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HomeMy WebLinkAboutRES 1999-21 - Board RESOLUTION NO. 992 OF THE TRUCKEE DONNER PUBLIC UTILITY DISTRICT ADOPTING THE DISTRICT'S AMENDED DEFINED BENEFIT PENSION PLAN WHEREAS, the defined benefit pension plan makes appropriate provisions for the Board of Directors to make amendments to the plan from time to time; and WHEREAS, the Board of Directors has amended the defined benefit pension plan eight times since its adoption on August 15, 1983; and WHEREAS, the Board of Directors further finds it in the best interest of the District to modify the current pension plan documents to bring the plan into compliance with the Tax Reform Act of 1986; other federal laws (TAMRA; OBRA 86, 87, 89, 90 and 93; Revenue Act of 92, GATT 94, USERRA 94 and Small Business Job Protection Act of 1996) which have been passed since 1986; and all current IRS and Department of Labor regulations NOW THEREFORE BE IT RESOLVED by the Board of Directors that the District's defined benefit pension plan as amended previously and including the amendment in the clause above, become effective January 1, 2000. (A letter from Wayne Richardson Company, Inc. dated May 12, 1998 is attached hereto and explains in detail the changes that have been and are being made to the August 15, 1983 document.) BE IT FURTHER RESOLVED that the appropriate officers are hereby authorized and directed to take any and all further actions necessary to implement the amended defined benefit pension plan and to ensure that the plan remains a tax qualified plan in accordance with the Internal Revenue Code and the requirements of the Employee Retirement Income Security Act of 1974. PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the District on the 301h day of December 1999 by the following roll call vote: AYES: Hemig, Jones, Maass and Sutton. NOES: None. ABSENT: Aguera TRUC E DONNER PUBLIC UTILITY DISTRICT By Peter L. Holzmeister, Clerk of the Board ATTE : Susan M. Craig, Deputy District derk smc TRUCKEE DONNER PUBLIC UTILITY DISTRICT DEFINED BENEFIT PLAN Table of Contents ARTICLE <J Page I. DEFINITIONS A. Accrued Benefit 1 B . Actuarial Equivalent 1 C . Administrator 1 D . Annuity Starting Date E . Applicable Interest Rate F . Average Compensation 2 G. Beneficiary 2 H . Code 2 I . Company J . Compensation 2 K. Credited Service 3 L . Death Benefit 3 M. Early Retirement 3 N. Early Retirement Age 3 O. Early Retirement Benefit 3 P . Early Retirement Date 3 Q. Effective Date 3 R . Eligible Employee 3 S . Eligible Spouse 4 T . Employee 4 U . Employer 4 V. Enrolled Actuary 4 W. Entry Date 4 X. ERISA Y. Fiscal Year Z . Hour of Service 5 A.A . Key Employee 6 AB . Leased Employee 6 AC . Non-Key Employee 7 AD . Normal Form i AE . Normal Retirement AF . Normal Retirement Age AG . Normal Retirement Benefit i AH . Normal Retirement Date lij ARTICLE Page III. EMPLOYER FUNDING AND BENEFITS (CONTINUED) R . Transitional Benefits 27 IV. LIMITATIONS ON BENEFITS 31 A. General Limitations 31 B . Application of Annual Additions 34 C . Multiple Plan Reduction 35 V. VESTING OF EMPLOYER FUNDED BENEFITS 38 A. Vesting 38 B . Termination of Employment 39 C . Rehired Participants 40 VI. LOANS TO PARTICIPANTS 41 VII. BENEFICIARIES 42 A. Designation 42 B . Absence of Valid Designation of Beneficiaries 42 VIH. PARTICIPANT'S CONTRIBUTIONS AND SPECIAL ACCOUNTS 43 A. Voluntary Contributions 43 B . Collection of Contributions 43 C . Accounts for Participant Contributions 43 D . Investment of Participant Contributions 43 E . Vesting 43 F . Withdrawal 43 G. Distribution 43 H . Designation of Beneficiaries 44 I . Transfers From Other Plans 44 LX. ESTABLIKIMENT OF TRUST 46 A. Trust Agreement 46 B . Trust Agreement Part of Plan 46 X. PLAN FIDUCIARIES AND ADMINISTRATION 47 A . Named Fiduciaries 47 B . Fiduciary Standard 47 C . Multiple Duties and Advisors 47 D . Allocation and Delegation of Fiduciary Duties 47 E . Indemnification 48 F . Costs and Expenses 48 G. Authority to amend and Terminate 48 Effective as of January 1, 1972, TRUCKEE DONNER PUBLIC UTILITY DISTRICT adopted the TRUCKEE DONNER PUBLIC UTILITY DISTRICT DEFINED BENEFIT PLAN (the "Prior Plan") and executed a Trust Agreement. Effective as of January 1, 1987, TRUCKEE DONNER PUBLIC UTILITY DISTRICT hereby amends and restates the Prior Plan and the Trust Agreement estab- lished under the Prior Plan to provide retirement entitlements for the exclusive benefit of its Eligible Employees and their Beneficiaries in accordance with the terms and conditions set forth in the Plan. The Plan and Trust are intended to meet the requirements for qualification under Section 401(a) and exemption from tax under Section 501(a) of the Internal Revenue Code of 1986, as amended. Moreover, notwithstanding any provision of this Plan to the contrary, no benefit accrued under the Prior Plan and protected under Section 411(d)(6) of the Internal Revenue Code of 1986. as amended, and regulations thereunder, shall be reduced or eliminated by this Plan. ARTICLE I DEFINITIONS A. "Accrued Benefit" shall mean, subject to the provisions of Paragraph Q of Article III, that portion of a Participant's Normal Retirement Benefit which he has earned as of a determination date. Said Accrued Benefit shall be subject to the minimum benefit requirements of Article III. For purposes of determining the Participant's Normal Retirement Benefit, it shall be assumed that years of Credited Service shall continue to the Participant's Normal Retirement Age. A Participant's Accrued Benefit shall be determined as follows: The Participant's Normal Retirement Benefit multiplied by a fraction (not greater than 1), the numerator of which is the actual number of Years of Service while an Eligible Employee and the denominator of which is the number of Years of Service while an Eligible Employee the Participant would have completed if the Partic- ipant had continued until his Normal Retirement Age. B. "Actuarial Equivalent" shall mean a benefit, payable in a different form and/or at a different time than a Participant's Accrued Benefit, which shall be an amount that is equal in value to the Participant's Accrued Benefit by using assumptions determined by an Enrolled Actuary. The pre-retirement assumptions to be used for this purpose are: Interest at seven percent (7%) per annum with mortality based on the UP-1984 (Uninsured Pensioners-Unisex) table of mortality with no setback. The post- retirement assumptions to be used for this purpose are: Interest at seven percent (7 0) per annum with mortality based on the 71 G- M Table for males with 3-year setback. In determining whether this Plan is a Top-Heavy Plan as of a "determination date," the same assumptions as stated above shall be used to calculate the value of each Partici- pant's Accrued Benefit as of such "determination date." If the definition of "Actuarial Equivalent" is amended, the value of a Participant's Accrued Benefit on or after the date of such amendment shall be the greater of: (1) the Actuarial Equivalent of the Partici- pant's total Accrued Benefit computed in accordance with the new definition, or (2) the Actuarial Equivalent of the Participant's accrued Benefit determined as of the date of such amendment and computed in accordance with the old definition. C. "Administrator" shall mean the Plan Administrator as specified in Arti- cle Y. - 1 - an Employee's benefit accruing in the current Plan Year, shall be limited to the applica- ble dollar limitation under Section 401(a)(17) of the Code for such prior period, except that for periods beginning before the first day of the first Plan Year beginning after December 31, 1993, the applicable dollar limitation shall be $150,000. For purposes of the preceding sentences, family member shall mean an Employee who is, on any one day of the year, a spouse or lineal descendant who has not attained age nineteen (19) before the last day of the vear, of an individual who during the year was (i) an active or former Employee and a five percent owner within the meaning of Section 414(q)(3) of the Code and the regulations thereunder, or (ii) one of the ten (10) most highly-paid highly compensated employees within the meaning of Section 414(q) of the Code; provided, how- ever, that any compensation paid to such spouse or lineal descendant shall be treated as if it were paid to the individual described in (i) or (ii) above. If, as a result of the family aggregation rules. the applicable dollar limitation under Section 401(a)(17) of the Code (as adjusted from time to time) is exceeded, the limitation shall be prorated among the Employee-and his family members in proportion to each one's Compensation as deter- mined prior to the application of this limitation. If the Plan Year (or such other applica- ble period specifically designated in the Plan), consists of a period of less than twelve (12) months, the applicable dollar limitation under Section 401(a)(17) of the Code (as adjusted from time to time) will be multiplied by a fraction, the numerator of which is the number of months in the Plan Year (or such other applicable period specifically designated in the Plan), and the denominator of which is twelve (12). K. "Credited Service" shall mean all Years of Service with the Employer while the Employee is an Eligible Employee. L. "Death Benefit" shall mean a benefit payable in the event of the death of a Participant prior to such Participant's Normal Retirement Age or separation from service as specified in Article III. M. "Early Retirement" shall mean retirement on or after a Participant's Early Retirement Age. N. "Early Retirement Age" shall mean the later of: 1. Age fifty-five (35), or 2. The age of the Participant upon completion of ten (10) Years of Ser- vice. O. "Early Retirement Benefit" shall mean a monthly benefit in the Normal Form as determined pursuant to Article III of this Plan. P. "Early Retirement Date" shall mean a date prior to the Participant's Nor- mal Retirement Date, which is the first day of any month coinciding with or following a Participant's termination of employment and after satisfaction of the requirements for entitlement to an Early Retirement Benefit. Q. "Effective Date" shall mean January 1, 1987. R. "Eligible Employee" shall mean any Employee, except the following per- sons: 1. A person who is less than twenty-one (21) years of age; or 2. A person who is receiving current entitlements or credits, or for whose account the Employer is currently contributing under another retirement plan designated as International City Management Assn. Deferred Compensation Plan. 3 - Y. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. Y. "Fiscal Year" shall mean the accounting period used by the Company on the Effective Date for federal income tax purposes which currently is the twelve (12) month period ending December 31st of each year. Z. "Hour of Service" shall mean each hour for which an Employee is: 1. Directly or indirectly paid or entitled to payment by the Employer for the performance of duties; 2. Directly or indirectly paid or entitled to payment by the Employer on account of a period of time during which no duties were 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 authorized under Paragraph D of Article H. However, no more than 501 Hours of Service shall be credited under this subparagraph 2 on account of any single continuous period during which the Employee performs no duties (whether or not such period occurs in a single computation period). Payments made or due under a plan maintained by the Employer solely to comply with applicable workers' compensation, unemployment compensation, or disability insurance law, or to reimburse an Employee for medical or medically-related expenses shall not be considered as payments by the Employer for purposes of this subparagraph: 3. Absent from work by reason of the pregnancy of the Employee, the birth of a child of the Employee, the placement of a child with the Employee in connection with the adoption of the child by the Employee, or the care of such child by the Employee for a period immediately following birth or placement. No more than 501 Hours of Service shall be credited under this subparagraph 3 by reason of any one pregnancy or placement. Hours of Service credited under this subparagraph 3 shall be credited solely for purposes of determining whether a One-Year Break in Service has occurred in a computation period. All Hours of Service credited under this subparagraph 3 shall be credited only in the computa- tion period in which the-absence from work begins if any of such Hours of Service are required in that computation period to avoid a One-Year Break in Service. If none of the Hours of Service credited under this subparagraph 3 are required to avoid a One-Year Break in Service in the computation period in which the absence begins, then the Hours of Service will be credited to the next computation period. An Employee will be credited with 8 Hours of Service for each day of absence cov- ered by this subparagraph. Credit shall be given pursuant to this subparagraph 3 only after the Employee furnishes to the Administrator such timely information as the Administrator may reasonably require to establish that the absence is for a reason described in this subparagraph; or 4. Either awarded back pay or for which the Employer agrees to pay such back pay, irrespective of mitigation of damages. An Hour of Service received under this subparagraph 4 shall be credited to that computation period for which the award was granted. The same Hours of Service shall not be credited both under either subparagraph 1 or 2. as the case may be, and under this subpara- graph 4. Hours of Service for which back pay is awarded or agreed to with respect to periods described in subparagraph 2 shall be subject to the limitations set forth in that subparagraph. The term "Leased Employee" shall include a person described above who is covered by a qualified money purchase pension plan of the other person who has entered into the agreement with the Employer which provides (i) a nonintegrated employer contribution rate of at least ten percent (10�1r') of compensation as defined in Section 415(c)(3) of the Code including amounts contributed pursuant to a salary reduction agreement which are excludable from his gross income under Sections 125, 402(e)(3), 402(h), and 403(b) of the Code, (ii) immediate participation. and (iii) immediate and full vesting. AC. "Non-Key Employee" shall mean any Employee who is not a Key Employee. AD. "Normal Form" shall mean an annuity payable monthly for the life of the Participant. The first monthly payment shall be made as of the first day of the month coincident with or next following the Participant's Normal Retirement Date with the last payment as of the first day of the month in which the recipient's death occurs. A.E. "Normal Retirement" shall mean retirement on or after the Participant's Normal Retirement Age. In the case of a Participant who continues in the employ of the Employer after reaching such Normal Retirement Age, "Normal Retirement" shall mean retirement on the delayed retirement date, which is the date of the Participant's actual termination of employment. When such Participant actually retires, he shall then be entitled to a Delayed Retirement Benefit in accordance with Article III. Notwithstanding the foregoing, if a Participant continues employment, but not in "section 203(a)(3)(B) ser- vice" under Department of Labor Regulation 29 CFR Section 2530.203-3, payment shall commence to the Participant as if the Participant had terminated employment as of his Normal Retirement Age and benefits will continue to accrue under the Plan. ,�.. AF. "Normal Retirement Age" shall mean age sixty-five (65). AG. "Normal Retirement Benefit" shall mean a monthly benefit in the Normal Form as determined pursuant to Article III of this Plan. A.H. "Normal Retirement Date" shall mean the first day of the month coinciding with or next following a Participant's attainment of Normal Retirement Age. AI. "One-Year Break in Service" shall mean, with respect to any Employee, a computation period during which the Employee is credited with 500 or fewer Hours of Service. Except as provided in Paragraph B of Article II, the Plan Year shall be the com- putation period. AJ. "Participant" shall mean any Eligible Employee who has become a partici- pant of this Plan, in accordance with Article II of this Plan. AK. "Plan" shall mean the TRUCKEE DONNER PUBLIC UTILITY DISTRICT DEFINED BENEFIT PLAN, as set forth herein, and any amendments hereto. AL. "Plan Year" shall mean the twelve (12) month period ending December 31st. ILti1I. "Rollover Account" shall mean the account established for an Eligible Employee in the books and records of the Plan for the purpose of recording any funds transferred to the Trustee from, or attributable to, another qualified plan or an individual retirement account, as adjusted for earnings and losses allocated thereto. AN. "Spousal Consent" shall mean an Eligible Spouse's written consent which acknowledges the effect of the Participant's election and is witnessed by a Plan represent- ative or a notary public. Spousal Consent may be in the form of a specific consent, general consent or limited general consent: ever, rollover contributions, the account of a Non-key Employee who was formerly a Key Employee, the account of an individual who has not performed services for the Employer at any time during the five (5) year period ending on the determination date, and further excluding those amounts attributable to deductible employee contributions (as defined in Section 7 2(o)(5)(A) of the Code); and (c) "aggregation group" means (i) each plan of the Employer in which a Kev Employee participates, and each other plan of the Employer which enables a plan in which a Key Employee participates to meet the requirements of Section 401(a)(4) or Section 410 of the Code (including a terminated plan maintained within the last five (5) year period ending on the "determination date"), and (ii) any other plan maintained by the Employer which the Company elects to include within the group, provided the resulting group satisfies Section 401(a)(4) and Section 410 of the Code. In determining the cumulative accrued benefits of a defined benefit plan for pur- poses of this Paragraph. the actuarial assumptions specified by the defined benefit plan for this purpose shall be utilized. If differing actuarial assumptions are specified for two or more defined benefit plans, then the actuarial assumptions for the defined benefit plan including the largest number of employees in the first year any defined benefit plan is included within the aggregation group shall be utilized. Solely for the purpose of deter- mining if the Plan, or any other plan in a required aggregation group of which this Plan is a part, is a Top-Heavy Plan, the accrued benefit of an Employee other than a Key Employee shall be determined (a) under the method, if any, that uniformly applies for accrual purposes under all plans maintained by the Employer, or (b) if there is no such method, as if such benefit accrued not more rapidly than the slowest accrual rate permit- ted under the fractional accrual rate of Section 411(b)(1)(C) of the Code. AP. "Total Compensation" shall mean all amounts paid or made available to an Employee which are treated as compensation under Treasury Regulation Section 1.415- 2(d)(2), and are not excluded from compensation under Treasury Regulation Sec- tion 1.415-2(d)(3). 1. Items Includable as Compensation. For purposes of applying the limitations of Section 415 of the Code, the term "compensation" includes: (a) The Participant's wages, salaries, fees for professional services and other amounts received for personal services actually rendered in the course of employment with an Employer maintaining the Plan (including, but not limited to, commissions paid to salesmen, compensation for services on the basis of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, reimbursements, and expense allowances). (b) In the case of a Participant who is an employee within the meaning of Section 401(c)(1) of the Code and the regulations thereunder, the Participant's earned income (as described in Section 401(c)(2) of the Code and the regulations thereunder). (c) For purposes of subsections (a) and (b) of this subparagraph, earned income from sources outside the United States (as defined in Sec- tion 911(b) of the Code, whether or not excludable from gross income under Section 911 of the Code). (d) Amounts described in Sections 104(a)(3), 105(a) and 105(h) of the Code, but only to the extent that these amounts are includable in the gross income of the employee. (e) Amounts paid or reimbursed by the Employer for moving expenses incurred by an employee, but only to the extent that these amounts are not deductible by the employee under Section 217 of the Code. - 9 - AT. "Year of Service" shall mean a computation period during which an Employee is credited with not less than 1,000 Hours of Service with the Employer. Except as provided in Paragraph B of Article 1I, the Plan Year shall be the computation period. - 11 - employment as of the date when their leaves of absence began, unless such failure to return was the result of Early Retirement, Normal Retirement, delayed retirement, Total Disability or death. E. Suspended Participation A Participant who ceases to be an Eligible Employee, but who has not separated from the service of the Employer, shall become a suspended Participant. During the period of suspension, no amounts which are based on his Compensation or Total Com- pensation from and after the date of suspension shall be used to determine Employer con- tributions hereunder. However, the Participant shall continue to vest in his Accrued Ben- efit, and he shall be entitled to benefits in accordance with the other provisions of the Plan while he is a suspended Participant. F. Inactive Participation A Participant who has fewer than 1,000 Hours of Service in any Plan Year, but who is not separated from the service of the Employer, shall be an inactive Participant for such Plan Year. No amounts which are based on his Compensation or Total Com- pensation shall be used to determine Employer contributions for such Plan Year. G. Reemployment After Retirement If a Participant is reemployed by the Employer in "section 203(a)(3)(B) service" after commencing benefit payments, the Participant's payments will be suspended and benefits will continue to accrue as described in subparagraph D-1 of Article III. Benefit payments will recommence as of the Participant's delayed retirement date and will be determined as provided in Paragraph H of Article III. The Employer shall adopt written procedures relating to this Paragraph G which comply with Department of Labor Regula- tion 29 CFR Section 2530.203-3; these written procedures shall be provided to Partici- pants by personal delivery or first class mail during the first payroll period in which the Plan withholds payments or the first calendar month that his benefits are suspended. 