Exhibit 2_NJ State Employee Deferred Compensation Plan ~1.pdf

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NEW JERSEY DIVISION OF PENSIONS AND

BENEFITS

NEW JERSEY STATE EMPLOYEES

DEFERRED COMPENSATION PLAN

AUTHORITY: Unless otherwise expressly noted, all provisions of this Plan were adopted by the New Jersey State Employees Deferred Compensation Board pursuant to authority delegated at N.J.S.A. 52:18A-163 et seq.

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TABLE OF CONTENTS

ARTICLE 1: ESTABLISHMENT AND

PURPOSE OF THE PLAN

1.1 Establishment of Plan

1.2 Purpose of Plan

ARTICLE 2: DEFINITIONS

2.1 Definitions

ARTICLE 3: PARTICIPATION IN

THE PLAN

3.1 Eligibility

3.2 Enrollment

3.3 Minimum Deferral

3.4 Maximum Deferral

3.5 Modifications to Amount Deferred

3.6 Voluntary Suspension of Deferral

3.7 Duration of Election to Defer Compensation

3.8 Compensation Deferral and Other Salary

Deductions

3.9 Transfer of Deferrals to Trust

3.10 Duration of Participation

3.11 Beneficiary Election

3.12 USERRA

ARTICLE 4: GENERAL

ADMINISTRATION

4.1 Records

4.2 Non-assignability

4.3 Amendment of the Plan

4.4 Termination of the Plan

4.5 Applicable Law

4.6 Responsibility for Administration and

Investment

4.7 Authority of the Administrator and the

Division of Investment

4.8 Certain Duties of the Administrator

4.9 Administrative and Investment Costs

4.10 Participants’ Financial Statements

ARTICLE 5: PARTICIPANT’S

ACCOUNT, INVESTMENTS AND

DISTRIBUTIONS

5.1 Establishment of Account; Valuation of

Accounts

5.2 Assets Held In Trust

5.3 Investment Options

5.4 Mode of Distribution

5.5 Valuation Dates and Account and

Investment Fund Valuations

5.6 Distribution Upon Retirement Or Death

5.7 Distribution upon Termination of Service:

Disability

5.8 Distribution upon Termination of Service

Prior to Retirement: Reasons other than

Death or Disability

5.9 Hardship Distributions

5.10 In-Service Distribution

ARTICLE 6: TRANSFERS AND

ROLLOVERS; PERMISSIVE

SERVICE CREDIT

6.1 Transfer of Fund Balances within the Plan

6.2 Transfers from Other Plans

6.3 Transfers from the Plan

6.4 Eligible Rollover Distributions

6.5 Distribution of Certain Previously Rolled

Over Amounts

6.6 Transfers to Purchase Permissive Service

Credit

6.7 Administrative Rules

ARTICLE 7: ALTERNATE PAYEE

7.1 Definition of Alternate Payee

7.2 Recordkeeping

7.3 Provisions of the Order

7.4 Benefit Payments

7.5 Death of Participant

7.6 Death of Alternate Payee

ARTICLE 8: MISCELLANEOUS

8.1 Escheat

8.2 Electronic Writings

8.3 Titles and Subheadings

8.4 EGTRRA Sunset

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ARTICLE 1: ESTABLISHMENT AND PURPOSE OF THE PLAN

1.1 Establishment of Plan

This Plan shall be known as the “New Jersey State Employees Deferred

Compensation Plan” (hereinafter referred to as the “Plan”) and was created in accordance with

P.L. 1978, c. 39. (N.J.S.A. 52:18A-162 et seq.) The Plan became effective on June 19, 1978.

The New Jersey State Employees Deferred Compensation Board (hereinafter referred to as the

“Board”) was empowered to adopt a written plan consistent with the requirements of the United

States Internal Revenue Code (“Code”), including without limitation Code Section 457(b).

The Plan as amended and restated herein describes the terms and conditions of the

Plan effective on and after January 1, 2002, except as otherwise noted.

