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Ordinance No. 1,361I ORDINANCE NO. 1361 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AMENDING THE CODE OF ORDINANCES BY THE AMENDMENT OF CHAPTER 23 "ADMINISTRATION ", BY THE AMENDMENT OF ARTICLE III, CITY RETIRE- MENT PLANS, BY THE ADDITION OF A NEW DIVISION 3, RETIREMENT PLAN FOR EMPLOYEES OF THE CITY OF BAYTOWN, AND PROVIDING FOR THE EF- FECTIVE DATE HEREOF. WHEREAS, the City Council of the City of Baytown finds that it will be in the public interest for the City to provide for its employees a supplemental retirement plan in addition to the Texas Municipal Retirement System; and WHEREAS, the City Council of the City of Baytown has previously improved an employee committee to recommend a supplemental retirement plan; and WHEREAS, to accomplish the aforesaid purpose it is desired to establish a retirement fund as a trust fund for receiving contributions and providing benefits for eligible employees known as the City of Baytown Retirement Fund; NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That all eligible employees of all departments of the City of Baytown, including the City Manager, may participate in the Retirement Plan For the Employees of the City of Baytown, a supplemental retirement plan, said plan to be managed pursuant to the terms of the Agreement And Declaration of Trust, City of Baytown Retirement Fund, a copy of said plan and said trust agreement being attached hereto, being marked Exhibits "A" and "B" respectively and made a part hereof for all intents and purposes. Section 2: Beginning with the implementation of the plan and each month thereafter, the City will contribute 5.6% of each qualified and participating employee's gross earnings in excess of Five Hundred and No /100 ($500.00) Dollars per month to the City of Baytown Retirement Fund. Section 3: A copy of the Retirement Plan for Employees of the City of Baytown and the Agreement and Declaration of Trust as incorporated herein shall be on file in the office of the City Clerk of the City of Baytown and are made a part of the Code of Ordinances of the City of Baytown by reference only. Section 4: That the initial trustees approved previously by the City Council of the City of Baytown are hereby ratified for all intents and purposes and may execute on behalf of the City of Baytown and employees of the City of Baytown all documents necessary for implementation of the plan and trust agreement. Section 5: Effective Date: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council this 8th ATTEST: day of February 1973. Z61 C. GLEN WALKER, Mayor ED NA OLIVER, City Clerk APPROVED: Ir J N . P FENN IG, ssi ant A orney NEEL RTC ARDS N, City Attorney -2- r EXHIBIT 11W RETIREMENT PLAN FOR EMPLOYEES OF THE CITY OF BAYTOWN A R T I C L E I T1afi ni H nnR When used in this Plan, the following terms shall have the meanings set forth below unless a different meaning is plainly required by the context: "Age" shall mean age at the nearest birthday. "Anniversary Date" shall mean March 1, 1974 and each March 1 thereafter. "Beneficiary" shall mean any individual, trust or other recipient named by a Participant to receive benefits payable hereunder upon his death, or the estate of the Participant, all as hereinafter provided. I'City" shall mean The City of Baytown which shall assume the obligations of this Plan with respect to its employees by the execution of this Plan and the Trust. "Contingent Annuitant" shall mean the person designated to receive any benefit payments falling due after the death of the Participant, if said Participant had elected the longer life annuity in Article VII, Section 7.1(c). "Disabled Participant" shall mean a person who has been a Participant but who has become entitled to disability benefits under Article VIII hereof. "Effective Date" shall mean March 1, 1973. -I- "Employee" shall mean any person permanently employed by the City whose custo- mary employment is for twenty (20) hours or more in any week and for five (5) months or more in any calendar year. "Group Annuity Contract" shall mean any Group Annuity Contract issued by the Insurer hereunder for the purpose of providing retirement and other related benefits in conjunction with this Retirement Plan. "Insurance Company" or "Insurer" shall mean a legal reserve life insurance com- pany organized or incorporated under the laws of any one of the United States of America and duly licensed in the state of Texas. "Normal Retirement Date" shall meant the first day of the month coinciding with or next succeeding a Participant's sixty fifth (65th) birthday provided that the Participant has at fifteen (15) years of continuous service as of that date. "Participant" shall mean an Employee who is eligible under the terms of Article III of this Plan and who has taken all the steps required by said Article III. It shall not include in its meaning a Retired Participant, a Terminated Parti- cipant, or Disabled Participant or a Participant who has become ineligible for any reason. "Plan" shall mean the Retirement Plan set forth in and by this document and all subsequent amendments thereto. "Retired Participant" shall mean a person who has been a Participant but who has commenced receiving retirement benefits under Article VII hereof. "Texas Municipal Retirement System" is a retirement plan established by and administered in accordance with the provisions of the Texas Municipal Retirement Act. --IA- "Total Years of Continuous Service" shall mean continuous employment before and after the effective date of this Plan. "Terminated Participant" shall mean a person who has been a Participant but who is no longer an Employee and whose status as an Employee has been ter- minated otherwise than by death, disability or retirement, or a person who has been a Participant and elects to terminate participation in the Plan while remaining actively employed. "Total Disability" shall mean permanent and total incapacity of a Partici- pant, in accordance with the Federal Social Security Act occurring after the Effective Date, and resulting in an Employee being unable to engage in any regular gainful employment or occupation by reason of any medically demon- strable physical or mental condition, excluding, however, any incapacity which (1) was contracted, suffered, or incurred while the Employee was engaged in or resulted from having engaged in a felonious enterprise, or (2) consists of chronic alcoholism or addiction to narcotics, or (3) results from an inten- tionally self- inflicted injury, or (4) results from service in the Armed Forces of any country, for which a service connected government disability pen- sion is payable. Proof of disability shall be submitted to the City. Such disability will not be considered established unless it has continued for a period of not less than six (6) consecutive months. "Trust" shall mean the Trust Agreement entered into between the District and the Trustees, with any and all amendments or supplements thereto and also, the Trust created by said Agreement. "Trustees" shall mean the individuals which may at any time be the acting Trustees of the Trust. -1B- "Trust Fund" shall mean all funds received by the Trustees together with all income, profits or increments thereon, and less any expenses or losses or pay- ments made out of the Fund. The singular form of any word shall include the plural wherever necessary for the proper interpretation of this Plan. The word "he" or "his" as used shall be interpreted to mean both the masculine and feminine genders. "Forfeited Amounts" as used means the portion of an employee's account repre- senting the City's contribution (valued as of the immediately preceding Anniversary Date and any City contributions made on his behalf since such Anniversary Date) which is not vested as outlined in Article VIII Section 8.2(b) and Article IX Section 9.2(b). -1C- A R T I C L E II Administration This Plan shall be administered by the Trustees in accordance with the provisions of this Plan and the Trust. The Trustees in interpreting any provision of the Plan and the Trust or in making any judgement or determination with respect to any person will apply uniform rules in a like manner to all persons under similar circumstances. A R T I C L E Ill Employees Entitled To Partici ate Section 3.1 Each Employee shall be eligible to participate if such employee is either (1) participating in the Texas Municipal Retirement System and is earning over $500 per calendar month or (2) is currently not participating in the Texas Municipal Retirement System. Section 3.2 Each Employee shall be eligible to become a Participant on the Anniversary Date of the Plan following six (6) consecutive months of employment. Section 3.3 To become a Participant, an Employee must execute such document or documents, if any, as the Trustees may reasonably require and make an employee con- tribution as outlined in Article V Section 5.4. If an employee does not elect to participate when initially eligible or subsequently elects to terminate participa- tion in the plan while remaining actively employed, such employee will not be eligible to participate again until the next plan anniversary date following one year of con- tinuous employment by the employee from the date of such election not to partici- pate. -3- 9 ART I C L E IV City Contributions Section 4.1 Subject to the provisions of this Plan the City will, from and after March 1, 1973, make a contribution on behalf of each Participant equal to 5.6% of one's eligible monthly earnings. Eligible monthly earnings are defined as follows; (1) monthly earnings in excess of $500 for Participant's participating in the Texas Municipal Retirement System or (2) full monthly earnings for Participants not par- ticipating in the Texas Municiapl Retirement System. Such contribution shall be forwarded by the City of the Trustees no less frequently than monthly. Each re- mission to the Trustees shall include such data as necessary for the Trustees to allocate the applicable amount to each Participant. -4- A R T I C L E V Participant's Contribution Section 5.1 Subject to the provisions of this Plan an eligible employee may make a contribution equal to 5% (of one's eligible monthly earnings). Eligible monthly earnings is defined as follows; (1) monthly earnings in excess of $500 for Parti- cipant's participating in the 'texas Municipal Retirement System or (2) full monthly earnings for Participants not participating in the Texas Municipal Retirement System. -5- A R T I C L E VI Records Section 6.1 The Trustees shall open a separate bookkeeping account in the name of each Participant, and shall credit to each such account that portion of each contribution of the City and Participant's contribution to the Trust to which the Participant for whom such account is held shall be entitled. Section 6.2 As of each Anniversary Date the Trustees shall within a reasonable time apportion the net earnings or losses of the Trust Fund among those Participants who are Participants on such Anniversary Date who as of the immediately preceding Anniversary Date shall have had a dollar and cents credit on the books of the Trust. Such "net earnings or losses" shall be deemed to mean gross earnings less all:ex- penses and taxes, and shall include any increases or decreases in the fair market value of the investments of the Trust during the year. In the case of investments in a common trust, or similar investment media the valuation of such investments on the most recent valuation date of such fund shall be taken as the value of such investments. Net earnings or losses for each year shall be credited or debited to such Participants proportionately in accordance with the ratios which the dollars and cents credit of each Participant as of the immediate preceding Anniversary Date (plus contributions made on their behalf, since the immediate Anniversary Date) bears to the aggregate of all such dollars and cents credits as of such date, pro- vided that no credit or debit shall be made to Participants who have died or termina- ted their employment subsequent to the immediate preceding Anniversary Date. For the purposes of this Article, the phrase "dollars and cents credit" shall mean the dollars and cents value of all cash or investments credited to the account of an individual Participant. Section 6.3 Should the "net earnings and losses" referred to in Section 6.2 hereto be insufficient to cover the expenses and taxes of the Trust on any Anniversary -6- ART I CLE VII Payment of Retirement Benefits Section 7.1 Upon the Normal Retirement Date of a Participant whose employment has not been terminated prior thereto, such Participant shall be entitled to one - hundred percent (1001) of his portion of account representing his contribution and the City's Contributions valued as of the immediate preceding Anniversary Date. The