2. If a Non-Key Employee is covered by another qualified plan main- tained by the Company under which a minimum benefit is being accrued or mini- mum contribution made (as defined in Section 416 of the Code and regulations thereunder) for such Non-Key Employee, then the minimum benefit otherwise pro- vided by this Paragraph E shall be reduced so that the total minimum benefit pro- vided does not exceed the minimum benefit required by Section 416(f) of the Code, with such adjustments as may be elected by the Company to satisfy the require- ments of Section 416(h) of the Code. 3. For purposes of this Paragraph E, the term: (a) "-Minimum.Annual Retirement Benefit" shall mean a benefit payable annually in the form of a single life annuity (with no ancillary ben- efits) beginning at the Normal Retirement Age. r (b) "average Annual Compensation" shall mean the average of the Total Compensation for the Participant's five (5) consecutive years which produce the highest such average. In the event a Participant has been such for fewer than five (5) years, such lesser period of participating service shall be used to determine .average Annual Compensation. Except to the extent otherwise provided in the Plan. a year shall not be included for purposes of determining Average Annual Compensation if: (i) Such year is not included in a Year of Service; (ii) Such year ends with or within a Plan Year beginning before January 1, 1994; or (iii) Such year begins after the close of the last year in which the Plan was a Top-Heavy Plan. (c) "Years of Nfinimum Benefit Service" shall mean Years of Ser- vice, but excluding: (i) Years of Service prior to January 1, 1984; (ii) Years of Service in which the Plan is not a Top-Heavy Plan; and (iii) Years of Service in excess of ten (10) years. F. -Maximum Benefit for any Participant The amount of a Participant's Normal Retirement Benefit shall be subject to the limitations of Section 415 of the Code as described under article IV of this Plan. G. Early Retirement Benefit Each Participant, upon Early Retirement, shall be entitled to receive an Early Retirement Benefit which shall be equal to his Accrued Benefit reduced for each year that his Early Retirement Date precedes his Normal Retirement Date. Such reduction shall be determined as follows: 1/15th for each of the first five (5) ,years that his Early Retirement Date precedes his Normal Retirement Date; 1/30th for each of the next five (5) years; and reduced actuarially for each additional year thereafter that his Early Retirement Date precedes his Normal Retirement Date. Said benefit shall commence as of the first day of the month coincident with or next following the Participant's Early Retirement Date. ment by the Employer. The opinion of the Company shall be based upon a medi- cal examination of the Participant performed by a physician or clinic appointed by the Company; or 3. Refuses to undergo any medical examination requested by the Com- pany, provided that a medical examination shall not be required more frequently than twice in any calendar year. If the Participant's disability retirement benefit ceases for reasons enumerated in this Paragraph J, such Participant shall not be prevented from qualifying for an entitlement under another provision of the Plan based on Credited Service and Compensation prior to such Participant's Total Disability. However, any other benefit to which a Participant may subsequently become entitled shall be offset by the Actuarial Equivalent of the amount of any distribution previously received during such period of Total Disability. The disability retirement benefit may commence as of the first day of the month coinci- dent with or next following the determination of the Company that a Total Disability has occurred. K. Eligible Spouse's Survivor Benefits 1. If a Participant dies on or after his Annuity Starting Date with respect to such benefit. the Participant's Eligible Spouse, if any. shall receive a benefit in the form of a qualified joint and survivor annuity as set forth in Para- graph L of this Article III. 2. If a Participant dies before his Annuity Starting Date with respect to such benefit, the Participant's Eligible Spouse, if any, shall receive the portion of the Participant's Accrued Benefit which is not being distributed in the form of a qualified joint and survivor annuity as a qualified pre-retirement survivor annuity unless otherwise elected as provided below. A "qualified pre-retirement survivor annuity" means an immediate survivor annuity for the life of the Eligible Spouse. Payments to the Participant's Eligible Spouse under such annuity shall be the same as the amounts which would be payable as a survivor annuity under a quali- fied joint and survivor annuity (or the Actuarial Equivalent thereof) if: (a) In the case of a Participant who dies after the earliest date on which he could elect to commence benefits under the Plan, such Participant had retired with an immediate qualified joint and survivor annuity on the day before his death. The qualified pre-retirement survivor annuity shall be calculated as of the Participant's death. (b) In the case of a Participant who dies on or before the earliest date on which he could elect to commence benefits under the Plan, such Participant had (i) separated from service on the earlier of actual separa- tion of service or the date of death, (ii) survived until the earliest date on which he could elect to commence benefits under the Plan. (iii) retired with a benefit in the form of an immediate qualified joint and survivor annuity at that time, and (iv) died on the day thereafter. The qualified pre- retirement survivor annuity shall be calculated as of the earliest date on which the Participant could elect to commence benefits. Reasonable actuarial adjustments shall be made to reflect payments earlier or later than the earliest date on which the Participant could have elected to commence benefits. For purposes of the separate account maintained for Participant contri- butions under Paragraph C of Article VIII, a "qualified pre-retirement survivor 17 - L. Qualified Joint and Survivor Annuity Unless the Participant elects otherwise as provided in subparagraph L-' below, the Company shall direct the Trustee to distribute on behalf of a vested Participant a benefit in the form of a qualified joint and survivor annuity for all distributions to the Partici- pant. 1. The term "qualified joint and survivor annuity" means an immediate annuity for the life of the Participant if he does not have an Eligible Spouse or, if he has an Eligible Spouse, an annuity which is the Actuarial Equivalent of the Normal Form or, if greater, any other alternate form of benefit payable under the Plan, for the life of the Participant with a survivor annuity for the life of his Eligi- ble Spouse. Upon the election of the Participant, which may be made at any time and any number of times, the survivor annuity percentage shall be not less than fifty percent (50 0) nor more than one hundred percent (100 c) of the amount of the annuity payable during the joint lives of the Participant and his Eligible Spouse. In the event the Participant fails to make a timely selection of the sur- vivor annuity percentage, such percentage shall be fifty percent (50°io). 2. Notwithstanding the foregoing, a Participant may elect to waive the qualified joint and survivor annuity and thereby receive an alternate form of distribution as set forth in Paragraph N of this Article III. Such waiver must be made within the ninety (90) day period ending on the Participant's Annuity Start- ing Date with respect to such benefit. A Participant may subsequently revoke an election to waive a qualified joint and survivor annuity and elect again to waive the qualified joint and survivor annuity at any time and any number of times prior to such Annuity Starting Date. All such elections and revocations shall be in .. writing. Any election to waive a qualified joint and survivor annuity (1) must specify the alternate form of distribution elected, (2) must be accompanied by the designation of a specific nonspouse beneficiary (including any class of beneficiaries or anv contingent beneficiaries). who will receive the benefit upon the Participant's death, if applicable, and (3) must be accompanied by a Spousal Consent, to the extent required under Paragraph AN of Article 1. Deferred Vested Benefit 1. A Participant who ceases to be an Employee for reasons other than death, Total Disability or retirement shall be entitled to a deferred vested benefit, commencing as of his Normal Retirement Date, which shall be equal to his Accrued Benefit at termination of employment multiplied by his vested percentage determined pursuant to Article V. 2. A Participant eligible for a termination benefit who ceases to be an Employee prior to satisfying the service requirements for an Early Retirement Benefit shall be entitled to elect to commence to receive his deferred vested bene- fit. The amount paid pursuant to this subparagraph _M-2 shall be the Actuarial Equivalent of the deferred vested benefit he would have received at his Normal Retirement Date. 3. A Participant eligible for a termination benefit who ceases to be an Employee after satisfying the service requirements for an Early Retirement Benefit but before satisfying the age requirement for such Early Retirement Benefit shall be entitled upon satisfaction of the age requirement to elect to commence to receive his deferred vested benefit. The amount paid pursuant to this subpara- graph VI-3 shall be the Actuarial Equivalent of the deferred vested benefit he would have received at his Normal Retirement Date. - 19 - his vested Accrued Benefit in a lump-sum. No distribution may be made under the . . preceding sentence after the Participant's Annuity Starting Date unless the Participant and his EIigible Spouse consent thereto in a manner which is comparable to the Spousal Consent requirements in Paragraph AN of Article 1. A Participant who has no vested right to his Accrued Benefit shall be deemed to have received a distribution of his entire vested Accrued Benefit as of the date he terminated participation in the Plan. When determining whether the present value of such vested Accrued Benefit exceeds $3,500 for distributions made in Plan Years commencing before January 1. 1989, accumulated deductible employee contributions described in Section 72(o) of the Code shall not be included. For purposes of this subparagraph N-4, the determination whether the Actuarial Equivalent present value of the Participant's vested Accrued Benefit is equal to or less than $3,500 shall be made utilizing as the interest assumption the lesser of(a) the interest rate specified in paragraph B of Article I, or (b) the Applicable Interest Rate. 5. The amount of a lump-sum payment shall be calculated using an interest rate which shall not exceed the lesser of: (a) the interest rate specified in paragraph B of Article I, or (b) the Applicable Interest Rate, regardless of whether the present value of the vested Accrued Benefit exceeds $25,000, as determined under (b) above. In no event shall the amount of any benefit determined under this subparagraph N-5 exceed the maximum benefit permitted under Section 415 of the Code. b. If any monthly annuity benefit payable under the Plan is $10 or less. the Plan may make benefit payments in less frequent intervals of one (1) year or less. 7. Any annuity contract distributed from this Plan to a Participant or Beneficiary shall be nontransferable, and the terms of any such annuity contract shall comply with the requirements of this Plan and the Code, including Section 401(a)(9) of the Code and the regulations thereunder. In the event of any inconsistency between the terms of such annuity contract and the terms of this Plan, the provisions of the Plan shall control. 0. Time of Distribution 1. The Company must provide the Participant with a "general notice of distribution" no less than thirty (30) days. and no more than ninety (90) days before the Participant's Annuity Starting Date. Such notice must be in writing and must set forth the following information: (i) an explanation of the eligibility requirements for. the material features of, and the relative values of the alternate forms of benefits available under Paragraphs L and N of this Article 111, and (ii) the Participant's right to defer receipt of a Plan distribution under subparagraphs 0-3 and 0-4 of this Article III. This general notice also shall include (a) the terms and conditions of a qualified joint and survivor annuity; (b) the Participant's right to make, and the effect of. an election to waive the qualified joint and survivor annuity: (c) the rights of the Participant's Eligible Spouse; and (d) the right to make, and the effect of. a revocation of an election to waive a qualified joint and survivor annuity. Such notice shall be given to the Participant in person. by - �l - the Participant without his prior consent if such distribution is necessary to com- ply with Section 415 or 411(b) of the Code. 5. votwithstandin; anything to the contrary contained in this Plan. other than the rules pertaining to-pre-1984 elections described in subpara- graph 0-6 below. distribution to a Participant shall commence no later than April 1st of the calendar year following the calendar ,year in which the Participant attains age 70-1/2. If the amount of the required payment cannot be ascertained by the date payment is to commence, or if it is not possible to make such payment because of the Company's inability to locate the Participant after making reason- able efforts to do so, a payment retroactive to the required commencement date shall be made no later than sixty (60) days after the date the amount of such pay- ment can be ascertained or the Participant is located. Lotwithstanding the foregoing, for Participants who have attained age 7 0-1/2 before January 1, 1988, and notwithstanding anything to the contrary contained in the Plan, distribution to a Participant shall commence no later than April 1st of the calendar year fol- lowing the calendar year in which the Participant attains age 70-1/2 or terminates employment, whichever occurs later; however, this exception does not apply to Employees who were five-percent (57G) owners (as defined in Section 416 of the Code) at any time during the Plan Year ending with or within the calendar year in which such owner attains age 66-1/2 or any subsequent Plan Year; provided, how- ever, that once distributions have begun to a five percent (5%) owner, such distri- butions must continue even if the Participant ceases to be a five percent (5%) owner in a subsequent year. 6. Notwithstanding anything in this Paragraph 0 to the contrary, a Participant may receive a Plan distribution at a time and in a form different from that required under this Paragraph if such distribution is pursuant to a written election by a Participant which (a) was signed and filed with the Employer prior to January 1, 1984, (b) specified when Plan distributions shall begin and in what form they shall be paid, (c) indicated the Participant's designated Beneficiary in the case of a distribution upon the Participant's death, (d) satisfied the require- ments of the Internal Revenue Code in effect immediately prior to the effective date of the Tax Equity and Fiscal Responsibility Act of 1982, (e) satisfies the requirements of Paragraph L of this Article III, and (f) either was not changed or changed only to substitute or add another Beneficiary if such change did not affect the period over which distributions were to be made. The Company shall alter this election if it determines that such action is necessary to preserve the tax qual- ification of this Plan. 7. The Participant's Beneficiary may consent to receive benefits as soon as practicable after the Participant's death. Such consent by a surviving spouse must be comparable to the Spousal Consent requirements in subparagraph AN of Article I. 8. A Beneficiary may elect to defer such distribution beyond the time specified in subparagraph 0-7 above, provided that such election is in writing, describes the form of benefit payment to be received, indicates the date distribu- tions are to commence, is signed by the Beneficiary, and satisfies the requirements of subparagraph 0-10 of this Article III. 9. In the event that the Beneficiary neither consents to receive a Plan distribution nor elects to defer receipt of a Plan distribution, the Beneficiary shall - 23 - versary of the Eligible Spouse's death to the Beneficiary designated by the Participant or, in the absence of such designation, to the estate of the Eligi- ble Spouse. 11. Notwithstanding any Plan provision to the contrary, all Plan distri- butions shall comply with the requirements of Section 401(a)(9) of the Code and the regulations thereunder, including Section 1.401(a)(9) 12. Notwithstanding any other provisions of this Plan to the contrary, for Plan Years beginning on or after January 1, 1992, Benefits distributed under this Plan to those Participants and former Participants who are among the twenty-five (25) most highly compensated employees shall be subject to the follow- ing requirements: (a) Such Benefits shall be restricted such that the annual pay- ments so distributed shall be no greater than an amount equal to the pay- ment that would be made on behalf of such Participant or former Partici- pant under a single life annuity which is the Actuarial Equivalent, as deter- mined in accordance with Paragraph B of Article I, of the sum of the Par- ticipant's or former Participant's accrued Benefit multiplied by his vested percentage and the Participant's or former Participant's other Benefits under this Plan. (b) The preceding subparagraph 0-12(a) shall not apply if: (i) After payment of the Benefit to a Participant or former Participant described in this subparagraph 0-12, the value of Plan assets equals or exceeds one hundred ten percent (110%) of the value of current liabilities, as defined in Section 412(1)(7) of the Code, or- (ii) The value of the Benefits distributable to a Participant or former Participant described in this subparagraph 0-12 is less than one percent (1%) of the value of current liabilities, as defined in Section 412(1)(7) of the Code. For purposes of this subparagraph 0-12, Benefit includes loans in excess of the amount set forth in Section 72(p)(2)(A) of the Code, any periodic income, any withdrawal values payable to a living Participant or former Participant. and any death benefits not provided for by insurance on the Participant's or former Partic- ipant's life. P. Direct Rollover Distributions to an Eligible Retirement Plan 1. Effective for distributions made after December 31, 1992, a Partici- pant or Beneficiary who is entitled to receive an Eligible Rollover Distribution may direct the Company to pay all or a portion of such distribution directly to an Eli- gible Retirement Plan, in lieu of paying such amount to the Participant or Benefi- ciary. 2. The Company shall establish reasonable rules and procedures with respect to elections to make direct rollover distributions to an Eligible Retirement Plan pursuant to this Paragraph P. 25 - 2. Accrued Benefit Formula. Each Participant's Accrued Benefit under the Plan shall be equal to the sum of: (a) the Participant's Frozen Accrued Benefit, if any, plus (b) the Participant's Accrued Benefit determined with respect to the current benefit formula as applied to the Participant's years of Credited Service beginning after the latest Fresh-Start Date. 3. Frozen Accrued Benefit Determination. The amount of the Partici- pant's Frozen Accrued Benefit shall be determined in accordance with the method described below: (a) : A Participant's Frozen Accrued Benefit is the amount of the Participant's Accrued Benefit determined in accordance with the provisions of the Plan in effect on the latest Fresh-Start Date, determined as if the Participant terminated employment with the Employer as of the latest Fresh-Start Date, without regard to any amendment made to the Plan after that date. If this Plan has not had a Fresh-Start Date, the Participant's Frozen Accrued Benefit shall be zero (0). (b) If, as of the latest Fresh-Start Date, the amount of a Partici- pant's Frozen Accrued Benefit was limited by the application of Section 415 of the Code, the Participant's Frozen Accrued Benefit shall be increased for years after the latest Fresh-Start Date to the extent permitted under Sec- tion 415(d)(1) of the Code. (c) If the Frozen Accrued Benefit of a Participant includes the top-heavy minimum benefits provided in Paragraph E of this Article III, the Participant's Frozen Accrued Benefit shall be increased to the extent necessary to comply with the average compensation requirement of Section 416(c)(1)(D)(i) of the Code. (d) If, as of the latest Fresh-Start Date: (i) the Plan's Normal Form of benefit in effect on such latest Fresh-Start Date is not the same as the Normal Form of bene- fit under the Plan after the latest Fresh-Start Date, or (ii) the Normal Retirement Age for any Participant on such latest Fresh-Start Date was greater than the Normal Retire- ment Age for such Participant after the latest Fresh-Start Date, the Frozen Accrued Benefit of a Participant shall be expressed as an Actu- arial Equivalent benefit in the Normal Form commencing at the Partici- pant's Normal Retirement Age. R. Transitional Benefits 1. The provisions of Paragraphs K and L of this Article III shall apply only to Participants who were credited with at least one (1) Hour of Service or paid leave under the Plan on or after August 23, 1984. `?. Any Participant (i) who was not credited with at least one (1) Hour of Service or paid leave on or after August 23, 1984, (ii) whose Annuity Starting Date had not occurred on or before August 23, 1984, and (iii) who was alive on August 23, 1984, may elect to have the automatic joint and survivor annuity pro- _ •?; _ that the only benefit payable with respect to a married Participant was a qualified joint and survivor annuity. In the event that the Participant requests additional information as provided below on or before the last day of the election period in the preceding sentence, such election period shall be extended ninety (90) days from the day additional information is pro- vided to the Participant. Unless the prior Plan provided otherwise, no spousal consent to such election is required. Such explanation shall be pro- vided at least ninety (90) days prior to the commencement of benefits. (b) A Participant employed after attaining his qualified early retirement are shall be afforded the opportunity to elect to have a survivor annuity payable on death. If such annuity is elected, payments thereunder shall be equal to the payments which would have been made to his Eligible Spouse as a survivor annuity pursuant to subparagraph R-5(a) above, if the Participant had retired on the day prior to his death. Any election made under this subparagraph R-5 shall be in writing and may be changed by the Participant at any time. The election period begins on the later of(i) the ninetieth (90th) day before the Participant attains the qualified early retire- ment age, or (ii) the date participation begins, and ends on the date the Participant terminates employment. (c) If the written explanation of the qualified joint and survivor annuity is mailed or personally delivered, it shall be provided by such time as to reasonably assure that it will be received on or about (i) in the case of a prior Plan which did not provide for the payment of benefits before nor- mal retirement age, the date which is nine (9) months before the Partici- pant attained normal retirement age, (ii) in the case of a prior Plan which provided for the payment of benefits before normal retirement age and which is required to provide for the election of an early survivor annuity) the date which is ninety (90) days before the latest'date for the beginning of the election period for the early retirement annuity, or (iii) in the case of a prior Plan which provided for the payment of benefits before normal retirement age and which was required only to provide for the election not to take the qualified joint and survivor annuity, the date which is nine (9) months before the Participant attains qualified early retirement age; pro- vided that if under (ii) or (iii) above the qualified early retirement age is the date the Participant begins participation in the Plan, the explanation may be provided on or about such date. If the written explanation is to be proved by posting, it shall be posted at a time which is reasonably calcu- lated to reach the Participant's attention on or about the date prescribed above and continue to be posted within such period. (d) Such written explanation shall set forth in nontechnical tan- guage (i) in the case of an election to waive the qualified joint and survivor annuity, a general description of the qualified joint and survivor annuity, the circumstances in which it will be provided unless the Participant has elected not to have benefits provided in that form, and the availability of such election, (ii) in the case of an election to receive an early survivor annuity, a general description of the early survivor annuity, the circum- stances under which it will be paid if elected, and the availability of such election, (iii) a general explanation of the relative financial effect on a Par- ticipant's annuity of either or both elections, and (iv) that the Participant ARTICLE IV LEVITATIONS ON BENEFITS A. General Limitations 1. The Annual Benefit payable to any Participant shall not exceed the lesser of the Defined Benefit Dollar Limitation or one hundred percent (100%) of the Participant's average annual Total Compensation for his high three (3) years, where "high three (3) years" refers to the period of three (3) consecutive Plan Years (or the actual number of consecutive years of employment for Participants who are employed for less than three (3) consecutive years with the Employer) during which the Participant was an active participant in the Plan and had the greatest aggregate Total Compensation. The limitation provided by this Para- graph A is subject to the following modifications: (a) If the Annual Benefit begins before the Participant's Social Security Retirement Age but on or after the Participant attains age 62, the Defined Benefit Dollar Limitation shall be reduced by: (i) Social Security Retirement Age 65. 5/9 of 1% for each month by which benefits commence prior to the month in which the Participant attains age 65; or (ii) Social Security Retirement Age 66 or over. 5/9 of 1% for each of the first 36 months and 5/12 of 1% for each of the addi- tional months (up to 24 such months) by which benefits commence prior to the month in which the Participant attains the Social Security Retirement Age. If the Annual Benefit begins before the Participant attains age 62, the Defined Benefit Dollar Limitation shall be adjusted so that it is the Actu- arial Equivalent of the Defined Benefit Dollar Limitation at age 62 utilizing as the interest assumption the greater of (i) the interest rate specified in Paragraph B of Article I or (ii) five percent (5%) per annum. (b) If the Annual Benefit of a Participant commences after the Participant's Social Security Retirement Age, the Defined Benefit Dollar Limitation shall be adjusted so that it is the Actuarial Equivalent of a ben- efit equal to the Defined Benefit Dollar Limitation beginning at the Social Security Retirement Age utilizing as the interest assumption the lesser of (i) the interest rate specified in Paragraph B of Article I or (ii) five per- cent (5%) per annum. (c) If the Plan was in existence on May 6, 1986, and met the applicable requirements of Section 415 of the Code for all Plan Years, then with respect to any Employee who is a Participant as of the first day of the Plan Year beginning on or after January 1, 1987, if his Current Accrued Benefit exceeds the benefit limitations under Section 415(b) of the Code, as modified by subparagraphs A-1(a) and A-1(b) above, then for purposes of Sections 415(b) and (e) of the Code, the Defined Benefit Dollar Limitation with respect to such Employee shall be equal to such Current Accrued Ben- efit. - •31 - value of benefits which are not directly related to retirement benefits (such as a qualified disability benefit, pre-retirement death benefit, or post- retirement medical benefit), and (iii) the value of post-retirement cost-of- living increases made in accordance with regulations; (b) "Annual Additions" means for any Plan Year the sum of the following amounts credited to a Participant's accounts in all qualified defined contribution plans maintained by an Employer: (i) Employer con- tributions, (ii) Employee Contributions, and (iii) forfeitures. Solely for pur- poses of this subparagraph A-2(b), the Total Compensation for a totally disabled (within the meaning of Section 22(e) of the Code) member of a defined contribution plan maintained by an Employer is the compensation which the member would have received for the year if the member had been paid at the rate of compensation paid immediately before becoming perma- nently and totally disabled; provided such imputed compensation may be taken into account only if the member is not an officer, an owner, or a highly compensated employee, (effective for years beginning after 1988, a Highly Compensated Employee) and only if contributions to the defined contribution plan are nonforfeitable when made. In addition amounts allo- cated, after March 31, 1984, to an individual medical account, as defined in Section 415(1)(2) of the Code, which is part of a pension or annuity plan maintained by an Employer, and amounts derived from contributions paid or accrued after December 31, 1985. in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee, as defined in Section 419A(d)(3) of the Code, under a welfare benefit fund, as defined in Section 419(e) of the Code, maintained by an Employer, shall also be treated as Annual Additions; (c) "Current Accrued Benefit" means a Participant's accrued ben- efit under the Plan, determined as if the Participant had separated from service as of the close of the last Plan Year beginning before January 1, 1987, when expressed as an Annual Benefit. In determining the amount of a Participant's Current Accrued Benefit. the following shall be disregarded: (i) any change in the terms and conditions of the Plan after May 5, 1986; and (ii) any cost-of-living adjustment occurring after -May 5, 1986; (d) "Defined Benefit Dollar Limitation" means the dollar limita- tion set forth in Section 415(b)(1) of the Code ($90,000 for the Plan Year that ends in 1987), as adjusted by the Secretary of the Treasury under Sec- tion 415(d) of the Code to reflect increases in the cost-of-living, in such manner as the Secretary shall prescribe; (e) "Defined Contribution Dollar Limitation" means $30,000 or, if greater, twenty-five percent (15%) of the Defined Benefit Dollar Limita- tion in effect for the Plan Year; (f) "Employee Contributions" means contributions to the Plan by a Participant during the Plan Year, without regard to any rollover con- tributions (as defined in Sections 402(a)(5), 403(a)(4), 403(b)(8), and 408(d)(3) of the Code), and without regard to any employee contributions to a simplified employee pension which are excludable from gross income under Section 408(k)(6) of the Code; `'. No Participant may make a contribution to this Plan with respect to a Plan Year if the contribution would cause a Participant's Annual Additions with respect to such Plan Year to exceed the limitations set forth hereunder. To deter- mine whether a contribution to this Plan is permitted, the Participant's provi- sional contributions to this Plan with respect to a Plan Year shall be aggregated with: (a) his prior contributions to this Plan with respect to such Plan Year, and his prior contributions to any defined contribution plans maintained by the Employer to the extent such contributions are included in the Annual Additions of said Participant for such Plan Year; (b) Employer contributions and forfeitures. if any, already allocated to the Participant's account in any defined contribution plan maintained by the Employer with respect to such Plan Year; and (c) amounts treated as Annual Additions for the Plan Year by reason of Section 415(l)(1) or Section 419A(d)(2) of the Code. C. Multiple Plan Reduction 1. The benefits to which a Participant may become entitled will be sub- ject to those additional limitations set forth herein. (a) If a Participant of this Plan also is or has been a participant in a defined contribution plan, as defined in Section 414(i) of the Code, or a welfare benefit fund, as defined in Section 419(e) of the Code, to which con- tributions have been made by the Employer, then in addition to the limita- tion contained in Paragraph A, the sum of the defined benefit plan fraction and the defined contribution plan fraction for any Plan Year shall not exceed 1.0. For purposes of this subparagraph: (i) The defined benefit plan fraction for any Plan Year is a fraction, the numerator being the Projected Annual Benefit of the Participant under all defined benefit plans maintained by the Employer (determined as of the close of the Plan Year) and the denominator being the lesser of: (1) The product of 1.25 (1.0 in the event this Plan is a Top-Heavy Plan) multiplied by the Defined Benefit Dollar Limitation, or (2) The product of 1.4 multiplied by an amount which is 100 0 of the Participant's average Total Compensa- tion for the three (3) consecutive Plan Years in which his Total Compensation was the highest. Notwithstanding the above, the transition rules under Section 415(e) of the Code are hereby incorporated by reference for Participants who were members as of the first day of the first Plan Year begin- ning after December 31, 1986, in one or more defined benefit plans maintained by the Employer which were in existence on May 6, 1986. (ii) The defined contribution plan fraction for any Plan Year is a fraction, the numerator being the sum of the Annual Addi- tions to the accounts of the Participant in all defined contribution �... plans, attributable to the Participant's nondeductible employee con- tributions to all defined benefit plans (whether or not terminated), individual medical accounts as defined in Section 415(1)(2) of the - 35 - 4. If the Employer maintains both defined benefit and defined contribu- tion plans, any adjustment necessary to meet the limitations of this Paragraph C -"' shall be made by first reducing the Participant's Annual Benefit under the defined benefit plan(s). ARTICLE XV -. NAME OF TRUST This Trust shall be known as the "TRUCKEE DONNER PUBLIC UTILITY DISTRICT DEFINED BENEFIT TRUST." This Agreement has been executed in several counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instru- ment, which may be sufficiently evidenced by one counterpart. This Agreement shall inure to the benefit of and be binding upon the parties hereto, their successors and assigns. ,r- - 23 - Completed Vested Years of Service Percentage Less than 1 0 % 1 10 2 20 3 30 4 40 5 60 6 80 7 or more 100 4. If a Participant who has completed: (a) five (5) Years of Service before the first day of the first Plan Year beginning after December 31. 1988; or (b) three (3) Years of Service at any time and at least one (1) Hour of Service on or after the first day of the first Plan Year beginning after December 31, 1988 elects, during the period commencing on the date the amendment is adopted and ending sixty (60) days after the later of (i) the day the Plan amendment is adopted, (ii) the day the Plan amendment becomes effective, or (iii) the day the Participant is issued a written notice of the Plan amendment, to have his Accrued Benefit derived from Employer contributions vest under the terms of the vesting schedule previously in effect, then, notwithstanding the provisions of the vesting schedules above, his Accrued Benefit shall vest in accordance with the schedule included in the Plan which he elects. 5. In determining the Years of Service under the Plan for purposes of determining a Participant's vested percentage under subparagraphs 2 and 3 above, all of a Participant's Years of Service with the Employer shall be taken into account, except as provided in subsections (a) and (b) of this subparagraph 5. (a) If, at the time of a One-Year Break in Service, a Participant does not have any vested right under subparagraph 2 or 3 above, Years of Service before such One-Year Break in Service shall not thereafter be taken into account if the number of consecutive One-Year Breaks in Service equals or exceeds either five (5) or the aggregate number of Years of Service before such Breaks in Service, whichever is greater; (b) The aggregate number of Years of Service before such Breaks in Service shall be deemed not to include any Years of Service not required to be taken into account hereunder by reason of any prior application of this subparagraph. 6. Amounts vested pursuant to this Paragraph shall not be subject to divestment for cause. B. Termination of Employment Upon termination of employment, a Participant shall be entitled to receive a bene- fit equal to the product of his Accrued Benefit multiplied by his vested percentage as determined hereunder. This amount shall be subject to distribution in accordance with the provisions of Article III. - :39 - ARTICLE VI LOANS TO PARTICIPANTS Participants are able to apply for a loan from the Plan to satisfy the Participant's obligation to an alternate payee under a Qualified Domestic Relations Order. All loan applications will be accepted and approved by the Plan Trustees on a uniform and non- discriminatory basis and will be subject to the availability of funds in their accounts. Loan application requests should be directed to the General Manager of Truckee-Donner Public Utility District. 1. Amounts of Loan: The principal amount of the total of all a participant's loans shall be limited to the lesser of: $25,000; or one-half of the balance of a participant's non-forfeitable account balance. 2. Term of Loan: Plan loans shall be issued for a maximum term of five (5) years and shall be repaid in full within this period. 3. Interest Rate: Interest shall be charged on all loans at two percent (2%) above the national prime rate of interest quoted at the end of the calendar quarter prior to issuance of the loan. Loan payments must be level and in an amount which will fully amortize the loan over its term. Payments will be made not less often than monthly by payroll deduction. 4. Documents: All loans shall be evidenced by a written promissory note x signed by the participant and personally guaranteeing the repayment of such loan. The note shall be secured by the participant's benefits under the plan. 5. Default Provisions: A loan will be considered in defauir if payments are more than QQ,days past due. If a loan is in default, the Plan will deduct the unpaid principal and interest from any distribution to which the Participant or his Beneficiary may be entitled. at the earliest time the distribution is payable under the terms of the plan. 6. Other Rules: (a) Loans must be fully prepaid from any distribution received by the participant from the plan. (b) Participants who have defaulted on loans may be refused subsequent loans by the Trustee. (c) A married Participant's legal Spouse must consent to any loan exceeding $3.500. (d) Loan payments received more than 5 days following the due date will be subject to a 10% late payment penalty. (e) Participants shall pay the administrative fee of S75.00 for processing the loan. (fl If a participant has had an outstanding loan balance during the preceding 12 months. the maximum loan available will he reduced. - 41 - ARTICLE VIII PARTICIPANT'S CONTRIBUTIONS AND SPECIAL ACCOUNTS A. Voluntary Contributions The Plan shall accept no Employee contributions for Plan Years beginning after December 31, 1986. B. Collection of Contributions All contributions will be held and administered in the Trust established under this Plan. C. Accounts for Participant Contributions The Company shall open a separate account for each Participant's voluntary con- tributions. At least once each year, as of the end of the Plan Year, or at more frequent intervals if directed by the Company, the Trustee shall value the part of the Trust assets attributable to such contributions on the basis of fair market values. The Company shall allocate the previously unallocated increments of Trust earnings to (or, as the case may be, charge the previously unallocated losses against) the respective accounts in proportion to the amounts therein, as of the valuation date. D. Investment of Participant Contributions Contributions made by a Participant pursuant to this Article VIII shall be com- mingled with the other assets of the Trust for investment purposes. E. Vesting A Participant's account to which his contributions are allocated, including his own contributions and any increases or decreases in value thereof, shall at all times be fully vested in the Participant and shall not be forfeitable for any cause. F. Withdrawal The balance of the account to which a Participant's voluntary contributions are allocated may be withdrawn upon fifteen (15) days' written notice to the Company, which notice shall include the written consent of the Participant and the Participant's spouse, if married, in accordance with Paragraph L of Article III, obtained within ninety (90) days of the date of the distribution. The amount credited to such account shall reflect any charges or credits to the account based on valuations directed by the Company to be made during such fifteen (15) day period. Effective January 1, 1989, such withdrawals may be made in the absence of severance of employment. The amount of any such withdrawal shall be limited to the balance of the Participant's account at the date of withdrawal. G. Distribution When a Participant dies or terminates his employment with the Employer, the account to which his contributions are allocated shall be distributed to him as provided in Paragraph K or L of Article III. respectively. - 43 H. Designation of Beneficiaries Subject to the provisions of Paragraph L of Article III, each Participant shall have the same right to designate a Beneficiary or Beneficiaries for the account to which his own contributions are allocated as he has for the benefits otherwise payable from this Plan. In the absence of a valid designation of Beneficiary or Beneficiaries upon the death of a Participant, such account shall be distributed in accordance with Paragraph B of Article VII. I. Transfers From Other Plans I. Transfers From Other Qualified Plans. An Eligible Employee who has had distributed to him his entire interest in a plan meeting the requirements of Section 401(a) of the Code (the "Other Plan") may, in accordance with proce- dures approved by the Company, transfer all or any portion of the distribution received from the Other Plan to the Trustee, provided the following conditions are met: (a) The transfer occurs on or before the sixtieth (60th) day after he receives the distribution from the Other Plan; (b) The distribution from the Other Plan qualifies in accordance with the following: (i) Rollovers before January 1. 1993. The distribution from the Other Plan qualifies as a qualified total distribution within the meaning of Section 402(a)(5)(E)(i) of the Code in effect on that date; (ii) Rollovers on or after January 1. 1993. The distribu- tion from the Other Plan qualifies as an Eligible Rollover Distribu- tion as defined in subparagraph P-4(a) of Article III; and (c) The amount transferred does not exceed: (i) Rollovers before January 1. 1993. The amount of such qualified total distribution received from the Other Plan less the amount, if any, considered contributed by the Participant in accor- dance with Section 402(a)(5)(B) of the Code in effect on that date; (ii) Rollovers on or after January 1, 1993. The amount of such Eligible Rollover Distribution which is includable in the Partici- pant's gross income. Notwithstanding any other provision hereof, there may be transferred directly from the trustee of the Other Plan to the Trustee, subject to the approval of the Company and Trustee that such transfer will not adversely affect the quali- fied status of the Plan, all or any of the assets, including voluntary contributions. if any, held (whether by trustee, custodian or otherwise) on behalf of any Other Plan which is maintained for the benefit of any Eligible Employees who are or are about to become Participants of this Plan. For transfers occurring on or after January 1, 1993, no voluntary contributions (other than deductible voluntary con- tributions as defined in Section 219 of the Code) may be transferred unless the transfer is a transfer of Plan assets and liabilities described in Section 414(1) of the Code. If the distribution is transferred from the Employee to the Employer, the Employer shall pay the transferred distribution to the Trustee on the earliest date 44 - ARTICLE LY ESTABLISHNIEV T OF TRUST A. Trust Agreement Contributions made by the Employer and Participants of the Plan, pursuant to Articles III and VIII hereof, and all other assets of this Plan shall be held in trust under a Trust Agreement. The Employer shall enter into a Trust Agreement with the Trustee for the administration of the Trust which shall contain the assets of the Plan. The Trus- tee shall not be responsible for the administration of this Plan but only for the Trust established pursuant to this Plan. - B. Trust Agreement Part of Plan The Trust Agreement shall be deemed to be a part of this Plan, and any rights or benefits accruing to any person under this Plan shall be subject to all of the relevant terms and provisions of the Trust Agreement, including any amendments. In addition to the powers of the Trustee set forth in the Trust Agreement, the Trustee shall have any powers, express or implied, granted to it under the Plan. In the event of any conflict between the provisions of the Trust Agreement and the provisions of the Plan, the provi- sions of the Plan shall control, except for the duties and responsibilities of the Trustee, in which case the Trust Agreement shall control. - 46 - E. Indemnification Any Employer shall indemnify and hold harmless the named fiduciaries and any officers or employees of the Employer to which fiduciary responsibilities have been dele- gated, from and against any and all liabilities, claims, demands, costs and expenses, including attorneys' fees, which may arise out of an alleged breach in the performance of their fiduciary duties under the Plan and under ERISA, other than such liabilities, claims, demands, costs and expenses as may result from the gross negligence or willful miscon- duct of such persons. The Company shall have the right, but not the obligation, to con- duct the defense of such persons in any proceeding to which this Paragraph applies. An Employer may satisfy its obligation under this Paragraph, in whole or in part, through the purchase of a policy or policies of insurance; however, no insurer shall have any rights against the Employer arising out of this Paragraph. F. Costs and Expenses The costs and expenses of the named fiduciaries shall be paid from Plan assets held in the Trust to the extent not paid by the Company. The payment by the Com- pany of such costs and expenses for a Plan Year shall not be deemed an election to pay the costs and expenses in any subsequent Plan Year. The Company may charge to an Employer such expenses advanced by it on behalf of the Employer. G. Authority to Amend and Terminate Subject to Article XI, the Board of Directors of the Company is the named fiduci- ary responsible for the amendment and termination of the Plan and Trust. H. Designation of Administrator The Company shall be the Administrator of the Plan for purposes of Section 3(16) of ERISA and Section 414(g) of the Code. I. Plan Administration The Administrator shall have the power and the duty to perform the following administrative functions according to the policies, interpretations, rules, practices and procedures established by the Board of Directors of the Company: 1. Interpret the Plan; 2. Formulate rules and regulations necessary to administer the Plan in accordance with its terms; 3. Establish and execute the funding policy of the Plan; 4. Invest Plan assets, if the Board of Directors of the Company has transferred responsibility for Plan investments to the Company pursuant to Arti- cle V of the Trust; 5. Annually review the funding policy and method; 6. Apply Plan rules determining eligibility for participation or benefits; 7. Calculate service and compensation credits for benefits; 8. Prepare employee communications material; 9. Maintain Participant's service and employment records; 10. Prepare reports required by government agencies - 48 - (a) A claimant whose claim has been denied, in whole or in part, „,. may request a full and fair review of the claim by the Board of Directors of they Company by making written request therefor within sixty (60) days of receipt of the notification of denial. The Board of Directors of the Com- pany, for good cause shown, may extend the period during which the request may be filed. The claimant shall be permitted to examine all docu- ments pertinent to the claim and shall be permitted to submit issues and comments regarding the claim to the Board of Directors of the Company in writing. (b) The Board of Directors of the Company shall render its deci- sion within sixty (60) days after receipt of the application for review, unless special circumstances (such as the need to hold a hearing) require an exten- sion of time for processing, in which case the decision shall be rendered as soon as possible but not later than one hundred and twenty (120) days after receipt of a request for review. If an extension of time is necessary, written notice shall be furnished the claimant before the extension period com- mences. (c) The Board of Directors of the Company shall decide whether a hearing shall be held on the claim. If so, it shall notify the claimant in writing of the time and place for the hearing. Unless the claimant agrees to a shorter period, the hearing shall be scheduled at least fourteen (14) days after the date of the notice of hearing. The claimant and/or his authorized representative may appear at any such hearing. (d) The Board of Directors of the Company shall send its decision on review to the claimant in writing within the time specified in this sec- tion. If the claim is denied, in whole or in part, the decision shall specify the reasons for the denial in a manner calculated to be understood by the claimant, referring to the specific Plan provisions on which the decision is based. The Board of Directors of the Company shall not be restricted in its review to those provisions of the Plan cited in the original denial of the claim. (e) If the Board of Directors of the Company does not furnish its decision on review within the time specified in this subparagraph 3, the claim shall be deemed denied on review. K. Agent for Legal Process The Company shall be the Plan's agent for service of legal process. - W (c) If a deduction for an Employer contribution is disallowed under Section 404 of the Code, or any successor provision thereto, the con- tribution shall be returned to the Employer (to the extent disallowed) within one (1) year after such disallowance. (d) In the case of the termination of the Plan, any residual assets of the Plan shall be distributed to the Employer at the direction of the Administrator (or at the direction of a trustee appointed upon the applica- tion of the Pension Benefit Guaranty Corporation) if all liabilities of the Plan to Participants and their Beneficiaries have been satisfied and the distribution does not contravene any provision of law, provided, however, that this provision shall not be effective before the end of the fifth calendar year following the earlier of: (1) the date of restatement, (2) the date of any earlier amendment or restatement allowing such reversion, or (3) the original effective date of this Plan, if the Plan has provided for such rever- sions from its original effective date. The certificate of an Enrolled Actuary engaged by the Company pursuant to ERISA stating that there are residual assets of the Plan remaining in the Trust Fund after all liabilities of the Plan to Participants and their Beneficiaries have been satisfied shall be con- clusive evidence of this fact: but in its discretion, the Trustee May require other and additional evidence of the existence and amount of residual assets. Notwithstanding the foregoing provisions of this Article XI, if any assets of the Plan attributable to employee contributions remain after all liabilities of the Plan to Participants and their Beneficiaries have been satis- fied, such assets so attributable at the direction of the Company (or at the direction of a trustee appointed upon the application of the Pension Benefit Guaranty Corporation) shall be equitably distributed to the Participants who made such contributions or to their Beneficiaries and the Employer may elect to reallocate the residual assets to those Employees who are Par- ticipants as of the date of termination of the Plan, such allocation to be made in a nondiscriminatory manner. Said election shall be in writing and shall be made prior to receipt of a determination by the Internal Revenue Service of the Plan's qualified status resulting from the termination. `?. The Company shall have no right to modify or amend the Plan retroactively in such a manner so as (i) to reduce the Participant's vested entitle- ment, (ii) to reduce the benefits of any Participant or his Beneficiary accrued under the Plan by reason of contributions made by an Employer prior to the mod- ification or amendment, or (iii) to eliminate an optional form of benefit with respect to benefits attributable to service before the amendment, except to the extent permitted by Section 411(d)(6) of the Code or Section 204(g) of ERISA and the regulations interpreting these sections. D. Limitations on Benefits in the Event of Plan Termination Notwithstanding any other provisions of this Plan to the contrary, in the event of Plan termination, the Benefits provided under this Plan to those Participants or former Participants who are considered highly compensated employees shall be limited to a Ben- efit that is nondiscriminatory under Section 401(a)(4) of the Code and shall be subject to the following conditions: ARTICLE XII MISCELLANEOUS A. Limitation of Rights; Employment Relationship Neither the establishment of the Plan and the Trust, nor any modifications thereof, nor the creation of any fund or account, nor the payment of any benefits, shall be construed as giving to any Participant or other person any legal or equitable right against the Employer or the Trustee except as provided herein; and in no event shall the terms of employment of any Employee or Participant, express or implied, be modified or in any way be affected hereby. B. Transfer of Assets of Employer; Transfer of Assets of Plan 1. If the Employer merges or consolidates with or into a corporation, or if substantially all of the assets of the Employer are transferred to another busi- ness, the Plan hereby created shall terminate on the effective date of such merger, consolidation or transfer. However, if the surviving corporation resulting from such merger or consolidation, or the business to which the Employer's assets have been transferred, adopts this Plan, it shall continue and such corporation or busi- ness shall succeed to all rights, powers and duties of the Employer hereunder. The employment of any Employee who continues in the employ of such successor cor- poration or business shall not be deemed to have been terminated for any purpose hereunder. 