TAX-SHELTERED ANNUITIES, PERA 401(k) PLAN AND COLORADO PERA DEFERRED COMPENSATION PLAN

Transcription

1 Adopted December 1974 Recoded August 1993 Revised October 2007 APS Code: DLB TAX-SHELTERED ANNUITIES, PERA 401(k) PLAN AND COLORADO PERA DEFERRED COMPENSATION PLAN The District may make tax-sheltered annuities and/or custodial accounts available to employees through the Aurora Public Schools Tax-Sheltered Annuity Plan (the TSA Plan or Plan ). Any such tax-sheltered annuities and/or custodial accounts offered shall meet the requirements of Section 403(b) of the Internal Revenue Service Code of 1986, as amended (the Code ), and the State of Colorado. The District may also make the PERA 401(k) Plan and Colorado PERA 457 Deferred Compensation Plan available to employees. The District assumes no responsibility for the viability, safety, financial stability or performance of any tax-sheltered annuity, custodial account, the PERA 401(k) Plan, or the Colorado PERA 457 Deferred Compensation Plan, and has not completed any investigation into any such matters. The District will not provide performance analysis or investment advice to employees. Employees are encouraged to conduct their own investigations of the tax-sheltered annuities, custodial accounts, PERA 401(k) investments, and Colorado PERA 457 Deferred Compensation Plan investments and vendors of such products.

2 Issued November 1978 Revised October 2007 APS Code: DLB-R TAX-SHELTERED ANNUITIES, PERA 401(k) PLAN AND COLORADO PERA DEFERRED COMPENSATION PLAN Page 1 of 2 Tax-sheltered annuity ( TSA ) contracts and/or custodial accounts are provided by vendors ( Vendors ) in accordance with Section 403(b) of the Internal Revenue Code of 1986, as amended ( Code ), through the Aurora Public Schools Tax-Sheltered Annuity Plan ( TSA Plan ). The 401(k) Plan is offered to employees of the District through PERA. The 457 Plan is offered to employees of the District through the Colorado PERA 457 Deferred Compensation Plan. Employees in the District who participate in the TSA Plan, PERA 401(k) Plan and/or the Colorado PERA 457 Deferred Compensation Plan (collectively the Plans ) are subject to the following conditions: 1. Employees may utilize any of the Vendors on the District-approved list for TSA contracts and/or custodial accounts. All Vendors who are currently providing TSA products to participants of the TSA Plan can continue to do so, provided that they comply with all District requirements for Vendors, and provided further that they have current commitments with at least 10 APS employees. New Vendors will be added to the approved list when they can demonstrate that 10 or more APS employees are willing to purchase TSA products. A Vendor is removed from the list when: (1) the number of its APS clients drops below 10 employees, (2) a Vendor fails to agree to the District s Vendor Participation Agreement (DLB-2-E), or (3) a Vendor fails to cooperate with requests for assistance or information from the District. 2. Employees may enroll in the Plans, by giving written notice to the Benefits Office before the current month s cut-off date. Employees may increase, reduce or cease salary reductions at any time by giving written notice to the Benefits Office not later than the current month s payroll cut-off date. All participating employees in the TSA Plan must sign the Tax-Sheltered Annuity Plan Enrollment and Salary Reduction Agreement (DLB- 1-E). 3. Each Employee will be allowed to make contributions to the Plans. However, such contributions are subject to the maximum limits determined under Code Sections 403(b), 401(k), 457, 402(g), 415, and 414(v) (if applicable). 4. Contributions to the TSA Plan can only be made from includible compensation, in accordance with IRS regulations.

3 Issued November 1978 Revised October 2007 APS Code: DLB-R TAX-SHELTERED ANNUITIES, PERA 401(k) PLAN AND COLORADO PERA DEFERRED COMPENSATION PLAN Page 2 of 2 5. Employees participating in the Plans must: (a) inform the District of any other salary reduction plans in which they participate, and (b) provide the District with such information as may be needed to monitor the Plans and assure compliance with all relevant laws, federal and state regulations, and Board Policy and Regulations. The employee agrees, upon request of the District, to instruct his or her Vendor to release any information or report that is reasonably required by the District for purposes of compliance with Code Sections 403(b), 401(k), 457, 402(g), 415, and 414(v) (if applicable). An employee s failure to comply with the requirements set forth in this paragraph may result in the employee being ineligible for further participation in the Plans. 6. The District does not endorse any company, vendor, fund group or investment instrument, nor has the District undertaken any investigations regarding the soundness of any company, vendor, fund group, or investment offered. Investments offered through the TSA Plans are made available by the TSA Vendors and are selected at the sole discretion of each individual participant. As a governmental-defined contribution plan under Code Section 414(d), the TSA Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). However, the Plan is intended to comply with ERISA Section 404(c). The Plan's fiduciaries may be relieved of any liability for losses experienced as a result of a participant's investment instructions. 7. The District has full authority and complete discretion to construe, interpret and apply any provision of the regulations, to determine the eligibility of any employee or Vendor to participate in the TSA Plan, to determine the allowable amount of salary reduction contributions, and to determine any issue of compliance with the requirements of Code Section 403(b). The District s determination of any issue that may arise under these regulations or the TSA Plan shall be final and binding on the employee and/or the employee s Vendor. These regulations and/or the Plans may be amended or modified in whole or in part or terminated by action of the District at any time in a manner which is consistent with the requirements of Code Sections 403(b), 401(k) or 457.

