CalPERS 457 Plan - Employee Retirement Plan AgreementPER ,S 457 Pi, ,Q-c to
CALIFORNIA PUBLIC EMPLOYEES
DEFINED CONTRIBUTION PLAN
The purpose of this Plan is to provide deferred compensation for members of the Public Employees' Retirement System
and other employees of California public employers that elect to participate in the Plan. This Plan is established pur-
suant to sections 21420 through 21433 of the Government Code of the State of California and is intended to constitute
an "eligible deferred compensation plan" within the meaning of section 457 of the Federal Internal Revenue Code.
ARTICLE 1 - DEFINITIONS
The following terms when used herein shall have the following meaning:
1.1 Account
The bookkeeping account maintained with respect to each Participant which reflects the value of the deferred compen-
sation credited to the Participant, including the Participant's Deferrals, the earnings or loss of the Fund (net of Fund
expenses) allocable to the Participant, any Transfers for the Participant's benefit, and any distributions made to the
Participant or the Participant's Beneficiary.
1.2 Adoption Agreement
The agreement under which an Employer becomes a participating Employer under this Plan.
1.3 Beneficiary
The person or persons designated by the Participant to receive distributions from the Participant's Account after the
Participant's death.
1.4 Board
The Board of Administration of PERS.
1.5 Code
The Federal Internal Revenue Code of 1986, as amended from time to time.
1.6 Deferral
An amount credited to a Participant's Account by reason of the Participant's agreement to defer a portion of his or her
salary or wages.
1.7 Deferral Agreement
The agreement between an Employer and an Employee, including any amendments thereto, which specifies the amount
of Deferrals to be made by the Employee. Each Deferral Agreement or amendment thereto shall be made or confirmed
in writing under procedures established by the Board.
1.8 Eligible Deferred Compensation Plan
A plan maintained by any employer that constitutes an "eligible deferred compensation plan" within the meaning of
section 457 of the Code and that has at all relevant times included the deferral limitations set forth in section 457(b).
1.9 Employee
Any individual who is a common law employee of an Employer and who is a participant in PERS or in such other pen-
sion plan or retirement system as may be maintained for the Employer's employees.
1.10 Employer
Any political subdivision of the State of California, or any integral part of the government of the State of California,
that has become a participating employer under this Plan pursuant to Article II. Where required by the context, refer-
ences to the Employer shall mean the current or former Employer of the Employee or Participant.
1.11 Fund
The Public Employees' Deferred Compensation Fund established pursuant to section 21425 of the Government Code.
1.12 Government Code
Those statutes of the State of California that have been codified as the Government Code.
2
PERS 457 Program
1.13 Includible Compensation
A Participant's calendar year compensation from the Employer that is includible in gross income for Federal income tax
purposes. Such term does not include any Deferral excludable from gross income under this Plan or any other amount
excludable from gross income under section 457(a), 403(b), 401(k), or 125 of the Code. Includible Compensation shall
be determined without regard to any community property laws.
1.14 Investment Option
One of the available alternatives for crediting investment earnings to a Participant's Account, which shall be based
upon the performance of one or a combination of the investment portfolios maintained under the Fund.
1.15 Normal Retirement Age
The age used to determine the three -year period in which a Participant may utilize the catch -up limitation under
Section 4.2. A Participant may designate as his or her Normal Retirement Age the age that will be attained in any
Year that is not earlier than the earliest Year in which the Participant will be eligible to retire without actuarial or simi-
lar reduction under PERS or another retirement system and that is not later than the Year of the Participant's Required
Beginning Date. Once a Participant has utilized the catch -up limitation under Section 4.2 or under a comparable pro-
vision of another Eligible Deferred Compensation Plan, that Participant's Normal Retirement Age may not thereafter
be changed.
1.16 Participant
Any Employee or former Employee for whom a Deferral has been credited under the Plan and for whom an Account is
maintained.
1.17 PERS
The Public Employees' Retirement System of the State of California.
1.18 Plan
The California Public Employees' Deferred Compensation Plan established pursuant to sections 21420 through 21433 of
the Government Code, the terms of which are set forth in this Plan document. To the extent required under section
457 of the Code, each Employer's participation in this Plan shall be treated as a separate plan, and each Employer's sep-
arate plan shall be deemed to include any other Eligible Deferred Compensation Plan maintained by that Employer.
1.19 Required Beginning Date
April 1st of the Year following the Year of a Participant's attainment of age 70- or Separation from Service, whichever is
later.
1.20 Separation from Service
The cessation of an Employee's active employment with an Employer. The standards applicable under section
402(d)(4)(A)(iii) of the Code shall apply in determining whether a Participant has had a Separation from Service with
the Employer. An Employee's rights upon Separation from Service with an Employer shall be unaffected by whether
the Employee thereafter becomes an Employee of another Employer that has adopted this Plan.
1.21 Transfer
An amount credited to a Participant's Account by reason of a transfer from another Eligible Deferred Compensation
Plan.
1.22 Unforeseeable Emergency
A circumstance of severe financial hardship to the Participant (or Beneficiary after the death of the Participant) result-
ing from a sudden and unexpected illness or accident of the Participant (or Beneficiary, as applicable) or of a dependent
(as defined in Section 152(a) of the Code), loss of property due to casualty, or other similar extraordinary or unforesee-
able circumstances arising from events beyond the control of the Participant (or Beneficiary, as applicable). A need to
send a child to college or to purchase a new home shall not constitute an Unforeseeable Emergency.
1.23 Year
A calendar year.
PERS 457 Program
ARTICLE 2 - EMPLOYER PARTICIPATION
2.1 Initial Participation
This Plan shall be available to the Employees of an Employer only if the Employer has executed an Adoption
Agreement and provided the Board with such information as the Board deems necessary to administer the Plan on
behalf of the Employer.
2.2 Terms of Participation
By executing an Adoption Agreement, an Employer agrees to adhere to all terms and conditions of the Plan, to
invest all Deferrals and Transfers in the Fund, and to follow all administrative procedures established by the Board.
Except as otherwise provided herein, the terms of this Plan shall apply on a uniform basis to all Employers participating
hereunder.
2.3 Duration of Employer Participation
Each Adoption Agreement shall provide that the Employer will make the Plan available to its Employees for a mini-
mum period of three (3) years. In the event that an Employer thereafter withdraws from participation in the Plan, all
amounts credited to the Accounts of the Employer's participating Employees will continue to be held in the Fund and
will be distributed in accordance with the terms of the Plan, except to the extent of any elective transfers from the Plan
pursuant to Section 7.2.
ARTICLE 3 - EMPLOYEE PARTICIPATION
3.1 Eligibility
Except as provided in section 21420 of the Government Code, all Employees of an Employer shall be eligible to partici-
pate in the Plan.
3.2 Initial Enrollment
In order to become a Participant, an Employee must enter into a Deferral Agreement, which shall become effective no
earlier than the calendar month following the month in which the agreement is made. A Deferral Agreement will be
given effect only if the Deferral amount elected therein satisfies whatever minimum the Board may establish, and the
Employee provides all information called for on the agreement form.
3.3 Effect of Deferral Agreement
Commencing with the effective date of an Employee's Deferral Agreement, his or her gross salary or wages shall be
reduced by the Deferral amount specified in the Deferral Agreement. Deferrals shall continue to be made in such
amount unless and until the Deferral Agreement is amended or the Employee has a Separation from Service with the
Employer. Subject to the limitations of Article IV, Deferrals shall not be subject to Federal or California income tax
withholding and shall not be reported as gross income on the Employee's annual wage statement (Form W -2).
However, Deferrals shall be subject to FICA taxation when earned.
3.4 Amendment of Deferral Agreement
A Participant may amend or revoke his or her Deferral Agreement at any time, provided, however, that no change in
the amount of a Participant's Deferrals will become effective until the calendar month following the month in which
the Deferral Agreement is amended.
3.5 Investment Options
Upon enrollment, the Participant shall designate the Investment Option or Investment Options to which his or her
Deferrals are to be allocated. A Participant may thereafter re- allocate his or her Account balance among the available
Investment Options. The minimum amounts or percentages that may be allocated among Investment Options, and the
timing and frequency of re- allocations, shall be subject to such limitations and procedures as the Board may from time
to time establish.
3.6 Beneficiary Designation
Upon enrollment, the Participant shall designate a Beneficiary to receive distributions from the Participant's Account
in the event of the Participant's death. A Participant may change his or her designated Beneficiary at any time, provid-
ed that an amended Beneficiary designation shall be given effect only if it is signed by the Participant and delivered to a
Plan representative (or post- marked for delivery) prior to the Participant's death. A Participant may designate any per-
son or persons as Beneficiaries. Unless otherwise provided in the Beneficiary designation form, each designated
Beneficiary shall be entitled to equal shares of the benefits payable after the Participant's death. If the Participant fails
4
PERS 457 Program
to designate a Beneficiary, or if no designated Beneficiary survives the Participant for a period of fifteen (15) days, then
the estate of the Participant shall be the Beneficiary. Notwithstanding the foregoing, a Participant's Beneficiary desig-
nation shall not be given effect and shall be overridden to the extent that such a designation would impair the rights of
any surviving spouse under applicable law.
3.7 Additional Deferrals
An Employer may make additional Fund investments with respect to any Employee, resulting in additional credits to
the Account of such Employee. Any such additional credits shall be treated as Deferrals for all purposes of the Plan.
The Employer shall notify the Board of any such additional Deferrals, and each Employee for whom such Deferrals are
to be made must complete a Deferral Agreement, regardless of whether elective Deferrals are to be made by such
Employee.
ARTICLE 4 - DEFERRAL LIMITATIONS
4.1 General Limitation
Except as provided in Section 4.2, a Participant's Deferrals for a Year shall not exceed the lesser of:
(a) $7,500 (or such greater dollar limit as may be in effect under section 457(g) of the Code), or
(b) 33_% of the Participant's Includible Compensation for the Year.
4.2 Catch -up Limitation
If a Participant has designated a proper Normal Retirement Age in the manner established by the Board, then for one
or more of the three (3) Years ending before the Year in which a Participant attains that Normal Retirement Age, the
Participant's Deferrals shall not exceed the lesser of:
(a) $15,000 (or such greater dollar amount as may be in effect under section 457 of the Code), or
(b) the limitation under Section 4.1, plus the portion of the limitation under Section 4.1 that was not used by
the Participant in a prior Year commencing after 1978. A prior Year shall be taken into account under this
paragraph only if the Participant was eligible in that Year to participate in this Plan or in any other Eligible
Deferred Compensation Plan.