benefits to which such Retired Participant shall be entitled shall be distributed in accordance with the following, (or any other options available under any Group Annuity Contract entered into by the Trustees) the exact option to be selected by the Trustees in con- sultation with Participant; A. In a lump sum; B. A life annuity with a death benefit with benefits payable to the Retired Participant from his date of retirement to his death of death. A death benefit will be payable on the death of the Retired Participant in an amount equal to the excess,'if any, of the amount actually credited to the Retired Participant's account at the date of his retirement and applied under this paragraph (b) over the sum of the payments of retirement annuity actually paid up until his death; C. A longer life annuity with benefits payable to the Retired Participant with either a one - hundred percent (100°/x) or less contribution to his Contingent Annuitant upon the Retired Participant's death. If the Contingent Annuitant is the spouse of the Retired Participant the benefit payable under this option is payable without restriction. If however, the Contingent Annuitant is a person other than the spouse of the Retired Participant, and is more than thirty (30) years younger than the Retired Participant, the benefit otherwise payable under this option to the Contingent Annuitant shall be limited so -7- that the value of the annuity payable to the Contingent Annuitant shall be less than fifty percent (501) of the value of the Retired Participant's actual retirement date; D. A life annuity with one - hundred twenty (120) guaranteed payments with benefits payable to the Retired Participant's lifetime. if however, such Retired Participant dies prior to receiving one - hundred twenty (120) monthly payments, his Beneficiary will receive the balance of the one hundred twenty (120) pay- ments due to the Retired Participant; E. A life annuity with sixty (60) guaranteed payments with benefits payable to the Retired Participant's lifetime. If however, such Retired Participant dies prior to receiving sixty (60) monthly payments, his Beneficiary will receive the balance of the sixty (60) payments due to the Retired Partici- pant; F. A life annuity payable for the Retired Participants lifetime; G. A variable annuity. The premium available, with respect to that portion of the Retirement Benefit to be on a variable basis, will be invested in an equity account made up primarily, but not necessarily exclusively, of com- mon stock. The Retirement benefit, with respect to that portion invested in the equity account will vary from month to month depending upon the invest- ment results of such account. Any of the forms of payment described above will be available in conjunction with the Variable Annuity but such optional form of payment must be applicable to the total annuity available to the Participant at his Actual Retirement Date. In order to invest a portion of the Retirement benefits in a Variable Annuity, election must be made prior to the Participant's actual Retirement Date. If a Participant retires with a Variable Annuity in effect and at any time subsequent to his Actual Retire- ment Date desired to convert the Variable Annuity portion of his portion of his Retirement Benefit to a total fixed income annuity, he may do so by written notification to the Trustees. If however, a Participant does - iA- Date, each Participant shall have his account reduced equally to cover the expenses and taxes. Section 6.4 As of each Anniversary Date, the Trustees shall within a reasonable time thereafter notify each Participant of the amount of net earnings or losses credited or charged against his account and the amount of contributions allocated.to his account, and the total amount credited to his account. -6A- convert a Variable Annuity to a total fixed income Annuity after actual Retirement Date or retired on his actual Retirement Date with a total fixed income annuity in effect, he may not at any subsequent date elect to have a portion of the fixed income annuity converted to a Variable Annuity; H. A combination of (a) and any one of the other options. No option or method of payment may be selected under (b), (d), or (e) above which would assure payment to a Beneficiary, other than the Participant or his spouse, beyond the acturail life expectancy of the Participant and his spouse,-determined on a joint and survivor basis as of the Participant's Normal Retirement Date. Section 7.2 If a Participant continues in the employ of the City beyond his Normal Retirement Date with the permission of the City, his retirement benefits otherwise payable under this Article shall be deferred until actual retirement, but not to exceed age 70 (in which case his account shall be equal to the vested value as of the Anniversary Date immediately preceding his actual retirement date plus any vested contributions made on his behalf by the City since such Anniversary Date). _7B_ A R T I C L E V11I Death and Total Disabilit Bene €its Section 8.1 In the event of the death or total disability of a Participant prior to the commencement of his retirement benefits hereunder, his death benefit shall consist of the following: A. One- hundred percent (1001) of the value of the portion of his account representing his contributions valued as of the immediately preceding Anniversary Date plus any contributions made by him since such Anniversary Date. B. The vested value of the total of the portion of his account representing the City's contribution valued as of the immediate preceding Anniversary Date and any City contributions made on his behalf since such Anniversary Date according to his total years of continuous service as follows: 1. A Participant with at least (5) years of continuous service will be vested at 10I of the value of.the portion of such account. 2. For every year of continuous service after five (5) years a Parti- cipant will be vested at an additional 10% of the value of the portion of such account. 3. A Participant with at least foutteen(14) years of continuous ser- vice will therefore be vested at one -- hundred percent (100%) of the value of the portion of such account. In the event of the death of a Terminated or Disabled Participant prior to com- plete distribution to him of the amount of his account to which he is entitled hereunder at the time of his death, his death benefit shall be one - hundred percent (100 %) of such undistributed amount. All of such death benefits shall be paid to the deceased Participant's Beneficiary designated in accordance with the provi- sions of Section 8.2 of this Article within one -- hundred and eighty (180) days following receipt of proof of the date of death. In the event of the death of a Retired Participant, the death benefit payable, if any, shall depend upon the form of retirement benefit elected in accordance with the terms of Article VII hereof. Section 8.3 At any time, and from time to time, each Participant, Retired Par- ticipant, Disabled Participant or Terminated Participant shall have the unre- stricted right to designate the Beneficiary to receive the death benefits to which he is entitled hereunder, and in accordance with the terms of the Group Annuity Contract to change any such designation. Each such designation for death benefits shall be evidenced by a written instrument filed with the Trustees, signed by the Participant and witnessed. If no such designation is on file with the Trustees at the time of the death of the Participant, or if for any reason in the sole discretion of the Trustees such designation is defective, then the estate of such Participant shall be conclusively deemed to be the Beneficiary designated to receive such benefit. _8A- A R T I C L E IX Termination of Status as a Participant Before Retirement Section 9.1 If any Participant shall cease to be an Employee, except at death, or as a Retired Participant or if a Participant elects to terminate participation in the plan while remaining actively employed, then he shall have no further right or interest whatsoever under this Plan, or receive any benefit other than as pro- vided in this Article. Section 9.2 If such termination of status as a Participant shall not fall with- in the provisions of Section 9.3 of this article, in lieu of any and all rights, interests, or benefits whatsoever under this Plan and Trust, he shall be vested as follows: A. 100% of the value of the portion of his account representing his contri- butions valued as of the immediately preceding Anniversary Date plus any contributions made by him since such Anniversary Date. B. I-f such employee does not withdraw any part of such vested contribution in Section 9.2 Part "At' of this article prior to the normal retirement date or retirement dates as outlined in Section 9.3 of this article, then such employee shall be vested in the-value of the total of the portion of his account representing the City's contribution valued as of the immediate preceding Anniversary Date and any City contributions made on his behalf since such Anniversary Date according to his total years of continuous service as follows: 1. A Participant with at least five (5) years of continuous service will be vested at 10% of the value of the portion of such account. 2. For every year of continuous service after five (5) years a Par- ticipant will be vested at an additional 10% of the value of the portion of such account. KIN 3. A Participant with at least fourteen (14) years of continuous service will therefore be vested at one - hundred percent (100 %) of the value of the portion of such account. Section 9.3 Each Participant who has attained one of the following ages and respective years of continuous employment; Age fifty (50) and at least twenty -five (25) years of employment; Age sixty (60) and at least twenty (20) years of employ- ment; or at any age providing if at least 28 years of employment, may retire on the first election of early retirement at least 30 days prior to the date elected for retirement. The retirement benefits payable shall be those which can be provided with the vested portion of his account determined under Section 8.2 hereof. The method from the options available under Section 7.1 of Article Vii hereof. Section 9.4 If any Participant ceases to be an Employee and later again becomes an Employee of the City, he shall be deemed under all provisions of this Plan to be a new Employee of the City as of the date of such re- employment. Section 9.5 Any amounts forfeited by a Terminated Participant hereunder shall be first used to offset any expenses of the Plan with any remaining amount used to off- Set future City contributions. Section 9.6 If any Participant elects to terminate participation in the Plan while remaining actively employed and withdraws any portion of his account repre- senting his contributions, then at a later date if such Employee elects to become a Participant as outlined in Article III Section 3.3, he shall be deemed under all provisions of this Plan a new Employee of the City as of the date of such election to again participate. For purposes of vesting provisions as outlined in Article IX Section 9.2, such Employee's continuous service shall start from the date of such election to again participate in the Plan. -9A- A R T I C L E X Leave of Absence Section 10.0 Any Employee may at any time, at the direction of the City, be given a Leave of Absence. Any such Leave of Absence must be given in advance and except in the case of military service may be cancelled at any time in the discretion of the City. In granting such Leave of Absence the City shall treat "all Employees in sim- ilar circumstances alike in accordance with the current personnel policy. Section 10.2 Any Employee on such Leave of Absence shall be deemed for the pur- poses of this Plan to be in the continuous employ of the City during the period of such Leave of Absence. No contributions shall be made on behalf of a Participant who is on such a Leave of Absence. Such a Participant shall continue to share pro- portionately in the net earnings and bear proportionately the losses and expenses of the Trust Fund so long as such Leave of Absence continues. Section 10.3 In the event an Employee shall enter the armed forces of the united States of America, such entry shall not be considered an interruption of continuous employment for the purposes of this Plan, and such Employee shall be treated as on a Leave of Absence which may not be cancelled by the City, provided: A. Such Employee returns to employment with the City within ninety (90) days after his discharge or separation from such armed forces; and B. Such Employee serves not more than four (4) years in such armed forces (plus any period of additional service imposed pursuant to law) if his original entry into such armed forces was voluntary. Section 10.4 If