1988-1962565L
NO 2,0 'Jj/0 _
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH
EMPLOYEE RESOURCES ADMINISTRATION CORPORATION FOR ADMINISTRATIVE
SERVICES RELATIVE TO THE CITY'S PROPOSED FLEXIBLE BENEFITS PLAN,
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR, AND PROVIDING AN
EFFECTIVE DATE
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS
SECTION I That the Mayor is hereby authorized to execute
the contract with Employee Resources Administration Corporation,
a copy of which is attached hereto and incorporated herein
SECTION II That the City Council hereby authorizes the
expenditureof in the manner and amount as specified in the
agreement
SECTION III That the City Council hereby authorizes the
City Manager to execute the City of Denton Cafeteria Plan in
substantially the form as shown in Exhibit A attached hereto
SECTION IV That this ordinance shall become effective
imme atdiTpon its passage and approval
PASSED AND APPROVED this the /3 day of 6&~ 1988
Y P NS, AYOR
ATTEST
r
JE ER , CRET
AP ROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY
i
2565L
THE STATE OF TEXAS § AGREEMENT BETWEEN THE CITY OF
DENTON AND EMPLOYEE RESOURCES
COUNTY OF DENTON § ADMINISTRATION CORPORATION
This agreement, executed the 1st day of January, 1989, is
between the City of Denton and Employee Resource Administration
Corporation, (the Claims Administrator), a Texas Corporation
WITNESSETH
SECTION I
The Plan
1 1 The City of Denton will adopt a cafeteria plan of
benefits under Section 125 of the tax code (the "Plan") providing
means by which eligible employees of the City of Denton can
secure the benefits set forth in the plan
1 2 The administrator of the Plan (as defined by the Employee
Retirement Income Security Act of 1974) is the City of Denton
1 3 The name of the Plan is the City of Denton
1 4 The effective date of the Plan is January 1, 1989
1 5 The Administrator hereby appoints a Claims Administrator,
an independent third party administrator, who will perform
certain functions for the operation of the plan
SECTION II
The Claims Administrator
2 1 The Claims Administrator, within the scope of its
professional ability and its employment under this agreement,
shall provide certain services for and shall assist the City of
Denton and the Plan Administrator in the administration of the
Plan as it may be requested and authorized from time to time
Such services shall include, but not necessarily be limited to
the following
a Completion of reports and payment of claims from the
Plan to the participants
b Provide periodic reports summarizing Plan expenditures
c Provide necessary data required for regulatory
disclosure information compliance
d Provide claim review, examination, and benefit
payments, in accordance with the Plan Document
e Maintain the Plan checking account, and all the
necessary records for the Plan (if required)
f Communicate the Plan to the City of Denton employees
in accordance with the Claims Administrator proposal
submitted on October 25, 1988
g Provide information for form 5500 preparation
h Prepare anti-discrimination report as required by law
2 2 The Claims Administrator is authorized to do all things
it deems necessary to carry out the terms and purposes of this
Agreement, including the execution of documents in the name of
the Plan
2 3 The Claims Administrator shall design and provide all
necessary forms for the implementation, administration, and
operation of the Plan
SECTION III
The City of Denton
3 1 The City of Denton shall assist the Claims Administrator
in any reasonable manner as to provide the services as set forth
by the Plan Such assistance shall include, but not be limited
to the following
a The City of Denton shall provide the Claims Admini-
strator with a complete list of all employees who are
eligible for benefits of the Plan Thereafter, the
City of Denton shall promptly notify the Claims
Administrator of any and all changes in employment for
purpose of determining eligibility for the Plan
Notification shall include termination, lay off,
change in classification, change in dependent status,
or any other change that may affect the eligibility of
any employee of the City of Denton
3 2 The City of Denton shall provide the necessary funds to
pay the Plan expenses The City of Denton shall transfer all
PAGE 2
funds necessary to the proper account in order that proper
distribution by the Claims Administrator may be carried out
a The City of Denton shall collect the contributions
made by the participants of the plan, in the manner it
may deem appropriate, and shall transfer the money so
collected to the Plan on a monthly or more frequent
basis
b To the extent of its liabilities, the City of Denton
hereby agrees to make all necessary contributions to
meet the obligations incurred by the Plan for its
eligible participants and eligible dependents where
applicable The Plan liabilities shall include
premiums, claims costs, and administration costs as
billed by the Claims Administrator
3 3 The City of Denton shall assist in the enrollment of the
employees into the Plan, and shall maintain a supply of forms,
enrollment cards or other documents, and shall distribute or make
available such documents to the employees
3 4 The City of Denton hereby agrees to cooperate with the
Claims Administrator with regard to the proper settlement of
claims and Plan obligations, and transmit any inquires pertaining
to the Plan to the Claims Administrator
SECTION IV
Procedure for Application and Payment of Benefits from the
Plan
4 1 Any eligible participant or participant's eligible
dependent(s) may make application for benefits from the Plan by
completing the claim form prescribed by the Claims Administrator
The applicant shall fully and truthfully complete such applica-
tion for benefits and the applicant shall supply such pertinent
information from personal or professional sources as may be
required by the Claims Administrator
4 2 The Claims Administrator shall accept any application for
benefits made in the appropriate manner, and shall determine
eligibility of such application in accordance with the Plan Docu-
ment If the Claims Administrator determines that the applicant
is entitled to receive payment of benefits from the Plan, the
Claims Administrator shall determine the amount payable bythe
Plan, and arrange for the payment of such amount If the Claims
Administrator determines that the applicant is not eligible for
benefits from the Plan or any portion thereof is denied or
PAGE 3
reduced, the Claims Administrator shall notify the applicant and
the City of Denton as to the reasons for denial, or reduction of
such claim
The Claims Administrator may compromise or adjust any claim,
application or application previously denied, or reduced in whole
or part, as the Claims Administrator feels may be in the best in-
terests of the Plan If the Claims Administrator adjusts any
such claim, he shall provide written notice to the City's
Personnel Director within 5 working days of such adjustment The
Claims Administrator shall be responsible for the initial review
of all disputed claims
SECTION V
Compliance With ERISA and Indemnification of City
5 1 The City of Denton and the Claims Administrator agree to
comply in all respects, individually and collectively with the
Employee Retirement Income Security Act of 1975 (ARISA) and
amendments thereto, and with all federal and/or other regulations
pertaining thereto, as they relate to the plan
Claims Administrator agrees to indemnify and hold the City of
Denton harmless from any and all loss, damage and expense, includ-
ing court costs and attorney's fees, resulting from and arising
out of claims, demands, or lawsuits brought against the Claims
Administrator for any negligent act or omission in administering
the Plan
Further, the Claims Administrator agrees to indemnify the City
of Denton and hold the City of Denton harmless against any and all
loss, damage and expense resulting from or arising out of dis-
honest, fraudulent, or criminal acts of the Claims Administrator's
officers and/or employees, acting alone or in collusion with
others
SECTION VI
6 1 The Claims Administrator shall be entitled to a fee for
its services to the Plan and under this agreement, which shall be
determined by the number of employees enrolled by the City of
Denton at the beginning of each month That fee shall be an
annual charge of $9 50 per employee A fee of $3 00 shall be
charged for each participant per month In addition a $2,000
communication fee for communication materials shall be paid upon
completion of open enrollment
PAGE 4
6 2 The fee agreed upon hereof shall be reviewed with any
plan changes and/or at least on an annual basis by both the City
of Denton and the Claims Administrator to determine the adequacy
of such fees The fees provided for herein may be adjusted by
written amendment to the agreement approved by both parties
SECTION VII
Termination of Agreement for Claims Administrator
7 1 This agreement may be terminated at any time by either
party by providing ninety days written notice to the other
party Upon notification of termination by either party, the
Claims Administrator shall continue to process all claims
incurred up to the date of termination, and shall, not later than
sixty days after the date of termination, prepare and deliver to
the City of Denton a final and complete accounting and report of
the Plan's financial activities
7 2 Should either party fail to perform in accordance with
the provisions of this Agreement, the other party may treat such
failure as a default of this Agreement and give the defaulting
party thirty (30) days' written notice to cure such default In
the event such default is not cured within said time frame, the
party giving such notice may terminate this Agreement
SECTION VIII
Miscellaneous Provisions
8 1 In the event of resignation or inability to serve by the
Claims administrator, the City of Denton may appoint a successor
Any successor, upon appointment, shall succeed to and be invested
with all powers conferred on the Claims Administrator
8 2 If during the operation of the Plan, the federal govern-
ment, the state government, or any political sub-division or
instrumentality shall assess any tax against the Plan, and the
Claims Administrator is required to pay such tax, the Claims
Administrator shall immediately notify the City of Denton and the
City of Denton shall promptly provide the funds necessary to
remit such taxes to the proper authority
8 3 This agreement may be amended by the City of Denton and
the Claims Administrator at any time by mutual written consent of
said parties
PAGE 5
8 4 In the event that the City of Denton shall fail to make
any required contributions to the Plan, the Claims Administrator
shall have the right to terminate this agreement upon fifteen
days written notice to the City of Denton
8 5 In the event of termination of this agreement resulting
from the default of the City of Denton, as provided above, the
Claims Administrator shall charge, and the City of Denton shall
pay to the Claims Administrator all fees, commitments, and
obligations incurred by the claims Administrator through such
date of termination
8 6 The Claims Administrator
for service of legal process
principal office
hereby is designated the agent
on behalf of the Plan at its
8 7 Claims Administrator agrees that it shall be in compli-
ance with all laws, statutes, and other governmental provisions
prevailing during the term of this Agreement
8 8 It is agreed that Claims Administrator shall maintain and
make available for inspection, audit and/or reproduction by an
authorized representative of the City or any other governmental
agency, books, documents, and other evidence pertinent to the
costs and expenses of this contract This includes, to the
extent such detail will properly reflect, all costs, direct and
indirect costs of labor, material, equipment, supplies, and
services and all other costs and expenses of whatever nature for
which reimbursement is claimed under provisions of this Agreement
SECTION IX
Effective Date and Term
9 1 This agreement shall become effective on January 1, 1989,
provided that the City of Denton has adopted the Cafeteria Plan
described in Section 1 1 If the City of Denton has not adopted
the plan on or before January 1, 1989, this agreement shall
become effective upon the date of adoption
9 2 This agreement shall be in effect for a period of one (1)
year from the effective date as outlined in Section 9 1
9 3 This agreement may, however, be extended for up to two
(2) additional one year periods, upon written approval from the
City Manager
PAGE 6
IN WITNESS WHERFOF, the City of Denton and the Cis s Admini-
strato v executed this agreement at e✓d .
this day of k2?4a"id
CITY OF DENTON, TEXAS
BY
MAYOR
s
ATTEST
M TERS, I Y ~CRETARY
APPROVED AS TO LEGAL FORM
DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY
BY , Z C
THE CLAIMS ADMINISTRATOR
EMPLOYEE RESOURCE ADMINISTRATION
CORPORATION
BY
JERRY'HURD, PRESIDENT
PAGE 7
EXHIBIT "A"
CITY CF DEMM
CAMMIA PLAN
EPfeative January it 1988
CITY OF DENTON
CAFETERIA PLAN
TABLE OF CONTENTS
ARTICLE
INTRODUCTION
1 1 Purpose of Plan
1.2 Cafeteria Plan Status
II
DEFINITIONS
2
1.
"Plan Administrator"
2.
2.
"Claim Administrator"
2
3
"Code"
2.4.
2.5
"Dental Plan"
2.6
"Dependent Care
Assistance Plan"
2
7
"Disability Plan"
2
8
"Effective Date"
2
9
"Employee"
2
10
"Key Employee"
2
11.
"Life Insurance Plan"
2
12
"Medical Care Plan"
2
13
"Medical Reimbursement Plan"
2.14
"Participant"
2
15
"Plan"
2
16
"Plan Year"
III
PARTICIPATION
3.1. Commencement of Participation
3 2 Cessation of Participation
3 3 Reinstatement of
Former Participant
IV
4
1.
Employer Contributions
4
2.
Participant Contributions
4
3
Change of Participant Contributions
4
4
New Participants
4
6
Failure to Elect
4
6
Ganges by Administrator
F-1 wo (PI 91 A
4 7 Automatic Termination
of Election
4 8 Maximum Employer Contributions
v ADMINISTRATION OF PLAN
5 1 Plan Administrator
5 2 Examination of Records
5 3 Reliance on Tables, etc
5 4 Nordiscriminatory Exercise of
Authority
5 5 Indemnifioation of
Administrator
vi AMENDMENT AND TEFMINATICN OF PLAN
VII MISCELLANEOUS PE40VISICNS
7 1 Information to be Furnished
7 2 Limitation of Rights
7 3 Governing law
ARTICLE I - Introduction
1 1 Purpose of Plan The purpose of this Plan is to provide employees
of CITY OF DENTON a benefit choice between dependent care, medical care, and
medical reimbursement included in the plan from time to time
1 2 Cafeteria Plan Status This Plan is intended to qualify as a
"cafeteria plan" under Section 125 of the Internal Revenue Code of 1986s as
amended, and is to be interpreted in a manner consistent with the requirements
of Section 125
ARTICLE II - Definitions
2 1 "Plan Administrator" means the City of Denton or such other person
or committee as may be appointed from time to time by the City of Denton to
supervise the administration of the Plan
2 2 "Claim Administrator" means Employee Resource Administration Corp
2 3 "Code" means the Internal Revenue Code of 1986, as amended from time
to time Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replace such section or subsection
2 4 "City of Denton" means CITY OF DENTON , a municipality organized
under the laws of the State of Texas
2 5 "Dental Plan" means the CITY OF DENTON dental insurance plan, as
amended from time to time
2 6 "Dependent Care Assistance Plan" means the CITY OF DENTON Dependent
Care Assistance Plan as amended from time to time
2 7 "Disability Plan" means the CITY OF DENTON group disability income
insurance plan, as amended from time to time
2 8 "Effective Date" means 1-1-88
2.9 "Employee" means any individual employed by the CITY OF DENlnN
2 10 "Key Employee" means any person who is a key employee as defined in
Section 416 (1) (1) of the Code
2 11 "Medical Care Plans" means the CITY OF DENTON medical plans, as
amended from time to time
2 12 "Medical Reimbursement Plan" means the CITY OF DENTO N Medical
Reimbursement Plan, as amended from time to time
2 13 "Participant" means any individual who participates in the Plan in
accordance with Article III
2 14 "Plan " means the CITY OF DEMON Cafeteria Plan as set forth
herein, together with any and all amendments and supplements hereto
2 16. "Plan Year" means the period beginning on the Effective Date and
ending on the day before the same date 12 months hence, and each 12 month
period thereafter
A pronoun or adjective in the masculine gender includes the feminine gender,
and the singular includes the plural, unless the context clearly indicates
otherwise
AMCLE III - Partioination
3 1 Commencement of Participation Each employee of the employer will
be eligible to participate in the plan (end his dependents will be eligible for
dependent coverage to the extent provided in any supplement or constituent
plan) on the Plan Year Anniversary Date after he meets all of the following
requirements
(a) He is a "covered employee" (that is, he is a
member of a group of employees of the employer to which
the plan has been and continues to be extended unilaterally),
(b) He has filed with the plan administrator any
written agreement electing to participate in the plan as
is required by the plan administrator, on a form satisfactory
to the plan administrator,
(o) With respect to any benefit provided for in a
supplement or constituent plan, he has satisfied all of
the eligibility requirements as described in an applicable
supplement or constituent plan, and
(d) With respect to dependent coverage, his dependents
have satisfied all of the eligibility requirements for
dependent coverage as described in an applicable supplement
or constituent plan
3 2 Cessation of Participation A Participant will cease to be a
Participant as of the earlier of (a) the date on which the Plan terminates or
(b) the date on which he ceases to be an Employee eligible to participate under
Section 3 1.
3 3 Reinstatement of Former Participant A former Participant will
become a Participant again if and when he meets the eligibility requirements of
Section 3 1
ARTICLE IV - Contributions
4 1 Employer Contributions The employer will pay the costs of the plan
at such times and in such amounts as shall be determined by the employer from
its
general assets
Nothing herein shall require the
employer to segregate or
set
aside any funds
or other property for the purpose
of paying any amounts
under the plan
4 2 participant Contributions participants shall make any
contributions required of them under the plan or an applicable supplement or
constituent plan from time to time in the amounts and at the times specified by
the plan administrator A participant may elect in writing on a form prepared
by and filed with the plan administrator an or before the date he first becomes
eligible to participate in the plan, and on or before the first day of any plan
year thereafter, to reduce his compensation for such plan year and to
contribute the amount of such salary reduction of the plan as his requnsed
contribution under the plan or an applicable supplement or constituent plan
pursuant to such written election form, the participant shall also apportion
his salary reduction contributions among the benefits provided for in any of
the supplements or constituent plans for which the participant or his covered
dependents qualify. In no event shall the sum of the amounts apportioned by
the participant to each benefit exceed the total amount of his salary reduction
contribution Salary reduction contributions will be made through payments
made periodically corresponding to payroll withholding
payments beginning with the first regularly scheduled payday for the plan year
for which the participant's written election is made (or the first regularly
scheduled payday which is on or after the date the participant first becomes
eligible to participate in the plan if a salary reduction agreement has
previously been properly executed) The plan administrator will establish
rules and regulations with respect to salary reduction agreements hereunder in
accordance with applicable law and regulations issued by the Department of the
Treasury under Section 128 of the Code Participant contributions shall be
used to provide plan benefits under an applicable supplement or constituent
plan or to pay premiums to modified or fully self-funded programs, insurance
companies, health maintenance organizations or other organizations or
institutions to provide such benefits as soon as reasonably practical but in no
event later than 90 days after such contributions are made A participant's
salary reduction contributions which are not used to provide plan benefits for
such plan year as provided in the preceding sentence shall not any time be
returned or repaid to participants but shall be forfeited
4 3 Change or Discontinuance of Participant Contributions
A participant may not revise the rate of his salary reduction contributions or
discontinue making salary reduction contributions except as follows
(a) The participant may file a written election form
with the plan administrator on or before the last working
day of any plan year revising the rate of his contributions
or discontinuing such contributions effective as of the
first regularly scheduled pay day of the next following
plan year.
(b) The participant's contributions will automatically
terminate as of the date his plan participation terminates
in accordance with Section 3 2 above
(c) The participant may file a written election with
the plan administrator to revoke any prior election and
to make a new election with respect to the remaining portion
of a plan year on account of and consistent with a change
in family status, including marriage, divorce, the death
of the participant's spouse or child, the birth or adoption
of a child, or the termination of employment of the partici-
pant's spouse, which revocation and new election will be
effective as of the date it is approved by the plan admini-
strator
For purpose of this Section, any election by a plan participant to change the
apportionment of his s lacy reduction contributions among the various benefits
provided for in any of the supplements or constituent plans will be considered
a revision of the rate of his contributions
4 4 New Participants As soon as practicable before an Employee becomes
a Participant under Section 3 1 or 3 3, the Administrator shall provide written
election forms and compensation reduction agreements to the Employee If the
Employee desires one or more optional benefit coverages for the Plan Year, he
shall so specify on the election forms and shall agree to a reduction in his
compensation as provided in Section 4 2 The election forms must be completed
and returned to the Administrator on or before such date as the Administrator
shall specify, which date shall be no later than beginning of the first pay
period for which the Participant's compensation reduction agreements will
apply
4 5 Failure to Elect A Participant failing to return a completed
election form to the Administrator on or before the specified due date for the
initial Plan Year of the Plan, or for the Plan Year in which be became a
Participant, shall be deemed to have elected not to participate in any optional
benefit plans A Participant failing to return a completed election form to
the Administrator on or before the specified due date for any subsequent Plan
Year shall be deemed to have made the same election as was in effect as to such
optional benefits Just prior to the end of the preceding Plan Year The
Participant shall also be deemed to have agreed to a reduction in his
compensation for the subsequent Plan year equal to the participant's share of
the cost from time to time during such Plan Year of each such optional benefit
he is deemed to have elected for such Plan year
4 6 Changes by Administrator If the Administrator determines, before
or during any Plan Year, that the Plan may fail to satisfy for such Plan Year
any nondiscrimination requirement imposed by the Code or any limitation on
benefits provided to Key Employees, the Administrator shall take such action as
the Administrator deems appropriate, under rules uniformly applicable to
similarly situated participants, to assure oompliance with such requirement or
limitation. Such action may inolude, without limitation, modification of
elections by highly compensated Employees or Key Employees with or without the
consent of such Employees
4 7 Automatic Termination of Election Elections made under this plan
(or deemed to be made under Section 4 5) shall automatically terminate on the
date on which the Participant ceases to be a Participant in the Plan, although
coverage or benefits under the Dental, Dependent Care Assistance, Medical Care,
and Medical Reimbursement Plans may continue if and to the extent provided by
such Plans
4 8 Maximum Emoloyer Contributions The maximum amount of employer
contributions under the Plan for any Participant shall be the sum of (a) the
maximum amounts which the Participant may receive in the form of dependent care
assistance wider the Dependent Care Assistance Plan and as medical
reimbursements under the Medical Reimbursement Plan, as set forth in such
Plans, and (b) the costs from time to time of the most expensive benefits
available to the Participant under the Dental and Medical Care Plans (including
the portion of such costs payable with noneleotive Company contributions)
ARTICLE V - Administration of Plan
5 1 Plan Administrator The administration of the Plan shall be under
the supervision of the Administrator it shall be a principal duty of the
Administrator to see that the Plan is carried out, in accordance with its
terms, for the exclusive benefit of persons entitled to participate in the Plan
without discrimination among them The Administrator will have full power to
administer the Plan in all of its details, subject to applicable requirements
of law For this purpose, the Administrator's powers will include, but will
not be limited to, the following authority, in addition to all other powers
provided by this Plan
(a) To make and enforce such rules and regulations
as it deems necessary or proper for the efficient admini-
stration of the Plan, including the establishment of any
claims procedures that may be required by applicable
provisions of law,
(b) To interpret the Plan, its interpretation thereof
in good faith to be final and conclusive on all persons
claiming benefits under the Plan,
(c) To decide all questions concerning the Plan and
the eligibility of any person to participate in the Plan,
(d) To appoint such agents, counsel, accountants,
consultants and a claims administrator as may be required
to assist in administering the Plan, and
(a) To allocate and delegate its responsibilities
under the Plan and to designate other persons to carry
out any of its responsibilities under the Plan, any such
allocation, delegation or designation to be in writing
Notwithstanding the foregoing, any claim which arises under the Dental Plan,
Dependent Care Assistance Plan, Medical Reimbursement Plan or any Medical Care
plan shall not be subject to review under this Plan, and the Administrator's
authority under this Section 5 1 shall not extend to any matter as to which an
administrator under any such other plan is empowered to make determinations
under such plan
5 2. Examination of Records. The Administrator will make available to
each Participant such of his records under the Plan as pertain to him, for
examination at reasonable times during normal business hours
5 3 Reliance on Tables etc In administering the Plan, the
Administrator will be entitled to the extent permitted by law to rely
conclusively on all tables, valuations, certificates, opinions and reports
which are furnished by, or in accordance with the instructions of, the
administrators of the Dental, Dependent Care Assistance, Medical Care and
Medical Reimbursement Plans, or by accountants, counsel or other experts
employed or engaged by the Administrator
5 4. Nondiscriminatory Exercise of Authority Whenever, in the
ministration of the Plan, any discretionary action by the Administrator is
required, the Administrator ahall exercise its authority in a nondiscriminatory
manner so that all persons similarly situated will receive substantially the
same treatment
5 5 Indemnification of Administrator The Company agrees to indemnify
and to defend to the fullest extent permitted by law any Employee serving as
the Administrator or as a member of a committee designated as Administrator
(including any Employee or former Employee who formerly served as Administrator
or as a member of such committee) against all liabilities, damages, costs and
expanses (including attorneys' fees and amounts paid in settlement of any
claims approved by the City of Denton) occasioned by any act or emission to act
in connection with the Plan, if such act or omission is in good faith
AST C F yt - Amendment and Termination of Plan
The Plan may at any time be amended or terminated by a written instrument
signed by the City Manager of the City of Denton
ANnCLE VII - Miscellaneous Provisions
7 1 Information to be Furnished participants shall provide the Campanny
and Administrator with such information and evidence, and shall sign such
documents, as may reasonably be requested from time to time for the purpose of
administration of the Plan
7 2 Limitation of Rights Neither the establishment of the Plan nor any
amendment thereof, nor the payment of any benefits, will be construed as giving
to any Participant or other person any legal or equitable right against the
CosWany or Administrator, except as provided herein
7 3 Governing Law This Plan shall be oonstrued, administered and
enforced according to the laws of Texas
IN WITNESS WHMUEO , the City of Denton has caused this Plan to be executed
in its name and behalf this 1st day of January, 1988, by its officer thereunto
duly authorized
CITY OF DENTM
CITY OF DENTON
MEDICAL REIMBURSEMENT PLAN
Effeotive Januray 1, 1988
.r
CITY OF DENTON
ARTICLE
I INTRODUOTIO]
II DEFINITIONS
2.1
"Plan Administrator"
2.2
"Claims Administrator"
2 3
"Cafeteria Plan"
2 4
"Code"
2 5,
"Company.
2 6
"Dependant"
2 7
"Effective Date"
2.8
"Employee"
2 9
"ERISA"
2 10
"Medical Reimbursement Account"
2.11.
"Participant"
2.12.
"Plan"
2 13
"Plan Year"
2 14.
"Qualifying Medical Care Expense"
III
3 1 Commencmment of Participation
3.2. Cessation of Participation
3 3. Reuustatement of Former Participant
IV
ELECTION TO RECEIVE MEDICAL CARE REIIffiURSEMWT
4 1 Election Procedure
4 2 Maximum Reimbursements
V
MEDICAL REIMBURSEMENT ACCOUNTS
5 1
Establishment of Accounts
5.2
Crediting of Accounts
5.3
Debiting of Accounts
5.4
Forfeiture of Accounts
ARTICLE
VI PAYMENT OF MEDICAL CARE EXPENSE
6 1 Claims for Reimbursement
6 2. Reimbursement or Payment of
Expenses
VII TERNINATION OF
VIII
8
1
Plan Administrator
8
2
Exsmination of Records
8
3
Reliance on Tables, etc
8
4
Named Fiduoiary
8
5
Claims and Review Procedures
8
6
Non-disoriminstory Exercise
of Authority
8
7
Indemnification of Administrator
IX AMENDMENT OR TERW ATION OF PLAN
9.1 Amendment of Plan
9 2. Termination of Plan
% MISCELLA
NEW
S
10
1
Communication to Employees
10
2
Limitation of Rights
10
3
Benefits Solely From General Assets
10
4
Nonassignability of Rights
10
5
No Guarantee of Tax Consequences
10.6
Indemnification of Company by
Participants
10
7
Governing Law
CITY OF DENTON
MEDICAL REDMRSEMENT PLAN
ARTICLE I - Introduction
This Plan is intended to qualify as a medical reimbursement plan under
Section 105(b) of the Internal Revenue Code of 1986, as amended, and is to be
interpreted in a manner consistent with the requirements of Section 105(b)
The purpose of the Plan is to enable Participants to elect to receive payments
or reimbursements of Qualifying Medical Care Expenses that are excludable from
the Participant's gross income under Section 105(b) of the Code
ARTICLE II - Definitions
Wherever used herein, the following terms have the following meanings
unless a different meaning is clearly required by the context
2 1 "Plan Administrator" means the City of Denton or such other person
or committee as may be appointed from time to time by the City of Denton to
supervise the administration of the Plan
2 2 "Claims Administrator" means Employee Resource Administration Corp
2.3 "Cafeteria Plan" means the CITY OF DENTON Cafeteria Plan effective
10-1-87, as amended from time to time.
2 4 "Code" means the Internal Revenue Code of 1986, as amended from time
to time Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection
2 8 "City of Denton" means CITY OF DENTON, a municipality organized
under the laws of Texas.
2 6 "Dependent" means any person who falls within the definition of
dependent provided in Section 162 of the Code
2 7 "Effective Date" means January 1, 1988
2 8 "Employee" means any individual employed by the City of Denton
2 9 "ERISA" means the Employee Retirement Income Security Act of 1974
2 10 "Medical Reimbursement Account" means the account described in
Article V hereof
2 11 "Participant" means each Employee who participates in the Plan in
accordance with Article III
2 12 "Plan" means the CITY CF DENTON Medical Reimbursement Plan as set
forth herein, together with any end all amendments and supplements hereto
2 13 "Plan Year" means 12-consecutive-month period beginning with the
original effective date of the Plan and each succeeding 12 month period
thereafter
2 14 "Qualifying medical care Expense" means an expense incurred by a
Participant, or by the spouse or Dependent of such Participant, for medical
care as defined in Section 213 of the Code (including without limitation
amounts paid for hospital bills, doctor and dental bills, drugs and premiums
for accident and health insurance), but only to the extent that the Participant
or other person incurring the expense is not reimbursed for the expense through
insurance or otherwise (other than under the Plan)
A pronoun or adjective in the masculine gender includes the feminine
gender, and the singular includes the plural, unless the context clearly
indicates otherwise.
ARTICLE III - Participation
3.1 commenoement of Participation Each employee of the employer will
be eligible to participate in the Plan (and his dependents will be eligible for
dependent coverage to the extent provided in any supplement or constituent
plan) on the Plan Year Anniversary Date after he has met all of the following
requirements
(a) He is a "Covered Employee" (that is, he is a
member of a group of employees of the employer to which
the plan has been and continues to be extended unilaterally),
(b) He has filed with the Plan Administrator any
written agreement electing to participate in the plan as
is required by the Plan Administrator, on a form satis-
factory to the Plan Administrator
(c) With respect to any benefit provided for in a
supplement or constituent plan, he has satisfied all of
the eligibility requirements as described in an applicable
supplement or constituent plan, and
(d) With respect to dependent coverage, his dependents
have satisfied all of the eligibility requirements for
dependent coverage as described in an applicable supplement
or constituent plan
3 2 Cessation of Participation. A Participant will cease to be a
Participant as of the earliest of (a) the date on which the Plan terminates or
(b) the date on which his election to receive medical care expense
reimbursements expires or is terminated under the Cafeteria Plan
3 3 Reinstatement of Former Participant If a former Participant who is
eligible under Section 3.1 elects again under the Cafeteria Plan to receive
medical care expense reimbursements under this Plan, he will again become a
Participant in this Plan on the effective date of such election
ARTICLE N - Election to Receive Medical Care Expense Reimbursements
4 1 Election Procedure. A Participant may elect to receive payments or
reimbursements of his Qualifying Medical Care Expense under this Plan by filing
an election and compensation reduction agreement in accordance with the
procedures established under the Cafeteria Plan An election to receive
payments or reimbursements of Qualifying Medical Care Expenses shall be
irrevocable during the Plan Year, subject to a change in family status,
as provided in the Cafeteria Plan
4.2. Maximum Reimbursements The maximum amount which the Participant
may receive under this Plan in the form of payments or reimbursements for
Qualifying Medical Care Expenses incurred in any Plan Year shall be the amount
by which the Participant has elected to reduce his compensation at the
beginning of the applicable Plan Year, but in no event more than $10,000 per
Plan Year.