4 Revised August 2010 Revised March 2012 APS Code: DLB-1-E ENROLLMENT AND SALARY REDUCTION AGREEMENT ( AGREEMENT ) Page 1 of 5 The undersigned Employee and the Joint District No. 28-J of the Counties of Adams and Arapahoe dba Aurora Public Schools ( Aurora Public Schools or District ), as sponsor of the Aurora Public Schools Tax-Sheltered Annuity Plan ( Plan ), hereby agree that: 1. Effective with respect to compensation made available on or after (date), that has not been otherwise currently available before this date, the Employee directs and agrees that the compensation to be paid by the District to the Employee shall be reduced by $ or % of compensation each pay period, not to exceed $17,000 in calendar year 2012 ($22,500 if the Employee will be fifty (50) or older in calendar year 2010 ( age fifty (50) catch-up ). (These amounts may be adjusted each subsequent calendar year based on the cost-of-living index). Further, this salary reduction may include special catch-up contributions if the Employee has completed fifteen (15) or more years of service with the District ( special catch-up ). If the Employee has completed fifteen (15) or more years of service with the District, the Employee should consult his or her vendor and attach a certification from the vendor as to the additional amount he or she may contribute under this catch-up rule. Any catch-up amount contributed by the Employee who is eligible for both an age fifty (50) catch-up and special catch-up is treated first as an amount contributed as a special catch-up and then as an age fifty (50) catch-up. 2. The Employee may also participate in the Plan by making a rollover contribution to the Plan, excluding after-tax contributions. If the Employee wishes to do so, but does not wish to make salary reduction contributions, the Employee should insert zero (0) in the blanks in paragraph 1, complete the last page of this Agreement, and any applicable forms from the Vendor. 3. The District shall pay the amount of the salary reduction to the current District-approved vendor(s)( Current Approved Vendor(s) or Vendor(s) ) designated by the Employee for the purchase of a non-transferable annuity contract and/or custodial account that the Current Approved Vendor represents meets the requirements of Section 403(b) of the Internal Revenue Code of 1986, as amended (the Code") to provide retirement benefits for the Employee. 4. The salary reduction specified in paragraph 1 may be changed during the term of this Agreement only by submitting a written request to the Benefits Office by no later than

5 Revised August 2010 Revised March 2012 APS Code: DLB-1-E ENROLLMENT AND SALARY REDUCTION AGREEMENT ( AGREEMENT ) Page 2 of 5 the current month s payroll cut-off date to be effective in the current pay period. However, no amounts can be deferred that can be paid or have been made available. 5. This Agreement shall apply to compensation paid to an Employee (or former Employee) including: (a) compensation earned while an Employee; (b) compensation paid to a former Employee which is received up to two and one-half (2 ½) months after the Employee s severance from employment or the end of the Plan Year that includes the date of the Employee s severance from employment, if it is a payment that would have been paid to the Employee while the Employee continued in employment with the District; (c) any unused accrued bona fide sick, vacation or other leave, which is paid to the Employee or former Employee if paid no later than two and one-half (2 ½) months after the Employee s severance from employment or the end of the Plan Year that includes the date of the Employee s severance from employment, if it is a payment that would have been paid to the Employee while the Employee continued in employment with the District, and (d) payment by the District to an Employee not currently working for the District because of qualified military service, but limited to the amount such Employee would have received if he/she were working for the District. This Agreement shall continue in effect indefinitely or until the date of termination stated in a written notice given by one party to the other, provided that at least thirty (30) days written notice is given to the Benefits Office. 6. The Aurora Public Schools administrative regulations (DLB-R) for Tax-Sheltered Annuities, as may be amended or modified ( regulations ) are hereby incorporated by this reference and made a part of this Agreement. 7. Employee participation in the Plan is voluntary. The Employee agrees, however, that participation in the Plan is subject to the terms and conditions of this Agreement and the regulations. The Employee agrees that his or her failure to comply with the terms of this Agreement or of the regulations will result in termination of the Employee s participation in the Plan. The Employee also agrees that failure by his or her Vendor(s) to cooperate with the District can result in termination of the Vendor s participation in the Plan. 8. The Employee further agrees that, if any adjustments are made by the Internal Revenue Service to the District s federal withholding tax reports due to the failure of either the Employee or the Employee s Vendor to comply with the requirements of Code Section

