Public Agency Retirement System / Union Bank 11The City of La Quinta Fiscally Responsible Reduction Plan
Effective February 15, 2011
Defined Benefit Plan
NBl 790408.2
TABLE OF CONTENTS
Page
INTRODUCTION.......................................................................................... ...............................
1
ARTICLE I
PARTICIPATION ............................................................ ...............................
2
1.1
Eligibility for Benefits ............................................................. ..............................2
1.2
Definitions ..................................................... ..............................3
1.3
Commencement of Benefits .................................................... ...............................
3
1.4
Participation ............................................................................. ..............................4
ARTICLElI
BENEFITS ......................................................................... ..............................5
2.1
Retirement Benefits ................................................................ ...............................
5
2.2
Designation of Beneficiary ..................................................... ...............................
5
ARTICLEIII
VESTING ......................................................................... ...............................
7
3.1
Vesting .........................................:........................................... ..............................7
3.2
Full or Partial Termination ...................................................... ...............................
7
3.3
Attainment of Normal Retirement Age ................................... ...............................
7
3.4
Effect of Vesting ...................................................................... ..............................7
ARTICLE IV
DISTRIBUTIONS ............................................................. ..............................8
4.1
Normal Form of Benefit .......................................................... ......:........................
8
4.2
Other Forms of Benefit ........................................................... ...............................
8
4.3
Actuarial Equivalence ........................................................... ...............................
18
4.4
Direct Rollovers .................................................................... ...............................
18
ARTICLE V
ADMINISTRATION AND AMENDMENT OF PLAN ...............................
22
5.1
Member's Rights Not Subject To Execution .......................... .............................22
5.2
Rules and Regulations ........................................................... ...............................
22
5.3
Amendment and Termination ................................................. .............................23
5.4
Military Service ...................................................................... .............................24
ARTICLE VI
ANNUAL BENEFIT LIMITATIONS ............................. .............................25
6.1
Definitions and Application .................................................... .............................25
6.2
Annual Limitation on Benefits ................................................ .............................26
ARTICLE VII
DEFINITIONS ................................................................ ...............................
30
7.1
Definitions ............................................................................... .............................30
NBI'. 7904082 _i_
INTRODUCTION
The City of La Quinta ( "Employer ") has adopted this tax qualified governmental defined
benefit plan for the benefit of its eligible employees to provide supplemental retirement benefits
to eligible employees of the Employer in addition to the benefits employees will receive from the
California Public Employees' Retirement System ( "CalPERS ").
It is intended that this Plan and the Trust established to hold the assets of the Plan shall be
qualified under Section 401(a) and tax - exempt under Section 501(a) of the Internal Revenue
Code of 1986, together with any amendments thereto (the "Code "). It is further intended that this
Plan and the Trust established hereunder shall meet the requirements of a pension trust under
California Government Code sections 53215 — 53224, or their successor sections (the "Act ").
Furthermore, this Plan is a "governmental plan," as defined in Code Section 414(d) that is
intended to be a permanent as distinguished from a temporary plan. At any time prior to the
satisfaction of all liabilities with respect to Members and their Beneficiaries under the Trust
created pursuant to this Plan, the Trust assets shall not be used for, or diverted to, purposes other
than the exclusive benefit of Members or their Beneficiaries, as prescribed in Section 401(a)(2)
of the Code.
It is intended that the Plan satisfy the requirements of the applicable provisions of the
Economic Growth and Tax Relief Reconciliation Act (commonly, known as "EGTRRA "), the
Pension Protection Act of 2006 (commonly known as the "PPA "), the Heroes Earnings
Assistance and Relief Tax Act of 2008 (commonly known as the "HEART Act ") and final
regulations under Section 415 of the Code, and that the provisions of this Plan reflecting such
requirements are hereby made effective as of the dates required by the legislation or guidance
referred to in this sentence.
NBI 790408.2
ARTICLE I
PARTICIPATION
1.1 Eligibility for Benefits
An Employee shall be eligible to receive Retirement Benefits under this Plan if he meets
the requirements under one of the following tiers:
Tier I
(a) is classified as a full -time General Employee by the Employer as of February 15,
2011;
(b) has attained sixty (60) years of age as of December 31, 2011;
(c) has completed at least ten (10) years of public service as of June 30, 2011 (for
purposes of satisfying this Section 1.1(c), employees age sixty -five (65) and older shall be
credited with an additional one -half (%) year of service credit);
(d) has completed at least five (5) years of service with the Employer as of June 30,
2011;
(e) has terminated employment with the Employer on or before June 30, 2011;
(f) has applied for benefits under this Plan; and
(g) has retired under CalPERS effective no later than July 1, 2011.
Tier II
(a) is classified as a full -time Director by the Employer (excluding the City Manager) as
of February 15, 2011;
(b) has attained fifty -five (55) years of age as of December 31, 2011;
(c) has completed at least ten (10) years of public service as of June 30, 2011;
(d) has completed at least five (5) years of service with the Employer as of June 30, 2011;
-2-
NB1: 7904082
(e) has terminated employment with the Employer on or before June 30, 2011;
(1) has applied for benefits under this Plan; and
(g) has retired under CalPERS effective no later than July 1, 2011.
The Employer reserves the right to amend this Section 1.1 to make other Employees
eligible to receive Retirement Benefits under this Plan.
1.2 Definitions
(a) "Director" shall mean any employee hired by the Employer for the purpose of
directing a department.
(b) "Full- time" shall mean a schedule comprised of at least forty (40) hours worked
within a fixed and regularly recurring seven (7) day period.
(c) "General Employee" shall mean any employee who is not a "Director" as defined in
Section 1.2(a) above.
(d) "Public service" shall mean service with any district, public authority, public
corporation, department or any political subdivision of any of the United States or the federal
government, including but not limited to, states themselves, public school districts, public
institutions of higher learning, cities and counties.
(e) "Years of service" shall mean the amount of time calculated from an Employee's date
of hire with the Employer through June 30, 2011.
1.3 Commencement of Benefits
Benefits shall commence as of the first day of the first month after an Employee meets
the eligibility requirements of Section 1.1, and may be made retroactive to such date, provided
that an Employee shall not be deemed to have satisfied such eligibility requirements earlier than
June 30, 2011.
-3-
NBI: 790408.2
1.4 Participation
An Employee will be credited with one Year of Participation for any year during which
the Employee is an Employee of the Employer.
-4-
. NBI. 790408 2
ARTICLE II
BENEFITS
2.1 Retirement Benefits
The monthly benefit commencing pursuant to Section 1.3 shall be paid in the Normal
Form of Benefit and in an amount equal to one - twelfth (1/12) of six percent (6 %) of the
Member's Final Pay.
2.2 Designation of Beneficiary
(a) Each Member shall have the right to designate a Beneficiary to receive the death
benefits, if any, that are payable to a Beneficiary from this Plan. Such designation does not
permit the Member to change a person identified under another provision of the Plan as being
eligible to receive a benefit. Such designation must be evidenced by a written instrument filed
with the Employer, on a form prescribed by the Employer, and signed by the Member.
(b) Unless otherwise required under Section 4.2(a)(3), the Beneficiary for a married
Member shall be the Member's spouse at the date of death, unless the written consent of such
spouse is provided upon a form acceptable to the Employer. Each such designation for death
benefits must be evidenced by a written instrument filed with the Employer, on a form prescribed
by the Employer, and signed by the Member. If no such designation is on file with the Employer
at the time of the death of the Member, or if for any reason at the sole discretion of the
Employer, such designation is defective, then the spouse of such Member shall be conclusively
deemed to be the Beneficiary designated to receive such benefit.
(c) The signature of the Member's spouse shall be required on a designation of
beneficiary form or an application for a benefit under the Plan if the spouse is not the
Beneficiary, unless the Member declares in writing that one of the following conditions exists:
-5-
NB1: 790408.2
(1) The Member is not married;
(2) The Member does not know, and has taken all reasonable steps to determine,
the whereabouts of the spouse;
(3) The spouse is incapable of executing the acknowledgment because of an
incapacitating mental or physical condition;
(4) The Member and spouse have executed a marriage settlement agreement that
makes the community property laws inapplicable to the marriage; or
(5) The current spouse has no identifiable community property interest in the
benefits.
Effective as of January 1, 2005, for purposes of this Section 2.2 only, all references in
this Section 2.2 to the term "marriage" shall also include the term "registered domestic
partnership." All references to the term "married" shall also include "registered domestic
partnership" and all references in this Section 2.2 to the term "spouse" shall also include the term
"registered domestic partner." The inclusion of "registered domestic partner" in the definition of
"spouse" shall not apply for the purposes of Sections 4.2(d), 4.4 and 6.2 of this Plan.
-6-
NB1: 7904082
ARTICLE III
VESTING
3.1 Vesting
A Member will be fully Vested in his Retirement Benefit upon meeting the requirements
of Section 1.1.
3.2 Full or Partial Termination
Notwithstanding the vesting schedule, upon the complete discontinuance of Employer
contributions to the Plan or upon any full or partial termination of the Plan, the Member's
Retirement Benefit shall become one hundred percent (100 %) Vested.
3.3 Attainment of Normal Retirement Age
A Member shall be fully Vested in his Retirement Benefit upon attainment of Normal
Retirement Age.
3.4 Effect of Vesting
Vesting shall entitle a Member to payment during his lifetime of the Retirement Benefit
at the times and upon the conditions specified herein, and shall entitle the Member's survivor or
Beneficiary to any death benefits provided herein. Any unpaid Retirement Benefits are forfeited
upon the Member's death under the Normal Form of Benefit.
-7-
NB I : 790408 2
ARTICLE IV
DISTRIBUTIONS
4.1 Normal Form of Benefit
Unless the Member elects another form of benefit as described under Section 4.2,
payments to a Member of a Retirement Benefit shall be made in the form of monthly payments
commencing pursuant to Section 1.3 and ending on the first day of the month in which the
Member's death occurs, in the amount specified in Section 2.1. This form of payment shall be
the "Normal Form of Benefit."
4.2 Other Forms of Benefit
In lieu of the Normal Form of Benefit, a Member may elect a form of benefit payment of
Actuarial Equivalent value to the Normal Form of Benefit in one of the following forms:
(a) Oational Form of Benefit Under this form of payment:
(1) The Member receives a reduced monthly benefit, and if the Member
predeceases the Beneficiary, the Beneficiary will receive a monthly payment for the life
of the Beneficiary equal to one hundred percent (100 %) of such reduced monthly benefit;
provided, however, that if the Beneficiary is not the spouse of the Member, this form of
payment shall be available only to the extent permitted pursuant to Section
4.2(d)(2)(D)(I).
(2) If the Beneficiary predeceases the Member, the Member's reduced monthly
payment will not increase.
(3) The Member's designation of a Beneficiary shall become irrevocable upon a
date selected by the Employer prior to commencement of benefits if electing this form of
payment provided, however, the Beneficiary shall be the Member's spouse at the date
-g-
NBI 790408.2
benefits commence, unless the written consent of such spouse is provided upon a form
acceptable to the Employer
(4) For the purpose of establishing actuarial equivalence between the Normal and
Optional Form of Benefit, the monthly amount of benefit payable under an Optional
Form of Benefit shall be a fixed percentage of the monthly amount of benefit payable
under the Normal Form of Benefit, as determined by the 1983 GAM and an interest
assumption of six percent (6 %).
(b) Fixed -Term Payout Under this form of payment:
(1) The Member receives a benefit paid over a designated period of time (not to
exceed the Member's life expectancy) that is actuarially equivalent to the Normal Form
of Benefit. The Member shall determine the term of the payment which shall be no less
than five (5) years and no greater than fifteen (15) years.
(2) Any remaining payments in the fixed -term payout schedule shall continue to
the Beneficiary or subsequent Beneficiaries in the event of the Member's death.
(c) Life Annuity with Period Certain Under this form of payment:
(1) At the option of the Member, the benefit shall be paid in fixed monthly
payments in the form of a life annuity (using the Member's life as the measuring period),
subject to a ten (10) year minimum.
(2) In the event the Member dies prior to receiving a total of one hundred and
twenty (120) payments, the remaining unpaid monthly payments shall be paid to a
designated Beneficiary.
W
N131 790408,2
(d) Limitations
(1) In the case of a Member who attains age 70 -1/2, distribution of such
MembePs entire interest must commence not later than the first day of April following
the later of the calendar year in which such Member attains age 70 -1/2 or the calendar
year in which the Member retires (the "Required Beginning Date "). In all cases,
distributions shall be made in at least the amounts determined in accordance with Code
Section 401(a)(9) and the regulations thereunder, as described in Section 4.2(d)(2) below.
(2) With respect to required minimum distributions under this Section 4.2(d) for
calendar years beginning after December 31, 2002, the following rules shall apply:
(A) All distributions required under this Section 4.2(d) shall be determined and
made in accordance with the Treasury Regulations under Section 401(a)(9) of the Code,
including, without limitation, the minimum distribution incidental benefit requirements.
The requirements of this Section 4.2(d) will take precedence over any inconsistent
provisions of the Plan, provided that this Section 4.2(d) shall not be considered to allow a
Member or Beneficiary to delay a distribution or elect an optional form of benefit not
otherwise provided in the Plan.
(B) Time and Manner of Distribution
(1) The Member's entire interest will begin to be distributed to the
Member no later than the Member's Required Beginning Date as defined in
Section 4.2(d)(1).
(11) If the Member dies before distributions begin, then the Member's
entire interest will begin to be distributed no later than as follows:
-10-
NB 1. 790408.2
(a) If the Member's surviving spouse is the Member's sole
designated Beneficiary, then distributions to the surviving spouse will
begin by December 31 of the calendar year immediately following the
calendar year in which the Member died, or by December 31 of the
calendar year in which the Member would have attained age 70 -1/2, if
later.
(b) If the Member's surviving spouse is not the Member's sole
designated Beneficiary, then distributions to the designated Beneficiary
will begin by December 31 of the calendar year immediately following the
calendar year in which the Member died.
(c) If there is no designated Beneficiary as of September 30 of the
year following the. year of the Member's death, the Member's entire
interest will be distributed by December 31 of the calendar year containing
the fifth anniversary of the Member's death.
(d) If the Member's surviving spouse is the Member's sole
designated Beneficiary and the surviving spouse dies after the Member but
before distributions to the surviving spouse begin, this Section
4.2(d)(2)(B)(I1), other than Section 4.2(d)(2)(B)(I1)(a), will apply as if the
surviving spouse were the Member.
For purposes of this Section 4.2(d)(2)(B)(11) and Section 4.2(d)(2)(E),
distributions are considered to begin on the Member's Required Beginning Date
(or, if Section 4.2(d)(2)(B)(11)(d) applies, the date distributions are required to
begin to the surviving spouse under Section 4.2(d)(2)(13)(11)(a)). If annuity
NBI 790408.2
payments irrevocably commence to the Member before the Member's Required
Beginning Date (or to the Member's surviving spouse before the date
distributions are required to begin to the surviving spouse under Section
4.2(d)(2)(B)(II)(a)), the date distributions are considered to begin is the date
distributions actually commence.
(III) Unless the Member's interest is distributed in the form of an annuity
purchased from an insurance company or in a single sum on or before the
Required Beginning Date, as of the first distribution calendar year distributions
will be made in accordance with Sections 4.2(d)(2)(C), (D) and (E). If the
Member's interest is distributed in the form of an annuity purchased from an
insurance company, distributions thereunder will be made in accordance with the
requirements of Section 401(a)(9) of the Code and the Treasury Regulations.
(C) Determination of Amount to be Distributed Each Year
(1) If the Member's interest is paid in the form of annuity distributions
under the Plan, payments under the annuity will satisfy the following
requirements:
(a) the annuity distributions will be paid in periodic payments
made at intervals not longer than one year;
(b) the distribution period will be over a life (or lives) or over a
period certain not longer than the period described in Sections
4.2(d)(2)(D) or (E);
_12_
N B 1 790408.2
(c) once payments have begun under a fixed -term payout under
Section 4.2(b), the fixed -term payout period will not be changed even if
the period certain is shorter than the maximum permitted;
(d) payments will either be non - increasing or increase only as
follows:
(i) by an annual percentage increase that does not exceed
the annual percentage increase in a cost of living index that is
based on prices of all items and issued by the Bureau of Labor
Statistics;
(ii) to the extent of the reduction in the amount of the
Member's payments to provide for a survivor benefit upon death,
but only if the Beneficiary whose life was being used to determine
the distribution period described in Section 4.2(d)(2)(D) dies or is
no longer the Member's Beneficiary pursuant to a qualified
domestic relations order within the meaning of Section 414(p) of
the Code; or
(iii) to pay increased benefits that result from a Plan
amendment.
(11) The amount that must be distributed on or before the Member's
Required Beginning Date (or, if the Member dies before distributions begin, the
date distributions are required to begin under Sections 4.2(d)(2)(B)(11)(a) or (b)) is
the payment that is required for one payment interval. The second payment need
not be made until the end of the next payment interval even if that payment
-13-
NBI 790408.2
interval ends in the next calendar year. Payment intervals are the periods for
which payments are received, e.g., bi- monthly, monthly, semi - annually, or
annually. All of the Member's benefit accruals as of the last day of the first
distribution calendar year will be included in the calculation of the amount of the
annuity payments for payment intervals ending on or after the Member's
Required Beginning Date.
(III) Any additional benefits accruing to the Member in a calendar year
after the first distribution calendar year will be distributed beginning with the first
payment interval ending in the calendar year immediately following the calendar
year in which such amount accrues.
(D) Requirements For Annuity Distributions That Commence During
Member's Lifetime
(I) If the Member's interest is being distributed in the form of a benefit
described in Section 4.2(a) for the joint lives of the Member and a nonspouse
Beneficiary, annuity payments to be made on or after the Member's Required
Beginning Date to the designated Beneficiary after the Member's death must not
at any time exceed the applicable percentage of the annuity payment for such
period that would have been payable to the Member using the table set forth in
Q &A- 2(c)(2) of Section 1.401(a)(9) -6 of the Treasury Regulations in the manner
described in Q &A- 2(c)(1) of the Treasury Regulations. If the form of distribution
combines a benefit described in Section 4.2(a) for the joint lives of the Member
and a nonspouse Beneficiary and a fixed -term payout annuity, the requirement in
14-
NB1: 790408.2
the preceding sentence will apply to annuity payments to be made to the
designated Beneficiary after the expiration of the fixed -term payout period.
(II) Unless the Member's spouse is the sole designated Beneficiary and
the form of distribution is a fixed -term payout annuity, the fixed -term payout
period for an annuity distribution commencing during the Member's lifetime may
not exceed the applicable distribution period for the Member under the Uniform
Lifetime Table set forth in Section 1.401(a)(9) -9, Q &A -2 of the Treasury
Regulations for the calendar year that contains the annuity starting date. If the
benefit commencement date precedes the year in which the Member reaches age
70, the applicable distribution period for the Member is the distribution period for
age 70 under the Uniform Lifetime Table set forth in Section 1.401(a)(9) -9,
Q &A -2 of the Treasury Regulations plus the excess of 70 over the age of the
Member as of the Member's birthday in the year that contains the benefit
commencement date. If the Member's spouse is the-Member's sole designated
Beneficiary and the form of distribution is a fixed -term payout annuity, the fixed -
term payout period may not exceed the longer of the Member's applicable
distribution period, as determined under this Section 4.2(d)(2)(D), or the joint life
and last survivor expectancy of the Member and the Member's spouse as
determined under the Joint and Last Survivor Table set forth in Section
1.401(a)(9) -9, Q &A -3 of the Treasury Regulations, using the Member's and
spouse's attained ages as of the Member's and spouse's birthdays in the calendar
year that contains the benefit commencement date.
-15-
NBl 7904082
(E) Requirements For Minimum Distributions Where Member Dies Before
Date Distributions Begin
(I) If the Member dies before the date distribution of his or her interest
begins and there is a designated Beneficiary, the Member's entire interest will be
distributed, beginning no later than the time described in Sections
4.2(d)(2)(B)(II)(a) or (b), over the life of the designated Beneficiary or over a
fixed -term payout period not exceeding:
(a) unless the benefit commencement date is before the first
distribution calendar year, the life expectancy of the designated
Beneficiary is determined using the Beneficiary's age as of the
Beneficiary's birthday in the calendar year immediately following the
calendar year of the Member's death; or
(b) if the benefit commencement date is before the first
distribution calendar year, the life expectancy of the designated
Beneficiary is determined using the Beneficiary's age as of the
Beneficiary's birthday in the calendar year that contains the benefit
commencement date.
(II) If the Member dies before the date distributions begin and there is no
designated Beneficiary as of September 30 of the year following the year of the
Member's death, distribution of the Member's entire interest will be completed by
December 31 of the calendar year containing the fifth anniversary of the
Member's death.
-16-
NBI: 7904082
(III) If the Member dies before the date distribution of his or her interest
begins, the Member's surviving spouse is the Member's sole designated
Beneficiary, and the surviving spouse dies before distributions to the surviving
spouse begin, this Section 4.2(d)(2)(E) will apply as if the surviving spouse were
the Member, except that the time by which distributions must begin will be
determined without regard to Section 4.2(d)(2)(B)(II)(a).
(F) Definitions
(I) Designated Beneficiary The individual who is designated as the
Beneficiary under Section 2.2 of the Plan and is the designated Beneficiary under
Section 401(a)(9) of the Code and Section 1.401(a)(9) -4 of the Treasury
Regulations.
(11) Distribution calendar year A calendar year for which a minimum
distribution is required. For distributions beginning before the Member's death,
the first distribution calendar year is the calendar year immediately preceding the
calendar year that contains the Member's Required Beginning Date. For
distributions beginning after the Member's death, the first distribution calendar
year is the calendar year in which distributions are required to begin pursuant to
Section 4.2(d)(2)(B)(Il).
(111) Life expectancy Life expectancy as computed by use of the Single
Life Table in Section 1.401(a)(9) -9, Q &A -1 of the Treasury Regulations.
(IV) Required Beginning Date The date set forth in Section 4.2(d)(1).
-17-
NBI. 790408 2
4.3 Actuarial Equivalence
For the purpose of establishing Actuarial Equivalence, the mortality assumption shall be
1983 GAM and the interest assumption shall be six percent (6 %) per annum.
4.4 Direct Rollovers
(a) This section applies to all distributions made on or after January 1, 1993.
Notwithstanding any provision of the Plan to the contrary that would otherwise limit a
distributee's election under this Plan, a distributee may elect, at the time and in the
manner prescribed by the Plan Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan specified by the distributee in a
direct rollover. A distributee includes an Employee or former Employee. In addition, the
Employee's or former Employee's surviving spouse and the Employee's or former
Employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
(b) A Beneficiary who is not the spouse of the Member may elect a direct trustee -to-
trustee transfer that qualifies as an eligible rollover distribution under this Section 4.4.
Such transfer shall be made to an individual retirement account described in Section
408(a) or an individual retirement annuity described in Section 408(b) that is established
for the purpose of receiving the distribution on behalf of such Beneficiary. Such
individual retirement account shall be deemed an inherited IRA pursuant to the
provisions of Section 402(c)(11) of the Code. In the case of a nonspouse Beneficiary, the
direct rollover may be made only to an individual retirement account or annuity described
in Section 408(a) or Section 408(b) ( "IRA ") that is established on behalf of the
-18-
NBI 790408.2
designated Beneficiary and that will be treated as an inherited IRA pursuant to the
provisions of Section 402(c)(11). Also, in this case, the determination of any required
minimum distribution under Section 401(a)(9) that is ineligible for rollover shall be made
in accordance with Notice 2007 -7, Q &A 17 and. 18, 2007 -5 I.R.B. 395.
(c) Definitions
(1) Eligible Rollover Distribution An eligible rollover distribution is any
distribution of all or any portion of the balance to the credit of the distributee, 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 distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such distribution is required under Section
401(a)(9) of the Internal Revenue Code, any hardship distribution, 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), and any
other distribution(s) that is reasonably expected to total less than $200 during a year. A
portion of a distribution shall not fail to be an eligible rollover distribution merely
because the portion consists of after -tax employee contributions which are not includible
in gross income. However, such portion may be transferred only to (1) an individual
retirement account or annuity described in Section 408(a) or (b) of the Code; (2) for
taxable years beginning after December 31, 2001 and before January 1, 2007; to a
qualified trust which is part of a defined contribution plan that agrees to separately
account for amounts so transferred, including separately accounting for the portion of
-19-
NB I'. 7904082
such distribution which is includible in gross income and the portion of such distribution
which is not so includible; or (3) for taxable years beginning after December 31, 2006, to
a qualified trust or to an annuity contract described in Section 403(b), if such trust or
contract provides for separate accounting for amounts so transferred (including interest
thereon), including separately accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution which is not so includible.
(2) Eligible Retirement Plan An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, a qualified defined contribution plan
described in Section 401(a) of the Code that accepts the distributee's eligible rollover
distribution, an annuity contract described in Section 403(b) of the Code, an annuity plan
described in Section 403(a) of the Code, and an eligible plan under Section 457(b) of the
Code which is maintained by a state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state and which agrees to separately
account for amounts transferred into such plan from this Plan. The definition of eligible
retirement plan shall also apply in the case of a distribution to a surviving spouse, or to a
spouse or former spouse who is the alternate payee under a qualified domestic relation
order, as defined in Section 414(p) of the Code. With respect to eligible rollover
distributions made on or after January 1, 2008, an eligible retirement plan shall also
include a Roth IRA as described in Section 408A of the Code, provided that the
distributee is not restricted from making such a rollover from this Plan to a Roth IRA
pursuant to Section 408A(c) of the Code.
-20-
NBI: 790408.2
(3) Direct Rollover A direct rollover is a payment by the Plan to the eligible
retirement plan specified by the distributee.
_21_
NBI : 790408 2
ARTICLE V
ADMINISTRATION AND AMENDMENT OF PLAN
5.1 Member's Rights Not Subiect To Execution
The right of a Member to a benefit under this Plan is not assignable and is not subject to
execution or any other process whatsoever, except to the extent permitted by the Code of Civil
Procedure and the Family Code of the State of California. Any payment hereunder required
under the California Family Code to a person other than the Member must not alter the form or
amount of benefits hereunder, except that to the extent provided in a valid court order, an
Actuarially Equivalent payment may be made to the spouse or child of a Beneficiary pursuant to
a qualified domestic relations order (as defined in Code Section 414(p)) prior to the Member's
retirement.
5.2 Rules and Regulations
The Employer has full discretionary authority to supervise and control the operation of
this Plan in accordance with its terms and may make rules and regulations for the administration
of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall
determine any questions arising in connection with the interpretation, application or
administration of the Plan (including any question of fact relating to age, employment,
Compensation or eligibility of Employees) and its decisions or actions in respect thereof shall be
conclusive and binding upon any and all persons and parties.
The Employer shall have all powers necessary to accomplish its purposes, including, but
not by way of limitation, the following:
(a) To determine all questions relating to the eligibility of Employees to participate;
(b) To construe and interpret the terms and provisions of the Plan;
_ZZ_
NB I 7904082
(c) To compute, certify to, and direct the Trustee with regard to the amount and kind
of benefits payable to the Members and their Beneficiaries;
(d) To authorize all disbursements by the Trustee from the Trust;
(e) To maintain all records that may be necessary for the administration of the Plan
other than those maintained by the Trustee; and
(0 To appoint a Plan Administrator or, any other agent, and to delegate to them or to
the Trustee such powers and duties in connection with the administration of the Plan as it may
from time to time prescribe, and to designate each such administrator or agent as a fiduciary with
regard to matters delegated to him.
With respect to management and control of investments, the Employer shall have the
power to direct the Trustee in writing with respect to the investment of the Trust assets or any
part thereof. Where investment authority, management and control of Trust assets have been
delegated to the Trustee by the Employer, the Trustee shall be a fiduciary with respect to the
investment, management and control of the Trust assets contributed by the Employer and
Members with full discretion in the exercise of such investment, management and control.
Where investment authority, management and control of Trust assets are not specifically
delegated to the Trustee, the Trustee shall be subject to the direction of the Employer.
Expenses and fees in connection with the administration of the Plan and the Trust shall be
paid from the Trust assets to the fullest extent permitted by law, unless the Employer determines
otherwise.
5.3 Amendment and Termination
The Employer shall have the right to amend, modify or terminate this Plan at any time.
In the event of the complete discontinuance of this Plan, the entire interest of each Member
_23_
NBI : 790408.2
affected thereby shall immediately become 100% Vested. The Employer shall not be liable for
the payment of any benefits under this Plan and all benefits hereunder shall be payable solely
from the assets of the Trust. Pursuant to Treasury Regulation Section 1.401 -2(b), after all
liabilities of this Plan to Members and their Beneficiaries have been satisfied following the
termination of this Plan, any residual assets of this Plan shall be used for such purposes as
determined by the Employer, including a distribution of the assets to the general funds of the
Employer. Furthermore, a contribution made by the Employer may be returned if. (1) the
contribution is made by reason of a mistake of fact (Section 403(c)(2)(A); (2) the contribution is
conditioned on qualification of the Plan under the Code and the Plan does not so qualify; or (3)
the contribution is conditioned on its deductibility under Section 404 of the Code. The return to
the Employer of the amount involved must be made within one year of the mistaken payment of
the contribution, the date of denial of qualification, or disallowance of the deduction.
5.4 Military Service
Effective December 12, 1994, and notwithstanding any provision of this Plan to the
contrary, contributions, benefits, and service credit with respect to qualified military service will
be provided in accordance with Section 414(u) of the Code. In the case of a Member who dies
while performing qualified military service, the survivors of the Member are entitled to any
additional benefits (other than benefit accruals relating to the period of qualified military service)
provided under the Plan had the Member resumed and then terminated employment on account
of death. A Member receiving a "differential wage payment," as defined in Code Section
3401(h)(2) shall be treated as an Employee of the Employer, and the differential wage payment
shall be treated as Compensation.
-24-
NBI: 790408.2
ARTICLE VI
ANNUAL BENEFIT LIMITATIONS.
6.1 Definitions and Application
As used in this Article VI, the following terms shall have the meanings specified below.
Unless otherwise stated below, the provisions of this Article VI shall apply to Limitation Years
beginning on or after January 1, 2009.
"Affiliated Company" means a company required to be aggregated with the Employer
for Purposes of Code Sections 414(b) and (c), provided, however, the determination under
Section 414(b) and (c) of the Code shall be made as if the phrase "more than 50 percent" were
substituted for the phrase "at least 80 percent" each place it is incorporated into Section 414(b)
and (c) of the Code.
"Annual Benefit" means a benefit payable annually in the form of a straight life annuity
(with no ancillary benefits) under a plan to which Employees do not contribute and under which
no rollover contributions are made, or to which assets have been transferred from a qualified plan
that was not maintained by the Employer. If the benefit is payable in a form other than a straight
life annuity, such form must be adjusted actuarially to be the equivalent of a straight life annuity
before applying the limitations of Section 6.2(a). The actuarial adjustment to the equivalent of a
straight life annuity will apply to all Plan benefits except as set forth herein. The actuarial
adjustment shall be made in accordance with the provisions of Treasury Regulation Section
1.415(b) -1(c), which are incorporated herein by reference. No actuarial adjustment is required
for the following: qualified joint and survivor annuity benefits, pre- retirement disability benefits,
pre- retirement death benefits, post- retirement medical benefits, and the value of an automatic
benefit increase feature made in accordance with applicable Treasury Regulations.
-25-
N B I 790408 2
"Employer" means the Employer and any Affiliated Company that adopts this Plan.
"Limitation Year" means a 12- consecutive month period ending on the Anniversary
Date. If the Limitation Year is amended to a different 12- consecutive month period, the new
Limitation Year must begin on a date within the Limitation Year in which the amendment is
made.
"Related Plan' means any other defined benefit plan (as defined in Section 415(k) of the
Code) maintained by the Employer.
"Year of Participation" means the Employee shall be credited with a Year of
Participation for each year in which the Employee is an Employee of the Employer. An
Employee who is permanently and totally disabled within the meaning of Section 415(c)(3)(C)(i)
of the Code for an accrual computation period shall receive a Year of Participation with respect
to that period. In addition, for an Employee to receive a Year of Participation for an accrual
computation period, the Plan must be established no later than the last day of such accrual
computation period. In no event will more than one Year of Participation be credited for any 12-
month period.
6.2 Annual Limitation on Benefits
Notwithstanding any other provision of the Plan:
(a) The Annual Benefit payable with respect to a Member under the Plan for any
Limitation Year shall not exceed an amount equal to $160,000, or such other dollar limitation
determined for the Limitation Year by automatically adjusting the $160,000 limitation by the
cost of living adjustment factor prescribed by the Secretary of the Treasury under Section 415(d)
of the Code in such manner as the Secretary shall prescribe. The new dollar limitation shall
apply to Limitation Years ending within the calendar year of the date of the adjustment.
-26-
NBI: 790408.2
(b) If the Member has less than ten Years of Participation with the Employer, the
limitation in Section 6.2(a) shall be reduced by multiplying it by a fraction, the numerator of
which is the Member's full and partial Years of Participation, and the denominator of which is
ten. To the extent provided in Treasury Regulations or in other guidance issued by the Internal
Revenue Service, the preceding sentence shall be applied separately with respect to each change
in the benefit structure of the Plan. The reduction provided in this paragraph does not apply to
payments made to the Member if his payments commence after he has become disabled (within
the meaning of Code Section 415(b)(2)(1)), and does not apply to payments made on account of
the Member's death.
(c) If the Annual Benefit of a Member begins prior to age 62, the limitation under
Section 6.2(a) applicable to the Member at such earlier age is an Annual Benefit payable in the
form of a straight life annuity beginning at the earlier age that is the actuarial equivalent of the
limitation applicable to the Member at age 62 (adjusted under subsection 6.2(b) above, if
required). The limitation applicable at an age prior to age 62 shall be determined in accordance
with the provisions of Treasury Regulation Section 1.415(b) -1(d), which are incorporated herein
by reference. The reduction in this Section 6.2(c) shall not apply for a Member who is a
"qualified participant," as defined in Code Section 415(b)(2)(H).
(d) If the Annual Benefit of a Member begins after age 65, the limitation under Section
6.2(a) applicable to the Member at such later age is an Annual Benefit payable in the form of a
straight life annuity beginning at the later age that is the actuarial equivalent of the limitation
applicable to the Member at age 65 (adjusted under subsection 6.2(b) above, if required). The
limitation applicable at an age after age 65 shall be determined in accordance with the provisions
of Treasury Regulation Section 1.415(b) -1(e), which are incorporated herein by reference.
-27-
NBI 790408.2
(e) Pursuant to Treasury Regulation Section 1.415(b)- I(a)(7)(iii), the rate of a
Member's accrual shall not be limited by this Article VI (but at all times the annual benefit
payable to the Member is subject to the limits set forth in this Article VI).
(f) The limitation in Section 6.2(a) is deemed satisfied if the Annual Benefit payable
to a Member is not more than $1,000 multiplied by the Member's number of years of service or
parts thereof (not to exceed ten) with the Employer, and the Employer (or a predecessor
employer) has not at any time maintained a defined contribution plan in which such Member
participated.
If the Employer maintains one or more defined benefit plans, in addition to this Plan,
covering an Employee who is also a Member in this Plan, the sum of the Annual Benefits of all
the plans will be treated as a single benefit for the purposes of applying the limitations of Section
6.2(a). For purposes of the preceding sentence, Annual Benefits under a "qualified governmental
excess benefit arrangement," as described in Section 415(m)(3) of the Code, shall be
disregarded. If the Annual Benefits exceed, in the aggregate, the limitations of Section 6.2(a),
the Normal Retirement Benefits under this Plan will be reduced (but not below zero) until the
sum of the benefits of the Related Plan(s) satisfy the limitations. In the case of an individual
who was a Member in one or more defined benefit plans of the Employer as of the first day of
the first Limitation Year beginning after December 31, 1986, the application of the limitations of
this Section 6.2 shall not cause the limitation under Section 6.2(a) for such individual under all
such defined benefit plans to be less than the individual's Current Accrued Benefit. The
preceding sentence applies only if such defined benefit plans met the requirements of Section
415 of the Code, for all Limitation Years beginning before May 6, 1986. For purposes of this
Section 6.2(f), an individual's Current Accrued Benefit means a Member's Accrued Benefit
-28-
NB 1 790408 2
under the Plan, determined as if the Member had separated from service as of the close of the last
Limitation Year beginning before January 1, 1987, when expressed as an annual benefit within
the meaning of Section 415(b)(2) of the Code. In determining the amount of a Member'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 adjustments occurring after
May 5, 1986.
(g) If a Member makes one or more contributions to the Plan to purchase "permissive
service credit," as defined in Code Section 415(n)(3), then the limitations of this Article VI shall
be treated as met only.if either (i) the limitations provided in Code Section 415(b) are met,
determined by treating the accrued benefit derived from such contributions as an annual benefit
for purposes of Code Section 415(b), or (ii) the requirements of Code Section 415(c) are met,
determined by treating all such contributions as annual additions for purposes of Code Section
415(c).
-29-
NBI: 790408.2
ARTICLE VII
7.1 Definitions
Whenever the following terns are used in the Plan, with the first letter capitalized, they
shall have the meanings specified below.
"Act" means the California Government Code.
"Anniversary Date" means July 1.
"Beneficiary" means the person, persons, trust or trusts designated by a Member, or, in
the absence of a designation, entitled by will or the laws of descent and distribution, to receive
the benefit specified under this Plan if the Member dies and means the Member's executor or
administrator if no other Beneficiary is designated and able to act under the circumstances.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Compensation" means, for Plan Years beginning after December 31, 2001 or 90 days
after the opening of the first legislature session on or after January 1, 2002, all compensation for
that portion of the Plan Year during which the Employee was a Member, paid in cash by the
Employer to the Member for personal services. Compensation in excess of $200,000 shall be
disregarded. Such amount shall be adjusted for increases in the cost of living in accordance with
Code Section 401(a)(17), except that the dollar increase in effect on January 1 of any calendar
year shall be effective for the Plan Year beginning with or within such calendar year. For any
short Plan Year the Compensation limit shall be an amount equal to the Compensation limit for
the calendar year in which the Plan Year begins multiplied by a ratio obtained by dividing the
number of full months in the short Plan Year by twelve (12).
-30-
NBI 790409 2
For purposes of determining benefit accruals in a Plan Year beginning after December
31, 2001, the annual compensation limit described in this Section 7.1 for determination periods
beginning before January 1, 2002 shall be $150,000 for any determination period beginning in
1996 or earlier; $160,000 for any determination period beginning in 1997, 1998, or 1999; and
$170,000 for any determination period beginning in 2000 or 2001.
"Effective Date" means, unless otherwise indicated herein, February 15, 2011.
"Eligible Employee" means an Employee who fulfills the requirements of Section I. I.
"Employee" means an employee of the Employer.
"Employer" means the City of La Quinta, which has adopted this Plan.
"Final Pay" means the Member's rate of base annual salary as of June 30, 2011,
modified to exclude longevity pay, differential pay, special duty pay, special assignment pay,
educational incentive pay, and CalPERS Employer Paid Member Contributions (EPMC), if
applicable.
"Member" means an Employee eligible to receive benefits under this Plan.
"Normal Form of Benefit" is the form of benefit described in Section 4.1.
"Normal Retirement Age" shall be age sixty -two (62) and meeting the requirements of
Section 1.1.
"Plan" means the City of La Quinta Fiscally Responsible Reduction Plan.
"Plan Administrator" means the individual or position designated by the Employer to
act on behalf of the Employer in matters relating to this Plan. If no designation is made, the
Employer shall be the Plan Administrator. If a Plan Administrator has been appointed the word
"Employer" as used in this Plan, shall mean Plan Administrator unless the context indicates a
different meaning is intended.
-31-
N131: 790408.2
"Plan Year" means the consecutive twelve -month period beginning on July I and ending
on June 30.
"Public Agency" means an employer authorized under California Government Code
Article 1.5, sections 53215 through 53224 to establish a pension trust.
"Regulations" means the regulations adopted or proposed by the Department of
Treasury from time to time pursuant to the Code.
"Retirement Benefits" means the benefits payable to the Member following retirement,
as described in Article Il.
"Trust" means the qualified trust established to hold the assets of the Plan.
"Trustee" means the trustee of the Trust.
"Vested" means the nonforfeitable portion of any account maintained on behalf of a
Member.
"Year of Participation" means any year in which an employee is an Employee of the
Employer.
-32-
NBI 790408.2
ADOPTION OF THE CITY OF LA QUINTA
FISCALLY RESPONSIBLE REDUCTION PLAN
The City of La Quinta Fiscally Responsible Reduction Plan is hereby adopted effective
February 15, 2011.
Title:
Date: 02—�/,/
NBI 790408.2
CITY OF LA QUINTA
EXCESS BENEFIT PLAN
EFFECTIVE FEBRUARY 15, 2011
DEFINED BENEFIT PLAN
TABLE OF CONTENTS
ARTICLE I PURPOSE........
ARTICLE II PARTICIPATION ........
ARTICLE III
BENEFITS; VESTING ........................
3.1
Amount of Benefit ... ...............................
3.2
Payment of Benefit .. ...............................
3.3
Vesting ..................... ...............................
3.4
Actuarial Equvalence ..............................
ARTICLE IV
4.1
4.2
4.3
4.4
4.5
4.6
........................ 1
....... ............................... 1
ADMINISTRATION AND AMENDMENT OF THE PLAN ...................
2
Rules and Regulations ....................................................... ...............................
2
Non - Alienation of Benefits ............................................... ...............................
2
Funding............................................................................. ...............................
3
Taxes.................................................................................. ..............................3
.
Amendment and Termination ........................................... ...............................
3
Compliancewith Laws ..................................................... ...............................
3
ARTICLE DEFINITIONS ................................................................. ..............................4
ARTICLE I
The purpose of this Plan is to supplement the benefits of certain Employees under the
City of La Quinta Fiscally Responsible Reduction Plan (the "Supplemental Retirement Plan ")
to the extent that such benefits are reduced by the limitations on benefits imposed by Section 415
of the Internal Revenue Code of 1986, as amended (the "Code ").
ARTICLE II
PARTICIPATION
Those Employees who are participants in the Supplemental Retirement Plan and whose
benefits at the time of payment are reduced by the limitation on benefits imposed by Section 415
of the Code shall be Participants hereunder.
ARTICLE III
BENEFITS; VESTING
3.1 Amount of Benefit
The value of the benefits which each Participant shall be entitled to receive under this
Plan shall be equal to the Actuarial Equivalent of the difference between the actual benefits of
such Participant under the Supplemental Retirement Plan and the Actuarial Equivalent of the
benefits that would have been payable to the Participant under such plan except for the
limitations on benefits imposed by Section 415 of the Code.
3.2 Payment of Benefit
The benefits payable under this Plan shall be payable to the Participant or to any other
person who is receiving or entitled to receive benefits with respect to the Participant (the
"Distributee ") under the Supplemental Retirement Plan. The benefits will be paid in the same
form, at the same times and for the same period as benefits are paid with respect to the
Distributee under the Supplemental Retirement Plan. Notwithstanding the foregoing, in the
event that the present value of the Actuarial Equivalent of the benefit to be paid under this Plan
(as determined by the Employer upon the advice of the actuary for PARS) at the commencement
of payment is $5,000 or less, the Employer may, in its discretion, elect to pay the benefit in a
single lump sum.
3.3 Vestin .
A Participant will be fully vested in his Retirement Benefit upon meeting the
requirements of Article II.
3.4 Actuarial Equivalence
For the purpose of establishing Actuarial Equivalence, the mortality assumption shall be
1983 GAM and the interest assumption shall be 6% per annum.
ARTICLE IV
ADMINISTRATION AND AMENDMENT OF THE PLAN
4.1 Rules and Regulations
The Employer has full discretionary authority to supervise and control the operation of
this Plan in accordance with its terms and may make rules and regulations for the administration
of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall
determine any questions arising in connection with the interpretation, application or
administration of the Plan (including any question of fact relating to age, employment,
compensation or eligibility of employees) and its decisions or actions in respect thereof shall be
conclusive and binding upon any and all persons and parties.
4.2 Non - Alienation of Benefits
Except as otherwise provided in the Plan, no right or benefit under the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any
attempt to anticipate, alienate, sell, assign, pledge, encumber or charge such right or benefit shall
be void. No such right or benefit shall in any manner be liable for or subject to the debts,
liabilities or torts of a Participant or other benefit recipient. In addition, no right of a Participant
or other benefit recipient under the Plan is transferable by inter vivos gift or testamentary
disposition.
2
4.3 Funding
The Plan shall be unfunded, and benefits under the Plan shall be paid from the general or
retirement fund of the Employer through an Excess Benefit Plan Fund hereby established for
payment of administration expense and benefit payments, subject to the claims of the Employer's
general creditors. No person other than the Employer shall by virtue of the. provisions of the
Plan have any interest in such amounts. Title to and beneficial ownership of any assets, whether
cash or other investments which the Employer may earmark to pay any amount under the Plan,
shall at all times remain with the Employer, and Participants and any other persons entitled to
benefits hereunder shall not have any property interest whatsoever in any specific assets of the
Employer. The obligation of the Employer to make payments pursuant to the Plan is contractual
only. No Participant or other person entitled to benefits hereunder shall have a preferred claim
or lien on any assets of the Employer.
4.4 Taxes
The Plan Administrator shall make appropriate arrangements to deduct from all amounts
paid under the Plan any taxes required to be withheld with respect to the Plan by any government
or governmental agency.
4.5 Amendment and Termination
The Employer shall have the right to amend the Plan (other than this section) or terminate
the Plan at any time. If the Plan is terminated, the actuarial equivalent present value of any
remaining benefits payable to a Participant or other person shall be paid in a lump sum 30 days
after the termination of the Plan.
4.6 Compliance with Laws
It is the intention that this Plan be a "qualified governmental excess benefit arrangement"
within the meaning of Section 415(m) of the Code, and may at any time be amended to comply
with the Code requirements to maintain such qualification and status.
3
ARTICLE V
DEFINITIONS
Whenever the following terms are used in the Plan, with the first letter capitalized, they
shall have the meanings first specified below.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Employer" shall mean the City of La Quinta that has adopted this Plan.
"Employee" shall mean an employee of the Employer.
"Normal Retirement Age" shall mean sixty -two (62) years of age.
"Participant" shall mean those Employees eligible for participation in the Plan.
"Plan" shall mean this City of La Quinta Excess Benefit Plan, as amended.
"Retirement Benefits" shall mean the benefits payable to the Participant following
retirement, as described in Article III.
"Supplemental Retirement Plan" shall mean the City of La Quinta Fiscally
Responsible Reduction Plan, effective February 15, 2011, as amended.
4
CITY OF LA QUINTA
EXCESS BENEFIT PLAN
The City of La Quinta Excess Benefit Plan is hereby adopted effective February 15, 2011.
By
Thomas Genovese
Title: City Manager
Date:
El
PUBLIC AGENCY
RETIREMENT SYSTEM (PARS)
TRUST AGREEMENT
PREAMBLE
The Huntington Beach City School District and State Center Community College District
formed and adopted the Public Agency Retirement System Trust ( "PARS Trust") on
July 1, 1991 ( "Effective Date "). Subsequent to the Effective Date other California public
agencies adopted the PARS Trust as the funding vehicle for tax qualified retirement
plans for employees. Subsequent to the Effective Date the PARS Trust was amended.
Effective as of July 1, 1999 ( "Amended Effective Date ") the PARS Trust was amended
and restated in its entirety as contained herein. This amended and restated Trust shall
supersede all prior versions of the PARS Trust as of the Amended Effective Date.
TABLE OF CONTENTS
ARTICLE
ARTICLE LDEFINITIONS
ARTICLE II THE PARS TRUST PROGRAM
ARTICLE III ADMINISTRATIVE MATTERS
ARTICLE IV THE TRUSTEE
ARTICLE V INVESTMENTS
ARTICLE VI FIDUCIARY RESPONSIBILITIES
PAGE
3
4
7
12
18
25
ARTICLE VII AMENDMENT, TERMINATION AND MERGER 28
ARTICLE Vlll MISCELLANEOUS PROVISIONS 30
ARTICLE IX ACKNOWLEDGMENT AND ACCEPTANCE 32
2
2567_12 PEL
Article I
DEFINITIONS
1.1 "Act" shall mean. California Government Code Sections 53215 53224, or their
successor sections.
1.2 "Agreement for Administrative Services" shall mean the agreement executed
between the Member Agency and the Trust Administrator which authorizes the
Trust Administrator to perform specific duties of administering the Member
Agency Plan and related Agency Trust.
1.3 "Amended Effective Date" shall mean July 1, 1999, the date the PARS Trust
Agreement was amended and restated in its entirety.
1.4 "Assets" shall mean all contributions and transfers of. assets received by an
Agency Trust on behalf of a Member Agencys Plan, together with the income
and earnings from such contributions and transfers and any increments accruing
to them.
1.5 "Agency Trust" shall mean the legally separate and individual trust, whose
provisions are identical to those of the PARS Trust Agreement, that is
established by a Member Agency when it adopts the PARS Trust by executing
an Adoption Agreement.
1.6 "Alternate Trustee" shall mean a trustee, other than the Trustee of the PARS
Trust Program, appointed by a Member Agency to serve as a trustee of a portion
of such Agency Trust's assets as to which the Trustee serves as custodian.
1.7 "Code" shall mean the Internal Revenue Code of 1986 as amended from time to
time.
1.8 "Custodian" shall mean Union Bank of California, N.A. whose duties are limited
to those specified in Section 4.3.
1.9 "Delegatee" shall mean an individual or entity, appointed by the Plan
Administrator or Member Agency to act in such matters as are specified in the
appointment.
1:10 "Effective Date" shall mean July 1, 1991, the date the PARS Trust Program was
established.
1.11 "Investment Fiduciary" shall mean the fiduciary with the authority and duty to
direct the investment and management (including the power to direct the
3
2567_12 PEL
acquisition and disposition) of some or all of the Assets of the Agency Trust
appointed by a Member Agency for its Agency Trust.
1.12 "Omnibus Account" shall mean an account, established for record keeping
purposes only, to commingle the Assets of the Agency Trust.
1.13 "Member Agency" shall mean a California public agency that adopts the
provisions of the PARS Trust Agreement.
1.14 "Plan" shall mean the tax qualified plan whose assets the Agency Trust holds.
1.15 "Plan Administrator" shall mean the individual designated by position of
employment at the Member Agency to act on its behalf in all matters relating to
the Member Agency's participation in the PARS Trust Program and Agency
Trust.
1.16 "PARS Trust Agreement" or "Trust Agreement" shall mean the Pro forma Public
Agency Retirement System trust document adopted by each Member Agency
upon execution of an Adoption Agreement, as amended from time to time.
1.17 "PARS Trust Program" shall mean the Public Agency Retirement System trust
arrangement.
1.18 "Participant" shall mean individual participating in a Member Agency Plan or that
individual's beneficiary.
1.19 "Trust Administrator" shall mean Phase II Systems.
1.20 'Trustee" shall mean the entity appointed as trustee of the PARS Trust that shall
also serve as trustee of each Agency Trust established pursuant to the
provisions of this trust agreement except where an Alternate Trustee has been
appointed.
Article II
THE PARS TRUST PROGRAM
2.1 Multiple Employer Trust
The PARS Trust Program is a multiple employer trust arrangement established to
provide economies of scale and efficiency of administration to public agencies
that adopt it to hold the assets of their Member Agency Plans maintained for the
benefit of their employees. The PARS Trust Program consists of the Agency
Trusts adopted and not terminated by Member Agencies.
4
2567_12 PEL
2.2 Qualified Governmental Retirement Trust
The PARS Trust Program is established pursuant to the provisions of Section
501 of the Internal Revenue Code of 1986, as amended (the "Code "), and
California Government Code Sections 53215 through 53224 providing for
pension trusts established by public agencies..
2.3 Date of Adoption
The date as of which each Member Agency adopts the PARS Trust Program
shall be the "Effective Date" of the PARS Trust Agreement and the Agency Trust,
as defined in Section 2.5, as to that Member Agency.
2.4 Member Agencies
Any California public agency may, by action of its governing body in a writing
accepted by the Trustee, adopt the provisions of the PARS Trust Agreement as
the trust portion of a qualified governmental retirement plan established for the
benefit of its employees. Executing an adoption instrument for the PARS Trust
Program ( "Adoption Agreement"), attached hereto as Exhibit "A ", shall constitute
such adoption, unless the Trustee requires additional evidence of adoption. In
order for such adoption to be effective, the public agency must also execute an
Agreement for Administrative Services with Phase II Systems, the Trust
Administrator, pursuant to section 3.6 of this PARS Trust Agreement. Such
adopting employer shall then become a Member Agency of the PARS Trust
Program.
Each such Member Agency shall, at a minimum, furnish the Trust Administrator
with the following documents to support its adoption of the PARS Trust Program:
(a) a certified copy of the Member Agency governing body resolution
authorizing the adoption of the PARS Trust Agreement and the
appointment of an individual designated by position of employment at the
Member Agency to act on its behalf in all matters relating to the Member
Agency's participation in the PARS Trust Program and Agency Trust
( "Plan Administrator");
(b) an original of the Adoption Agreement executed by the Plan Administrator
or other duly authorized Member Agency employee;
(c) an original of the Agreement for Administrative Services with Phase IF,
Systems executed by the Plan Administrator or other duly authorized
Member Agency employee and Phase II Systems;
(d) an address notice; and
2567_12 PEL
(e) such other documents as the Trustee may reasonably request.
2.5 Agency Trust
By adopting the PARS Trust Agreement, as provided in Section 2.4, a Member
Agency shall be deemed to have adopted a legally separate and individual
Agency Trust whose provisions are identical to those of the PARS Trust
Agreement. The Assets of an Agency Trust shall be available only to pay
benefits pursuant to the provisions of the Plan to participants and beneficiaries of
the Member Agency entitled to receive benefits under the provisions of the Plan.
The Agency Trust is created for the purpose of receiving contributions made to
fund the Member Agency's Plan; accumulating, managing and investing those
contributions; and providing benefits to active or retired participants of the Plan;
their joint annuitants, or their beneficiaries. Each Agency Trust shall be used to
fund only a single Plan maintained by the Member Agency. A Member Agency
may establish additional Agency Trusts to fund the assets of additional Plans by
executing one or more additional Adoption Agreement(s).
2.6 Assets of Agency Trust
The assets of the Agency Trust shall consist of all contributions and transfers
received by the Agency Trust on behalf of the Member Agency's Plan, together
with the income and earnings from such contributions and transfers, and any
increments accruing to them ( "Assets "). All contributions or transfers shall be
received by the Trustee in cash or in other property acceptable to the Trustee.
The Trustee shall manage and administer the Assets of the Agency Trust without
distinction between principal and income. The Trustee and the Trust
Administrator shall have no duty to compute any amount to be transferred or paid
to the Agency Trust by the Member Agency and the Trustee and the Trust
Administrator shall not be responsible for the collection of any contributions or
transfers to the Agency Trust.
2.7 Commingling for Investment and Administration
The Assets of more than one Agency Trust may be commingled by the Trustee
or Investment Fiduciary in one or more Omnibus Accounts for investment and
administrative purposes, to provide economies of scale and efficiency of
administration to the Agency Trusts. The responsibility for Plan. level accounting
within this Omnibus Account(s) shall be that of the Trust Administrator.
28 Trustee Accounting
The Trustee shall be responsible only for maintaining records and maintaining
accounts , for the aggregate assets of the PARS Trust Program. The
2567_12 PEL
responsibility for Plan level accounting for each Agency Trust, based upon the
Omnibus Account(s), shall be that of the Trust Administrator.
2.9 No Diversion of Assets
The Assets in each Agency Trust shall be held in trust for the exclusive purpose
of providing benefits to the Participants of the Plan for which the Agency Trust is
holding assets and defraying the reasonable expenses of such Plan. The Assets
shall not be used for or diverted to, any other purpose.
2.10 Type and Nature of Trust
Neither the full faith and credit nor the taxing power of each Member Agency, the
State of California or any political subdivision thereof other than each Member
Agency is pledged to the distribution of benefits hereunder. Except for
contributions and other amounts hereunder, no other amounts are pledged to the
distribution of benefits hereunder. Distributions of benefits are neither general
nor special obligations of any Member Agency, but are payable solely from the
Assets of each Agency Trust, as more fully described herein. No employee of
any Member Agency or beneficiary may compel the exercise of the taxing power
by any Member Agency.
Distributions of Assets under any Agency Trust are not debts of any Member
Agency, the State of California or any of its political subdivisions within the
meaning of any constitutional or statutory limitation or restriction. Such
distributions are not legal or equitable pledges, charges, liens or encumbrances,
upon any of a Member Agency's property, or upon any of its income, receipts, or
revenues, except amounts in the accounts which are, under the terms of each
Plan, Agency Trust and the Act, set aside for distributions. Neither the members
of the legislative body of any Member Agency nor its officers, employees, agents
or volunteers are liable hereunder.
Article III
ADMINISTRATIVE MATTERS
3.1 Appointment of Trustee
Two thirds or more of the Member Agencies acting jointly, may by a two- thirds or
greater vote, act to appoint a bank, trust company, retirement board, insurer,
committee or such other entity as permitted by California law, to serve as the
trustee of the PARS Trust Program ("Trustee "). Such action must be in writing.
Upon the written acceptance of such entity it shall become the Trustee of the
PARS Trust Program and, subject to the provisions of Section 3.10, the trustee of
each Agency Trust. By executing an Adoption Agreement, the adopting Member
2567_12 PEL
Agency hereby appoints the Union Bank of Califomia, N.A. as the Trustee as of
the Amended Effective Date.
3.2 Removal of Trustee
Two thirds or more of the Member Agencies acting jointly, may by a vote of two -
thirds or greater, act to remove the Trustee. Such action must be in writing and
delivered to the Trustee and the Trust Administrator. Upon such removal from
the PARS Trust the Trustee shall also be removed as trustee of each of the
Agency Trusts. The Plan Administrator may remove the Trustee as trustee of an
Agency Trust by giving at least ninety (90) days prior written notice to the Trustee
and the Trust Administrator and withdrawing from the PARS Trust Program.
33 Resignation of Trustee
The Trustee may resign as trustee of the PARS Trust Program at any time by
giving at least ninety (90) days prior written notice to the Trust Administrator and
to each Plan Administrator of each Member Agency that has adopted the PARS
Trust Agreement and not terminated its participation in the PARS Trust Program.
Such resignation shall also be deemed a resignation as trustee of. each of the
Agency Trusts. The Trustee may resign as trustee of an Agency Trust by giving
at least ninety (90) days written notice to the Plan Administrator of such Agency
Trust and to the Trust Administrator. The Member Agency's appointment of a
successor trustee to the Agency Trust will vest the successor trustee with title to
the Assets of its Agency Trust upon the successor trustee's acceptance of such
appointment.
3.4 The Plan Administrator
The goveming body of each Member Agency shall have plenary authority for the
administration and investment of the Agency Trust pursuant to the laws and
Constitution of the State of California and applicable federal laws and
regulations. Each Member Agency shall by resolution designate a Plan
Administrator. Unless otherwise specified in the instrument the Plan
Administrator shall be deemed to have authority to act on behalf of the Member
Agency, in all matters pertaining to the Member Agency's participation in the
PARS Trust Program and in regard to the Agency Trust of the Member Agency.
Such appointment of a Plan Administrator shall be effective upon receipt and
acknowledgment by the Trustee and the Trust Administrator and shall be
effective until the Trustee and Trust Administrator are fumished with a resolution .
of the Member Agency that the appointment has been modified or terminated.
3.5 Failure to Appoint Plan Administrator
If a Plan Administrator is not appointed, or such appointment lapses, the Member
Agency shall be deemed to be the Plan Administrator. As used in this document
2567_12 PEL
Plan Administrator shall be deemed to mean Member Agency when a Plan
Administrator has not been appointed.
3.6 Delegatee
The Plan Administrator, acting on behalf of the Member Agency, may delegate .
certain authority, powers and duties to an entity to act in those matters specified
in the delegation ( "Delegatee "). Any such delegation must be in a writing that
names and identifies the Delegatee, states the effective date of the delegation,
specifies the authority and duties delegated, is executed by the Plan
Administrator and is acknowledged in writing by the Delegatee, the Trust
Administrator (if not the Delegatee) and the Trustee. Such delegation shall be
effective until the Trustee and the Trust Administrator are directed in writing by
the Plan Administrator that, the delegation has been rescinded or modified.
3.7 Certification to Trustee
The governing body of each Member Agency, or other duly authorized official,
shall certify in writing to the Trustee and the Trust Administrator the names and
specimen signatures of the Plan Administrator and Delegatee, if any, and all
others authorized to act on behalf of the Member Agency whose names and
specimen signatures shall be kept accurate by the Member Agency acting
through a duly authorized official or governing body of the Member Agency. The
Trustee and the Trust Administrator shall have no liability if it acts upon the
direction of a Plan Administrator or Delegatee that has been duly authorized, as
provided in Section 3.6, if that Plan Administrator or Delegatee is no longer
authorized to act, unless the Member Agency has informed the Trustee and the
Trust Administrator of such change.
3.8 Directions to Trustee
Except as provided in Section 5.18 of this Trust Agreement, all directions to the
Trustee from the Plan Administrator or Delegatee must be in writing and must be
signed by the Plan Administrator or Delegatee, as the case may be. For all
purposes of this Trust Agreement, direction shall include any certification, notice,
authorization, application or instruction of the Plan Administrator, Delegatee or
Trustee appropriately communicated. The above notwithstanding direction may
be implied if the Plan Administrator or Delegatee has knowledge of the Trustee's
intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper
direction of the Plan Administrator, or Delegatee, appointed in accordance with
the provisions of this PARS Trust Agreement. In the case of any direction
deemed by the Trustee to be unclear or ambiguous the Trustee may seek written
instructions from the Plan Administrator, the Agency or the Delegatee on such
2567_12 PEL
matter and await their written instructions without incurring any liability. If at any
time the Plan Administrator or the Delegatee should fail to give directions to the
Trustee, the Trustee may act in the manner that in its discretion seems advisable
under the circumstances for carrying out the purposes of the PARS Trust
Program and /or any Agency Trust which may include not taking any action. The
Trustee may request directions or clarification of directions received and may
delay acting until clarification is received. In the absence of timely direction or
clarification, or if the Trustee considers any direction to be a violation of the
PARS Trust Agreement or any applicable law, the Trustee shall in its sole
discretion take appropriate action, or refuse to act upon a direction.
3.9 Alternate Trustee
A Member Agency may appoint a trustee, other than the Trustee, as to a portion
of the assets in the Agency Trust by designating such person or entity as: an
Alternate Trustee on the Adoption Agreement and by specifying which assets
shall be subject to the fiduciary management of the Alternate Trustee. Such
appointment shall not be effective unless it is in writing, specifies clearly the
assets as to which the Alternate Trustee is to have trustee powers, is
acknowledged in writing by the Alternate Trustee, is delivered to and
acknowledged by the Trustee and the Trust Administrator. Only a bank, trust
company, retirement board, insurer, the Member Agency or such entity as
permitted by California law to be a trustee may be appointed an Alternate
Trustee. Such appointment will become effective upon acceptance by the
Alternate Trustee.
3.10 Powers Of Alternate Trustee
The Alternate Trustee shall be deemed to have all of the powers and duties and
responsibilities specified in the PARS Trust Agreement for the PARS Trustee in
Article IV unless otherwise specified in the Adoption Agreement.
3.11 Responsibility of Trustee Upon Appointment of Alternate Trustee
Upon the appointment of an Alternate Trustee, the Trustee shall have no liability
or responsibility for any matters relating to the management, investment or
administration of those assets as to which the Alternate Trustee has been
appointed and shall only have the duties set forth in Section 4.3.
3.12 Trust Administrator
The Member Agencies have appointed Phase II Systems as the Trust
Administrator. The Trust Administrator has accepted its appointment subject to
each Member Agency s delegation of authority, to act as . such, pursuant to
Section 3.6 of this PARS Trust Agreement. The Trust Administrator's duties
10
2567_12 PEL
involve the performance of the following services pursuant to the provisions of
this trust agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Agency Trust;
(b) Directing the Trustee to make distributions from the Agency Trust to
Participants pursuant to the provisions of the Member Agency's Plan and
liquidate assets in order to make such distributions;
(c) Notifying the Investment Fiduciary of the amount of Assets in the Agency
Trust available for further investment and management by the Investment
Fiduciary;
(d) Allocating contributions, earnings and expenses to each Agency Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of the
Trust Administrator and to do such other acts as shall be appropriate to
carry out the intent of the Agency Trusts.
(f) Such other services as the Member Agency and the Trust Administrator
may agree in the Agreement for Administrative Services pursuant to
Section 2.4.
3.13 The Trust Administrator shall be entitled to rely on, and shall be under no duty to
question, direction and /or data received from the Plan Administrator, or other
duly authorized entity, in order to perform its authorized duties under this trust
agreement. The Trust Administrator shall not have any duty to compute
contributions made to the Agency Trust, determine or inquire whether
contributions made to the Agency Trust by the Plan Administrator or other duly
authorized entity are adequate to meet and discharge liabilities under the Plan; or
determine or inquire whether contributions made to the Agency Trust are in
compliance with the Plan; The Trust Administrator shall not be liable for non
performance of duties if such non performance is directly caused by erroneous,
and /or late delivery of, directions or data from the Plan Administrator, or other
duly authorized entity.
3.14 Additional Trust Administrator Services
The Plan Administrator may at any time retain the Trust Administrator as its:
agent to perform any act, keep any records or accounts and make any
computations which are required of the Member Agency or the Plan
Administrator by this PARS Trust Agreement or by the Member Agencys Plan.
The Trust Administrator shall be separately compensated for such service and
such services shall not be deemed to be contrary to the PARS Trust Agreement.
11
2567_12 PEL
3.15 Trust Administrator's Compensation
As may be agreed upon from time to time by the Member Agency and Trust
Administrator, the Trust Administrator will be paid reasonable compensation for
services rendered or reimbursed for expenses properly and actually incurred in
the performance of duties with respect to the Agency Trust and to the PARS.
Trust Program in accordance with Section 53217 of the Act.
3.16 Resignation or Removal of Trust Administrator
The Trust Administrator may resign at any time by giving at least one hundred
twenty (120) days written notice to each Member Agency of the PARS Trust
Program and the Trustee. The Member Agencies, by a two- thirds or greater
vote, may remove the Trust Administrator by delivering, at least one hundred?
twenty (120) days prior to the effective date of such removal, written notice to the
Trust Administrator and to the Trustee.
Article IV
THE TRUSTEE
4.1 Powers and Duties of the Trustee
Except as otherwise provided in Article V and subject to Article Vi, the Trustee
shall have full power and authority with respect to property held in the Agency
Trust to do all such acts, take all proceedings, and exercise all such rights and
privileges, whether specifically referred to or not in this document, as could be
done, taken or exercised by the absolute owner, including, without limitation, the
following:
(a) To invest and reinvest the Assets or any part hereof in any one or more
kind, type, class, item or parcel of property, real, personal or mixed,
tangible or intangible; or in any one or more kind, type, class, item or issue
of investment or security; or in any one or more kind, type, class or item of
obligation, secured or unsecured; or in any combination of them. To retain
the property for the period of time that the Trustee deems appropriate;
(b) To acquire and sell options to buy securities ( "call" options) and to acquire
and sell options to sell securities ( "put" options);
(c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including mineral leases), exchange and in any other manner to acquire,
manage, deal with and dispose of all or any part of the Agency Trust
12
2567_12 PEL -
property, for cash or credit and upon any reasonable terms and
conditions;
(d) To make deposits, with any bank or savings and loan institution, including
any such facility of the Trustee or an affiliate thereof provided that the
deposit bears a reasonable rate of interest;
(e) To invest and reinvest the Assets, or any part thereof in any one or more
collective investment trust funds, including common and group trust funds
that consist exclusively of assets of exempt pension and profit sharing
trusts and individual retirement accounts qualified and tax exempt under
the Code, that are maintained by the Trustee or an affiliate thereof. The
declaration of trust or plan of operations for any such common or
collective fund is hereby incorporated herein and adopted into this PARS
Trust Agreement by this reference. The combining of money and other
assets of the Agency Trust with money and other assets of other qualified
trusts in such fund or funds is specifically authorized. Notwithstanding
anything to the contrary in this trust agreement, the Trustee shall have full
investment responsibility over assets of the trust invested in such
commingled funds. If the plan and trust for any reason lose their tax
exempt status, and the Assets have been commingled with assets of other
tax exempt trusts in Trustee's collective investment funds, the Trustee
shall within 30 days of notice of such loss of tax exempt status, liquidate
the Agency Trust's units of the collective investment fund(s) and invest the
proceeds in a money market fund pending investment or other instructions
from the Plan Administrator. The Trustee shall not be liable for any loss or
gain or taxes, if any, resulting from said liquidation;
(f) To place uninvested cash and cash awaiting distribution in one or more
mutual funds and /or commingled investment funds maintained by or made
available by the Trustee, and to receive compensation from the sponsor of
such fund(s) for services rendered, separate and apart from any Trustee's
fees hereunder. Trustee or Trustee's affiliate may also be compensated
for providing investment advisory services to any mutual fund or
commingled investment funds;
(g) To borrow money for the purposes of the Agency Trust from any source
with or without giving security; to pay interest; to issue promissory notes
and to secure the repayment thereof by pledging all or any part of the
Assets;
(h) To take all of the following actions as directed by the Investment Fiduciary
or other person with investment discretion over the trust assets: to vote
proxies of any stocks, bonds or other securities; to give general or special
proxies or powers of attorney with or without power of substitution; to
exercise any conversion privileges, subscription rights or other options,
13
2567_12 PEL
and to make any payments incidental thereto; to consent to or otherwise
participate in corporate reorganizations or other changes affecting
corporate securities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities or other property held in the Agency Trust;
(i) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may be
necessary or appropriate to carry out the powers herein granted;
(j) To raze or move existing buildings; to make ordinary or extraordinary;,
repairs, alterations or additions in and to buildings; to construct buildings,
and other structures and to install fixtures and equipment therein;
(k) To pay or cause to be paid from the Agency Trust any and all real or
personal property taxes, income taxes or other taxes or assessments of
any or all kinds levied or assessed upon or with respect to the Agency
Trust or the Plan;
(1) As directed by the Trust Administrator, to hold term or ordinary life
insurance contracts on the lives of Participants (but in the case of conflict
between any such contract and the Plan, the terms of the Plan shall
prevail); to pay from the Agency Trust the premiums on such contracts; to
distribute, surrender or otherwise dispose of such contracts; to pay the
proceeds, if any, of such contracts to the proper persons in the event of
the death of the insured Participant; to enter into, modify, renew and
terminate annuity contracts of deposit administration of immediate
participation or other group or individual type with one or more insurance
companies and to pay or deposit all or any part of the Agency Trust
Assets thereunder; to provide in any such contract for the investment of all
or any part of funds so deposited with the insurance company in securities:;
under separate accounts; to exercise and claim all rights and benefits,
granted to the contract holder by any such contracts;
(m) To exercise all the further rights, powers, options and privileges granted,
provided for, or vested in trustees generally under applicable federal or
California laws, as amended from time to time, it being intended that,
except as herein otherwise provided, the powers conferred upon the
Trustee herein shall not be construed as being in limitation of any authority
conferred by law, but shall be construed as consistent or in addition
thereto.
14
2567_12 PEL
4.2 Additional Trustee Powers
In addition to the other powers enumerated above, and whether or not the
Member Agency has retained investment authority or delegated it to an
Investment Fiduciary or Participants in Participant Directed. Accounts, the Trustee
in any and all events is authorized and empowered:
(a) To invest funds pending required directions in any type of interest - bearing
account including without limitation, time certificates of deposit or interest-
bearing accounts issued by Union Bank of California N.A., or any mutual
fund or short term investment fund ( "Fund "), whether sponsored or
advised by Union Bank of California or any affiliate thereof, Union Bank of
California, N.A. or its affiliate may be compensated for providing such
investment advice and providing other services to such Fund, in addition
to any Trustee's fees received pursuant to this Trust Agreement;
(b) To cause all or any part of the Agency Trust to be held in the name of the
Trustee (which in such instance need not disclose its fiduciary capacity)
or, as permitted by law, in the name of any nominee, and to acquire for the
Agency Trust any investment in bearer form, but the books and records of
the Agency Trust shall at all times show that all such investments are a
part of the Agency Trust and the Trustee shall hold evidences of title to all
such investments;
(c) To serve as sole custodian with respect to the Agency Trust Assets;
(d) To employ such agents and counsel as may be reasonably necessary in
managing and protecting the Assets and to pay them reasonable
compensation; to employ any broker - dealer, including a broker - dealer
affiliated with the Trustee, and pay to such broker - dealer at the expense of
the Agency Trust, its standard commissions; to settle, compromise or
abandon all claims and demands in favor of or against the Agency Trust ;.
and to charge any premium on bonds purchased at par value to the
principal of the Agency Trust without amortization from the Agency Trust,
regardless of any law relating thereto;
(e) In addition to the powers listed herein, to do all other acts necessary or
desirable for the proper administration of the Agency Trust, as though the
absolute owner thereof;
(f) To abandon, compromise, contest, arbitrate or settle claims or demands
to prosecute, compromise and defend lawsuits, but without obligation to
do so, all at the risk and expense of the Agency Trust;
(g) To exercise and perform any and all of the other powers and duties
speed in this Trust Agreement or the Plan;
15
2567_12 PEL
(h) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by United States
agency;
To comply with all requirements imposed by applicable provisions of law;
(j) To seek written instructions from the Plan Administrator or other fiduciary
on any matter and await their written instructions without incurring any
liability. If at any time the Plan Administrator or the fiduciary should fail to
give directions to the Trustee, the Trustee may act in the manner that in its
discretion seems advisable under the circumstances for carrying out the
purposes of this Agency Trust;
(k) As directed by the Plan Administrator or Delegatee if duly authorized, to
cause the benefits provided under the Plan to be paid directly to the
persons entitled thereto under the Plan, and in the amounts and in the
manner specified, and to charge such payments against the Agency Trust
with respect to which such benefits are payable;
(1) To compensate such executive, consultant, actuarial, accounting,
investment, appraisal, administrative, clerical, secretarial, medical,
custodial, depository and legal firms, personnel and other employees or
assistants as are engaged by the Plan Administrator in connection with
the administration of the Plan and to pay from the Agency Trust the
necessary expenses of such firms, personnel and assistants, to the extent
not paid by the Plan Administrator;
(m) To act upon proper written directions of the Plan Administrator or
Delegatee, including directions given by photostatic transmissions using
facsimile signature;
(n) To pay from the Agency Trust the expenses reasonably incurred in the
administration of the Agency Trust as provided in the Plan;
(o) To maintain insurance for such purposes, in such amounts and with such
companies as the Plan Administrator shall elect, including insurance to
cover liability or losses occurring by reason of the acts or omissions of
fiduciaries but only if such insurance permits recourse by the insurer
against the fiduciary in the case of a breach of a fiduciary obligation by
such fiduciary.
16
2567_12 PEL
4.3 Custodial Powers
If an Alternate Trustee has been appointed pursuant to Section 3.9, Union Bank
of California, N.A., ( "Bank ") as Custodian, shall only have the following
responsibilities:
(a) Keep records of all transactions entered into for the Agency Trust and
furnish to Alternate Trustee statements no less frequently than quarterly
showing all principal and income transactions and Agency Trust Assets,
which shall be deemed rated and approved by Alternate Trustee unless
Custodian is advised to the contrary within ninety (90) days of Custodian's
mailing thereof by first class mail to Alternate Trustee;
(b) Receive payments of income and principal on Agency. Trust Assets, and
retain or remit in accordance with Alternate Trustee's written instructions;
(c) Hold Agency Trust Assets in Bank's name as Custodian for Alternate
Trustee or in Bank's nominee name, or, as to securities eligible to be held
by the depository trust company or other depository, in its nominee name;
(d) Purchase and sell securities, attend to the exchange of securities, deposit
or exchange securities of companies in reorganization, and tender
securities on redemption or tender offer solely upon direction of Alternate
Trustee;
(e) Sign the name of Alternate Trustee to stock and bond powers and any
other instruments required for the proper exercise of Bank's duties, and
Bank is appointed Alternate Trustee's attomey -in -fact for these purposes;
(f) Forward all proxies and accompanying materials to Alternate Trustee to
be voted unless directed in writing to the contrary. Disclose Alternate
Trustee's name and address in response to requests from issuers of
securities and others to facilitate direct communication for proxy and
tender offer response;
(g) Sell all fractional shares of stock received as a result of stock dividends or
other corporate action;
(h) Notify Alternate Trustee of any inability to collect income or principal if the
securities or other property constituting Assets upon which such amount is
payable is in default, or if payment is refused after due demand. Bank,
shall be under no obligation or duty to take any action to effect collection
of defaulted payments, or to file or pursue any bankruptcy or class action
claims with respect to Agency Trust.
n
256712 PEL
(i) Perform a telephonic verification to Alternate Trustee or Alternate
Trustee's authorized representative or such other security procedure
selected by Alternate Trustee prior to wiring funds or following facsimile
directions as Bank may require. Alternate Trustee assumes all risk of
delay. of transfer if Bank is unable to reach Alternate Trustee or Altemate
Trustee's authorized representative, or in the event of delay as a result of
attempts to comply with any other security procedure selected by
Alternate Trustee.
Article V
INVESTMENTS
5.1 Investment Fiduciary
Except as herein provided, the Plan Administrator shall be the Investment
Fiduciary.
5.2 Appointment of Trustee or an Investment Manager as Investment Fiduciary
The Plan Administrator may appoint the Trustee or an investment manager as
the Investment Fiduciary, with the authority and duty to direct the investment and
management of all or any portion of the Assets of the Agency Trust.
5.3 Appointment of Investment Fiduciary
No action of the Plan Administrator pursuant to 5.2 shall be effective until a
certified copy of the revised Adoption Agreement and, if required, any such
resolution of the governing body of the Member Agency or Plan Administrator
action is delivered to the Trustee. Upon receipt and acceptance, the Trustee or
investment manager, as the case may be, shall assume fiduciary responsibility
with respect to the investment and management of such assets of the Agency
Trust as are specified in the resolution or action. Any transfer of investment
authority to the Trustee or to an investment manager may be revoked by
delivering to the Trustee or the investment manager a written notice from eitherr
the Member Agency governing body or the Plan Administrator, as the case may
be.
5.4 Reliance by Trustee on Investment Fiduciary
The appointment, selection and retention of an Investment Fiduciary shall be
solely the responsibility of the Member Agency acting through its governing body
or the Plan Administrator. The Trustee may rely upon the fact that the
18
2567_12 PEL
Investment Fiduciary is authorized to direct the investment and management of
the Assets of the Agency Trust until such time as the Plan Administrator shall
notify the Trustee in writing that another Investment Fiduciary has been
appointed to replace the Investment Fiduciary named, or, in the alternative, that
the Investment Fiduciary named has been removed.
5.5 When Trustee is not Investment Fiduciary
The Trustee shall not be the Investment Fiduciary and shall have no
responsibility or authority for the investment and management of assets unless
specifically designated as the Investment Fiduciary as to some or all of the
assets in the Agency Trust and accepts such designation.
(a) During such period or periods of time, if any, as the Plan Administrator or
an Investment Fiduciary is authorized to direct the investment and
management of the Assets of the Agency Trust, the Trustee shall (subject
to the overriding limitations hereinafter set forth) effect and change
investment of the Assets of the Agency Trust as directed in writing by the
Plan Administrator, or Investment Fiduciary, as the case may be, and shall
neither effect nor change any such investments without such direction and
shall have no right, duty or responsibility to recommend investments or
investment changes. The following provisions shall govern the Trustee
during such period or periods of time, if any, during which the Plan
Administrator or an Investment Fiduciary is authorized to direct the
investment and management of the Assets of any Agency Trust:
(b) So long as the Plan Administrator retains or reacquires full power and
responsibility to direct the .Trustee with respect to the investment and
management of all or any portion of the Assets of the Agency Trust, the
Trustee shall not be liable nor responsible for losses or unfavorable results
arising from the Trustee's compliance with proper directions of the Plan
Administrator which are made in accordance with the terms of this Trust.
Agreement and which are not contrary to the provisions of any applicable
federal or state statute regulating such investment.
(c) In the event an Investment Fiduciary is given authority and responsibility
with respect to the investment and management of the Assets of the
Agency Trust, neither the Trustee nor the Plan Administrator shall be
liable or responsible in any way for any losses or other Unfavorable results
arising from the Trustee's compliance with investment or management
directions received by the Trustee from the Investment- Fiduciary.
5.6 Investment Directions Must be in Writing
Subject to the provisions of Section 5.18, in order to be valid all directions
concerning investments made by the Plan Administrator, or the Investment
1s
2567_12 PEL
Fiduciary, or PARS Trustee must be signed by the authorized person or persons
acting on behalf of the Plan Administrator, Investment Fiduciary -or Trustee, as
the case may be.
5.7 Trustee Reliance On Directions
(a) The Trustee shall be entitled to rely upon directions which the Trustee
receives. The Trustee shall be under no duty to question any directions of
the Investment Fiduciary or Plan Administrator nor to review any securities
or other property of the PARS Trust or Agency Trust constituting assets
thereof with respect to which an Investment Fiduciary or the Plan
Administrator has investment responsibility, nor to make any suggestions
to the Investment Fiduciary or Plan Administrator in connection therewith.
The Trustee shall, as promptly as possible, comply with any written
directions given by the Plan Administrator or an Investment Fiduciary
hereunder. The Trustee shall not be liable, in any manner nor for any
reason, for the making or retention of any investment pursuant to such
directions, nor shall the Trustee be liable for its failure to invest any or all
of the Assets of the Agency Trust in the absence of such written
directions. The Trustee shall be under no obligation to seek written
clarification in the event of ambiguity.
(b) During such period of time, if any, as the Plan Administrator, or an
Investment Fiduciary, is authorized to direct the Trustee, the Trustee shall
have no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any securities
purchased of which notice was given prior to the purchase of such
securities, and shall have no obligation to exercise any such right unless
the Trustee is informed of the existence of the right and is instructed to
exercise such right, in writing, by the Plan Administrator or the Investment
Fiduciary, as the case may be, within a reasonable time prior to the
expiration of such right.
(c) In any.event, neither the Plan Administrator nor any Investment Fiduciary
referred to above shall direct the purchase, sale or retention of any Assets
of the Agency Trust if such directions are not in compliance with
applicable law.
5.8 Trustee Fees
As may be agreed upon, in writing, between the Plan Administrator and Trustee,
the Trustee will be paid reasonable compensation for services rendered or
reimbursed for expenses properly and actually incurred in the performance of
duties with respect to the Agency Trust or the PARS Trust.
20
256712 PEL
5.9 Contributions
The Plan Administrator shall make all of its contributions to the Trustee, and shall
also transmit all contributions of Plan participants, as may be required or allowed
by the Plan, to the Trustee. Such contributions shall be in cash unless the
Trustee agrees to accept a contribution that is not in cash. All contributions shall
be paid to the Trustee for investment and reinvestment pursuant to the terms of
this Trust Agreement. The Trustee shall not have any duty to determine or
inquire whether any contributions to the Agency Trust made to the Trustee by
any Plan Administrator are in compliance with the Plan; nor shall the Trustee
have any duty or authority to compute any amount to be paid to the Trustee by
any Plan Administrator; nor shall the Trustee be responsible for the collection or
adequacy of the contributions to meet and discharge liabilities under the Plan.
The contributions received by the Trustee from each Member Agency shall be
held and administered pursuant to the terms hereof without;, distinction between
income and principal.
5.10 Money Market Fund
Pending any investment directions, such cash in the Agency Trust in an amount
as is reasonable in the discretion of the Trustee, may be deposited in a money
market fund selected by the Trustee or the Member Agency.
5.11 Purchase of Contracts
The Trustee shall have the authority to purchase individual or group insurance,
annuity, preliminary term, group pension, and variable annuity contracts in
accordance with the directions of the Plan Administrator or other insurance
contracts at the direction of the Plan Administrator or Investment Fiduciary if such
contracts are acceptable to the Trustee. The Trustee shall act as custodian of
such contracts if an Alternate Trustee is appointed as to such contracts.
5.12 Records
(a) The Trustee shall maintain accurate records and detailed accounts of all
investments, receipts, disbursements and other transactions hereunder at
the PARS Trust level. Such records shall be available at all reasonable
times for inspection by the Trust Administrator. The Trustee shall, at the
direction of the Trust Administrator, submit such valuations, reports or
other information as the Trust Administrator may reasonably require.
(b) Valuation The assets of the Agency Trust shall be valued at their fair
market value on the date of valuation, as determined by the Trustee based
upon such sources of information as it may deem reliable; provided,
however, that the Plan Administrator shall instruct the Trustee as to
valuation of assets which are not readily determinable on an established
21
2567_12 PEL
market. The Trustee may rely conclusively on such valuations provided
by the Plan Administrator and shall be indemnified and held harmless by
the Plan Administrator with respect to such reliance. If the Plan
Administrator fails to provide such values, the Trustee may take whatever
action it deems reasonable, including employment of attorneys, appraisers
or other professionals, the expense of which will be an expense of
administration of the Agency Trust. Transactions in the account involving
such hard to value assets may be postponed until appropriate valuations
have been received and Trustee shall have no liability therefore.
5.13 Statements
(a) Periodically as specified, and within sixty days after June 30, or the end of
the PARS Trust's fiscal year if different, Trustee shall render to the Trust
Administrator as directed, a written account showing in reasonable
summary the investments, receipts, disbursements and other transactions
engaged in by the Trustee during the preceding fiscal year or period with
respect to the PARS Trust. Such account shall set forth the assets and
liabilities of the PARS Trust valued as of the end of the accounting period.
(b) The Trust Administrator may approve such statements either by written
notice or by failure to express objections to such statements by written
notice delivered to the Trustee within 90 days from the date the statement
is delivered to the Trust Administrator. Upon approval, the Trustee shall
be released and discharged as to all matters and items set forth in such
statement as if such account had been settled and allowed by a decree
from a court of competent jurisdiction.
5.14 Wire Transfers
The Trustee shall follow the Plan Administrator's, Delegatee's, or Trust
Administrator's wire transfer instructions in compliance with <the written security
procedures provided by the party providing the wire transfers. The Trustee shall
perform a telephonic verification to the Plan Administrator, Trust Administrator, or
Delegatee, of such other security procedure, as selected by the party providing
wire transfer directions, prior to wiring funds or following facsimile directions as
Trustee may require. The Plan Administrator assumes the risk of delay of
transfer if Trustee is unable to reach the Plan Administrator, or in the event of
delay as a result of attempts to comply with any other security procedure
selected by the directing party.
5.15 Exclusive Benefit
The Assets of the Agency Trust shall be held in for the exclusive purpose of
providing benefits to the participants and their beneficiaries of the Member
Agency Plan, and defraying reasonable expenses of the Plan, and shall not be
22
2567_12 PEL
used for or diverted to any other purpose. No party shall have authority to use or
divert such Plan's Assets for the payment of benefits or expenses of any other
Member Agencys Plan.
5.16 Delegation of Duties
The Plan Administrator, Delegatee, or Trust Administrator, may at any time retain
the Trustee as its agent to perform any act, keep any records or accounts and
make any computations that are required of the Plan Administrator, Delegatee or
Trust Administrator by this Trust Agreement or by the Plan. The Trustee may be
compensated for such retention and such retention shall not be deemed to be
contrary to this Trust Agreement.
5.17 Distributions
All benefits payable pursuant to the Plan shall be paid out of the Assets of the
Agency Trust by the Trustee pursuant to the direction of the Plan Administrator or
Delegatee. The Trustee shall, from time to time, upon the written direction of the
Plan Administrator or Delegatee, make distributions from the Assets of the
Agency Trust to or for the benefit of such persons, in such manner in such
form(s), in such amounts and for such purposes as may be specified in such
directions. The Trustee at the direction of the Plan Administrator or Delegatee
may make any distribution required to be made by it hereunder by delivering to
the Plan Administrator or Delegatee:
Its check payable to the person to whom such distribution is to be made,
for delivery to such person; or
Its check payable to an insurer for the benefit of such person, for delivery
by such insurer; or insurance contracts held on the life of the Participant to
whom or with respect to whom the distribution is being made, for
redelivery to the person to whom such distribution is to °be made; provided
that any contract distributed shall be endorsed as non - transferable.
In directing : the Trustee to make distributions, the Plan Administrator or
Delegatee shall follow the provisions of the Plan and shall not direct that any
distribution be made either during the existence or upon discontinuance of the
Plan, which would cause any part of the Assets of the Agency Trust to be used
for or diverted to purposes other than as provided in the Plan and this PARS
Trust. In no event shall the Trustee have any responsibility respecting the
application of such distributions, nor for determining or inquiring into whether
such distributions are in accordance with the Plan.
23
2567_12 PEL
5.1.8 Participant Directed Accounts
The Member Agency may, by written resolution and execution of the Adoption
Agreement, terminate the Plan Administrator's right to direct the investment and
management of all or any portion of the Assets of the Agency Trust and allow
Participants to direct their own account balances ( "Participant Directed
Accounts "). Notwithstanding any other provision of this Trust Agreement, for
Participant Directed Accounts, ' the Trustee shall be- entitled to act upon proper
directions of the Plan Administrator,. Trust Administrator, and Participants
including directions in writing, or oral instructions which Trustee in its discretion
may follow without receipt of written instructions, instruction given by photostatic
teletransmission using facsimile signature, or those instructions which are
digitally recorded on the UBOC Voice Response Unit ("VRU ") or internet website.
Trustee is hereby authorized to record conversations and transmissions made in
connection with the Agency Trust. Trustee's recording or lack of recording of any
such oral, internet or digital instructions, and /or receipt or lack of receipt of
facsimile transmissions, as reflected in the Trustee's records maintained in the
ordinary course of business shall constitute conclusive proof of Trustee's receipt
or non - receipt of such instructions.
The Trustee and /or Trust Administrator shall not be liable in any manner for
investment or other losses or other liability attributable to Participant's directions,
or lack thereof, or exercise of control over the investments of their Participant
Directed Accounts. Likewise, the Trustee and /or Trust Administrator shall have
no duty or responsibility to review, monitor or make recommendations regarding
investments made at the direction of the Participants or the Plan Administrator.
In order for Member Agency to be relieved of investment fiduciary liability, the
requirements of California law including Section 53213.5 of the California
Government Code must be met. The Plan Administrator shall establish uniform
and nondiscriminatory rules for the operation of the Participant Directed
Accounts, including whether the Participant shall direct the Trustee or direct the
Plan Administrator who directs the Trust Administrator- who forwards such
directions to the Trustee. Member Agency shall designate whether Participant
Directed Accounts are to be established pursuant to the provisions of section
5.18(a) or 5.18(b), below:
(a) Participant Direction in Individually Directed Accounts If the Member
Agency has so elected, Participants may. have investment direction power
over their own segregated account balances ( "Individually Directed
Account" or "IDA "). Investments may be directed. by Participants into
assets administratively acceptable to. Trustee, as limited by guidelines
developed by the Plan Administrator (the "Permissible Investment
Guidelines"). Plan Administrator shall notify Participants of the Plan's
Permissible Investment Guidelines as in effect from time to time. In the
absence of directions from a Participant, the Plan Administrator may direct
the investment of the IDA. The Trustee may refuse to comply with the
24
2567_12 PEL
directions of the Participant to invest in assets other than those listed in its
Permissible Investments Guidelines or with directions which the Trustee
deems to be improper or contrary to the provisions of the Plan and Agency
Trust or the Internal Revenue Code and shall have no liability for such
refusal.
(b)
so elects, I '
the Participant's Account Balance l
nceshallbe s Agency
segregated ntoa
Participant Directed Account ( "SelectBENEFIT Account "), over which the
Participant may direct investment into one or more investment alternatives
( "Investment Options "). The. Plan Administrator, or its appointed
Investment Fiduciary shall have full responsibility for designating the
Investment Options under the Plan and for selecting the underlying
investment vehicle(s) for each designated Investment Option into which a
Participant may direct investment of his or her SelectBENEFIT Account.
To the extent allowed by law, neither the Member Agency, the Plan
Administrator, the Trust Administrator nor the Trustee shall have any
responsibility for monitoring the directions of the Participant nor shall the
Member Agency, the Plan Administrator, the Trust Administrator or the
Trustee be liable in any manner for investment or other losses or other
liability for following directions of a Participant.
(c) If SelectBENEFIT Accounts are established, notwithstanding. any other
provision of this Trust Agreement, the Member Agency may appoint the
Trustee to provide ministerial services as recordkeeper for such accounts
by so indicating in the Member Agency's Adoption Agreement, provided
that an acceptable service agreement has been executed by and between
the Member Agency, the Plan Administrator, the Trustee and the Trust
Administrator.
Article VI
FIDUCIARY RESPONSIBILITIES
6.1 More Than One Fiduciary Capacity
Any one or more of the fiduciaries with respect to the PARS Trust Agreement or
the Agency Trust may, to the extent required thereby or as directed by the Plan
Administrator pursuant to this PARS Trust Agreement and the Plan, serve in
more than one fiduciary capacity with respect to the PARS Trust Agreement, the
Agency Trust and the Plan.
25
256712 PEL
6.2 Fiduciary Discharge of Duties
Except as otherwise provided in the Code and applicable law each fiduciary shall
discharge such fiduciary's duties with respect to the PARS Trust Agreement and
the Plan:
Solely in the interest of the Participants and for the exclusive purpose of
providing benefits to Participants, and defraying reasonable expenses of
administering1he 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 like
character and with like aims. By diversifying the investments of the Plan and the
Agency Trust so as to minimize the risk of loss and to maximize the rate of
return, unless under the circumstances it is clearly prudent not to do so.
6.3 Limitations on Fiduciary Responsibility
To the extent permitted by applicable law:
No fiduciary shall be liable with respect to a breach of fiduciary duty by any other
fiduciary if such breach was committed before such party became a fiduciary or
after such party ceased to be a fiduciary.
No fiduciary shall be liable for a breach by another fiduciary unless the non-
breaching fiduciary knowingly participates in such a breach, knowingly
undertakes to conceal such breach, or has actual knowledge of such breach and
fails to take reasonable steps to remedy such breach.
No fiduciary shall be liable for carrying out a proper direction from another
fiduciary, including refraining from taking an action in the absence of a proper
direction from the other fiduciary possessing the authority and responsibility to
make such a direction, which direction the fiduciary in good faith believes to be
authorized and appropriate.
6.4 Indemnification of Trustee by Member'Agency
The Trustee shall not be liable for, and Member Agency shall indemnify, defend
(as set out in .6.8 of this Trust Agreement), and hold the Trustee (including its
officers, agents, employees and attorneys) and other Member Agencies and
Alternate Trustees, harmless from and against any claims, demands, loss, costs,
expense or liability imposed on the indemnified party, including reasonable
attorneys' fees and costs incurred by the indemnified party, arising as a result of
Member Agency's active or passive negligent act or omission or willful
misconduct in the execution or performance of its duties under this Trust
Agreement.
26
2567_12 PEL
6.5 Indemnification of Member Agency by Trustee
The Member Agency shall not be liable for, and Trustee shall indemnify, defend
(as set out in 6.8 of this Trust Agreement), and hold the Member Agency
(including its officers, agents, employees and attorneys) and other Member
Agencies and Alternate Trustees, harmless from and against any claims,
demands, loss, costs, expense or liability imposed on the indemnified party,
including reasonable attorneys' fees and costs incurred by the indemnified party,
arising as a result of Trustee's active or passive negligent act or omission or
willful misconduct in the execution or performance of its duties under this Trust
Agreement.
6.6 Indemnification of Trustee by Trust Administrator
The Trustee shall not be liable for, and Trust Administrator shall indemnify and
hold the Trustee (including its officers, agents, employees and attorneys)
harmless from and against any claims, demands, loss, costs, expense or liability
imposed on the indemnified party, including reasonable attomeys' fees and costs
incurred by the indemnified party, arising as a result of Trust Administrator's
active or passive negligent act or omission or willful misconduct in the execution
or performance of its duties under this Trust Agreement.
6.7 Indemnification of Trust Administrator by Trustee
The Trust Administrator shall not be liable for, and Trustee shall indemnify and
hold the Trust Administrator (including its officers, agents, employees and
attorneys) harmless from and against any claims, demands, loss, costs, expense
or. liability imposed on the indemnified party, including reasonable attorneys' fees
and costs incurred by the indemnified party, arising as a result of Trustee's active
or passive negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
6.8 Indemnification Procedures
Promptly after receipt by an indemnified party of notice or receipt of a claim or
the commencement of any action for which indemnification may be sought, the
indemnified party will notify the indemnifying party in writing of the receipt or
commencement thereof. When the indemnifying party has agreed to provide a.
defense as set out above that party shall assume the defense of such action
(including the employment of counsel, who shall be counsel. satisfactory to such
indemnitee) and the payment of expenses, insofar as such action shall relate to
any alleged liability in respect of which indemnity may be sought against the
indemnifying party. Any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense thereof, but
the fees and expenses of such counsel shall not be at the expense of the
27
2567_12 PEL
indemnifying party unless (i) the employment of such counsel has been
specifically authorized by the indemnifying party or (ii) the named parties to any
such action (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interest between them.
The indemnifying party shall not be liable to indemnify any person for any
settlement of any such action effected without the indemnifying party's consent.
6.9 No Joint and Several Liability
This document is not intended to and does not create any joint powers
agreement or any joint and several liability. No Member Agency shall be
responsible for any contributions, costs or distributions of any other Member
Agency.
Article VII
AMENDMENT, TERMINATION AND MERGER
7.1 No Obligation to Continue Plan and Trust
Continuance of the Agency Trust, participation in the PARS Trust Program and
continuation of the Plan are not assumed as a contractual obligation of the
Member Agency.
7.2 Amendments
(a) The PARS Trust Agreement may only be amended or terminated as
provided herein. A two- thirds majority or greater of the Member Agencies
shall have the right to amend this Trust Agreement from time to time, and
to similarly amend cancel any amendments. A copy of.all amendments
shall be delivered to the Trustee, the Trust Administrator and Plan
Administrators promptly as each is made.
(b) Such amendments shall be set forth in an instrument in writing executed
by the amending party, the Trust Administrator and the Trustee. Any
amendment may be current, retroactive or prospective, provided,
however, that no amendment shall:
(1) Cause the Assets of any Agency Trust to be used for or diverted to
purposes other than for the exclusive benefit of Participants who
have an interest in such Agency Trust or for the purpose of
defraying the reasonable expenses of administering such Agency
Trust.
2s
2567_12 PEL
(2) Have any retroactive effect so as to reduce the benefits of any
Participant having an interest in the Agency Trust as of the date the
amendment is adopted, except that such changes may be made as
may be required to permit this PARS Trust Agreement to meet the
requirements of applicable law.
(3) Change or modify the duties, powers or liabilities of the Trustee or
the Trust Administrator hereunder without its consent.
(4) Permit the Assets of any Agency Trust to be used for the benefit of
any other Plan of the Member Agency unless the Member Agency
agrees to such use.
7.3 Termination of Plan
A termination of the Plan for which the Agency Trust was established shall not, in
itself, effect a termination of an Agency Trust. Upon any termination of the Plan,
the Assets of the Agency Trust shall be distributed by the Trustee as and when
directed by the Plan Administrator. From and after the date of such termination
of the Plan and until final distribution of the Assets the Trustee shall continue to
have all the powers provided herein as are necessary or expedient for the orderly
liquidation and distribution of such assets and the Agency Trust shall continue
until the interests of all Participants have been completely distributed to or for the
benefit of the Participants in accordance with the Plan.
7.4 Reversion
In the event a Member Agency's Plan is terminated, the vested interest of any
Participant shall not be diminished or adversely affected. Except as may be
provided in this Trust Agreement or the Plan, such termination shall not vest in
the Member Agency any corpus or income under the Agency Trust, nor permit
the Plan to discriminate as to coverage, or as to allocation of contributions or
earnings, in favor of employees who are officers, shareholders, or highly
compensated, nor cause the Agency Trust to lose its exemption pursuant to
501(a) of the Code. No modification, amendment or termination of the Plan shall
be construed to be a termination of the Agency Trust so as to require the Trustee
to make a distribution of any of the Assets of the Agency Trust to any Participant.
In order to make such distribution the Trustee must receive written instructions
from the Plan Administrator or Delegatee in a form acceptable to the Trustee.
If any Member Agency adopts a Plan whose assets are maintained in an Agency
Trust and makes application to the Internal Revenue Service, within one year
from the date of adoption of such Plan, for a determination that such Plan is a
qualified plan under Section 401 (a) of the Code, and if such Plan is determined
by the Internal Revenue Service not to be a qualified Plan, then all contributions
2s
2567_12 PEL
and investment income attributable to such Plan shall be returned to the Member
Agency upon application to the Trustee.
7.5 Fund Recovery Based on Mistake of Fact
Except as hereinafter provided, the Assets of the Agency Trust shall never inure
to the benefit of the. Member Agency. The Assets shall be held for the exclusive
purposes of providing benefits to Participants having an interest in the Plan and
defraying reasonable expenses of administering the Agency Trust. The sole
exception to the foregoing is as follows:
Mistake of Fact. In the case of a contribution which is made by the Plan
Administrator because of a mistake of fact, that portion of the contribution relating
to the mistake of fact (exclusive of any earnings or losses attributable thereto)
may be returned to the Plan Administrator, provided such return occurs within
one (1) year "after discovery by the Plan Administrator of the mistake. If any
repayment is payable to the Plan Administrator, then, as a condition to such
repayment, and only if requested by trustee, the Plan Administrator shall
execute, acknowledge and deliver to the Trustee its written undertaking, in a form
satisfactory to the Trustee, to indemnify, defend and hold the Trustee harmless
from all claims, actions, demands or liabilities arising in connection with such
repayment.
7.6 Transfers from Other Qualified Plans
Notwithstanding any other provision hereof, there may be transferred to the
Trustee, upon direction of the Plan Administrator, all or any of the assets held
(whether by a trustee, custodian or otherwise) on behalf of any other plan which
satisfies the applicable requirements of Section 401 of the Code, and which is
maintained for the benefit of any persons who are or will become Participants in
the Plan.
7.7 Termination
The PARS Trust Agreement may be terminated only by a unanimous agreement
of all Member Agencies. Such action must be in writing and delivered to the
Trustee and Trust Administrator.
Article VIII
MISCELLANEOUS PROVISIONS
8.1 Nonalienation
To the maximum extent permitted by law, a Participants interest in the Agency
Trust shall not in any way be liable to attachment, garnishment, assignment or
30
2567_12 PEL
other process, or be seized, taken, appropriated or applied by any legal or
equitable process, to pay any debt or liability of the Participant or any other party.
Agency Trust Assets shall not be subject to the claims of the Member Agency or
the claims of its creditors.
8.2 Saving Clause
In the event any provision of this PARS Trust Agreement and each Agency Trust
is held illegal or invalid for any reason, said illegality or invalidity shall not affect
the remaining parts of the PARS Trust and /or Agency Trust, but this instrument
shall be construed and enforced as if said provision had never been included.
8.3 Applicable Law
This PARS Trust Agreement and each Agency Trust shall be construed,
administered' and governed under the Code and the applicable provisions of
California law. To the extent any of the provisions of this Trust Agreement or the
Plan are inconsistent with the Code or applicable California law, the provisions of
the Code or California law shall control. In the event, however, that any provision
is susceptible to more than one interpretation, such interpretation shall be given
thereto as is consistent with the Trust Agreement and the Plan being a qualified
governmental retirement trust and plan within the meaning of the Code.
8.4 Joinder of Parties
In any action or other judicial proceedings affecting this Trust Agreement, it shall
be necessary to join as parties only the Trustee, the Plan Administrator or
Delegatee. No participant or other persons having an interest in any Agency
Trust shall be entitled to any notice or service of process unless otherwise
required by law. Any judgment entered in such a proceeding or action shall be
binding on all persons claiming under this Trust Agreement, provided, however,
that nothing in this Trust Agreement shall be construed as to deprive a participant
of such participant's right to seek adjudication of such participant's rights under
applicable law.
8.5 Employment of Counsel
The Trustee may consult with legal counsel (who may be counsel for the Trustee
or Member Agency Plan Administrator) and charge the Agency Trust.
8.6 Gender and Number
Words used in the masculine, feminine or neuter gender shall each be deemed
to refer to the other whenever the context so requires; and words used in the
singular or plural number shall each be deemed to refer to the other whenever
the context so requires.
31
256712 PEL -
8.7 Headings
Headings used in this Trust Agreement are inserted for convenience of reference
only and any conflict between such headings and the text shall be resolved in
favor of the text.
8.8 Counterparts
The Adoption Agreement of this Trust Agreement may be executed in an original
and any number of counterparts by the Plan Administrator (executing an
Adoption Agreement), the Trust Administrator and the Trustee, each of which
shall be deemed to be an original of the one and the same instrument.
Article IX
ACKNOWLEDGMENT AND ACCEPTANCE
The provisions of the PARS Trust Agreement as contained herein are hereby amended
and restated as of July 1, 1999 (the "Amended Effective Date ").
IN WITNESS WHEREOF, the Plan Administrator (by executing the Adoption
Agreement) the Trust Administrator and Trustee have executed this Trust Agreement by
their duly authorized agents on this19th day of January, 2000.
ACKNOWLEDGED AND ACCEPTED this 19th day of January, 2000.
THE TRUSTEE
UNION BANK OF CALIFORNIA, N.A.
By:
Title: Senior Vice President
THE TRUST ADMINISTRATOR
PHASE II SYSTEMS
Title: President
32
266712 PEL
EXHIBIT "A"
ADOPTION AGREEMENT
TO THE
PARS TRUST AGREEMENT
Member Agency: City of La Quinta
Plan Name: City of La Quinta Fiscally Responsible Reduction Plan
Plan Effective: February 15, 2011
Plan Administrator: Thomas Genovese
Title: City Manager
Address: 78 -495 Calle Tampico, La Quinta, CA 92253
The above referenced California public agency ( "Member Agency ") adopts the PARS Trust
Agreement, as amended and restated effective 7/1/99, as the trust portion ( "Agency Trust ") of the
above referenced qualified plan ( "Plan"), effective as of the date set out above. Pursuant to
resolution number 2011 -012 and 2011 -028, dated February 15, 2011 and April 19, 2011,
respectively, which authorizes the adoption of the PARS Trust Agreement and names the above
referenced individual by position of employment to act on behalf of the Member Agency in all
matters relating to the Member Agency's participation in the PARS Trust Program and Agency Trust
( "Plan Administrator "), the Plan Administrator certifies the following entities within the Agency
Trust:
TRUSTEE: Union Bank, N.A.
TRUST ADMINISTRATOR: Phase II Systems dba Public Agency Retirement Services
INVESTMENT FIDUCIARY: Union Bank, N.A., acting through its subsidiary HighMark
A Capital Management, a registered investment advisor
: J `/'/
B Title: City Manager
Date: 'z/ //
ACCEPTED:
Trust Administrator: se II Systems dba Public Agency Retirement Services
By Title: P/)-!E 5t OEY-T -
Date: 5 io,
Trustee and ipyestment Fiduciary: Union Bank, N.A. ,
By: Title: y/ o
Date:
Trustee and Inv tment Fid iary: Union Bank, N.A. /�
By: _ ` Title: 14
Date: 513 —/ /
CITY OF LA QUINTA
EXCESS BENEFIT TRUST AGREEMENT
Section 415(m).Trust 3/8/06
TABLE OF CONTENTS
Page
ARTICLE I
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
ARTICLE II
ESTABLISHMENT AND GENERAL OPERATION OF TRUST
Establishment of Trust ................................................ ............................... 2
Revocability................................................................ ............................... 2
GrantorTrust .............................................................. ............................... 2
Trust Contributions ..................................................... ............................... 2
Payments to Employer ................................................ ............................... 2
Signing Authority, Administrator .................................. ............................... 2
Acceptance of Assets; Trust Composition .................. ............................... 3
Trust Contributions ..................................................... ............................... 3
No Duty of Trustee to Enforce Collection ................... ............................... 3
Plan Administration ..................................................... ............................... 3
Participant Accounts ................................................... ............................... 3
TaxReporting ............................................................. ............................... 3
Trust Administrator ..................................................... ............................... 4
INVESTMENTS
2.1
Employer Directs Investments .....................................
..............................4
2.2
Appointment of Trustee (or Other Individual or
Entity) as Investment
Manager.....................................................................
..............................4
2.3
Funding Policy and Investment Guidelines .................
............................... 4
2.4
Disposition of Income .................................................
............................... 5
ARTICLE III
TRUSTEE'S POWERS
3.1
General Trustee's Powers ..........................................
............................... 5
3.2
Additional Powers ........................................................
..............................7
3.3
Delegatee ...................................................................
............................... 9
3.4
Directions to Trustee ...................................................
............................... 9
3.5
Trust Administrator ...................................................
............................... 10
3.6
Additional Trust Administrator Services ....................
............................... 11
3.7
Trust Administrator's Compensation .........................
............................... 11
3.8
Resignation or Removal of Trust Administrator ........
............................... 11
ARTICLE IV
TRUSTEE AND EMPLOYER DUTIES
4.1
Legal Duties ..............................................................
............................... 11
4.2
Payments to Participants ..........................................
............................... 11
Section 415(m).Trust 3/8/06
4.3
Accounts and Records .............................................. ...............................
12
4.4
Reports .................................................................... .................:...........13
16
4.5
Follow Employer Direction ........................................ .....:.........................
13
4.6
Information to be Provided to Trustee ...................... ...............................
13
ARTICLE V
RESTRICTIONS ON TRANSFER
18
5.1
Persons to Receive Payment ................................... ...............................
14
5.2
Assignment and Alienation Prohibited ...................... ...............................
14
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
19
6.1
Resignation or Removal of Trustee .......................... ...............................
15
6.2
Designation of Successor ......................................... ...............................
15
6.3
Upon Resignation ..................................................... ...............................
15
6.4
Court Appointment of Successor .............................. ...............................
15
6.5
Successor's Powers .................................................. ...............................
15
6.6
Successor's Duties ................................................... ...............................
16
ARTICLE VII AMENDMENT
7.1 Power to Amend ....................................................... ............................... 16
ARTICLE VIII LIABILITIES
8.1
Declaration of Intent .................................................. ...............................
16
8.2
Liability of the Trustee ............................................... ...............................
16
8.3
Indemnification ......................................................... ...............................
17
ARTICLE IX
DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1
Revocation and Termination ..................................... ...............................
18
9.2
Duration .................................................................... .............................19
ARTICLE X
MISCELLANEOUS
10.1
Emergencies and Delegation .................................... ...............................
19
10.2
Expenses and Taxes ................................................ ...............................
19
10.3
Third Parties ............................................................. ...............................
20
10.4
Adoption by Affiliate Employer .................................. ...............................
20
10.5
Binding Effect; Successor Employer ......................... ...............................
21
10.6
Relation to Plan ........................................................ ...............................
21
10.7
Arbitration of Disputes .............................................. ...............................
21
10.8
Attorney Fees and Costs .......................................... ...............................
21
10.9
Partial Invalidity ........................................................... .............................22
10.10
Construction ................................................................ .............................22
Section 415(m).Trust iii 3/8/06
10.11 Notices ............................:....................................... .............................22
ARTICLE XI DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF
EMPLOYER
11.1 Trustee Responsibility .............................................. ............................... 22
ARTICLE XII EFFECTIVE DATE
12.1 Effective Date ........................................................... ............................... 25
Addresses of Parties for Notice ................................ ............................... 25
Section 415(m).Trust iv 3/8/06
TRUST UNDER THE CITY OF LA QUINTA EXCESS BENEFIT PLAN
This Trust Agreement (the "Trust Agreement" or "Trust ") is made by and
between the City of La Quinta (the "Employer "), Public Agency Retirement Services
( "PARS" and /or "Trust Administrator ") and UNION BANK, N.A., a national banking
association (the "Trustee "), and shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder.
PURPOSE
(a) WHEREAS, the Employer has adopted the plan or plans attached as
Exhibit A or which subsequently may be designated in writing by the Employer (the
"Plan ") pursuant to which the Employer expects to incur unfunded liabilities with respect
to certain employees of the Employer.
(b) WHEREAS, Employer wishes to establish a trust (hereinafter called
"Trust ") and to contribute to the Trust assets that shall be held therein, subject to the
claims of Employer's creditors in the event of Employer's Insolvency, as herein defined,
until paid to Plan participants in such manner and at such times as specified in the
Plan;
(c) WHEREAS, it is the intention of the parties that this Trust shall constitute
an unfunded arrangement and shall not affect the status of the Plan as an unfunded
plan maintained for the purpose of providing deferred compensation for a select group
of employees;
(d) WHEREAS, it is the intention of Employer to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of its liabilities
under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 415(m).Trust 1 3/8/06
ARTICLE I
ESTABLISHMENT OF TRUST
1.1 Establishment of Trust The Employer hereby deposits with Trustee in Trust
a sum of money which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in the Trust Agreement.
REVOCABILITY
1.2 Revocability The Trust hereby established shall be revocable by Employer.
1.3 Grantor Trust The Trust is intended to be a grantor trust, of which Employer
is the grantor, within the meaning of Subpart E, Part I, Subchapter J, Chapter
1, Subtitle A of the Internal Revenue Code of 1986, as amended, and shall
be construed accordingly.
1.4 Trust Assets The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of Employer and shall be used
exclusively for the uses and purposes of Participants and Employer's general
creditors as herein set forth. Plan participants and beneficiaries of deceased
participants (hereinafter called "Participants ") shall have no preferred claim
on, or any beneficial ownership interest in, any of the Trust. Any rights
created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Participants against Employer. Any assets held by the
Trust will be subject to the claims of Employer's general creditors under
federal and state law in the event of Insolvency, as defined in Article XI
herein.
1.5 Payments to Employer The Employer shall maintain the right and power to
direct Trustee to return to Employer or to divert to others any of the Trust
assets before all payment(s) of benefits have been made to Participants
pursuant to the terms of the Plan.
1.6 Signing Authority: Administrator The Employer shall certify in writing to the
Trustee the names and specimen signatures of all those who are authorized
to act as or on behalf of the Employer, and those names and specimen
signatures shall be updated as necessary by a duly authorized official of the
Employer. The Employer shall promptly notify the Trustee if any person so
designated is no longer authorized to act on behalf of the Employer. Until the
Trustee receives written notice that a person is no longer authorized to act on
behalf of the Employer, the Trustee may continue to rely on the Employer's
designation of such person.
Section 415(m). Trust 2 3/8/06
1.7 Acceptance of Assets; Trust Composition All contributions or transfers shall
be received by the Trustee in cash or in any other property acceptable to the
Trustee. The Trust shall consist of the contributions and transfers received
by the Trustee, together with the income and earnings from them and any
increments to them. The Trustee shall hold, manage and administer the
Trust in accordance with this Trust Agreement without distinction between
principal and income.
1.8 Trust Contributions Employer, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other property in trust
with Trustee to augment the principal to be held, administered and disposed
of by Trustee as provided in this Trust Agreement. Neither Trustee nor any
Participant shall have any right to compel such additional deposits.
1.9 No Duty of Trustee to Enforce Collection Notwithstanding anything herein to
the contrary, Trustee shall have no authority or obligation to enforce the
collection of any contribution or transfer to the Trust.
1.10 Plan Administration The Employer and not the Trustee shall be responsible
for administering the Plan (including without limitation determining the rights
of the Employer's employees to participate in the Plan, determining any
Participant's right to benefits under such Plan), and issuing statements to
Participants of their interest in the trust and Plan. The Employer may
delegate such responsibilities to a record keeper.
1.11 Participant Accounts If required, the Employer shall maintain in an equitable
manner a separate account for each Participant under the Plan ( "Account ") in
which it shall keep a record of the share of such Participant under such Plan
in the Trust. The Employer may appoint a record keeper to maintain such
Accounts. A Participant's Account under the Plan shall represent the portion
of the Trust allocated to provide such Participant benefits under such Plan. If
the Trustee is directed by the Employer to segregate the Trust into separate
Accounts for each Participant, at the time it makes a contribution to the Trust,
the Employer shall certify to the Trustee the amount of such contribution
being made in respect of each Participant under each Plan.
The Trustee may rely on information provided to the Trustee by the Employer
and the Trustee's and Employer's determination of Account values shall be
conclusive and binding on all interested parties.
1.12 Tax Reporting The Trustee shall be responsible for individual tax reporting
and withholding as directed by the Employer. The Employer agrees to
indemnify and defend the Trustee against any liability for the payment of such
taxes, interest or penalties resulting from or related to the Trust.
Section 415(m).Trust 3 3/8/06
1.13 Trust Administrator The Trust Administrator shall be Public Agency
Retirement Services.
ARTICLE II
INVESTMENTS
2.1 Employer Directs Investments Except as provided in Section 2.2 below, the
Employer shall have all power over, and responsibility for, the management,
disposition and investment of the Trust assets, and the Trustee shall comply
with proper written directions of the Employer concerning those assets. The
Employer shall not issue directions in violation of the terms of the Plan and
Trust or prohibited by the laws and Constitution of the State of California and
applicable federal laws and regulations. Except to any extent required by,the
laws and Constitution of the State of California and applicable federal laws
and regulations, or otherwise provided in this Trust Agreement, the Trustee
shall have no duty or responsibility to review, initiate action, or make
recommendations regarding Trust assets and shall retain all such assets until
directed in writing by the Employer to dispose of them.
2.2 Appointment of Trustee (or Other Individual or Entity) as Investment
Manager The Employer may appoint the Trustee or other appropriately
regulated individual or entity as Investment Manager, thereby delegating to
the Trustee or other individual or entity the full power, authority and duty to
direct the investment and management of all or any portion of the assets of
the Trust as specified by the Employer and to the extent provided in Article III,
subject to the investment guidelines established by the Employer as provided
below. The Employer represents and warrants that any appointment made
pursuant to this Section 2.2 complies with the laws and Constitution of the
State of California and applicable federal laws and regulations. No
appointment and delegation made pursuant to this Section 2.2 shall be
effective unless made in writing and signed by both the Trustee and the
Employer.
2.3 Funding Policy and Investment Guidelines The Employer shall have the
responsibility for establishing and carrying out a funding policy and method,
consistent with the objectives of the Plan and, subject to the laws and
Constitution of the State of California and applicable federal laws and
regulations, taking into consideration the Plan's short-term and long -term
financial needs. To the extent that the Trustee is appointed Investment
Manager of all or a portion of the assets of the Trust in accordance with
Section 2.2 above, the Trustee's responsibility for investment and
diversification of such portion of the assets shall be subject to, and is limited
by, the investment guidelines issued to it by the Employer in writing. It is
understood that, unless otherwise agreed in writing, the Employer, rather
than the Trustee, shall be responsible for the overall diversification of Trust
assets.
Section 415(m).Trust 4 3/8/06
2.4 Disposition of Income During the term of this Trust, all income received by
the Trust, net of expenses and taxes, shall be accumulated and reinvested.
ARTICLE 111
TRUSTEE'S POWERS
3.1 General Trustee's Powers Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an asset of
the Trust, Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the
policy to a different form) other than to a successor Trustee, or to loan to any
person the proceeds of any borrowing against such policy.
(a) To invest and reinvest the Trust or any part thereof in any one or more
kind, type, class, item or parcel of property, real, personal or mixed,
tangible or intangible; or in any one or more kind, type, class, item or
issue of investment or security; or in any one or more kind, type class
or item of obligation, secured or unsecured; or in any combination of
them;
(b) To acquire, sell and exercise options to buy securities ( "call" options)
and to acquire, sell and exercise options to sell securities ( "put"
options);
(c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose,
including beyond the life of this Trust), exchange and in any other
manner to acquire, manage, deal with and dispose of all or any part of
the Trust property, for cash or credit;
(d) To make deposits with any bank or savings and loan institution,
including any such facility of the Trustee or an affiliate thereof,
provided that the deposit bears a reasonable rate of interest;
(e) To retain all or any portion of the Trust in cash temporarily awaiting
investment or for the purpose of making distributions or other
payments, without liability for interest thereon, notwithstanding the
Trustee's receipt of float;
(f) To borrow money for the purposes of the Trust from any source other
than a party in interest of the Plan, with or without giving security; to
pay interest; to issue promissory notes and to secure the repayment
thereof by pledging all or any part of the Trust assets;
Section 415(m).Trust 5 3/8/06
(g) To take all of the following actions: to vote proxies of any stocks,
bonds or other securities; to give general or special proxies or powers
of attorney with or without power of substitution; to exercise any
conversion privileges, subscription rights or other options, and to make
any payments incidental thereto; to consent to or otherwise participate
in corporate reorganizations or other changes affecting corporate
securities and to delegate discretionary powers and to pay any
assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities or other property held in the Trust;
(h) To make, execute, acknowledge and deliver any and all documents of
transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers herein granted;
(i) To pay or cause to be paid from the Trust any and all real or personal
property taxes, income taxes or other taxes or assessments of any or
all kinds levied or assessed upon or with respect to the Trust or the
Plan;
Q) Subject to the limitations of 3.1, to hold term or ordinary life insurance
contracts or to acquire annuity contracts on the lives of Participants
(but in the case of conflict between any such contract and a Plan, the
terms of the Plan shall prevail); to pay from the Trust the premiums on
such contracts; to distribute, surrender or otherwise dispose of such
contracts; to pay the proceeds, if any, of such contracts to the proper
persons in the event of the death of the insured Participant; to enter
into, modify, renew and terminate annuity contracts of deposit
administration, of immediate participation or other group or individual
type with one or more insurance companies and to pay or deposit all
or any part of the Trust thereunder; to provide in any such contract for
the investment of all or any part of funds so deposited with the
insurance company in securities under separate accounts; to exercise
and claim all rights and benefits granted to the contract holder by any
such contracts. All payments and exercise of all powers with respect
to insurance contracts shall be solely on the direction of Employer;
(k) To exercise all the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under applicable
federal or state laws, as amended from time to time, it being intended
that, except as otherwise provided in this Trust, the powers conferred
upon the Trustee herein shall not be construed as being in limitation of
any authority conferred by law, but shall be construed as in addition
thereto.
Section 415(m).Trust 6 1 3/8/06
(1) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and
dividing the gains therefrom, within the meaning of section 301.7701 -2
of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
3.2 Additional Powers In addition to the other powers enumerated above, the
Trustee is authorized and empowered:
(a) To invest funds in any type of interest - bearing account including,
without limitation, time certificates of deposit or interest - bearing
accounts issued by UNION BANK, N.A. To use other services or
facilities provided by the UnionBanCal Corporation (UNBC), its
subsidiaries or affiliates including Union Bank, N.A. (Bank), to the
extent allowed by applicable law and regulation. Such services may
include but are not limited to (1) the placing of orders for the purchase,
exchange, investment or reinvestment of securities through any
brokerage service conducted by, and (2) the purchase of units of any
registered investment company managed or advised by Bank, UNBC,
or their subsidiaries or affiliates and /or for which Bank, UNBC or their
subsidiaries or affiliates act as custodian or provide other services for
a fee, including, without limitation, the HighMark Group of mutual
funds. The parties hereby acknowledge that the Bank may receive
fees for such services in addition to the fees payable under this
Agreement. Fee schedules for additional services shall be delivered to
the appropriate party in advance of the provision of such services.
Independent fiduciary approval of compensation being paid to the
Bank will be sought in advance to the extent required under applicable
law and regulation.
If Union Bank, N.A. does not have investment discretion, the services
referred to above, as well as any additional services, shall be utilized
only upon the appropriate direction of an authorized party.
(b) To cause all or any part of the Trust to be held in the name of the
Trustee (which in such instance need not disclose its fiduciary
capacity) or, as permitted by law, in the name of any nominee,
including the nominee name of any depository, and to acquire for the
Trust any investment in bearer form; but the books and records of the
Trust shall at all times show that all such investments are a part of the
Trust and the Trustee shall hold evidences of title to all such
investments as are available;
Section 415(m).Trust 7 3/8/06
(c) To serve as custodian with respect to the Trust assets, to hold assets
or to hold eligible assets at the Depository Trust Company or other
depository;
(d) _ To employ such agents and counsel as may be reasonably necessary
in administration and protection of the Trust assets and to pay them
reasonable compensation; to employ any broker - dealer covered in the
self- dealing section, and pay to such broker - dealer its standard
commissions; to. settle, compromise or abandon all claims and
demands in favor of or against the Trust; and to charge any premium
on bonds purchased at par value to the principal of the Trust without
amortization from the Trust, regardless of any law relating thereto;
(e) To abandon, compromise, contest, arbitrate or settle claims or
demands; to prosecute, compromise and defend lawsuits, but without
obligation to do so, all at the risk and expense of the Trust;
(f) To permit such inspections of documents at the principal office of the
Trustee as are required by law, subpoena or demand by United States
or state agency during normal business hours of the Trustee;
(g) To comply with all requirements imposed by law;
(h) To seek written instructions from the Employer on any matter and
await written instructions without incurring any liability. If at any time
the Employer should fail to give directions to the Trustee, the Trustee
may act in the manner that in its discretion it deems advisable under
the circumstances for carrying out the purposes of this Trust. Such
actions shall be conclusive on the Employer and the Participants on
any matter if written notice of the proposed action is given to Employer
five (5) days prior to the action being taken, and the Trustee receives
no response;
(i) To compensate such executive, consultant, record keeper, actuarial,
accounting, investment, appraisal, administrative, clerical, secretarial,
custodial, depository and legal firms, personnel and other employees
or assistants as are engaged by the Employer in connection with the
administration of the Plan and to pay from the Trust the necessary
expenses of such firms, personnel and assistants, to the extent not
paid by the Employer;
(j) To impose a reasonable charge to cover the cost of furnishing to
Participants statements or documents;
(k) To act upon proper written directions of the Employer or any
Participant including directions given by photostatic teletransmission
Section 415(m).Trust 8 3/8/06
using facsimile signature. If oral instructions are given, to act upon
those in Trustee's discretion prior to receipt of written instructions.
Trustee's recording or lack of recording of any such oral instructions
taken in Trustee's ordinary course of business shall constitute
conclusive proof of Trustee's receipt or non - receipt of the oral
instructions;
(1) To pay from the Trust the, expenses reasonably incurred in the
administration of the Trust;
(m) To maintain insurance for such purposes, in such amounts and with
such companies as the Employer shall elect, including insurance to
cover liability or losses occurring by reason of the acts or omissions of
fiduciaries (but only if such insurance permits recourse by the insurer
against the fiduciary in the case of a breach of a fiduciary obligation by
such fiduciary);
(n) As directed by the Employer, to cause the benefits provided under the
Plan to be paid directly to the persons entitled thereto under the Plan,
and in the amounts and at the times and in the manner specified by
the Plan, and to charge such payments against the Trust and
Accounts with respect to which such benefits are payable;
(o) To exercise and perform any and all of the other powers and duties
specified in this Trust Agreement or the Plan; and in addition to the
powers listed herein, to do all other acts necessary or desirable for the
proper administration of the Trust, as though the absolute owner
thereof.
3.3 Delegatee The Employer may delegate certain authority, powers and duties
to an entity to act in those matters specified in the delegation ( "Delegatee ").
Any such delegation must be in a writing that names and identifies the
Delegatee, states the effective date of the delegation, specifies the authority
and duties delegated, is executed by the Employer and is acknowledged in
writing by the Delegatee, the Trust Administrator (if not the Delegatee) and
the Trustee. Such delegation shall be effective until the Trustee and the
Trust Administrator are directed in writing by the Employer that the delegation
has been rescinded or modified.
3.4 Directions to Trustee Except as otherwise provided in this Trust Agreement,
all directions to the Trustee from the Employer or Delegatee must be in
writing and must be signed by the Employer or Delegatee, as the case may
be. For all purposes of this Trust Agreement, direction shall include any
certification, notice, authorization, application or instruction of the Employer,
Delegatee or Trustee appropriately communicated. The above
Section 415(m).Trust 9 3/8/06
notwithstanding direction may be implied if the Employer or Delegatee has
knowledge of the Trustee's intentions and fails to file written objection.
The Trustee shall have the power and duty to comply promptly with all proper
direction of the Employer, or Delegatee, appointed in accordance with the
provisions of this Trust Agreement. In the case of any direction deemed by
the Trustee to be unclear or ambiguous the Trustee may seek written
instructions from the Employer, the Agency or the Delegatee on such matter
and await their written instructions without incurring any liability. If at any time
the Employer or the Delegatee should fail to give directions to the Trustee,
the Trustee may act in the manner that in its discretion seems advisable
under the circumstances for carrying out the purposes of the Trust Program
and /or any Agency Trust which may include not taking any action. The
Trustee may request directions or clarification of directions received and may
delay acting until clarification is received. In the absence of timely direction
or clarification, or if the Trustee considers any direction to be a violation of the
Trust Agreement or any applicable law, the Trustee shall in its sole discretion
take appropriate action, or refuse to act upon a direction.
3.5 Trust Administrator The Employer has appointed PARS as the Trust
Administrator. The Trust Administrator has accepted its appointment subject
to the Employer's delegation of authority, to act as such, pursuant to Section
3.3 of this Trust Agreement. The Trust Administrator's duties involve the
performance of the following services pursuant to the provisions of this trust
agreement and the Agreement for Administrative Services:
(a) Performing periodic accounting of the Agency Trust;
(b) Directing the Trustee to make distributions from the Agency Trust to
Participants pursuant to the provisions of the Plan and liquidate assets
in order to make such distributions;
(c) Notifying the Investment Fiduciary of the amount of Assets in the
Agency Trust available for further investment and management by the
Investment Fiduciary;
(d) Allocating contributions, earnings and expenses to each Agency Trust;
(e) Directing the Trustee to pay insurance premiums, to pay the fees of
the Trust Administrator and to do such other acts as shall be
appropriate to carry out the intent of the Agency Trusts.
(f) Such other services as the Employer and the Trust Administrator may
agree.
Section 415(m).Trust 10 3/8/06
3.6 Additional Trust Administrator Services. The Employer may at any time
retain the Trust Administrator as its agent to perform any act, keep any
records or accounts and make any computations which are required of the
Employer by this Trust Agreement or by the Plan. The Trust Administrator
shall be separately compensated for such service and such services shall not
be deemed to be contrary to the Trust Agreement.
3.7 Trust Administrator's Compensation As may be agreed upon from time to
time by the Employer and Trust Administrator, the Trust Administrator will be
paid reasonable compensation for services rendered or reimbursed for
expenses properly and actually incurred in the performance of duties.
3.8 Resignation or Removal of Trust Administrator The Trust Administrator may
resign at any time by giving at least one hundred twenty (120) days written
notice to the Employer and the Trustee.
ARTICLE IV
TRUSTEE AND EMPLOYER DUTIES
4.1 Legal Duties The Trustee and Employer shall exercise any of the foregoing
powers from time to time as required by law.
4.2 Payments to Participants
(a) Employer shall deliver to Trustee a schedule (the "Payment
Schedule ") that indicates the amounts payable in respect of each
Participant, that provides a formula or other instructions acceptable to
Trustee for determining the amount so payable, the form in which such
amount is to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the
Participants in accordance with such Payment Schedule. As directed
by Employer, the Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to
be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate
taxing authorities or determine that such amounts have been reported,
withheld and paid by Employer.
(b) The entitlement of a Participant to benefits under the Plan shall be
determined by Employer or such party as it shall designate under the
Plan, and any claim for such benefits shall be .considered and
reviewed under the procedures set out in the Plan.
Section 415(m).Trust 11 3/8/06
(c) Employer may make payment of benefits directly to Participants as
they become due under the terms of the Plan. Employer shall notify
Trustee of its decision to make payment of benefits directly prior to the
time amounts are payable to Participants. In addition, if the principal
of the Trust, and earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan,
Employer shall make the balance of each such payment as it falls due.
Trustee shall notify Employer where principal and earnings are not
sufficient. Trustee shall have no duty or obligation to enforce or
compel Employer to make payments hereunder. Employer may direct
Trustee to reimburse Employer for payments made directly by
Employer to Participants, and shall provide the Trustee with such
documentation to evidence those direct payments as the Trustee may
reasonably request.
(1) In the event payments are made by Employer directly to
Participants, Employer shall have sole responsibility for the
reporting and withholding of any federal, state, or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authority.
(2) Trustee shall have no duty or responsibility with respect to the
above stated reporting, withholding or payment of taxes and
shall have no responsibility to determine that Employer has
provided for such reporting, withholding or payment of such
taxes.
(3) Employer shall indemnify and hold Trustee harmless from any
and all losses, claims, penalties or damages which may occur
as a result of Trustee following in good faith the written direction
of the Employer to reimburse Employer for payments made
hereunder to Participants and arising from Employer's tax
reporting, withholding and payment obligations hereunder.
(d) Upon the satisfaction of all liabilities of the Employer under the Plan to
all Participants the Trustee shall hold or distribute the Trust in
accordance with the written instructions of the Employer. Except as
provided in (c) above, at no time prior to the Employer's Insolvency, as
defined in Article XI, or the satisfaction of all liabilities of the Employer
under the Plan in respect of all Participants having Accounts
hereunder shall any part of the Trust revert to the Employer.
4.3 Accounts and Records The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements and all other transactions
required to be done, including such specific records as shall be agreed upon
Section 415(m).Trust 12 318/06
in writing between the Employer and the Trustee. All such accounts, books
and records shall be open to inspection and audit at all reasonable times by
the Employer and by the Participants. Within sixty (60) days after the close
of each quarter and Plan year and within sixty (60) days after the resignation
or removal of the Trustee as provided in Article VI hereof, the Trustee shall
render to the Employer a written account showing in reasonable summary the
investments, receipts, disbursements and other transactions engaged in by
the Trustee during the preceding Plan Year or accounting period with respect
to the Trust. Such account shall set forth the assets and liabilities of the
Trust. The Employer shall have ninety (90) days after the Trustee's mailing
of each such quarterly or final account within which to file with the Trustee
written objections to such account. Upon approval or by failure to file with the
Trustee written objections to such account within the 90 -day period, the
Employer shall release and discharge the Trustee from all liability and
accountability to the Employer as to all matters and items set forth in such
account as if such account had been settled and allowed by a decree from a
court of competent jurisdiction, such settlement and allowance to be final and
binding.
Notwithstanding anything herein to the contrary, the Trustee shall have no
duty or responsibility to obtain valuations of any assets of the Trust Fund, the
value of which is not readily determinable on an established market.
Employer shall bear sole responsibility for determining said valuations and
shall be responsible for providing said valuations to Trustee in a timely
manner. Trustee may conclusively rely on such valuations provided by
Employer and shall be indemnified and held harmless by Employer with
respect to such reliance.
4.4 Reports The Trustee shall file such descriptions and reports and shall furnish
such information and make such other publications, disclosures, registrations
and other filings as are required of the Trustee by law. The Trustee shall
have no responsibility to file reports or descriptions, publish information or
make disclosures, registrations or other filings unless directed by the
Employer.
4.5 Follow Employer Direction The Trustee shall have the power and duty to
comply promptly with all proper directions of the Employer.
4.6 Information to be Provided to Trustee The Employer shall maintain and
furnish the Trustee with all reports, documents and information as shall be
required by the Trustee to perform its duties and discharge its responsibilities
under this Trust Agreement, including without limitation a certified copy of
each of the Plan and all amendments thereto.
The Trustee shall be entitled to rely on the most recent reports, documents
and information furnished to it by the Employer. The Employer shall be
Section 415(m).Trust 13 3/8/06
required to notify the Trustee as to the termination of employment of any
Participant by death, retirement or otherwise.
The Employer shall arrange for each Investment Manager if appointed
pursuant to Section 2.2, and each insurance company issuing contracts held
by the Trustee pursuant to Section 3.10), to furnish the Trustee with such
valuations and reports as are necessary to enable the Trustee to fulfill its
obligations under this Trust Agreement, and the Trustee shall be fully
protected in relying upon such valuations and reports.
ARTICLE V
RESTRICTIONS ON TRANSFER
5.1 Persons to Receive Payment
(a) The Trustee shall, except as otherwise provided in section 4.2(d) and
subsection (b) hereunder, pay all amounts payable hereunder only to
the person or persons designated under the Plan or deposit such
amounts to the Participant's checking or savings account as directed
by the Employer and not to any other person or corporation, and only
to the extent of assets held in the Trust, and shall follow written
instructions by the Employer. The Employer's written instructions, to
the Trustee to make distributions or not to make distributions, and the
amount thereof, shall be conclusive on all Participants.
(b) Should any controversy arise as to the person or persons to whom any
distribution or payment is to be made by the Trustee, or as to any
other matter arising in the administration of the Plan or Trust, the
Trustee may retain the amount in controversy pending resolution of the
controversy or the Trustee may file an action seeking declaratory relief
and /or may interplead the Trust assets in issue, and name as
necessary parties the Employer, the Participants and /or any or all
persons making conflicting demands.
(c) The Trustee shall not be liable for the payment of any interest or
income, except for that earned as a Trust investment, on any amount
withheld or interpleaded under subsection (b).
(d) The expense of the Trustee for taking any action under subsection (b)
shall be paid to the Trustee from the Trust.
5.2 Assignment and Alienation Prohibited Benefits payable to Participants under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
Section 415(m).Trust 14 3/8/06
garnishment, levy, execution or other legal or equitable process.
Notwithstanding the foregoing, the Trust shall at all times remain subject to
the claims of creditors of the Employer in the event the Employer becomes
Insolvent as provided in Article XI.
ARTICLE VI
RESIGNATION, REMOVAL AND SUCCESSION
6.1 Resignation or Removal of Trustee Trustee may resign at any time by
written notice to the Employer, which shall be effective thirty (30) days after
receipt of such notice unless Employer and Trustee agree otherwise. The
Employer may remove the Trustee at any time by written notice to the
Trustee, which shall be effective thirty (30) days after receipt of such notice
unless the Trustee and Employer otherwise agree.
6.2 Designation of Successor Upon notice of the Trustee's resignation or
removal, the Employer shall promptly designate a successor Trustee who will
accept transfer of the assets of the Trust.
If no successor Trustee is designated within thirty (30) days of notice of
Trustee's resignation or removal, then the Trustee may apply to a court of
competent jurisdiction for appointment of a successor or instructions as
provided in Section 6.4 below.
6.3 Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed as soon as administratively feasible
after receipt of notice of resignation, removal or transfer and appointment of
and acceptance by successor Trustee, unless Employer extends the time
limit.
6.4 Court Appointment of Successor If Trustee resigns or is removed, a
successor shall be appointed, in accordance with Section 6.2 hereof, by the
effective date of resignation or removal under paragraph 6.1 of this section.
If no such appointment has been made, Trustee may apply to a court of
competent jurisdiction for appointment of a successor or for instructions. All
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust. Until a successor Trustee has
accepted its appointment and received transfer of the Trust assets, the
Trustee shall be entitled to be compensated for its services according to its
published fee schedule then in effect for acting as Trustee.
6.5 Successor's Powers A successor Trustee shall have the same powers and
duties as those conferred upon the original Trustee hereunder. A resigning
Section 415(m).Trust 15 3/8/06
Trustee shall transfer the Trust assets and shall deliver the assets of the
Trust to the successor Trustee as soon as practicable. The resigning Trustee
is authorized, however, to reserve such amount as may be necessary for the
payment of its fees and expenses incurred prior to its resignation, and the
Trust assets shall remain liable to reimburse the resigning Trustee for all fees
and costs, expenses or attorneys' fees or losses incurred, whether before or
after resignation, due solely to Trustee's holding title to and administration of
Trust assets.
6.6 Successor's Duties A successor Trustee shall have no duty to audit or
otherwise inquire into the acts and transactions of its predecessor.
ARTICLE VII
AMENDMENT
7.1 Power to Amend This Trust Agreement may be amended by a written
instrument executed by Trustee and Employer. No such amendment shall
conflict with the terms of the Plan.
ARTICLE VIII
LIABILITIES
8.1 Declaration of Intent To the full extent permitted by law, it is the intent of this
Article to relieve each fiduciary from all liability for any acts or omissions of
any other fiduciary or any other person and to declare the absence of
liabilities of all persons referred to in this Article to the extent not imposed by
law or by provisions of this Trust Agreement. Each of the following Sections,
in declaring such limitation, is set forth without limiting the generality of this
Section but in each case shall be subject to the provisions, limitations and
policies set forth in this Section.
8.2 Liability of the Trustee
(a) The Trustee shall have no powers, duties or responsibilities with
regard to the administration of the Plan or to determine the rights or
benefits of any person having or claiming an interest under the Plan or
in the Trust or under this Trust Agreement or to examine or control any
disposition of the Trust or part thereof which is directed by the
Employer, as applicable.
(b) The Trustee shall have no liability for the adequacy of contributions for
the purposes of the Plan or for enforcement of the payment thereof.
Section 415(m).Trust 16 3/8/06
(c) The Trustee shall have no liability for the acts or omissions of the
Employer or Fiduciaries.
(d) The Trustee shall have no liability for following proper directions of
Employer or Employer's designated Fiduciaries, or any Participant
when such directions are made in accordance with this Trust
Agreement and the Plan.
(e) During such period or periods of time, if any, as Employer or
Investment Manager (collectively, "Fiduciary") is directing the
investment and management of Trust assets, the Trustee shall have
no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other right relating to any
securities purchased on the directions of such Fiduciary if notice of any
such right was given prior to the purchase of such securities. If such
notice is given after the purchase of such securities, the Trustee shall
notify such Fiduciary. The Trustee shall have no obligation to exercise
any such right unless it is instructed to exercise such right, in writing,
by the Fiduciary within a reasonable time prior to the expiration of such
right.
(f) During such period or periods of time, if any, as a Fiduciary is directing
the investment and management of Trust assets, if such Fiduciary
directs the Trustee to purchase securities issued by any foreign
government or agency thereof, or by any corporation domiciled outside
of the United States, it shall be the responsibility of the Fiduciary to
advise the Trustee in writing with respect to any laws or regulations of
any foreign countries or any United States territories or possessions
which shall apply, in any manner whatsoever, to such securities,
including, but not limited to, receipt of dividends or interest by the
Trustee for such securities.
8.3 Indemnification
(a) The Trustee shall not be liable for, and Employer shall indemnify,
defend, and hold the Trustee (including its officers, agents, employees
and attorneys) harmless from and against any claims, demands, loss,
costs, expense or liability imposed on the indemnified party, including
reasonable attorneys' fees and costs incurred by the indemnified party,
arising as a result of (1) any acts taken by the Trustee in accordance
with directions (or failure to act in the absence of directions) from the
Employer, Investment Manager or any other person or entity
authorized to act on their behalf which the Trustee reasonably believes
to have been given by them, or (2) the Employer's active or passive
Section 415(m).Trust 17 3/8/06
negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(b) The Employer shall not be liable for, and Trustee shall indemnify,
defend, and hold the Employer (including its officers, agents,
employees and attorneys) harmless from and against any claims,
demands, loss, costs, expense or liability imposed on the indemnified
party, including reasonable attorneys' fees and costs incurred by the
indemnified party, arising as a result of Trustee's active or passive
negligent act or omission or willful misconduct in the execution or
performance of its duties under this Trust Agreement.
(c) Promptly after receipt by an indemnified party of notice or receipt of a
claim or the commencement of any action for which indemnification
may be sought, the indemnified party will notify the indemnifying party
in writing of the receipt or commencement thereof. When the
indemnifying party has agreed to provide a defense as set out above
that party shall assume the defense of such action (including the
employment of counsel, who shall be counsel satisfactory to such
indemnitee) and the payment of expenses, insofar as such action shall
relate to any alleged liability in respect of which indemnity may be
sought against the indemnifying party. Any indemnified party shall
have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and expenses of such
counsel shall not be at the expense of the indemnifying party unless (i)
the employment of such counsel has been specifically authorized by
the indemnifying party or (ii) the named parties to any such action
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate due to actual or potential
differing interest between them. The indemnifying party shall not be
liable to indemnify any person for any settlement of any such action
effected without the indemnifying party's consent.
ARTICLE IX
DURATION, TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation and Termination The Trust shall not terminate until the date on
which Participants are no longer entitled to benefits pursuant to the terms of
the Plan, unless sooner revoked in accordance with Section 1.2 hereof. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
Employer. In the event the Trust is terminated following the distribution of all
payments and benefits called for herein, from the date of such termination of
the Trust and until the final distribution of the remaining Trust assets, if any,
Section 415(m).Trust 18 3/8/06
the Trustee shall continue to have all the powers provided under this Trust
Agreement that are necessary or desirable for the orderly liquidation and
distribution of the Trust.
9.2 Duration This Trust shall continue in full force and effect for the maximum
period of time permitted by law and in any event until the expiration of twenty -
one years after the death of the last surviving person who was living at the
time of execution hereof who at any time becomes a Participant in the Plan,
unless this Trust is sooner terminated in accordance with this Trust
Agreement.
ARTICLE X
MISCELLANEOUS
10.1 Emergencies and Delegation
(a) In case of an emergency, the Trustee may act in the absence of
directions from any other person having the power and duty to direct
the Trustee with respect to the matter involved and shall incur no
liability in so acting.
(b) By written notice to the Trustee, the Employer may authorize the
Trustee to act on matters in the ordinary course of the business of the
Trust or on specific matters upon the signature of its delegate.
10.2 Expenses and Taxes
(a) The Employer, or at its option, the Trust, shall quarterly pay the
Trustee its expenses in administering the Trust and reasonable
compensation for its services as Trustee at a rate to be agreed upon
by the parties to this Trust Agreement, based upon Trustee's
published fee schedule. However, the Trustee reserves the right to
alter this rate of compensation at any time by providing the Employer
with notice of such change at least thirty (30) days prior to its effective
date. Reasonable compensation shall include compensation for any
extraordinary services or computations required, such as
determination of valuation of assets when current market values are
not published and interest on funds to cover overdrafts. The Trustee
shall have a lien on the Trust for compensation and for any reasonable
expenses including counsel, appraisal, or accounting fees, and these
shall be withdrawn from the Trust and may be reimbursed by the
Employer.
(b) Reasonable counsel fees, reasonable costs, expenses and charges of
the Trustee incurred or made in the performance of its duties,
Section 415(m).Trust 19 3/8/06
expenses relating to investment of the Trust such as broker's
commissions, stamp taxes, and similar items and all taxes of any and
all kinds that may be levied or assessed under existing or future laws
upon or in respect to the Trust or the income thereof, and the Trustee's
charges for issuing distribution checks to Participants or their
representatives shall be paid from, and shall constitute a charge upon
the Trust.
(c) In the event any Participant is determined to be subject to federal
income tax on any amount under this Trust Agreement prior to the time
of payment hereunder, the entire amount determined to be so taxable
shall, at the Employer's direction, be distributed by the Trustee to such
Participant from the Trust. For the above purposes, a Participant shall
be determined to be subject to federal income tax with respect to the
Trust upon the earlier of: (a) a final determination by the United States
Internal Revenue Service ( "IRS ") addressed to the Participant which is
not appealed to the courts; (b) an opinion of legal counsel designated
in writing by the Employer, addressed to the Employer and the
Trustee, that, by reason of Treasury Regulations, amendments to the
Code, published IRS rulings, court decisions or other substantial
precedent, amounts hereunder subject the Participant to federal
income tax prior to payment. The Employer shall undertake at its
discretion and at its sole expense to defend any tax claims described
herein which are asserted by the IRS against any Participant, including
attorney fees and costs of appeal, and shall have the sole authority to
determine whether or not to appeal any determination made by the
IRS or by a lower court. The Employer also agrees to reimburse any
Participant under this Section for any interest or penalties in respect of
tax claims hereunder upon receipt of documentation thereof.
10.3 Third Parties
(a) No person dealing with the Trustee shall be required to follow the
application of purchase money paid or money loaned to the Trustee
nor inquire as to whether the Trustee has complied with the
requirements hereof.
(b) In any judicial or administrative proceedings, only the Employer and
the Trustee shall be necessary parties and no Participant or other
person having or claiming any interest in the Trust shall be entitled to
any notice or service of process (except as required by law). Any
judgment, decision or award entered in any such proceeding or action
shall be conclusive upon all interested persons.
10.4 Adoption by Affiliated Employer Any affiliate of the Employer (an "Affiliated
Employer ") may adopt one or more of the Employer's Plans with the approval
Section 415(m).Trust 20 3/8/06
of the Employer, and the Affiliated Employer shall concurrently become a
party to this Trust Agreement by giving written notice of its adoption of the
Plan and this Trust Agreement to the Trustee. Upon such written notice, the
Affiliated Employer shall become a signatory to this Trust Agreement.
10.5 Binding Effect: Successor Employer This Trust Agreement shall be binding
upon and inure to the benefit of any successor to the Employer or its
business as the result of merger, consolidation, reorganization, transfer of
assets or otherwise and any subsequent successor thereto. In the event of
any such merger, consolidation, reorganization, transfer of assets or other
similar transaction, the successor to the Employer or its business or any
subsequent successor thereto shall promptly notify the Trustee in writing of
its successorship and shall promptly supply information required by the
Trustee.
10.6 Relation to Plan All words and phrases used herein shall have the same
meaning as in the Plan, and this Trust Agreement and the Plan shall be read
and construed together. In the event of any conflict between the terms of the
Plan and this Trust Agreement with respect to the rights and duties of the
Trustee, this Trust Agreement shall control. Whenever in the Plan it is
provided that the Trustee shall act as therein prescribed, the Trustee shall be
and is hereby authorized and empowered to do so for all purposes as fully as
though specifically so provided herein or so directed by the Employer.
10.7 Mediation and Arbitration of Disputes. If a dispute arises under this Trust
Agreement between or among the Employer and Trustee or any Participant,
except as provided in Sections 5.1(b) and 6.4, the parties agree first to try in
good faith to settle the dispute by mediation under the Commercial Mediation
Rules of the American Arbitration Association. Thereafter, any remaining
unresolved controversy or claim arising out of or relating to this Agreement, or
the performance or breach thereof, shall be decided by binding arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association and Title 9 of California Code of Civil Procedure Sections 1280 et
seq. The sole arbitrator shall be a retired or former Judge associated with the
American Arbitration Association. Judgement upon any award rendered by
the arbitrator shall be final and may be entered in any court having
jurisdiction. Each party shall bear its own costs, attorney's fees and its share
of arbitration fees. The Alternate Dispute Resolution Agreement in this
Agreement does not constitute a waiver of the parties' rights to a judicial
forum in instances where arbitration would be void under applicable law, and
does not preclude Bank from exercising its rights to interplead the funds of
the Account at the cost of the Account.
10.8 Attorney Fees and Costs If any action is brought by the Trustee or the
Employer against the other in a court of law in order to compel arbitration
pursuant to Section 10.7 above, the prevailing party in such proceeding to
Section 415(m).Trust 21 3/8/06
compel arbitration shall be entitled to recover from the other party reasonable
attorneys' fees, court costs and necessary disbursements incurred in
connection with such proceeding, including but not limited to copying costs,
filing fees, expert costs and fees and word processing fees.
10.9 Partial Invalidity Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof. In the event of any such holding, the
Employer and Trustee and, if applicable, Participants, will immediately amend
this Trust Agreement as necessary to remedy any such defect.
10.10 Construction This Trust Agreement shall be governed by and construed in
accordance with the laws of California.
10.11 Notices Any notice, report, demand or waiver required or permitted
hereunder shall be in writing, shall be deemed received upon the date of
delivery if given personally or, if given by mail, upon the receipt thereof, and
shall be given personally or by prepaid registered or certified mail, return
receipt requested, addressed to Employer and Trustee as listed below in
Article XII; if to a Participant, to the last mailing address provided to the
Trustee with respect to such individual, provided, however, that if any party or
his or its successor shall have designated a different address by written
notice to the other parties, then to the last address so designated.
ARTICLE XI
DISTRIBUTIONS IN THE EVENT OF INSOLVENCY OF EMPLOYER
11.1 Trustee and Employer Responsibility upon notice of Employer's Insolvency
(a) Insolvency Trustee shall cease payment of benefits to Participants if
the Employer is Insolvent. Employer shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Employer is unable to pay its
debts as they become due, or (ii) Employer is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in Section
1.4 hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Employer under federal and state law as
set forth below.
(1) The Governing Board and the Plan Administrator designated by
the Employer shall have the duty to inform Trustee in writing of
Employer's Insolvency. If a person claiming to be a creditor of
Employer alleges in writing to Trustee that Employer has
Section 415(m).Trust 22 3/8/06
become Insolvent, Trustee shall determine whether Employer is
Insolvent and, pending such determination, Trustee shall
discontinue payment of benefits to Participants. If Trustee is
unable to obtain information sufficient to ascertain Insolvency,
Trustee may seek instructions of a court of law or submit the
matter for arbitration before the American Arbitration
Association or interplead the Trust Assets at the expense of the
Trust.
(2) Unless Trustee has actual knowledge of Employer's Insolvency,
or has received written notice from Employer or a person
claiming to be a creditor alleging that Employer is Insolvent,
Trustee shall have no duty to inquire whether Employer is
Insolvent. Trustee may in all events rely on such evidence
concerning Employer's solvency as may be furnished to Trustee
and that provides Trustee with a reasonable basis for making a
determination concerning Employer's solvency.
(3) If at any time Trustee has determined that Employer is
Insolvent, Trustee shall discontinue payments to Participants
and shall hold the assets of the Trust for the benefit of
Employer's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants to pursue
their rights as general creditors of Employer with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Participants in
accordance with Section 4.2 of this Trust Agreement only after
Trustee has determined that Employer is not Insolvent (or is no
longer Insolvent).
(c) Determination of Insolvency Upon receipt of the aforesaid written
notice of the Employer's Insolvency, the Trustee shall notify the
Employer, and the Employer, within thirty (30) days of receipt of such
notice, shall engage an arbitrator (the "Arbitrator ") acceptable to
Trustee, from the American Arbitration Association to determine the
Employer's solvency or Insolvency. The Employer shall cooperate fully
and assist the Arbitrator, as may be requested by the Arbitrator, in
such determination and shall pay all costs relating to such
determination. The Arbitrator shall notify the Employer and Trustee
separately by registered mail of its findings. If the Arbitrator
determines that the Employer is solvent or if once found Insolvent the
Employer is no longer Insolvent, the Trustee shall resume holding the
Trust assets for the benefit of the Participants and may make any
distributions called for under this Trust Agreement, including any
amounts which should have been distributed during the period when
Section 415(m).Trust 23 3/8/06
the Trustee suspended distributions in response to a notice of the
Employer's Insolvency, including earnings (or losses) on such
suspended distributions. If the Arbitrator determines that the Employer
is Insolvent or is unable to make a conclusive determination of the
Employer's Insolvency, the Trustee shall continue to retain the assets
of the Trust until the Employer's status of solvency or Insolvency is
decided by a court of competent jurisdiction or it distributes all or a
portion of the Trust assets to any duly appointed receiver, trustee in
bankruptcy, custodian or to the Employer's general creditors, but only
as such distribution is ordered by a court of competent jurisdiction.
The Trustee shall have no liability for relying upon the determination of
the Arbitrator as to the Employer's solvency or Insolvency.
(d) If a court of competent jurisdiction orders distribution of only part of the
Trust assets and does not specify the manner in which Trust assets
are to be liquidated, the Trustee shall liquidate Trust assets as directed
by the Employer.
If the Employer fails to provide instructions as to the manner of
liquidation within five (5) business days prior to the date the Trustee is
required to comply with the court's order, the Trustee shall liquidate
and shall have the authority to order any Investment Manager to
liquidate the Trust assets in such manner as the Trustee shall
determine in its sole and absolute discretion. The Trustee shall not be
liable for any damages resulting from the Trustee's exercise in good
faith of its power to liquidate assets as provided in this paragraph.
(e) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to subsection (b)(3)
hereof and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of
all payments due to Participants under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any
payments made to Participants by Employer in lieu of the payments
provided for hereunder during any such period of discontinuance of
which Trustee has actual knowledge.
Section 415(m).Trust 24 3/8/06
Nothing in this Trust Agreement shall in any manner diminish any right of a Participant
to pursue his or her rights as a general creditor of the Employer with regard to
payments under the Trust or otherwise.
ARTICLE XII
EFFECTIVE DATE
This Trust Agreement shall be effective upon the Trustee's receipt of assets
to be held in trust hereunder, and is signed by the parties on the date(s) set forth below
their names.
UNION BANK, N.A.
/ �?'300 U4op) kd-irrPd-�),
(Address)
CRUZ", G Tairy /�—
City of La Quinta
"Employer ", Sponsor of the Trustee
S�cv City of La Quinta Excess Benefit Plan
(Plan)
By: C�lLfij "
(typed or printed name)
Date:
By:
(typed or printed name)
Date: 5:y3 --//
78 -495 Calle Tampico
(Address)
La Quinta CA 92253
Thomas Genovese, City Manager
(typed or printed name)
THE TRUST ADMINISTRATOR
PUBLIC AGENCY RETIREMENT
SERVICES
By:
Title: / f IDrWT
Date:
AGREEMENT FOR ADMINISTRATIVE SERVICES
This Agreement for Administrative Services ( "Agreement ") is made this � Z day of
2011, between Phase II Systems, a corporation organized and existing under the laws of the State oo
California, doing business as Public Agency Retirement Services (hereinafter "PARS ") and the City
of La Quinta ( "Agency ").
WHEREAS, Agency is desirous of retaining PARS, as Trust Administrator to the PARS Trust, to
provide administrative and consulting services with respect to the qualified and non - qualified City of
La Quinta Fiscally Responsible Reduction Plan (the "Plan ").
NOW THEREFORE, the parties agree:
1. Services. PARS will provide the services pertaining to the Plan as described in the exhibit
attached hereto as "Exhibit IA" ( "Services ") in a timely manner, subject to the further provisions
of this Agreement.
2. Fees for Services. PARS will be compensated for performance of the Services as described in the
exhibit attached hereto as "Exhibit I B ".
3. Payment Terms. Payment for the Services will be remitted directly from Plan assets unless
otherwise stated in Exhibit IB. In the event that the Agency chooses to make payment directly to
PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon
an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS
within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of
1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice
delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless
PARS has previously received written communication disputing the subject invoice that is signed
by a duly authorized representative of the Agency.
4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will
be billed to the Agency at the rates indicated in the PARS standard fee schedule in effect at the
time the services are provided and shall be payable as described in Section 3 of this Agreement.
Before any such services are performed, PARS will provide the Agency with written notice of the
subject service's, terms, and an estimate of the fees therefore.
5. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency's
providing PARS the information specified in the exhibit attached hereto as "Exhibit I C "( "Data ").
It shall be the responsibility of the Agency to certify the accuracy, content and completeness of the
Data so that PARS may rely on such information without further audit. It shall further be the
responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a
reasonable amount of time for the Services to be performed. Except as specified in Exhibit ]A,
PARS shall be under no additional duty to question Data received from the Agency, to compute
contributions made to the Plan, to determine or inquire whether contributions are adequate to meet
and discharge liabilities under the Plan, or to determine or inquire whether contributions made to
the Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable
for nonperformance of Services if such non - performance is caused by or results from erroneous
and /or late delivery of Data from the Agency. In the event that the Agency fails to provide Data
in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1 C, PARS
reserves the right, notwithstanding the further provisions of this Agreement, to terminate this
Agreement upon no less than ninety (90) days written notice to the Agency.
6. Suspension of Contributions. In event contributions are suspended, either temporarily or
permanently, prior to the complete discharge of PARS' obligations under this Agreement, PARS
reserves the right to bill the Agency for Services under this Agreement actually completed and
accepted by Agency at the rates indicated in PARS' standard fee schedule in effect at the time the
services are provided, subject to the terms established in Section 3 of this Agreement. Before any
such services are performed, PARS will provide the Agency with written notice of the subject
services, terms, and an estimate of the fees therefore.
7. Records. During the term of this Agreement, and for a period of five (5) years after termination of
this Agreement, PARS shall provide duly authorized representatives of the Agency access to all
records and material relating to calculation of PARS' fees under this Agreement. Such access
shall include the right to inspect, audit and reproduce such records and material and to verify
reports furnished in compliance with the provisions of this Agreement. All information so
obtained shall be accorded confidential treatment as provided under applicable law.
8. Confidentiality. Without the Agency's consent, PARS shall not disclose any information relating
to the Plan except to duly authorized officials of the Agency and to parties retained by PARS to
perform specific services within this Agreement. The Agency shall not disclose any information
relating to the Plan to individuals not employed by the Agency without the prior written consent
of PARS, except as such disclosures may be required by applicable law or where such disclosure
is made to the Agency's attorneys (including attorneys not employed by the Agency) to enable
such attorneys to advise the Agency with respect to the Plan or any matter related to the Plan.
9. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor.
As such, neither the Agency nor any of its officers, employees or agents shall have the power to
control the conduct of PARS, its officers, employees or agents, except as specifically set forth and
provided for herein. PARS shall pay all wages, salaries and other amounts due its employees in
connection with this Agreement and shall be responsible for all reports and obligations respecting
them, such as social security, income tax withholding, unemployment compensation, workers'
compensation and similar matters.
10. Professional Liability Insurance. During the term of this agreement, PARS will maintain at
coverage levels appropriate for this Plan, professional liability insurance covering the services to
be provided under this Agreement.
11. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless,
including their respective officers, directors, employees, agents and attorneys, from any claim,
loss, demand, liability, or expense, including reasonable attorneys' fees and costs, incurred by the
other as a consequence of PARS' or Agency's, as the case may be, acts, errors, or omissions with
respect to the performance of their respective duties hereunder, which duties expressly exclude
any duty of PARS to submit any application for a determination letter of any kind with respect to
the Plan to the IRS. If Agency submits an application to the IRS with respect to the Plan, the
Agency shall indemnify and hold PARS harmless from any claim, loss, demand, liability, or
expense, including reasonable attorney's fees, incurred by PARS that was caused by either the
filing of such application to the IRS with respect to the Plan or a ruling or other action by the IRS
with respect to such application, provided that such claim, loss, demand, liability, or expense is
made by, or incurred as a result of, a claim by a participant/beneficiary of the Plan and /or the
Agency and no other person or entity.
12. Compliance with Applicable Law. The Agency shall observe and comply with federal, state
and local laws in effect when this Agreement is executed, or which may come into effect during
the term of this Agreement, regarding the administration of the Plan. PARS shall observe and
comply with federal, state and local laws in effect when this Agreement is executed, or which
may come into effect during the term of this Agreement, regarding Plan administrative services
provided under this Agreement.
13. Applicable Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of California. In the event any party institutes legal proceedings to enforce or
interpret this Agreement, venue and jurisdiction shall be in any state court of competent
jurisdiction.
14. Force Majeure. When satisfactory evidence of a cause beyond a party's control is presented to
the other party, and nonperformance was unforeseeable, beyond the control and not due to the
fault of the party not performing, a party shall be excused from performing its obligations under
this Agreement during the time and to the extent that it is prevented from performing by such
cause, including but not limited to: any incidence of fire, flood, acts of God, acts of terrorism or
war, commandeering of material, products, plants or facilities by the federal, state or local
government, or a material act or omission by the other party.
15. Ownership of Reports and Documents. The originals of all letters, documents, reports, and
data produced for the purposes of this Agreement shall be delivered to, and become the property
of the Agency. Copies may be made for PARS but shall not be furnished to others without
written authorization from Agency.
16. Records Retention. After the termination of this Agreement, PARS will retain all books,
records, ledgers, journals, correspondence and documents in its possession, whether in hard copy
or in an electronic format, relating to the Plan for such periods as the Agency and /or the Plan is
required to retain such records by applicable law, but in no event for a period ending prior to the
date that is six (6) years after all benefits under the Plan have been transferred or distributed.
PARS will cooperate in providing to the Agency such information or copies of materials in its
possession relating to the Plan as requested by the Agency.
17. Designees. The Plan Administrator of the Agency, or his /her designee, shall have the authority
to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent
to and in accordance with the written authority granted by the Governing Body of the Agency, a
copy of which writing shall be delivered to PARS. Any officer of PARS, or his or her designees,
shall have the authority to act for and exercise any of the rights of PARS as set forth in this
Agreement.
18. Cooperation with Successor. PARS shall cooperate in good faith with the Agency and any
successor Trust Administrator in the conversion of the Plan to a new Trust Administrator. PARS
will use reasonable efforts to transfer all relevant information concerning the Plan to the Agency
or to a successor Trust Administrator. Should the termination of services be concurrent with a
termination of the Plan, PARS will use reasonable efforts to dispose of participant's benefits per
the Agency's and, as appropriate, the participants' instructions. PARS shall be paid a termination
fee based on the current schedule of termination fees in place at the time of termination of
service, if any. If the Plan is funded by a lump sum payment, PARS will not be entitled to a
termination fee.
19. Notices. All notices hereunder and communications regarding the interpretation of the terms of
this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by
depositing the notices in the U.S. mail, registered or certified mail, return receipt requested,
postage prepaid and addressed as follows:
(A) To PARS: PARS
4350 Von Karman Avenue, Suite 100
Newport Beach, CA 92660
Attention: President
(B) To Agency: City of La Quinta
78 -495 Calle Tampico
La Quinta, CA 92253
Attention: City Manager
Notices shall be deemed given on the date received by the addressee.
20. Term of Agreement. This Agreement shall remain in effect for the period beginning April 19,
2011 and ending June 30, 2015 ( "Term "). This Agreement will continue unchanged for
successive twelve -month periods following the Term unless either party gives written notice to
the other party of the intent to terminate prior to ninety (90) days before the end of the Term.
21. Amendment. This Agreement may not be amended orally, but only by a written instrument
executed by the parties hereto.
22. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the
parties with respect to the subject matter set forth in this Agreement. In the event a conflict arises
between the parties with respect to any term, condition or provision of this Agreement, the
remaining terms, conditions and provisions shall remain in full force and legal effect. No waiver
of any term or condition of this Agreement by any party shall be construed by the other as a
continuing waiver of such term or condition.
23. Provisions That Survive Termination. The following provisions of this Agreement will
survive the termination of this Agreement:
(A) The indemnification provisions for both the Agency and PARS;
(B) PARS' obligation to cooperate in good faith with the Agency and /or successor Trust
Administrator; and
(C) PARS' obligation to retain and provide documents.
24. Attorney's Fees. In the event any action is taken by a party hereto to enforce the terms of this
Agreement, the prevailing party therein shall be entitled to receive its reasonable attorney's fees.
25. Counterparts. This Agreement may be executed in any number of counterparts, and in that
event, each counterpart shall be deemed a complete original and be enforceable without reference
to any other counterpart.
26. Headings. Headings in this Agreement are for convenience only and shall not be used to
interpret or construe its provisions.
27. Effective Date. This Agreement shall be effective on the date first above written, and also shall
be the date the Agreement is executed.
AGENCY:
BY
TITLE: City Manager
DATE: XZy&l
PARS:
BY:
TITLE:
DATE:
EXHIBIT IA
SERVICES
PARS will provide the following services for the City of La Quinta: .
1. Plan Consultation Services:
(A) Meeting with Agency personnel to discuss the impact to the Agency of implementing a
Plan;
(B) If appropriate, completing a fiscal analysis, based on data and assumptions provided by
Agency, to determine the fiscal feasibility of a Plan;
(C) Meeting with Agency personnel to discuss the fiscal analysis and receive feedback on the
analysis, data, and assumptions made;
(D) Making appropriate revisions to the fiscal analysis as directed by Agency.
2. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation
timelines, benefit communication strategies, data reporting and contribution submission
requirements;
(B) Providing the necessary analysis and advisory services to finalize these elements of the
Plan;
(C) Providing the documentation needed to establish the Plan for review by Agency legal
counsel, with the exception of the Plan document which shall be provided by Agency
legal counsel.
3. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the
PARS Trust Program ( "Trustee "), based upon information received from the Agency and
the Trustee;
(B) Performing periodic accounting of Plan assets, including the allocation of employer
contributions, distributions, investment activity and expenses (if applicable), based upon
information received from the Agency and /or Trustee;
(C) Acting as ongoing liaison between the Participant and the Agency in regard to
distribution payments, which shall include use by the Participants of toll -free telephone
communication to PARS;
(D) Producing benefit illustrations and processing enrollments;
(E) Coordinating the processing of Participant distribution payments pursuant to authorized
written Agency certification of distribution eligibility, authorized direction by the
Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-
provided Data;
(F) Directing Trustee to liquidate Plan assets (if necessary) and make Participant distribution
payments, and producing required tax filings regarding said distribution payments;
(G) Notifying the Trustee of the amount of Plan assets available for further investment and
management, or, the amount of Plan assets necessary to be liquidated in order to fund
Participant distribution payments;
(H) Coordinating actions with the Trustee as directed by the Plan Administrator within the
scope this Agreement;
(I) Preparing and submitting a report of Plan activity to the Agency, unless directed by the
Agency otherwise;
(J) Coordinating and selecting of a licensed actuary to perform actuarial valuation, if
required, on a periodic basis to comply with state and federal laws (the actuarial
certification fee for which shall be paid by the Agency);
(K) Preparing and submitting the Annual Report of Financial Transactions to the California
State Controller, as required by law, for the PARS Trust Program, including the required
certified audit of the PARS Trust.
4. Plan Compliance Services: Coordinating and preparing changes to the Trust, Plan and other
associated legal documents required by federal and state agencies to maintain the Plan in
compliance for review by Agency legal counsel.
5. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial
advice. In providing the services specified above, PARS will retain qualified professional service
providers at its cost as it deems necessary if the service lies outside its area of expertise.
6. Any analysis provided by PARS is subject to the receipt of accurate information and assumptions
as may be provided by Agency. The Agency is responsible for integrating the PARS analysis
into any Agency budgetary analysis or decision - making processes. The fiscal projections in the
PARS analysis are dependent upon future experience conforming to the assumptions used and the
results will be altered to the extent that future experience deviates from these assumptions. It is
certain that actual experience will not conform exactly to the assumptions used in the analysis.
EXHIBIT 1B FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit IA based upon the
following schedule:
1. Upon implementation of the Plan associated with this Agreement, the Agency agrees to pay:
(A) An ongoing administration fee equal to five and one -half percent (5.50 %) of all
contributions made by the Agency on behalf of participants in the subject Plan, subject to
a $5,000.00 minimum per year for five years. Fees will be billed to the Trustee as
contributions are made by the Agency, and it will be the responsibility of the Trustee to
pay those fees from the assets of the Plan. These fees are exclusive of Trustee and
investment management fees, which are based on the standard fees charged by the
Trustee. Trust Administrator must obtain the Agency's Plan Administrator approval
before directing Trustee to pay such fees.
(B) A fee equal to actuarial expenses, if any, charged to PARS by an outside contractor for an
actuarial valuation of the Agency's Plan ( "Actuarial Valuation Fee ").
(C) A fee equal to the stated legal fees related to any ongoing federal and/or state required
Plan compliance changes. Such fees will not be charged to the Agency without prior
authorization by the Plan Administrator.
2. In the event that the Plan associated with this Agreement is not implemented, the Agency
agrees to pay a one -time fee equal to $5,000.00. The fee will be billed to the Agency upon
notice of cancellation of the Plan and it will be the responsibility of the Agency to pay this fee.
EXHIBIT 1 C DATA REQUIREMENTS
PARS will
information:
the Services under this Agreement contingent upon receiving the following
1. Participant Data (provided by Agency):
(A)Participant's Legal Name
(B) Participant's Position
(C) Participant's Address
Birth Date
(E) Participant's Hire Date
(F) Participant's Contract Salary
(G)Years of Agency Service
(H)Retirement Date
2. Executed Legal Documents (provided by Agency):
(A) Certified Resolution
(B) Adoption Agreement
(C) Plan Document
(D) Trustee Investment Forms
3. Completed Funding Documents (provided by Agency):
(A) Authorization to Pay Benefits Form
(B) Funding of PARS Fiscally Responsible Reduction Plan Form
4. Completed E nrolh
(A) Correction orm
(B) Enrollment Form
(C) Beneficiary I esi
(D) Tax Withholding
(E) Letter of Re s igna
Forms (timely submitted by Participant):
Form
Request Form
5. Other information pertinent to the Services as reasonably requested by PARS.