rp-04-56.pdf

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Part III

Administrative, Procedural, and Miscellaneous
[26 CFR 601.201]: Rulings and determination letters.

Rev. Proc. 2004-56

SECTION 1. PURPOSE

This Revenue Procedure provides model amendments that may be used by a
State or local government eligible employer (as defined in § 457(e)(1)(A) of the Internal
Revenue Code) to amend or draft its eligible § 457(b) plan to reflect the requirements of
§ 457 and the regulations thereunder.

SECTION 2. BACKGROUND AND GENERAL INFORMATION

.01 Section 457 applies to nonqualified deferred compensation plans established
by State and local government and tax-exempt employers. Under § 457, eligible
employers may establish three different types of plans or arrangements: (1) eligible
plans established by State and local government entities (eligible § 457(b)
governmental plans); (2) eligible plans established by other tax-exempt entities (eligible
§ 457(b) plans of tax-exempt entities); and (3) ineligible plans under § 457(f). Under the
last sentence of § 457(b), the Commissioner may notify an eligible § 457(b)
governmental plan that it is administered in a manner that is inconsistent with § 457(b).

.02 Final regulations under § 457 (TD 9075) were published in the Federal
Register (68 FR 41230) on July 11, 2003. These regulations replaced existing final
regulations that were published in the Federal Register on September 27, 1982 (47 FR
42335) (T.D.7836). The final regulations provide guidance for complying with the
changes made to § 457 by the Economic Growth and Tax Relief Reconciliation Act of
2001 Pub. L. 107-16 (EGTRRA), the Taxpayer Relief Act of 1997, Pub. L. No. 105-34
(TRA’ 97), and the Small Business Job Protection Act of 1996, Pub. L. No. 104-188
(SBJPA). The regulations also provide guidance on many non-EGTRRA issues, such
as the tax treatment of excess deferrals, plan loans, plan terminations, and
unforeseeable emergencies.

.03 Sections 615, 631, 632, 634, 635, 641, 646, 647, and 649 of EGTRRA made
changes to eligible § 457(b) governmental plans, including increases in elective deferral
limits, repeal of the rules coordinating the § 457 plan limits with contributions to certain
other types of plans, catch-up contributions for individuals age 50 or over, extension of
qualified domestic relation order rules to § 457 plans, rollovers to and from various

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types of eligible retirement plans, § 403(b) contracts and individual retirement
arrangements (IRAs), and transfers to purchase permissive service credits under
governmental defined benefit plans.

.04 Rev. Proc. 98-41, 1998-32 I.R.B. 135, provided model amendments that
may be used for eligible § 457(b) governmental plans to reflect the revisions made to
§ 457 by the SBJPA, including the requirement that eligible § 457(b) governmental
plans hold all assets and income in trust for the exclusive benefit of participants and
beneficiaries.

SECTION 3. USE OF THE MODEL AMENDMENTS

Any State or local government employer may amend its eligible § 457(b) defined
contribution governmental plan to comply with one or more of the changes made to
§ 457 by the SBJPA, TRA '97, EGTRRA, and the regulations issued under § 457 by
adopting one or more of the Model Amendments contained in the Appendix to this
revenue procedure. With respect to the benefit provisions relating to each of the Model
Amendments, the Model Amendments have been prepared to conform with the
applicable § 457(b) requirements, taking into account the general requirement that an
eligible plan must include all of the material terms and conditions for benefits under the
plan. For example, the Model Amendments do not incorporate the applicable legal
requirements by reference, but instead describe those requirements in a manner
intended to enable the plan administrator to implement the plan provisions on the basis
of the language of the Model Amendments to the extent feasible.

The regulations provide that an eligible § 457(b) governmental plan may contain
certain optional features not required for plan eligibility under § 457(b), such as in
service distributions from rollover accounts, distributions for unforeseeable
emergencies, loans, plan to plan transfers, and distributions of smaller accounts to
eligible participants. Accordingly, these Model Amendments contain optional as well as
required provisions that may be used in adopting an eligible § 457(b) governmental
plan. However, if the optional provisions are used, the optional provisions must meet, in
both form and operation, the relevant requirements under the Code and the regulations,
as well as operate in accordance with the terms of the plan.

SECTION 4. RELIANCE BY EMPLOYERS ON MODEL AMENDMENTS

If an eligible governmental employer adopts one or more of these Model
Amendments for its plan that is intended to be an eligible § 457(b) governmental plan,
the plan will be treated as meeting the plan requirements for eligibility under § 457(b)
with respect to these provisions. An employer may adopt the applicable Model
Amendment provided in this revenue procedure on a word-for-word basis or adopt an
Amendment that is substantially similar in all material respects. However, these Model
Amendments are limited in scope. Therefore, use of the Model Amendments does not
have the same status as a private letter ruling which provides that a plan is an eligible §
457(b) governmental plan. In addition, if an eligible governmental employer adopts one

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or more of the Model Amendments, the plan must be operated in accordance with the
Model Amendments and must continue to satisfy in both form and operation any other
requirements of § 457 in order to maintain eligibility. To the extent an employer’s plan
does not include the Model Amendments or an amendment that is substantially similar
in all respects, an eligible governmental employer who requests a private letter ruling
from the IRS on plan eligibility under § 457 must clearly highlight and describe in the
written request how its plan provisions differ from the Model Amendments.

SECTION 5. DATE AMENDMENTS ARE ADOPTED

Pursuant to this revenue procedure, for purposes of the last sentence of
§ 457(b), an eligible § 457(b) governmental plan will be treated as having adopted
timely amendments to reflect the requirements of EGTRRA described in section 2.03 of
this revenue procedure if the related Model Amendment, or any other amendment that
satisfies that requirement, is adopted no later than December 31, 2005, the amendment
is effective as of a date not later than the latest date permitted under § 457(b), and the
operation of the plan since that date is not inconsistent with the amendment.

SECTION 6. AREAS NOT COVERED BY THIS REVENUE PROCEDURE

This revenue procedure does not apply to eligible § 457(b) plans of tax-exempt
entities or ineligible plans under § 457(f).

SECTION 7. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 98-41 is superseded.

SECTION 8. COMMENTS REQUESTED

Treasury and IRS are interested in receiving comments on the Model
Amendments contained in this revenue procedure and any other Model Amendments
that interested parties believe should be added to this revenue procedure. Comments
should be sent to the following address: Internal Revenue Service, Attn:
CC:DOM:CORP:R (Section 457 Plans), Room 5201, P. O. Box 7604, Ben Franklin
Station, Washington, DC 20044. Written comments may be hand delivered Monday
through Friday between 8 a.m. and 4 p.m. to: Internal Revenue Service, Courier’s Desk,
Attn: CC:PA:RU (Section 457 Plans), 1111 Constitution Avenue, NW., Washington, DC
20224. Alternatively, written comments may be submitted electronically via the Internet
by selecting the “Tax Regs” option on the IRS Home Page, or by submitting them
directly to the IRS Internet site at http:/www.irs.gov/tax_regs/reglist.html. Comments
should be received by November 30, 2004.

SECTION 9. PAPERWORK REDUCTION ACT

The collection of information contained in this revenue procedure has been
reviewed and approved by the Office of Management and Budget in accordance with

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the Paperwork Reduction Act (44 U.S.C. 3507) under control number 1545-1904.

An agency may not conduct or sponsor, and a person is not required to respond
to, a collection of information unless the collection of information displays a valid OMB
control number.

The collection of information in this revenue procedure is pursuant to § 457(b) of
the Code and § 1.457-1 of the Income Tax Regulations. Sections 2.2, 2.4, and 2.6 of
the Appendix to this revenue procedure deal with the election to defer compensation
and the information that has to be provided to the administrator of the plan by a
participant in the plan. Sections 5.2, 5.3, 5.4, 5.10 and 6.3 of the Appendix to this
revenue procedure deal with the participant’s rights to distribution and the notification
that the participant must give to the administrator of the plan. Section 8.6 of the
Appendix to this revenue procedure deals with the procedure that an administrator of a
plan must follow when distributees cannot be located. This information is required to
enable sponsors of plans of state or local governments described in this revenue
procedure to make the necessary amendments to ensure compliance with the statutory
requirements of § 457(b) and the regulations thereunder. The likely respondents are
state or local governments.

The estimated total annual reporting and/or recordkeeping burden is 41,040
hours.

The estimated annual burden per respondent/recordkeeper varies from 3 to 8
hours, depending on individual circumstances, with an estimated average of 4 hours.
The estimated number of respondents and/or recordkeepers is 10,260.

The estimated frequency of responses is occasional.

Books or records relating to a collection of information must be retained as long
as their contents may become material in the administration of any internal revenue law.
Generally tax returns and tax return information are confidential, as required by 26
U.S.C. § 6103.

DRAFTING INFORMATION

The principal author of this revenue procedure is Vernon S. Carter of the Office
of the Division Counsel/Associate Chief Counsel (Tax Exempt & Government Entities).
For further information regarding this revenue procedure contact Vernon S. Carter on
(202) 622-6060 (not a toll free call).

APPENDIX FOR REVENUE PROCEDURE 2004-56

MODEL AMENDMENTS

Note to sponsors: The Model Amendments in this Appendix are designed for

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use by eligible governmental employers maintaining eligible § 457(b) defined
contribution plans that permit employees to elect to defer compensation, that are
maintained on the basis of the calendar year, and that provide for the use of one or
more trusts to satisfy the requirements of § 457(g). In this Appendix presenting the
Model Amendment language, the portions printed in italics are explanatory notes for the
benefit of the §457(b) plan sponsor and are not to be included in the Model
Amendments. In addition, certain items indicated by brackets can be filled in by the
plan sponsor as required or as appropriate.

MODEL AMENDMENT 1

Definition of Terms

Section 1
Definition of Terms Used in Model Amendments

The following words and terms, when used in the Model Amendments, have the
meaning set forth below and should be adopted as part of the corresponding Model
Amendment, as identified at the end of each definition below and also as identified at
the end of each Model Amendment.

1.1 "Administrator": [Insert Identity of person, committee or organization
appointed to administer the Plan]. Note: This definition is used in Model Amendments
2, 3, 4, 5, 6, and 8.

1.2 "Account Balance": The bookkeeping account maintained with respect to
each Participant which reflects the value of the deferred Compensation credited to the
Participant, including the Participant’s Annual Deferrals, the earnings or loss of the Fund
(net of Fund expenses) allocable to the Participant, any transfers for the Participant’s
benefit, and any distribution made to the Participant or the Participant’s Beneficiary. If a
Participant has more than one Beneficiary at the time of the Participant’s death, then a
separate Account Balance shall be maintained for each Beneficiary. The Account
Balance includes any account established under Section 6 for rollover contributions and
plan-to-plan transfers made for a Participant, the account established for a Beneficiary
after a Participant’s death, and any account or accounts established for an alternate
payee (as defined in section 414(p)(8) of the Code). Note: This definition is used in
Model Amendments 2, 3, 4, 5, 6, and 8.

Note: A plan is not required to maintain a separate account for each Beneficiary
in order to satisfy section 401(a)(9), but this Model Amendment provides for such
separate accounts so that installment payments are permitted to be made over each
beneficiary's life expectancy as permitted under § 1.401(a)(9)-8, A-2(a)(2) of the Income
Tax Regulations. However, because, under the Model Amendment, each separate
account is permitted to have only a single beneficiary, certain beneficiary designations
are not permitted under the Model Amendment, such as a death benefit in the form of a
fixed dollar payment that is not determined as of the date of death and that is not to be

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maintained in a separate account to which gains and losses are credited.

1.3 "Annual Deferral": The amount of Compensation deferred in any year.
Note: This definition is used in Model Amendments 2, 3, 4, 5, 6 and 7.

1.4 "Beneficiary": The designated person (or, if none, the Participant’s estate)
who is entitled to receive benefits under the Plan after the death of a Participant. Note:
This definition is used in Model Amendments 2, 4, 5, 6 and 8.

1.5 "Code": The Internal Revenue Code of 1986, as now in effect or as hereafter
amended. All citations to sections of the Code are to such sections as they may from
time to time be amended or renumbered. Note: This definition is used in Model
Amendments 2, 3, 4, 5, 6, 7, and 8.

1.6 "Compensation": All cash compensation for services to the Employer,
including salary, wages, fees, commissions, bonuses, and overtime pay, that is includible
in the Employee's gross income for the calendar year, plus amounts that would be cash
compensation for services to the Employer includible in the Employee's gross income for
the calendar year but for a compensation reduction election under section 125, 132(f),
401(k), 403(b), or 457(b) of the Code (including an election to defer compensation under
Section 3). Note: This definition is used in Model Amendments 2, 3, 4, and 5.

1.7 "Employee": Each natural person, whether appointed or elected, who is
employed by the Employer as a common law employee, excluding any employee who is
included in a unit of employees covered by a collective bargaining agreement that does
not specifically provide for participation in the Plan. Note: This definition is used in
Model Amendments 2, 3, 4, and 6.

Note: A plan is not required to be offered to all employees and may provide for
specific classes of employees to be excluded.

1.8 "Employer": [Name of State entity]. Note: This definition is used in Model
Amendments 2, 3, 4, 6, and 8.

Note: State means a State (treating the District of Columbia as a State as provided
under § 7701(a)(10)), a political subdivision of a State, and any agency or instrumentality
of a State.

1.9 "Includible Compensation": An Employee’s actual wages in box 1 of Form
W-2 for a year for services to the Employer, but subject to a maximum of $200,000 (or
such higher maximum as may apply under section 401(a)(17) of the Code) and increased
(up to the dollar maximum) by any compensation reduction election under section 125,
132(f), 401(k), 403(b), or 457(b) of the Code (including an election to defer Compensation
under Section 3). Note: This definition is used in Model Amendment 3.

1.10 "Normal Retirement Age"
: Age 65. Note: This definition is used in Model

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Amendments 3 and 5. See Note after Section 3.3.

1.11 "Participant": An individual who is currently deferring Compensation, or
who has previously deferred Compensation under the Plan by salary reduction and who
has not received a distribution of his or her entire benefit under the Plan. Only individuals
who perform services for the Employer as an Employee may defer Compensation under
the Plan. Note: This definition is used in Model Amendments 2, 3, 4, 5, 6, 7, and 8.

1.12 "Plan": [INSERT NAME OF PLAN]. Note: This definition is used in Model
Amendments 2, 3, 4, 5, 6, 7 and 8.

1.13 "Severance from Employment": The term Severance from Employment
means the date that the Employee dies, retires, or otherwise has a severance from
employment with the Employer, as determined by the Administrator (and taking into
account guidance issued under the Code). Note: This definition is used in Model
Amendments 2, 4, 5, and 6.

1.14 "Trust Agreement": The written agreement (or declaration) made by and
between the Employer and the Trustee under which the Trust Fund is maintained. Note:
This definition is used in Model Amendment 7.

1.15 "Trust Fund": The trust fund created under and subject to the Trust
Agreement. Note: This definition is used in Model Amendments 2, 7, and 8.

1.16 "Trustee": The Trustee duly appointed and currently serving under the Trust
Agreement. Note: This definition is used in Model Amendments 4, 5, 7 and 8.

1.17 "Valuation Date": [Each business day/The last day of the calendar
month/The last day of the calendar quarter/ Each December 31]. Note: This definition is
used in Model Amendments 4 and 5.

MODEL AMENDMENT 2

Participation and Contributions

Section 2
Participation and Contributions

2.1 Eligibility
. Each Employee shall be eligible to participate in the Plan and
defer Compensation hereunder immediately upon becoming employed by the Employer.

Note: As indicated above, this Model Amendment assumes that the employer has
a broad based plan with an immediate eligibility, that the plan is limited to elective
contributions, and that the plan has no matching or other employer non-elective
contributions.

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2.2 Election Required for Participation. An Employee may elect to become a
Participant by executing an election to defer a portion of his or her Compensation (and
have that amount contributed as an Annual Deferral on his or her behalf) and filing it with
the Administrator. This participation election shall be made on the deferral agreement
provided by the Administrator under which the Employee agrees to be bound by all the
terms and conditions of the Plan. The Administrator may establish a minimum deferral
amount, and may change such minimums from time to time. The participation election
shall also include designation of investment funds and a designation of Beneficiary. Any
such election shall remain in effect until a new election is filed.

2.3 Commencement of Participation
. An Employee shall become a Participant
as soon as administratively practicable following the date the Employee files a
participation election pursuant to Section 2.2. Such election shall become effective no
earlier than the calendar month following the month in which the election is made. A new
Employee may defer compensation payable in the calendar month during which the
Participant first becomes an Employee if an agreement providing for the deferral is
entered into on or before the first day on which the Participant performs services for the
Employer.

2.4 Information Provided by the Participant
. Each Employee enrolling in the
Plan should provide to the Administrator at the time of initial enrollment, and later if there
are any changes, any information necessary or advisable for the Administrator to
administer the plan, including, without limitation, whether the Employee is a participant in
any other eligible plan under Code section 457(b).

2.5 Contributions Made Promptly
. Annual Deferrals by the Participant under the
Plan shall be transferred to the Trust Fund within a period that is not longer than is
reasonable for the proper administration of the Participant’s Account Balance. For this
purpose, Annual Deferrals shall be treated as contributed within a period that is not longer
than is reasonable for the proper administration if the contribution is made to the Trust
Fund within 15 business days following the end of the month in which the amount would
otherwise have been paid to the Participant.

2.6 Amendment of Annual Deferrals Election
. Subject to other provisions of
the Plan, a Participant may at any time revise his or her participation election, including a
change of the amount of his or her Annual Deferrals, his or her investment direction and
his or her designated Beneficiary. Unless the election specifies a later effective date, a
change in the amount of the Annual Deferrals shall take effect as of the first day of the
next following month or as soon as administratively practicable if later. A change in the
investment direction shall take effect as of the date provided by the Administrator on a
uniform basis for all Employees. A change in the Beneficiary designation shall take effect
when the election is accepted by the Administrator.

2.7 Leave of Absence
. Unless an election is otherwise revised, if a Participant is
absent from work by leave of absence, Annual Deferrals under the Plan shall continue to

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the extent that Compensation continues.

2.8 Disability
. A disabled Participant may elect Annual Deferrals during any
portion of the period of his or her disability to the extent that he or she has actual
Compensation (not imputed Compensation and not disability benefits) from which to
make contributions to the Plan and has not had a Severance from Employment.

Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 2: Administrator, Account Balance, Annual Deferral, Beneficiary, Employee,
Participant, Plan, Severance from Employment, and Trust Fund.

MODEL AMENDMENT 3

Limitations on Amounts Deferred

Section 3
Limitations on Amounts Deferred

3.1 Basic Annual Limitation
. The maximum amount of the Annual Deferral
under the Plan for any calendar year shall not exceed the lesser of (i) the Applicable
Dollar Amount or (ii) the Participant's Includible Compensation for the calendar year. The
Applicable Dollar Amount is the amount established under section 457(e)(15) of the Code
applicable as set forth below:

For the following years:

The Applicable Dollar Amount is:

2002

$11,000

2003

$12,000

2004

$13,000

2005

$14,000

2006 or thereafter

$15,000 Adjusted for cost-of-living
after 2006 to the extent provided under
section 415(d) of the Code.

3.2 Age 50 Catch-up Annual Deferral Contributions
. A Participant who will
attain age 50 or more by the end of the calendar year is permitted to elect an additional
amount of Annual Deferrals, up to the maximum age 50 catch-up Annual Deferrals for the
year. The maximum dollar amount of the age 50 catch-up Annual Deferrals for a year is
as follows:

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For the following years:

The maximum age 50 catch-up
dollar amount is:

2002

$1,000

2003

$2,000

2004

$3,000

2005

$4,000

2006 or thereafter

$5,000, adjusted for cost-of-living
after 2006 to the extent provided under
the Code.

3.3 Special Section 457 Catch-up Limitation. If the applicable year is one of a
Participant’s last 3 calendar years ending before the year in which the Participant attains
Normal Retirement Age and the amount determined under this Section 3.3 exceeds the
amount computed under Sections 3.1 and 3.2, then the Annual Deferral limit under this
Section 3 shall be the lesser of:

(a) An amount equal to 2 times the Section 3.1 Applicable Dollar Amount for
such year; or

(b) The sum of:

(1) An amount equal to (A) the aggregate Section 3.1 limit for the current
year plus each prior calendar year beginning after December 31, 2001
during which the Participant was an Employee under the Plan, minus (B) the
aggregate amount of Compensation that the Participant deferred under the
Plan during such years, plus

(2) An amount equal to (A) the aggregate limit referred to in section
457(b)(2) of the Code for each prior calendar year beginning after
December 31, 1978 and before January 1, 2002 during which the
Participant was an Employee (determined without regard to Sections 3.2
and 3.3), minus (B) the aggregate contributions to Pre-2002 Coordination
Plans for such years.

However, in no event can the deferred amount be more than the Participant’s
Compensation for the year. Note: This limitation is required because the Model
Amendment is limited to elective contributions.

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Note: Generally, for purposes of the special § 457 catch-up definition in Section
3.3, a plan must specify the normal retirement age under the plan. A plan may define
normal retirement age as any age that is on or after the earlier of age 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 pension 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 70½. Alternatively, a plan
may provide that a participant is allowed to designate a normal retirement age within
these ages. For purposes of the special § 457 catch-up in Section 3.3, an entity
sponsoring more than one eligible plan may not permit a participant to have more than
one normal retirement age under the eligible plans it sponsors.

Note: Special rule for eligible plans of qualified police or firefighters
. An eligible
plan with participants that include qualified police or firefighters as defined under
§ 415(b)(2)(H)(ii)(I) of the Code may designate a normal retirement age for such qualified
police or firefighters that is earlier than the earliest normal retirement age designated
under the general rule above, but in no event may the normal retirement age be earlier
than age 40. Alternatively, a plan may allow a qualified police or firefighter participant to
designate a normal retirement age that is between age 40 and age 70 ½.

3.4 Special Rules
. For purposes of this Section 3, the following rules shall apply:

(a) Participant Covered By More Than One Eligible Plan. If the Participant is or
has been a participant in one or more other eligible plans within the meaning of section
457(b) of the Code, then this Plan and all such other plans shall be considered as one
plan for purposes of applying the foregoing limitations of this Section 3. For this purpose,
the Administrator shall take into account any other such eligible plan maintained by the
Employer and shall also take into account any other such eligible plan for which the
Administrator receives from the Participant sufficient information concerning his or her
participation in such other plan.

(b) Pre-Participation Years
. In applying Section 3.3, a year shall be taken into
account only if (i) the Participant was eligible to participate in the Plan during all or a
portion of the year and (ii) Compensation deferred, if any, under the Plan during the year
was subject to the Basic Annual Limitation described in Section 3.1 or any other plan
ceiling required by section 457(b) of the Code.

(c) Pre-2002 Coordination Years
. For purposes of Section 3.3(b)(2)(B),
“contributions to Pre-2002 Coordination Plans” means any employer contribution, salary
reduction or elective contribution under any other eligible Code section 457(b) plan, or a
salary reduction or elective contribution under any Code section 401(k) qualified cash or
deferred arrangement, Code section 402(h)(1)(B) simplified employee pension
(SARSEP), Code section 403(b) annuity contract, and Code section 408(p) simple
retirement account, or under any plan for which a deduction is allowed because of a

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contribution to an organization described in section 501(c)(18) of the Code, including
plans, arrangements or accounts maintained by the Employer or any employer for whom
the Participant performed services. However, the contributions for any calendar year are
only taken into account for purposes of Section 3.3(b)(2)(B) to the extent that the total of
such contributions does not exceed the aggregate limit referred to in section 457(b)(2) of
the Code for that year.

Note: See generally § 1.457-4(c)(3)(iv) of the Income Tax Regulations for rules
relating to the application of the coordination limit for years prior to 2002 for purposes of
determining the underutilized limit.

(d) Disregard Excess Deferral
. For purposes of Sections 3.1, 3.2 and 3.3, an
individual is treated as not having deferred compensation under a plan for a prior taxable
year to the extent Excess Deferrals under the plan are distributed, as described in Section
3.5. To the extent that the combined deferrals for pre-2002 years exceeded the
maximum deferral limitations, the amount is treated as an Excess Deferral for those prior
years.

3.5 Correction of Excess Deferrals
. If the Annual Deferral on behalf of a
Participant for any calendar year exceeds the limitations described above, or the Annual
Deferral on behalf of a Participant for any calendar year exceeds the limitations described
above when combined with other amounts deferred by the Participant under another
eligible deferred compensation plan under section 457(b) of the Code for which the
Participant provides information that is accepted by the Administrator, then the Annual
Deferral, to the extent in excess of the applicable limitation (adjusted for any income or
loss in value, if any, allocable thereto), shall be distributed to the Participant. Note: See
§ 1.457-4(e)(1) of the Income Tax Regulations for the federal income tax treatment of a
distribution of excess deferrals.

Note: See generally §§ 1.457-4 and 1.457-5 of the Income Tax Regulations for
rules relating to limitations on contributions.

3.6 Protection of Persons Who Serve in a Uniformed Service
. An Employee
whose employment is interrupted by qualified military service under Code section 414(u)
or who is on a leave of absence for qualified military service under Code section 414(u)
may elect to make additional Annual Deferrals upon resumption of employment with the
Employer equal to the maximum Annual Deferrals that the Employee could have elected
during that period if the Employee’s employment with the Employer had continued (at the
same level of Compensation) without the interruption or leave, reduced by the Annual
Deferrals, if any, actually made for the Employee during the period of the interruption or
leave. This right applies for five years following the resumption of employment (or, if
sooner, for a period equal to three times the period of the interruption or leave).

Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 3: Administrator, Account Balance, Annual Deferral, Code, Compensation,
Employee, Includible Compensation, Normal Retirement Age, Participant, and Plan.

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MODEL AMENDMENT 4

Loans

Section 4
Loans

4.1 Loans
. A Participant who is an Employee may apply for and receive a loan
from his or her Account Balance as provided in this Section 4. Any such loan may not be
for an amount less than the minimum amount specified by the Administrator. If not
specified by the Administrator, the minimum loan amount shall be [$1,000].

4.2 Maximum Loan Amount
. No loan to a Participant hereunder may exceed the
lesser of:

(a) $50,000, reduced by the greater of (i) the outstanding balance on any loan from
the Plan to the Participant on the date the loan is made or (ii) the highest outstanding
balance on loans from the Plan to the Participant during the one-year period ending on
the day before the date the loan is approved by the Administrator (not taking into account
any payments made during such one-year period), or

(b) one half of the value of the Participant’s vested Account Balance (as of the
Valuation Date immediately preceding the date on which such loan is approved by the
Administrator).

For purposes of this Section 4.2, any loan from any other plan maintained by a
participating employer shall be treated as if it were a loan made from the Plan, and the
Participant’s vested interest under any such other plan shall be considered a vested
interest under this Plan; provided, however, that the provisions of this paragraph shall not
be applied so as to allow the amount of a loan under this Section 4.2 to exceed the
amount that would otherwise be permitted in the absence of this paragraph.

4.3 Terms of Loan
. The terms of the loan shall:

(a) require level amortization with payments not less frequently than quarterly
throughout the repayment period, except that alternative arrangements for repayment
may apply in the event that the borrower is on an bona fide unpaid leave of absence for a
period not to exceed one year for leaves other than a qualified military leave within the
meaning of section 414(u) of the Code or for the duration of a leave which is due to
qualified military service;

(b) require that the loan be repaid within five years unless the Participant certifies
in writing to the Administrator that the loan is to be used to acquire any dwelling unit
which within a reasonable time is to be used (determined at the time the loan is made) as
a principal residence of the Participant; and

14

(c) provide for interest at a rate equal to one percentage point above the prime rate
as published in the [Insert name of a nationally recognized newspaper that publishes the
prime rate daily] on the first business day of the month in which the loan is approved by
the Administrator.

4.4 Security for Loan; Default
.

(a) Security. Any loan to a Participant under the Plan shall be secured by the
pledge of the portion of the Participant’s interest in the Plan invested in such loan.

(b) Default
. In the event that a Participant fails to make a loan payment under this
Section 4 within 90 days after the date such payment is due, a default on the loan shall
occur. In the event of such default, (i) all remaining payments on the loan shall be
immediately due and payable, (ii) effective as of the first day of the calendar month next
following the month in which any such loan default occurs, the interest rate for such loan
shall be (if higher than the rate otherwise applicable) the rate being charged on loans
from the Plan that are approved by the Administrator in the month in which such default
occurs, (iii) no contributions shall be made on such Participant’s behalf prior to the first
payroll period that follows by 12 calendar months the date of repayment in full of such
loan, and (iv) the Participant shall be permanently ineligible for any future loans from the
Plan.
In the case of any default on a loan to a Participant, the Administrator shall apply
the portion of the Participant’s interest in the Plan held as security for the loan in
satisfaction of the loan on the date of Severance from Employment. In addition, the
Administrator shall take any legal action it shall consider necessary or appropriate to
enforce collection of the unpaid loan, with the costs of any legal proceeding or collection
to be charged to the Account Balance of the Participant.

Notwithstanding anything elsewhere in the Plan to the contrary, in the event a loan
is outstanding hereunder on the date of a Participant’s death, his or her estate shall be his
or her Beneficiary as to the portion of his or her interest in the Plan invested in such loan
(with the Beneficiary or Beneficiaries as to the remainder of his or her interest in the Plan
to be determined in accordance with otherwise applicable provisions of the Plan).

4.5 Repayment
. The Participant shall be required, as a condition to receiving a
loan, to enter into an irrevocable agreement authorizing the Employer to make payroll
deductions from his or her Compensation as long as the Participant is an Employee and
to transfer such payroll deduction amounts to the Trustee in payment of such loan plus
interest. Repayments of a loan shall be made by payroll deduction of equal amounts
(comprised of both principal and interest) from each paycheck, with the first such
deduction to be made as soon as practicable after the loan funds are disbursed; provided
however, that a Participant may prepay the entire outstanding balance of his loan at any
time (but may not make a partial prepayment); and provided, further, that if any payroll
deductions cannot be made in full because a Participant is on an unpaid leave of absence
or is no longer employed by a participating employer (that has consented to make payroll

15
deductions for this purpose) or the Participant’s paycheck is insufficient for any other
reason, the Participant shall pay directly to the Plan the full amount that would have been
deducted from the Participant’s paycheck, with such payment to be made by the last
business day of the calendar month in which in which the amount would have been
deducted.

Note: Loans are not required to be repaid by payroll withholding. See § 1.457-
6(f)(2) of the Income Tax Regulations for additional rules that may apply if loans are not
repaid by payroll withholding.

Note: See § 1.72(p)-1 of the Income Tax Regulations for the federal income tax
treatment of loans generally.

Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 4: Administrator, Account Balance, Code, Compensation, Employee,
Employer, Severance from Employment, Participant, Plan, Trustee and Valuation Date.

MODEL AMENDMENT 5

Distribution of Benefits

SECTION 5
Benefit Distributions

5.1 Benefit Distributions At Retirement or Other Severance from
Employment. Upon retirement or other Severance from Employment (other than due to
death), a Participant is entitled to receive a distribution of his or her Account Balance
under any form of distribution permitted under Section 5.3 commencing at the date
elected under Section 5.2. If a Participant does not elect otherwise, the distribution shall
be paid as soon as practicable following Normal Retirement Age or, if later, following
retirement or other Severance from Employment and payment shall be made in [quarterly]
[monthly] installments of the minimum annual payments described in paragraph (b) of
Section 5.3.

5.2 Election of Benefit Commencement Date
. A Participant may elect to
commence distribution of benefits at any time after retirement or other Severance from
Employment by a notice filed at least [30 days] before the date on which benefits are to
commence. However, in no event may distribution of benefits commence later than the
date described in Section 5.8.

5.3 Forms of Distribution
. In an election to commence benefits under Section
5.2, a Participant entitled to a distribution of benefits under this Section 5 may elect to
receive payment in any of the following forms of distribution:

(a) a lump sum payment of the total Account Balance or

16
(b) annual installment payments through the year of the Participant’s death, the
amount payable each year equal to a fraction of the Account Balance equal to one
divided by the distribution period set forth in the Uniform Lifetime Table at section
1.401(a)(9)-9, A-2, of the Income Tax Regulations for the Participant’s age on the
Participant’s birthday for that year. If the Participant’s age is less than age 70, the
distribution period is 27.4 plus the number of years that the Participant’s age is less than
age 70. At the Participant’s election, this annual payment can be made in monthly or
quarterly installments. The Account Balance for this calculation (other than the final
installment payment) is the Account Balance as of the end of the year prior to the year for
which the distribution is being calculated. Payments shall commence on the date elected
under Section 5.2. For any year, the Participant can elect distribution of a greater amount
(not to exceed the amount of the remaining Account Balance) in lieu of the amount
calculated using this formula.

5.4 Death Benefit Distributions
. Commencing in the calendar year following the
calendar year of the Participant’s death, the Participant’s Account Balance shall be paid
to the Beneficiary in a lump sum.

Alternatively, if the Beneficiary with respect to the Participant’s Account Balance is
a natural person, at the Beneficiary’s election, distribution can be made in annual
installments (calculated in a manner that is similar to installments under Section 5.3) with
the distribution period determined under this paragraph. If the Beneficiary is the
Participant’s surviving spouse, the distribution period is equal to the Beneficiary’s life
expectancy using the single life table in section 1.401(a)(9)-9, A-1, of the Income Tax
Regulations for the spouse’s age on the spouse’s birthday for that year. If the
Beneficiary is not the Participant’s surviving spouse, the distribution period is the
Beneficiary’s life expectancy determined in the year following the year of the Participant’s
death using the single life table in section 1.401(a)(9)-9, A-1, of the Income Tax
Regulations for the Beneficiary’s age on the Beneficiary’s birthday for that year, reduced
by one for each year that has elapsed after that year. For any year, a Beneficiary can
elect distribution of a greater amount (not to exceed the amount of the remaining Account
Balance) in lieu of the amount calculated using this formula.

Note: A plan is not required to include the particular forms of payment that are in
Section 5.3 and Section 5.4, and may include additional forms of payment so long as the
material terms and conditions for those other forms are set forth in the plan and the
additional forms of payment satisfy the requirements of § 401(a)(9) of the Code.

5.5 Account Balances of $5,000 or Less
. Notwithstanding Sections 5.2, 5.3 and
5.4, if the amount of a Participant’s Account Balance is not in excess of $5,000 (or the
dollar limit under section 411(a)(11) of the Code, if greater) on the date that payments
commence under Section 5.3 or on the date of the Participant’s death, then payment shall
be made to the Participant (or to the Beneficiary if the Participant is deceased) in a lump
sum equal to the Participant’s Account Balance as soon as practicable following the
Participant’s retirement, death, or other Severance from Employment.

17
5.6 Amount of Account Balance. Except as provided in Section 5.3, the amount
of any payment under this Section 5 shall be based on the amount of the Account
Balance on the preceding Valuation Date.

5.7 Revocation of Prior Election
. Any election made under this Section 5 may
be revoked at any time.

5.8 Latest Distribution Date
. In no event shall any distribution under this Section
5 begin later than the later of (a) April 1 of the year following the calendar year in which
the Participant attains age 70 1/2 or (b) April 1 of the year following the year in which the
Participant retires or otherwise has a Severance from Employment. If distributions
commence in the calendar year following the later of the calendar year in which the
Participant attains age 70 ½ or the calendar year in which the Severance from
Employment occurs, the distribution on the date that distribution commences must be
equal to the annual installment payment for the year that the Participant has a Severance
from Employment determined under paragraph (b) of Section 5.3 and an amount equal to
the annual installment payment for the year after Severance from Employment
determined under paragraph (b) of Section 5.3 must also be paid before the end of the
calendar year of commencement.

5.9 In-Service Distributions From Rollover Account
. If a Participant has a
separate account attributable to rollover contributions to the plan, the Participant may at
any time elect to receive a distribution of all or any portion of the amount held in the
rollover account.

Note: A plan is not required to permit in-service distribution from a rollover
account. See Rev. Rul. 2004-12, 2004-7 I.R.B. 478.

5.10 Unforeseeable Emergency Distribution
.

(a) Distribution
. If the Participant has an unforeseeable emergency before
retirement or other Severance from Employment, the Participant may elect to receive a
lump sum distribution equal to the amount requested or, if less, the maximum amount
determined by the Administrator to be permitted to be distributed under this Section 5.10.

(b) Unforeseeable emergency defined
. An unforeseeable emergency is defined as
a severe financial hardship of the Participant resulting from: an illness or accident of the
Participant, the Participant’s spouse, or the Participant’s dependent (as defined in section
152(a)); loss of the Participant's property due to casualty (including the need to rebuild a
home following damage to a home not otherwise covered by homeowner’s insurance,
e.g., as a result of a natural disaster); the need to pay for the funeral expenses of the
Participant’s spouse or dependent (as defined in section 152(a) of the Code); or other
similar extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. For example, the imminent foreclosure of or
eviction from the Participant's primary residence may constitute an unforeseeable
emergency. In addition, the need to pay for medical expenses, including non-refundable

18
deductibles, as well as for the cost of prescription drug medication, may constitute an
unforeseeable emergency. Except as otherwise specifically provided in this Section 5.10,
neither the purchase of a home nor the payment of college tuition is an unforeseeable
emergency.

(c) Unforeseeable emergency distribution standard
. A distribution on account of
unforeseeable emergency may not be made to the extent that such emergency is or may
be relieved through reimbursement or compensation from insurance or otherwise, by
liquidation of the Participant's assets, to the extent the liquidation of such assets would
not itself cause severe financial hardship, or by cessation of deferrals under the plan.

(d) Distribution necessary to satisfy emergency need
. Distributions because of an
unforeseeable emergency may not exceed the amount reasonably necessary to satisfy
the emergency need (which may include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably anticipated to result from the
distribution).

5.11 Mandatory Distributions for Certain Account Balances of $5,000 or
Less. At the direction of the Administrator, a Participant’s total Account Balance shall be
paid in a lump sum as soon as practical following the direction if (a) the total Account
Balance does not exceed $5,000 (or the dollar limit under section 411(a)(11) of the Code,
if greater), (b) the Participant has not previously received a distribution of the total amount
payable to the Participant under this Section 5.11 and (c) no Annual Deferral has been
made with respect to the Participant during the two-year period ending immediately
before the date of the distribution.

Note: This Model Amendment (Section 5.11) may be adopted for a § 457(b) plan
to provide for the mandatory de minimis distribution option permitted under § 457(e)(9)(A)
of the Code. If it wishes, the plan sponsor may also substitute in the following Model
Amendments a consistent figure lower than $5,000 in place of "$5,000 (or the dollar limit
under § 411(a)(11) of the Code, if greater)." In addition, the plan may allow participants
to choose whether or not they wish to receive payment under this provision.

5.12 Rollover Distributions
.

(a) A Participant or the surviving spouse of a Participant (or a Participant’s former
spouse who is the alternate payee under a domestic relations order, as defined in section
414(p) of the Code) who is entitled to an eligible rollover distribution may elect, at the time
and in the manner prescribed by the Administrator, to have all or any portion of the
distribution paid directly to an eligible retirement plan specified by the Participant in a
direct rollover.

(b) For purposes of this Section 5.12, an eligible rollover distribution means any
distribution of all or any portion of a Participant’s Account Balance, except that an eligible
rollover distribution does not include (a) any installment payment under Section 5.3 for a
period of 10 years or more (b) any distribution made under Section 5.10 as a result of an

19
unforeseeable emergency, or (c) for any other distribution, the portion, if any, of the
distribution that is a required minimum distribution under section 401(a)(9). In addition,
an eligible retirement plan means an individual retirement account described in section
408(a) of the Code, an individual retirement annuity described in section 408(b) of the
Code, a qualified trust described in section 401(a) of the Code, an annuity plan described
in section 403(a) or 403(b) of the Code, or an eligible governmental plan described in
section 457(b) of the Code, that accepts the eligible rollover distribution.

Note: Section 402(f) and § 457(e)(16)(B) of the Code require a plan administrator
to provide a written explanation to any recipient of an eligible rollover distribution. The
written explanation must cover the direct rollover rules, the mandatory income tax
withholding on distributions not directly rolled over, the tax treatment of distributions not
rolled over (including the special tax treatment available for certain lump sum
distributions), and when distributions may be subject to different restrictions and tax
consequences after being rolled over. Section 402(f) provides that this explanation must
be given within a reasonable period of time before the plan makes an eligible rollover
distribution. See Notice 2002-3, 2002-2 I.R.B. 289 that contains a Safe Harbor
Explanation that plan administrators may provide to recipients of eligible rollover
distributions from employer plans in order to satisfy the notice requirement.

Note: In determining the portion of any distribution that is a required minimum
distribution for a year and thus not an eligible rollover distribution, for any participant who,
during the calendar year of distribution, is age 70 ½ or older and who has had a
Severance from Employment, the amount of the minimum annual installment payment
described in paragraph (b) of Section 5.3 may be treated as the amount of the required
minimum distribution. For distributions to a surviving spouse, any distribution made
before the calendar year in which the participant would have attained age 70 ½ is not a
required minimum distribution. For the calendar year in which the participant would have
attained age 70 ½ or any later year, the amount of the minimum annual installment
payment described in paragraph (b) of Section 5.3 may be treated as the amount of the
required minimum distribution.

Note: See generally § 1.457-6 of the Income Tax Regulations for rules relating to
restrictions on distributions.
.
Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 5: Administrator, Account Balance, Annual Deferral, Beneficiary, Code,
Normal Retirement Age, Participant, Plan, Severance from Employment, and Valuation
Date.

MODEL AMENDMENT 6

Rollovers to the Plan and Transfers

SECTION 6
Rollovers to the Plan and Transfers

20

6.01 Eligible Rollover Contributions to the Plan.

(a) A Participant who is an Employee and who is entitled to receive an eligible
rollover distribution from another eligible retirement plan may request to have all or a
portion of the eligible rollover distribution paid to the Plan. The Administrator may require
such documentation from the distributing plan as it deems necessary to effectuate the
rollover in accordance with section 402 of the Code and to confirm that such plan is an
eligible retirement plan within the meaning of section 402(c)(8)(B) of the Code.

(b) For purposes of Section 6.01(a), an eligible rollover distribution means any
distribution of all or any portion of a Participant’s benefit under another eligible retirement
plan, except that an eligible rollover distribution does not include (1) any installment
payment for a period of 10 years or more, (2) any distribution made as a result of an
unforeseeable emergency or other distribution which is made upon hardship of the
employee, or (c) for any other distribution, the portion, if any, of the distribution that is a
required minimum distribution under section 401(a)(9) of the Code. In addition, an eligible
retirement plan means an individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section 408(b) of the Code, a qualified
trust described in section 401(a) of the Code, an annuity plan described in section 403(a)
or 403(b) of the Code, or an eligible governmental plan described in section 457(b) of the
Code, that accepts the eligible rollover distribution.

(c) The Plan shall establish and maintain for the Participant a separate account for
any eligible rollover distribution paid to the Plan from any eligible retirement plan that is
not an eligible governmental plan under section 457(b) of the Code. In addition, the Plan
shall establish and maintain for the Participant a separate account for any eligible rollover
distribution paid to the Plan from any eligible retirement plan that is an eligible
governmental plan under section 457(b) of the Code.

6.02 Plan-to-Plan Transfers to the Plan
. At the direction of the Employer, the
Administrator may permit a class of Participants who are participants in another eligible
governmental plan under section 457(b) of the Code to transfer assets to the Plan as
provided in this Section 6.02. Such a transfer is permitted only if the other plan provides
for the direct transfer of each Participant's interest therein to the Plan. The Administrator
may require in its sole discretion that the transfer be in cash or other property acceptable
to the Administrator. The Administrator may require such documentation from the other
plan as it deems necessary to effectuate the transfer in accordance with section
457(e)(10) of the Code and section 1.457-10(b) of the Income Tax Regulations and to
confirm that the other plan is an eligible governmental plan as defined in section 1.457-
2(f) of the Income Tax Regulations. The amount so transferred shall be credited to the
Participant’s Account Balance and shall be held, accounted for, administered and
otherwise treated in the same manner as an Annual Deferral by the Participant under the
Plan, except that the transferred amount shall not be considered an Annual Deferral
under the Plan in determining the maximum deferral under Section 3.

21
6.03 Plan-to-Plan Transfers from the Plan.

(a) At the direction of the Employer, the Administrator may permit a class of
Participants and Beneficiaries to elect to have all or any portion of their Account Balance
transferred to another eligible governmental plan within the meaning of section 457(b) of
the Code and section 1.457-2(f) of the Income Tax Regulations. A transfer is permitted
under this Section 6.03(a) for a Participant only if the Participant has had a Severance
from Employment with the Employer and is an employee of the entity that maintains the
other eligible governmental plan. Further, a transfer is permitted under this Section
6.03(a) only if the other eligible governmental plan provides for the acceptance of plan-to-
plan transfers with respect to the Participants and Beneficiaries and for each Participant
and Beneficiary to have an amount deferred under the other plan immediately after the
transfer at least equal to the amount transferred.

(b) Upon the transfer of assets under this Section 6.03, the Plan’s liability to pay
benefits to the Participant or Beneficiary under this Plan shall be discharged to the extent
of the amount so transferred for the Participant or Beneficiary. The Administrator may
require such documentation from the receiving plan as it deems appropriate or necessary
to comply with this Section 6.03 (for example, to confirm that the receiving plan is an
eligible governmental plan under paragraph (a) of this Section 6.03, and to assure that
the transfer is permitted under the receiving plan) or to effectuate the transfer pursuant to
section 1.457-10(b) of the Income Tax Regulations.

Note: See § 1.457-10(b)(4) of the Income Tax Regulations for rules relating to
plan-to-plan transfers among eligible governmental plans of the same employer (and, for
this purpose, the employer is not treated as the same employer if the participant’s
compensation is paid by a different entity).

6.04 Permissive Service Credit Transfers
.

(a) If a Participant is also a participant in a tax-qualified defined benefit
governmental plan (as defined in section 414(d) of the Code) that provides for the
acceptance of plan-to-plan transfers with respect to the Participant, then the Participant
may elect to have any portion of the Participant’s Account Balance transferred to the
defined benefit governmental plan. A transfer under this Section 6.04(a) may be made
before the Participant has had a Severance from Employment.

(b) A transfer may be made under Section 6.04(a) only if the transfer is either for
the purchase of permissive service credit (as defined in section 415(n)(3)(A) of the Code)
under the receiving defined benefit governmental plan or a repayment to which section
415 of the Code does not apply by reason of section 415(k)(3) of the Code.

Note: See generally § 1.457-10(b) and (e) of the Income Tax Regulations for rules
relating to transfers and rollovers, including rules permitting in service transfers among
eligible § 457(b) governmental plans of the same employer.

22
Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 6: Administrator, Account Balance, Beneficiary, Code, Employee, Employer,
Participant, Plan, and Severance from Employment.

MODEL AMENDMENT 7

Trust Funds

Section 7
Trust Funds

The following Model Amendments may be used to reflect the mandatory trust
requirement applicable to eligible plans of state and local government entities under
§ 457(g) of the Code. Plan assets may instead be invested in whole or in part in annuity
contracts or custodial accounts, in which case additional requirements will apply. See
§ 1.457-8 of the Income Tax Regulations.

Trust Fund
. All amounts of Annual Deferrals, all property and rights purchased
with such amounts, and all income attributable to such amounts, property, or rights shall
be held and invested in the Trust Fund in accordance with this Plan and the Trust
Agreement. The Trust Fund, and any subtrust established under the Plan, shall be
established pursuant to a written agreement that constitutes a valid trust under the law of
[INSERT NAME OF STATE]. The Trustee shall ensure that all investments, amounts,
property, and rights held under the Trust Fund are held for the exclusive benefit of
Participants and their Beneficiaries. The Trust Fund shall be held in trust pursuant to the
Trust Agreement for the exclusive benefit of Participants and their Beneficiaries and
defraying reasonable expenses of the Plan and of the Trust Fund. It shall be impossible,
prior to the satisfaction of all liabilities with respect to Participants and their Beneficiaries,
for any part of the assets and income of the Trust Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants and their Beneficiaries.

Note: See generally § 1.457-8 of the Income Tax Regulations for rules relating to
funding.

Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 7: Annual Deferral, Beneficiary, Code, Participant, Plan, Trust Agreement,
Trust Fund, and Trustee.

MODEL AMENDMENT 8

Miscellaneous

The following provisions are optional provisions that are not required to be
adopted.

Section 8

23
Miscellaneous

8.1 Non-Assignability
. Except as provided in Section 8.2 and 8.3, the interests
of each Participant or Beneficiary under the Plan are not subject to the claims of the
Participant's or Beneficiary’s creditors; and neither the Participant nor any Beneficiary
shall have any right to sell, assign, transfer, or otherwise convey the right to receive any
payments hereunder or any interest under the Plan, which payments and interest are
expressly declared to be non-assignable and non-transferable.

8.2 Domestic Relation Orders
. Notwithstanding Section 8.1, if a judgment,
decree or order (including approval of a property settlement agreement) that relates to the
provision of child support, alimony payments, or the marital property rights of a spouse or
former spouse, child, or other dependent of a Participant is made pursuant to the domestic
relations law of any State (“domestic relations order”), then the amount of the Participant’s
Account Balance shall be paid in the manner and to the person or persons so directed in the
domestic relations order. Such payment shall be made without regard to whether the
Participant is eligible for a distribution of benefits under the Plan. The Administrator shall
establish reasonable procedures for determining the status of any such decree or order and
for effectuating distribution pursuant to the domestic relations order.

Note: See generally § 414(p) of the Code and § 1.457-10(c) of the Income Tax
Regulations for rules regarding domestic relations orders.

8.3 IRS Levy
. Notwithstanding Section 8.1, the Administrator may pay from a
Participant's or Beneficiary's Account Balance the amount that the Administrator finds is
lawfully demanded under a levy issued by the Internal Revenue Service with respect to
that Participant or Beneficiary or is sought to be collected by the United States
Government under a judgment resulting from an unpaid tax assessment against the
Participant or Beneficiary.

8.4 Mistaken Contributions
. If any contribution (or any portion of a contribution)
is made to the Plan by a good faith mistake of fact, then within one year after the payment
of the contribution, and upon receipt in good order of a proper request approved by the
Administrator, the amount of the mistaken contribution (adjusted for any income or loss in
value, if any, allocable thereto) shall be returned directly to the Participant or, to the extent
required or permitted by the Administrator, to the Employer.

8.5 Payments to Minors and Incompetents
. If a Participant or Beneficiary
entitled to receive any benefits hereunder is a minor or is adjudged to be legally incapable
of giving valid receipt and discharge for such benefits, or is deemed so by the
Administrator, benefits will be paid to such person as the Administrator may designate for
the benefit of such Participant or Beneficiary. Such payments shall be considered a
payment to such Participant or Beneficiary and shall, to the extent made, be deemed a
complete discharge of any liability for such payments under the Plan.

8.6 Procedure When Distributee Cannot Be Located
. The Administrator shall

24
make all reasonable attempts to determine the identity and address of a Participant or a
Participant's Beneficiary entitled to benefits under the Plan. For this purpose, a
reasonable attempt means (a) the mailing by certified mail of a notice to the last known
address shown on [Insert Name of the Employer]’s or the Administrator's records, (b)
notification sent to the Social Security Administration or the Pension Benefit Guaranty
Corporation (under their program to identify payees under retirement plans), and (c) the
payee has not responded within 6 months. If the Administrator is unable to locate such a
person entitled to benefits hereunder, or if there has been no claim made for such
benefits, the Trust Fund shall continue to hold the benefits due such person.

Note: The following definitions from Model Amendment 1 are used in this Model
Amendment 8: Administrator, Account Balance, Beneficiary, Employer, Participant, Plan,
Trust Fund, and Trustee.