ARTICLE V - Medical Reimbursement Accounts
5 1 Establishment of Accounts The City of Denton will establish and
maintain on its books a Medical Reimbursement Account for each Plan year with
respect to each Participant who has elected to receive reimbursement of
Qualifying Medical Care Expenses incurred during the Plan Year
5 2 Crediting of Accounts There shall be credited to a Participant's
Medical Reimbursement Account for each Plan Year, as of each date compensation
is paid to the Participant in such Plan Year, an amount equal to the reduction,
if any, to be made in such compensation in accordance with the Participant's
election and compensation reduction agreement under the Cafeteria Plan All
amounts credited to each such Medical Reimbursement Account shall be the
property of the City of Denton until paid out pursuant to Article VI
5 8 Debiting of Accounts A Participant's Medical Reimbursement Account
for each Plan year shall be debited from time to time in the amount of any
payment under Article VI to or for the benefit of the Participant for
Qualifying Medical Care Expenses incurred during such Plan Year Amounts
debited to each such Medical Reimbursement Account shall be treated as payments
of the earliest amounts credited to the Account and not yet treated as paid
under this sentence, under a "first-in/first-out" approach
5 4 Forfeiture of Accounts The amount credited to a Participant's
Medical Reimbursement Account for any Plan Year shall be used only to reimburse
the Participant for Qualifying Medical Care Expenses incurred during such Plan
Year, and only if the Participant applies for reimbursement on or before the
90th day following the close of the Plan Year If any balance remains in the
Participant's Medical Reimbursement Account for a Plan year after all
reimbursements hereunder, such balance shall not be carried over to reimburse
the Participant for Qualifying Medical Care Expenses incurred during a
subsequent Plan Year, and shall not be available to the Participant in any
other form or manner, but shall remain the property of the City of Denton, and
the Participant shall forfeit all rights with respect to such balance
ARTICLE VI - Payment of Medical Care Expense Reimbursements
.
6 1 Claims for Reimbursement A Participant who has elected to receive
medical care reimbursements for a Plan Year may apply to the City of Denton for
reimbursement of Qualifying Medical Care Expenses incurred by the Participant
during the Plan Year by submitting an application in writing to the City of
Denton, in such form as the City of Denton may prescribe, setting forth
(a) the amount, date and nature of the expense with
respect to which a benefit is requested,
(b) the name of the person, organization or entity
to which the expense was or is to be paid,
(c) the name of the person for whom the expense was
incurred and, if such person is not the Participant requesting
the benefit, the relationship of such person to the Participant,
and
(d) the amount recovered or expected to be recovered,
under any insurance arrangement or other plan, with respect
to the expense
such application shall be accompanied by bills, invoices, receipts,
cancelled checks or other statements showing the amounts of such expenses,
together with any additional doaamentation which the Administrator may request
6 2 Reimbursement or Payment of Expenses The City of Denton, through
the Claims Administrator shall reimburse the Participant from the Participant's
Medical Reimbursement Account for Qualifying Medical Care Expenses incurred
touring the Plan year, for which the Participant submits a written application
and documentation in accordance with Section 6.1 The City of Denton may,
through the Claims Administrator and at its option, pay any such Qualifying
Medical Care Expenses directly to the person providing or supplying medical
care in lieu of reimbursing the Participant No reimbursement or payment under
this Section 6 2 of expenses incurred during a Plan Year shall at any time
exceed the balance of the Participant's Medical Reimbursement Account for the
Plan Year at the time of the reimbursement or payment The amount of any
Qualifying Medical Care Expenses not reimbursed or paid as a result of the
preceding sentence shall be carried over and reimbursed or paid only if and
when the balance in such Account permits such reimbursement or payment
ARTICLE VII - Termination of Participation
In the event that a Participant ceases to be a Participant for any reason,
any election to receive reimbursements for Qualifying Medical Care Expenses and
any related compensation reduction agreement made under the Cafeteria Plan
shall terminate The Participant (or his estate) shall be entitled to
reimbursement only for Qualifying Medical Care Expenses incurred within the
same Plan Year and prior to the 90th day after the date participation is
terminated, and only if the Participant (or his estate) applies for such
reimbursement in accordance with Section 6 1 on or before the earlier of (1)
the 180th day following the date participation is terminated, and (2) the 90th
day after the close of the Plan Year No such reimbursement shall exceed the
remaining balance, if any, in the Participant's Medical Reimbursement Account
for the Plan Year in which the expenses were incurred
ARTICLE VIII - Administration
8 1 Plan Administrator The administrator of the Plan shall be under
the supervision of the Administrator It shall be a principal duty of the
Administrator to see that the Plan is carried out, in accordance with its
terms, for the exclusive benefit of persons entitled to participate in the Plan
without discrimination among them The Administrator will have full power to
administer the Plan in all of its details subject, however, to the requirements
of ERISA For this purpose, the Administrator's powers will include, but will
not be limited to, the following authority, in addition to all other powers
provided by this Plan
(a) To make and enforce such rules and regulations
as it deems necessary or proper for the efficient admini-
stration of the Plan,
(b) To interpret the Plan, its interpretation thereof
in good faith to be final and conclusive on all persons
claiming benefits under the Plan,
(c) To decide all questions concerning the Plan and
the eligibility of any person to participate in the Plan,
(d) To compute the amount of benefits which will
be payable to any Participant or other person in accordance
with the provisions of the Plan, and to determine the person
or persons to whom such benefits will be paid,
(e) To authorize the payment of benefits,
(f) To appoint such agents, counsel, accountants,
consultants, actuaries and claims administrator as may
be required to assist in administering the Plan, and
(g) To allocate and delegate its responsibilities
under the Plan and to designate other persons to carry
out any of its responsibilities under the Plan, any such
allooation, delegation or designation to be by written
instrument and in aooordanoe with Section 405 of ERISA
8 2 Examination of Records The Administrator will make available to
each Participant such of his records as pertain to him, for examination at
reasonable times during normal business hours
8 3 Reliance on Tables, eto In administering the Plan, the
Administrator will be entitled, to the extent permitted by law, to rely
conclusively on all tables, valuations, certificates, opinions and reports
which are furnished by any accountant, counsel or other expert who is employed
or engaged by the Administrator
8 4 Named Fiduciary The Plan Administrator will be a "named fiduciary"
for purposes of Section 402 (a) (1) of ERISA with authority to control and
manage the operation and administration of the Plan, and will be responsible
for complying with all of the reporting and disclosure requirements of Part I
of Subtitle B of Title I of ERISA
8.5 Claims of Review Procedures
(a) Claims Procedure If any person believes he is being denied
any rights or benefits under the Plan, such person may file a claim in writing
with the Plan Administrator If any such claim is wholly or partially
denied, the Plan Administrator will notify such person of its decision in
writing Such notification will be written in a manner calculated to be
understood by such person and will contain (i) specific reasons for the denial,
(ii) a description of any additional material or information necessary for such
person to perfect such claim and an explanation of why such material or
information is necessary and (iv) information as to the steps to be taken if
the person wishes to submit a request for review Such notification will be
given within 90 days after the claim is received by the Administrator (or
within 180 days, if special circumstances require an extension of time for
processing the claim, and if written notice of such extension and
circumstances is given to such person within the initial 90 day period) If
such notification is not given within such period, the claim will be considered
denied as of the last day of such period and such person may request a review
of his claim
(b) Review Procedure Within 60 days after the date on which a
person receives a written notice of a denied claim (or, if applicable, within
60 days after the date on which such denial is considered to have occurred)
such person (or his duly authorized representative) may (i) file a written
request with the Plan Administrator for a review of his denied claim and of
pertinent documents and (ii) submit written issues and comments to the Plan
Administrator The Plan Administrator will notify such person of its decision
in writing Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the decision as
well as specific reference to pertinent Plan provisions The decision on
review will be made within 60 days after the request for review is received by
the Plan Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by the Plan
Administrator to hold a hearing, and if written notice of such extension and
circumstances is given to such person within the initial 60 day period) If the
decision on review is not made within such period, the claim will be considered
denied
8 6. Nondiscriminatory Exercise of Authority Whenever, in the
administration of the Plan, any discretionary action by the Plan Administrator
is required, the Plan Administrator shall exercise its authority in a
non-disoriminatory manner so that all persons similarly situated will receive
substantially the same treatment
8 7 Indemnification of Plan Administrator The City of Denton agrees to
indemnify and to defend to the fullest extent permitted by law any Employee
serving as the Plan Administrator or as a member of a committee designated as
Plan Administrator (including any Employee or former Employee who formerly
served as Plan Administrator or as a member of such committee) against all
liabilities, damages, costs and expenses (including attorneys' fees and amounts
paid in settlement of any claims approved by the City of Denton) occasioned by
any act or omission to act in connection with the Plan, if such act or omission
is in good faith
ARTICLE IX - Amendment or Termination of Plan
9.1 Amendment of Plan The City of Denton reserves the power at any
time or times to amend the provisions of the Plan to any extent and in any
manner that it may deem advisable, by a written instrument signed by the City
Manager of the City of Denton
9,2 Termination of Plan The City of Denton has established the Plan
with the bona fide intention and expectation that it will be continued
indefitely, but the City of Denton will have no obligation whatsoever to
maintain the Plan for any given length of time and may discontinue or terminate
the Plan at any time without liability Upon termination or discontinuance of
the Plan, all elections and reductions in compensation related to the Plan
shall terminate, and reimbursements shall be made only in accordance with
Article VII
ARTI9A X - Miscellaneous
10 1 Communication to Employees. Promptly after the Plan is adopted, the
City of Denton will notify all Employees of the availability and terms of the
Plan
10 2 Limitation of Rights Neither the establishment of the Plan nor any
amendment thereof will be construed as giving to any Participant or other
person any legal or equitable right against the Plan Administrator or the City
of Denton, except as expressly provided herein, and in no event will the terms
of employment or service of any Participant be modified or in any way be
affected hereby
10 3 Benefits Solely From General Assets The benefits provided
hereunder will be paid solely from the general assets of the City of Denton
Nothing herein will be construed to require the City of Denton of the Plan
Administrator to maintain any fund or segregate any amo4mt for the benefit of
any Participant, and no Participant or other person shall have any claim
against, right to, or security or other interest in, any fund, account or asset
of the City of Denton from which any payment under the Plan may be made
10 4 Nonassignability of Rights The right of any Participant to receive
any reimbursement under the Plan shall not be alienable by the Participant by
assignment or any, other method, and will not be subject to be taken by his
creditors by any process whatsoever, and any attempt to cause such right to be
so subjected will not be recognized, except to such extent as may be required
by law.
10 5. No Guarantee of Tax Consequences Neither the Plan Administrator nor
the City of Denton makes any commitment or guarantee that any amounts paid to
or for the benefit of a Participant under Article VI will be excludable from
the Participant's gross income for federal or state income tax purposes, or
that any other federal or state tax treatment will apply to or be available to
any Participant It shall be the obligation of each Participant to determine
whether each payment under Article VI is excludable from the Participant's
gross income for federal and state income tax purposes, and to notify the City
of Denton if the Participant has reason to believe that any such payment is not
so excludable
10 6 Indemnification of City of Denton by Participants If any
participant receives one or more payments or reimbursements under Article VI
that are not for Qualifying Medical Care Expenses, such Participant shall
indemnify and reimburse the City of Denton for any liability it may incur for
failure to withhold federal or state income tax or Social Security tax from
such payment or reimbursements However, such indemnification and
reimbursement shall not exceed the amount of additional federal and state
income tax that the Participant would have owed if the payments or
reimbursements had been made to the Participant as regular cash compensation,
plus the Participant's share of any Social Security tax that would have been
paid on such compensation, less any such additional income and Social Security
tax actually paid by the Participant
10 7 Governing Law The Plan will be construed, administered and
enforced according to the laws of the State of Texas
IN WITNESS WHERBOF, the City of Denton has caused this Plan to be executed
in its name and on its behalf by its officers thereunto duly authorized this
1st day of January, 1988
CITY OF DENTON
CITY OF DENTON
DEPENDENT CARE ASSISTANCE PLAN
Effeotive January 1, 1988
CITY OF DENT ON
DEPENDENr CARE ASSISTANCE PLAN
TABLE OF CONTENTS
ARTICLE
I INTRODUCTION
II DEFINITIONS
2
1
"Plan Administrator"
2
2
"Claim Administrator"
2
3
"Cafeteria Plan"
2
4 .
"Code"
2
5
"Company"
2
6
"Dependent"
2
7
"Dependent Care Assistance
Account
2
8
"Dependent Care )bcpensea"
2
9
"Dependent Care Service
provider"
2
10
"Effective Date"
2
11
"Employee"
2
12
"Participant"
2
13
"Plan"
2
14
"Plan Year"
III PARTICIPATION
3.1 Commencement of Partioipation
3 2 Cessation of Participation
3 3 Reinstatement of Former
Participant
IV ELECTION TO RECEIVE DEPENDENT CARE ASSISTANCE
4 1 Election Procedure
4 2 Maximum Dependent Care
Assistance
V DEPENDENT CARE ASSISTANCE ACCOUNTS
5 1 Establishment of Accounts
5.2 Crediting of Accounts
5 3 Debiting of Accounts
5 4. Forfeiture of Accounts
ARTICLE
VI. PAYMENT OF DEPENDENT CARE ASSISTANCE
6 1 Claims for Reimbursement
6 2 Reimbursement or Payment
of Expenses
6 3 Report to Participants on or
Before January 31 of Each Year
VII TECd9INATICN OF PARTICIPATION
VIII.
8 1 Plan Administrator
8.2 Examination of Records
8 3.. Reliance of Tables, etc
8 4 Indemnification of Administrator
IX AMENDMENT OR TERMINATION OF PLAN
9 1 Amendment of Plan
9.2. Termination of Plan
10.1.
10.2.
10 3
10 4
10 6
10.6
10 7
Cowunication to Employees
Limitation of Rights
Benefits Solely From
General Assets
Nonassignability of Rights
No Guarantee of Tax Consequences
Indemnification of City of Denton by
Participants
Governing Law
I
CITY OF Dl$M
DEPE MEKr CARE ASSISTANCE PLAN
ARTICLE I - Introduction
This Plan is intended to qualify as a dependent care assistance program
under Section 129 of the Internal Revenue Code of 1986, as emended, and is to
be interpreted in a manner consistent with the requirements of Section 129
The purpose of the Plan is to enable participants to elect to receive payments
or reimbursements of their dependent care expenses that are excludable from the
Participants' gross income under Section 129 of the Code
ARTICM II - Definitions
Wherever used herein, the following terms have the following meanings
unless a different meaning is clearly required by the context
2 1 "Plan Administrator" means the City of Denton or such other person or
committee as may be appointed from time to time by the City of Denton to serve
at its pleasure
2.2 "Claim Administrator" means Employee Resource Administration Corp
2 3 "Cafeteria Plan" means the City of Denton Cafeteria Plan effective
1-1-88, as amended from time to time
2 4 "Code" means the Internal Revenue Code of 1986, as amended from time
to time. Reference to any section or subsection of the Code includes reference
to any comparable or succeeding provisions of of any legislation which amends,
supplements or replaces such section or subsection
2 5 "City of Denton " means City of Denton , a municipality organised
under the laws of the State of Texas.
2.6. "Dependent" means any individual who is (a) a dependent of the
Participant who is under the age of 15 and with respect to whom the Participant
is entitled to an exemption under Section 151 (c) of the Code, or (b) a
dependent or spouse of the Participant who is physically or mentally incapable
of caring for himself
2.7 "Dependent Care Assistance Account" means the account described in
Article V hereof.
2 S. "Dependent Care RKpenses" mean expenses incurred by a Participant
which (a) are incurred for the care of a Dependent of the Participant or for
related household services, (b) are paid or payable to a Dependent Care Service
Provider, and (e) are incurred to enable the Participant to be gainfully
employed for any period for which there are one or more Dependents with respect
to the Participant. "Dependent Care Expenses" shall not include expenses
incurred for services outside the Participant's household for the care of a
Dependent unless such Dependent is described in Section 2 6(a) or regularly
spends at least eight hours each day in the Participant's household Dependent
Care Expenses shall be deemed to be incurred at the time the services to which
the expenses relate are rendered
2 9 "Dependent Care Service Provider" means a person who provides care or
other services described in Section 2 8(a)
above, but shall not include (a) a dependent care center (as defined in Section
21(b) (2) (D) of the Code), unless the requirements of Code Section 21(b) (2)
(C) are satisfied, or (b) a related individual described in Section 129(c) of
the Code.
2 10 "Effective Date" means 1-1-88
2 11 "Employee" means any individual employed by the Company
2 12 "ERISA" means the Employee Retirement Income Security Act of 1974
2 13 "Participant" means each Employee who participates in the Plan in
aocordanoQ with Article III
2 14 "Plan" means the City of Denton Dependent Care Assistance Plan as
set forth herein, together with any and all amendments and supplements hereto
2 15 "Plan Year" means the 12-oonsecutive-month period beginning with the
original effective date of the Plan and each suing 12 month period
thereafter
A pronoun or adjective in the masculine gender includes the feminine
gender and the singular includes the plural, unless the context clearly
indicates otherwise
ARTICLE III - Participation
3.1 Commencement of Participation Each employee of the employer will
be eligible to participate in the plan (anus his dependents will be eligible for
dependent coverage to the extent provided in any supplement or constituent
plan) on the Plan Year Anniversary Date, after he has met all of the following
requirements
(a) He is a "covered employee" (that is, he is a member of a group of
employees of the employer to which the plan has been and continues to be
extended unilaterally),
(b) He has filed with the plan administrator any written agreement
electing to participate in the plan as is required by the plan
administrator, on a form satisfactory, to the plan administrator,
(c) With respect to any benefit provided for in a supplement or
constituent plan, he has satisfied all of the eligibility requirements
as described in an applicable supplement or constituent plan, and
(d) With respect to dependent coverage, his dependents have satisfied
all of the eligibility requirements for dependent coverage as described
in an applicable supplement or constituent plan
3 2 Cessation of Participation A Participant will cease to be a
Participant as of the earliest of (a) the date on which the Plan terminates or
(b) the date on which his election to receive dependent Care assistance expires
or is terminated under the Cafeteria Plan
3.3 Reinstatement of Former Participant If a former Participant who is
eligible under Section 3 1 elects again under the Cafeteria Plan to receive
dependent care assistance under this Plan, he will again become a Participant
in this Plan on the effective date of such election
ARTICLE N - Election to Receive Dependent Care Assistance
4 1 Election Procedure A Participant may elect to receive dependent
care assistance under this Plan by filing an election and compensation
reduction agreement in accordance with the procedures established under the
Cafeteria Plan. An election to receive dependent care assistance shall be
irrevocable during the Plan Year, subject to a change in family status, as
provided in the Cafeteria Plan.
4 2 Maximum Dependent Care Assistance The maximum amount which the
Participant may receive in any Plan Year in the form of dependent care
assistance under this Plan shall be the least of (a) the Participant's earned
income for the Plan Year (after all reductions in compensation including the
reduction related to dependent care assistance), (b) the actual or deemed
earned income of the Participant's spouse for the Plan Year or (o) $5,000 In
the case of a spouse who is a full-time student at an educational institution
or is physically or mentally incapable of caring for himself, such spouse shall
be deemed to have earned income of not less than $200 per month if the
Participant has one Dependent and $400 per month if the Participant has two or
more Dependents
ARTICLE V - Dependent Care Assistance Accounts
5 1 Establishment of Accounts The City of Denton will establish and
maintain on its books a Dependent Care Assistance Account for each Plan year
with respect to each Participant who has elected to receive dependent care
assistance for the Plan Year
5.2. Crediting of Accounts. There shall be credited to a Participant's
Dependent Care Assistance Account for each Plan Year, as of each date
compensation is paid to the Participant in such Plan Year, an amount equal to
the reduction, if any, to be made in such compensation in accordance with the
Participant's election and compensation reduction agreement under the Cafeteria
Plan All amounts credited to each such Dependent Care Assistance Account
shall be the property of the City of Denton until paid out pursuant to Article
VI
5 3 Debiting of Accounts A Participant's Dependent Care Assistance
Account for each Plan Year shall be debited from time to time in the amount of
any payment under Article VI to or for the benefit of the Participant for
Dependent Care Expenses incurred during such Plan Year Amounts debited to
each such Dependent Care Assistance Account shall be treated as payments of the
earliest amounts credited to the Account and not yet treated as paid under this
sentence, under a "first-in/first-out" approach
5 4. Forfeiture of Accounts. The amount credited to a Participant's
Dependent Care Assistance Account for any Plan Year shall be used only to
reimburse the Participant for Dependent Care Expenses incurred during such Plan
Year, and only if the Participant applies for reimbursements hereunder, such
balance shall not be carried over to reimburse the Participant for Dependent
Care Expenses incurred during a subsequent Plan Year, and shall not be
available to the Participant in any other form or manner, but shall remain the
property of the City of Denton, and the Participant shall forfeit all rights
with respect to such balance
ARTICLE VI - Payment of Dependent Care Assistance
6 1. Claims for Reimbursement A Participant who has elected to receive
dependent care assistance for a Plan Year may apply to the City of Denton or
its designated Claims Administrator for reimbursement of Dependent Care
Expenses incurred by the Participant during the Plan Year by submitting an
application in writing to the Company, or the Claims Administrator, in such
form as the City of Denton or the Claims Administrator ■ay prescribe, setting
forth
(a) the amount, date and nature of the expense with respect to which a
benefit is requested,
(b) the name of the person, organization or entity to which the expense
was or is to be paid, and
(c) such other information as the City of Denton or the Claims
Administrator may from time to time require.
Such application shall be accompanied by bills, invoices, receipts, cancelled
checks or other statements showing the amounts of such expenses, together with
any additional documentation which the City of Denton or the Claims
Administrator may request
6 2 Reimbursement or Payment of Expenses The City of Denton through the
Claims Administrator shall reimburse the Participant from the Participant's
Dependent Care Assistance Account for Dependent Care Expense incurred during
the Plan Year for which the Participant submits documentation in accordance
with Section 6 1 The City of Denton through the Claims Administrator, at its
option, may pay any such Dependent Care Expenses directly to the Dependent Care
Service Provider in lieu of reimbursing the Participant No reimbursement or
payment under this Section 6 2 of expenses incurred during a Plan year shall at
any time exceed the balance of the Participant's Dependent Care Assistance
Account for the Plan Year at the time of the reimbursement or payment The
amount of any Dependent Care Expenses not reimbursed or paid as a result of the
preceding sentence shall be carried over and reimbursed or paid only if and
when the balance in suoh Account permits such reimbursement or payment
6 3 Report to Participants On or before the end of the Plan Year, the
Administrator shall furnish to each Participant who has received dependent care
assistance during the prior Plan Year a written statement showing the amount of
such assistance paid during such year with respect to the Participant
ARTICLE VII - Termination of Participation
In the event that a Participant ceases to be a Participant in this Plan
for any reason, the Participant's compensation reduction agreement relating to
dependent care assistance shall terminate The Participant (or his estate)
shall be entitled to reimbursement only for Dependent Care Expenses incurred
within the sauce Plan Year and prior to the 90th day after the date
participation is terminated, and only if the Participant (or his estate)
applies for such reimbursement in accordance with Section 6 1 on or before the
earlier of (1) 180th day following the date participation is terminated, and
(2) the 90th day after the close of the Plan Year No such reimbursement shall
exceed the remaining balance, if any, in the Participant's Dependent Care
Assistance Account for the Plan Year in which the expenses were incurred
ARTICLE VIII - Administration
8 1 Plan Administrator. The administration of the Plan shall be under
the supervision of the Administrator It shall be a principal duty of the
Administrator to see that the Plan is carried out, in accordance with its
terms, for the exclusive benefit of persons entitled to participate in the Plan
without discrimination among them The Administrator will have full power to
administer the Plan in all of its details, subject to applicable requirements
of law For this purpose, the Administrator's powers will include, but will
not be limited to, the following authority, in addition to all other powers
provided by this Plan
(a) To make and enforce such rules and regulations as it deems necessary
or proper for the efficient administration of the Plan, including the
establishment of any claims prcedures that may be required by applicable
provisions of law,
(b) To interpret the Plan, its interpretation thereof in good faith to
be final and conclusive on all persons claiming benefits under the Plan,
(c) To decide all questions concerning the Plan and the eligibility of
any person to participate in the Plan,
(d) To appoint such agents, counsel, accountants, consultants and/or
Claims Administrator as may be required to assist in administering the
Plan, and
(e) To allocate and delegate its responsibilities under the Plan and to
designate other persons to carry out any of its responsibilities under
the Plan, any such allooation, delegation or designation to be by
written instrument and in accordance with applicable requirements of
law
8.2 Examination of Records The Administrator will make available to
each Participant such of its records under the Plan as pertain to his, for
examination at reasonable times during normal business hours
8 S Reliance an Tables, eto. In administering the Plan, the
Administrator will be entitled to the extent permitted by law to rely
conclusively on all tables, valuations, certificates, opinions and reports
which are furnished by acoamtante, counsel or other experts employed or
engaged by the Administrator
8 4 Named Fiduciary The Plan Administrator will be a "named fiduciary"
for purposes of Section 402 (a) (1) of ERISA with authority to control and
manage the operation and administraton of the Plan, and will be responsible for
complying with all of the reporting and disclosure requirements of Part I
ofSubtitle B of Title I of ERISA
8 b. Claims of Review Procedures
(a) Claims Procedure If any person believes he is being denied any rights
or benefits under the Plan, such person may file a claim in writing with the
Plan Administrator If any such claim is wholly or partially denied, the Plan
Administrator will notify such person of its decision in writing Such
notification will be written in a manner calculated to be understood by such
person and will contain (i) specific reasons for the denial, (ii) a description
of any additional material or information necessary for such person to perfect
such claim and an explanation of why such material or information is necessary
and (iii) information as to the steps to be taken if the person wishes to
submit a request for review Such notification will be given within 90 days
after the claim is received by the Administrator (or within 180 days, if
special circumstances require an extension of time for processing the claim,
and if written notice of such extension and circumstances is given to such
person within the initial 90 day period) If such notification is not given
within such period, the claim will be considered denied as of the last day of
such period of such person may request a review of his claim
(b) Review Procedure Within 60 days after the date on which a
person receives a written notice of a denied claim (or, if applicable, within
90 days after the date on which such denial is considered to have occurred)
such person (or his duly authorized representative) may (i) file a written
request with the Plan Administrator for a review of his denied claim and of
pertinent documents and (ii) submit written issues and comments to the Plan
Administrator The Plan Administrator will notify such person of its decision
in writing Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the decision as
well as specific reference to pertinent Plan provisions The decision on
review will be made within 60 days after the request for review is received by
the Plan Administrator (or within 120 days, if special circumstances require an
extension of time for processing the request, such as an election by the Plan
Administrator to hold a hearing, and if written notice of such extension and
circumstances is given to such person within the initial 60 day period) If
the decision on review is not made within such period, the claim will be
considered denied
8 6 Nondiscriminatory Exercise of Authority Whenever, in the
administration of the Plan, any discretionary action by the Plan Administrator
is required, the Plan Administrator shall exercise its authority in a
non-discriminatory manner so that all persons similarly situated will receive
substantially the same treatment
8 7 Idemnification of Administrator The City of Denton agrees to
idemnify and to defend to the fullest extent permitted by law any Employee
serving as the Administrator or as a member of a committee designated as
Administrator (including any Employee or former Employee who formerly served as
Administrator or as a member of such committee) against all liabilities,
damages, costs and expenses (including attorneys' fees and amounts paid in
settlement of any claims approved by the Company) occasioned by any act or
omission to act in connection with the Plan, if such act or omission is in good
faith
ARTICLE IX - Amendment or Termination of Plan
9.1 Amerv*m t of Plan The City of Denton reserves the power at any
time or times to amend the provisions of the Plan to any extent and in any
manner that it may deem advisable, by a written instrument signed by the City
Manager of the City of Denton
9.2. Termination of Plan. The City of Denton has established the Plan
with the bona fide intention and expectation that it will be continued
indefinitely, but the City of Denton will have no obligation whatsoever to
maintain the Plan for any given length of time and may discontinue or terminate
the Plan at any time without liability Upon termination or discontinuance of
the Plan, all elections and reductions in compensation relating to the Plan
shall terminate, and reimbursements shall be made only in accordance with
Article VII
ARTICLE X - Miscellaneous
10,1 Communication to Employees Promptly after the Plan is adopted, the
City of Denton will notify all Employees of the availability and terms of the
Plan
10.2 Limitation of Rights. Neither the establishment of the Plan nor any
amendment thereof will be construed as giving to any Participant or other
person any legal or equitable right against the Administrator or the Company,
except as expressly provided herein, and in no event will the terms of
employment or service of any Participant be modified or in any way be affected
hereby
10.3 Benefits Solely from General Assets The benefits provided
hereunder will be paid solely from the general assets of the Company Nothing
herein will be construed to require the City of Denton or the Administrator to
maintain any fund or segregate any amount for the benefit of any Participant,
and no Participant or other person shall have any claim against, right to, or
security or other interest in, any fund, account or asset of the City of Denton
from which any payment under the Plan may be made
10 4 Nonassignability of Rights The right of any Participant to receive
any reimbursement under the Plan shall not be alienable by the Participant by
assignment or any other method, and will not be subject to be taken by his
creditors by any process whatsoever, and any attempt to cause such right to be
so subjected will not be recognized, except to such extent as may be required
by law.
10.5 No Guarantee of Tax Conseeuences Neither the Administrator nor the
City of Denton makes any commitment or guarantee that any amounts paid to or
for the benefit of a Participant under Article VI will be excludable from the
Participant's gross income for federal or state income tax purposes, or that
any other federal or state tax treatment will apply to or be available to any
Participant It shall be the obligation of each Participant to determine
whether each payment under Article VI is excludable from the Participant's
gross income for federal and state income tax purposes, and to notify the City
of Denton if the Participant has reason to believe that any such payment is not
so excludable
10 6 Indemnification of City of Denton Participants If any Participant
receives one or more payments or reimbursements under Article VI that are not
for Dependent Care Expenses, such Participant shall indemnify and reimburse the
City of Denton for any liability it may incur for failure to withhold federal
or state incase tax or Social Security tax from such payments or
reimbursements However, such indemnification and reimbursement shall not
exceed the amount of additional federal and state income tax that the
Participant would have owed if the payments of reimbursements had been made to
the Participant as regular cash compensation, plus the Participant's share of
any Social Security tax that would have been paid on such compensation, less
any such additional income and Social Security tax actually paid by the
Participant
10 7 Governing Law The Plan will be construed, administered and enforced
according to the laws of Texas
IN WITNESS WHEREOF, the City of Denton has caused this Plan to be executed
in its name and on its behalf by its officers thereunto duly authorized this
1st day of January, 1988
CITY OF DE'NTON