HomeMy WebLinkAbout1997-12 Established a 457 Deferred Compensation Plan for the Fire Fighters and Police Officers of the Town of VailRESOLUTION NO. 12
SERIES OF 1997
A RESOLUTION TO ESTABLISH A 457 DEFERRED COMPENSATION PLAN FOR THE
FIRE FIGHTERS AND POLICE OFFICERS OF THE TOWN OF VAIL.
WHEREAS, to establish a 457 Deferred Compensation Plan for the firefighters and
police officers of the Town of Vail that is administered by the Fire and Police Pension
Association, it is necessary to establish agreements with the Fire and Police Pension
Association of Colorado; and
WHEREAS, the Town of Vail is a municipality with employees who are members of the
Fire and Police Pension Association as defined in C.R.S. Section 31-31-1024; and
WHEREAS, the purpose of the 457 Deferred Compensation Plan is to enable
employees who become covered under the plan to enhance their retirement security; and
WHEREAS, there is in existence a 457 Deferred Compensation Plan for Town of Vail
employees who are not members of the Fire and Police Pension Association of Colorado.
that:
NOW, THEREFORE, be it resolved by the Town Council of the Town of Vail, Colorado,
That the Town of Vail hereby establishes a Deferred Compensation Plan to be
effective upon the execution of the necessary plan agreements.
2. That the Town Council hereby approves and adopts the Adoption Agreement,
the Model FPPA Deferred Compensation Plan, and the Rabbi Trust Agreement attached
hereto as Exhibit A and directs the Town Manager to execute these and all other agreements
necessary to establish the 457 Deferred Compensation Plan for the firefighters and police
officers of the Town of Vail.
3. This resolution shall take effect immediately upon its passage.
INTRODUCED, READ, APPROVED AND ADOPTED is , ,D 'day of March, 1997.
Robert W. Armour, Mayor
ATTEST:
Holly L. McCutcheon, Town Clerk
CARESQLU97.12
ADOPTION AGREEMENT
FOR THE MODEL FPPA DEFERRED COMPENSATION
TRUST AGREEMENT
This Agreement made as of May 1, 1997, by and between the Fire and Police
Pension Association of Colorado (hereinafter referred to as the Trustee) and Town of Vail
hereinafter referred to as the Employer).
WHEREAS, the Employer has executed an Adoption Agreement to establish
a Model FPPA Deferred Compensation Plan (hereinafter referred to as the "Plan") to
provide deferred compensation and retirement benefits to Employees under Internal
Revenue Code § 457; and
WHEREAS, the Employer wishes to establish a Trust and to transfer to the
Trust, assets which shall be held for the exclusive purposes of providing benefits to the
Participants and Beneficiaries and defraying reasonable expenses of administering thePlanandTrust, in such manner and at such times as specified in the Plan;
NOW, THEREFORE, the Employer and the Trustee hereby establish the
Trust and agree that the terms of the Trust shall be comprised as set forth in the attached
Model FPPA Deferred Compensation Trust Agreement attached hereto.
IN WITNESS WHEREOF, the undersigned parties have executed this
Adoption Agreement on .z 1997.
EMPLOYER
Town of Vail
FPPA,TRUSTEE
By: P -z7- ;
Its: Executive Director
L -Z L By: —/
Its: L-L,:, rn4--,,
FPPA,TRUSTEE
By: P -z7- ;
Its: Executive Director
MODEL FPPA
DEFERRED COMPENSATION
TRUST AGREEMENT
as of January 1, 1997)
TM472631124773.2
MODEL FPPA
DEFERRED COMPENSATION
TRUST AGREEMENT
Section 1. General Duties of the Employer: The Employer shall make
regular periodic payments to the Trustee equal to the amount of its participatingEmployees' total Deferrals which are deferred in accordance with the Model FPPA Deferred
Compensation Plan (the "Plan").
Section 2. General Duties of the Trustee: The Trustee shall hold all funds
received by it hereunder, which, together with the income therefrom, shall constitute the
Trust Funds. It shall administer the Trust Funds, collect the income thereof, and make
payments therefrom, all as hereinafter provided. The Trustee shall also hold all Trust
Funds which are transferred to it as successor Trustee by the Employer from existingdeferredcompensationarrangementswithitsEmployeeswhichmeetthesameInternal
Revenue Code requirements which govern the Plan. Such Trust Funds shall be subject to
all of the terms and provisions of this Trust.
Section 3. Investment Powers and Duties of the Trustee: The Trustee
shall have the power in its discretion to invest and reinvest the principal and income of the
Trust Fund and keep the Trust Fund invested, without distinction between principal and
income, in such securities or in other property, real or personal, wherever situated, as the
Trustee shall deem advisable, including, but not limited to, stocks, common or preferred,
bonds, retirement annuity and insurance policies, mortgages, and other evidences of
indebtedness or ownership, and in common trust funds of approved financial or investment
institutions, with such institutions acting as Trustee of such common trust funds, or separate
and different types of funds (accounts) including equity, fixed-income, and those which fulfill
requirements of state and local governmental laws, established with such approved
financial or investment institutions. For these purposes, this Trust Fund may be com-
mingled with others established by the Trustee under this form of agreement with other
Employers. In making such investments, the Trustee shall not be subject at any time to anylegal. limitation governing the investment of such funds. Investment powers and investment
discretion vested in the Trustee by this Section may be delegated by the Trustee to any
bank, insurance or trust company, or any investment advisor, manager or agent selected byit.
Section 4. Investments: A Participant or Beneficiary of the Plan may
request that Deferrals under the Plan be allocated among available investment options
established by the Trustee. The initial allocation request may be made at the time of
enrollment. Investment allocation requests shall remain effective with regard to all
subsequent Deferrals, until changed in accordance with the provisions of this section. A
Participant or Beneficiary may change his or her allocation request at the end of each
calendar month pursuant to procedures established by the Trustee, by notifying the Trusteeinwriting. Such changes shall become effective as soon as administratively feasible. While the Trustee intends to invest Deferrals according to the Participant requests, it
reserves the right to invest Deferrals without regard to such requests.
TJP1472631124773.2
Section 3. Administrative Powers of the Trustee; The Trustee shall have
the power in its discretion:
a) To purchase, or subscribe for, any securities or other
property and to retain the same in trust.
b) To sell, exchange, convey, transfer or otherwise dispose of
any securities or other property held by it, by private contract, or at public auction. No
person dealing- with the Trustee shall be bound to see the application of the purchase
money or to inquire into the validity, expediency, or propriety of any ,such sale or other
disposition.
c) To vote upon 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 oppose, or to consent to, or otherwise participate in, cor-
porate reorganizations or other changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or charges in connection therewith; and
to generally exercise any of the powers of an owner with respect to stocks, bonds, securi-
ties or other property held as part of the Trust Funds.
d) To cause any securities or other property held as part of the
Trust Funds to be registered in its own name, and to hold any investments in bearer form,
but the books and records of the Trustee shall at all times show that all such investments
are a part of the Trust Fund.
e) To borrow or raise money for the purpose of the Trust in
such amount, and upon such terms and conditions, as the Trustee shall deem advisable;
and, for any sum so borrowed, to issue its promissory note as Trustee, and to secure the
repayment thereof by pledging all, or any part, of the Trust Funds. No person lending
money to the Trustee shall be bound to see the application of the money lent or to inquire
into its validity, expediency or propriety of any such borrowing.
f) To keep such portion of the Trust Funds in cash or cash
balances as the Trustee, from time to time, may deem to be in the best interest of the Trust
created hereby, without liability for interest thereon.
g) To accept and retain for such time as it may deem
advisable any securities or other property received or acquired by it as Trustee hereunder,
whether or not such securities or other property would normally be purchased as
investments hereunder.
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 settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Trust Funds; to commence or defend suits
or legal or administrative proceedings; and to represent the Trust Funds in all suits and
legal and administrative proceedings.
TJP1472631124773.2
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0) To do all such acts, take all such proceedings, and exercise
all such rights and privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to administer the Trust Funds and to carry out the purposes of thisSection.
Section 6. Distributions from the Trust Funds: The Trustee shall make
benefit payments from the Trust Fund to Participants in accordance with the provisions in
the Plan for distribution of benefits.
Section 7. Valuation of Trust Funds: At least once a year, as of valuation
dates designated by the Trustee, the Trustee shall determine the value of the Trust Funds.
Assets of the Trust Funds shall be valued at their market values at the close of business
on the valuation date, or, in the absence of readily ascertainable market values as the
Trustee shall determine, in accordance with methods consistently followed and uniformly
applied.
Section 8. Evidence of Action by Employer: The Trustee may rely upon
any certificate, notice or direction purporting to have been signed on behalf of the Employer
which the Trustee believes to have been signed by a duly designated official of the
Employer. No communication shall be binding upon any of the Trust Funds or Trustee until
they are received by the Trustee.
Section 9. Advice of Counsel: The Trustee may consult with any legal
counsel with respect to the construction of the Pian or Trust, its duties hereunder, or any
act, which it proposes to take or omit, and shall not be liable for any action taken or omitted
in good faith pursuant to such advice.
Section 10. Miscellaneous: The Trustee shall be use ordinary care and
reasonable diligence, but shall not be liable for any mistake of judgment or other action
taken in good faith. The Trustee shall not be liable for any loss sustained by the Trust
Funds by reason of any investment made in good faith and in accordance with the
provisions of this Section. The Trustee's duties and obligations shall be limited to those
expressly imposed upon it by this section, notwithstanding any reference of the Plan.
Section 11.. Taxes: The Trustee shall deduct from and charge against the
Trust Funds any taxes on the Trust Funds or the income thereof or which the Trustee is
required to pay with respect to the interest of any person therein.
Section 12. Expenses: The Trustee shall deduct from any charge against
the Trust Fund all reasonable expenses incurred by the Trustee in the administration of the
Trust Fund, including counsel, agency and other necessary fees.