6 Revised August 2010 Revised March 2012 APS Code: DLB-1-E ENROLLMENT AND SALARY REDUCTION AGREEMENT ( AGREEMENT ) Page 3 of 5 403(b), the District has the right to recover the amount of all such adjustments from the Employee. 9. This Agreement shall supersede and terminate any prior salary reduction agreements between the Employee and the District. 10. The Employee agrees that the annual amount of his/her salary reduction contributions under this Agreement, any similar agreement for the PERA Code Section 401(k) plan, or under any other salary reduction agreement, cannot exceed the limitations that are specified in the regulations and the applicable provisions of the Code. The Employee understands that the Vendor(s) will conduct periodic testing to determine compliance with the applicable limitations and, the Employee agrees that, if the Vendor or the District determines that the Employee s salary reduction contributions are in excess of the annual limit, the Vendor or the District will ask the Employee to submit any relevant information. After consideration of such information, the Vendor and/or the District will take such corrective action as the Employer determines is necessary to bring the Employee s salary reduction contributions into compliance with the applicable limits, including, but not limited to, reduction or suspension of future salary reduction contributions or refund of excess salary reduction contributions, adjusted for earnings and/or losses in accordance with the Plan. Any decision made by the District will be final and binding on the Employee. The Employee will fully cooperate with and will instruct his/her Vendor(s) to promptly comply with any directions from the District. 11. The Employee agrees and understands that contributions are suspended for at least six (6) months after the receipt of a hardship distribution or a qualified reservist distribution under this Plan and all other plans maintained by the District. 12. The Employee agrees and understands that, by sponsoring the Plan, the District: a. has undertaken no investigation and makes no representations or warranties of any kind with respect to the financial condition or stability of any Vendor; and b. has undertaken no investigation and makes no representations or warranties of any kind with respect to the suitability or future performance of any investment option that is or may be offered to the Employee by any Vendor; and

7 Revised August 2010 Revised March 2012 APS Code: DLB-1-E ENROLLMENT AND SALARY REDUCTION AGREEMENT ( AGREEMENT ) Page 4 of 5 c. is not responsible in any way for the results, financial consequences or tax consequences of either the Employee s decision to participate in the Plan, the Employee s selection of any particular Vendor, or the Employee s decision to select any investment option offered by a Vendor. 13. The District has full authority and complete discretion to construe, interpret and apply any provision of the regulations, to determine the eligibility of any employee or Vendor to participate in the Plan, to determine the allowable amount of salary reduction contributions, and to determine any issue of compliance with the requirements of Code Section 403(b). The District s determination of any issue that may arise under the regulations or the Plan shall be final and binding on the Employee and/or the Vendor. 14. Nothing in this Agreement shall be deemed to create or constitute an employment agreement or contract or any form of a property right, and nothing contained herein shall be construed or deemed to give the Employee any right to be retained in the employ of the District. 15. The District reserves the right to amend or terminate the Plan or this Agreement at any time for any reason it determines to be appropriate. 16. By execution of this Agreement, Employee waives and releases any and all rights, present or future, to receive payment in any other form of the amount of the salary reduction specified in paragraph 1 except: (a) the right of the Employee s estate upon the Employee s death while in the employ of the District, or (b) the right personally upon the termination of the Employee s employment, by reason other than death, to receive all or any part of the amount specified for which the Employee has already rendered services but which the District is not otherwise obligated to pay.

8 Revised August 2010 Revised March 2012 APS Code: DLB-1-E ENROLLMENT AND SALARY REDUCTION AGREEMENT ( AGREEMENT ) Page 5 of This Agreement may be amended only by means of a writing that is signed by both of the parties hereto. The parties have executed this Agreement on the dates given below. APPROVED BY DISTRICT: AURORA PUBLIC SCHOOLS EMPLOYEE: Print Name: By: Signature: Title: Social Security # Date: Address: The Employee shall provide the following information regarding the current District-Approved Vendor ( Vendor ) selected for any rollover or salary reduction amount under the Plan. If more than one Vendor is selected, include additional Vendor information below. Designated Agent: Vendor: Address: Phone:

