Loading...
HomeMy WebLinkAboutDeferred Compensation Plan ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (631) 765-6145 Telephone (631) 765-1800 southoldtown.northfork.net OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD THIS IS TO CERTIFY THAT THE FOLLOWING RESOLUTION NO. 827 OF 2004 XVAS ADOPTED AT THE REGULAR MEETING OF THE SOUTHOLD TOWN BOARD ON NOVEMBER 30, 2004: WHEREAS, the New York State Deferred Compensation Board (the "Board~'), pursuant to Section 5 of the New York State Finance Law ("Section 5") and the Regulations of the New York State Deferred Compensation Board (the "Regulations"), has promulgated the Plan Document of the Deferred Compensation Plan for Employees of the Town of Southold (the "Model Plan") and offers the Model Plan for adoption by local employers; WHEREAS, the Town of Southold, pursuant to Section 5 and the Regulations, has adopted and currently administers the Model Plan known as the Deferred Compensation Plan for Employees of the Town of Southold; WHEREAS, effective May 2 l, 2004, the Board amended the Model Plan to adopt provisions relating to · Authorization to reject a participant investment request if the request is contrary to the rules, regulations or prospectus of the affected investment fund. Authorization to distribute assets that have been rolled into the plan from another qualified retirement plan in accordance with the distribution rules of the plan that previously held the assets. Limitations on a participant's eligibility to obtain a loan in the event that the participant has previously defaulted on a loan. Modifications related to comments provided by the Internal Revenue Service in response to the Board's request for a private letter ruling stating that the Model Plan document constitutes an "eligible deferred compensation plan." · Technical amendments pertaining to plan loan rules and the status of plan loans and other withdrawals upon the death of a participant. WHEREAS, the Board has offered for adoption the amended and restated Model Plan to each Model Plan sponsored by a local employer in accordance with the Regulations; and WHEREAS, upon due deliberation, the Town Board of the Town of Southold has concluded that it is prudent and appropriate to amend the Deferred Compensation Plan for Employees of the Toxvn of Southold by adopting the amended and restated Model Plan, NOW, THEREFORE, BE IT RESOLVED, that the Town Board of the Town of Southold hereby amends the Deferred Compensation Plan for Employees of the Town of Southold effective December 1v 2004 by adovtine the amended and restated Model Plan effective May 21~ 2004, in the form attached hereto as Exhibit A. Elizabeth A. Neville Southold Town Clerk 2 Deferred Compensation Plan for Employees of the Town of Southold Plan Document PURPOSE The purpose of the Plan is to encourage Employees to make and continue careers with the Town of Southold by providing eligible Employees with a convenient way to save on a regular and long-term basis and thereby provide for their retirement as set forth herein. A Local Employer that is not a participating employer in the Deferred Compensation Plan for Employees of the State of New York and Other Participating Jurisdictions or the sponsor of any other eligible deferred compensation plan may adopt this Plan by complying with the procedures set forth in the Regulations. The benefits provided to any Participant under the Plan ~vill be based upon the aggregate Plan Benefit and will depend upon the investment results achieved by the Financial Organizations appointed to invest the assets of the Plan allocated to each of the Plan's Investment Funds hereunder and the Participant's individual investment choices among the Plan's Investment Funds. Each Participant shall be 100 percent vested at all times in his or her Plan Benefit in accordance with the terms of the Plan. In accordance with amendments made to Section 457 of the Code and other federal laws by the Small Business Job Protection Act of 1996 and the Economic Growth and Tax Relief Reconciliation Act of 200 l, all amounts of Compensation deferred under the Plan, all property and fights purchased with such amounts and all income attributable to such amounts, property and rights are held in trust as of the Effective Date for the exclusive benefit of Participants and their Beneficiaries and Alternate Payees pursuant to the Trust Agreement. The terms and provisions of the Plan in effect prior to the Effective Date, if any, shall govern with respect to periods prior to the Effective Date. The Plan and the Trust Agreement are intended to satisfy the requirements for an "eligible deferred compensation plan" under Section 457 of the Code. SECTION 1. DEFINITIONS When used herein the following terms shall have the following meanings: "Account" means the account established and maintained in respect of a Participant pursuant to Section 5.1. The Account shall include all Amounts Deferred and Section 457 Transfers. "Administrative Service Agency" means an Administrative Service Agency as defined in the Regulations selected by the Committee to provide services in respect of the Plan. If the Trust Agreement so provides, the record keeping services normally performed by an Administrative Service Agency may be performed by the Trustee, provided that the Trustee othenvise qualifies as an Administrative Sen'ice Agency. "Alternate Payee" means any spouse, former spouse, child or other dependent ora Participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefit payable under the Plan with respect to such Participant. "Alternate Payee Account" means the account established for an Alternate Payee pursuant to a Qualified Domestic Relations Order, provided, however, that the Alternate Payee Account shall separately account for all amounts received from (i) the Participant's Rollover Account and (ii) from all amounts rolled into the Plan by the Alternate Payee pursuant to Section 7.5(b)(ii). "Amount Deferred~' means Compensation deferred by a Participant pursuant to Section 3.1. 5 "Beneficiary" means the beneficiary or beneficiaries designated by a Participant pursuant to Section 8 to receive the amount, if any, payable under the Plan upon such Participant's death. "Business Da)," means any day that is not a Saturday, a Sunday or other day on which the New York Stock Exchange is not open for the trading of securities. "Code" means the Internal Revenue Code of 1986, as noxv in effect or as hereat~er amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. "Committee" means the Deferred Compensation Committee of the Town of Southold. "Compensation" means all compensation for services to the Employer, including salary, wages, fees, commissions and overtime pay that is includible in the Employee's gross income for each Plan Year under the Code and any accumulated sick pay, accumulated vacation pay and back pay paid to a Participant by his or her Employer. "Distributee" means (a) an Employee or former Employee, (b) the Surviving Spouse of an Employee or former Employee and (c) the spouse or former spouse of an Employee or former Employee, but only to the extent such spouse or former spouse is an Alternate Payee under a Qualified Domestic Relations Order and only with regard to the interest of such spouse or former spouse. "Earliest Retirement Date" means the earlier of(a) the date on which the Participant Severs from Employment and (b) the date the Participant attains age 50. "Effective Date" means January 1, 2002, unless otherwise stated. "Eligible Retirement Plan" means (i) an individual retirement account described in Section 408(a) of the Code, (ii) an individual retirement annuity described in Section 408(b) of the Code, (iii) a qualified trust under Section 401 (a) or 401 (k) of the Code, (iv) an annuity contract described in Section 403(b) of the Code and (v) an eligible deferred compensation plan described in Section 457 of the Code that is maintained by a state, political subdivision of a state, any agency or instrumentality ora state or political subdivision ora state. "Eligible Rollover Distribution" means all or any portion of the pretax contributions and earnings thereon to the credit of a Distributee, except that an Eligible Rollover Distribution shall not include (a) any distribution that is (i) one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary or (ii) for a specified period often years or more, (b) any distribution to the extent such distribution is required under Section 401 (a)(9) of the Code, (c) any distribution due to a hardship of the Distributee, including, without limitation, an unforeseen emergency pursuant to Section 6. I, and (d) the portion of any distribution that is not includible in gross income; provided, however, that clause (d) shall not apply to the extent such portion is transferred (i) in a direct trustee-to-trustee transfer to a qualified trust under Section 401 (a) of the Code that is part of a defined contribution plan and that separately accounts for amounts so transferred or (ii) to an Eligible Retirement Plan under Section 408 of the Code. "Employee" means any individual who receives compensation for services from the Employer, including any elected or appointed officer or employee of the Employer, and any employee who is included in a unit of employees covered by a negotiated collective bargaining agreement which specifically provides for participation in the Plan. An Employee shall not 7 include an independent contractor, a consultant or any other individual classified by the Employer as not eligible to participate in the Plan. "Employer" means the Town of Southold. "Enrollment Date" means, with respect to an Employee, each payroll date on which such Employee receives Compensation, or such other date or dates as the Committee may establish either in lieu of, or in addition to, such dates. "Financial Organization" means a Financial Organization as defined in the Regulations selected by the Committee to provide services in respect of the Plan. If the Trust Agreement so provides, the financial services provided by a Financial Organization may be performed by the Trustee, provided that the Trustee otherwise qualifies as a Financial Organization. "Includible Compensation" means "includible compensation" as defined in Section 457(e)(5) of the Code. "Investment Fund" means each of the Investment Funds provided for in Section 4.1. "Local Employer" means a Local Employer as defined in Section 5 of the State Finance Law. "Normal Retirement Age" means, for purposes of Section 3.2(b), any age designated by a Participant (i) beginning no earlier than the earliest age at which a Participant has the right to retire under the Employer's basic pension plan, if any, and to receive immediate retirement benefits without actuarial or similar reduction because of retirement before some later age specified in such basic pension plan or, in the case of a Participant who does not participate in such basic pension plan, age 65, and (ii) ending no later than age 70½. Notwithstanding the previous sentence, a Participant xvho is a qualified police officer or firefighter (as defined under Section 415(b)(2)(H)(ii)(I) of the Code) may designate a Normal Retirement Age that is earlier than the earliest Normal Retirement Age described above, but in no event may such Normal Retirement Age be earlier than age 40. Notwithstanding anything in the Plan to the contrary, the Participant's designation of a Normal Retirement Age under Section 3.2(b) shall not control the date that payment of such Participant's benefits shall commence pursuant to Section 7. Effective for Plan Years prior to January 1, 2003, in the case of a Participant ~vho continued to work beyond age 70½ and who, upon the attainment of age 70V2, had not made the catch-up election provided for under Section 3.2(b), the Normal Retirement Age shall be the age designated by the Participant, which shall not be later than the age at which the Participant Severs from Employment xvith the Employer. "Participant" means an [~mployee or former Employee who has given an investment direction under Section 4 and who continues to have an Account or Rollover Account under the Plan. "Participation Agreement" means a written agreement between an Employee and the Employer, pursuant to which the Employee elects to reduce his or her Compensation and to have the Amount Deferred contributed to the Plan. on his or her behalf in accordance xvith the terms of the Plan; provided, however, that in the case of a de£erral of accumulated sick or vacation pay or back pay, such Participation Agreement shall be entered into in accordance with the timing requirements of the Treasury Regulations promulgated under Section 457 of the Code. "Plan" means the Deferred Compensation Plan for Employees of the Town of Southold, as the same may be amended fi'om time to time. 9 "Plan Benefit" means, with respect to a Participant, the interest of such Participant in the Trust Fund, excluding any portion of such interest payable to an Altemate Payee pursuant to a Qualified Domestic Relations Order. "Plan Year" means the calendar year. "Qualified Domestic Relations Order" means any judgment, decree or order, including, but not limited to, approval of a property settlement agreement, which has been determined by the Administrative Service Agency to meet the requirements of a qualified domestic relations order within the meaning of Section 414(p) of the Code. "Regulations" means the rules and regulations promulgated by the Deferred Compensation Board of the State of New York pursuant to Section 5 of the State Finance Law, as the same may be an~ended from time to time. "Review Committee" means the committee designated by the Committee to review claims to rights or benefits under the Plan in accordance with Section 9.5 and requests for hardship withdrawals under Section 6. "Rollover Account" means the account established and maintained in respect of a Participant or a Bcncficiary who is a Participant's Surviving Spouse pursuant to Section 7.5(b)(ii). '~Rollover Contribution" means a cash amount contributed by a Participant, a Beneficiary who is a Participant's Surviving Spouse or Alternate Payee to a Rollover Account or, if applicable, an Altemate Payee Account, which the Administrative Service Agency has determined qualifies as an Eligible Rollover Distribution and which the Administrative Service Agency, in accordance with guidelines promulgated by the Committee, has determined may be contributed; provided, however, that the distributing Eligible Retirement Plan shall not be an 10 eligible deferred compensation plan under Section 457(b) of the Code and provided further that the distributing Eligible Retirement Plan shall have separately accounted for all amounts included in the Rollover Contribution. "Section 457 Transfer" means a transfer made into an Account pursuant to Section 7.5(b)(i). "Severance from Employment" or "Severs from Employment" means a severance from the emplo3nnent of the Employer within the meaning of Section 457 of the Code and the Treasury Regulations thereunder and USERRA. "State" means the State of New York. "Surviving Spouse" means the survivor of a deceased Participant to ~vhom such Participant was legally married on the date of the Participant's death. "Treasury Regulations" means the regulations promulgated by the Treasury Department under the Code, as now in effect or as hereafter amended. All citations to sections of the Treasury Regulations are to such sections as they may from time to time be amended or renumbered. "Trust Agreement" means an agreement entered into in respect of the Plan between the Committee and one or more Trustee(s) pursuant to xvhich all cash and other rights and properties and all income attributable to such cash and rights and properties are held in trust for the exclusive benefit of Participants and their Beneficiaries and Alternate Payees, as such agreement may be amended from time to time. "Trust Fund" means the assets of the Plan, including cash and other rights and properties arising from Amounts Deferred, Section 457 Transfers and Rollover Contributions which are held and administered by the Trustee pursuant to the Trust Agreement. 11 "Trustee" means the trustee or trustees acting as such under the Trust Agreement, and any successors thereto. "Unit" means a unit measuring the value of a Participant's proportionate interest in an Investment Fund. "USERRA" means the provisions of the Uniformed Services Employment and Reemployment Rights Act o f 1994 contained in chapter 43 o f title 38 o f the United States Code. "Valuation Date" means each Business Day, except that for purposes of an Investment Fund invested primarily in guaranteed investment contracts and synthetic guaranteed investment contracts, Valuation Date shall mean the last Business Day of each month of each Plan Year unless the Committee shall, in its discretion, determine that the Valuation Date of such Investment Fund shall occur more frequently. 12 PARTICIPATION 2. l (a) Each Employee shall be eligible to participate in the Plan as of any Enrollment Date following the date he or she becomes an Employee, and shall commence such participation in the Plan by duly filing with the Employer and the Administrative Service Agency, in a manner prescribed by the Committee, by the tenth day of the calendar month preceding such Enrollment Date or such other date as the Committee may determine, a Participation Agreement and any enrollment forms or other pertinent information concerning the Employee and his or her Beneficiary which the Committee may require; provided, however, that in no event shall any deferral be accepted until the first Enrollment Date following the date on which such Participation Agreement is filed. (b) Each Employee enrolling in the Plan shall provide the Administrative Service Agency, at the time of initial enrollment and thereafter if there are any changes, with such information as may be required by the Committee. 2.2 Participation in the Plan by Employees shall be ~vholly voluntary. 2.3 The participation of a Participant shall cease upon payment to the Participant of the entire value of his or her Plan Benefit or upon the Participant's death prior to such payment. 13 AMOUNTS DEFERRED 3.1 (a) A Participant may elect to defer Compensation under the Plan by authorizing, on his or her Participation Agreement, regular payroll deductions that do not in the aggregate exceed the limitations of Section 3.2. (b) A Participant may increase or decrease the rate of deferral of his or her Compensation, within the limitations of Section 3.2, as of any Enrollment Date by duly filing a new Participation Agreement, or such other form authorized for such purpose by the Committee, with the Employer and the Administrative Service Agency by the tenth day of the calendar month preceding such Enrollment Date, or such other date during the calendar month preceding such Enrollment Date as the Committee may determine. (c) A Participant may discontinue, or temporarily suspend, his or her deferral of Compensation as of any Enrollment Date by giving written notice thereof to the Employer and the Administrative Service Agency at least twenty, or such other number as the Conunittee may determine, days prior to such date. 3.2 (a) The amount that may be deferred by a Participant for any Plan Year shall be a minimum of $260 and shall not exceed the lesser off (i) $ l 1,000 or such other greater amount as may be permitted pursuant to Section 457(¢)(15) of the Code, and (ii) 100% of the Participant's Includible Compensation for the Plan Year. (b) Notwithstanding the limitation provided for in Section 3.2(a), a Participant may file an election in the manner provided by the Committee to have the catch-up limitation set forth in this Section 3.2(b) apply to the determination of the maximum amount that may be deferred during one or more of the last three Plan Years ending before attainment of the 14 Participant's Normal Retirement Age. If the catch-up limitation is elected, the maximum amount that may be deferred for each of the Plan Years covered by the election shall not exceed the lesser of: txvice the dollar amount set forth in Section 3.2(a)(i); and the sum of the limitations provided for in Section 3.2(a) for all Plan Years the Participant was eligible to participate in the Plan, minus the aggregate amount actually deferred for such Plan Years(disregarding any amounts deferred pursuant to Section 3.2(c)). A Participant may not elect to have this Section 3.2(b)(i) apply more than once, whether or not the Participant rejoins the Plan after Severance from Employment (c) (i) All Participants who have attained age 50 before the close of a Plan Year and ~vho are not permitted to defer additional Compensation pursuant to Section 3.2(a) for such Plan Year, due to the application of any limitation imposed by the Code or the Plan, shall be eligible to make additional catch-up contributions in accordance with, and subject to, the limitations of this Section 3.2(c) and Section 414(v) of the Code and the Treasury Regulations thereunder. (ii) additional catch-up contributions pursuant to this Section 3.2(c) shall not exceed the lesser of: (A) the excess of 100% of Participant's Includible Compensation for the Plan Year over the sum of any other Amounts Deferred by the Participant for such Plan Year; and (B) $1,000, or such greater amount as may be permitted by Section -314(v)(2)(B) of the Code. 15 (d) Notwithstanding anything in Sections 3.2(b) and 3.2(c) to the contrary, ifa Participant who is eligible to make an additional catch-up contribution under Section 3.2(c) for a Plan Year in which the Participant has elected to make a catch-up contribution under Section 3.2(b), such Participant is entitled to the greater of: the catch-up contribution limitation amount under Section 3.2(b); and the additional catch-up contribution amount under Section 3.2(c). Notxvithstanding the limitation provided for in Section 3.2(a), any Participant who is entitled to reemployment fights pursuant to USERRA and who is so reemployed in accordance with the provisions of such law may elect to make such additional deferrals as are permitted or required by USERRA. 3.3 The Trustee shall withhold or cause to be withheld from any amounts distributed in respect of a Participant's Plan Benefit or in respect of a Qualified Domestic Relations Order all federal, state, city or other taxes as shall be required pursuant to any law or governmental ruling or regulation, including, but not limited to, Treasury Regulations. In the event that any Amounts Deferred under the Plan for any Plan Year exceed the limitations provided for in Section 3.2, any such excess deferrals shall be distributed to the Participant, with allocable net income, as soon as practicable after the Administrative Service Agency determines that the amount was an excess deferral. 16 INVESTMENT OF AMOUNTS DEFERRED AND ROLLOVER CONTRIBUTIONS 4.1 All amounts of Compensation deferred in accordance with Section 3 shall be paid by the Employer as promptly as possible, but in no event later than two Business Days from the applicable payroll date, to the Trustee and shall be invested promptly in accordance with the investment directions of the Participant by the Trustee (but in no event later than two Business Days following receipt thereof by the Trustee) in the Investment Funds provided by one or more Financial Organizations appointed by the Committee in accordance with the Regulations, to be held, managed, invested and reinvested in accordance with the applicable agreement entered into by the Committee or the Trustee with each such Financial Organization. The Committee shall have the right in its sole discretion to replace any Financial Organization or Investment Fund with a successor Financial Organization or Investment Fund or to select any additional Financial Organization or Investment Fund and to incur any and all reasonable fees and expenses on behalf of the Plan and to allocate such fees and expenses among Accounts in connection with such replacement or addition. 4.2 An Employee ~vho has enrolled in the Plan pursuant to Section 2 shall, by filing a direction in writing or in such other form as the Committee may authorize with the Administrative Sen'ice Agency, specify the percentage (in multiples of one percent or such other percentage as may be prescribed by the Committee from time to time) of the amount of his or her Amounts Deferred, Section 457 Transfers and Rollover Contributions that shall be allocated to each Investment Fund made available by the Committee; provided, however, that the same percentages shall apply to the Rollover Account as apply to the Account. 4.3 Any investment direction given by a Participant shall be deemed to be a continuing direction until changed. A Participant may change his or her investment direction xvith respect to future Amounts Deferred, future Section 457 Transfers and future Rollover 17 Contributions, as of any Enrollment Date, by giving notice in writing or in such other form as the Committee may authorize to the Administrative Service Agency at least one Business Day prior to such Enrollment Date; provided, ho*vever, that the same percentages shall apply to the Rollover Account as apply to the Account. All future .awaounts Deferred, future Section 457 Transfers and future Rollover Contributions shall be invested by the Trustee in the Investment Funds in accordance with such changed direction. 4.4 (a) As of any Valuation Date during a Plan Year, a Participant may direct, by giving notice in writing or in such other form as the Committee may authorize, to the Administrative Service Agency that all, or any multiple of one percent (or such other percent as may be prescribed by the Committee from time to time), of his or her interest in any of the Investment Funds be liquidated and the proceeds thereof transferred to one or more other Investment Funds in the proportions directed by such Participant. (b) If the Trustee or any Financial Organization appointed by the Committee shall advise the Committee that it is not reasonably able to prudently liquidate the necessary amount and transfer it from one of the Investment Funds to another, the amount to be transferred xvith respect to each Participant who duly requested such a transfer may be reduced in proportion to the ratio which the aggregate amount that the Trustee or the Financial Organization has advised the Committee may not prudently be so transferred bears to the aggregate amount that all Participants have duly requested be so transferred. Regardless of any Participant's investment direction, no transfer between Investment Funds may be made in violation of any restriction imposed by the terms of the agreement between the Committee or the Trustee and a Financial Organization providing any Investment Fund or of any applicable law. Notwithstanding anything in this Section 4.4(b) to the contrary, thc Trustee or the Financial Organization may 18 have the right, ~vithout prior notice to any Participant, to suspend for a limited period of time daily transfers between and among Investment Funds for one or more days if the Trustee or the Financial Organization determines that such action is necessary or advisable (i) in light of unusual market conditions, (ii) in response to technical or mechanical problems xvith the Plan's automated system, if any, or the Plan's third-party record keeper and (iii) in connection with any suspension of normal trading activity on the New York Stock Exchange. 4.5 The Administrative Service Agency shall have the right to decline to implement any investment direction upon determination that: (i) the person giving the direction is legally incompetent to do so; (ii) implementation of the investment direction would be contrary to the Plan or applicable law or governmental ruling or regulation including, but not limited to, Treasury Regulations; (iii) implementation of the investment direction xvould be contrary to a court order, including, but not limited to, a Qualified Domestic Relations Order; or (iv) implementation of the investment direction would be contrary to the rules, regulations or prospectuses of the Investment Funds. 4.6 Each Participant is solely responsible for the investment and allocation of his or her Plan Benefit in and among the Investment Funds and shall assume all risk in connection with any decrease in the value of any or all of the Funds. Neither the Committee, any Trustee, any Employer nor the Administrative Service Agency is empowered to advise a Participant as to the manner in which such Plan Benefit shall be allocated among the Investment Funds. The fact that a particular Investment Fund is available to Participants for investment under the Plan shall not be construed as a recommendation for investment in such Investment Fund. Any investment guidance or advice setwices provided by the Plan to Participants shall not be considered a violation of this Section 4.6. 19 4.7 (a) The entire value of each Participant's Account and Rollover Account and each Alternate Payee Account under the Plan shall be set aside and held in the Trust Fund pursuant to the Trust Agreement for the exclusive benefit of Participants and their Beneficiaries and Alternate Payees and defraying reasonable expenses of the Plan and of the Trust Fund pursuant to Section 5.3. (b) Each Participant shall be 100 percent vested at all times in his or her Plan Benefit in accordance with the ternas of the Plan. Each Alternate Payee shall be 100 percent vested at all times in his or her Alternate Payee Account in accordance with the terms of the Plan. 4.8 (a) Notwithstanding any other provision of the Plan, during any period when an Alternate Payee Account is created and the corresponding interest in the Trust Fund is segregated on behalf of an Alternate Payee pursuant to a Qualified Domestic Relations Order as provided in Section 11.4(b), the Alternate Payee may be entitled to direct the investment of such interest in accordance with this Section 4 as if he or she were the Participant, to the extent provided in such order. In the event that an Alternate Payee fails to specify an investment direction, such Alternate Payee's interest in the Trust Fund shall be invested in the same manner as the relevant Participant's Plan Benefit as of the date of creation of the Alternate Payee Account. (b) Notwithstanding any other provision of the Plan, during any period folloxving the death of a Participant and prior to distribution of the entire Plan Benefit of such Participant, such Participant's Beneficiary shall be entitled to direct the investment of such Plan Benefit, or, as applicable, his or her proportional interest in such Plan Benefit, in accordance with this Section 4 as if he or she were the Participant. 20 4.9 No power of attorney, other than one properly executed in accordance with Section 5-1501 of Title 15 of the General Obligations Law of the State, as such may be amended from time to time, shall be effective to permit an attorney-in-fact to make any investment direction on behalf of a Participant except upon specific determination by the Administrative Service Agency that the instrument expressly grants the power to act on behalf of the Participant regarding investment direction under this Plan. 21 ACCOUNTS AND RECORDS OF THE PLAN 5.1 (a) The Administrative Service Agency shall establish and maintain an Account and, as necessary, a Rollover Account in respect of each Participant (or in the case ora Rollover Account, a Beneficiary who is a Participant's Surviving Spouse, if applicable) and, to the extent his or her entire Plan Benefit has not been distributed, each former Participant showing the value of his or her Plan Benefit, the value of the portion of his or her Plan Benefit, if any, which is invested in each Investment Fund and other relevant data pertaining thereto. Each Account and Rollover Accotmt shall be adjusted as of each Valuation Date to reflect all Units or dollars credited thereto and valued as provided in Section 5.2(b) less all Units or dollars distributed, withdrawn or deducted therefrom in accordance with the terms of the Plan. With respect to each Participant, all Amounts Deferred, all Section 457 Transfers in accordance with Section 7.5(b)(i) and all Rollover Contributions in accordance with Section 7.5(b)(ii) shall be credited to his or her Account or Rollover Account, as applicable. (b) Each Participant and, for any period following the death of a Participant and prior to distribution of the entire Plan Benefit of such Participant, each Beneficiary shall be furnished with a written statement of his or her Account and RolloYer Account (including the value of the interest he or she has, if any, in each Investment Fund and the amount of and explanation for each allocation to or deduction from his or her Account and Rollover Account since the last statement provided) at least quarterly. During the period prior to distribution of his or her entire interest under the Plan, each Alternate Payee shall be furnished ~vith a written statement of his or her Alternate Payee Account (including the value of the interest he or she has, if any, in each Investment Fund and the amount of and explanation for each allocation to or deduction from his or her Alternate Payee Account since the last statement provided) at least quarterly. 