2. In no event shall this Plan be merged or consolidated with any other plan, nor shall there be any transfer of assets or liabilities from this Plan to any other plan, unless immediately after such merger, consolidation or transfer, each Participant's benefits, if such other plan were then to terminate, are at least equal to or greater than the benefits to which the Participant would have been entitled, had this Plan been terminated immediately before such merger, consolidation, or transfer. C. Spendthrift Provision Neither the Employer nor the Trustee shall recognize any transfer. mortgage, pledge, hypothecation, order, or assignment by any Participant or Beneficiary of all or part of his interest hereunder, except a transfer pursuant to a "qualified domestic rela- tions order" within the meaning of Section 414(p) of the Code or Section 303(d) of the Retirement Equity Act of 1984. Such interest shall not otherwise be subject in any manner to transfer by operation of law. Such interest shall be exempt from the claims of creditors or other claimants from all orders, decrees, levies, garnishments and/or execu- tions and other legal or equitable processes or proceedings against such Participant or Beneficiary to the fullest extent permitted by law. D. Applicable Law: Severability The Plan hereby created shall be construed, administered and governed in all respects in accordance with ERISA and the laws of the State of California; provided, however, that if any provision of this Plan is susceptible of more than one interpretation, such interpretation shall be given thereto as is consistent with the Plan being a qualified employees' pension plan under the provisions for qualification set forth in the Code. If .34 - Trust Agreement under the TRUCKEE DONNER PUBLIC UTILITY DISTRICT DEFINED BENEFIT PLAN Table of Contents ARTICLE Page I. RECEIPT OF CONTRIBUTIONS 1 A. Establishment of Trust 1 B . Governing Law `? II. PAYMENTS FROM TRUST FUND 3 A. Distributions 3 B . Diversion of Funds Prohibited 3 C. Failure of Plan to Qualify 3 D . Nondeductibility of Contributions 3 E . Contributions Made in Error 3 F . Segregation of Disqualified Funds 4 III. INVESTMENTS AND FUNDING POLICY A. Management of Trust Assets 5 B . Standard of Care C. Jurisdiction over Trust Assets 5 D . Prohibited Transactions 5 E . Employer Securities and Real Property 0 F . Investment Powers 5 G. Funding Policy 6 IV. OTHER POWERS OF THE TRUSTEE A. General i B . Combination of Assets 9 V. TRANSFER OF INVESTMENT POWERS 10 A. Appointment of Investment Manager or Company 10 B . Powers of Investment Manager or Company 10 C . Limited Liability of Trustee; Authority to Direct Trustee 10 D . Appointment and Removal of Investment Manager 10 ii ) ARTICLE Paae XIV. MISCELLANEOUS (CONTINUED) E . Applicable Law 22 XV. NAME OF TRUST 23 B. Governing Law The Plan, this :agreement and the Trust Fund thereunder are intended to meet all the requirements of Section 401(a) and Section 501(a) of the Code and ERISA. as the same may be amended from time to time. attributable to the contribution, after deducting therefrom all expenses, fees and taxes attributable thereto. Such payment shall be made within one year after payment of the contribution. F. Segregation of Disqualified Funds If, after initial qualification, it is finally determined that the Plan and Trust of any Employer which has been accepted as a party to the Plan and this Trust no longer meet the requirements of Section 401(a) and Section 501(a) of the Code, such Employer's Plan and Trust shall no longer participate herein as of the date of disqualification and the assets of such Trust shall be segregated as soon as possible after the date of disqualifica- tion and held as a separate fund. Thereafter, upon written direction of the Administra- tor, the Trustee shall distribute to the Company or to the Participants in the Plan, as the case may be, that portion of the assets of the segregated Trust, which portion is not subject to substantial risk of forfeiture, in such manner as provided in the Plan and Trust. G. Funding Policy 1. The discretion of the Trustee in investing and reinvesting the prin- cipal and income of the Trust Fund shall be subject to such funding policy, and any changes thereof from time to time, as the Company may, pursuant to the Plan. adopt and communicate to the Trustee in writing. It shall be the duty of the Trustee to act strictly in accordance with such funding policy, and any changes therein, as so communicated to the Trustee in writing, provided that all such instructions to the Trustee fulfill its fiduciary standards of quality and diver- sification. 2. The Company shall establish and carry out a funding policy consis- tent with the purposes of the Plan and the requirements of applicable law, as may be appropriate from time to time. As part of such funding policy, the Company shall advise the Trustee or the Investment Manager (if an Investment Manager has been appointed), of the cash assets required, under the funding policy then in effect, to meet the liquidity requirements for the administration of the Plan. - 6 - I To manage, administer. operate, repair, improve and mortgage or lease for any number of years, regardless of any restrictions on leases made by trustees, or to otherwise deal with any real property or interest therein; to renew or extend or to participate in the renewal or extension of any mortgage, and to agree to the reduction in the interest on any mortgage or other modification or change in the terms of any mortgage or guarantee thereof in any manner and upon such terms as may be deemed advisable; to waive any defaults, whether in the per- formance of any covenant or condition of any mortgage or in the performance of anv guarantee, or to enforce any such default in such manner as may be deemed advisable, including the exercise and enforcement of foreclosure; 8. To invest all or part of the Trust Fund in interest-bearing deposits with the Trustee, or with a bank or similar financial institution.related to the Trustee if such bank or other institution is a fiduciary with respect to the Plan as defined in ERISA. including but not limited to investments in time deposits, sav- ings deposits, certificates of deposit or time accounts which bear a reasonable interest rate; 9. To register any investment held in the Trust Fund in its own name or in the name of a nominee or to hold any investment in bearer form; 10. To employ suitable agents, accountants and counsel (which may be counsel for the Company) and to pay their reasonable expenses and compensation out of the Trust Fund; 11. Subject to the requirements of Section 408(b)(6) of ERISA, to hold any part or all of the Trust Fund uninvested; 12. To form corporations and to create trusts to hold title to any securi- ties or other property, all upon such terms and conditions as it may deem advis- able; 13. To transfer, at any time and from time to time, such part or all of the Trust Fund as it shall deem advisable to itself as trustee of any common or collective trust fund or pooled investment fund, which fund has been qualified under Section 401(a) and is exempt under Section 501(a) of the Code, and which fund is maintained by it as a medium for the collective investment of funds of pension, profit sharing or other employee benefit trusts of which it may from time to time be acting as Trustee, and to withdraw any part or all of the Trust Fund so transferred; in which event the Declaration of Trust establishing each such com- mon or collective fund is hereby made a part of this Agreement, as fully as if set forth at length herein, but only to the extent that such Declaration of Trust shall not be inconsistent with the provisions hereof. The assets of the Trust invested in said common or collective trust shall be held and administered by the Trustee strictly in accordance with the terms of the instrument and the combining of assets of the Trust with the assets of other trusts in such common or collective trust is specifically authorized; 14. To make, execute and deliver as Trustee any and all deeds, leases, mortgages, advances. contracts, waivers, releases or other instruments in writing necessary or proper in the employment of any of the foregoing powers; .. 15. To exercise, generally, any of the powers which an individual owner might exercise in connection with property, either real or personal, held by the Trust Fund, and to do all other acts that the Trustee may deem necessary or ARTICLE V TRANSFER OF INVESTMENT POWERS A. Appointment of Investment Manager or Company Notwithstanding anything to the contrary herein contained. the Company may, by resolution of its Board of Directors, remove from the Trustee and transfer to itself or to an Investment Manager or Managers the authority and duty to manage, acquire or dis- pose of all or a portion of the Trust assets. As used herein, the term "Investment Man- ager" means a person or organization who satisfies the requirements of Section 3(38) of ERISA and has provided written acknowledgment to the Company and the Trustee that he has done so. B. Powers of Investment Manager or Company If the Company transfers the authority to manage, acquire or dispose of Trust assets to itself or to an Investment Manager or Managers, the Company, Investment Manager or Managers, as the case may be, shall exercise such authority in strict confor- mity with the requirements and standards referred to and set forth in the Trust for the exercise of such authority by the Trustee. C. Limited Liability_ of Trustee: Authority to Direct Trustee If an Investment Manager is appointed by the Board of Directors of the Company. the Trustee shall follow the written directions of the Investment Manager with respect to the management, acquisition or disposal of Trust assets, specifically including the powers set forth in Article N, subparagraphs A(1), (2), (3), (4), (5), (6), (7), (8) and (14). The Trustee may consent to accept oral directions for the purchase or sale of securities sub- ject to confirmation in writing. The Trustee shall be under no duty to question, or make inquiries as to. any act or direction of any Investment Manager taken as provided herein, or any failure to give directions, or to review the securities held as a result of directions by the Investment Manager, or to make any suggestions to the Investment Manager with respect to investment and reinvestment of, or disposing of investments in, the Trust. The Trustee shall not be liable for any acts or omissions of any Investment Manager, or be under any obligation to invest or otherwise manage any assets of the Trust Fund. Accordingly, the Trustee shall be under no liability for any loss of any kind which may result by reason of any act or failure to act, provided such act or failure to act is in accordance with any directions of the Investment Manager or is by reason of inaction in the absence of written directions from the Investment Manager. D. Appointment and Removal of Investment Manager In selecting and retaining an Investment Manager, the Board of Directors of the Company shall act solely in the interest of the Participants and Beneficiaries and with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man would use in the conduct of an enterprise of a like character and with like aims. The Board of Directors of the Company shall periodically review the performance of the Investment Manager. In the event an Investment Manager should resign or the Board of Directors of the Company should revoke its appointment of an Investment Man- ager, notice shall be furnished to the Trustee. Unless the notice designates a new Invest- ment Manager, it shall state whether responsibility for the investment and management of the assets of the Trust has been transferred back to the Trustee or assumed by the Company, as the case may be. t0 ARTICLE VI FEES AND EXPENSES The expenses incurred by the Trustee in the performance of its duties, including fees for legal services, and if the Trustee is a bank, trust company, or savings and loan association, such compensation to the Trustee as may be agreed upon in writing from time to time between the Company and the Trustee, and all other proper charges and disbursements of the Trustee, including anv and all taxes assessed against the Trustee or the Trust Fund, shall be paid from the Trust Fund unless paid by the Company. Not- withstanding the provisions of Article II hereof, payments under this Article VI may be made without the approval or the direction of the Company. t'_' - ARTICLE VIII ACCOUNTS AND RECORDS A. Required Records The Trustee shall keep accurate and detailed accounts of all investments. receipts, disbursements and other transactions hereunder and all such accounts and other records relating thereto shall be open to inspection and audit at all reasonable times by any per- son designated by the Company. Within a reasonable period of time following the close of each Plan Year and within a reasonable period of time after the removal or resignation of the Trustee as provided under Article IC hereof, the Trustee shall file with the Com- pany a written account setting forth all investments, receipts, disbursements and other transactions effected by it during such Plan Year or during the period from the close of the last Plan Year to the date of such removal or resignation. Upon the expiration of sixty (60) days from the filing of such account, the Trustee shall be forever released, remised and discharged from all liability and accountability to anyone with respect to the propriety of any such account or transactions, except such account or transactions as to which the Company shall within such sixty (60) day period file written exceptions and objections. To the extent permitted by law, but subject to any express provision of applicable law as may be in effect from time to time to the contrary, no person other than the Company may require an accounting or bring any action against the Trustee with respect to the Trust Fund or its actions as Trustees. B. Valuation Procedures If the Trustee shall determine that the Trust Fund consists in whole or in part of property not traded freely on a recognized market, or that information necessary to ascertain the fair market value thereof is not readily available to the Trustee, the Trustee shall request the Company to instruct the Trustee as to the value of such property for all purposes under the Plan and this Agreement, and the Company shall comply with such request. The Trustee shall be entitled to rely upon the value placed upon such property by the Company in its instructions to the Trustee. Notwithstanding the foregoing, or if the Company shall fail or refuse to instruct the Trustee as to the value of such property within a reasonable time after receipt of the Trustee's request to do so, the Trustee may in its sole discretion engage a competent appraiser to determine the fair market value of such property for all purposes hereunder. The determination of any such appraiser as to the fair market value of such property shall be deemed final. Any expenses with respect to such appraisal shall be paid by the Trustee out of the Trust Fund or, at the option of the Company, by the Company. C. Judicial Settlements Notwithstanding any other provision of this Article VIII, the Trustee shall have the right to have a judicial settlement of its accounts. In any proceeding for a judicial settlement of the Trustee's accounts, or for instructions in connection with the Trust Fund, the only necessary parties thereto in addition to the Trustee shall be the Com- pany. If the Trustee so elects, it may bring in any other person or persons as a party or parties defendant. 14 - ARTICLE X .. L MITATION ON TRUSTEE'S LIABILITY A. General The Named Fiduciaries shall administer the Plan as provided therein, and the Trustee shall not be responsible in any respect for administering the Plan nor shall the Trustee be responsible for the adequacy of the Trust Fund to meet or discharge any pay- ments or liabilities under the Plan. The Company from time to time shall furnish the Trustee with the names and specimen signatures of the officers of the Company, and shall promptly notify the Trustee of the termination of office of any officer of the Company and the appointment of such person's successor. Until notified to the contrary in writing, the Trustee may rely upon the most recent certification of the officers of the Company furnished to it by the Company. B. Limitation on Fiduciarv's Liability A fiduciary under this Agreement shall be responsible solely for its own acts or omissions. Except to the extent imposed by ERISA, no fiduciary shall have the duty to question whether any other fiduciary is fulfilling all of the responsibilities imposed upon such other fiduciary by ERISA, or by anv regulation or ruling issued thereunder. A fidu- ciary shall have no liability respecting a breach of fiduciary responsibility of another fidu- ciary with respect to this Agreement unless he knowingly participates in such breach, knowingly undertakes to conceal such breach, has actual knowledge of such breach and fails to take reasonable remedial action to remedy said breach or, through his negligence in performing his own specific fiduciary responsibilities which give rise to his status as a fiduciary, he has enabled such other fiduciary to commit a breach of the latter's fiduciary responsibilities. C. Certification by Company Any action required by any provision of this Agreement to be taken by the Board of Directors of the Company shall be evidenced by a resolution of the Board of Directors to the Trustee and certified by the Secretary or an Assistant Secretary of the Company. Unless other evidence with respect thereto has been expressly prescribed in this Agree- ment, any other action of the Company under any provision of this Agreement, including any approval of or exceptions to the Trustee's accounts, shall be evidenced by a certifi- cate signed by an officer of the Company. The Trustee may accept a certificate signed by an officer of the Company as proof of any fact or matter that the Trustee.deems necessary or desirable to have established in the administration of the Trust Fund (unless other evidence of such fact or matter is expressly prescribed herein). D. No Dutv to Investigate The Trustee shall be entitled conclusively to rely upon any written notice, instruc- tion, direction, certificate or other communication believed by it in good faith to be genu- ine and to have been signed by the proper person or persons, and the Trustee shall be under no duty to make investigation or inquiry as to the truth, accuracy, or completeness of any statement contained therein. The Trustee shall not be liable for losses to the Trust Fund or for any unfavorable investment result arising from its compliance with the directions of the Board of Directors of the Company made in accordance with the terms of this Agreement, and which directions are not contrary to Title I of ERISA. 16 - ARTICLE XI A_MENDiMENT OF AGREEMENT The Company reserves the right at any time and from time to time by action of its Board of Directors to amend in whole or in part any or all of the provisions of this Agreement, with the exception of Paragraph B of article II hereof, by an instrument in writing duly acknowledged and delivered to the Company and the Trustee, provided that no such amendment which affects the rights, duties, responsibilities or immunities of the Trustee may be made without its consent. �4 t'` only in part) and shall not be responsible in any way or to any person for the further disposition of the Trust Fund (or that part of the Trust Fund so applied or distributed, if the Plan is terminated only in part) or any part thereof so applied or distributed. t 1cr C a _ •2p _ ART L(3LE III ADDITIONAL QOyIPANIES A. Ado do n Additional Employers may, with the agprgv41.of the Board of Directors of the Company and'by resolution of its-.'own Bo#d of Directors, adopt, this trust, if such Employer shall have adopted the Plan. B. Segregation of Funds Any participating Employer may at any ume segregate its Trust Fund and con- tinue the same in accordance wi h the provu$t-0ns Otthis Agreement as though such Employer wet the soie:creattir thereof Ira s ch�even`t, Foie Con pany shall direct the Trustee to delrver=;.t©'I s l as:Trustee of such segre&-" ed and separate Trust Fund such cash and such secVriitie ,o1 ether ptopert as-rr ay be deterrnin d by the Company to } con titute e. pro'fo 'dhate share of the assets•t'he :h ld'in~r$spect of the Participants ate a to ,of su6h Employer aid athe,Boa W:.o ply any4uch Participants. Such Employers nay ther'eafteF e�ereise, i respect 66 su6 separate Trust Fund, all of the rights and powers reserved to the Company under t-he provisions of this Agreement. ARTICLE XII TERNIINATIOi\+ OF PLAN, OR TRUST A. General This Agreement and the Trust created hereby or the Trust which is part of the Plan may be terminated at any time by the Company. The Trust Fund shall be paid out by the Trustee as and when directed by the Company, in accordance with the provisions of Article II hereof. B. Distribution of Residual Assets In the case of the termination of the Plan, any residual assets of the Plan may be distributed to the Company (or at the direction of a trustee appointed upon the applica- tion of the Pension Benefit Guaranty Corporation) if all liabilities of the Plan to Partici- pants and their Beneficiaries have been satisfied and the distribution does not contravene any provision of law, provided, however, that this provision shall not be effective before the end of the fifth calendar year following the earlier of: (1) the date of restatement, (2) the date of any earlier amendment or restatement allowing such reversion, or (3) the orig- inal effective date of this Plan, if the Plan has provided for such reversions from its origi- nal effective date. The certificate of an enrolled actuary engaged by the Company pur- suant to ERISA stating that there are residual assets of the Plan remaining in the Trust Fund after all liabilities of the Plan to Participants and their Beneficiaries have been sat- isfied shall be conclusive evidence of this fact; but in its discretion, the Trustee may require other and additional evidence of the existence and amount of residual assets. n - Notwithstanding the foregoing provisions of this Article XII, if any assets of the Plan attributable to employee contributions remain after all liabilities of the Plan to Partici- pants and their Beneficiaries have been satisfied, such assets so attributable at the direc- tion of the Company (or at the direction of a trustee appointed upon the application of the Pension Benefit Guaranty Corporation) shall be equitably distributed to the Partici- pants who made such contributions or to their Beneficiaries and the Employer may elect to reallocate the residual assets to those Employees who are Participants as of the date of