1.2 Purpose of Plan

The purpose of this Plan is to provide an optional benefit to Employees whereby a designated amount of the Participant’s Includible Compensation is withheld each eligible Pay

Period by the State of New Jersey or other Participating Employer from current federal income tax liability, credited to an Account under the Plan for the Participant, and invested in one or more Investment Funds as provided for herein, until one of the specified events occurs which permits all or part of the Account to be distributed to the Participant or his/her Beneficiary.

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ARTICLE 2: DEFINITIONS

2.1 Definitions

These words and terms, when used in this Chapter, shall have the following meanings unless the context clearly indicates otherwise.

“Account” -- the bookkeeping account maintained for each Participant that reflects the cumulative amount of the Participant’s Deferred Compensation (and any transfers or rollovers (see Article 6)), as adjusted from time to time as described in the first paragraph of

Section 5.1. If a transfer under Section 6.2 or a rollover under Section 6.3 is credited to the

Participant under this Plan, the Plan Administrator may direct that there be maintained a separate subaccount or subaccounts with regard to such transfer or rollover amounts as adjusted from time to time for investment gain or loss, such subaccounts’ share of Plan administrative expenses, and any distributions.

“Automatic Distribution Date” -- the latest date as of which the Participant’s

Account may begin to be distributed under Code Section 401(c)(9). For a Participant, this date is

April 1 of the calendar year after the Plan Year in which the Participant attains age 70 1/12 or, if later, retires or has a Termination of Service with the Participating Employer.

“Beneficiary” -- the person, persons or legal entity provided for by the Participant to receive any undistributed portion of his/her Account that becomes payable in the event of the

Participant’s death.

“Benefit Commencement Date” -- means the date selected by the Participant under Section 5.4, or by the Beneficiary under Section 5.6; or the date designated by the Plan

Administrator under Section 5.4 by reason of the Participant’s failure to make such an election.

“Board” -- the New Jersey State Employees Deferred Compensation Board.

“Catch-up Dollar Limitation” -- prior to January 1, 2002, the Catch-up Dollar

Limitation is $15,000. On and after January 1, 2002, the Catch-up Dollar Contribution means twice the Dollar Limitation.

“Code” -- the Internal Revenue Code of 1986, as now in effect or as hereinafter amended. All citations to the Code are to such Sections as they may from time to time be amended or renumbered.

“Compensation” -- the salary, wages, fees, commissions, bonuses and overtime pay which is paid to an Employee for employment rendered to the Participating Employer from date of enrollment in the Plan.

“Council” -- the State Investment Council.

“Deferred Compensation” -- that portion of the Participant’s Includible

Compensation that the Participant and Participating Employer mutually agree to defer by means of acceptance of the Participant’s Enrollment Agreement, until such Enrollment Agreement is

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DMEAST #9080985 v7 3 rescinded or amended, or until the conditions for distribution set forth in Article 5 of this Plan are met.

“Disability” -- a total and permanent disability determined pursuant to the statutes and regulations of the retirement system of which the Participant is a member or, if the

Participant is not a member of any such retirement system, the Plan Administrator shall make such determination based upon the requirements established for disability in the retirement system in which the Participant would otherwise be required to enroll.

“Division of Investment” -- the State Division of Investment.

“Dollar Limitation” -- the applicable dollar amount within the meaning of Code

Section 457(b)(2)(A) and 457(e)(15)(A), as adjusted for the cost-of-living in accordance with

Code Section 457(e)(15)(B).

“Eligible Retirement Plan” -- an individual retirement account described in Code

Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Sections 403(a) or 403(b), a qualified trust described in Code Section

401(a), or an eligible deferred compensation plan described in Code Section 457(b) which is maintained by an eligible governmental employer described in Code Section 457(e)(1)(A).