Section 13. Settlement of Accounts: The Trustee shall keep accurate anddetailedaccountsofallinvestments, receipts, disbursements, and other transactions
hereunder.
a) Accounts shall be valued at least quarterly each Plan Year
and each Participant shall receive written notice of his or her account balance following
T7P1472631124773.2
1911
such valuation. Account balances shall reflect the Deferral amount, any earnings
attributable to such amount, and shall be reduced by administrative, investment and other
fees attributable to such amounts.
b) Within 90 days after the close of each fiscal year, the
Trustee shall render to the Employer an accounting of its acts and transactions as Trustee
hereunder with respect to each Employer participating in the Pian. If any part of the Trust
Fund shall be invested through the medium of any common, collective or commingled trust
funds, the last annual report of such trust funds shall be submitted with and incorporated in
the account.
c) If within 90 days after the mailing of the account, or any
amended account, the Employer has not filed with the Trustee notice of any objection to
any act or transaction of the Trustee, the account or amended account shall become an
account stated. If any objection has been fled, and if the Employer is satisfied that it
should be withdrawn or if the account is adjusted to the Employer's satisfaction, the
Employer shall in writing filed with the Trustee signify approval of the account and it shall
become an account stated.
d) When an account becomes an account stated, such
account shall be finally settled, and the Trustee shall be completely discharged and
released, as if such account had been settled and allowed by a judgment or decree of a
court of competent jurisdiction in an action or proceedings in which the Trustee and the
Employer were parties. The Trustee shall have the right to apply at any time to a court of
competent jurisdiction for the judicial settlement of its account.
Section 14. Resignation of Trustee: The Trustee may resign at any time
by filing with the Employer its written resignation. Such resignation shall take effect 60
days from the date of such filing and upon appointment of a successor pursuant to
Section 1.16, whichever shall first occur.
Section 15. Removal of Trustee: The Employer may remove the Trustee
at any time by delivering to the Trustee a written notice of its removal and an appointment
of a successor pursuant to Section 16. Such removal shall not take effect prior to 60 days
from such delivery unless the Trustee agrees to an earlier effective date.
Section 16. Appointment of Successor Trustee: The appointment of a
successor to the Trustee shall take effect upon the delivery to the Trustee (a) an instrument
in writing executed by the Employer appointing such successor, and exonerating such
successor from liability for the acts and omissions of its predecessor, and (b) an
acceptance in writing, executed by such successor. All of the provisions set forth herein
with respect to the Trustee shall relate to each successor with the same force and effect as
if such successor had been originally named as Trustee hereunder. If a successor is not
appointed within 60 days after the Trustee gives notice of its resignation pursuant to
Section 14, the Trustee may apply to any court of competent jurisdiction for appointment of
a successor.
Section 17. Transfer of Funds to Successor. Upon the resignation or
removal of the Trustee and appointment of a successor, and after the final account of the
T.P1472531124773.2
4..
Trustee has been properly settled, the Trustee shall transfer and deliver any of the TrustFundsinvolvedtosuchsuccessor.
Section 18. Plan -to -Plan Transfers: Notwithstanding any other Plan
provision, distribution of amounts deferred by the former Participant of the Plan shall not
commence upon Separation from Service, but instead shall be automatically transferred to
another Eligible Deferred Compensation Plan, of which the former Participant has become
a Participant, if:
acceptance, and (
a) the Pian receiving such amounts provides for their
b) a Participant incurs a Separation from Service with the
Employer in order to accept employment with another "eligible" entity.
This Trust will accept the transfer of amount previously deferred
by a Participant under another Eligible Deferred Compensation Plan.
Section 19. Duration and Revocation: This Trust shall continue for such
time as may be necessary to accomplish the purpose for which it was created. The Trust
may not be terminated until the date on which no Pian Participant is entitled to any benefitsunderthePlan. Upon termination of the Trust, any remaining assets shall be returned to
the Employer. The Trust may be revoked only if the Internal Revenue Service determines
that the Pian is not an eligible deferred compensation plan under Internal Revenue Code
Section 457. In all other instances, the Trust is irrevocable. Termination of this Trust shall
not, however, relieve the Employer of the Employers continuing obligation to pay deferred
compensation upon the applicable distribution date to any and/or each Employee with
whom the Employer has entered into a Voluntary Salary Deferral Agreement.
Section 20. Amendment: The Employer shall have the right to amend the
Trust in whole and in part but only with the Trustee's written consent. Any such amendmentshall - become effective upon (a) delivery to the Trustee of a written instrument of
amendment, and (b) the endorsement by the Trustee on such instrument of its consent
thereto.
Section 21. Ownership of Assets: All amounts deferred under the Plan
and contributed to the Trust, all property and rights purchased with such amounts, and all
income attributable to such amounts, property or rights shall be held for the exclusive
purposes of providing benefits 'to . the Participants and Beneficiaries and defraying
reasonable expenses of administering the Plan and this Trust.
All amounts contributed to the Trust shall be held as a separate
and distinct trust for each Employer's employees and former employees who are
Participants in the Plan and their beneficiaries. However, Trust funds of several employers
may be commingled for investment purposes, provided that the Trustee maintains an
accounting reflecting the Trust funds held on behalf of each Employers employees.
Section 22. Anti -Alientation: Benefits to Participants under the Plan and
this Trust Agreement may not be anticipated, assigned, alienated or subject to attachment,
TM47263M4773.2
5-
garnishment, levy, execution or other legal or equitable process. If a court of competent
jurisdiction holds any provision of this Trust to be invalid or unenforceable, the remaining
provisions of the Trust shall continue to be fully effective. This Trust shall be construed in
accordance with applicable federal law, and to the extent otherwise applicable, the laws of
the State of Colorado.
IN WITNESS WHEREOF, the undersigned parties have executed this Trust
Agreement on Cv. - .,?.1 _, 1997.
EMPLOYER
Town of Vail
BY G. C
Its. TAw
FPPA,TRUSTEE
Its: Executive Director
UP1472636 24773.2
ADOPTIOII-GREEMENT
MODEL FPPA DEFERRED COMPENSATION PLAN
as of January 1, 1997)
THIS DEFERRED COMPENSATION PLAN is hereby established by Town of VailhereinafterreferredtoastheEmployer), by agreement with the Fire and Police Pension
Association of Colorado (hereinafter referred to as the FPPA), to establish a plan of
deferred compensation for its eligible employees.
WHEREAS, the Employer is a municipality or special district of the State of
Colorado, with Employees who are "members" of the FPPA as . defined in
C.R.S. § 31-31-102(4); and
WHEREAS, the purpose of the Plan is to enable employees who become covered
under the Pian to enhance their retirement security by permitting them to enter into
agreements with the Employer to defer compensation and receive benefits at retirement,
death, separation from service, and for financial hardships due to unforeseeable
emergencies; and
WHEREAS, except as provided in Section 8.05, the Plan shall be maintained for the
exclusive benefit of covered employees, and is intended to comply with the eligible deferred
compensation plan requirements of Section 457 of the Internal Revenue Code of 1986, as
now in effect or as hereafter amended, and regulations thereunder, and other applicable
law,
NOW, THEREFORE, WITNESSETH that the Employer hereby establishes a
deferred compensation plan to be effective May 1, 1997, and hereby adopts the Model
FPPA Deferred Compensation Plan (as of January 1, 1997) as set forth in the attached
Exhibit A.
IN WITNESS WHEREOF, the undersigned parties hereby execute this AdoptionAgreementonr- a 11997.
EMPLOYER
Town of Vail
r
Its:
FPPA
By: -
Its'. Executive Director
TIP1472631114136.2
J
MODEL FPPA
DEFERRED COMPENSATION PLAN
as of January 1, 1997)
Exhibit A
TABLE OF CONTENTS
Section 1. Definitions
Section 2. Participation.......
I . 3
Section 3. Deferral of Compensation .............
Section 4. Time of Benefit Payment 6
Section 5. Benefit Payments.,,..,, g
Section 6. Beneficiaries 11
Section 7. Amendment and Termination
Section 8. Miscellaneous
i
Section 1. 6--itnitions
The following terms when used herein shall have the following meaning, unless a
different meaning is clearly required by the context.
1.01 Administrator: "Administrator" means the FPPA or the entity designated
by the FPPA to carry out certain nondiscretionary administrative functions of the Plan
pursuant to Section 8.02 of the Plan.
1.02 Adoption Agreement: "Adoption Agreement" means the agreement
between the Employer and the FPPA whereby the Employer adopts and establishes this
Plan. Upon execution, this document, along with the Adoption Agreement, constitute the
Plan.
1.03 Beneficiary: "Beneficiary" means the person(s) or estate entitled to
receive benefits under this Plan after the death of a Participant.
1.04 Code: "Code" means the Internal Revenue Code of 1986, as amended
and including all regulations promulgated pursuant thereto.
1.05 Compensation: "Compensation" means the total remuneration earned by
an employee for personal services rendered to the Employer for the calendar year,
including amounts deferred under this Plan and any other deferred compensation plan.
1.06 Deferral: "Deferral" means the annual amount of Compensation that a
Participant elects to defer receipt of pursuant to a properly executed Voluntary Salary
Deferral Agreement.
1.07 Effective Date: "Effective Date" means the date specified by the
Employer in the Adoption Agreement on which the Employer adopts the Pian.
1.08 Eligible Employee: "Eligible Employee" means any person employed by
the Employer who is a "member" of the police or fire department. The term "member" shall
have -the meaning set forth in C.R.S. § 31-31-102(4) (1986) Repl. Vol. 12(B) (1996 Cum.
Supp., as amended).
1.09 - Eligible Deferred Compensation. Plan or Eligible Plan: "Eligible
Deferred Compensation Plan" or "Eligible Plan" means any plan defined in Section 457(b)
of the Code and includes this Plan, among others.