22 (c) The establishment and maintcnance of, or allocations and credits to, the Account and Rollover Account of any Participant shall not vest in such Participant or his or her Beneficiary any right, title or interest in and to any Trust Fund assets or Plan benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and the Trust Agreement. The establishment and maintenance of, or allocations and credits to, the Alternate Payee Account of any Alternate Payee shall not vest in such Alternate Payee any right, title or interest in and to any Trust Fund assets or Plan benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Qualified Domestic Relations Order, the Plan and the Trust Agreement. 5.2 (a) The Plan Benefit shall equal the value of a Participant's Account and Rollover Account which shall be determined by aggregating the value of his or her separate interests, if any, in each Investment Fund. (b) The Trust Fund shall consist of the Investment Funds. The aggregate value of the Accounts and the Rollover Accounts, the Alternate Payee Accounts and any reserve for expenses and suspense accounts, if any, shall be equal to the value of the Trust Fund. Each Investment Fund shall be valued either in Units or in dollars. As of each Valuation Date, each Fund shall be valued pursuant to the Trust Agreement and the agreements between the Committee or the Trustee and the Financial Organizations to reflect the effect of income received and accrued, realized and unrealized profits and losses, and all other transactions of the preceding period. 5.3 (a) The expenses of administering the Plan, including (i) the fees and expenses of the Financial Organizations and Administrative Service Agency for the performance of their duties under the Plan, (ii) the expenses incurred by the Colnmittee or any of its members 23 or any Trustee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants, consultants, and agents and cost of services rendered in respect of the Plan and the Trust Agreement (as provided therein)), and (iii) all other proper charges and disbursements of the Financial Organizations, Administrative Service Agency, the Committee or its members (including settlements of claims or legal actions approved by counsel to the Plan) or any Trustee shall be paid out of the Trust Fund, and allocated to and deducted from the Accounts and Alternate Payee Accounts as of each Valuation Date, unless paid by the Committee from State funds allocated for such expenses or the Employer elects to pay such expenses directly. (b) Brokerage fees, transfer taxes and any other expenses incident to the pumhase or sale of securities by the Financial Organizations for the Investment Funds shall be deemed to be part of the cost of such securities, or deducted in computing the proceeds therefrom, as the case may be. Taxes, if any, of any and all kinds whatsoever which are levied or assessed on any assets held or income received by the Trust Fund shall be allocated to and deducted from the Accounts and Alternate Payee Accounts in accordance with the provisions of this Section 5. 24 WITHDRAWALS FOR UNFORESEEABLE EMERGENCIES; WITHDRAWALS OF SMALL ACCOUNTS; LOANSi WITHDRAWALS OF ROLLOVER ACCOUNTS 6.1 Upon a showing by a Participant of an unforeseeable emergency, the Administrative Service Agency may, in its sole discretion, permit a payment to be made to the Participant in an amount which does not exceed the lesser of (i) the amount reasonably needed to meet the financial need created by such unforeseeable emergency or (ii) an amount which, together with any prior distribution or withdraxval, does not exceed the value of the Participant's Plan Benefit determined as of the most recent Valuation Date. Any such payment shall be made from the Trust Fund by the Trustee upon the direction of the Administrative Service Agency and shall be xvithdrawn by the Trustee pro rata fi'om the Investment Funds in which the Participant has an interest, unless the Participant specifies in the request for such a payment the portion of the total amount to be withdrawn by the Trustee from each Investment Fund. Such payment shall first be charged to the Account of the Participant and, if necessary, then to the Rollover Account. All payments shall be made in one lump cash sum within sixty days after approval of the request. 6.2 (a) For purposes of this Section 6, an unforeseeable emergency is defined, as required by the Treasury Regulations promulgated under Section 457 of the Code, as a severe financial hardship of a Participant resulting from an illness or accident of the Participant, the Participant's spouse or the Participant's dependent, as defined in Section 152(a) of the Code, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable cimumstances arising as a result of events beyond the control of the Participant. In accordance with the Treasury Regulations, the need to send a Participant's child to college or the desire to purchase a home does not constitute an unforeseeable emergency. 25 (b) For purposes of this Section 6, an amount will not be considered to be reasonably needed to meet the financial need created by an unforeseeable emergency to the extent that such need is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation ora Participant's assets, to the extent the liquidation of such assets ~vould not itself cause severe financial hardship, or (iii) by cessation of deferrals under the Plan. 6.3 A Participant with respect to whom his or her Account, irrespective of the amount in the Participant's Rollover Account, does not exceed $5,000 (or such greater amount as may be permitted by Section 401(a)(l 1) of the Code) may elect at any time to receive a lump sum distribution, not to exceed $5,000 of his or her Account and Rollover Account at least sixty days following such election, provided that: (a) there has been no Amount Deferred by such Participant during the two-year period ending on the date of distribution, and (b) there has been no prior distribution elected by such Participant pursuant to this Section 6.3. 6.4 With respect to a Participant or an Alternate Payee whose Account or Alternate Payee Account does not exceed the amount set forth in Section 6.3, the Committee, at its discretion, may direct the Trustee to distribute the Participant's Account and Rollover Account or the Alternate Payee's Alternate Payee Account as soon as practicable following the Participant's Severance from Employment or in accordance with the requirements and provisions of Sections 6.3(a) and 6.3(b); provided, ho*v'ever, that such distributions shall made in accordance with the requirements of Section 40 l(a)(3 I) of the Code and any Treasury Regulations, or any other applicable regulations, promulgated thereunder; and provided further, 26 that the Plan shall be amended, in accordance with the Regulations, to set forth such requirements as soon as practicable after final Treasury Regulations, or any other applicable regulations have been issued. 6.5 On or after the date on which the Committee adopts a loan program, which date may not be before January 1, 2003, upon request of an eligible Participant, the Committee may, in its sole discretion and on such terms and conditions as it shall prescribe under written uniform rules which shall be deemed to be a part of the Plan; provided that such rules are consistent with the provisions set forth in this Section 6.5, direct the Trustee to make loans to such eligible Participant. Plan loans shall be granted to those Participants who are active Employees, and, if the Committee shall determine, to those Participants who are on an approved leave of absence from their Employer. Each Participant shall have only one outstanding Plan loan at a time. The principal amount of any Plan loan shall be for an amount equal to at least $1,000, or such other amount as the Committee shall determine, and shall not exceed the lesser of(i) 50% of the value of the sum of(A) the Participant's Account and (B) the Participant's Rollover Account, if applicable, and (ii) $50,000. All Plan loans, other than those for the purpose of acquiring the dwelling trait which is, or within a reasonable time shall be, the principal residence of the Participant, shall be repaid over a non-renewable repayment period of five years. A Plan loan made for acquiring a principal residence shall be repaid over a non-renewable repayment period o~up to 15 years, or such other term as the Committee shall determine. Each Plan loan granted shall bear a rate of interest equal to one percentage point above the prime interest rate as published in the Wall Street Journal, or such other reasonable rate of interest as the Committee shall determine. A Plan loan shall be made first from the Participant's Account, until exhausted, and then from his or her Rollover Account. Any Plan loan shall be repaid in substantially equal 27 installments of principal and accrued interest which shall be paid at least quarterly, subject to the methods and procedures as shall be determined by the Committee and the Administrative Service Agency. All Plan loans shall be made from of the Trust Fund and notes evidencing such obligations shall be considered assets of the Trust Fund. All Plan loans shall be secured, as of the date of the Plan loan, by the sum of(i) the Participant's Account and (ii) the Participant's Rollover Account, if applicable, provided, however, that no more than 50% of such Participant's Account balance shall be used as security for the Plan loan. Ifa Participant fails to make any scheduled repayment of his or her Plan loan within 90 days of its due date, or such other period as the Committee shall determine, such Participant shall be considered in default and the Administrative Service Agency shall declare a deemed distribution to have occurred with respect to such Plan loan, effective as of the date of the default. The Committee, may in its sole discretion, establish or change fi.om time to time, the standards or requirements for making any Plan loan, including, without limitation, assessing an administrative fee against the Participant for such Plan loan. For purposes of this Section 6.5, an outstanding loan shall include (i) any loan that is being repaid in compliance with this Section 6.5 until repaid in full and (ii) any loan that is considered in default until subsequently repaid. Notwithstanding anything in this Section 6.5 to the contrary, a participant who has defaulted on a loan made under the Plan and which is not repaid shall not be eligible to obtain another loan hereunder until such time as the maximum non-renewable payment period over xvhich such defaulted loan could have been repaid has expired, and then only to the extent permitted by Section 1.72(p)-1 of the Treasury Regulations, considering such defaulted and unpaid loan as still outstanding. 6.6 Effective as of May 21, 2004, the Committee may provide that a Participant xvho has a Rollover Account shall be permitted to ~vithdraw all or any portion of such Rollover Account at 28 any time during a Plan Year; provided that such withdrawals shall be paid pursuant to a method of payment elected by the Participant, and the value of such shall be determined, in accordance with Section 7.3 hereof. 6.7 If a Participant should die prior to the payment of any withdrawal requested under this Section 6, or the disbursement of the proceeds of any Plan loan requested under this Section 6, the Participant's withdrawal or loan request shall be void as of the date of death. 29 DISTRIBUTIONS FROM THE PLAN AND OTHER ELIGIBLE RETIREMENT PLANS 7.1 (a) Except as otherwise provided in Section 6, a Participant may not receive distribution of his or her Plan Benefit at any time prior to the earlier of(i) such Participant's Severance from Employment with the Employer or (ii) the Plan Year in which such Participant attains age 70½. Upon a Participant's Severance from Employment with the Employer for any reason other than death or upon commencement of the Plan Year in which he or she attains age 70½, the Participant shall be entitled to receive an amount equal to the value of his or her Plan Benefit, which shall be paid in cash by the Trustee from the Trust Fund in accordance with one of the methods described in Section 7.3 and as of the commencement date elected by the Participant in accordance with the procedures prescribed under Section 7.4(a). In the case of a Participant who continues in service with the Employer following his or her attainment of age 70½, such Participant may elect to commence the distribution of his or her Plan Benefit and such election shall designate a method of payment in accordance with Section 7.3; provided, however, that payments may not commence earlier than forty-five days, or such other number the Committee shall determine, following the Participant's attainment of age 70'/2. (b) Not~vithstanding anything in this Section 7.1 to the contrary, in accordance with the requirements of Section 401 (a)(9) of the Code, distributions shall commence no later than the April 1st following the close of the Plan Year in which (i) the Participant attains age 70~/2 or (ii) the Participant Severs from Employment, whichever is later. 7.2 If a Participant dies before receiving final distribution of his or her Plan Benefit, an amount equal to the value of the unpaid portion thereof as of the date of death shall be paid in cash by the Trustee from the Trust Fund to the Participant's Beneficiary by one of the methods described in Section 7.3;l~rovided, however, that if the Participant dies after payments 30 have commenced then payment to the Participant's Beneficiary must be made in accordance with the provisions of Section 401 (a)(9) of the Code. 7.3 (a) Subject to the following provisions of this Section 7.3, any payment made under this Section 7 shall be made in one of the following methods, as the Participant (or, in the case of the death of a Participant, his or her Beneficiary) may elect pursuant to Section 7.4 hereof: (i) one lump cash sum payment; or (ii) with respect to such Participant's Account and Rollover Account, substantially equivalent monthly, quarterly, semi-annual or annual installment payments; provided, ho,'ever, that a Participant (or, in the case of the death of a Participant, his or her Beneficiary) may elect to receive (A) an initial installment payment in a specified amount and (B) the balance of his or her Account in substantially equivalent monthly, quarterly, semi-annual or annual installment payments as long as the initial payment is in an amount greater than the amount of the subsequent installment payments at the time they commence and such subsequent payments commence within two years of such initial payment. (iii) A Participant who elects to receive installment payments or who is currently receiving installment payments pursuant to Section 7.3(a)(ii), may elect, in accordance ~vith procedures established by the Administrative Service Agency, to receive a portion of his or her Account or Rollover Account distributed in a lump sum; provided, hoa,ever, that no lump sum payment shall be less than $500.00, or such other amount as the Committee shall determine, and provided further, that such elections shall not be made more than twelve times per Plan Year, or such other number as the Committee shall 31 determine. Such lump sum payment shall not result in a discontinuation of subsequent installment payments; provided, however, that such subsequent payments may be redetermined in accordance with methods and procedures established by the Administrative Service Agency. (b) Ifa Participant (or, in the case of death of a Participant, his or her Beneficiary) elects a lump sum payment, pursuant to Sections 7.3(a)(i) or 7.3(a)(iii), the value of the Participant's Plan Benefit shall be determined as of the Valuation Date coincident with or last preceding the date on which the Plan Benefit is withdrawn from the Investment Funds and liquidated for distribution. (c) Ifa Participant (or, in the case of death of a Participant, his or her Beneficiary) elects to receive installment payments, subject to Section 7.3(a)(ii), such Participant's Account and Rollover Account shall continue to participate in the investment performance of the Investment Fund or Funds in xvhich such amounts are invested and to bear its allocable share of administrative and investment expenses until the Valuation Date coincident with or last preceding the date on which such Plan Benefit amounts are withdrawn from the Investment Funds and liquidated for distribution; provided, however, that the amount of the installments need not be re-determined to reflect changes in the value of the Account more frequently than annually. All such redeterminations shall be made by the Administrative Service Agency in accordance with procedures of uniform application. 7.4 (a) In the case of the Participant's Severance from Employment with the Employer or death, a distribution election may be made by the Participant or his or her Beneficiary prior to, or after, payments commence pursuant to the provisions of this Section 7. Such election shall specify the form of payment described in Section 7.3 elected and the date on 32 which payments shall commence; provided, however, that payments may not commence earlier than forty-five days, or such other number the Committee shall determine, following the Participant's Severance from Employment or death. A Participant or his or her Beneficiary, including a Participant or his or her Beneficiary who is currently receiving distributions under the Plan, irrespective of the date on xvhich such distributions commenced, may change both the timing and the form of payment elected in accordance with procedures established by the Administrative Service Agency, subject to Section 7.6. (b) If a Participant dies before distribution of his or her Plan Benefit has commenced, a distribution will be made to the Beneficiary pursuant to the Beneficiary's election duly filed with the Administrative Service Agency in accordance with the provisions of Section 7.4(a); provided, however, any distribution to a Beneficiary shall be made in accordance with the provisions of Section 401(a)(9) of the Code. All distributions shall commence not later than the close of the Plan Year immediately following the Plan Year in which the Participant died, or, in the event such Beneficiary is the Participant's Surviving Spouse, on or before the close of the Plan Year in which such Participant xvould have attained age 70Vz, if later (or, in either case, on any later date prescribed by the Treasury Regulations). If such Beneficiary who is also the Surviving Spouse dies after the Participant's death but before distributions to such Beneficiary commence, this provision shall be applied to require payment of any further benefits as if such Surviving Spouse were the Participant. 7.5 (a) In connection xvith a Participant's Severance from Employment, the Distributee may elect, at the time and in the manner prescribed by the Administrative Service Agency, to have all or any portion of the Participant's Account and Rollover Account that qualifies as an Eligible Rollover Distribution paid directly to the trustee of an Eligible 33 Retirement Plan, provided that such other plan provides for the acceptance of such amounts by the trustee. The Plan shall provide written information to Distributees regarding Eligible Rollover Distributions to the extent required by Section 402(t') of the Code. (b) Compensation previously deferred by a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to another eligible deferred compensation plan under Section 457 of the Code maintained by another employer that is a state, political subdivision of a state, any agency or instrumentality of a state or political subdivision of a state shall be accepted for transfer by the Trustee in the form and in the manner specified by the Administrative Service Agency. All such Section 457 Transfers shall be credited to the Participant's Account or the Alternate Payee Account and shall be invested in accordance with the investment direction of the Participant, the Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to Sections 4.2, 4.3, or 4.8, whichever is applicable; such Section 457 Transfers are subject to all of the terms and conditions of the Plan. (ii) (A) An accrued benefit of a Participant, a Beneficiary who is a Participant's Sm-riving Spouse or spousal Alternate Payee under an Eligible Retirement Plan that is distributed to the Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee or is directly rolled over to the Plan as an Eligible Rollover Distribution may be accepted as a Rollover Contribution by the Trustee in the form and in the manner specified by the Administrative Service Agency; provided, however, that such Participant, Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee has made an Investment Fund direction pursuant to Sections 4.2, 4.3, or 4.8, xvhichever is applicable, and filed a ~vritten request with the Administrative Service Agency requesting that such transfer be accepted. 34 (B) The Administrative Service Agency, in accordance ~vith the Code and procedures established by the Committee, shall, as soon as practicable following its receipt of the xvritten request of a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee, determine whether the Rollover Contribution shall be accepted by the Plan. Any written request filed by a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to this Section 7.5(b) shall set forth the fair market value of such Rollover Contribution and a statement satisfactory to the Administrative Service Agency that the amount to be transferred constitutes a Rollover Contribution. In the event the Administrative Service Agency permits the transfer of the Rollover Contribution, the Trustee shall accept such Rollover Contribution and the transfer of such Rollover Contribution shall be deemed to have been made on the Valuation Date next following the date on which it was paid over to the Trustee. The Rollover Contribution shall be maintained in a separate, fully vested Rollover Account for the benefit of the contributing Participant or the Beneficiary xvho is a Participant's Surviving Spouse and, in the case of a spousal Alternate Payee, the Alternate Payee Account, and shall be invested in accordance with the investment direction of the Participant, the Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee, pursuant to Sections 4.2, 4.3 or 4.8, xvhichever is applicable. (C) All amounts so transferred shall be credited to the Participant's Rollover Account or Alternate Payee Account and if the Committee so provides in accordance with Section 6.6, shall be available for distribution at any time during the Plan Year. No other contributions shall be allocated to the Rollover Account. 35 (c) With respect to trustee-to-trustee transfers, a Participant or Beneficiary may elect, in accordance with procedures established by the Administrative Service Agency, to have all or any portion of the value of his or her Account and Rollover Account transferred to the trustee of a defined benefit govemmental plan as described in Section 414(d) of the Code; provided, however, that such transfer is for the purchase of permissive service credit (as defined in Section 415(n)(3)(A) of the Code) under such plan or a repayment of contributions and earnings with respect to a forfeiture of service under such plan. 7.6 Notwithstanding anything in the Plan to the contrary, all distributions of a Plan Benefit to a Participant or his or her Beneficiary shall commence in accordance with the amount and timing requirements of the Treasury Regulations under Section 401 (a)(9) of the Code, which are incorporated herein by reference. 36 DESIGNATION OF BENEFICIARIES 8.1 Each Participant shall file with the Administrative Service Agency a written designation of one or more persons as the Beneficiary who shall be entitled to receive the Plan Benefit, if any, payable under the Plan upon his or her death. A Participant may from time to time revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with the Administrative Service Agency. The last such designation received by the Administrative Service Agency shall be controlling; provided, however, that no designation or change or revocation thereof shall be effective unless received by the Administrative Service Agency prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. 8.2 If no such Beneficiary designation is in effect at the time ora Participant's death, or if no designated Beneficiary survives the Participant, or if no designated Beneficiary can be located with reasonable diligence by the Administrative Service Agency, the payment of the Plan Benefit, if any, payable under the Plan upon his or her death shall be made by the Trustee from the Trust Fund to the Participant's Surviving Spouse, if any, or if the Participant has no Surviving Spouse, or the Surviving Spouse cannot be located with reasonable diligence by the Administrative Service Agency, then to his or her estate. If the Administrative Service Agency is in doubt as to the right of any person to receive such amount, it shall inform the Committee and the Trustee and the Trustee may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Trustee may pay such amount into any court of appropriate jurisdiction or to any other person pursuant to applicable laxv and such payment shall be a complete discharge of the liability of the Trustee, Plan, Committee, Employer, Administrative Service Agency and Financial Organizations. If the Beneficiary so designated by the Participant shall die after the death of the Participant but prior to receiving a 37 complete distribution of the amount that ~vould have been paid to such Beneficiary had such Beneficiary's death not then occurred, then, for proposes of the Plan, the distribution that would other~vise have been received by such Beneficiary shall be paid to the Beneficiary's estate. 8.3 No power of attorney, other than one properly executed in accordance ~vith Section 5-1501 of Title 15 of the General Obligations Law of the State, as such may be amended from time to time, shall be effective to permit an attorney-in-fact to make or change a Beneficiary designation on behalf of a Participant except upon specific determination by the Administrative Service Agency that the instrument expressly grants the power to act on behalf of the Participant regarding Beneficiary designation under this Plan. 38 ADMINISTRATION 9.1 Except as otherwise provided herein, the operation and administration of the Plan shall be the responsibility of the Committee. The Committee shall have the power and the duty to take all action and to make all decisions necessary or proper to carry out its responsibilities under the Plan. All determinations of the Committee as to any question involving its responsibilities under the Plan, including, but not limited to, interpretation of the Plan or as to any discretionary actions to be taken under the Plan, shall be solely in the Committee's discretion and shall be final, conclusive and binding on all parties. 9.2 Without limiting the generality of the foregoing, the Committee shall have the following powers and duties: (a) to require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefit under the Plan; (b) to make and enforce such rules and regulations and prescribe the use of such forms as it shall deem necessary for the efficient administration of the Plan; (c) to interpret the Plan and to resolve ambiguities, inconsistencies and omissions; (d) to decide all questions concerning the Plan and the eligibility of any Employee to participate in the Plan; (e) to determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan (f) to permit more lenient time periods than otherwise may be specified in Sections 2.1, 3. l(b), 3. l(c), 4.3, 6.1, 6.3, 6.5, 7.1 (a) and 9.5 of the Plan; provided, however, in no case may a Participant's election to commence Compensation deferrals, or to modify existing 39 Compensation deferrals, be effective until notice of such election is filed with the Employer or Administrative Service Agency; and (g) to determine the methods and procedures for the implementation and use of any automated telephone, computer, intemet, intranet or other electronic or automated system adopted by the Committee for purposes of Plan administration, including, xvithout limitation, for receiving and processing enrollments and instructions ~vith respect to the investment of assets allocated to a Participant's Account or Rollover Account and for such other purposes as may be designated from time to time. 9.3 Except as may be prohibited by applicable laxv, the Committee or any member thereof, or any person, firm or corporation to whom may be delegated any duty or power in connection ~vith administering, managing or supervising the administration or management of the Plan or Trust Fund, shall not be liable for (a) anything done or omitted to be done by it or by them unless the act or omission claimed to be the basis for liability amoanted to a failure to act in good faith or was due to gross negligence or willful misconduct; (b) the payment of any amount under the Plan; or (c) any mistake of judgment made by it or on its behalf by a member of the Committee. No member of the Committee, nor any delegate, shall be personally liable under any contract, agreement, bond or other instrument made or executed by him or her or on his or her behalf in connection with the Plan or Trust Fund. 9.4 Except as otherwise provided in the Plan and the Trust Agreement, the Trustee shall have responsibility with respect to the control or management of the assets of the Plan and the Trust Fund. The Committee shall periodically review the performance and methods of the Trustee and the Committee may appoint and remove or change the Trustee. The Committee shall have the power to appoint or remove one or more Financial Organizations and 40 to delegate to such Financial Organization(s) authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan and Trust Fund in accordance with the Regulations and shall periodically review the performance and methods of such Financial Organization(s) and may direct the acquisition or disposition of the assets in any Investment Fund. 9.5 (a) The Committee shall have general authority under the Plan. The decisions of the Committee shall be final, binding and conclusive on all interested persons for all purposes. The Committee may delegate its general authority as it deems appropriate in accordance with the terms of the Plan and all applicable Code sections and Treasury Regulations; provided, however, that such delegation shall be subject to revocation at any time at the discretion of the Committee. Notwithstanding any other provision of the Plan, the Committee's general authority shall include the right to review, revise, modify, revoke, or vacate any decision made or action taken by any party under the Plan which right includes, but is not limited to, the right to review, revise, modify, revoke, or vacate any decision of the Reviexv Committee at any time upon reasonable notice to the claimant. (b) Any claim to rights or benefits under the Plan, including, without limitation, any purported Qualified Domestic Relations Order, or request for hardship withdrawal under Section 6 must be filed in writing with the Committee, or xvith such other entity as the Committee may designate. Within sixty days after receipt of such claim, the Committee, or such other entity designated by the Committee, shall notify the claimant and, if such claimant is not the Participant, any Participant against whose Plan Benefit the claim is made, that the claim has been granted or denied, in whole or in part. Notice of denial of any 41 claim in whole or in part by the Committee, or by such other entity designated by the Committee, shall include the specific reasons for denial and notice of the rights granted by Section 9.5(c). (c) Any claimant or Participant who has received notice of denial or grant, in xvhole or in part, of a claim made in accordance with the foregoing subsection (b) may file a written request within thirty days of receipt of such denial for review of the decision by the Revie~v Committee. Within ninety days after receipt of such request for review, the Reviexv Committee shall notify the claimant and, as applicable, the Participant, that the claim has been granted or denied, in whole or in part; provided, howeYer, that the Review Committee may in its discretion extend such period by up to an additional 120 days upon notice to the claimant and, as applicable, the Participant, prior to expiration of the original ninety days that such additional period is needed for proper review of the claim. Notice of denial of any claim in whole or in part by the Review Committee shall include the specific reasons for denial and shall be final, binding and conclusive on all interested persons for all purposes. (d) Subject to the discretion of the Committee or such other entity as the Committee may designate to determine otherwise, no distribution of any Plan Benefit shall be permitted during any period during which a claim, including, without limitation, a purported Qualified Domestic Relations Order, against all or part of such Plan Benefit is being reviewed in accordance with the provisions of this Section 9.5. If the Trustee or the Administrative Service Agency reasonably believes that a claim, including, without limitation, a purported Qualified Domestic Relations Order, against all or part of any Plan Benefit is likely to be asserted, such Trustee or Administrative Service Agency shall notify the Committee and it shall be within the discretion of the Committee to refuse to permit any distribution of all or part of such Plan Benefit pending determination of such claim. 