an Employee fails to return to employment with the City within ninety (90) days following termination of his Leave of Absence or within the statutory period during which his right to re- employment is guaranteed by law after he has first -10- become eligible for discharge or separation from active military duty, whichever per- iod shall be longer, his employment with the City shall be considered terminated at the expiration of such period unless he has previously notified the City that his`employ- ment is to be considered terminated at earlier date. -10A- ART I C L E XI Rights of Participant Section 11.1 No employee shall have any right to question the action of the City in terminating its liability to contribute to the Trust or in terminating the Plan in its entirety. Each Participant shall have the right only to see the record of the Trustees' accounts with respect to his own participation and shall have no right to inquire as to accounts with respect to other persons or other matters. Section 11.2 The sole rights of a Participant, Retired Participant, Disabled Par- ticipant or Terminated Participant under this Plan shall be to have this Plan admin- istered according to its provisions, to receive whatever benefits he may be entitled to hereunder, and to name the Beneficiary to receive any death benefits to which such person may be entitled in accordance with the terms of this Plan. Section 11.3 The Trust Fund is established for the purpose of providing for the support of the Participants of the Trust upon their retirement in the first place, and in the second place, for the support of their families as herein provided. No right or interest of any kind of any Participant in the Trust or in any part of the Trust Fund shall be transferable or assignable by the Participants or subject to alienation, anticipation or encumbrance by the Participant, and insofar as the laws of the State of Texas, or any other state whose laws may govern, permit, no rights or interest of any kind of any Participant in the Trust or in any part of the Trust Fund shall be sub- ject to garnishment, attachment, execution or levy of any kind. Section 11.4 In the event any suit or proceeding with respect to the Plan or the Trust Fund shall be instituted against the City or the Trustees by, or on behalf of, any Participant, or former Participant, the result of which shall be adverse to such -11-- claimant, all costs, attorney's fees, expenses, judgements or settlements incurred or paid by the City or the Trustees in connection therewith shall be charged directly to the account of such Participant, or former Participant. -11A- AR TI C L E XII Discontinuance of Plan Section 12.1 Although the City hopes to continue the Plan and the contributions to the Trust indefinitely, the City may, for good cause, terminate the Plan and all further contributions to the Trust at any time. Notice of such termination shall be liven in writing to the Trustees, delivered in person or mailed to the Trustees at their last known address. Section 12.2 Upon the termination of the Plan or the complete discontinuance of contributions to the Trust, the Trustees shall be notified in writing of such event by the City. Except as provided for in Article XV hereof, each Participant, Retired Par- ticipant, Disabled Participant and Terminated Participant, and the Beneficiary of each deceased Participant shall be vested with all rights to any funds in his accounts as of the date.of such termination, and such funds shall be paid and distributed to such persons, within a reasonable time, free of trust. Section 12.3 Not withstanding anything to the contrary contained herein, the Trustees' fees and expenses of administration of the Trust Fund and other expenses incident to the termination and distribution of the Trust incurred after the termin- ation of the Plan and Trust shall be paid from the Trust Fund. -12- ART ICLE XIII Miscellaneous Provisions Section 13.1 This Plan and the Trust are created for the exclusive benefit of Employees of the City and their Beneficiaries. If any provision of this Plan or the Trust is susceptible of more than one interpretation, then among those inter- pretations which are possible, that one shall always be given to this Plan and the Trust and each and every one of their provisions which will be consistent with this Plan and.--the Trust being an employees' Plan and Trust within the meaning of Sections 401(x) and 501(a) of the Internal Revenue Code, as amended, or as it may be replaced by any sections of the Federal Law of like intent and purpose. Section 13.2 Except as provided by the terms of Article XIV hereof, under no circumstances whatsoever shall any funds contributed to the Trust hereunder or any assets of the Trust Fund ever revert to, or be used or enjoyed by, the City, nor shall any such funds or assets ever be used other than for the benefit of the Employees of the City or the Beneficiaries of such Employees. Section 13.3 The City and the Trustees shall be discharged from any liability in acting upon any notice, request, consent, letter, telegram or other paper or document believed by them, to be genuine, and to have been signed or sent by the proper person. Section 13.4 This Plan shall be construed according to the laws of the State of Texas. -13- t A R T I C L E XIV Amendment Section 14.1 Amendment. The City shall have the right to amend this Retirement Plan at any time. Except as any such amendment may be necessary in order to qualify this Plan and the Trust under the proper section of the Internal Revenue Code, no such amendment shall be made which would have any of the following effects: Deprive any Beneficiary of a then deceased Participant of the right to receive the benefits to which the Beneficiary may be entitled hereunder. Deprive any then Retired or Disabled Participant of the benefits to which he is entitled hereunder. Deprive any then Participant of any of the Proportionate interest in the Trust Fund to which he would be entitled were he to terminate employment on the date of such amendment. It is also expressly understood that no amendments shall be made which would increase the duties or obligations of the Trustees without the Trustees' written consent thereto. -14- A R T I CLF XV Revocability Section 15.1 This Plan and the Trust are based upon the condition precedent that it shall be approved and qualified by the Internal Revenue Service as meeting the requirements