“Eligible Rollover Distribution” -- any distribution of all or any portion of the balance to the credit of a Distributee (see Section 6.4), except that an Eligible Rollover

Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the

Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Sections 401(a)(9) and 457(d)(2); and any distribution made upon the hardship of the Distributee. For purposes of distributions from other

Eligible Retirement Plans rolled over into this Plan, the term Eligible Rollover Distribution shall not include the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

“Employee” -- any temporary or permanent common law employee who is on the payroll of a Participating Employer. For purposes of determining eligibility under the Plan, the classification (e.g., common law employee, independent contractor, leased employee) to which an individual is assigned by a Participating Employer shall be final and conclusive, regardless of whether a court, governmental agency or any entity subsequently finds that such individual should have been assigned to a different classification.

“Enrollment Agreement” -- an agreement signed by an Employee in such form as may be provided by the Plan Administrator to become a Participant in the Plan. Information required by the Enrollment Agreement may be provided by means of a written form, or electronically or telephonically, if and to the extent so approved by the Plan Administrator.

“Includible Compensation” -- The term “Includible Compensation” has the meaning given to the term “participant’s compensation” by Code Section 415(c)(3). In general, (Page 5 of 35)

DMEAST #9080985 v7 4 the term “participant’s compensation” means the Compensation of the Participant from the

Participating Employer for the year (or Pay Period, as the context requires). “Participant’s compensation” shall include any elective deferral (as defined in Code Section 402(g)(3)) or any other amount which is deferred by the Participating Employer at the election of the Participant and which is not includible in the gross income of the Participant by reason of a compensation reduction election under Code Section 125, 132(f)(4), 401(k), 403(b) or 457(b). “Includible

Compensation” shall not include (a) a Participating Employer’s pick up of Participant contributions to an employees’ trust under Code Section 414(h) or (b) amounts treated as

“accrued 125 compensation” because of the Participating Employer’s requirement that its employees participate in an employer-sponsored health insurance program unless the Participant states that he/she is provided health coverage elsewhere.

“Investment Fund” -- an investment option offered to Participants in the Plan, as determined by the Board and as authorized or approved by the regulations of the State

Investment Council. Investment Funds shall include the New Jersey State Employees Deferred

Compensation Equity Fund, the New Jersey State Employees Deferred Compensation Small

Capitalization Equity Fund, the New Jersey State Employees Deferred Compensation Fixed

Income Fund and the New Jersey State Employees Deferred Compensation Cash Management

Fund (collectively, the “Common Funds”) and additional funds selected by the Director of the

Division of Investment in consultation with the Board (the “Outside Funds”).

“Normal Retirement Age” -- with respect to each Participant, is the age elected by the Participant which may not be earlier than the earliest date at which the Participant has the right to retire without the consent of the Participating Employer and to immediately receive unreduced retirement benefits under the Participating Employer’s basic retirement plan and which may not be later than the later of the date that the Participant attains age 70 1/2, or the date of the Participant’s actual Retirement or Termination of Service with the Participating Employer.

“Participant” -- any Employee who fulfills the eligibility and enrollment requirements for participation in the Plan as set forth in Article 3 of this Plan. An Employee who becomes a Participant shall remain a Participant for so long as he/she is on an authorized leave of absence and so long as his/her Enrollment Agreement remains in effect for such time.

“Participating Employer” -- the State of New Jersey and, subject to the independent approval of the State Treasurer and the Board, the University of Medicine and

Dentistry of New Jersey, the New Jersey Institute of Technology, Rutgers, the State University, and any other agency, authority, commission or instrumentality of the State of New Jersey which has an independent corporate existence.

“Pay Period” -- the pay period applicable to each Participant, as determined by the

Participating Employer.

“Plan” -- The New Jersey State Employees Deferred Compensation Plan, as it may be amended from time to time.

“Plan Administrator” -- the Division of Pensions and Benefits in the Department of the Treasury of the State of New Jersey, either solely or in conjunction with one or more

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DMEAST #9080985 v7 5 private organizations which contract with the Board for the performance of administrative duties.

The Plan Administrator is the final authority on all matters concerning the operation and administration of the Plan, except as to those duties and responsibilities concerning the investment of Plan assets which are supervised by the Division of Investment.

“Qualified Uniformed Service” -- any service (whether voluntary or involuntary) by an individual in the Uniformed Services if such individual is entitled to reemployment rights under USERRA with a Participating Employer with respect to such service. For purposes of the foregoing, the “Uniformed Services” mean the Armed Forces, the Army National Guard and Air

National Guard (when engaged in active duty for training, inactive duty training, or full-time

National Guard duty), the commissioned corps of the Public Health Service, and any other category of persons designated by the President of the United States in time of war or emergency.

“Retirement” -- a severance of the Participant’s employment relationship with the

Participating Employer for any reason, other than death, which renders the Participant eligible to file for and receive benefits from a State-administered retirement system. For purposes of these rules, a disability or deferred retirement becomes a Retirement, within the meaning of this Plan, when the person severs the employment relationship with his/her Participating Employer.

“Returning Veteran” -- an individual who returns to employment with a

Participating Employer from Qualified Uniformed Service within the period of time during which his/her reemployment rights are protected by law.

“State” -- the State of New Jersey.

“Termination of Service” -- the severance of the Participant’s employment relationship with a Participating Employer (within the meaning of Code Section

457(d)(1)(A)(ii)) prior to his/her retirement or death.

“Treasury Regulations” -- the temporary and final regulations published by the

Department of Treasury under the Code.

“Trust” -- the trust, custodial account or annuity contract under which the Plan’s assets must be held consistent with Code Section 457(g). Pursuant to that Code Section, the

Plan’s assets must be held in:

(a) A trust described in Code Section 457(g)(1) that is established under the applicable laws of the State;

(b) A trust described in Code Section 457(g)(1) that is established with the

Trustee/Custodian as the trustee of the Trust; and/or

(c) A custodial account or annuity contract described in Code Section

457(g)(3).

“Trustee/Custodian” -- one or more banks, trust companies or insurance companies with which the State Treasurer has contracted to hold and invest designated assets or

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DMEAST #9080985 v7 6 classes of assets contributed with respect to the Plan, and to provide administrative and recordkeeping services with respect thereto and to Participants and Beneficiaries in the Plan.

“USERRA” -- the Uniformed Services Employment and Reemployment Rights

Act of 1994 contained in Chapter 43 of Title 38 of the United States Code.

“Valuation Date” -- means, for Common Funds, the last business day of each month (or on each day that the primary securities exchanges in the United States are open for business, if so determined by the Director of the Division of Investment), and, for Outside Funds, each day that the primary securities exchanges in the United States are open for business.

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ARTICLE 3: PARTICIPATION IN THE PLAN

3.1 Eligibility

Each Employee on the payroll of a Participating Employer is eligible to participate in the Plan. Notwithstanding the foregoing, a Participating Employer may exclude from eligibility under this plan Employees which it classifies as temporary or seasonal.

3.2 Enrollment

Any Employee eligible to participate in the Plan may become a Participant by entering into an Enrollment Agreement. The Enrollment Agreement must be filed prior to the beginning of the calendar month in which the deferral of compensation is to commence, or such other date as may be permitted under the Code. Such deferral of compensation must be in accordance with the provisions of Sections 3.3 and 3.4 herein. The deferral election will be implemented effective as of the first full Pay Period in the calendar month commencing after the date the Employee-completed Enrollment Agreement is executed and filed with the Plan

Administrator, or as soon thereafter as administratively practicable. No amounts shall be deferred with respect to an Employee’s Compensation unless and until a completed Enrollment

Agreement, including the amount to be deferred and investment instructions, is filed with the

Plan Administrator.

3.3 Minimum Deferral

Each Employee who becomes a Participant in the Plan must agree in writing to defer a minimum of one percent of Includible Compensation paid to him/her during each eligible

Pay Period. Requested deferrals in excess of the one percent minimum percentage must be made as full percentages in multiples of one percent.

