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CC RES 2009-089 RESOLUTION NO. 2009-89 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES ESTABLISHING A RETIREMENT HEALTH SAVINGS PLAN. The City Council of City of Rancho Palos Verdes (the "Council"), a California governmental entity, does hereby adopt the following resolutions in writing, pursuant to applicable California law. WHEREAS, the Council deems it be advisable to provide a retirement health savings plan (the "Plan") for certain employees of City of Rancho Palos Verdes; WHEREAS, such Plan is intended to be a Health Reimbursement Arrangement ("HRA") within Sections 105 and 106 the Internal Revenue Code of 1986 ("Code") and in accordance with Revenue Ruling 2002-41 (June 26, 2002); WHEREAS, with respect to such Plan, the Council deems it advisable to participate in a non-taxable trust as described in Section 501(c)(9) of the Code ("Trust"); WHEREAS, the Council has reviewed the Retirement Health Savings Plan Document (the "Basic Plan Document") and the Basic Plan Document Adoption Agreement for the City of Rancho Palos Verdes (the "Adoption Agreement") attached as Exhibit A and the MG Trust Company, LLC Public Employer VEBA Trust Agreement (the "Trust Agreement") attached as Exhibit B. WHEREAS, the Council deems it advisable to hire OptumHealth Financial Services, Inc. to provide certain administrative services with respect to the Plan and the Trust, as further described in the OptumHealth Financial Services Master Services Agreement (the "MSA") and the Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and Recordkeeping Administrative Services (the "SOW") attached as Exhibit C. WHEREAS, the Council deems it advisable to authorize the Mayor to sign all necessary documents on behalf of City of Rancho Palos Verdes accomplishing the establishment of the Plan and the Trust; NOW, THEREFORE, BE IT RESOLVED, that the Council hereby authorizes establishment of the Plan and the Trust effective January 1, 2010. BE IT FURTHER RESOLVED, that the Council hereby authorizes the finalization and execution of the Basic Plan Document and the Adoption Agreement in substantially the same form as the document attached as Exhibit A. BE IT FURTHER RESOLVED, that the Council hereby authorizes the finalization and execution of the Trust Agreement in substantially the same form as the document attached as Exhibit B. BE IT FURTHER RESOLVED, that the Council hereby authorizes the finalization and execution of the MSA and SOW in substantially the same form as the document attached as Exhibit C. BE IT FURTHER RESOLVED, that this Council hereby authorizes and directs the Mayor of the City of Rancho Palos Verdes to act on behalf of the City of Rancho Palos Verdes in accomplishing the establishment of the Plan and the Trust, including, but not limited to, executing the necessary documents, and such person or persons be authorized to do whatever else is necessary to accomplish this objective. BE IT FURTHER RESOLVED, that this Council hereby authorizes and directs the City Manager of the City of Rancho Palos Verdes to act on behalf of the City of Rancho Palos Verdes in obtaining a determination by the Internal Revenue Service of the Trust's tax exempt status, including, but not limited to, executing the application for such determination, and such person or persons be authorized to do whatever else is necessary to accomplish this objective. PASSED, APPROVED and ADOPTED this 17th day of November 2009. Mayor ATTEST: i_//' City Clerk State of California ) County of Los Angeles ) ss City of Rancho Palos Verdes ) I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby certify that the above Resolution No. 2009-89, was duly and regularly passed and adopted by the said City Council at a regular meeting thereof held on November 17, 2009. (Akikek& City Clerk Resolution No. 2009-89 Page 2 of 2 HEALTH REIMBURSEMENT ARRANGEMENT BASIC PLAN DOCUMENT @Hitesman & Associates. PA 2008 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 1 of 39 TABLE OF CONTENTS ARTICLEI. INTRODUCTION ......... Named ..s.....r..ar.ar.r,r armor.. a..... a........... atra m...,,.araa.xxar.... memo Benitez an raa...r.ra.r.a.r1 ARTICLEII. DEFINITIONS ■ .............. a. rraarxerr. ar..■ ea.■.■ s.. r■rara.■r..rara,rar.rr•■ara.ra. moor■ s■... r. a ..a■..as..aaa.a,.r.,.a.rraea.,3 ARTICLE III, ADOPTING EMPLOYEEa.... r,...,..ar.xrr.aaa...museum .a.. oral.. aassra. a.■ r■. r. rr■ r■ rr■ ar...■ ■ra.r..s.x..xra.r.rarra.r..,ra6 ARTICLE IV. ELIGIBILITY AND PARTICIPATION OF EMPLOYEES ........ a.. rr.......... r.,. r.. .,aaa ..............a.a......a.7 ARTICLE V. BENEFITS UNDER THE PLAN . rraar, s. r.■:. r ..aarara..ara.rr.a.sr■agar.s.., ara.■■■■■■.■.. r. s.r.raa.a..rs.r..a....ra.rraa.. ARTICLE VI. CONTRIBUTIONS .....,.a..aa....aa. aaa. r.... a. a...... rr ......a.a.aasr....aa..rxas..ar. art.. r .a..ra.raassaaa.s.a.aaar.rarrxa 13 ARTICLE VII. CLAIMS DETERMINATIONS AND REVIEW OF DENIED CLAIM .... ...... r,. ,..mass ...a...a,......a.a.r..14 ARTICLE VIII. HIPAA PRIVACY AND SECURITY PROVISIONS r ra.. a.a. arxxar.. a....... axarx. r. a .a.....r.,.ra....,.,....a.,a.18 ARTICLE IX. PLAN ADMINISTRATION ......... a. oil ar. me am it aura. a to aar. a.. ra... IN a me ra.rraaa as aa.arr am ... am a me a a a a. a a a as at aa...aaravasa22 ARTICLE X. PLAN AMENDMENT AND TERMINATION atom. rraars. aaaaaa... raaearr■■ aarrr, rrr.■■ a■■ a ■■.a.r.r.r. :s..r..arrrra.ar.1 2 ARTICLE XI. GENERAL PROVISIONS ■■....... a off ..tsar.a■as. aaa ■a..srr :..arrr..r....r.r..rrs25 ARTICLE XII. COBRA CONTINUATION. ti gill aa2 ara. r. a a a a a a a 905 ar0 0 rrr2aa8aasitva ara. a a4aaaaaa2aaaaaaaaa.. r. .aalxaaaaaaaaa.aoaaaarlaraara28 @Hitesman & Associates, PA 2008 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 2 of 39 ARTICLE I. INTRODUCTION 1.1 Establishment. An executed Adoption Agreement plus this Basic Plan Document constitute the "Plan" for an Adopting Employer. The effective date of the Plan is set forth in the Adoption Agreement. 1.2 Purpose. The purpose of the Plan is to provide certain Employees with an opportunity to receive reimbursement for certain Health Care Expenses as provided in this Plan. It is the intention of the Adopting Employer that the benefits provided and payable under this Plan be eligible for exclusion from the gross income of Participants as provided by Sections 105(b) and 106 of the Code. In addition, it is the intention of the Adopting Employer that the Plan qualify as a Health Reimbursement Arrangement ("HRA') under IRS Revenue Ruling 200241 (June 26, 2002) and IRS Notice 2002 -45 (June 26, 2002). 1.3 HIPAA Primacy and Security Rules. This Plan is a "covered entity" for purposes of the Privacy Rules and Security Rules as described in greater detail in Article VIII below. 1.4 Not ERISA Plan. This Plan is not an employee welfare benefit plan for purposes of ERISA. 1.5 Trust. This Plan is intended to be funded through a Trust, reflected in a separate document. 1.6 Coverage options. The Plan consists of one or more of the following coverage options as described below. (a) The following coverage options indicated in the Adoption Agreement are available under the Plan: (i) Full Scope option. Participants may receive reimbursement for Health Care Expenses incurred by themselves and their Spouses and Dependents. (ii) Limited Scope option. Participants may receive reimbursement for only Limited Scope Health Care Expenses incurred by themselves and their Spouses and Dependents. If provided in the Adoption Agreement, Participants enrolled in a high deductible health plan (as defined in Section 223 of the Code) sponsored by the Adopting Employer shall automatically be enrolled in this coverage option. (iii) Suspended Account option. Participants may receive no reimbursements from their HC Accounts. However, the balance of the Participant's HC Account will be preserved for use in subsequent Plan Years. (iv) other. Such other coverage option as described in the Adoption Agreement. (b) Except as otherwise provided above, Participants will be covered under the "Full Scope Option" unless the Participant elects in writing and in a manner specified by the Plan Administrator to participate in another available coverage option for a particular Plan Year. Such an election shall be made prior to the beginning of the Plan Year and shall be irrevocable during the Plan Year. The election will automatically renew for subsequent Plan Years unless the Participant makes an election (in the manner specified above) to participate in a different coverage option for such subsequent Plan Year. �c} If a Participant changes coverage options, the following rules apply with respect to claims for reimbursement under the Plan unless provided otherwise in the Adoption Agreement: QHitesman & Associates,, PA 2008 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 3 of 39 Expenses incurred during a particular Plan Year will be eligible for reimbursement under the Plan in accordance with the coverage option in which the Participant is enrolled for that Plan Year. For example, if a Participant who is enrolled in the "Limited Scope Option" for a Plan Year incurs an expense for something other than a Limited Scope Health Care Expense during that Plan Year, that expense cannot be reimbursed under the Plan at any time in the future (e.g., if the Participant enrolls in the "Full Scope option" for the following Plan Year and submits the expense for reimbursement during that Plan Year ). Also, if a Participant who is enrolled in the "Suspended Account Option" for a Plan Year incurs a Health Care Expense during that Plan Year, that expense cannot be reimbursed under the Plan at any time in the future (e.g., if the Participant enrolls in the "Full Scope option" for the following Plan Year and submits the expense for reimbursement during that Plan Year ). During a Plan Year in which a Participant participates in the "Limited Scope option," the Plan will not reimburse Health Care Expenses that are not Limited Scope Health Care Expenses regardless of when the expense was incurred. For example, if a Participant incurs an expense for something other than a Limited Scope Health Care Expense in a Plan Year, that expense cannot be reimbursed during a subsequent Plan Year in which the Participant is enrolled in the "Limited Scope option." (iii) During a Plan Year in which a Participant participates in the "Suspended Account Option,"' the Plan will not reimburse any Health Care Expenses regardless of when the expense was incurred. For example, if a Participant incurs a Health Care Expense in a Plan Year, that expense cannot be reimbursed during a subsequent Plan Year in which the Participant is enrolled in the "Suspended Account Option."' ©Hitesman & Associates, PA 2008 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 4 of 39 ARTICLE II. DEFINITIONS The following words and phrases are used in this Plan and shall have the meanings set forth in this Article unless a different meaning is clearly required by the context or is defined within an Article. 2.1 Adopting Employer means a state or political subdivision thereof that adopts this Plan by completing and executing an Adoption Agreement. 2.2 Adoption Agreement means the separate agreement, or portions thereof, completed and executed by an Adopting Employer setting forth the Adopting Employer's selection of options under the Plan. 2.3 Authorized Representative means, for the claims and appeal proced uses, the person entitled to act on behalf of the claimant with respect to a benefit claim or appeal. In order for the Plan to recognize a person as an Authorized Representative, written notification to that affect signed by the claimant and notarized must be received by the Plan. An assignment for purposes of payment is not designation of an "Authorized Representative." 2.4 Basic Plan Document means this document, which together with an executed Adoption Agreement constitutes the Plan for an Adopting Employer. 2.5 Code means the Internal Revenue Code of 1986, as amended from time to time. 2.6 Covered Individual means a Participant,, Dependent of a Participant and the Spouse of a Participant, and any other person appropriately covered under the Plan. 2.7 Dependent means as defined in the Adoption Agreement. Notwithstanding the foregoing, Dependent shall not include an individual who is not a "dependent" for purposes of Section 105 of the Code. 2.8 Designated Representative means the entity, if any, designated by and under contract with the Plan Administrator to perform certain administrative functions with respect to the Plan, including, but not limited to, claims administration and recordkeeping. If no such entity is designated by the Plan Administrator, the Plan Administrator shall serve as the Designated Representative. 2.9 Employee means any person employed by the Adopting Employer on or after the Effective Date, except that it shall not include: (a) Any employee included within a unit of employees covered by a collective bargaining unit unless such agreement provides, whether specifically or generally, for coverage of the employee under this Plan; (b) Any employee who is a nonresident alien and receives no earned income from the Adopting Employer from sources within the United States; and (c) Any employee who is a leased employee as defined in Section 414(n )(2) of the Code. 2.10 Employer Contribution means a nonelective contribution made by the Adopting Employer on behalf of each Participant in the Plan. The Employer Contribution is an amount that has not been actually or constructively received by the Participant, and it is made available to the Participant exclusively for reimbursement under the Plan. @Hitesman & Associates, PA 2008 3 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 5 of 39 2.11 Entry Date means the date as of which an Employee becomes a Participant in this Plan as set forth in the Adoption Agreement. 2.12 ePHI means PHI maintained or transmitted in electronic media, including, but not limited to, electronic storage media (i.e., hard drives, digital memory medium) and transmission media used to exchange information in electronic storage media (i.e., internet, extranet, and other networks). PHI transmitted via facsimile and telephone is not considered to be transmissions via electronic media. 2.13 ERISA means the Employee Retirement Income Security Act of 1974 and regulations thereunder, as amended from time to time. Plans sponsored by public sector entities are not subject to ERISA. 2.14 HC Account means "health care account" and is the record keeping account established under the Plan for each Participant. 2.15 Health care Expense means as defined in the Adoption Agreement. Notwithstanding the foregoing, Health Care Expense shall not include any expense not described as an eligible H RA expense in IRS Revenue Ruling 2002 -41 and IRS Notice 2002 -45. If Health Care Expense is defined to include health insurance premiums and the Adopting Employer sponsors a cafeteria plan, Health Care Expense shall not include premiums that may be paid on a pre -tax basis in accordance with the terms of such cafeteria plan, which may include premiums for major medical coverage provided by the Employer and premiums for coverage under an insurance contract, health maintenance organization agreement, or other benefit agreement providing coverage issued on a non - group, individual basis. If Health Care Expense is defined in the Adoption Agreement to include premiums for qualified long -term care insurance, the amount of such premium that will qualify as a Health Care Expense shall be limited to the portion that constitutes "eligible long -term care premiums" as defined in Section 213(d)(10) of the Code. 2.16 HIPAA means the Health Insurance Portability and Accountability Act of 1996 and regulations thereunder, as amended from time to time. 2.17 Health Reimbursement Arrangement ( "HRA ") means an employer funded medical reimbursement program within the meaning of IRS Revenue Ruling 2002 -41 (June 26, 2002) and IRS Notice 2002 -45 (June 26, 2002). 2.15 Highly compensated Individual means an individual who is among the highest paid twenty - five (25) percent of all "non- excludable Employees" based upon compensation received during the preceding Plan Year. "Non- excludable Employees" include all Employees except those Employees who are not Participants and who fall within one of the following categories: (a) Employees who have not completed three (3) years of service, (b) Employees who have not attained age twenty -five (25), (c) part -time or seasonal Employees, (d) Employees who are included a unit of Employees covered under a collective bargaining agreement, and (e) Employees who are nonresident aliens and who receive no earned income from a source within the United States. 2.19 Limited Scope Health Care Expense means, unless provided otherwise in the Adoption Agreement, a Health Care Expense for dental or vision care. 2.20 Managing Body means the person or persons with authority to make decisions for the Adopting Employer. 2.21 Participant means an Employee who has become and not ceased to be a Participant pursuant @Hitesman & Associates, PA 2008 4 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 6 of 39 to Article IV. In addition, Participant includes persons "deemed" to be Participants under a specific provision of this Plan. 2.22 PHI means health information that: (a) Is created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse; (b) Relates to the past, present, or future physical or mental health or condition of an individual; the provision of health care to an individual; or the past, present, or future payment for the provision of health care to an individual; and (c) Either identifies the individual or reasonably could be used to identify the individual. PHI includes ePHI. 2.23 Plan means the Adopting Employer's Plan as may be amended from time to time. It consists of a completed Adoption Agreement plus the Basic Plan Document. The name of the Plan is reflected in the Adoption Agreement. 2.24 Plan Administrator means the entity, person or persons determined under Section 9.1. 2.25 Plan Year means the twelve (12) month period beginning and ending as indicated in the Adoption Agreement. The initial Plan Year may be a "short" Plan Year beginning and ending as indicated in the Adoption Agreement. The records of the Plan will be kept based upon the Plan Year. 2.26 Privacy Rules means the Standards or Privacy or Individually Identifiable Health Information at 45 C.F.R. part 160 and part 164 at subparts A and E. 2.27 Security Incident means "security incident" as defined in 45 C.F.R. Section 164.304, which generally defines "security incident" to include attempted or successful unauthorized access, use, disclosure, modification, or destruction of ePHI. 2.28 Security Rules means the Security Standards and Implementation Specifications at 45 C.F.R. part 160 and part 164 at subparts A and C. 2.29 Spouse means "Spouse" as defined in the Adoption Agreement. 2.30 Trust means the trust identified in the Adoption Agreement, created for the purpose of accepting and holding Employer Contributions, and limited other contributions, made under the Plan. 2.31 Trustee means the person or persons identified as a "Trustee" under the Trust. @Hitesman & Associates, PA 2008 5 Nan -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 7 of 39 . ARTICLE III. ADOPTING EMPLOYER 3.1 Adoption of Plan. An Adopting Employer may adopt the Plan by resolution duly adopted by its Managing Body, as represented and warranted in the Adoption Agreement, and upon execution of an Adoption Agreement. 3.2 Cessation of Employer Participation. An Adopting Employer may cease to be an Adopting Employer in accordance with Article X. 3.3 Recordkeeping and Reporting. An Adopting Employer shall furnish, or arrange for the furnishing, to the Designated Representative the information with respect to each Covered Individual necessary to enable the Designated Representative to maintain records sufficient to determine the benefits due to or which may become due and to prepare and provide any reports required by law. @Hitesman & Associates, PA 2008 5 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 8 of 39 ARTICLE IV, ELIGIBILITY AND PARTICIPATION of EMPLOYEES 4.1 Eligibility Requirements,, Each Employee shall be eligible to participate in this Plan upon meeting the eligibility requirements set forth in the Adoption Agreement. 4.2 Participant Status. An Employee who has met the eligibility requirements described in Section 4.1 shall be a Participant as of the Employee's Entry Date. 4.3 Conditions of Participation. As a condition of participation and receipt of benefits under this Plan, the Participant agrees to: (a) observe all Plan rules and regulations; (b) Consent to inquiries by the Designated Representative and Plan Administrator with respect to any provider of services involved in a claim under this Plan; (c) Submit to the Plan Administrator all notifications, reports, bills, and other information required by the Plan or which the Designated Representative and Plan Administrator may reasonably require; and (d) Cooperate with all reasonable requests of the Designated Representative and Plan Administrator that may by necessary for the proper administration of the Plan. Failure to do so relieves the Plan, Plan Administrator, Designated Representative, and Adopting Employer of any obligations under this Plan with respect to that Participant and any others claiming entitlement to benefits under this Plan through that Participant and shall result in the termination of the Participant's participation in the Plan. 4.4 Termination of Contributions. Unless provided otherwise in the Adoption Agreement, a Participant shall cease to be eligible to receive contributions under this Plan at midnight of the earliest of the following dates: (a) The date of the death of the Participant; (b) The date of termination of the Participant's employment with the Adopting Employer; (c) The date of the Participant's failure to meet the eligibility requirements of Section 4.1, as may be amended from time to time in accordance with Article X; or (d) The date of termination of the Plan in accordance with Article X. Termination of contributions under this Plan shall not prevent a former Participant from receiving continuation coverage required by applicable law. 4.5 Termination of Participation. Unless provided otherwise in the Adoption Agreement, a Participant shall cease to be a Participant at midnight of the earliest of the following dates: (a) The date of the termination of the Participant's employment with the Adopting Employer; (b) The date of the death of the Participant; (c) The date the balance of the Participant "s HC Account reaches zero, if no further QHitesman & Associates, PA 2008 7 Non -EIISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 9 of 39 contributions will be made to said account under Article VI; or (d) The date of termination of the Plan in accordance with Article X. Termination of participation in this Plan shall not prevent a former Participant from receiving continuation coverage required by applicable law. 4.6 Deemed Participants. For certain purposes, persons that were not Employees are deemed to be Participants as required by law. @Hitesman & Associates, PA 2008 8 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 10 of 39 ARTICLE V. BENEFITS UNDER THE PLAN 5.1 Health Care ( "HC ") Account. The He Account will be credited with the Employer Contribution. A Participant's HC Account will be decreased from time to time in the amount of payments made to the Participant for Health Care Expenses. 5.2 Claims for Reimbursement. claims for reimbursement under this Plan shall be made by completing a claim form and submitting such form to the Designated Representative. The Designated Representative is entitled to rely on the information provided on the claim form in processing claims under this Plan. A claim must be submitted for payment within the time period indicated in the Adoption Agreement. where circumstances beyond the Participant's control prevent submission within the described time frame, notice of a claim with an explanation of the circumstances may be accepted by the Designated Representative as a timely filing. claims shall be determined in accordance with Article VII, 5.3 Incurred Expenses. To be reimbursable, the Participant must have incurred a Health care Expense after his /her Entry Date. An expense is "incurred" when the Participant is provided with the care giving rise to the Health care Expense, not when the service is billed or paid. Reimbursement shall not be made for future projected expenses. 5.4 Timing of Reimbursement. Reimbursements shall be made pursuant to a schedule established by the Designated Representative and communicated to the Participants, provided reimbursements shall be made no less frequently than monthly. 5.5 Maximum Reimbursement The maximum reimbursement a Participant may receive at any time shall be the amount of the Participant's HC Account balance at the time the reimbursement request is processed. The maximum reimbursement requirements apply to the Participant, Spouse, and Dependents on an aggregate basis, not an individual basis. If a Participant's claim is for an amount that is more than the Participant's current HC Account balance, the excess, unreimbursed part of the claim will be carried into the subsequent month(s), to be paid as the balance of the Participant's HC Account becomes adequate. Notwithstanding the foregoing, the excess, unreimbursed portion of a claim will not be carried over into the subsequent month(s) if no further contributions will be made to the Participant's HC Account under Article VI. 5.6 Termination of Participation. (a) Termination of Employment. Notwithstanding anything herein to the contrary, unless specifically provided otherwise in the Adoption Agreement,, the former Participant may continue to access the HC Account following termination of employment for purposes of obtaining reimbursement of Health care Expenses. Such access shall continue until the earliest to occur of the events identified in Section 4.5(b), (c) or (d). Such access shall also be provided to those individuals, if any, who at the time of the termination of the Participant's participation were the Participant's Spouse or Dependents. Such access to the Participant's HC Account by a Spouse and Dependents shall cease upon the earlier of the date of termination of the Participant's access or the date the Spouse ceases to be a Spouse or the Dependent ceases to be a Dependent, as the case may be. If continuation coverage is required by applicable law, the access described in this Section 5.6(a) shall be provided only if offered as and selected in lieu of such continuation coverage. (b) Death. Notwithstanding anything herein to the contrary, unless specifically provided QHitesman & Associates, PA 2008 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 11 of 39 otherwise in the Adoption Agreement, in the event a Participant's participation in the Plan terminates because of the Participant's death, the Participant has no surviving Spouse or Dependents, and the former Participant incurred a Health Care Expense prior to the Participant's death that would have been reimbursable out of the Participant's HC Account but that has not been submitted for reimbursement, the deceased Participant's estate may submit such Health Care Expense for reimbursement in accordance with Section 5.2. A certified copy of the deceased Participant's death certificate and proof that the person acting upon behalf of such Participant's estate has authority _to do so must be submitted with such claims. ii. Notwithstanding anything herein to the contrary, unless specifically provided otherwise in the Adoption Agreement, the deceased Participant's surviving Spouse, if any, may continue to access the Participant's HC Account for purposes of obtaining reimbursement of Health Care Expenses until the earlier of: (1) the date on which the HC Account balance reaches zero; or (2) the date on which the surviving Spouse dies. No claim shall be paid to a surviving Spouse pursuant to this subsection (ii) unless a certified copy of the deceased Participant's death certificate has been provided to the Designated Representative. If continuation coverage is required by applicable law, the access described in this Section 5.6(b)(ii) shall be provided only if offered as and selected in lieu of such continuation coverage. Notwithstanding anything herein to the contrary, unless specifically provided otherwise in the Adoption Agreement, the deceased Participant's surviving Dependents, if any, may continue to access the Participant's HC Account for purposes of obtaining reimbursement of Health Care Expenses until the earlier of: (1) the date on which the HC Account balance reaches zero; or (2) the date the last surviving Dependent dies. No claim shall be paid to a surviving Dependent pursuant to this subsection (iii) unless a certified copy of the deceased Participant`s death certificate has been provided to the Designated Representative. If continuation coverage is required by applicable law, the access described in this Section 5.5(b)(iii) shall be provided only if offered as and selected in lieu of such continuation coverage. iv. No one other than the Participant's Spouse and Dependents may have access to the Participant's HC Account following the Participant's death. 5.7 Nond i1scrim! nation, This Plan is intended to be nondiscriminatory and to meet the requirements under applicable sections of the Code. If the Plan Administrator determines before or during any Plan Year, that the Plan may fail to satisfy any nondiscrimination requirement imposed by the Code or any limitation on benefits provided to Highly Compensated Individuals, the Plan Administrator shall take such action as the Plan Administrator deems appropriate, under rules uniformly applicable to similarly situated Participants, to assure compliance with such requirements or limitation. UHitesman & Associates. PA 2008 10 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 12 of 39 5.8 HC Account Forfeitures,, Unless provided otherwise in the Adoption Agreement, any amount remaining in a Participant's HC Account shall be forfeited following the later to occur of: (1) the termination of Participant's participation in the Plan, (2) the termination of any continuation coverage provided by the Plan under applicable law, or (3) the termination of any coverage provided by the Plan in lieu of continuation coverage required by applicable law; provided that where participation or coverage is terminated because of the death of the Participant, forfeiture shall not occur until the expiration of the time period contained in Section 5.2 for the submission of claims. Notwithstanding the forgoing, unless provided otherwise in the Adoption Agreement, a Participant's HC Account shall also be forfeited if no further contributions shall be made to the HC Account and either: (i) the balance of the HC account is less than $5 and no claim has been submitted by the Participant for a period of six (6) months, or (ii) the balance of the HC account is less than $25 and no claim has been submitted by the Participant for a period of twelve (12) months. Amounts forfeited hereunder shall be used for the purposes described in the Adoption Agreement. If the Adoption Agreement indicates that forfeitures shall be contributed to the HC Accounts of other Participants, the following rules shall apply. Forfeitures occurring during a Plan Year shall be held in a separate subaccount until the close of the Plan Year. Immediately following the close of the Plan Year, the balance of such forfeiture subaccount (including any earnings that have accrued on the forfeitures) shall be allocated to the HC Accounts of the Participants identified in the Adoption Agreement who were employed by the Adopting Employer on the last day of such Plan Year in the manner provided in the Adoption Agreement. To the extent the full balance of the forfeiture subaccount cannot be allocated as provided in the Adoption Agreement (e.g., because the balance does not divide evenly among the number of Participants), any balance remaining shall be held in the forfeiture subaccount until the end of the subsequent Plan Year and allocated at that time. 5.9 Medical Support orders. Notwithstanding any provision of this Plan to the contrary this Plan shall recognize medical child support orders as required under applicable state law or under the Child Support Performance and Incentive Act of 1995. Participants involved in a divorce or child custody matter should be directed to have their legal counsel contact the Plan Administrator. 