan Administrator has been appointed and has accepted such appointment. (d) A simple majority of the members of the Administrative Committee shall constitute a quorum, and any act by such majority, by vote at a meeting, or in writing without a meeting, shall constitute the action of the Administrative Committee. The 2-1 eq S Administrative Committee shall keep minutes of its meetings, and shall appoint and prescribe the duties of a chairman, and a secretary, who may, but need not be, one of its members. 2.03. POWERS. The Plan Administrator shall have full power and discretion to administer the Plan and to construe and apply all of its provisions. The Plan Administrator's powers and duties, unless properly delegated, shall include, but are not limited to: (a) Compiling and maintaining all records necessary for the Plan, including preparing, filing and furnishing reports and other documents required under the provisions of the Internal Revenue Code; (b) Authorizing the Trustee to make payment of all benefits as they become payable under the Plan; (c) Adopting rules and regulations for the administration of the Plan, not inconsistent with the Plan and the Trust Agree- ment; (d) Engaging such legal, administrative, actuarial, invest- ment, accounting and other professional services as are necessary; (e) Approving mortality tables, interest rates, withdrawal or turnover rates, salary scales and other factors required to be taken into account in connection with any actuarial matters arising under the Plan; (f) Giving written directions to the Trustee concerning investments and other matters, or authorizing others to give such written instructions; (g) Providing periodic reports and other information or data to Participants; (h) Doing and performing such other matters as may be provided for in other parts of this Plan or Trust. 2.04. ACTIONS. No power conferred on the Plan Administrator or the Trustee or retained by Employer shall be exercised in such manner as to cause or create discrimination in favor of highly compensated employees or persons whose principal duties consist of supervis- ing the work of other employees. The Plan Administrator, 2-2 Employer and its legally constituted authority shall be entitled to rely conclusively upon the tables, valuations, certificates and reports furnished by an actuary or accountant employed by the Plan Administrator under this Plan, and/or upon opinions of counsel or other experts; and such members, and each of them, shall be fully protected as to any action taken or allowed by them in good faith and reliance upon any such tables, valuations, certificates, reports or opinions; and all actions taken or allowed by them shall be conclusive upon all persons having or claiming any interest under the Plan. Employer, or in its absence the Trustee, shall reimbur • Administrator for any necessary or proper expenses • in exercising its duties. Except for such reimburse - e Plan Administrator shall not receive any compensation administration of the Plan. (a) Any Participant or Beneficiary may file with t Administrator a written statement setting forth a claim benefits. The written statement shall be signed and set the claim in a manner reasonably calculated to bring it Plan Administrator's attention. (b) If a claim is wholly or partially denied, notice of th decision shall be furnished by the Plan Administrator to the claimant within ninety (90) days after receipt of the claim. If within such ninety (90) days, the claim has neither been denied in writing nor granted, it shall be deemed denied on the 90th day. (c) Any notice of denial•of claim shall be written in manner calculated to be understood by the claimant and shall include the following: (ii) specific reference denial is based; (iii) tion necessary explanation of provisions description of additional material or informa- r the claimant to perfect the claim and an v such material or information is necessary; an appropriate information claimant wishes to submit (d) A claimant may obtain a full and fair review by appeal- ing a denied claim to the Plan Administrator in writing within sixty (60) days after receipt by the claimant of the notice of denial. A claimant may review pertinent documents and may submit issues and comments in writing. The claimant may request review by the Board of Directors of the Employer, in addition to the Plan Administrator. An appeal may be requested or pursued by a duly authorized representative of the claimant. Within sixty (60) days of receipt of a request for review, a written decision shall be rendered. The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent provisions of the Plan on which the decision is based. 2.07. INDEMNIFICATION OF THE PLAN ADMINISTRATOR. The Plan Administrator shall be indemnified by the Employer and not from the Trust Fund against any and all liabilities arising by reason of any act or failure to act made in good faith pursuant to the provisions of the Plan if the act or failure to act is judicially determined not to be a breach of fiduciary responsibility. The indemnification shall include expenses and attorney's fees reasonably incurred in the defense of any claim relating thereto. 2-4 All contributions the Trustee. The Trus tions received by it, contributions to be ma tions received comply made under the Plan shall be delivered to ee shall be accountable for all contribu- iut shall have no duty to require any .e to it, or to determine whether contribu ith the Plan. The trust assets and all accumulated income shall be subject to the claims of general creditors of the Employer until such time as it is distributed to Participants. No Participant or Beneficiary shall have any secured right with respect to the Trust. Except as provided in Sections 3.04 and 4.03, the Employer shall not have a right or claim of any nature in or to the Trust Fund except to require the Trustee to hold, invest, apply and pay such assets in the Trust in accordance with the Trust Agreement for the benefit of the Participants and beneficiaries, and as provided in Section 9.01 for defraying reasonable expense of administerina the Plan and Trust. Upon written request from the Employer the amount of a contribution made by reason of a mistake of fact shall be credited to the Employer as an offset to future Employer Contributions. The amount to be credited to the Employer is the excess of the amount contributed over the amount which would have been contributed had there not occurred a mistake of fact. The credit to the Employer of the amount involved must be made within one year of the mistake in payment of the contribution, as the case may be. Earnings attributable to the excess contribution may not be credited to the Employer, but losses attributable thereto must reduce the amount to be so credited. If the withdrawal of the amount attributable to the mistake in contribution will cause the balance of the individual account of any Participant to be reduced to less than the balance which would have been in the account had the mistaken amount not been contributed, then the amount to be credited to the Employer shall be reduced so as to avoid such reduction. ARTICLE 4. 4.01. DUTIES OF EMPLOYER. The Employer shall appoint a Plan Administrator to adminis- ter the Plan and shall certify to the Trustee the names and specimen signature of the Plan Administrator or signatures of members of the Administrative Committee acting from time to time. The Employer shall make monetary contributions to the Trust Fund as the same may be appropriate by due action. The Employer shall keep accurate books and records with respect to its Employees, their service with the Employer, and their annual compensation. 4.02. DUTIES OF TRUSTEE. The Trustee shall hold and invest all monetary contributions received from the Employer by the Trustee, and all Trust Funds which are transferred to it as a successor Trustee by the Employer from existing deferred compensation arrangements with its Employees under plans described in Section 457 of the Code, all of which, together with the income therefrom, shall constitute the Trust Fund. The Trustee shall manage and administer the Trust Fund pursuant to the terms of this Trust Agreement without distinction between principal and income and without liability for the payment of interest thereon. The Trustee shall not have a duty or authority to compute any amount to be paid to the Trustee by the Employer nor shall the Trustee be responsible for the collection of any contribution. The powers, duties and responsibilities of the Trustee shall be limited to those set forth in this Trust Agreement; and nothing contained in the Plan either expressly or by implication, shall be deemed to impose any additional powers, duties or responsibilities on the Trustee. 4.03. RESPONSIBILITY OF TRUSTEE REGARDING PAYMENTS WHEN EMPLOYER IS INSOLVENT. (a) Employer shall be considered insolvent for purpose of this Trust Agreement if (i) Employer is unable to pay its debts as they mature, or (ii) Employer is subject to pending proceeding under the Bankruptcy Code. (b) At all times, the principal and income of the Trust shall be subject to the claims of general creditors of Employer, and at any time the Trustee has actual knowledge, or has deter- mined, that Employer is insolvent, the Trustee shall deliver any 4-1 I. undistributed principal and income in the Trust to satisfy such claims as a court of competent jurisdiction may direct. The City Board of Employer shall have the duty to inform the Trustee of the Employer's insolvency. If Employer or a person claiming to be a creditor of Employer alleges in writing to the Trustee that Employer has become insolvent, Trustee shall independently determine, within thirty (30) days after receipt of such notice, whether Employer is insolvent and, upon verifying such allegation, Trustee shall discontinue payments of benefits to employees, and shall hold the Trust assets for the Employer's general creditors. Trustee shall resume payment of benefits to employees only after Trustee has determined that Employer is not insolvent. Unless Trustee has actual knowledge of Employer's insolvency, Trustee shall not have a duty to inquire whether Employer is insolvent. Trustee may in all events rely on such evidence concerning Employer's solvency as may be furnished to Trustee which will give Trustee a reasonable basis for making such determination. Nothing in this Trust Agreement shall in any way diminish any rights of employees to pursue their rights as general creditors of Employer with respect to the retirement benefits or otherwise. (c) If the Trustee discontinues payment of benefits from the Trust pursuant to the preceding paragraph and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments which would have been made to such employee in accordance with the Plan during the period of discontinuance. (d) The Trustee shall be held harmless and will not incur liability for good faith efforts to comply with this Article. 4-2 I. tt 5.01. POWERS. The Trustee shall have full power and authority to invest and reinvest the Trust Fund in any investments permitted by law for the investment of trust funds in the State of Arkansas. The Trustee shall also have full power with respect to any and all assets at any time received or held in the Trust Fund, 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, without in any way limiting or impairing the generality of the foregoing, the following powers and authority: (a) To retain the same for such period of time as it deems appropriate. (b) To sell the same, at either public or private sale, at such time or times and on such terms and conditions as to credit or otherwise as it may deem appropriate. (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 Fund, and to pay any and all calls and assessments imposed upon the owners of such securi- ties as a condition of their participating therein; and to consent to any contract, lease, mortgage, purchase or sale of property, by or between such corporation and any other corpora- tion or person. (d) To exercise or dispose of any right it 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 it may deem advisable. (e) To deposit any security with any protective or reorga- nization committee, and to delegate to such committee such power and authority with relation thereto as it may deem proper, and to agree to pay and to pay out of the Trust Fund 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 obliga- tion due or becoming due. 5-1 Y •• (g) To grant options to purchase any asset, including common stocks held in the Trust Fund. (h) To compromise, arbitrate or otherwise adjust or settle claims in favor of or against the Trust Fund, and to deliver or accept in either total or partial satisfaction of any indebted- ness or other obligation any asset, and to continue to hold for such period of time as the Trustee may deem appropriate any asset so received. (i) To exchange any asset for other asset upon such terms and conditions as the Trustee may deem proper, and to give and receive money to effect equality in price. (j) To vote proxies, to execute powers of attorney and deliver same to such person or persons as the Trustee may deem proper, granting to such person such power and authority with relation to any securities at any time held for the Trust Fund as it may deem proper. (k) To foreclose any obligation by judicial proceeding or otherwise. (1) To sue or defend in connection with any and all securi- ties or other assets at any time received or held for the Trust Fund with all costs and attorneys' fees in connection therewith to be charged against the Trust Fund. (m) To borrow money, with or without giving security. (n) To cause any securities held for the Trust Fund to be registered and to carry any such securities in the name of a nominee or nominees. (o) To hold such portion of the Trust Fund as the Trustee may deem necessary for the ordinary administration of the Trust Fund in short-term cash equivalents having ready marketability or by depositing the same in pass book savings account in any bank subject to the rules and regulations governing such deposits, and without regard to the amount of any such deposit. (p) To transfer all or part of the Trust Fund to be commin- gled with other funds in a common trust, a mutual fund, similar fund administered by the Trustee or other open-end investment companies. (q) To invest in savings accounts, money market accounts or certificates of deposit of the Trustee or the Employer, if the Trustee or Employer is a bank. 5-2 a 5.02. RESTRICTION ON EXERCISE OF POWERS. The powers granted to the Trustee shall be exercised by the Trustee in its sole discretion. The Plan Administrator may, however, at any time and from time to time, by written direction to the Trustee, require the Trustee to obtain the written approval of the Plan Administrator before exercising any such powers. 5.03. 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. 5.04. PLAN ADMINISTRATOR INSTRUCTIONS TO THE TRUSTEE. The Trustee shall from time to time receive written direc- tions, orders, requests or instructions from the Plan Administrator or by any such person or persons as may from time to time be designated therefor by the Plan Administrator. The Trustee shall act and shall be fully protected in acting in accordance with such directions, orders, requests and instructions except as otherwise provided under federal or state law. In directing the Trustee to make payments, the Plan Administrator shall follow the provisions of the related Plan and shall not direct that any payment be made, either during the existence or upon discontinuance of the related 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 Employees of the employer or their Beneficiaries, pursuant to the provisions of such Plan. The Trustee shall be under no liability for any distribution made 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. The Trustee shall not be liable for the proper application of any part of the Trust Fund 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 Fund to meet and discharge any and all payments and liabilities under the related Plan. 5.05. DISTRIBUTIONS TO PARTICIPANTS. The Trustee may make any payment required to be made here- under, by mailing a check for the amount thereof to the person to 5-3 whom such payment is to be made, at such address as may have last been furnished the Trustee, or if no such address shall have been so furnished, to such person in care of the Employer at its principal office. The Trustee shall not have an obligation to search for or ascertain the whereabouts of any payee or distributes of the Trust Fund, however, if any payment or distribution to be made from the Trust Fund is not claimed, the Trustee shall notify the plan Administrator of that fact promptly. 5.06. INVESTMENTS. The Plan Administrator shall exercise the power to direct the Trustee with regard to the type and number of investment options available to Participants including the prudent selection of specific pooled investments meeting the requirements of the Code, the category of options including but not limited to such funds as equities, mixed assets, fixed income and money market, the risk or beta associated with each option and the continued suitability of such investments based on financial performance or other criteria related solely to the exclusive benefit of the Participants and beneficiaries.. All orders, requests and instructions to the Trustee pursuant to this article shall be in writing and signed by the designee(s) of the Plan Administrator. The Trustee shall act and shall be fully protected in acting in accordance with such orders, requests and instructions except as otherwise provided under state or federal law. 5.07. INVESTMENT MANAGER. The Plan Administrator shall have the right, but shall be under no obligation, to appoint an investment manager or managers to direct the investment of all or of any portion of the assets of the trust fund. The investment manager or managers shall be (a) Registered as an investment advisor under the Invest- ment Advisor's Act of 1940, (b) A bank as defined in that Act, or (c) An insurance company qualified to manage, acquire or dispose of assets of the Plan under the laws of more than one State. Upon appointment, the investment manager shall certify and acknowledge to the Trustee receipt of a copy of the Plan and Trust, that the investment manager is fiduciary with respect to 5-4 such Plan and Trust, and that the investment manager has assumed the duties and responsibilities conferred by the Plan Administrator. 5.08. PARTICIPANT DIRECTION OF INVESTMENTS. (a) Notwithstanding any other provision of this Plan and Trust, the Plan Administrator shall allow a Participant to direct the Trustee in writing to invest the amount credited to the Participant's Account in any one or more Investment Options established by the Plan Administrator. (b) The Plan Administrator shall adopt rules concerning the number of Investment Options which a Participant may elect, the percentage of his/her Account which may be invested in each Investment Option, and procedures for changing investment options. (c) Any investment direction shall be made by the Participant to the Trustee in writing on a form adopted for this purpose by the Plan Administrator. The Trustee shall carry out the Participant's directions in accordance with uniform procedures established by the Plan Administrator. Any direction by the Participant regarding the investment of assets shall remain in effect until another valid written direction has been made by the Participant. (d) The Trustee shall keep separate records of investments made pursuant to a Participant's direction under this Section. Any gains or losses arising from an investment made pursuant to a Participant's direction shall be allocated solely to such Parti- cipant's Account. (e) The interest of each Participant or beneficiary in their self -directed Account(s) shall be deemed to be contractual only and each Participant or beneficiary shall not have any individual ownership interest in any trust asset. 5-5 SETTLEMENT OF TRUST ACCOUNTS 6.01. GENERAL RECORDS. The Trustee shall maintain accurate records and detailed accounts of all investments, receipts, disbursements, and other transactions hereunder, and such records shall be available at all reasonable times to inspection by the Plan Administrator, the Employer (or any authorized representative), Participants or Beneficiaries. The Trustee shall maintain a unit accounting valuation system with which to administer the trust and each Participant's Account and shall, at the direction of the Plan Administrator, submit to the Plan Administrator such valuations, reports or other information as the Plan Administrator may reasonably require. In the absence of fraud or bad faith, the valuation of the Trust Fund by the Trustee shall be conclusive. 6.02. ANNUAL ACCOUNT. Within sixty (60) days following the close of each Plan Year (or following the close of any period as may be agreed upon by the Trustee and the Plan Administrator) the Trustee shall file with the Plan Administrator a written account setting forth a description and fair market value of all securities and other assets purchased and sold, all receipts, disbursements, and other transactions effected by it during such period, listing the fair market value of securities and other assets held by it at the end of such period. The fair market value of the Trust Fund shall be the fair market value of all securities and other assets then held including any cash balance and all income accrued or received during the valuation period. In determining the fair market value, the Trustee may rely upon any data or information it believes to be reliable and which it can obtain with reasonable diligence. The Plan Administrator may approve such account by written notice of approval delivered to the Trustee or by failure to object in writing to the Trustee within sixty (60) days from the date upon which the account was delivered to the Plan Administrator. Upon receipt of written approval of the account, or upon the passage of said period of time, without written objections having been delivered to the Trustee, such account shall be deemed to be approved, and the Trustee shall be released and discharged as to all items, matters and things set forth in such account, as if such account had been settled and allowed by a decree of a court of competent jurisdiction. 6-1 ARTICLE 7. 7.01. DURATION. It is the intention of the Employer that this Trust Agree- ment shall be permanently administered subject to Section 3.02 and 4.03, for the benefit of its Employees, and this Trust Agreement is, accordingly, irrevocable. If conditions change, however, this Trust Agreement and the Trust Fund created hereunder may be terminated upon sixty days' written notice by the Employer, and upon such termination the Trust Fund shall be distributed by the Trustee as and when directed by the Plan Administrator. From and after the date of termination of this Trust Agreement and the Trust, and until final distribution of the Trust Funds, the Trustee shall continue to have all the powers provided under this Trust Agreement as are necessary and expedient for the orderly administration, liquidation and distri- bution of the Trust Fund. 7.02. This Trust Agreement may be amended at any time by written agreement of the Employer and the Trustee; provided, however, that such Amendment shall not operate to: (a) Subject to Section 3.02, 3.04 or 4.03, revest the Trust Fund or any part thereof in the Employer; (b) Reduce the then Account or the amount then held for the benefit of any Participant in the Plan, or (c) 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 and their Beneficiaries. In order to maintain the status of the Plan as an eligible deferred compensation plan under Section 457 of the Code or to comply with other applicable laws, or to maintain the status of the Trust as a grantor trust under Section 671 of the Code, an amendment may be retroactive. 7-1 8.01. METHOD. The Trustee may resign or may be removed by the Employer. Such resignation or removal may be accomplished at any time upon giving of sixty (60) days' written notice. Termination of the Trustee shall not, however, relieve the Employer of the Employer's continuing obligation to pay deferred compensation to Employees in accordance with the terms of the Plan. Upon such resignation or removal, the Employer shall appoint a successor Trustee to whom the then Trustee shall transfer all assets of the Trust Fund then held by it. Such successor Trustee shall there- upon succeed to all of the powers and duties given to the Trustee by this Trust Agreement. Within sixty (60) days of such transfer of the trust assets, the resigning or removed Trustee shall render to the Employer an account in the form and manner prescribed for the annual account by Section 6.02. Unless the Employer shall within sixty (60) days after the rendition of such account file with the Trustee written objections thereto, the account shall be deemed to have been approved, and the Trustee shall be released and discharged as to all items, matters and things set forth in such account, as if such account had been settled and allowed by a decree of a court of competent jurisdiction. 8-1 9.01. MANNER OF PAYMENT. The Trustee shall deduct from and charge against the Trust Fund any taxes paid by it which may be imposed upon the Trust Fund or the income thereof or which the Trustee is required to pay with respect to the interest of any person therein. The Employer shall pay to the Trustee in a mutally agreed timely manner its expenses in administering the Trust Fund and, if the Trustee is not an Employee, a reasonable compensation for its services as Trustee hereunder, at a rate to be agreed upon from time to time. The Trustee shall have a lien on the Trust Fund for such compensation and for any reasonable expenses, including counsel fees, and the same may be withdrawn from the Trust Fund, unless paid by the Employer. Expenses which are directly related to investment transactions such as broker's commission and contract loadings shall be paid out of the assets of the Trust or from a specific investment option account when an expense item is specifically related to that account. 9-1 10.01. GOVERNING LAW. The Trust Agreement shall be administered in the State of Arkansas, and its validity, construction and all rights hereunder shall be governed by the laws of that State. If any provisions of this Agreement shall be invalid or unenforceable, the remain- ing provisions thereof shall continue to be fully effective. 10.02. SPENDTHRIFT CLAUSE. No Participant shall have the right to assign, transfer, hypothecate, encumber, commute or anticipate his or her interest in the Plan and such benefits shall not in any way be subject to any legal process or levy of execution upon, or attachment or garnishment proceedings against, the same for the payment of any claim against any such person. In no event shall the Trustee pay over any part of the interest in the trust of any Participant or beneficiary to any assignee or creditor of such person. Any attempted assignment or other disposition of interest in the trust shall not be merely voidable but absolutely void. However, payments may be made to a spouse or former spouse pursuant to a domestic relations order, so long as the Partici- pant would be entitled to a distribution at such time. 10.03. BINDING EFFECT. This agreement shall be binding upon persons who are enti- tled to any benefits hereunder, their heirs and legal representa- tives, and upon the Employer, the Trustee and the respective successors and assigns. 10.04. LITIGATION. Necessary parties to any accounting, litigation, or other proceedings shall include only the Trustee and the Employer. Settlement or judgment in any such cases in which the Employer or any other participating Employer is duly served or cited shall be binding upon all Participants, Beneficiaries, and their beneficiaries and estate, and upon all persons claiming by, through or under them, to the extent permitted by law. 10-1 be • • tom► 10.05. HEADINGS. The headings of articles and sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Trust Agreement, the text shall control. IN WITNESS WHEREOF, the Employer and Trustee have signed this Plan and Trust on , 1992. CITY OF FAYETTEVILLE By Its TRUSTEE: By Trust Officer CWh.&a274 10-2