Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
CC Resolution 11745 (Deferred Compensation Plan Amendment)
and RESOLUTION NO. 11745 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL AMENDING THE NATIONWIDE RETIREMENT SOLUTIONS DEFERRED COMPENSATION PLAN TO AUTHORIZE THE ADOPTION OF A NATIONWIDE ACCUMULATED BENEFIT CONVERSION PROGRAM. WHEREAS, the City of San Rafael has employees rendering valuable services; WHEREAS, the City of San Rafael has established a deferred compensation plan for such employees which serves the interest of the City by enabling it to provide reasonable retirement security for its employees by providing increased flexibility in its personnel management system; and by assisting in the attraction and retention of competent personnel; and WHEREAS, the City of San Rafael has decided to offer eligible employees a defined contribution plan established under Section 401(a) of the Internal Revenue Code to take advantage of the tax-deferred savings to eligible employees by delaying income taxation on earnings until such amounts are withdrawn from the plan; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael hereby adopts The Nationwide Accumulated Benefit Conversion Program by hereby specifically adopting the Nationwide Retirement Solutions Governmental Accumulated Benefit Defined Contribution Plan and Trust; and BE IT FURTHER RESOLVED, that the City Manager or his designated officer is authorized to execute all necessary agreements with Nationwide incidental to the administration of the Program and shall do all things necessary and proper to implement G I■ SAL �`Al -s this Resolution, including but not limited to executing the Adoption Agreement and Administrative Agreement. I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the City Council of said City held on Mom, the lath day of A4 2005, by the following vote to wit: AYES: COUNCILMEMBERS: Cohen, Heller, Miller and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: Phillips JEANNE M. LEONCINI, City Clerk MManagement Services- WorkFile\Finance- Work File\Council Material\Resolutions\2005\City\Nationwide ABC Program.doc THE NATIONWIDE ACCUMULATED BENEFIT CONVERSION PROGRAM" ADOPTION AGREEMENT FOR NATIONWIDE RETIREMENT SOLUTIONS GOVERNMENTAL ACCUMULATED BENEFIT DEFINED CONTRIBUTION PLAN AND TRUST (Money Purchase Plan) The undersigned Employer adopts The Nationwide Retirement Solutions Governmental Accumulated Benefit Defined Contribution Plan and Trust (Money Purchase Plan) for those Employees who shall qualify as Participants hereunder, to be known as the I City of San Rafael (Enter Plan Name) It shall be effective as of the date specified below. The Employer hereby selects the following Plan specifications: CAUTION: Failure to properly fill out this Adoption Agreement may result in disqualification of the Plan. EMPLOYER INFORMATION (An amendment to the Adoption Agreement is not needed solely to reflect a change in the information in this Employer Information Section.) 2 NAME OF EMPLOYER City of San Rafael 3 ADDRESS 1400 Fifth Avenue; P.O. Box 151560 San Rafael, CA 94915-1560 City State Zip TELEPHONE (415) 485-3069 4 EMPLOYER'S TAXPAYER IDENTIFICATION NUMBER 94-6000424 5 NAME(S) OF TRUSTEE(S) a. City of San Rafael It C. 6 TRUSTEES' ADDRESS a. x❑ Use Employer Address DC -4242-0904 7 S b. ❑ Street City State Zip LOCATION OF EMPLOYER'S PRINCIPAL OFFICE a. ®State of California b. ❑ Commonwealth of This Plan and Trust shall be governed under the laws of the state or commonwealth where the Employer's principal place of business is located unless another state or commonwealth is specified: EMPLOYER FISCAL YEAR means the 12 consecutive month period: Commencing on a. July 1 (e.g., January I") and month day ending on b. _ June 30 (e.g., December 31S`) month day 9 TYPE OF GOVERNMENTAL ENTITY CAUTION: The Plan may only be adopted by State and local governments and agencies and may not be adopted by 501(c) tax-exempt organizations, federal governmental agencies, Native American tribes or private sector employers. a. ❑ State government or state agency b. ❑ County or county agency c. ❑X Municipality or municipal agency d. ❑ Other, please specify: (e.g., an eligible water district) 0 2004 Nationwide Retirement Solutions, Inc. 2 PLAN INFORMATION 10. EFFECTIVE DATE This Adoption Agreement of the Nationwide Retirement Solutions Governmental Accumulated Benefits Defined Contribution Plan and Trust shall: a. ❑ establish a new Plan effective as of Apri 1 18, 2005 (hereinafter called the "Effective Date"). b. ❑ constitute an amendment and restatement in its entirety of a previously established qualified Plan of the Employer which was effective (hereinafter called the "Effective Date"). Except as specifically provided in the Plan, the effective date of this amendment and restatement is 11. PLAN YEAR means the 12 consecutive month period: Commencing on a. 1-1 (e.g. January 151) and ending on b. 12-31 (e.g. December 3151) IS THERE A SHORT PLAN YEAR? C. ❑ No d. x❑ Yes, beginning April 18, 2005 and ending December 31, 2005 12. PLAN NUMBER assigned by the Employer (select one) a. ® 001 b. ❑ 002 c. ❑ 003 d. ❑ Other (in sequence with numbers used for retirement plans maintained by the employer) © 2004 Nationwide Retirement Solutions, Inc. 3 13. NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to appoint an Administrator. If none is named, the Employer will become the Administrator.) a. ® Employer (Use Employer Address and Telephone) b. ❑ Use Name, address and telephone number below: Name Address City State Zip Telephone Administrator's Tax Identification Number 14. PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS a. 0 Employer (Use Employer Address) b. ❑ Name Address City State Zip Telephone ELIGIBILITY, VESTING AND RETIREMENT AGE 15. ELIGIBLE EMPLOYEES (Plan Section 3.1) Employees who have the following types of accumulated benefits under the Employer's accumulated benefits programs and whose accumulated benefits qualify for conversion as a contribution to this Plan under the terms of the following accumulated benefits program(s) of the Employer: a. H Sick leave b. Vacation leave c. Paid administrative/personal leave d. Other (e.g., accumulated benefits leave) 0 2004 Nationwide Retirement Solutions, Inc. 4 AND (chose a or f or both) e. B all Employees terminating service with the Employer during the Plan Year and who have satisfied the eligibility requirements based on the terms of the Employer's accumulated benefits plans checked below: 1. ❑ Age none (e.g., 55 years of age) 2. ❑ Accumulated Benefits Value in excess of (e.g., $2,000) 3. ❑ Accumulated Leave Hours in excess of (e.g., 40 hours) 4. Not to exceed 75 percent of Available Leave Hours f. ❑Active Employees who are not terminating service during the Plan Year and who meet the following requirements: 1. ❑Age (e.g., 55 years of age) 2. ❑Accumulated Benefits Value in excess of (e.g., $2,000) 3. ❑Accumulated Leave Hours in excess of (e.g., 40 hours) 4. ❑N/A No exclusions NOTE: For purposes of this section, the tern Employee shall include all Employees of this Employer and any leased employees deemed to be Employees under Code Section 414(n) or 414(0). 16. EFFECTIVE DATE OF PARTICIPATION AND VESTING (Plan Section 3.2) An Eligible Employee shall become a Participant of the Plan as of the first day he or she met all eligibility requirements and shall be 100% vested upon entering the Plan. 17. NORMAL RETIREMENT AGE (Plan Section 1.20) means any age that is on or after the earlier of the age of 65 or the age at which Participants have the right to retire and receive, under the basic defined benefit pension plan of the Employer (or a money purchase plan in which the Participant also participates if the Participant is not eligible to participate in a defined benefit plan), immediate retirement benefits without actuarial or similar reduction because of retirement before some later specified age, and that is not later than age 70 '/2. Such age shall be specified as: a. ❑ the date a Participant attains his or her birthday. b. ❑ the later of the date a Participant attains his or her birthday or the anniversary of the first day of the Plan Year in which participation in the Plan commenced. Optional normal retirement age for qualified police or firefighters c. ❑ N/A d. ❑ Any age the employee selects between ages of 40 and 70 ''/z. © 2004 Nationwide Retirement Solutions, Inc. 5 CONTRIBUTIONS AND ALLOCATIONS 18. a. COMPENSATION (Plan Section 1.7) with respect to any Participant means wages, tips, and other compensation on Form W-2, including compensation which is not currently includible in the Participant' s gross income by reason of the application of Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B), 403(b), 414(h) or 457(b). No compensation shall be excluded. b. The Limitation Year for Code Section 415 purposes shall be the same as the determination period for Compensation unless an alternative period is specified (must be a consecutive 12 month period). c. FOR PURPOSES OF THIS SECTION, Compensation shall be based on: 1. P9 the Plan Year. 2. ❑ the Fiscal Year coinciding with or ending within the Plan Year. NOTE: The Limitation Year shall be the same as the year on which Compensation is based. d. HOWEVER, for an Employee' s first year of Participation, Compensation shall be recognized as of the first day of the Plan Year. 19. FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION Employer contribution for each Participant will be determined by the Employer each year based on the converted value of accumulated benefits that are eligible for contribution to this Plan. In no event will the Employer's contribution for the year exceed the statutory maximum of # & of compensation up to $ BUQas indexed) of each Participant's Compensation as described under IRC 415(c). Employer shall make a regular contribution of h/a (e.g., zero) on behalf of each Participant, which amount may be modified by Employer resolution or amendment. 20. DISTRIBUTIONS UPON DEATH (Plan Section 6.2) Distributions upon the death of a Participant prior to receiving any benefits shall ... a. ER begin within 1 year of death for a designated beneficiary and be payable over the life (or over a period not exceeding the life expectancy) of such beneficiary, except that if the beneficiary is the Participant's spouse, begin within the time the Participant would have attained age 70 1/2. b. ❑ be made within 5 years of death for all beneficiaries. © 2004 Nationwide Retirement Solutions, Inc. 21. CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION Distributions upon termination of employment pursuant to Section 6.3 of the Plan shall not be made unless the following conditions have been satisfied: a. B N/A. Immediate distributions may be made at Participant's election and as soon as administratively practicable. b. ❑ The Participant has reached his or her Early or Normal Retirement Age. c. ❑ Distributions may be made at the Participant's election on or after the Anniversary Date following termination of employment. d. ❑ Other 22. FORM OF DISTRIBUTIONS (Plan Sections 6.4 and 6.6) Distributions under the Plan may be made (select all that apply) a. ® in systematic withdrawals b. ® in lump sums c. ® in installments AND, regardless of any provisions in the Plan to the contrary, if the Participant's vested interest derived from Employer and Employee contributions is less than $1,000 an immediate distribution shall be made. AND, Rollover contributions and earnings allocable thereto shall be disregarded in determining the Participant's vested balance. MISCELLANEOUS 23. TRANSFERS AND ROLLOVERS (Plan Sections 4.6 and 7.9) a. ® Yes, transfers from qualified plan (and rollovers) will be allowed. b. ❑ No, transfers from qualified plans (and rollovers) will not be allowed. AND, transfers shall be permitted ... c. ❑ from any Employee, even if not a Participant. d. ® from Participants only. 24. ROLLOVERS (Plan Sections 4.6 and 7.9) a. ® Rollovers will be accepted by the Plan for Participants. b. ❑ Rollovers will not be accepted by the Plan. AND, if a. is elected, distributions from a Participant's Rollover Account may be made at any time upon the written request of the Participant. 0 2004 Nationwide Retirement Solutions, Inc. 25. LOANS TO PARTICIPANTS (Plan Section 7.4) a. X❑ Loans are not permitted. b. ❑ Loans are permitted. IF loans are pennitted: c. ❑ the minimum loan will be $ (e.g., $1000); and d. ❑ a Participant may only have (e.g., one) loan outstanding at any time. PLEASE CAREFULLY READ This Adoption Agreement may be used only in conjunction with the Nationwide Retirement Solutions Goverunental Accumulated Benefit Defined Contribution Plan and Trust Document #01. This Adoption Agreement and the basic Plan document shall together be known as the Nationwide Retirement Solutions Governmental Accumulated Benefit Defined Contribution Plan and Trust #01-01. The adoption of this Plan, the qualification of the Plan and Trust under Code Sections 401(a) and 501(a), respectively, and the related tax consequences are the responsibility of the Employer and its independent tax and legal advisors. In order to have reliance in such circumstances or with respect to such qualification requirements, application for a determination letter must be made to the appropriate office of the Internal Revenue Service. This Adoption Agreement and the accompanying Plan document may not be used unless an authorized representative of Nationwide Retirement Solutions has acknowledged the use of the Plan. Such acknowledgment is for ministerial purposes only. It acknowledges that the Employer is using the Plan but does not represent that this Plan, including the choices selected on the Adoption Agreement, has been reviewed by a representative of Nationwide Retirement Solutions or constitutes a qualified defined contribution plan. Nationwide Retirement Solutions, Inc. With regard to any questions regarding the provisions of this Plan, adoption of the Plan, or the effect of an opinion letter from the IRS, call or write (this information must be completed by the sponsor of this Plan or its designated representative. Name: Address: Telephone: ( ) 0 2004 Nationwide Retirement Solutions, Inc. IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be executed on this 18 day of Avril , 20 05 EMPLOYER: pp By: J1V1 f\jatKeno off, AssistantManager CIT 'F SAN RAFAELi TRUSTEE TRUSTEE TRUSTEE PARTICIPATING EMPLOYER: CITY OF SAN RAFAEL (enter name) By: Ken Nor f Ass�stan C anager © 2004 Nationwide Retirement Solutions, Inc. D The Nationwide Accumulated Benefit Conversion Program is a service mark of the Nationwide Life Insurance Company. ADMINISTRATIVE AGREEMENT FOR THE NATIONWIDE ACCUMULATED BENEFIT CONVERSION PROGRAM SM This Administrative Agreement (hereinafter "Agreement") is executed this 18 day of April 1 20 05 , by and between City of San Rafael (hereinafter "Employer"), and Nationwide Retirement Solutions, Inc. ("Nationwide"). WHEREAS, the Employer desires to adopt The Nationwide Accumulated Benefit Conversion Program m ("Program") to provide retirement benefits for eligible participants; and WHEREAS, the Program includes The Nationwide Retirement Solutions Governmental Accumulated Benefit Defined Contribution Plan and Trust ("Plan") and all investment products offered as investment options thereunder; and WHEREAS, Employer recognizes that through the adoption of the Program all such regulatory, operational, administrative, and other Plan management responsibilities are assumed by the Employer, in accordance with the terms of the Plan's Adoption Agreement and basic Plan and Trust document (collectively referred to as "Plan Document"), and certain responsibilities have been and may be delegated by the Employer to Nationwide (serving in a capacity as a third -party administrator); and WHEREAS, Employer has enacted the necessary resolution to adopt the Plan and to adopt this Administrative Agreement; and WHEREAS, Employer desires to offer the Plan developed in cooperation with Nationwide which permits the Employer and its employees to enjoy the advantages derived from Section 401(a) of the Internal Revenue Code ("Code"); and WHEREAS, the Plan is intended to assist the Employer in providing an increased measure of financial security to its eligible employees by providing for additional retirement income through Employer contributions; NOW, THEREFORE, in consideration of the premises set forth hereinabove and the premises contained hereinafter, the parties agree as follows: I. REGULATORY CONSIDERATIONS A. Nationwide represents that, to the best of its knowledge, the Plan Document meets all necessary criteria for approval by all federal regulatory authorities governing such plans at the time of adoption. Nationwide has not obtained a Determination or Advisory Letter with respect to the qualification status of the Plan. Employer is encouraged DC -4243-0904 to apply for a Determination Letter or request a Private Letter Ruling (PLR), as deemed appropriate by Employer's legal counsel. In the event Employer applies for a Determination Letter or requests a PLR, Employer and not Nationwide shall be responsible for any fees related to such requests. B. Employer has determined that it is eligible to adopt and offer the Plan to its eligible employees and such Plan is a governmental plan as defined under IRC Section 414(d). Further, Employer has determined it is authorized under applicable state law to adopt the Plan and that amounts of the accumulated benefits that are converted and contributed to the Plan constitute employer nonelective contributions. 