5.10 Consolidated omnibus Budget Reconciliation Act of 1985 (COBRA "). Continued coverage shall be provided only if and as required under the Consolidated omnibus Budget Reconciliation Act of 1985 ('COBRA'), as amended. To the extent not contained in Article XII, the Plan Administrator shall, within the parameters of the law, establish uniform policies by which to provide such continuation coverage, including but not limited to providing alternative coverage in lieu of COBRA as provided in the regulations. There shall also be compliance with any state laws concerning continuation of health insurance coverage to the extent applicable and not preempted by federal law. 5.11 Coordination with Cafeteria Plan. To the extent the Adopting Employer also sponsors a medical reimbursement program as part of its cafeteria plan within the meaning of Section 125 of the Code, a Participant participates in the medical reimbursement program, and the Participant or a Covered Individual covered through such a Participant incurs an eligible Health Care Expense that is also eligible for reimbursement under the medical reimbursement program, which program pays first is described in the Adoption Agreement. 5.12 Further Limitations on Benefits. (a) This Plan does not cover expenses incurred for any loss caused by or resulting from injury or disease for which benefits are payable under any worker's compensation law or other employer, union, association or governmental sponsored group insurance plan. (b) This Plan does not cover expenses incurred for any loss caused by or resulting from @Hitesman & Associates, PA 2008 11 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 13 of 39 injury or disease for which benefits are received by the Participant, the Participant's Spouse or the Participant's Dependent under any health and accident insurance policy or program, whether or not premiums are paid by the Adopting Employer or by the Participant, the Participant's Spouse or the Participant's Dependent child. (c) Amounts reimbursed under a dependent care assistance program described in Section 129 of the Code shall not be reimbursed under this Plan. QHitesman & Associates, PA 2008 12 Nan -EIISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 14 of 39 ARTICLE VI. CONTRIBUTIONS 6.1 Employer Contributions. The Adopting Employer shall make a fixed contribution per Participant as set forth in the Adoption Agreement. Such Employer Contributions may include mandatory salary reduction contributions. The amount of the Employer Contribution, and any restrictions on the use thereof, shall be identified in the Adoption Agreement and communicated to the Participants. The amount of the Employer Contribution may change from time to time as reflected in the Adoption Agreement. Contributions shall be available for reimbursement as described in the Adoption Agreement. 6.2 No Employee Contributions. Except for contributions required for continuation coverage as described in Section 5.10, no contributions other than Employer Contributions (including mandatory salary reduction contributions) are required nor will they be accepted. 6.3 Trust. All contributions shall be held in the Trust. The investment of the assets of the Trust shall be directed as provided in the Adoption Agreement. Notwithstanding the foregoing, the investment of any assets of the Trust that constitute forfeitures shall be directed by the Plan Administrator until such time, if any, that such forfeitures are allocated to the HC Accounts of other Participants. @Hitesman & Associates, PA 2008 13 Non -ERiSA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 15 of 39 ARTICLE VII. CLAIMS DETERMINATIONS AND REVIEW OF DENIED CLAIM The following procedures apply: 7.1 Initial Claim Determination. (a) Time Frame for Decision. The decision maker must determine the claim within thirty (30) days of receipt of the claim. (b) Extension of Time. If the decision maker is not able to determine the claim within this time period due to matters beyond its control, the decision maker may take an additional period(s) of up to fifteen (15) days to determine the claim. If this additional time will be needed, the decision maker must notify the claimant or the claimant's Authorized Representative prior to the expiration of the then current time period for determining the claim. Notification: The notification of the need for the extension must include a description of the "matters beyond the plan's control" that justify the extension and the date by which a decision is expected. (c) Incomplete Claims. If the reason for the extension described in paragraph (b) above is the failure to provide necessary information and the claimant is appropriately notified, the decision maker's period of time to make a decision is "tolled." Tolling: The period of time in which the decision maker must determine a claim is suspended from the date upon which notification of the missing necessary information is sent until the date upon which the claimant responds. Notification: For this purpose, notification can be made orally to the claimant or the health care professional, unless the claimant requests written notice. The notification will include a time frame in which the necessary information must be provided. once the necessary information has been provided, the decision maker must decide the claim within the extension described above. If the requested information is not provided within the time specified, the claim may be decided without that information. 7.2 Decision. (a) Notification of Decision. written (or electronic) notification of the decision maker's determination must be provided to the claimant or the claimant's Authorized Representative. Such notification must be provided only where the decision is adverse. "Adverse" means: • A denial, reduction, or termination of, or • A failure to provide or make payment in whole or in art for a benefit. QHitesman & Associates, PA 2008 14 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 16 of 39 (b) Adverse Decision. For adverse claim determinations, the notification shall reflect at least the following: • State the specific reason(s) for determination; • Reference specific Plan provision(s) upon which the determination is based; • Describe additional material or information necessary to complete the claim and why such information is necessary; • Describe Plan procedures and time limits for appeal of the determination and the right to obtain information about those procedures; • Disclose any internal rule, guidelines, protocol or similar criterion relied on in making the adverse determination (or state that such information will be provided free of charge upon request); and ■ where the decision involves scientific or clinical judgment, disclose either (1) an explanation of the scientific or clinical judgment applying the terms of the Plan to claimant's medical circumstances, or (2) a statement that such explanation will be provided at no charge upon request. Notice of the adverse determination may be provided in written or electronic form. Electronic notices will be provided in a form that complies with applicable legal requirements. (c) Not Adverse Decision. For claim determinations that are not adverse, notice will be provided that informs the claimant or the claimant's Authorized Representative the claim has been accepted. 7.3 Access to Relevant Documents. In order (1) to evaluate whether to request review of an adverse determination, and (2) if review is requested, to prepare for such review, the claimant or the claimant's Authorized Representative will have access to all relevant documents. Relevant: A document, record or other information is "relevant" if it was relied upon in making the determination, or was submitted to the Plan, considered by the Plan, or generated in the course of making the benefit determination without regard to whether it was relied upon. 7.4 Appeal a Denied Claim. If a claim is denied, in whole or part, the claimant or the claimant's Authorized Representative may request the denied claim be reviewed. (a) Requesting Review. The claimant or the claimant's Authorized Representative has a period of 180 days to appeal the claim determination. The appeal request must be in writing and should be sent to the address specified in the notification of adverse decision described above. QHitesman & Associates, PA 2008 15 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 17 of 39 (b) Submission & Consideration of Comments. The claimant or the claimant's Authorized Representative will have the opportunity to submit documents, written comments, or other information in support of the appeal. The review of the adverse benefit determinations will take into account all new information, whether or not presented or available at the initial determination. No deference will be afforded to the initial determination. (c) consultation with Independent Medical Expert. In the case of a claim denied on the grounds of a medical judgment, a health professional with appropriate training and experience will be consulted. The health care professional who is consulted on appeal will not be the individual who was consulted, if any, during the initial determination or a subordinate of that individual. Disclosure: If the advice of a medical or vocational expert was obtained by the Plan in connection with the claim denial, the names of each such expert shall be provided, regardless of whether the advice was relied upon. (d) Time Frame for Decision. If claimant or the claimant's Authorized Representative requests a review of a denied claim within the time frame described above, the decision maker shall review of claim and make a determination no later than 50 days from the date the review request was received. (e) (Decision. The review of the claim will be conducted by the Plan Administrator. It will be made by a person different from the person who made the initial determination and such person will not be a subordinate of the original decision maker. The information in the administrative record shall be reviewed. Additional information submitted shall be considered. The decision shall be based upon that information plus the terms of the Plan and past interpretations of the same and similar Plan provisions. The decision maker may rely upon protocols, guidelines, or other criterion. (f} Notification of Decision. Written (or electronic) notification of the decision maker's determination must be provided to the claimant or the claimant's Authorized Representative. Such notification must be provided whether the decision is adverse or not adverse. "Adverse" means: • A denial, reduction, or termination of, or • A failure to provide or make payment in whole or in pa rt for a benefit. (g) Adverse Decision. For adverse appeal determinations, the notification shall reflect at least the following: • State the specific reason(s) for determination; ■ Reference specific Plan provision(s) upon which the determination is based; • Disclose any internal rules, guidelines, protocol or similar criterion relied on in making the adverse determination (or state that such information will be provided free of charge upon request); ■ A statement indicating entitlement to receive upon request, and without charge, reasonable access to or copies of all documents, records or other information relevant to the determination; and @Hitesman & Associates, PA 2008 16 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 18 of 39 ■ Where the decision involves scientific or clinical judgment, disclose either (1) an explanation of the scientific or clinical judgment applying the terms of the Plan to claimant's medical circumstances,, or (2) a statement that such explanation will be provided at no charge upon request. Notice of the adverse determination may be provided in written or electronic form. Electronic notices will be provided in a form that complies with applicable legal requirements. (h) Not Adverse Decision. For claim determinations that are not adverse, notice will be provided that informs the claimant or the claimant's Authorized Representative the decision has been reversed, and the claim accepted. @Hitesman & Associates. PA 2008 17 Nan -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 19 of 39 ARTICLE VIII. HIIPAA PRIVACY AND SECURITY PROVISIONS The Privacy Rules and Security Rules apply to this Plan. 8.1 Use and Disclosure of PHI. The Plan will use PHI to the extent of and in accordance with the uses and disclosures permitted by HIPAA. Specifically, the Plan will use and disclose PHI for purposes related to health care treatment, payment for health care and health care operations. The Plan will also use and disclose PHI as permitted by authorization of the subject of PHI. (a) Payment includes activities undertaken by the Plan to obtain premiums or determine or fulfill its responsibility for coverage and provision of Plan benefits that relate to an individual to whom health care is provided. These activities include, but are not limited to, the following: (1) Determination of eligibility, coverage and cost sharing amounts (for example, cost of a benefit, plan maximums and co-- payments as determined for an individual's claim); (2) Coordination of benefits; (3) Adjudication of health benefits claims (including appeals and other payment disputes); (4) Subrogation of health benefit claims; (5) Establishing employee contributions; (6) Risk adjusting amounts due based on enrollee health status and demographic characteristics; (7) Billing, collection activities and related health care data processing; (8) Claims management and related health care data processing, including auditing payments, investigating and resolving payment disputes and responding to participant inquiries about payments; (9) obtaining payment under a contract for reinsurance (including stop -loss and excess of loss insurance); (10) Medical necessity reviews or reviews of appropriateness of care or justification of charges; (11) Utilization review, including pre - certification, preauthorization, concurrent review and retrospective review; (12) Disclosure to consumer reporting agencies related to the collection of premiums or reimbursement (the following PHI may be disclosed for payment purposes: name and address, date of birth, Social Security number, payment history, account number and name and address of provider and/or health Plan); and (13) Rei m bu rsemen t to the Pla n. @Hitesman & Associates, PA 2008 18 Nan -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 20 of 39 (b) Health care operations include, but are not limited to, the following activities: (1) Quality assessment; (2) Population -based activities relating to improving health or reduction health care costs, protocol development, case management and care coordination, disease management, contacting health care providers and patients with information about treatment alternatives and related functions; (3) Rating provider and Plan performance, including accreditation, certification, licensing or credentialing activities; (4) Underwriting, premium rating and other activities relating to the creation, renewal or replacement of a contract of health insurance or health benefits, and ceding, securing or placing a contract for reinsurance of risk relating to health care claims (including stop -loss insurance and excess of loss insurance); (5) Conducting or arranging for medical review, legal services and auditing function, including fraud and abuse detection and compliance programs; (6) Business planning and development, such as conducting cost -- management and planning - related analyses related to managing and operating the Plan, including formulary development and administration, development or improvement of payment methods or coverage policies; (7) Business management and general administration activities of the Plan, including, but not limited to: a. Management activities relating to the implementation of and compliance with HIPAA's administrative simplification requirements; b. Customer service, including data analyses for policyholders; (8) Resolution of internal grievances; (9) Due diligence in connection with the sale or transfer of assets to a potential successor in interest, if the potential. successor in interest is a covered entity under HIPAA or following completion of the sale or transfer, will become a covered entity. 8.2 Adopting Employer's Obligations under Privacy Rules. Under HIPAA, the Plan may not disclose PHI to the Adopting Employer (as defined by the Privacy Rules under HIPAA) unless the Adopting Employer agrees to certain conditions. The Adopting Employer agrees to the following conditions, thereby allowing the Plan to disclose PHI to the Adopting Employer. The Adopting Employer will: (a) Not use or further disclose PHI other than as permitted or required by the Plan document or as required by law; (b) Ensure that any agents, including a subcontractor, to whom the Plan provides PHI received from the Plan agree to the same restrictions and conditions that apply to the Adopting Employer with respect to such PHI; @Hitesman & Associates, PA 2008 19 Non -ERYSA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 21 of 39 (c) Not use or disclose PHI for employment related actions and decision unless authorized by an individual; (d) Not use or disclose PHI in connection with any other benefit or employee benefit plan of the Adopting Employer unless authorized by an individual; (e) Report to the Plan any PHI use or disclosure, that is inconsistent with the uses or disclosures provided for, of which it becomes aware; (f) Make available to an individual for inspection and copying PHI about the individual as allowed by and in accordance with HIPAA; (g) Make PHI available for amendment and incorporate any amendments to PHI in accordance with HIPAA; (h) Make available the information required to provide an accounting of disclosures; (i) Make internal practices, books and records relating to the use and disclosure of PHI received from Plan available to the HHS Secretary for the purposes of determining the Plan's compliance with HIPAA; and, (} If feasible, return or destroy all PHI received for the Plan that the Adopting Employer still maintains in any form, and retain no copies of such PHI when no longer needed for the purpose for which disclosure was made (or if return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction infeasible). 8.3 Adopting Employer's obligations under Security Rules. If the Adopting Employer creates, receives, maintains, or transmits ePHI, the Adopting Employer will: (a) Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of ePHI; (b) Ensure that any agents, including subcontractors,, to whom the Adopting Employer provides ePHI or to whom ePHI is provided on behalf of Adopting Employer implement reasonable and appropriate security measures to protect the ePHI; (c) Report to the Plan any Security Incident of which it becomes aware; and (d) Implement reasonable and appropriate security measures to ensure that only those persons identified in Section 8.4 have access to ePHI and that such access is limited to the purposes identified in Section 8.5. 8.4 Adequate separation between the Plan and the Adopting Employer must be maintained. In accordance with HIPAA, only the following employees or classes of employees may be given access to PHI and ePHI; (1} The benefit manager; and, (2) Staff designated by the benefit manager. The Adopting Employer shall identify, by name, these persons in writing to the Designated Representative. QHitesman & Associates, PA 2008 20 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 22 of 39 8.6 Limitation of PHI and ePHI Access and Disclosure. The persons described in Section 8.4 above may only have access to, and use and disclose, PHI and ePHI for Plan administration functions that the Adopting Employer performs for the Plan. 8.6 Noncompliance Issues. If the person described in Section 8.4 above does not comply with this Plan document, the Adopting Employer shall provide a mechanism for resolving issues of noncompliance, including, but not limited to, disciplinary action against such person. ©Hitesman & Associates, PA 2008 21 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 23 of 39 ARTICLE IX, PLAN ADMINISTRATION 9.1 Plan Administrator. (a) The Plan Administrator shall be responsible for the general supervision of the Plan and shall have authority to control and manage the operation and administration of the Plan. The Plan Administrator shall perform any and all acts necessary or appropriate for the proper management and administration of the Plan. (b) The Adopting Employer shall be the Plan Administrator unless its Managing Body designates a person or persons other than the Adopting Employer to be the Plan Administrator. The Adopting Employer shall also be the Plan Administrator if the person or persons so designated cease to be the Plan Administrator. (c) The Plan Administrator may designate an individual or entity to act on its behalf with respect to certain powers, duties, and/or responsibilities regarding the operation and administration of this Plan. 9.2 Agent for Service of Legal Process. The agent for service of legal process for the Plan is the Plan Administrator, 9.3 Allocation of Responsibility for Administration. The Plan Administrator shall have the sole responsibility for the administration of this Plan as is specifically described in this Plan. The designated representatives of the Plan Administrator shall have only those specific powers, duties, responsibilities, and obligations as are specifically given to them under this Plan. The Plan Administrator warrants that any directions given, information furnished, or action taken by it shall be in accordance with the provisions of the Plan authorizing or providing for such direction, information or action. It is intended under this Plan that the Plan Administrator shall be responsible for the proper exercise of its own powers, duties, responsibilities, and obligations under this Plan and shall not be responsible for any act or failure to act of another Employee of the Adopting Employer. Neither the Plan Administrator, nor the Adopting Employer makes any guarantee to any Participant in any manner for any loss or other event because of the Participant's participation in this Plan. 9.4 Rules and Decisions. Except as otherwise specifically provided in the Plan, the Plan Administrator may adopt such rules and procedures as it deems necessary, desirable, or appropriate. All rules and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Participant, the Adopting Employer, or legal counsel, or other entity acting on behalf of the Adopting Employer or Plan Administrator. 9.5 Records and Reports. The Plan Administrator shall be responsible for complying with all reporting, filing and disclosure requirements for the Plan. 9.6 Authorization of Benefit Payments. The Plan Administrator (or its designee) shall issue directions to the Trustee concerning all benefits which are to be paid from the Trust, pursuant to the provisions of the Plan, and warrants that all such directions are in accordance with the Plan. 9.7 other Powers and Duties of the Administrator. The Plan Administrator shall also have such other duties and powers as may be necessary to discharge its duties under the Plan including, but not limited to, the following; @Hitesman & Associates, PA 2008 22 Nan -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 24 of 39 (a) Discretion to construe and interpret the Plan in a non - discriminatory manner, to decide all questions of eligibility and to determine all questions arising in the administration and application of the Plan; (b) To receive from the Adopting Employer and from Participants such information as shall be necessary for the proper administration of the Plan; (c) To furnish the Adopting Employer, upon request, such annual reports with respect to the administration of the Plan as are reasonable and appropriate; and [d] To appoint individuals to assist in the administration of the Plan and any other agents the Plan Administrator deems advisable including legal and actuarial counsel. The Plan Administrator shall not have the power to add to, subtract from, or modify any of the terms of the Plan, to change or add to any benefits provided by the Plan, or to waive or fail to apply any requirements of eligibility for a benefit under this Plan. ©Hitesman & Associates, PA 2008 23 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 25 of 39 ARTICLE X. PLAN AMENDMENT AND TERMINATION 10.1 Amendment by Adopting Employer. The Adopting Employer reserves the right to amend, alter, or wholly revise this Plan or the Adoption Agreement, prospectively or retrospectively, at any time by the action of its Managing Body, and the interest of each Participant is subject to the powers so reserved. The Adopting Employer expressly may amend, alter or wholly revise this Plan or the Adoption Agreement if it determines it necessary or desirable, with or without retroactive effect, to comply with the law. Such changes shall not affect any right to benefits that accrued prior to such amendments. Such amendment shall be made in writing and shall be delivered promptly to the Designated Representative, Plan Administrator, and Trustee. 10.2 Adopting Employer's Right to Terminate. Although the Adopting Employer expects the Plan to be maintained for an indefinite time, the Adopting Employer reserves the right to terminate the Plan or any portion of the Plan at any time. In the event of the dissolution, merger, consolidation, or reorganization of the Adopting Employer, the Plan shall terminate unless the Plan is continued by a successor to the Adopting Employer in accordance with the resolution of such successor's Managing Body. Such termination shall not affect any right to benefits that accrued prior to such termination. Such action shall be made in writing and shall be delivered to the Designated Representative, Plan Administrator, and Trustee at least ninety (90) days prior to the effective date of the termination. QHitesman & Associates, PA 2008 24 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 26 of 39 ARTICLE XI, GENERAL PROVISIONS 11.1 No Reversion to the Plan Administrator or Adopting Employer. Unless specifically permitted by applicable law, no part of the corpus or income of the Trust shall revert to the Adopting Employer or be used for or diverted to, purposes other than the exclusive benefit of participants and other persons entitled to benefits under the Plan. 11.2 Persons Dealing With Trust. No person dealing with the Trust shall be required to see to the application of any money paid or property delivered to the Trust, or to determine whether or not the Trust is acting pursuant to any authority granted to them under the Trust. 11.3 Non - Alienation of Benefits. Benefits payable under this Plan shall not be subject to anticipation, alienation, sale, transfer, execution, or levy of any kind either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a spouse or former spouse, or for any other relative of the Participant, prior to actually being received by the person entitled to the benefit under the terms of the Plan, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to benefits payable under the Plan shall be void. The Adopting Employer, Plan Administrator and /or Designated Representative shall not in any manner be made liable for, or subject to, the debts, contracts, liabilities, engagements or torts of any person entitled to benefits under the Plan. 11.4 Action by Employer. Whenever the Adopting Employer, under the terms of this Plan, is permitted or required to do or perform any act or matter or thing, it shall be done and performed by the Managing Body of the Adopting Employer or such representatives of the Adopting Employer as the Managing Body may designate. 11.5 No Guarantee of Tax consequences. Notwithstanding any provision in this Plan to the contrary, this Plan makes no commitment or guarantee that any amounts paid to or on behalf of a Participant under this Plan will be excludable from the Participant's gross income for federal or state income tax purposes. It shall be the obligation of each Participant to determine whether each payment is excludable from the Participant's gross income for federal and state income tax purposes, and to notify the Plan Administrator if the Participant has reason to believe that any such payment is not so excludable. 11.5 compensation and Expenses. The Designated Representative shall be entitled to reasonable fees for its services hereunder, which shall be described in an administrative services agreement between the Designated Representative and the Plan Administrator. Such fees and any expenses incurred by the Designated Representative in connection with the Plan (including expenses and fees of persons hired or employed by them) shall be paid as described in the Adoption Agreement. The compensation of the Trustee, as provided for in the Trust document, shall also be paid as described in the Adoption Agreement. 11.7 Governing Law. This Plan shall be construed and enforced according to the laws of the State identified in the Adoption Agreement, except to the extent preempted by federal law. 11.8 Family and Medical Leave Act of 1993 ("FMLA "). Notwithstanding any provision of this Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with FMLA, to the extent the Adopting Employer is subject to such law. @Hitesman & Associates, PA 2008 25 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 27 of 39 11.9 Newborns' and Mothers' Health Protection Act ( "NMHPA"). Notwithstanding any provision of this Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with NMHPA. Federal law requires the following statement be included in the Plan document, verbatim: Under federal law, group health plans and health insurance issuers offering group health insurance generally may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery, or less than 96 hours following a cesarean section. However, the plan or issuer may pay for a shorter stay if the attending physician (e.g., your physician, nurse, or midwife, or a physician assistant), after consultation with the mother, discharges the mother or newborn earlier. Also, under federal law, plans and issuers may not set the level of benefits or out -of- pocket costs so that any later portion of the 48 -hour (or 96- hour) stay is treated in a manner less favorable to the mother or newborn than any earlier portion of the stay. In addition, a plan or issuer may not, under federal law, require that a physician or other health care provider obtain authorization for prescribing a length of stay of up 48 hours (or 96 hours). However, to use certain providers or facilities, or to reduce your out-of-pocket costs, you may be required to obtain precertification. For information on prewcertification, contact your Plan Administrator. 11.10 Women's Health and Cancer Rights Act of 1998 ("WHCRA"). Notwithstanding any provision of this Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with WHCRA. 11.11 Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA "). Notwithstanding any provision of this Plan to the contrary, this Plan shall be operated and maintained in a manner consistent with USERRA. The Plan Administrator shall, within the parameters of the law, establish uniform policies by which to provide such continuation coverage required by USERRA. 11.12 Plan Not a Contract of Employment. The Plan is not an employment agreement and does not assure the continued employment of any Employee or Participant for any period of time. Nothing contained in the Plan shall interfere with the Adopting Employer's right to discharge an Employee at any time, regardless of the effect such discharge may have upon the individual as a Participant in this Plan. 11.13 Erroneous Payments. If the Plan makes a payment for benefits in excess of the benefits required by the Plan or makes a payment to or on behalf of an individual who is not currently covered by the Plan, the Plan shall be entitled to recover such erroneous payment from the recipient thereof. 11.14 Medicare Secondary Payer, The Plan shall comply with the Medicare secondary payer rules found in 42 U.S.C. § 1395y. In general, the Plan shall pay benefits primary to Medicare if any one of the following conditions is satisfied: (a) the Employer employed twenty (20) or more employees for each working day in at least twenty (20) weeks in either the calendar year in which the claim is made or the preceding calendar year, the Participant is employed by the Employer, and the Participant is actually covered by Medicare by reason of obtaining the age of 65; (b) the Employer employed 140 or more employees on at least 50% of its regular business days during the calendar year preceding the year in which the claim was made, the Participant is employed by the Employer, and the Participant is actually covered by Medicare by reason of disability; and (c) the Participant is entitled to Medicare by reason of end stage renal disease and the claim is made during the twelve (12) month period beginning in the first month in which such @Hitesman & Associates, PA 2008 26 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 28 of 39 Participant is entitled to benefits under Medicare (regardless of whether he/she applies for such benefits). In all other cases, the Plan shall pay benefits secondary to Medicare. 11.15 Medicare Part D. The Plan shall cooperate with Medicare Part D prescription drug plans (and Covered Individuals who are enrolled in such plans) with respect to coordination of benefits between the Plan and the Medicare Part D plan, including the provision of information to the Medicare Part D plan (or the Covered Individuals) regarding the benefits provided under the Plan for costs covered by the Medicare Part D plan. Covered Individuals enrolled in Medicare Part D plans shall cooperate with the Plan so that the Plan may perform its obligations under this subsection. 11.16 Certificates of Creditable Coverage. When coverage terminates, or upon request by a Covered Individual during coverage or within two (2) years of termination of coverage under this Plan, Covered Individuals will be provided with a certification of creditable coverage by the Plan Administrator (or its designee). A request for a certification of creditable coverage should be directed to the Plan Administrator. Upon request, the Plan Administrator (or its designee) will issue the certification of creditable coverage as soon as reasonably possible. @Hitesman & Associates, PA 2008 27 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 29 of 39 ARTICLE XII, COBRA CONTINUATION 12.1 Compliance with COBRA. Continued coverage for the Plan shall be provided only if and as required under the Consolidated omnibus Budget Reconciliation Act of 1985 ["COBRA', as amended, as it applies to group health plans sponsored by public sector employers through the Public Health Services Act ("PHSA'�. 12.2 COBRA Policies and Procedures, To the extent not provided herein, the Plan Administrator shall, within the parameters of the law, establish uniform policies by which to provide such continuation coverage. 12.3 Notification Procedures. The Plan requires the notifications described below with respect to continuation coverage under COBRA: (a) Notice of qualifying event. Under the law, a Covered Individual (or a representative acting on behalf of the Covered Individual) has the responsibility to inform the Plan of a divorce, legal separation, or a child losing dependent status under the Plan (the "qualifying event") within sixty (60) days of the latest of: (i) the date of the qualifying event; (ii) the date coverage would be lost because of the qualifying event; or (iii) the date on which the Covered Individual was informed of the responsibility to provide notice and the procedures for doing so. The notification must be provided in writing and be mailed, ema iled, or faxed to the Plan. oral notification, including notification by telephone and/or voice messaging, is not acceptable. The notification must be dated (e.g., postmarked, electronically dated, etc.) no later than the last day of the sixty (60) day notice period described above. The notification must: (1) state the name of the Plan; (2) state the name and address of the employee or former employee who is or was covered under the Plan; (3) state the name(s) and add ress(es) of all Covered Individuals who lost coverage due to the qualifying event; (4) include a detailed description of the event; (5) identify the effective date of the event; and (6) be accompanied by any documentation providing proof of the event (i.e., the divorce decree). If no notification is received within the required time period, no continuation coverage will be provided. If the notification is incomplete, it will be deemed timely if the Plan is able to determine the plan to which it applies, the identity of the employee and the Covered Individuals, the qualifying event, and the date on which the qualifying event occurred, provided that the missing information is provided within thirty (30) days. If the missing information is not provided within that time, the notification will be ineffective and no continuation coverage will be provided. (b) Notice of second qualifying event. A Covered Individual (or a representative acting on behalf of the Covered Individual) must notify the Plan of the death of the employee, divorce or separation from the employee, or a dependent child's ceasing to be eligible for coverage as a dependent under the Plan, if that event occurs within the eighteen (18) month continuation period (or an extension of that period for disability or for pre - termination Medicare entitlement). The notification must be provided within sixty (60) days after such a second qualifying event occurs in order to be entitled to an extension DHitesman & Associates, PA 2008 28 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 30 of 39 of the continuation period. The notification must be provided in writing and be mailed, emailed, or faxed to the Plan. oral notification, including notification by telephone and/or voice messaging, is not acceptable. The notification must be dated (e.g., postmarked, electronically dated, etc.) no later than the last day of the sixty (60) day notice period described above. The notification must: (1) state the name of the Plan; (2) state the name and address of the employee or former employee who is or was covered under the Plan; (3) state the name(s) and address(es) of all Covered Individuals who lost coverage due to the initial qualifying event and who are receiving COBRA coverage at the time of the notice; (4) identify the nature and date of the initial qualifying event that entitled the Covered Individuals to COBRA coverage; (5) include a detailed description of the event; (6) identify the effective date of the event; and (7) be accompanied by any documentation providing proof of the event (i.e., the divorce decree). If no notification is received within the required time period, no extension of the continuation period will be provided. If the notification is incomplete, it will be deemed timely if the Plan is able to determine the plan to which it applies, the identity of the employee and the Covered Individuals, the qualifying event, and the date on which the qualifying event occurred, provided that the missing information is provided within thirty (30) days. If the missing information is not provided within that time, the notification will be ineffective and no extension of the continuation period will be provided. . (c) Notice of disability. A Covered Individual (or a representative acting on behalf of the Covered Individual) must notify the Plan when a Covered Individual has been determined to be disabled under the Social Security Act within sixty (60) days of the latest of: (i) the date of the disability determination; (ii) the date of the qualifying event; (iii) the date coverage would be lost because of the qualifying event; or (iv) the date on which the Covered Individual was informed of the responsibility to provide notice and the procedures for doing so. Notwithstanding the foregoing, notification must be provided before the end of the first eighteen (18) months of continuation coverage. The notification must be provided in writing and be mailed, emailed, or faxed to the Plan. Oral notification, including notification by telephone and/or voice messaging, is not acceptable. The notification must be dated (e.g., postmarked, electronically dated, etc.) no later than the last day of the sixty (60) day notice period described above. The notification must: (1) state the name of the Plan; (2) state the name and address of the employee or former employee who is or was covered under the Plan; (3) state the narne(s) and add ress(es) of all Covered individuals who lost coverage due to the initial qualifying event and who are receiving COBRA coverage at the time of the notice; (4) identify the nature and date of the initial qualifying event that entitled the qualified beneficiaries to COBRA coverage; (5) state the name of the disabled Covered Individual; (6) identify the date upon which the disabled Covered Individual became disabled; (7) identify the date upon which the Social Security Administration made its determination of disability; and QHitesman & Associates, PA 2008 Non -ERISA Basic Plan Document 29 Resolution No. 2009 -89 Exhibit A Page 31 of 39 (8) include a copy of the determination of the Social Security Administration. If no notification is received within the required time period, no extension of the continuation period will be provided. If the notification is incomplete, it will be deemed timely if the Plan is able to determine the plan to which it applies, the identity of the employee and the Covered Individuals, the qualifying event, and the date on which the qualifying event occurred, provided that the missing information is provided within thirty (30) days. If the missing information is not provided within that time, the notification will be ineffective and no extension of the continuation period will be provided. If such person has been determined under the Social Security Act to no longer be disabled, the person must notify the Plan of that determination within thirty (30) days of the later of: (i) the date of such determination; or (ii) the date on which the Covered. Individual was informed of the responsibility to provide notice and the procedures for doing so. The notification must be in writing and be mailed to the Plan. Regardless of when the notification is provided, continuation coverage will terminate retroactively on the first day of the month that begins thirty (30) days after the date of the determination, or the end of the initial coverage period, if later. If the notification is not provided within the required time, the Plan reserve the right to seek reimbursement of any benefits provided by the Plan between the date coverage terminates and the date the notification is provided. (d) Notice of coverage Under Another Group Health Plan or Medicare. A Covered Individual must notify the Plan immediately if any Covered Individuals receiving continuation coverage actually become covered by another group health plan or Medicare. Regardless of when such notification is provided. coverage will terminate retroactively to the date of the coverage under the other group health plan or Medicare. If, for whatever reason, a Covered Individual on continuation coverage receives any benefits under the Plan after coverage is to cease under the foregoing rule, the Plan reserves the right to seek reimbursement from such Covered Individual. @Hitesman & Associates, PA 2008 30 Non -ERISA Basic Plan Document Resolution No. 2009 -89 Exhibit A Page 32 of 39 BASIC PLAN DOCUMENT ADOPTION AGREE M ENT FOR CITY OF RANCHO PALOS VERDES This is the Adoption Agreement referred to in the Basic Plan Document ["Basic Plan Document'). This Adoption Agreement plus the Basic Plan Document, as amended from time to time. constitutes the Plan for the Adopting Employer. ADOPTING EMPLOYER INFORMATION: Employer Name: City Rancho Palos Verdes Address: 30940 Hawthorne Blvd City, State Zip: Phone /Fax Number: Contact Person; Name: Rancho Palos Verdes CA 90275 310- 544 -5204 Eric Mausser Title: Human Resources Manager Address: 30940 Hawthorne Blvd City, State Zip Rancho Palos Verdes,,_ CA 90275 Phone/Fax No.: 310 - 544 -5204 Email Address: ericm @rpv.com Addendum(s) Attached: ❑ Yes 0 No Note: Any addendum attached should be labeled as an "Addendum to the Adoption Agreement" and include a reference to the name of the Plan. ARTICLE I: INTRODUCTION 1.1 original effective date: January 1 2010 (month, Y. Year Effective date of amendment/restatement: N/A moo Y. Year 1.6(a) Coverage options available under the Plan include: 0 Full Scope Caption. El Limited Scope Option. El Suspended Account option. El Other: 1.6(a){ii} Limited Scope Caption is: Z N/A El Available only for Participants enrolled in the Adopting Employer's high deductible health plan on an automatic basis. ❑ Available for all Participants on an elective basis. ❑ Available for all Participants on an automatic basis for Participants enrolled in the Adopting Employer's high deductible health plan and on an elective basis for other Participants. Q Hitesman & Associates, PA 2008 Page 1 Basic Plan Adoption Agreement Resolution No. 2009 -89 Exhibit A Page 33 of 39 1.6(c) Reimbursement rules are modified as follows: ® N/A ❑ Descri be: IARTICLE II: DEFINITIONS 2.7 Dependent means: ® "Dependent" for purposes of Section 152 of the Code determined without regard to subsections (b )(1), (b )(2 ). and (d )(1 )(B). ❑ Other: 2.11 Entry Date means: ❑ Date Employee becomes eligible to participate. ® Other: The first pay period following the E m l o ee's completion of his or her probationary period. 2.15 Health Care Expense means: ❑ Maximum permitted by law (i.e., Section 213(4) medical expenses). ❑ An expense which, but for the deductible, co- insurance, and co -pay requirements under a specific group medical coverage sponsored by the Adopting Employer, would have been paid by that group medical coverage. Specified group medical coverage: ® Other: Because all reimbursements are provided after a Participant's employment terminates,_ see below for the applicable definition of Health Care Expense. For Participants who have chosen to spend down their accounts in lieu of COBRA once they terminate employment Health Care Expense means: ❑ N/A — no such access provided El Same as while employed ® Maximum permitted by law (i.e., Section 213(d) medical expenses) El other: 2.19 Limited Scope Health Care Expense means: ® N/A El Health Care Expense for dental or vision care. El Health Care Expense for dental, vision, or preventive care. 2.23 Name of Plan: Ci ty of Rancho Palos Verdes Retirement Health Savings Plan 2.25 Plan Year is: July 1 through June 30 (=nffi, day year 2.25 The initial "short" Plan Year is: January 1 2010 through June 30 2010 �month,, day, year @ Hitesman & Associates, PA 2008 Basic Plan Adoption Agreement Page 2 Resolution No. 2009 -89 Exhibit A Page 34 of 39 2.29 Spouse means: ® An individual who is legally married to a Participant and who is treated as a 'spouse" under the Code. ❑ other: 2.30 Name of Trust: City of Rancho Palos Verdes Retirement Health Savings Trust ARTICLE IV: ELIGIBILITY AND PARTICIPATION OF EMPLOYEES 4.1 To be eligible. an Employee must satisfy each of the following requirements: ❑ Age: ❑ Length of service: ® Employment classification: Full -time Em to ees who 1 have completed the new hire rvbatlona eriod and work an 80 hour bi -weekly schedule. ❑ Coverage under a specified group medical plan: El other: 4.4 Termination of Employer Contributions: As provided in the Basic Plan Document ❑ other: 4.5 Termination of participation: 0 As provided in the Basic Plan Document El other: ARTICLE V; BENEFITS UNDER THE PLAN 5.2 Time period for submitting claims: ® within 365 days from the date the claim was incurred ❑ other: 5.6(a) Post - termination access: ® As provided in the Basic Plan Document ❑ other: 5.6(b) Post -death access by Spouse & Dependents: 0 As provided in the Basic Plan Document ❑ other: @ Hitesman & Associates, PA ZOOS Page 3 Basic Plan Adoption Agreement Resolution No. 2009 -89 Exhibit A Page 35 of 39 5.8 When forfeitures occur generally: 0 As provided in the Basic Plan Document ❑ other: 5.8 Forfeitures of small HC Account balances occur: M As provided in the Basic Plan Document El other: 5.8 Use of forfeitures: El Pay administrative costs that would otherwise be paid from the Trust (i.e., Participants' HC Account balances) and that are incurred during current and future Plan Years El Pay administrative costs that would otherwise be paid from the Trust (i.e., Participants' HC Account balances) and that are incurred during the current Plan Year (i.e., the Plan Year in which the forfeiture occurs) . If forfeitures remain, they shall be: [:1 Contributed to the HC Accounts of all Participants on a per capita basis ❑ Contributed on a per capita basis to the HC Accounts of: (1) if the Participant to whom the forfeiture is attributable was part of a bargaining unit, all other Participants in such Participant's bargaining unit, or (2) if the Participant to whom the forfeiture is attributable was not part of a bargaining unit, all non - bargained Participants ❑ Other: ® Contributed to the HC Accounts of all Participants on a per capita basis El Contributed on a per capita basis to the HC Accounts of: (1) if the Participant to whom the forfeiture is attributable was part of a bargaining unit, all other Participants in such Participant's bargaining unit, or (2) if the Participant to whom the forfeiture is attributable was not part of a bargaining unit, all non - bargained Participants El Other: 5.11 Which plan pays first: El This Plan � Medical expense reimbursement plan under a cafeteria plan sponsored by the Adopting Employer El Other: Q Hitesman & Associates,, PA 2008 Basic Plan Adoption Agreement Page 4 Resolution No. 2009 -89 Exhibit A Page 36 of 39 ARTICLE VI: CONTRIBUTIONS 5.1 Employer Contribution amount, timing, restrictions: One Time Contribution: El N/A - no such contribution is available. El Fixed dollar amount: ® Fixed formula; A retroactive contribution as determined b the City Council. ❑ Restrictions, if any: Contributed: Recurring Contributions: El N/A - no such contributions are available. El Fixed dollar amount: ❑ Per calendar month on or about the first of the month El Per year on or about the first day of the Plan Year El Other: ® Fixed formula; 1 $51.55 as a nonelective em to er contribution plus 2 1% of gross compensation,, as a mandatory sala reduction contribution. El Per calendar month on or about the first of the month ❑ Per year on or about the first day of the Plan Year ® Other: Per p a eriod. ® Restrictions: The nonelective employer contribution shall be adjusted annually each March based upon CPI. @ Hitesman & Associates, PA 2008 Basic Plan Adoption Agreement Page 5 Resolution No. 2009 -89 Exhibit A Page 37 of 39 Conversion Contributions: ❑ Annual contribution of accumulated vacation or sick leave: ® N/A — no such contribution is available El Descri be: El Contribution of accumulated vacation or sick leave upon termination of employment: Z N/A — no such contribution is available El Describe: 6.1 Availability for reimbursement of HC Account balance: ❑ As soon as deposited ® Upon termination of employment ❑ Other: 6.3 Direction of Investments: El Plan Administrator � Participant ❑ Other: ARTICLE XI: GENERAL PROVISIONS 11.6 Reasonable fees of Plan Supervisor shall be paid as follows: ❑ Fixed fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (i.e., billed to the Adopting Employer ); asset -based fees shall be charged to the Participant and paid from the Participant's HC Account El All fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (billed to the Adopting Employer) ® All fees shall be charged to the Participant and paid from the Participant's HC Account ❑ other: For Participants who have chosen to spend down their accounts in lieu of COBRA, once they terminate employment, reasonable fees of Plan Supervisor shall be paid as follows: ❑ N/A -- no such access provided El Fixed fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (i.e., billed to the Adopting Employer); asset -based fees shall be charged to the Participant and paid from the Participant's HC Account ❑ All fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (i.e., billed to the Adopting Employer) ® All fees shall be charged to the Participant and paid from the Participant's HC Account ❑ Other: p Hitesman & Associates, PA 2008 Page 6 Basic Plan Adoption Agreement Resolution No. 2009 -89 Exhibit A Page 38 of 39 11.6 Reasonable fees of Trustee shall be paid as follows: ❑ Fixed fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (i.e., billed to the Adopting Employer); asset -based fees shall be charged to the Participant and paid from the Participant's HC Account ® All fees shall be charged to the Plan and paid from the general assets of the Adopting Employer (billed to the Adopting Employer) El All fees shall be charged to the Participant and paid from the Participant's HC Account El Other: 11.7 Governing law -- State of California on list one state ACKNOWLEDGE MENTS 1. Pursuant to Section 2.8(a)� any collectively bargained Employees participating in this Plan participate because the collective bargaining agreement provides for coverage under this Plan. 2. This Plan has been duly adopted or authorized to be adopted by the Adopting Employer's Managing Body. 3. This Plan is a ' "covered entity" for purposes of the Primacy Rules and Security Rules under the Health Insurance Portability and Accountability Act (HIPAA ). ADOPTING EMPLOYER: CITY OF RANCHO PALOS VERDES Date: 1X* 16'47� By: Its • . . @ Hitesman & Associates, PA 2008 Page 7 Basic Plan Adoption Agreement Resolution No. 2009 -89 Exhibit A Page 39 of 39 MG TRUST COMPANY, LLC PUBLIC EMPLOYER VEBA TRUST AGREEMENT Resolution No. 2009 -89 Exhibit B Page 1 of 28 TABLE OF CONTENTS Page AGREEMENT... r... r ..................... r...... r..... r.. a.............. ro.. a... ...ss.►..r......a..s........... a. a. a m. a.. sea .......see 1 ARTICLE I DEFINITIONS •.■•.. a..rr.rr...Rr.... s.......rr..R.••....... r.rr.. r......•...... ■ .............................■ 1 1.01 Beneficiary ............................ a.. r .r0R..o.oa *am .r.ar &Rrr.a @,..... me so a.r.Rra...a s..,s. am* ...aa.a.oa mesa ..00...0 1 1.02 Code ....••• rror. o. s..••■• o■• oR.•• R•■ o■• s...• a.........•■ asset ......... a.►►••. a....•• same • rr. ■..a..o..R..ss0R.o.R.arr.ar..r. 1 1.03 Confidential Information .....,.,....rrrrrr .................. s. a..........rr..•.• •.............................■ 1 1.04 Designated Representative ...................................................... ..r.R..R......r................ 2 1.05 Eligible Employee ........................................ r. r.............. r......... ..........................r..., 2 1.06 Employer .................................................................................. ..............................2 1.07 Fiduciary .......................................... ............................... r. R..... .....,..........,.............. 2 1.08 Force Majeure .............................rrr.................. ra...........rr.rr..... ............................... 2 1.09 Instruction(s) ■.,. a ......................rr.............. r...... a. a......... r............ .,..........,.................s 2 1.10 Investment Manager ................................................................ ............................... 2 1.11 IRS ...... a .............. s................,........ r... r.............. r.............,.... r.... ............................... 2 1.12 Participant ....■ oa ..................... a....■ arr000mo....• a..• r.• oom.• o......• r.• r••• rR■• •►s......o....s.aoo.oroRR.Rro.. 2 1.13 Person . r.rr...... r.. r..rr.rr.rr..rr........ r ............... r..... a..,........... a........... ..............................■ 2 1.14 Plan r..rrar.. a..rr.rrrr ................ r.... a...........rrr............... r............ a...,. ............................... 2 1.15 Plan Administrator ............................. . ....................... ............................... r .. r ......... 3 1.16 Trust .... s.. a...• a■ o• ■..a....o. come ga....a......rra* Room•. o. a.. some rrrRro. mammas .. same. rr•■ states ...r.rR.rra...a.. seems see 3 1.17 Trust Agreement ............... r,.. r......,......... rr ............,.................. ...,..................mgr...... 3 1.18 Trust Fund ............................................................................... ............................... 3 1,19 Trustee ........... R......... r .............. a....... r..rr.................. R................. ..................,...........r 3 ARTICLE II ESTABLISHMENT AND PURPOSE OF THE TRUST . ............................... 3 2.01 Designation .............................................................,.,............. ............................... 3 2.02 Purpose ..................... r..ar. r...■ o.•...............ra....,......• r. r.............• ■.............................. 3 2.03 Exclusive Benefit r.......■ r.. rROr. RRaRO. ar•...■■....■■ rro..■•.........•■ r.•■• RrrR►.►■ ■.......►.a.o..ar...r.........• 3 2.04 Return of Amounts to the Employer ....................................... ............................... 4 2.05 Superseding Effect of the Trust Agreement............................................................ 4 ARTICLE III ACCEPTANCE OF, CONTRIBUTIONS TO, DISTRIBUTIONS FROMTRUST .................. r............................................... ............................... 4 3.01 Acceptance of Trust ................................................................ ............................... 4 _1_ Resolution No. 2009 -89 Exhibit B Page 2 of 28 TABLE OF CONTENTS (continued) Page 3.02 Receipt of Contributions .......■•. a ...............• a....r.......................■ ............................... 4 3.03 Separate Accounts for Plans ................................................... ............................... 5 3.04 Distributions..,. rr.■.■•..• s.• r...• s. rr...••......•. r, a............• aaaa a............ a9aa aa.r..a.0a.a..a ass ....a....a *a■ 5 ARTICLE IV MANAGEMENT AND CONTROL OF TRUST FUND ASSETS ................ 6 4.01 Standard of Conduct and Liabilities of Fiduciaries ................ ............................... 6 4.02 Trustee's Powers of Investment and Management ................. ............................... 6 4.03 Investments ............ .. rr.. aa................ a.■■■.aa aa. a. a.. a.. a■ a. aa.......... a.. as* ■. ass aa...a..a.. as, . ass ..a.....a 9 4.04 Authority of Trustee... a......r ............. r... r.............. r......,........... ............................... 10 4.05 Power to Do All Necessary Acts .......................................... ............................... 10 4.06 Voting of Proxies .................................................................. ............................... 10 4.07 Appointment of Investment Manager and Power to Direct Trustee .................... 10 4.05 Employer Representations and warranties ............ ► a sass. r ....... ............................... 11 ARTICLE V THE PLAN ADMINISTRATOR, THE DESIGNATED REPRESENTATIVE AND THE EMPLOYER ............... .............................12 5.01 Action by the Plan Administrator ..................................... a..... .............................12 5.02 Action by an Employer ......................................................... ............................... 12 5.03 Formal Action by Employer ...................... a..................,....... ........................a...,.. 12 5.04 Appointment of Designated Representative; Action by the Designated Representative....................................................................... ............................... ARTICLE VI THE TRUSTEE .............................................................. ............................... 13 5.01 Reliance on written Instrument ■ .................../. a....... ...aa..aa.a6a,.r.....a...... #a& a a a a.. a•, aa... 13 6.02 Action by the Trustee ............................................................ ............................... 13 6.03 Consultation with Counsel and Accountant .......................... ............................... 13 5.04 Bond Not Required ...................... ............................... . ......... ............................... 13 6.05 Returns, Reports and Information ................... • .... r ............... ■ ............................... 13 6.06 Indemnification ■ ..................■■. r......... r........ r.....• a.................■.• ■................a............. 13 6.07 Acts of Prior Trustees .................. a...... r............... r............... r. .....................,......... 14 6.05 Plan Assets Not Held in Trustee's Trust. a ................ r............ ...............r............... 14 ARTICLE VII DISPUTE RESOLUTION .............................................. ............................... 14 ARTICLE VIII ACCOUNTS AND RECORDS ...................................... ............................... 15 ARTICLE IX FEES AND EXPENSES ................................................. ............................... 15 -ii- Resolution No. 2009 -89 Exhibit B Page 3 of 28 TABLE OF CONTENTS (continued) Page 9.01 Expenses of Administration .................................................. ............................... 15 9.02 Authorization with Respect to Taxes .................................... ............................... 16 ARTICLE X RESIGNATION OR REMOVAL OF TRUSTEE; SUCCESSOR TRUSTEE........................... a.. r.....•...... a....... r. r. r. r............. ■.........................../.. 16 10.01 Resignation; Removal of the Trustee .................................... ............................... 16 10.02 Appointment of Successor Trustee ........ ............................... •.............................. 17 10.03 Transfer of Assets to Successor Trustee ............................... ............................... 17 10.04 Terminating Trustee's Accounting ....................................... ............................... 17 10.05 Changes in organization of Trustee ................... 17 10.06 Employer Bankruptcy .......................... r.,....,..../,...,.............,. ............................... 18 ARTICLE XI AMENDMENT OF TR UST ........................................... ............................... 18 ARTICLE XII TERMINATION OF TRUST..►.....■./..►./../../.....■ rr.. a•■ rs■ s• r .■.../... /../../....a..aa.arar• 19 12.01 Termination of Trust Fund../.......,....■ r.■ r•■/..•■.•■/.//../.......• r•. r..• •....../././.....r..a.aarsr.... 19 12.02 Continuation by an Employer's Successor ......... / ........ ............................... r........ 19 12.03 Liquidation of Trust ............................ ............................... r ........................ a r ....... 19 ARTICLE XIII MISCELLANEOUS ■/.■ a........ r... r.....■ rra•.•■..■.•■/..///.......•...■ •.s..rr...r.ars ...............■ 19 13.01 Applicable Law ..................................................................... ............................... 19 13.02 Evidence......,/ ............./././../ s..../............................./............,.... ................,............20 13 ►03 Notices ...../..►..►...../..../f../....,./.\....//\.///./.../............/\./.../../....// ..... \..... /... /. /. /... /... ►..• 20 13.04 Limitation on Claims ............................................ .r.......r........r............ /..........seam. 20 13.05 Severability of Provisions ..................................................... ............................... 20 13.06 Trust Qualification ................................................................ ............................... 20 13.07 Construction of Trust Agreement ..................... / ................... r........... r ................. r 13.08 Spendthrift Provisions ........................................................... ............................... 21 13.09 Title of Trust Assets ......./.../..... s ..............//................. s...... r... .......,..../....r............. 21 13.14 Rights Determined from Entire Instrument ......................................................... 21 1 3.1 1 Waiver......./ ................ s/./.,...../..................../.......................... ............................... 21 13.12 word Usage .......................................................................... ............................... 21 13.13 Assignment .........../ .................../..................►►........./............. ........................../..r. 21 13.14 Force Majeure ............................................................. ............................... se... 21 s• —iii— Resolution No. 2009 -89 Exhibit B Page 4 of 28 TABLE OF CONTENTS (continued) Page 13.15 Complete Agreement ............ a ............................................... ............................... 21 13.16 Confidentiality ...................................................................... ............................... 21 13.17 USA Patriot Act Notification ................................................ ............................... 22 13.18 Execution in Counterparts ..................................................... ............................... 22 iv- Resolution No. 2009 -89 Exhibit B Page 5 of 28 PLAN IDENTIFYING INFORMATION Plan Sponsor: CitV of Rancho Palos Verdes Address: 30940 Hawthorne Blvd City: Rancho Palos Verdes State: CA Zip: 90275 Phone Number: (310)__544 -5204 Plan Name: Ci of Rancho Palos Verdes Retirement Health Savings Plan Original Effective Date of Plan: January 1 2010 Trust Tax ID#: TBD Trust fiscal year end date: Plan Administrator (if different from Plan Sponsor) :. Address: city. Phone Number: State: June 30 Zip: Designated Representative: 011tumHealth Financial Services Comipanj Address: 11490 aeon Street NW, Suite 200 City: Coon Rapids mr.nnninrnnrnrp.uuunuirurui� State: MN Zip; 55448 Phone Number: 763 772 -1378 AGREEMENT This Directed Trustee Agreement ( "Trust Agreement') is entered into by and between the Employer, the Designated Representative, and MG Trust Company, LLC ( "Trustee ") effective as of January 1, 2010. ARTICLE I DEFINITIONS For purposes of the Trust Agreement, the following terms shall have the meanings respectively indicated unless the context clearly requires otherwise: 1.01 Beneficiary. ("Beneficiary" means any Person or entity entitled to receive benefits which are payable upon or after a Participant's death pursuant to the Plan. 1.02 Code. "Code" means the Internal Revenue Code of 1955, as amended from time to time. References to any section of the Code shall include any successor provision thereto. 1.03 Confidential Information. "Confidential Information" shall mean (individually and collectively) proprietary information of the parties to this Trust Agreement, including but not limited to, their inventions, confidential information, know-how, trade secrets, business affairs, prospect lists, product designs, product plans, business strategies, finances, and fee structures. Resolution No. 2009 -89 Exhibit B Page 6 of 28 1.04 Deli Hated Re resentative. "Designated Representative" means any Person named above or any authorized successor thereto who agrees to be bound by this Agreement, who is authorized by the terms of this Agreement to give directions to the Trustee or to act on behalf of the Plan Administrator hereunder. 1.05 Eligible Employee. "Eligible Employed" means an employee or retiree who is eligible to participate in the Plan, as set forth in the Plan documents. 1.06 Employer. "Employer" generally means the sponsor of the Plan and related Trust designated above and any other Employer that adopts the Plan with the consent of the Sponsor. If the Sponsor is a representative board or group for several employers, "Employer" refers to the employers participating in the Plan. 1.07 Fducary. "Fiduciary" means the Employer, a fiduciary named in the Plan, or such other Person as is so designated under the Plan's terms and identified as such in Instructions to the Trustee. 1.08 Force Maleure. "Force Majeure" means a cause or event outside the reasonable control of the parties or that could not be avoided by the exercise of due care, such as an act of God or any mechanical, electronic or communications failure. 1.09 Instruction(s). "Instruction(s)" means any oral, written, or electronic direction given to the Trustee in a form and manner required or accepted by the Trustee. The Trustee may require that any Instruction be in writing or in an electronic format, and may recognize standing requests, directions, or requisitions as Instructions. 1.10 Investment Mana er. "Investment Manager" means a Person that is a registered investment adviser, bank, insurance company or other investment professional that is identified as such in Instructions to the Trustee, and who is appointed in accordance with Section 4.07 to manage, acquire or dispose of any portion of the Trust Fund. Investment Manager may also be a State governmental entity if permitted by applicable State law. 1.11 IRS. "IRS" means the Internal Revenue Service. 1.12 'Participant. "Participant" means an Eligible Employee who participates in the Plan as provided in the Plan, and shall include any employee, former employee, or dependent of any of the foregoing who is eligible to participate in and receive benefits from the Plan, and shall include the Beneficiary(ies) with respect to any deceased employee or former employee for such time as the Beneficiary is entitled to receive benefits under the Plan 1.13 Person. "Person" means an individual, committee of individuals, partnership, limited liability partnership, joint venture, corporation, limited liability corporation, mutual Employer, joint -stock Employer, non - profit or not -for- profit organization, trust, estate, unincorporated organization, association or employee organization. 1.14 Flan. "Plan" means the employee benefit plan or plans listed above, as presently in force or as hereafter amended by the Plan Sponsor from time to time, some or all of the assets of which are held by the Trustee pursuant to the terms of this Trust Agreement. The Plan may consist of health, accident, life insurance, and other such benefits permitted under Section 501(c)(9) of the Code for Eligible Employees and their dependents and Beneficiaries, the governing instruments of which shall be on file with the Designated Representative. The Employer shall not be under any obligation to provide any �2� Resolution No. 2009 -89 Exhibit B Page 7 of 28 specific type or level of benefits to Eligible Employees and their dependents and Beneficiaries solely because of this Trust Agreement. 1.15 Plan Administrator. "Plan Administrator" shall have the meaning provided in the Plan. 1.15 Trust. "Trust" means the legal entity resulting from the Trust Agreement between the Employer(s) and the Trustee who receives the contributions, and holds, invests and disburses funds to and for the benefit of Participants and their Beneficiaries, and each separate trust, if any, existing hereunder at the time in question. If the Plan existed prior to the effective date of this Trust Agreement, the Trust shall constitute a continuation by means of an amendment and restatement of each of the prior trusts from which Plan assets are transferred to the Trustee. 1.17 Trust &reement. "Trust Agreement" means this Directed Trust Agreement between the Employer and the Trustee, as reflected herein, provided that if this instrument, pursuant to its terms, be amended, "Trust Agreement" as at a particular date, shall mean this instrument, as amended and in force on such date. 1.18 Trust Fund. "Trust Fund" means all assets of whatsoever bind or nature from time to time held by the Trustee pursuant to this Trust Agreement, without distinction as to income and principal. 1.19 Trustee. "Trustee" means MG Trust Company, LLC and any duly appointed additional or successor Trustee or Trustees acting hereunder. ARTICLE II ESTABLISHMENT AND PURPOSE OF THE TRUST 2.01 Designation. The Employer hereby establishes the Trust. The Trust shall consist of an initial contribution of money or other property, acceptable to the Trustee in its sole discretion, made by the Employer or transferred from a previous trustee under the Plan, and such additional sums of money or other property acceptable to the Trustee in its sole discretion, as shall from time to time be delivered to the Trustee under the Plan, all investments made therewith and proceeds thereof, and all earnings and profits thereon, less the payments that are made by the Trustee as provided herein. 2.02 Pu ose. The purpose of this Trust is to provide a source of funding for the Plan, which provides certain benefits for the Employer's Eligible Employees who become Participants-. The Employer intends the Trust to qualify as a tax exempt trust of a voluntary employees' beneficiary association ( "VEBA ") within the meaning of Section 501(c)(9) of the Code and the regulations issued thereunder. Should the income of the Trust become subject to unrelated business income tax, the Employer shall so notify the Trustee. The Employer established the Trust to provide funding only for benefits that are permitted to be provided by a VEBA under Code Section 501(c )(9) and that are payable to Eligible Employees of the Employer. 2.03 Exclusive Benefit. This Trust shall be maintained for the exclusive benefit of Participants and their Beneficiaries and, to the extent permitted by the Plan, the payment of reasonable Plan administration expenses. Except as provided under applicable law or otherwise provided in Section 2.04 below, no part of the Trust Fund shall be used for, or diverted to any purpose other than that stated in this Section 2.03. It is intended that this Trust Agreement be construed so that no disqualified benefit (within the meaning of Section 4976 of the Code) be provided hereunder. ..3 � Resolution No. 2009 -89 Exhibit B Page 8 of 28 2.04 Return of Amounts to the Employer. The Employer agrees that at no time shall any part of the net earnings of the Trust Fund inure to the benefit of the Employer or any individual other than through the payment of benefits permitted by such Plan and this Trust Agreement, nor shall any part of the corpus or income of the Trust be used for, or diverted to, purposes other than for the exclusive benefit of such Participants and their dependents and Beneficiaries. Notwithstanding the above, Trust Funds maintained for a Plan may be refunded to the Employer upon its Instruction to the Trustee in the following circumstances if, and only if, a Plan expressly so provides for such refund: (a) A contribution is made to the Trust Fund by the Employer because of a mistake of fact and is returned to the Employer within one (l) year after payment of such contribution; (b) A contribution is conditioned on qualification of the Plan as exempt from tax under Section 501 (a) of the Code, and the contribution is returned within one year after the date of denial of qualification of the Plan; (c) Any excess insurance premiums, based on mortality or morbidity experience of the insurer, may be refunded to the Employer. Any contributions returned will not include gains on such excess contributions, but must be reduced by any losses. The Trustee will return contributions to the Employer if the Employer or the Plan Administrator provides Instructions to the Trustee to do so. In all circumstances, it is understood and agreed that the Employer is solely responsible for ensuring that an Instruction to return any amount to the Employer meets all applicable legal requirements. The Trustee has no duty or responsibility to question, and may conclusively rely upon any such Instruction. 2.05 Suipersedina Effect of the Trust Agreement. To the extent there are any inconsistencies between this Trust Agreement and any provisions set forth in the Plan document pertaining to a matter addressed herein, this Trust Agreement shall control, and its provisions shall supersede all other provisions in the Plan pertaining to the duties, responsibilities, obligations and liabilities of the Trustee. Further, this Trust Agreement shall operate as an amendment of the Plan that replaces all references to trustee discretion in the Plan with references to the discretion of the Plan Administrator. Under no circumstances shall the terms of the Plan be interpreted as conferring any investment or administrative discretion on the Trustee. ARTICLE III ACCEPTANCE OF CONTRIBUTIONS TO I3ISTRIBUTIONS FROM TRUST 3.01 Acceptance of Trust. The Trustee, by affixing its signature to this Trust Agreement, accepts this Trust and agrees to act as Trustee of the Trust according to the terms and conditions of this Trust Agreement, all of which the parties hereto agree, and to which the Employers and the Participants from time to time hereunder, and all those Persons claiming through or under any of them, shall be deemed to have agreed. Nothing contained in the Plan, either expressly or by implication, shall be deemed to impose any powers, duties or responsibilities on the Trustee beyond those imposed by this Trust Agreement. The Trustee shall not have the authority to interpret the Plan. 3.02 Receipt of Contributions. The Trustee shall receive any contributions under the Plan paid to it in cash. All contributions so received, together with the income therefrom, any other increment thereon, and all assets acquired by investment or reinvestment, shall be held, managed, and administered by the Trustee pursuant to the terms of this Trust Agreement without distinction between principal and income and without liability for the payment of interest thereon. The Trustee shall not be responsible for 4- Resolution No. 2009 -89 Exhibit B Page 9 of 28 the collection of any contributions under or required by the Plan, but shall be responsible only for cash actually received by it hereunder. The Trustee shall have no power or duty to inquire whether the amount of any contributions delivered to it by an Employer is correct or complies with the terms of the Plan. The Trustee shall have no duty to compute any amount required to be transferred or paid to it by the Employer. 3.03 Se arate Accounts for Plans. The Trustee will establish an account for each Employer, and all assets held by it and contributions received by it, and all such contributions and accruals thereto from time to time, shall be held by the Trustee hereunder in the Trust Fund and shall be invested and applied by it as herein provided, and all of the assets in the Trust Fund Shall be available to pay benefits that become payable with respect to the Employer. Notwithstanding the foregoing, the Designated Representative shall create and maintain separate accounts for each separate Plan of the Employer under the Trust Fund. The account of each Plan shall be debited or credited, as the case may be, (i) for the entire amount of every contribution received on behalf of such Plan, every benefit payment or expense or other charge properly allocated to such Plan, and every transaction relating solely to such Plan, and (ii) for its equitable share (i.e., in proportion to the relative balance of its then existing account interest) of any item of allocated or accrued income, gain or loss, and general expenses and other transaction allocable to the Trust Fund as a whole. with every payment of a contribution to the Trust Fund, the Employer shall give written notice to the Designated Representative of the Plan with respect to which the contribution is made. 3.04 Distributions. (a/ Distributions. Upon receipt of Instructions from the Plan Administrator or the Designated Representative, the Trustee shall mare payments from the Trust Fund in such manner, amounts and times, and for such purposes, as may be specified in such Instructions, or for the payment of fees and expenses pursuant to Article Ix ( "Distributions "). The Designated Representative shall have the responsibility for making benefit payments under the Plan. The Designated Representative may open a benefit account, including through a commercial checking account in a federally insured banking institution. The Designated Representative shall have the responsibility to assure that any such commercial banking account is established and maintained in accordance with applicable law and is properly insured, as applicable. The Trustee shall make transfers of funds to the benefit account at such time and in such amounts as the Designated Representative may from time to time direct. The Designated Representative shall Identify those individuals who are authorized to sign manually or by facsimile signature any and all checks, drafts and orders against the benefit account, and the depository bank is authorized to honor any and all checks, drafts and orders so signed, regardless of by whom or by what the actual or purported facsimile signature or signatures may have been affixed thereto, if such signature or signatures resemble those duly filed. The Designated Representative shall have full responsibility with respect to all matters relating to the benefit account, including the power to direct stop payment on any check., draft or order, and to reissue and deposit checks. The Trustee shall have no duty to question the propriety of any direction of the Designated Representative to make transfers from the Trust Fund to the benefit account, to account for funds retained in or disbursed from the benefit account, or to pay any tax arising by reason of any benefit payment. (b) Trustee Liabilily for Distributions Pursuant to Instructions, Subject to Section 6.01, the Trustee shall not be liable for any Distribution made by it pursuant to Instructions received from the Designated Representative or the Plan Administrator, and shall be under no duty to make inquiry as to whether any Distribution directed by the Designated Representative or the Plan Administrator is made pursuant to the provisions of the Plan or any applicable law', or as to the effect of any Instruction for tax purposes or otherwise. Likewise, the Trustee need not see to the application of any _5_ Resolution No. 2009 -89 Exhibit B Page 10 of 28 Distribution made to or for the benefit of a Participant pursuant to the Instructions of the Designated Representative or the Plan Administrator. (c) Limitations. The Trustee shall neither be responsible for the adequacy of the Trust Fund to discharge any payments and liabilities under the Plan, nor be required to make any Distributions under the Plan in excess of the net realizable value of the assets of the Trust allocable to such Plan at the time of the Distribution. The Trustee shall not be required to make any Distribution in cash unless the Designated Representative or the Plan Administrator has/have provided Instructions as to the assets to be converted to cash for the purpose of making such Distribution. ARTICLE Iv MANAGEMENT AND CONTROL of TRUST FUND ASSETS 4.01 Standard of Conduct and Liabilities of Fiduciaries. The Trustee and each fiduciary hereunder shall discharge its duties hereunder solely in the interest of the Participants and for the exclusive purpose of providing benefits to Participants and for paying reasonable expenses of administering the Plan. The Trustee and each fiduciary hereunder shall perform all of its duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, or in accordance with such other standard as may, from time to time, be required by law, and in accordance with the Plan and this Trust Agreement, insofar as they are consistent with applicable law. The Trustee and each fiduciary hereunder shall not cause the Trust to engage in a transaction if it knows or should know that such transaction directly or indirectly constitutes a prohibited transaction under applicable law. The fiduciary standards reflected in this Section 4.01 shall apply to the parties hereunder according to and limited by the scope of such party's duties, as expressly described in this Trust Agreement. The Trustee shall not maintain the indicia of ownership in any assets of the Trust Fund outside of the jurisdiction of the District Courts of the United States. 4.02 Trustee's Powers of Investment and Management. (a) The Trustee shall have no discretion over the investment of Trust assets, no responsibility for the selection of investment options under the Trust, and shall not render investment advice to any Person in connection with the selection of such options. Except to the extent required by applicable law or as otherwise provided in this Trust Agreement, the Trustee shall have no duty or responsibility to review, initiate action, or make recommendations regarding Trust assets and the Trustee shall retain assets until it receives Instructions from the Designated Representative or the Plan Administrator regarding disposal of them. Except as provided below, the Plan Administrator shall have all power over and responsibility for the management, disposition, and investment of the Trust assets, and the Trustee shall comply with the Instructions of the Plan Administrator concerning those assets. The Plan Administrator represents to the Trustee that it shall not issue Instructions that violate the terms of the Plan and Trust or that are prohibited by applicable law. (b) The Plan Administrator shall have the exclusive authority and discretion to select the investments pursuant to Section 4.03, and to provide Instructions to the Trustee regarding investment of contributions hereunder unless an Investment Manager is appointed for such purpose. If permitted under the Plan, the Designated Representative shall maintain separate accounts for Participants under one or more Plans and each separate account for each Participant under each Plan shall be maintained in accordance with procedures or systems approved or arranged by the Employer. The Employer may direct '2 Resolution No. 2009 -89 Exhibit B Page 11 of 28 the Trustee in writing to divide the Trust Fund into two (2) or more subfunds, including an interest - bearing account to hold balances in Employees' accounts below a minimum threshold determined by the Employer (the "Base Account'), and an array of investment subfunds which shall serve as vehicles for the investment of Employees' accounts at the direction of Employees. The Employer shall determine the general investment characteristics and objectives of each investment subfund. The Employer or the investment manager designated by the Employer, as the case may be, shall have complete investment discretion over each investment subfund assigned to it, subject only to the general investment characteristics and objectives established for the particular investment. The Employer acknowledges and agrees that the Trustee shall not select the Base Account or the investment subfunds. The account of each Participant shall have a ratable interest in the Base Account or investment subfund. Participant directions regarding investments of such accounts shall be furnished to the Plan Administrator under procedures adopted by the Employer or the Plan Administrator consistent with the Plan document, and the Designated Representative or the Plan Administrator shall provide Instructions to the Trustee regarding the investment of such amounts. The Plan Administrator is responsible for ensuring that the design and operation of a Participant - directed investment program satisfies the requirements of the Plan. The Trustee shall not be liable for any loss, or by reason of any breach, which results from such Participant's exercise of control with respect to Plan investments. If a Participant who has the right to direct investments under the terms of the Plan fails to provide such direction to the Plan Administrator, the Plan Administrator shall direct the investment of such Participant's account. The Designated Representative or the Plan Administrator shall maintain records showing the interest of each Participant or Beneficiary in the Trust Fund. The Trustee shall have no duty or responsibility to review, male recommendations, or otherwise render advice regarding investments made pursuant to Instructions received from the Plan Administrator or the Designated Representative, and shall be required to act only upon receipt of such Instructions. (c) when acting hereunder, subject to the Instructions of the Designated Representative or the Plan Administrator, as provided in the remaining Sections of this Trust Agreement, the Trustee shall have the following powers with respect to any and all cash and other assets at any time held by it and constituting part of the Trust Fund: (l) To purchase or subscribe for securities or other property and to retain them in trust; to sell any securities or other property at any time held by it at either public or private sale for cash or other consideration or on credit at such time or times and on such terms and conditions as may be deemed appropriate; to exchange such securities or other property and to grant options for the purchase or exchange thereof, and to convey, partition or otherwise dispose of, with or without covenants, including covenants of warranty of title, any securities or other property free of all trusts; to charge the Trust for the cost of all securities purchased or received against a payment and to credit the Trust with the proceeds received from the securities sold or delivered against payment. For any trades not settled immediately upon placement, the Trustee shall have the right to sell securities from the Trust in a reasonably prudent fashion sufficient to recover any funds advanced; (2) To oppose, or consent to and participate in, any plan of reorganization, consolidation, merger, combination or other similar plan; to oppose or to consent to any contract, lease, mortgage, purchase, sale or other action by any corporation pursuant to such plan, and to accept and retain any securities or other property issued under any such plan; to deposit any securities or other property with any protective, reorganization or other similar Plan Administrator; to delegate discretionary power thereto and to pay and agree to pay part of its expenses and compensation and any assessments levied with respect to any such securities or other property so deposited; (3) To assign, renew, extend or discharge or participate in the assignment, renewal, extension or discharge of any debt, mortgage or other lien, upon such terms, including a partial release, as may be deemed advisable by the Trustee, and to agree to a reduction in the rate of interest Resolution No. 2009 -89 Exhibit B Page 12 of 28 thereon or to any other modification or change in the terms thereof or of any guarantee pertaining thereto, in any manner and to any extent that may be deemed in the best interest of the Trust Fund; to waive any default, whether in the performance of any covenant or condition of any note, bond or mortgage or in the performance of any guarantee, or to enforce any such default in such manner and to such extent as may be deemed advisable; to exercise and enforce any and all rights of foreclosure and to exercise and enforce, in any action, suit or proceeding at law or in equity, any rights or remedies in respect of any debt, mortgage, lien or guarantee; (4) To exercise all conversion and subscription rights pertaining to any securities or other property; (5) Except as limited in Section 3.02 hereof, to collect and receive any and all moneys, securities or other property of whatsoever kind or nature due or owing or belonging to the Trust Fund and to give full discharge and acquittance therefor; (6) Upon the receipt of Instructions from an Investment Manager or other Plan fiduciary, to exercise, personally or by general or limited power of attorney, any right, including the right to vote or grant proxies, discretionary or otherwise, appurtenant to any assets held by the Trust, and the right to participate in voting trusts with other stockholders. The Plan Administrator shall have responsibility for instructing the Trustee as to voting such shares and the tendering of such shares, by proxy or in person, except to the extent such responsibility is delegated to another Person, under the terms of the Plan or Trust Agreement or under an agreement between the Fiduciary of the Plan and an Investment Manager, in which case such Persons shall have such responsibility. In no event shall the Trustee be responsible for the voting or tendering of shares of securities held in the Trust or for ascertaining or monitoring whether or how proxies are voted or whether the proper number of proxies is received; (7) To register any securities or other property held by it hereunder in the name of the Trustee or in the names of nominees with or without the addition of words indicating that such securities or other property are held in a fiduciary capacity, to take and hold the same unregistered or in form permitting transferability by delivery, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities or other property may be held in the name of the nominee of such depository with other securities deposited therein by other Persons, or to deposit or to arrange for the deposit of any securities or other property issued by the United States government, or any agency or instrumentality thereof, with a Federal Reserve bank, provided that the books and records of the Trustee shall at all times disclose that all such securities or other property are part of the Trust Fund; (8) To settle, compromise or submit to arbitration, any claims, debts or damages due or owing to or from the Trust Fund; to commence or defend suits or legal proceedings whenever, in its judgment, any interest of the Trust Fund so requires, and to represent the Trust Fund in all suits or legal proceedings in any court of law or equity or before any other body or tribunal and to charge against the Trust Fund all reasonable expenses and attorney's fees in connection therewith; (9) To borrow money for the purposes of the Trust Fund from others, excluding the Trustee in its corporate capacity and excluding any other party in interest; (10) To invest all or part of the Trust Fund in interest bearing deposits with a bank or similar financial institution related to the Trustee if such bank or other institution is a fiduciary with respect to the Plan, including but not limited to investments in time deposits, negotiable order of 4. Resolution No. 2009 -89 Exhibit B Page 13 of 28 withdrawal (NOW) accounts, savings deposits, certificates of deposit or time accounts which bear a reasonable interest rate; (11) To invest and reinvest all or a part of the Trust Fund, in accordance with the Designated Representative or the Plan Administrator's Instructions, in any available investments and to dispose of all or any part of the Securities or other property which may from time to time or at any time constitute the Trust Fund, in accordance with Instructions provided by the Designated Representative or the Plan Administrator, and furnished to the Trustee pursuant to Section 4.03; (12) The Trustee may invest and reinvest all or a portion of the Trust Fund pursuant to an agreement between the Employer and the Trustee establishing a special. designated "pooled investment fund" primarily for the purpose of valuing certain trust assets held by the Trustee in a fiduciary capacity. The terms and conditions of such an agreement specifically creating such a pooled investment fund shall be incorporated by reference into this Trust Agreement; (13) To register Trust Fund property in the Trustee's own name, in the name of a nominee or in bearer form, provided the Trustee's records and accounts show that such property is an asset of the Trust Fund; (14) To exercise or dispose of any right it may have as the holder of any security, to convert the same into another security, to acquire any additional security or securities, to make any payments, to exchange any security, or to do any other act with reference thereto; (15) To exchange any property for other property upon such terms and conditions as the Trustee may deem proper, and to give or receive money to effect equality in price; (16) To deposit any security with any protective or reorganization committee, to delegate to that committee such power and authority as the Trustee may deem proper, and to agree to pay out of the Trust Fund that portion of the expenses and compensation of that committee as the Trustee may deem proper; (17) To appoint agents as necessary or desirable, including, legal counsel who may be counsel for the Employer; (18) To hold that portion of the Trust Fund as the Trustee may deem necessary for ordinary administration, to transfer assets to another trust or fiduciary, pending investment Instructions, and to disburse funds in cash, without liability for interest, by depositing the same in any bank (including deposits that bear no interest or a reasonable rate of interest in a bank or similar financial institution supervised by the United States or a State, even where a bank or financial institution is the Trustee, or otherwise is a fiduciary of the Plan, subject to the rules and regulations governing such deposits, and without regard to the amount of any such deposit); and (19) To retain insurance contracts that are guaranteed investment contracts. 4.03 Investments. (a) Investment Options. The Plan Administrator and the Designated Representative (or, if applicable, the Investment Manager) shall from time to time notify the Trustee in writing or electronically of its selection of the investments available under the Plan. The Plan Administrator (or, if applicable, the Investment Manager) shall have the sole duty to ascertain whether such investments are consistent with the Plan's investment policy, if any, or are otherwise a suitable investment of the Plan's W Resolution No. 2009 -89 Exhibit B Page 14 of 28 assets. Cash or other property received by the Trustee as contributions, or otherwise, as permitted hereunder, shall, per the Plan Administrator's or the Designated Representative's Instructions, be credited to any or all of such investments. (b) Investment Direction. The Plan Administrator or the Designated Representative shall have the exclusive right, in accordance with the provisions of the Plan, to direct the investment by the Trustee of all amounts allocated to this Trust Fund among any one or more of the available investments. All investment Instructions provided to the Trustee by the Plan Administrator or the Designated Representative shall be timely furnished. In making any investment of the assets of the Trust Fund, the Trustee shall be fully entitled to rely on such directions furnished to it by the Plan Administrator or the Designated Representative or Fiduciary in accordance with the Plan Administrator's or the Designated Representative's approved rules and procedures, and shall be under no duty to make any inquiry or investigation with respect thereto. If the Trustee receives any contribution under the Plan that is not accompanied by Instructions directing its investment, the Trustee shall notify the Plan Administrator of that fact within a reasonable period of time, and the Trustee may, in its discretion, hold uninvested or return all or a portion of such contribution without liability for loss of income or appreciation pending receipt of proper investment Instructions. It is specifically intended under the Plan and this Trust Agreement that the Trustee shall have no discretionary authority to determine the investment of the assets of the Trust Fund except as otherwise provided in Section 4.02(c)( 1 S) and this Section 4.03. 4.04 Authority of Trustee. A third party dealing with the Trustee shall not make, or be required by any Person to make, any inquiry concerning the authority of the Trustee to take or omit any action but shall be fully protected in relying upon the certification of the Trustee that it has authority to take such proposed action. No Person dealing with the Trustee shall be required to follow the application by the Trustee of any moneys, securities or other property paid or delivered to the Trustee. 4.05 Power to Do All Necessary- Acts. To the extent not inconsistent with the express provisions hereof, enumeration of any power herein shall not be by way of limitation, but shall be cumulative and construed as full and complete power in favor of the Trustee. In addition to the authority specifically herein granted, the Trustee shall have such power to do all acts as may be deemed necessary for full and complete management of the Trust Fund and appropriate to carry out the purposes of this Trust Fund, and shall further have all powers and authorities conferred on trustees by the laws of the State of Colorado. 4.05 Voting of Proxies. The Trustee shall maintain a complete record of the manner in which it votes securities held as part of the Trust Fund, which shall be voted only in accordance with Instructions provided to the Trustee by the Plan Administrator or other Plan fiduciary independent of the Trustee, as provided under this Trust Agreement. 4.07 ApRointment of Investment Manner and Power to Direct Trustee. (a) A.=ointment. The fiduciary named in the Plan as having such authority, may in its sole discretion appoint one or more Investment Managers with respect to some or all of the assets of the Trust Fund. Any such Investment Manager shall: ( 1) be registered as an investment adviser under the Investment Advisers Act of 1940 or registered under the laws of the applicable state; (Z) be a bank, as defined in the Investment Advisers Act of 1940; or (3) be an insurance company qualified to manage, acquire or dispose of Plan assets under the laws of more than one state. The authority of the Investment Manager shall not begin until the Trustee receives Instructions from the Employer regarding the appointment of such Investment Manager. Such Instructions shall specify the scope of the Investment Manager's authority with respect to the assets of the Trust Fund, and the Investment Manager's authority 11112 Resolution No. 2009 -89 Exhibit B Page 15 of 28 thereunder shall continue and the Trustee shall be fully protected in relying on the notice of appointment provided hereunder until the Trustee receives an Instruction containing notice that such appointment has been rescinded. (b) Power to Direct Trustee. The assets with respect to which a particular Investment Manager has been appointed shall be specified by the Employer, and the Trustee shall account for such assets separately from all other Trust assets. The Investment Manager shall, in accordance with the standard of conduct contained in Section 4.01 hereof, have the duty and power to direct the Trustee in every aspect of its investments specifically including (1) the power to direct the Trustee to invest and reinvest any securities or other property under its management and control so that such investments are diversified so as to minimize the risk of large losses unless under the circumstances it is prudent not to do so, and (2) the voting of proxies with respect to shares of stock which are subject to such Investment Manager's management, control, and responsibility with respect to investment and reinvestment. The Employer shall require the Investment Manager to maintain a record of the reasons for the manner in which it voted such proxies and the date it instructed the Trustee to vote and communicate such information from time to time to the Employer, but not less frequently than annually. The Trustee shall follow the Instructions of the investment Manager regarding the investment and reinvestment of the Trust Fund or such portion thereof as shall be under management by the Investment Manager. The Trustee shall be under no duty or obligation to review any investment to be acquired, held or disposed of pursuant to such Instructions nor to make any recommendations with respect to the disposition or continued retention of any such investment. The Investment Manager shall have the sole duty and responsibility of determining the acceptability of any contributions of property made under this Trust if such contributed property is to be part of its investment responsibility. (c} Reliance U on Directions. The Trustee may rely upon any order, certificate, notice, direction, or other documentary confirmation purporting to have been issued or given by an Investment Manager, which the Trustee believes to be genuine and to have been issued or given by such Investment Manager. The Trustee shall not be liable for the acts or omissions of an Investment Manager and shall have no liability or responsibility for acting or not acting pursuant to the direction of, or failing to act in the absence of, any direction from the Investment Manager (except with respect to short-term investments under Sections 4.02(c)(18) and 4.03(a) hereof), unless the Trustee knows that by such action or failure to act, it would be itself committing a breach of fiduciary duty or participating in a breach of fiduciary duty by the Investment Manager, it being the intention of the parties that, except with respect to investments under Sections 4.42(c)(18) and 4.03(a) hereof, the Trustee shall have the full protection of applicable law. 4.08 Em to er Re resentations and Warranties. (a} Prmr-----Av ntment of Investment Man a er, The Employer hereby represents and warrants to the Trustee that it has taken the necessary and advisable steps to properly appoint, accredit, and supervise any Investment Manager authorized hereunder, including: (1) Execution by the fiduciary named in the Plan as having such authority of instruments appointing the Investment Manager; and (2) Receipt of an instrument executed by the Investment Manager accepting such appointment and acknowledging that it is a fiduciary under applicable law with respect to the relevant assets of the Trust Fund, and that the Investment Manager meets the requirements of Section 4.07(a)(1) — (3) above. 1110 Resolution No. 2009 -89 Exhibit B Page 16 of 28 (b) Survival. The provisions of this Section 4.05 shall survive the termination of this Trust Agreement. ARTICLE V THE PLAN ADMINISTRATOR THE DESIGNATED REPRESENTATIVE AND THE EMPLOYER 5.01 I,IAction by the Plan Administrator. Subject to Section 6.01, the Trustee shall be fully protected in relying upon Instructions provided by the Plan Administrator. 5.02 Action by an Emuloyer. Any action by an Employer, including action taken pursuant to the Plan, shall be evidenced by a copy of a written instrument executed in accordance with Section 5.03 hereof. Subject to Section 6.01, the Trustee shall be fully protected in acting in accordance with such written instrument delivered to it. 5.03 Formal Action by Employer. Any formal action herein permitted or required to be 1111111111191IIIlllllll .11llllq ll..IIIIIP.IIIr� 1. taken by an Employer shall be by resolution of its board of directors or other governing board or body, or by written instrument executed by a person or group of persons who has been authorized by resolution of its board of directors or other governing board or body as having authority to tape such action 5.04 Appointment of Designated Representative; Action b .2 the Designated Re�re,esent tine. The Employer hereby designates and authorizes its Designated Representative to provide Instructions to the Trustee on behalf of the Employer, including to place orders for the purchase and sale of securities, and authorizes the Trustee to disburse funds on behalf of the Employer upon Instruction from such Designated Representative and perform as otherwise described in this Trust Agreement. The Employer hereby also authorizes and directs the Trustee to pay for securities and receive payment from the sale of securities or other investment transactions arising out of Instructions of the Designated Representative. Designation of a Designated Representative is subject to the following provisions: (a) The Employer agrees that the Trustee may rely on Instructions from the Designated Representative, and the Employer agrees that the Trustee shall be under no duty to make an investigation with respect to any Instructions received from the Designated Representative; (b) Except to the extent delegated to an Investment Manager or another trustee, the Employer is solely responsible for managing the investment of the Trust Fund and for the direction and supervision of the Designated Representative. All Instructions, directions, and confirmations received by the Trustee from a Designated Representative shall be deemed to have been authorized by the Employer; (c) The Employer agrees that a Designated Representative is not an agent of the Trustee; and (d) The Employer may remove a Designated Representative and designate a new representative at any time by written notice to the Trustee in a form satisfactory to the Trustee. The Employer will give the Trustee prompt written notice of any change in the identity or authority of any Designated Representative. Removal of a Designated Representative will not have the effect of canceling any Instruction that has been received by the Trustee from the Designated Representative prior to the date that notice of removal is received by the Trustee. Until written notice of such change is received, the Trustee may conclusively rely upon and be protected in acting on the latest identification provided to it without further inquiry or verification. 42-- Resolution No. 2009 -89 Exhibit B Page 17 of 28 ARTICLE VI THE TRUSTEE 6.01 Reliance on written Instrument. The Trustee shall be fully protected in relying on the identity of the Plan Administrator identified above, and the identities of successors to such Person or others authorized to provide Instructions to the Trustee to the extent that the Trustee is provided Instructions regarding appointment of same. The Trustee shall be fully protected in acting upon any instrument, certificate, or paper believed by it to be genuine and to be signed or presented by the proper Person or Persons. The Trustee shall be under no duty to make any investigation or inquiry as to any statement contained in any such writing but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained. 6.02 Action -by the Trustee. The Trustee may delegate ministerial acts, specifically including, but not limited to, the signing of checks, endorsement of stock certificates, production of statements and accountings provided for hereunder, execution of transfer instruments and any other document, and the signing of tax returns and governmental reports to be done by any agent of the Trustee. 6.03 Consultation with Counsel and Accountant. The Trustee may from time to time consult with counsel or an accountant who may also be counsel or an accountant for an Employer, and as long as the Trustee acts in conformity with the standards of Section 4.01 hereof, the opinion of such counsel or accountant with respect to legal matters or accounting matters, respectively, shall have full and complete authorization and protection in respect of any action taken or suffered by the Trustee in good faith and in accordance with such opinion. 6.04 Bond Not ReAuired. The Trustee shall not be required to furnish any bond or security for the performance *of its powers and duties hereunder. The cost of any bond required by applicable law shall be paid as an expense of the Trust Fund, unless paid by the Employer. 6.05 returns Re arts and Information. Except as set forth in a written agreement between the parties, the Plan Administrator shall be responsible for the preparation and filing of all returns, reports, and information required of the Trust or Plan by law, including (as applicable) Forms 990, 990-T, W -2, or any other information or tax returns. The Plan Administrator shall also be responsible for making any disclosures to Participants required by law. 6.06 Indemnification. The Plan Sponsor, Plan Administrator and Employer each hereby agree to indemnify, defend and hold the Trustee and its affiliates, and their respective directors, managers, officers, employees, agents and other representatives (the "Indemnified Parties ") harmless from any and all losses, costs, excise taxes, expenses, fees, liabilities, damages, claims of any nature whatsoever, including but not limited to legal expenses, court costs, legal fees, costs of or associated with enforcement actions, investigations, suits, and regulatory or other actions and appeals thereof resulting from their reliance upon any certificate, notice, confirmation, or Instruction, purporting to have been delivered by the Plan Administrator, a Fiduciary, an Investment Manager, or a Designated Representative hereunder ( "Plan Representative(s)" ). The Plan Sponsor, Plan Administrator and Employer each waive any and all claims of any nature each now has or may have against the indemnified Parties, which arise, directly or indirectly, from any action that the Trustee takes in good faith in accordance with any certificate, notice, confirmation, or Instruction from a Plan Representative. The Plan Sponsor, Employer and the Plan Administrator also hereby agree to indemnify, defend and hold the Indemnified Parties harmless from and against any and all losses, costs, excise taxes, expenses, fees, liabilities, damages, claims of any nature whatsoever, including but not limited to legal expenses, court costs, legal fees, costs of or associated with enforcement actions, investigations, suits, and regulatory or other actions and appeals thereof, arising, 591! Resolution No. 2009 -89 Exhibit B Page 18 of 28 directly or indirectly, out of any loss or diminution of the Trust Fund resulting from changes in the market value of the Trust Fund assets; reliance, or action taken in reliance, on Instructions from the Employer or one or more Plan Representatives; any exercise or failure to exercise investment direction authority by the Employer or by a Plan Representative; the Trustee's refusal on advice of counsel to act in accordance with any investment direction provided by the Employer or a Plan Representative; any other act or failure to act by the Employer or a Plan Representative; any prohibited transaction due to any actions taken or not taken by the Trustee in reliance on Instructions from the Employer or a Plan Representative; or any other act the Trustee takes in good faith hereunder that arises under this Trust Agreement or the administration of the Trust Fund. The Trustee shall not be liable to the Employer, Plan Sponsor or a Plan Representative for any act, omission, or determination made in connection with this Trust Agreement except for its gross negligence or willful misconduct. Without limiting the generality of the foregoing, the Trustee shall not be liable for any losses arising from its compliance with Instructions from the Employer, Plan Sponsor or a Plan Representative; or executing, failing to execute, failing to timely execute or for any mistake in the execution of any Instructions, unless such action or inaction is by reason of the gross negligence or willful misconduct of the Trustee. The provisions of this Section 6.06 shall survive the termination, amendment or expiration of this Trust Agreement. 6.07 Acts of Prior Trustees. The assets of the Trust Fund or evidence of ownership shall be held by the Trustee under the terms of the Plan and this Trust Agreement. If the assets represent amounts transferred from another trustee, the Trustee named hereunder shall not be responsible for any actions or inactions of prior fiduciaries, including the review of the propriety of any investment under the former trust; said review to be the responsibility of prior fiduciaries. The Trustee named hereunder shall not be required to examine or question in any way the administration of the Trust prior to its appointment. 6.08 Plan Assets Not Feld in Trustee's Trust. If, as provided in the Plan, other trustees of separate trusts under the Plan may be appointed, the Trustee under this Trust Agreement shall have no duties or responsibilities for Plan assets not held in the Trust by the Trustee. ARTICLE VII DISPUTE RESOLUTION The parties acknowledge that this Trust Agreement evidences a transaction involving interstate commerce. Except as provided in Section 10.02, the parties agree that any misunderstandings, controversies or disputes arising from this Trust Agreement shall be decided by binding arbitration which shall be conducted, upon request by either party, in Denver, Colorado, before three (3) arbitrators designated by the American Arbitration Association (the "AAA"), in accordance with the terms of the Commercial Arbitration Rules of the AAA and, to the maximum extent applicable, the United States Arbitration Act (Title 9 of the United States Code). The decision of the majority of the arbitrators shall be binding and conclusive upon the parties. Notwithstanding anything herein to the contrary, either party may proceed to a court of competent jurisdiction to obtain equitable relief at any time, other than to stay arbitration. Further, any such court proceeding shall only be brought in the federal district court in Denver, Colorado. The arbitration panel shall have no authority to award special, indirect, consequential, punitive or other damages not measured by the prevailing pasty's actual damages. To the maximum extent practicable, an arbitration proceeding under this Trust Agreement shall be concluded within one hundred eighty (180) days of the filing of the dispute with the AAA. The provisions of this arbitration clause shall survive any termination, amendment or expiration of the Trust Agreement and if any term, -14- Resolution No. 2009 -89 Exhibit B Page 19 of 28 covenant, condition or provision of this arbitration clause is found to be unlawful or invalid or unenforceable, the remaining parts of the arbitration clause shall not be affected thereby and shall remain fully enforceable. Judgment on any award rendered by the arbitration panel may be entered in any court having competent jurisdiction. The parties shall each pay one -half of the forum and arbitrators' fees. The prevailing party in the arbitration, or in any court proceeding, shall be entitled to its reasonable attorney's fees and expenses from the non - prevailing party. ARTICLE VIII ACCOUNTS AND RECORDS The Trustee shall maintain true, accurate, and detailed accounts of all investments, receipts, disbursements and other transactions hereunder. All accounts, books, and records relating thereto shall be open to inspection and may be audited from time to time by any person designated by the Plan Administrator during the Trustee's regular business hours as mutually agreed to in writing by the parties. Within thirty (30) days after the close of the calendar year of the Trust Fund, within thirty (30) days after the removal or resignation of the Trustee, and from time to time as mutually agreed to by the Plan Administrator and the Trustee, the Trustee shall file an account with the Plan Administrator which shall show: (a) the assets of the Trust Fund, as of the end of such period, and current value thereof; and (b) all investments, receipts, disbursements, and other transactions effected by it during such calendar year or other period for which such accounting is filed. The Plan Administrator may approve such accounting by notice of approval delivered to the Trustee or by failure to express objection to such accounting delivered to the Trustee within sixty (60) days from the date upon which the accounting is delivered to the Plan Administrator. Upon the expiration of sixty (60) days from the date of filing such account with the Plan Administrator or upon earlier specific approval thereof by the Plan Administrator, the Trustee, as between each Employer, the Plan Administrator and the Trustee, shall be forever released and discharged from all liability as to all items and matters included in such accounting as if settled by the decree of a court of competent jurisdiction, except with respect to any such action or transaction to which the Plan Administrator shall within such sixty (60) day period, file written objections with the Trustee. The liability of the Trustee to persons other than an Employer or the Plan Administrator shall be limited to actions under statutory authority brought within the period permitted by law for the bringing of such action. Nothing herein contained, however, shall be deemed to diminish the right of the Trustee to have its accounts j udicially settled by a court of competent jurisdiction. In any case, the Trust Fund shall be valued by the Trustee at the frequency agreed to by the Trustee and the Employer, but in any event not less than annually at the fair market value as of the close of business at the end of the last business day of the fiscal year of the Plan. Except as specified below, in the absence of fraud, the Trustee's valuation of the Trust Fund shall be conclusive. ARTICLE IX FEES AND EXPENSES 9,01 Expenses of Administration. [a'I Generals . The Trustee shall be paid such reasonable compensation as shall from time to time be agreed upon by the Employer and the Trustee. Compensation payable hereunder shall include any earnings on funds retained pursuant to Section 4.02(d)(18) hereof. Such compensation may be paid by the Employer or the Designated Representative or, upon receipt of Instructions from either, may be deducted from the Trust Fund. M12 Resolution No. 2009 -89 Exhibit B Page 20 of 28 Subject to the Plan Administrator's approval, the Trustee may pay outside counsel, independent accountants, actuaries, and other outside persons engaged by it, such compensation and expenses as are reasonable and proper as expenses of administration of the Trust Fund. All such compensation and all expenses of administration of the Trust, and the Plan of which it is a part, including fees of outside counsel, independent accountants, and actuaries, shall be a charge against and may be withdrawn by the Trustee out of the Trust Fund. However, nothing herein shall prohibit the Employer from paying such amounts if the Trust Fund is sufficient and the Employer so elects. The Trustee may charge the Trust for the cost of all securities purchased or received against a payment and credit the Trust with the proceeds received from the securities sold or delivered against the payment. For any trades not settled immediately upon placement, the Trustee shall have the right to sell securities from the Trust in a reasonably prudent fashion sufficient to recover any funds advanced. Expenses incurred by the Trustee that it believes to be subject to indemnification under Section 6.06 of this Trust Agreement shall be paid by the Employer upon the Trustee's request, provided that the Employer may delay payment of any amount in dispute until such dispute is resolved according to the provisions of Article VII hereof. Such resolution may include the award of interest on unpaid amounts determined to be payable to the Trustee under this Section. The Trustee shall not beheld liable for its use of Plan assets to the extent that the use of such assets is permitted by applicable law. In the event a successor Trustee is named pursuant to Section 10.02, prior to transferring assets to such successor, the Trustee is authorized to reserve such sum of money as it may deem advisable for payment of its fees and expenses in connection with the settlement of its accounts or other proper Trust expenses, and any balance of such reserve remaining after the payment of such fees and expenses shall be paid to the successor Trustee. If the Trust applies to a court for appointment of a successor Trustee, as permitted under Section 10.02, the Trustee shall be entitled to reasonable compensation and reimbursement for costs associated with bringing such action. (b) Disclosure. The Designated Representative shall disclose any compensation, reimbursements, fees and expenses payable from the Trust Fund pursuant to Section 9.01(x), and any changes to such amounts, to the Employer and the Participants, as required by applicable law. 9.02 Authorization with Respect to Taxes. The Trustee may execute, as trustee, any declarations or certificates pertaining to the Trust that may be required under any tax law(s) or governmental regulation(s) now or hereafter without prior approval of the Employer. The Trustee shall notify the Plan Administrator or the Designated Representative of any tax levied upon or assessed against the Trust Fund of which the Trustee has knowledge. If the Trustee receives no Instructions from the Plan Administrator or the Designated Representative, the Trustee may pay the tax from the Trust Fund. If the Plan Administrator or the Designated Representative wishes to contest the tax assessment, it shall give appropriate and timely instructions to the Trustee. The Trustee shall not be required to bring any legal actions or proceedings to contest the validity of any tax assessments unless the Trustee has been indemnified to its satisfaction against loss or expense related to such actions or proceedings, including reasonable attorney's fees. ARTICLE x RESIGNATION OR REMOVAL OF TRUSTEE;- SUCCESSOR TRUSTEE 10.01 Resignation; Removal of the Trustee. The Trustee may resign at any time by giving at least thirty (30) days' prior notice of such resignation to the Employer, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. The SUM Resolution No. 2009 -89 Exhibit B Page 21 of 28 Employer may remove the Trustee, with or without cause, upon giving at least thirty (30) days' prior notice to the Trustee, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. As directed by Employer, notice of removal of the Trustee may be provided by the Designated Representative. 10.02 A ointment of Successor Trustee. The Employer shall appoint a successor Trustee or additional Trustees to fill the vacancy occurring as the result of the resignation or removal of the Trustee. The Employer shall designate the successor Trustee by an instrument, delivered by Employer or the Designated Representative to the Trustee so removed and to the successor Trustee, the Plan Administrator and all other fiduciaries of the Plan that have been identified in Instructions provided to the Trustee. The successor Trustee shall have all of the rights, powers, privileges, liabilities, and duties of a Trustee as set forth in this Trust Agreement. If either party has given notice of termination as provided under this Trust Agreement, and upon the expiration of the advance notice period no other successor Trustee has been appointed and has accepted such appointment, this provision shall serve as (a) notice of appointment as Trustee of the Designated Representative if authorized under state law to serve as a trustee, and (b) as acceptance by the Designated Representative of that appointment. If no appointment of a successor is made by the Employer within thirty (30) days after the resignation or removal of the Trustee, after notice to the other party, the Trustee or the Employer may apply to any court of competent jurisdiction for appointment of a successor. The Trustee shall be furnished with notice from the Employer or the court, as the case may be, of the appointment of the successor, and shall also be furnished with evidence of the successor's acceptance of trusteeship. 10.03 Transfer of Assets to Successor Trustee. Upon acceptance of such appointment by a successor Trustee, the Trustee shall assign, transfer, pay over and deliver the assets then constituting the Trust Fund to the successor Trustee. The Trustee is authorized, however, to reserve such reasonable sum of money, as to it may seem advisable, to provide for any sums chargeable against the Trust Fund for which it may be liable, or for its fees and expenses in connection with the settlement of its account or otherwise, and any balance of such reserve remaining after payment of such fees and expenses shall be paid over to the successor Trustee. If the reserve is not sufficient for all amounts otherwise payable hereunder, the resigning or removed Trustee shall be entitled to reimbursement for any deficiency from the successor Trustee and the Employer, which shall be jointly and severally liable therefor. Each, successor Trustee shall succeed to the title of all securities or other property then held in the Trust Fund and vested in its predecessor without the signing or filing of any further instrument, but any resigning or removed Trustee shall execute all documents and do all acts necessary to vest such title of record in any successor Trustee. The terminating Trustee shall transfer all property of the Trust Fund then held by it to such successor Trustee. The terminating Trustee may require as a condition of making such transfer that the successor Trustee present evidence that any bonding requirement under applicable law has been met and may require that the Employer provide the Trustee with an indemnification against any losses arising from the replacement of the Trustee. 10.04 Terminating Trustee's Accounting. within thirty (30) days after the transfer to the successor Trustee, the terminating Trustee shall provide the Employer with an account in the form and manner prescribed for the annual account by Article VIII hereof. Unless the Employer files written objections with the Trustee within sixty (60) days after such account has been mailed or otherwise delivered, the account shall be deemed to have been approved by the Employer. 10.05 Changes in Dr anization of Trustee. Any corporation, banking association or trust company into which a corporate Trustee may be merged, converted or with which it may be consolidated, or any corporation, banking association, or trust company, resulting from any merger, reorganization or consolidation to which a corporate Trustee may be a party, or any corporation, banking association or -17- Resolution No. 2009 -89 Exhibit B Page 22 of 28 trust company to which all or substantially all of the trust business of a corporate Trustee may be transferred shall be the successor of the corporate Trustee `hereunder without the execution or filing of any instrument or the performance of any other act and with the same powers and duties as conferred upon the Trustee hereunder. In any such event, it shall not be necessary for the Trustee or any successor Trustee to give advance notice thereof to any person, and any requirements, statutory or otherwise, that any such notice shall be given are hereby waived. Notwithstanding the foregoing, the Trustee agrees to provide the Employer with notice in writing promptly after any such organizational change of the Trustee. 10.06 Employer Bankru tc . (a) If the Employer becomes insolvent, files for or becomes subject to bankruptcy or a similar proceeding in state or federal court, the Employer will notify the Trustee in writing as soon as possible. The notification will include confirmation of the individual(s) who will direct the Trustee. If, within sixty (60) days of such filing the Employer does not notify the Trustee, the Trustee may invoke the provisions of Section 10.06(c). (b) Notwithstanding any provision hereof to the contrary, in the case of bankruptcy, insolvency, or dissolution of the Employer, the Trustee will have the right to petition. a court of competent jurisdiction to appoint a new Trustee, the costs of such action being payable from the Trust Fund. (c) In the case of dissolution of the Employer, or at any other time that the Employer does not respond to requests from the Trustee for confirmation of the individuals who will provide direction to the Trustee, the Trustee may, in its sole discretion, assume the Plan has been terminated and distribute assets according to applicable law. Before the Trustee may make such assumption, however, the Trustee will send to the last known address of the Employer, and the individuals who last had authority for providing direction to the Trustee, via certified mail, a written notice of the Trustee's intent to begin such action. The Trustee will then wait at least thirty (30) days before beginning such action. (d) If the Trustee receives notice of the Employer's bankruptcy, insolvency or dissolution (either by the Employer or a court of competent jurisdiction), or if the Plan has been deemed abandoned as described in Section 10.06(c) above, any fees and other expenses relating to the provision of services under this Trust Agreement (whether current or overdue) may be immediately deducted from the Trust Fund. ARTICLE XI AMENDMENT OF TRUST This Trust Agreement may be amended by an instrument executed by the Plan Sponsor and the Trustee, and the provisions of any such amendment may be made applicable to the Trust Fund as constituted at the time of the amendment as well as to any part of the Trust Fund subsequently acquired. Any amendment shall, unless otherwise provided therein, become effective upon execution by the Plan Sponsor and the Trustee. However, no amendment shall alter the duties, liabilities, or compensation of the Trustee without its consent. Nor shall any amendment cause any part of the Trust Fund to revert to or be recoverable by the Employer or to be used for or diverted to purposes other than the exclusive benefit of Participants and their dependents and Beneficiaries, except to the extent permitted by law and the Plan. An amendment to this Trust Agreement that is mutually agreed to hereunder by the Plan Sponsor and the Trustee shall be binding upon all Employers as of the effective date of such amendment. -1 S- Resolution No. 2009 -89 Exhibit B Page 23 of 28 ARTICLE XII TERMINATION OF TRUST 12.01 Termination of Trust Fund. This Trust Agreement and the Trust created hereby may be terminated at any time by the Employer upon thirty (3 0) days notice. 12.02 Continuation bv an Employer' s Successor. Any corporation or other business entity succeeding to the interest of an Employer by sale, transfer, consolidation, merger, or bankruptcy, may elect to continue this Trust or any separate trust then existing hereunder, subject to the approval of the Employer, by adopting this Trust Agreement and assuming the duties and responsibilities of the Plan and Trust, or such corporation or other business entity may establish a separate plan and trust for the continuation of benefits for its employees, in which event, subject to the approval of the Employer, the Trust assets held on behalf of the employees of the prior employer shall be transferred to the trustee of the new trust. 12.03 Li uidation of Trust. The Employer reserves the right to terminate the Trust upon notice in writing delivered to the Trustee as described above; provided, however, that at no time may any part of the corpus or income of the Trust Fund be used for, or diverted to, purposes other than for the exclusive benefit of Participants and their Beneficiaries under a Plan, and defraying the administrative expenses of the Plan until all Plan liabilities have been satisfied, except as set forth in Section 2.04. If the Trust is terminated, the Trustee shall distribute all cash, securities and other property then constituting the Trust Fund, less any amount constituting charges against the Trust Fund, in such manner and at such times as may be prescribed by the Plan or Plans. If a Plan is terminated, this Trust Agreement shall nevertheless continue in effect. If, upon termination of a Plan, there remains a balance in the Trust Fund with respect to the Plan, the Trustee shad apply and distribute such balance, less the amount of any charges against those assets arising under the terminated Plan, in such manner and at such times as the Employer shall determine. Notwithstanding the foregoing, in no event shall any part of the corpus or net earnings of the Trust Fund inure to the benefit of any individual other than through the payment of benefits described or otherwise provided in Section 501(c)(9) of the Code. Any assets remaining after payment of all obligations of the Trust and satisfaction of liabilities to Participants and their Beneficiaries shall be used exclusively to provide additional benefits permitted under Section 501(c)(9). The Trustee may condition the transfer or distribution of any assets of the Trust Fund in its sole discretion, on the indemnification of the Trustee against any liability arising from such transfer or distribution that is provided by the Employer or may require the Employer to post a bond sufficient to protect the Trustee against such liability. From the date of termination of the Plan and until the final distribution of the Trust assets, the Trustee shall continue to have all the powers provided under this Trust Agreement that are necessary or desirable for the orderly liquidation and distribution of the Trust Fund. ARTICLE XIII MISCELLANEOUS 13.01 A 1icable Law. (a) Choice of Law. Except where inconsistent with the express provisions hereof, the powers and duties of the Trustee and all questions of interpretation, construction, operation, and effect 110 Resolution No. 2009 -89 Exhibit B Page 24 of 28 of this Trust Agreement shall be governed by the laws of the State of Colorado. All contributions to the Trustee shall be deemed to take place in the State of Colorado, and the Trustee shall be liable to account in the courts of that state. (b) Choice of Venue. All controversies, disputes, and claims arising under this Trust Agreement and not otherwise resolved will be submitted to the United States District Court for the district where the Trustee has its principal place of business, and by executing this Trust Agreement, each party hereto consents to that court's exercise of personal jurisdiction over them 13.02 Evidence. Evidence required of anyone under this Trust Agreement may be by certificate, affidavit, document, facsimile, E -mail or other form which the person acting in reliance thereon considers to be pertinent and reliable, and to be signed, made, or presented by the proper party. 13.03 Notices. The address of the Employer shall be as set forth in this Trust Agreement, but may be changed by providing written notice to the Trustee sent by certified mail, return receipt requested. 13.04 Limitation on Claims. No claim may be made by the Employer against the Trustee for any lost profits or any special, indirect or consequential damages in respect of any breach or wrongful conduct in any way related to this Trust Agreement. 13.05 Severability of Provisions. Should any provision of this Trust Agreement be held invalid or illegal for any reason, such illegality or invalidity shall not affect the remaining provisions of this Trust Agreement, but shall be fully severable, and the Trust Agreement shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. 13.06 Trust ualification. The Trust is intended to qualify as a tax - exempt trust under Code Section 501(a) such that it may be part of a plan that is qualified under Code Section 501(c )(9) as a "voluntary employees' beneficiary association." The Employer shall be solely responsible for ensuring the compliance of the Plan and Trust with the applicable sections of the Code, and the Trustee may assume, unless advised to the contrary that the Plan is qualified and that the Trust is entitled to tax exemption. If the Plan ceases to be qualified within the meaning of Code Section 501(c)(9), the Employer shall notify the Trustee of same as promptly as is reasonable, and such notice shall include Instructions to the Trustee as to the disposition of the assets remaining in the Trust. If the qualification of the Trust as exempt from tax under Section 501(x) of the Code is denied, the Trust Agreement may be restated as a governmental trust under Section 115 of the Code, and in such event, all assets of the Plan will remain in the Trust Fund pursuant to the terms of the restated Trust Agreement. 13.07 Construction of Trust Agreement. If and whenever the Trustee be, in good faith, in mom doubt as to the proper construction or interpretation of this Trust Agreement, or any other question that may arise during the administration of the Trust herein created, the Trustee is authorized to resolve all such doubts and questions in such manner as it may deem proper, without the necessity of resorting to a court for construction or instructions, and all decisions so made shall be binding and conclusive on all persons ever interested hereunder. In addition, the Trustee may apply to the Plan Administrator for Instructions, directions, authorizations or information, and the Trustee may demand assurances satisfactory to it that any action that it is directed to take will not adversely affect the tax exemption of the Trust; provided, however, that no such assurances shall be required if, in the opinion of counsel (which counsel may also be counsel for the Employer), such action does not adversely affect the tax exemption of the Trust. This Trust Agreement shall be binding upon all persons who are ever entitled to such benefits hereunder, their heirs, executors, administrators and legal representatives, and upon all Employers and their successors, and upon the Trustee and its successors. -20- Resolution No. 2009 -89 Exhibit B Page 25 of 28 13.05 Spendthrift Provisions. Any claimed interest of a Participant, or of a dependent or Beneficiary of a Participant, in the Trust Fund or to a benefit from the Plan shall not be subject to the claims of any creditors or others, or to legal or equitable process, and may not be voluntarily or involuntarily alienated, encumbered or assigned. Neither the Trust Fund nor any benefits hereunder shall be liable for or subject to the debts, contracts, liabilities, engagements, or torts of any person to whom such benefits or funds are payable, nor shall the Trust Fund or any benefits hereunder be considered an asset of such person in the event of his bankruptcy. 13.09 Title of Trust Assets. The legal and equitable title and ownership of all assets at any time constituting a part of the Trust Fund shall be and remain with the Trustee, and neither any Employer nor any Participant in the Plan (or any person who may be entitled to benefits under the Plan) shall ever have any legal or equitable estate therein, save and except that a Participant shall be entitled to receive distribution as and when lawfully made under the terms hereof. 13.10 Ri hts Determined from Entire Instrument. This Trust Agreement embodies the entire agreement and understanding of the parties relating to the subject matter hereof. This Trust Agreement, for convenience only, has been divided into Articles and Sections, but the rights, powers, duties, privileges, and other legal relationships shall be determined from this Trust Agreement as an entirety and without regard to the division into Articles and Sections or to the headings prefixing such Sections. 13.11 waiver. No waiver by either party of any failure or refusal to comply with an obligation hereunder shall be deemed a waiver of any other obligation hereunder or any subsequent failure or refusal to comply with any other obligation hereunder. 13.12 word Usage. whenever appropriate, words used in this Trust Agreement in the singular may mean the plural, the plural may mean the singular, and the masculine may mean the feminine. The words "herein," "hereof, " "hereto " and "hereunder" shall refer to this Trust Agreement. 13.13 Assignment. This Trust Agreement, and any of the rights and obligations hereunder, may not be assigned by the Employer without the prior written consent of the other party(ies), and such consent may be withheld in any such party's sole discretion. The Trustee may assign this Trust Agreement in whole or in part, and any of its rights and obligations hereunder without the consent of the Employer, provided notice of such assignment is sent to the Employer at least thirty (30) days prior to the effective date of any such assignment. All provisions in this Trust Agreement shall extend to and are binding upon the parties hereto and their respective successors and permitted assigns. 13.14 Force M ai eur e. The Trustee may delay the processing of any transaction provided for hereunder due to a Force Majeure. 13.15 Complete Agreement. This Trust Agreement and any schedule of fees provided to the Trustee by the Employer or the Plan Administrator embody the entire agreement and understanding of the parties relating to the subject matter hereof. 13.16 Confidential. The parties to this Trust Agreement recognize that in the course of implementing and providing the services described herein, each party may disclose to the other Confidential Information. All such Confidential Information, individually and collectively, and other proprietary information disclosed by a party shall remain the sole property of the party disclosing the same, and the receiving party shall have no interest or rights with respect thereto. Each party agrees to maintain all such Confidential Information in trust and confidence to the same extent that it protects its own proprietary information, and not to disclose such Confidential Information to any third party without -� 1- Resolution No. 2009 -89 Exhibit B Page 26 of 28 the written consent of the other party(ies). Each party further agrees to take all reasonable precautions to prevent any unauthorized disclosure of Confidential Information. In addition, each party agrees not to disclose or make public to anyone, in any manner, the terms of this Trust Agreement, except as required by law, without the prior written consent of the other party(ies). 13.17 USA Patriot Act Notification. The following notification is provided to Employer pursuant to Section 326 of the USA Patriot Act of 2001, 31 U.S.C. Section 5318: IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NE'L]LT ACCOUNT. To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person or entity that opens an account, including any deposit account, treasury management account, loan, other extension of credit, or other financial services product. what this means for the Employer: when Employer opens an account, if the Employer is an individual, the Trustee will ask for the Employer's name, taxpayer identification number, residential address, date of birth, and other information that will allow the Trustee to identify Employer, and, if Employer is not an individual, Trustee will ask for the Employer's official name, taxpayer identification number, business address, and other information that will allow the Trustee to identify the Employer. The Trustee may also ask, if the Employer is an individual, to see a valid driver's license or other identifying documents, and, if the Employer is not an individual, to see the Employer's legal organizational documents or other identifying documents. 3.1 S Execution in Counterparts. This Trust Agreement may be executed in any number of counterparts, each of which shall be deemed an original and no other counterpart need be produced. Telephonic or electronic facsimile copies of original signatures, writings, or initials on this Trust Agreement shall be as valid as the original signatures, writings, or initials. IN WITNESS VaI REOF, the parties have caused this Trust Agreement to be executed by their duly authorized officers effective as of the date and year first written above. PLAN SPONSOR/EIVIPLOYER MG TRUST COMPANY, LLC Tit DESIGNATED REPRESENTATIVE By: Title: Date: By: Title: Date: Resolution No. 2009 -89 Exhibit B Page 27 of 28 077296, 000002, 102517443.2 10/16108 _23. Resolution No. 2009 -89 Exhibit B Page 28 of 28 MASTER. SERVICES AGREEMENT THIS MASTER SERVICES AGREEMENT ( "Agreement ") is entered into and effective January 1, 2010 (the "Effective Date ") by and between Administration Resources Corporation, a Minnesota Corporation with a principal business address of 11490 Xeon St. NW, Suite 200, Coon Rapids, Minnesota 55448, dba OptumHealth Financial Services, ( "Plan Supervisor "), and City of Rancho Palos Verdes ( "Plan Sponsor "), with a principal address of 30940 Hawthorne Blvd, Rancho Palos Verdes, California 90275. WHEREAS, Plan Supervisor, itself and through its affiliates, is engaged in business as a provider of high quality financial, recordkeeping and administrative products and services; and WHEREAS, Plan Sponsor desires to acquire from Plan Supervisor, and Plan Supervisor desires to provide to Plan Sponsor, certain products and services subject to the terms and conditions set forth herein in this Agreement. NOW, THEREFORE, in consideration of the promises and covenants contained herein and other good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties mutually agree to the following terms and conditions: 1. Services 1.1 Plan Supervisor Services. Plan Supervisor agrees to make available and perform, directly or through one or more of its affiliates, and Plan Sponsor agrees to accept those certain services identified in one or more schedules to this Agreement (collectively "Services "). Plan Supervisor will provide or make available such Services to Plan Sponsor in accordance with the terms and conditions of this Agreement and the applicable schedule (collectively "Schedule ") and each Schedule executed by Plan Supervisor and Plan Sponsor shall be deemed to incorporate all of the terms and conditions of this Agreement. In the event that a provision in a Schedule conflicts with, waives, limits or releases a provision in this Agreement, the provision of this Agreement will prevail unless the Schedule specifically states that the provision in the Schedule will prevail. 1.2 Customized Services. During the Term of this Agreement, Plan Sponsor may request in writing that Plan Supervisor provide specific customized services ( "Customized Services ") or additional services ( "Additional Services ") that Plan Supervisor does not already offer or provide to Plan Sponsor, including requests for custom interfaces to its internal or operational systems. References to "Services" in this Agreement shall include Customized and/or Additional Services. Within thirty (30) days of the request, Plan Supervisor will respond in writing with an initial response based on the information provided by Plan Sponsor. Plan Supervisor will, in its sole discretion, determine whether it will provide the requested Customized and/or Additional Services. If Plan Supervisor elects to provide such Customized and/or Additional Services, the parties will mutually agree on a statement of work ( "SOW "), the form of which will be provided by Plan Supervisor, which will, at a minimum: (a) detail the services to be provided and the term for which they are being provided; (b) the fees to be paid by Plan Sponsor to Plan Supervisor for such services; (c) any service level commitments to which the parties agree in connection with such services; and (d) any other terms and conditions to which the parties agree. Each SOW executed by Plan Supervisor and Plan Sponsor shall be deemed to incorporate all of the terms and conditions of this Agreement and in the event that a provision in an SOW conflicts with, waives, limits or releases a provision in this Agreement, the provision of this Agreement will prevail unless the SOW specifically states that the provision in the SOW will prevail. 1.3 Improvements and Modification of Services. Plan Supervisor reserves the right to upgrade, improve, modify or discontinue any Services provided or made available to Plan Sponsor hereunder and in any Schedule and SOW, including but not limited to, the improvement or modification of any Customized Services, Additional Services, facility, system, equipment, and personnel in connection therewith. Subject to the terms City'of Rancho Palo Verdes 1 -1 -10 Resolution No. 2009 -89 Exhibit C Page 1 of 23 and conditions set forth herein, after the Effective Date, Plan Sponsor may request changes to Services being provided by Plan Supervisor, and if Plan Supervisor agrees to provide the requested changes, Plan Sponsor shall bear all charges, fees, and costs, at Plan Supervisor's then - current time and materials rates for professional development services, for each hour and all materials associated with any such changes. 1.4 Provision of Services and Standard of Care. In performing the Services contemplated under this Agreement, each Schedule and any applicable SOW throughout the Initial Term and each Renewal Term, Plan Sponsor shall not contract with any other party to provide services similar to the Services and Plan Supervisor shall have the sole and exclusive right to provide the Services, including but not limited to, all facilities, systems, equipment, networks and personnel in connection therewith. For so long as no event of default by Plan Sponsor has occurred and is continuing, Plan Supervisor agrees to provide the Services in accordance with the standards set forth in each Schedule and, if applicable, SOW (the "Standards "). In the absence of such Standards, Plan Supervisor shall exercise ordinary care and diligence as typically provided in the normal course and scope of business by the same or a si Sponsor agrees to execute and deliver to Plan Supervisor all documents and provide all testimony to register and enforce, solely in the name of Plan Supervisor, any rights in the Developed IP. (e) License to Use Intellectual Pro e . Plan Sponsor hereby grants to Plan Supervisor a nonexclusive limited license to use Plan Sponsor's Intellectual Property for advertising and other purposes necessary or desirable to provide the Services. Plan Supervisor is authorized to permit a third party to use Plan Sponsor's Intellectual Property to the extent needed or desirable to provide Services to Plan Sponsor hereunder. (f) Systems. The Plan Supervisor System contains information and computer software that are proprietary and Confidential Information of Plan Supervisor, their suppliers and licensors. Plan Sponsor agrees not to attempt to circumvent the devices employed by Plan Supervisor to prevent unauthorized access thereto, including but not limited to, alterations, decompiling, disassembling, modifications and reverse engineering thereof. "Plan Supervisor System" shall mean Plan Supervisor's systems and equipment obtained for or used by Plan Supervisor from time to time to perform tasks and services related to this Agreement, including without limitation computers and related hardware, hardware configurations, operations systems and related firmware, proprietary software and other software and related algorithms, and other data and facilities (including internet connectivity, as applicable), together with any modifications, enhancements and updates thereto. 2. Taxes and Terms of Payment 2.1 Fees. Plan Sponsor hereby agrees to pay Plan Supervisor those amounts set forth in each Schedule and applicable SOW for the Services, including but not limited to, any Additional and Customized Services. All fees shall become effective as indicated on the applicable Schedule and/or Sow and Plan Supervisor shall provide Plan Sponsor with at least sixty (60) days written notice prior to the effective date of any change, modification or waiver of any such fees. Such notice shall act to amend, and shall be a part of, this Agreement and any applicable Schedule or Sow. Plan Sponsor shall pay Plan Supervisor for any additional billable services, which Plan Sponsor requests and Plan Supervisor performs and which are not specified in any Schedule or Sow, at Plan Supervisor's then - current time and materials rates. Plan Sponsor will reimburse Plan Supervisor for all reasonable out of pocket expenses incurred in performing under this Agreement, including transportation, hotel accommodations, meals, telephone calls, and overnight couriers. Expenses reimbursed under this Section 2.1 are not refundable by Plan Supervisor to Plan Sponsor for any reason. 2.2 Invoices. Plan Supervisor will send an invoice to Plan Sponsor on a monthly basis for all Services applicable to each month during the Term, which shall include charges for all Services to be provided during the current month for which a recurring fee is charged, and for time and material expenses incurred in the prior month. Any invoice sent by Plan Supervisor to Plan Sponsor shall' be stated in, and all payments made in, U.S. dollars. Plan Sponsor agrees to pay all amounts invoiced by Plan Supervisor within thirty (30) days after the date of each invoice. Payments not received by the due date shall bear interest at a rate equal to the lesser of one and one -half percent (11/2%) per month, or the maximum rate allowed by law. 2.3 Fundin . Plan Supervisor shall have no responsibility, risk, liability or obligation for the funding of any plan benefits. The responsibility and obligation for funding plan benefits shall be the sole and total responsibility of the Plan Sponsor. Plan Supervisor is not responsible for requiring that any contributions be made, or for determining that the contributions that are received by any trust comply with the terms of any plan. Plan Sponsor understands and agrees that Plan Supervisor shall not be obligated to at any time extend or otherwise grant any extension of credit or other financial accommodation to Plan Sponsor in connection with the Services provided herein. 2.4 Taxes. `Taxes" shall mean any manufacturers, sales, use, gross receipts, excise, personal property or similar tax or duty, including any interest or penalty thereon, assessed by any governmental or quasi- City of Rancho Palo Verdes 1 -1 -1 D 3 Resolution No. 2009 -89 Exhibit C Page 3 of 23 governmental authority upon or as a result of the performance of Services pursuant to this Agreement or materials furnished with respect to the Agreement, except any income, franchise, privilege, or similar tax on or measured by Plan Supervisor's net income, capital stock or net worth. Plan Sponsor will not be responsible for any income or other tax imposed on any gross income, net income, or net worth of Plan Supervisor incurred as a result of or otherwise in connection with this Agreement. Plan Sponsor shall be responsible for all Taxes arising out of or related to this Agreement. In the event that Plan Supervisor is required to remit payment of or for any such Tax, Plan Sponsor shall reimburse Plan Supervisor for such payment within five (5) business days. 3. Records and Information 3.1 Records. Each party agrees to maintain accurate and complete records, data and other documentation ( "Records ") relating to the provision and receipt of Services under this Agreement and any applicable Schedule or SOW. All of Plan Supervisor's Records will be maintained by Plan Supervisor in accordance with Plan Supervisor's then current document retention practices ( "Retention Practices ") and nothing contained in this Section shall be construed as requiring Plan Supervisor to maintain any Records for any period of time in excess of the periods required by Plan Supervisor's Retention Practices, which periods shall in no event be less than those required by applicable law. 3.2 Data and Information. Insofar as the performance of Services under this Agreement by Plan Supervisor requires data, documents, information or materials of any nature to be furnished, in whole or in part, by Plan Sponsor or Plan Sponsor's employees, agents or other representatives, or requires other services to be performed by Plan Supervisor or Plan Supervisor's employees, agents or other representatives, Plan Sponsor hereby agrees to furnish or cause its employees, agents or other representatives, to furnish all such data., documents, information and materials and to perform all such services within a reasonable time, and in such form or manner, as is necessary in order to enable Plan Supervisor to perform Services hereunder in a timely manner. 4. Confidentiality 4.1 Confidentialx Obligations. From time to time, either party (the "Disclosing Party ") may disclose or make available to the other party (the "Receiving Party "), whether orally or in physical form, confidential or proprietary information concerning the Disclosing Party and/or its business, vendors, products or services in connection with this Agreement (together, "Confidential Information "). Confidential Information of Plan Sponsor includes, without limitation, systems architecture, policies and procedures, customer, employee, provider, vendors, member and beneficiary information, claims information, vendor information (including agreements, software and products), product plans, and any other information which is normally and reasonably considered confidential. Confidential Information of Plan Supervisor includes, without limitation, software, the Plan Supervisor System and system architecture, processes, polices and procedures, and customer, employee and provider information and product and business plans, and any other information which is normally and reasonably considered confidential. The terms of this Agreement, each Schedule and SOW and the negotiations leading thereto shall be the Confidential Information of both parties and may be disclosed to third parties only with the consent of both parties hereto. Each party agrees that during the Term and thereafter: (a) it will use Confidential Information belonging to the Disclosing Party solely for the purpose(s) of this Agreement; and (b) it will take all reasonable precautions to ensure that it does not disclose Confidential Information belonging to the Disclosing Party to any third party (other than the Receiving Party's employees and/or professional advisors on a need -to -know basis who are bound by obligations of nondisclosure and limited use at least as stringent as those contained herein) without first obtaining the Disclosing Party's written consent., Upon request by the Disclosing Party, the Receiving Party will return all copies of any Confidential Information to the Disclosing Party, or, if the return of such or a portion of such Confidential Information is not possible using commercially reasonable efforts, the Receiving Party will City of Rancho Palo Verdes 1.1-10 4 Resolution No. 2009 -89 Exhibit C Page 4 of 23 destroy such Confidential Information. The Receiving Party will be responsible for any breach of this Section by its employees, representatives, and agents. 4.2 Exclusions. The term "Confidential Information" will not include any information that the Receiving Party can establish by written evidence: (a) was independently developed by the Receiving Party without use of or reference to any Confidential Information belonging to the Disclosing Party; (b) was acquired by the Receiving Partly from a third party having the legal right to furnish same to the Receiving Party without disclosure restrictions; or (c) was at the time in question (whether at disclosure or thereafter) generally known by or available to the public (through no breach of this Agreement by the Receiving Party). 4.3 - uired Disclosures. These confidentiality obligations will not restrict any disclosure required by order of a court or any governmental agency, provided that in the case of an order, the Receiving Party gives prompt notice (unless prohibited by applicable law from providing such notice) to the Disclosing Party of any such order and reasonably cooperates with the Disclosing Party at the Disclosing Party's request and expense to resist such order or to obtain a protective order. 4.4 Injunctive Relief. The parties acknowledge and agree that the disclosure of Confidential Information may result in irreparable harm for which there is no adequate remedy at law. The parties therefore agree that the Disclosing Party shall be entitled to seek an injunction in the event the Receiving Party violates or threatens to violate the provisions of this Section and that no bond will be required. This remedy will be in addition to any other remedy available at law or equity. 5. Term of the Agreement 5.1 Initial Term. The term of this Agreement shall begin on the Effective Date and shall continue in full force and effect for a period of one (1) year ( "Initial Term"). 5.2 Renewal. Upon the expiration of the Initial Term of this Agreement, this Agreement shall be automatically renewed for consecutive one (1) year terms thereafter ( "Renewal Term ") until and unless terminated as provided in Section 5.3 hereunder. 5.3 Termination at End of Initial Term. Subject to providing ninety (90) days prior written notice, either party hereto may terminate this Agreement at the end of the Initial Term or any time therafter. 5.4 Termination b Supervisor. Plan Supervisor may terminate this Agreement at any time in the event Plan Sponsor fails to make or adequately and timely provide for the payment of fees and expenses due hereunder, but only if Plan Supervisor gives Plan Sponsor written notice of such failure and Plan Sponsor fails to remedy such failure within thirty (30) days after its receipt of said notice. Upon the expiration of the thirty (30) day period, Plan Supervisor may terminate this Agreement by giving Plan Sponsor written notice, which termination shall be effective immediately upon Plan Sponsor's receipt of such notice. If such failure to pay is remedied by Plan Sponsor within such thirty (30) day period, then this Agreement shall continue as though no such notice had been given. 5.5 Earl Termination by Plan Sponsor. Plan Sponsor may terminate this Agreement at any time during the Initial Term or any subsequent Renewal Term by giving at least ninety (94) days prior written notice to Plan Supervisor. In the event Plan Sponsor elects to terminate this Agreement without cause or for convenience at any time pursuant to this Section 5, and such termination is effective before the last day of the Initial Term. Plan Sponsor shall pay those amounts set forth in each Schedule and applicable Sow for the Services, including but not limited to, any Additional and Customized Services for each month (prorated for partial months) that the termination date requested by Plan Sponsor precedes the termination date of this Agreement as set forth in this Section 5. City of Rancho Palo Verdes 1 -1.10 5 Resolution No. 2009 -89 Exhibit C Page 5 of 23 5.6 Default and Remedies. If either party fails to observe, keep or perform any material term or condition of this Agreement, any Schedule or SOW required to be observed, kept or performed by that party, the other party, in addition to any other rights and remedies it may have, shall have the right to terminate this Agreement without paying a termination fee; provided, however, that the party seeking to terminate this Agreement gives the other party a written notice of such failure claimed to be a material breach of terms and conditions of this Agreement and the party receiving said notice fails to remedy the breach within thirty (30) days after its receipt of said notice. If the material breach is not remedied by the defaulting party within the thirty (30) day period provided for above, the non - defaulting party may terminate this Agreement by giving the defaulting party written notice effective immediately. If the material breach is remedied by the defaulting party within such thirty (30) day period, then this Agreement shall continue as though no such notice had been given. 5.7 Effect of Termination. Termination of this Agreement shall not terminate Plan Sponsor's obligations to pay Plan Supervisor fees for all Services performed and expenses incurred under this Agreement, according to the agreed upon fee schedule, any Schedule and SOW prior to the discontinuance of performance of Services by Plan Supervisor hereunder. 5.8 Deconversion. Plan Sponsor agrees to provide Plan Supervisor with at least ninety (90) days prior written notice of any conversion from Plan Supervisor to another service provider providing the same or substantially similar services to Plan Supervisor. Upon termination, Plan Supervisor and Plan Sponsor shall work together to develop a suitable deconversion plan with the new vendor. Information and materials provided by Plan Supervisor pursuant to this Section 5.8 shall be in a form and format used by Plan Supervisor at the time of deconversion. Plan Supervisor shall Provide Plan Sponsor adequate instructions concerning the format and means of accessing Plan Sponsor's data. Plan Supervisor shall be entitled to charge Plan Sponsor a fee based upon Plan Supervisor's then current rate schedule for the services rendered pursuant to this paragraph 5.$(a). 6. Use of the Services and Indemnification 6.1 Use Of The Services. (a) Plan Sponsor is solely responsible for any instruction it transmits, sends or gives Plan Supervisor, including payment or other funds transfer instructions; for its failure to access the Services in the manner prescribed by Plan Supervisor, and for its failure to supply accurate information and data to Plan Supervisor in providing Services to Plan Sponsor. In connection with the Services to be provided by Plan Supervisor pursuant hereto, Plan Sponsor hereby authorizes and designates Plan Supervisor, where applicable, to act as the agent for Plan Sponsor in making payment to a third -party as identified or directed in the Schedule or SOW and to receive payment on behalf of Plan Sponsor as directed in the Schedule or SOW. Plan Supervisor shall provide only ministerial and nondiscretionary services pursuant to this Agreement and Plan Supervisor does not assume Plan Sponsor's fiduciary, administrative, or other responsibilities for compliance with, and as defined by, the Employee Retirement Income Security Act of 1974 (ERISA) and any other applicable federal or state statutes. (b) Plan Sponsor is responsible at implementation for providing accurate information on all current participants and employees who are in their election period. In addition, the Plan Sponsor will review the initial information provided by the Plan Supervisor to verify that the set up information is accurate. In no event shall Plan Supervisor be liable with respect to any loss, liability, cost, damage or expense caused by Plan Supervisor's failure to perform hereunder but not reported by Plan Sponsor to Plan Supervisor within fifteen (15) business days of any errors in implementation information or set -up information. If the output information provided by Plan Supervisor is in paper format only, Plan Sponsor's notice requirement under this Section 6.1(b) shall be extended up to thirty (3 0) days following the month in which the services were provided. City of Rancho Palo Verdes 1-1-10 6 Resolution No. 2009 -89 Exhibit C Page 6 of 23 (e)-- Not a FiducigU or Administrator. It is agreed and understood by the Plan Sponsor that Plan Supervisor shall not be designated or deemed the "Plan Administrator" or "Fiduciary" for any Plans as these terms are construed under ERISA. Notwithstanding anything in the Agreement to the contrary, any delegation of authority or duties pursuant to this Agreement shall not have the effect of making Plan Supervisor a fiduciary and such duties or other similar duties are hereby retained by the Plan Sponsor. 6.2 Indemnification. Plan Sponsor shall be liable to and shall indemnify, defend and hold Plan Supervisor its directors, officers, employees, representatives, successors and permitted assigns harmless from and against any and all claims, demands by third parties, losses, liability, cost, damage and expense, including litigation expenses and reasonable attorneys' fees and allocated costs for in -house legal services, to which Plan Supervisor, its directors, officers, employees, representatives, successors and permitted assigns may be subjected or which it may incur in connection with any claims which arise from or out of or as the result of (a) Plan Sponsor's breach of this Agreement, as determined by a court or other tribunal having jurisdiction of the matter; (b) any of Plan Sponsor's plans, coverage under a plan, plan design and/or interpretation, subject to Plan Supervisor fulfilling its duties under this contract; (c) any violation of any state, federal or local statute, regulation, rule or guideline; or (d) the negligence of Plan Sponsor, its directors, officers, employees, agents and affiliates in the performance of their duties and obligations under this Agreement. Plan Sponsor shall bear all -risk of loss of items, records, data and materials during transit from Plan Sponsor to Plan Supervisor's location or that of Plan Supervisor's agents or sub- contractors. Plan Sponsor shall be released from its obligations under this Section 6.2 to the extent such third party claims, demands, damages, costs, liabilities, losses and expenses result from the acts or negligence of Plan Supervisor, its directors, officers, employees, representatives, successors and permitted assigns. Plan Supervisor will indemnify and hold harmless Plan Sponsor against any and all losses, liabilities, penalties, fines, costs, damages, and expenses that Plan Sponsor incurs, including reasonable attorney's fees, which arise out of (i) Plan Supervisor's or Plan Supervisor's vendors' negligence in the performance of Plan Supervisor's or Plan Supervisor's venders', subcontractors' or representatives' obligation sunder this Agreement or (ii) Plan Supervisor's material breach of this Agreement, as determined by a court or other tribunal having jurisdiction of the matter. Notwithstanding the foregoing, Plan Sponsor will remain responsible for payment of benefits and Plan Supervisor's indemnification will not extend to indemnification of Plan Sponsor or the Plan(s) against any claims, liabilities, damages, judgments or expenses that constitute payment of Plan benefits. This provision shall survive the termination of this Agreement. 6.3 Data Transmission. In no event shall Plan Supervisor be liable with respect to any loss, liability, cost, damage or expense arising from any loss, theft, disappearance of or damage to data transmitted by any dataline or other means of electronic transmission that occurs during such transmission. 6.4 Force Maieure. In no event shall Plan Supervisor be liable with respect to the failure of its duties and obligations under this Agreement, any Schedule or SOW, other than an obligation to pay money, which is attributable to acts of God, war, terrorism, conditions or events of nature, civil disturbances, work stoppages, equipment failures, power failures, fire or other similar events beyond its control, unless the failure to perform such duties and obligations is a result of the breaching party's failure to maintain adequate business continuity capabilities and to periodically ensure the effectiveness of same. 6.5 peratxonal_ Breakdowns. Plan Supervisor does not guarantee the absence of break downs, operational failures, unavoidable delays or other similar causes beyond Plan Supervisor's control and Plan Supervisor shall have no liability for loss, liability, cost, damage or expense resulting directly or indirectly from any such cause, on the condition that Plan Supervisor made prompt and reasonable efforts to remedy the problems. 6.6 Special Dam es. In no event will either party be liable for any special, consequential or punitive damages, including but not limited to, lost profits, even if such party knew of the possibility of such damages. City of Rancho Palo Verdes 1.1.10 7 Resolution No. 2009 -89 Exhibit C Page 7 of 23 7. General Provisions 7.1 Controlling Law and Jurisdiction. This Agreement shall be interpreted, construed and governed in accordance with the laws of the State of California, U.S.A., without reference to conflict of laws principles. All disputes arising from or relating to this Agreement shall be arbitrated or litigated within the exclusive jurisdiction of the state and/or federal courts located within the State of California and the parties hereby consent to such exclusive jurisdiction and waive objections to venue therein, except for proceedings that need to be brought in another jurisdiction to enforce an order or judgment of an arbitrator or court in California. To the extent that a state and/or federal court located within the State of California refuses to exercise jurisdiction hereunder, the parties agree that jurisdiction shall be proper in any court in which jurisdiction may be obtained notwithstanding this Section. 7.2 Limitation of Liabili . PLAN SUPERVISOR HEREBY DISCLAIMS ALL WARRANTIES WITH RESPECT TO PLAN SUPERVISOR PRODUCTS AND SERVICES PROVIDED HEREIN, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE. Under no circumstances shall the financial responsibility of Plan Supervisor for any failure of performance by Plan Supervisor under this Agreement exceed the fees or charges paid to Plan Supervisor for the transaction, activity or equipment that is or was the subject of the alleged failure of performance. To the extent that third party software is relicensed by Plan Supervisor to Plan Sponsor, Plan Supervisor shall use commercially reasonable efforts to pass through to Plan Sponsor all warranties from such third party licensors to the extent Plan Supervisor has the right to do so. 7.3 DiVute Resolution. Plan Supervisor and Plan Sponsor agree to work together in good faith to resolve any and all disputes between them, including but not limited to all questions of arbitrability, the existence, validity, scope or termination of this Agreement, any Schedule or SOW or any term thereof. In the event that a dispute between Plan Sponsor and Plan Supervisor cannot be resolved in good faith by the parties, such dispute shall be submitted to binding arbitration in accordance with the commercial arbitration rules of the American Arbitration Association. Such disputes shall be heard by a board of three arbitrators selected as provided herein, and the decision of any two (2) such arbitrators on any issue shall be final. The arbitration proceedings shall be held in the state of California and during the pendency of any arbitration, this Agreement, any Schedules or SOWS shall continue in full force and effect until terminated as allowed in accordance with the terms and conditions thereof, and Plan Supervisor and Plan Sponsor shall continue to perform their respective obligations. Either party may request such arbitration by written notice to the other, specifying the name and address of the arbitrator selected by the requesting party and a brief description of the dispute which such party wishes to have arbitrated. Unless otherwise agreed to in writing by the parties, the party wishing to pursue a dispute must initiate the arbitration within one (1) year after the date on which notice of the dispute was given or shall be deemed to have waived its right to pursue the dispute in any forum. The other party shall by written notice to the requesting party, within twenty (20) days of receipt of such request, specify the name and address of the arbitrator selected by such other party. If the other party does not do so within such twenty (20) day period, the requesting party may, upon notice to the other party, elect a second arbitrator. The two arbitrators appointed shall select a third arbitrator within twenty (20) days of the appointment of the second arbitrator. In the event they fail to do so within a twenty (20) day period, the third arbitrator shall be selected by the American Arbitration Association. Until such time as three arbitrators shall have been appointed, either party shall have the right, by written notice to the other and to the arbitrators selected, to specify further disputes under this Agreement, any Schedule or SOW to be determined through such arbitration. The arbitrators shall interpret this Agreement, any Schedule or SOW in accordance with the ordinary meaning of language and commercial customs, usage, City of Rancho Palo Verdes 1-1-10 8 Resolution No. 2009 -89 Exhibit C Page 8 of 23 and practices as may be applicable. The arbitrators in hearing and deciding any matter presented pursuant to this Agreement, any Schedule or SOW, shall have no power to amend, modify, or ignore any portion of this Agreement, any Schedule or SOW and the arbitrators shall render any decision strictly in accordance with the terns thereof. The parties shall be entitled to such discovery as the arbitrators deem appropriate to permit a party to properly present its case. Awards made pursuant to such arbitration shall be in writing, setting forth findings of fact and conclusions of law and judgment may be entered on any award made in any court having jurisdiction. In the event that any portion of this Section 7.3 or any part of this Agreement, any Schedule or Sow is deemed to be unlawful, invalid, void or unenforceable, such unlawfulness, invalidity, voidness or unenforceability shall not serve to invalidate any other part of this Section 7.3 or this Agreement, any Schedule or SOW. In the event any court determines that this arbitration procedure is not binding or otherwise allows litigation involving a dispute hereunder to proceed, the parties hereby waive any and all right to trial by jury in, or with respect to, such litigation. Such litigation would instead proceed with the judge as the finder of fact. This Section 7.3 governs any dispute between the parties arising before or after execution of this Agreement, any Schedule or SOW and shall survive any termination of this Agreement, any Schedule or SOW. 7.4 Plan and Trust Establishment. Plan Sponsor acknowledges and agrees that it is solely responsible for all aspects of the Plan Sponsor's benefit plan(s) ("Plan"), including but not limited to: (i) establishment of any plan, trust (if applicable) or other component deemed necessary and appropriate by Plan Sponsor to establish the Plan; (ii) any operations, administration, recordkeeping, benefit eligibility determinations, and all other actions necessary or required to maintain or operate all aspects of the Plan, except for Plan Supervisor's Services listed in the applicable SOW; (iii) creating and maintaining all Plan documentation, including but not limited to, the Plan Document, the Trust Document (if applicable), any Summary Plan Descriptions and Summary of Material Modifications; (iv) any and all amendments or modifications to the Plan, any trust (if applicable), or any Plan or trust documents associated with the Plan; and (v) the delivery to all individuals within or otherwise participating in the Plan ( "Participants ") of all appropriate and necessary documents and materials, including, but not limited to, the Plan Document, Trust Document, Plan and Trust amendments, the Summary Plan Descriptions, enrollment forms, and application and notice forms, as may be necessary for the operation of the Plan or to satisfy the requirements of state or federal laws and regulations. 7.5 Plan Amendments and/or Termination. If Plan Sponsor amends or modifies any documents related to the Plan, Plan Sponsor agrees to notify Plan Supervisor in writing no later than the effective date of the amendment or the date of adoption of any such amendment or modification. Plan Supervisor shall not be responsible for modifying its Services or providing any Additional Services related to any such amendment or modification until Plan Supervisor has received such notification and only after Plan Supervisor has given its written consent of any such amendment or modifications, which consent not to be unreasonably withheld but may be conditioned upon Plan Sponsor's agreement to pay increased administrative fees. 7.6 Entire Agreement. This Agreement, the documents or instruments referred to herein and all subsequent amendments, modifications or substitutions, embody the entire agreement and understanding of the parties hereto with respect to the subject matter herein. The parties have not relied upon any promises, representations, warranties (either express or implied), agreements, covenants or undertakings, other than those expressly set forth or referred to herein and save as expressly pro -vided herein, this Agreement may not be altered, amended, discharged or terminated, nor may any consent to the departure from the terms hereof be given, orally (even if supported by new consideration), but only by an instrument in writing signed by authorized represents -tives of each party hereto. This Agreement shall supersede all prior agreements and the understanding between the parties with respect to such subject matter. City of Rancho Palo Verdes 1 -1 -10 9 Resolution No. 2009 -89 Exhibit C Page 9 of 23 7.7 Severability. In the event that any provision of this Agreement is held to be unenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions will not be affected, and in lieu of such invalid or unenforceable provision there will be added automatically, as part of this Agreement, a provision as similar in terms as may be valid and enforceable. This Agreement does not establish any type of agency, partnership, or joint venture relationship between the parties and neither party shall perform any acts to bind or to purport to bind the other party in any way or to represent that the other party is in any way responsible or liable for its acts, statements, or omissions. 7.8 Notices, All notices, demand or other communication required or permitted hereunder will be in writing and will be given by hand delivery, overnight delivery service, charges prepaid, or certified mail, return receipt requested, postage prepaid, to the addresses set forth below in this Agreement. All such notices, demands, and other communications will be deemed to have been received and effective three (3) business days after mailing. If to Plan Sponsor: City of Rancho Palos Verdes 30940 Hawthorne Blvd Rancho Palos Verdes, California 90275 Attention: Sara Singer If to Plan Supervisor: optumHealth Financial Services 11490 Xeon Street NW, Suite 200 Coon Rapids, Minnesota 55448 Attention: General Manager With Copy to: optut nHealth Financial Services, Inc. 12501 whitewater Drive Minnetonka, Minnesota 55343 Attention: General Counsel 7.9 Independent Contractors. The parties are independent contractors and nothing in this Agreement or otherwise shall be deemed or construed to create any other relationship, including one of employment, joint venture or agency, except as expressly provided herein. 7.10 Electronic Si nature /Counte arts. The parties acknowledge and agree that this Agreement may be executed or accepted using electronic, stamped or facsimile signatures, and that such a signature shall be legally binding to the same extent as a written signature by a party's authorized representative. Each party waives any legal requirement that this Agreement be embodied, stored or reproduced in tangible media, and agrees that an electronic reproduction shall be given the same legal force and effect as a signed writing. Furthermore, this Agreement may be executed and delivered in as many counterparts as may be deemed necessary or convenient each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one of the same Agreement. 7.11 Construction. This Agreement has been reviewed by all parties hereto and shall be construed and interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and intentions of the parties hereto. Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, and references to the part include the whole. The use of the word "including" shall be construed as providing examples only and shall not limit the generality of any provision in which it is used. The use of the word "or" has the inclusive meaning represented by the phrase "and /or ". The words "hereof', "hereby ", "hereunder ", and similar terms used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Section, subsection, clause, and exhibit references are to this Agreement unless otherwise specified. City of Rancho Palo Verdes 1-1 -1D 10 Resolution No. 2009 -89 Exhibit C Page 10 of 23 7.1 2 Signature Authority. The undersigns hereby certify that they have been duly authorized by all necessary and appropriate corporate action to execute this Agreement on behalf of their respective party to form a legally binding contract and understand that acceptance of this Agreement constitutes an agreement to be bound to perform in strict conformity with the terms and conditions set forth herein. IN WITNESS WHEREOF, Plan Supervisor and Plan Sponsor have caused this Agreement to be executed by their duly authorized officers, effective as of the date first above written. Plan Supervisor OptumHealth Financial Services 0 Print Name: Title: Plan Sponsor City of Rancho Palo Verdes 0 Pri, Title: Mayor City of Rancho Palo Verdes 1 -1 -10 11 Resolution No. 2009 -89 Exhibit C Page 11 of 23 BUSINESS ASSOCIATE CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT This business associate agreement ( "Agreement') is made as of December 1, 2009, by and between City of Rancho Palos Verdes ( "Covered Entity ") and Administration Resources Corporation, dlbla OptumHealth Financial Services ( "Business Associate "). WHEREAS, Covered Entity and Business Associate have entered into or will enter into a services agreement for the provision of services by OptumHealth Financial Services ( "Service Agreement "); WHEREAS, the parties may need to use and or disclose Protected Health Information ( "PHI ") pursuant to this Agreement and the Service Agreement; !NMR,EAS, the parties intend to satisfy certain standards and requirements of the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA ") to the extent applicable to each party and as may be amended from time to time; THEREFORE, in consideration of receiving certain confidential and other information from Covered Entity, Business Associate hereby agrees as follows: I. Definitions A. Confidential Business Information. Proprietary information, including but not limited to, trade secrets, customer lists, or patented, trademarked, trade- named, service- marked or copyrighted material or other property belonging to a party performing under this Agreement and the Service Agreement. B. Designated Record Set. Has the meaning established for purposes of 45 C.F.R. § 164.501,as amended from time to time, and includes currently a group of records maintained by or for a Covered Entity (as this term is defined by 45 C.F.R. § 160.103) that is: (i) the medical records and billing records about individuals maintained by or for a covered health care provider; (ii) the enrollment, payment, claims adjudication, and case or medical management records systems maintained by or for a health plan; or (iii) used, in whole or in part, by or for the Covered Entity to make decisions about individuals. C. Electronic Protected Health Information (11EPHI11). Has the same meaning as the term "electronic protected health information" established for purposes of 45 C.F.R. § 164.103 as hereafter amended, and currently includes electronic protected health information that is created, received, transmitted or maintained in electronic media by or on behalf of the Plan. D. Health Care operations. Has the meaning established for purposes of 45 C.F.R. § 164.501, as amended from time to time. E. Individual. The person who is the subject of the Protected Health Information and includes a person who qualifies as a personal representative under 45 CFR § 164.502(g). F. Plan. A Covered Entity's plan of health care coverage that contains the terms and conditions of coverage City of Rancho Palo Verdes 1 -1 -14 12 Resolution No. 2009 -89 Exhibit C Page 12 of 23 for health care services. G. Protected Health Information ( "PHI "). Has the meaning established for purposes of 45 C.F.R. § 160.103, as amended from time to time and includes any information: (i) that relates to the past, present or future physical or mental condition of an individual; the provision of health care to an individual; or the past, present or future payment for the provision of health care to an individual; (ii) that is transmitted or maintained by any electronic medium, including but not limited to, the Internet (wide - open), Extranet (using Internet Technology to link a business with information only accessible to collaborating parties), leased lines, dial up lines, private networks, and those transmissions that are physically moved from one location to another using magnetic tape, disk, or compact disk media; (iii) that identifies the individual or with respect to which there is a reasonable basis to believe the information can be used to identify the individual, and constitutes individually identifiable health information as defined by and established for purposes of 45 C.F.R § 106.103, as amended from time to time. H. Security Incident. Has the meaning established for purposes of 45 C.F.R. § 164.304, as amended from time to time, and currently means the attempted or successful unauthorized access, use, disclosure, modification, or destruction of information or interference with system operations in an information system. Unless otherwise specified in this Agreement, all capitalized terms in this section not otherwise defined have the meaning established for purposes of Title 45 parts 160, 162 and 164 of the United States Code of Federal regulations, as amended from time to time. H. Protected Health Information and Confidential Business Information A. Protected Health Information and Confidential Business Information. To the extent that Business Associate creates or receives Protected Health Information ( "PHI ") from Covered Entity, or on Covered Entity's behalf, both parties agree that Business Associate and its employees, subcontractors or representatives needing access to such information may use and disclose PHI it receives from Covered Entity or on behalf of Covered Entity to administer the Plan, perform under this Agreement and/or the Service Agreement, and for Health Care Operations. 1. Additional Permissible Uses. Unless otherwise limited herein, Business Associate may: a) use the PHI in its possession for its management and administration and to fulfill any present or future legal responsibilities; b) disclose the PHI in its possession to third parties for the purpose of its management and administration or to fulfill any present or future legal responsibilities; provided, however, that the disclosures are required by law or that the Business Associate has received from the third party written assurances that: (i) the information will be held confidentially and used or further disclosed only as required by law or for the purpose for which it was disclosed to the third party; and City of Rancho Palo Verdes 1 -1 -1 0 13 Resolution No. 2009 -89 Exhibit C Page 13 of 23 (ii) the third party will notify Business Associate of any instances of which it becomes aware in which the confidentiality of the information has been breached; c) use and disclose PHI to report violations of law to appropriate Federal and State authorities, as permitted or required by law; d) aggregate the PHI as permitted by HIPAA; e) de- identify any and all PHI provided that the information is de- identified in accordance with HIPAA. De- identified information does not constitute PER and is not subject to the terms and conditions of this Agreement. De- identified information may be used by Business Associate for research, creating comparative databases, statistical analysis, or other studies, and is considered by Business Associate to be its Confidential Business Information; f) use or disclose PHI for research, as defined under the privacy regulations issued pursuant to HIPAA including, but not limited to, projects for therapeutic outcomes research, and for epidemiological studies. Business Associate may obtain and maintain, on behalf of Covered Entity, any consents, authorizations or approvals that may be required by the applicable federal or state laws and regulations for use or disclosure of PHI for such purposes. The parties will maintain the confidentiality of such information as it relates to any individual, provider or the Covered Entity's business. Any research, including any databases, analyses, and studies related thereto are considered by Business Associate to be its Confidential Business Information; and g) create, receive, use, or disclose limited data sets as permitted under HIPAA, provided however, that Business Associate agrees that use of the limited data set will be limited to research, Health Care operations or public health purposes and that it shall: (i) not use or further disclose the limited data set other than as agreed upon or as otherwise required by law; (ii) use appropriate safeguards to prevent use or disclosure of the limited data set other than as agreed upon; (iii) report to the Covered Entity any use or disclosure of the limited data set not provided for by this Agreement of which it becomes aware; (iv) ensure that any of the Business Associate's agents, including a subcontractor, to whom Business Associate provides the limited data set, agrees to the same restrictions and conditions that apply to the limited data set recipient with respect to such information; and (v) not identify the limited data set or contact any individual who is the subject of the PHI contained in the limited data set. These limited data sets are considered by Business Associate to be its Confidential Business Information. Business Associate may also disclose limited data sets to Covered Entity and Covered Entity's vendors at Covered City of Rancho Palo Verdes 1-1 -10 14 Resolution No. 2009 -89 Exhibit C Page 14 of 23 Entity's direction subject to the recipient's agreement to abide by the requirements of II.A. Lg (i) through (v). B. Business Associate's obligations. Both parties agree that Business Associate shall: 1. not use or further disclose the PHI other than as permitted by this Agreement; 2. use administrative, physical and technical safeguards to prevent use or disclosure of PHI and/or EPHI other than as permitted or required by this Agreement; 3. report to Covered Entity any use or disclosure of any PHI and/or EPHI, or a Security Incident of which Business Associate becomes aware that is not permitted by this Agreement 4. ensure that any subcontractor or agent of Business Associate to whom Business Associate provides any PHI and/or EPHI agrees to the same restrictions and conditions that apply to Business Associate with regard to the use and/or disclosure of PHI pursuant to this section; 5. upon request by Covered Entity, make available to Covered Entity, or as directed by Covered Entity, to the Individual, such PHI contained in a Designated Record Set maintained by Business Associate as necessary to allow Covered Entity to respond to a request for access to PHI as required by HIPAA; 6. incorporate any amendments or corrections to the PHI in its possession that constitutes a Designated Record Set maintained by Business Associate as required by HIPAA; d. document disclosures of PHI in the same manner as would be required of Covered Entity to respond to a request by an Individual for an accounting of disclosures of PHI as required by HIPAA; 7. make its internal practices, books and records relating to the use and disclosure of PHI available to the Secretary of U.S. Department of Health and Human Services ( "DHHS ") for purposes of determining Covered Entity's compliance with HIPAA; and S. except as provided for herein, or as required by law, upon termination of this Agreement and/or the Service Agreement, return to Covered Entity or destroy the PHI and retain no copies in any form, if feasible. If Business Associate determines that returning or destroying the PHI is infeasible, Business Associate agrees to extend the protections, limitations and restrictions of this section to such PHI and to limit any further uses and/or disclosures of such PHI retained to the purposes that make the return or destruction of the PHI infeasible, for as long as Business Associate maintains such PHI. C. Covered Entity's obligations. Covered Entity agrees to: 1. be responsible for using administrative, physical and technical safeguards at all times to maintain and ensure the confidentiality, privacy and security of PHI transmitted to Business Associate pursuant to this Agreement, in accordance with the standards and requirements of HIPAA until such PHI is received by Business Associate; 2. amend its Plan documents to include specific provisions to restrict the use or disclosure of PHI and to ensure adequate procedural safeguards and accounting mechanisms for such uses or disclosures, in accordance with the HIPAA privacy regulation; 3. obtain any consent or authorization that may be required by applicable federal or state laws and regulations prior to furnishing Business Associate the PHI; City of Rancho Palo Verdes 1 -1 -10 15 Resolution No. 2009 -89 Exhibit C Page 15 of 23 4. forward to Business Associate any requests for access to, or an accounting of disclosure of PHI that is part of a Designated Record Set in such a timely manner that permits compliance with the required response time frames for such requests. If Covered Entity does not forward the request to the Business Associate in a timely manner, Covered Entity will be responsible for issuing an extension notice to the requestor of the PHI; 5. notify Business Associate of any limitation(s) in, or revisions to its notice of privacy practices of Covered Entity in accordance with 45 C.F.R. § 164.520, to the extent that such limitation may affect Business Associate's use or disclosure of PHI. Should such limitations or revisions materially increase Business Associate's cost of providing services under this Agreement and/or the Service Agreement, Covered Entity shall reimburse Business Associate for such increase in cost; 6. in the event that the Covered Entity honors a request to restrict the use or disclosure of PHI pursuant. to 45 C.F.R. § 164.522 (a); Covered Entity agrees not to provide Business Associate any PHI that is subject to any arrangements or -restrictions, including, but not limited to, restrictions on the use and/or disclosure of PHI as provided for by HIPAA, that may limit Business Associate's ability to use and/or disclose PHI under this Agreement unless Covered Entity notifies Business Associate of the restriction or limitation and Business Associate agrees to honor the limitation. Should such limitations or revisions materially increase Business Associate's cost of providing services under this Agreement, Covered Entity shall reimburse Business Associate for such increase in cost as mutually agreed to by the parties; 7. regardless of 45 C.F.R., § 164.522, provide Business Associate with the appropriate kind and amount of information, which may include PHI, in order for the Business Associate to properly perform pursuant to this Agreement and /or the Service Agreement. D. Confidential Communications. Business Associate agrees to accommodate a reasonable request by an Individual or on behalf of Covered Entity to receive communication of PHI by an alternative means or alternative locations and document those alternative means or alternative locations pursuant to 45 C.F.R. § 164.522 (b), in a prompt and reasonable manner consistent with the HIPAA regulations. E. Confidential Business Information. Both parties acknowledge that in the course of performing under this Agreement and/or the Service Agreement, each party may learn or receive confidential, trade secret or other proprietary information concerning the other party, or third parties to whom the other party has an obligation of confidentiality ( "Confidential Business Information "). Each party shall take all necessary steps to provide the maximum protection to the other party's Confidential Business Information and records. Each party agrees to take at least such precautions to protect the other party's Confidential Business Information as it takes to protect its own Confidential Business Information. Such information shall not be disclosed to third parties without the express written consent of the party to whom the information belongs. The parties shall not utilize any Confidential Business Information belonging to the other party other than as expressly permitted by this Agreement or otherwise in writing. Each party shall retain sole ownership of its own Confidential Business Information. M. Miscellaneous A. Amendment. This Agreement cannot be altered or amended unless agreed to by both parties in writing. Both parties agree to amend this Agreement from time to time to comply with the requirements of HIPAA and other federal and state privacy and consumer rights laws and regulations. B. Termination. Covered Entity may exercise its right to terminate this Agreement and the Service Agreement upon 30 days written notice to Business Associate if Covered Entity reasonably determines that Business Associate has breached a material term of this Agreement. Such written notice shall include a City of Rancho Palo Verdes 1-1-10 1 6 Resolution No. 2009 -89 Exhibit C Page 16 of 23 description of the Covered Entity alleged material breach of this Agreement and afford Business Associate an opportunity to cure said breach within the notice period. Failure to so cure a material breach shall be grounds for termination of this Agreement and/or the Service Agreement upon expiration of the notice period. Business Associate's nonperformance under this Agreement due to failure of Covered Entity to properly provide PHI, shall neither constitute a breach of contract nor provide grounds for termination. C. Survival Clause. Any provision of this Agreement that contemplates performance, observance or enforcement subsequent to the termination of this Agreement, shall survive termination and remain of full force and effect between the parties. D. No assignment. Any assignment of this Agreement by Business Associate without Covered Entity's prior written consent shall be void. F. Interpretation. The terms and conditions of this Agreement shall be construed in light of any applicable interpretation of and/or guidance on HIPAA issued by DHHS or any court of competent jurisdiction. Any ambiguity in this Agreement shall be resolved in favor of a meaning that permits compliance with applicable laws and regulations. In the event of a conflict between this Agreement and the Service Agreement regarding the use and disclosure of PHI and/or Confidential Business Information, the terms of this Agreement shall control. F. Effective Date. Each term and condition of this Agreement required by HIPAA shall be effective on the compliance date applicable to Covered Entity, or this Agreement, under the HIPAA privacy regulation. To the extent that any provisions are subject to the Security Standards set forth by 45 C.F.R. Parts 160, 162 and Part 164 Subchapter C, such provisions shall be effective April 20, 2005. G. Business Associate shall comply with each and every obligation imposed on business associates under 42 USC 17921 -17954 (Subtitle D of Title XIII of the American Recovery and Reinvestment Act of 2009)( "ARRA "), and each of those obligations is hereby incorporated by reference into this Agreement, with the understanding that compliance with each of those obligations is required under this Agreement only as of the date upon which compliance with each of those obligations is required under ARRA. OptumHealth Financial Services City of Rancho Palos Verdes 11490 Xeon St NW, Suite 200 30940 Hawthorne Blvd Coon Rapids, MN 55445 Rancho Palos Verdes, California 90275 By • Print Name: Title: By. Print Name: Stefan Wolowic� Title: Mayor City of Rancho Palo Verdes 1 -1 -10 17 Resolution No. 2009 -89 Exhibit C Page 17 of 23 Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and Recordkeeping Administrative Services Overview. City of Rancho Palos Verdes (Plan Sponsor) has entered into a Master Services Agreement dated January 1, 2010 with Administration Resources Corporation, dba OptumHealth Financial Services (Plan Supervisor) for the purpose of providing certain employee health care benefit services. This document contains a detailed description of the services to be provided by Plan Supervisor as well as the corresponding fee(s) for providing said services. Certain services described in this document may be performed by an affiliated registered broker - dealer or other qualified entity in compliance with applicable law. The services described herein this Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and Recordkeeping Administrative Services, together with the Master Services Agreement and any accompanying Schedules or Statements of Work, constitute the entire agreement of services to be provided on behalf of Plan Sponsor by Plan Supervisor and its affiliates. No amendments to this Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and Recordkeeping Administrative Services will be affected unless agreed upon in writing by both parties, Plan Sponsor: City of Rancho Palos Verdes Primary Contact Name: Sara. Singer Primary Contact Number: 31 0- 544 -5204 Primary Contact Email: saras@rpv.com 1. Definitions 51.1 "A &reement'means this Schedule Administration Services any attached Schedules and employer adoption agreements incorporated into this Agreement by reference. 1.2 "COBRA" means the Consolidated Omnibus Budget Reconciliation Act of 1955, and as it appears in the Public Health Services Act, and the regulations thereunder, as amended. 1.3 "Code" means the Internal Revenue Code of 1956, and regulations thereunder, as amended. 1.4 "ERISA" means the Employee Retirement Income Security Act of 1974, and the regulations thereunder, as amended. 1.5 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, and the regulations thereunder, as amended. 1.6 "Participant" means an individual that is participating in the Plan, including Participants on continuation coverage as required by COBRA or other applicable continuation requirements. 1.7 "Plan Document" means the Plan Document for the City of Rancho Palos Verdes VEBA Health Savings Plan. 1.5 "Plan-Sponsor" means City of Rancho Palos Verdes. 1.9 "Plan Supervisor means Administration Resources Corporation. 1.10 "Summary Plan Descri tion" means the written document as distributed to the Participants of the plan, describing the plan terms and conditions. 1.11 "Trust Document" means the Standard Trust document for the City of Rancho Palos Verdes VEBA Health Savings Trust. 1.12 "VEBA" means Voluntary Employees' Beneficiary Association. 2. Plan Supervisor's Responsibilities 2.1 The Plan Supervisor shall perform VEB plan services for the Plan Sponsor and any optional services initialed by Plan Sponsor on this Schedule. City of Rancho Palo Verdes 1 -1 -10 1 Resolution No. 2009 -89 Exhibit C Page 18 of 23 2.2 Initial Em to ee Communication and On om* Re ortin . Upon initial eligibility, mail appropriate employee communication materials to Participants. Thereafter, mail reimbursements and explanations of benefit materials to Participants and maintain a participant web site. 2.3 2.1. Claim Reimbursement Processing. Process all claims for any and all services selected on this Schedule presented for payment in accordance with the terms of the Plan, and any written claim procedures or other practices established by the Plan Sponsor and communicated to the Plan Supervisor, including, but not limited to, reasonable investigatory work to determine claim eligibility under the Plan and preparing and distributing benefit checks or drafts to Plan Participants. 2.4 Wuiries. Answer inquiries from the Plan Sponsor, and plan participants concerning requirements, procedures, or benefits of the Plan. 2.5 Claim Reimbursement File. Maintain claim reimbursement files. 2.5 Standard Reports. Provide Plan Sponsor the following reports: (a) Quarterly Plan administration report, including all Participant transactions and balances by fund and in total; (b) Quarterly Trust reconciliation to the Plan report totals, by fund and in total; (c) Quarterly Plan year -to -date claim activity; (d) Annual Plan administration report, including all Participant transactions and balances by fund and in total; (e) Annual Trust reconciliation to the Plan report totals, by fund and in total; (f) Annual Participant statements including Plan Year account statements provided to Plan Sponsor for distribution to Participants; (g) Annual forfeiture reports, if applicable. 2.7 website &e ports. Provide Plan Sponsor with the following website reports: (a) Age demographics including reporting of Plan Participants by configurable age group, years of service and average account balance; (b) Maim distribution reports including Participant census data, claim amounts paid and withdrawal dates within a selected date range; (c) Employee census including Participant name, and address, dates and age; (d) Termination reports for terminated Participant's census data and balance within a selected date range; (e) web usage statistics by a number of categories and the number of web requests made by Participants within a selected date range. 2.8 Recordkeel2ing. Perform recordkeeping services as described herein and in accordance with accurate and timely data provided by the Plan Sponsor: (a) Maintain records of allocations of the Plan's account by Participant and contribution type for each investment fund selected by the Participant or the Plan Sponsor, as applicable. (b) Perform calculations of allocations of Plan Sponsor contributions and earnings according to the direction and information provided by Plan Sponsor. (c) If applicable, perform allocation of existing account balances into investment funds according to directions from Participants provided in accordance with procedures established by Plan Supervisor. Such transactions will be processed each business day as requested by Participants and in accordance with the Plan Supervisor's procedures, or, as soon as administratively feasible. (d) Confirmations of investment transfers directed by Participants will be sent to Participants, if City of Rancho Palo Verdes 1.1-10 2 Resolution No. 2009 -89 Exhibit C Page 19 of 23 applicable. 2.9 Participant Access to Information. Provide Participants with on -going access to the recordkeeping system via a voice response system ( "VRS') and/or website connection on a twenty -four (24) hour basis. Plan Supervisor does not guarantee immediate access or uninterrupted service at any time. Plan Supervisor shall use reasonable efforts to properly maintain the VRS and website using generally accepted industry standards. Plan Supervisor will not be responsible for circumstances beyond Plan Supervisor's reasonable control. Such circumstances shall include, but are not limited to, damage, wear and tear, or maintenance work done to telephone lines, delays or damage due to man -made or natural disasters, unauthorized use of a Participants personal identification number or claims resulting from thereof, or failure or delay of the system for any other reason outside of the Plan Supervisor's control. 2.10 Reporting. If requested by Plan Sponsor, prepare IRS Forms 990, subject to review by the Plan . Sponsor, based on information it may possess and information provided to Plan Supervisor by Plan Sponsor or Plan Trustees. Plan Supervisor is not responsible for preparation of any other tax return, report or other document required by any local, State or Federal law or agency with respect to the Plan. Plan Sponsor is responsible for filing and/or distributing IRS Form 990, and all other tax returns, reports, or any other such documents and forms. If chosen as an optional service as listed on this Schedule, Plan Supervisor will assist Plan Sponsor with other reporting requirements, including IRS Form 5500, if applicable, and Summary Annual Reports. 2.11 Shareholder Communications. For securities held in the account other than employer stock, Plan Supervisor will cause all proxies and accompanying materials solicited by an entity, and all prospectuses issued by a company whose securities are held in account ( "shareholder communications") to be mailed to the Plan Sponsor within a reasonable period of time after the receipt of such shareholder communications by Plan Supervisor. In the event a participant makes a request to the Plan Supervisor for a copy of any shareholder communication, the Plan Supervisor shall forward such request, within a reasonable time period, to the Plan Sponsor who shall be responsible for responding to such request. (a) Plan Supervisor has no responsibility to disseminate copies of shareholder communications to Participants who have invested their accounts in the securities for which such shareholder communications have been received or to any other person. If the shareholder communications include a requirement, request, or opportunity for action (such as a proxy, consent, election, instruction, direction, approval, or similar action) ("Proxies"), the Plan Sponsor will be solely responsible for soliciting and forwarding Proxy votes in accordance with the plan document and the requirements of the law. (b) In no case will Plan Supervisor be under any duty to determine how, or if, Proxies are voted or to take any other action in connection with any shareholder communication. Plan Supervisor will be under no obligation to forward or return any other corporate material received on behalf of the account unless required by law except to the extent provided in this paragraph. 2.12 Ministerial and Nondiscretionary. Plan Supervisor accepts responsibility only for the ministerial and nondiscretionary services described in this Agreement and only to the extent that Plan Sponsor furnishes accurate and timely information to Plan Supervisor. The services to be performed by Plan Supervisor shall be performed within the framework of policies, interpretations, rules, practices and procedures set or established by the Plan Sponsor. Plan Supervisor shall not have discretionary authority or control respecting management of the Plan and shall not have authority to exercise any control respecting disposition of the assets of the Plan and shall not render investment advice with respect to any money or other property of the Plan Sponsor or the Plan and shall have no authority or responsibility to do so. 2.13 Not a Fiduciary. Plan Supervisor does not assume Plan Sponsor's fiduciary, administrative, or other City of Rancho Palo Verdes 1 -1-10 3 Resolution No. 2009 -89 Exhibit C Page 20 of 23 responsibilities for compliance with and as defined by ER.ISA and any other applicable federal or state statutes. 2.14 Prospectuses. Plan Supervisor is not responsible for distributing or mailing any fund prospectuses to the Plan Sponsor or any Participant. 3. Plan Sponsor's Responsibilities 3.1 Plan Documentation. Plan Sponsor shall establish the Plan(s) and Trust(s), all Plan and Trust documentation, including, but not limited to, Plan Documents, Trust Documents, Summary Plan Descriptions, Plan and Trust amendments, Summary of Material Modifications and the application for tax- exempt status, including IR.S Form 1 024, Application for Recognition of Exemption Under Section 5 01(a), for the Trust(s) . (a) Plan Provisions. Plan Sponsor shall determine the benefit and administrative provisions of the Plan and Trust and shall be solely responsible for the terms of the Plan and Trust. (b) Document Review. Plan Sponsor will review documents provided and be responsible for all terms within the documents that define the parameters of the Plan and Trust. 3.2 Eligibilfty Determination. Plan Sponsor shall make all benefit eligibility determinations required under any of the Plans covered by this Schedule. 3.3 Miscellaneous. The Plan Sponsor shall be responsible for taking the following actions: (a) Provide the Plan Supervisor with a complete and accurate list of all individuals eligible for benefits under the Plan (hereafter known as "Participants ") and who are enrolled at any time during the year in the Plan, changes in benefit eligible status, employee contributions if any, and such other information as the Plan Supervisor may reasonably require in order to render the services contemplated by this Agreement. (b) Notify the Plan Supervisor of any changes in Participant eligibility. If Plan Sponsor amends or modifies any plan or trust documents that may affect the services provided by Plan Supervisor pursuant to this Agreement, Plan Sponsor agrees to notify Plan Supervisor no later than the effective date of the amendment or the date of adoption of the amendment. Plan Supervisor shall be responsible for providing services pursuant to such amendment only upon its written consent, such consent not to be unreasonably withheld but may be conditioned upon Plan Sponsor's agreement to pay increased administrative fees. (c) Unless otherwise agreed to in a separate written administration services agreement between Plan Supervisor and Plan Sponsor, the Plan Sponsor will be responsible for COBRA continuation and any state continuation requirements if applicable. (d) Plan Sponsor is responsible for compliance with HIPAA. except as provided in the HIPAA Business Associate Agreement in Schedule B. Plan Sponsor shall make all determinations with regard to the Family and Medical Leave Act (FMLA). Plan Sponsor shall be responsible for compliance with any Qualified Medical Child Support Orders (QMCSO). Plan Supervisor shall be entitled to rely solely on Plan Sponsor's determinations and shall not be responsible for verifying such determinations. (e) Plan Sponsor shall distribute to Participants and provide or return to the Plan Supervisor as needed, appropriate and necessary materials and documents, including, but not limited to, Summary Plan Descriptions, if appropriate, or other plan summaries, Summary Annual Reports, Plan amendments, Summary of Material Modifications or other change summaries, enrollment forms, and claim reimbursement forms as may be necessary for the operation of the Plan or to satisfy the requirements of law. (f Unless otherwise noted in this Schedule, Plan Sponsor shall satisfy reporting, notice, disclosure, and annual return requirements and other regulatory requirements imposed by law. The City of Rancho Palo Verdes 1 -1 -10 4 Resolution No. 2009 -89 Exhibit C Page 21 of 23 responsibility for filing and/or distributing IRS Form 990, and all other tax returns, reports, or other documents shall be that of the Plan Sponsor. (g) Utilize and maintain Plan Supervisor as the single, sole and exclusive Plan Supervisor to assist Plan Sponsor in administering the Plan. (h) Provide Plan Supervisor with any additional information as may be reasonably requested by Plan Supervisor from time to time. (i) Mail and/or otherwise distribute all fund prospectuses as necessary. (j) Review all communication products and materials prepared by Plan Supervisor to ensure consistency of the materials with the terms of the Plan. 3.4 Investments. Plan Sponsor has the sole responsibility to adopt the investment policy for Trust asset investments and for determining how and with whom to invest Trust assets. Plan Supervisor shall have no investment responsibility with respect to Trust assets. 4. Funding Plan Sponsor will transmit contributions directly to the Trustee for the Trust. Plan Supervisor shall coordinate with and receive funds directly from the Trustee for the Trust for purposes of reimbursing eligible claims of Participants. Plan Sponsor shall, in a mutually agreed format, provide Plan Supervisor with such contribution information as is reasonably required by Plan Supervisor in order to perform its duties hereunder, including, but not limited to, the amount of the contribution to be allocated to each participant. Plan Sponsor is responsible for the accuracy and completeness of the information submitted to Plan Supervisor and is solely responsible for any adverse consequences that may result from errors or inaccuracies in such information. Plan Supervisor shall have no responsibility, risk, liability or obligation for the funding of any plan benefits. The responsibility and obligation for funding plan benefits shall be the sole and total responsibility of Plan Sponsor. Plan Supervisor is not responsible for requiring that any contributions be made, or for determining that the contributions that are received by any trust comply with the terms of any plan. 5. Records During the term of this Agreement, the Plan Supervisor shall maintain the records and files in conjunction with the administrative services to be performed by Plan Supervisor hereunder and consistent with the federal record retention requirements. All records and files generated are, and will remain, the property of the Plan Supervisor. Upon termination of this Agreement and upon execution of a waiver (on a form acceptable to Plan Supervisor) of Plan Supervisor's responsibility by the Plan Sponsor, all records and files in the Plan Supervisor's possession will be returned to the Plan Sponsor and Plan Sponsor will be solely responsible for retention of such records and files. The term "records and files" shall include the claim fixes, election farms, and claim reimbursement forms. 6. Fees 6.1 In exchange for the services rendered pursuant to this Agreement, the Plan Supervisor shall receive the amount determined in accordance with the Fee Schedule. Generally, all such fees will be paid as provided in the Adoption Agreement, provided per participant per month fees may be paid directly from the accounts of Participants that are claims active (i.e. able to submit claims and obtain reimbursement) only if such participants will not be receiving any future contributions. 6.2 Payment by Participants. Subject to the foregoing, if the Plan provides that administrative fees for employees shall be paid from the Trust (including from a Participant's account), the Plan Supervisor shall bill the Trust and/or the Participants' accounts directly as the fees become due. Notwithstanding the forgoing, if the Plan provides that the administrative fees for a Participant who has terminated' employment with Plan Sponsor, shall be paid from the Participant's account every six (6) months (in City of Rancho Palo Verdes 1 -1 -10 5 Resolution No. 2009 -89 Exhibit C Page 22 of 23 January and July) on a prospective basis (i.e. the January billing shall cover January through June). If the participant terminates employment after the regularly scheduled billing dates (i.e. in January and July), ' the first billing for that Participant shall occur on the date following the date of termination and shall cover the months between that date and the date of the next regularly scheduled billing. 6.3 Minimum Fees. The minimum monthly fee described in the Fee Schedule shall apply if the sum of the recordkeeping fees and standard claims processing fess (excluding such fees that are charged with respect to participants not currently employed by the Plan Sponsor and that are deducted from their health care reimbursement accounts) does not exceed the applicable minimum provided in the Fee Schedule. If the minimum fee applies, the asset-based fees in the Fee Schedule and any recordkeeping fees and standard claims processing fees deducted from the health care reimbursement accounts of Participants not employed by Plan Sponsor will be charged and collected in addition to the applicable minimum monthly fee. 6.4 Fees of Distributors. In the event Plan Sponsor or the Plan is responsible for authorized distributor fees related to the Plan, Plan Supervisor reserves the right to bill and collect from the Trust any distributor fees, which shall be in addition to the administrative fees described in the Fee Schedule. 6.5 Fees a able b Mutual Funds. Plan Supervisor, its agents and affiliates, may receive compensation from certain mutual funds or their affiliates to cover expenses relating to services provided by Plan Supervisor, its agents and affiliates, to the funds, including, but not limited to, the purchase and redemption of shares and participant level recordkeeping. This compensation is paid directly to the Plan Supervisor, its agents or affiliates, by the funds pursuant to a services agreement between the Plan Supervisor and each fund or its affiliate. Plan Sponsor is not responsible for this payment. Payment made to Plan Supervisors its agents and affiliates, by the funds is based upon a percentage of the average daily net asset value of shares invested in the fund, or a set fee per each fund in which a participant invests. Plan Sponsor may contact Plan Supervisor to receive additional information concerning this compensation, including which funds pay compensation to Plan Supervisor, its agents and affiliates, and an estimate of the total amount of compensation received during a particular period of time. 7. Fee Schedule In exchange for the services rendered pursuant to this Schedule of work, the Plan Supervisor shall receive the amount determined in accordance with Schedule A that is attached hereto and herein incorporated by reference. IN ''FITNESS WHEREOF, pursuant and in accordance with the Agreement between the parties, the parties have executed this Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and Recordkeeping Administrative Services effective as of the date first above written. optumHealth Financial Services M Name: Title: City of Rancho Palo Verdes 1 -1-10 City of Rancho Palos Verdes Name: tefan Wolowicz Title: Ma o r 6 Resolution No. 2009 -89 Exhibit C Page 23 of 23