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Item 4FCITY OF SOUTHLAKE MEMORANDUM August 25, 2009 TO: Shana Yelverton, City Manager FROM: Kevin Hugman, Director of Human Resources Sharen Jackson, Director of Finance SUBJECT: Resolution No. 09 -053, Electing to participate in the PARS Public Agencies Post - retirement Health Care Plan Trust, and designating a Plan Administrator Action Requested: City Council approval of Resolution No. 09 -053, electing to participate in the PARS public agencies post- retirement health care plan trust, and designating a Plan Administrator. Background Information: In Spring 2004, the Governmental Accounting Standards Board (GASB) issued Statement No. 45 (GASB 45) which relates to the accounting treatment for other post employment benefits (OPEB). These benefits relate primarily to retiree health insurance coverage and the City's financial obligation which must be actuarially accounted for over a 30 -year period. GASB 45 seeks to establish an annual cost associated with providing post - employment benefits to current and former employees in order to record a liability for future health care benefits on the City's Comprehensive Annual Financial Report beginning with fiscal year 2009. The City engaged the services of Gabriel, Roeder, Smith and Company (GRS) to perform an actuarial analysis of the future liabilities of current benefits provided to active and retired employees. Annual Required Contribution amounts (ARC) to fund the actuarial liability were calculated under two different scenarios: (1) a pay -as- you -go approach (PAYGO); and (2) establishing an irrevocable trust fund specifically for retiree health plan coverage. The PAYGO approach results in higher annual required contributions to fully fund the actuarial liability. Funds placed in an irrevocable trust fund can be invested long term and achieve higher rates of return, leading to a lower ARC required to fund the actuarial liability. The Trust funds can only be used for the purpose intended — to make future payments related to retiree health care. Public Agency Retirement Systems (PARS) has established a multi - employer irrevocable trust in accordance with Section 115 of the Shana Yelverton, City Manager August 25, 2009 Page 2 of 3 Internal Revenue Code and has obtained a private letter ruling from the IRS providing assurance of their Trust as a tax - exempt pre - funding vehicle for postemployment benefits. It should be noted that while the PARS product is a multi - employer trust, there is no sharing of liabilities or investment earnings and separate employer accounts are maintained. PARS will administer the Trust using Union Bank as Trustee and Highmark Capital Management as Investment Manager. PARS has offices in Dallas and Irvine, California and is a leading provider of OPEB Trust services for compliance with GASB 45. The City of Southlake currently uses PARS to administer the Alternate Retirement System in lieu of Social Security for temporary, part -time employees. We have been pleased with the service PARS and Union Bank have provided. The City Manager is designated as the Plan Administrator and is authorized to delegate individuals in writing to act on her behalf with the Trust Administrator, the Trustee and the Investment Manager. The Investment Manager will assist the City in providing an appropriate investment strategy for the City's managed accounts. Financial Considerations: For the fiscal year ending September 30, 2009, the City will invest $130,000 in the Trust and plans to invest $50,000 in FY 2010. The GRS calculated ARC is $128,502. ( NOTE : Employers must disclose the ARC and the net OPEB obligation, which is the difference between actual contributions and the ARC. Therefore, even when actual contributions are less than the ARC, the smaller this difference is, the stronger the financial health of the city. Any funding of future liabilities is a positive move and will be viewed favorably by rating agencies and auditors.) The fee for services provided by PARS is 0.25% for assets under $10 million, with a minimum monthly fee of $400. Trustee /Investment Management fees are 0.35% for assets under $5 million with no minimum limit. Initial administrative and management costs will be $5,255 annually (assumes initial investment of $130,000). The fee percentage decreases as the amounts held in trust increase. Fees will initially be paid from the General Fund, however, as the trust's assets grow, the fees can be paid from investment earnings. Citizen Input/ Board Review: NIA Shana Yelverton, City Manager August 25, 2009 Page 3 of 3 Legal Review: The City Attorney has reviewed Resolution No. 09 -053, and the related Trust documents (Adoption Agreement, Trust Agreement, Master Plan Document, and Agreement for Administrative Services), Alternatives: Changes as may be desired by City Council. Supporting Documents: Resolution No. 09 -053 Adoption Agreement Trust Agreement Master Plan Document (amended and restated as of May 16, 2007) Agreement for Administrative Services Staff Recommendation: City Council approve Resolution No. 09 -053, electing to participate in the PARS public agencies post - retirement health care plan trust, and designating the City Manager as the Plan Administrator. City of Southlake, Texas RESOLUTION NO. 09 -053 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, ELECTING TO PARTICIPATE IN THE PARS PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN TRUST; DESIGNATING A PLAN ADMINISTRATOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, it is determined to be in the best interest of the City of Southlake (the "City ") to participate in the PARS Public Agencies Post- Retirement Health Care Plan Trust (the "Program ") to fund post - employment benefits for its employees as specified in the City's policies and/or applicable collective bargaining agreements; and WHEREAS, the City is eligible to participate in the Program, a tax - exempt trust and plan performing an essential governmental function within the meaning of Section 115 of the Internal Revenue Code, as amended, and the Regulations issued thereunder, and is a tax - exempt trust under the relevant statutory provisions of the State of Texas; NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, THAT: Section 1: The City Council hereby adopts the PARS Public Agencies Post - Retirement Health Care Plan Trust, including the PARS Public Agencies Post- Retirement Health Care Plan, as part of the City Retirement Program, effective September 1, 2009 Section 2: The City Council hereby appoints the City Manager or his /her successor as the City's Plan Administrator for the Program. Section 3: The City's Plan Administrator is hereby authorized to execute the PARS legal documents on behalf of the City and to take whatever additional actions are necessary to maintain the City's participation in the Program and to maintain compliance of any relevant regulation issued or as may be issued; therefore, authorizing him /her to take whatever additional actions are required to administer the City's PARS plan(s). Section 4: This resolution shall become effective after its passage and adoption by the City Council. PASSED AND APPROVED THIS THE DAY OF , 2009. John Terrell, Mayor ATTEST: Lori Payne, City Secretary 8/26/2009 ADOPTION AGREEMENT TO THE PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN NB 1;679999.4 EXHIBIT "A" TO PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT No guarantV that payments or reimbursements to em to ees former employees or retirees will be tax -free The Trust has obtained a ruling from the Internal Revenue Service concerning only the federal tax treatment of the Trust's income. That ruling may not be cited or relied upon by the Employer whatsoever as precedent concerning any matter relating to the Employer's health plan(s) (including post- retirement health plans). In particular, that ruling has no effect on whether contributions to the Employer's health plan(s) or payments from the Employer's health plan(s) (including reimbursements of medical expenses) are excludable from the gross income of employees, former employees or retirees, under the Internal Revenue Code. The federal income tax consequences to employees, former employees and retirees depend on the terms and operation of the Employer's health plan(s). Introduction By executing this Adoption Agreement, the Employer specified in Section It of this Adoption Agreement adopts: (1) the Public Agencies Post - Retirement Health Care Plan Document (the "Master Plan Document integrated with the variable provisions contained within this Adoption Agreement, and (2) the Public Agencies Post - Retirement Health Care Plan Trust Agreement (the "Trust Agreement "). Defined terms shall have the meanings attributed to such terms in the Master Plan Document or the Trust Agreement. The Employer hereby selects the following Plan specifications: Section I Plan and Trust Information A.1.1 FULL NAME OF TRUST: Public Agencies Post - Retirement Health Care Plan Trust A.1.2 FULL NAME OF PLAN: Public Agencies Post- Retirement Health Care Plan, as adopted by (name of Employer): City of Southlake A.1.3 EFFECTIVE DATE OF PLAN: If this is a restatement of an existing plan, the restatement became effective: NA NB I:679999.4 EXHIBIT "A7 TO PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT Section II Employer Information A.2.1 EMPLOYER INFORMATION: (See Section 2.1 of Master Plan Document): NAME OF AGENCY ADDRESS: (Street) City of Southlake 1400 Main Street. Suite 440 (City, State Zipcode): Southlake, TX 761092 (Phone Number): (817) 481 -5581 A.2.2 EMPLOYER'S PLAN ADMINISTRATOR: A.2.3 EMPLOYER'S TAX IDENTIFICATION NUMBER: 75- 1251142 A.2.4 EMPLOYER'S FISCAL YEAR means the 12 consecutive month period: Commencing on (month, day) October 1 and Ending on (month, day) September 30 Section III Eligible Employees and Eligible Dependents A.3.1 ELIGIBLE EMPLOYEE: The determination of Eligible Employees and Eligible Dependents is finally and conclusively made by the Employer according to its applicable policies and collective bargaining agreements, and without reference to this Plan. Section IV Investment A.4.1 INVESTMENT APPROACH: (See Section 6.1 of the Master Plan Document): The Employer shall select either a discretionary or a directed approach to investment. X a. Discretionary Investment Approach If the Discretionary Investment Approach is selected, the Employer hereby directs the Trustee to invest the Assets of the Employer's Agency Account pursuant to one of the investment strategies listed on the accompanying Investment Strategy Selection and Disclosure Form or another investment strategy as mutually agreed upon by the Employer and the Trustee. NBI:679999.4 EXHIBIT "A° TO PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT b. Directed Investment Approach If the Directed Investment Approach is selected, the Employer must attach its investment policy and retain its own Registered Investment Advisor. The Employer shall be permitted to direct investments of its Agency Account pursuant to the terms of the Trust Agreement. Execution and Adoption of flan and Related Documents By executing this Adoption Agreement, the Employer hereby adopts and agrees to be bound by the Master Plan Document and the Trust Agreement, and hereby ratifies, confirms and approves the appointment of Union Bank of California, N.A. as the Trustee and the appointment of Public Agency Retirement Services as the Trust Administrator as of the Effective Date. The Employer understands and agrees that the Trust Agreement may be amended from time to time by a vote of the Employers as set forth in the Trust Agreement. This Adoption Agreement is hereby executed and effective as of this day of , 2009. EMPLOYER: CITY OF SOUTHLAKE By: Name Title ACCEPTED: Trust Administrator: Phase II Systems, dba Public Agency Retirement Services Title: Date: Trustee and Investment Fiduciary: Union Bank of California, N.A. By: Title: Date: Date: Title: NB 1:679999.4 EXHIBIT "A" TO PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT APPENDIX A ELIGIBLE EMPLOYEES AND ELIGIBLE DEPENDENTS OF EMPLOYER (non - binding list set forth to facilitate administration) NB1:679999.4 EXHIBIT "A" TO PUBLIC AGENCIES POST- RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT PUBLIC AGENCIES POST- RETIREMENT HEALTH CARE PLAN TRUST AGREEMENT (amended and restated as of May 16, 2007) NB I :557192.5 ARTICLE I DEFINITIONS 1.1 "Adoption Agreement" shall have the meaning given to such term in Section 2.3. 1.2 "Agency Account" shall have the meaning given to such term in Section 2.4. 1.3 "Agreement for Administrative Services" shall mean the agreement executed between the Employer and the Trust Administrator which authorizes the Trust Administrator to perform specific duties of administering the Agency Account of the Employer. 1.4 "Assets" shall have the meaning given to such term in Section 2.5. 1.5 "Code" shall mean the Internal Revenue Code of 1986 as amended from time to time. 1.6 "Delegatee" shall mean an individual or entity, appointed by the Plan Administrator or Employer to act in such matters as are specified in the appointment. 1.7 "Effective Date" shall mean November 1, 2005, the date the Trust was established, and with respect to each Employer, the Effective Date shall be the date on which the Employer executes the Adoption Agreement. 1.8 "Eligible Dependent" shall mean any dependent of an Eligible Employee who is entitled to health care and welfare benefits after the termination of such Eligible Employee's employment with the Employer pursuant to the Employer's policies and/or applicable collective bargaining agreements. 1.9 "Eligible Employee" shall mean any employee of the Employer who is entitled to post - employment health care and welfare benefits pursuant to such Employer's policies and/or applicable collective bargaining agreements. Unless the context otherwise requires, the terra "Eligible Employee" as used herein shall include any Eligible Dependents. 1.10 "Employer" shall mean a public agency that executes the Adoption Agreement, thereby adopting the provisions of this Trust Agreement, provided that such agency is a state, a political subdivision of a state, or an entity the income of which is excludible from gross income under Section 115 of the Code. 1.11 "GASB" shall mean the Governmental Accounting Standards Board.. 1.12 "Omnibus Account" shall mean an account, established for record keeping purposes only, to aggregate the balances of the Assets credited to the Agency Accounts. The Trust Administrator shall maintain and reconcile, at the Agency Account level, the investments of the Agency Accounts and will provide reports NB 1:6571 92.3 to the Plan Administrator with respect to such investments. The Trustee will maintain a record of the aggregate balance (principal and earnings) for all Agency Accounts. The Trust Administrator will in the ordinary course of business maintain a record of the name, address, taxpayer identification number, account number and amount of funds, including earnings, of each Employer. On periodic valuation dates (no less frequently than monthly) to be established by the Trust Administrator, the Trustee and Trust Administrator will reconcile the aggregate balance information maintained by the Trustee with the Agency Account level records maintained by the Trust Administrator pursuant to this Trust Agreement. 1.13 "OPEB "- shall mean "other post - employment benefits," such as medical, dental, vision, life insurance, long -term care and other similar benefits provided to retirees, other than pension benefits. 114 "OPEB Obligation" shall mean an Employer's obligation to provide post - employment health care and welfare benefits to its Eligible Employees as specified in such Employer's policies and /or applicable collective bargaining agreements. 1.15 "Plan" shall mean the Public Agencies Post - Retirement Health Care Plan, adopted by each Employer as a separate Plan for that Employer upon the execution of an Adoption Agreement and the satisfaction of certain other requirements contained herein. 1.16 "Plan Administrator" shall mean the individual designated by position of employment at the Employer to act on its behalf in all matters relating to the Employer's participation in the Trust. 1.17 "Trust" shall mean the Public Agencies Post - Retirement Health Care Plan trust arrangement. 1.18 "Trust Administrator" shall mean Public Agency Retirement Services or any successor trust administrator appointed by the Employers as provided herein. The Trust Administrator shall serve as trust administrator to the Trust established pursuant to this Trust Agreement until such Trust Administrator resigns or is removed as provided in Article Ill. 1.19 "Trust Agreement" shall mean this Public Agencies Post - Retirement Health Care Plan trust document adopted by each Employer upon execution of an Adoption Agreement, as amended from time to time. 1.20 "Trustee" shall mean Union Bank of California, N.A., or any successor trustee appointed by the Employers as provided herein. The Trustee shall serve as trustee of the 'Trust established pursuant to the provisions of this Trust Agreement until such Trustee resigns or is removed as provided in Article III. 2 NB 1, 657192.3 ARTICLE II THE TRUST 2.1 Multiple Employer Trust The Trust is a multiple employer trust arrangement established to provide economies of scale and efficiency of administration to public agencies that adopt it to hold the assets used to fund its OPEB Obligation. The Trust is divided into Agency Accounts to hold the Assets of each Employer as described in Section 2A. 2.2 Purpose The Trust is established with the intention that it qualify as a tax - exempt trust performing an essential governmental function within the meaning of Section 115 of the Code and any regulations issued thereunder and as a tax - exempt trust under the provisions of the relevant state's statutory provisions of each Employer. This Trust Agreement shall be construed and the Trust shall be administered in a manner consistent with such intention. The fundamental purpose of the Trust is to fund past - employment benefits (other than pension benefits), such as medical, dental, vision, life insurance, long -term care and similar benefits, offered by the Employer to its employees as specified in each Employer's policies and /or applicable collective bargaining agreements. It is intended that adopting Employers retain an interest in the underlying securities held in the Trust on their behalf, rather than in the Trust itself. 2.3 Employers Any public agency may, by action of its governing body in writing accepted by the Trustee, adopt the provisions of the Trust Agreement. Executing an adoption instrument for the Trust ( "Adoption Agreement "), in the form attached hereto as Exhibit "A" (or such other form as may be approved by the Trustee), shall constitute such adoption, unless the Trustee requires additional evidence of adoption. In order for such adoption to be effective, the public agency must also execute an Agreement for Administrative Services with Public Agency Retirement Services, the Trust Administrator, pursuant to section 3.6 of this Trust Agreement. Such adopting Employer shall then become an Employer of the Trust. Each such Employer shall, at a minimum, furnish the Trust Administrator with the following documents to support its adoption of the Trust: (a) a certified copy of the resolution(s) of the governing body of the Employer authorizing the adoption of the Trust Agreement and the appointment of the Plan Administrator for such Employer; N 81:657192.3 (b) an original of the Adoption Agreement executed by the Plan Administrator or other duly authorized Employer employee; (c) an original of the Agreement for Administrative Services with Public Agency Retirement Services executed by the Plan Administrator or other duly authorized Employer employee and Public Agency Retirement Services; (d) an address notice; and (e) such other documents as the Trustee may reasonable request. (f) Any action taken by the Plan Administrator for an Employer shall be deemed to have been taken by such Employer. Any notice given to or delivered by the Plan Administrator for an Employer shall be deemed to have been given to or delivered by such Employer. 2.4 Agency Accounts Upon an Employer's adopting the Trust Agreement, as provided in Section 2.3, a separate "Agency Account" shall be established under the Trust for that Employer, and all Assets of the Trust attributable to that Employer shall be held in that Employer's Agency Account. The Assets of the Trust that are held in an Employer's Agency Account shall be available only to pay post - employment health care and welfare benefits of Eligible Employees of that Employer (including reimbursement of the Employer for payments to health care providers with respect to such benefits) and shall not be available to pay any obligations incurred by any other Employer as provided in Section 2.8. 2.5 Assets of Agency Account The assets held in an Agency Account shall consist of all contributions and transfers received by the Trust on behalf of the Employer, together with the income and earnings from such contributions and transfers, and any increments accruing to them, net of any investment losses, benefits, expenses or other costs ( "Assets "). All contributions or transfers shall be received by the Trustee in cash or in other property acceptable to the Trustee. The Trustee shall manage and administer the Assets held in Agency Accounts without distinction between principal and income. The Trustee and the Trust Administrator shall have no duty to compute any amount to be transferred or paid to the Agency Account by the Employer, and the Trustee and the Trust Administrator shall not be responsible for the collection of any contributions or transfers to the Agency Account. 2.6 Aggregate Balance for investment and Administration The balances of the Assets of more than one Agency Account may be aggregated by the Trustee in one or more Omnibus Accounts for investment and administrative purposes, to provide economies of scale and efficiency of administration to the Agency Accounts. The responsibility for Plan and Agency 4 NB1:6571 92.8 Account level accounting within this Omnibus Account(s) shall be that of the Trust Administrator. 2.7 Trustee Accounting The Trustee shall be responsible only for maintaining records and maintaining accounts for the aggregate assets of the Trust. The responsibility for Plan level accounting for each Agency Account, based upon the Omnibus Account(s), shall be that of the Trust Administrator.. 2.8 No Diversion of Assets The Assets in each Agency Account shall be held in trust for the exclusive purpose of providing post - employment health care and welfare benefits to the Eligible Employees of the Employer for which such Agency Account was established and defraying the reasonable administrative and actuarial expenses of such Employer's participation in the Trust. The Assets in each Agency Account shall not be used for or diverted to, any other purpose, including, but not limited to, the satisfaction of any other Employer's OPEB Obligation. 2.9 Type and Nature of Trust Neither the full faith and credit nor the taxing power of each Employer is pledged to the distribution of benefits hereunder. Except for contributions and other amounts hereunder, no other amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are neither general nor special obligations of any Employer, but are payable solely fi the Assets held in such Employer's Agency Account, as more fully described herein. No employee of any Employer or beneficiary may compel the exercise of the taxing power by any Employer. Distributions of Assets from any Agency Account are not debts of any Employer within the meaning of any constitutional or statutory limitation or restriction. Such distributions are not legal or equitable pledges, charges, liens or encumbrances, upon any of an Employer's property, or upon any of its income, receipts, or revenues, except amounts in the accounts which are, under the terms of each Plan and the Trust set aside for distributions. Neither the members of the governing body of any Employer nor its officers, employees, agents or volunteers are liable hereunder. 2.10 Loss of Tax - Exempt Status as to Any Employer If any Employer participating in the Trust receives notice from the Internal Revenue Service that the Trust as to such Employer fails to satisfy the requirements of Section 115 of the Code, or if any Employer consents to the Internal Revenue Service's determination that the Trust fails to meet such requirements, Assets having a value equal to the funds then held in such Employer's Agency Account shall be segregated and placed in a separate trust by the Trustee for the exclusive benefit of such Employer's Eligible Employees N131:657192.8 within a reasonable time after the Trust Administrator notifies the Trustee of the Internal Revenue Service's determination. Each Employer participating in the Trust agrees to immediately notify the Trust Administrator upon receiving such notice or giving such consent. The separate trust provided for in this Section 2.10 shall thereafter be considered as a separate trust containing all of the provisions of this Trust Agreement until terminated as provided in this Trust Agreement. ARTICLE III ADMINISTRATIVE MATTERS 3.1 Appointment of Trustee The Employers may, with the approval of two- thirds (213) or more of the Employers then participating in the Trust, act to appoint a bank, trust company, retirement board, insurer, committee or such other entity as pennitted by law, to serve as the trustee of this Trust. Such action must be in writing. Upon the written acceptance of such entity it shall become the Trustee of the Trust. If the Trustee is removed or resigns pursuant to Section 3.2, the Employers shall appoint a successor Trustee in accordance with the voting requirements set forth in this Section 3.1. 3.2 Resignation or Removal of Trustee The Employers may act to remove the Trustee, provided that such action must satisfy the voting requirements set forth in Section 3.1 and notice of such action must be promptly delivered to the Trust Administrator, the Trustee and each Plan Administrator. The Trustee may also resign at any time by giving at least ninety (90) days prior written notice to the Trust Administrator and to the flan Administrator of each Employer that has adopted the Trust Agreement and not terminated its participation in the Trust; provided, however, that the Trustee may resign immediately upon the earlier of the approval date or the effective date of any amendment of the Trust Agreement by the Employers that would change or modify the duties, powers or liabilities of the Trustee hereunder without the Trustee's consent. The Trustee shall, upon the appointment and acceptance of a successor trustee, transfer and deliver the Assets and all records relating to the Trust to the successor, after reserving such reasonable amount as it shall deem necessary to provide for its fees and expenses and any sums chargeable against the Trust for which it may be liable. The Trustee shall do all acts necessary to vest title of record in the successor trustee. 3.3 Withdrawal of Employer An Employer may elect to withdraw from the Trust by giving at least ninety (90) days prior written notice to the Trustee and the Trust Administrator. If an Employer so elects to withdraw, Assets having a value equal to the funds held in b NB 1:657142.8 such Employer's Agency Account shall be segregated by the Trustee and, as soon as practicable, shall be transferred to a trust established by the Employer, provided that (i) such trust shall satisfy the requirements of Section 115 of the Code, and (ii) all assets held by such trust shall qualify as "plan assets" within the meaning of GASB Statement No. 45, in each case as reasonably determined by the Employer and certified in writing by the Employer to the Trust Administrator. The Employer shall appoint a trustee for the such Employer's separate trust, and such appointment shall vest the successor trustee with title to the transferred Assets upon the successor trustee's acceptance of such appointment. 3.4 The Plan Administrator The governing body of each Employer shall have plenary authority for the administration and investment of such Employer's Agency Account pursuant to any applicable state laws and applicable federal laws and regulations. Each Employer shall by resolution designate a Plan Administrator. Unless otherwise specified in the instrument the Plan Administrator shall be deemed to have authority to act on behalf of the Employer in all matters pertaining to the Employer's participation in the Trust and in regard to the Agency Account of the Employer. Such appointment of a Plan Administrator shall be effective upon receipt and acknowledgment by the Trustee and the Trust Administrator and shall be effective until the Trustee and the Trust Administrator are furnished with a resolution of the Employer that the appointment has been modified or terminated. 3.5 Failure to Appoint Plan Administrator If a Plan Administrator is not appointed, or such appointment lapses, the Employer shall be deemed to be the Plan Administrator. As used in this document the term "Plan Administrator" shall be deemed to mean "Employer" when a Plan Administrator has not been appointed for such Employer. 3.6 Delegatee The Plan Administrator, acting on behalf of the Employer, may delegate certain authority, powers and duties to a Delegatee to act in those matters specified in the delegation. Any such delegation must be in a writing that names and identifies the Delegatee, states the effective date of the delegation, specifies the authority and duties delegated, is executed by the Plan Administrator, is acknowledged in writing by the Delegatee, and is certified as required in Section 3.7 to the Trust Administrator. Such delegation shall be effective until the Trustee and the Trust Administrator are directed in writing by the Plan Administrator that the delegation has been rescinded or modified. 3.7 Certification to Trustee The governing body of each Employer, or other duly authorized official, shall certify in writing to the Trustee and the Trust Administrator the names and specimen signatures of the Plan Administrator and Delegatee, if any, and all 7 NB 1.657192.8 others authorized to act on behalf of the Employer whose names and specimen signatures shall be kept accurate by the Employer acting through a duly authorized officer or governing body of the Employer. The Trustee and the Trust Administrator shall have no liability if they act upon the direction of a flan Administrator or Delegatee that has been duly authorized, as provided in Section 3.6, if that Plan Administrator or Delegatee is no longer authorized to act, unless the Employer has informed the Trustee and the Trust Administrator of such change. 3.8 Directions to Trustee All directions to the Trustee from the Plan Administrator or Delegatec must be in writing and must be signed by the Plan Administrator or Delegatee, as the case may be. For all purposes of this Trust Agreement, direction shall include any certification, notice, authorization, application or instruction of the Plan Administrator, Delegatee or Trustee appropriately communicated. The above notwithstanding direction may be implied if the Plan Administrator or Delegatee has knowledge of the Trustee's intentions and fails to file written objection. The Trustee shall have the power and duty to comply promptly with all proper directions of the Plan Administrator or Delegatee, appointed in accordance with the provisions of this Trust Agreement. In the case of any direction deemed by the Trustee to be unclear or ambiguous the Trustee may seek written instructions from the Plan Administrator, the Employer or the Delegatee on such matter and await their written instructions without incurring any liability. If at any time the Plan Administrator or the Delegatec should fail to give directions to the Trustee, the Trustee may act in the manner that in its discretion seems advisable under the circumstances for carrying out the purposes of the Trust and /or the applicable Agency Account which may include not taking any action. The Trustee may request directions or clarification of directions received and may delay acting until clarification is received. In the absence of timely direction or clarification, or if the Trustee considers any direction to be a violation of the Trust Agreement or any applicable law, the Trustee shall in its sole discretion take appropriate action, or refuse to act upon a direction. 3.9 Appointment of Trust Administrator The Employers may, with the approval of two- thirds (2/3) or more of the Employers then participating in the Trust, act to appoint a bank, trust company, retirement board, insurer, committee or such other entity as permitted by law, to serve as Trust Administrator of the Trust. Such action must be in writing. Upon the written acceptance of such entity it shall become the Trust Administrator of the Trust. If the Trust Administrator is removed or resigns pursuant to Section 3.13, the Employers shall appoint a successor Trust Administrator in accordance with the voting requirements set forth in this Section 3.9. 8 N B 1:65 7192.8 3.10 Trust Administrator The Trust Administrator's duties involve the performance of the following services pursuant to the provisions of this Trust Agreement and the Agreement for Administrative Services: (a) Perfonning periodic accounting of each Agency Account and reconciling such Agency Account balances with the Trust/Omnibus Account; (b) Directing the Trustee to make distributions from the applicable Agency Account to health care providers (or to the Employer for reimbursement of payments made to health care providers) for post - employment health care and welfare benefits; (c) Allocating contributions, earnings and expenses to each Agency Account; (d) Directing the Trustee to pay the fees of the Trust Administrator and to do such other acts as shall be appropriate to carry out the intent of the Trust; (e) Such other services as the Employer and the Trust Administrator may agree in the Agreement for Administrative Services pursuant to Section 2.3. The Trust Administrator shall be entitled to rely on, and shall be under no duty to question, direction and /or data received from the Plan Administrator, or other duly authorized entity, in order to perform its authorized duties under this trust agreement. The Trust Administrator shall not have any duty to compute contributions made to the Trust, determine or inquire whether contributions made to the Trust by the Plan Administrator or other duly authorized entity are adequate to meet an Employer`s OPEB Obligation as may be determined under GASB Statement Nos. 43 and 45 and any future GASB pronouncements; or determine or inquire whether contributions made to the Trust are in compliance with the Employer's policies and /or applicable collective bargaining agreements. The Trust Administrator shall not be liable for nonperformance of duties if such nonperformance is directly caused by erroneous, and /or late delivery of, directions or data from the Plan Administrator, or other duly authorized entity. 3.11 Additional Trust Administrator Services The Plan Administrator may at any time retain the Trust Administrator as its agent to perform any act, keep any records or accounts and make any computations which are required of the Employer or the flan Administrator by this Trust Agreement or by the Employer's policies and /or applicable collective bargaining agreements. The Trust Administrator shall be separately compensated for such service and such services shall not be deemed to be contrary to the Trust Agreement. 9 N B l :657192.3 312 Trust Administrator's Compensation As may be agreed upon from time to time by the Employer and Trust Administrator, the Trust Administrator will be paid reasonable compensation for services rendered or reimbursed for expenses properly and actually incurred in the performance of duties with respect to such Employer's Agency Account and to the Trust. 3.13 Resignation or Removal of Trust Administrator The Employers may act to remove. the Trust Administrator, provided that such action must satisfy the voting requirements set forth in Section 3.9 and notice of such action must be promptly delivered to the Trust Administrator, the Trustee and each Plan Administrator. The Trust Administrator may also resign at any time by giving at least one hundred and twenty (120) days prior written notice to the Trustee and to the Plan Administrator of each Employer that has adopted the Trust Agreement and not terminated its participation in the Trust; provided, however, that the Trust Administrator may resign immediately upon the earlier of the approval date or the effective date of any amendment of the Trust Agreement by the Employers that would change or modify the duties, powers or liabilities of the Trust Administrator hereunder without the Trust Administrator's consent. The Trust Administrator shall, upon the appointment and acceptance of a successor trust administrator, transfer all records relating to the Trust to the successor. ARTICLE IV THE TRUSTEE 4.1 Powers and Duties of the Trustee Except as otherwise provided in Article V and subject to Article Vl, the Trustee shall have full power and authority with respect to property held in the Trust to do all such acts, take all proceedings, and exercise all such rights and privileges, whether specifically referred to or not in this document, as could be done, taken or exercised by the absolute owner, including, without limitation, the following: (a) To invest and reinvest the Assets or any part hereof in any one or more kind, type, class, item or parcel of property, real, personal or mixed, tangible or intangible; or in any one or more kind, type, class, item or issue of investment or security; or in any one or more kind, type, class or item of obligation, secured or unsecured; or in any combination of them (including those issued by the Trustee of any of its affiliates, to the extent permitted by applicable law), and to retain the property for the period of time that the Trustee deems appropriate; (b) To acquire and sell options to buy securities ( "call" options) and to acquire and sell options to sell securities ( "put" options); 10 NB 1:657192,8 (c) To buy, sell, assign, transfer, acquire, loan, lease (for any purpose, including mineral leases), exchange and in any other manner to acquire, manage, deal with and dispose of all or any part of the Trust property, for cash or credit and upon any reasonable terms and conditions; (d) To make deposits, with any bank or savings and loan institution, including any such facility of the Trustee or an affiliate thereof provided that the deposit bears a reasonable rate of interest; (e) To invest and reinvest the Assets, or any part thereof in any one or more collective investment trust funds, including common and group trust funds that consist exclusively of assets of exempt pension and profit sharing trusts and individual retirement accounts qualified and tax exempt under the Code, that are maintained by the Trustee or an affiliate thereof The declaration of trust or plan of operations for any such common or collective fund is hereby incorporated herein and adopted into this Trust Agreement by this reference. The combining of money and other assets of the Trust with money and other assets of other non - qualified trusts in such fund or funds is specifically authorized. Notwithstanding anything to the contrary in this Trust Agreement, the Trustee shall have full investment responsibility over assets of the trust invested in such commingled funds. If the plan and trust for any reason lose their tax exempt status, and the Assets have been commingled with assets of other tax exempt trusts in Trustee's collective investment funds, the Trustee shall within 30 days of notice of such loss of tax exempt status, liquidate the Trust's units of the collective investment fund(s) and invest the proceeds in a money market fund pending investment or other instructions from the Plan Administrator. The Trustee shall not be liable for any loss or gain or taxes, if any, resulting fi said liquidation; (f) To place uninvested cash and cash awaiting distribution in one or more mutual funds and /or commingled investment funds maintained by or made available by the Trustee or any of its affiliates, and to receive compensation from the sponsor of such fund(s) for services rendered, separate and apart from any Trustee's fees hereunder. The Trustee or its affiliate may also be compensated for providing investment advisory services to any mutual fund or commingled investment funds; (g) To borrow money for the purposes of the Trust from any source with or without giving security; to pay interest; to issue promissory notes and to secure the repayment thereof by pledging all or any part of the Assets; (h) To take all of the following actions: to vote proxies of any stocks, bonds or other securities; to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options, and to make any payments incidental thereto; to consent to or otherwise participate in corporate reorganizations or other changes affecting NB 1.657192.8 corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held in the Trust; (i) To make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted; 0) To raze or move existing buildings; to make ordinary or extraordinary repairs, alterations or additions in and to buildings; to construct buildings and other structures and to install fixtures and equipment therein; (k) To pay or cause to be paid from the Trust any and all real or personal property taxes, income taxes or other taxes or assessments of any or all kinds levied or assessed upon or with respect to the Trust; (1) To exercise all the further rights, powers, options and privileges granted, provided for, or vested in trustees generally under applicable federal or state laws, as amended from time to time, it being intended that, except as herein otherwise provided, the powers conferred upon the Trustee herein shall not be construed as being in limitation of any authority conferred by law, but shall be construed as consistent or in addition thereto. 4.2 Additional Trustee Powers In addition to the other powers enumerated above, the Trustee in any and all events is authorized and empowered: (a) To invest funds pending required directions in any type of interest-bearing account, including, without limitation, time certificates of deposit or interest - bearing accounts issued by the Trustee, or any mutual fund or short term investment fund ( "Fund "), whether sponsored or advised by the Trustee or any affiliate thereof); the Trustee or its affiliates may be compensated for providing such investment advice and providing other service to such Fund, in addition to any Trustee's fees received pursuant to this Trust Agreement; (b) To cause all or any part of the Trust to be held in the name of the Trustee (which in such instance need not disclose its fiduciary capacity) or, as permitted by law, in the name of any nominee, and to acquire for the Trust any investment in bearer form, but the books and records of the Trust shall at all times show that all such investments are a part of the Trust and the Trustee shall hold evidences of title to all such investments; (c) To serve as custodian with respect to the Trust Assets; 12 NB 1:657192.$ (d) To employ such custodians, agents and counsel as may be reasonably necessary in managing and protecting the Assets and to pay them reasonable compensation from the Trust; to employ any broker - dealer or other agent, including any broker - dealer or other agent affiliated with the Trustee, and pay to such broker - dealer or other agent, at the expense of the Trust, its standard commissions or compensation; to settle, compromise or abandon all claims and demands in favor of or against the Trust; and to charge any premium on bonds purchased at par value to the principal of the Trust without amortization from the Trust, regardless of any law relating thereto; (e) In addition to the powers listed herein, to do all other acts necessary or desirable for the proper administration of the Trust, as though the absolute owner thereof; (0 To prosecute, compromise and defend lawsuits, but without obligation to do so, all at the risk and expense of the Trust; and to tender its defense to the Employer in any legal proceeding where the interests of the Trustee and the Employer are not adverse; (g) To exercise and perform any and all of the other powers and duties specified in this Trust Agreement or the Plan; (h) To permit such inspections of documents at the principal office of the Trustee as are required by law, subpoena or demand by a United States agency; (i) To comply with all requirements imposed by applicable provisions of law; 0) To seek written instructions from the Plan Administrator or other fiduciary on any matter and await their written instructions without incurring any liability. If at any time the flan Administrator or the fiduciary should fail to give directions to the Trustee, the Trustee may act in the manner that in its discretion seems advisable under the circumstances for carrying out the purposes of the Trust; (k) To compensate such executive, consultant, actuarial, accounting, investment, appraisal, administrative, clerical, secretarial, medical, custodial, depository and legal firms, personnel and other employees or assistants as are engaged by the Plan Administrator in connection with the administration of the Plan and to pay from the Trust the necessary expenses of such fit - ins, personnel and assistants, to the extent not paid by the Plan Administrator; (1) To act upon proper written directions of the Plan Administrator or Delegatee, including directions given by photostatic transmissions using facsimile signature, and such other forms of directions as the parties shall agree; (in) To pay from the Trust the expenses reasonably incurred in the administration of the Trust as provided in the Plan; 13 N ©I :6ST 192.3 (n) To maintain insurance for such purposes, in such amounts and with such companies as the Plan Administrator shall elect, including insurance to cover liability or losses occurring by reason of the acts or omissions of fiduciaries but only if such insurance permits recourse by the insurer against the fiduciary in the case of a breach of a fiduciary obligation by such fiduciary. ARTICLE V INVESTMENTS 5.1 Discretionary Versus Directed Investment The Employer shall elect either a discretionary or directed investment approach. If the Employer elects a discretionary investment approach, the Employer shall further elect between the various investment strategies offered and the Trustee, in accordance with Article IV, shall have absolute discretion over the investment of the Assets held in such Employer's Agency Account, If the Employer elects a directed investment approach, the Trustee shall direct the investment of the Assets of such Employer's Agency Account in accordance with the direction provided by such Employer. 5.2 Trustee Fees As may be agreed upon, in writing, between the Plan Administrator and Trustee, the Trustee will be paid reasonable compensation for services rendered or reimbursed for expenses properly and actually incurred in the perfonnance of duties with respect to the applicable Agency Account or the Trust. 5.3 Contributions Eligible Employees are not permitted to make contributions to the Trust. The Plan Administrator shall, on behalf of the Employer, make all contributions to the Trustee. Such contributions shall be in cash unless the Trustee agrees to accept a contribution that is not in cash. All contributions shall be paid to the Trustee for investment and reinvestment pursuant to the terms of this Trust Agreement. The Trustee shall not have any duty to determine or inquire whether any contributions to the Trust made to the Trustee by any Plan Administrator are in compliance with the Employer's policies and/or collective bargaining agreements; nor shall the Trustee have any duty or authority to compute any amount to be paid to the Trustee by any Plan Administrator; nor shall the Trustee be responsible for the collection or adequacy of the contributions to meet an Employer's OPEB Obligation, as may be determined under GASB Statement No. 45. The contributions received by the Trustee from each Employer shall be held and administered pursuant to the terms hereof without distinction between income and principal. 14 HaI:657192.8 5.4 Records (a) The Trustee shall maintain accurate records and detailed accounts of all investments, receipts, disbursements and other transactions hereunder at the Trust level. Such records shall be available at all reasonable times for inspection by the Trust Administrator, The Trustee shall, at the direction of the Trust Administrator, submit such valuations, reports or other information as the Trust Administrator may reasonably require. (b) The Assets of the Trust shall be valued at their fair market value on the date of valuation, as determined by the Trustee based upon such sources of information as it may deem reliable; provided, however, that the Plan Administrator shall instruct the Trustee as to valuation of assets which are not readily determinable on an established market. The Trustee may rely conclusively on such valuations provided by the Plan Administrator and shall be indemnified and held harmless by the Employer with respect to such reliance. If the Plan Administrator fails to provide such values, the 'Trustee may take whatever action it deems reasonable, including employment of attorneys, appraisers or other professionals, the expense of which will be an expense of administration of the Trust. Transactions in the account involving such hard to value assets may be postponed until appropriate valuations have been received and Trustee shall have no liability therefore. 5.5 Statements (a) Periodically as specified, and within sixty days after December 3l, or the end of the Trust's fiscal year if different, Trustee shall render to the Trust Administrator as directed, a written account showing in reasonable summary the investments, receipts, disbursements and other transactions engaged in by the Trustee during the preceding fiscal year or period with respect to the Trust. Such account shall set forth the assets and liabilities of the Trust valued as of the end of the accounting period. (b) The Trust Administrator may approve such statements either by written notice or by failure to express objections to such statements by written notice delivered to the Trustee within 90 days from the date the statement is delivered to the Trust Administrator. Upon approval, the Trustee shall be released and discharged as to all matters and items set forth in such statement as if such account had been settled and allowed by a decree from a court of competent jurisdiction. 5.6 Wire Transfers The Trustee shall follow the Plan Administrator's, Delegatee's, or Trust Administrator's wire transfer instructions in compliance with the written security procedures provided by the party providing the wire transfers. The Trustee shall perform a telephonic verification to the Plan Administrator, Trust Administrator, 15 N B 1:657192.8 or Delegatee, or such other security procedure as selected by the party providing wire transfer directions, prior to wiring funds or following facsimile directions as Trustee may require. The Plan Administrator assumes the risk of delay of transfer if Trustee is unable to reach the Plan Administrator, or in the event of delay as a result of attempts to comply with any other security procedure selected by the directing party. 5.7 Exclusive Benefit The Assets of an Employer's Agency Account shall be held in trust for the exclusive purpose of providing post - employment health care and welfare benefits to the Eligible Employees of the Employer pursuant to the Employer's policies and/or applicable collective bargaining agreements, and defraying the reasonable expenses associated with the providing of such benefits, and shall not be used for or diverted to any other purpose. No party shall have authority to use or divert the Assets of an Agency Account of an Employer for the payment of post - employment health care and welfare benefits or expenses of any other Employer. 5.8 Delegation of Duties The Plan Administrator, Delegatee, or Trust Administrator, may at any time retain the Trustee as its agent to perform any act, keep any records or accounts and make any computations that are required of the Plan Administrator, Delegatee or Trust Administrator by this Trust Agreement or by the Plan. The Trustee may be compensated for such retention and such retention shall not be deemed to be contrary to this Trust Agreement. 5.9 Distributions The Trustee shall, from time to time, upon the written direction of the Plan Administrator or Delegatee, make distributions from the Assets of the Trust to the insurers, third party administrators, health care and welfare providers or other entities providing Plan benefits or services, or to the Employer for reimbursement of Plan benefits and expenses paid by the Employer in such manner in such form(s), in such amounts and for such purposes as may be specified in such directions. In no event shall the Trustee have any responsibility respecting the application of such distributions, nor for determining or inquiring into whether such distributions are in accordance with the Employer's policies and /or applicable collective bargaining agreements. 16 NBI- 657192.8 ARTICLE VI FIDUCIARY RESPONSIBILITIES 6.1 More Than One Fiduciary Capacity Any one or more of the fiduciaries with respect to the Trust Agreement or the Trust may, to the extent required thereby or as directed by the Flan Administrator pursuant to this Trust Agreement, serve in more than one fiduciary capacity with respect to the Trust Agreement and the Trust. 6.2 Fiduciary Discharge of Duties Except as otherwise provided by applicable law, each fiduciary shall discharge such fiduciary's duties with respect to the Trust Agreement and the Trust: (a) solely in the interest of the Eligible Employees and for the exclusive purpose of providing post - employment health care and welfare benefits to Eligible Employees, and defraying reasonable administrative and actuarial expenses associated with providing such benefits, and (b) with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent roan acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims. 6.3 Limitations on Fiduciary Responsibility To the extent allowed by the laws of the state of each Employer: No fiduciary shall be liable with respect to a breach of fiduciary duty by any other fiduciary if such breach was committed before such party became a fiduciary or after such party ceased to be a fiduciary. No fiduciary shall be liable for a breach by another fiduciary except as provided by law. No fiduciary shall be liable for carrying out a proper direction from another fiduciary, including refraining from taking an action in the absence of a proper direction from the other fiduciary possessing the authority and responsibility to make such a direction, which direction the fiduciary in good faith believes to be authorized and appropriate. 6.4 Indemnification of Trustee by Employer The Trustee shall not be liable for, and Employer shall (to the extent allowed by the laws of the state of each Employer) indemnify, defend (as set out in 6.8 of this Trust Agreement), and hold the Trustee (including its officers, agents, employees 17 NB 1:657192.8 and attorneys) and other Employers harmless from and against any claims, demands, loss, costs, expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred by the indemnified party, arising as a result of Employer's active or passive negligent act or omission or willful misconduct in the execution or performance of its duties under this Trust Agreement. 6.5 Indemnification of Employer by Trustee The Employer shall not be liable for, and Trustee shall (to the extent allowed by the laws of the state of each Employer) indemnify, defend (asset out in 6.8 of this Trust Agreement), and hold the Employer (including its officers, agents, employees and attorneys) and other Employers handless from and against any claims, demands, loss, costs, expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred by the indemnified party, arising as a result of Trustee's active or passive negligent act or omission or willful misconduct in the execution or performance of its duties under this Trust Agreement. 6.6 Indemnification of Trustee by Trust Administrator The Trustee shall not be liable for, and Trust Administrator shall (to the extent allowed by the laws of the state of each Employer) indemnify and hold the Trustee (including its officers, agents, employees and attorneys) harmless from and against any claims, demands, loss, costs, expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred by the indemnified party, arising as a result of Trust Administrator's active or passive negligent act or omission or willful misconduct in the execution or performance of its duties under this Trust Agreement. 6.7 Indemnification of Trust Administrator by Trustee The Trust Administrator shall not be liable for, and Trustee shall (to the extent allowed by the laws of the state of each Employer) indemnify and hold the Trust Administrator (including its officers, agents, employees and attorneys) harmless from and against any claims, demands, loss, costs, expense or liability imposed on the indemnified party, including reasonable attorneys' fees and costs incurred by the indemnified party, arising as a result of Trustee's active or passive negligent act or omission or willful misconduct in the execution or performance of its duties under this Trust Agreement. 6.8 Indemnification Procedures Promptly after receipt by an indemnified party of notice or receipt of a claim or the commencement of any action for which indemnification may be sought, the indemnified party will notify the indemnifying party in writing of the receipt or commencement thereof. When the indemnifying party has agreed to provide a defense as set out above that party shall assume the defense of such action 18 N B 1:657192.8 (including the employment of counsel, who shall be counsel reasonably satisfactory to such indemnitee) and the payment of expenses, insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought against the indemnifying party. Any indemnified party shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the indemnifying party unless (i) the employment of such counsel has been specifically authorized by the indemnifying party or (ii) the named parties to any such action (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interest between them. The indemnifying party shall not be liable to indemnify any person for any settlement of any such action effected without the indemnifying party's consent. The indemnification procedures of this Trust Agreement shall survive the termination of the Trust, any Employer's participation in the Trust and/or this Trust Agreement. 6.9 No Joint and Several Liability This document is not intended to and does not create any joint powers agreement or any joint and several liability. No Employer shall be responsible for any contributions, costs or distributions of any other Employer. ARTICLE VII AMENDMENT, TERMINATION AND MERGER 7.1 No Obligation to Continue Trust Participation in the Trust and continuation of the Employer's policies and /or applicable collective bargaining agreements that provide post - employment health care and welfare benefits are not assumed as a contractual obligation of the Employer. 7.2 Amendment of Trust (a) The Trust Agreement may be amended only by the approval of two - thirds (2/3) or more of the Employers then participating in the Trust. Any such amendment by the Employers shall be set forth in an instrument in writing and shall be delivered to the Trustee, the Trust Administrator and all Plan Administrators not less than one hundred and eighty (180) days before the effective date of such amendment; provided, however, that any party may waive in writing such 180 -day requirement with respect to any amendment (and such waiver shall not constitute a waiver with respect to any other amendment); and provided, further, that a waiver in writing of such 180 -day requirement by two - thirds (2/3) or more of the Plan Administrators of the Employers participating in the Trust as of the date the amendment is adopted shall constitute a waiver of such 19 NB 1:657192.8 180 -day requirement by all of the Employers then participating in the Trust. In addition, the Trust Administrator or the Trustee shall have the right to amend this Trust Agreement from time to time (without the requirement of a vote of Employers) solely for the purpose of keeping the Trust Agreement in compliance with the Code and applicable state law. Any such amendment by the Trust Administrator or the Trustee shall be set forth in an instrument in writing and shall be delivered to the Trustee, the Trust Administrator and all Plan Administrators promptly as each is made. (b) Any amendment of the Trust Agreement may be current, retroactive or prospective, provided, however, that no amendment shall: (1) Cause the Assets of any Agency Account to be used for or diverted to purposes other than for the exclusive benefit of Eligible Employees of the applicable Employer or for the purpose of defraying the reasonable expenses of administering such Agency Account. (2) Permit the Assets of any Agency Account to be used for the benefit of any other Employer. 7.3 Termination of Employer's Obligation to Provide OPEB A termination of the Employer's obligation to provide OPEB pursuant to its policies and /or applicable collective bargaining agreements for which the Employer's Agency Account was established shall not, in itself, effect a termination of the Agency Account. Upon a termination of the Employer's obligation to provide OPEB pursuant to its policies and /or applicable collective bargaining agreements, the Assets of the Agency Account shall be distributed by the Trustee when directed by the Plan Administrator in accordance with this Section 7.3. From and after the date of such termination and until final distribution of the Assets, the Trustee shall continue to have all the powers provided herein as are necessary or expedient for the orderly liquidation and distribution of such Assets, and the Agency Account shall continue until the Assets have been completely distributed. Such Assets shall be used first to satisfy any remaining obligations of the Employer to provide OPEBs pursuant to its policies and /or applicable collective bargaining agreements (to the extent that such distribution constitutes the exercise of an "essential governmental function" within the meaning of Section 115 of the Code) and to satisfy any of such Employer's obligations under this Trust Agreement. Any Assets remaining in the Agency Account after giving effect to the foregoing sentence shall be paid to the Employer to the extent permitted by law and consistent with the requirements of Section 115 of the Code. 7.4 Fund Recovery Based on Mistake of Fact Except as hereinafter provided or in accordance with Section 7.3, the Assets of the Trust shall never inure to the benefit of the Employer. The Assets shall be 20 NB 1:657192.8 held for the exclusive purposes of providing post - employment health care and welfare benefits to Eligible Employees and defraying reasonable expenses of administering the Trust. However, in the case of a contribution which is made by an Employer because of a mistake of fact, that portion of the contribution relating to the mistake of fact (exclusive of any earnings or losses attributable thereto) may be returned to the Employer, provided such return occurs within two (2) years after discovery by the Employer of the mistake. If any repayment is payable to the Employer, then, as a condition to such repayment, and only if requested by Trustee, the Employer shall execute, acknowledge and deliver to the Trustee its written undertaking, in a form satisfactory to the Trustee, to indemnify, defend and hold the Trustee harmless from all claims, actions, demands or liabilities arising in connection with such repayment. 7.5 Termination of Trust The Trust and this Trust Agreement may be terminated only by the unanimous agreement of all Employers. Such action must be in writing and delivered to the Trustee and Trust Administrator. Upon a termination of the Trust, the Assets of each Agency Account under the Trust shall be distributed by the Trustee when directed by the Plan Administrator for that Agency Account in accordance with this Section 7.5. From and after the date of such termination and until final distribution of the Assets, the Trustee shall continue to have all the powers provided herein with respect to each Agency Account as are necessary or expedient for the orderly liquidation and distribution of the Assets of such Agency Account, and the Agency Account shall continue until the Assets have been completely distributed. The Assets of each Agency Account shall be used first to satisfy any remaining obligations of the applicable Employer to provide OPEBs pursuant to its policies and /or applicable collective bargaining agreements (to the extent that such distribution constitutes the exercise of an "essential governmental function" within the meaning of Section 115 of the Code) and to satisfy any of such Employer's obligations under this Trust Agreement. Any Assets remaining in such Agency Account after giving effect to the foregoing sentence shall be paid to the Employer to the extent permitted by law and consistent with the requirements of Section 115 of the Code. In no case will the assets of the Trust be distributed on termination to an entity that is not a state, a political subdivision of a state or an entity the income of which is excluded from gross income under Section 115 of the Code. 21 N B 1 :657 192.8 ARTICLE VIII MISCELLANEOUS PROVISIONS 8.1 Nonalienation Eligible Employees do not have an interest in the Trust. Accordingly, the Trust shall not in any way be liable to attachment, garnishment, assignment or other process, or be seized, taken, appropriated or applied by any legal or equitable process, to pay any debt or liability of an Eligible Employee or any other party. Trust Assets shall not be subject to the claims of any Employer or the claims of its creditors. 8.2 Saving Clause In the event any provision of this Trust Agreement is held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the Trust Agreement, but this instrument shall be construed and enforced as if said provision had never been included. 8.3 Applicable Law This Trust Agreement and the Trust shall be construed, administered and governed under the Code and the law of the State of California. To the extent any of the provisions of this Trust Agreement are inconsistent with the Code or applicable state law, the provisions of the Code or state law shall control. In the event, however, that any provision is susceptible to more than one interpretation, such interpretation shall be given thereto as is consistent with the Trust Agreement being a tax - exempt trust within the meaning of the Code. 8.4 Joinder of Parties In any action or other judicial proceedings affecting this Trust Agreement, it shall be necessary to join as parties only the Trustee, the Plan Administrator or Delegatee. No participant or other persons having an interest in the Trust or any Agency Account shall be entitled to any notice or service of process unless otherwise required by law. Any judgment entered in such a proceeding or action shall be binding on all persons claiming under this Trust Agreement; provided, however, that nothing in this Trust Agreement shall be construed as to deprive a participant of such participant's right to seek adjudication of such participant's rights under applicable law. 8.5 Employment of Counsel The Trustee may consult with legal counsel (who may be counsel for the Trustee, the Trust Administrator or any Employer) with respect to the interpretation of this Agreement or the Trustee's duties hereunder or with respect to any legal 22 N B 1:657192.$ proceedings or any questions of law and shall be entitled to take action or not to take action in good faith reliance on the advice of such counsel and charge the Trust and, as applicable, one or more Agency Accounts. 8.6 Gender and Number Words used in the masculine, feminine or neuter gender shall each be deemed to refer to the other whenever the context so requires; and words used in the singular or plural number shall each be deemed to refer to the other whenever the context so requires. 8.7 Headings Headings used in this Trust Agreement are inserted for convenience of reference only and any conflict between such headings and the text shall be resolved in favor of the text. 8.8 Counterparts This Trust Agreement may be executed in an original and any number of counterparts by the Plan Administrator (executing an Adoption Agreement), the Trust Administrator and the Trustee, each of which shall be deemed to be an original of the one and the same instrument. * * * * * * ** Signature Page Follows * * * * * * ** 23 N B 1:657192.8 IN WITNESS WHEREOF, the Plan Administrator (by executing the Adoption Agreement), the Trustee and the Trust Administrator have executed this restated Trust Agreement by their duly authorized agents on the dates set forth below their names, to be effective on May 16, 2007. UNION BANK OF CALIFORNIA "Trustee" By: r� ignature \7©A it cv Typed or printed name Its: ____(free �aeS1G(rro�� By: Signature Typed or printed name Its: Date: & UNION BANK OF CALIFORNIA BUSINESS TRUST CQIPLIANCE AP AL BY _ 6 eLA-:,t' DATE / 2612-202 PUBLIC AGENCY RETIREMENT SERVICES "Trust Administrator" By: A,��P� Signature Daniel Johnson Typed or printed name Its: President Date: aS26o 7 24 NB 1:657192.8 PUBLIC AGENCIES POST - RETIREMENT HEALTH CARE PLAN MASTER PLAN DOCUMENT (amended and restated as of May 16, 2007) NB 1:680074.5 No guaranty that payments or reimbursements to employees, former employees or retirees will be tax -free The Trust has obtained a ruling from the Internal Revenue Service concerning only the federal tax treatment of the Trust's income. That ruling may not be cited or relied upon by the Employer whatsoever as precedent concerning any matter relating to the Employer's health plan(s) (including post - retirement health plans). In particular, that ruling has no effect on whether contributions to the Employer's health plan(s) or payments from the Employer's health plan(s) (including reimbursements of medical expenses) are excludable from the gross income of employees, former employees or retirees, under the Internal Revenue Code. The federal income tax consequences to employees, former employees and retirees depend on the terms and operation of the Employer's health plan(s). INTRODUCTION The Employer specified in the Adoption Agreement has adopted this qualified governmental post - retirement health care plan ( "Plan ") for the benefit of its Eligible Employees. The Plan document consists of this Master Plan Document plus the Adoption Agreement. Assets of the Plan are held under a trust (the "Trust ") evidenced by a trust agreement (the "Trust Agreement "). Each Employer's separate portion of the Trust is referred to as such Employer's "Agency Account." Capitalized terms that are not defined herein shall have the meaning attributed to such terms in the Trust Agreement. It is intended that this Plan and the Trust established to hold the assets of the Plan shall be tax - exempt under Section 115 of the Internal Revenue Code of 1986, together with any amendments thereto ("Code "), and that contributions to the Plan shall be deemed "plan assets" pursuant to Government Accounting Standards Board Statement No. 45 ( "GASB 45 "). At any time prior to the satisfaction of all liabilities with respect to Eligible Employees under an Employer's Agency Account, the Agency Account assets shall not be used for, or diverted to, purposes other than the exclusive benefit of Eligible Employees. NH 1:6$00745 -I- ARTICLE I PLAN AND TRUST INFORMATION 1.1 Plan Name. The name of the Plan adopted by the Employer is set forth in Section A.1.2 of the Adoption Agreement. 1.2 Effective Date The Plan is effective as of the date set forth in Section A. 1.3 of the Adoption Agreement. If as stated in the Adoption Agreement, this Plan is a restatement of an existing plan, the effective date of the restatement is set forth in the Adoption Agreement, 1.3 Plan Year The Plan Year shall be the consecutive twelve -month period beginning on January I and ending on December 3l. ARTICLE 11 EMPLOYER INFORMATION 2.1 Employer The name and address of the Employer sponsoring this Plan (the "Employer ") are as set forth in Section A.2.1 of the Adoption Agreement. The Adoption Agreement can only be used by a governmental agency that is a state, a political subdivision of a state, or an entity the income of which is excludible from gross income under Section 115 of the Code to establish a plan. ARTICLE III ELIGIBLE EMPLOYEES 3.1 Eligible Employees Each employee of the Employer who is or becomes eligible for post - retirement health care and welfare benefits as specified in such Employer's applicable policies and/or applicable collective bargaining agreements shall become an Eligible Employee hereunder. Dependents of an Eligible Employee shall be entitled to benefits under the Plan after the termination of such Eligible Employee's employment with the Employer (the "Eligible Dependents ") to the extent so provided in the applicable policies and/or collective bargaining agreement of the Employer. NB L680079.5 :680079.5 -2- 3.2 Termination of Eligible Employee or Eligible Dependent Status An Eligible Employee or Eligible Dependent shall cease to be an Eligible Employee or Eligible Dependent as specified in the Employer's applicable policies and/or applicable collective bargaining agreements. ARTICLE IV CONTRIBUTIONS 4.1 Amount of Member Aaencv Contributions Eligible Employees and Eligible Dependents are not permitted to make contributions to the Trust, provided however, that nothing herein shall be deemed to (i) prevent the Employer from imposing a charge (including, without limitation, a payroll deduction) for coverage under the Plan, or (ii) prevent the Employer from depositing the proceeds of any such charge to the Trust (provided that such deposit shall be considered an Employer contribution and shall not be segregated within Employer's Agency Account from any other Employer contributions). Each Employer shall from time -to -time contribute to its Agency Account an amount determined by such Employer in its sole discretion. Such amount may, but need not, equal such Employer's "annual required contribution" ( "ARC ") as determined in accordance with GASB45. 4.2 Administrative Expenses The Employer may make contributions to its Agency Account sufficient to defray all or part of the expenses of administering the Plan or may pay such expenses directly. 4.3 Allocation of Administrative Expenses If the Employer chooses not to directly pay the expenses of administering this Plan, such expenses shall be charged against the Agency Account for such Employer. 4.4 Reversions The Employer shall have the right to a return of contributions from this Plan only if the conditions for such return set forth in the Trust Agreement are satisfied. NB 1 :6800795 -3 ARTICLE V DISTRIBUTION OF BENEFITS 5.1 Payment of Distribution Distribution shall only be made to the insurers, third party administrators, health care and welfare providers or other entities providing Plan benefits or services as designated by the Employer or to the Employer for the reimbursement of Plan benefits and expenses paid by the Employer. No distributions shall be made directly to Eligible Employees or Eligible Dependents. The Plan Administrator or its Delegatec shall provide instructions to the Trustee regarding how distributions and reimbursements are to be made. ARTICLE VI FUNDING AND INVESTMENT 6.1 Fundine and Investment The assets of the Plan shall be held in the Agency Account of each Employer. In Section A.4.1 of the Adoption Agreement, each Employer shall elect between a discretionary or directed investment approach. If the Employer elects a discretionary investment approach, the Employer shall further elect between the various investment strategies offered in the investment strategy selection and disclosure form. If the Employer elects a directed investment approach, the Employer, in accordance with the Trust Agreement, shall have absolute discretion over the investment of the assets of its Agency Account. 6.2 Type and Nature of Plan and Trust Neither the faith and credit nor the taxing power of each Employer is pledged to the distribution of benefits hereunder. Except for contributions, earnings and other amounts held in the Trust, no amounts are pledged to the distribution of benefits hereunder. Distributions of benefits are neither general nor special obligations of the Employer, but are payable solely from contributions, as more fully described herein. No employee of any Employer or any other person may compel the exercise of the taxing power by the Employer. Distributions of benefits are not a debt of the Employer within the meaning of any constitutional or statutory limitation or restriction. Distributions are not a legal or equitable pledge, charge, lien or encumbrance, upon any of the Employer's property, or upon any of its income, receipts or revenues. N131:680079.5 -4- ARTICLE VII ADMINISTRATION, AMENDMENT AND TERMINATION OF PLAN 7.1 Designation of Plan Administrator In Section A.2.2 of the Adoption Agreement, the Employer shall provide the name of the Plan Administrator that has been duly authorized and designated by the governing body of the Employer to act on its behalf in all matters pertaining to the Plan and the Trust pursuant to Section 3.4 of the Trust Agreement. If no name is provided, the Employer is the Plan Administrator. In addition to a Plan Administrator the Employer may designate a Delegatee to perform those activities relating to the Plan as specified in the written appointment of such Delegatee certified to the Trust Administrator. Except where the context requires otherwise, the term "Employer" as used in this Article shall mean the Plan Administrator or Delegatee where responsibility for administration of the Plan has been given to such parties. 7.2 Rules and Regulations The Employer has full discretionary authority to supervise and control the operation of this Plan in accordance with its terms and may make rules and regulations for the administration of this Plan that are not inconsistent with the terms and provisions hereof. The Employer shall determine any questions arising in connection with the interpretation, application or administration of the Plan (including any question of fact relating to age, employment, compensation or eligibility of Eligible Employees or Eligible Dependents) and its decisions or actions in respect thereof shall be conclusive and binding upon all persons and parties. The Employer shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: (a) To determine all questions relating to an Eligible Employee's or Eligible Dependent's eligibility; (b) To construe and interpret the terms and provisions of the Plan; (c) To compute, certify to, and direct the Trustee with regard to the amount and kind of benefits payable to health care providers; (d) To authorize all disbursements from its Agency Account; (e) To maintain all records that may be necessary for the administration of tllc Plan othcr than those maintained by the Trustee; and (f) To appoint a Plan Administrator or, any other agent, and to delegate to them or to the Trustee such powers and duties in connection with the administration of the Plan as it may from time to time prescribe. NB 1 6800745 -5 Expenses and fees incurred in connection with the administration of the Plan and the Trust shall be paid from the Trust assets to the fullest extent permitted by law, unless the Employer determines otherwise. The Employer may elect to make contributions to its Agency Account sufficient to defray the expenses of administering the Plan or may pay such expenses directly. 7.3 Amendment and Termination The Employer shall have the right to amend, modify or terminate the Plan at any time. If an Employer terminates the Plan, the Assets held in its Agency Account shall be distributed by the Trustee as provided in Section 7.3 of the Trust Agreement. ARTICLE VIII MISCELLANEOUS 8.1 Nonalienation An Eligible Employee or Eligible Dependent does not have any interest in the Plan or the Assets held in the Trust. Accordingly, the Trust shall not in any way be liable to attachment, garnishment, assignment or other process, or be seized, taken, appropriated or applied by any legal or equitable process, to pay any debt or liability of an Eligible Employee, Eligible Dependent or any other party. 8.2 Investment All contributions, interest earned, and any assets of the Plan shall at all times be invested and managed in accordance with the Trust Agreement and the requirements of applicable law. 8.3 Parties to the Plan Eligible Employees, Eligible Dependents and unions of each Employer are not parties to this Plan. The Plan is only a funding source for such Employer's post - retirement health care and welfare benefits and does not increase the rights of any Eligible Employee, Eligible Dependent or union. 8.4 Confidential Medical Information Each Employer and its health care providers or other service providers shall not share confidential medical information regarding employees of the Employer with the Plan, the Trustee, or the Trust Administrator.. N B I :68007'9.5 -6- AGREEMENT FOR ADMINISTRATIVE SERVICES This agreement ( "Agreement ") is made this day of , 2009, between Phase II Systems, a corporation organized and existing under the laws of the State of California, doing business as Public Agency Retirement Services (hereinafter "PARS ") and the City of Southlake, Texas ( "Agency "). WHEREAS, Agency has adopted the PARS Public Agencies Post - Retirement Health Care Plan (the "Plan "), and is desirous of retaining PARS, as Trust Administrator to the PARS Public Agencies Post - Retirement Health Care Plan Trust, to provide administrative services. NOW THEREFORE, the parties agree: I. Services. PARS will provide the services pertaining to the Plan as described in the exhibit attached hereto as "Exhibit lA" ( "Services ") in a timely manner, subject to the further provisions of this Agreement. 2. Fees for Services. PARS will be compensated for performance of the Services as described in the exhibit attached hereto as "Exhibit I B ". 3, Payment Terms. Payment for the Services will be remitted directly from Plan assets unless the Agency chooses to make payment directly to PARS. In the event that the Agency chooses to make payment directly to PARS, it shall be the responsibility of the Agency to remit payment directly to PARS based upon an invoice prepared by PARS and delivered to the Agency. If payment is not received by PARS within thirty (30) days of the invoice delivery date, the balance due shall bear interest at the rate of 1.5% per month. If payment is not received from the Agency within sixty (60) days of the invoice delivery date, payment plus accrued interest will be remitted directly from Plan assets, unless PARS has previously received written communication disputing the subject invoice that is signed by a duly authorized representative of the Agency. 4. Fees for Services Beyond Scope. Fees for services beyond those specified in this Agreement will be billed to the Agency at the rates indicated in the PARS' standard fee schedule in effect at the time the services are provided and shall be payable as described in Section 3 of this Agreement. Before any such services are performed, PARS will provide the Agency with written notice of the subject services, terms, and an estimate of the fees therefore. Information Furnished to PARS. PARS will provide the Services contingent upon the Agency's providing PARS the information specified in the exhibit attached hereto as "Exhibit 1 C" ( "Data "). It shall be the responsibility of the Agency to certify the accuracy, content and completeness of the Data so that PARS may rely on such information without further audit. It shall further be the responsibility of the Agency to deliver the Data to PARS in such a manner that allows for a reasonable amount of time for the Services to be performed. Unless specified in Exhibit IA, PARS shall be under no duty to question Data received from the Agency, to compute contributions made to the Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Page l Plan are in compliance with the Plan or applicable law. In addition, PARS shall not be liable for non performance of Services if such non performance is caused by or results from erroneous and /or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit IC, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency. 6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS' fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law. Confidentiality. Without the Agency's consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers' compensation and similar matters. 9. Indemnification. To the extent permitted by law, PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, employees, agents and attorneys, from any claim, loss, demand, liability, or expense, including reasonable attorneys' fees and costs, incurred by the other as a consequence of PARS' or Agency's, as the case may be, acts, errors or omissions with respect to the performance of their respective duties hereunder. 10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan. PARS shall observe and comply with federal, state and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement. Page 2 1 1. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in any state court of competent jurisdiction sitting in Tarrant County, Texas. l2. Force Majeure. When a party's nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that it is prevented from performing by such cause, including but not limited to: any incidence of fire, flood, acts of God, acts of terrorism or war, commandeering of material, products, plants or facilities by the federal, state or local government, or a material act or omission by the other party. 13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to, and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency. 14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS. Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement. 15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows: (A) To PARS: PARS; 5141 California Avenue, Ste. 150; Irvine, CA 92617; Attention: President (B) To Agency: City of Southlake; 1400 Main Street, Suite 440, Southlake, TX 76092; Attention: [Plan Administrator] Notices shall be deemed given on the date received by the addressee. 16. Term of Agreement. This Agreement shall remain in effect for the period beginning , 2009 and ending , 2012 ( "Term "). This Agreement may be terminated at any time by giving ninety (90) days written notice to the other party of the intent to terminate. Absent a ninety (90) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve month periods following the Term. 17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto. Page 3 18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement. In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition. 19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney's fees. 20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart. 21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions. 22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed. AGENCY: BY: TITLE: [Plan Administrator] DATE: PARS: BY: TITLE: DATE: Page 4 EXHIBIT IA PARS will provide the following services for the City of Southlake PARS Public Agencies Post - Retirement Health Care Plan: 1. Plan Installation Services: (A) Meeting with appropriate Agency personnel to discuss plan provisions, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting and contribution submission requirements; (B) Providing the necessary analysis and advisory services to finalize these elements of the Plan; (C) Providing the documentation needed to establish the Plan for review by Agency legal counsel; 2. Plan Administration Services: (A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Trust Program ( "Trustee "), based upon information received from the Agency and the Trustee; (B) Performing periodic accounting of Plan assets, reimbursements and investment activity, based upon information received from the Agency and/or Trustee; (C) Coordinating the processing of reimbursement payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency - provided Data; (D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope this Agreement; (E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise; (F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with GASB 45; (H) Coordinating periodic audits of the Trust; (I) Monitoring Plan and Trust Compliance with federal and state laws. 3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice. In providing the services specified above, PARS will retain qualified professional service providers at its cost as it deems necessary if the service lies outside its area of expertise. Page 5 EXHIBIT I B FEES FOR SERVICES PARS will be compensated for performance of Services, as described in Exhibit IA based upon the following schedule; (A) An annual asset fee paid from Plan assets based on the following schedule: For Plan Assets from: Annual Rate: $0 to $10,000,000 0.25 % $10,000,001 to $15,000,000 0.20% $15,000,00 t to $50,000,000 0.15% $50,000,001 and above O. t0% Annual rates are subject to a monthly minimum equal to $400.00. Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual Rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included. (B) A fee equal to the out of pocket costs charged to PARS by an outside contractor for formatting contribution data on to a suitable magnetic media, charged only if the contribution data received by PARS from the Agency is not on readable magnetic media ( "Data Processing Fee "). Page 6 UY"MIT It DATA REQUIREMENTS PARS will provide the Services under this Agreement contingent upon receiving the following information: 1. Contribution Data — Completed Contribution Transmittal Form signed by Plan Administrator (or authorized Designee) which contains the following information: (A) Agency name (B) Contribution amount (C) Signed certification of reimbursement from the Plan Administrator, or authorized Designee 2. Reimbursement Data — Completed Payment Reimbursement Form signed by the Plan Administrator (or authorized Designee) which contains the following information: (A) Agency name (B) Payment reimbursement amount (C) Applicable statement date (D) Copy of applicable premium statement (E) Signed certification of reimbursement from the Plan Administrator (or authorized Designee) 3, Executed Legal Documents: (A) Certified Resolution (B) Adoption Agreement to the PARS Public Agencies Post - Retirement Health Care Plan (C) Trustee Investment Forms 4. Other information requested by PARS and Actuarial Provider Page 7