11. THIRD PARTY ADMINISTRATOR A. The Employer hereby appoints Nationwide as third -party administrator in fulfilling certain administrative requirements of the Plan. B. Nationwide shall perform the administrative services set forth in this Agreement; unless Nationwide is precluded from performing such services in the normal course of business, in whole or in part, due to Acts of God, fire, flood, sabotage, and accidents resulting from aircraft, trains or other vehicles or other accidents beyond the reasonable control of Nationwide. Nationwide shall not be responsible for performing all or that portion of the services precluded by the foregoing events for such period of time as Nationwide is precluded from performing such services in the normal course of business. Nationwide shall not be liable for lost profits, losses, damage or injury, including without limitation, special or consequential damages, resulting in whole or part from the foregoing events. C. "Acts of God" are defined as acts, events, happenings or occurrences due exclusively to natural causes and inevitable accident or disaster, exclusive of all human intervention. Ill. RESPONSIBILITIES OF NATIONWIDE Nationwide agrees to the following terms and conditions. Nationwide assumes no responsibility for services prior to the effective date of the Agreement, nor after termination of the Agreement. Nationwide will: A. Provide Employer with the Plan Document and provide Employer with such assistance as is reasonably necessary to install and implement the Plan. B. Provide Employer the necessary forms or access to electronic media for purposes of transmitting employee data necessary for converting and maintaining participant accounts under the Plan. Nationwide shall accept or reject participant election forms, based on good order requirements of Nationwide. C. Provide an administrative support system to facilitate Employer contributions, reconciliations, disbursements to the investment media, and maintenance of the individual and Employer account records, provide periodic statements, coordinate employee distributions, and assure proper tax reporting. D. Provide such accounting and internal control systems as are necessary to provide Employer with those reports specified in this Agreement as may be necessary to meet the Employer's financial reporting requirements. E. Prepare and distribute sales/marketing literature, communication materials, and other written and visual aids which Nationwide deems necessary to communicate the Plan to eligible employees of the Employer; F. Establish a program for ongoing contact with participants in order to answer questions and to provide additional information and other services reasonably required in connection with the Plan. G. Provide customer services including a toll-free number and Internet website at no additional cost to Employer for participant exchanges and account balance information and other services as may be provided by Nationwide. H. As directed by Employer, Nationwide will approve and process withdrawal and distribution requests I. Nationwide shall review and process distribution, withdrawal and loan requests (if permitted under the Plan) received directly from participants. Any requests must be submitted on forms provided by Nationwide. Form request must be determined to be in good order in accordance with Plan provisions before the request can be processed. Nationwide shall rely upon information provided on the form as accurate. Nationwide shall contact Employer when information missing cannot reasonably be obtained from participant. Specific duties Nationwide is authorized by Employer to carry out are: Send a distribution package to the participant address of record, upon receipt of notice of separation from service or retirement. Current payout options include those listed in Exhibit A. Should the Employer wish to offer additional payment options to participants, Nationwide must agree to these in writing. Such agreement shall not be unreasonably denied. Nationwide agrees to use its best efforts to implement any agreed upon change in payment options within 45 days. • Administer the provisions of the loan program (if permitted by the Plan) pursuant to the terms of the Plan and in accordance with administrative policies as agreed upon by Employer and Nationwide. Details of applicable loan administration policies and loan program are included in Exhibit B. J. As payor, Nationwide will compute and deduct from any disbursements made under the Plan all appropriate Federal and State income taxes required by law to be withheld from plan distributions. Nationwide will furnish appropriate tax reporting forms to all participants receiving payments or benefits from the Plan, and also furnish appropriate tax reporting to the IRS and appropriate state agencies. K. Nationwide shall not be responsible for monitoring applicable Code limits that may be exceeded as a result of aggregating all contributions to all plans should Employees participate in more than one plan sponsored by Employer. L. If applicable, the Nationwide shall not be responsible for monitoring contribution limits that may be exceeded as a result of contributions to other plans sponsored by the Employer, including but not limited to Code Sections 403(b), 401(a), 401(k), and 457 plans. M. Post deposits on the same Business Day of receipt of the order to process such deposit, if the enrollment form of a participant and all information necessary for processing the purchase order are complete upon receipt by Nationwide, and received by Nationwide in Good Order not later than the time period established by Nationwide. "Good Order" is defined as the reconciliation of contribution data and funds remitted by Employer. "Business Day" is defined as any day that the New York Stock Exchange is open for trading. N. If a contribution to be allocated to an eligible employee is received prior to receipt of the participant's election form, allocate the contribution to the participant's account and hold it in a fixed investment option or other such fund designated by Employer as the default investment option. At no time will contributions be returned to the Employer except as expressly permitted by law. Nationwide shall not be responsible for gains or losses incurred under the default investment option as a result of the participant's failure to provide investment direction or future contribution allocation instructions. O. Provide participants opportunities to redirect future contribution amounts to any Investment Product offered by the Plan, subject to any limitations or restrictions established by the Employer, Nationwide or 4 Investment Provider. All requests will be processed within the time period established by the Administrator after receipt in good -order by the Administrator and will be effective with the next following pay period contribution. P. Provide participants opportunities to exchange existing account balances from one Investment Option offered by the Plan to another, subject to any limitations or restrictions established by the Employer, Nationwide, or Investment Provider. As long as an exchange request is received during the hours that the securities exchanges are open, both the request for the fund being "sold" and the new fund being purchased will be effective with that same day's closing price, provided the funds offered by the Plan allow same day pricing. Nationwide's obligations under this Agreement with respect to the investment of Plan contributions shall be subject to, and superseded by, any applicable regulatory or legislative requirements. Q. Establish and maintain individual participant account records and calculate daily valuations of participant accounts. Such records shall contain the participant's social security number, the allocation of contributions to the investment options available under the Plan as directed by the participant, the participant's address, the participant's birth date, the participant's beneficiary designation, and any other data necessary for administration of the participant's account. R. Provide quarterly individual account reports to each participant reflecting the account balances as of each March 31, June 30, September 30, and December 31 ("Statement of Account"). S. Provide the following reports to the Employer on a timely basis as follows: (1) Plan level quarterly summaries within thirty (30) days after the end of each calendar year quarterly reporting period (March 31, June 30, September 30 and December 31), indicating the total amounts invested, total values (including earnings or losses with respect thereto), and total amount of funds to each investment option under the Plan. (2) Other reports as mutually agreed to by the Employer and Nationwide. T. Provide plan amendments as requested by Employer, or as required by legislative or regulatory changes. U. Provide a summary plan booklet for employees, and any necessary updates. V. Provide a loan program and an Employer's administration manual (if loans are permitted under the Plan). IV. RESPONSIBILITIES OF THE EMPLOYER The Employer agrees to the following terms and conditions. The Employer will: A. Provide Nationwide its full cooperation and support in administering the necessary means for transmission of data necessary in the administration of the Plan; B. Disseminate from time to time such promotional and communication materials as may be provided to it for employee distribution; C. Arrange for representatives of Nationwide to conduct any necessary enrollment meetings with the Employer's eligible employees; D. Provide the legal name of Employer, official or committee appointed as the Plan Administrator acting on behalf of the Employer on all material matters relating to activities of the Plan; E. Accept the terms and conditions of the investment media used as funding media under the Program; F. Use the Plan Document, promotional materials, and other forms provided as a service by Nationwide in connection with the Employer's adoption of the Plan; G. Abide by the payout options available under the Plan; H. Indicate to Nationwide those employees eligible to receive contributions and calculate and remit these contributions to Administrator; 1. Administer the Plan in accordance with the Plan Document; J. Submit timely census information to the Nationwide in the requested format; K. Provide Nationwide the deposits by wire transfer, through an automated clearinghouse or by check; and L. Provide to Nationwide in such electronic magnetic media, or another mutually agreed upon method, a deferral listing with respect to participant accounts to include not less than the following: 1. Name of Participant 2. Social Security number of the participant 3. Amount to be credited to participant's sub-account(s) 4. Employer Number (Administrator to provide) 5. Payroll effective date V. ADMINISTRATIVE FEES A. Nationwide also shall be entitled to a Participant account set-up fee of $50.00 per Participant account to be due and assessed upon the initial contribution by the Employer to the Plan and prior to any distribution from the Participant account. B. Nationwide also shall be entitled to a maintenance fee of $50.00 per year per Participant account which shall be assessed beginning one-year after the initial account set-up and every year thereafter until the Participant account value is zero. In the event a Participant account value is less than $50.00 at the time of the assessment of the annual maintenance fee, Nationwide is entitled to receive as its annual maintenance fee the amount of the Participant account value, after which the account shall be closed. C. Participant Loans [IF APPLICABLE]: Nationwide shall process participant loans pursuant to the terms of the Plan and loan administrative procedures adopted thereunder. Nationwide shall charge the following loan fees: An application fee of $ NSA will be deducted from the Participant's account at the time of loan origination. This application fee is nonrefundable. ° An annual loan maintenance fee of $NSA will also be deducted on from the Participant's account until the loan is repaid in full. A default fee of $ NIA will be deducted from the participant's account at the time of default, and annually thereafter until the loan is repaid or upon occurrence of a distributable event. VI. TERMINATION Either party may terminate this Agreement upon 90 days' written notice to the other party. VII. INDEMNIFICATION Nationwide agrees to hold harmless and indemnify the Employer, its appointed and elected officers and Participants from any loss resulting from Nationwide's failure to perform its duties and services pursuant to this Agreement which directly results from Nationwide's negligence or willful misconduct. Nationwide's liability hereunder shall be limited to penalties and interest assessed with respect to such failure. Employer agrees to hold harmless and indemnify Nationwide, its appointed and elected officers and employee's for any loss resulting from Employer's failure to perform its duties and services pursuant to this Agreement. Employer agrees to hold harmless and indemnify Nationwide for any consequences resulting from the failure of the Employer to request a PLR or file for a Determination Letter, as appropriate. VIII. OTHER PROVISIONS A. Nationwide will rely on the accuracy of information received from the Employer. Should an error or omission in the information received cause Nationwide to reprocess any of the services described, the Employer agrees to pay Nationwide for the services, which must be repeated. At the request of the Employer, Nationwide shall provide an estimate of the additional costs. B. The Employer understands and agrees that Nationwide does not hereby agree or contract to provide legal, tax or investment advice and nothing in this Agreement shall be construed to provide the same. Any responsibility for the preparation and interpretation of any legal documents affecting the Plan shall be the sole responsibilities of the Employer and/or legal counsel retained by the Employer for such purposes. C. Nationwide agrees to perform services contained in this Agreement at the request of the Employer as evidenced by the Employer's execution of this Agreement. Nationwide is not a fiduciary and does not accept any fiduciary responsibility whatsoever by virtue of performing services provided under this Agreement. D. This Agreement, including attached Exhibits, shall constitute the entire Agreement. IX. CONTRACT TERM This Agreement is effective April 18, 2005 , until terminated in accordance with Section VI above. EMPLOYER: CITY of SAN RAF L Signature: Ken crdhoff, 4 Title: Assistant _g ty Manager -Date: April 18, 2005 Nationwide Retirement Solutions, Inc. Signature: Title: Date: 9 The Nationwide Accumulated Benefit Conversion Program is a service mark of the Nationwide Life Insurance Company. EXHIBIT A THE FOLLOWING FORMS OF PAYMENT AS DEFINED IN THE PLAN: Lump Sums Installments Systematic Withdrawals EXHIBIT B Loan Program and Administrative Policies [IF APPLICABLE] 10 THE NATIONWIDE ACCUMULATED BENEFIT CONVERSION PROGRAM'm THE NATIONWIDE RETIREMENT SOLUTIONS GOVERNMENTAL ACCUMULATED BENEFIT DEFINED CONTRIBUTION PLAN AND TRUST (Money Purchase Plan) DC -4241-0904 TABLE OF CONTENTS ARTICLE I DEFINITIONS ARTICLE II ADMINISTRATION 2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER......................................4 2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY..........................................4 2.3 POWERS AND DUTIES OF THE ADMINISTRATOR...........................................4 2.4 RECORDS AND REPORTS.............................................................................5 2.5 APPOINTMENT OF ADVISORS......................................................................6 2.6 INFORMATION FROM EMPLOYER.................................................................6 2.7 PAYMENT OF EXPENSES.............................................................................6 2.8 CLAIMS PROCEDURES.......................................................... • . • ...................6 ARTICLE III ELIGIBILITY 3.1 CONDITIONS OF ELIGIBILITY......................................................................7 3.2 EFFECTIVE DATE OF PARTICIPATION...........................................................7 3.3 DETERMINATION OF ELEGIBILITY...............................................................7 3.4 TERMIMATION OF ELIGIBILITY...................................................................7 3.5 OMISSION OF ELIGIBLE EMPLOYEE..............................................................7 3.6 MANDATORY PARTICIPATION.....................................................................8 ARTICLE IV CONTRIBUTION AND ALLOCATION 4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION .........................8 4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION....................................8 4.3 ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS..................8 0 2004 Nationwide Retirement Solutions, Inc. 4.4 MAXIMUM ANNUAL ADDITIONS..................................................................9 4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS......................................13 4.6 TRANSFERS AND ROLLOVERS INTO THE PLAN..............................................13 4.7 DIRECTED INVESTMENT ACCOUNT.............................................................14 ARTICLE V VALUATIONS 5.1 VALUATION OF THE TRUST FUND & PARTICIPANT ACCOUNTS ...................... 15 5.2 METHOD OF VALUATION...........................................................................15 ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.....................................15 6.2 DETERMINATION OF BENEFITS UPON DEATH..............................................15 6.3 DETERMINATION OF BENEFITS UPON TERMINATION....................................16 6.4 DISTRIBUTION OF BENEFITS UPON RETIREMENT OR TERMINATION...............17 6.5 MINIMUM DISTRIBUTION REQUIREMENTS..................................................17 6.6 DISTRIBUTION OF BENEFITS UPON DEATH..................................................19 6.7 DISTRIBUTION FOR MINOR BENEFICIARY....................................................19 6.8 LOCATIONOF PARTICIPANT OR BENEFICIARY UNKOWN...............................19 6.9 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS........................................19 ARTICLE VII TRUSTEE 7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE.................................................20 7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE..................................20 7.3 OTHER POWERS OF THE TRUSTEE...............................................................21 7.4 LOANS TO PARTICIPANTS..........................................................................23 7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS.......................................24 © 2004 Nationwide Retirement Solutions, Inc. 7.6 TRUSTEE'S COMMPENSATION AND EXPENSES AND TAXES ...........................24 7.7 REPORTS OF THE TRUSTEE.........................................................................25 7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE .............................25 7.9 TRANSFERS AND ROLLOVERS OUT OF THE PLAN..........................................26 7.10 TRUSTEE INDEMNIFICATION....................................................................27 ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS 8.1 AMENDMENT...........................................................................................27 8.2 TERMINATION..........................................................................................28 8.3 MERGER OR CONSOLIDATION ............................................ • . • . • ...................28 ARTICLE IX MISCELLANEOUS 9.1 EMPLOYER ADOPTIONS.............................................................................28 9.2 PARTICIPANT'S RIGHTS.............................................................................28 9.3 ALIENATION.............................................................................................29 9.4 CONSTRUCTION OF PLAN..........................................................................29 9.5 GENDER AND NUMBER.............................................................................29 9.6 LEGAL ACTION........................................................................................30 9.7 PROHIBITION AGAINST DIVERSION OF FUNDS..............................................30 9.8 RECEIPT AND RELEASE FOR PAYMENTS......................................................30 9.9 ACTION BY EMPLOYER.............................................................................30 9.10 HEADINGS..............................................................................................30 9.11 APPROVAL BY INTERNAL REVENUE SERVICE............................................31 9.12 UNIFORMITY..........................................................................................31 9.13 PAYMENT OF BENEFITS...........................................................................31 9.14 UNIFORMED SERVICES EMPLOYMENT & REEMPLOYMENT ACT...................32 '�' 2004 Nationwide Retirement Solutions, Inc. ARTICLE X PARTICIPATING EMPLOYERS 10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER.................................32 10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS........................................32 10.3 DESIGNATION OF AGENT.........................................................................32 10.4 EMPLOYEE TRANSFERS...........................................................................33 10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FOREITURES.................33 10.6 AMENDMENT..........................................................................................33 10.7 DISCONTINUANCE OF PARTICIPATION......................................................33 10.8 ADMINISTRATOR'S AUTHORITY...............................................................33 © 2004 Nationwide Retirement Solutions, Inc. ARTICLE I DEFINITIONS As used in this Plan, the following words and phrases shall have the meanings set forth herein unless a different meaning is clearly required by the context: 1.1 "Administrator" means the person(s) or entity designated by the Employer pursuant to Section 2.2 to administer the Plan on behalf of the Employer. 1.2 "Adoption Agreement" means the separate agreement, which is executed by the Employer and accepted by the Trustee, which sets forth the elective provisions of this Plan as specified by the Employer. 1.3 " Aggregate Account" means with respect to each Participant, the value of all accounts maintained on behalf of a Participant, whether attributable to Employer or Employee contributions, subject to the provisions of Section 4.3 1.4 "Anniversary Date" means the last day of the Plan Year. 1.5 "Beneficiary" means the person or entity to whom all or a portion of a Deceased Participant's interest in the Plan is payable, subject to the restrictions of Section 6.2 and 6.6. 1.6 "Code" means the Internal Revenue Code of 1986, as amended. 1.7 "Compensation" with respect to any Participant means information required to be reported under Code Sections 6041, 6051 and 6052 (Wages, tips and other compensation as reported on Form W-2). Compensation is defined as wages, as defined in Code Section 3401(a), and all other payments of Compensation to an Employee by the Employer (in the course of the Employer's trade or business) for which the Employer is required to furnish the Employee a written statement under Code Sections 6041(d), 6051(a)(3) and 6052. Compensation must be determined without regard to any rules under Code Section 3401(a) that limit the remuneration included in wages based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)). In addition, if specified in the Adoption Agreement, Compensation for all Plan purposes shall also include compensation which is not currently includible in the Participant's gross income by reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h)(2) or 457(b). Amounts under Code Section 125 include any amounts not available to a Participant in cash in lieu of group health coverage because the Participant is unable to certify that he or she has other health coverage. An amount will be treated as an amount under Code Section 125 only if the Employer does not request or collect information regarding the Participant's other health coverage as part of the enrollment process for the health plan. The annual compensation of each Participant taken in account in determining allocations for any Plan Year beginning after December 31, 2001, shall not exceed $200,000, as adjusted for cost -of -living increases in accordance with Section 401 (a)(1 7)(B) of the Code. Annual compensation means compensation during the Plan Year or such other consecutive 12 -month period over which compensation is otherwise determined under the Plan (the determination period). 0 2004 Nationwide Retirement Solutions, Inc. 1.8 "Deceased Participant" means a Participant or Former Participant who has died. 1.9 "Eligible Employee" means any Employee as specified in the Adoption Agreement. 1.10 "Employee" means any person who is employed by the Employer, but excludes any person who is employed as an independent contractor. 1.11 `Employer" means the entity specified in the Adoption Agreement, any Participating Employer (as defined in Section 10.1) which shall adopt this Plan, any successor which shall maintain this Plan and any predecessor which has maintained this Plan. 1.12 "Fiscal Year" means the Employer's accounting year as specified in the Adoption Agreement. 1.13 "Forfeiture" means is an amount forfeited pursuant to Sections 3.5 or 6.8. 1.14 "Former Participant" means a person who has been a Participant, but who has ceased to be a Participant for any reason. 1.15 "415 Compensation" means compensation as defined in Section 4.4. If, in connection with the adoption of any amendment, the definition of "415 compensation" has been modified, then, for Plan Years prior to the Plan Year which includes the adoption date of such amendment, "415 Compensation" means compensation determined pursuant to the Plan then in effect. 1.16 "Highly Compensated Employee" means an individual who has Compensation in excess of $80,000 (as indexed) from the Employer in the immediate prior year and, if the Employer elects the application of this clause for the preceding year, was in the top paid group of the employees for such preceding year. For this purpose, an Employee is in the top paid group of Employees for any year if such Employee is in the group consisting of the top 20 percent of the Employees when ranked on the basis of Compensation paid during such year. 1.17 "Investment Manager" means an entity that (a) has the power to manage, acquire, or dispose of Plan assets and (b) acknowledge fiduciary responsibility to the Plan in writing. Such entity must be a person, firm, or corporation registered as an investment adviser under the Investment Advisers Act of 1940, a bank, or an insurance company. 1.18 "Normal Retirement Age" means the age elected by the Employer in the Adoption Agreement. 1.19 "Participant" means any Eligible Employee who participates in the Plan as provided in Article III and has not for any reason become ineligible to participate further in the Plan. -2- © 2004 Nationwide Retirement Solutions, Inc. 1.20 "Participant's Account" means the account established and maintained by the Administrator for each Participant with respect to his or her total interest under the Plan, whether resulting from the Employer's contributions or otherwise. 1.21 "Participant's Rollover Account" means the account established and maintained by the Administrator for each Participant with respect to his or her interest under the Plan resulting from amounts transferred from another eligible retirement plan or "conduit" IRA in accordance with Section 4.6 from which the Administrator or Trustee accepts transfer. 1.22 "Plan" means this instrument (the Nationwide Retirement Solutions Governmental Accumulated Benefits Defined Contribution Plan and Trust Basic Plan Document #01) as adopted by the Employer, including all amendments thereto, and the Adoption Agreement as adopted by the Employer. 1.23 "Plan Year" means the Plan's accounting year as specified in the Adoption Agreement. 1.24 "Regulation" means the Income Tax Regulations as promulgated by the Secretary of the Treasury or his or her delegate, and as amended from time to time. 1.25 "Retirement," "Retired" or their derivatives refer to (i) an Employee's voluntary severance of service from the Employer due to a specific age or otherwise or (ii) an Employee's involuntary separation of service other than for Total and Permanent Disability or death. 1.26 "Retired Participant" means a person who has been a Participant, but who has separated from the service of the Employer for reasons of Retirement. 1.27 "Retirement Date" means the date as of which a Participant retires from employment with the Employer. 1.28 "Termination" or "Terminated" or their derivatives refer to an Employee's involuntary severance of employment from the Employer for any reason other than Total or Permanent Disability or the Employee's death. 1.29 "Terminated Participant" means a person who has been a Participant, but whose employment with the Employer has been Terminated for reasons other than Retirement, Total and Permanent Disability or the Employee's death. 1.30 "Total and Permanent Disability" means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months. A licensed physician chosen by the Administrator shall determine the disability of a Participant. However, if the condition constitutes total disability under the federal Social Security Acts, the Administrator may rely upon such determination that the Participant is Totally and Permanently Disabled for the purposes of this Plan. The determination shall be applied uniformly to all Participants. 1.31 "Trustee" means the person or entity named in the Adoption Agreement and any successors. -3- © 2004 Nationwide Retirement Solutions, Inc. l .32 "Trust Fund" means the assets of the Plan, as the same shall exist from time to time. That portion of the Trust Fund that is exclusive of all Vested interests in Participant Accounts and any Rollover Participant Accounts shall be called the "Trust Fund Remainder." 1.33 "Valuation Date" shall be every business day that the Trustee, any transfer agent appointed by the Trustee, or the Employer and any stock exchange used by such agent, are open for business. ARTICLE II ADMINISTRATION 2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER (a) The Employer shall be empowered to appoint and remove the Trustee and the Administrator from time to time. The Employer shall take all steps necessary to assure that the Plan is being operated for the exclusive benefit of the Participants and their Beneficiaries in accordance with the terms of the Plan and the Code. (b) The Employer may, in its discretion, appoint an Investment Manager to manage all or designated portion of the assets of the Plan other than the Participant Accounts. In such event, the Trustee may follow the directive of the Investment Manger in investing the assets of the Plan managed by the Investment Manager. As described in Section 4.7, each Participant shall manage his own investments in his Participant Account, and each Participant shall be solely responsible for the performance of such Account, and neither the Fund Manger, the Administrator, the Employer, nor any of their agents, attorneys, employees, successors or assigns shall be responsible or liable for same. (c) The Employer shall periodically review the performance of any fiduciary or other person to whom duties have been delegated or allocated by it under the provisions of this Plan or pursuant to procedures established hereunder. 2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY The Employer, or its designated agent, shall be the Administrator of the Plan. 2.3 POWERS AND DUTIES OF THE ADMINISTRATOR The primary responsibility of the Administrator is to administer the Plan for the exclusive benefit of the Participants and their Beneficiaries, subject to the specific terms of the Plan. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and determine all questions arising in connection with administration, interpretation, and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to be deemed a qualified plan and the terms of Code Section 401(a), and shall comply with its terms and regulations -4- 0 2004 Nationwide Retirement Solutions, Inc. issued pursuant thereto. The Administrator shall have all powers necessary or appropriate to accomplish his or her duties under this Plan. The Administrator shall be charged with the duties of the general administration of the Plan, including, but not limited to, the following: (a) the discretion to determine all questions relating to the eligibility of Employees to participate or remain a Participant hereunder and to receive benefits under the Plan; (b) to compute, certify, and direct the Trustee with respect to the amount and the kind of benefits to which any Participant shall be entitled hereunder; (c) to authorize and direct the Trustee with respect to all nondiscretionary or otherwise directed disbursements form the Trust Fund; (d) to maintain all necessary records for the administration of the Plan; (e) to interpret the provisions of the Plan and to make and publish such rules for regulation of the Plan as are consistent with the terms hereof; (f) to compute and certify to the Employer and to the Trustee from time to time the sums of money necessary or desirable to be contributed to the Plan; (g) to consult with the Employer and the Trustee regarding the short and long -tern liquidity needs of the Plan in order that the Trustee can exercise any investment discretion in a manner designed to accomplish specific objectives; (h) to assist any Participant regarding his or her rights, benefits, or elections available under the Plan; (i) to establish and maintain limitations or transferred exchanges from one investment option to another and to decline to implement any investment instruction for a Participant where it deems appropriate; and (j) to review and settle all claims against the Plan, including claims where settlement cannot be calculated or is not calculated in accordance with the Plan's benefit formula. This authority specifically permits the Administrator or settle, in compromise fashion, disputed claims for benefits and any other disputed claims made against the Plan. 2.4 RECORDS AND REPORTS The Administrator shall keep a record of all actions taken and shall keep all other books of account, records, and other data that may be necessary for proper administration of the Plan and shall be responsible for supplying all information and reports to the Internal Revenue Service, Participants, Beneficiaries and others as required by law. -S- © 2004 Nationwide Retirement Solutions, Inc. 2.5 APPOINTMENT OF ADVISERS The Administrator, or the Trustee, may appoint counsel, specialists, advisors, and other persons as the Administrator or the Trustee deems necessary or desirable in connection with the administration of this Plan. The Administrator may appoint a suitable third party to administer the Plan for the Administrator, subject to the Administrator's ultimate review and authority. 2.6 INFORMATION FROM EMPLOYER To enable the Administrator to perform his functions, the Employer shall supply full and timely information to the Administrator on all matters relating to the Compensation of all Participants, their Hours of Service, their Years of Service, their Retirement, death, disability, or Termination of employment, and such other pertinent facts as the Administrator may require; and the Administrator shall advise the Trustee of such of the foregoing facts as may be pertinent to the Trustee's duties under the Plan. The Administrator may rely upon such information as is supplied by the Employer and shall have no duty or responsibility to verify such information. 2.7 PAYMENT OF EXPENSES All expenses of administration of the Plan may be paid out of the pool of Forfeited monies or Forfeited Participant interests in the Plan (the "Forfeited Funds") and/ or from annual or other fees assessed Participants by the Trustee and Administrator unless paid by the Employer. Such expenses shall include any expenses incident to the functioning of the Administrator, including, but not limited to, fees of accountants, counsel, and other specialists and their agents, and other costs of administering the Plan. Until paid, the expenses shall constitute a liability of the Plan. However, the Employer may reimburse the Plan for any administration expense incurred. Any administration expense paid to the Plan as a reimbursement shall not be considered an Employer contribution. 2.8 CLAIMS PROCEDURE Any person who believes that he or she is entitled to a benefit under the Plan shall file with the Plan Administrator a written notice of claim for such benefit within 45 days of such right accruing or shall forever waive entitlement to such benefit. Within 120 days after its receipt of such written notice of claim, the Plan Administrator shall either grant or deny such claim provided, however, any delay on the part of the Plan Administrator is arriving at a decision shall not adversely affect benefits payable under a granted claim. -6- © 2004 Nationwide Retirement Solutions, Inc. ARTICLE III ELIGIBILITY 3.1 CONDITIONS OF ELIGIBILITY Any Eligible Employee who has become eligible to be a Participant shall become a Participant effective as of the day specified in the Adoption Agreement. 3.2 EFFECTIVE DATE OF PARTICIPATION An Eligible Employee who has become eligible to be a Participant shall become a Participant effective as of the day specified in the Adoption Agreement. In the event an Employee who has satisfied the Plan's eligibility requirements and would otherwise have become a Participant shall go from a classification of a noneligible Employee to an Eligible Employee, such Employee shall become a Participant as of the date he or she becomes an Eligible Employee. 3.3 DETERMINATION OF ELIGIBILITY The Administrator shall determine the eligibility of each Employee for participation in the Plan based upon information furnished by the Employer. Such determination shall be conclusive and binding upon all persons, as long as the same is made pursuant to the Plan. Such determination shall be subject to review per Section 2.8. 3.4 TERMINATION OF ELIGIBILITY In the event a Participant shall go from a classification of an Eligible Employee to an ineligible Employee, such Former Participant shall own that portion of his Participant Account in which he has a Vested interest as of the date of his loss of eligibility, including any investment returns or losses attributable to that portion of the Participant's loss of eligibility to participate in the Plan, he shall be entitled to no further Employer contributions, and shall be prohibited from making any Employee contributions. 3.5 OMISSION OF ELIGIBLE EMPLOYEE If, in any Plan Year, any person who should not have been included as a Participant in the Plan is erroneously included and discovery of such incorrect inclusion is not made until after a contribution for the year has been made, the Employer shall not be entitled to recover the contribution made with respect to the ineligible person. In such event, the amount contributed with respect to the ineligible person shall constitute a Forfeiture for the Plan Year in which the discovery is made, and the ineligible person shall be entitled to no Employer contributions (and earnings thereon) made on his behalf of the Plan. 7- © 2004 Nationwide Retirement Solutions, Inc. 3.6 MANDATORY PARTICIPATION Employee participation in the Plan is mandatory for employees who meet the Plan's eligibility requirements. ARTICLE IV CONTRIBUTION AND ALLOCATION 4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION The Employer shall make contributions over such period of years as the Employer may determine. On behalf of each Participant, the Employer shall contribute the amount specified in the Adoption Agreement. All contributions by the Employer shall be made in cash. 4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION The Employer shall generally pay to the Trustee its contribution to the Plan for each Plan Year within the time prescribed by law. 4.3 ALLOCATION OF CONTRIBUTIONS, FORFEITURES AND EARNINGS (a) The Administrator shall establish and maintain an account (the "Participant Account") for each Participant in the name of each Participant to which the Administrator shall credit as of each Valuation Date, all amounts allocated to each such Participant as set forth herein. (b) The Employer shall provide the Administrator with all information required by the Administrator to make a proper allocation of the Employer's contributions. Within a reasonable period to time after the date of receipt by the Administrator of such information, the Administrator shall allocate such contributions in the manner set forth in Section 4.1 herein and as specified in the Adoption Agreement. (c) Each Participant's Account shall be credited with the actual earnings or losses attributable to all contributions to such Account, less any fees and expenses assessed for operation of the Plan. (d) As of each Valuation Date any amounts, which became Forfeitures since the last Valuation Date shall first be made available to the Administrator to pay the administrative expenses of the Plan in accordance with the Adoption Agreement. If Forfeitures exceed the administrative expenses of the Plan, then Forfeitures will be used to reduce Employer contributions to the Plan. (e) Notwithstanding anything herein to the contrary, any Deceased Participant, Retired Participant or Terminated Participant who died, Retired or Terminated employment with the Employer, as applicable, during the Plan Year shall not be credited with any Employer Contributions from and after the date of his or her Retirement, Termination or death, as provided in the Adoption Agreement. -8- © 2004 Nationwide Retirement Solutions, Inc. 4.4 MAXIMUM ANNUAL ADDITIONS (a)(1) If the Participant does not participate in, and has never participated in another qualified plan maintained by the Employer, or a welfare benefit fund (as defined in Code Section 419(e)), maintained by the Employer, or an individual medical account (as defined in Code Section 415(1)(2)) maintained by the Employer, which provides Annual Additions (as defined below), or a simplified employee pension (as defined in Code Section 408(k)) the amount of Annual Additions which may be credited to the Participant's Account for any Limitation Year (as hereafter defined) shall not exceed the lesser of the Maximum Permissible Amount (as hereafter defined) or any other limitation contained in this Plan. If the Employer contribution that would otherwise be contributed or allocated to the Participant's accounts would cause the Annual Additions of the Limitation Year to exceed the Maximum Permissible Amount, the amount contributed or allocated will be reduced so that the Annual Additions for the Limitation Year will equal the Maximum Permissible Amount. (2) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant on the basis of a reasonable estimation of the Participant's Compensation for the Limitation Year, uniformly determined for all Participants similarly situated. (3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for such Limitation Year shall be determined on the basis of the Participant's actual Compensation for such Limitation Year. (4) If there is an Excess Amount pursuant to Section 4.4(a)(2) or Section 4.5, the Excess Amount will be disposed of in the following manner: (i) If, after the application of subparagraphs (i) and (ii), an Excess Amount still exists, and the Participant is covered by the Plan at the end of the Limitation Year, the Excess Amount in the Participant's Account will be used to reduce Employer contributions for such Participant in the next Limitation Year, and each succeeding Limitation Year if necessary; (ii) If, after the application of subparagraphs (i) and (ii), an Excess Amount sill exists, and the Participant is not covered by the Plan at the end of a Limitation Year, the Excess Amount will be held unallocated in a suspense account. The suspense account will be applied to reduce future Employer contributions for all remaining Participants in the next Limitation Year, and each succeeding Limitation Year if necessary; (iii) Excess amounts in the suspense account may not be distributed to Participants or Former Participants. (b)(1) This subsection applies if, in addition to this Plan, the Participant is covered under another qualified contribution plan maintained by the Employer, or a welfare benefit fund (as defined in Code Section 419(e)) maintained by the Employer, or a simplified employee pension maintained by the Employer, or an individual medical account (as defined in Code Section 415(1)(2)) maintained by the Employer, which provides Annual Additions, during any Limitation Year. The Annual Additions which 0 2004 Nationwide Retirement Solutions, Inc. may be credited to a Participant's accounts under this Plan for any such Limitation Year shall not exceed the Maximum Permissible Amount reduced by the Annual Additions credited to a Participant's accounts under the other plans and welfare benefit funds for the same limitation Year. If the Annual Additions with respect to the Participant under other defined contribution plans and welfare benefit funds maintained by the Employer are less than the Maximum Permissible Amount and the Employer contribution that would otherwise be contributed or allocated to the Participant's Accounts under this Plan would cause the Annual Additions for the Limitation Year to exceed this limitation, the amount contributed or allocated will be reduced so that the Annual Additions under all such plans and welfare benefit funds for the Limitation Year will equal the Maximum Permissible Amount. If the Annual Additions with respect to the Participant under such other defined contribution plans and welfare benefit funds in the aggregate are equal to or greater than the Maximum Permissible Amount, no amount will be contributed to the Participant's Account under this Plan for the Limitation Year. (2) Prior to determining the Participant's actual Compensation for the Limitation Year, the Employer may determine the Maximum Permissible Amount for a Participant in the manner described in Section 4.4(a)(2). (3) As soon as is administratively feasible after the end of the Limitation Year, the Maximum Permissible Amount for the Limitation Year will be determined on the basis of the Participant's actual Compensation for the Limitation Year. (4) If, pursuant to Section 4.4(b)(2) or Section 4.5, a Participant's Annual Additions under this Plan and such other plans would result in an Excess Amount for a Limitation Year, the Excess Amount will be deemed to consist of the Annual Additions last allocated, except that Annual Additions attributable to a simplified employee pension, will be deemed to have been allocated first, followed by Annual Additions to a welfare benefit fund or individual medical account, regardless of the actual allocation date. (5) If an Excess Amount was allocated to a Participant on an allocation date of this Plan, which coincides, with an allocation date of another plan, the Excess Amount attributed to this Plan will be the product of: (i) the total Excess Amount allocated as of such date, times (ii) the ratio of (1) the Annual Additions allocated to the Participant for the Limitation Year as of such date under this Plan to (2) the total Annual Additions allocated to the Participant for the Limitation Year as of such date under this and all the other qualified defined contribution plans. (6) Any Excess Amount attributed to this Plan will be disposed in the manner described in Section 4.4(a)(4). (c) For purposes of applying the limitations of Code Section 415, the transfer of funds from one qualified plan to another is not an "Annual Addition." In addition, the following are not Employee contributions for the purposes of Section 4.4(f)(1)(b); (1) rollover contributions (as defined in Code Section 402(c)(4), 403(a)(4), 403(b)(8), and 408(d)(3)); (2) repayments of loans (if permitted) made to a Participant -10- 0 2004 Nationwide Retirement Solutions, Inc. from the Plan; (3) repayments of distributions received by an Employee pursuant to Code Section 411(a)(7)(B)(cash-outs);(4) repayments of distributions received by and Employee pursuant to Code Section 411(a)(3)(D) (Mandatory contributions); and (5) Employee Contributions to a simplified employee pension excludable from gross income under Code Section 408(K)(6). (d) For purposes of this Section, the following terms shall be defined as follows: (1) "Annual Additions" means the sum credited to a Participant's accounts for any Limitation Year of (1) Employer contributions, (2) effective with respect to Limitation Years beginning after December 31, 1986, Employee contributions, (3) Forfeitures and (4) amounts allocated, after March 31, 1984, to an individual medical account, as defined in Code Section 415(1)(2), which is part of a pension or annuity plan maintained by the Employer. Except, however, the "415 Compensation" percentage limitation referred to in paragraph (a)(2) above shall not apply to: (1) any contribution for medical benefits (within the meaning of Code Section 419A(f)(2)) after separation from service which is otherwise treated as an "Annual Addition," or (2) any amount otherwise treated as an "Annual Addition" under Code Section 415(1)(1). Notwithstanding the foregoing, for Limitation Years beginning prior to January 1, 1987, only that portion of Employee contributions equal to the lesser of Employee contributions in excess of six percent (6%) of "415 Compensation" or one-half of Employee contributions shall be considered an Annual Addition. For this purpose, any Excess Amount applied under Sections 4.4(a)(4) and 4.4(b) in the Limitation Year to reduce Employer contributions shall be considered Annual Additions for such Limitation Year. (2) "Compensation" means a Participant's Compensation as defined in the Adoption Agreement. However, regardless of any selection made in the Adoption Agreement, for Limitation years beginning prior to January 1, 1998, "415 Compensation" shall exclude Compensation, which is not currently includible in the Participant's gross income by reason of the application of Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b), 414(h) or 457(b). For Limitation Years beginning after December 31, 1997, such amounts, except for 414(h), shall be included. For Limitation Years beginning after December 31, 1991, for purposes of applying the limitations of this article, Compensation for a Limitation Year is the Compensation actually paid or made available during such Limitation Year. Notwithstanding the preceding sentence, Compensation for a Participant in a defined contribution plan who is Permanently and Totally Disabled (as defined in Code Section 22(e)(3)) is the Compensation such Participant would have received for the Limitation Year if the Participant had been paid at the rate of Compensation paid immediately before becoming Permanently and Totally Disabled; such imputed Compensation for the disabled Participant may be taken into account only if the Participant is not a Highly Compensated Employee and contributions made on behalf of such Participant are nonforfeitable when made. (3) "Defined Contribution Dollar Limitation" means $40,000 as adjusted under Code Section 415(d). -11- © 2004 Nationwide Retirement Solutions, Inc. (4) "Employer" means the Employer that adopts this Plan and all affiliated Employers, except for purposes of this Section, affiliated employers shall be determined pursuant to the modification made by Code Section 415(h). (5) "Excess Amount" means the excess of the Participant's Annual Additions for the Limitation Year over the Maximum Permissible Amount. (6) "Highest Average Compensation" means the average Compensation for the three consecutive Years of Service with the Employer that produces the highest average. A Year of Service with the Employer is the 12 consecutive month period defined in Question 18 of the Adoption Agreement, which is used to determine Compensation under the Plan. (7) "Limitation Year" means the Compensation Year (a 12 consecutive month period) as elected by the Employer in the Adoption Agreement. All qualified plans maintained by the Employer must use the same Limitation Year. If the Limitation Year is amended to a different 12 consecutive month period, the new Limitation Year must begin on a date within the Limitation Year in which the amendment is made. (8) "Maximum Permissible Amount" means the maximum Annual Addition that may be contributed or allocated to a Participant's account under the plan for any Limitation Year, which shall not exceed the lesser of: (i) the Defined Contribution Dollar Limitation, or (ii) 100 percent of the Participant's Compensation for the Limitation Year. The Compensation limitation referred to in (ii) shall not apply to any contribution for medical benefits (within the meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition under Code Sections 415(1)(1) or 419A(d)(2). If a short Limitation Year is created because of an amendment changing the Limitation Year to a different 12 consecutive month period, the Maximum Permissible Amount will not exceed the Defined Contribution Dollar Contribution multiplied by the following fraction: Number of months in the short Limitation Year 12 (9) "Projected Annual Benefit" means the annual retirement benefit, if any (adjusted to an actuarially equivalent straight life annuity if such benefit is expressed in a form other than a straight life annuity or qualified joint and survivor annuity) to which the Participant would be entitled under the terms of the plan assuming: (i) the Participant will continue employment until any Normal Retirement Age set forth in such plan (or current age, if later), and -12- © 2004 Nationwide Retirement Solutions, Inc. (ii) the Participant's Compensation for the current Limitation Year and all other relevant factors used to determine benefits under the plan will remain constant for all future Limitation Years. (e) Notwithstanding anything contained in this Section to the contrary, the limitations, adjustments and other requirements prescribed in this Section shall at all times comply with the provisions of Code Section 415 and the Regulations hereunder, the terms of which are specifically incorporated herein by reference. 4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS If as a result of the allocation of Forfeitures, a reasonable error in estimating a Participant's annual Compensation, a reasonable error in determining the amount of elective deferrals (within the meaning of Code Section 402(g)(3)) that may be made with respect to any Participant under the limits of Section 4.4, or other facts and circumstances to which Regulation 1.415-6(b)(6) shall be applicable, the "Annual Additions" under this Plan would cause the maximum provided in Section 4.4 to be exceeded, the Administrator shall treat the excess in accordance with Section 4.4 (a)(4). 4.6 TRANSFERS AND ROLLOVERS INTO PLAN (a) If specified in the Adoption Agreement, and with the consent of the Administrator, amounts may be transferred from other qualified plans, provided that the trust from which funds are transferred permits the transfer to be made and the transfer will not jeopardize the tax-exempt status of the Plan or create adverse tax consequences for the Employer. At the election of the Administrator or Trustee, the amounts transferred may be included in the Participant's Account or may be set up in a separate account herein referred to as a "Participant's Rollover Account." All amounts in either account attributable to rollover distributions therein (the "Rollover Amounts") shall be fully vested at all times and shall not be subject to Forfeiture for any reasons. (b) Rollover Amounts in a Participant's Rollover Account or Participant Account (except as referenced separately in Subsection 4.6(a), collectively, "Participant Account") shall be held by the Trustee pursuant to the provisions of this Plan and may not be withdrawn by, or distributed to the Participant, in whole or in part, except as provided in the Adoption Agreement. (c) Amounts attributable to elective contributions (as defined in Regulation Section 1.401(k)-I(g)(3), including amounts treated as elective contributions, which are transferred from another qualified plan in a plan -to -plan transfer shall be subject to the distribution limitations provided for the Regulations 1.401(k)l(d). (d) At such date when the Participant or his Beneficiary shall be entitled to receive benefits, the fair market value of the Participant's Rollover Amount shall be used to provide any applicable additional benefits to the Participant or his Beneficiary. Any distributions of Rollover Amounts held in a Participant's Account shall be made in a manner which is consistent with and satisfies the provisions of Article VI, including, but not limited to, all notice and consent requirements of Code Sections 411(a)(11) and 417 and the Regulations there under. Furthermore, such amounts shall not be considered as -13- 0 2004 Nationwide Retirement Solutions, Inc. part of a Participant's benefit in detennining whether an involuntary cash -out of benefits without Participant consent may be made. (e) The Administrator may direct that Employee transfers made after a Valuation Date (as hereafter defined) be segregated into a separate account for each Participant until such time as the allocations pursuant to this Plan have been made, at which time they may remain segregated or be invested as determined by the Administrator. (f) For purposes of this Section the term "qualified plan" shall mean any tax qualified plan under Code Section 401(a). The term "amounts transferred from other qualified plans" shall mean: (i) amounts transferred to this Plan directly from another qualified plan; (ii) lump -sum distributions received by Employee from another qualified plan which are eligible for tax free rollover to a qualified plan and which are transferred to this plan from a conduit individual retirement account or annuity has no assets other than assets which (A) were previously distributed to the Employee by another qualified plan as a lump -sum distribution (B) were eligible for tax-free rollover to a qualified plan and (C) were deposited in such conduit individual retirement account within sixty (60) days of receipt thereof; (iv) amounts distributed to the Employee form a conduit individual retirement account or annuity meeting the requirements of clause (iii) above, and transferred by the Employee to this Plan within sixty (60) days of his or her receipt thereof from such conduit individual retirement account or annuity; and (v) amounts distributed to the Employee that constitute an "eligible rollover distribution" as defined in Section 7.9 (b) that distributed by an "eligible retirement plan" as defined in Section 7.9 (c). (g) Prior to accepting any transfers to which this Section applies, the Administrator may require the Employee to establish that the amounts to be transferred to this Plan meet the requirements of this Section and the Code and may also require the Employee to provide an opinion of counsel satisfactory to the Administrator that the amounts to be transferred meet the requirements of this Section and the Code. This subsection 4.6(g) shall be implemented via uniformly applied written procedures. 4.7 DIRECTED INVESTMENT ACCOUNT (a) All Participants shall direct the Trustee as to the investment of their individual Participant Account balances in specific assets as permitted by the Administrator provided the Plan and its Administrator permit such investments. (b) The Participant Account of each Participant shall be charged or credited as appropriate with the net earnings, gains, losses and expenses as well as any appreciation or depreciation in market value during each Plan Year attributable to such Account. (c) The Administrator shall establish a procedure, to be applied in a uniform and nondiscriminatory manner, setting forth the permissible investment options under this Section, how often changes between investments may be made, and any other limitations that the Administrator shall impose on a Participant's direct investments. -14- © 2004 Nationwide Retirement Solutions, Inc. (d) Life insurance may not be selected as a permissible investment option for the Plan. ARTICLE V VALUATIONS 5.1 VALUATION OF THE TRUST FUND AND PARTICIPANT ACCOUNTS The Administrator shall direct the Trustee, as of each Valuation Date, and at such other date or dates deemed necessary by the Administrator to determine the net worth of the assets comprising the Trust Fund and each Participant Account as same exists on the Valuation Date. In determining such net worth, the Trustee shall value the assets comprising the Trust Fund and Participant Accounts at their fair market value as of the Valuation Date and shall deduct all expenses for which the Trustee has not yet obtained reimbursement from the Employer, Participants or the Trust Fund, as the case may be. 5.2 METHOD OF VALUATION In determining the fair market value of securities held in the Trust Fund and Participant Accounts, which are listed on a registered stock exchange, the Administrator shall direct the Trustee to value the same at the prices they were last traded on such exchange preceding the close of business on the Valuation Date. If such securities were not traded on the Valuation Date, or if the exchange on which they are traded was not open for business on the Valuation Date, then the securities shall be valued at the prices at which they were last traded prior to the Valuation Date. Any unlisted security held in the Trust Fund or any Participant Account shall be valued at its bid price next preceding the close of business on the Valuation Date, which bid price shall not be obtained from a registered broker or an investment banker. In determining the fair market value of assets other than securities for which trading or bid prices can be obtained, the Trustee may appraise such assets itself, or in its discretion, employ one or more appraisers for that purpose and rely on the values established by such appraiser or appraisers. Where the Trust Fund or Participant Account assets included an annuity contract (if permitted by the Trustee or Administrator), it shall be valued at the annuity contract value. ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS 6.1 DETERMINATION OF BENEFITS UPON RETIREMENT Upon a Participant's Retirement, or as soon thereafter as is practical, the Administrator shall direct, as elected by the Participant from various options provided by the Administrator, the distribution of all Vested amounts credited to such Participant's Account in accordance with Section 6.4. 6.2 DETERMINATION OF BENEFITS UPON DEATH (a) Upon the death of a Participant (the "Decedent") before his or her Termination of employment with the Employer, the Beneficiary of the Decedent shall -15- © 2004 Nationwide Retirement Solutions, Inc. timely advise the Administrator of the Decedent's death and the Administrator shall then direct, in accordance with the provisions of Section 6.6, the distribution of the Decedent's Vested interest in his Participant Account to said Beneficiary or whomever a court of competent jurisdiction directs. (b) The Administrator may require such proper proof of death and such evidence of the right of any person to receive payment of the value of the account of a Deceased Participant, as the Administrator may deem desirable. The Administrator's determination of death and of the right of any person to receive payment shall be conclusive. (c) The designation of a Beneficiary shall be made on a form satisfactory to the Administrator. A Participant may at any time revoke his or her designation of a Beneficiary change his or her Beneficiary by filing written notice of such revocation or change with the Administrator. In the event no valid designation of Beneficiary exists at the time of the Participant's death, the Decedent's Vested interest in his Participant Account shall be payable to his estate. 6.3 DETERMINATION OF BENEFITS UPON TERMINATION (a) Upon the termination of a Participant's employment with the Employer for any reason other than Retirement or death, the Administrator shall direct that the amount of the Vested portion of such Terminated Participant's Account be paid to the Terminated Participant or his designee in a manner and within the time convenient to the Administrator and in compliance with the Code and Section 6.4. The amount of the portion of the Participant's Account, which is not vested, maybe credited to a separate account and at such time as the amount becomes Forfeiture shall be treated in accordance with the provisions of the Plan regarding Forfeitures. Notwithstanding the above and if elected in the Adoption Agreement, if the value of a Terminated Participant's Vested benefit derived from Employer and Employee contributions are less than, and at the time of any prior distribution, has been less than $1,000, the Administrator may direct that the entire Vested benefit be paid to such Participant (or at the Participant's election, another qualified plan's trustee) in a single lump -sum without regard to the consent of the Participant or the Participant's spouse. Unless otherwise elected by the Employer in the Adoption Agreement, such Vested benefit for purposes of this paragraph shall be determined without regard to that portion of the Vested benefit that is attributable to rollover contributions (and earnings allocable thereto) within the meaning of Code Sections 402 (c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457 (e)(16). (b) A Participant shall become fully Vested immediately upon entry into the Plan. (c) Upon the complete discontinuance of the Employer's contributions to the Plan or upon any full or partial termination of the Plan, all amounts credited to the account of any affected Participant shall become 100% Vested and shall not thereafter be subject to Forfeiture. - 16- 0 2004 Nationwide Retirement Solutions, Inc. (d) In determining Years of Service for purposes of Vesting under the Plan, Years of Service will be credited to Participants with respect to periods of qualified military service as provided in Code Section 414(u). 6.4 DISTRIBUTION OF BENEFITS UPON RETIREMENT OR TERMINATION The Administrator, as it deems fit or, if an election has been made by a Participant, pursuant to the election of the Participant, shall direct the distribution to a Participant or Beneficiary of any amount to which he or she is entitled under the Plan in one lump -sum payment in cash, or as otherwise permitted by the Employer's election in Adoption Agreement. 6.5 Minimum Distribution Requirements (a) Effective Date. The provisions of this Section will apply for purposes of determining required minimum distributions for calendar years beginning with the 2003 calendar year. (b) Requirements of Treasury Regulations Incorporated. All distributions required under this Section will be determined and made in accordance with the Treasury regulations under Section 401(a)(9) of the Internal Revenue Code. (c) Required Beginning Date. The Participant's entire interest will be distributed, or begin to be distributed, to the Participant no later than the Participant's required beginning date. (d) Death of Participant Before Distributions Begin. If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows: (i) If the Participant's surviving spouse is the Participant's sole designated beneficiary, distributions to the surviving spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70 1/2, if later. (ii) If the Participant's surviving spouse is not the Participant's sole designated beneficiary, distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died. (iii) If there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (iv) If the Participant's surviving spouse is the Participant's sole designated beneficiary and the surviving spouse dies after the Participant but before distributions to the surviving spouse begin, this Section will apply as if the surviving spouse were the Participant. (e) Required Minimum Distributions During Participant's Lifetime. During the Participant's lifetime, the minimum amount that will be distributed for each distribution calendar year is the lesser of- - 17- © 2004 Nationwide Retirement Solutions, Inc. (i) the quotient obtained by dividing the Participant's account balance by the distribution period in the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the Participant's age as of the Participant's birthday in the distribution calendar year; or (ii) if the Participant's sole designated beneficiary for the distribution calendar year is the Participant's spouse, the quotient obtained by dividing the Participant's account balance by the number in the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9 of the Treasury regulations, using the participant's and spouse's attained ages as of the Participant's and spouse's birthdays in the distribution calendar year. (f) Death On or After Date Distributions Begin and Participant Survived by Designated Beneficiary. (i) If the Participant dies on or after the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the longer of the remaining life expectancy of the Participant or the remaining life expectancy of the Participant's designated beneficiary, determined as follows: The Participant's remaining life expectancy is calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (ii) If the Participant's surviving spouse is the Participant's sole designated beneficiary, the remaining life expectancy of the surviving spouse is calculated for each distribution calendar year after the year of the Participant's death using the surviving spouse's age as of the spouse's birthday in that year. For distribution calendar years after the year of the surviving spouse's death, the remaining life expectancy of the surviving spouse is calculated using the age of the surviving spouse as of the spouse's birthday in the calendar year of the spouse's death, reduced by one for each subsequent calendar year. (iii) If the Participant's surviving spouse is not the Participant's sole designated beneficiary, the designated beneficiary's remaining life expectancy is calculated using the age of the beneficiary in the year following the year of the Participant's death, reduced by one for each subsequent year. (iv) No Designated Beneficiary. If the Participant dies on or after the date distributions begin and there is no designated beneficiary as of September 30 of the year after the year of the Participant's death, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the participant's account balance by the Participant's remaining life expectancy calculated using the age of the Participant in the year of death, reduced by one for each subsequent year. (g) Death Before Date Distributions Begin and Participant Survived by Designated Beneficiary. If the Participant dies before the date distributions begin and there is a designated beneficiary, the minimum amount that will be distributed for each distribution calendar year after the year of the Participant's death is the quotient obtained by dividing the Participant's account balance by the remaining life expectancy of the Participant's designated beneficiary. -18- © 2004 Nationwide Retirement Solutions, Inc. (i) No Designated Beneficiary. If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death. (h) Death of Surviving Spouse Before Distributions to Surviving Spouse Are Required to Begin. If the Participant dies before the date distributions begin, the Participant's surviving spouse is the Participant's sole designated beneficiary, and the surviving spouse dies before distributions are required to begin, this Section will apply as if the surviving spouse were the Participant. 6.6 DISTRIBUTION OF BENEFITS UPON DEATH Unless otherwise required by the Code or as elected by the Employer in the Adoption Agreement, the Administrator shall distribute to the Decedent's Beneficiary, or his or her estate, as the case may be, all of the Decedent's Vested interest in his Participant Account in one lump -sum payment in cash within a reasonable time following the Administrator's discovery of the Decedent's death and claim by his Beneficiary for such benefits. Any such distributor must conform with Section 6.5. 6.7 DISTRIBUTION FOR MINOR BENEFICIARY In the event a distribution is to be made to a minor, then the Administrator may direct that such distribution be paid to the legal guardian, or if none, to a parent of such Beneficiary or a responsible adult with whom the Beneficiary maintains his or her residence, or to the custodian for such Beneficiary under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted by the laws of the state in which said Beneficiary resides. Such a payment to the legal guardian, custodian or parent of a minor Beneficiary shall fully discharge the Trustee, Employer, Administrator and Plan from further liability on account thereof. 6.8 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN In the event that all, or any portion, of the distribution payable to a Participant or his or her Beneficiary hereunder shall, at the Participant's attainment of age 62 or Normal Retirement Age, remain unpaid solely by reason of the inability of the Administrator, after sending a registered letter, return receipt requested, to the last known address of said Participant, and after further diligent effort by the Administrator to ascertain the whereabouts of such Participant or his or her Beneficiary, the amount so distributable shall be treated as a Forfeiture pursuant to the Plan. In the event a Participant or Beneficiary is located subsequent to his or her benefit being reallocated, such benefit shall be restored, fust from Forfeitures, if any, and then from an additional Employer contribution if necessary. 6.9 LIMITATIONS ON BENEFITS AND DISTRIBUTIONS All rights and benefits, including elections, provided to a Participant in this Plan shall be subject to the rights afforded to any "alternate payee" under a "qualified -19- © 2004 Nationwide Retirement Solutions, Inc. domestic relations order." A distribution to an "alternate payee" shall be permitted if such distribution is authorized by a "qualified domestic relations order", even if the affected Participant is not permitted to otherwise take a distribution from the Plan. For purposes of this section, "alternate payee" and "qualified domestic relations order" have the means set forth under Code Section 414(p). ARTICLE VII TRUSTEE 7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE The Trustee shall have the following categories of responsibilities: (a) To invest, manage, and control the Trust Fund Remainder subject, however, to the advice of an Investment Manager, if same should be appointed, except that the Trustee shall have no responsibility to invest or manage any investments or monies contained in any Participant Account although the Trustee shall have authority to disburse, place, transfer and distribute sums from such Participant Accounts as specified in this Plan or do any other act authorized by this Plan for said Trustee so to do with respect to the Trust Fund or the Trust Fund Remainder; (b) At the direction of the Administrator, to pay benefits or make distributions required under the Plan to or for the benefit of Retired Participants, Terminated Participants, Deceased Participants or their designees or Beneficiaries, as applicable; (c) To maintain records of receipts and disbursements and furnish to the Employer and/or Administrator for each Plan Year a written annual report per Section 7.7; and (d) If there shall be more than one Trustee, they shall act by a majority of their number, but may authorize one or more of them to sign papers on their behalf. 7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE (a) The Trustee shall invest and reinvest the Trust Fund Remainder to keep same invested without distinction between principal and income and in such securities or property, real or personal, wherever situated, as the Trustee shall deem advisable, including, but not limited to, stocks, common or preferred, bonds, mutual funds, collective investment trusts and other evidences of indebtedness or ownership, and real estate or any interest therein. The Trustee shall at all times in making investments of the Trust Fund Remainder consider, among other factors, the short and long-term financial needs of the Plan on the basis of information furnished by the Employer. In making such investments, the Trustee shall not be restricted to securities or other property of the character expressly authorized by the applicable law for trust investments; however, the Trustee shall give due regard to any limitations imposed by the Code so that at all times this plan may qualify as a qualified Plan. -20- © 2004 Nationwide Retirement Solutions, Inc. (b) The Trustee may employ a bank or trust company pursuant to the terms of its usual and customary bank agency agreement, under which the duties of such bank or trust company shall be of a custodial, clerical and record-keeping nature. (c) The Trustee may from time to time transfer to a common, collective, or pooled trust fund maintained by any corporate Trustee hereunder pursuant to Revenue Ruling 81-100, all or such part of the Trust Fund as the Trustee may deem advisable, and such part or all of the Trust Fund so transferred shall be subject to all the terms and provisions of the common, collective, or pooled trust fund which contemplate the commingling for investment purposes of such trust assets with trust assets of other trusts. The Trustee may withdraw from such common, collective, or pooled trust fund all or such part of the Trust Fund, as the Trustee may deem advisable. 7.3 OTHER POWERS OF THE TRUSTEE The Trustee, in addition to all powers and authorities under common law, statutory authority and other provisions of this Plan, shall have the following powers and authorities to be exercised in the Trustee's sole discretion: (a) To purchase, or subscribe for, any securities or other property and to retain the same. In conjunction with the purchase of securities, margin accounts may be opened and maintained; (b) To sell, exchange, convey, transfer, and grant options to purchase, or otherwise dispose of any securities or other property held by the Trustee, by private contract or at public auction. No person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition, with or without advertisement; (c) To vote upon any stocks, bonds, or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to oppose, or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, and to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other property. (d) To cause any securities or other property to be registered in the Trustee's own name or in the name of one or more of the Trustees nominees, and to hold any investments in bearer form, but the books and records of the Trustee shall at all times show that all such investments are part of the Plan; (e) To borrow or raise money for the purposes of the Plan in such amount, and upon such terms and conditions, as the Trustee shall deem advisable, and for any sum so borrowed, to issue a promissory note as Trustee, and to secure the repayment thereof by pledging all, or any part, of the Trust Fund Remainder; and no person lending money to the Trustee shall be bound to see to the application of the money lent or to inquire into the validity, expediency, or propriety of any borrowing; 0 2004 Nationwide Retirement Solutions, Inc. (f) To keep such portion of the Trust Fund Remainder in cash or cash balances as the Trustee may, from time to time, deem to be in the best interests of the Plan, without liability for interest thereon; (g) To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder; (h) To make, execute, acknowledge, or deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; (i) To settle, compromise, or submit to arbitration any claims, debts, or damages due or owing to or from the Plan, to commence or defend suits or legal or administrative proceedings, and to represent the Plan in all suits and legal and administrative proceedings; 0) To employ suitable agents and counsel and to pay their reasonable expenses and compensation, and such agent or counsel may or may not be agent or counsel for the Employer; (k) To invest funds of the Trust Fund Remainder in time deposits or savings accounts bearing a reasonable rate of interest in the Trustee's bank; (1) To invest in Treasury Bills and other form of United States government obligations; (m) To sell, purchase and acquire put or call options if the options are traded on and purchased through a national securities exchange registered under the Securities Exchange Act of 1934, as amended, or, if the options are not traded on a national securities exchange, are guaranteed by a member firm of the New York Stock Exchange; (n) To deposit monies in federally insured savings accounts or certificates of deposit in banks or savings or loan associations; (o) To pool all or any of the Trust Fund Remainder, from time to time, with assets belonging to any other qualified employee pension benefit trust created by the Employer or any Affiliated Employer, and to commingle such assets and make joint or common investments and carry joint accounts on behalf of this Plan and such other trust or trusts, allocating undivided shares or interests in such investments or accounts or any pooled assets of the two or more trusts in accordance with their respective interests; (p) To do all such acts and exercise all such rights and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to carry out the purposes of the Plan. (q) The powers granted to the Trustee shall be exercised in the sole fiduciary discretion of the Trustee. However, each Participant shall direct the Trustee to separate and keep separate his or her interest in the Plan; and further each Participant is authorized -22- © 2004 Nationwide Retirement Solutions, Inc. and empowered, in his or her sole and absolute discretion, to give directions to the Trustee in such form as the Trustee may require concerning the investment of the Participant's Account, which direction must be followed by the Trustee, and so long as such investments are offered by the Plan and approved for investment by the Administrator or Trustee. Neither the Trustee nor any other persons, including the Administrator or otherwise, shall be under any duty to question any such direction of the Participant or to review any securities or other property, real or personal, or to make any suggestions to the Participant in connection therewith, and the Trustee shall comply as promptly as practicable with directions given by the Participant hereunder. Any such direction may be of a continuing nature or otherwise. The Trustee may refuse to comply with any direction from the Participant in the event the Trustee, in its sole and absolute discretion, deems such directions improper by virtue of applicable law, and in such event, the Trustee shall not be responsible or liable for any loss or expense which may result. Any costs and expenses related to compliance with the Participant's directions shall be bome by the Participant's Account. Notwithstanding anything hereinabove to the contrary, the Trustee shall not, at any time after December 31, 1981, invest any portion of a Participant's Account in "collectibles" within the meaning of that term as employed in Code Section 408(m). 7.4 LOANS TO PARTICIPANTS (a) If specified in the Adoption Agreement, the Trustee (or, if loans are treated as Directed Investment pursuant to the Adoption Agreement, the Administrator) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to Participants under the following circumstances: (1) loans shall be made available to Participants who are currently employed on a reasonably equivalent basis; (2) loans shall not be made available to highly compensated employees (as defined in Code Section 414(q)) in an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time. (b) Loans shall not be granted to any Participant that provide for a repayment period extending beyond such Participant's Normal Retirement Date or Termination. (c) Loans made pursuant to this Section (when added to the outstanding balance of all other loans made by the Plan to the Participant) shall be limited to the lesser of: (1) $50,000 reduced by the excess (if any) of the highest outstanding balance of loans from the Plan to the Participant during the one year period ending on the day before the date that such loan is made, over the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made, or (2) (i) one-half (1/2) of the present value of the non -forfeitable accrued benefit of the Employee under the Plan. For purposes of this limit, all plans of the Employer shall be considered one plan. (d) Loans shall provide for level amortization with payments to be made not less frequently than quarterly over a period not to exceed five (5) years. However, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at -23- 0 2004 Nationwide Retirement Solutions, Inc. the time the loan is made) as a principal residence of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. (e) A Participant loan procedure shall be established which must include, but need not be limited to, the following: (1) the identity of the person or positions authorized to administer the Participant loan program; (2) a loan application procedure; (3) the basis on which loans will be approved or denied; (4) limitations, if any, on the types and amounts of loans offered, as specified in the Adoption Agreement; (5) the procedure under the program for determining a reasonable rate of interest; (6) the types of collateral which may secure a Participant loan; and (7) the events constituting default and the steps that will be taken to preserve plan assets. Such Participant loan procedure shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of this Plan. Furthermore, such Participant loan procedure may be modified or amended in writing from time to time without the necessity of amending this Section of the Plan. Notwithstanding anything in this Section to the contrary, any loan made pursuant to this Section that is secured by the Participant's interest in the Plan may be offset against the Participant's interest to the extent permissible by the Code. (i) Unless indicated otherwise in the Adoption Agreement, loan payments will be suspended under this Plan as permitted under Code Section 414(u). 7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS At the direction of the Administrator, the Trustee shall, from time to time, in accordance with the terms of the Plan, make payments out of the Trust Find. The Trustee shall not be responsible in any way for the application of such payments. 7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES The Trustee shall be paid such reasonable compensation as set forth in the Trustee's fee schedule, if any, or as otherwise agreed upon in writing by the Employer and the Trustee or as otherwise specified by law. An individual serving as Trustee who already receives full-time pay from the Employer shall not receive compensation from this Plan. In addition, the Trustee shall be reimbursed for any reasonable expenses, including counsel fees incurred by it as Trustee. Such compensation and expenses shall be paid from the Trust Fund or fees assessed Participants unless paid or advanced by the Employer. All taxes of any kind and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect of, the Trust Fund or the income thereof, -24- © 2004 Nationwide Retirement Solutions, Inc. shall be paid from the Trust Fund or Participation Accounts to the extent permitted by law. 7.7 REPORTS OF THE TRUSTEE Within a reasonable period of time after the end of each calendar quarterly period, the Trustee, or its agent, shall furnish to the Employer or Administrator a written statement of account setting forth: (a) the net income, or loss, of the Trust Fund Remainder and/or Participant Accounts; (b) all payments and distributions made from the Trust Fund Remainder and Participant Accounts; and (c) such further information as the Trustee and/or Administrator deems appropriate or as otherwise agreed between the Administrator or Trustee and any of their third party administrators or designees. Failure by the Employer and/or Administrator to disapprove any such statement of account within thirty (30) days after its receipt thereof shall be deemed an approval thereof. The approval by the Employer and/or Administrator of any statement of account shall be binding as to all matters embraced therein as between the Employer or Administrator and the Trustee to the same extent as if the account of the Trustee had been settled by judgment or decree in an action for a judicial settlement of its account in a court of competent jurisdiction in with the Trustee, the Employer or Administrator and all persons having or claiming an interest in the Plan were parties; provided, however. However, nothing herein contained in this Section shall deprive the Trustee of its right to have its accounts judicially settled if the Trustee so desires 7.8 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE (a) The Trustee may resign at any time by delivering to the Employer, at least thirty (30) days before its effective date, a written notice of resignation. (b) The Employer may remove the Trustee by mailing by registered mail or certified mail, addressed to such Trustee at the Trustee's last known address, at least thirty (30) days before its effective date, a written notice of removal. (c) Upon the death, resignation, incapacity, or removal of any Trustee, a successor may be appointed by the Employer; and such successor, upon accepting such appointment in writing and delivering same to the Employer, shall without further act, become vested with all the powers and responsibilities of the predecessor as if such successor had been originally named as a Trustee herein. Until such a successor is appointed, the remaining Trustee or Trustees (if there shall be one) shall have full authority to act under the terms of the Plan. (d) The Employer may designate one or more successors prior to the death, resignation , incapacity, or removal of a Trustee. In the event a successor is so designated by the Employer and accepts designation, the successor shall, without further -25- 0 2004 Nationwide Retirement Solutions, Inc. act, become vested with all the powers and responsibility of the predecessor as if such successor had been originally named as Trustee herein immediately upon the death resignation, incapacity, or removal of the predecessor. (e) Whatever any Trustee hereunder ceases to serve as such, such Trustee shall furnish to the Employer and Administrator a written statement of account with respect to the portion of the Plan Year during which such Trustee served. This statement shall be either (i) included as part of the annual statement of account for the Plan Year required under Section 7.7, or (ii) set forth in a special statement. Any such special statement of account should be rendered to the Employer no later than the due date of the annual statement of account for the Plan Year. The procedures set forth in Section 7.7 for the approval by the Employer of annual statements of accounts shall apply to any special statement of account rendered hereunder and approval by the Employer of any such special statement in the manner provided in Section 7.7 shall have the same effect upon he statement as the Employer's approval of an annual statement of account. No successor to the Trustee shall have any duty or responsibility to investigate the acts or transaction of any predecessor who has rendered all statements of account required by Section 7.7 and this subparagraph. 7.9 TRANSFERS AND ROLLOVERS OUT OF PLAN Notwithstanding any other provision contained in this Plan, the Trustee, at the direction of the Administrator, shall transfer the Vested interest, if any, of such Participant in his Account to another trust forming part of a pension, profit sharing, or stock bonus plan maintained by such Participant's new employer and represented by said employer in writing as meeting the requirements of Code Section 401(a), provided that the trust to which such transfers are made permits the transfer to be made. (a) Notwithstanding any provisions of the Plan to the contrary, with respect to authorized distributions from the Plan made after December 31, 1992, a Participant shall be permitted to elect to have any "eligible rollover distribution" transferred directly to an "eligible retirement Plan" specified by the Participant. The Plan provisions otherwise applicable to distributions continue to apply to the direct transfer option. The Participant shall„ in the manner prescribed by the Administrator, specify the amount to be directly transferred and the "eligible retirement plan" to receive the transfer. Any portion of a distribution, which is not transferred, shall be distributed to the Participant. (b) For purposes of this Section, the term "eligible rollover distribution" means any distribution other than (i) a distribution of substantially equal periodic payments (not less frequently than annually) over the life or life expectancy of the Participant (or joint life expectancies of the Participant and the designated beneficiary) or a distribution over a period certain of ten years or more; (ii) amounts required to be distributed under Code Section 401(a)(9); (iii) the portion of any other distribution that is not includible in gross income; (excess annul additions, and income allocable thereto, returned pursuant to Section 4.5; (v) convective distributions of excess deferrals, together with the income allocable thereto; (vi) loans that are deemed distributed under Code Section 72(p); (vii) the cost of coverage under a life insurance contract (P.S. 58 costs) and (viii) similar items designated by the Cominissioner in revenue rulings, notices and other guidance published in the Internal Revenue Bulletin. -26- © 2004 Nationwide Retirement Solutions, Inc. (c) For purposes of this Section, the term "eligible retirement plan" means (i) an individual retirement account as described in Code Section 408(a); (ii) an individual retirement annuity as described in Code Section 408(b) (iii) an annuity plan as described in Code Section 403(a), (iv) an eligible plan under Code Section 457(b) which is maintained by the State, political subdivision of a State, or any agency or instrumentality of a State or political subdivision of a State; (v)or a defined contribution plan as described in Code Section 401(a) which is exempt from tax under Code Section 501(a) and which accepts rollover distributions, provided that the Plan Administrator of such plan represents in writing that at such plan meets the requirements of Code Section 401(a). (d) The election described in Subsection (a) shall also be available to the surviving spouse after the Participant's death; however, distributions to the surviving spouse may only be transferred to an eligible retirement plan. For purposes of Subsection (a), a spouse or former souse who is the alternate payee under a qualified domestic relations order as defined in Code Section 414(p) will be treated as the Participant. 7.10 TRUSTEE INDEMNIFICATION The Employer agrees to indemnify and save harmless the Trustee and Administrator and their agents employees, attorneys, successors and assigns against any and all claims, losses, damages, expenses and liabilities they may incur in the exercise and performance of the Trustee's powers and duties hereunder, unless the same are determined by a final order of a court of law to be due to intentional misconduct. The Trustee and Administrator and their agents, employees, attorneys, successors and assigns shall be conclusively deemed to have acted innocently and without any intention to commit intentional wrongdoing if their actions or omissions, and the case may be, were based upon and/or the result of reliance upon the advice of their designated counsel, and this is so even if such advice is eventually proven incorrect. Upon demand, the Employer shall pay all costs and liabilities incurred by the Administrator and/or Trustee and their agents, employees, attorneys, successors and assigns, including all attorney's fees and costs of litigation incurred by them, arising under the indemnity provided in this Section, as such costs and liabilities arise. ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS 8.1 AMENDMENT (a) The Employer shall have the right at any time to amend this Plan subject to the limitations of this Section. However, any amendment, which affects the rights, duties or responsibilities of the Trustee and Administrator, may only be made with the Trustee's and Administrator's written consent. Any such amendment shall become effective as provided therein upon its execution. The Trustee shall not be required to execute any such amendments unless the amendment affects the duties of the Trustee hereunder. (b) No amendment to the Plan shall be effective if it violates the Code or authorizes or pen -nits any part of the Trust Fund (other than such part as is required to pay -27- © 2004 Nationwide Retirement Solutions, Inc. taxes and administration expenses) to be used for or diverted to any purpose other than for the exclusive benefit of the Participants of their Beneficiaries or estates; or causes any reduction in the amount credited to the account of any Participant; or causes or permits any portion of the Trust Fund to revert to or become property of the Employer. 8.2 TERMINATION (a) The Employer shall have the right at any time to terminate the Plan by delivering to the Trustee and Administrator written notice of such termination. Upon any full or partial termination, all amounts credited to the affected Participant's Accounts shall become 100% Vested and shall not thereafter be subject to Forfeiture, and all unallocated amounts shall be allocated to the accounts of all Participants pro rata. (b) Upon the full termination of the Plan, the Employer shall direct the distribution of the assets to Participants in a manner, which is consistent with and satisfies the provisions of Section 6.4. Distributions to a Participant shall be made in cash. 8.3 MERGER OR CONSOLIDATION The Plan may be merged or consolidated with, or its assets and/or liabilities may be transferred to any other plan only if the benefits which would be received by a Participant of this Plan, in the event of a termination of the Plan immediately after such transfer, merger or consolidation, are at least equal to the benefits the Participant would have received if the Plan had terminated immediately before the transfer, merger or consolidation. ARTICLE IX MISCELLANEOUS 9.1 EMPLOYER ADOPTION (a) Any organization may become the Employer hereunder by executing the Adoption Agreement in form satisfactory to the Trustee, and it shall provide such additional information as the Trustee may require. The consent of the Trustee to act as such shall be signified by its execution of the Adoption Agreement. (b) Except as otherwise provided in this Plan, the affiliation of the Employer and the participation of its Participants shall be separate and apart from that of any other employer and its participants hereunder. 9.2 PARTICIPANT'S RIGHTS Nothing contained in this Plan shall be deemed to give any Participant or Employer the right to be retained in the service of the Employer or to interfere with the right of the Employer to discharge any Participant or Employee at any time regardless of the effect, which such discharge shall have upon him as a Participant of this Plan. -28- © 2004 Nationwide Retirement Solutions, Inc. 9.3 ALIENATION (a) Subject to the exceptions provided below, no benefit which shall be payable to any person (including a Participant or his or her Beneficiary) shall be subject in any manner to anticipation, alienation, sale, transfer, assign. Pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign. Pledge, encumber, or charge the same shall be void. No such benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, encouragements, or torts of any such person, nor shall it be subject to attachment or legal process for or against such person, and the same shall not be recognized except to such extent as may be required by law. (b) This provision shall not apply to the extent a Participant or Beneficiary is indebted to the Plan, for any reason, under any provision of this Plan. At the time a distribution is to be made to or for a Participant's or Beneficiary's benefit, such proportion of the amount to be distributed equal to such indebtedness shall be paid to the Plan, to apply against or discharge such indebtedness. Prior to making a payment, however, the Participant or Beneficiary must be given written notice by the Administrator that such indebtedness is to be paid in whole or part from his or her Participant's Account. If the Participant or Beneficiary does not agree that the indebtedness is a valid claim against his or her Vested interest in his or her Participant's Account, he or she shall be entitled to a review of the validity of the claim in accordance with procedures provided in Section 2.8. (c) This provision shall not apply to a "qualified domestic relations order" defined in Code Section 414(p), and those other domestic relations orders permitted to be so treated by the Administrator under the provisions of the Retirement Equity Act of 1984. The Administrator shall establish a written procedure to determine the qualified status of domestic relations orders and to administer distribution under such qualified orders. Further, to the extent provided under a "qualified domestic relations order," a former spouse of a Participant shall be treated as the spouse or surviving spouse for all purposes under the Plan. (d) Notwithstanding any provisions of this Section to the contrary, an offset to a Participant's accrued benefit against an amount that the Participant is ordered or required to pay the Plan with respect to a judgment, order, or decree issued, or a settlement entered into, on or after August 5, 1997, shall be permitted in accordance with Code Section 401(a)(13)(C). 9.4 CONSTRUCTION OF PLAN This Plan shall be construed and enforced according to the Code. 9.5 GENDER AND NUMBER Wherever any words are used herein in the masculine, feminine or neuter gender, they shall be construed as though they were also used in all of the other genders in all cases where they would so apply, and wherever any words are used herein in the singular or plural form, they shall be construed as though they were also used in the other form in all cases where they would so apply. -29- © 2004 Nationwide Retirement Solutions, Inc. 9.6 LEGAL ACTION In the event any claim, suit, or proceeding is brought regarding the Trust Fund and/or Plan established hereunder to which the Trustee or the Administrator or their agents, employees, attorneys, successors or assigns may be a party, and such claim, suit, or proceeding is resolved in favor of the Trustee or Administrator or their agents, employees, attorneys, successors or assigns, they shall be entitled to be reimbursed from the Trust Fund for any and all costs, attorney's fees, and other expenses pertaining thereto incurred by them for which they shall have become liable. 9.7 PROHIBITION AGAINST DIVERSION OF FUNDS (a) Except as provided below and otherwise specifically permitted by law, it shall be impossible by operation of the Plan, by termination, by power of revocation or amendment, by the happening of any contingency, by collateral arrangement or by any other means, for any part of the corpus or income of any Trust Fund maintained pursuant to the Plan or any funds contributed thereto to be used for, or diverted to, purposes other than the exclusive benefit of Participants, Retired Participants, Terminated Participants, Deceased Participants or their Beneficiaries. (b) In the event the Employer shall make a contribution under a mistake of fact, the Employer may demand repayment of such contribution at any time within one (1) year following the time of payment and the Trustees shall return such amount to the Employer within the one (1) year period. Earnings of the Plan attributable to the contributions may not be returned to the Employer but any losses attributable thereto must reduce the amount so returned. 9.8 RECEIPT AND RELEASE FOR PAYMENTS Any payment to any Participant, Retired Participant, Terminated Participant, Deceased Participant, or his or her legal representative, Beneficiary, or to any guardian or committee appointed for such Participant, Retired Participant, Terminated Participant, Deceased Participant or Beneficiary in accordance with the provisions of this Plan shall, to the extent thereof, be in full satisfaction of all claims hereunder against the Trustee and the Employer. 9.9 ACTION BY THE EMPLOYER Whenever the Employer under the terms of the Plan is permitted or required to do or perform any act or matter or thing, it shall be done and performed by a person duly authorized by the Employer's legally constituted authority. 9.10 HEADINGS The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. -30- 0 2004 Nationwide Retirement Solutions, Inc. 9.11 APPROVAL BY INTERNAL REVENUE SERVICE Notwithstanding anything herein to the contrary, if, pursuant to a timely application filed by or on behalf of the Plan, the Commissioner of Internal Revenue Service or his or her delegate should determine that the Plan does not initially qualify as a tax-exempt plan and trust under Code Sections 401 and 501, respectively, and such determination is not contested, or if contested, is finally upheld, then if the Plan is a new plan, it shall be void from its establishment and all amounts remaining in the Plan attributable to contributions made to the Plan by the Employer, less expenses paid, shall be returned within one year, except that such amounts shall be net of any investment returns or losses,. Thereafter, the Plan shall terminate and the Trustee shall be discharged from all further obligations. If the disqualification relates to an amended plan, then the Plan shall operate as if it had not been amended and restated, except with respect to any part of the amended Plan, which shall not cause Plan disqualification. 9.12 UNIFORMITY All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. 9.13 PAYMENT OF BENEFITS Benefits under this Plan shall be paid, subject to the applicable provisions of Article, only upon death, Retirement or Termination from employment by the Employer, or upon Plan Termination. 9.14 UNIFORMED SERVICES EMPLOYMENT AND REEMPLOYMENT ACT Notwithstanding any provision in this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Section 414(u) of the Code. ARTICLE X PARTICIPATING EMPLOYERS 10.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER Any governmental employer may adopt this Plan and all of the provisions hereof, and participate herein and be known as a "Participating Employer," by a properly executed document evidencing said intent and will of such Participating Employer. 10.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS (a) Each Participating Employers shall be required to select the same Adoption Agreement provisions as those selected by the employer other than the Plan Year, the Fiscal Year, and such other items that must, by necessity, vary among employers. -31- © 2004 Nationwide Retirement Solutions, Inc. (b) Each such Participating Employer shall be required to use the same Trustee as provided in this Plan. (c) The Trustee may, but shall not be required to, commingle, hold and invest as one Trust Fund all contributions made by Participating Employers, as well as all increments thereof. (d) The transfer of any Participant from or to an Employer participating in this Plan, whether it be an Employee of the Employer or a Participating Employer, shall not affect such Participant's rights, under the Plan, and all amounts credited to such Participant's Account as well as his or her accumulated service time with the transferor or predecessor, and his or her length of participation in the Plan, shall continue to his or her credit. (e) Any expenses of the Plan, which are to be paid by the Employer, shall be paid by each Participating Employer in the same proportion that the total amount standing to the credit of all Participants employed by such Employer bears to the total standing to the credit of all Participants. 10.3 DESIGNATION OF AGENT Each Participating Employer shall be deemed to be a part of this Plan; provided, however, that with respect to all of its relations with the Trustee and Administrator for the purpose of this Plan, each Participating Employer shall be deemed to have designated irrevocably the Employer as its agent. Unless the context of the Plan clearly indicates the contrary, the word "Employer" shall be deemed to include each Participating Employer as related to its adoption of the Plan. 10.4 EMPLOYEE TRANSFERS It is anticipated that an Employee may be transferred between Participating Employers, and in the event of any such transfer, the Employee involved shall carry his or her accumulated service and eligibility to the new Employer. No such transfer shall effect a termination of employment hereunder, and the Participating Employer to which the Employee is transferred shall thereupon become obligated hereunder with respect to such Employee in the same manner, as was the Participating Employer from whom the Employee was transferred. 10.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES Any contribution or Forfeiture subject to allocation during each Plan Year shall be allocated among all Participants of all Participating Employers in accordance with the provisions of this Plan. On the basis of the information furnished by the Administrator, the Trustee shall keep separate books and records concerning the affairs of each Participating Employer hereunder and as to the accounts and credits of the Employees of each Participating Employer. In the event of an Employee transfer from one Participating Employer to another, the transferring Employer shall immediately notify the Trustee thereof. -32- © 2004 Nationwide Retirement Solutions, Inc. 10.6 AMENDMENT Amendment of this Plan by the Employer at any time when there shall be a Participating Employer hereunder shall only be by the written action of each and every Participating Employer and with the consent of the Trustee, where such consent is necessary in accordance with the terms of this Plan. 10.7 DISCONTINUANCE OF PARTICIPATION A Participating Employer shall be permitted to discontinue or revoke its participation in the Plan at any time. At the time of any such discontinuance or revocation, satisfactory evidence thereof and of any applicable conditions imposed shall be delivered to the Trustee. If appropriate, the Trustee shall thereafter transfer, deliver and assign trust Fund assets allocable to the Employees of such Participating Employer, who are Plan Participants, to such new Trustee as shall have been designated by such Participating Employer, in the event that it has established a separate pension plan for its Employees. If no successor is designated, the Trustee shall retain such assets for the Employees of said Participating Employer pursuant to the provisions of Article VII hereof as otherwise deemed appropriate by the Trustee. In no such event shall any part of the corpus or income of the Trust Fund as it relates to such Participating Employer be used for or diverted for purposes other than for the exclusive benefit of the Employees of such Participating Employer. 10.8 ADMINISTATOR'S AUTHORITY The Administrator shall have the authority to make any and all necessary rules or regulations, binding upon all Participating Employers and all Participants, to effectuate the purpose of the Article. -33- 0 33- © 2004 Nationwide Retirement Solutions, Inc.