42 9.6 The Committee shall arrange for the engagement of legal counsel and certified public accountants, who may be counsel or accountants for the Employer, and other consultants, and make use of agents and clerical or other personnel, for purposes of this Plan. The Committee may rely upon the written opinions of counsel, accountants and consultants, and upon any information supplied by the Trustee, a Financial Organization or Administrative Service Agency appointed in accordance with the Regulations, and delegate to any agent or to any member of the Committee its authority or the authority of the Employer to perform any act hereunder, including without limitation those matters involving the exercise of discretion; provided, however, that such delegation shall be subject to revocation at any time at the discretion of the Committee. 9.7 No member of the Committee shall be entitled to act on or decide any matters relating solely to such member or any of his or her rights or benefits under the Plan. 9.8 Any action of the Committee may be taken at a meeting. The Committee shall establish its own procedures and the time and place for its meetings and provide for the keeping of minutes of all meetings. 9.9 Notwithstanding any other provision hereof, the Plan shall at all times be operated in accordance with the requirements of applicable laxv, including, without limitation, the Regulations. 43 AMENDMENT OR TERMINATION 10.1 (a) Subject to Section 10. l(b) and any requirements of State or federal law, the Committee reserves the right at any time and with or without prior notice to amend, suspend or terminate the Plan, any deferrals thereunder, the Trust Agreement and any Investment Fund, in whole or in part and for any reason and xvithout the consent of any Employee, Participant, Beneficiary or other person. The Plan shall be terminated automatically upon complete and final discontinuance of all deferrals thereander. (b) No amendment or modification shall be made which would retroactively impair any individual's rights to any benefits under the Plan, except as provided in Section 10. l(c). (c) Any amendment, suspension or termination of any provisions of the Plan, any deferrals thereunder, the Trust Agreement or any Investment Fund may be made retroactively if required to meet any applicable requirements of the Code or any other applicable law. 10.2 Upon termination of the Plan, the Employer shall permit no further deferrals of Compensation under the Plan and all Plan Benefits and other interests in the Trust Fund shall thereafter be payable as provided in the Plan. Any distributions, transfers or other dispositions of the Plan Benefits as provided in the Plan shall constitute a complete discharge of all liabilities under the Plan. The Committee and the Trustee(s) shall remain in existence and the Trust Agreement and all of the provisions of the Plan which in the opinion of the Committee are necessary for the execution of the Plan and the administration and distribution, transfer or other disposition of interests in the Trust Ftmd shall remain in force. 44 GENERAL LIMITATIONS AND PROVISIONS 11.1 The Plan, as duly amended from time to time, shall be binding on each Participant and his or her Surviving Spouse, heirs, administrators, trustees, successors, assigns, and Beneficiaries and all other interested persons. 11.2 Nothing contained herein shall give any individual the fight to be retained in the employment of the Employer or affect the right of the Employer to terminate any individual's employment. The adoption and maintenance of the Plan shall not constitute a contract between the Employer and any individual or consideration for, or an inducement to or condition of, the employment of any individual. 11.3 If the Administrative Service Agency shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs, is a minor, or has died, then it shall so notify the Committee and the Trustee, and any payment due him or her or his or her estate (unless a prior claim therefor has been made by a Beneficiary, Surviving Spouse or duly appointed legal representative or the time period during which a Beneficiary or Surviving Spouse could make a claim under the Plan has not elapsed) may, if the Trustee so elects, be paid to his or her spouse, a child, a relative, or any other person maintaining or having custody of such person otherwise entitled to payment or deemed by the Trustee to be a proper recipient on behalf of such person. Any such payment shall be a complete discharge of all liability under the Plan therefor. l 1.4 (a) Except insofar as may otherwise be required by law or in accordance xvith this Section 11.4, no amount payable at any time under the Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, garnishment, charge or encumbrance of any kind, and any attempt to so alienate such amount, whether presently or thereat~er payable, shall be void. If any person shall attempt to, or shall, so 45 alienate any amount payable under the Plan, or any part thereof, or if by reason of bankruptcy or other event happening at any time such amount would not be enjoyed by the person to whom it is payable under the Plan, then the Trustee shall notify the Committee and, if it so elects, may direct that such amount be xvithheld and that the same or any part thereof be paid to or for the benefit of such person, his or her spouse, children or other dependents, or any of them, in such manner and proportion as the Trustee may deem proper. (b) Payments with respect to a Participant's Plan Benefit may be made by the Trustee from the Trust Fund to one or more Alternate Payees pursuant to the terms of a Qualified Domestic Relations Order; provided hmvever, that such Qualified Domestic Relations Order shall not create any rights greater than the Participant's rights under the Plan. Notwithstanding any provisions of the Plan to the contrary, any distribution due to an Alternate Payee may be paid in one lump sum as soon as practicable following the qualification of the order if the Alternate Payee consents thereto; otherxvise it shall be payable on or after the date on which the Participant attains Earliest Retirement Age. Upon receipt of a Qualified Domestic Relations Order by the Plan, a portion of the Participant's Accotmt and Rollover Account, which portion shall be determined in accordance with the Qualified Domestic Relations Order, shall be segregated and maintained on behalf of each Alternate Payee designated under such Qualified Domestic Relations Order until payment is made to the Alternate Payee in accordance with this Section 11.4 and the terms of the Plan. No liability whatsoever shall be incurred by the Committee, Trustee, Employer, Administrative Service Agency, Reviexv Committee or any Financial Organization solely by reason of any action taken in accordance ~vith this Section 12.4 pursuant to the terms of a Qualified Domestic Relations Order. 46 11.5 Each Participant shall file ~vith the Administrative Service Agency such pertinent information concerning himself or herself and his or her Beneficiary as the Committee may specify, and no Participant, Beneficiary or other person shall have any rights or be entitled to any benefits under the Plan unless such information is filed by or with respect to him or her. 11.6 All elections, designations, requests, notices, instructions, and other communications from a Local Employer, Employee, Participant, Beneficiary, Surviving Spouse or other person to the Committee, Administrative Service Agency or the Employer required or permitted under the Plan shall be in such form as is prescribed from time to time by the Committee, shall be mailed by first class mail or delivered to such location as shall be specified by the Committee, and shall be deemed to have been given and delivered only upon actual receipt thereof at such location. Copies of all elections, designations, requests, notices, instructions and other communications from an Employee, Participant, Beneficiary, Surviving Spouse or other person to the Employer shall be promptly filed with the Administrative Service Agency. 11.7 All notices, statements, reports and other communications from a Local Employer, the Trustee or the Committee to any Employee, Participant, Beneficiary, Surviving Spouse or other person required or permitted under the Plan shall be deemed to have been duly given xvhen delivered to, or when mailed by first class mail, postage prepaid and addressed to such Employee, Participant, Beneficiary, Surviving Spouse or other person at his or her address last appearing on the records of the Committee, the Trustee or the Local Employer. 11.8 The Committee may, upon the recoramendation of the Administrative Service Agency, enlarge or diminish the time periods set forth in Sections 2.1, 3. l(b), 3. l(c), 4.3, 6.1, 6.3, 6.5 and 9.5; provided it determines that such action is necessary or desirable to facilitate 47 the proper administration of the Plan, and provided further that in no case mhy a Participant's election to commence Compensation deferrals, or to modify existing Compensation deferrals, be effective until notice of such election is filed with the Employer or Administrative Service Agency. 11.9 The amounts set aside and held in the Trust Fund shall be for the exclusive purpose of providing benefits to the Participants and their Beneficiaries and Alternate Payees and defraying expenses of Plan and Trust Fund administration and no part of the Trust Fund shall revert to any Employer; provided, however, that the setting-aside of any amounts to be held in the Trust Fund is expressly conditioned upon the following: if an amount is set aside to be held in the Trust Fund by an Employer in a manner which is inconsistent xvith any of the requirements of Section 457(b) of the Code, such amount shall be returned to such Employer prior to the first day of the first Plan Year commencing more than 180 days after the date of notification of such inconsistency by the Secretary of the Treasury. Any amounts so returned to the Employer, and the earnings thereon, shall be distributed to the Participants on whose behalf such amounts xvere set aside. 11.10 The Trust Fund shall be the sole source of benefits under the Plan and, except as otherwise required by applicable law, the Committee, the Employer and the Trustee assume no liability or responsibility for payment of such benefits, and each Participant, his or her spouse or Beneficiary, or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the Trust Fund for such payment and shall not have any right, claim or demand therefor against the Committee, or any member thereof, the Employer, the Trustee, or any employee or director thereof. 48 11. l I Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the Trust Agreement or any other funding instrument that is part of the Plan and the Trust Fund. 11.12 The duties and responsibilities allocated to each person under the Plan and the Trust Agreement shall be the several and not joint responsibility of each, and no such person shall be liable for the act or omission of any other person. 11.13 The captions preceding the Sections hereof have been inserted solely as a matter of convenience and in no xvay define or limit the scope or intent of any provisions hereof. l 1.14 The Plan and all rights thereunder shall be governed by and construed in accordance xvith the Code and the Treasury Regulations promulgated thereunder and the laxvs of the State. 49 Amended Model Plan Draft September 23, 2004 Plan Document for the DEFERRED COMPENSATION PLAN FOR EMPLOYEES OF the Town of Southold As amended and restated January 1, 2002 (including Amendments through May 21, 2004) ELIZABETH A. NEVILLE TOWN CLERK REGISTRAR OF VITAL STATISTICS MARRIAGE OFFICER RECORDS MANAGEMENT OFFICER FREEDOM OF INFORMATION OFFICER Amended Model Plan Draft September 23, 2004 Town Hall, 53095 Main Road P.O. Box 1179 Southold, New York 11971 Fax (631) 765-6145 Telephone (631) 765-1800 southoldtown.nort hfork.net OFFICE OF THE TOWN CLERK TOWN OF SOUTHOLD Deferred Compensation Plan for Employees of the Town of Southold Plan Document TABLE OF CONTENTS Section ...................................................................................................................................... Page PURPOSE ...................................................................................................................................... 3 SECTION 1. DEFINITIONS ........................................................................................... 5 "Account". ............................................................................................................... 5 "Administrative Service Agency". ........................................................................... 5 "Alternate Payee". .................................................................................................. 5 Alternate Payee Account ..................................................................................... 5 "Amount Deferred". ................................................................................................ 5 "Beneficiary". .......................................................................................................... 6 "Business Day". ...................................................................................................... 6 "Code". .................................................................................................................... 6 "Committee". ........................................................................................................... 6 "Compensation". ..................................................................................................... 6 "Distributee". .......................................................................................................... 6 "Earliest Retirement Date". .................................................................................... 6 "Effective Date". ..................................................................................................... 6 "Eligible Retirement Plan". .................................................................................... 7 "Eligible Rollover Distribution". ............................................................................ 7 "Employee". ............................................................................................................ 7 Emplo) er ............................................................................................................. 8 "Enrollment Date". ................................................................................................. 8 "Financial Organization". ...................................................................................... 8 "Includible Compensation". .................................................................................... 8 "Investment Fund". ................................................................................................. 8 "Local Employer". .................................................................................................. 8 "Normal Retirement Age". ...................................................................................... 8 Amended Model Plan Draft September 23, 2004 "Participant". .......................................................................................................... 9 "Participation Agreement". .................................................................................... 9 "Plan". .................................................................................................................... 9 "Plan Benefit". ...................................................................................................... 10 "Plan Year". .......................................................................................................... 10 "Qualified Domestic Relations Order". ................................................................ 10 "Regulations". ....................................................................................................... 10 "Review Committee". ............................................................................................ 10 "Rollover Account". .............................................................................................. 10 "Rollover Contribution". ....................................................................................... 10 "Section 457 Transfer". ........................................................................................ 11 "Severance from Employment" or "Severs from Employment". ...........................11 "State". .................................................................................................................. 11 "Surviving Spouse". .............................................................................................. 11 "Treasury Regulations". ....................................................................................... 11 "Trust Agreement". ............................................................................................... 11 "Trust Fund". ........................................................................................................ 11 "Trustee". .............................................................................................................. 12 "Unit". ................................................................................................................... 12 "USERRA'. ........................................................................................................... 12 "Valuation Date". ................................................................................................. 12 SECTION 2. PARTICIPATION ................................................................................... 13 SECTION 3. AMOUNTS DEFERRED ........................................................................ 14 SECTION 4. INVESTMENT OF AMOUNTS DEFERRED AND ROLLOVER CONTRIBUTIONS ......................................................................................................... 17 SECTION 5. ACCOUNTS AND RECORDS OF THE PLAN ................................... 22 SECTION 6. WITHDRAWALS FOR UNFORESEEABLE EMERGENCIES; WITHDRAWALS OF SMALL ACCOUNTS; LOANS; WITHDRAWALS OF ROLLOVER ACCOUNTS ............................................................................................ 25 SECTION 7. DISTRIBUTIONS FROM THE PLAN AND OTHER ELIGIBLE RETIREMENT PLANS ................................................................................................. 30 Amended Model Plan Draft September 23, 2004 SECTION 8. DESIGNATION OF BENEFICIARIES ................................................ 37 SECTION 9. ADMINISTRATION ............................................................................... 39 SECTION 10. AMENDMENT OR TERMINATION ................................................. 44 SECTION 11. GENERAL LIMITATIONS AND PROVISIONS .............................. 45 . NYS DEFERRED LINOA A"GELLO COMPENSATION FREDERICK J. JACOBS BOARD .ABY LOUISE MALLICK ~~ www. n~sdc .corn November 10, 2004 Mr. John A. Cushman Town of Southold P.O. Box 1179 Southold, NY 11971-0959 Dear Mr. Cushman: The purpose of this letter is to provide you with notice of recent amendments to the plan document for the Deferred Compensation Plan for Employees of [Name of Local Employer] (the "Model Plan), which have been adopted effective May 21, 2004 (unless otherwise indicated). The new version of the Model Plan is now the only version sponsored by the Deferred Compensation Board of the State of New York (the "Board'). The amendments to the Model Plan, which are more fully explained in the enclosed summary, include the following provisions: · Authorization for a Model Plan to reject a participant investment request if the request is contrary to the rules, regulations or prospectus of the affected investment fund. Authorization (previously communicated to you on April 26, 2004) for a Model Plan to distribute assets that have been rolled into the plan from another qualified retirement plan in accordance with the distribution rules of the plan that previously held the assets. · Limitations on a participant's eligibility to obtain a loan in the event that the participant has previously defaulted on a loan. Modifications related to comments provided by the Internal Revenue Service (the "/RS") in response to the Board's request for a private letter ruling stating that the Model Plan document constitutes an "eligible deferred compensation plan." · Technical amendments pertaining to plan loan rules and the status of plan loans and other withdrawals upon the death of a participant. The enclosed summary includes information pertaining to the amendments as well as the contribution limits that are effective for calendar year 2005. As mentioned above, certain amendments to the Model Plan were made in response to comments from the IRS concerning the Board's private letter ruling request. The IRS is currently finalizing its review of the ruling request. Although the Board's counsel does not anticipate that further changes NEW YORK STATE DEFERRED COMPENSATION BOAR[) ROOM 124, EMP[RE STATE PLAZA CONCOURSE NORTH P.O. BOX 2103 ALBANY, NY 12220-2103 (5] 8) 473-6619 Fax: (51S) 473-7255 Mr. John A. Cushman Page 2 November 10, 2004 will be required, based on this dialogue, the IRS may provide additional comments that could necessitate further amendments to the Model Plan. If this is the case, the Board will send you a revised Model Plan document including any such necessary amendments. In any event, Model Plan Sponsors must adopt the enclosed amended Mode/Plan by December 31, 2004. To assist you in adopting the amended Model Plan, the following materials are included on the enclosed: · Model Plan, including amendments through May 21, 2004 (on diskette) · Sample Adoption Resolution (on diskette) · Rules and Regulations of the New York State Deferred Compensation Board Effective March 12, 2003 (on diskette) · Instructions Regarding the Adoption of the amended Model Plan (on diskette) · Summary of Amendments to the Model Plan Document (attached) If you are unable to access the documents on the enclosed diskette or have questions regarding the Model Plan document, please contact me or Edward Lilly, Deputy Executive Director, at (518) 473-6619. Sincerely, Julian M. Regan Executive Director JMR:st Enclosures cc: David P. Ellers, Department of Civil Service Nationwide' Retirement Solutions a Nationwide' Financial company December 6, 2004 Dear Plan Sponsor: You have recently received a communication and disk from the NYS Deferred Compensation Board (NYSDCB) asking you to amend and restate the Model Plan for 2004 due by December 31st. On the disk is an instruction letter with six items needed to fulfill the filing requirements. I have included those below with a corresponding NRS Response. Each item needs to be completed along with your passed resolution and mailed to Nationwide Retirement Solutions (NRS) in the envelope provided. We will then incorporate the forms that we have here to make the final packet to be submitted to NYSDCB. (i.) an amended and restated copy of the sponsoring employer's deferred compensation plan supplying all information bracketed in the Model Plan; NRS Response: On your disk you received from the State you ~,qll find a file referred to as (Model Plan Doc Ma3' 21-2004). You ~*ill need to input )'our entiO, name and then print this file. (ii.) an executed copy of the trust agreement entered into with each trustee (if you have already supplied a trust agreement at the time you filed an earlier amended and restated copy of the plan, you must also submit a copy of the letter notifying each trustee of the nexv amendment to the plan); NRS Response: This document is located in our home office so you will not need to provide a cop3:. We ~*~ll include it in the.final package that is sent to the Civil Service Office. (iii.) an opinion signed by the local employer's chief executive officer and chief legal officer stating that ks deferred compensation plan and trust agreement meet the requirements of Section 457 and all other applicable federal, State and local laws, including the Regulations, and that all required approvals of any local governing body or officer have been obtained; NRS Response: See Response for (iv) (iv.) the name of each trustee, independent consultant, financial organization, firm of certified public accountants and administrative service agency which has been selected to provide services with respect to the plan and a certification signed by the local employer's chief executive officer and chief legal officer stating that each such trustee, independent consultant, f'mancial organization, firm of certified public accountants and administrative service agency has been duly selected to provide services in accordance with the provisions of the Regulations; NRS Response: We have combined (iii) and (iv) in one Certification Letter that is included with this mailing. Have this letter printed on your letterhead and then signed by the appropriate person(s) (v.) evidence that bonds and insurance have been secured pursuam to the provisions of the Regulations; and NRS Response: This document is located in our home office. You ,~ill not need to provide a copy. We ,~ill send it Mth the final package. (vi.) except to the extent that fiduciary acknowledgment is not required under section 9003.6 of the Regulations, evidence that each trustee, independent consultant, administrative service agency or financial organization selected by the deferred compensation committee xvill act as a fiduciary under Section 457(g) of the Internal Revenue Code and State and common trust law principles with respect to all trusteeship, administrative or investment matters for which it has assumed responsibility and the plan will be indemnified as a resuk of any cause of action brought against it as a result of acts or omissions of the trustee, independent consukant, administrative service agency or financial organization together with the reasonable costs of litigation arising therefi'om. NRS Response: Refers to "Self Trusted" entities onl): If your entiO' is "Self Trusted" you will find included with this mailing a Trustee FiduciaO, / Indemnification / Bonding Acknowledgement Letter which will need to be com?leted and signed. If you have some questions as to the status of your plan please contact us using the information provided below. We hope to make this as stress fi'ee as xve possibly can. So please call us with any questions you may have at 877-677-3678 ask for me Bernie Keeney at extension 48695. And as always, "Nationwide is on >four side." (Date) ?]ease Z/ace oa Letterhead Certification 9002.2 a (3) and 9002.2 a (4) President George C. Sinnott Civil Service Commission The State Campus Albany. NY 12239 RE: Deferred Compensation Plan for (Entity Name) Dear President Sinnott: Pursuant to the procedures for bidding and establishing an" eligible deferred compensation plan" set forth in Subtitle II. Parts 9002 and 9003 of the March 12, 2003 Rules and Regulations, (the" Regnlations" ). by the New York State Deferred Compensation Board, we are adopting for the benefit of our employees the Model Plan. as amended and restated on January 1. 2003 (the" Model Plan" ), including Amendments through May 21, 2004. Pursuant to Section 9002.2 a (3) of the Regulations, we certify the fo[lowing: a. We, on behalf of the (Entity Name) are aware that there are three options available for adopting a Deferred Compensation Plan as described in Section 9001.2 (a) of the Regulations, that we have made an informed choice in adopting such plan. and that we understand the ongoing responsibilities being undertaken by adopting such a plan, including and without limitation, the Regulations, Section 457 of the Internal Revenue Code and the Model Plan Document; b. That the Deferred Compensation Plan and Trust Agreement meet the requirements of Section 457 of the internal Revenue Code and ali other applicable Federal, State and local laws including Subtitle ii of the Regulations; and c. That ali required approvals of any local governing body or officer have been obtained. Pursuant to Section 9002.2 a (4) of the Regulations, we certify the following: The following contractors, who are providing deferred compensation services for the (Entity Name), have been dui>' selected to provide these services in accordance with the provisions of Part 9003 of the Regulations: Administrative Service Agency: Nationwide Retirement Solutions Financial Organization: Nationwide Financial Services, Inc. Trustee: Nationwide Trust Company, FSB Sincerely, Name (Type out CEO) and [)ate Name (Type out - CFO) and Date NYSDEFERRED COMPENSATION BOARD www.n~sdcp.com LINDA ANGELLO FREDERICK J. JACOBS MARY LOUISE MALLICK December 7, 2004 Mr. John A. Cushman Town of Southold P.O. Box 1179 Southold, NY 11971-0959 Dear Mr. Cushman: The purpose of this letter is to reiterate requirements of the Rules and Regulations of the New York State Deferred Compensation Board (the "Rules') and of the Plan document for Model Deferred Compensation Plans (the "Model Plan Document') that preclude certain annuity contracts and set forth acceptable methods for distributing plan benefits to participants. Precluded Investments (Certain Annuity Contracts) As you are aware, the Rules set forth basic requirements for establishing and operating a deferred compensation plan. Although compliance is required, recent inquiries from plan sponsors and service providers have indicated a less than complete understanding of Rules that pertain to annuity contracts as precluded investments. For this reason, these basic rules are summarized below: · A plan may not provide for the investment of assets in an annuity contract providing for a term which could exceed five years or which is measured by one or more natural lives or any life insurance or other contract providing traditional death benefits (Section 9003.7) · Contracts of any description may not exceed five (5) years in duration in most circumstances and in exceptional circumstances may be extended for a maximum of two consecutive one (1)- year periods by a vote duly taken (Section 9003.5). Model Plan Document Criteria for Distributing Plan Benefits Section 7 of the Model Plan Document sets forth criteria that govern the distribution of plan benefits to participants who have severed from employment or have attained age 701/2. These criteria are summarized below: · Plan benefits must be paid from the plan trust (Section 7.1). · Permissible distribution options include lump sum payments, periodic payments (monthly, quarterly, semiannual, annual) or partial lump sum payments (Section 7.3). · The portion of a participant's account not necessary for a current benefit payment shall continue to participate in the investment performance of the selected investment fund(s) (Section 7.3 (c)). NEW YORK STATE DEFERRED COMPENSATION BOARD ROOM 124, EMPIRE STATE PLAZA CONCOURSE - NORTH P.O. BOX 2103 ALBANY, NY 12220-2103 1518) 473-6619 Fax: {518) 473-7255 Mr. John A. Cushman Page 2 December 7, 2004 Model Plan Document Criteria for Distributing Plan Benefits (cont.) ,, A participant must be permitted to change both the timing and form of the benefit payment option they have previously chosen (Section 7.4 (a)). · if a participant dies prior to receiving the full amount of his or her plan benefit, the remaining assets will be paid to the beneficiary (Section 7.2). An annuity contract that guarantees a benefit payment over the life of the participant or the life of the participant and a beneficiary is not in conformance with the Model Plan Document and, therefore, is precluded as a distribution option. Conclusion As you are aware, by operating a Model Plan fully compliant with the Rules and the Model Plan Document, you are offering an important and valued benefit to your employees. P~an service providers share in the responsibility for ensuring that your plan is in compliance with the Rules and the Model Plan Document, both of which may be obtained from the New York State Deferred Compensation Plan's Web site (www.nysdcp.com) or from this office. If you have questions regarding this letter or the requirements of the Rules and the Model Plan Document, please contact me or Edward J. Lilly, Deputy Executive Director, at (518) 473-6619. Very truly yours, JMR:st Julian M. Regan Executive Director December 14, 2004 Mr. John Cushman Town of Southold P.O. Box 1179 53095 Main Road Southold, NY 11971 Re: Town of Southold Deferred Compensation Plan NYS Model Plan Filing Dear John: Enclosed please find the following items which are necessary for the state filing: Evidence of bonds and insurance - a certificate of insurance and cover letter are enclosed for Hartford Life. A cover letter is enclosed for Investors Bank & Trust Company ("IBT"), the certificate of insurance is forthcoming. Fiduciary acknowledgments - a letter of acknowledgment is enclosed for Hartford Life. The fiduciary acknowledgement for IBT is located within the Trust Agreement on page 2, section 3.1. In our filings to the State, we normally provided the enclosed page which refers them to the Trust Agreement. If possible, please forward a copy of the completed packet to my attention. John, should you have any questions regarding the above materials, or with any other aspect of the Town's program, please do not hesitate to contact me. I may be reached at 1-800-243-5868. Regards, Amy~B. umphrey~ Account Relationship Representative Institutional Solutions Group Eric. Securities Offered Through Hartford EquSy Sales Company, fro'. 