9 Page 1 of 18 This Tax-Sheltered Annuity Plan Vendor Participation Agreement ("Agreement") between ("Vendor") and Joint District No. 28-J of the Counties of Adams and Arapahoe ( District ) is hereby entered into this day of, 20. Vendor agrees to comply with the rules and regulations as specified herein. Vendor may offer its non-transferable annuity contracts ( Annuities ) and/or custodial accounts ( Accounts ), which comply with Section 403(b)(1) and Section 403(b)(7) of the Internal Revenue Code, as amended ( Code ), respectively, to the District s employees. The District agrees to sponsor the Aurora Public Schools Tax-Sheltered Annuity Plan, as may be amended from time to time ( Plan ). 1. Annuities and Accounts. The Vendor may offer its Annuities and Accounts to employees of the District who elect to enroll in the Plan in a manner consistent with the provisions of this Agreement. In addition, the Vendor shall be responsible for: a. providing, to the employee, a copy of the Annuity contract, Account agreement and/or individual investment certificate, selected by the employee; b. ensuring the employee receives a copy of the prospectus, if applicable, and otherwise acting in accordance with the regulations or administrative guidance governing the sale of securities; and c. ensuring that the Annuities and/or Accounts shall comply with any pertinent present or future federal or Colorado law or regulations. 2. Enrollment and Salary Reduction Agreement. The Vendor agrees to use the standardized Enrollment and Salary Reduction Agreement provided by the District. Pursuant to the terms of the Enrollment and Salary Reduction Agreement executed by an employee, the District shall pay the amount of the salary reduction to the Vendor, in accordance with the terms of the Plan, for the purchase of Annuities and/or Accounts of which the employee is named as the owner to provide retirement benefits for the employee. 3. Enrollment Process. The Vendor understands that newly-hired employees and existing employees may enroll in the Plan at any time. All requests to start salary reduction contributions must be submitted on the required standardized Enrollment and Salary Reduction Agreement to the Benefits Department no later than the current month s

10 Page 2 of 18 payroll cut-off date to be effective for the current pay period. In addition, all requests to make changes to the existing program must be submitted to the Benefits Department no later than the current month s payroll cut-off date to be effective for the current pay period. 4. Employee Communication/Education. The Vendor shall provide the employee with investment education materials. Any computer models used for investment education must comply with regulations issued pursuant to the Pension Protection Act of Compliance with Plan Terms and Administrative Regulations. Vendor agrees that it will comply with the terms and conditions of the Plan (including the exchange of information as may be necessary to satisfy Code Section 403(b), the regulations issued thereunder and any other applicable guidance) and the administrative regulations, as may be amended from time to time for the Plan, copies of which are attached hereto, and hereby incorporated by reference to and made a part of this Agreement. Only vendors which have signed this Agreement may market TSA products in the District. 6. Information Sharing Agreement. Vendor agrees to share information with the District and other vendors, which includes providing each other and other vendors designated by the District with the following information: a. Information necessary for the resulting contract or custodial account, or any other contract or custodial accounts to which contributions have been made by the District, to satisfy Code Section 403(b), including the following: (i) (ii) the District providing information as to whether the Participant s employment with the District is continuing, and notifying the Vendor when the Participant has had a severance from employment (for purposes of the distribution restrictions); the Vendor notifying the District of any hardship withdrawal if the withdrawal results in a six month suspension of the Participant s right to make salary reduction contributions under the Plan;

11 Page 3 of 18 (iii) (iv) the Vendor notifying the District of any distributions by reason of performing service in the uniformed services under Code Section 414(u)(12)(B) and as described in Code Section 3401(h)(2)(A) if the distribution results in a six month suspension of the Participant s right to make salary reduction contributions under the Plan; and the Vendor providing information to the District or other Vendors concerning the Participant s or Beneficiary s Code Section 403(b) contracts or custodial accounts or qualified employer plan benefits (to enable a Vendor to determine the amount of any plan loans and any rollover accounts that are available to the Participant under the Plan in order to satisfy the financial need under the hardship withdrawal rules); and b. Information necessary in order for the resulting contract or custodial account and any other contract or custodial account to which contributions have been made for the Participant by the District to satisfy other tax requirements, including the following: (i) (ii) the amount of any plan loan that is outstanding to the Participant in order for a Vendor to determine whether an additional plan loan satisfies the loan limitations of the Plan, so that any such additional loan is not a deemed distribution under Code Section 72(p)(1); and information concerning the Participant s or Beneficiary s after-tax employee contributions in order for a Vendor to determine the extent to which a distribution is includible in gross income. This paragraph 6 shall survive the termination of this Agreement. 7. Maximum Contributions. Vendor acknowledges and agrees that: a. any such salary reductions must be coordinated with the Employees salary reductions to the PERA Section 401(k) Plan and other salary reduction agreements, if any;

12 Page 4 of 18 b. it shall not knowingly accept any contribution, made by salary reduction or otherwise, which exceed in any year, the maximum contribution permitted by law under Code Section 403(b) and Treas. Reg. Section 1.403(b)-4; c. it shall perform maximum contribution calculations pursuant to Code Sections 403(b), 402(g), 415 and 414(v), if applicable, for each employee and provide each employee and the District with written notification of the maximum contribution within ten (10) days of enrolling in the Plan; d. it shall perform additional calculations as needed for newly hired employees and as the result of salary increases; e. it shall hold harmless and indemnify the District from every claim, demand and judgment, including costs for penalties and/or interest, which may be made by reason of a challenge to the tax-qualified status of any Annuities and/or Accounts purchased by the District from the Vendor or by reason of a challenge to the Annuity and/or Account calculation computed for any participant of the Plan with the Vendor, excluding claims, demands and judgments based upon the negligence or wrongdoing of the indemnified parties or inaccurate information provided by them; and f. with regard to the maximum contribution calculations, the Vendor is entitled to rely on any reasonable information furnished by the employee and the District as correct. 8. Catch-Up Rules. The Vendor agrees to perform the catch-up limit calculations under Code Section 402(g) for those individuals with more than fifteen (15) years of service and/or under Code Section 414(v) for those individuals who will reach at least age fifty (50) in the year of calculation, and who wish to and are capable of contributing more under the Catch-Up Rules. Further, the Vendor shall provide each individual with more than fifteen (15) years of service with a certification as to the amount he or she may contribute under the Catch-Up Rules. It is understood that, with regard to the catch-up calculations, the Vendor is entitled to rely on any reasonable information furnished by the employee and the District as correct.

13 Page 5 of Excess Elective Deferrals. The Vendor agrees to return any excess elective deferrals, adjusted for any earnings or losses allocable to those contributions through the end of such taxable year, within thirty (30) days of the close of the calendar year in which the elective deferral was contributed to the extent permitted under the Code. 10. Withdrawal Rules. Prior to any contribution being made to the Vendor, or its delegate, the Vendor agrees to provide written notice of the tax and administrative ramifications of the following withdrawal rules and agrees to indemnify the employee and the District for losses arising out of said Vendor s failure to communicate such information: a. The Vendor must be able to record keep separately, funds that have at some time in the past been invested in an Account and thereafter been transferred to an Annuity. The Vendor can only offer a product that can maintain the distribution restrictions that were imposed by the Account. b. The Vendor must either be able to record keep a December 31, 1988, account balance or inform employees of its inability to do so and the ramifications of such deficiency as it may relate to prospective distribution requests. c. At least thirty (30) days before, and, not more than one-hundred eighty (180) days before the date of distribution, the Vendor shall provide the Participant, Beneficiary, or Alternate Payee, the notice prescribed by Code Section 402(f). 11. Hardship Withdrawals or Disability Determination. The District agrees to establish procedures in accordance with appropriate rules specified in the Plan and the applicable sections of the Code and regulations, to determine whether an employee has incurred a financial hardship or a disability. In no event will the Vendor assume responsibility for assisting in the making of a hardship or disability determination. The Vendor agrees to notify the District when a request for hardship withdrawal is made and when an approved hardship withdrawal is made so the District can take the appropriate action to stop salary reduction contributions for a six-month period and to take all other necessary actions. 12. Loans. The Vendor agrees to properly administer loans, including the income-tax reporting of defaulted loans in accordance with Code Section 72(p) and the Treasury

14 Page 6 of 18 regulations thereunder. Loans shall only be available from Annuities. Loans shall not be available from Accounts. The Vendor agrees that, to the extent an employee requests a loan from the Vendor, the Vendor agrees to notify the District and ensure that appropriate questions are asked of the employee to assure the Vendor that the number and the amount of loans outstanding to the employee from all products offered under the Plan by the Vendor are within legal limits. The Vendor shall be responsible for the administration of any loans made from its products, and shall provide the employee with written notice of the ramifications if the aggregate of the loans were to exceed the legal limits. Each Vendor is responsible for all information reporting and tax withholding required by applicable federal and state law in connection with distributions and loans. It is understood that in no event shall the District be the holder of any promissory note issued in conjunction with a loan agreement. 13. Minimum Required Distributions. The Vendor agrees to take sole responsibility to determine when a minimum payout must begin pursuant to Code Section 401(a)(9). In no event will the District assume responsibility for assisting in the making of this determination. 14. Transfer of Funds. If the Vendor allows transfers of funds to another Vendor, the Vendor may only do so to a District-approved Vendor provided all the requirements of Treas. Reg. Section 1.403(b)-10 and the Plan are met. The District will provide each approved Vendor with a list of all Vendors which are approved to do business with the District. All Vendors have the responsibility of being fully informed of the names of all Districtapproved Vendors and in no event will any Vendor allow a transfer of funds to an unapproved Vendor. 15. Rollover Rules. The Vendor shall have the responsibility to administer the direct rollover rules of Code Section 403(b)(8) with respect to providing direct rollovers of eligible rollover distributions and which meet the distribution requirements of Code Sections 401(a)(31) and 403(b)(10), including providing required notices.

15 Page 7 of Domestic Relations Order. The District shall have the responsibility to determine the qualified status of any domestic relations order in accordance with Colorado Revised Statutes Section In no event will the Vendor assume the responsibility for making this determination. 17. Veterans Rights. The Vendor shall follow the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994, as amended, including the requirements of Code Section 414(u) and any regulations promulgated thereunder. 18. Solicitation Guidelines. The Vendor agrees to any solicitation guidelines imposed by the District. Such guidelines shall be designed so that they shall not disturb District s school environment. The primary purpose of the guidelines, if any, is to improve communications with employees on their rights and privileges under the Plan. The District shall limit the solicitation of TSA products to the employee s personal time via the Internet, telephone, or at the employee s home. The District will also permit Vendor visits to each school one day per month. Vendor should call in advance to arrange each month s visit and sign in at the school office upon arrival. Vendor visits to schools will be conducted in an assigned area designated by each school. Life insurance and other insurance-related products shall not be added to or sold in conjunction with an Annuity and/or Account. 19. Vendor Registration. Each participating vendor must keep current information on names of its designated representatives and agents on file with the District by completing and updating the Tax-Sheltered Annuity Registration Form that is attached hereto. Any changes will be reported by the Vendor to the Benefits Office within ten (10) working days of such change. 20. Vendor Representatives. The Vendor shall be responsible for closely supervising the activity of its representatives who are involved in the Plan and shall take all necessary steps to see that such individuals:

16 Page 8 of 18 a. are competent to provide counsel and education on Annuities and/or Accounts with due regard to the technical rules and procedures that apply under the Code and regulations thereunder; b. are properly licensed by the appropriate federal and state agencies; and c. agree to act professionally and ethically in the sales process. Prompt and thorough servicing of the Annuities and/or Accounts shall be the responsibility of the Vendor. Failure to provide such adequate servicing or unethical behavior or sales tactics will represent sufficient reason for revocation of approval as a participating Vendor. The District reserves the right to approve any representative soliciting Annuity and/or Account business at the District with such approval being discretionary on the part of the District based on criteria similar to the criteria established in a., b., and/or c. above. 21. Vendor Charges/Fees. The Vendor hereby agrees to provide employees with a summary of all sales charges, management fees, maintenance fees, surrender charges, penalties, restrictions, etc., that could affect the value of an employee s Annuities and/or Accounts. Furthermore, the summary shall be written in language that can be understood by the average Plan participant. 22. Additional Vendor Requirements. All Vendors who are currently providing Annuity and/or Account products to Plan participants can continue to do so, provided that they comply with the terms of this Agreement and, provided further that they have current commitments with at least ten (10) District employees. New Vendors will be added to the approved list when they can demonstrate that ten (10) or more District employees are willing to purchase Annuities and/or Accounts. Vendors are removed from the list when: a. the Vendor is not in compliance with the ten (10) employee requirement; b. a Vendor fails to agree to the District s Vendor Participation Agreement; or

17 Page 9 of 18 c. a Vendor fails to cooperate with requests for assistance or information from the District. 23. Financial Ratings. Vendors shall notify the District and all employees who have an Annuity or Account with the Vendor of any filing by the Vendor under the United States Bankruptcy Code. Such notification shall be received by the District and employees no later than thirty (30) days after the event. 24. The Vendor s Representations and Warranties. The Vendor represents and warrants to the District as follows: a. The Vendor is legally authorized to conduct business a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated. The Vendor has full corporate power and authority, and all requisite rights, licenses and permits to carry on the business in the State of Colorado; and b. The Vendor has full capacity, right, power and authority to execute and deliver this Agreement, and to carry out the transactions contemplated hereby, and its performance will not violate any laws or regulations applicable to it, nor contravene the terms of any other contract, agreement or instrument to which it is a party. 25. Reporting and Compliance. The Vendor agrees to provide to the District, upon request, reports and operational information, including but not limited to information on account balances, distributions or loans that is requested by the District for the purpose of conducting compliance testing. The Vendor further agrees to promptly and fully cooperate with the District in taking any corrective action deemed necessary by the District to bring the Plan into compliance with the requirements of Code Section 403(b), including prompt distribution of any excess elective deferrals, adjusted for earnings and losses. 26. Tax Reporting. The Vendor is responsible for all applicable tax and federal reporting requirements. Further, the Vendor shall comply with all applicable withholding rules

18 Page 10 of 18 relating to distributions to employees and beneficiaries, and shall timely file all required information returns with federal, state and local tax authorities relating to such distributions, including but not limited to, preparation of Forms 1099-R. 27. Indemnification. The Vendor agrees to hold harmless and indemnify the District, the employees, and their successors and assigns, against any and all claims, liability, loss, cost, damage, fines, penalty or expense, including but not limited to, attorneys fees accountants fees and consulting fees in connection with any claim, suit, complaint, charge, proceeding or action of any kind alleging a violation of any statutory or regulatory provision, or otherwise arising out of the performance or nonperformance by the Vendor of its duties or responsibilities under this Agreement, unless and to the extent that such performance or nonperformance occurred at the direction of, or was caused by, the District. This hold harmless and indemnification includes, but is not limited to, compensatory damages, punitive damages, regulatory fines and penalties. The District shall notify the Vendor on the receipt of any such claim, suit, complaint or charge, at which time the Vendor shall assume responsibility for the defense at its cost of any such claim, suit, complaint or charge unless the District in its discretion decides to undertake the defense thereof. If the District decides to undertake the defense, it will do so at its own cost and expense. 28. Authority. The District has full authority and complete discretion to construe, interpret, and apply any provision of the regulations; including eligibility of any employee or Vendor to participate in the Plan; to determine allowable salary reduction contributions; and to determine any issue of compliance with the requirements of Code Section 403(b). The District s determination of any issue that may arise under the guidelines or the Plan shall be final and binding on the employee and/or the Vendor. 29. Survival of The Vendor s Obligations. All the terms, covenants, representations, warranties and agreements of the Vendor in this Agreement or in any document, certificate, schedule or instrument delivered in connection herewith shall survive the termination of this Agreement and shall continue in effect.

19 Page 11 of Notices. Any and all notices, requests, consents, demands and other communications required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given: a. when delivered, if sent by registered or certified mail (return receipt requested); b. when delivered, if delivered personally; or c. on the second following business day, if sent by United States Express Mail or overnight courier, in each case to the parties at the following addresses (or at such other addresses as shall be specified by like notice), with postage or delivery charges prepaid: If to the Vendor: With a copy to: If to Aurora Public Schools: Dion Arguelles, Esq. Aurora Public Schools 1085 Peoria Street Aurora, Colorado 80011

20 With a copy to: Cindy S. Birley, Esq. Davis Graham & Stubbs LLP th Street, Suite 500 Denver, CO Page 12 of Independent Contractor. It is expressly understood that the Vendor is an independent contractor, and this Agreement shall not constitute or be considered to create a partnership, joint venture, agency or employee/district relationship between the parties and no party nor any of its employees or agents shall have the power or authority to bind or obligate either of the other parties. 32. Undocumented Immigrant Public Contracts for Services, Colo. Rev. Stat et seq. Pursuant to Colorado Revised Statutes ( C.R.S. ) , et. seq., the Vendor shall meet the following requirements prior to signing this Agreement (public contract for services) and for the duration thereof the Vendor shall not knowingly employ or contract with an undocumented immigrant to perform work under this Agreement or enter into a contract with a subcontractor that fails to certify to the Vendor that the subcontractor shall not knowingly employ or contract with an undocumented immigrant to perform work under this Agreement. The Vendor represents, warrants, and agrees that: a. it has confirmed the employment eligibility of all employees who are newly hired for employment in the United States to perform work under this Agreement, through participation in either the E-Verify Program (defined in C.R.S (3.7)) or the Department Program established pursuant to C.R.S (5)(c). b. it shall not use either the E-Verify Program or the Department Program procedures to undertake pre-employment screening of job applicants while this Agreement is being performed. c. if the Vendor obtains actual knowledge that a subcontractor performing work under this Agreement knowingly employs or contracts with an undocumented

21 Page 13 of 18 immigrant, the Vendor shall: notify the subcontractor and the District within three (3) days that the Vendor has actual knowledge that the subcontractor is employing or contracting with an undocumented immigrant; it shall terminate the contract with the subcontractor if within three (3) days of receiving the notice required pursuant to the previous provision, the subcontractor does not stop employing or contracting with the undocumented immigrant; except that the Vendor shall not terminate the contract with the subcontractor if, during such three (3) days, the subcontractor provides information to establish that the subcontractor has not knowingly employed or contracted with an undocumented immigrant; and d. it shall comply with all reasonable requests made in the course of an investigation under C.R.S. Section by the Colorado Department of Labor and Employment. If the Firm fails to comply with any requirement of this Article or C.R.S. Section et. seq., the Board may terminate this Agreement for breach and the Firm shall be liable for actual and consequential damages to the Plan. If the Vendor violates any provision of this Agreement pertaining to undocumented immigrants, the District may terminate this Agreement for a breach of contract. If the Agreement is so terminated, the Vendor shall be liable for actual and consequential damages to the District as required by law. The District will notify the Office of the Secretary of State if the Vendor violates this provision of this Agreement and the District terminates the Agreement for such breach. 33. Amendment. This Agreement may be modified or amended only by means of a written agreement by all of the parties hereto. No waiver of any provision hereof shall be construed as a further or continuing waiver of such provision or any other provision hereof. 34. Entire Agreement. This Agreement constitutes the final expression of, and contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior understandings with respect thereto.

22 Page 14 of Government Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to principles of conflicts of law. 36. Arbitration. Any action to enforce or interpret this Agreement or to resolve disputes between the parties hereto shall be settled by arbitration in accordance with the rules of the American Arbitration Association. Arbitration as provided herein shall be the exclusive dispute resolution process in the State of Colorado, but arbitration shall be nonexclusive process elsewhere. Any party may commence arbitration by sending a written demand for arbitration to the other parties. Such demand shall set forth the nature of the matter to be resolved by arbitration. Arbitration shall be conducted in Adams or Arapahoe County, Colorado. The substantive law of the State of Colorado shall be applied by the arbitrator to the resolution of the dispute. The parties shall share all initial costs of arbitration. The prevailing party shall be entitled to reimbursement by the other party(ies) of such party(ies) s attorney s fees, costs and expenses incurred in connection with the arbitration. All decisions of the arbitrator shall be final, binding and conclusive on all parties, and shall constitute the only method of resolving disputes or matters subject to arbitration pursuant to this Agreement. Judgment may be entered upon any such decision in accordance with applicable law in any court having jurisdiction thereof. 37. Attorney s Fees. In the event of any dispute with respect to the subject matter of this Agreement (including an arbitration), the prevailing party shall be entitled to its reasonable attorney s fees and court or arbitration costs incurred in resolving or settling the dispute, in addition to any and all other damages or relief which a court or arbitrator may deem proper. 38. Term of Agreement; Termination. This Agreement shall be effective as of the date first above written, and shall continue until it expires or terminates in accordance with the following sentence. In the District s discretion, this Agreement may be terminated upon thirty (30) days advance written notice, by registered or certified mail, return receipt requested, to the Vendor. The Vendor will fully cooperate with any successor Vendor in the conversion process including the provision of all necessary data and reports to the successor Vendor.

23 Page 15 of 18 In the Vendor s discretion, this Agreement may be terminated upon ninety (90) days advance written notice, by registered or certified mail, return receipt requested, to the District. 39. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

24 Page 16 of 18 The undersigned Vendor hereby agrees to accept and abide by the terms, conditions, rules and regulations now in effect and as amended from time to time in the future by the District to be a District-approved Vendor for the District. IN WITNESS WHEREOF, this Agreement is entered into as of the date executed by the Vendor and the District below. VENDOR Company Name By: Title: Date: The Vendor listed above is hereby accepted by the Aurora Public Schools as a District-approved Vendor in the Plan provided it continues to abide by the terms and conditions set forth in this Agreement, as it may be amended from time to time in the future. DISTRICT JOINT DISTRICT NO. 28-J OF THE COUNTIES OF ADAMS AND ARAPAHOE DBA AURORA PUBLIC SCHOOLS By: Title: Date:

25 Page 17 of 18 Tax-Sheltered Annuity Vendor Registration Form This is a registration for your company s participation in the Aurora Public Schools Tax- Sheltered Annuity Plan. The District offers the Plan for the benefit of its employees, but does not, by processing this registration, endorse any Vendor or product. In order to qualify as a Vendor in the District, this registration must be completed and returned to the Benefits Office in accordance with the District s administrative regulations for the Plan. Your Name: Business Address: Telephone Number: Fax: Company/Agency Affiliation: Please list applicable licenses/registrations, including type, number, original effective date, and renewal date: Type License/Registration Number Original Date Effective Renewal Date

26 Page 18 of 18 Tax-Sheltered Annuity Vendor Registration Form List the product(s) which you propose to offer to District employees. Note: For each individual product, a separate TSA registration form must be completed. To provide the most efficient manner of processing, please supply both name and address where contributions are to be sent. I agree to make appropriate calculations, pursuant to Code Section 403(b). The Tax-Sheltered Annuity Vendor Registration Form must be submitted no later than the first of the month in which any contributions will be sent. VENDOR Company Name By: Title: Date: