Fort Walton Beach Resolution — 2009-45 - Establish Defined Plan after 1/10 — reading text

compensated Employees in an amount greater than the amount made available to other Employees. c) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. d) Loan Limit. No Participant loan shall exceed the present value of the Participant's Nonforfeitable Interest in his/ her Account. e) Foreclosure. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan. f) Reduction ofAccount. Notwithstanding any other provision of this Plan, the portion of the Participant's vested Account balance used as a security interest held by the Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. Ifless than one hundred percent (100%) of the Participant's nonforfeitable Account balance ( determined without regard to the preceding sentence) is payable to the surviving spouse, then the Account balance shall be adjusted by first reducing the nonforfeitable Account bal- ance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the surviving spouse. g) Amount ofLoan. At the time the loan is made, the principal amount of the loan plus the outstanding balance ( principal plus accrued interest) due on any other outstanding loans to the Participant or Beneficiary from the Plan and from all other plans of the Employer that are qualified employer plans under section 72( p) (4) of the Code shall not exceed the lesser of: 1) $ 50, 000, reduced by the excess (if any) of i) The highest outstanding balance of loans from the Plan during the one ( 1) year period ending on the day before the date on which the loan is made, over ii) The outstanding balance of loans from the Plan on the date on which such loan is made; or 2) ( / 2) of the value of the Participant's Nonforfeitable Interest in all of his/ her One- half 1 Accounts under this Plan ( or $ 10, 000, if greater, for loans prior to January 1, 2006). For the purpose of the above limitation, all loans from all qualified employer plans, including 457( b) plans, under Code section 72( p)(4) of the Code are aggregated. h) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Participant in any calendar year. No loan shall be approved if an existing loan from the Plan to the Participant is in default to any extent. i) Length ofLoan. The terms of any loan issued or renegotiated after December 31, 1993, shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least quarterly ( except as otherwise provided in Treasury Regulation section 1. 72( p)- 1, Q& A-9 for certain leave of absence and military leave), over a period that does not exceed five ( 5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time after the loan is made as the princi- pal residence of the Participant, the five ( 5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments 22  and interest payments otherwise due may be suspended during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this Subsection i),with a revised payment schedule ( within such term) instituted at the end of such period of suspension. If the Participant fails to make any installment payment, the Plan Administrator may, according to Treasury Regulation 1. 72( p )- 1, allow a cure period, which cure period cannot continue beyond the last day of the calendar quarter following the calendar quarter in which the required installment payment was due. j) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. k) Note. The loan shall be evidenced by a promissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. Unless waived by a Participant, any plan loan that is outstanding on the date that active duty military service begins will accrue interest at a rate of no more than 60/ 0 during the period of military service in accordance with the provisions of the Servicemembers Civil Relief Act ( SCRA), 50 USC App. ~ 526 and subject to the notice requirements contained therein. This limitation applies even if loan payments are suspended during the period of military service as permitted under the Plan and Treasury regulations. 1) Security. The loan shall be secured by an assignment of that portion the Participant's right, title and interest in and to his/ her Employer Contribution Account ( to the extent vested), Participant Contribution Account, and Rollover Account that is equal to fifty percent ( 50%) of the Participant's Account ( to the extent vested). m) Assignment or Pledge. For the purposes of paragraphs ( h) and (i), assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. n) Spousal Consent. If the Employer elected the Q]SA Election in the Adoption Agreement, the Participant must first obtain his or her spouse's notarized consent to the loan. 0) Other Terms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal requirements, to maintain the qualification of the Plan and Trust under section 401 (a) of the Code, or to prevent the treatment of the loan for tax purposes as a distribution to the Participant. The Employer, in its discretion for any reason, may fix other terms and conditions of the loan, not inconsistent with the provisions of this Article. 13. 03 Participant Loan Accounts. a) Upon approval of a loan to a Participant by the Employer, an amount not in excess of the loan shall be transferred from the Participant's other investment fund(s), described in Section 6. 05 of the Plan, to the Participant's Loan Account as of the Accounting Date immediately preceding the agreed upon date on which the loan is to be made. b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consideration for a loan permitted by Section 13. 01 of the Plan or in cash. Uninvested cash balances in a Participant's Loan Account shall not bear interest. No person who is otherwise a fiduciary of the Plan shall be liable for any loss, or by reason of any breach, that results from the Participant's exercise of such control. c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repay- ment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other 23  investment funds, in accordance with Section 6. 05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant' s Loan Account. d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the of the Plan, governing the establishment and maintenance of Participant Loan Accounts. provisions XIv: PLAN AMENDMENT, TERMINATION AND OPTIONAL PROVISIONS 14. 01 Amendment by Employer. The Employer reserves the right, subject to Section 14. 02 of the Plan, to amend the Plan from time to time by either: a) Filing an amended Adoption Agreement to change, delete, or add any optional provision; or b) Continuing the Plan in the form of an amended and restated Plan and Trust. No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Participant's accrued benefit. Notwithstanding the preceding sentence, a Participant's Account balance may be reduced to the extent permitted under section 412( c)(8) of the Code. For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Participant's Account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit. Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Participant as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage ( determined as of such date) of such Employee's right to his/ her Employer- derived accrued benefit will not be less than his percentage computed under the plan without regard to such amendment. No amendment to the Plan shall be effective to eliminate or restrict an optional form of benefit. The preceding sentence shall not apply to a Plan amendment that eliminates or restricts the ability of a Participant to receive payment of his or her Account balance under a particular optional form of benefit if the amendment provides a single- sum distribution form that is otherwise identical to the optional form of benefit being eliminated or restricted. For this purpose, a single- sum distribution form is otherwise identical only if the single- sum distribution form is identical in all respects to the eliminated or restricted optional form of benefit ( or would be identical except that it provides greater rights to the Participant) except with respect to the timing of payments after commencement. The Employer