200 }topmeadow Street. Sim~bury, cr 06089 1-800-528-900~ Hartford Life Insurance Cotnpanlcs Hartford Re~onal Office 55 Farmin~on Avenue Suite 601 Hartford, CT 06105 Mailing Addre,~: P.O. Box 2008 llarfford, CT 06104 Telephone 860 520 1600 Ext 3 Toll Free 800 243 5868 Ext 1 Facsimile 860 520 2603 HARTFORD December 14, 2004 President Daniel E. Wall Civil Service Commission The State Campus Albany, NY 12239 Dear Mr. Wall: We are submitting the enclosed documentation to amend and update the Town Of Southold deferred compensation Model Plan. These documents are being filed as required by Subtitle II, Section 9002.2(a) of the Rules & Regulations of the New York State Deferred Compensation Board. Please send the appropriate acknowledgement to: John Cushman Town Of Southold Po Box 1179 53095 Main Road Southold, NY 11971 Thank you for your assistance in this matter. Should you have any questions on this filing please contact me directly. I can be reached at 1-800-243-5868, option 2. Regargl~, 1% 7' Wy ' rrow Regional M~ager Institutional Group Solutions Cc: John Cushman- Town Of Southold Attachments Securities Offered Through Hartford Equity Sales Company, lin'. 200 Hopmeadow Street. Sim~bmT. CT 06089 1-800-528-9009 Hartford Life Insurance Companie~ Hartford Regional Office 55 Farmington Avenue Suite 601 Hartford, CT 06105 Mailing .Address: P.O. Box 2908 Hataford, CT 06104 lbleplmne 860 520 1600 Ext 3 Toll Free 800 2!-3 5868 Ext l I-'acsimile 860 520 2603 AMENDING PLAN DOCUMENT INDEX The following documents and/or materials have been assembled to satisfy the requirements of the Rules and Regulations ("Regulations") of the New York State Deferred Compensation Board ("Board") for the amendment of an eligible Deferred Compensation Plan pursuant to Section 5 of the State Finance Law. This submission should result in a written acknowledgement to the Board by the President of the New York State Civil Service Commission that all of the documents and materials required by Section 9002.2(a) have been received. Section 9002.2(a) - "Documents to be Filed" 1. Completed copy of the Model Plan as Amended and Restated January 1, 2002 including amendments through May 21, 2004; 2. Executed copy of the most recent Trust Agreement and copy of the letter notifying each Trustee of the new amendments to the plan; 3. Certification of sections 9002.2a(3) and 9002.2a(4) pertaining to the Plan and names of the selected contractors; 4. Certificates of Insurance and Fiduciary Acknowledgements · Hartford Life · Trustee 5. A copy of the resolution adopting the changes to the Model Plan document Plan Document for the DEFERRED COMPENSATION PLAN FOR EMPLOYEES OF Town of Southold As amended and restated January 1, 2002 (including Amendments through May 21, 2004) NYDOCS0bq01505$.2 Deferred Compensation Plan for Employees of Town of Southold Plan Document TABLE OF CONTENTS Section ...................................................................................................................................... Page PURPOSE ...................................................................................................................................... 1 SECTION 1. DEHNITIONS ........................................................................................... 3 "Account". ............................................................................................................... 3 "Administrative Service Agency". ........................................................................... 3 "Alternate Payee". .................................................................................................. 3 "Alternate Payee Account". .................................................................................... 3 "Amount Deferred". ................................................................................................ 3 "Beneficiary". .......................................................................................................... 4 "Business Day". ...................................................................................................... 4 "Code". .................................................................................................................... 4 "Committee". ........................................................................................................... 4 "Compensation". ..................................................................................................... 4 "Distributee". .......................................................................................................... 4 "Earliest Retirement Date". .................................................................................... 4 "Effective Date". ..................................................................................................... 4 "Eligible Retirement Platt". .................................................................................... 4 "Eligible Rollover Distribution". ............................................................................ 5 "Employee". ............................................................................................................ 5 "Employer". ............................................................................................................ 6 "Enrollment Date". ................................................................................................. 6 "Financial Organization". ...................................................................................... 6 "Includible Compensation". .................................................................................... 6 "Investment Fund". ................................................................................................. 6 "Local Employer". .................................................................................................. 6 "Normal Retirement Age". ...................................................................................... 6 "Participant". .......................................................................................................... 7 "Participation Agreement". .................................................................................... 7 "Platt". .................................................................................................................... 7 "Plan Benefit". ........................................................................................................ 7 "Plan Year". ............................................................................................................ 8 "Qualified Domestic Relations Order". .................................................................. 8 "Regulations". ......................................................................................................... 8 "Review Committee". .............................................................................................. 8 "Rollover Account". ................................................................................................ 8 NYDOCS01/1015058 2 i "Rollover Contribution". ......................................................................................... 8 "Section 457 Transfer". .......................................................................................... 9 "Severance from Employment" or "Severs from Employment". ............................. 9 "State". .................................................................................................................... 9 "Surviving Spouse". ................................................................................................ 9 "Treasu~, Regulations". ......................................................................................... 9 "Trust Agreement". ................................................................................................. 9 "Trust Fund". .......................................................................................................... 9 "Trustee". ................................................................................................................ 9 "Unit". ................................................................................................................... 10 "USERRA". ........................................................................................................... 10 "Valuation Date". ................................................................................................. 10 SECTION 2. PARTICIPATION ................................................................................... 11 SECTION 3. AMOUNTS DEFERRED ........................................................................ 12 SECTION 4. INVESTMENT OF AMOUNTS DEFERRED AND ROLLOVER CONTRIBUTIONS ......................................................................................................... 16 SECTION 5. ACCOUNTS AND RECORDS OF THE PLAN ................................... 21 SECTION 6. WITHDRAWALS FOR UNFORESEEABLE EMERGENCIES; WITHDRAWALS OF SMALL ACCOUNTS; LOANS; WITHDRAWALS OF ROLLOVER ACCOUNTS ............................................................................................ 24 SECTION 7. DISTRIBUTIONS FROM THE PLAN AND OTHER ELIGIBLE RETIREMENT PLANS ................................................................................................. 29 SECTION 8. DESIGNATION OF BENEFICIARIES ................................................ 36 SECTION 9. ADMINISTRATION ............................................................................... 38 SECTION 10. AMENDMENT OR TERMINATION ................................................. 43 SECTION 11. GENERAL LIMITATIONS AND PROVISIONS .............................. 44 NYDOCS01/1015058.2 ii Deferred Compensation Plan for Employees of Town of Southold Plan Document PURPOSE The purpose of the Plan is to encourage Employees to make and continue careers with Town of Southold by providing eligible Employees with a convenient way to save on a regular and long-term basis and thereby provide for their retirement as set forth herein. A Local Employer that is not a participating employer in the Deferred Compensation Plan for Employees of the State of New York and Other Participating Jurisdictions or the sponsor of any other eligible deferred compensation plan may adopt this Plan by complying with the procedures set forth in the Regulations. The benefits provided to any Participant under the Plan will be based upon the aggregate Plan Benefit and will depend upon the investment results achieved by the Financial Organizations appointed to invest the assets of the Plan allocated to each of the Plan's Investment Funds hereunder and the Participant's individual investment choices among the Plan's Investment Funds. Each Participant shall be 100 percent vested at all times in his or her Plan Benefit in accordance with the terms of the Plan. In accordance with amendments made to Section 457 of the Code and other federal laws by the Small Business Job Protection Act of 1996 and the Economic Growth and Tax Relief Reconciliation Act of 2001, all amounts of Compensation deferred under the Plan, all property and rights purchased with such amounts and all income attributable to such amounts, property and rights are held in trust as of the Effective Date fbr the exclusive benefit of Participants and their Beneficiaries and Alternate Payees pursuant to the Trust Agreement. The NYDOCS01/1015058 2 1 terms and provisions of the Plan in effect prior to the Effective Date, if any, shall govern with respect to periods prior to the Effective Date. The Plan and the Trust Agreement are intended to satisfy the requirements for an "eligible deferred compensation plan" under Section 457 of the Code. NYDOCSOI/IOI5058.2 2 SECTION 1. DEFINITIONS When used herein the following terms shall have the following meanings: "Account" means the account established and maintained in respect of a Participant pursuant to Section 5.1. The Account shall include all Amounts Deferred and Section 457 Transfers. "Administrative Service Agency" means an Administrative Service Agency as defined in the Regulations selected by the Committee to provide services in respect of the Plan. If the Trust Agreement so provides, the record keeping services normally performed by an Administrative Service Agency may be performed by the Trustee, provided that the Trustee otherwise qualifies as an Administrative Service Agency. "Alternate Payee" means any spouse, former spouse, child or other dependent of a Participant who is recognized by a domestic relations order as having a right to receive all, or a portion of, the benefit payable under the Plan with respect to such Participant. "Alternate Payee Account" means the account established for an Alternate Payee pursuant to a Qualified Domestic Relations Order, provided, however, that the Alternate Payee Account shall separately account for all amounts received from (i) the Participant's Rollover Account and (ii) from all amounts rolled into the Plan by the Alternate Payee pursuant to Section 7.5(b)(ii). "Amount Deferred" means Compensation deferred by a Participant pursuant to Section 3.1. NYDOCS01/1015058.2 3 "Beneficiary" means the beneficiary or beneficiaries designated by a Participant pursuant to Section 8 to receive the amount, if any, payable under the Plan upon such Participant's death. "Business Day" means any day that is not a Saturday, a Sunday or other day on which the New York Stock Exchange is not open for the trading of securities. "Code" means the Internal Revenue Code of 1986, as now in effect or as hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. "Committee" means the Deferred Compensation Committee of Town of Southold. "Compensation" means all compensation for services to the Employer, including salary, wages, fees, commissions and overtime pay that is includible in the Employee's gross income for each Plan Year under the Code and any accumulated sick pay, accumulated vacation pay and back pay paid to a Participant by his or her Employer. "Distributee" means (a) an Employee or former Employee, (b) the Surviving Spouse of an Employee or former Employee and (c) the spouse or former spouse of an Employee or former Employee, but only to the extent such spouse or former spouse is an Alternate Payee under a Qualified Domestic Relations Order and only with regard to the interest of such spouse or former spouse. "Earliest Retirement Date" means the earlier of (a) the date on xvhich the Participant Severs from Employment and (b) the date the Participant attains age 50. "Effective Date" means January 1, 2002, unless otherwise stated. "Eligible Retirement Plan" means (i) an individual retirement account described in Section 408(a) of the Code, (ii) an individual retirement annuity described in Section 408(b) of NYDOCS01/1015058.2 4 the Code, (iii) a qualified trust under Section 401(a) or 401(k) of the Code, (iv) an annuity contract described in Section 403(b) of the Code and (v) an eligible deferred compensation plan described in Section 457 of the Code that is maintained by a state, political subdivision of a state, any agency or instrumentality of a state or political subdivision of a state. "Eligible Rollover Distribution" means all or any portion of the pretax contributions and eamings thereon to the credit ora Distributee, except that an Eligible Rollover Distribution shall not include (a) any distribution that is (i) one of a series of substantially equal periodic payments (not less fi-equently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's Beneficiary or (ii) for a specified period often years or more, (b) any distribution to the extent such distribution is required under Section 401(a)(9) of the Code, (c) any distribution due to a hardship of the Distributee, including, without limitation, an unforeseen emergency pursuant to Section 6. I, and (d) the portion of any distribution that is not includible in gross income; provided, however, that clause (d) shall not apply to the extent such portion is transferred (i) in a direct trustee-to-trustee transfer to a qualified trust under Section 401(a) of the Code that is part of a defined contribution plan and that separately accounts for amounts so transferred or (ii) to an Eligible Retirement Plan under Section 408 of the Code. "Employee" means any individual who receives compensation for services from the Employer, including any elected or appointed officer or employee of the Employer, and any employee who is included in a unit of employees covered by a negotiated collective bargaining agreement which specifically provides for participation in the Plan. An Employee shall not include an independent contractor, a consultant or any other individual classified by the Employer as not eligible to participate in the Plan. NYDOCS01 ' I 015058.2 5 "Employer" means Town of Southold. "Enrollment Date" means, with respect to an Employee, each payroll date on which such Employee receives Compensation, or such other date or dates as the Committee may establish either in lieu of, or in addition to, such dates. "Financial Organization" means a Financial Organization as defined in the Regulations selected by the Committee to provide services in respect of the Plan. If the Trust Agreement so provides, the financial services provided by a Financial Organization may be performed by the Trustee, provided that the Trustee otherwise qualifies as a Financial Organization. "Includible Compensation" means "includible compensation" as defined in Section 457(e)(5) of the Code. "Investment Fund" means each of the Investment Funds provided for in Section 4.1. Finance Law. "Local Employer" means a Local Employer as defined in Section 5 of the State "Normal Retirement Age" means, for purposes of Section 3.2(b), any age designated by a Participant (i) beginning no earlier than the earliest age at which a Participant has the right to retire under the Employer's basic pension plan, if any, and to receive immediate retirement benefits without actuarial or similar reduction because of retirement before some later age specified in such basic pension plan or, in the case of a Participant who does not participate in such basic pension plan, age 65, and (ii) ending no later than age 70V2. Notwithstanding the previous sentence, a Participant who is a qualified police officer or firefighter (as defined under Section 415(b)(2)(H)(ii)(I) of the Code) may designate a Normal Retirement Age that is earlier NYDOCS01:1015058 2 6 than the earliest Normal Retirement Age described above, but in no event may such Normal Retirement Age be earlier than age 40. Notwithstanding anything in the Plan to the contrary, the Participant's designation of a Normal Retirement Age under Section 3.2(b) shall not control the date that payment of such Participant's benefits shall commence pursuant to Section 7. Effective for Plan Years prior to January 1, 2003, in the case of a Participant who continued to work beyond age 70V2 and who, upon the attainment of age 70½, had not made the catch-up election provided for under Section 3.2(b), the Normal Retirement Age shall be the age designated by the Participant, which shall not be later than the age at which the Participant Severs from Employment with the Employer. "Participant" means an Employee or former Employee who has given an investment direction under Section 4 and who continues to have an Account or Rollover Account under the Plan. "Participation Agreement" means a written agreement between an Employee and the Employer, pursuant to which the Employee elects to reduce his or her Compensation and to have the Amount Deferred contributed to the Plan on his or her behalf in accordance with the terms of the Plan; provided, however, that in the case of a deferral of accumulated sick or vacation pay or back pay, such Participation Agreement shall be entered into in accordance with the timing requirements of the Treasury Regulations promulgated under Section 457 of the Code. "Plan" means the Deferred Compensation Plan for Employees of Town of Southold, as the same may be amended from time to time. "Plan Benefit" means, with respect to a Participant, the interest of such Participant in the Trust Fund, excluding any portion of such interest payable to an Alternate Payee pursuant to a Qualified Domestic Relations Order. NYDOCS0 [t 1015058.2 7 "Plan Year" means the calendar year. "Qualified Domestic Relations Order" means any judgment, decree or order, including, but not limited to, approval ora property settlement agreement, which has been determined by the Administrative Service Agency to meet the requirements of a qualified domestic relations order within the meaning of Section 414(p) of the Code. "Regulations" means the rules and regulations promulgated by the Deferred Compensation Board of the State of New York pursuant to Section 5 of the State Finance Law, as the same may be amended fi.om time to time. "Review Committee" means the committee designated by the Committee to review claims to rights or benefits under the Plan in accordance with Section 9.5 and requests for hardship withdraxvals under Section 6. "Rollover Account" means the account established and maintained in respect of'a Participant or a Beneficiary who is a Participant's Surviving Spouse pursuant to Section 7.5(b)(ii). "Rollover Contribution" means a cash amount contributed by a Participant, a Beneficiary who is a Participant's Surviving Spouse or Alternate Payee to a Rollover Account or, if applicable, an Alternate Payee Account, which the Administrative Service Agency has determined qualifies as an Eligible Rollover Distribution and which the Administrative Service Agency, in accordance with guidelines promulgated by the Committee, has determined may be contributed; provided, however, that the distributing Eligible Retirement Plan shall not be an eligible deferred compensation plan under Section 457(b) of the Code and provided further that the distributing Eligible Retirement Plan shall have separately accounted for all amounts included in the Rollover Contribution. NYDOCS01.q015058.2 8 "Section 457 Transfer" means a transfer made into an Account pursuant to Section 7.5(b)(i). "Severance from Employment" or "Severs from Employment" means a severance from the employment of the Employer within the meaning of Section ,$57 of the Code and the Treasury Regulations thereunder and USERRA. "State" means the State of New York. "Surviving Spouse" means the survivor of a deceased Participant to whom such Participant was legally married on the date of the Participant's death. "Treasury Regulations" means the regulations promulgated by the Treasury Department under the Code, as now in effect or as hereafter amended. All citations to sections of the Treasury Regulations are to such sections as they may from time to time be amended or renumbered. "Trust Agreement" means an agreement entered into in respect of the Plan between the Committee and one or more Trustee(s) pursuant to which all cash and other rights and properties and all income attributable to such cash and rights and properties are held in trust for the exclusive benefit of Participants and their Beneficiaries and Alternate Payees, as such agreement may be amended from time to time. "Trust Fund" means the assets of the Plan, including cash and other rights and properties arising from Amounts Deferred, Section 457 Transfers and Rollover Contributions which are held and administered by the Trustee pursuant to the Trust Agreement. "Trustee" means the trustee or trustees acting as such under the Trust Agreement, and any successors thereto. NYDOCS0 UI015058 2 9 "Unit" means a unit measuring the value of a Participant's proportionate interest in an Investment Fund. "USERRA" means the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994 contained in chapter 43 of title 38 of the United States Code. "Valuation Date" means each Business Day, except that for purposes of an Investment Fund invested primarily in guaranteed investment contracts and synthetic guaranteed investment contracts, Valuation Date shall mean the last Business Day of each month of each Plan Year unless the Committee shall, in its discretion, determine that the Valuation Date of such Investment Ftmd shall occur more frequently. NYDOCS01 q 015058 2 10 SECTION 2. PARTICIPATION 2.1 (a) Each Employee shall be eligible to participate in the Plan as of any Enrollment Date following the date he or she becomes an Employee, and shall commence such participation in the Plan by duly filing with the Employer and the Administrative Service Agency, in a manner prescribed by the Committee, by the tenth day of the calendar month preceding such Enrollment Date or such other date as the Committee may determine, a Participation Agreement and any enrollment forms or other pertinent information concerning the Employee and his or her Beneficiary which the Committee may require; provided, however, that in no event shall any deferral be accepted until the first Enrollment Date following the date on which such Participation Agreement is filed. (b) Each Employee enrolling in the Plan shall provide the Administrative Service Agency, at the time of initial enrollment and thereafter if there are any changes, with such information as may be required by the Committee. 2.2 Participation in the Plan by Employees shall be wholly voluntary. 2.3 The participation of a Participant shall cease upon payment to the Participant of the entire value of his or her Plan Benefit or upon the Participant's death prior to such payment. NYDOCS01/1015058.2 1 I SECTION 3. AMOUNTS DEFERRED 3.1 (a) A Participant may elect to defer Compensation under the Plan by authorizing, on his or her Participation Agreement, regular payroll deductions that do not in the aggregate exceed the limitations of Section 3.2. (b) A Participant may increase or decrease the rote of deferral of his or her Compensation, within the limitations of Section 3.2, as of any Enrollment Date by duly filing a nexv Participation Agreement, or such other form authorized for such purpose by the Committee, with the Employer and the Administrative Service Agency by the tenth day of the calendar month preceding such Enrollment Date, or such other date during the calendar month preceding such Enrollment Date as the Committee may determine. (c) A Participant may discontinue, or temporarily suspend, his or her deferral of Compensation as of any Enrollment Date by giving written notice thereof to the Employer and the Administrative Service Agency at least twenty, or such other ntanber as the Committee may determine, days prior to such date. 3.2 (a) The amount that may be deferred by a Participant for any Plan Year shall be a minimum of $260 and shall not exceed the lesser off (i) $11,000 or such other greater amount as may be permitted pursuant to Section 457(e)(l 5 ) o f the Code, and (ii) 100% of the Participant's Includible Compensation for the Plan Year. (b) Notwithstanding the limitation provided for in Section 3.2(a), a Participant may file an election in the manner provided by the Committee to have the catch-up limitation set forth in this Section 3.2(b) apply to the determination of the maximum amount that may be NYDOCSOI/IOI5058 2 12 deferred during one or more of the last three Plan Years ending before attainment of the Participant's Normal Retirement Age. If the catch-up limitation is elected, the maximum amount that may be deferred for each of the Plan Years covered by the election shall not exceed the lesser off (ii) twice the dollar amount set forth in Section 3.2(a)(i); and the sum of the limitations provided for in Section 3.2(a) for all Plan Years the Participant was eligible to participate in the Plan, minus the aggregate amount actually deferred for such Plan Years(disregarding any amounts deferred pursuant to Section 3.2(c)). A Participant may not elect to have this Section 3.2(b)(i) apply more than once, whether or not the Participant rejoins the Plan after Severance from Employment (c) (i) All Participants who have attained age 50 before the close of a Plan Year and who are not permitted to defer additional Compensation pursuant to Section 3.2(a) for such Plan Year, due to the application of any limitation imposed by the Code or the Plan, shall be eligible to make additional catch-up contributions in accordance with, and subject to, the limitations of this Section 3.2(c) and Section 414(v) of the Code and the Treasury Regulations theretmder. (ii) additional catch-up contributions pursuant to this Section 3.2(c) shall not exceed the lesser off NYDOCSOI.tlOI5058.2 13 (A) the excess of 100% of Participant's Includible Compensation for the Plan Year over the sum of any other Amounts Deferred by the Participant for such Plan Year; and (B) $1,000, or such greater mount as may be permitted by Section 414(v)(2)(B) of the Code. (d) Notwithstanding anything in Sections 3.2(b) and 3.2(c) to the contrary, if a Participant who is eligible to make an additional catch-up contribution under Section 3.2(c) for a Plan Year in which the Participant has elected to make a catch-up contribution under Section 3.2(b), such Participant is entitled to the greater of: (i) the catch-up contribution limitation amount under Section 3.2(b); and (ii) the additional catch-up contribution amount under Section 3.2(c). (e) Notwithstanding the limitation provided for in Section 3.2(a), any Participant who is entitled to reemployment rights pursuant to USERRA and who is so reemployed in accordance with the provisions of such law may elect to make such additional deferrals as are permitted or required by USERRA. 3.3 The Trustee shall withhold or cause to be withheld from any amounts distributed in respect ora Participant's Plan Benefit or in respect of a Qualified Domestic Relations Order all federal, state, city or other taxes as shall be required pursuant to any law or governmental ruling or regulation, including, but not limited to, Treasury Regulations. NYDOCS01sl015058.2 14 3.4 In the event that any Amounts Deferred under the Plan for any Plan Year exceed the limitations provided for in Section 3.2, any such excess deferrals shall be distributed to the Participant, with allocable net income, as soon as practicable after the Administrative Service Agency determines that the amount was an excess deferral. NYDOCS01 1015058.2 15 SECTION 4. INVESTMENT OF AMOUNTS DEFERRED AND ROLLOVER CONTRIBUTIONS 4.1 All amounts of Compensation deferred in accordance with Section 3 shall be paid by the Employer as promptly as possible, but in no event later than two Business Days from the applicable payroll date, to the Trustee and shall be invested promptly in accordance with the investment directions of the Participant by the Trustee (but in no event later than two Business Days following receipt thereof by the Trustee) in the Investment Funds provided by one or more Financial Organizations appointed by the Committee in accordance with the Regulations, to be held, managed, invested and reinvested in accordance with the applicable agreement entered into by the Committee or the Trustee with each such Financial Organization. The Committee shall have the right in its sole discretion to replace any Financial Organization or Investment Fund with a successor Financial Organization or Investment Fund or to select any additional Financial Organization or Investment Fund and to incur any and all reasonable fees and expenses on behalf of the Plan and to allocate such fees and expenses among Accounts in connection with such replacement or addition. 4.2 An Employee who has enrolled in the Plan pursuant to Section 2 shall, by filing a direction in writing or in such other form as the Committee may authorize with the Administrative Service Agency, specify the percentage (in multiples of one percent or such other percentage as may be prescribed by the Committee from time to time) of the amount of his or her Amounts Deferred, Section 457 Transfers and Rollover Contributions that shall be allocated to each Investment Fund made available by the Committee; provided, however, that the same percentages shall apply to the Rollover Account as apply to the Account. 4.3 Any investment direction given by a Participant shall be deemed to be a continuing direction until changed. A Participant may change his or her investment direction NYDOCS01 1015058.2 16 with respect to future Amounts Deferred, future Section 457 Transfers and future Rollover Contributions, as of any Enrollment Date, by giving notice in writing or in such other form as the Committee may authorize to the Administrative Service Agency at least one Business Day prior to such Enrollment Date; provided, however, that the same pementages shall apply to the Rollover Account as apply to the Account. All future Amounts Deferred, future Section 457 Transfers and future Rollover Contributions shall be invested by the Trustee in the Investment Funds in accordance with such changed direction. 4.4 (a) As of any Valuation Date during a Plan Year, a Participant may direct, by giving notice in writing or in such other form as the Committee may authorize, to the Administrative Service Agency that all, or any multiple of one percent (or such other percent as may be prescribed by the Committee from time to time), of his or her interest in any of the Investment Funds be liquidated and the proceeds thereof transferred to one or more other Investment Funds in the proportions directed by such Participant. (b) If the Trustee or any Financial Organization appointed by the Committee shall advise the Committee that it is not reasonably able to prudently liquidate the necessary amount and transfer it from one of the Invcstment Funds to another, the amount to be transferred with respect to each Participant xvho duly requested such a transfer may be reduced in proportion to the ratio which the aggregate amount that the Trustee or the Financial Organization has advised the Committee may not prudently be so transferred bears to the aggregate amount that all Participants have duly requested be so transferred. Regardless of any Participant's investment direction, no transfer between Investment Funds may be made in violation of any restriction imposed by the terms of the agreement betxveen the Committee or the Trustee and a Financial Organization providing any Investment Fund or of any applicable law. Notwithstanding NYDOCS01!I015058.2 1 7 anything in this Section 4.4(b) to the contrary, the Trustee or the Financial Organization may have the right, without prior notice to any Participant, to suspend for a limited period of time daily transfers between and among Investment Funds for one or more days if the Trustee or the Financial Organization determines that such action is necessary or advisable (i) in light of unusual market conditions, (ii) in response to technical or mechanical problems with the Plan's automated system, if any, or the Plan's third-party record keeper and (iii) in connection with any suspension of normal trading activity on the New York Stock Exchange. 4.5 The Administrative Service Agency shall have the right to decline to implement any investment direction upon determination that: (i) the person giving the direction is legally incompetent to do so; (ii) implementation of the investment direction would be contrary to the Plan or applicable law or governmental ruling or regulation including, but not limited to, Treasury Regulations; (iii) implementation of the investment direction would be contrary to a court order, including, but not limited to, a Qualified Domestic Relations Order; or (iv) implementation of the investment direction would be contrary to the rules, regulations or prospectuses of the Investment Funds. 4.6 Each Participant is solely responsible for the investment and allocation of his or her Plan Benefit in and among the Investment Funds and shall assume all risk in connection with any decrease in the value of any or all of the Funds. Neither the Committee, any Trustee, any Employer nor the Administrative Service Agency is empowered to advise a Participant as to the manner in which such Plan Benefit shall be allocated among the Investment Funds. The fact that a particular Investment Fund is available to Participants for investment under the Plan shall not be construed as a recommendation for investment in such Investment NYDOCSOI/1015058.2 1 8 Fund. Any investment guidance or advice services provided by the Plan to Participants shall not be considered a violation of this Section 4.6. 4.7 (a) The entire value of each Participant's Account and Rollover Account and each Alternate Payee Account under the Plan shall be set aside and held in the Trust Fund pursuant to the Trust Agreement for the exclusive benefit of Participants and their Beneficiaries and Alternate Payees and defraying reasonable expenses of the Plan and of the Trust Fund pursuant to Section 5.3. (b) Each Participant shall be 100 percent vested at all times in his or her Plan Benefit in accordance with the terms of the Plan. Each Alternate Payee shall be 100 percent vested at all times in his or her Alternate Payee Account in accordance with the terms of the Plan. 4.8 (a) Notwithstanding any other provision of the Plan, during any period when an Alternate Payee Account is created and the corresponding interest in the Trust Fund is segregated on behalf of an Alternate Payee pursuant to a Qualified Domestic Relations Order as provided in Section 11.4(b), the Alternate Payee may be entitled to direct the investment of such interest in accordance with this Section 4 as if he or she were the Participant, to the extent provided in such order. In the event that an Alternate Payee fails to specify an investment direction, such Alternate Payee's interest in the Trust Fund shall be invested in the same manner as the relevant Participant's Plan Benefit as of the date of creation of the Alternate Payee Account. (b) Notwithstanding any other provision of the Plan, during any period following the death of a Participant and prior to distribution of the entire Plan Benefit o f such Participant, such Participant's Beneficiary shall be entitled to direct the investment of such Plan NYDOCSOI/IO[5058.2 19 Benefit, or, as applicable, his or her proportional interest in such Plan Benefit, in accordance with this Section 4 as if he or she were the Participant. 4.9 No power of attorney, other than one properly executed in accordance xvith Section 5-1501 of Title 15 of the General Obligations Law of the State, as such may be amended from time to time, shall be effective to pernfit an attorney-in-fact to make any investment direction on behalf of a Participant except upon specific determination by the Administrative Service Agency that the instrument expressly grants the power to act on behalf of the Participant regarding investment direction under this Plan. NYDOCS01,'1015058 2 20 SECTION 5. ACCOUNTS AND RECORDS OF THE PLAN 5.1 (a) The Administrative Service Agency shall establish and maintain an Account and, as necessary, a Rollover Account in respect of each Participant (or in the case of a Rollover Account, a Beneficiary who is a Participant's Surviving Spouse, if applicable) and, to the extent his or her entire Plan Benefit has not been distributed, each former Participant showing the value of his or her Plan Benefit, the value of the portion of his or her Plan Benefit, if any, which is invested in each Investment Fund and other relevant data pertaining thereto. Each Account and Rollover Account shall be adjusted as of each Valuation Date to reflect all Units or dollars credited thereto and valued as provided in Section 5.2(b) less all Units or dollars distributed, withdrawn or deducted therefrom in accordance with the terms of the Plan. With respect to each Participant, all Amounts Deferred, all Section 457 Transfers in accordance with Section 7.5(b)(i) and all Rollover Contributions in accordance with Section 7.5(b)(ii) shall be credited to his or her Account or Rollover Account, as applicable. (b) Each Participant and, for any period following the death of a Participant and prior to distribution of the entire Plan Benefit of such Participant, each Beneficiary shall be furnished with a written statement of his or her Account and Rollover Account (including the value of the interest he or she has, if any, in each Investment Fund and the amount of and explanation for each allocation to or deduction from his or her Account and Rollover Account since the last statement provided) at least quarterly. During the period prior to distribution of his or her entire interest under the Plan, each Altemate Payee shall be furnished with a written statement of his or her Alternate Payee Account (including the value of the interest he or she has, if any, in each Investment Fund and the an~ount of and explanation for each allocation to or NYDOCSOI: IOI 5058 2 2 l deduction fi.om his or her Alternate Payee Account since the last statement provided) at least quarterly. (c) The establishment and maintenance of, or allocations and credits to, the Account and RoIlover Account of any Participant shall not vest in such Participant or his or her Beneficiary any right, title or interest in and to any Trust Ftmd assets or Plan benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Plan and the Trust Agreement. The establishment and maintenance of, or allocations and credits to, the Alternate Payee Account of any Alternate Payee shall not vest in such Alternate Payee any fight, title or interest in and to any Trust Fund assets or Plan benefits except at the time or times and upon the terms and conditions and to the extent expressly set forth in the Qualified Domestic Relations Order, the Plan and the Trust Agreement. 5.2 (a) The Plan Benefit shall equal the value of a Participant's Account and Rollover Account xvhich shall be determined by aggregating the value of his or her separate interests, if any, in each Investment Fund. (b) The Trust Fund shall consist of the Investment Funds. The aggregate value of the Accounts and the Rollover Accounts, the Alternate Payee Accounts and any reserve for expenses and suspense accounts, if any, shall be equal to the value of the Trust Fund. Each Investment Fund shall be valued either in Units or in dollars. As of each Valuation Date, each Fund shall be valued pursuant to the Trust Agreement and the agreements between the Committee or the Trustee and the Financial Organizations to reflect the effect of income received and accrued, realized and unrealized profits and losses, and all other transactions of the preceding period. NYDOCS01:1015058.2 22 5.3 (a) The expenses of administering the Plan, including (i) the fees and expenses of the Financial Organizations and Administrative Service Agency for the performance of their duties under the Plan, (ii) the expenses incurred by the Committee or any of its members or any Trustee in the performance of their duties under the Plan (including reasonable compensation for any legal counsel, certified public accountants, consultants, and agents and cost of services rendered in respect of the Plan and the Trust Agreement (as provided therein)), and (iii) all other proper charges and disbursements of the Financial Organizations, Administrative Service Agency, the Committee or its members (including settlements of claims or legal actions approved by counsel to the Plan) or any Trustee shall be paid out of the Trust Fund, and allocated to and deducted from the Accounts and Alternate Payee Accounts as of each Valuation Date, unless paid by the Committee from State funds allocated for such expenses or the Employer elects to pay such expenses directly. (b) Brokerage fees, transfer taxes and any other expenses incident to the pumhase or sale of securities by the Financial Organizations for the Investment Funds shall be deemed to be part of the cost of such securities, or deducted in computing the proceeds therefrom, as the case may be. Taxes, if any, of any and all kinds whatsoever which are levied or assessed on any assets held or income received by the Trust Fund shall be allocated to and deducted from the Accounts and Alternate Payee Accounts in accordance with the provisions of this Section 5. NYDOCSO1/IOI5058.2 23 SECTION 6. WITHDRAWALS FOR UNFORESEEABLE EMERGENCIES; WITHDRAWALS OF SMALL ACCOUNTS; LOANS; WITHDRAWALS OF ROLLOVER ACCOUNTS 6.1 Upon a showing by a Participant of an unforeseeable emergency, the Administrative Service Agency may, in its sole discretion, permit a payment to be made to the Participant in an amount which does not exceed the lesser of (i) the amount reasonably needed to meet the financial need created by such unforeseeable emergency or (ii) an amount which, together with any prior distribution or withdrawal, does not exceed the value of the Participant's Plan Benefit determined as of the most recent Valuation Date. Any such payment shall be made from the Trust Fund by the Trustee upon the direction of the Administrative Service Agency and shall be withdrawn by the Trustee pro rata from the Investment Funds in which the Participant has an interest, unless the Participant specifies in the request for such a payment the portion of the total amount to be withdrawn by the Trustee from each Investment Fund. Such payment shall first be charged to the Account of the Participant and, if necessary, then to the Rollover Account. All payments shall be made in one lump cash sum within sixty days after approval of the request. 6.2 (a) For purposes of this Section 6, an unforeseeable emergency is defined, as required by the Treasury Regulations promulgated under Section 457 of the Code, as a severe financial hardship of a Participant resulting from an illness or accident of the Participant, the Participant's spouse or the Participant's dependent, as defined in Section 152(a) of the Code, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. In accordance with the Treasury Regulations, the need to send a Participant's child to college or the desire to purchase a home does not constitute an unforeseeable emergency. N Y DOCS01 ,'101505 8.2 2 4 (b) For purposes of this Section 6, an amount will not be considered to be reasonably needed to meet the financial need created by an unforeseeable emergency to the extent that such need is or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation ora Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or (iii) by cessation of deferrals under the Plan. 6.3 A Participant with respect to whom his or her Account, irrespective of the amotmt in the Participant's Rollover Account, does not exceed $5,000 (or such greater amount as may be permitted by Section 40 l(a)(11) of the Code) may elect at any time to receive a lamp sum distribution, not to exceed $5,000 of his or her Account and Rollover Account at least sixty days following such election, provided that: (a) there has been no Amount Deferred by such Participant during the two-year period ending on the date of distribution, and (b) there has been no prior distribution elected by such Participant pursuant to this Section 6.3. 6.4 With respect to a Participant or an Alternate Payee whose Account or Alternate Payee Account does not exceed the amount set forth in Section 6.3, the Committee, at its discretion, may direct the Trustee to distribute the Participant's Account and Rollover Account or the Alternate Payee's Alternate Payee Account as soon as practicable following the Participant's Severance from Employment or in accordance with the requirements and provisions of Sections 6.3(a) and 6.3(b); provided, however, that such distributions shall made in accordance with the requirements of Section 401 (a)(31) of the Code and any Treasury Regulations, or any other applicable regulations, promulgated thereunder; and provided further, NYDOCS01~I015058 2 25 that the Plan shall be amended, in accordance with the Regulations, to set forth such requirements as soon as practicable after final Treasury Regulations, or any other applicable regulations have been issued. 6.5 On or after the date on xvhich the Committee adopts a loan program, which date may not be before January 1, 2003, upon request of an eligible Participant, the Committee may, in its sole discretion and on such terms and conditions as it shall prescribe under written uniform roles which shall be deemed to be a part of the Plan;provided that such roles are consistent with the provisions set forth in this Section 6.5, direct the Trustee to make loans to such eligible Participant. Plan loans shall be granted to those Participants who are active Employees, and, if the Committee shall determine, to those Participants who are on an approved leave of absence fi.om their Employer. Each Participant shall have only one outstanding Plan loan at a time. The principal amount of any Plan loan shall be for an amount equal to at least $1,000, or such other amount as the Committee shall determine, and shall not exceed the lesser of(i) 50% of the value of the sum of(A) thc Participant's Account and (B) the Participant's Rollover Account, if applicable, and (ii) $50,000. All Plan loans, other than those for the purpose of acquiring the dwelling unit which is, or xvithin a reasonable time shall be, the principal residence of the Participant, shall be repaid over a non-renewable repayment period of five years. A Plan loan made for acquiring a principal residence shall be repaid over a non- renewable repayment period of up to 15 years, or such other term as the Committee shall determine. Each Plan loan granted shall bear a rate of interest equal to one percentage point above the prime interest rate as published in the Wall Street Journal, or such other reasonable rate of interest as the Committee shall determine. A Plan loan shall be made first from the Participant's Account, until exhausted, and then from his or her Rollover Account. Any Plan NYDOCSOVI015058 2 26 loan shall be repaid in substantially equal installments of principal and accrued interest which shall be paid at least quarterly, subject to the methods and procedures as shall be determined by the Committee and the Administrative Service Agency. All Plan loans shall be made fi.om of the Trust Fund and notes evidencing such obligations shall be considered assets of the Trust Fund. All Plan loans shall be secured, as of the date of the Plan loan, by the sum of (i) the Participant's Account and (ii) the Participant's Rollover Account, if applicable, provided, however, that no more than 50% of such Participant's Account balance shall be used as security for the Plan loan. Ifa Participant fails to make any scheduled repayment of his or her Plan loan within 90 days of its due date, or such other period as the Committee shall determine, such Participant shall be considered in default and the Administrative Service Agency shall declare a deemed distribution to have occurred with respect to such Plan loan, effective as of the date of the default. The Committee, may in its sole discretion, establish or change from time to time, the standards or requirements for making any Plan loan, including, without limitation, assessing an administrative tee against the Participant for such Plan loan. For purposes of this Section 6.5, an outstanding loan shall include (i) any loan that is being repaid in compliance with this Section 6.5 until repaid in full and (ii) any loan that is considered in default until subsequently repaid. Notwithstanding anything in this Section 6.5 to the contrary, a participant who has defaulted on a loan made under the Plan and which is not repaid shall not be eligible to obtain another loan hereunder until such time as the maximum non-renewable payment period over which such defaulted loan could have been repaid has expired, and then only to the extent permitted by Section 1.72(p)-1 of the Treasury Regulations, considering such defaulted and unpaid loan as still outstanding. 6.6 Effective as of May 21, 2004, the Committee may provide that a Participant who has a Rollover Account shall be permitted to withdraw all or any portion of such NYDOCS01:I015058 2 27 Rollover Account at any time during a Plan Year; provided that such withdrawals shall be paid pursuant to a method of payment elected by the Participant, and the value of such shall be determined, in accordance with Section 7.3 hereof. 6.7 If a Participant should die prior to the payment of any withdrawal requested under this Section 6, or the disbursement of the proceeds of any Plan loan requested under this Section 6, the Participant's withdraxval or loan request shall be void as of the date of death. NYDOCS01.,'1015058.2 28 SECTION 7. DISTRIBUTIONS FROM THE PLAN AND OTHER ELIGIBLE RETIREMENT PLANS 7.1 (a) Except as otherwise provided in Section 6, a Participant may not receive distribution of his or her Plan Benefit at any time prior to the earlier of (i) such Participant's Severance from Employment with the Employer or (ii) the Plan Year in which such Participant attains age 70~. Upon a Participant's Severance from Employment with the Employer for any reason other than death or upon commencement of the Plan Year in which he or she attains age 70½, the Participant shall be entitled to receive an amount equal to the value of his or her Plan Benefit, which shall be paid in cash by the Trustee from the Trust Fund in accordance with one of the methods described in Section 7.3 and as of the commencement date elected by the Participant in accordance with the procedures prescribed under Section 7.4(a). In the case ora Participant who continues in service with the Employer following his or her attainment of age 7055, such Participant may elect to commence the distribution of his or her Plan Benefit and such election shall designate a method of payment in accordance with Section 7.3; provided, however, that payments may not commence earlier than forty-five days, or such other number the Committee shall determine, following the Participant's attainment of age 70½. (b) Notwithstanding anything in this Section 7.1 to the contrary, in accordance with the requirements of Section 401(a)(9) of the Code, distributions shall commence no later than the April 1st folloxving the close of the Plan Year in which (i) the Participant attains age 70½ or (ii) the Participant Severs from Employment, whichever is later. 7.2 Ifa Participant dies before receiving final distribution of his or her Plan Benefit, an amount equal to the value of the unpaid portion thereof as of the date of death shall be paid in cash by the Trustee from the Trust Fund to the Participant's Beneficiary by one of the NYDOCS01:I015058.2 29 methods described in Section 7.3; provided, however, that if the Participant dies after payments have commenced then payment to the Participant's Beneficiary must be made in accordance with the provisions of Section 401 (a)(9) of the Code. 7.3 (a) Subject to the following provisions of this Section 7.3, any payment made under this Section 7 shall be made in one of the following methods, as the Participant (or, in the case of the death of a Participant, his or her Beneficiary) may elect pursuant to Section 7.4 hereofi (i) one lump cash sum payment; or (ii) with respect to such Participant's Account and Rollover Account, substantially equivalent monthly, quarterly, semi-annual or annual installment payments; provided, however, that a Participant (or, in the case of the death of a Participant, his or her Beneficiary) may elect to receive (A) an initial installment payment in a specified amount and (B) the balance of his or her Account in substantially equivalent monthly, quarterly, semi-annual or annual installment payments as long as the initial payment is in an amount greater than the amount of the subsequent installment payments at the time they commence and such subsequent payments commence within two years of such initial payment. (iii) A Participant who elects to receive installment payments or who is currently receiving installment payments pursuant to Section 7.3(a)(ii), may elect, in accordance with procedures established by thc Administrative Service Agency, to receive a portion of his or her Account or Rollover Account distributed in a lump sum; provided, however, that no lump sum payment shall be less than $500.00, or such other amount as the Cormnittee shall determine, and provided further, that such elections shall not be NYDOCS01/1015058.2 30 made more than twelve times per Plan Year, or such other number as the Committee shall determine. Such lump sum payment shall not result in a discontinuation of subsequent installment payments; provided, however, that such subsequent payments may be redetermined in accordance with methods and procedures established by the Administrative Service Agency. (b) If a Participant (or, in the case of death of a Participant, his or her Beneficiary) elects a lump sum payment, pursuant to Sections 7.3(a)(i) or 7.3(a)(iii), the value of the Participant's Plan Benefit shall be determined as of the Valuation Date coincident with or last preceding the date on which the Plan Benefit is withdrawn from the Investment Funds and liquidated for distribution. (c) If a Participant (or, in the case of death of a Participant, his or her Beneficiary) elects to receive installment payments, subject to Section 7.3(a)(ii), such Participant's Account and Rollover Account shall continue to participate in the investment performance of the Investment Fund or Funds in which such amounts are invested and to bear its allocable share of administrative and investment expenses until the Valuation Date coincident with or last preceding the date on which such Plan Benefit amounts are withdrawn from the Investment Funds and liquidated for distribution; provided, however, that the amount of the installments need not be redetermined to reflect changes in the value of the Account more frequently than annually. All such redetenninations shall be made by the Administrative Service Agency in accordance with procedures of uniform application. 7.4 (a) In the case of the Participant's Severance from Employment xvith the Employer or death, a distribution election may be made by the Participant or his or her Beneficiary prior to, or after, payments commence pursuant to the provisions of this Section 7. NYDOCS01iI015058 2 31 Such election shall specify the form of payment described in Section 7.3 elected and the date on which payments shall commence; provided, however, that payments may not commence earlier than forty-five days, or such other number the Committee shall determine, following the Participant's Severance from Employment or death. A Participant or his or her Beneficiary, including a Participant or his or her Beneficiary who is currently receiving distributions under the Plan, irrespective of the date on which such distributions commenced, may change both the timing and the form of payment elected in accordance with procedures established by the Administrative Service Agency, subject to Section 7.6. (b) Ifa Participant dies before distribution of his or her Plan Benefit has commenced, a distribution will be made to the Beneficiary pursuant to the Beneficiary4s election duly filed with the Administrative Service Agency in accordance with the provisions of Section 7.4(a); pro¥ided, however, any distribution to a Beneficiary shall be made in accordance with the provisions of Section 401(a)(9) of the Code. All distributions shall commence not later than the close of the Plan Year immediately following the Plan Year in which the Participant died, or, in the event such Beneficiary is the Participant's Surviving Spouse, on or before the close of the Plan Year in which such Participant ~vould have attained age 70!/~, if later (or, in either case, on any later date prescribed by the Treasury Regulations). If such Beneficiary who is also the Surviving Spouse dies after the Participant's death but before distributions to such Beneficiary commence, this provision shall be applied to require payment of any further benefits as if such Surviving Spouse were the Participant. 7.5 (a) In connection with a Participant's Severance from Employment, the Distributee may elect, at the time and in the manner prescribed by the Administrative Service Agency, to have all or any portion of the Participant's Account and Rollover Account that NYDOCS01~ 1015058 2 32 qualifies as an Eligible Rollover Distribution paid directly to the trustee of an Eligible Retirement Plan, provided that such other plan provides for the acceptance of such amounts by the trustee. The Plan shall provide written information to Distributees regarding Eligible Rollover Distributions to the extent required by Section 402(0 of the Code. (b) Compensation previously deferred by a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to another eligible deferred compensation plan under Section 457 of the Code maintained by another employer that is a state, political subdivision of a state, any agency or instrumentality of a state or political subdivision of a state shall be accepted for transfer by the Trustee in thc form and in the manner specified by the Administrative Service Agency. All such Section 457 Transfers shall be credited to the Participant's Account or the Alternate Payee Account and shall be invested in accordance with the investment direction of the Participant, the Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to Sections 4.2, 4.3, or 4.8, whichever is applicable; such Section 457 Transfers are subject to all of the terms and conditions of the Plan. (ii) (A) An accrued benefit of a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee under an Eligible Retirement Plan that is distributed to the Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee or is directly rolled over to the Plan as an Eligible Rollover Distribution may be accepted as a Rollover Contribution by the Trustee in the form and in the manner specified by the Administrative Service Agency; provided, ho,vever, that such Participant, Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee has made an Investment Fund direction pursuant to Sections 4.2, NYDOCSOI;1015058.2 33 4.3, or 4.8, whichever is applicable, and filed a written request with the Administrative Service Agency requesting that such transfer be accepted. (B) The Administrative Service Agency, in accordance with the Code and procedures established by the Committee, shall, as soon as practicable following its receipt of the written request ora Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee, determine whether the Rollover Contribution shall be accepted by the Plan. Any written request filed by a Participant, a Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee pursuant to this Section 7.5(b) shall set forth the fair market value of such Rollover Contribution and a statement satisfactory to the Administrative Service Agency that the amount to be transferred constitutes a Rollover Contribution. In the event the Administrative Service Agency permits the transfer of the Rollover Contribution, the Trustee shall accept such Rollover Contribution and the transfer of such Rollover Contribution shall be deemed to have been made on the Valuation Date next following the date on which it was paid over to the Trustee. The Rollover Contribution shall be maintained in a separate, fully vested Rollover Account for the benefit of the contributing Participant or the Beneficiary who is a Participant's Surviving Spouse and, in the case of a spousal Alternate Payee, the Alternate Payee Account, mad shall be invested in accordance with the investment direction of the Participant, the Beneficiary who is a Participant's Surviving Spouse or spousal Alternate Payee, pursuant to Sections 4.2, 4.3 or 4.8, whichever is applicable. (C) All amounts so transferred shall be credited to the Participant's Rollover Account or Alternate Payee Account and if the Committee so provides in accordance NYDOCS01~I015058~2 34 xvith Section 6.6, shall be available for distribution at any time during the Plan Year. No other contributions shall be allocated to the Rollover Account. (c) With respect to trustee-to~trustee transfers, a Participant or Beneficiary may elect, in accordance with procedures established by the Administrative Service Agency, to have all or any portion of the value of his or her Account and Rollover Account transferred to the trustee of a defined benefit governmental plan as described in Section 414(d) of the Code; provided, however, that such transfer is for the purchase of permissive service credit (as defined in Section 415(n)(3)(A) of the Code) under such plan or a repayment of contributions and earnings with respect to a forfeiture of service under such plan. 7.6 Notwithstanding anything in the Plan to the contrary, all distributions of a Plan Benefit to a Participant or his or her Beneficiary shall commence in accordance with the amount and timing requirements o f the Treasury Regulations under Section 401 (a)(9) of the Code, which are incorporated herein by reference. NyDOCS01.,1015058 2 35 SECTION 8. DESIGNATION OF BENEFICIARIES 8. I Each Participant shall file with the Administrative Service Agency a written designation of one or mom persons as the Beneficiary who shall be entitled to receive thc Plan Benefit, if any, payable under the Plan upon his or her death. A Participant may from time to time revoke or change his or her Beneficiary designation without the consent of any prior Beneficiary by filing a new designation with thc Administrative Service Agency. The last such designation received by the Administrative Service Agency shall be controlling; provided, however, that no designation or change or revocation thereof shall be effective tmless received by the Administrative Service Agency prior to the Participant's death, and in no event shall it be effective as of a date prior to such receipt. 8.2 If no such Beneficiary designation is in effect at the time ora Participant's death, or if no designated Beneficiary survives thc Participant, or if no designated Beneficiary can be located with reasonable diligence by thc Administrative Service Agency, the payment of the Plan Benefit, if any, payable under the Plan upon his or her death shall be made by the Trustee from the Trust Fund to thc Participant's Surviving Spouse, if any, or if thc Participant has no Surviving Spouse, or the Surviving Spouse cannot be located with reasonable diligence by the Administrative Service Agency, then to his or her estate. If the Administrative Service Agency is in doubt as to the right of any person to receive such amount, it shall inform thc Committee and the Trustee and the Trustee may retain such amount, without liability for any interest thereon, until the rights thereto are determined, or the Trustee may pay such amount into any court of appropriate jurisdiction or to any other person pursuant to applicable la~v and such payment shall be a complete discharge of the liability of the Trustee, Plan, Committee, Employer, Administrative Service Agency and Financial Organizations. If the Beneficiary so NYDOCS01/1015058 2 36 designated by the Participant shall die after the death of the Participant but prior to receiving a complete distribution of the amount that would have been paid to such Beneficiary had such Beneficiary's death not then occurred, then, for purposes of the Plan, the distribution that would otherwise have been received by such Beneficiary shall be paid to the Beneficiary's estate. 8.3 No power of attorney, other than one properly executed in accordance xvith Section 5-1501 of Title 15 of the General Obligations Law of the State, as such may be amended from time to time, shall be effective to permit an attorney-in-fact to make or change a Beneficiary designation on behalf ora Participant except upon specific determination by the Administrative Service Agency that the instrument expressly grants the power to act on behalf of the Participant regarding Beneficiary designation under this Plan. NYDOCSOIilOI5058.2 37 SECTION 9. ADMINISTRATION 9.1 Except as otherxvise provided herein, the operation and administration of the Plan shall be the responsibility of the Committee. The Committee shall have the power and the duty to take all action and to make all decisions necessary or proper to carry out its responsibilities under the Plan. All determinations of the Committee as to any question involving its responsibilities under the Plan, including, but not limited to, interpretation of the Plan or as to any discretionary actions to be taken under the Plan, shall be solely in the Committee's discretion and shall be final, conclusive and binding on all parties. 9.2 Without limiting the generality of the foregoing, the Committee shall have the following powers and duties: (a) to require any person to furnish such information as it may request for the purpose of the proper administration of the Plan as a condition to receiving any benefit under the Plan; (b) to make and enforce such rules and regulations and prescribe the use of such forms as it shall deem necessary for the efficient administration of the Plan; (c) to interpret the Plan and to resolve ambiguities, inconsistencies and omissions; (d) to decide all questions concerning the Plan and the eligibility of any Employee to participate in the Plan; (e) to determine the amount of benefits ~vhich shall be payable to any person in accordance with the provisions of the Plan (f) to permit more lenient time periods than otherwise may be specified in Sections 2.1, 3. l(b), 3.1(c), 4.3, 6.1, 6.3, 6.5, 7.1(a) and 9.5 of the Plan; provided, however, in no NYDOCS01/1015058.2 38 case may a Participant's election to commence Compensation deferrals, or to modify existing Compensation deferrals, be effective until notice of such election is filed with the Employer or Administrative Service Agency; and (g) to determine the methods and procedures for the implementation and use of any automated telephone, computer, internet, intranet or other electronic or automated system adopted by the Committee for purposes of Plan administration, including, without limitation, for receiving and processing enrollments and instructions with respect to the investment of assets allocated to a Participant's Account or Rollover Account and for such other purposes as may be designated from time to time. 9.3 Except as may be prohibited by applicable law, the Committee or any member thereof, or any person, firm or corporation to ~vhom may be delegated any duty or power in connection with administering, managing or supervising the administration or management of the Plan or Trust Fund, shall not be liable for (a) anything done or omitted to be done by it or by them unless the act or omission claimed to be the basis for liability amounted to a failure to act in good faith or xvas due to gross negligence or willful misconduct; (b) the payment of any amount under the Plan; or (c) any mistake of judgment made by it or on its behalf by a member of the Conunittee. No member of the Committee, nor any delegate, shall be personally liable under any contract, agreement, bond or other instrument made or executed by him or her or on his or her behalf in connection with the Plan or Trust Fund. 9.4 Except as otherwise provided in the Plan and the Trust Agreement, the Trustee shall have responsibility with respect to the control or management of the assets of the Plan and the Trust Fund. The Committee shall periodically review the performance and methods of the Trustee and the Committee may appoint and remove or change the Trustee. The NYDOCS01q015058.2 39 Committee shall have the power to appoint or remove one or more Financial Organizations and to delegate to such Financial Organization(s) authority and discretion to manage (including the power to acquire and dispose of) the assets of the Plan and Trust Fund in accordance with the Regulations and shall periodically review the performance and methods of such Financial Organization(s) and may direct the acquisition or disposition of the assets in any Investment Fund. 9.5 (a) The Committee shall have general authority under the Plan. The decisions of the Committee shall be final, binding and conclusive on all interested persons for all purposes. The Committee may delegate its general authority as it deems appropriate in accordance with the terms of the Plan and all applicable Code sections and Treasury Regulations; provided, however, that such delegation shall be subject to revocation at any time at the discretion of the Committee. Notwithstanding any other provision of the Plan, the Committee's general authority shall include the right to review, revise, modify, revoke, or vacate any decision made or action taken by any party under the Plan which right includes, but is not limited to, the right to review, revise, modify, revoke, or vacate any decision of the Review Committee at any time upon reasonable notice to the claimant. (b) Any claim to rights or benefits under the Plan, including, without limitation, any purported Qualified Domestic Relations Order, or request for hardship withdrawal under Section 6 must be filed in writing with the Committee, or with such other entity as the Committee may designate. Within sixty days after receipt of such claim, the Committee, or such other entity designated by the Committee, shall notify the claimant and, if such claimant is not the Participant, any Participant against whose Plan Benefit the claim is made, that the claim has been granted or denied, in ~vhole or in part. Notice of denial of any NYDOCS01/1015058.2 40 claim in whole or in part by the Committee, or by such other entity designated by the Committee, shall include the specific reasons for denial and notice of the rights granted by Section 9.5(c). (c) Any claimant or Participant who has received notice of denial or grant, in xvhole or in part, of a claim made in accordance with the foregoing subsection (b) may file a written request within thirty days of receipt of such denial for review of the decision by the Review Committee. Within ninety days after receipt of such request for review, the Review Committee shall notify the claimant and, as applicable, the Participant, that the claim has been granted or denied, in whole or in part; provided, however, that the Review Committee may in its discretion extend such period by up to an additional 120 days upon notice to the claimant and, as applicable, the Participant, prior to expiration of the original ninety days that such additional period is needed for proper review of the claim. Notice of denial of any claim in whole or in part by the Review Committee shall include the specific reasons for denial and shall be final, binding and conclusive on all interested persons for all purposes. (d) Subject to the discretion of the Committee or such other entity as the Committee may designate to determine otherwise, no distribution of any Plan Benefit shall be permitted during any period during which a claim, including, without limitation, a purported Qualified Domestic Relations Order, against all or part of such Plan Benefit is being reviewed in accordance with the provisions of this Section 9.5. If the Trustee or the Administrative Service Agency reasonably believes that a claim, including, without limitation, a purported Qualified Domestic Relations Order, against all or part of any Plan Benefit is likely to be asserted, such Trustee or Administrative Service Agency shall notify the Committee and it shall be within the discretion of the Committee to refuse to permit any distribution of all or part of such Plan Benefit pending determination of such claim. NYDOC$OI/IOI5058.2 41 9.6 The Committee shall arrange for the engagement of legal counsel and certified public accountants, who may be counsel or accountants for the Employer, and other consultants, and make use of agents and clerical or other personnel, for purposes of this Plan. The Committee may rely upon the written opinions of counsel, accountants and consultants, and upon any information supplied by the Trustee, a Financial Organization or Administrative Service Agency appointed in accordance with the Regulations, and delegate to any agent or to any member of the Committee its authority or the authority of the Employer to perform any act hereunder, including without limitation those matters involving the exercise of discretion; provided, however, that such delegation shall be subject to revocation at any time at the discretion of the Committee. 9.7 No member of the Committee shall be entitled to act on or decide any matters relating solely to such member or any of his or her rights or benefits under the Plan. 9.8 Any action of the Committee may be taken at a meeting. The Committee shall establish its own procedures and the time and place for its meetings and provide for the keeping of minutes of all meetings. 9.9 Notwithstanding any other provision hereof, the Plan shall at all times be operated in accordance with the requirements of applicable law, including, without limitation, the Regulations. NYDOCS01/1015058 2 42 SECTION 10. AMENDMENT OR TERMINATION 10.1 (a) Subject to Section 10. l(b) and any requirements of State or federal law, the Committee reserves the right at any time and with or without prior notice to amend, suspend or terminate the Plan, any deferrals thereunder, the Trust Agreement and any Investment Fund, in whole or in part and for any reason and without the consent of any Employee, Participant, Beneficiary or other person. The Plan shall be terminated automatically upon complete and final discontinuance of all deferrals thereunder. (b) No amendment or modification shall be made which would retroactively impair any individual's rights to any benefits under the Plan, except as provided in Section 10.1 (c). (c) Any amendment, suspension or termination of any provisions of the Plan, any deferrals thereunder, the Trust Agreement or any Investment Fund may be made retroactively if required to meet any applicable requirements of the Code or any other applicable law. 10.2 Upon termination of the Plan, the Employer shall permit no further deferrals of Compensation under the Plan and all Plan Benefits and other interests in the Trust Fund shall thereafter be payable as provided in the Plan. Any distributions, transfers or other dispositions of the Plan Benefits as provided in the Plan shall constitute a complete discharge of all liabilities under the Plan. The Committee and the Trustee(s) shall remain in existence and the Trust Agreement and all of the provisions of the Plan xvhich in the opinion of the Committee are necessary for the execution of the Plan and the administration and distribution, transfer or other disposition of interests in the Trust Fund shall remain in force. NYDOCSOI/IOI5058.2 43 SECTION 11. GENERAL LIMITATIONS AND PROVISIONS 11. l The Plan, as duly amended fi.om time to time, shall be binding on each Participant and his or her Surviving Spouse, heirs, administrators, trustees, successors, assigns, and Beneficiaries and all other interested persons. 11.2 Nothing contained herein shall give any individual the right to be retained in the employment of the Employer or affect the right of the Employer to terminate any individual's employment. The adoption and maintenance of the Plan shall not constitute a contract between the Employer and any individual or consideration for, or an inducement to or condition of, the employment of any individual. l 1.3 If the Administrative Service Agency shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs, is a minor, or has died, then it shall so notify the Committee and the Trustee, and any payment due him or her or his or her estate (unless a prior claim therefor has been made by a Beneficiary, Surviving Spouse or duly appointed legal representative or the time period during which a Beneficiary or Surviving Spouse could make a claim under the Plan has not elapsed) may, if the Trustee so elects, be paid to his or her spouse, a child, a relative, or any other person maintaining or having custody of such person otherwise entitled to payment or deemed by the Trustee to be a proper recipient on behalf of such person. Any such payment shall be a complete discharge of all liability under the Plan therefor. 11.4 (a) Except insofar as may otherwise be required by law or in accordance with this Section 11.4, no amount payable at any time under the Plan shall be subject in any manner to alienation by anticipation, sale, transfer, assignment, bankruptcy, pledge, attachment, garnishment, charge or encumbrance of any kind, and any attempt to so alienate such amount, NYDOCS01,1015058.2 44 whether presently or thereafter payable, shall be void. If any person shall attempt to, or shall, so alienate any amount payable under the Plan, or any part thereof, or if by reason of bankruptcy or other event happening at any time such amount would not be enjoyed by the person to whom it is payable under the Plan, then the Trustee shall notify the Committee and, if it so elects, may direct that such amount be with_held and that the same or any part thereof be paid to or for the benefit of such person, his or her spouse, children or other dependents, or any of them, in such manner and proportion as the Trustee may deem proper. (b) Payments with respect to a Participant's Plan Benefit may be made by the Trustee from the Trust Fund to one or more Alternate Payees pursuant to the terms of a Qualified Domestic Relations Order; provided however, that such Qualified Domestic Relations Order shall not create any rights greater than the Participant's rights under the Plan. Notwithstanding any provisions of the Plan to the contrary, any distribution due to an Alternate Payee may be paid in one lump sum as soon as practicable following the qualification of the order if the Alternate Payee consents thereto; otherwise it shall be payable on or after the date on which the Participant attains Earliest Retirement Age. Upon receipt of a Qualified Domestic Relations Order by the Plan, a portion of the Participant's Account and Rollover Account, which portion shall be determined in accordance with the Qualified Domestic Relations Order, shall be segregated and maintained on behalf of each Alternate Payee designated under such Qualified Domestic Relations Order until payment is made to the Alternate Payee in accordance with this Section 11.4 and the terms of the Plan. No liability whatsoever shall be incurred by the Committee, Trustee, Employer, Administrative Service Agency, Review Committee or any Financial Organization solely by reason of any action taken in accordance with this Section 12.4 pursuant to the terms of a Qualified Domestic Relations Order. NYDOCSOIqOI5058 2 45 11.5 Each Participant shall file with the Administrative Service Agency such pertinent intbrmation concerning himself or herself and his or her Beneficiary as the Committee may specify, and no Participant, Beneficiary or other person shall have any rights or be entitled to any benefits under the Plan unless such information is filed by or with respect to him or her. 11.6 All elections, designations, requests, notices, instructions, and other communications from a Local Employer, Employee, Participant, Beneficiary, Surviving Spouse or other person to the Committee, Administrative Service Agency or the Employer required or permitted under the Plan shall be in such form as is prescribed from time to time by the Committee, shall be mailed by first class mail or delivered to such location as shall be specified by the Committee, and shall be deemed to have been given and delivered only upon actual receipt thereof at such location. Copies of all elections, designations, requests, notices, instructions and other communications from an Employee, Participant, Beneficiary, Surviving Spouse or other person to the Employer shall be promptly filed with the Administrative Service Agency. 11.7 All notices, statements, reports and other conununications from a Local Employer, the Trustee or the Committee to any Employee, Participant, Beneficiary, Surviving Spouse or other person required or permitted under the Plan shall be deemed to have been duly given when delivered to, or when mailed by first class mail, postage prepaid and addressed to such Employee, Participant, Beneficiary, Surviving Spouse or other person at his or her address last appearing on the records of the Committee, the Trustee or the Local Employer. 11.8 The Committee may, upon the recommendation of the Administrative Service Agency, enlarge or diminish the time periods set forth in Sections 2.1, 3.1 (b), 3.1 (c), 4.3, 6.1, 6.3, 6.5 and 9.5; provided it determines that such action is necessary or desirable to facilitate NYDOCS01~I015058.2 46 the proper administration of the Plan, and provided further that in no case may a Participant's election to commence Compensation deferrals, or to modify existing Compensation deferrals, be effective until notice of such election is filed with the Employer or Administrative Service Agency. 11.9 The amounts set aside and held in the Trust Fund shall be for the exclusive purpose of providing benefits to the Participants and their Beneficiaries and Alternate Payees and defraying expenses of Plan and Trust Fund administration and no part of the Trust Fund shall revert to any Employer; provided, however, that the setting-aside of any amounts to be held in the Trust Fund is expressly conditioned upon the following: if an amount is set aside to be held in the Trust Fund by an Employer in a manner which is inconsistent with any of the requirements of Section 457(b) of the Code, such amount shall be returned to such Employer prior to the first day of the first Plan Year commencing more than 180 days after the date of notification of such inconsistency by the Secretary of the Treasury. Any amounts so returned to the Employer, and the earnings thereon, shall be distributed to the Participants on whose behalf such amounts were set aside. 11.10 The Trust Fund shall be the sole soume of benefits under the Plan and, except as otherwise required by applicable law, the Committee, the Employer and the Trustee assume no liability or responsibility for payment of such benefits, and each Participant, his or her spouse or Beneficiary, or other person who shall claim the right to any payment under the Plan shall be entitled to look only to the Trust Fund for such payment and shall not have any right, claim or demand therefor against the Committee, or any member thereof, the Employer, the Trustee, or any employee or director thereof. NYDOCSOI/IOI5058 2 47 11.1 l Any and all rights or benefits accruing to any persons under the Plan shall be subject to the terms of the Trust Agreement or any other funding instrument that is part of the Plan and the Trust Fund. 11.12 The duties and responsibilities allocated to each person under the Plan and the Trust Agreement shall be the several and not joint responsibility of each, and no such person shall be liable for the act or omission of any other person. 11.13 The captions preceding the Sections hereof have been inserted solely as a matter of convenience and in no way define or limit the scope or intent of any provisions hereof. 11.14 The Plan and all rights thereunder shall be govemed by and construed in accordance with the Code and the Treasury Regulations promulgated thereunder and the laws of the State. NYDOCS0 Izl015058.2 48 Amending and Restating the Model Plan Instructions The Deferred Compensation Plan for Employees of [Name of Local Employer] (the "Model Plan") was recently amended and restated effective January I, 2003 by the New York State Deferred Compensation Board (the "Board"). As described in the cover letter from the Board dated November 10, 2004, you should amend your current Model Plan as soon as administratively possible, but in no case later than December 31, 2004. 1. How to Adopt the Changes. You must adopt the amendments by adopting the enclosed Model Plan no later than December 31, 2004. 2. If you have not adopted the previous restatement of the Model Plan. You may no longer adopt any of the previous restatements of the Model Plan. You may only adopt the May 21, 2004 an~ended and restated Model Plan. The most recent previous Model Plan was amended and restated as of January 1, 2003. 3. Filing Requirement. To amend and restate your deferred compensation plan, you must comply with certain filing requirements set forth in the rules and regulations of the Board (the "Regulations"). Under the Regulations, a local employer adopting the Model Plan must file the following materials with the President of the New York State Civil Service Commission prior to the effective date of such adoption: (i.) an amended and restated copy of the sponsoring employer's deferred/ compensation plan supplying all information bracketed in the Model Plan; (ii.) an executed copy of the trust agreement entered into with each trustee (if you have already supplied a trust agreement at the time you filed an earlier amended and restated copy of the plan, you must also submit a copy of the letter notifying,/ each trustee of the new amendment to the plan); (iii.) an opinion signed by the local employer's chief executive officer and chief legal officer stating that its deferred compensation plan and trust agreement meet the requirements of Section 457 and all other applicable federal, State and local laxvs, including the Regulations, and that all required approvals of any local governing body or officer have been obtained; (iv.) the name of each trustee, independent consultant, financial organization, finn of certified public accountants and administrative service agency xvhich has been selected to provide sen'ices with respect to the plan and a certification signed by the local employer's chief executive officer and chief legal officer stating that each such trustee, independent consultant, financial organization, firm of certified public accountants and administrative service agency has been duly selected to provide services in accordance with the provisions of the Regulations; (v.) evidence that bonds and insurance have been secured pursuant to the provisions of the Regulations; and (vi.) except to the extent that fiduciary acknowledgment is not required under section 9003.6 of the Regulations, evidence that each trustee, independent consultant, administrative service agency or financial organization selected by the deferred compensation committee xvill act as a fiduciary under Section 457(g) of the Internal Revenue Code and State and common trust law principles with respect to all trusteeship, administrative or investment matters for which it has assumed responsibility and the plan will be indenmified as a result of any cause of action brought against it as a result of acts or omissions of the trustee, independent consultant, administrative service agency or financial organization together with the reasonable costs of litigation arising therefrom. The amended and restated Model Plan may not be effectively adopted until you have been furnished xvith a written acknowledgment by the President of the New York State Civil Service Commission that all materials listed above have been received. 4. Filing Address and Contact Information. Please send your completed documentation package to the following address: The Honorable Daniel E. Wall President NYS Civil Setwice Commission State Office Campus, Building 1 Albany, NY 12239 It has come to the attention of the Board's staff that a number of local Model Plan sponsors have returned their previous documentation to their administrative service agency rather than to the Civil Service Commission. While your administrative service agency should be informed of your adoption of the Model Plan document, please note that the Model Plan sponsor is responsible for filing documentation with the Department of Civil Service. If you have any questions concerning the filing or acknoxvledgement process, please contact Mr. David Ellers at (518) 457-2925. -2- APR 07 200~ 11:00 FR STRS OHIO NW 614 8S4 8179 TO ~9163176~1~66 P.81/12 5900 padre,ocli D~ve, Dubl~, OH ~.3016 Nationwide Retirement Soultions 1~ Jc~n Cushman 631-765-1366 631-7654333 Fmna Anna Dawson ~ 11 Rm Town of Southold, ~ CC: New York Mode/Plan documents x U~ent I'1 For Review r'l Plme Comm4mt · Conune~ Hm am the required docummel fo~ b NY Modd Plan filing. Thanks for your mJppO~t. Have you had ~ opportunity to visit oar welmite also, Nationwide Retirement Solutions Anita Dawson, Relationship Manager 5900 Parte~xxl Ddve, PW 04 04 Dubilin, OH 43016 1-877-677-3678 ext. 4 8064 614-854~8179 Fax dawsonal~nafiorrwide, corn NYS DEFERRED COMPENSATION BOARD www.n~'sdcp.com LINDA ANGELLO FREDERICK J. JACOBS MARY LOUISE MALLICK January 10,2005 TOWN OF SOUTHOLD TOWN OF SOUTHOLD PO BOX 1179 SOUTHOLD, NY 11971 Dear TOWN OF SOUTHOLD: The purpose of this letter is to inform you that the New York State Deferred Compensation Board (the "Board') recently acted to amend the New York state Deferred Compensation Plan Document (the "Plan Document'). The changes are effective May 21, 2004 (unless otherwise indicated). The amendments to the Plan Document, which are more fully explained in the enclosed summary, include the following provisions: · Authorization for the Plan to reject a participant investment request if the request is contrary to the rules, regulations or prospectus of the affected investment fund. Authorization for the Plan to distribute assets that have been roiled into the Plan from another qualified retirement plan in accordance with the distribution rules of the plan that previously held the assets. · Limitations on a participant's eligibility to obtain a loan in the event that the participant has previously defaulted on a loan. Modifications related to comments provided by the Internal Revenue Service (the "IRS") in response to the Board's request for a private letter ruling stating that the Plan constitutes an "eligible deferred compensation plan." · Technical amendments pertaining to Plan loan rules and the status of Plan loans and other withdrawals upon the death of a participant. The enclosed summary includes information pertaining to the amendments as well as the contribution limits that are effective for calendar year 2005. NEW 'tORK STATE DEFERRED COMPENSATION BOARD ROOM 124, EMPIRE ST,aTE PLAZA CONCOURSE - NORTH P.O. BOX 2103 ALBAN'I, N~' 12220-2103 (518) 473~610 Fax: (518) 473-7255 TOWN OF SOUTHOLD Page 2 Janua~ 10,2005 A complete copy of the Plan Document for the New York State Deferred Compensation Plan is available on the Plan's Web site (www. nysdcp.com). If you are unable to access the Plan Document or if you have questions regarding the Plan Document, please contact this office at (518) 473-6619 or the HELPLINE at 1-800-422-8463. SincereJy, Julian M. Regan Executive Director JMR:st Enclosure NRS-2677-1204 Summary of Amendments to the Plan Document (Effective May 21, 2004) The New York State Deferred Compensation Board (the "Board') voted to amend the Plan Document for the New York State Deferred Compensation Plan (the "Plan'), on September 27, 2004. The following is a summary of those amendments. Retirement Catch-Up Limitation - The determination of the maximum Retirement Catch-Up deferral amount is limited to the plan years during which the participant was eligible to participate in the Plan. (Section 3.2(b)(ii)) Individual Transaction Restrictions - The Administrative Service Agency may reject an investment direction from a participant if the requested transaction would be contrary to the rules, regulations or prospectus of the investment fund. (Section 4.5) Limitations on Loans Subsequent to a Default - Any loan that is in default is deemed to be an outstanding loan until paid in full. The Plan may permit a loan to a participant who has previously defaulted on a loan, but only after the maximum time period for which the original loan could have been repaid has expired. The amount of the original loan and accrued interest is deducted from the maximum permissible amount for any loan subsequent to a default. (Section 6.4) Withdrawal of Rollover Assets - The Plan may permit participants who have rolled assets into the Plan from another qualified retirement plan to receive a distribution of those assets at any time in accordance with the rules of the plan that originally held the assets provided that the assets are separately accounted for. Assets rolled Jn from another governmental deferred compensation plan may not be distributed until the participant is eligible for a distribution under the rules for a governmental deferred compensation plan. (Sections 6.5 and 7.5(b)(ii)(C)) Status of Plan Loans and In-service Withdrawal Requests Upon Death of Participant - if a participant should become deceased prior to the payment of proceeds of any withdrawal or loan requested under Section 6, the loan or benefit payment request is deemed void as of the date of his or her death. (Section 6.6) Rollovers by Alternate Payees - A direct rollover of assets into the Plan by an alternate payee may only be made by an alternate payee who is the spouse or former spouse of the participant in the Plan. (Section 7.5(b)) Purchase of Retirement Service Credit - Participants may use Plan assets to purchase retirement service credit in any governmental defined benefit plan. This provision is no longer restricted to such plans within the State of New York. (Section 7.5(c)) Liability Limitation of Committee Members - As requested by the IRS, provides clarification that Board members are not protected from liability in the event that the member has failed to act in good faith or has engaged in gross negligence or willful misconduct. (Section 9.3) Deferral Limits for 2005 Regular Deferral Limit $14,000 Additional Deferral for Age 50 and Over Participants $4,000 $14,000 Maximum Retirement Catch-Up Deferral Participants who become Age 50 at any time during calendar year 2005 are eligible to make Age 50 and Over Catch-Up contributions. Participants who are eligible to retire in 2008 or sooner without a reduction in benefits are eligible to participate in the Retirement Catch-Up provision in 2005. The additional amount that a participant may contribute under the Retirement Catch-Up provision is based on the difference between the amount contributed to the Plan in past years and the maximum amount that could have been contributed to the Plan in those years ("underutilized deferrals"). A participant may not make Age 50 and Over contributions and Retirement Catch-Up contributions during the same time. However, if a participant is participating in the Retirement Catch-Up provision and is also eligible to make Age 50 and Over contributions, the higher contribution maximum may be used. Page 2 Summary of Amendments to the Model Plan Document (Effective January 1, 2004) The New York State Deferred Compensation Board voted to amend the Plan Document for the Deferred Compensation Plan of [Name of Local Employer], commonly referred to as the Model Plan Document, on September 27, 2004. The following is a summary of those amendments. Retirement Catch-Ut Limitation - The determination of the maximum Retirement Catch-Up deferral amount is limited to the plan years during which the participant was eligible to participate in the Model Plan sponsored by his or her current employer. (Section 3.2(b)(ii)) Individual Transaction Restrictions - The Administrative Service Agency of a Model Plan may reject an investment direction from a participant if the requested transaction would be contrary to the rules, regulations or prospectus of the investment fund. (Section 4.5) Mandatory Distribution of Plan Accounts - Model Plans are permitted to require a participant to withdraw all assets from his or her plan account if the account holds less than $5,000. This amendment will require the Model Plan to comply with requirements of the Internal Revenue Code (§401 (a)(31)) with regard to such mandatory distributions and to comply with any future rules relating to that section. (Section 6.4) Plan Loan Rules - A Model Plan that permits loans must, at a minimum, comply with the provisions set forth in the Model Plan document in the event the Model Plan sponsor adopts additional requirements. (Section 6.5) Limitation~ on Loe, ns Sub~eouent to a Defa~JIt - Any loan that is in default is deemed to be an outstanding loan until paid in full. A Model Plan may permit a loan to a participant who has previously defaulted on a loan, but only after the maximum time period for which the original loan could have been repaid has expired. The amount of the original loan and accrued interest is deducted from the maximum permissible amount for any loan subsequent to a default. (Section 6.5) Withdrawal of Rollover Assets - A Model Plan may permit participants who have rolled assets into the plan from another qualified retirement plan to receive a distribution of those assets at any time in accordance with the rules of the plan that originally held the assets provided that the assets are separately accounted for. Assets rolled in from another governmental deferred compensation plan may not be distributed until the participant is eligible for a distribution under the rules for a governmental deferred compensation plan. (Sections 6.6 and 7.5(b)(ii)(C)) Status of Plan Loans and In-service Withdrawal Re(3uests Uoon Death of Particioant - If a participant should become deceased prior to the payment of proceeds of any withdrawal or loan requested under Section 6, the loan or benefit payment request is deemed void as of the date of his or her death. (Section 6.7) Rollovers by Alternate Payees - A direct roliover of assets into a Model Plan by an alternate payee may only be made by an alternate payee who is the spouse or former spouse of the participant in the plan. (Section 7.5(b)) Purchase of Retirement Service Credit - Participants may use plan assets to purchase retirement service credit in any governmental defined benefit plan. This provision is no longer restricted to such plans within the State of New York. (Section 7.5(c)) Liability Limitation of Committee Members - As requested by the IRS, provides clarification that Deferred Compensation Committee members are not protected from liability in the event that the member has failed to act in good faith or has engaged in gross negligence or willful misconduct. (Section 9.3) Deferral Limits for 2005 Regular Deferral Limit $14~000 Additional Deferral for Age 50 and Over Participants $4,000 Maximum Retirement Catch-Up Deferral $14~000 Participants who become Age 50 at any time during calendar year 2005 are eligible to make Age 50 and Over Catch-Up Contributions. Participants who are eligible to retire in 2008 or sooner without a reduction in benefits are eligible to participate in the Retirement Catch-Up provision in 2005. The additional amount that a participant may contribute under the Retirement Catch-Up provision is based on the difference between the amount contributed to the Plan in past years and the maximum amount that could have been contributed to the Plan in those years ("underutilized deferrals"). A participant may not make Age 50 and Over contributions and Retirement Catch-Up contributions during the same time. However, if a participant is participating in the Retirement Catch-Up provision and is, also, eligible to make Age 50 and Over contributions, the higher contribution maximum may be used. NYS DEFERRED COMPENSATION BOARD www.n~'sdcp.com LINDA ANGELLO FREDERICK J. JACOBS MARY LOUISE MALLICK January 10,2005 Rudler,Barbara Town Of Southold 53095 Rt 25-Po Box 1179 Southold, NY 11971 Dear Rudler,Barbara: The purpose of this letter is to inform you that the New York State Deferred Compensation Board (the "Board") recently acted to amend the New York State Deferred Compensation Plan Document (the "Plan Document"). The amendments to the Plan Document, which are more fully explained in the enclosed summary, include the following provisions: · Authorization for the Plan to reject a participant investment request if the request is contrary to the rules, regulations or prospectus of the affected investment fund. Authorization for the Plan to distribute assets that have been rolled into the Plan from another qualified retirement plan in accordance with the distribution rules of the plan that previously held the assets. · Limitations on a participant's eligibility to obtain a loan in the event that the participant has previously defaulted on a loan. Modifications related to comments provided by the Internal Revenue Service (the "/RS") in response to the Board's request for a private letter ruling stating that the Plan constitutes an "eligible deferred compensation plan." · Technical amendments pertaining to Plan loan rules and the status of Plan loans and other withdrawals upon the death of a participant. The enclosed summary includes information pertaining to the amendments as well as the contribution limits that are effective for calendar year 2005. If you have questions regarding the Plan Document, please contact this office at (518) 473-6619 or the HELPLINE at %800-422-8463. Sincerely, Julian M. Regan Executive Director Enclosure NRS-2675-1204 NEW YORK STATE DEFERRED COMPENSATION BOARD ROOM 124, EMPIRE STATE PLAZA CONCOURSE - NORTH P.O. BOX 2103 ALBANY, Nfl' 12220-2103 (518) 4,'U5~-6619 Fax: {518) 473-7255 Summary of Amendments to the Plan Document (Effective May 21,2004) The New York State Deferred Compensation Board (the "Board'} voted to amend the Plan Document for the New York State Deferred Compensation Plan (the "P/an'l, on September 27, 2004. The following is a summary of those amendments. Retirement Catch-Up Limitation - The determination of the maximum Retirement Catch-Up deferral amount is limited to the plan years during which the participant was eligible to participate in the Plan. (Section 3.2(b)(ii)) Individual Transaction Restrictions - The Administrative Service Agency may reject an investment direction from a participant if the requested transaction would be contrary to the rules, regulations or prospectus of the investment fund. (Section 4.5) Limitations on Loans Subsequent to a Default - Any loan that is in default is deemed to be an outstanding loan until paid in full. The Plan may permit a loan to a participant who has previously defaulted on a loan, but only after the maximum time period for which the original loan could have been repaid has expired. The amount of the original loan and accrued interest is deducted from the maximum permissible amount for any loan subsequent to a default. (Section 6.4) Withdrawal of Rollover Assets - The Plan may permit participants who have rolled assets into the Plan from another qualified retirement plan to receive a distribution of those assets at any time in accordance with the rules of the plan that originally held the assets provided that the assets are separately accounted for. Assets rolled in from another governmental deferred compensation plan may not be distributed until the participant is eligible for a distribution under the rules for a governmental deferred compensation plan. (Sections 6.5 and 7.5(b)(ii)(C)) Status of Plan Loans and In-service Withdrawal Requests Upon Death of Participant - If a participant should become deceased prior to the payment of proceeds of any withdrawal or loan requested under Section 6, the loan or benefit payment request is deemed void as of the date of his or her death. (Section 6.6) Rollovers by Alternate Payees - A direct rollover of assets into the Plan by an alternate payee may only be made by an alternate payee who is the spouse or former spouse of the participant in the Plan. (Section 7.5(b)) Purchase of Retirement Service Credit - Participants may use Plan assets to purchase retirement service credit in any governmental defined benefit plan. This provision is no longer restricted to such plans within the State of New York. (Section 7.5(c)) Liability Limitation of Committee Members - As requested by the IRS, provides clarification that Board members are not protected from liability in the event that the member has failed to act in good faith or has engaged in gross negligence or willful misconduct. (Section 9.3) Deferral Limits for 2005 Regular Deferral Limit Additional Deferral for Age 50 Maximum Retirement and Over Participants Catch-Up Deferral $14,000 $4,000 $14,000 Participants who become Age 50 at any time during calendar year 2005 are eligible to make Age 50 and Over Catch-Up contributions. Participants who are eligible to retire in 2008 or sooner without a reduction in benefits are eligible to participate in the Retirement Catch-Up provision in 2005. The additional amount that a participant may contribute under the Retirement Catch*Up prevision is based on the difference between the amount contributed to the Plan in past years and the maximum amount that could have been contributed to the Plan in those years ("underutilized deferrals"). A participant may not make Age 50 and Over contributions and Retirement Catch-Up contributions during the same time. However, if a participant is participating in the Retirement Catch-Up provision and is also eligible to make Age 50 and Over contributions, the higher contribution maximum may be used. ACCOUNTING & FINANCE DEPT. John A. Cushman, Town Comptroller Telephone (631 ) 765-4333 Fax ~631'~ 765-1366 E-mail: accounting@ town.southold.ny.us TOWN HALL ANNEX 54375 Main Road P.O. Box 1179 Southold, NY 11971-0959 http://southoldtown.northfork.net/ TOWN OF SOUTHOLD OFFICE OF THE SUPERVISOR March 22, 2005 The Honorable Daniel W. Wall President NYS Civil Service Commission State Office Campus, Building 1 Albany, NY 12239 Dear President Wall: We are submitting the following documentation to amend and update the Town of Southold deferred compensation Model Plan. If you have any question concerning this submission, please contact me at (631) 765-4333 or email me at john.cushman~,town.southold,ny.us. Also, please send a copy of the acknowledgement letter to my attention as well as to the following: Hartford Life Insurance Co. Jeffrey R. Morrow, Regional Manager PO Box 2908 Hartford, CT 06104 Your assistance with this matter is appreciated. Sincerely, Town Comptroller cc: Jeffrey R. Morrow, Hartford Life Insurance Co. ACCOUNTING & FINANCE DEPT. John A. Cushman, Town Comptroller Telephone (631 ) 765-4333 Fax (631) 765-1366 E-maih accounting~town.southold.ny.us TOWN HALL ANNEX Feather Hill, Building 10 620 Traveler Street P.O. Box 1179 Southold, NY 11971-0959 TOWN OF SOUTHOLD OFFICE OF THE SUPERVISOR Investors Bank & Trust Attn: Dorothy C. Hodgldns 200 Clarendon Street Boston, MA 02116 November 30, 2004 Subject: Notification of Deferred Compensation Plan Amendments Dear Trustee: This letter is to provide you notice of recent amendments to the Deferred Compensation Plan for the Employees of the Town of Southold, ~vhtch xvere adopted effective December 1, 2004. The following is a summary of those amendments: Retirement Catch-Up Limitation - The determination of the maximum Retirement Catch-Up deferral amount is limited to the plan years during which the participant was eligible to participate in the Model Plan sponsored by his or her current employer. (Section 3.2Co)(ii)) Individual Transaction Restrictions - The Administrative Set,see Agency of a Model Plan may reject an investment direction fi.om a participant if the requested transaction would be contrary to the rules, regulations or prospectus of the investment fund. (Section 4.5) Mandatory' Distribution of Plan Accounts - Model Plans are permitted to require a participant to withdraw all assets from his or her plan account if the account holds less than $5,000. This amendment will require the Model Plan to comply with requirements of the Internal Revenue Code (§401 (a)(31)) with regard to such mandatory distributions and to comply with any future rules relating to that section. (Section 6.4) Plan Loan Rules - A Model Plan that permits loans must, at a minimum, comply with the provisions set forth in the Model Plan document in the event the Model Plan sponsor adopts additional requirements. (Section 6.5) Limitations on Loans Subsequent to a Default - .Any loan that is in default is deemed to be an outstanding loan until paid in full. A Model Plan may permit a loan to a participant who has previously defaulted on a loan, but only after the maximum time period for which the original loan could have been repaid has expired. The amount of the original loan and accrued interest is deducted from the maximum permissible amount for any loan subsequent to a default. (Section 6.5) Withdrawal of Rollover Assets - A Model Plan may permit participants who have rolled assets into the plan from another qualified retirement plan to receive a distribution of those assets at any time in accordance with the rules of the plan that originally held the assets provided that the assets are separately accounted for. Assets rolled in from another governmental deferred compensation plan may not be distributed until the participant is eligible for a distribution under the rules for a governmental deferred compensation plan. (Sections 6.6 and 7.5(b)(ii)(C)) Status of Plan Loans and h-service Withdrawal Requests Upon Death of Participant - If a participant should become deceased prior to the payment of proceeds of any withdrawal or loan requested under Section 6, the loan or benefit payment request is deemed void as of the date of his or her death. (Section 6.7) Rollovers by Alternate Payees - A direct rollover of assets into a Model Plan by an alternate payee may only be made by an alternate payee who is the spouse or former spouse of the participant in the plan. (Section 7.5(b)) Purchase of Retirement Service Credit - Participants may use plan assets to purchase retirement service credit in any governmental defined benefit plan. This provision is no longer restricted to such plans within the State of New York. (Section 7.5(c)) Liability Limitation of Committee Members As requested by the IRS, provides clarification that Deferred Compensation Committee members are not protected from liability in the event that the member has failed to act in good faith or has engaged in gross negligence or willful misconduct. (Section 9.3) The Town of Southold has adopted the amended and restated Model Plan including amendments through May 21, 2004 and is filing the plan with New York State Civil Service Commission. For your convenience, a copy of the original trust agreement is enclosed. Sincerely, cc: The Hartford Insurance Company ACCOUNTING & FINANCE DEPT. John A, Cushman, Town Comptroller Telephone (631 ) 765-4333 Fax (631) 765-1366 E-mail: accounting@town.southold.ny.us TOWN HALL ANNEX Feather Hill, Building 10 620 Traveler Street P.O. Box 1179 Southold, NY 11971-0959 TOWN OF $OUTHOLD OFFICE OF THE SUPERVISOR CERTIFICATION 9002.2(a)(3) (i) We, on behalf of the Town of Southold, are aware that there are three opUons for adopting a plan as described in section 9001.2(a) of the Rules and Regulations. that we have made an informed choice in adopting such plan, and that we understand our ongoing responsibilities being undertaken by adopting such plan, including and without limitation, the Regulations, Section 457 of the Internal Revenue Code, and the Model Plan Document; (ii) that the Deferred Compensation Plan for the employees of the To~vn of Southold and the Trust Agreement meet the requirements of Section 457 of the Internal Revenue Code and all other applicable Federal, State and local la~vs including Subtitle li of the Regulations; and (iii) th~ allrequired approvals ofanylocalgove~ing body or officer have been obtained. CERTIFICATION 9002.2(a)(3) Pursuant to section 9002.2(a)(4) of the Regulations, we certify that the following contractors, who are providing deferred compensation services for the Plan Sponsor Name, have been duly selected to provide these services in accordance with the provisions of part 9003 of the Regulations: Administrative Service Agencies: Nationwide Life Insurance Co., The Hartford Insurance Company, Inc. Financial Organizations: Nationwide Life Insurance Co., The Harttbrd Insurance Company, Inc. Trustees: LNationwide Trust Company, FSB, Investors Banktfg Trust (~hief Exec~tive~fficer) Date (C~ef Date SUCCESSOR TRUSTEE AGREEMENT This Successor Trustee Agreement ("Agreement") is made and entered into as of the 5 day of April ,2004 ("Effective Date"), by and among the Town of Southold ("Employer") and Investors Bank & Trust Company ("][BT") WHEREAS, the Employer sponsors the Town of Southold Deferred Compensation Plan ("Plan"), a qualified retirement plan under Section 457 of the Internal Revenue Code of 1986, as amended ("Code"); WHEREAS, the Employer previously entered into a Trust Agreement with Manufacturers and Traders Trust Company ("M&T Bank"), successor to Allfirst Trust Company, N.A., f/kJa FMB Trust Company N.A., wherein M&T Bank acted as directed trustee for the Plan; WHEREAS, the Employer now wishes to appoint ][BT as the Successor Trustee for the Plan; WHEREAS, IBT agrees m serve as Successor Trustee for the Plan as provided herein and under the terms of the Trust Agreement; NOW THEREFORE, for good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. As of the Effective Date, the Employer shall remove M&T Bank as h'ustee of the Plan. The Employer appoints ][BT as Successor Trustee to the Plan, and IBT accepts appointment as Successor Trustee for the Plan as of the Effective Date. The Parties agree that IBT shall assume the role of Successor Trustee as provided for herein and in the Trust Agreement for the Plan as of the Effective Date. The Parties agree that, from and after the Effective Date, IBT shall have all fights, duties and obligations of the Trustee as set forth herein and in the Trust Agreement for the Plan, the terms and conditions of which are hereby incorporated into and made a part of this Agreement. ][BT agrees, from and after the Effective Date, to assume all such rights, duties and obligations of the Trustee in accordance with the terms and conditions provided for herein and in the Trust Agreement for the Plan. The Employer hereby certifies that as of the Effective Date the Plan is a qualified plan under the Code, and agrees to notify the Trustee if it has any reason to believe the Plan has ceased or will cease to be so qualified. IBT will not be liable or responsible for anything done or omitted to be done in the administration of the Plan's trust ("Trust") before it became Trustee or after it ceases to be Trustee. The Employer agrees to indemnify and hold harmless IBT for any losses, liabilities, costs, damages or expenses, including reasonable attorneys' fees and expenses, which IBT may incur or pay out by mason of any alleged or actual action or inaction on the part of any predecessor or successor trustee of the Trust for the Plan. In the management of the Trust and to the fullest extent permitted, IBT may employ agents and delegate to them such ministerial and limited discretionary duties as the Trustee shall see fit. As of the Effective Date, IBT has appointed Hartford Life Insurance Company ("Hartford") as the agent to which it has delegated certain duties. The Employer hereby acknowledges and consents to such delegation of duties between IBT and Hartford, and further acknowledges that Employer was responsible for the selection and appointment of Hartford as the delegatee/servicing agent for the Trustee. The Employer hereby agrees to hold harmless IBT from and against any loss, liability, cost, damage or expense, including reasonable attorney's fees, which IBT may incur or pay out by reason of: (i) Hartford's performance and exercise of any duties or powers delegated to them, (ii) Hartford's actions or failures to act in accordance with the duties or powers delegated to them, and (iii) Employer's investment of plan assets in any investment vehicle sponsored or made available through Hartford and/or its affiliates. IN WITNESS WHEREOF, the Parties have caused this A~eement to be executed by their duly authorized representatives as of the date specified above. The Employer Joshua Y. Horton Supervisor Title Investors Bank & Trust Company 8~lly G. 8tubbs Inve~or8 B~nk & Tru~ Title Harsh USA Inc. 200 Clarendon St Boston, )~4 02116 Paul Denny (617) q21~0275 Ar. tn: Ms. Gall $i~ard COMPANIES AFFOROING COVERAGE COe~PANY A ~?'[ UNION FIRE IN¢: CO OF PA D Ftnanc~a l InstftutfOn Bond (Fl Bond) Coverage 002903830 PR[H F$ BOND 5/25/04 5/25/05 $50f~f Each Loss/SIOOPIf Aggregate Evldence of FtnanCla? Instftuclon 8ond CFr_ Bond) Coverage for Investors Flnancfa7 5eevlces Co~'poratlon, Te~ of Southold P.O- ~ II~ 5309~ ~fn Ibaad .S:wthold. NY 129~1 I~ HARTFORD President Daniel E. Wall NYS Civil Service Commission The State Campus Albany, NY 12239 Re: Fiduciary and Bonding Letter Dear President Sinnott: The Hartford Insurance Company, the selected Administrative Services Agency and Financial Organization is a fiduciary and is acting in a fiduciary capacity and responsible under Section 9003.6 and 9002.2(6) of the Regulations and Section 457 of the IRC for the administration and/or investment of any assets entrusted to us by any plan established by the Town Of Southold. The Town Of Southold Plan will be indemnified as a result of any cause of action brought against it as a result of any acts or omissions on the part of The Hartford Insurance Company together with the reasonable costs of litigation arising therefrom. Since the insurance coverage on The Hartford Insurance Agency in behalf of the Town Of Southold Plan is less than $25 million, we hereby state that the current bonding in effect on behalf of this deferred compensation plan represents 100 percent of the amount of funds being managed, administered or held by the Hartford Insurance Company. Sincerely, Zachary J. Karas Regional Vice President Institutional Solutions Group 12/15/2004 Date Securities Offered ~llarough Hartford Equity Sales Company, Inc. 200 Hopmeadow Street, Simshury, CT 06089 1-800-528-9009 Hartford Life Insurance Companies Hartford Regional Office 55 Farmlngton Avenue Suite 601 Hartford, CT 06105 Mailing Address: P.O. Box 2908 Hartford, CT 06104 Telephone 860 520 1600 Ext 3 Toll Free 800 243 5868 Ext 1 Facsimile 860 520 2603 ,08/26{2004 13:47 FAX 6179373491 [BT ~002 INVESTORS FINANCIAL SERVICES CORP. August 23, 2004 Evidence of Trustee Bonding For a N..~w York 457 Plan RE: New York Deferred Compensation Trustee Bonding Requirement In accordance with Section 9005.4 of the New York Deferred Compensation Rt les and Regulations, we hereby englose evidence that Investors Financial Services Corp. maintains fidelity bonding of an aggregate amount where the penal sum of the bond represents the lesser of 100 percent of the funds administered or managed or $25 million according to the requirements oftbe above stated Section and that a new and sufficient bond will be obtained when and if the assets oftbe plan exceed this original bonding amount. 200 Clarendon Steer, P.O. Box 9130, Boston, MA 02117-9130 * 'tel: (617) 937-6700 IBT T-ma, tee Fiduciary Acknowledgment Please Note: The IBT Fiduciary Acknowledgment is located within the trust agreement. Within the trust agreement, you will fred the Fiduciary Acknowledgment on page 2 in section 3.1. The indemnification language is located on page 6, section 4.5, second paragraph. ACORD., CERTIFICATE OF LIABIL CORPORATE INSURANCE ACCOUNT 860-520-277O THE HARTFORD FINANCIAL SERVICES GROUP,INC HARTFORD PLAZA HARTFORD, CT 06115 TY INSURANCE 12/09/2004 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW, INSURERS AFFORDING COVERAGE tNAIC # INSURERA. HARTFORD CASUALTY INS. CO. INSURER B; INSURER C: INSURER O -r INSURER E COVERAGES THE POLICIES OF INSURANCE LISTED EELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT. TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. . A FIDELITY BOND 00 FY 3850271 6/15/2004 6/15/2005 $3,000,000 INCLUDES COVERAGE FOR HARTFORD LIFE, A SUBSIDIARY OF THE HARTFORD FINANCIAL SERVICES GROUP, INC. DEFERRED COMPENSATION CONTRACT WITH THE TOWN OF SOUTHOLD FOR THE BENEFIT OF THE TOWN OF SOUTHOLD DEFERRED COMPENSATION PLAN TRUST CERTIFICATE HOLDER CANCELLATION TOWN OF SOUTHOLD TOWN COMPTROLLER P.O. BOX 1179 SOUTHOLD, NY 11971-0959 SHOULD ANY OF THE ABOVE DESCRIBED PO LICIES BE CANCELLED BEFORE THE EXPIRATION AUTHORIZED REPBESENTATI~ ~ ~. ~ ACORD 25 (2001108) 'ACORD CORPORATION 1988 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(les) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon. ACORD 25 (2001108) GEORGEE. PATAKI gOVERNOR Mr. John A. Cushman Town Comptroller Town of Southold P.O. Box 1179 Southold, NY 11971-0959 STATE OF NEW YORK DEPARTMENT OF CIVIL SERVICE DANIEL E. WALL THE STATE CAMPUS COMMISSIONER ALBANY, NEW YORK 12239 ~pnl 4 zuub ///;~ · .- --- --,._ Dear Mr. Cushman: Re: Acknowledgement of the Deferred Compensation Model Plan for Employees of the Town of Southold This is to advise you that I have acknowledged to the New York State Deferred Compensation Board receipt of documentation relative to updating the above Model Plan reflecting all amendments through May 21, 2004. This acknowledgment is based upon the participation of Hartford Insurance Company in conjunction with Investors Bank & Trust in your Town's Plan, and allows for continued payroll deferrals of deferred compensation for your Town's employees. If, in the future, your committee makes changes to or selects other Plan contractors, please remember that equivalent documents must be submitted to the President of the Civil Service Commission before that organization's participation in your Plan. If you have questions concerning this acknowledgement, please contact David Ellers of my staff on (518) 457-2925. Sincerely,. ~ ~uty Commissioner Ms. Linda Angello NYS Deferred Compensation Board Empire State Plaza Concourse - North Room 124 Albany, NY 12223 Hartford Life ATTN: Jeffrey Morrow, RPS Sales 55 Farmington Avenue, Suite 1201 Hartford, CT 06105 GEORGE E. PATAKI GOVERNOR STATE OF NEW YORK DEPARTMENT OF CIVIL SERVICE THE STATE CAMPUS ALBANY, NEW YORK 12239 DANIEL E. WALL COMMISSIONER JOHN F BARR EXECUTIVE DEPU'rYCOMMISSIONER April 4, 2005 Ms. Linda Angello NYS Deferred Compensation Board Empire State Plaza Concourse - North Room 124 Albany, NY 12223 Dear Ms. Angello: Re: Acknowled.qement of the Deferred Compensation Model Plan for Employees of the Town of Southold Receipt is hereby acknowledged from the Town of Southold Deferred Compensation Committee of the following documents and materials required to be submitted under Section 9002.2a of the "Rules and Regulations" ("Rules" or "Regulations") in reference to the model plan or another plan, prior to acceptance of any deferrals: A copy of the Model Plan Document for employees of the Town of Southold effective December 1, 2004, updated and reflecting all amendments through May 21, 2004. An executed copy of the Trust Agreement entered into with each trustee for the Town of Southold made on April 5, 2004, by and among the Town of Southold Deferred Compensation Committee ("Grantor") and Investors Bank & Trust serving as Trustee ("Trustee"). Also included is a copy of the Trustee Notification Letter summarizing the new amendments to the Grantor's Model Plan. COPY Ms. Linda Angello April 4, 2005 Page 2 A certification, signed by the Chief Executive Officer and Chief Legal Officer of the Town of Southold, that the Town of Southold is (i) aware that there are three options for adopting a Deferred Compensation Plan as described in Section 9001.2(a) of the Regulations and has made an informed choice in adopting such plan and that the Town of Southold understands the ongoing responsibilities it is undertaking, including, without limitation, the Regulations, Section 457 of the Internal Revenue Code and the Model Plan Document; (ii) that the Town of Southold Deferred Compensation Plan and Trust Agreement meet the requirements of Section 457 of the Internal Revenue Code and all other applicable State and local laws including the Regulations; and (iii) that all required approvals of any local governing body or officer have been obtained. A certification signed by the Chief Executive Officer and Chief Legal Officer providing the names of all deferred compensation contractors including each administrative service agency, financial organization, trustee, independent consultant, and firm of certified public accountants, and stating that each has been duly selected to provide services in accordance with the provisions of Subtitle II, Part 9003. A copy of the Certificate of Liability Insurance showing Hartford Casualty Insurance Company covering Hartford Insurance Company with a Fidelity Bond in the amount of $3 million. A copy of the Certificate of Liability Insurance showing National Union Fire covering Investors Bank & Trust with a Financial Institution Bond in the amount of $50 million. a. Acknowledgments by Hartford Insurance Company that: (1) They have fiduciary responsibility under Section 9003.6 of the Regulations for the administration and/or investment of any assets entrusted to them by any plan established by the Town of Southold. (2) The Town of Southold will be indemnified against any cause of action brought against it as a result of any acts or omissions of such companies together with the reasonable costs of litigation arising therefrom. Ms. Linda Angello April 4, 2005 Page 3 Acknowledgement by Investors Bank & Trust, as found within their trust agreement, that they will act as a fiduciary under Federal, State and common trust law principles with respect to all trusteeship matters for which they have assumed responsibility, and that such employer will be indemnified as a result of any cause of action brought against it as a result of any acts or omissions of the Trustee together with the reasonable costs of litigation arising therefrom. Signed statements that Hartford Insurance Company and Investors Bank & Trust maintain bonding in an aggregate amount where the penal sum of the bond represents the lesser of 100 percent of the amount of funds administered or $25 million. These documents have been filed in the Department of Civil Service. It should be understood that this acknowledgment in no way implies or signifies endorsement of the Plan. If you have questions concerning this acknowledgement, please contact David Ellers of my staff on (518) 457-2925. Sincerely, John F. Bart Executive Deputy Commissioner CC~ ,/- Mr. John A. Cushman Town Comptroller Town of Southold P.O. Box 1179 Southold, NY 11971-0959 ACCOUNTING & FINANCE DEPT. John A. Cushman. Town Comptroller Telephone (631 ) 765-4333 Fax ~631) 765-1366 E-mail: accounting @town.southold.ny.us TOWN HALL ANNEX 54375 Main Road P.O. Box 1179 Southold. NY 11971-0959 http://southoldtown.north fork.net/ TOWN OF SOUTHOLD Old'VICE OF THE SUPERVISOR April 7, 2005 The Honorable Daniel W, Wall President NYS Civil Service Commission State Office Campus, Building 1 Albany, NY 12239 Dear President Wall: We are submitting the following documentation to amend and update the Town of Southold deferred compensation Model Plan. If you have any question concerning this submission, please contact me at (631) 765-4333 or email me at iohn.cushman~town.southold,ny, us. Also, please send a copy of the acknowledgement letter to my attention as well as to the following: Nationwide Retirement Solutions Bernie Keeney, PW-04-06 5900 Parkwood Place Dublin, OH 43016 Your assistance with this matter is appreciated. Sincerely, Town Comptroller cc: Bernie Keeney, Nationwide Retirement Solutions ACCOUNTING & FINANCE DEPT. John A. Cushman, Town Comptroller Telephone (631) 765-4333 Fax (631) 765-1366 E-mail: accounting@town.southold.ny.us TOWN HALL ANNEX Feather Hill, Building 10 620 Traveler Street P.O. Box 1179 Southold, NY 11971-0959 TOWN OF SOUTHOLr~ OFFICE OF THE SUPERVISOR Nationwide Trust Company, FSB 3 Nationwide Plaza (03-23-R2) Columbus, OH 43212-2220 November 30, 2004 Subject: Notification o f De ferred Compensation Plan Amendments Dear Trustee: This letter is to provide you notice of recent amendments to the Deferred Compensation Plan for the Employees of the Town of Southold, which were adopted effective December l, 2004. The following is a summary of those amendments: Retirement Catch-Up Limitation - The determination of the maximum Retirement Catch-Up deferral amount is limited to the plan years during which the participant was eligible to participate in the Model Plan sponsored by his or her current employer. (Section 3.2(b)(ii)) Individual Transaction Restrictions - The Administrative Service Agency of a Model Plan may reject an investment direction from a participant if the requested transaction would be contrary to the rules, regulations or prospectus of the investment fund. (Section 4.5) Mandatory Distribution of Plan Accounts - Model Plans are permitted to require a participant to withdraw all assets from his or her plan account if the account holds less than $5,000. This amendment will require the Model Plan to comply with requirements of the Internal Revenue Code (§40 l(a)(31)) with regard to such mandatory distributions and to comply with any future rules relating to that section. (Section 6.4) Plan Loan Rules - A Model Plan that permits loans must, at a minimum, comply with the provisions set forth in the Model Plan document in the.event the Model Plan sponsor adopts additional requirements. (Section 6.5) Limitations on Loans Subsequent to a Default - Any loan that is in default is deemed to be an outstanding loan until paid in full. A Model Plan may permit a loan to a participant who has previously defaulted on a loan, but only after the maximum time period for which the original loan could have been repaid has expired. The amount of the original loan and accrued interest is deducted from the maximum permissible amount for any loan subsequent to a default. (Section 6.5) Withdrawal of Rollover Assets - A Model Plan may permit participants who have rolled assets into the plan from another qualified retirement plan to receive a distribution of those assets at any time in accordance with the roles of the plan that originally held the assets provided that the assets are separately accounted for. Assets rolled in fi.om another governmental deferred compensation plan may not be distributed until the participant is eligible for a distribution under the rules for a governmental deferred compensation plan. (Sections 6.6 and 7.5(b)(ii)(C)) Status of Plan Loans and In-service Withdrawal Requests Upon Death of Participant - If a participant should become deceased prior to the payment of proceeds of any withdrawal or loan requested under Section 6, the loan or benefit payment request is deemed void as of the date of his or her death. (Section 6.7) Rollovers by Alternate Payees - A direct rollover of assets into a Model Plan by an alternate payee may only be made by an alternate payee who is the spouse or former spouse of the participant in the plan. (Section 7.5(b)) Purchase of Retirement Service Credit - Participants may use plan assets to purchase retirement service credit in any governmental defined benefit plan. This provision is no longer restricted to such plans within the State of New York. (Section 7.5(c)) Liability Limitation of Committee Members As requested by the IRS, provides clarification that Deferred Compensation Committee members are not protected from liability in the event that the member has failed to act in good faith or has engaged in gross negligence or willful misconduct. (Section 9.3) The Town of Southold has adopted the amended and restated Model Plan including amendments through May 21, 2004 and is filing the plan with New York State Civil Service Comrmssion. For your convenience, a copy of the original trust agreement is enclosed. Sincerely, )rJos~ a Y. Horton Supervisor cc: Nationwide Life Insurance Co. ACCOUNTING & FINANCE DEPT. John A. Cushman, Town Comptroller Telephone (631) 765-4333 Fax (631) 765-1366 E-mail: accounting@town.southold.ny.us TOWN HALL ANNEX Feather Hill, Building 10 620 Traveler Street P.O. Box 1179 Southold, NY 11971-0959 TOWN OF $OUTHOL1-} OFFICE OF THE SUPERVISOR CERTIFICATION 9002.2(a)(3) (i) We, on behalf of the Town of Southold, are aware that there are three options for adopting a plan as described in section 9001.2(a) of the Rules and Regulations. that we have made an informed chmce in adopting such plan, and that we understand our ongoing responsibilities being undertaken by adopting such plan, including and without limitation, the Regulations, Section 457 of the Internal Revenue Code, and the Model Plan Document; (ii) that the Deferred Compensation Plan for the employees of the Toum of Southold and the Trust Agreement meet the requirements of Section 457 of the Internal Revenue Code and all other applicable Federal, State and local laxvs including Subtitle II of the Regulations: and (iii) that all required approvals of any local governing body or officer have been obtained. CERTIFICATION 9002.2(a)(3) Pursuant to section 9002.2(a)(4) of the Regulations, we certify that the following contractors, who are providing deferred compensation services for the Plan Sponsor Name, have been duly selected to provide these services in accordance with the provisions of part 9003 of the Regulations: Administrative Service Agencies: Nationwide Life Insurance Co., The Hartford Insurance Company, Inc. Financial Organizations: Nationwide Life Insurance Co., The Hartford Insurance Company, Inc. Trustees: Nationwide Trust Company, FSB, Investors Bank~ Trust thief Executive Officer) . Daie [Ch~[[£egal IOf~ Date CORPORATION- TRUSTED PLANS President Daniel E. Wall Civil Service Commission State Office Campus Albany NY 12239 Re: NYS Deferre~ Compensation Model Plan for "NAME OF PLAN SPONSOR" Fiduciary Indemni ficatton Acknowledqement and Bondinq' Statement Dear Mr, Wall: Nationwide Retirement Solutions is serving aS the Administrative Service Agency, Nationwide Trust Company. FS8 is serving as directed trustee, and Nationwide Financial Services, Inc, is serving as Financial Organization for "NAME OF PLAN SPONSOR"'s governmental Section 457 deferred compensation model plan, Both Nationwide Retirement Solutions and Nationwide Trust Company, FSB are wholly owned subsidiaries of Nationwide Financial Services, Inc. The following fiduciary and indemnification acknowledgement and bonding statement applies: Nationwide Retirement Solutions, Nationwide Financial Services, Inc., and Nationwide Trust Company. FSB will act as a fiduciary and be responsible under Section 9003.6 and 9002,2(6) of the New York State Deferred Compensation Board's "Rules & Regula51ons" (RegulatiOns) and under Section 457(g) of the Internal Revenue Code with respect to all administration and investmen[ matters for which they have assumed responsibility in regard to the "NAME OF PLAN SPONSOR". 'NAME OF PLAN SPONSOR" will be indemnified as a result of any cause of action Drought against it as a result of any negligent acts or omissions on the part of Nationwide Retirement Solutions, Nationwide Financial Services, Irc,. or Nationwide Trust Company, FSB including the reasonable cost of litigation arising therefrom. Additionally. Nationwide Retirement Solutions, Nationwide Financial Services, Inc.. and Nationwide Trust Company. FSB are each bonded For at least $25 million for the benefit of "NAME OF PLAN SPONSOR". A Certificate of Insurance is provided showing this coverage, and this coverage amount is equal to the maximum amount required by the Regulations. Mark R. Thresher President - Chief Operating Officer Nationwide Financial Services, Inc. ~ · ~ ~ o 11:00 FR STRS OHIO 614 054 8179 TO ~916317651366 P.03/12 ACORD,. CERTIFICATE OF LIABILITY INSURANCE PRODUCER: FidcUD, ~nd Deposit Con~ny of Maryhnd Rockside C~tcr IH 5990 West Creek ~ad, Sui~ 121 ~de~ndence~ OH 44131-212~ INSURED O~e Nationwide ~lumbus, Ohio 4321~-~0 4/5/05 mis CERTIFICATE IS iSSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE C, OVERAGE AFFORDED BY THE POLICIES BELOW. INSURERS AFFORDING COVERAGE INSURER ~: Fidelily ~d Deposit Company of Marylaud INSURER ~ 'iNSURER C: (NSUS~R D: cOVERAGES THE POUCIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO 1TIE INSURED NAMED ,~VE FOR THE POLICY PERIOD INDICATED. No3wm'ISTANDING ANY RECUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMBNT wm-I RESPECT TO WHICH THIS CERTIFICATE MAY SE ISSUED OR MAY PERTAIN, 1TIE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES, AGGREGATE LIMITS BHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. r-lr-i CLAIM~ MADE [] OCCUR MED EXP (Any one parson) [] pOLiCY J-t PROJEGT r-tLOC WOI~KER$ COMPENSATION &NID J WCSTATU- I I OTH- A Insurance Companies B]ankct Bond FiB 488-86-81-04 08/15104 08/15/05 'Limits of at least $25,000,000 Fraud & D[shonc~ Nationwide Rcfircmcll; Solutions, Nafionwidg Financisl Services, and Natioawide Trust Company. FSB IN'lC FBO: TOWN OF SOUTHOLD ENTI'CY #3260 ACCOUNTING & FINANCE DEPT SOUTHOLD NY 11971-0959 CANCELL&TION ~r- ~- -- . ,I 0 ~ ACO~ ICORPO~AllON ~gm]~ ! RPR 8? 2885 11:81FR STRS OHIO 614 854 8179 TO ~916517651~66 TRUST AGREEMENT FOR THE TOWN OF SOUTHOLD DEFERRED COMPENSATION PLAN P. 84/12 THIS TRUST AGREEb~NT made this 10th day of~l~c~__~__~ 1__.~.g, by and between the ]~cferred Compensation Committee duly appointed by The Town Of Southold, having its prin¢ilXfl place of business in The Town Of Southold (hereinafter referred to az thc "Grantor") and Nationwide Trust Company, FSB having its office at Three Nationwide Columbus, Ohio (hereinafter called the ~l'rustee"). WITNESSETH: WHERFAS, The Town Of Southold (the "Employer") has adopted the Model Plan authorized by the Deferred Compensation Board of the State of New York (as amended and restated Apr/! l, 1998) called The Town Of Southold's Deferred Compcn.sation Plan (the "Model Plan") and the Grantor is authorized to act on its behalf; and WHEREAS, the Model Plan, as adopted by the Employer, requirca that all amounts of deferred compensation be held in trust for the exclurivc benefit of participants and thch' beneficiaries; and WHEREAS, the Grantor deshes that a portion of these amounts be invested in group annuity conlracts issued by l~,lationwidc Life Insurance Company ("-lqat/onwide"), an Ohio stock legal reserve life insurance company, to be held m trust; and WHEREAS, Grantor has designated Nationwide Trust Company, FSB az Trustee in accordance with the New York State Deferred Compensation Board Rules and Regulations as set forth at Part 9000 to Part 9006 of Subtitle II of Title 9 NYCRR (the "Regulations") as published in the State Register on July 1, 1998, with an effective date of Oetober 1, 1998, and Section 457(g) of the Internal Revenue Code of 1986, as amended (the "Code"), to hold ~ group annuity contracts under theTown of Southold's Model Plan for the exclusive benefit of participants and their beneficiaries; and WI-~, Trustee is duly authorized to act as Trustee under applicable law and the Regulations and consents to act as Trus~-e in the manner descn'bed in the prec_~ng clause and in accordance w/th thc provisions of this agreement as set forth belo~r, and ~, Nalion~vide Trust Company, F~B has consented to act as Trustee and to hold these group annuity contracts to effectuate and maintain the Model Plan on the terms hereinafter set forth; and NOW, ~ORE, thc parties hereto do hergby mutually declare and agree effective as of the date set forth above as follow~: ARTICLE I ESTABL~SHlVlENT OF TRUST The Grantor here, by establishes with the Trustee, pursuant to the Model Plan, a Trust Fund which shall be comprised of the Nationwide group annuity contracts set forth in Schedule A which shall be registered in thc legal name oftbe Trustee for thc exclusive benefit of participants and their beneficiaries. Such group annuity contracts herein are referred to as the "Trust Fund" or the "Trust". Thc Trust Fund shall be held by the Trustee in trust and dealt with ixi accordance with the pmv/sions of this Trus~ Agreement At no ~ime shall any part oftbe corpus or income of the Trust Fund be used or diverted to purposes other than for the exclusive benefit of Employees and their beneficiaries prior m thc satisfaction of all liabilities under the Model Plan. The Trust Fund may be used only to pay plan benefits and defray reasonable expenses of administering the Model Plan and cannot revert to the State or Employer until all plan benefits have been paid to participants or beneficiaries in accordance w/th the terms of thc Model Plan and the Regulations. ARTICLE H 1. It shall be the duty of thc Trustee: (a) To hold in its legal name the Nationwide group annuity conlrn~s set forth in Schedule A for the exclusive benefit of participants and their beneficiaries. (b) To rends' an accounting to thc Grantor. (c) To execute transactions under the Nationwide group annuity conmwts as directed by the Grantor or its duly authorized agent. Notwiths~.~mding any provision of this Agreement to the conUary, the Trustee shall discharge its duties under this Agr~ment with the care, skill, prudence and diligence under the circumstances then prevailing that a ptuden! pe.t~on acting in a like capacity and familiar with such mai'rets would use in the conduct of an ent~prise ora like character and with like aims, The Trustee shall not bo linble for any loss sustained by Nationwide group annuity contracts, thc purchase of which has been directed by the Employer. 2 OHIO NW 614 854 8179 TO ~916317651~66 ARTICLE IH FAYM~NTS FROM TRUST FUND Payments shall be made from the Trust Fund consistent with the prov/sions of the Nationwide group annuity contracts to such persons, in such manner, at such times and/n such amounts as the Employer, the Grantor or the designated adminislxative services agency, acting as Employer's or Orantor's agent for the purpose, shall from time to time direct. The Trustee shall be fully protected with respect to payments out of the Trust Fund in accorcla~.~ with the provisions of the Nationwide group annuity contracts and shall have no responsibility to see to the application of such payments or to ascertain whether such directions comply with the terms of the Model Plan, and shall not be liable for any payment made by it in good faith without actual notice or knowledge of the changed condition or status of any parson receiving payments hereunder. Trustee shall not be responsible for amounts paid from the Trust Fund which are not claimed. ARTICLE IV INYE~ OF TRUST FUND 1. The Grantor shall be solely responsible for the selection, making and termination of investments of amounts under the Plan including that portion of.such amounts held in trust hereunder in the form of thc Nationwide group conlracts. 2, Thc following rules shall ~overn thc investments in thc Nat/onwide ~roup annuity contracts directed by thc Grantor. (a) The Grantor shall give the Trustee written notice of the removal of Nationwide or an exchange of one Nationwide group annuity contract for another or the addition of another Nationwide g~uup annuity contracts. Co) With respect to the group armui~y contracts, T~ sh~l! assume only those powers, responsibilities and obligations granted to the Trustee by figs Agreement. (c) The Trustee may in. good faith rely on the continuing authority of Nationwide to manage assets under the Nationwide group annuity conUacts, until given writien notice by the Employer of the removal of Nationwide and ~ Trustee shall not be liable for the acts or omissions of Nationwide except to the extent txovided by law. 3. Neither the Employer nor the Grantor or the Trustee may enter into a contract or agreement with a financial organization as defined in the Regulations for the investment of any amounts under the Plan in an annuity contract for a term which exceeds five years or which is measured by one or more natural lives or any life insurance or other contracl providing traditional death benefits. 4. With respect to that portion of amounts deferred under thc Model Plan allocated to the Nationwide group annuity conwacts, together with all necessary instructions, the Employer 3 its ~ents s~l ~ pmmpfl. . ~ossihle, h,,t in no ~t lam'-tl~-~ t~" ~i~ a~ following ~-'e~i~t thereof ]~y suc~ m~o~ts to ~ionwid¢. T~¢ £ore§oi~g notwith~,4i~g, ~mom~ts deferred shall be Wansfei,~! to the Nationwide within the period required by the Regulations. Such amounts shall not be considered invested in the Trust Fund until such amounts are received and accepted by Nationwidc. 5. lqationwide, upon receipt of the amounts descnq~ed in the preceding paragraph, if not otherwise invested, shall transfer to an interest beating account to hold such amounts in cash or cash equivalents within one business day from daie of receipt, where such amounts may remain until Nationwide receives all ne, e~ry investment instructions or otherwise determines it prudent to Wansfer such mounts to another investment fund. Amounts held by the Employer or its administrative service agency shall not be deemed invested in the Nationwide group annuity conlracts until their relces¢ and upon receipt and acceptance by Nationwide. 6. The foregoing notwithstanding, the ass~ of the Model Plan arc to be allocated among the investment options available under the Model Plan in accordance with the investmcat dis~;'6ons of participants ofthe Model Plan, which investment directions may be communicated in writing to Nationwide by an administrative service agency appointed by the Grantor_ 7. Any disin'bution under the Nationwid~ group annuity contracts shall be deemed as if such distributions were made by the Trustee from the Trust Fund. 8. The Grantor, in accordance with the Regulations, has sole responsibility for the appointment of financial o ~r~nnh, seions. A. momlts held under the Model Plan shall be at ali times invested by the Grantor in one or more of a broad range of investment alternatives, including without limitation a diverse selection of fixed income and equity investments. ARTICLE ¥ POWERS OF TRUSi'~:E 1. The Trust~ is authorized and empowered: (a) To apply for and procure from Nationwide the Nationwide group annuity conU-acts ns directed by Grantor;, Co) To exercise at any time or from time to time whatever rights and privileges may be granted under such Nationwide g~oup annuity conwacts as directed by the G-ranter or a designated administrative service agency; (c) In addition m the enumerated pow~s herein, thc Trustee shall do all other acts which in its judgement are necess~y or desirable for thc proper adminiatcation of the Trust Fund. 2. All right, t/tlc and interest in and to the Nat/onwide group annuity conlracts of the. Trust Fund shall at all times be vested exclusively in the Trustee, subject to thc provisions of Paragraph I of this Article V. 4 ~ ~'/ ~5 11:02 FR STRS OHIO NW 614 854 8179 TO ~916~1765i~66 ~ ~" ARTICLE VI ~-' P.08/12 ACCOUNTS OF TRUSTEE I. The Trustee or its agents shall maintain accurate and detailed records and accounts of all investments, receipts, disbursements and other transactions hereunder, and all accounts, books and records relatln~ thereto shall be open at ali reasonable times to inspection and audit by an person or persons designated by the Employer or the G-cantor. 2. The Trustee, at the direction of the l~mployer or the Cn-antor, shall submit to the auditors for the Employer reports or other information as they may r~a~onably request. 3. The Employer may approve such accounting by written nol/co of approval delivered to the Trustee or by failmc to expl~is objections to such accounting in vaiting delivered to the Trustee within six (6) months from the date upon. which thc accounting was delivered to the Employer. Both the Employer and the Trustee, nevertheless, shall have the fight to have Trust accounts settled by judicial proceeding if elected, in which event only the Trustee and the Employer shall be necessary parties. ARTICLE VII RESPONSIBILITY OF TRUSTEE The Tru,v~ shall bc fully protected from any raspollsl-bility for any action taken or on~ittext in ~_ccordance with written dit'ections purporting to be signe~l by the authorized representative of the Employer, the Committee, thc designated admini~h~tive serviee agency or Nationwide Insurance Company, any of which the Trustee reasonably believes in good faith to be §enu/ne. ARTICLE VIII SUCCESSION OF TRUSTEES 1. Subject to Articles IX and XI]I, the Trustee and any succ~soxs in lrust may be removed by the Cnantor or Employer at any time upon the giving of sixty (60) days notiee in writing to the Trustee then acting, but such notice may be waived by the Trustce. Such removal shall be effected by delivering to the Trustee a written noticc of its removal and of the appointment of a successor Trustee, executed by the Grantor and an acceptance in writing execu~d by the sucee~sor Trustee so appointed. 2_ Thc Trustee and any successors in Uu_vt may resign as Truste~ hereunder by filing with the Cn-antor a w~itten resignation which shall take effect sixty (60) days after thc date of such filing, but such notice may be waived by the Cn-antor. ifa successor Trustee is appointed prior to thc expiration of the sixty-day period, thc resignation of the Trustee shall be effective on .thc date of such appoinlment 3. Upon such removal or resignation, or inability to act ~ Trustee, the Crramor shall appoint and designate a successor TruStee. All of thc provisions set forth herein with respect to a prior Trustee shall relate to each successor Trustee appointed f~om time to time, with the same force and effect as if such successor Tms~.,e origimflly had been named herein ns Trustee. 4. Upon the appointment of a successor to any Trustee, the removed or resigning Trustee shall ~ransfer and deliver the assets in the Trust Fund to such suuces.~r Trustee or financial orga~iTsiiun, as permitted under the Regulations, after reserving (if appropriate) such reasonable amount as it shall deem neeessa~ to provide for any sums chargeable against the Trust Fund for which it may be liable. The receipt by the successor to the Trus~ and the approval of the Crrantor to the fimfl accounting of the removed or resigning Trustee shall be a full and complete acquittal and discharge of such removed or resigning Trustee to the extent permitted by law, and any successor Tmst~ or financial orl~mization shall have no liability whatsoever for the acts or omissions of any prior Trustee. If the Employer or Grantor shall fail to exp~ss objection to such a_ _,'counting in writing delivered to the removed or resigning Trustee within slx (6) monlh~ from the date of receipt by the Grantor of such final accounting, such ac¢ounling shall be considered as approYad by the Grantor. S. In the event that the Trustee shall at any time merge or consolidate with, or shall sell or transfer substantially all of its assets and business to another co~poration, the corporation resulting from such merger or consolidation or into which it is converted or to which such sale or Wansfer shall be made shall thereupon become and be the Trustee under this Agreement with the same effect as though originally so named; providing said successor is duly authorized to act as Trustee or financial orga~i~tion under the Regulations and Section 457 of thc Code. ARTICLE IX TEBM~ATION OF TRUST 1. This Agreement and Trust may be terminated at any time by the Grantor upon written notice delivered to the Trustee. Upon such termination, the Trust Fund shall be distn'buted by the Trustee in ac~ordanco with the Model Plan certified by the C-rantor to be th~ in effe~ and with the w~tten directions of the Cr~antor. Units sooner ~'minat~ the Trust created hereunder shall terminate immediately upon thc termination of the last group annuity contracts held in the Trust 2. In no event shall the Employer or the Grantor, at any time, receive any value from the Trust until the satisfaction of all liabilities of the Model Plan; except that contribut/ons made by the Grantor through mistake of fact shall bc returned in accordance with the Regulations. 3. -. From and after the date of the lermination of the Tmsl and until the final distribution of the fund, the Trustee shall continue to have ali the powers provided under the Trust Agr~:men! as are necessary and expedient for the orderly disposition of the Fund. 4. Upon termination of this Agreement and Trust, the Trustee shall impose no penalty or surrender charges for the transfer of assets or responsibilities. I~PR 0? ~005 :Ll:05 FR STR5 OHIO N~d 614 854 8179 TO ~916517551566 P.10/1P_ 5. Anyotherprc- ~nofthisArriclelXmtbecontra~n,- 'thstanding, nolrustee who is thc only truste~ under this Agreement and Trust shall be forced u, resign solely by reason of thc operation of ARicie XlII prior R~ the time such person's successor has been duly qualified and appointed. ARTICLE X A.M]gNDMENTS TO TRUST The Grantor shall have the risht at any time and from time to time to amend this Agreement in whole or in part by an insmanent in writing executed by it and delivered to thc Tncstee; provided, however, that no amendment shall cause any part of thc Trust Fund to be used for, or diver~ed to, purposes other than for the exclusive benefit of Participants of the Model Plan, or their beneficiaries, and provided ftuther, that the rights, duties or responsibilities of the Tnistee shall not be changed without its written consent. Any amendment may be made retroactively which is necessary to bring the Model Plan into conformity with guvemmental laws or regula~om in order to qualify the Model Plan and Agreement for tax exemption. Any amendment shall become effective upon the date herein stated but shall not be binding upon the Trustee until delivery of the written amendment to the Trustee, provided tlmt any amendment which changes the rights, duties, or responsibilities of the Trustee shall become effective only upon the endorsemem of the Trustee's written consent but ma), be applied retroactively. ARTICLE XI .IURISDICIION AND CONSTRUCTION I. This Agreement shall be consuued and enforeed aecording to thc laws of the State of New York and ali provisions hereof shall be administered according to its laws, except to the extent which laws may be super~ied by any Federal law, in which event such Federal law shall apply. 2. In case any provisions of thi~ Trust Agreement shall be held illegal or invalid for any ~e.son, said illegality or invalidity shall not affect the remaining provisions of this Trust Agreement, but shall be fully severable, end the Trust Agreement shall be consh'ued and enforced as if said illegal or invalid provisions had never be~n inserted harem. 3. In the case of any incot~sistency between the Model Plan and this Agreement with respect to the duties and obligations of the Trustee, this Agreement shall control, subject to applicable regulatory provisions of the Regulations and Section 457 of the Code; said Regulations shall also con~'ol to the extent its provisions may be inconsistent with this Agreement. 4. Wherever used in this instrument, a masculin~ pronoun shall be used to include the masculine and feminine gender, and a singular word shall be deemed to include the singular and plural, in all cases where the context requires. 7 ~PR 0'? ~005 11:05 ~ 51R5 UHIO N~ 614 854 81'79 TO ~iGdl?GSiJ6~ P. I1/i~ ARTICLE NON ALIENATION The Nationwide group annuity contracts of the Model Plan which are held by the Trustee arc given for the purpose of providing for the support of the covered Employees upon their retirement. Therefore, subject to applicable laws, no benefit payable at any time under the Mod~l Plan shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garr~shrncnt or encumbrance of uny kind. Any attcmpt to alienate, sell, Ir, msfer, assign, plcdg~ or otherwise encumber any such bencfit~, whether presently or thercafter payable, shall be void. No retirement benefit, nor the Trust Fund, shall in any manner be liable for or subject to the debts or liability of any F. saployees or retired Employees entitled to or receiving any~¢nt benefits. If any Employee or retirod Employee shall attempt to, or shall alienate, sell. mmsfer, assign, pledge, or otherwise encumber his benefits under thc Model Plan. or any part thercof, or if by reason of his bunkn~tcy or other event happening at any such time such benefits would devolve upon anyone else or would not be enjoyed by him, then thc Crrantor in its discretion way terminate his int.,mt in such benefit and may direc~ thc Trustee to hold or apply it to or for the benefit of such Employee in such manner a~ the Grantor may deem proper and any such payment shall be a complete discharge of the liability for any such benefit under thc Model Plan. ARTICLE XIII TERM OF TRUST This Agrc'~ment shall terminate thirty (30) days following the termination of Nationwide as a Financial Orgaaization as defined in the Regulations or immediately upon termination of or transfer of all assets from the Nationwide group annuity contracts. ARTICLE X1V ACCEPTANCE OF TRUST AND FIDUCIARY ACKNOWLEDGMENT Thc Trustee hcreby accepts this Tras~ and agrees to hold the ~oup annuity contracts now or here~ctcr cot~gtating thc Trust Fund hereunder, subject to all of the terms and conclitioas of this Agreement. Trustee here. by acknowiedg~s that it is a fiduciary with respect to all investment matte~ for which it has assumed rcsponsibility und~ the terms and conditiom of this Agreement and that it wi'Il indemnify the IViodel Plan as a result of any cause of action as a result of acts and omissions of the Trustee. Trustee shall ptuchase such iasurancc or bond as may be reasonably necessary to satisfy thc rccluircments of thc Regulations. APR 07 2005 11:03 FR STRS OHIO NM 614 854 8199 TO ~916317651~66 P.12/12 The Town of Southold D~ferred Compensation Committee Louisa Evans. TRUSTEE: Nationwide Trust Company, F~B 9 TOTAL PAGE. 12 ~* GEORGE E. PATAK~ GOVERNOR DEPARTMENT OF CIVIL SERVICE June 17,2005 DANIEL E. WALL EXECUTIVE DEPU rY COMMISSIONER Mr. John A. Cushman Town Comptroller Town of Southold 54375 Main Road P.O. Box 1179 Southold, NY 11971-0959 Dear Mr. Cushman: Re: Acknowledgement of the Deferred Compensation Model Plan for Employees of the Town of Southold This is to advise you that I have acknowledged to the New York State Deferred Compensation Board receipt of documentation relative to updating the above Model Plan reflecting all amendments through May 21, 2004. This acknowledgment is based upon the participation of Nationwide Retirement Solutions in conjunction with Nationwide Trust Company, FSB in your Town's Plan, and allows for continued payroll deferrals of deferred compensation for your Town's employees. If, in the future, your committee makes changes to or selects other Plan contractors, please remember that equivalent documents must be submitted to the President of the Civil Service Commission before that organization's participation in your Plan. If you have questions concerning this acknowledgement, please contact David Ellers of my staff on (518) 457-2925. Sincerely, Executive Deputy Commissioner CC: Ms. Linda Angello NYS Deferred Compensation Board Empire State Plaza Concourse - North Room 124 Albany, NY 12223 Ms. Paula Shingledecker Regional Vice President Nationwide Retirement Solutions 5900 Parkwood Place PW-04-08 Dublin, OH 43016