of the Federal Internal Revenue Code and regulations issued thereunder with respect to employees' trusts so that the City's contributions will not be currently taxable to the Participants as income. Accordingly, anything hereinabove contained to the contrary not withstanding, if a Final Ruling shall be received in writing from the Interanl Revenue Service that this Plan and the Trust does not qualify under the terms of Sections 401 and 501 of the Internal Revenue Code, there shall be no vesting in any Participants of any assets of the Trust Fund held by the Trustees, and the Trustees, upon receipt of written notice from the City, together with a copy of such a ruling, shall transfer and pay over to the City all of the net assets in the trust fund remaining after deduction of proper expenses of termination, and the Trust shall thereupon terminate. For the purposes of this Article XV, "Final Ruling" shall mean either (I) the initial letter ruling from the District Director, in response to the City's original applica- tion for a ruling„ or (II) if such letter ruling is unfavorable and a written appeal is taken or protest filed within sixty (60) days of the date of such letter ruling it shall mean the ruling received in response to such appeal or protest. _15- IN WITNESS WHEREOF, The City has caused this Plan to be executed. ;CI BAYTOWN Official Title Datedl(,.n c.p.. �, CI 73 •r • l� EXHIBIT "B" AGREE14ENT AND DECLARATION OF TRUST CITY OF BAYTO:tiN RETIREMENT FUND This Agreement and Declaration of Trust is made and entered into as of the day of , 19 , in the City of Baytown, State of Texas, by and between the City of Baytown (hereinafter referred to as City) and J. B. LeFevre , Merman Steele Edna diver Yom Gentry, ayor and Jon C. Pfennig , (hereinafter referred to as Trustees). WITNESSETH THAT: Whereas, the City of Baytown has established a Retirement Plan for certain of its employees, and Whereas, to accomplish the aforesaid purpose, it is desired to establish a retirement fund as a trust fund for receiving con- tributions and providing benefits for eligible employees, and Whereas, the said trust fund is to be known as the City of Baytown Retirement Fund, and r Whereas, it is desired to set forth the terms and conditions under which -the said fund is to be established and administered, and Whereas, it is mutually agreed that the fund.shall be admin- istered by trustees and it is desired to define the powers and duties of the trustees and the nature of the benefits to be pro- vided. Now, therefore, in consideration of the premises, it is mutually understood and agreed as follows: M Section 1. Section 2. of the City who Section 3. who may at any ment. ARTICLE I DEFINITIONS City as used herein means the City of Baytown. Participant as used herein means an employee is participating under the Plan. Trustees as used herein means the individuals time be acting as Trustees under this Trust.Agree- Section 4. Agreement and Declaration of Trust or Trust Agreement. The term "Agreement and Declaration of Trust" or ' "Trust Agreement" as used herein shall mean this instrument including any amendments hereto and modifications hereof. Section 5. Plan. The term "Plan" as used herein shall mean the City of Baytown Retirement Plan. Section 6. Fund. The term "Fund" as used herein shall mean the City of Baytown Retirement Fund, the trust fund cre- ated pursuant to this Trust Agreement, and shall mean generally the monies or other things of value which comprise the corpus and additions to the trust fund. Section 7. Contributions. The term "Contributions" as used herein shall mean the payments paid or payable to the Fund by the City- Section 8. Benefits. The term " Benefits" as used herein shall mean the pension benefits to be provided pursuant to the Plan. ' r� T ARTICLE II GENERAL Section 1. Establishment of Fund. As hereby created the -- _- City of Baytown Retirement Fund shall comprise the entire assets derived from City contributions made to or for the account of this Fund together with any and all investments made and held by the Trustees, or monies received by the Trustees as contribu- tions or as income from investments made and held by the Trustees or otherwise, and any other money or property, received and /or held by the Trustees for the uses, purposes and trust set forth in this Trust Agreement. Section 2. General Purpose. The Fund shall be a trust land and shall be used for the purpose of providing retirement benefits, and shall provide the means for financing the expenses of the Trustees and the establishmant, operation and administra- tion of the Fund, in accordance with this Trust Agreement, includ- ing, but not limited, to the payment of all reasonable and neces- sary expenses for administering the affairs of the Fund, including. but without limitation, the expenses which may be incurred in con- nection with the establishment and maintenance of the Fund and the employment of administrative, legal, expert and actuarial services. Nn ARTICLE III TRUSTEES Section 1. The City shall appoint five (5) initial Trustees. Any subsequent Trustees shall be appointed by the City Council upon recommendation by the Trustees and shall hold office during the plea- - sure of the City Council which,City Council shall also fill vacancies upon recommendation by the Trustees. Any Trustee may resign his duties hereunder by filing with the City his written resignation. However, at all times there shall be at least one Trustee who is also a member of the City Council of the City of Baytown. Section 2. The Trustees may rake rules and regulations for the administration of the Plan which are not inconsistent with the terms and provisions thereof. Section 3. Any act which the Plan authorizes or requires the Trustees to do may be done by a majority of the members of the Trustees expressed from time to time by a'vote at a meeting, or in writing without a meeting, shall constitute the action of the Trustees and shall have the same effect for all purposes as if assented to by all of the Trustees at that time in office. Section 4. The Trustees shall supervise and control the operation of-the Plan in accordance with the terns thereof and shall have all powers necessary to accomplish that purpose. The Trustees may construe the Plan 'and Trust Agreement, and their constructions and actions thereon in good faith shall be final and conclusive. They may correct any defect or supply any omis- sion or reconcile any inconsistency in such manner and to such;-- - extent as they shall deem expedient to carry the same into ef- fec t, and they shall be the sole and final judge of such exped -- . iency . Section 5. The Trustees shall use ordinary care and rea- sonable diligence in the exercise of their powers and the per- formance of their duties hereunder, but shall not be liable for any mistake of judgment or other action taken-in good faith, or i for any loss, unless resulting from their own gross neglect. Section 6. The Trustees shall see that books of account are kept which shall show all receipts and expenses and a com- plete record of the operation of the Plan and Trust Agreement, including records of the accounts of individual Participants. Any Participant may demand a record of the Trustee's accounts with respect to his own participation but shall have no right to inquire as to accounts of other Participants. , Section 7. The City may at any time inspect the books of account or'have the same inspected by any agent or employee and may.at any time demand an accounting from the Trustees. Section 8. The Trustees shall file with the City an annual statement or accounting of their acts hereunder, and the City may enter into an agreement approving and allowing the same, and any such agreement made in good faith shall be final, binding and conclusive on all persons and parties hereto or claiming -. any interest hereunder and shall be a full discharge and acquit.- tance of the Trustees toith respect to the matters set forth in such statement or accounting. Section 9. The Trustees may consult with counsel who may be counsel to the City. The Trustees shall be relieved of all responsibility whatsoever for anything done or omitted upon the written advice of counsel. Section 10. in the event that any dispute shall arise regard- ing the person to whom payment or delivery of any sums shall be made'by the Trustees, or regarding any act to be performed by E the Trustees, the Trustees may retain such payment and have post- poned such delivery, or have postponed the performing of such act, until adjudication of such dispute shall have been made in a court of competent jurisdiction or until they shall have been indemnified against loss to their satisfaction. Section 11. The Trustees shall not be bound to become a party to any legal action against any person or persons, Or between any persons, unless they shall first have been indemni- fied to their satisfaction. Section 12. The Trustees are authorized to incur any expen- ses necessary to the proper discharge of their duties and respon- sibilities in administering the Plan and Trust Agreement including 0 the retaining of attorneys or other required assistants. The incurred expenses shall be a liability of the Trust. J Section 13. The Trustees are authorized in their discretion -- to invest and reinvest or direct an insurance company to invest and reinvest any portion of the Trust Fund without being limited or restricted by statutes governing the investment of trust funds, but shall be fully protected in making investments or entering into a contractual agreement with an insurance company to make investments in behalf of the Trustees in bonds, notes, mortgages, commercial paper, preferred stocks, common stocks or other secur- ities, rights, obligations in property, real or personal, includ- ing shares and certificates of participation issued by investment I companies as defined by the Investment Company Act of 1940. The Trustees may sell securities or investments at any time held by them for cash or on credit, transfer, dispose of or con- vert any securities or investments at any time held by them or exchange such securities or other investments for other securi- ties or property which the Trustees shall deem acceptable,and in which the Trustees shall have power to invest. Any such sale, transfer, disposition, conversion or exchange may be made publicly or by private arrangement, and no person dealing with the Trustees shall be bound to see the application of the purchase money or to inquire into the validity, expediency or propriety of any such sale or other disposition. Section 14. The Trustees are authorized to carry out such investment responsibility by entering into a group annuity con- tract or contracts with any legal reserve life insurance corn pany organized or incorporated under the laws of any one of the United States of America and duly licensed in-the State of Texas.. • Section 15. The Trustees in.interpreting any provision of the Plan or Trust Agreement or in making any judgment or deter- mination with respect to any person 'thereunder will apply uni- form rules in a like manner to all persons under similar circum- stances. I ARTICLE IV CONTRIBUTIONS TO THE FUND Section 1. Rate of Contributions. In order to effectuate - the purposes hereof, the City shall contribute to the Fund the amount required by the plan. Section 2. Effective Date of Contributions. All contribu- tions shall be made as required by the plan and shall continue to be paid as long as the plan remains in effect. Section 3. Mode of Payment. All contributions shall be payable to the Fund and shall be paid in the manner and form determined by the Trustees. in r ARTICLE V PLAN OF BENEFITS Section 1. Benefits. The Trustees shall have full author- ity to determineall questions of the nature, amount and duration of benefits to be provided based on what it is estimated the Fund can provide without undue depletion or excessive accumula- tion, provided,- however, that no, benefits other than benefits provided under the plan may be provided for or paid under this Trust Agreement. Section 2. Eligibility Requirements for Benefits. The Trustees shall-have-full authority to determine eligibility re-- quirements for benefits and to adopt rules and regulations set- i ting forth same which shall be binding on the employees and their beneficiaries. Section 3. Method of Providing Benefits. The benetxts shall be provided and maintained by such means as the Trustees shall in their sole discretion determine. Section 4. Written Plan of Benefits. The detailed basis on which payment of benefits is to be made pursuant to this Trust Agreement shall be specified in writing. All changes or modifications shall be specified in writing to the Trustees. Section 5. Approval of Plan. The Plan adopted by the City shall be as such as will qualify for approval by the In- ternal Revenue Service, U. S. Treasury Department, and will continue as a qualified plan_ The Trustees are authorized to take any action and to make whatever applications are necessary to the internal Revenue: Service in order to receive and maintain approval of the Plan as a qualified plan. r r ARTICLE VI AMENDMENT OR REVOCATION OF DECLAWiT? ON OF TRUST Section 1. This Trust may at any time and from time to time be amended by an instrument in writing by the Trustees. Any such amendment shall take effect upon the execution and written notification thereof to the City providing that any amendment may be made retroactive which is necessary to bring the Trust into conformity with any governmental laws or regu- lations. r s S . ARTICLE VII ,�IT S CELLANEOUS Section I. Illegality. In case any provisions of this y Trust shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining provi- sions of this Trust, but shall be fully severable, and this ' Trust shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein. Section 2. Ambiguity. This Trust Agreement and the Plan are intended to comply with all of the requirements for quali- fication under the provisions of the Internal Revenue Code; r therefore, if any provision of this Trust Agreement is subject to more than one interpretation, such ambiguity shall be resolved in favor of that interpretation which shall be consis- tent with the Trust Agreement and the Retirement Plans being so qualified. Section 3. Laws of Texas to Govern. This Declaration of Trust and the Trust Agreement hereby created shall be %ov- erned by the laws of the State of-Texas. Section 4. Binding Effect. This Declaration of Trust and the Trust Agreement hereby created shall be binding upon any successors of the Trustees. I Section 5. This trust is hereby declared to be irrevocable. However, the employer reserves the right to terminate its con- tributions to this trust. In the event that the employer elects - to terminate its contributions to this trust during any month, then the termination shall be effective as of the beginning of that month, and there shall not be any contributions to the trust by the employer for that month. Section 6. The alienation or encumbrance of the interest of any participant, member or beneficiary under the plan or in the fund is hereby.prohibited and no such interest shall be stb-- ject to garnishment, attachment, execution or the claims of cred- itors of any such person; except, however, that any participant, 1. member or beneficiary_lray make, a valid and enforceable assignment or encumbrance to the trustees and except further that the inter- est of any participant, member or beneficiary shall be charged with and be subject to garnishment, attachment, execution or the claims of or by the employer arising out of any dishonest, fraud- ulent, criminal or malicious act or ommi.ssion of such participant r_ or member or of the deceased member through whom such beneficiary claims. Section 7. Conditions of Employment Not Affected by Trust: The establishment and maintenance of the trust will not be con--= strued as conferring any legal rights upon any member to the con- tinuation of his employment with the employer, nor will the trust interfere with the right of the employer to discipline, layoff, or discharge any member. Section S. The pronoun he, him, or his, referring to a member shall also be deemed to refer to and include females as well as males. Section 9. The titles to the articles and headings of sections in this agreement are placed herein for convenience of reference only and, in case of any conflict, the text of this instrument, rather than such titles or headings, shall con- trol. Section 14. This trust is intended to be qualified under the Internal Revenue Code and the lawful rules and regulations of the Secretary of the Treasury or his delegate promulate thereunder so as to be a tax free trust. This trust will be submitted to the Secretary of the Treasury or his delegate for a ruling with respect to such qualification. in the event that the Secretary of the Treasury or his delegate refuses to approve this trust and rule that this is not a tax -free trust, then the initial contribution and all other contributions which the employer has made to this trust prior to initial qualification of the plan by internal Revenue Service.sball be returned to 1 the employer. section 11. If by reason or on the basis of all or any part of any contribution of the employer to the fund or any payment by the fund to any member or beneficiary a tax or assess- - ment accrues against the employer or there arises any obligation of the employer to collect or withhold any tax or assessment accruing against any member or beneficiary at any time, the trustees shall pay such tax and assessment, if any, accruing against the employer, shall collect and withhold such tax and assessment, if any, accruing against the member or beneficiary and.shall discharge in full- such liability and obligation, if` any, of the employer. Section 12. This trust shall continue until all property r trusteed. thereunder is paid out and distributed in accordance with the plan. In no event shall the power of alienation of . the vesting of the interest of any person under the plan or in the fund be suspended for a period longer than allowed by the laws of the State of Texas. Section 13. The trustees shall not be required to give r _ a bond of any character in connection with their trusteeship hereunder. Section 14. In the event this plan is abandoned, the employpr_wil,l promptly notify the District Director of Internal: Revenue, stating the circumstances which led to the discontinu- ance of the plan. Section 15. The trustees shall-notify the District Direc- for of internal P.evenue of the termination of the plan before the distribution of the assets of the trust are made. _ in witness whereof, the City of Baytown has caused this trust to bi2' approved and executed this the day of . 19 CITY OF BAYTOWN By : w Title: Mayor . We hereby agree to act as trustees for the above trust. r tiV ♦: r . Section 15. The trustees shall-notify the District Direc- for of internal P.evenue of the termination of the plan before the distribution of the assets of the trust are made. _ in witness whereof, the City of Baytown has caused this trust to bi2' approved and executed this the day of . 19 CITY OF BAYTOWN By : w Title: Mayor . We hereby agree to act as trustees for the above trust. r tiV ♦: