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HomeMy WebLinkAboutResolution 1998-070RESOLUTION NO. 98-70 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The City "Flexible Compensation Plan" adopted by Resolution No. 88-3 on January 25, 1988, shall hereafter be known as "The City of North Richland Hills Flexible Benefits Premium Only Plan." 2. The Plan be, and is hereby, amended as set out in Exhibit "A" attached hereto and made a part hereof, and said Exhibit "A" be, and is hereby, adopted. 3. The amendment (Exhibit "A") shall be in full force and effect from and after January 1, 1999. PASSED AND APPROVED this 21St day of December,1998. APPROVED: ATTEST: ,,~ - ~ ~ ,, Patricia Hutson, City Secretary ,, %~ Charles Scoma, Mayor APPRO AS TO FORM AND LE LITY~: '~ ~ ~ ~ ~~' (~ L Rex McEntir~/ City Attorney APPROVED AS TO CONTENT: n ,. /~_ elani Fragge, Director of an Resources EXHIBIT A CITY OF NORTH RICHLAND HILLS FLEXIBLE BENEFITS PREMIUM ONLY PLAN Effective February 1, 1.988 Restated as of January 1, 1999 RESOLUTION NO. 98-70 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF NORTH RICHLAND HILLS, TEXAS, that: 1. The City "Flexible Compensation Plan" adopted by Resolution No. 88-3 on January 25, 1988, shall hereafter be known as "The City of North Richland Hills Flexible Benefits Premium Only Plan." 2. The Plan be, and is hereby, amended as set out in Exhibit "A" attached hereto and made a part hereof, and said Exhibit "A" be, and is hereby, adopted. 3. The amendment (Exhibit "A") shall be in full force and effect from and after January 1, 1999. PASSED AND APPROVED this 21St day of December,1998. APPROVED: ATTEST: A /~ Y _~ Y Charles Scoma, Mayor +~ / .yy (f/ Y Patricia Hutson, City Secretary APPRO AS TO FORM AND LE LITY ~ / ~ ~~ Rex McEntir~ City Attorney APPROVED AS TO CONTENT: ~elani Fra a Director an Resources 99 9'~ EXHIBIT A CITY OF NORTH RICHLAND HILLS FLEXIBLE BENEFITS PREMIUM ONLY PLAN Effective February 1, 1988 Restated as of January 1, 1999 City cif North Richland Hills Flexible Benefits Premium Only Plan Table of Contents Article Page hltl'OdllCtl017 I Article I Definitions 2 Article II Eligibility Provisions 5 Article III Contributions 7 Article IV Participant Elections and Benefit Options 9 Article V COBRA Rights 1? Article VI Amendment or Termination 13 Article VII Administration 14 Article VIII Miscellaneous Provisions 16 Table I Maximum Amount of Salary Reductions 17 INTRODUCTION Effective February 1, 1988, The City of North Richland Hills (the "Company") first established the City of North Richland Hills Flexible Benefits Premium Only Plan (the "Plan"). The pu~posc of the Plan is to provide eligible employees with the right to forego payment of a po--tion of their compensation and to instead have the Employer pay on their behalf premiums or other contributions required for participation in certain benefit plans sponsored by the Employer or to waive coverage Lmde~r certain benefit plans sponsored by the Employer. The Company now amends and restates the Plan in its entirety, effective as of January 1, 1999. The Plan is intended to qualify as a cafeteria plan under Section l 25 of the hlternal Revenue Code oC 1986 and is to be interpreted in a manner consistent with the requirements of the Code. ARTICLE I Definitions As used herein, the following words and phrases, when appearing herein with an initial capital letter, shall have the following meanings unless a different meaning is plainly required by the context. Words in the masculine gender shall be deemed to include the feminine gender and words in the feminine gender shall be deemed to include the masculine gender; and, unless the context otherwise requires, the singular shall include the plural and the plural the singular. Any headings herein arc included for reference only and are not to be construed so as to alter, modify, supplement, or aid in interpretation of, any of the terms of the Plan. 1.01 Board means the Board of Directors, or other similar policy-making authority, of The City of Nortl~ Richland Hills, as constituted from time to time. 1.02 Change in Family Status means: (a) Marriage or divorce of the F.,mployee; (b) Death of the Employee's Spouse or a dependent child of the Employee; (c) Birth or adoption of a child of the Employee; (d) Switching fi-om part-time to full-time status, or from full-time to part-time status by the Employee or the Employee's Spouse; (c) Taking an unpaid leave of absence by the Employee or the Employee's Spouse; (f) Significant change in the health coverage of the Employee or the Employee's Spouse attributable to the Spouse's employment; (g) The termination of employment (or commencement of employment) of the Employee's Spouse; or (h) Such other events related to family status that under regulations and rulings of the Internal Revenue Service arc not disallowed as justification for revolting an election under a cafeteria plan and/or making a new election thereunder. 1.03 COBRA means the extension of medical coverage that must be offered in accordance with the Consolidated Onmibus Budget Reconciliation Act of 1985, along with any amendments to such law and any pertinent Treasury regulations, rulings, notices or other promulgations. 1.04 Code means the Internal Revenue Code of 1986, as amended from time to time, along with any pertinent Treasury regulations, rulings, notices or other promulgations. Reference to any section or subsection of the Code includes references to any comparable or successor provisions of any legislation that amends, supplements or replaces such SeCtlOn OI' SLIbSCCtl011. 1.05 Comnanv means The City of North Richland Hills, a municipal corporation incorporated in the State of Texas. I.OG Effective Date means February 1, 1988. Effective Date of Restatement means January I , 1999. 1.07 Employee means a person who is an employee of the Employer and renders services to the Employer in a status that the Employer acknowledges as "employee" (regardless of whether that person is an "employee" as that term is used in Section 3121(d)(1) or (?) of the Code or in other authorities) and who normally works twenty (20) or more hours per week and who is not a member of a unit covered by a collective bargaining agreement. 1.08 Emnlover means the Company, and any Participating Employer which has adopted and currently maintains the Plan for the benefit of its eligible Employees. 1.09 Health Plan means any of the health (medical, dental and/or vision care) plans, including any HMO plans, that are made available through the Employer. All of these plans are maintained in accordance with, and described in, one or more documents that are not contained within this Plan document, but are hereby incorporated by this reference. 1.10 Hi>?hly Compensated Employee means a Participant who is determined to be highly compensated under the applicable section of the Code. 1.1 1 HMO means any of one or more health n>aiutenance organizations that may be offering health benefits to eligible Employees, from time to time. 1. ] 2 Kev Employee means those participants who are determined to be lcey employees in accordance with Code Section 416(i). 1.13 Participant means any eligible Employee of a Participating Employer covered under this Plan who completes and delivers an Election Form to the Company, as described iu accordance with Article II. 1.14 Participating Employer means the Company and all entities which are part of the same "controlled group" as the Company, as determined under Sections 414(b), (c), or (m) of the Codc, provided such an entity has adopted the Plan in writing with the consent of the Board. Non-U.S. entities or subsidiaries shall not be treated as part of the controlled group for this purpose. A business entity shall be treated as a Participating Employer only while it is a member of the controlled group that includes the Company. I .l 5 Plan means this City of North Richland Hills Flexible Benefits Premium Only Plan. 1.16 Plan Administrator means the person or persons responsible foe the admiuisiration of the Plan, as identified in Section 7.01. 1.17 Plan Year means the twelve (12) month period beginning 12:01 A.M. each January l and ending 12:00 A.M. (midnight) each December 31. l .18 Oualified Beneficiary means any person who meets the COBRA criteria to he a "Qualified Beneficiary" and who is afforded rights of continued medical coverage under COBRA as a result of a "qualifying event," as defined in COBRA and in the Health Plan document. 1.19 Salarv Reductions means contributions made as described in Section 3.01. 1.20 Spouse means the person to whom the Employee is legally married. 4 ARTICLE II Eligibility Provisions 2.01 Effective Date ol~Particination for Eligible Emnlo_vees. An Employee is entitled to become a Par-ticipaut in this Plan on the later of: (a) The Effective Date, if he is employed by the Employer on that date, or (b) The date the Employee becomes eligible to participate in the Health Plan. 2.U2 Termination of Participation for Eligible Emnlovees. Except as otherwise required by Article V, coverage with respect to a Participant shall end on the earliest of the following events: (a) The date this Plan terminates; (b) The date the Participant chooses not to have an election in effect under the terms of this Plan and has appropriately declared that intent in writing to the Plau; (c) The date the Participant ceases making the contributions required under the terms o[~the Plan; or (d) The date the individual ceases to be an Employee. 2.03 Termination of Benefit Plan Coverage. A Participant's coverage under any benefit plan option elected under this Plan shall terminate on the date so specified in the plan document of the respective benefit plan, unless under the terms of the benefit plan option, coverage continues after a Participant no longer participates through this Plan. Each Plan Year, the Participant shall be deemed to have elected coverage under this Plan and the Health Plan option unless he appropriately waives coverage in writing for that Plan Year. 2.04 COBRA Rights. Notwithstanding any provision to the contrary herein, nothing in this Article II shall affect the rights of a Qualified Beneficiary under COBRA. 2.05 Reemployment. (a) In the case of an individual whose participation has ended in accordance with Section 2.02(b) or (c), such individual shall again become a Participant on the Cirst day of the Plan Year unless he appropriately waives coverage in wiring. (b) Subject to the restrictions of Section 125 of the Code, in the case of an individual whose participation has ended in accordance with Section 2.02(d), such individual shall again be entitled to become a Participant on the date he again performs services for the Employer. Any Employee who was a Participant at any time during the Plan Year in which such Employee again becomes entitled to participate in the Plan shall be restricted to the election that was previously in effect with respect to that Plan Ycar. ARTICLE III Contributions 3.01 Salary Reductions. Unless the Eligible Employee waives, or opts out of, the Plan in writing, the Participant will be deemed to have elected to redl-ce his compensation for a Plan Year and to use such amounts to purchase one or more of the various benefit options offered under Article IV of this Plan. The monetary amount associated with this election constitutes Salary Reductions. 3.0? New Participants. In the case of an Employee who becomes a Participant after the first day of a Plan Year, the maximum amount of Salary Reductions made available to such Participant for the balance of the Plan Year shall be prorated on the basis of the number of deductions remaining in such Plan Year. There are 24 deductions in a full Plan Year. 3.03 Pav Reduction and Payroll Withholding. A Participant's compensation for a Plan Year shall be reduced by the amount of the Salary Reductions for the Plan Year under Section 3.01. Such Salary Reductions shall be made only by payroll reduction. At the end of each Participant's taxable year, however, those Participants who arc Highly Compensated Employees with respect to such year will have the amount of the discriminatory excess, if any, as determined in the sole discretion of the Company to be in accordance with the relevant provisions of the Code, added to such Participant's compensation for purposes of reporting gross income to the Internal Revenue Service via Form W-2. 3.04 Maximum Amount of Contributions,. The maximum amount of Salary Reductions for any Plan Year may vaty from Participant to Participant, and/or from year to year and arc stated in Table I (which is attached hereto and incorporated herein by this reference). 3.05 Reduction of Certain Elections. The Company shall have the power to reduce, or completely revoke, Salary Reductions of certain Participants in accordance with Section 3.01 of this Plan, at any time prior to or during a Plan. Year, subject to the following: (a) Reduction of Certain Elections to Prevent Discrimination. Notwithstanding any other provision of this Section, the Plan Administrator, at the direction of the Company, may reduce or revoke a Salary Reduction of a Participant described below to the extent necessary to prevent this Plan from being considered discriminatory under Section 125(b) or ] OS(h)(2) of the Code. (1) If such a reduction affects benefits ~mder or contributions to a Health Plan, only the Salary Reductions of Participant(s) who are highly compensated as defined by either Section 105(h) or Section 125(e) of the Code may he reduced. (2) If such a reduction affects other qualified benetts, only the Salary Reductions of Participants who are highly compensated as defined in 7 Section 125(e) of the Code, or are otherwise Key Employees as defined in Section l 25(b) of the Codc may be reduced. (b) Reduction of Certain Elections Affecting Code Section 415.. The Company may reduce the amount of Salary Reductions made on behalf of any Participant to the extent it deems it necessary to enable any qualified retirement plan niaintaincd by the Employer under Code Section 401 to comply with the limitation on annual additions as set forth in Code Section 415. 3.06 Forfeitures. Any forfeitures of Salary Reductions shall be used by the Company for any legitimate Plan purpose, including without limitation, payment of benefits under the Plan or the reasonable costs of administering the Plan. 8 ARTICLE IV Participant Elections and Benefit Options 4.01 Benefit Options. Subject to all other provisions of this Plan, a Participant will be deemed to have chosen nontaxable benefits under any one or more Health Plans for which he is eligible. 'This automatic election of benefits may be waived; the decision to continue participation or to waive coverage may be refei---ed to as an "election" even though participation in this Plan is automatic. 4.U2 Election Procedures. Approximately sixty (60) days prior to the commencement of each Plan Year, the Company shall provide a written form to each Participant and to each other Employee who is eligible to become a Participant at the beginning of the Plan Year. Subject to Section 4.07 of this Plan, each Participant shall specify on the form whether he is declining participation in the Plan for such Plan Year by filing a waiver (in which case, he will be deemed to have elected taxable cash). An Employee who does not file a waiver for a Plan Year shall thereby agree to a reduction in his compensation as provided in Article I11. The participation in this Plan or the waiver shall be effective as of the first day of the next following Plan Year. Any waiver must be completed and returned to the Company on or before such date as the Company shall specify, which date shall be no later than the beginning of the first pay period for which the Participant's Plan Year's decision will apply. 4.03 New Emplovices. If an Employee first becomes eligible to be a Participant under this Plan at some time other than at the beginning of a Plan Year, the Compa~ly will provide such Employee with a statement of coverage and the for-n to waive coverage in writing if waiver is desired. An Employee who does not waive benefits for a Plan Year shall thereby agree to a reduction in his compensation as provided in Article III. If coverage is waived, the form must he completed and retunled to the Company on or before such date as the Co-npany shall specify, which date shall be no later than the beginning of the fast pay period for which the Participant's Plan Year's elections will apply. 4.04 Duration of Decision. Except as provided in Sections 4.07, 4.08 and 4.09, each Participant's election to participate or to waive coverage is irrevocable and shall remain in effect through the last day of the Plan Year with respect to which it is made. 4.05 Benefit Enrollment. Enrollment in any of the benefit plans offered under this Plan shall be governed by the terms, conditions, and provisions of that plan's plan document. 4.06 Value of Benefits. The Company shall, in its sole discretion, determine and set the cost to Employees associated with each benefit offered under this Plan. Subject to restrictions on election changes in Code Section 125, such cost can be changed by the Company at any time at the beginning of, or during, a Plan Year without prior notification to Participants or Employees or to any Employer or Participating Employer. 4.07 Absence of Completed Election Fortn. Both an Employee who was not a Participant on the last day of the next preceding Plan Year, and a Participant on that date with an election of nontaxable health Plan option(s) in effect as of that date, shall be deemed to have 9 purchased such Health Plan option(s) as remain(s) available as a benefit plan option under the Plan and shall Ii-rther be treated as having agreed to reduce his compensation by whatever amount is then necessary to purchase such Health Plan coverage as provided in accordance with Article Ill of this Plan. The opportunity to waive coverage will once again be of{erect. 4.08 Chances in Emplovee Elections. Except as provided in Sections 4.02, 4.09 and the second paragraph of this Section 4.08, after ailing a waiver or remaining an active Participant for a Plan Year, a Participant may revoke his elections for that Plan Year and make new elections with respect to the remainder of the Plan Year only if both the revocation and the new election are on account of and consistent with a Change in Family Status, and il~such change is allowed under the terms of the plan documents of the respective benefit plan(s) affected by such revocation and new election. Provided however, in the went that a Health Plan option provided by an independent thi--d party is significantly curtailed or terminated during a Plan Year or iCthe cost significantly increases, any affected Participant may prospectively change to another similar Health Plan option. Provided further, if the cost of a Health Plan option provided by an independent third party provider under this Plan increases or decreases during a Plan Year, affected Participants' Salary Reductions will automatically increase or decrease, on a reasonable and consistent basis. Changes in contributions and benefits attributable to a change in the Participant's election shall be effective with respect to the pay period which begins coincident with or immediately following the date the new Election Form is accepted by the Company. 4.09 Changes Due to Leaves. Upon beginning a Family and Medical Leave Act (FMLA) leave, a Participant may revoke an existing election of Health Plan coverage participation unde-- this Plan for the remainder of the Plan Year, with the effect o[~declining participation in the Plan for the remainder of the Plan Year and selecting taxable cash. Upon returning from FMLA leave, an Employee choosing such revocation, or otherwise having ceased to be a Participant during such FMLA leave, may choose to immediately reinstate his Health Plan coverage under this Plan on the same terms as prior to taking FMLA leave (including family or dependent coverage). In addition, a Participant who is reinstated to a Health Plan following FMLA leave will have the same opportunities to make election changes ruxler this Plan as persons returning from non-FMLA leave. Regardless oCanything to the contrary in this Plan, an Employee retunling from FMLA leave has no greater right to benefits }i~r the remainder of the Plan Year than an Employee who has been continuously working during the Plan Year. For a Participant who does not revoke his Health Flan coverage upon beginning an FMLA leave, payroll deductions for Sala--y Reductions will continue during the FMLA Leave, so long as the Participant's compensation from the Employer is sufficient to fund such participation. A Participant taking an unpaid FMLA leave who does not revoke his election upon beginning an FMLA leave may pre-pay all or part of the Salary Reduction amounts that 10 will become due during any portion of his scheduled FMLA leave that will occur during the then-current compensation due to him from the Employer. For an unpaid FMLA leave, a Participant may pre-pay all or part of the a-nounts due du--ing FMLA leave for the remainder of the FMLA period. Alternatively, in the absence ofpre-payment, a Participant may pay his share of the cost of the Health Plan on a "pay-as-you-go" basis on the same schedule that applies to an Employee who is not on FMLA leave. Pay-as-you-go payments will be after-tax, except to the extent the Employee on FMLA leave has taxable compensation payable during the leave period. Any portion of the Employee's share of the cost of benefit plan options he has under the Plan that is not paid during the Employee's FMLA leave must be repaid following FMLA leave, to the extent provided by the FMLA and regulations thereunder, on an after-tax basis. An Employee who fails to return from FMLA leave will be required to repay the full cost of benefits generated during his leave period to the extent permitted under the FMLA. This Plan allows an election change in connection with non-FMLA leaves as a Change in Family Status. A Participant who is reinstated to a Health Plan following FMLA Leave will have the same opportunities to make election changes as persons returning from non- FMLA leave. 4.12 Discrimination Limitation. Any provisions of the Plan to the contrary notwithstanding, no more than twenty-five percent (25`%) of the aggregate amounts paid hereunder during any Plan Year for Plan benefits shall be provided to the class of individuals who are Key Employees. ARTICLE V COBRA Rights 5.01 In General. The health benefits provided under this Plan maybe subject to COBRA. h~ the event any provision of this document is inconsistent with COBRA, the provisions of COBRA arc applicable. A statement of COBRA rights under any Health Plan, if applicable, is contained in such plan's own plan document. 5.02 Definition of Employee and Participant. For purposes of COBRA, the terms Employee and Participant may include former Employees who have terminated employment with the Company and persons who are current or former dependent Spouses or dependents of Employees. Accordingly, to the extent required by COBRA, any Qualified Beneficiary who has elected certain rights under COBRA shall be afforded privileges otherwise restricted to Participants, as defined in Article 1 of this Plan. 5.03 Enrollment Options. During Election Periods described in Section 4.02, a Participant who has election rights on account of his status as a Qualified Beneficiary shall be limited to electing prospective coverage under a Health Plan, unless other options are required by COBRA. No plan. or coverage available under this Plan shall be available to anyone who is a Qualified Beneficiary except to the extent required by applicable law. 12 ARTICLF. VI Amendment or Termination 6.01 Amendment or Termination,. Except as provided herein, the Board reserves the; right to amend or terminate this Plan at any time and in any manner. The Board may delegate this authority to any o('ficer of the Company. In the event of a termination of the Plan, all liabilities of the Plan shall be satisf ed to the extent and as required by this plan document and any applicable law. 13 ARTICLE VII Administration 7.01 Administrator. The administration of the Plan shall be under the supervision of the Company, as Plan Administrator. It shall be a principal duty of the Company to see that the Plan is carried out, in accordance with its terns, for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them. 7.02 Powers and Duties. The Plan Administrator will have fi-Il power to administer the Plan in all of its details, subject to applicable requirements of law. For this purpose, the Plan Administrator's powers will include, but will not be limited to, the following discretionary authority, in addition to all other powers provided by this Plan: (a) To establish a finding policy and method consistent with the objectives of the Plan. (h) 7'o 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 procedures that may be required by applicable provisions of law. (c) To inte-pret the Plan, its interpretation in good faith to be final and conclusive on all persons claiming benefits under the Plan. (d) To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan. (e) To appoint such agents, counsel, accountants, consultants and other persons as may be required to assist in administering the Plan. (f) To allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, including but not limited to delegating certain claims administration duties to a claims administrator, provided that any such allocation, delegation or designation shall be set out in a written instrument executed by the Plan Administrator and the designated party. (g) To communicate to any insurer or other supplier or administrator of benefits under this Plan in writing all information required to carry out the provisions of the Plan. (h) To notify the Participants in writing of any substantive amendment or termination of the Plan or of a change in benefits available under the Plan. Notwithstanding the provisions of this Section, the powers and duties allocated to the Plan Administrator and described in this Section shall only be applicable with respect to a 14 claim arising under any plan or to the administration of such plan to the extent that such power or duty is not allocated (either expressly or by implication) to the individual(s) or entity appointed to serve as administrator of such plan. 7.03 Reliance on Tables• etc. In administering the Plan, the Plan Administrator will be entitled, to the extent permitted bylaw, to rely conclusively on all tables, valuations, certificates, opinions and reports which are fiir~ished by, or in accordance with the instructions of, the administrators of any of the plans offered within the Plan, or by accountants, legal counsel or other experts employed or engaged by the Company. 7.U4 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 nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 7.05 Standard of Review. The Plan Administrator shall perform its duties as the Plan Administrator and, in its sole discretion, shall determine appropriate courses of action in light of the reason and purpose for which this Plan is established and maintained. In particular, the Plan Administrator shall interpret all Plan provisions, and make all determinations (including factual determinations) as to whether any particular Participant or beneficiary is entitled to receive any benefit under the terms of this Plan, and all such interpretations and determinations shall be made by the Plan Administrator in its sole discretion. Any construction of the terms of the Plan that is adopted by the Plan Administrator and for which there is a rational basis shall be final and legally binding on all parties. Any interpretation of the Plan or other action of the Plan Administrator shall be subject to review only if such interpretation or other action is without rational basis. Any review of a final decision or action of the Plan Administrator shall be based only on such evidence presented to or considered by the Plan Administrator at the time it made the decision that is the subject of review and such final decision or action shall be entitled to the maximum deference permitted by law. 15 ARTICLF, Vlll Miscellaneous Provisions 8.01 Information to be Furnished. Participants shall provide the Plan 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. 8.02 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 Company or any Participating Employer, except as expressly provided herein. This Plan shall not be deemed to constitute a contract between the Company and any Participant, or to be iu consideration of, or an inducement for, the employment of any Participant or Employee. Nofl~ing contained in this Flan shall be deemed to give any Participant or Employee the right to be retained in the service of the Company or to interfere with the right of the Company to discharge vly Participant or Employee at any time, regardless of the effect such discharge would have upon him as a Participant of this Plan. 8.U3 Governing Law. This Plan shall be construed, administered and enforced according to the laws of Texas, except to the extent it may be govenled by federal law. 8.U4 No Guarantee of Tax Consequences. Notwithstanding anything herein to the contrary, the Company neither insures nor makes any comtnihnent or guarantee that any aulounts paid to a Participant pursuant to the Plan or any amounts by which a participant's wages are reduced pursuant to Article III will be excludable from the Participant's gross income for federal, state or local income tax purposes. It shall be the obligation of each Participant to notify the Plan Administrator if the Participant has reason to believe that any payment made or to be made to the Participant pursuant to the Plan is not excludable li~om the Participant's gross income for federal, state or local income tax purposes. 16 8.05 Funding,. Payments due under the Plan will be made from the general assets of the Employer, and no funds will be escrowed or otherwise earmarked to pay benefits. Different funding mechanisms may be used to provide benefits under any Health Plan or other benefit option. Such funding mechanisms shall be set out in the plan documents of such Health Plan or other benef t option. W WITNESS WHEREOF, the Company has caused this Plan to be executed in its name and behalf this ~'." day of ;~ ,,', ;; ,'";'~°,~ , 19~' T , by its officer thereunto duly authorized. ATTEST (SEAL,) THE CITY OF NORTH RICHLAND HILLS d , ,1, 17 TABLE I Maximum Amount of Salarv Reductions The maximum amount of Salary Reductions for a Participant for each Plan Year is the maximum cost to an Employee for the most expensive combination of benefit plan options available under the Plan that one Participant could elect under the terms of the Plan. For the 1999 Plan Year, this amount is $1,500. is