1.10 Employer: "Employer' means the entity specified in the Adoption
Agreement which adopts the Plan for the benefit of its Eligible Employees.
1.11 FPPA: "FPPA" means the Fire and Police Pension Association, a
corporate body and political subdivision of the State of Colorado, which acts as Trustee,
custodian, and Administrator of the Plan.
1.12 Includable Compensat. j: "Includable Compensation' means
compensation for services performed for the Employer which (taking into account the
provisions of Section 457 of the Code and other provisions of Chapter 1 of the Code) is
currently includable in gross income as properly reportable on the employee's federal tax
form relating to his or her wage and tax statement.
1.13 Normal Retirement Age: "Normal Retirement Age" means age 70 112 or
some other earlier age specified in writing by the Participant. In no event shall Normal
Retirement Age be earlier than the earliest date at which one may retire under the
Employer's basic pension plan without the Employer's consent and receive immediate
retirement benefits, without incurring an actuarial or similar reduction in benefits.
1.14 - Participant: "Participant" means an Eligible Employee or former Eligible
Employee who is or has been enrolled in the Plan and who retains the right to benefits
under the Plan.
1.15 Plan: "Plan" means the Model FPPA Deferred Compensation Plan (as of
January 1, 1991), as amended and restated April 26, 1995 and January 1, 1997, either in
its previous or present form or as amended from time to time.
1.16 Plan Year: "Plan Year" means the twelve-month period beginning
January 1 and ending December 31, from and after the Effective Date.
1.17 Retirement Committee: A committee of not less than three persons
selected by the Employer to carry out the discretionary functions of administering the Plan.
1.18 Trustee: "Trustee" means the FPPA as set forth in the Model FPPA
Deferred Compensation Trust Agreement.
1.19 Voluntary Salary Deferral Agreement: "Voluntary Salary Deferral
Agreement" means the agreement between a Participant and the Employer to defer receipt
by the Participant of Compensation not yet earned. Such agreement shall state the
Deferral amount to be withheld from a Participant's paycheck and shall become effective no
earlier than the first day of any month after it is executed by the Participant and accepted bytheRetirementCommittee.
2
1-i
Section 2. Participation
2.01 Eligibility for Participants: Each Eligible Employee may become a
Participant in this Plan on the first day of the month next following commencement of
employment as an Eligible Employee and enrollment pursuant to Section 2.02. Any person
elected or appointed to a term of office with the Employer shall be deemed to commence
employment at the time such person assumes office.
2.02 Enrollment: Eligible Employees may enroll in the Plan by completing a
Voluntary Salary Deferral Agreement. Enrollment shall be effective on the first day of the
month next following completion of the Voluntary Salary Deferral Agreement.
3
Section 3. Defer, — of Compensation
3.01 Deferral Procedure: Pursuant to a Voluntary Salary Deferral Agreement,
each Participant's Deferral amount shall be deducted from his or her paychecks in
approximately equal increments throughout the year. The Deferral amount shall not be
included as gross income of the Participant for purposes of federal income tax.
3.02 Maximum Deferral
a) Primary Limitation: The Deferral amount in any taxable year may
not exceed the lesser of:
7,500 (as indexed pursuant to Code § 457(e)(15)) or
2. 33-113% of the Participant's Includable Compensation.
b) Catch-up Limitation:
1. A Participant may trigger the catch-up limitation by electing
a Normal Retirement Age pursuant to Section 1.13. The maximum Deferral amount for
each of a Participant's last three (3) taxable years ending before he or she attains Normal
Retirement Age, is the lesser of:
i) $15,000, or
ii) the primary limitation amount determined -under
Section 3.02(a) for the current year, plus so much of the primary
limitation amount that was not utilized in prior taxable years in
which the employee was eligible to participate in the Plan,
beginning after December 31, 1978. A Participant may use a prior
year only if the Deferral amounts under the Plan in existence during
the year were subject to the maximum deferral amount described in
Treas. Reg. Section 1.457-2(e)(1982).
2. The catch-up limitation is available to a Participant onlyduringonethree-year period. If a Participant uses the catch-up limitation and then
postpones Normal Retirement Age or returns to work after retiring, the limitation shall not beavailableagainbeforeasubsequentretirement.
c) Coordination With Other Pians: If a Participant participates in more
than one Eligible Deferred Compensation Plan, the total deferral under all plans shall be
subject to the maximum limitations specified in Section 3.02. Any amount excluded from
gross income by the Code under Code §§ 403(b), 402(e)(3), 402(h)(1)(B) or 402(k) for the
taxable year and a deduction which is allowable by reason of a contribution to an
organization described in Section 501(c)(18) of the Code for the taxable year shall reduce
the primary limitation amount determined under Section 3.02(a) and (b), and the $15,000
limitation in Section 3.02(b)(1)(i).
3.03 Minimum Deferral: A Participant must comply with any minimum monthly
4
deferra. aquirements . which may be set the Employer from time to time i a
nondiscriminatory basis.
3.04 Changing Deferrals: A Participant may change Deferrals with respect to
Compensation not yet earned by executing a new Voluntary Salary Deferral Agreement.
The change shall be effective on the first day of the month following the month a new
Voluntary Salary Deferral Agreement is received by the Retirement Committee.
3.05 Suspension of Deferrals:
a) Voluntary: A Participant may suspend_ Deferrals by giving the
Retirement Committee written notice. Following suspension, a Participant may reinstate
Deferrals by executing a new Voluntary Salary Deferral Agreement and delivering it to the
Retirement Committee. Reinstatement shall be effective on the first day of the month
following completion of the new Agreement. Deferral suspensions and resumptions can be
made at any time.
b) Automatic: Deferrals shall automatically be suspended for any
month in which there are insufficient monies available to make the entire deduction agreed
upon.
5
Section 4. Time of Benefit Paymek.._
4.01 Eligibility for Payment: Payments from the Plan shall not be made until the
calendar year in which the Participant attains age 70-112, incurs a Separation from Service,
or suffers an approved financial hardship that results from an unforeseeable emergency.
a) Separation from Service: "Separation from Service" means the
termination of a Participant's employment with the Employer within the meaning of CodeSection402(e)(4)(A)(iii).
b) Hardship Withdrawal:
1. Procedure: A Participant may request a withdrawal for
Hardship by submitting a written request to the Retirement Committee, accompanied by
evidence that his or her financial condition warrants an advance release of funds and
results from an unforeseeable emergency which is beyond the Participant's control. The
Retirement Committee shall review he request and determine whether payment of anyamountisjustified. If payment is justified, the amount shall be limited to an amount
reasonably needed to meet the emergency. The Retirement Committee shall determine the
amount and form of payment. Any money remaining in the account after HardshipWithdrawalshallbedistributedinaccordancewiththeprovisionsofthisPlan.
2. Hardship Defined: "Hardship" means a severe financial
setback to the Participant resulting from a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant, loss of the Participant's property due to
casualty, or other similar extraordinary and unforeseeable circumstances, arising fromeventsbeyondtheParticipant's control. Whether circumstances constitute an
unforeseeable emergency depends on the facts of each case, but, in any case, payment
may not be made to the extent that such hardship is or may be relieved:
i) through reimbursement or compensation byinsuranceorotherwise,
ii) by liquidation of the Participant's assets, to the extent
that liquidation itself would not cause severe financial hardship; or
iii) by cessation of Deferrals under the Plan.
Unforeseeable emergencies shall not include the payment of
college tuition or the purchase of a residence.
3. Hardship Withdrawals After Benefit Commencement: Once
regular installment payments to a Participant have commenced under the Plan, the
Participant may request payment acceleration if the Participant suffers a Hardship asdefinedabove. The Retirement Committee may permit accelerated payments; however,
the amount of an accelerated payment shall not exceed the amount needed to meet the
emergency. Any amount remaining in the account after such accelerated payment shall be
distributed in accordance with the provisions of this Plan.
0
2 Benefit Commencement Da—,,
a) Time of Commencement: Except for a Hardship Withdrawal
pursuant to Section 4.01(b), benefit payments to a Participant shall not commence to
Participants or Beneficiaries earlier than the earliest of:
the calendar year in which the Participant attains age 70-
112,
2. 60 days after the Participant incurs a Separation from
Service with the Employer, or
3. 60 days following the death of the Participant.
b) Participant Election: Within 60 days after Separation from Service,
a Participant may make an election of a specific date for commencement of benefits that is
the first day of a month, provided that the date elected is not earlier than the "Earliest
Benefit Commencement Date” determined under Section 4.02(a) and is not later than the
Latest Commencement Date" determined under Section 4.02(f), and may also make an
election of the form of payment. The election of a Benefit Commencement Date may be
changed once, provided that the election is made prior to the actual commencement of
benefit distributions and the date elected is no later than the Latest Commencement Date.
The election of the form of payment may also be changed once, provided that the notice of
the change is received by the Retirement Committee not later than 30 days before the date
on which benefit payments are to commence.
c) Failure to Make Timely Election: If a Participant fails to make an
election of a date for commencement of benefits within the time period specified in Section
4.02(b), then benefit payments will commence on the first day of the month that is
coincident with or immediately follows 60 days after the later of (i) the date on which the
Participant attains age 60, or (ii) the date of the Participant's Separation from Service. If a
Participant fails to make an election of the form of payment within the time period specified
in Section 4.02(b), then the benefit will be paid in the form of a Lump Sum.
d) Spouse Beneficiary Election: Subject to Section 4.02(e), a spouse
Beneficiary entitled to benefits may make a one-time irrevocable election to defer
commencement of benefits to a date that is on the first day of the month that is coincident
with or immediately follows the latest of the dates specified in Section 4.02(x). Such
election may be made at any time prior to the Benefit Commencement Date by completing
and delivering to the Retirement Committee forms provided for this purpose.
e) Non -spouse Beneficiary Election: A non -spouse Beneficiary
entitled to benefits may make a one-time irrevocable election to defer commencement of
benefits to a date which is no later than December 31 of the year following the year of the
Participant's death, or the Beneficiary may elect a later commencement date, provided that
benefit payments are completed by December 31 of the year which contains the five-year
anniversary of the Participant's death.
f) Latest Commencement Date: Notwithstanding any other Plan
7
pror in to the contrary, benefits for a Pal —ipant or Beneficiary shall commenc" - io later
than the later of: (i) April 1 of the calendar year following the calendar year in which the
Participant attains age 70-112, or (ii) 60 days after the date on which the Participant incurs
Separation from Service with the Employer.
Section 5. Ber-,,At Payments
5.01 Election: A Participant or Beneficiary may elect the form of payment of
benefits pursuant to Section 4.02(b).
5.02 Forms of Payment: A Participant or Beneficiary may elect payment in
one of the following forms:
a) Lump Sum: A single payment of the entire balance in a
Participant's account.
b) Annuity: Monthly payments contingent on the life expectancy of
the Participant or Beneficiary, or over such life expectancy and a guaranteed period of time.
c) Installments: Subject to the limitations of Section 5.03, monthly
payments over a specified period of time or in specified annual dollar amounts.
d) Combination: A lump sum cash payment of a portion of the
balance in a Participant's account, with the remainder of the account to be paid in
substantially equivalent monthly installments as specified by the Participant. The election
of a schedule of installment payments is irrevocable.
5.03 Limitations: Notwithstanding any Plan provision to the contrary or any
form of payment election, the Plan must meet the minimum distribution requirements of
Code §§ 457(d)(2) and 401(a)(9) and the Treasury regulations thereunder.
a) If benefits commence before the Participant's death, the Participant
must elect a form under which:
1. benefits will be paid over a period not extending beyond the
life expectancy of the Participant or the joint life expectancies of the Participant and a
designated Beneficiary,
2. any amount payable to the Beneficiary must be distributed
at least as rapidly as benefits were distributed to the Participant immediately prior to death,
and
3. on the date benefits commence, the Participant is expected
to receive during his/her life expectancy more than 50% of the total value of the benefits.
b) If benefits commence after the Participant's death, the entire
amount payable must be distributed:
1. within the life expectancy of a spouse Beneficiary, or
2. for non -spouse Beneficiaries, within fifteen years after the
death of the Participant, provided benefits commence by December 31 of the year following
the year in which the Participant's death occurs, or
09
3. for non -spouse Beneficiaries who elect a laterCommencementDate, by December 31 of the calendar year containing the five-yearanniversaryoftheParticipant's death.
c) Upon the death of a Participant whose payments have
commenced, the Beneficiary shall receive further payments only to the extent provided in
the form of payment then in effect, subject to the limitations stated herein.
10
Section 6. L ,.eficiaries
6.01 Designation: A Participant shall have the right to designate a Beneficiary,
and amend or revoke such designation at any time, in writing. Such designation,
amendment or revocation shall be effective upon receipt by the Retirement Committee.
Notwithstanding the foregoing, a Participant who elects a joint and survivor annuity form of
payment may not elect a non -spouse joint annuitant, and may not change his or her joint
annuitant after payments commence.
6.02 Failure to Designate a Beneficiary: If no designated Beneficiary
survives the Participant and benefits are payable following the Participant's death, the
Retirement Committee may direct that payment of benefits be made to the person or
persons in the first of the following classes of successive preference Beneficiaries. The
Participant's:
a) spouse,
b) descendants, per stirpes,
c) parents, in equal shares,
d) brothers and sisters, in equal shares,
e) estate.
11
Section 7. Amenc int and Termination
7.01 Amendment: (a) The Employer may amend this Plan by transmitting
such amendment in writing to the Trustee at least 30 days prior to the effective date of the
amendment. 'The consent of the Trustee shall not be required in order for an amendment
to become effective, however, the Trustee shall be under no obligation to continue to act as
Trustee or Administrator if it disapproves of the amendment. No amendment shall divest
any Participant of any rights to Deferrals prior to the date of any amendment or amend the
Plan so that it is no longer in compliance with the requirements of Section 457 of the Code.
b) The Trustee may propose an amendment -to the Plan at any by
written notice to the Employer at least 30 days before the effective date of the amendment.
If the Trustee approves an amendment to the Plan, such amendment shall automatically be
effective with respect to the Employer unless the Employer notifies the Trustee in writing
within 60 days after the date of approval of the amendment that the Employer objects to the
amendment. The Trustee shall be under no obligation to continue to act as Trustee or
Administrator if the Employer disapproves of any amendment.
7.02 Termination: Although the Employer has established this Plan with a
bona fide intention and expectation to maintain the Plan indefinitely, the Employer mayterminatethePlaninwholeorinpartatanytimewithoutanyliabilityforsuchterminationordiscontinuance. Upon termination of the Plan, the Employer shall notify the Trustee in
writing of the effective date of termination of the Plan. Upon Plan termination, all Deferrals
shall cease. The Trustee shall retain all Deferrals until each Participant attains age 70%,
incurs a Separation from Service or incurs a Hardship and benefits commence under
Sections 4.01 and 4.02, in the form determined under Section 5.
12
Section 8. M. _Jellaneous
8.01 General Duty of the Employer: The Employer shall make regular
periodic payments to the Trustee equal to the amount of its participating Employees' total
Deferrals. The Employer shall have the authority to make all discretionary decisions
affecting the rights or benefits of Participants under this Plan. The Employer shall appoint
at least three persons to serve on the Retirement Committee, which shall carry out the
discretionary functions of administering the Plan as set forth in this Plan.
8.02 Duties of the Administrator: The Administrator shall perform all
nondiscretionary administrative functions in connection with the Plan, including the .
maintenance of accounts on behalf of each Participant, the provision of periodic reports on
the status of each account and the disbursement of benefits on behalf of the Employer in
accordance with the provisions of this Plan.
The FPPA shall be the Administrator of the Plan, provided, that the FPPA
may appoint a third party administrator to perform certain administrative functions. The
duties and compensation of any such third party administrator shall be by agreement
between the FPPA and third party administrator.
8.03 Investments: A Participant or Beneficiary of the Plan may request that
Deferrals under the Plan be allocated among available investment options established by
the Trustee. The initial allocation request may be made at the time of enrollment.
Investment allocation requests shall remain effective with regard to all subsequent
Deferrals, until changed in accordance with the provision of this section. A Participant or
Beneficiary may change his or her allocation request once a month after earnings have
been allocated, by notifying the Trustee in writing. Such changes shall become effective as
soon as administratively feasible. While the Trustee intends to invest Deferrals according
to the Participant requests, it reserves the right to invest Deferrals without regard to such
requests.
8.04 Plan -to -Pian Transfers: Notwithstanding any other Plan provision,
distribution of amounts deferred by a former Participant of this Plan shall not commence
upon- Separation from Service, but instead shall be automatically transferred to another
Eligible Deferred Compensation Plan, of which the former Participant has become a
Participant, if:
a) the Plan receiving such amounts provides for their acceptance, and
b) the Participant incurs a Separation from Service with the Employer
in order to accept employment with another "eligible" entity.
The Trustee will accept the transfer of amounts previously deferred by a
Participant under another Eligible Deferred Compensation Plan.
8.05 Ownership of Assets: All amounts deferred under the Plan and
contributed to the Trust, all property and rights purchased with such amounts, and all
income attributable to such amounts, property or rights shall be held for the exclusive
13
purF :s of providing benefits to Participai . and Beneficiaries and defraying m_,onable
expenses of administering the Plan and Trust.
All amounts contributed to the Trust shall be held as a separate and
distinct trust for each Employer. However, Trust funds of several Employers may be
commingled for investment purposes, provided that the Trustee maintains an accountingreflectingtheTrustfundsheldonbehalfofeachEmployer.
8.06 Limitations of Rights; Employment Relationship: Neither the
establishment of this Plan nor any modification thereof, nor the creation of any fund or
account, nor the payment of any benefits, shall be construed as giving a Participant or other
person any legal or equitable right against the Employer except as provided in the Plana In .
no event shall the terms of employment of any employee be modified or in any way beaffectedbythePlan.
8.07 Limitation on Assignment: Benefits under this Plan may not be
assigned, sold, transferred, or encumbered, and any attempt to do so shall be void. A
Participant's or Beneficiary's interest in benefits under the Plan shall not be subject to debts
or liabilities of any kind and shall not be subject to attachment, garnishment or other legal
process.
8.08 Representations: The FPPA does not represent or guarantee that anyparticularfederalorstateincome, payroll, personal property or other tax consequence will
result from participation in this Plan. A Participant should consult with professional tax
advisors to determine the tax consequences of his or her participation. Furthermore, the
FPPA does not represent or guarantee successful investment of Deferrals, and shall not be
required to repay any loss which may result from such investment or lack of investment.
8.09 Severability: If a court of competent jurisdiction holds any provisions of
this Plan to be invalid or unenforceable, the remaining provisions of the Plan shall continue
to be fully effective.
8.10 Applicable Law: This Plan shall be construed in accordance with
applicable federal law and, to the extent otherwise applicable, the laws of the State ofColorado.
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by itsdulyauthorizedrepresentativethis --4a --kday of'T1997.
EMPLOYER
Town of Vail
1 /
Witness: .. By:
Title: 7YDw rn
TJFW2631114136.2
14
BRIEF EXPLANATION OF CHANGES TO
THE MODEL FPPA DEFERRED COMPENSATION PLAN
1. All references to the Colorado Revised Statutes were amended to reflect the
reorganization of Tine 31, Articles 30, 30.5 and 31.
2. Section 3.02(a) . Primary Limitation. The $7,500 limitation amount is now indexed to
inflation. We amended this section to reflect that the amount will be adjusted.
3. Section 4.02(b) Participant Election. In general, a participant in a Section 457 may begin
receiving distributions from the plan no earlier than (a) age 70 % or (b) separation from
service. Under prior law, the participant had only one election, after he became eligible to
begin receiving distributions, to delay those distributions to a later date. The participant
now is permitted to make one additional election to delay distributions, so long as the
election is made before the participant actually begins receiving distributions.
4. Until deferrals under a Section 457 pian were distributed to participants, the amounts
deferred and all income thereon, had to remain the sole property of the employer, subject
only to the claims of the employer's general creditors. The Small Business Job Protection
Act of 1996 (°SBJPA") requires that the amounts deferred now be held in trust for the
exclusive benefit of the participants and their beneficiaries. Both the plan document and
the trust were amended to reflect that the plan assets are to be held exclusively for
participants and beneficiaries. Thus, if a participant were to declare bankruptcy, his
interest in the plan would probably be excludable from his bankruptcy estate.
ADOPTION AGREEMENT
MODEL FPPA DEFERRED COMPENSATION PLAN
as of April 26, 1995)
THIS DEFERRED COMPENSATION PLAN is hereby established by the
Town of Vail (hereinafter referred to as the Employer), by agreements with the Fire and
Police Pension Association of Colorado (hereinafter referred to as the FPPA), to
establish a plan of, deferred compensation for its employees.
WHEREAS, the Employer is a municipality or special district of the State
of Colorado, with Employees who are "members" of the FPPA as defined in C.R.S. §
31-31-102(4); and
WHEREAS, the purpose of the Plan is to enable employees who become
covered under the Plan to enhance their retirement security by permitting them to enter
into agreements with the Employer to defer compensation and receive benefits at
retirement, death, separation from service, and for financial hardships due to
unforeseeable emergencies; and
WHEREAS, except as provided in Section 8.05, the Plan shall be
maintained for the exclusive benefit of covered employees, and is intended to comply
with the eligible deferred compensation plan requirements of Section 457 of the
Internal Revenue Code of 1986, as now in effect or as hereafter amended, and
regulations thereunder, and other applicable law;
NOW, THEREFORE, WITNESSETH that the Employer hereby
establishes a deferred compensation plan to be effective , 1997 and
hereby adopts the Model FPPA Deferred Compensation Plan (as of April 26, 1995) as
set forth in the attached Exhibit A.
IN WITNESS WHEREOF, the undersigned parties hereby execute this
Adoption Agreement on , 1997.
EMPLOYER
Town of ai!
By: e.
Its: G ri7 • ,
FPPA
By:
Its: Executive Director
MODEL FPPA
DEFERRED COMPENSATION PLAN
as of April 26, 1995)
TABLE OF CONTENTS
Section 1. Definitions
Section 2. Participation ...........................
Section 3. Deferral of Compensation ................
Section 4. Time of Benefit Payment ......................
Section 5. Benefit Payments
Section 6. Beneficiaries
Section 7. Amendment and Termination .....................
Section 8. Miscellaneous
Page
1
3
4
6
9
11
12
13
Section 1. Definitions
The following terms when used herein shall have the following meaning, unless
a different meaning is clearly required by the context.
1.01 Administrator: "Administrator" means the FPPA or the entity
designated by the FPPA to carry out certain nondiscretionary administrative functions
of the Plan pursuant to Section 8.02 of the Plan.
1.02 Adoption Agreement: "Adoption Agreement" means the agreement
between the Employer and the FPPA whereby the Employer adopts and establishes
this Plan. Upon execution, this document, along with the Adoption Agreement
constitute the Plan.
1.03 Beneficiary: "Beneficiary" means the person(s) or estate entitled to
receive benefits under this Plan after the death of a Participant.
1.04 Code: "Code" means the Internal Revenue Code of 1986, as
amended and including all regulations promulgated pursuant thereto.
1.05 Compensation: "Compensation" means the total remuneration earned
by an employee for personal services rendered to the Employer for the calendar year
including amounts deferred under this Plan and any other Deferred Compensation
Plan.
1.06 Deferral: "Deferral" means the annual amount of Compensation that a
Participant elects to defer receipt of pursuant to a properly executed Voluntary SalaryDeferralAgreement,
1.07 Effective Date: "Effective Date" means the date specified by the
Employer in the Adoption Agreement on which the Employer adopts the Plan.
1.08 Eligible Employee: "Eligible Employee" means any person employedbytheEmployerwhoisa "member" of the police or fire department. The term
member" shall have the meaning set -forth in C.R.S. § 31-31-102(4) (1986) Repl. Vol.
12(B).
1.09 Eligible Deferred Compensation Plan or Eligible Plan: "Eligible
Deferred Compensation Plan" or "Eligible Plan" means any plan defined in Section
457(b) of the Code and includes this Plan among others.
1.10 Employer: "Employer" means the entity specified in the Adoption
Agreement which adopts the Plan for the benefit of its Employees.
1.11 FPPA: "FPPA" means the Fire and Police Pension Association, a
corporate body and political subdivision of the State of Colorado, which acts as
Trustee, custodian, and Administrator of the Plan.
1.12 Includable Compensation: "Includable Compensation" means
compensation for services performed for the Employer which (taking into account the
provisions of Section 457 of the Code and other provisions of Chapter 1 of the Code) is
1-
currently includable in gross income as properly. reportable on the employee's federal
tax form relating to his or her wage and tax statement.
1.13 Normal Retirement Age: "Normal Retirement Age" means age 70 112
or other earlier age specified in writing by the Participant. In no event shall Normal
Retirement Age be earlier than the earliest date at which one may retire under the
Employer's basic pension plan without the Employer's consent and receive immediate
retirement benefits, without incurring an actuarial or similar reduction in benefits.
1.14 Participant: "Participant" means an employee or former employee
who is or has been enrolled in the Plan and who retains the right to benefits under the
Plan.
1.15 Plan: "Plan" means the Fire and Police Pension Association Deferred
Compensation Plan (as of January 1, 1991) either in its previous or present form or as
amended from time to time.
1.16 Plan Year: "Plan Year" means the twelve-month period beginningJanuary1, and ending December 31 from and after the Effective Date,
1.17 Retirement Committee: A committee of not less than three persons
selected by the Employer.
1.18 Trustee: 'Trustee" means the FPPA as set forth in the Model FPPA
Deferred Compensation Rabbi Trust Agreement.
1.19 Voluntary Salary Deferral Agreement: 'Voluntary Salary DeferralAgreement" means the agreement between a Participant and the Employer to defer
receipt by the Participant of Compensation not yet earned. Such agreement shall state
the Deferral amount to be withheld from a Participant's paycheck and shall become
effective no earlier than the first day of any month after it is executed by the Participant
and accepted by the Retirement Committee.
2-
Section 2. Participation
2.01 Eligibility for Participants: Each Eligible Employee may become a
Participant in this Plan on the first day of the month next following commencement of
employment as an Eligible Employee and enrollment pursuant to Section 2.02. Any
person elected or appointed to a term of office with the Employer shall be deemed to
commence employment at the time such person assumes office.
2.02 Enrollment: Eligible Employees may enroll in the Plan by completingaVoluntarySalaryDeferralAgreement. Enrollment shall be effective on the first day of
the month next following completion of the Voluntary Salary Deferral Agreement.
3-
Section 3. Deferral of Compensation
3.01 Deferral Procedure: Pursuant to a Voluntary Salary Deferral
Agreement, each Participant's Deferral amount shall be deducted from his or her
paychecks in approximately equal increments throughout the year. The Deferral
amount shall not be included as gross income of the Participant for purposes of federal
income tax.
3.02 Maximum Deferral
a) Primary Limitation: The Deferral amount in any taxable year
may not exceed the lesser of:
1. $7,500 or
2. 33-113° of the Participant's Includable Compensation.
b) Catch-up Limitation:
1. A Participant may trigger the catch-up limitation byelectingaNormalRetirementAgepursuanttoSection1.13. The maximum Deferral
amount for each of a Participant's last three (3) taxable years ending before he or she
attains Normal Retirement Age, is the lesser of:
1 $15,000, or
2 the primary limitation amount determined under
Section 3.02(a) for the current year, plus so, much of the primary
limitation amount that was not utilized in prior taxable years in
which the employee was eligible to participate in the Plan,
beginning after December 31, 1978. A Participant may use a
prior year only if the Deferrals under the Plan in existence
during the year were subject to the maximum deferral amount
described in Treas. Reg. Section 1.457-2(e)(1982).
2. The catch-up limitation is available to a Participant onlyduringonethree-year period. If a Participant uses the catch-up limitation and then
postpones Normal Retirement Age or returns to work after retiring, the limitation shall
not be available again before a subsequent retirement.
c) Coordination With Other Plans: If a Participant participates in
more than one Eligible State Deferred Compensation Plan, the total deferral under all
plans shall be subject to the maximum limitations specified in Section 3.02. AnyamountexcludedfromgrossincomeoftheCodeunderSection403(b), 402(a)(8) or402(h)(1)(B) of the Code for the taxable year and a deduction which is allowable by
reason of a contribution to an organization described in Section 501(c)(18) of the Code
for the taxable year shall reduce the primary limitation amount determined underSection3.02(a) and (b), and the $15,000 limitation in Section 3.02(b)(1)(i).
4-
3.03 Minimum Deferral: A Participant must comply with any minimum
monthly deferral requirements which may be set by the Employer from time to time on a
nondiscriminatory basis.
3.04 Changing Deferrals: A Participant may change Deferrals with respect
to Compensation not yet earned by executing a new Voluntary Salary DeferralAgreement. The change shall be effective on the first day of the month following the
month of notice to the Retirement Committee.
3.05 Suspension of Deferrals:
a) Voluntary: A Participant may suspend Deferrals by giving theRetirementCommitteewrittennotice. Following suspension, a Participant may
reinstate Deferrals by executing a new Voluntary Salary Deferral Agreement and
delivering it to the Retirement Committee. Reinstatement shall be effective on the first
day of the month following completion of the new Agreement. Deferral suspensions and
resumptions can be made at any time.
b) Automatic: Deferrals shall automatically be suspended for any
month in which there are insufficient monies available to make the entire deduction
agreed upon.
5-
M
Section 4. Time of Benefit Payment
4.01 Eligibility for Payment: Payments from the Plan shall not be made
until the calendar year in which the Participant attains age 70-112, upon Separation
from Service, or an approved financial hardship that results from an unforeseeable
emergency.
a) Separation from Service: "Separation from Service: means the
severance of a Participant's employment with the Employer within the meaning of CodeSection402(e)(4)(A)(iii).
b) Hardship Withdrawal:
1. Procedure: A Participant may request a withdrawal for
Hardship by submitting a written request to the Retirement Committee, accompanied by
evidence that his or her financial condition warrants an advance release of funds and
results from an unforeseeable emergency which is beyond the Participant's control.
The Retirement Committee shall review he request and determine whether payment of
any amount is justified. If payment is justified, the amount shall be limited to an amount
reasonably needed to meet the emergency. The Retirement Committee shall
determine the amount and form of payment. Any money remaining in the account after
Hardship Withdrawal shall be distributed in accordance with the provisions of this Plan.
2. Hardship Defined: "Hardship" means a severe financial
setback of the Participant resulting from a sudden and unexpected illness or accident of
the Participant or a dependent of the Participant, loss of the Participant's property duetocasualty, or other similar extraordinary and unforeseeable circumstances, arisingfromeventsbeyondtheParticipant's control. Whether circumstances constitute an
unforeseeable emergency depends on the facts of each case, but, in any case,
payment may not be made to the extent that such hardship is or may be relieved:
1 through reimbursement or compensation byinsuranceorotherwise;
2 by liquidation of the Participant's assets, to the
extent that liquidation itself would not cause severe financial
hardship; or
3 by cessation of Deferrals under the Plan.
Unforeseeable emergencies shall not include the need to send aParticipant's child to college, or the desire to purchase a home.
3. Hardship Withdrawals After Benefit Commencement:
Once regular installment payments to a Participant have commenced under the Plan,
the Participant may request payment acceleration if the Participant suffers, a Hardshipasdefinedabove. The Retirement Committee may permit accelerated payments,
however, the amount of an accelerated payment shall not exceed the amount neededtomeettheemergency. Any amount remaining in the account after such accelerated
payment shall be distributed in accordance with the provisions of this Plan.
M
En
4.02 Benefit Commencement Date:
a) Time of Commencement: Except for a Hardship Withdrawal
pursuant to Section 4.01(b), benefit payments to a Participant shall not commence to
Participants or Beneficiaries earlier than the earliest of:
1. the calendar year in which the Participant attains age
70-1/2,
2. 60 days after the Participant incurs Separation fromServicewiththeEmployer, or
3. 60 days following the death of the Participant.
b) Participant Election: Within 60 days after Separation from
Service, a Participant may make a one-time election of a specific date for
commencement of benefits that is the first day of a month, provided that the date
elected is not earlier than the earliest "Benefit Commencement Date" determined under
Section 4.02(x) and is not dater than the "Latest Commencement Date" determined
under Section 4.02(f), and may also make an election of a form of payment. The
election of a date for commencement of payment of benefits is irrevocable. The
election of a form of payment may be changed once, provided that the notice of the
change is received by the Administrator by not later than 30 days before the date on
which benefit payments are to commence and that the change of form of payment isirrevocable.
c) Failure to Make Timely Election: If a Participant fails to make an
election of a date for commencement of benefits within the time period specified inSection4.02(b), then benefit payments will commence on the first day of a month that is
coincident with or immediately follows 60 days after the later of 1) the date on which
the Participant attains age 60, or 2) the date of the Participant's Separation fromService. If a Participant fails to make an election of a form of payment within the time
period specified in Section 4.02(b), then the benefit will be paid in the form of a LumpSum.
d) Spouse Beneficiary Election: Subject to Section 4.02(e), a
spouse Beneficiary entitled to benefits may make a one-time irrevocable election to
defer commencement of benefits to a date that is on the first day of the month that is
coincident with or immediately follows the latest of the dates specified in Section4.02(a). Such election may be made at any time prior to the Benefit Commencement
date by completing and delivering to the Retirement Committee forms provided for this
purpose.
e) Non -spouse Beneficiary Election: A non -spouse Beneficiaryentitledtobenefitsmaymakeaone-time irrevocable election to defer commencement
of benefits to a date which is no later than December 31 of the year following the yearoftheParticipant's death, or the Beneficiary may elect a later commencement date
7-
provided that benefit payments are completed by December 31 of the year which
contains the five-year anniversary of the Participant's death.
f) Latest Commencement Date: Notwithstanding any other Plan
provision to the contrary, benefits for a Participant or Beneficiary shall commence no
later than the later of (i) April 1 of the calendar year following the calendar year in
which the Participant attains age 70-112, or (ii) 60 days after the date on which the
Participant incurs Separation from Service with the Employer.
Section 5. benefit Payments
5.01 Election: A Participant or Beneficiary may elect the form of payment of
benefits pursuant to Section 4.02(b).
5.02 Forms of Payment: A Participant or Beneficiary may elect payment in
one of the following forms:
a) Lump Sum: A single payment of the entire balance. in a
Participant's account.
b) Annuity: Periodic payments contingent on the life expectancy of
the Participant or Beneficiary, or over such life expectancy and a guaranteed period of
time.
c) Installments: Subject to the limitations of Section 5.03, periodic
payments over a specified period of time or in specified annual dollar amounts.
d) Combination: A lump sum cash payment of a portion of the
balance in a Participant's account, with the balance of the account to be paid in
substantially equivalent monthly, quarterly, semi-annual or annual installments as
specified by the Participant. The election of a schedule of installment payments is
irrevocable.
5.03 Limitations: Notwithstanding any Plan provision to the contrary or any
form of payment election, the Plan must meet the minimum distribution requirements of
I. R. C. Section 457(d)(2) and 401(a)(9).
a) If benefits commence before the Participant's death, the
Participant must elect a form under which:
1. benefits will be paid over a period not extending beyond
the life expectancy of the Participant or the joint life expectancies of the Participant and
a designated Beneficiary,
2. any amount payable to the Beneficiary must be distributed
at least as rapidly as benefits were distributed to the Participant immediately prior todeath, and
3. on' the date benefits commence, the Participant is
expected to receive more than 50% of the total value of the benefit.
b) If benefits commence after the Participant's death, the entire
amount payable must be distributed:
1. within the life expectancy of a spouse Beneficiary, or
2. for non -spouse Beneficiaries, within fifteen years after thedeathoftheParticipant, provided benefits commence by December 31 of the yearfollowingtheyearinwhichtheParticipant's death occurs, or
W
3. for non -spouse Beneficiaries who elect a. later
Commencement Date, by December 31 of the calendar year containing the five-year
anniversary of the Participant's death.
c) Upon the death of a Participant whose payments have
commenced, the Beneficiary shall receive further payments only to the extent provided
in the form of payment in effect, subject to the limitations stated herein.
10-
Section b. Beneficiaries
6.01 Designation: A Participant shall have the right to designate a
Beneficiary, and amend or revoke such designation at any time, in writing. Such
designation, amendment or revocation shall be effective upon receipt by the Retirement
Committee. Notwithstanding the foregoing, a Participant who elects a joint and survivor
annuity form of payment may not elect a non -spouse joint annuitant, and may not
change his or her joint annuitant after payments commence.
6.02 . Failure to Designate a Beneficiary: If no designated Beneficiary
survives the Participant and benefits are payable following the Participant's death, the
Retirement Committee may direct that payment of benefits be made to the person or
persons in the first of the following classes of successive preference Beneficiaries. The
Participant's:
a) spouse,
b) descendants, per stirpes,
c) parents,
d) brothers and sisters,
e) estate.
11-
Section 7. Amenument and Termination
7.01 Amendment: (a) The Employer may amend this Plan by transmitting
such amendment in writing to the Trustee at least 30 days prior to the effective date of
the amendment. The consent of the Trustee shall not be required in order for an
amendment to become effective, however, the Trustee shall be under no obligation to
continue to act as Trustee or Administrator if it disapproves of the amendment. No
amendment shall divest any Participant of any rights to Deferrals prior to the date of
any amendment or amend the Plan so that it is no longer in compliance with the
requirements of Section 457 of the Code.
b) The Trustee may propose an amendment to the Plan at any time
by written notice to the Employer at least 30 days before the effective date of the
amendment. If the Trustee approves an amendment to the Plan, such amendment
shall automatically be effective with respect to the Employer unless the Employer
notifies the Trustee in writing within 60 days after the date of approval of the
amendment that the Employer objects to the amendment. The Trustee shall be under
no obligation to continue to act as Trustee or Administrator if the Employer disapproves
of any amendment.
7.02 Termination: Although the Employer has established this Plan with a
bona fide intention and expectation to maintain the Plan indefinitely, the Employer may
terminate the Plan in whole or in part at any time without any liability for suchterminationordiscontinuance. Upon termination of the Pian, the Employer shall notifytheTrusteeinwritingoftheeffectivedateofterminationofthePlan. Upon Plan
termination, all Deferrals shall cease. The Trustee shall retain all Deferrals until each
Participant Separates from Service or incurs a Hardship and benefits commence under
Sections 4.01 and 4.02, in the form determined under Section 5.
12-
Section 8. miscellaneous
8.01 General Duty of the Employer: The Employer shall make regular
periodic payments to the Trustee equal to the amount of its participating Employees,
total Deferrals. The Employer shall have the authority to make all discretionarydecisions' affecting the rights or benefits of Participants under this Plan. The Employer
shall appoint at least three persons to serve on a Retirement Committee, which shall
carry out the discretionary functions of administering the Plan as set forth in this Plan.
8.02 Duties of the Administrator: The Administrator shall ' perform all
nondiscretionary administrative functions in connection with the Plan, including the
maintenance of accounts on behalf of each Participant, the provision of periodic reports
on the status of each account and the disbursement of benefits on behalf of the
Employer in accordance with the provisions of this Plan.
The FPPA shall be the Administrator of the Plan, provided, that the
FPPA may appoint a third party administrator to perform certain administrative
functions. The duties and compensation of any such third party administrator shall be
by agreement between the FPPA and third party administrator.
8.03 Investments: A Participant or Beneficiary of the Plan may request that
Deferrals under the Plan be allocated among available investment options established
by the Trustee. The initial allocation request may be made at the time of enrollment.
Investment allocation requests shall remain effective with regard to all subsequent
Deferrals, until changed in accordance with the provision of this section. A Participant
or Beneficiary may change his or her allocation request once a month after earnings
have been allocated, by notifying the Trustee in writing. Such changes shall become
effective as soon as administratively feasible. While the Trustee intends to invest
Deferrals according to the Participant requests, it reserves the right to invest Deferrals
without regard to such requests.
8.04 Plan -to -Plan Transfers: Notwithstanding any other Plan provision,
distribution of amounts deferred by -the former. Participant of this Plan shall not
commence upon Separation from Service, but instead shall be automaticallytransferredtoanotherEligibleDeferredCompensationPlan, of which the formerParticipanthasbecomeaParticipant, if:
a) the Plan receiving such amounts provides for their acceptance, and
b) a Participant Separates from Service with the Employer in order
to accept employment with another "eligible" entity.
This Trust will accept the transfer of amount previously deferred by aParticipantunderanotherEligibleDeferredCompensationPlan.
8.05 Ownership of Assets: All amounts deferred under the Plan and
contributed to the Trust, all property and rights purchased with such amounts, and allincomeattributabletosuchamounts, property or rights shall remain (until made
available to the Participant or Beneficiary) solely the property of the Employer (without
13-
being restricted to the provision of benefits under the Plan), and shall be subject.to the
claims of the Employer's general creditors upon the Employer's Insolvency.
All amounts contributed to the Trust shall be held as a separate and
distinct trust for each Employer. However, Trust funds of several Employers may be
commingled for investment purposes, provided that the Trustee maintains an
accounting reflecting the Trust funds held on behalf of each Employer. In the event of
an Employer's Insolvency, the creditors of such an Employer only have an interest in
the Trust funds held on behalf of the Employer who is Insolvent and shall not have an
interest in the Trust Funds of any other Employer.
8.06 Limitations of Rights; Employment Relationship: Neither the
establishment of this Plan nor any modification thereof, nor the creation of any fund or
account, nor the payment of any benefits, shall be construed as giving a Participant or
other person any legal or equitable right against the Employer except as provided in
the Pian. In no event shall the terms of employment of any employee be modified or in
any way be affected by the Plan.
8.07 Limitation on Assignment: Benefits under this Plan may not be
assigned, sold, transferred, or encumbered, and any attempt to do so shall be void. A
Participant's or Beneficiary's interest in benefits under the Plan shall not be subject to
debts or liabilities of any kind and shall not be subject to attachment, garnishment or
other legal process.
8.08 Representations: The FPPA does not represent or guarantee that
any particular federal or state income, payroll, personal property or other tax
consequence will result from participation in this Plan. A Participant should consult
with professional tax advisors to determine the tax consequences of his or her
participation. Furthermore, the FPPA does not represent or guarantee successful
investment of Deferrals, and shall not be required to repay any loss which may resultfromsuchinvestmentorlackofinvestment.
8.09 Severability: If a court of competent jurisdiction holds any provisions
of this Plan to be invalid or unenforceable, the remaining -provisions of the Plan shall
continue to be fully effective.
14-
8.10 Applicable Law: This Plan shall be construed in accordance with
applicable federal law and, to the extent otherwise applicable, the laws of the State of
Colorado.
IN WITNESS WHEREOF, the Employer has caused this Plan to be executed byitsdulyauthorizedrepresentativethisdayof , 1997.
EMPLOYER
Town of Vail
Witness: By:
Title:
15-
ADOPTION AGREEMENT
FOR THE MODEL FPPA DEFERRED COMPENSATION
RABBI TRUST AGREEMENT
This Agreement made as of , 1997 by and between the Fire and
Police Pension Association of Colorado (hereinafter referred to as the Trustee) and the
Town of Vail (hereinafter referred to as the Employer).
WHEREAS, the Employer has executed an Adoption Agreement to establish a
Model Deferred Compensation Plan (hereinafter referred to as the "Pian") to provide
deferred compensation and retirement benefits to Employees under Internal Revenue
Code § 457; and
WHEREAS, the Employer wishes to establish a Trust and to transfer to the
Trust, assets which shall be held, subject to claims of the Employer's creditors in the
event of the Employer's insolvency, until paid to Participants in such manner and at
such times as specified in the Plan;
NOW, THEREFORE, the Employer and the Trustee hereby establish the Trust
and agree that the terms of the Trust shall be comprised as set forth in the attached
FPPA Deferred Compensation Rabbi Trust Agreement attached hereto.
IN WITNESS WHEREOF, the undersigned parties have executed this Adoption
Agreement on 1997
EMPLOYER
Town of Vail
By:
Its:
TRUSTEE
FPPA
By:
Its:
TJPA5558\124773.1
Executive Director
a
MODEL FPPA
DEFERRED COMPENSATION
RABBI TRUST AGREEMENT
TSP\45558\124773.I
MODEL FPPA
DEFERRED COMPENSATION
RABBI TRUST AGREEMENT
1.01 General Duties of the Employer: The Employer shall make regular
periodic payments to the Trustee equal to the amount of its participating Employees'
total Deferrals which are deferred in accordance with the Plan.
1.02 General Duties of the Trustee: The Trustee shall hold all funds received
by it hereunder, which, together with the income therefrom, shall constitute the Trust
Funds. It shall administer the Trust Funds, collect the income thereof, and make
payments therefrom, all as hereinafter provided. The Trustee shall also hold all Trust
Funds which are transferred to it as successor Trustee by the Employer from existing
deferred compensation arrangements with its Employees which meet the same Internal
Revenue Code requirements which govern this Plan. Such Trust Funds shall be
subject to all of the terms and provisions of this Trust.
1.03 Investment Powers and Duties of the Trustee: The Trustee shall have
the power in its discretion to invest and reinvest the principal and income of the Trust
Fund and keep the Trust Fund invested, without distinction between principal and
income, in such securities or in other property, real or personal, wherever situated, as
the Trustee shall deem advisable, including, but not limited to, stocks, common or
preferred, bonds, retirement annuity and insurance policies, mortgages, and other
evidences of indebtedness or ownership, and in common trust funds of approved
financial or investment institutions, with such institutions acting as Trustee of such
common trust funds, or separate and different types of funds (accounts) includingequity, fixed-income, and those which fulfill requirements of state and local
governmental laws, established with such approved financial or investment institutions.
For these purposes, this Trust Fund may be commingled with others established by theTrusteeunderthisformof' agreement with other Employers. in making suchinvestments, the Trustee shall not be subject at any time to any legal limitationgoverningtheinvestmentofsuchfunds. Investment powers and investment discretion
vested in the Trustee by this Section may be delegated by the Trustee to any bank,
insurance or trust company, or any investment advisor, manager or agent selected byit.
1.04 Investments: A Participant or Beneficiary of the Plan may request that
Deferrals under the Plan be allocated among available investment options establishedbytheTrustee. The initial allocation request may be made at the time of enrollment.
Investment allocation requests shall remain effective with regard to all subsequentDeferrals, until changed in accordance with the provisions of this section. A Participant
TAP\45559\124773.1
or beneficiary may change his or her allocation request at the end of each calendar
quarter pursuant to procedures established by the Trustee, by notifying the Trustee in
writing. Such changes shall become effective as soon as administratively feasible.
While the Trustee intends to invest Deferrals according to the Participant requests, it
reserves the right to invest Deferrals without regard to such requests.
1.05 Administrative Powers of the Trustee: The Trustee shall have the
power in its discretion:
a) To purchase, or subscribe for, any securities or other property andtoretainthesameintrust.
b) To sell, exchange, convey, transfer or otherwise dispose of any
securities or other property held by it, by private contract, or at public auction. No
person dealing with the Trustee shall be bound to see the application of the purchase
money or to inquire into the validity, expediency, or propriety of any such sale or other
disposition.
c) To vote upon 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 oppose, or 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 to generally exercise any of the powers of an owner with respect to
stocks, bonds, securities or other property held as part of the Trust Funds.
d) To cause any securities or other property held as part of the Trust
Funds to be registered in its own name, and to hold any investments in bearer form, but
the books and records of the Trustee shall at all times show that all such investments
are a part of the Trust Fund.
e) To borrow or raise .money for the purpose of the Trust in such
amount, and upon such terms and conditions, as the Trustee shall deem advisable;
and, for any sum so borrowed, to issue its promissory note as Trustee, and to secure
the repayment thereof by pledging all, or any part, of the Trust Funds. No person
lending money to the Trustee shall be bound to see the application of the money lent or
to inquire into its validity, expediency or propriety of any such borrowing.
f) To keep such portion of the Trust Funds in cash or cash balances
as the Trustee, from time to time, may deem to be in the best interest of the Trust
created hereby, without liability for interest thereon.
g) To accept and retain for such time as it may deem advisable any
securities or other property received or acquired by it as Trustee hereunder, whether or
not such securities or other property would normally be purchased as investmentshereunder.
TJP1455581124773.1 _2.,
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 settle, compromise, or submit to arbitration any claims, debts, or
damages due or owing to or from the Trust Funds; to commence or defend suits or
legal or administrative proceedings; and to represent the Trust Funds in all suits and
legal and administrative proceedings.
0) 'To do all such acts, take all such proceedings, and exercise all .
such rights and privileges, although not specifically mentioned herein, as the Trustee
may deem necessary to administer the Trust Funds and to carry out the purposes of
this Section.
1.06 Distributions from the Trust Funds: The Trustee shall make benefit
payments from the Trust Fund to Participants in accordance with the provisions in the
Plan for distribution of benefits.
1.07 Valuation of Trust Funds: At least once a year as of valuation dates
designated by the Trustee, the Trustee shall determine the value of the Trust Funds.
Assets of the Trust Funds shall be valued at their market values at the close of
business on the valuation date, or, in the absence of readily ascertainable market
values as the Trustee shall determine, in accordance with methods consistentlyfollowedanduniformlyapplied.
1.08 Evidence of Action by Employer: The Trustee may rely upon any
certificate, notice or direction purporting to have been signed on behalf of the Employer
which the Trustee believes to have been signed by a duly designated official of theEmployer. No communication shall be binding upon any of the Trust Funds or Trustee
until they are received by the Trustee.
1.09 Advice of Counsel: The Trustee may consult with any legal counsel with
respect to the construction of the Plan or Trust, its duties hereunder, or any act, which
it proposes to take or omit, and shall not be liable for any action taken or omitted in
good faith pursuant to such advice.
1.10 Miscellaneous: The Trustee shall use ordinary care and reasonable
diligence, but shall not be liable for any mistake of judgment or other action taken ingoodfaith. The Trustee shall not be liable for any loss sustained by the Trust Funds byreasonofanyinvestmentmadeingoodfaithandinaccordancewiththeprovisionsofthisSection. The Trustee's duties and obligations shall be limited to those expresslyimposeduponitbythissection, notwithstanding any reference of the Plan.
1.11 Taxes: The Trustee shall deduct from and charge against the Trust Funds
any taxes on the Trust Funds or the income thereof or which the Trustee is required to
pay with respect to the interest of any person therein.
TJP1455581124773.1 _3_
1.12 Expenses: The Trustee shall deduct from any charge against the Trust
Fund all reasonable expenses incurred by the Trustee in the administration of the Trust
Fund, including counsel, agency and other necessary fees.
1.13 Settlement of Accounts: The Trustee shall keep accurate and detailed
accounts of all investments, receipts, disbursements, and other transactions hereunder.
Accounts shall be valued at least quarterly each Plan Year and each
Participant shall receive written notice of his or her account balance following such
valuation. Account balances' shall reflect the Deferral amount, any earnings
attributable to such amount, and shall be reduced by administrative, investment and
other fees attributable to such amounts.
Within 90 days after the close of each fiscal year, the Trustee shall render
to the Employer an accounting of its acts and transactions as Trustee hereunder with
respect to each Employer participating in the Plan. If any part of the Trust Fund shall
be invested through the medium of any common, collective or commingled Trust Funds,
the last annual report of such Trust Funds shall be submitted with and incorporated in
the account.
If within 90 days after the mailing of the account, or any amended
account, the Employer has not filed with the Trustee notice of any objection to any actortransactionoftheTrustee, the account or amended account shall become an
account stated. If any objection has been filed, and if the Employer is satisfied that it
should be withdrawn or if the account is adjusted to the Employer's satisfaction, the
Employer shall in writing filed with the Trustee signify approval of the account and it
shall become an account stated.
When an account becomes an account stated, such account shall be
finally settled; and the Trustee shall be -completely discharged and released, as if such
account had been settled and allowed by a judgment or decree of a court of competent
jurisdiction in an action or proceedings in which the Trustee and the Employer were
parties. The Trustee shall have the right to apply at any time to a court of competent
jurisdiction for the judicial settlement of its account.
1.14 Resignation of Trustee: The Trustee may resign at anytime by filing withtheEmployeritswrittenresignation. Such resignation shall take effect 60 days from
the date of such filing and upon appointment of a successor pursuant to Section 1.16,
whichever shall first occur.
1.15 Removal of Trustee: The Employer may remove the Trustee at any timebydeliveringtotheTrusteeawrittennoticeofitsremovalandanappointmentofa
successor pursuant to Section 1.16. Such removal shall not take effect prior to 60 days
from such delivery unless the Trustee agrees to an earlier effective date.
TJP1455581124773.1 -4_
1. 16 Appointment of Successor Trustee: The appointment of a successor to
the Trustee shall take effect upon the delivery to the Trustee (a) an instrument in
writing executed by the Employer appointing such successor, and exonerating such
successor from liability for the acts and omissions of its predecessor, and (b) an
acceptance in writing, executed by such successor. All of the provisions set forth
herein with respect to the Trustee shall relate to each successor with the same force
and effect as if such successor had been originally named as Trustee hereunder. If a
successor is not appointed within 60 days after the Trustee gives notice of its
resignation pursuant -to Section 1.14, the Trustee may apply to any court of competent
jurisdiction for appointment of a successor.
1.17 Transfer of Funds to Successor: Upon the resignation or removal of the
Trustee and appointment of a successor, and after the final account of the Trustee has
been properly settled, the Trustee shall transfer and deliver any of the Trust Funds
involved to such successor.
1.18 Plan -to -Plan Transfers: Notwithstanding any other Plan provision,
distribution of amounts deferred by the former Participant of the Pian shall not
commence upon Separation from Service, but instead shall be automatically
transferred to another Eligible Deferred Compensation Plan, of which the former
Participant has become a Participant, if:
and (
a) the Plan receiving such amounts provides for their acceptance,
b) a Participant Separates from Service with the Employer in order to
accept employment with another "eligible" entity.
This Trust will accept the transfer of amount previously deferred by aParticipantunderanotherEligibleDeferredCompensationPlan.
1.19 Duration and Revocation: This Trust shall continue for such time as maybenecessarytoaccomplishthepurposeforwhichitwascreated. The Trust may not
be terminated until the date on which any Plan Participant is entitled to no morebenefitsunderthePlan. Upon termination of the Trust, any remaining assets shall bereturnedtotheEmployer. The Trust may be revoked only if the Internal Revenue
Service determines that the Trust is not a valid Rabbi Trust or the Plan is not an eligible
deferred compensation plan under Internal Revenue Code Section 457. In all otherinstances, the Trust is irrevocable. Termination of this Trust shall not, however, relieve
the Employer of the Employer's continuing obligation to pay deferred compensation
upon the applicable distribution date to* any and/or each Employee with whom theEmployerhasenteredintoaVoluntarySalaryDeferralAgreement.
1.20 Amendment: The Employer shall have the right to amend the Trust in
whole and in part but only with the Trustee's written consent. Any such amendmentshallbecomeeffectiveupon (a) delivery to the Trustee of a written instrument of
TJP1455581124773.1 _5-
amendment, and (b) the endorsement by the Trustee on such instrument of its consent
thereto.
1.21 Ownership of Assets: All amounts deferred under the Plan and
contributed to the Trust, all property and rights purchased with such amounts, and all
income attributable to such amounts, property or rights shall remain (until made
available to the Participant or Beneficiary) solely the property of the Employer (without
being restricted to the provision of benefits under the Plan), but shall be subject to the
claims of the Employer's general creditors upon the Employer's Insolvency.
All amounts contributed to the Trust shall be held as 'a separate and
distinct trust for the Employer. However, Trust funds of several employers may be
commingled for investment purposes, provided that the Trustee maintains an
accounting reflecting the Trust funds held on behalf of the Employer. In the event of
the Employer's Insolvency, the creditors of the Employer only have an interest in the
Trust funds held on behalf of the Employer who is Insolvent and shall not have an
interest in the Trust funds of any other employer.
1.22 Employer Insolvency:
a) The Employer shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) the Employer is unable to pay its debts as they mature, or (ii) the
Employer is subject to a pending proceeding as a debtor under the Bankruptcy Code.
b) At all times during the continuance of this Trust, the principal and
income of the Trust shall be subject to claims of general creditors of the Employer ashereinaftersetforth, and at any time the Trustee has actual knowledge, or has
determined, that the Employer is Insolvent, the Trustee shall deliver any undistributed
principal and income in the Trust to satisfy such claims as a court of competent
jurisdiction may direct. The chief executive officer and chairman of the governing body
of the Employer shall have the duty to inform the Trustee of the Employer's Insolvency. If the Employer or a person claiming to be a creditor of the Employer alleges in writingtotheTrusteethattheEmployerhasbecomeInsolvent, the Trustee shall
independently determine, within thirty (30) days after receipt of such notice, whether
the Employer is Insolvent and, pending such determination, the Trustee shall
discontinue payments of benefits to Plan Participants, shall hold the Trust assets for
the benefit of the Employer's general creditors, and shall resume payments of benefits
only after the Trustee has determined that the Employer is not Insolvent (or is no longer
Insolvent, if the Trustee initially determined the Employer to be Insolvent). Unless the
Trustee has actual knowledge of the Employer's Insolvency, the Trustee shall have nodutytoinquirewhethertheEmployerisInsolvent.
1.23 Benefits to Participants under the Plan and this Trust Agreement may notbeanticipated, assigned, alienated or subject to attachment, garnishment, levy, execution or other legal or equitable process. If a court of competent jurisdiction holds
any provision of this Trust to be invalid or unenforceable, the remaining provisions oftheTrustshallcontinuetobefullyeffective. This Trust shall be construed in
TJP14555&124773.1 _S_
accordance with applicable federal law, and to the extent otherwise applicable, the laws
of the State of Colorado. The Trust is intended to be a grantor trust under Internal
Revenue Code Section 671 and a Rabbi Trust under the Internal Revenue Code,
IN WITNESS WHEREOF, the Employer has caused this Trust to be executed by
its duly authorized representative this day of '11997.
Witness:
EMPLOYER
Town of Vail
By:
Its:
TJP1455581124773.1 _7_