4.3 Coordination with Other Plans
The limitations under Section 4.1 and 4.2 shall be reduced by any amount excluded from the Participant's gross income
for the same Year (or any prior Year taken into account under Section 4.2) under sections 402(e)(3), 402(h)(1)(B),
403(b), 457(a), or 501(c)(18) of the Code under a plan maintained by the Employer or any other employer, except that
the limitation under Section 4.1(b) shall not be reduced by any amount excluded from gross income under a plan main-
tained by another Employer.
ARTICLE 5 - PARTICIPANT ACCOUNTS
5.1 Crediting of Accounts
All Deferrals and Transfers with respect to a Participant shall be credited to the Participant's Account as of the date
such amounts are invested in the Fund in accordance with the procedures established by the Board. The Employer shall
cause all Deferrals and Transfers to be invested in the Fund as soon as practicable after such amounts are withheld from
the Participant's salary or wages or are available from the transferor plan, as applicable.
5.2 Account Balances
The value, or balance, of each Participant's Account shall equal the aggregate value of the Fund investments held with
respect to the Participant, based on the Investment Options selected by the Participant, and the method of valuation
established by the Board. Each Participant shall periodically receive a statement which shows his or her Account bal-
ance and summarizes any credits or other transactions since the preceding statement. In the event that an individual
has participated in this Plan by reason of employment with two or more Employers, separate Accounts shall be main-
tained for such individual with respect to each employment relationship.
I'ERS 457 Program
ARTICLE 6 - DISTRIBUTIONS
6.1 Commencement of Distributions upon Separation from Service
Upon a Participant's Separation from Service with an Employer, the Participant may elect to receive distributions under
one of the Optional Distribution Forms described in Section 6.2, commencing no earlier than the sixty -first (61st) day
following the date of the Participant's Separation from Service, or the Participant may elect a Deferred Commencement
Date under Section 6.3. If neither such election is made within sixty (60) days of the Participant's Separation from
Service, distributions shall commence under the Default Distribution Option as soon as practicable thereafter. Except
as provided in Section 6.6 (relating to Unforeseeable Emergencies), no amount will be distributed from a Participant's
Account before the sixty -first (61st) day following the date of the Participant's Separation from Service with the
Employer.
6.2 Optional Distribution Forms
Prior to the commencement date under Section 6.1 or Section 6.3, as applicable, the Participant may elect to have his
or her Account distributed in one of the following forms:
(a) a single lump -sum payment;
(b) substantially nonincreasing installment payments for a period of years (payable on an annual, semi - annual,
quarterly, or monthly basis) which extends no longer than the life expectancy of the Participant or such longer
period as permitted under Section 6.8;
(c) partial lump -sum payment of a designated amount, with the balance payable in substantially nonincreasing
installment payments for a period of years, as described in paragraph (b); or
(d) annuity payments (payable on an annual, quarterly, or monthly basis) for the Participant's lifetime, or for
the lifetimes of the Participant and the Participant's Beneficiary if permitted under Section 6.8;
(e) such other form of installment payments as may be approved by the Board consistent with the limitations
of Section 6.8.
No election of a distribution form under this Section 6.2 may be made or changed after the commencement date for
such distribution form.
6.3 Deferred Commencement Date
Not later than sixty (60) days following the date of the Participant's Separation from Service, the Participant may elect
a Deferred Commencement Date for part or all of the Participant's Account balance. Such date may not be later than
the Participant's Required Beginning Date. Unless an Optional Distribution Form is elected before that Deferred
Commencement Date, the Participant's Account shall then be distributed under the Default Distribution Option. A
Participant's election of a Deferred Commencement Date under this Section 6.3 shall be irrevocable.
6.4 Default Distribution Option
For purposes of this Article 6, the "Default Distribution Option" shall be substantially nonincreasing annual install-
ments over ten (10) years or, if less, the number of years obtained by dividing the Participant's Account balance at the
benefit commencement date by $3,500 and by rounding the quotient to the nearest whole number.
6.5 Cash -outs and Combined Payments
The Board reserves the right to adopt guidelines, which shall be uniformly applied to all Plan Participants and
Beneficiaries, under which Account balances below a specified level may be distributed in a lump -sum upon Separation
from Service or at a Deferred Commencement Date and installment payments below a specified amount may be com-
bined and paid at less frequent intervals (but not less frequently than annually).
6.6 Unforeseeable Emergencies
In the event of an Unforeseeable Emergency prior to or after the commencement of distributions, a Participant
(or Beneficiary after the death of the Participant) may apply to receive that part of the value of the Participant's
Account that is reasonably needed to satisfy the emergency need, including any income tax resulting from the
distribution. Payment will not be made to the extent that the financial hardship may be satisfied through cessation
of Deferrals, insurance or other reimbursement, or a liquidation of other assets to the extent such liquidation would not
itself cause severe financial hardship.
0
PERS 457 Program
6.7 Death Benefits
Upon the Participant's death, the Participant's remaining Account balance shall be payable to the Beneficiary com-
mencing on the sixty-first (61st) day after the date of the Participant's death, unless, within sixty (60) days of the
Participant's death, the Beneficiary irrevocably elects a Deferred Commencement Date that is consistent with the limi-
tations set forth below. Prior to the Beneficiary's commencement date, the Beneficiary may irrevocably elect to receive
the Participant's remaining Account balance under any of the Optional Distribution Forms described in Section 6.2
that is consistent with the limitations set forth below. If a Beneficiary fails to make a timely election of an Optional
Distribution Form, death benefits shall be paid under the Default Distribution Option or over such shorter period as
may be required under the limitations set forth below.
(a) If the Participant dies prior to the Participant's Required Beginning Date and the Beneficiary is the
Participant's surviving spouse, the commencement date shall be no later than the last day of the Year in which
the Participant would have attained age 70_ (or, if later, the Year immediately following the Year of the
Participant's death) and shall be paid over a period that does not exceed the life or life expectancy of the sur-
viving spouse.
(b) If the Participant dies prior to the Participant's Required Beginning Date and the Beneficiary is not the
Participant's surviving spouse, the entire Account balance shall be distributed no later than (i) the last day of
the Year which includes the fifth (5th) anniversary of the Participant's death, or (ii) if distributions to the
Beneficiary commence by the last day of the Year immediately following the Year of the Participant's death, the
last day of the Year which includes the fifteenth (15th) anniversary of the Participant's death.
(c) If the Participant dies after the Participant's Required Beginning Date or after the commencement of distri-
butions in the form of an annuity, the Beneficiary may not elect to defer the commencement of death benefits,
and the Participant's remaining Account shall be distributed at least as rapidly as under the method selected by
the Participant.
(d) In the event that a Beneficiary dies before all payments to the Beneficiary have been completed, the
remaining value of the Participant's Account shall be paid to the estate of the Beneficiary in a lump sum.
(e) If there are two or more Beneficiaries, the provisions of this Section 6.7 and Section 6.8 shall be applied
separately to each Beneficiary with respect to that Beneficiary's share in the Participant's Account.
(f) No Beneficiary shall have any right of recovery against the Employer or the Plan for any distributions that
are made in the name of the Participant before a Plan representative has been duly notified of the Participant's
death.
6.8 Limitations on Distribution Options
No distribution option may be selected by a Participant or Beneficiary under this Article 6 unless it satisfies the require-
ments of section 401(a)(9) and section 457(d)(2) of the Code, including that installment payments be made in substan-
tially nonincreasing amounts and that payments commencing before the death of the Participant satisfy the incidental
death benefits requirement of section 457(d)(2)(B)(i)(I). The terms of this Article shall be construed in accordance
with those Code sections and the regulations thereunder. Unless otherwise elected by the Participant or a Beneficiary,
all distribution periods based on life expectancies shall be determined in the manner required under section 401(a)(9)
of the Code without recalculation of life expectancies.
6.9 Distributions from Fund
Except as otherwise provided herein, all distributions shall be made directly from the Fund to the Participant or
Beneficiary. To the extent required by law, income and other taxes shall be withheld from each benefit payment, and
payments shall be reported to the appropriate governmental agency or agencies.
6.10 Annuities
In the event that a Participant or Beneficiary elects to receive distributions in the form of a life annuity or another
annuity form that cannot be distributed from the Fund, the portion of the Participant's Account balance allocable to
that form of distribution shall be distributed from the Fund and used to purchase a commercial annuity contract under
which that form of annuity is provided. The amount of the annuity payments to the Participant or Beneficiary shall
equal the amounts payable under such annuity contract. An annuity contract acquired in connection with an annuity
form of distribution shall be the sole property of the Employer, and the Employer shall be solely responsible to assure
that all benefit payments are made in accordance with the terms of the Plan, and that all tax withholding and reporting
requirements are satisfied.
PERS 457 Pro i-am
ARTICLE 7 - TRANSFERS
7.1 Acceptance of Transfers
A Transfer will be accepted and credited to a Participant's Account under the Plan if such Transfer is made from anoth-
er Eligible Deferred Compensation Plan maintained by the Employer or another employer and is made in cash or other
property that the Board accepts for investment in the Fund. Any Transfer so credited to a Participant's Account shall
be invested in the Fund, and the portion of the Participant's Account balance attributable to such Transfer shall be dis-
tributed in accordance with the terms of the Plan.
7.2 Transfers to Other Plans
At the election of a Participant, all or a portion of the Participant's Account balance may be transferred to another
Eligible Deferred Compensation Plan maintained by the Employer or another employer, provided that such other plan
accepts transfers.
7.3 Transfer Conditions
The Board reserves the right to limit the terms and conditions under which Transfers will be accepted from or made to
other Eligible Deferred Compensation Plans, including such terms and conditions as are necessary to comply with regu-
lations or other pronouncements under section 457 of the Code and to assure that any transferor or transferee plan con-
stitutes an Eligible Deferred Compensation Plan.
ARTICLE 8 - PARTICIPANT RIGHTS
8.1 General Creditor Status
No Participant or Beneficiary shall have any vested or secured interest in any assets of the Fund or any other assets that
may be held or set aside under the Plan and shall have no claim under the Plan except as a general creditor of the
Employer. Except as provided in Article IX, all Fund investments made by an Employer and any other assets that may
be held in connection with an Employer's participation in this Plan, including all property and rights and income attrib-
utable to Deferrals, shall remain the sole property and rights of such Employer subject only to the claims of such
Employer's general creditors.
8.2 Benefits Based on Account Balances
The benefits payable to each Participant (and his or her Beneficiary) shall be measured by and limited to the amounts
properly credited to the Participant's Account. A Participant shall have no claim under the Plan for any loss or
diminution of his or her Account balance that is attributable to any loss in the value of the investment portfolios of the
Fund that correspond with the Investment Options selected by the Participant.
8.3 Nonassignability
Except as provided in Section 8.4, the rights of a Participant or Beneficiary under this Plan may not be sold, assigned,
pledged, commuted, transferred, or otherwise conveyed, and any attempt to assign or transfer rights or benefits under
this Plan shall not be recognized. Except as otherwise required by law, the rights of a Participant or Beneficiary under
this Plan shall not be subject to attachment, garnishment, or execution, or to transfer by operation of law in the event
of bankruptcy or insolvency of the Participant or Beneficiary or otherwise.
8.4 Transfers under Domestic Relations Orders
To the extent required under a final judgment, decree, or order (including approval of a property settlement agreement)
made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for pay-
ment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a
separate account shall be established with respect to the spouse, former spouse, or child who shall be entitled to choose
Investment Options in the same manner as the Participant. Any amount so set aside for a spouse, former spouse, or
child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the judg-
ment, decree, or order directs a different form of payment. Nothing in this Section 8.4 shall be construed to authorize
any amount to be distributed under the Plan at a time or in a form that is not permitted under Section 457 of the Code.
PERS 457 Program
8.5 Release from Liability to Participant
A Participant's right to receive benefits under the Plan shall be reduced to the extent that any portion of a Participant's
Account has been paid or set side for payment to a spouse, former spouse, or child pursuant to Section 8.4 or to the
extent that the Employer or the Plan is otherwise subject to a binding judgment, decree, or order for the attachment,
garnishment, or execution of any portion of the Participant's Account or of any distributions therefrom. The
Participant shall be deemed to have released the Employer and the Plan from any claim with respect to such amounts in
any case in which (i) the Employer, the Plan, or any Plan representative has been served with legal process or otherwise
joined in a proceeding relating to such amounts, (ii) the Participant has been notified of the pendency of such proceed-
ing in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process or
by mail from the Employer or a Plan representative to the Participant's last known mailing address, and (iii) the
Participant fails to obtain an order of the court in the proceeding relieving the Employer and the Plan from the obliga-
tion to comply with the judgment, decree, or order.
8.6 Participation in Legal Proceedings
Neither the Employer nor any Plan representative shall be obligated to incur any cost to defend against or set aside any
judgment, decree, or order relating to the division, attachment, garnishment, or execution of the Participant's Account
or of any distribution therefrom. Notwithstanding the foregoing, if the Employer, the Plan, or a Plan representative is
joined in any such proceeding, a Plan representative shall take such steps as it deems necessary and appropriate to pro-
tect the terms of the Plan.
ARTICLE 9 - TERMS OF FUND INVESTMENTS
9.1 Use of Fund
Except as otherwise provided herein, the Fund shall serve as the exclusive investment vehicle for amounts held under
this Plan. By executing an Adoption Agreement, each participating Employer shall agree to accept the terms and con-
ditions of Fund investments set forth herein and to invest all Deferrals and Transfers with respect to its Employees in
the Fund. Subject to the relevant provisions of the Government Code and to Section 9.7, the Fund is intended to
serve as a restricted trust fund for the exclusive purpose of enabling participating Employers to provide deferred compen-
sation benefits under this Plan.
9.2 Administration of Fund
As provided in section 21426 of the Government Code, the Board has the exclusive control of the administration and
investment of the Fund. As provided in section 21425 of the Government Code, the Board may retain a bank or trust
company to serve as a custodian for safekeeping, recordkeeping, delivery, securities valuation, investment performance
reporting, or other services in connection with the investment of the Fund. In addition, the Board may retain one or
more investment managers or investment advisors to manage or participate in the management of the investment port-
folios of the Fund. All expenses and fees incurred in the administration of the Fund shall be treated as Plan expenses
under Section 10.4•
9.3 Investment Options
The Board shall establish such Investment Options as it deems necessary to provide Participants with a diversified range
of alternatives, including but not limited to Investment Options of the type described in section 21422.1 of the
Government Code. Each Investment Option shall be based upon the investment performance of one or a combination
of separate investment portfolios maintained under the Fund. The Board shall specify the investment objectives and
characteristics of each Investment Option and the corresponding investment portfolio or portfolios and shall provide
Employers and eligible Employees with a written description of each available Investment Option. The Board, in its
sole discretion, may add, eliminate, or consolidate Investment Options and corresponding investment portfolios from
time to time. In the event that an Investment Option is eliminated, the Board shall provide prior notice of such elimi-
nation, and if the Participants whose Accounts were wholly or partially allocated to that Investment Option do not
make a re- allocation, the Board shall re- allocate such amounts to the available Investment Option or Investment
Options that the Board in its sole discretion deems most comparable to the eliminated Investment Option.
9.4 Fund Investments
Subject to the limitations of applicable law and such further limitations as the Board may establish, each investment
portfolio of the Fund may hold any form of investment that is consistent with its investment objectives. Without limit-
ing the generality of the foregoing, the investment portfolios may hold equity or debt securities (other than securities
issued by any Employer), fixed or variable annuity contracts (including deposit administration contracts) issued by life
insurance companies, certificates of deposit or fixed rate investment contracts issued by a bank or similar institution,
and such short -term instruments or deposits as the Board deems necessary to satisfy the liquidity needs of the Fund.
PERS 457 Program
In addition, each investment portfolio may hold shares, units, or participating interests in regulated investment compa-
nies, common or collective trust funds maintained by banks or similar institutions, investment partnerships, or other
pooled investment funds or trusts that may issue participating interests to Eligible Deferred Compensation Plans.
9.5 Valuation and Accounting
Each investment portfolio of the Fund shall be valued at least monthly, and the value of each Participant's Account
shall be determined by aggregating the value of his or her separate interests, if any, in each investment portfolio. The
valuation of each investment portfolio shall reflect income received and accrued, realized and unrealized gains and loss-
es, and allocable Fund expenses. The value of each Participant's interest in an investment portfolio may be measured in
units, shares, or dollars. In addition, the Board shall maintain records showing the value of the Fund investments allo-
cable to each participating Employer, which shall equal the total of the Account values of all Participants (and deceased
Participants) whose entitlement to benefits under the Plan is attributable to employment with that Employer.
9.6 Redemption Restrictions
No Employer shall have any right to redeem, revoke, sell, or otherwise liquidate any part of its interest in the Fund
except as may be necessary to:
(a) effectuate a Participant's election to transfer all or a portion of his or her Account balance to another
Eligible Deferred Compensation Plan;
(b) effectuate the purchase of an annuity contract, as provided in Section 6.10;
(c) correct an excess Deferral or other mistaken investment in the Fund;
(d) reimburse the Employer for any Plan benefits that may have been paid by the Employer out of its other
assets; or
(e) satisfy the claims of the Employer's general creditors in the event of the Employer's insolvency, as provided
in Section 9.7.
Nothing in paragraphs (a) through (e), above, shall give any Employer the right to redeem, revoke, sell, or otherwise
liquidate any Fund investment, unless the Board or its designee has been provided with adequate evidence of the
Employer's right to do so.
9.7 Employer Insolvency
In the event that a participating Employer is unable to pay its debts as they become due or is subject to a pending pro-
ceeding as a debtor under the United States Bankruptcy Code, the Employer shall be treated as "insolvent," and the
Board shall suspend benefit payments from the Participant Accounts allocable to that Employer and shall hold the Fund
assets allocable to that Employer for the benefit of the Employer's general creditors. Nothing in this Section 9.7 shall
preclude any Participant or Beneficiary from pursuing his or her rights as a general creditor of the Employer with respect
to benefits due under the Plan during such a period of suspension. The Employer shall resume benefit payments to such
Participants and Beneficiaries only after the Board has determined that the Employer is not insolvent (or is no longer
insolvent); the first payments following such resumption shall include the aggregate amount of all benefits not paid dur-
ing the period of suspension, and the Employer shall be reimbursed by the Fund for any benefits paid out of other assets
of the Employer during the period of suspension. An Employer's insolvency shall be determined as follows:
(a) The governing body and the highest ranking official of the Employer shall have the duty to inform the
Board in writing of the Employer's insolvency.
(b) If a person claiming to be a creditor of the Employer alleges in writing to the Board that the Employer has
become insolvent, the Board shall determine whether the Employer is insolvent and, pending such determina-
tion, the Board shall discontinue payment of the Employer's deferred compensation obligations from the Fund.
(c) Unless the Board has actual knowledge of the Employer's insolvency, or has received notice from the
Employer or a person claiming to be a creditor alleging that the Employer is insolvent, the Board shall have no
duty to inquire whether the Employer is insolvent.
(d) The Board may in all events rely on such evidence concerning the Employer's insolvency as may be fur-
nished to the Board and that provides the Board with a reasonable basis for making a determination concern-
ing the Employer's solvency.
10
PERS 457 Program
ARTICLE 10 - ADMINISTRATION OF PLAN
10.1 Duties of Board
Except as provided in Section 10.3, the administration of the Plan shall be under the exclusive control of the Board.
The decisions of the Board shall be final, binding, and conclusive on all interested persons for all purposes. No member
of the Board shall be entitled to act on or decide any matters relating solely to himself or herself or any of his or her
rights or benefits under the Plan. To the maximum extent permitted by law, each member of the Board shall be held
harmless for all acts performed in good faith in connection with the Plan.
10.2 Delegation of Authority
The Board may delegate to any individual member of the Board, any employee or employees of PERS, or any indepen-
dent contractor the authority to act as the Board's agent with respect to any matter within the control of the Board,
provided that any such delegation of authority shall be subject to revocation by the Board. Any act that the Board is .
required or authorized to perform under the terms of this Plan, including any communication to be made or received by
the Board and the adoption of any supplementary guidelines or procedures, may be performed by an agent of the Board,
provided such person is acting within the scope of that person's delegation of authority from the Board. To the maxi-
mum extent permitted by law, each employee of PERS shall be held harmless for any act performed in good faith in
connection with the Plan. Any independent contractor who is retained to perform services under the Plan shall per-
form such services solely as the agent of the Board and shall not be liable to any Employer, Participant, or Beneficiary
for any act performed (or not performed) hereunder.
10.3 Duties of Employer
In accordance with procedures established by the Board, the Employer shall be responsible:
(a) to assure that participation in the Plan is limited to Employees of the Employer and to make the Plan avail-
able to all eligible Employees;
(b) to assure that Deferrals are properly deducted from the salaries and wages of participating Employees and
remitted on a timely basis to the Fund and to report the amount of such Deferrals on Employee's wage state-
ments in the manner required under applicable law;
(c) to assure that Deferrals, taking account of amounts deferred under any other Eligible Deferred
Compensation Plan maintained by the Employer, do not exceed the limitations described in Article IV;
(d) to approve distribution elections and applications, including applications for withdrawals on account of
Unforeseeable Emergencies, in accordance with the requirements of Article V; and
(e) to provide the Board with such information and in such form as the Board deems necessary for the proper
administration of the Plan.
10.4 Plan Expenses
The expenses of administering the Plan and Fund, including (i) expenses incurred by the Board in the administration of
the Plan and Fund, (ii) fees and expenses approved by the Board for investment advisory, custodial, recordkeeping, and
other plan administration and communication services, and (iii) any other expenses or charges allocable to the Plan or
the Fund that have been approved by the Board shall be charged to the Fund or, as appropriate, to a particular
Investment Option or Investment Options under the Fund and shall be reflected in Participants' Account balances as
provided in Section 5.2. Brokerage fees, transfer taxes, and any other costs incident to the purchase or sale by the Fund
of securities or other investments shall be deemed to be part of the cost of such securities or investments or deducted in
computing the sales proceeds therefrom and shall be accounted for accordingly. Notwithstanding the foregoing, the
Board reserves the right, as provided in section 21424 of the Government Code, to enter into arrangements with
Employers under which specified administration costs are borne by such Employers or charged against additional
Deferrals under Section 3.7 at the time invested in the Fund.
10.5 Communications from Participants
All enrollments, elections, designations, applications and other communications by or from an Employee, Participant,
Beneficiary, or legal representative of any such person regarding that person's rights under the Plan shall be made in the
form and manner established by the Board and shall be deemed to have been made and delivered only upon actual
receipt by the person designated by the Board to receive such communication. Neither the Board nor the Employer
shall be required to give effect to any such communication that is not made on the prescribed form and in the pre-
scribed manner and that does not contain all information called for on the prescribed form. The Employer shall
promptly furnish the Board or its designee a copy of any such communication that is delivered or transmitted to the
Employer.
11
PERS 457 Promam
10.6 Communications to Employers
All notices, statements, reports, and other communications from the Board to any Employer shall be deemed to have
been duly given when delivered to, or when mailed by first class mail, to the official of the Employer who has been des-
ignated by the Employer in connection with its Adoption Agreement (or as a modification of the information provided
in connection with its Adoption Agreement) to receive such communications.
10.7 Communications to Participants
All notices, statements, reports, and other communications from the Board or an Employer to any Employee,
Participant, Beneficiary, or legal representative of any such person shall be deemed to have been duly given when deliv-
ered to, or when mailed by first class mail, to such person at his or her last mailing address appearing on the Plan
records.
10.8 Time Periods
As necessary or desirable to facilitate the proper administration of the Plan and consistent with the requirements of sec-
tion 457 of the Code, the Board may further restrict the time periods during which a Participant or Beneficiary is
required to make any election under the Plan, including the making or amending of a Deferral Agreement, the making
or amending of Investment Option selections, the election of distribution commencement dates or distribution forms.
ARTICLE 11 - GENERAL PROVISIONS
11.1 Amendment
Subject to the requirements of the Government Code, the Board reserves the right at any time to amend or modify the
Plan without the consent of any Employer, Participant, or Beneficiary. The Board shall give notice of any such amend-
ment or modification to participating Employers. Except as may be required to maintain the status of the Plan as an
Eligible Deferred Compensation Plan under section 457 of the Code or to comply with other applicable law, no amend-
ment or modification shall impair any individual's right to benefits under the Plan or expand any Employer's obligation
to provide benefits with respect to amounts previously credited to Participants' Accounts.
11.2 Effect on Employment
Nothing contained herein shall give any Employer the right to be retained in the employment of an Employer or affect
the right of an Employer to terminate any Employee's employment.
11.3 Binding Contract
The terms of this Plan, as duly amended from time to time, shall constitute a contract between each Participant and the
Employer and shall be binding, as applicable, upon their heirs, administrators, trustees, successors, assigns, and
Beneficiaries.
11.4 Supplementary Information and Procedures
Any explanatory brochures, pamphlets, or notices distributed by the Board to Employees, Participants, Beneficiaries, or
Employers shall be distributed for information purposes and shall not override any provision of this Plan or give any per-
son any claim or right not provided for under this Plan. Notwithstanding the foregoing, to the extent that the terms of
this Plan document authorize the Board to adopt supplementary guidelines or procedures, any publication announcing
such guidelines or procedures may be relied upon by the persons to whom it is distributed, unless and until modified by
a subsequent publication. Any procedural requirement described in any such publication shall be binding upon the
Employee, Participant, Beneficiary, or Employer, as applicable, to the same extent as if such requirement were set forth
in this Plan document.
11.5 Incompetence of Payee
If an Employer or the Board 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, any payment due him or her, or his or her estate, may be paid to his or her
spouse, a child, a relative, or any other person having maintaining or having custody of such person, unless a prior claim
therefore has been made by a duly appointed legal representative. Any such payment shall be a complete discharge of
all liability under the Plan thereof.
11.6 Applicable Law
This Plan shall be construed under the laws of the State of California and in conformity with the requirements of sec-
tion 457 of the Code and all regulations thereunder applicable to Eligible Deferred Compensation Plans.
12
PERS 457 Program
EMPLOYER ADOPTION AGREEMENT
By executing this Agreement, the employer identified below (the "Employer ") adopts the California Public Employees'
Deferred Compensation Plan (the "Plan ") for the benefit of its employees. The Employer further agrees and represents
as follows:
1. The Employer is a political subdivision of the State of California eligible to adopt the Plan for the benefit of its
employees.
2. The Employer has duly adopted a resolution (copy attached) or taken such other official action as required for its
lawful adoption and implementation of this Plan and has authorized the undersigned to execute this agreement on
behalf of the Employer.
3. The Employer has been furnished with and reviewed a copy of the Plan document which explains the rights and
obligations of the Employer under the Plan, as well as the rights and options available to the Employer's employees
under the Plan; the Employer agrees to follow the terms of the Plan document, which are incorporated herein by
reference.
4• The Employer understands and agrees that all amounts deferred under the Plan are to be invested in the Public
Employees' Deferred Compensation Fund (the "Fund "), an investment entity established to hold amounts deferred
under the Plan, and that the Employer shall have no right to sell, redeem, or otherwise liquidate its investments in the
Fund, except as provided in Article 9 of the Plan.
5. The Employer understands that, except for certain responsibilities delegated to the Employer under the Plan, the
administration of the Plan and Fund is subject to the exclusive control of the Board of Administration of the Public
Employees' Retirement System (the "Board "). The Employer further understands that the Board has appointed State
Street Bank and Trust Company and State Street Bank and Trust Company of California, N.A. (collectively, "State
Street ") to perform administrative services under the Plan and to act as the Board's agent in all matters relating to the
administration of the Plan; the Employer agrees to deal directly with State Street (or any successor agent duly appointed
by the Board) on all matters relating to its participation in the Plan and to cooperate with State Street in the dissemi-
nation of Plan information to the Employer's employees.
6. The information set forth on the attached specifications page is complete and accurate and may be relied upon by
the Board and State Street in the administration of the Plan on behalf of the Employer and its employees, unless and
until the Employer has provided State Street with a written modification of such specifications.
7. The Employer has been furnished with a copy of a manual that describes the procedures to be followed by the
Employer in the administration of the Plan for its employees, and the Employer agrees to adhere to the procedures set
forth in that manual, and in any revisions thereof or procedural notices that are hereafter furnished, to the Employer.
8. The Employer agrees to make the Plan available to its employees and otherwise to abide by this Agreement for a
minimum period of three (3) years commencing on the effective date shown on the attached specifications page; this
Agreement shall remain in full force and effect after such three -year period unless terminated by the Employer or the
Board upon sixty (60) days prior written notice.
(Name of Employer) ity of Gi1r6
(TtAe) Jail Baksa, Cit Administrator
Date: February 20, 1996
Accepted by State Street Bank and Trust Company on behalf of the Board of Administration of the Public Employees'
Retirement System
WM
Date: Witness:
13
Amendment To Plan Document
The following amendment to the Section 457 Plan of OJ�3 to , is hereby
adopted, effective i , 1997 to incorporate the provisions of Small Business Job
Protection Act of 1996' .
Section 3.6 of the Plan is hereby amended to read:
"Custodian/Trustee" means a bank, trust company, financial institution, or other legally
authorized entity appointed by the Employer to have custody of assets in the
Investment Fund.
Section 4.4 is hereby amended to read:
The Employer shall invest the Participant's deferrals in accordance with such selection.
Section 5.3(a), "Annual limitation" is hereby amended to read:
Except as provided in Paragraph (b) below the maximum amount that a Participant may
defer during any Employment Period, when added to the amount of any Employer
Contribution for such Participant during the Employment Period, shall not exceed the
lesser of $7,500 (or as may be adjusted for cost -of- living by the Secretary of the
Treasury) or 33 -% of the Participant's Includible Compensation.
Section 6 "Investment Fund ", shall be amended to read as follows:
6.1 Investment Fund. The Employer shall establish an Investment Fund for the
purpose of investing amounts of Deferred Compensation and Employer Contributions, if
any, credited to Participant Accounts. Such Participants Accounts shall at all times be
held by the Custodian/ Trustee for the exclusive benefit of the Participant or Beneficiary.
The Employer may cause funds deferred under this Plan to be commingled for
investment only with funds deferred under the Q% +V d �r:(b r� deferred
compensation plan, so long as the investment directives under such Plan are
substantially similar to the investment directives under this Plan and so long as
adequate records are maintained to enable the identification of the portion of such
funds and earnings that pertain to each Plan.
6.2 Custodial Trust Provisions
(a) Custodian/Trustees. The Custodian/Trustees shall be, at any time, the duly
appointed and authorized DVFCAAa Cer^ .*Resignation, removal
and appointment of such Custodian/Trustees, as well as compensation and
expense reimbursement of the Custodian/Trustees shall be in accordance with
tJtrO� Cc1 fi�.����
1
(ii) All fiduciaries shall discharge their duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting-in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims, and as
defined by applicable State:law.
(e) Custodian/Trustees' Powers and Duties. The Custodian/Trustees' powers and
duties shall be those defined under applicable State law.
(f) This Plan and Investment Fund is intended to be exempt from taxation under
Section 501(a) of the Internal Revenue Code ( "Code") and intended to comply
with Section 457(g) of such code.
6.3 Investment Options. Each participant may allocate his Deferred Compensation
and Employer Contributions, if any, among the investment options, if any,
provided under the Plan. A Participant may change his investment options in
accordance with rules established by the Employer. Such modification may
effect transfers of Compensation already deferred and any Employer
Contributions that may have already been made from one investment option to
another and/or may prospectively change the investments to which future
deferrals of Compensation and Employer Contributions, if any, shall be allocated,
effective as soon as practicable after the Participant makes the change.
6.4 Account. The Employer shall maintain an Account for each Participant to which
shall be credited any Employer Contributions made for such Participant and such
Participant's Deferred Compensation at such times as it would have been
payable but for the terms of this Participation Agreement. Each Participant's
Account shall be revalued at least quarterly to reflect the earnings, gains and
losses creditable thereto or debitable therefrom in accordance with the
performance of the investment options selected by the Participant pursuant to
Subsection 4.4, 6.2 and 6.3. The eamings, gains and losses or charges
creditable to or debitable from an Account shall mean the actual earnings, gains
and losses of each investment option, on a pro rata basis among the Accounts of
those Participants who selected that investment option.
Section 7.1 "Payments on Separation from Service" is hereby amended to read:
Subject to the provision of Subsection 7.5, upon a Participant's separation from
service with the Employer for any reason (including Disability), the entire amount
credited to his Account (less any federal, state or local income tax required to be
withheld therefrom) shall be paid to him in a single lump sum immediately after
the expiration of the Election Period; provided, however, that during such
Election Period a Participant (including a Participant who has utilized the
catch -up deferral provisions of Subsection 5.3(b) with an Account balance in
excess of an amount specified by the Employer, which amount shall not exceed
the amount specified in Section 457(e)(9)(A) of the Code, as the same may be
3
I. Amended Exhibit A
The Administrative Agreement with Great Western Bank and any Exhibit A thereto is
hereby amended effective the ! day of O Ccc ^6CA , 1997 as follows:
A. Exhibit A and /or any successor amendment(s) are hereby deleted and
replaced in their entirety by this Amended Exhibit A which incorporates by
reference those investment options contained on the FundSelect® "Core
List" attached hereto as Item II or any FundSelect® "Extended List ", if so
applicable, as the pWI investment options available under the deferred
compensation plan as of the effective date listed above.
B. Employer agrees that FundSelect® Advisers, Inc., ("Fund Select"") may
unilaterally add new investment options to the plan quarterly and /or
replace existing investment options annually or on such other frequency
as agreed to in writing by Employer and FundSelect®.
C. Employer agrees to be bound by the terms of the "Procedures for
Removing Investment Options" attached hereto as Item III.
D. Employer agrees the effective date for offering the investment options
outlined on the FundSelect® "Core List" will be the first day of the month at
least one month subsequent to the month the Amended Exhibit A is
executed.
E. Employer agrees to restrict the total investment options of the plan to not
exceed those provided on the FundSelect® "Core List ", or the total of
such other investment options which Employer and FundSelect® mutually
agree to substitute and /or add to those provided on the FundSelect® "Core
List ".
Employer: d-' lit oy Great Western Bank:
0
By: By:
Employer #: J3 r / Date:
Date: /1 J 4
Exhibit B
Deferred Compensation Plan
Administration Agreement
Effective �J /t7 , 19 this Exhibit becomes part of the Deferred Compensation
Plan Administration Agreement between Great Western Bank ( "Great Western Bank "), and
C t -�`1 cY _P G% IRO V , (the "Agency ")
and is designed to memorialize the fo lowing additional terms that will apply to the provision of
investment management and administrative services in connection with the Plan's investment in the
FundSelect't Stable Value Fund ( "The SVF ").
1. Great Western (through its subcontractor, National Deferred Compensation, Inc.,
( "NDC ") and its affiliate broker - dealer, FundSelect® Advisers, Inc., ( "FSA "), as appropriate), will
provide the Basic Services described in such Deferred Compensation Plan Administration Agreement
("the Agreement ") in connection with the Plan's investment in the SVF for the fees described in
Paragraph 2 below.
2. For performing Basic Services in connection with the Plan's overall Administration,
NDC will assess the fees described as follows. Pursuant to a separate agreement, Norwest Bank
Minnesota, N.A. ( "Norwest ") provides investment management, custody, and other ancillary services to
the SVF and charges a fee therefor (the " Norwest Management and Services Fee "), and NDC provides
valuation of participant investments in the SVF for which it charges a separate SVF Valuation Fee.
These SVF fees are described in Paragraph 3 herein. The aggregate of the Norwest Management and
Services Fee, the NDC SVF Valuation Fee, and the Great Western Plan Administration Fee paid each
month is referred to herein as the "Total Monthly Fee ". Such Total Monthly Fee will be included daily
in the unit value calculation of the participant's value in the SVF, and will not be reflected as a charge
against the account.
3. The Total Monthly Fee will be the Norwest Management and Services Fee and the NDC
SVF Valuation Fee and the Great Western Plan Administration Fee which will be calculated as set out
below:
a. Norwest's Management and Services Fee will be
.15% annually, based upon the first $100 Million of average monthly net
assets invested in the SVF and,
ii. .10% annually based upon the next $300 Million of average monthly net
assets invested in the SVF,
.05% annually, based upon the balance of the average monthly net assets
invested in the SVF.
-Over-
SV_B
FundSelect®
in cooperation with Great Western Bank
Fund Select" Advisers, Inc. - 1550 Old Henderson Road - Columbus, Ohio 43220
FundSelect'Core List of 25 Investment Options
Vanguard Bond Index Fund - Total Bond Market Portfolio
This fund invests in a portfolio of fixed - income securities selected to match the Lehman Brothers Aggregate
Bond Index. The Aggregate Bond Index is a broad market - weighted index which encompasses three major
classes of investment grade fixed- income securities in the United States: U.S. Treasury and agency
securities, corporate bonds, and mortgage- backed securities with maturities greater than one year.
The Bond Fund of America
This fund seeks to provide a high level of current income consistent with the preservation of capital by
investing primarily in intermediate -term and long -term fixed- income securities (bonds). Normally, at least 60
percent of the fund's assets are in high -grade marketable corporate debt securities, mortgage- backed and
asset - backed securities, government obligations, and money market instruments. The fund may invest up to
35 percent of assets in debt securities rated BB or lower. The fund may also purchase foreign debt
securities.
Kemper High -Yield A Fund
This fund seeks the highest level of current income obtainable from a professionally managed, diversified
portfolio of fixed- income securities which the fund's investment manager considers consistent with
reasonable risk. As a secondary objective, the fund will seek capital gains where consistent with its primary
objective. The high yield, fixed- income securities in which the fund intends to invest are commonly referred to
as "junk bonds" and normally offer a current yield or yield to maturity that is significantly higher than the yield
available from securities rated in the four highest categories assigned by Standard & Poor's or Moody's.
The Income Fund of America
The objective of this fund is to emphasize current income while secondarily striving to attain capital growth.
The fund believes that a portfolio with relatively high current income can also generate growth of capital. The
fund strives to accomplish this objective by investing in a broadly diversified portfolio of securities, including
stocks and bonds.
Fidelity Equity Income Fund
While this fund seeks income, potential for capital appreciation is also a consideration. The fund normally
invests at least 65 percent of assets in income - producing equity securities that have a demonstrated yield
higher than the composite yield on the stocks in the S &P 500 Index. It may invest the balance of assets in all
types of domestic and foreign securities, including bonds and convertibles. The fund may invest up to 20
percent of assets in debt securities rated below investment grade. It does not intend to invest in debt
securities of companies without proven earnings or credit.
Kemper - Dreman High Return A Fund
The investment objective of this fund is to achieve a high rate of total return. The fund invests primarily in
common stocks paying high dividends relative to the dividend yield of the S &P 500 Index. It generally
invests in stocks issued by large cap companies that management believes to have established records of
earnings and dividends, low price /earnings ratios, reasonable returns on equity, and sound finances.
Washington Mutual Investors Fund
This fund seeks income and the opportunity for growth of principal. The fund invests in common stocks or
equivalent securities that are legal for the investment of trust funds in the District of Columbia. It intends to be
fully invested and well diversified. Management tries to select a portfolio that an investor with fiduciary
responsibility might select under the Prudent Investor Rule of the Superior Court of the District of Columbia.
Deposit products are offered by Great Western Bank, a Federal Savings Bank, and are insured by the FDIC. Mutual fund products are offered by FundSekct®
and are not FDIC insured, are not deposits or other obligations of, or guaranteed by, Great Western Bank, and are subject to investment risk, including
possible loss of the principal amount invested. FundSelect" and Great Western Bank are independent companies and are not affiliated with each other.
FundSPlar t ®Ac3viGers. Inr. is a member of SIPC and NASD
FundSelect'Core List of 25 Investment Options, cont.
Franklin Mutual Beacon Fund
This fund seeks capital appreciation; income is a secondary objective. The fund primarily invests in common
and preferred stocks, as well as corporate debt securities of any credit quality (rated or unrated), and
convertible securities. These securities are believed by the fund's manager to be trading at prices below
their intrinsic value, according to factors such as price /book ratio, price /earnings ratio, and cash flow. The
fund may also invest its assets in securities of companies involved in mergers, consolidations, liquidations,
and reorganizations. In addition, it may invest in' domestic and foreign securities.
PBHG Growth Fund
This fund seeks capital appreciation by investing in common stocks and convertible securities issued by
companies with market capitalizations or annual revenues not exceeding $2 billion. It invests primarily in
companies that the advisor believes have outlooks for significant earnings growth and capital appreciation
potential. The fund may also invest in foreign securities.
DFA U.S. 9 -10 Small Company Portfolio
This fund seeks long -term capital appreciation by investing in a diverse group of small U.S. companies with
readily marketable securities. These companies may be traded on the NYSE, the AMEX, or the
over - the - counter market, but their market capitalizations must be comparable with those in the smallest
quintile of the NYSE (smallest 20 %).
Kaufmann Fund
The objective of this fund is long -term capital appreciation. The fund invests primarily in common stocks of
small- and medium -size companies; however, it may also purchase convertibles. To select investments, the
advisor evaluates a company's growth prospects, the economic outlook for its industry, new product
development, management, security value, and financial characteristics. The fund may invest up to 10
percent of assets in options and may leverage up to one -third of holdings. It may also invest up to 25 percent
of assets in foreign securities.
Janus Worldwide Fund
This fund seeks long -term growth of capital consistent with preservation of capital, and invests primarily in
foreign and domestic common stocks. Its portfolio is usually spread across at least five different countries,
including the United States, though it may at times invest in a single country. The fund may also invest in
preferred stocks, warrants, government securities, and corporate debt. It may use derivatives for hedging
purposes or as a means of enhancing return.
Templeton Foreign Fund
This fund seeks long -term capital growth by investing primarily in stocks of companies outside of the United
States. It maintains a flexible investment policy and can invest in all types of securities and in any foreign
country, developed or underdeveloped. While common stocks are the usual form of investment, the fund
may also invest in preferred stocks and certain debt securities (rated or unrated), or in comparable unrated
securities as determined by the fund's manager. The fund's current policy, however, is to not invest more
than 5 percent of its total assets in debt securities which carry a rating lower than BBB.
EuroPacific Growth Fund
This fund seeks long -term growth of capital. The fund normally invests at least 65 percent of assets in equity
securities of issuers domiciled in Europe or the Pacific Basin. It may invest up to 20 percent of assets in
securities issued in developing countries. It may also invest in convertible securities and straight debt
securities; no more than 5 percent of assets may be invested in debt securities rated below investment grade.
For more complete information about the mutual fund products, including charges and expenses, ask your FundSelece Deferred
Compensation Plan Representative for a current prospectus. Read it carefully before investing in any option.
3
III. Procedures for Removing Investment Options
Employer hereby agrees to adopt the following procedures for removing investment
options under the plan for reasons such as non - performance and /or lack of
participation.
FundSelect® will review all investment options on a periodic basis. FundSelect® may
add new investment options to the plan quarterly, however, the removal of investment
options will take place once annually in accordance with the procedures and
approximate time line below:
Procedures
1. FundSelect® will notify the employer:
• which option(s), if any, will be removed from the list of
available options,
• reasons why the option(s) is being removed, and
• which remaining option(s) is most similar in investment
objective /style.
2. The employer will notify FundSelect:
• of the default option(s) it chooses in the event
participants do not select an option(s).
Unless otherwise specified by the employer, all balances
and deferral allocations which are not changed by
participants on or before the removal date will default to the
Great Western Bank Liquid Savings Account.
3. FundSelect will notify all affected participants first with a
newsletter article and then with a personal letter. These
communications will:
briefly outline the reasons the option(s) has been
removed,
advise participants they must exchange existing
balances and reallocate ongoing deferrals to another
option,
notify the participant of the date by which this must be
accomplished, and the default procedures, if no action is
taken by the participant.
-Over-
Time Line
March 1st
March 15th
Newsletter
April 10 -20
Personal
Letter
May 1 -15
Supplemental Savings Programs
CalPERS 457 Program
- P. O. Box 942713
Sacramento, CA 94229 -2713
,,lrERS 1T� n� Telecommunications Device for the Deaf - (916) 795 -3240
Ca (916) 795-3904, FAX (916) 795 -2761
December 22, 2005
CalPERS 457 Program Employers:
RE: CaIPERS 457 PLAN -- AMENDED AND RESTATED PLAN DOCUMENT
The CalPERS 457 Plan is an eligible governmental 457 plan and trust, as
determined by IRS' private letter ruling issued on the CalPERS 457 plan
document in 1999. On the advice of our tax counsel, we have relied on the IRS
regulations and IRS Model Plan language to amend our plan document within the
grace period permitted by the IRS regulations to ensure that the CalPERS 457
Plan remains an eligible 457 plan under our IRS' private letter ruling.
Please find enclosed the CalPERS 457 Plan Document, as amended and
restated effective January 1, 2002 to reflect changes made to Section 457 of the
Internal Revenue Code by the Economic Growth and Tax Relief Reconciliation
Act of 2001 Pub. L. 107 -16 (EGTRRA), the Taxpayer Relief Act of 1997, Pub. L.
No. 105 -34 (TRA' 97), and the Small Business Job Protection Act of 1996, Pub.
L. No. 104 -188 (SBJPA). The enclosed Plan Document complies with the Final
457 regulations published in the Federal Register (68 FR 41230) on July 11,
2003, and the Proposed Income Tax Regulations (REG- 130241 -04) published in
Internal Revenue Bulletin 2005 -27 on July 5, 2005.
Employers that have already adopted the CaIPERS 457 Plan do not have to
approve the amendments or readopt the enclosed plan document. CalPERS, as
fiduciary and trustee of the Plan, takes the responsibility for maintaining plan
compliance with federal and state law. With the amendments contained in the
enclosed Plan Document, the CaIPERS 457 Plan is in full compliance. No
further action is required on your part.
The CaIPERS 457 Program reflected in the enclosed Plan Document offers
participants the full range of benefit features permitted by federal tax law:
• Higher annual contribution limits (up to $15,000 in 2006)
• The ability to contribute additional amounts over age 50 (up to $5,000 in
2006)
Ca1PERS 457 Deferred Compensation Plan Document
The purpose of this Plan is to provide deferred compensation for California public employees
that elect to participate in the Plan. This Plan is established pursuant to sections 21670 through
21685 of the Government Code of the State of California and is intended to constitute an
"eligible deferred compensation plan" within the meaning of section 457 of the Federal Internal
Revenue Code. This amended and restated Plan is effective January 1, 2002.
Article 1 - Definitions
The following terms when used herein shall have the following meaning:
1.1 Account: The bookkeeping account maintained with respect to each Participant which
reflects the value of the deferred compensation credited to the Participant, including the
Participant's Deferrals, the earnings or loss of the Fund (net of Fund expenses) allocable to the
Participant, any Transfers for the Participant's benefit, and any distributions made to the
Participant or the Participant's Beneficiary.
If a Participant has more than one Beneficiary at the time of the Participant's death, then a
separate Account Balance shall be maintained for each Beneficiary. The Account Balance
includes any account established under Section 7.2 for rollover contributions and plan -to -plan
transfers made for a Participant, the account established for a Beneficiary after a Participant's
death, and any account or accounts established for an alternate payee (as defined in section
414(p)(8) of the Code).
1.2 Adoption Agreement: The agreement under which an Employer becomes a participating
Employer under this Plan.
1.3 Beneficiary: The person or persons designated by the Participant to receive distributions
from the Participant's Account after the Participant's death.
1.4 Board: The Board of Administration of CaIPERS.
1.5 Code: The Federal Internal Revenue Code of 1986, as amended from time to time.
1.6 Deferral: An amount credited to a Participant's Account by reason of the Participant's
agreement to defer a portion of his or her salary or wages.
1.7 Deferral Agreement: The agreement between an Employer and an Employee, including any
amendments thereto, which specifies the amount of Deferrals to be made by the Employee. Each
1.16 Participant: Any Employee or former Employee for whom a Deferral has been credited
under the Plan and for whom an Account is maintained.
1.17 CalPERS: The Public Employees' Retirement System of the State of California.
1.18 Plan: The California Public Employees' Deferred Compensation Plan established pursuant
to sections 21670 through 21685 of the Government Code, the terms of which are set forth in this
Plan document. To the extent required under section 457 of the Code, each Employer's
participation in this Plan shall be treated as a separate plan, and each Employer's separate plan
shall be deemed to include any other Eligible Deferred Compensation Plan maintained by that
Employer.
1.19 Required Beginning Date: April 1 st of the Year following the Year of a Participant's
attainment of age 70' /z or Severance from Employment, whichever is later.
1.20 Severance from Employment: The date that the Employee dies, retires, or otherwise has a
severance from employment with the Employer, as determined by the Employer (and taking into
account guidance issued under the Code). An Employee's rights upon Severance from
Employment with an Employer shall be unaffected by whether the Employee thereafter becomes
an Employee of another Employer that has adopted this Plan.
1.21 Transfer: An amount credited to a Participant's Account by reason of a transfer from
another Eligible Deferred Compensation Plan.
1.22 Trustee: The Board of Administration of Ca1PERS
1.23 Unforeseeable Emergency: A severe financial hardship of the 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
(including the need to rebuild a home following damage to a home not otherwise covered by
homeowner's insurance, e.g., as a result of a natural disaster); the need to pay for the funeral
expenses of the Participant's spouse or dependent (as defined in Section 152(a) of the Code); or
other similar extraordinary and unforeseeable circumstances arising as a result of events beyond
the control of the Participant. For example, the imminent foreclosure of or eviction from the
Participant's primary residence may constitute an Unforeseeable Emergency. In addition, the
need to pay for medical expenses, including non - refundable deductibles, as well as for the cost of
prescription drug medication, may constitute an Unforeseeable Emergency. A need to send a
child to college or to purchase a new home shall not constitute an Unforeseeable Emergency.
1.24 Year: A calendar year.
-3-
3.5 Investment Options: Upon enrollment, the Participant shall designate the Investment Option
or Investment Options to which his or her Deferrals are to be allocated. A Participant may
thereafter re- allocate his or her Account balance among the available Investment Options. The
minimum amounts or percentages that may be allocated among Investment Options, and the
timing and frequency of re- allocations, shall be subject to such limitations and procedures as the
Board may from time to time establish.
3.6 Beneficiary Designation: Upon enrollment, the Participant shall designate a Beneficiary to
receive distributions from the Participant's Account in the event of the Participant's death. A
Participant may change his or her designated Beneficiary at any time, provided that an amended
Beneficiary designation shall be given effect only if it is signed by the Participant and delivered
to a Plan representative (or post- marked for delivery) prior to the Participant's death. A
Participant may designate any person or persons as Beneficiaries. Unless otherwise provided in
the Beneficiary designation form, each designated Beneficiary shall be entitled to equal shares of
the benefits payable after the Participant's death. If the Participant fails to designate a
Beneficiary, or if no designated Beneficiary survives the Participant for a period of fifteen (15)
days, then the estate of the Participant shall be the Beneficiary. Notwithstanding the foregoing, a
Participant's Beneficiary designation shall not be given effect and shall be overridden to the
extent that such a designation would impair the rights of any surviving spouse under applicable
law.
3.7 Additional Deferrals: An Employer may make additional Fund investments with respect to
any Employee, resulting in additional credits to the Account of such Employee. Any such
additional credits shall be treated as Deferrals for all purposes of the Plan. The Employer shall
notify the Board of any such additional Deferrals, and each Employee for whom such Deferrals
are to be made must complete a Deferral Agreement, regardless of whether elective Deferrals are
to be made by such Employee.
Article 4 - Deferral Limitations
4.1 General Limitation: Except as provided in Section 4.2 or 4.3, a Participant's Deferrals for a
Year shall not exceed the lesser of:
(a) the Applicable Dollar Amount, or
(b) the Participant's Includible Compensation for the Year.
The Applicable Dollar Amount is the amount established under section 457(e)(15) of the Code
applicable as set forth below:
-5-
(2) An amount equal to (A) the aggregate limit referred to in Section 457(b)(2) of the
Code for each prior calendar year beginning after December 31, 1978 and before January 1, 2002
during which the Participant was an Employee (determined without regard to Sections 4.2 and
4.3), mnuis (B) the aggregate contributions to Pre -2002 Coordination Plans for such years.
4.4 Special Rules: For purposes of this Section 4, the following rules shall apply:
(a) Participant Covered By More Than One Eligible Plan. If the Participant is or has been a
participant in one or more other eligible plans within the meaning of Section 457(b) of the Code,
then this Plan and all such other plans shall be considered as one plan for purposes of applying
the foregoing limitations of this Section 4. For this purpose, the Employer shall take into account
any other such eligible plan maintained by the Employer and shall also take into account any
other such eligible plan for which the Employer receives from the Participant sufficient
information concerning his or her participation in such other plan.
(b) Pre - Participation Years. In applying Section 4.3, a year shall be taken into account only if (i)
the Participant was eligible to participate in the Plan during all or a portion of the year and (ii)
salary and wages, if any, under the Plan during the year was subject to the Basic Annual
Limitation described in Section 4.1 or any other plan ceiling required by Section 457(b) of the
Code.
(c) Pre -2002 Coordination Years. For purposes of Section 4.3(b)(2)(B), "contributions to Pre -
2002 Coordination Plans" means any employer contribution, salary reduction or elective
contribution under any other eligible Code Section 457(b) plan, or a salary reduction or elective
contribution under any Code Section 401(k) qualified cash or deferred arrangement, Code
Section 402(h)(1)(B) simplified employee pension (SARSEP), Code Section 403(b) annuity
contract, and Code Section 408(p) simple retirement account, or under any plan for which a
deduction is allowed because of a contribution to an organization described in Section 501(c)(18)
of the Code, including plans, arrangements or accounts maintained by the Employer or any
employer for whom the Participant performed services. However, the contributions for any
calendar year are only taken into account for purposes of Section 4.3(b)(2)(B) to the extent that
the total of such contributions does not exceed the aggregate limit referred to in Section
457(b)(2) of the Code for that year.
(d) Disregard Excess Deferral. For purposes of Sections 4.1, 4.2 and 4.3, an individual is treated
as not having deferred compensation under a plan for a prior taxable year to the extent Excess
Deferrals under the plan are distributed, as described in Section 4.6. To the extent that the
combined deferrals for pre -2002 years exceeded the maximum deferral limitations, the amount is
treated as an Excess Deferral for those prior years.
-7-
Article 5 - Participant Accounts
5.1 Crediting of Accounts: All Deferrals and Transfers with respect to a Participant shall be
credited to the Participant's Account as of the date such amounts are invested in the Fund in
accordance with the procedures established by the Board. The Employer shall remit to CaIPERS
all Deferrals and Transfers directed by Participants to be invested in the Fund as soon as
practicable after such amounts are withheld from the Participant's salary or wages or are
available from the transferor plan, as applicable.
5.2 Account Balances: The value, or balance, of each Participant's Account shall equal the
aggregate value of the Fund investments held with respect to the Participant, based on the
Investment Options selected by the Participant, and the method of valuation established by the
Board. Each Participant shall periodically receive a statement which shows his or her Account
balance and summarizes any credits or other transactions since the preceding statement. In the
event that an individual has participated in this Plan by reason of employment with two or more
Employers, separate Accounts shall be maintained for such individual with respect to each
employment relationship.
Article 6 - Distributions
6.1 Commencement of Distributions upon Severance from Employment: Upon a
Participant's Severance from Employment with an Employer, the Participant may elect to receive
distributions under one of the optional distribution forms described in Section 6.2, or the
Participant may elect a deferred commencement date under Section 6.3. If no election is made by
the date the Participant attains age 65 (or, if later, 30 days after the Participant's Severance from
Employment), distributions shall commence as soon as practicable thereafter in the form of
substantially equal annual installments over 10 years.
6.2 Optional Distribution Forms: Prior to the commencement date under Section 6.1 or Section
6.3, as applicable, the Participant may elect to have his or her Account distributed in one of the
following forms:
(a) a single lump sum payment;
(b) installment payments for a period of years (payable on an annual, semi - annual, quarterly, or
monthly basis) which extends no longer than the life expectancy of the Participant or such longer
period as permitted under Section 6.8(b);
(c) partial lump sum payment of a designated amount;
6.6 Unforeseeable Emergency Distributions:
In the event of an Unforeseeable Emergency prior to or after the commencement of distributions,
a Participant (or Beneficiary after the death of the Participant) may apply to receive that part of
the value of the Participant's Account that is reasonably needed to satisfy the emergency need,
including any income tax resulting from the distribution. Payment will not be made to the extent
that the financial hardship may be satisfied through cessation of Deferrals, insurance or other
reimbursement, or a liquidation of other assets to the extent such liquidation would not itself
cause severe financial hardship.
6.7 Death Benefits: Upon the Participant's death, the Participant's remaining Account balance
shall be payable to the Beneficiary commencing on the sixty -first (61 st) day after the date of the
Participant's death, unless, within sixty (60) days of the Participant's death, the Beneficiary elects
a deferred commencement date that is consistent with the limitations set forth below. Prior to the
Beneficiary's commencement date, the Beneficiary may elect to receive the Participant's
remaining Account balance under any optional distribution form described in Section 6.2,
provided that the elected distribution form satisfies the limitations set forth below. If a
Beneficiary fails to make a timely election of an optional distribution form, death benefits shall
be paid in the form of substantially equal annual installments over 10 years (or over such shorter
period as may be required under the limitations set forth below).
(a) If the Participant dies prior to the Participant's Required Beginning Date and the Beneficiary
is the Participant's surviving spouse, the commencement date shall be no later than the last day of
the Year in which the Participant would have attained age 70'h (or, if later, the Year immediately
following the Year of the Participant's death) and shall be paid over a period that does not exceed
the Beneficiary's life expectancy using the single life table in Section 1.401(a)(9) -9, A -1, of the
Income Tax Regulations for the spouse's age on the spouse's birthday for that year.
(b) If the Participant dies prior to the Participant's Required Beginning Date and the Beneficiary
is not the Participant's surviving spouse, the entire Account balance shall be distributed no later
than (i) the last day of the Year which includes the fifth (5th) anniversary of the Participant's
death, or (ii) if distributions to the Beneficiary commence by the last day of the Year
immediately following the Year of the Participant's death, the entire Account balance shall be
distributed over the Beneficiary's life expectancy determined in the year following the year of the
Participant's death using the single life table in Section 1.401(a)(9) -9, A -1, of the Income Tax
Regulations for the Beneficiary's age on the Beneficiary's birthday for that year, reduced by one
for each year that has elapsed after that year.
(c) If the Participant dies after the Participant's Required Beginning Date or after the
commencement of distributions in the form of an annuity, the Beneficiary may not elect to defer
the commencement of death benefits, and the Participant's remaining Account shall be
distributed at least as rapidly as under the method selected by the Participant.
elect, at the time and in the manner prescribed by the Board, to have all or any portion of the
distribution paid directly to an eligible retirement plan specified by the Participant in a direct
rollover.
(c) Definitions. For purposes of this Section 6.9, an eligible rollover distribution means any
distribution of all or any portion of a Participant's Account balance, except that an eligible
rollover distribution does not include (a) any installment payment under Section 6.2 for a period
of 10 years or more (b) any distribution made under Section 6.6 as a result of an unforeseeable
emergency, or (c) for any other distribution, the portion, if any, of the distribution that is a
required minimum distribution under Section 401(a)(9). In addition, an eligible retirement plan
means an individual retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, a qualified trust described in Section
401(a) of the Code, an annuity plan described in Section 403(a) or 403(b) of the Code, or an
eligible governmental plan described in Section 457(b) of the Code, that accepts the eligible
rollover distribution.
6.10 Annuities: In the event that a Participant or Beneficiary elects to receive distributions in the
form of a life annuity or another annuity form that cannot be distributed from the Fund, the
portion of the Participant's Account balance allocable to that form of distribution shall be
distributed from the Fund and used to purchase a commercial annuity contract under which that
form of annuity is provided. The amount of the annuity payments to the Participant or
Beneficiary shall equal the amounts payable under such annuity contract.
Article 7 - Transfers
7.1 Acceptance of Transfers: A Transfer will be accepted and credited to a Participant's
Account under the Plan if such Transfer is made from another Eligible Deferred Compensation
Plan maintained by the Employer or another employer and is made in cash o° other property that
the Board accepts for investment in the Fund. Any Transfer so credited to a Participant's Account
shall be invested in the Fund, and the portion of the Participant's Account balance attributable to
such Transfer shall be distributed in accordance with the terms of the Plan.
7.2 Eligible Rollover Contributions to the Plan:
(a) A Participant who is an Employee and who is entitled to receive an eligible
rollover distribution from another eligible retirement plan may request to have all or a
portion of the eligible rollover distribution paid to the Plan. The Board may require such
documentation from the distributing plan as it deems necessary to effectuate the
rollover in accordance with Section 402 of the Code and to confirm that such plan is an
eligible retirement plan within the meaning of Section 402(c)(8)(B) of the Code.
- 13-
7.5 Permissive Service Credit Transfers: If a Participant is also a participant in a tax- qualified
defined benefit governmental plan (as defined in Section 414(d) of the Code) that provides for
the acceptance of plan -to -plan transfers with respect to the Participant, then the Participant may
elect to have any portion of the Participant's Account balance transferred to such defined benefit
governmental plan as may be permitted by such defined benefit governmental plan. A transfer
under this Section 7.5 may be made before the Participant has had a Severance from
Employment; provided, however, that such a transfer may be made only if the transfer is either
for the purchase of permissive service credit (as defined in Section 415(n)(3)(A) of the Code)
under the receiving defined benefit governmental plan or a repayment to which Section 415 of
the Code does not apply by reason of Section 415(k)(3) of the Code.
Article 8 — Loans
8.1 Loans: A Participant who is an Employee may apply for and receive a loan from his or her
Account Balance as provided in this Section 8. Any such loan may not be for an amount less
than $1,000.
8.2 Maximum Loan Amount: No loan to a Participant hereunder may exceed the lesser of.
(a) $50,000, reduced by the greater of (i) the outstanding balance on any loan from the Plan to
the Participant on the date the loan is made or (ii) the highest outstanding balance on loans from
the Plan to the Participant during the one -year period ending on the day before the date the loan
is approved by the Plan (not taking into account any payments made during such one -year
period), or
(b) one half of the value of the Participant's vested Account Balance (as of the Valuation Date
immediately preceding the date on which such loan is approved by the Plan).
For purposes of this Section 8.2, any loan from any other plan maintained by a participating
employer shall be treated as if it were a loan made from the Plan, and the Participant's vested
interest under any such other plan shall be considered a vested interest under this Plan; provided,
however, that the provisions of this paragraph shall not be applied so as to allow the amount of a
loan under this Section 8.2 to exceed the amount that would otherwise be permitted in the
absence of this paragraph.
8.3 Terms of Loan: The terms of the loan shall:
(a) require level amortization with payments not less frequently than quarterly throughout the
repayment period, except that alternative arrangements for repayment may apply in the event that
the borrower is on an bona fide unpaid leave of absence for a period not to exceed one year for
-15-
loan funds are disbursed; provided however, that a Participant may prepay the entire outstanding
balance of his loan at any time (but may not make a partial prepayment); and provided, further,
that if any payroll deductions cannot be made in full because a Participant is on an unpaid leave
of absence or is no longer employed by a participating employer (that has consented to make
payroll deductions for this purpose) or the Participant's paycheck is insufficient for any other
reason, the Participant shall pay directly to the Plan the full amount that would have been
deducted from the Participant's paycheck, with such payment to be made by the last business day
of the calendar month in which in which the amount would have been deducted.
Article 9 - Participant Rights
9.1 Participants' Interest in the Fund: The Fund shall constitute a trust held for the exclusive
benefit of Participants and Beneficiaries under the Plan. The Board is the Trustee of the Fund.
No part of the corpus or income of the Fund shall be used for, or diverted to, purposes other than
for the exclusive benefit of Participants and their Beneficiaries, and no Employer or creditor of
an Employer shall have any interest in or claim against any part of the assets of the Fund.
9.2 Benefits Based on Account Balances: The benefits payable to each Participant (and his or
her Beneficiary) shall be measured by and limited to the amounts properly credited to the
Participant's Account. A Participant shall have no claim under the Plan for any loss or
diminution of his or her Account balance that is attributable to any loss in the value of the
investment portfolios of the Fund that correspond with the Investment Options selected by the
Participant.
9.3 Nonassignability: Except as provided in Section 9.4, the rights of a Participant or
Beneficiary under this Plan may not be sold, assigned, pledged, committed, transferred, or
otherwise conveyed, and any attempt to assign or transfer rights or benefits under this Plan shall
not be recognized. Except as otherwise required by law, the rights of a Participant or Beneficiary
under this Plan shall not be subject to attachment, garnishment, or execution, or to transfer by
operation of law in the event of bankruptcy or insolvency of the Participant or Beneficiary or
otherwise.
9.4 Transfers under Domestic Relations Orders: To the extent required under a final
judgment, decree, or order (including approval of a property settlement agreement) made
pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or
set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to
carry out the terms of such an order, a separate account shall be established with respect to the
spouse, former spouse, or child who shall be entitled to choose Investment Options in the same
manner as the Participant. Any amount so set aside for a spouse, former spouse, or child shall be
paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the
judgment, decree, or order directs a different form of payment. Nothing in this Section 9.4 shall
- 17-
and fees incurred in the administration of the Fund shall be treated as Plan expenses under
Section 11.4.
10.3 Investment Options: The Board shall establish such Investment Options as it deems
necessary to provide Participants with a diversified range of alternatives, including but not
limited to Investment Options of the type described in section 21673 of the Government Code.
Each Investment Option shall be based upon the investment performance of one or a
combination of separate investment portfolios maintained under the Fund. The Board shall
specify the investment objectives and characteristics of each Investment Option and the
corresponding investment portfolio or portfolios and shall provide Employers and eligible
Employees with a written description of each available Investment Option. The Board, in its sole
discretion, may add, eliminate, or consolidate Investment Options and corresponding investment
portfolios from time to time. In the event that an Investment Option is eliminated, the Board shall
provide prior notice of such elimination, and if the Participants whose Accounts were wholly or
partially allocated to that Investment Option do not make a re- allocation, the Board shall re-
allocate such amounts to the available Investment Option or Investment Options that the Board
in its sole discretion deems most comparable to the eliminated Investment Option.
10.4 Fund Investments: Subject to the limitations of applicable law and such further limitations
as the Board may establish, each investment portfolio of the Fund may hold any form of
investment that is consistent with its investment objectives. Without limiting the generality of the
foregoing, the investment portfolios may hold equity or debt securities (other than securities
issued by any Employer), fixed or variable annuity contracts (including deposit administration
contracts) issued by life insurance companies, certificates of deposit or fixed rate investment
contracts issued by a bank or similar institution, and such short-term instruments or deposits as
the Board deems necessary to satisfy the liquidity needs of the Fund. In addition, each
investment portfolio may hold shares, units, or participating interests in regulated investment
companies, common or collective trust funds maintained by banks or similar institutions,
investment partnerships, or other pooled investment funds or trusts that may issue participating
interests to Eligible Deferred Compensation Plans.
10.5 Valuation and Accounting: Each investment portfolio of the Fund shall be valued at least
monthly, and the value of each Participant's Account shall be determined by reference to the
portion of the Participant's Account allocable to each investment portfolio. The valuation of each
investment portfolio shall reflect income received and accrued, realized and unrealized gains and
losses, and allocable Fund expenses. The value of each Participant's interest in an investment
portfolio may be measured in units, shares, or dollars. In addition, the Board shall maintain
records showing the value of the Fund investments allocable to all Participants (and deceased
Participants) whose entitlement to benefits under the Plan is attributable to employment with
each participating Employer.
_19-
11.3 Duties of Employer: In accordance with procedures established by the Board, the
Employer shall be responsible:
(a) to assure that participation in the Plan is limited to Employees of the Employer and to make
the Plan available to all eligible Employees;
(b) to assure that Deferrals are properly deducted from the salaries and wages of participating
Employees and remitted on a timely basis to the Fund and to report the amount of such Deferrals
on Employee's wage statements in the manner required under applicable law;
(c) to assure that Deferrals, taking account of amounts deferred under any other Eligible
Deferred Compensation Plan maintained by the Employer, do not exceed the limitations
described in Article 4;
(d) to approve distribution elections and applications, including applications for withdrawals on
account of Unforeseeable Emergencies, in accordance with the requirements of Article 6;
(e) to provide the Board with such information and in such form as the Board deems necessary
for the proper administration of the Plan; and
(f) to carry out such other responsibilities as the Employer and the Board may agree.
11.4 Plan Expenses: The expenses of administering the Plan and Fund, including (i) expenses
incurred by the Board in the administration of the Plan and Fund, (ii) fees and expenses approved
by the Board for investment advisory, custodial, recordkeeping, and other plan administration
and communication services, and (iii) any other expenses or charges allocable to the Plan or the
Fund that have been approved by the Board shall be charged to the Fund or, as appropriate, to a
particular Investment Option or Investment Options under the Fund and shall be reflected in
Participants' Account balances as provided in Section 5.2. Brokerage fees, transfer taxes, and any
other costs incident to the purchase or sale by the Fund of securities or other investments shall be
deemed to be part of the cost of such securities or investments or deducted in computing the
sales proceeds therefrom and shall be accounted for accordingly. Notwithstanding the foregoing,
the Board reserves the right, as provided in section 21675 of the Government Code, to enter into
arrangements with Employers under which specified administration costs are borne by such
Employers or charged against additional Deferrals under Section 3.7 at the time invested in the
Fund.
11.5 Communications from Participants: All enrollments, elections, designations, applications
and other communications by or from an Employee, Participant, Beneficiary, or legal
representative of any such person regarding that person's rights under the Plan shall be made in
the form and manner established by the Board and shall be deemed to have been made and
delivered only upon actual receipt by the person designated by the Board to- receive such
-21 -
12.3 Binding Contract: The terms of this Plan, as duly amended from time to time, shall
constitute a contract between each Participant and the Employer and shall be binding, as
applicable, upon their heirs, administrators, trustees, successors, assigns, and Beneficiaries.
12.4 Supplementary Information and Procedures: Any explanatory brochures, pamphlets, or
notices distributed by the Board to Employees, Participants, Beneficiaries, or Employers shall be
distributed for information purposes and shall not override any provision of this Plan or give any
person any claim or right not provided for under this Plan. Notwithstanding the foregoing, to the
extent that the terms of this Plan document authorize the Board to adopt supplementary
guidelines or procedures, any publication announcing such guidelines or procedures may be
relied upon by the persons to whom it is distributed, unless and until modified by a subsequent
publication. Any procedural requirement described in any such publication shall be binding upon
the Employee, Participant, Beneficiary, or Employer, as applicable, to the same extent as if such
requirement were set forth in this Plan document.
12.5 Incompetence of Payee: If an Employer or the Board 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, any payment due him or her, or his or her estate, may be paid to-his or her spouse, a child, a
relative, or any other person having maintaining or having custody of such person, unless a prior
claim therefor has been made by a duly appointed legal representative. Any such payment shall
be a complete discharge of all liability under the Plan thereof.
12.6 Applicable Law: This Plan shall be construed under the laws of the State of California and
in conformity with the requirements of section 457 of the Code and all regulations thereunder
applicable to Eligible Deferred Compensation Plans.
-23-