termination of the Plan, such allocation to be made in a nondiscriminatory manner. Said election shall be in writing and shall be made prior to receipt of a determination by the Internal Revenue Service of the Plan's qualified status resulting from the termination. C. Release and Discharge of Trustee In case the Plan is terminated in whole or in part by the Company as authorized by Section 4041 (or by the Pension Benefit Guaranty Corporation pursuant to Sec- tion 4042) of ERISA, the Trustee (subject to the provisions of Paragraph B of Article II of this Agreement and reserving such sums as the Trustee shall deem necessary in settling its accounts and to discharge any obligations of the Trust Fund for which the Trustee may be liable) shall apply or distribute the Trust Fund in accordance with the written directions of the Company (or of any trustee appointed upon the application of the Pen- sion Benefit Guaranty Corporation). Upon such termination of the Plan in whole or in part, the Trustee shall have a right to have its account settled as provided in Article VIII of this Agreement. When the accounts of the Trustee shall have been so settled and the Trust Fund shall have been so applied or distributed, the Trustee thereupon shall be released and discharged from all further accountability or liability respecting the Trust Fund (or that part of the Trust Fund so applied or distributed, if the Plan is terminated - 19 - E. Indemnification The Company shall indemnify and hold the Trustee harmless from and against, all liabilities and claims (including reasonable attorneys fees and expenses in defense thereof) arising out of or in any way connected with the Plan or the Trust or the management, operation, administration or control thereof and based in whole or in part on: 1. An act or inaction of the Company (which includes, in this Para- graph E, the Company, the Board of Directors, any Investment Manager or Man- agers which may be appointed, or any actual or ostensible agent of any of them); or `?. Any action or inaction of the Trustee resulting from the absence of proper directions hereunder, or in accordance with any directions, purported or real, from the Company, whether or not proper hereunder, relied upon in good faith by the Trustee. i 1 - ARTICLE LY TRUSTEE'S REMOVAL OR RESIGNATION The Trustee may be removed by the Company at any time upon thirty (30) days' notice in writing to the Trustee. The Trustee may resign at any time upon thirty (30) days' notice in writing to the Company. Upon such resignation or removal, the Com- pany shall appoint a successor trustee, who shall have the same powers and duties as those conferred upon the Trustee named in this Agreement. The removal of a trustee and the appointment of a successor trustee shall be by written instrument delivered to the Trustee. - l•i - ARTICLE VII TRUSTEE'S DUTIES AND OBLIGATIONS A. Standard of Care The Trustee shall discharge its duties under this Agreement solely in the interest of the Participants of the Plan and their Beneficiaries and for the exclusive purpose of providing benefits to such Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan, with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, and by diversifying the investments of the Plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so, all in accor- dance with the provisions of this Agreement insofar as they are consistent with the provi- sions of ERISA; but the duties and obligations of the Trustee as such shall be limited to those expressly imposed upon it by this Agreement notwithstanding any reference herein to the Plan, or to the provisions thereof. B. Certification and Proof of Facts The Trustee shall be entitled, as it may deem appropriate from time to time, to require that the Company, a Named Fiduciary, or any other person involved in the administration of the Plan or the investment of the Trust Fund, or having any interest under either the Plan or the Trust Fund, provide such certification and proof of facts as shall permit the Trustee to perform its duties under ERISA (or any regulation there- under) or to exercise the powers granted the Trustee under this Agreement. t3 - E. Agents of the Company If the Company transfers the authority to manage, acquire or dispose of Trust assets to itself, it may employ such persons or organization to render advice or perform other services with respect to its responsibilities as it determines to be necessary and appropriate. Unless appointed as an Investment Manager, such person or organization shall not be authorized to direct the Trustee as to investments and shall have no discre- tionary authority over the assets of the Trust. F. Trustee's Powers Following Removal of Investment Nfanager In the event that an Investment Manager should resign or be removed by the Company, the Trustee shall manage the investment of the Trust Fund pursuant to Arti- cles III, IV and V hereof, unless and until it shall be notified of the appointment of another Investment Manager, with respect thereto, as provided in this Article V. G. Segregation of Accounts The accounts, books and records of the Trustee shall reflect the segregation, pur- suant to the provisions of Article V hereof, of any portion or portions of the Trust Fund in a separate investment account or accounts. - 11 - proper to carry out any of the powers set forth in this Article IV or which are otherwise in the best interests of the Trust Fund; . . 16. To lend. through a collective investment fund, any securities held in such collective investment fund to brokers, dealers or other borrowers and to per- mit the loaned securities to be transferred into the name and custody and be voted by the borrower or others. B. Combination of Assets The Trustee may combine the assets of this Trust for investment purposes with any other trust established by the Company pursuant to the provisions of any qualified employee benefit plan. In such event. the Trustee shall keep separate records of the amounts allocable to each such fund. i - 9 - ARTICLE IV OTHER POWERS OF THE TRUSTEE A. General The Trustee in administering the Trust Fund is authorized and empowered, sub- ject to the provisions of Article III hereof: 1. To purchase and subscribe for any securities or other property and to retain such securities or other property in trust; to purchase, retain, or sell securities issued by any foreign government or agency thereof, or by any corpora- tion domiciled outside of the United States, provided, however, it shall be the responsibility of the person or persons directing the investment in such securities to advise the Trustee in writing with respect to any laws or regulations of any foreign countries or any United States territories or possession which shall apply in any manner whatsoever to such securities including, but not limited to. receipt of dividends or interest by the Trustee from such securities; 2. To sell at public or private sale, for cash, or upon credit, or other- wise dispose of any property, real or personal; and no person dealing with the Trustee shall be bound to see to the application or to inquire into the validity, expediency or propriety of any such sale or other disposition; 3. To adjust, settle, contest, compromise and arbitrate any claims, debts, or damages due or owing to or from the Trust Fund, and to sue, commence -� or defend any legal proceedings in reference thereto; 4. To exercise any conversion, redemption or exchange privilege, subscription rights or other options pertaining to or in connection with securities or other property held by it, provided, however, the Trustee shall have no duty to determine the existence of anv such conversion, redemption, exchange, subscrip- tion or other right relating to any securities purchased hereunder of which notice was given prior to the purchase of such securities, and shall have no duty to exer- cise any such right unless it is informed of the existence of the right and is instruc- ted to exercise such right, in writing, by the person or persons making or directing the investment in such securities, within a reasonable time prior to the expiration of such right; to consent to or otherwise participate in any reorganization or other changes affecting corporate securities; to deposit any property with any committee or depositary; and to pay any assessments or other charges in connection there- with; 5. To exercise itself, or by general or limited power of attorney, any right, including the right to vote, incident to any securities or other property held by it; 6. To borrow money upon such terms and conditions as may be deemed advisable to carry out the purposes of the trust and to pledge securities or other property in repayment of any such loan; provided, however, that loans or advances may be made by the Trustee hereunder by way of overdrafts or otherwise on a temporary basis; `� ARTICLE III INVESTNMENTS AND FUNDING POLICY A. Management of Trust Assets Except as hereinafter provided. the Trustee shall have exclusive authority and dis- cretion to manage and control the assets of the Trust. B. Standard of Care The Trustee shall exercise its authority under this Article in accordance with the provisions of Paragraph A of Article VII. C. Jurisdiction over Trust Assets Except as may be permitted under regulations promulgated by the Secretary of Labor, the Trustee shall not maintain the indicia of ownership of any Trust assets out- side the jurisdiction of the district courts of the United States. D. Prohibited Transactions The Trustee shall not engage in any prohibited transactions within the meaning of Section 406 and Section 407 of ERISA. or Section 4975(c) of the Code, unless such trans- action is exempt under Section =408 or Section 414(c) of ERISA or Section 49 i 6(d) of the Code. E. Employer Securities and Real Property The Trustee shall not invest Plan assets in "qualifying employer securities" or "qualifying employer real property," as these terms are defined in Section 407(d) of ERISA. F. Investment Powers Within the limitations of the foregoing, the Trustee shall invest and reinvest the principal and income of the Trust Fund and keep the Trust Fund invested, without distinction between principal and income, in such securities or in such property, real or personal, tangible or intangible, or part interest therein, wherever situate, whether or not productive of income, or consisting of wasting assets, as the Trustee shall deem advisable. including but not limited to stocks. common or preferred, trust and participation certifi- cates, any common or collective trust fund or pooled investment fund, including such funds presently or hereafter maintained by the Trustee, interests in investment com- panies whether so-called "open-end mutual funds" or "closed-end mutual funds," individual annuities, group annuities, commodities contracts, options to purchase or sell securities (whether or not such securities are held in the Trust Fund), leaseholds, fee titles, bonds or notes and mortgages, and other evidences of indebtedness or ownership, irrespective of whether such securities or such property shall be of the character authorized by any state law from time to time for trust investments. As used in this Paragraph, the term "investment company" shall include shares of open-end investment companies, including, without limiting the generality of the foregoing, such investment companies as are commonly known as "money-market funds." The Trustee shall use the price established and provided from time to time by any such open-end investment com- pany for any valuation required under the terms of this Agreement. ARTICLE II PAYMENTS FROM TRUST FUND A. Distributions Subject to the limitations imposed by Paragraph B of this Article II, the Trustee shall, from time to time on the written directions of the Administrator, make payments out of the Trust Fund to such persons, in such amounts and for such purposes as may be specified in the written directions of the Administrator. Any written direction of the Administrator shall constitute a certification that, the distribution or payment so directed is one which the Administrator is authorized to direct. B. Diversion of Funds Prohibited Anything contained in this agreement to the contrary notwithstanding, it shall be impossible at any time prior to the satisfaction of all liabilities with respect to Partici- pants and their Beneficiaries, for any part of the Trust Fund to be used for or diverted to purposes other than for the exclusive benefit of the Participants under the Plan and their Beneficiaries, except as permitted by this Article H, and except that payment of taxes and administration expenses may be made from the Trust Fund as provided in Article VI hereof. C. Failure of Plan to Qualify Notwithstanding any provision of this Agreement to the contrary, if the Plan of _ which the trust established hereunder is a part shall for any reason fail to be granted ini- tial qualified status under Section 401(a) of the Code, provided that the application for determination is made by the time prescribed by law, and the Internal Revenue Service notifies the Company in writing that the Plan does not so qualify, the Company shall provide the Trustee with a copy of such notification, and upon receipt thereof, together with a written direction from the Company to do so, the Trustee shall pay over to the Company the net assets then held under this Agreement, after having first deducted therefrom all expenses, fees and taxes then accrued. Such payment shall be made within one year after receipt of an adverse determination from the Internal Revenue Service. D. i\Nondeductibility of Contributions If any contribution made by the Company to the Trust is conditioned upon the deductibility of the contribution under Section 404 of the Code, or any successor provi- sion thereto, then to the extent the deduction for such contribution is disallowed by the Internal Revenue Service, the Company shall provide the Trustee with a copy of the noti- fication of disallowance, and upon receipt thereof, together with a written direction from the Company to do so, the Trustee shall pay over to the Company the contribution plus earnings attributable to the contribution, after deducting therefrom all expenses, fees and taxes attributable thereto. Such payment shall be made within one year after disallow- ance of the deduction by the Internal Revenue Service. E. Contributions Made in Error If any contribution made by the Company to the Trust is made by virtue of a mistake of fact, the Company shall provide the Trustee with written notification of the mistake, and upon receipt thereof, together with a written direction from the Company to do so, the Trustee shall pay over to the Company the contribution plus earnings THIS TRUST AGREEMENT, made this day of , , by and between TRUCKEE DONNER PUBLIC UTILITY DISTRICT, a cor- poration organized and existing under the laws of the State of California (hereinafter referred to as the "Company") and J. Ronald Hernia, Robert A. Jones, James A. 'Maass. Patricia Sutton and Joseph R. Aguera (as Co-Trustees hereinafter referred to as the "Trustee"). WITNESSETH WHEREAS, the Company has adopted the TRUCKEE DONNER PliBLIC UTILITY DISTRICT DEFINED BENEFIT PLAN for its eligible employees (hereinafter referred to as the "Plan"); and WHEREAS, the Company is responsible for administering the Plan; and WHEREAS, the Plan, this Agreement and the Trust Fund constitute parts of the Plan intended by the Company to meet all the requirements for qualification under Sec- tion 401(a) and exemption from tax under Section 501(a) of the Internal Revenue Code of 1986 (the "Code"), and the Employee Retirement Income Security Act of 1974 ("ERISA"), as the same may be amended from time to time; and WHEREAS, under the Plan, funds will from time to time be contributed to the Trustee, which funds will constitute a Trust Fund to be held for the exclusive benefit of the Participants in the Plan or their Beneficiaries, including payment of certain expenses; and WHEREAS, the Company desires the Trustee to hold, invest, reinvest and other- r.. + wise to administer the funds, and the Trustee has indicated its willingness to do so, all pursuant to the terms of this Agreement; NOW, THEREFORE, in consideration of the premises and of the mutual cov- enants herein contained, the Company and the Trustee do hereby covenant and agree as follows: ARTICLE I RECEIPT OF CONTRIBUTIONS A. Establishment of Trust The Trustee shall receive any contributions paid to it in cash or in the form of such other property as it may from time to time deem acceptable, and which contribu- tions shall have been delivered to it. All contributions so received, together with the income therefrom and any other increment thereon, (hereinafter collectively referred to as the "Trust Fund") shall be held, invested, reinvested and administered by the Trustee pursuant to the terms of this Agreement without distinction between principal and income. The Company shall make contributions in such manner and at such times as shall be appropriate. The Trustee shall not be responsible for the calculation or collec- tion of any contribution under or required by the Plan, but shall be responsible only for ..� property received by it pursuant to this Agreement. The Plan shall be administered by the administrator provided for in the Plan and the Trustee shall not be responsible for the administration of the Plan. - 1 - ARTICLE Page . V. TRANSFER OF INVESTMENT POWERS (CONTINUED) E . Agents of the Company 1I F . Trustee's Powers Following Removal of Investment Manager 11 G. Segregation of Accounts 11 VI. FEES AND EXPENSES 12 VII. TRUSTEE'S DUTIES AND OBLIGATIONS 13 A. Standard of Care 13 B . Certification and Proof of Facts 13 VIII. ACCOUNTS AND RECORDS 14 A. Required Records 14 B . Valuation Procedures 14 C . Judicial Settlements 14 LX. TRUSTEE'S REMOVAL OR RESIGNATION 16 X. LIMITATION ON TRUSTEE'S LIABILITY 16 A. General 16 B . Limitation on Fiduciary's Liability 16 C . Certification by Company 16 D . No Duty to Investigate 16 E . Indemnification 17 XI. AMENDMENT OF AGREEMENT 18 XII. TERMINATION OF PLAN OR TRUST 19 A. General 19 B . Distribution of Residual Assets 19 C . Release and Discharge of Trustee 19 XIII. ADDITIONAL COMPANIES 21 A. Adoption ?1 B . Segregation of Funds 21 XIV. MISCELLANEOUS ?? A. Irrevocability ?'? B . Instructions 22 C . Prohibition on Alienation D . Gender and -umber ii ► any provision of this Plan shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue in full force and effect. E. Incorooracion of Trust Acrreement Provisions The relevant provisions of the Trust Agreement regarding: (1) the exclusive bene- fit of Employees and their Beneficiaries, (?) amendment, (3) termination, (4) other employers, (5) California law, (6) headings, gender and number, and (7) nonalienation are hereby incorporated into this Plan and are equally applicable to the Plan and to the Trust, which Plan and Trust together shall constitute the entire Plan as defined in the Code. F. Nonliability Any payment to any Participant, or to his legal representative or Beneficiary, in accordance with the provisions of the Plan, shall to the extent thereof be in full satisfac- tion of all claims hereunder against the Trustee, the Company and the Employer, any of whom may require such Participant, legal representative or Beneficiary, as a condition precedent to such payment, to execute a receipt therefor in such form as shall be deter- mined by the Trustee, the Company or the Employer, as the case may be. The Employer does not guarantee the Trust, the Participants, former Participants or their Beneficiaries against loss of or depreciation in value of any right or benefit that any of them may acquire under the terms of this agreement. All benefits payable hereunder shall be paid or provided for solely from the Trust, and the Employer does not assume any liability or responsibility therefor. G. Nfissing Persons In the case of any benefit payable to a person under this Plan, if the Company is unable to locate the person within six (6) months from the date a certified letter was mailed to such person notifying him of the benefit, the Company shall direct the Trustee to maintain the Participant as an inactive Participant. The Company shall continue to maintain this Participant in inactive status until: (1) the person entitled to the benefit makes application therefor; or (?) the benefit reverts by escheat to the state, whichever occurs first. This Plan has been executed in several counterparts, each of which shall be deemed to be an original, and said counterparts shall constitute but one and the same instrument, which instrument may be sufficiently evidenced by one counterpart. Dated: 1. For Plan Years beginning prior to January 1, 1992, retirement bene- fit payments distributed under this Plan to those Participants and former Partici- pants who are among the twenty-five (25) most highly compensated employees shall be restricted in accordance with the provisions of the plan in effect during such years as distributions may have occurred. 2. For Plan Years beginning on or after January 1, 1992, Benefits dis- tributed under this Plan to those Participants and former Participants who are among the twenty-five (25) most highly compensated employees shall be restricted such that the annual payments so distributed shall be no greater than an amount equal to the payment that would be made on behalf of such Participant or former Participant under a single life annuity which is the Actuarial Equivalent, as deter- mined in accordance with Paragraph B of Article I, of the sum of the Participant's or former Participant's Accrued Benefit and the Participant's or former Partici- pant's other Benefits under this Plan. 3. The preceding subparagraph D-2 shall not apply if: (a) After payment of the Benefit to a Participant or former Par- ticipant described in subparagraph D-2 above, the value of Plan assets equals or exceeds one hundred ten percent (110%) of the value of current liabilities, as defined in Section 412(1)(7) of the Code, or (b) The value of the Benefits distributable to a Participant or former Participant described in subparagraph D-2 above is less than one percent (157c) of the value of current liabilities, as defined in Sec- tion 412(1)(7) of the Code. For purposes of this Paragraph D, Benefit includes loans in excess of the amount set forth in Section 72(p)(2)(A) of the Code, any periodic income, any withdrawal values payable to a living Participant or former Participant, and any death benefits not provided for by insurance on the Participant's or former Participant's life. �M -:3 - ARTICLE XI A1vIEND%IENT AND TERMINATION A. Amendment To provide for contingencies which may require or make advisable the clarifica- tion, modification or amendment of this Plan, the Board of Directors of the Company reserves the right to amend this Plan (and such right is delegated to the Board of Direc- tors of the Company by all Employers), at any time and from time to time, in whole or in part, by formally adopting such amendment in writing. Such power to amend includes the right, without limitation, to make retroactive amendments referred to in Sec- tion 401(b) of the Code. However, such right to amend the Plan shall be subject to Para- graph C of this Article XI. Further, no amendment of the Plan shall (1) alter, change or modify the duties, powers or liabilities of the Trustee or an Investment Manager appointed pursuant to the Trust Agreement without its written consent; or (2) permit any assets of the Trust to be used to pay premiums or contributions of the Employer under any other plan maintained by the Employer for the benefit of its employees. B. Termination or Complete Discontinuance of Contributions Although the Employer has established the Plan with the bona fide intention and expectation that it will be able to make contributions indefinitely, nevertheless the Employer is not and shall not be under any obligation or liability whatsoever to continue its contributions or to maintain the Plan for any given length of time. An Employer may, in its sole and absolute discretion, discontinue such contributions or terminate the Plan with respect to its Employees, in accordance with the provisions of the Plan, at any time with no liability whatsoever for such discontinuance or termination. If the Plan is terminated or partially terminated, or if contributions of an Employer are completely dis- continued, the rights of all affected Participants in their Accrued Benefits shall thereupon become nonforfeitable, notwithstanding any other provisions of the Plan. However, the Trust shall continue until all benefits have been distributed in accordance with the Plan. C. Nonreversion 1. Except as provided in this subparagraph C-1, the assets of the Plan shall never inure to the benefit of an Employer; such assets shall be held for the exclusive purpose of providing benefits to Participants and their Beneficiaries and for defraying the reasonable administrative expenses of the Plan. (a) If an Employer contribution is made by virtue of a mistake of fact, this Paragraph C shall not prohibit the return of such contribution to the Employer within one (1) year after the payment of the contribution. (b) If an Employer contribution is made to the Plan which does not initially qualify under Section 401(a) of the Code, or any successor pro- vision thereto, then the contribution shall be returned to the Employer within one (1) year after the date of denial of qualification of the Plan, pro- vided that an application for determination is made by the time prescribed by law for filing the Employer's return for the taxable year in which the Plan was adopted, or such later date as the Secretary of the Treasury may prescribe. - .5 1 - 11. Calculate benefits and. if necessary, purchase annuity contracts which satisfy the requirements of Sections 401(a)(9), 401(a)(11) and 417 of the -- Code: 12. Orient new Participants and advise Participants of their rights and options under the Plan; 13. Collect contributions and apply contributions as provided in the Plan; 14. Prepare reports concerning Participants' benefits; 15. Process claims; and 16. Make recommendations to the Board of Directors of the Company on Plan administration. The Administrator (and those to whom it has delegated its authority) shall have vested in it under the terms of this Plan full discretionary and final authority when exercising its duties hereunder. J. Claims Procedures 1. Filing of Claim. A Participant or Beneficiary who believes he is enti- tled to a benefit which he has not received may file a claim in writing with his Employer. The Employer may require a claimant to submit additional informa- tion, if necessary to process the claim. The Company or its delegate shall review the claim and render its decision within ninety (90) days from the date the claim is filed (or the requested additional information is submitted, if later), unless special circumstances require an extension of time for processing the claim. If such an extension is required, written notice of the extension shall be furnished the claimant within the initial ninety (90) day period. The notice shall indicate the special circumstances requiring the extension and the date by which the Company expects to reach a decision on the claim. In no event shall the extension exceed a period of ninety (90) days from the end of the initial period. 2. Notice of Claim Denied. If the Company denies a claim, in whole or in part, it shall provide the claimant with written notice of the denial within the period specified in subparagraph 1. The notice shall be written in language calcu- lated to be understood by the claimant, and shall include the following informa- tion: (a) The specific reason for such denial; (b) Specific reference to pertinent Plan provisions upon which the denial is based; (c) A description of any additional material or information which may be needed to clarify or perfect the request, and an explanation of why such information is required: and (d) An explanation of the Plan's review procedure with respect to the denial of benefits. 3. Review Procedure. Anv claimant whose claim has been denied. in whole or in part. shall follow those review procedures as set forth herein. "` ARTICLE X PLAN FIDUCIARIES AND ADINIINISTRATION A. Named Fiduciaries The authority to control and manage the operation and administration of the Plan is vested in the named fiduciaries specified herein. Each named fiduciary shall be respon- sible solely for the tasks allocated to it. No fiduciary shall have any liability for a breach of fiduciary responsibility of another fiduciary with respect to the Plan and Trust, unless it participates knowingly in the breach; has actual knowledge of the breach and fails to take reasonable remedial action to remedy said breach; or, through its negligence in per- forming its own specific fiduciary responsibilities, which give rise to its status as a fiduci- ary, it has caused another fiduciary to commit a breach of fiduciary responsibility. B. Fiduciary Standard Each named fiduciary and every other fiduciary under the Plan shall discharge its duties with respect to the Plan solely in the interests of the Participants and Beneficiaries and; 1. For the exclusive purpose of providing benefits to Participants and their Beneficiaries and defraying reasonable expenses of administering the Plan; 2. With the care, skill, prudence and diligence, under the circumstances then prevailing, that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; 3. In accordance with the documents and instruments governing the Plan, insofar as these are consistent with the provisions of Title I of ERISA. C. Multiple Duties and Advisors Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan. A named fiduciary, or a fiduciary designated by a named fiduci- ary in accordance with the terms of the Plan, may employ one or more persons to render advice with regard to any responsibilities such fiduciary has under the Plan. D. Allocation and Delegation of Fiduciary Duties Each named fiduciary may allocate its fiduciary duties among its members or may delegate its responsibilities to persons who are not named fiduciaries with respect to the specific responsibility delegated. Any such allocation or delegation shall be in writing and shall be made a permanent part ofthe records of the named fiduciary. Such alloca- tion or delegation shall be reviewed periodically by the named fiduciary and shall be ter- minable upon such notice as the named fiduciary, in its sole discretion, deems reasonable and prudent under the circumstances. An action by the Board of Directors of the Com- pany allocating or delegating its named fiduciary responsibilities shall be evidenced by a duly adopted resolution of the Board of Directors of the Company. - 47 - on which such transferred distribution can reasonably be segregated from the Employer's general assets, but in any event, within thirty (30) days of receipt of the distribution by the Employer. Transfers pursuant to this subparagraph may be made regardless of whether the Eligible Employee has satisfied the service requirements of Paragraph A of Article II. 2. Transfers From Individual Retirement Accounts. An Eligible Employee who receives a distribution from an individual retirement account described in Section 408(a) of the Code or an individual retirement annuity described in Section 408(b) of the Code which constitutes the entire amount of such account or annuity (including earnings thereon), and no portion of which is attributable to any source other than: (a) Rollovers before January 1, 1993. A qualified total distribu- tion, as defined in Section 402(a)(5)(E)(i) of the Code in effect on that date: (b) Rollovers on or after January 1. 1993. An Eligible Rollover Distribution, as defined in subparagraph P-4(a) of Article III. from a qualified employees' trust described in subparagraph I-1, may, in accor- dance with procedures approved by the Company, transfer the entire amount of such distribution to the Trustee, within sixty (60) days after receiving the distri- bution. If the Employee transfers the distribution to the Employer, rather than to the Trustee, the Employer shall pay the transferred distribution to the Trustee on the earliest date on which such transferred distribution can reasonably be segre- gated from the Employer's general assets, but in any event, within thirty (30) days of receipt of the distribution by the Employer. Transfers pursuant to this subpar- agraph may be made regardless of whether the Eligible Employee has satisfied the service requirements of Paragraph A of Article II. 3. Administration. The Company shall develop such procedures, including procedures for obtaining information from an Eligible Employee desiring to make such a transfer, as it deems necessary or desirable to enable it to deter- mine that the proposed transfer will meet the requirements of this Paragraph I. Upon approval by the Company, the amount transferred shall be deposited in the Trust'Fund and shall be credited to a Rollover Account. The Rollover Account shall be one hundred percent (100°%) vested in the Eligible Employee and shall share in the allocation of gains or losses in the Trust Fund pursuant to Para- graph C of Article III. Upon termination of employment, the total amount of the Eligible Employee's Rollover Account shall be distributed in accordance with Par- agraph L of Article III. In the case of an Eligible Employee who has not com- pleted the service requirements of Paragraph A of Article II at the date of the transfer, the Rollover Account shall represent the Eligible Employee's sole interest in the Plan until he becomes a Participant. ARTICLE VII BENEFICIARIES A. Designation Subject to the qualified pre-retirement survivor annuity and qualified joint and survivor annuity requirements set forth in Article III, a Participant shall have the right to designate, on forms provided by the Employer, a Beneficiary or Beneficiaries to receive the benefits herein provided in the event of his death and to revoke such designation or to substitute another Beneficiary or Beneficiaries at any time. B. Absence of Valid Designation of Beneficiaries If, upon the death of a Participant, former Participant or Beneficiary, there is no valid designation of Beneficiary on file with the Employer, the following shall be desig- nated as the Beneficiary or Beneficiaries, in order of priority: 1. The surviving spouse; — Surviving children, including adopted children, in equal shares; 3. Surviving parents, in equal shares; 4. The Participant's estate; 5. The Beneficiary's estate; 6. The trustee(s) of the trust(s) named as beneficiary of the residue of the Participant's probate estate; 7. The trustee(s) of the trust(s) named as beneficiary of the residue of the Beneficiary's probate estate. The determination of the Company as to which persons, if any, qualify within the cate- gories listed above shall be final and conclusive upon all persons- , - 42 - C. Rehired Participants Notwithstanding anything to the contrary contained in this Article V, a Partici- pant's benefit shall be offset by the Actuarial Equivalent of the amount of any distribu- tion he has previously received. 40 - ARTICLE V VESTING OF EMPLOYER FUNDED BENEFITS A. Vesting 1. The Participant's Accrued Benefit derived from Employer contribu- tions and the Participant's Rollover Account shall vest in accordance with this Article V; provided, however, if the Participant does not complete at least one Hour of Service on or after the first day of the Plan Year beginning on or after January 1, 1989, such Participant shall vest in his Accrued Benefit derived from Employer contributions pursuant to the vesting schedule(s) under the plan which was in effect immediately prior to this restatement. (a) A Participant's total Accrued Benefit derived from Employer contributions shall be vested in him upon attainment of Normal Retirement Age, Early Retirement Date, or on earlier termination of employment by reason of Total Disability, or by death. However, if the Participant does not complete at least one Hour of Service on or after the first day of the Plan Year beginning on or after January 1, 1989, such Participant shall vest in his Accrued Benefit derived from Employer contributions pursuant to the vesting schedule(s) under the plan which was in effect immediately prior to this restatement. (b) The amount credited to a Participant's Rollover Account, if any, shall be fully vested in him at all times. 2. In the event this Plan is a Top-Heavy Plan, then (except as provided in subparagraph 1), a Participant's Accrued Benefit derived from Employer contri- butions shall vest in accordance with the following schedule: Completed Vested Years of Service Percentage Less than 2 0 2 20 3 40 4 60 5 80 6 or more 100 3. Except as provided in subparagraphs 1 and 2, a Participant's Accrued Benefit derived from Employer contributions shall vest in accordance with the following schedule: - :38 - ARTICLE XIV MISCELLANEOUS A. Irrevocabilitv Except for such amendments as are permitted under Article XI hereof, the trust created under this Agreement is irrevocable.. Nevertheless, the Company may at any time in its sole and absolute discretion discontinue making contributions to the Trust or terminate the Trust in accordance with the provisions of the Plan. B. Instructions In addition to instructions relating to valuation, at any time the Trustee may, by written request, seek instructions from the Company on any matter. If at any time the Company should fail to give directions to the Trustee, the Trustee may act, and shall be protected in acting without such directions, in such manner as in its discretion seems appropriate and advisable under the circumstances for carrying out the purposes of this Trust. Notwithstanding any other provision hereof, there may be transferred to the Trustee, subject to the approval of the Company and the Trustee and to a prior determi- nation of the Internal Revenue Service that such transfer will not affect the qualified status of the Plan, all or any of the assets held (whether by a trustee, custodian or other- wise) on behalf of any other plan which satisfied the applicable requirements of Sec- tion 401(a) of the Code, and which other plan is maintained for the benefit of any persons who are or are about to become Participants of this Plan. C. Prohibition on Alienation No benefits under this Agreement shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge. encumbrance, charge, garnishment, execu- tion or levy of any kind, either voluntary or involuntary; any attempt to so anticipate, alienate, sell, transfer. assign, pledge, encumber, charge or otherwise dispose of any right to entitlements payable hereunder shall be void; nor shall any such benefits, in any manner, be subject to any liability in connection with the debts, contracts, liabilities or torts of the person entitled to such benefits. D. Gender and Number As used in this Agreement, the masculine, feminine or neuter gender, the singular or plural number and the use of the collective or the separate shall each be deemed to include the others whenever the context so indicates. E. Applicable Law This Agreement as amended from time to time, shall be administered, construed and enforced according to the laws of the State of California and in courts situated in that State, except as such law may be preempted by the Federal laws. If any provision of this Agreement is held invalid or unenforceable, the invalidity or unenforceability shall not affect any other provisions, and the agreement shall be construed and enforced as if the provision had not been included. . a Code, and welfare benefit funds maintained by the Employer as of the end of the Plan Year under consideration, and the denominator being the sum of the lesser of the following amounts determined for such Plan Year and for each prior year of service with the Employer: (1) The product of 1.25 (1.0 in the event this Plan is a Top-Heavy Plan) multiplied by the Defined Contribution Dollar Limitation, or (2) The product of 1.4 multiplied by an amount equal to 2557c of the Participant's Total Compensation. Notwithstanding the above, the transition rules under Section 415(e) of the Code are hereby incorporated by reference for Participants who were members as of the first day of the first Plan Year begin- ning after December 31, 1986, in one or more defined contribution plans maintained by the Employer which were in existence on May 6, 1986. (b) At the election of the Company, in applying subpara- graph 1(a)(ii) with respect to any year ending after December 31, 1982, the amount taken into account in determining the denominator of the defined contribution plan fraction with respect to each Participant for all years ending before January 1, 1983 shall be an amount equal to the product of (i) and (ii) below: (i) The amount determined as the denominator of the defined contribution plan fraction under the provisions of Sec- tion 415 of the Code, which provisions were in effect for the Plan Year ending in 1982, and which amount is determined in accordance with subparagraph 1(a)(ii) for the year ending in 1982, multiplied by (ii) A fraction in which the numerator is the lesser of (1) $51,875 ($41,500 in the event this Plan is a Top-Heavy Plan) or (2) 1.4 multiplied by 25% of the Participant's Total Compensa- tion for the Plan Year ending in 1981 and the denominator is the lesser of (1) $41,500 or (2) 25% of the Participant's Total Compensa- tion for the Plan Year ending in 1981. ?. For purposes of the limitations contained in this Article IV, all defined contribution plans of the Employer (whether or not terminated) shall be treated as one defined contribution plan. Similarly, all defined benefit plans of the Employer (whether or not terminated) shall be treated as one defined benefit plan for these purposes. 3. Notwithstanding anything to the contrary contained in this Para- graph C, in the event this Plan is a Top-Heavy Plan but would not be a Top- Heavy Plan if "90 percent" were substituted for "60 percent" each place it appears in Paragraph AO of Article I, and, further, if the minimum benefit percentages described in subparagraphs E-1 and of Article III are three percent (3%) and thirty percent (30%), respectively (or if, as contemplated by subparagraph E-2 of Article III, increased benefits or contributions necessary to satisfy the requirements of Section 416(h)(2) of the Code are provided in another plan or plans maintained - by the Company), then the special provisions for Top-Heavy Plans contained in subparagraphs C-l(a)(i)(1), (a)(ii)(1) and (b)(ii) shall not apply. - 36 - (g) "Employer" includes a corporation which is a member of a controlled group of corporations or a trade or business which is under com- mon control as defined in Section 414(b) or (c) of the Code (as modified by Section 41.5(h)); a service organization which is a member of an affiliated service group which includes an Employer adopting this Plan, as defined in Section 41.1(m) of the Code; a leasing organization with respect to which an Employer adopting this Plan is a "recipient" within the meaning of Sec- tion 414(n) of the Code; and any other entity required to be aggregated with the Employer pursuant to regulations under Section 414(o) of the Code; (h) "Projected Annual Benefit" means the Annual Benefit a Par- ticipant would receive, assuming the Participant continued his employment and continued receiving his current Total Compensation in each subsequent Plan Year until the later of: (i) the Participant's Normal Retirement Age or (ii) the Participant's current age, and further assuming that all relevant factors used to determine benefits under the plan for the current Plan Year remained constant for all future years; (i) "Social Security Retirement Age" means the age used as the retirement age for the Participant as defined in Paragraph of Article I, except that such Paragraph shall be applied without regard to the age increase factor, and as if the early retirement age under Section 216(1)(2) of the Social Security Act were sixty-two (62); and (j) "Year of Participation" means any Plan Year in which a Par- ticipant both (i) receives Credited Service (as defined in Paragraph K of . Article I) for the Plan Year and (ii) is treated as a Participant or an inac- tive Participant (as defined in Paragraph F of Article II) for at least one day of the Plan Year. A Participant who is permanently and totally dis- abled within the meaning of Section 415(c)(3)(C)(i) of the Code for a Plan Year shall receive a Year of Participation with respect to that Plan Year. No more than one (1) Year of Participation shall be credited for any twelve (12) consecutive month period. For purposes of this subpara- graph A-2(j), a Suspended Participant (as defined in Paragraph E of Arti- cle II) shall not be considered a Participant unless such Suspended Partici- pant was treated as an Eligible Employee on at least one day of the Plan Year. 3. The Employer elects to use the Plan Year as the limitation year for purposes of Section 415 of the Code. B. Application of Annual Additions 1. Any Nondeductible Voluntary Contributions made by a Participant pursuant to the provisions contained in Article VIII shall be considered as a defined contribution plan and, further, shall be counted as Annual Additions. A Participant's Annual Additions for any Plan Year shall not exceed the lesser of the Defined Contribution Dollar Limitation for the Plan Year or twenty-five per- cent (25%) of the Participant's Total Compensation for the Plan Year. The per- centage limitation of the preceding sentence shall not apply to any contribution for medical benefits (within the meaning of Section 419A(f)(2) of the Code after separation from service which is otherwise treated as an Annual Addition, or to any amount otherwise treated as an Annual Addition under Section 415(1)(1) of the Code. - :34 - (d) If a Participant has completed less than ten (10) Years of Par- ticipation. the Participant's Annual Benefit shall not exceed the Defined Benefit Dollar Limitation as adjusted by multiplying such amount by a fraction not to exceed one (1), the numerator of which is the Participant's number of Years (or part thereof) of Participation in the Plan, and the denominator of which is ten (10). In addition, if the Participant has com- pleted less than ten (10) Years of Service with the Employer, the percentage limitation of subparagraph A-1 hereof and the minimum benefit exception of subparagraph A-I(e) below shall be adjusted by multiplying such amount by a fraction not to exceed one (1), the numerator of which is the Partici- pant's Years of Service (or part thereof), and the denominator of which is ten (10). In no event, however, shall the provisions of this subpara- graph A-1(d) reduce the percentage limitation of Section 415(b)(1) of the Code or the minimum Annual Benefit permitted by subparagraph A-1(e) hereof below one-tenth (1/10th) of the applicable limitation as determined without regard to the limitations provided by this subparagraph A-1(d). To the extent provided by the Secretary of the Treasury, the limitations provided by this subparagraph A-1(d) shall be applied separately with respect to each change in the benefit structure of the Plan. (e) Notwithstanding the limitations set forth in this Paragraph A (other than the limitation set forth in the second sentence of subpara- graph A-1(d)), the Annual Benefit payable to a Participant shall be deemed not to exceed the limitations set forth therein if the Annual Benefit payable under this Plan and under all other defined benefit plans of the Employer does not exceed ten thousand dollars ($10,000) for the Plan Year or for any prior Plan Year, and if the Employer has not at any time maintained a '' defined contribution plan or, for amounts allocated after March 31, 1984, a welfare benefit fund as defined in Section 419(e) of the Code, or an individual medical account as defined in Section 415(1)(2) of the Code, which is part of a pension or annuity plan of the Employer, in which the Participant participated. (f) In the case of a Participant employed after attainment of Normal Retirement Age who continues to accrue benefits under the Plan and to whom benefit payments commence as of his Normal Retirement Date, the limitations set forth in this Article shall be first calculated as of the commencement of benefit payments, and shall be recalculated each year as described in Paragraph H of Article III. 2. For purposes of this Article IV, the term: (a) "Annual Benefit" means the Participant's annual benefit pay- able in the form of a straight life annuity under all qualified defined benefit plans maintained by an Employer, excluding any benefits attributable to the Participant's contributions or rollover contributions, if any, to the plans or to any assets transferred from a qualified plan that was not main- tained by an Employer. Except as provided below, a benefit payable in a form other than a straight life annuity must be adjusted to an actuarial equivalent straight life annuity, utilizing as the interest assumption the greater of (i) the interest rate specified in Paragraph B of Article I, or (ii) five percent (5 0) per annum. No actuarial adjustment to the benefit is required for (i) the value of a qualified joint and survivor annuity, (ii) the may request additional information and the procedures for requesting such additional information as set forth in the subparagraph below. Such expla- nation shall be furnished to the Participant in the manner set forth in sub- paragraph 0-1 of this Article III. (e) The Plan Administrator shall furnish to a Participant, upon a timely written request, a written explanation in nontechnical language of the terms and conditions of the qualified joint and survivor annuity and the financial effect upon the particular Participant's annuity of making an elec- tion (in terms of dollars per annuity payment). Such additional informa- tion shall be personally delivered or mailed to the Participant within thirty (30) days from the date of request. (f) For purposes of this subparagraph R-5 a Participant's "quali- fied early retirement age" is the latest of: (i) The earliest date under the Plan on which the Partici- pant may elect to receive retirement benefits; (ii) The first-day of the one hundred twentieth (120th) month beginning before the Participant reaches Normal Retirement Age; or (iii) The date the Eligible Employee becomes a Participant. (g) Any election made under this subparagraph R-5 may be revoked in writing during the specified election period. 6. Determination of Qualified Domestic Relations Order(QDRO). A domestic relations order shall specifically state all of the following in order to be deemed a Qualified Domestic Relations Order("QDRO"): (a)the name and last known mailing address (if any)of the Participant and of each alternate payee covered by the domestic relations order; (b)the dollar amount or percentage of the Participant's benefit to be paid by the Plan to each alternate payee, or the manner in which the amount or percentage will be determined; (c)the number of payments or period for which the domestic relations order applies; and(d)the specific plan to which the domestic relations order applies. A domestic relations order shall not be deemed a QDRO if it requires the Plan to provide: (e) any type or form of benefit, or any option not already provided for in the Plan; (f) increased benefits, or benefits in excess of the Participant's vested rights; (g)payment of a benefit earlier that allowed by the Plan's earliest retirement provisions; or(h)payment of benefits to an alternate payee which are required to be paid to another alternate payee under another QDRO. Promptly, upon receipt of a domestic relations order, which may or may not be"Qualified" the Plan Administrator shall notify the Participant and any alternate payee(s)of such receipt. The Plan Administrator shall then forward the domestic relations order to the Plan's third-party administrator to determine whether or not the domestic relations order is "qualified" as defined in Code Section 414(p). Within a reasonable time after receipt of the domestic relations order,not to exceed 60 days,the Plan's third-party administrator shall make a determination as to its "qualified" status and the Participant and any altemate payee(s) shall be promptly notified in writing of the determination. If the "qualified" status of the domestic relations order is in question,there will be delay in any payout to any payee until the status is resolved. Once an order is deemed a QDRO, the Plan Administrator shall pay to the alternate payee(s) all the amounts due under the QDRO. This Article will allow payouts to alternate payee(s) and not the Participant. 30 - visions of subparagraph R-5 of this Article III apply if (iv) he was credited with at least one (1) Hour of Service or paid leave on or after September 2, 1974, but (v) he was not credited with such service or leave after the first day of the first Plan Year beginning on or after January 1, 1976. Such a Participant shall be given notice of his right to elect to have the automatic joint and survivor annuity apply at the time the Participant applies for benefit payments. 3. Any Participant (i) who was not credited with at least one (1) Hour of Service or paid leave on or after August 23, 1984, (ii) whose Annuity Starting Date had not occurred on or before August 23, 1984, and (iii) who was alive on August 23, 1984, may elect to have his benefits paid in the form of a qualified pre-retirement survivor annuity as provided in subparagraph K-2 of this Article III if (iv) he was credited with at least one (1) Hour of Service or paid leave in any Plan Year beginning on or after January 1, 1976, (v) he has completed at least ten (10) Years of Service under the Plan, and (vi) he has a nonforfeitable right to all (or any portion) of his Accrued Benefit derived from Employer contributions. 4. The Participant's election under subparagraphs R-2 and R-3 above may be made between August 23, 1984 and the Participant's Annuity Starting Date or death, whichever is earlier. 5. Anv Participant who has made an election pursuant to subpara- graph R-2 above, and any Participant who does not elect pursuant to subpara- graph R-3 above to have the provisions of Paragraphs K and L of this Article III apply, or is ineligible to elect under subparagraph R-3 only because he does not have at least ten (10) Years of Service when he separated from service, shall have his benefits distributed in accordance with all of the following requirements: (a) If benefits become payable in the form of a life annuity to a Participant (with a spouse as defined in the Plan as in effect immediately prior to August 23, 1984) who: (i) Begins to receive payments under the Plan on or after Normal Retirement Age; or (ii) Dies on or after attaining Normal Retirement Age while employed by an Employer; or (iii) Begins to receive payments on or after qualified early retirement age (as herein defined) if benefits are payable under the prior Plan before Normal Retirement Age; or (iv) Separates from service on or after attaining Normal Retirement Age (or the qualified early retirement age) and after sat- isfying the eligibility requirements for benefits under the Plan but dies before beginning to receive benefits; then such benefits shall be received in the form of an annuity for the life of the Participant with a fifty percent (50%) survivor annuity for the life of such spouse which is the Actuarial Equivalent of the life annuity otherwise payable to the Participant. Notwithstanding the above, a Participant may elect in writing to receive all or a part of his benefit in a form other than the qualified joint and survivor annuity during a period commencing upon receipt of a written explanation of the joint and survivor annuity and end- ing on the date benefits are to commence, unless the prior Plan provided • 08 - 3. The Company shall treat the election by a Participant or Beneficiary to make or not make a direct rollover with respect to one payment in a series of periodic payments as applicable to all subsequent payments in the series unless the Participant or Beneficiary subsequently changes the election. 4. For purposes of this Paragraph P and subparagraph N-1 of this Arti- cle III, the following definitions shall apply: (a) "Eligible Rollover Distribution" shall mean any distribution of all or any portion of the balance to the credit of the Participant or Bene- ficiary, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Participant or Beneficiary, or the joint lives (or joint life expectancies) of the Participant or Beneficiary and such Participant's or Beneficiary's designated beneficiary, or for a specified period of ten years or more: any distribution to the extent such distribution is required under Sec- tion 401(a)(9) of the Code; and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). (b) "Eligible Retirement Plan" shall mean an individual retire- ment account described in Section 408(a) of the Code, an individual retire- ment annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Participant's or Beneficiary's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement account or individual retirement annuity. (c) "Beneficiary" shall include a Participant's former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the Code, with respect to the interest of the former spouse. Q. Determination of Accrued Benefit Fresh-Start Rules This Paragraph Q shall apply to all Participants who have accrued benefits as of the Fresh-Start Date and are credited with at least one Hour of Service after that date. 1. Definitions. For purposes of this Paragraph Q, the terms Normal Form, Normal Retirement Age and Plan shall be construed under the provisions of the Plan in effect on the latest Fresh-Start Date if such term is to be applied as of such latest Fresh-Start Date. Further, the following definitions shall apply unless indicated otherwise: (a) "Fresh-Start Date" shall mean the last day of the Plan Year preceding the Plan Year for which any amendment of the Plan that directly or indirectly affects the amount of a Participant's benefit determined under the current benefit formula (such as an amendment to the definition of Compensation used in the current benefit formula or a change in the Nor- mal Retirement Age) is made effective. (b) "Frozen Accrued Benefit" shall mean the amount of the Par- ticipant's Accrued Benefit as of the latest Fresh-Start Date determined in accordance with the provisions of subparagraph Q-3 of this Article III. receive a Plan distribution as soon as practicable after the Participant's death. Notwithstanding the foregoing but subject to subparagraph 0-10 below, if the Beneficiary is the Participant's Eligible Spouse, the Beneficiary shall not receive a Plan distribution before the date the Participant attained or would have attained Normal Retirement Age if the present value of the Participant's vested Accrued Benefit exceeds $3,500 at the time of distribution (or, if the present value of the Participant's vested Accrued Benefit exceeded $3,500 prior to such distribution, is less than or equal to $3,500 for distributions made after the initial distribution date). When determining whether the present value of the Participant's vested Accrued Benefit exceeded $3,500 for distributions made in Plan Years commencing before January 1, 1939, accumulated employee deductible contributions described in Section 72(o) of the Code shall not be included. For purposes of this subpara- graph 0-9, the determination whether the Actuarial Equivalent present value of the Participant's vested Accrued Benefit is equal to or less than $3,500 shall be made utilizing as the interest assumption the lesser of (a) the interest rate speci- fied in Paragraph B of Article I or (b) the Applicable Interest Rate. 10. Notwithstanding any provision of this Paragraph 0 to the contrary, any distribution to a Participant's Beneficiary must comply with the following requirements: (a) If distributions to a Participant have begun and the Partici- pant dies before his entire interest has been distributed to him, the remain- ing portion shall be distributed at least as rapidly as under the distribution method being utilized on the date of his death. (b) Except as provided in subparagraph 0-10(c) below, in no event shall distributions be made later than December 31 of the calendar year which contains the fifth anniversary of the Participant's death unless the Participant's designated Beneficiary elects to receive payments in substantially equal installments at least annually for a period not exceeding the Beneficiary's life expectancy, in which case the first installment must be made by December 31 of the calendar year immediately following the calen- dar year of the Participant's death. Any such election shall be made prior to the date the distribution is scheduled to commence. (c) An Eligible Spouse who elects to receive installment payments as set forth in subparagraph 0-10(b) above, over such Eligible Spouse's life expectancy (which may be redetermined no more frequently than annually) may defer commencement of payments until December 31 of the calendar year the deceased Participant would have attained age 70-1 f 2. Such an election shall be made by the earlier of (1) the date the distribution is required to commence under the preceding sentence, or (2) December 31 of the calendar year which contains the fifth anniversary of the Participant's death. An Eligible Spouse who elects to have her life expectancy redeter- mined must do so no later than the time distributions are required to com- mence under this subparagraph, at which time the election will be irrevoca- ble and shall apply to all subsequent years; provided, however, that if no election is made by the time distribution is required to commence, life expectancy may not be redetermined. If the Eligible Spouse elects to defer such distribution in accordance with this subparagraph and the Eligible Spouse dies leaving an unpaid balance, the balance shall be distributed no later than December 31 of the calendar year which contains the fifth anni- _ 24 _ posting, or by placing it in an Employer publication which is distributed in such a manner as to be reasonably available to such Participant. If the notice is to be posted, it shall be posted at the location within the Participant's principal place of employment which is customarily used for employer notices to employees with regard to labor-management relation matters. Notice under this Paragraph 0 is not required if the present value of the Participant's vested Accrued Benefit is less than or equal to $3,500. 2. Upon receipt of the general notice of distribution, a Participant may consent in writing to receive a distribution of his vested Accrued Benefit to be dis- tributed at the time and in the manner set forth in this Article III. The Partici- pant's consent to receive such distribution prior to his Normal Retirement Age must be accompanied by the written consent of the Participant's Eligible Spouse, if married, which is comparable to the Spousal Consent requirements in Para- graph AN of Article I, unless the distribution is to be made in the form of a quali- fied joint and survivor annuity. 3. Subject to the maximum deferral requirements of subparagraphs 0-5 and 0-6 of this Article III, a Participant may elect to defer receipt of a Plan distri- bution, provided that such election is in writing, describes the form of benefit pay- ment, indicates the date the distribution is to commence, and is signed by the Par- ticipant. To the extent not inconsistent with subparagraph 0-4 below, in the event that the Participant does not elect to defer receipt of his distribution, pay- ment of a Participant's Accrued Benefit shall begin not later than the 60th day after the latest of the close of the Plan Year in which: (a) The Participant attains the earlier of age sixty-five (65) or ........... Normal Retirement Age; (b) Occurs the tenth (loth) anniversary of the year in which the Participant entered the Plan; or (c) The Participant terminates employment with the Employer. 4. In the event that the Participant has terminated employment and the Participant (and the Eligible Spouse, if applicable) neither consents to receive a Plan distribution nor elects to defer receipt of a Plan distribution, the Actuarial Equivalent present value of the Participant's vested Accrued Benefit shall be dis- tributed in the form of a qualified joint and survivor annuity upon the Partici- pant's Normal Retirement Date (or, such later date of termination), but in no event before the date the Participant attains Normal Retirement Age, if the Actu- arial Equivalent present value of such vested Accrued Benefit derived from Employer and Employee contributions (including rollovers) exceeds $3,500 (or, if the present value of such vested Accrued Benefit exceeded $3,500 prior to such distribution, is less than or equal to $3,500 for distributions made after the initial distribution date). When determining whether the present value of such vested Accrued Benefit exceeds $3,500 for distributions made in Plan Years commencing before January 1, 1989, accumulated deductible employee contributions described in Section 72(o) of the Code shall not be included. For purposes of this subpara- graph 0-4. the determination whether the Actuarial Equivalent present value of the Participant's vested Accrued Benefit is equal to or less than $3,500 shall be made utilizing as the interest assumption the lesser of (a) the interest rate speci- Red in Paragraph B of Article I or (b) the Applicable Interest Rate. The Company may distribute a benefit in the form of a qualified joint and survivor annuity to N. Optional Forms of Benefit 1. Effective for distributions made after December 31, 1992, a Partici- pant or Beneficiary who is entitled to receive an Eligible Rollover Distribution may direct the Company to pay all or a portion of such distribution directly to an Eli- gible Retirement Plan, in lieu of paying such amount to the Participant or Benefi- ciary, pursuant to Paragraph P of this Article III. Except as provided in Para- graph L, a Participant may elect to receive his retirement benefits in any form, including a lump-sum distribution, provided that distributions, if not made in a lump-sum, may be made only over one of the following periods (or a combination thereof): (a) The life of the Participant; (b) The life of the Participant and his Beneficiary; (c) A period certain not extending beyond the life expectancy of the Participant; or (d) A period certain not extending beyond the joint and last sur- vivor expectancy of the Participant and his designated Beneficiary. An election to receive a Plan distribution under any method set forth in this Para- graph N for an Annuity Starting Date which occurs on or after the Participant's Normal Retirement Age shall apply to all subsequent distributions made on behalf of the Participant. The form of benefit selected shall be the Actuarial Equivalent of the Normal Form of benefit. 2. The amount to be distributed each year pursuant to any period cer- tain form of benefit shall be at least an amount equal to the amount required under Treasury Regulation Section 1.401(a)(9)-2. For purposes of subpara- graph N-1 above, a Participant may elect (other than in the case of a life annuity) to have the life expectancy of either he or his spouse. or both. redetermined: pro- vided, however, that if a timely election is not made, such redetermination shall not be made. A Participant's election to redetermine life expectancy shall be made no later than the time distributions are required to commence under subpar- agraph 0-5 of this Article III, shall be irrevocable, shall specify the frequency with which redeterminations are to be made (not more frequently than annually), and shall require that such redeterminations be made from that date forward. 3. If the Participant's Eligible Spouse is not the designated Beneficiary, the method of distribution selected must assure that at least fifty percent (50%) of the present value of the amount available for distribution is paid within the Par- ticipant's life expectancy; and payments under such distribution method shall comply with Treasury Regulation Section 1.401(a)(9)-2 Q&A-6(b). 4. Notwithstanding anything to the contrary in this Article III. if a Participant ceases to be an Employee for any reason and the Actuarial Equivalent present value of his vested Accrued Benefit derived from Employer and Employee contributions (including rollovers) is equal to or less than $3.500 on the date distributions commence, the Company may in its sole discretion pay as soon as practicable to the Participant or his Beneficiary, as the case may be, the Actuarial Equivalent present value of his vested Accrued Benefit in a lump-sum. Effective January 1, 1989, the Company shall pay as soon as practicable to the Participant or his Beneficiary, as the case may be, the Actuarial Equivalent present value of annuity" shall mean an annuity for the life of the surviving spouse the Actuarial Equivalent of which is fifty percent (50 c) of such account. 3. Within the applicable notice period, each Participant (other than nonvested Participants who are no longer employed by the Employer) shall be fur- nished with a written "notice of the qualified pre-retirement survivor annuity" in such terms and in such manner as would be comparable to the "general notice of distribution" provided pursuant to subparagraph 0-1 of this Article III. Effective as of the first day of the Plan Year beginning after December 31, 1988, the notice must be accompanied by a general description of the eligibility conditions, relative values, and other material features of each method of distribution under Para- graph N of this Article III. The "applicable notice period" means, with respect to each Participant, whichever of the following periods ends last: (1) the period beginning with the first day of the Plan Year in which the Participant attains age 32 and ending with the close of the Plan Year preceding the Plan Year in which the Participant attains age 35; or (2) the period commencing one ,year before and ending one year after the individual becomes a Participant. In addi- tion, the applicable notice period for a Participant who separates from service before attaining age 35 shall be the period beginning one'year before and ending one year after the Participant's separation from service. Such notice shall be given to the Participant in person, by mailing, by posting, or by placing it in an Employer publication which is distributed in such a manner as to be reasonably available to such Participant. If the explanation is to be posted, it shall be posted at the location within the Participant's principal place of employment which is customarily used for employer notices to employees with regard to labor- management relations matters. 4. A Participant may elect to waive a qualified pre-retirement survivor annuity, revoke such election, and elect again to waive the qualified pre-retirement survivor annuity at any time and anv number of times during the applicable elec- tion period. All such elections and revocations shall be in writing. Any election to waive a qualified pre-retirement survivor annuity must be accompanied by (1) the designation of a specific nonspouse beneficiary (including any class of beneficiaries or any contingent beneficiaries) who will receive the benefit upon the Participant's death, if applicable, and (2) a Spousal Consent to the extent required under Para- graph AN of Article I. The "applicable election period" for the waiver of the qual- ified pre-retirement survivor annuity shall commence once the Participant receives a written explanation of such annuity as set forth in subparagraph K-3 above or on the first day of the Plan Year in which the Participant attains age 35, which- ever occurs earlier. Any waiver of the qualified pre-retirement survivor annuity made prior to the first day of the Plan Year in which the Participant attained age 35 shall become invalid as of such date and a new waiver must be issued in order for a waiver of a qualified pre-retirement survivor annuity to be effective. 5. If a Participant dies with an effective waiver of the qualified pre- retirement survivor annuity in force or the Eligible Spouse so elects after the Par- ticipant's death, his benefit shall be distributed in the manner specified in Para- graph I of this Article III. If such spouse requests that benefits be paid in a form other than a survivor annuity, the Company shall provide to the spouse, within a reasonable amount of time after such request, a written explanation in nontechni- cal language of the survivor annuity and any other form of payment which may be selected. This explanation shall state the financial effect (in terms of dollars) of each form of payment. - N - H. Delaved Retirement Benefit If a Participant continues to be employed (or is reemployed by the Employer) after attaining Normal Retirement Age in "section 203(a)(3)(B) service" under Department of Labor Regulation 29 CFR Section 2530.203-3, payments shall not commence (or, in the case of reemployment, shall be suspended) until the Participant's delayed retirement date. Such Participant, upon Normal Retirement on a delayed retirement date, shall be entitled to receive a Delayed Retirement Benefit which shall be equal to the greater of: 1. The Actuarial Equivalent of the Normal Retirement Benefit the Par- ticipant would have received at his Normal Retirement Date; or 2. The Normal Retirement Benefit based on years of Credited Service and Average Compensation through the Participant's actual retirement date. The Plan shall give notice to such Participant as required under Department of Labor Regulation 29 CFR Section 2530.203-3(b)(4) no later than the end of the first calendar month or payroll period in which the Plan delays the commencement of payments (or suspends payments due to reemployment). Notwithstanding the foregoing, if a Partici- pant continues to be employed (or is reemployed by the Employer) after attaining Nor- mal Retirement Age, but not in "section 203(a)(3)(B) service" under Department of Labor Regulation 29 CFR Section 2530.203-3, payments shall not be delayed or suspended. Payment to such Participant shall commence as if the Participant had terminated employment as of the Participant's Normal Retirement Age. Benefits will accrue while such Participant remains employed as described in Article III and the amount of the pay- ments will be recalculated each year on the anniversary of the Participant's Normal Retirement Date to reflect those additional benefits. I. Death Benefit 1. In the event of the death of a Participant prior to such Participant's Normal Retirement Age or Annuity Starting Date, such Participant's Beneficiary shall be entitled to receive a Death Benefit equal to the Actuarial Equivalent of the Participant's Accrued Benefit. 2. The Death Benefit payable hereunder shall be reduced by the Actu- arial Equivalent of any qualified pre-retirement survivor annuity payable pursuant to the provisions of Paragraph K of this Article III. J. Disability Retirement Benefit In the event of the Total Disability of a Participant prior to such Participant's Normal Retirement Age, such Participant may elect to receive a disability retirement benefit. The disability retirement benefit shall be determined in accordance with the Early Retirement Benefit provisions of Paragraph G of this Article III, provided, however, if the Total Disability occurred prior to the Participant's Early Retirement Age, the disa- bility retirement benefit shall be equal to the Actuarial Equivalent of the Participant's Early Retirement Benefit determined without regard to age and service requirements. Total Disability shall be considered to have ended and eligibility for a disability retire- ment benefit shall cease, if, prior to the Participant's Normal Retirement Age, the Partic- ipant: 1. Returns to the employ of the Employer; 2. Recovers sufficiently, in the opinion of the Company, to be able to engage in regular employment, and such Participant refuses an offer of employ- - 16 - ARTICLE [II EMPLOYER FUNDING AND BENEFITS . . A. Employer Contributions The Employer shall contribute all amounts needed to provide the benefits under this Plan. The amount of Employer contribution shall be based on the recommendation of the Enrolled Actuary using such methods and assumptions as he may deem advisable and consistent with the minimum funding standards of ERISA. Any actuarial gains from forfeitures shall be used to reduce Employer contributions. B. Waiver of Employer Contributions Notwithstanding anything herein to the contrary, contributions by an Employer may be waived in whole or in part in any Plan Year during which a substantial business hardship has been sustained, as determined in writing by the Secretary of the Treasury pursuant to Section 412(d) of the Code. C. Annual Valuation Within a reasonable period of time after, the end of each Plan Year and within a reasonable period of time after the removal or resignation of the Trustee, the Trustee shall determine the fair market value of the Trust Fund as of the close of the Plan Year (or the close of the shorter period ending with such resignation or removal),.using proce- dures in accordance with generally accepted accounting principles. The net increase or decrease in the fair market value of the Trust Fund since the previous valuation date .: shall be allocated to the Employer contribution fund, and to any separate accounts of each Participant as designated herein. Said allocation shall be made in the same propor- tion that the fair market value of the Employer contribution fund and such separate accounts bear to the total fair market value of the Trust Fund. D. Normal Retirement Benefit 1. Subject to the provisions of Paragraphs E and F of this Article III. each Participant, upon attainment of his Normal Retirement age, shall be entitled to receive a Normal Retirement Benefit equal to one-twelfth (1/12) of 40% of such Participant's average Compensation reduced for service less than 20 years at Nor- mal Retirement Date, plus .5 of 1% of such Participant's Average Compensation for each Year of Service in excess of 20 years at Normal Retirement Date. 2. Notwithstanding any provision of this Paragraph D to the contrary, if a Participant is entitled to a Minimum Annual Retirement Benefit pursuant to Paragraph E of this article III, the Participant's Normal Retirement Benefit shall be the greater of the benefit otherwise provided by this Paragraph D or the Mini- mum Annual Retirement Benefit. E. Minimum Benefit Requirements 1. Notwithstanding any provision of this Plan to the contrary. in any Plan Year in which the Plan is a Top-Heavy Plan, each Non-Key Employee who is a Participant shall accrue a Minimum Annual Retirement Benefit which shall be equal to the lesser of: (a) two percent (2%) of the Participant's Average Annual --- Compensation multiplied by Years of Minimum Benefit Service, or (b) twenty per- cent (20%) of the Participant's .average Annual Compensation. 14 - ARTICLE II ELIGIBILITY AND PARTICIPATION An Eligible Employee shall become a Participant of the Plan in accordance with the following requirements; provided, however, that an Eligible Employee who was a Par- ticipant of the Plan prior to the effective date of this amendment shall continue to be a Participant of the Plan under the terms and conditions set forth herein: A. Service Requirement 1. Each Eligible Employee who has completed one (1) Year of Service shall become a Participant of the Plan as of the Entry Date coincident with or next following the last day of the Eligibility Computation Period during which such period of service is completed. 2. An Eligible Employee who satisfies the service requirements of sub- paragraph 1 but who is not an Eligible Employee on the Entry Date shall become a Participant of the Plan immediately upon again becoming an Eligible Employee. B. Eligibility Computation Period For purposes of Article II. the initial Eligibility Computation Period shall be the twelve (12) consecutive month period commencing with the date on which an Employee first performs an Hour of Service for the Employer. Thereafter. the Eligibility Computa- tion Period shall be the twelve (12) consecutive month period beginning on the anniver- sary of the first day of the initial Eligibility Computation Period. C. Participation Participation in the Plan continues until a Participant terminates by Early Retire- ment, Normal Retirement, by delayed retirement, by reason of Total Disability, or by death or severs employment with the Employer and has a One-Year Break in Service. An Employee whose participation in the Plan has terminated shall become a Participant again on the date he again becomes an Eligible Employee. An Employee whose participa- tion in the Plan has terminated but who has not received all benefits under the Plan shall be a "former Participant." For the purpose of establishing a One-Year Break in Service hereunder, the applicable computation period shall be the Eligibility Computation Period as defined in Paragraph B of Article H hereof. D. Leaves of Absence A Participant's employment is not considered terminated for purposes of the Plan while he is on leave of absence with the consent of the Employer, provided that he returns to the employ of the Employer at the expiration of such leave. Leaves of absence shall mean leaves granted by the Employer, in accordance with written rules uniformly applied to all Employees, for reasons of health or public service or for reasons determined by the Employer to be in its best interests. A Participant's employment shall also not be .deemed to have terminated while he is a member of the Armed Forces of the United States, provided that he returns to the employment of the Employer within ninety (90) days (or such longer period as may be prescribed by law) from the date he first became entitled to his discharge. Participants who do not return to the employ of the Employer within sixty (60) days following the end of the leave of absence. or within the required time in case of service with the armed Forces, shall be deemed to have terminated their t2 _ (f) The value of a non-qualified stock option granted to an employee by the Employer, but only to the extent that the value of the option is includable in the gross income of the employee for the taxable year in which granted. (g) The amount includable in the gross income of an employee upon making the election described in Section 83(b) of the Code. 2. Items Not Includable as Compensation. The term "compensation" does not include items such as: (a) Contributions made by the Employer to a plan of deferred compensation to the extent that, before the application of the Code Sec- tion 415 limitations to that plan, the contributions are not includable in the gross income of the employee for the taxable year in which contributed. In addition, Employer contributions made on behalf of an employee to a sim- plified employee pension described in Section 408(k) of the Code are not considered as compensation for the taxable year in which contributed to the extent such contributions are deductible by the employee under Sec- tion 219(b)(7) of the Code. Additionally, any distributions from a plan of deferred compensation are not considered as compensation for Code Sec- tion 415 purposes, regardless of whether such amounts are includable in the gross income of the employee when distributed. However, any amounts received by an employee pursuant to an unfunded non-qualified plan may be considered as compensation for Code Section 415 purposes in the year such amounts are includable in the gross income of the employee. (b) Amounts realized from the exercise of a non-qualified stock option, or when restricted stock (or property) held by an employee either becomes freely transferable or is no longer subject to a substantial risk of forfeiture under Section 83 of the Code and the regulations thereunder. (c) Amounts realized from the sale, exchange or other disposition of stock acquired under a qualified stock option. (d) Other amounts which receive special tax benefits, such as premiums for group term life insurance (but only to the extent that the premiums are not includable in the gross income of the employee), or con- tributions made by an Employer (whether or not under a salary reduction agreement) toward the purchase of an annuity contract described in Sec- tion 403(b) of the Code (whether or not the contributions are excludable from the gross income of the employee). Except as otherwise provided in this Plan, Total Compensation shall be determined on the basis of the Plan Year. AQ. "Total Disability" shall mean the mental or physical inability of a Partici- pant to perform his normal job, as evidenced by the certificate of a medical examiner satisfactory to the Employer, certifying such inability and certifying that such condition is likely to be permanent. AR. "Trust" shall mean the trust established pursuant to Article LY of this Plan. A.S. "Trustee" shall mean the trustee or trustees of the Trust established pur- suant to this Plan. 10 - 1. A "specific consent" shall specify the nonspouse Beneficiary, if any (and, in the case of a Participant's election to waive a qualified joint and survivor annuity, the alternate form of distribution elected). ?. A "general consent" shall allow the Participant, without further Spousal Consent, to change the Beneficiary designation (and, in the case of a Par- ticipant's election to waive a qualified joint and survivor annuity, to elect any alternate form of distribution), if such general consent indicates that the Eligible Spouse has the right to limit her consent to a specific Beneficiary (and alternate form of distribution, if applicable) and that such spouse voluntarily elects to relin- quish such right. 3. A "limited general consent" shall allow the Participant, without fur- ther Spousal Consent, to change the Beneficiary designation to any person or per- sons (natural or otherwise) among those set forth in writing (and, in the case of a Participant's election to waive a qualified joint and survivor annuity, to elect one or among a list of alternate forms of distributions set forth in writing, or any com- bination of the above). Once made, a general consent shall be irrevocable. A specific or limited general consent shall be irrevocable unless the Participant changes his Beneficiary designation or revokes his election to waive the qualified joint and survivor annuity or the qualified pre- retirement survivor annuity, as applicable; upon such event, a specific consent and a limited general consent (if the Participant's subsequent Beneficiary designation or election of an alternate form of benefit is not among those options expressly set forth in the limited general consent) shall be deemed to be revoked. Notwithstanding the foregoing, Spousal Consent is not required if the Participant establishes to the satisfaction of a Plan representative that such written consent may not be obtained because there is no Eligible Spouse or that the Eligible Spouse cannot be located. In addition, no Spousal Consent is necessary if the Participant has been legally separated or abandoned within the meaning of local law and the Participant provides the Plan representative with a court order to that effect. so long as such court order does not conflict with a qualified domestic rela- tions order. If the Eligible Spouse is legally incompetent to consent, the Eligible Spouse's legal guardian may consent on her behalf, even if the legal guardian is the Participant. If the Eligible Spouse has consented to the designation of a trust as the Participant's Bene- ficiary, Spousal Consent is not required for the designation of or change in trust benefi- ciaries. AO. "Top-Heavy Plan" shall mean (1) a plan in which, as of the "determination date," the aggregate of "accounts" of Key Employees exceeds sixty percent (60%) of the aggregate of "accounts" of all employees under the plan; and (2) each plan which is included in an "aggregation group" if such group is a top-heavy group, as determined under Section 416(g)(2) of the Code. For purposes of this Paragraph: (a) "determination date" means the last day of the immediately preceding Plan Year or, in the case of the first Plan Year, the last day of such year. Where two or more plans are aggregated, the plans will be aggregated by adding together the results for each plan as of the determina- tion dates for such plans which fall in the same calendar year; (b) "accounts" means the sum of all accounts maintained for the employee determined as of the most recent valua- tion date occurring within the twelve-month period ending on the determination date (or, in the case of a defined benefit plan, the present value of the cumulative accrued benefits determined as of the valuation date used for computing plan costs for minimum funding purposes), including distributions made with respect to such employee under the plan during the five (5) year period ending on the "determination date," but excluding, how- - 8 - For purposes of subparagraphs 2 and 4 of this Paragraph Z, and for purposes of subparagraph 1 in the case of an Employee for whom records of hours worked are not required by applicable law to be kept, an Employee shall be credited with 10 Hours of .... , Service for each day for which he would have been required to be credited with an Hour of Service. Hours of Service shall be credited to the applicable computation period in accordance with Department of Labor Regulation Section 2530.200b-2(b) and (c). A.A. "Key Employee" shall mean an Employee or former Employee and their Beneficiaries who, within the meaning of Section 416(i) of the Code and the regulations thereunder, is or at any time during the four preceding Plan Years has been: 1. An officer of the Employer whose annual compensation exceeds 50% of the amount in effect under Section 415(b)(1)(A) of the Code for any such Plan Year; 2. One of the ten Employees whose annual compensation from the Employer exceeds the limitation in effect under Section 415(c)(1)(A) and who owns or is considered as owning more than a one-half percent (1/2 c) ownership interest and one of the ten largest percentage ownership interests in the Employer; 3. A five percent (5 0) owner of the Employer; or 4. A one percent (1 0) owner of the Employer having an annual com- pensation of more than $150,000. For purposes of this definition, no more than fifty employees (or, if less than fifty, either three employees or ten percent of all employees, whichever is greater) shall be treated as officers. In addition, for purposes of determining ownership percentages here- under, the constructive ownership rules of Section 318 of the Code shall apply as pro- -� vided by Section 416(i)(1)(B) of the Code. For purposes of subparagraph 2, if two Employees have the same interest in the Employer, the Employee having greater annual compensation from the Employer shall be treated as having a larger interest. For pur- poses of determining the number of officers taken into account under subparagraph AA-1 above, employees described in Section 414(q)(8) of the Code shall be excluded. For pur- poses of determining compensation for years beginning after 1988, Total Compensation shall be used in addition to elective and salary- contributions made to any 401(k) plan of the Employer, a simplified employee pension plan, a cafeteria plan, and a tax-sheltered annuity. A.B. "Leased Employee" shall mean a person (other than an Employee) who has performed services (i) of a type historically performed for the Employer by employees in the Employer's field of business, (ii) on a substantially full-time basis for a period of at least one (1) year, (iii) either directly or indirectly for the Employer (or for the Employer and related persons determined in accordance with Section 414(n)(6) of the Code), and (iv) pursuant to a written or oral agreement between the Employer and any other person. For purposes of this Plan, Leased Employees shall be treated as follows: 1. Contributions and benefits provided to the Leased Employee by the person who has entered into the agreement with the Employer. which are attribut- able to services performed for the Employer, shall be treated as provided by the Employer. ?. Service provided by the individual who becomes a Leased Employee to the person who has entered into the agreement with the Employer, which are attributable to services performed for the Employer, shall be treated as provided under this Plan. - 6 - S. "Eligible Spouse" shall mean that spouse to whom a Participant is married and has been married for at least one (1) year on either the Annuity Starting Date or the date of his death, whichever occurs earlier. To the extent provided under a "qualified domestic relations order" as described in Section 414(p) of the Code, the term Eligible Spouse shall mean a former spouse in addition to or in place of the Participant's current spouse. In addition, if a Participant marries within one (1) year before the Annuity Starting Date and the Participant and the Participant's spouse in such marriage have been married for at least one (1) year ending on or before the Participant's death, such spouse shall be considered an Eligible Spouse. Notwithstanding the preceding sentence, a Participant who is married on his Annuity Starting Date with respect to such benefit (without regard to the one-year rule) shall receive benefits in the form of a qualified joint and survivor annuity for the joint lives of himself and his spouse, unless such annuity is waived (for purposes of the Spousal Consent requirements, his spouse shall be considered an Eligible Spouse). In the event the preceding sentence is applied but the Participant is divorced or the spouse dies within the one-year period and the Participant so notifies the Company in writing, the Participant's former spouse shall not receive a survivor benefit and the Participant's benefit shall be adjusted retroactively and prospectively to the extent consistent with a qualified domestic relations order, if any. T. "Employee" shall mean a person currently employed by the Employer, any portion of whose income is subject to withholding of income tax and/or for whom Social Security or railroad retirement contributions are made by the Employer, as well as any other person qualifying as a common law employee of the Employer. "Employee" shall also include any Leased Employee deemed to be an Employee as provided in Sec- tions 414(n) or 414(o) of the Code. U. "Employer" shall mean the Company and any other corporation, partner- ship or sole proprietorship which has adopted or hereafter adopts the Plan with the approval of the Company. In addition, for purposes of determining an Employee's Hours of Service, the term "Employer" includes: 1. Any corporation or trade or business which is or was a member of a controlled group of corporations, a group of businesses under common control or an affiliated service group (within the meaning of Section 414(b), (c), (m), and (o) of the Code, respectively) of which an Employer adopting the Plan is a member, but only for such period as the corporation or trade or business and the adopting Employer are or were considered members of the group; 2. Any corporation or trade or business which is a predecessor employer, if this Plan is a successor plan to the predecessor employer's qualified plan; and 3. Any corporation or trade or business for which a Leased Employee performs services, but only for such period as the Leased Employee performs such services. V. "Enrolled Actuary" shall mean a person enrolled by the Joint Board for the Enrollment of Actuaries under ERISA who has been engaged by the administrator to prepare valuations, establish appropriate assumptions, and complete all required actuarial reports. W. "Entry Date" shall mean the date upon which an Eligible Employee First becomes a Participant, which shall be the Effective Date or the first day of the first or seventh month of the Plan Year. D. "Annuity Starting Date" shall mean the first day of the first period for which an amount is payable as an annuity or, in the case of a benefit not payable in the form of an annuity, the first day on which all events have occurred which entitle the Par- ticipant to such benefit. In the case of a deferred annuity, the Annuity Starting Date shall be the date on which the annuity payments are scheduled to commence. E. "Applicable Interest Rate" shall mean the interest rate or rates which would be used, as of the first day of the Plan Year that contains the Annuity Starting Date, by the Pension Benefit Guaranty Corporation for purposes of determining the present value of the Participant's benefits under the Plan, if the Plan had terminated on such date with insufficient assets to provide benefits guaranteed by the Pension Benefit Guaranty Corporation on that date. F. "Average Compensation" shall mean the average of the Compensation for the Participant's three (3) consecutive years which produce the highest such average. The period of service over which Compensation shall be considered when determining a Participant's Average Compensation shall begin with the date the Participant first per- forms an Hour of Service for the Employer and end with his most recent date of termina- tion. In the event the period of employment is fewer than three (3) years, such lesser period of service shall be used to determine Average Compensation. G. "Beneficiary" shall mean the person or persons (natural or otherwise) desig- nated by or for a Participant, entitled under this Plan to receive benefits after the death of a Participant. H. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. I. "Company" shall mean TRUCKEE DONNER PUBLIC UTILITY DISTRICT, a California corporation. J. "Compensation" shall mean all compensation for the Plan Year (or such other applicable period specifically designated in the Plan) paid or payable in cash or in kind by the Employer for personal services and elective deferrals with respect to employ- ment with the Employer: (i) under a qualified cash or deferred arrangement described in Section 401(k) of the Code; (ii) to a plan qualified under Section 125 of the Code; (iii) to a tax sheltered annuity described in Section 403(b) of the Code; (iv) to a plan qualified under Section 402(h) of the Code; or (v) to a plan qualified under Section 457 of the Code. However, in the event that this Plan becomes a Top-Heavy Plan in a Plan Year beginning before January 1, 1989, Compensation shall not include, with respect to any Employee, in any Plan Year (or such other applicable period specifically designated in the Plan), any compensation in excess of $200,000. For Plan Years that began after December 31, 1988 but before January 1, 1994 (whether or not a Top-Heavy Plan), Com- pensation shall not include, with respect to any Employee (after aggregation of family members), in any Plan Year (or such other applicable period specifically designated in the Plan), any compensation in excess of $200,000 or such other amount established sub- sequent to 1989 and prior to 1994 by the Secretary of the Treasury in accordance with Section 401(a)(17) of the Code. For Plan Years beginning after December 31, 1993, Com- pensation shall not include, with respect to any Employee (after aggregation of family members), in any Plan Year (or such other applicable period specifically designated in the Plan), any Compensation in excess of $150,000 or such other amount established sub- sequent to 1993 by the Secretary of the Treasury in accordance with Section 401(a)(17) of �.. the Code. In addition, effective for benefits accrued after December 31, 1993 the amount of Compensation for any prior Plan Year that may be taken into account in determining ARTICLE Page X. PLAN FIDUCLAR.IES AND ADMINISTRATION (CONTINUED) H. Designation of Administrator 48 I . Plan Administration 48 J . Claims Procedures 49 K. Agent for Legal Process 50 XI. AMENDMENT AND TERMINATION 51 A. Amendment 51 B . Termination or Complete Discontinuance of Contributions 51 C . Nonreversion 51 D . Limitations on Benefits in the Event of Plan Termination 52 XII. MISCELLANEOUS 54 A. Limitation of Rights; Employment Relationship 54 B . Transfer of Assets of Employer; Transfer of Assets of Plan 54 C . Spendthrift Provision 54 D . Applicable Law; Severability 54 E . Incorporation of Trust Agreement Provisions 55 F . Nonliability 55 G. Missing Persons 55 ( iv) ARTICLE Page I. DEFINITIONS (CONTINUED) A I . One-Year Break in Service 7 A J . Participant 7 AK. Plan 7 AL . Plan Year 7 AM. Rollover Account 7 AN. Spousal Consent 7 AO . Top-Heavy Plan 8 AP . Total Compensation 9 AQ. Total Disability 10 AR . Trust 10 A S . Trustee 10 AT . Year of Service 11 II. ELIGIBILITY AND PARTICIPATION 12 A. Service Requirement 12 B . Eligibility Computation Period 12 C . Participation 12 D . Leaves of Absence 12 r E . Suspended Participation 13 F . Inactive Participation 13 G . Reemployment After Retirement 13 III. EMPLOYER FUNDING AND BENEFITS 14 A. Employer Contributions 14 B . Waiver or Employer Contributions 14 C . Annual Valuation 14 D . Normal Retirement Benefit 14 E . Minimum Benefit Requirements 14 F . Maximum Benefit for any Participant 15 G. Early Retirement Benefit 15 H . Delayed Retirement Benefit 16 I . Death Benefit 16 J . Disability Retirement Benefit 16 K. Eligible Spouse's Survivor Benefits 17 L . Qualified Joint and Survivor Annuity 19 M. Deferred Vested Benefit 19 N. Optional Forms of Benefit 20 0 . Time of Distribution 21 P . Direct Rollover Distributions to an Eligible Retirement Plan 25 Q. Determination of Accrued Benefits Fresh-Start Rules 26 � ii �