3.4 Maximum Deferral

(a) Normal Limitation -- Except as provided in subsections (b) and (c) of this section, the total amount of Compensation that can be deferred for any calendar year under this Plan shall be the lesser of: (1) 100% of the Participant’s Includible Compensation for the taxable year OR (2) the Dollar Limitation. Amounts deferred under any other Code Section

457(b) plans must be coordinated for the annual maximum deferral. For the year of enrollment only Includible Compensation paid from the date of enrollment to the end of the calendar year shall be included.

(b) Last Three Years Catch-up Contributions -- For one or more of the last three (3) taxable years of a Participant ending before his/her attainment of Normal

Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of:

(1) the Catch-up Dollar Limitation, or

(2) the sum of

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(i) the Normal Limitation (as described in Section

3.4(a)) for the taxable year, and

(ii) the Normal Limitation for each prior taxable year of the Participant commencing on or after January 1, 1979 less the amount of the Participant’s Deferred

Compensation for such prior taxable years.

With respect to taxable years beginning on or before December 31, 2001, each such taxable year’s Normal Limitation described in subsection (ii) above shall be reduced pursuant to the provisions of Code Section 457(c) applicable to such taxable year.

For purposes of this subsection (b), a “prior taxable year” shall be taken into account under the preceding sentence only if the Participant was eligible to participate in the

Plan for such year (or in any other eligible deferred compensation plan established under Code

Section 457(b) which is properly taken into account pursuant to Treasury Regulations under

Code Section 457), and compensation (if any) deferred under the Plan (or such other plan) was subject to the Normal Limitation. Notwithstanding the foregoing, in the case of a Participant who has been rehired by a Participating Employer following a Termination of Service, “prior taxable year” shall not include any years prior to such Termination of Service.

This Section 3.4(b) shall not apply in any taxable year in which the contribution amount permitted by Section 3.4(c) exceeds the contribution amount permitted by this Section

3.4(b).

The following table describes, as of January 1, 2006, the earliest combination of age and service under the several retirement systems covering employees of Participating

Employers, representing the earliest “Normal Retirement Age” that a Participant may elect for purpose of fixing the period for making catch-up contributions under this subsection (b). A

Participant’s election of a Normal Retirement Age under this subsection (b) shall be irreversible once deferrals have been made utilizing the catch-up provisions of this subsection (b). The

Participant Normal Retirement Age does not control his/her Benefit Commencement Date.

EARLIEST DATE FOR NORMAL RETIREMENT AGE ELECTION FOR PURPOSES

OF LAST-THREE-YEARS CATCH-UP ELECTION (January 1, 2006)

NJ Retirement System Minimum Age Minimum Service Credit

Teachers’ Pension and Annuity Fund 52 years of age

57 years of age with at least 22 years of service, or with any number of years of service

Public Employees’ Retirement System 52 years of age

57 years of age with at least 22 years of service, or with any number of years of service

Police and Firemen’s Retirement

System

Any age

52 years of age with at least 22 years of service, or with any number of years of service

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State Police Retirement System Any age

52 years of age with at least 22 years of service, or with any number of years of service

Judicial Retirement System 57 years of age with any number of years of service

Alternate Benefits Program 3 years prior to separation from service at any age

No retirement plan affiliation 62 years of age

Other retirement plans As determined by the Plan Administrator based on the provisions of the retirement plan

(c) Catch-up Contributions for Participants Age 50 and Over -- A

Participant who will attain the age of 50 before the close of the taxable year, and with respect to whom no other elective deferrals may be made to the Plan for the Plan Year by reason of the

Normal Limitation of Subsection 3.4(a), may enter into an Enrollment Agreement to make elective deferrals in addition to those permitted by the Normal Limitation in an amount not to exceed the lesser of (1) the applicable dollar amount as defined in Code Section 414(v)(2)(B), as adjusted for the cost-of-living in accordance with Code Section 414(v)(2)(C), or (2) the excess

(if any) of (i) the Participant’s compensation (as defined in Code Section 415(c)(3)) for the year, over (ii) any other elective deferrals of the Participant for such year which are made without regard to this Section 3.4(c). An additional contribution made pursuant to this Section 3.4(c) shall not, with respect to the year in which the contribution is made, be subject to any otherwise applicable limitation contained in Code Section 457(e)(15), or be taken into account in applying such limitation to other contributions or benefits under the Plan or any other plan.

Notwithstanding the foregoing, for purposes of applying the limitations set forth in Code Section

414(v)(2), all plans maintained by the Participating Employer that are described in Code Section

414(v)(6)(A)(iii) shall be treated as a single plan. This Section 3.4(c) shall not apply in any taxable year in which the contribution amount permitted by Section 3.4(b) exceeds the contribution amount permitted by this Section 3.4(c).

(d) Distribution of Excess Deferral Amounts -- Notwithstanding any provision of the Plan to the contrary, the Plan shall distribute any Deferred Compensation in excess of the applicable limit described in this Section 3.4 in a manner consistent with Code

Section 457(b) and any Treasury Regulations or other authority promulgated thereunder.

3.5 Modifications to Amount Deferred

A Participant may amend an Enrollment Agreement to change the percentage amount of Includible Compensation not yet earned which is to be deferred. Such amended

Enrollment Agreement will become effective as of the first full Pay Period in the calendar month commencing after the date the amended Enrollment Agreement is executed and filed with the

Plan Administrator (or as soon thereafter as administratively practicable).

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3.6 Voluntary Suspension of Deferral

(a) A Participant may elect to suspend his/her deferral of compensation at any time by filing a form for this purpose with the Plan Administrator. Unless otherwise authorized by the Participant, such suspension will be implemented effective as of the first full Pay Period in the calendar month commencing after the date the Participant’s suspension election is so filed, or as soon thereafter as administratively practicable.

(b) A Participant may elect to resume his/her deferral of compensation in accordance with Section 3.2 by filing a new Enrollment Agreement with the Plan

Administrator. Unless otherwise authorized by the Participant, deferrals will commence with the first full Pay Period in the calendar month commencing after the date the new Enrollment

Agreement is executed and filed with the Plan Administrator (or as soon thereafter as administratively practicable).

3.7 Duration of Election to Defer Compensation

Once an Enrollment Agreement containing an election to have Includible

Compensation deferred has been made by the Participant, the election shall continue in effect until the Participant’s Termination of Service, Retirement or death unless, prior to such event, the Participant has modified his/her Enrollment Agreement in accordance with Section 3.5 herein or voluntarily elected to suspend his/her deferral in accordance with Section 3.6 herein.

3.8 Compensation Deferral and Other Salary Deductions

For each Employee who enrolls under Section 3.2, 3.5 or 3.6(b) herein and who becomes a Participant, the Participating Employer shall reduce the Participant’s gross

Compensation, on a Pay Period by Pay Period basis, by the Deferred Compensation amount indicated on the Participant’s Enrollment Agreement. Deductions from a Participant’s gross

Compensation for state and social security taxes, pension contributions and other mandatory or elective deductions shall be made before the Participant’s Deferred Compensation is deducted.

Any amount of the Participant’s Compensation that is deferred under the Plan shall continue to be included for all purposes, including state taxation, social security and pension benefits earned by any such Participant, but any Compensation deferred shall not be included in the computation of any federal income taxes withheld from the Participant’s Compensation on behalf of such

Participant.

Notwithstanding any provision of the Plan to the contrary, the amount excludible from a Participant’s gross income under this Plan or any other eligible deferred compensation plan under Code Section 457(b) shall not exceed the limits set forth in Code Sections 457(b) and

414(v). Prior to January 1, 2002, the limits under Code Section 457(b) described in the first sentence of this Section 3.8 shall be further reduced by any amount excluded from gross income under Code Sections 401(k), 402(e)(3), 402(h)(1)(B), and 403(b), or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in Code

Section 501(c)(18).

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3.9 Transfer of Deferrals to Trust

Deferrals made at the Participant’s election under the Plan shall be transferred to the Trustee/Custodian and placed in Trust within a period of time following the Pay Period to which the Participant’s deferral election relates that is not longer than is reasonable for the proper administration of the Participant’s Account. For this purpose, deferrals shall be treated as transferred within the meaning of the foregoing sentence if the transfer is made to the Trust within 15 business days following the end of the calendar month in which falls the pay date of the Pay Period to which the deferral relates.

3.10 Duration of Participation

An Employee shall continue his/her participation in the Plan until such time as he/she is no longer deferring a portion of his/her Compensation, including a voluntary suspension in accordance with Section 3.6 herein, and all balances credited to his/her Account have been paid or otherwise distributed.

3.11 Beneficiary Election

A Participant may choose his/her Beneficiary in the event he/she should die prior to receiving the full amount of his/her Account, by filing a Beneficiary Designation form. The election of a Beneficiary may be made upon enrollment into the Plan. The Participant may change the Beneficiary election at any time provided the proper Beneficiary Designation form for this purpose is filed with the Plan Administrator. A new Beneficiary Designation form will supersede all others on file with the Plan Administrator. If no Beneficiary is designated, or if the designated Beneficiary predeceases the Participant, then the estate of the Participant shall be the beneficiary. In the event the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares (per capita) of the Account payable at the Participant’s death, unless otherwise provided by the Participant.

3.12 USERRA

This Plan shall be administered to satisfy the applicable requirements of

USERRA in accordance with the provisions of Code § 414(u). With respect to a Returning

Veteran, the rules of the Plan shall be modified as follows:

(a) A Returning Veteran who was an eligible Employee immediately prior to his/her Qualified Uniformed Service shall be deemed to remain an eligible Employee throughout his/her Qualified Uniformed Service.

(b) Each Returning Veteran who, during his/her period of Qualified

Uniformed Service, would have been eligible to make an election to authorize his/her

Participating Employer to make contributions of his/her Deferred Compensation to this Plan, shall be permitted to contribute an amount equal to the Deferred Compensation that he/she could have made during such absence from employment. Such “make-up contributions” shall be made during the period that begins with his/her reemployment by the Participating Employer and ends with (1) the expiration of a period of five years, or (2) if shorter, a period of three times the period of Qualified Uniformed Service. Any make-up contributions described in this Subsection

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(b) shall be in addition to those elective deferrals of Deferred Compensation that the Participant may elect to make for the calendar year pursuant to Section 3.2.

(c) For purposes of determining the amount of any make-up contributions under Subsection (b) above and for applying the maximum deductible contribution limits applicable to a Code Section 457(b) plan, a Participant’s Includible Compensation during any period of Qualified Uniformed Service shall be deemed to equal either:

(1) the Includible Compensation he would have received but for such Qualified Uniformed Service, based on the rate of pay he would have received from a

Participating Employer; or

(2) if the amount described in (1) above is not reasonably certain, his average Includible Compensation from the Participating Employer during the 12-month period immediately preceding the Qualified Uniformed Service (or, if shorter, the period of employment immediately preceding the Qualified Uniformed Service). Such amount shall be adjusted as necessary to reflect the length of the Participant’s Qualified Uniformed Service.

(d) For purposes of applying the maximum deductible contribution limits applicable to a Code Section 457(b) plan, contributions described in Subsection (b) shall be treated as contributions for the calendar year to which they relate, rather than the calendar year in which they are actually made.

(e) The Plan Administrator shall establish such rules and procedures as it deems necessary or desirable to implement the provisions of this Section, provided that they are not in violation of USERRA, any regulations thereunder, or any other applicable law.

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ARTICLE 4: GENERAL ADMINISTRATION

4.1 Records

The minutes of the Board’s meetings are public records and may be inspected during regular business hours at the Office of the Division of Pensions and Benefits under the supervision of a representative of the Division of Pensions and Benefits.

Records considered confidential include specific individual Account or investment changes, mailing addresses of active and retired Participants and individual files relating to Beneficiary designation.

4.2 Non-assignability

This Plan and any contract entered into between the Participating Employer and a

Participant and the benefits, procedures or payments thereunder are non-assignable and non-transferable and shall not be sold, assigned, pledged, commuted, transferred or otherwise conveyed by an Employee, Participant or Beneficiary. Any attempt to so assign or transfer shall not be deemed to constitute a revocation by such Participant pursuant to Section 3.6 herein.

Except as otherwise required by law, any Deferred Compensation paid pursuant to this Plan shall not be subject to attachment, garnishment or execution or to transfer by operation of law in the event of bankruptcy or insolvency.

The Plan may not provide for the payment of amounts under the Plan other than amounts deferred under the Plan and any moneys earned thereon. The Plan may allow for the portability of appropriate amounts of deferred compensation from similar plans maintained by other employers (See Article 6 of this Plan concerning Transfers and Rollovers).

4.3 Amendment of the Plan

The Board shall have the authority, by the vote of a majority of its members, to amend this Plan from time to time, including without limitation to accommodate changes in the

Code, Treasury Regulations, Federal statutes, or State laws or rules. No amendments or modification shall affect the rights of Participants or their Beneficiaries to the receipt of compensation deferred prior to such amendment or modification.

4.4 Termination of the Plan

The Board, in accordance with the provisions of P.L. 1978, c. 39, shall have the authority, by the vote of a majority of its members, to terminate this Plan consistent with the requirements of the Code. Notice of such termination shall be provided to the

Trustee/Custodian(s). The assets of the Plan will be distributed pursuant to relevant provisions of the Plan and of the contractual agreements with the Trustee/Custodian(s), provided however, that upon termination of the Plan, the Board may elect that each Account shall be distributed in a single sum as soon as administratively practicable without respect to any other benefit, right or feature of the Plan. Notwithstanding the foregoing, any such distributions shall comply with the

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DMEAST #9080985 v7 14 requirements of the Code, any applicable Treasury Regulations thereunder, and the laws of the

State of New Jersey.

Upon termination, each Participant shall be deemed to have withdrawn from the

Plan as of the date of such termination; the Participant’s full Compensation on a non-deferred basis will be restored; and the Plan Administrator shall treat such Participants as if they had a

Termination of Service on the date of such termination.

4.5 Applicable Law

This Plan shall be construed, administered and governed in all respects under and by the laws of the State of New Jersey and consistent with applicable Sections of the Code and the regulations and interpretations of the Internal Revenue Service. The Board shall have authority to make any changes in this Plan necessary to conform its terms with the requirements of the federal law and the Internal Revenue Service.

4.6 Responsibility for Administration and Investment

This Plan shall be administered by the Plan Administrator.

The Division of Investment shall serve as the named fiduciary for the investment of funds under the Plan, subject to certain supervision by the State Investment Council as described below and shall be responsible for all functions related to the management of those investments including, but not limited to, the voting of any shares held pursuant to the provisions of Article 5 of this Plan.

Subject to the prior approval of the Board, the Division of Pensions and Benefits may contract with one or more private parties (“agent” or “agents”), including without limitation the Trustee/Custodian(s), to perform some or all of the administrative functions prescribed by the

Plan.

Subject to the prior approval of the State Investment Council and the Board, the

State Treasurer may contract with one or more private parties (“agent” or “agents”), including without limitation the Trustee/Custodian(s), for the holding and investment of some or all amounts contributed to the Plan in accordance with the Investment Funds specified in Article 5 of this Plan and any accounting and administrative functions related thereto.

Any contract authorized by this Section shall be conducted in accordance with applicable procurement bidding requirements for awarding State contracts.

4.7 Authority of the Administrator and the Division of Investment

The Plan Administrator and, with regard to investment matters, the Division of

Investment and the State Investment Council shall have the full power and authority to promulgate, adopt, amend or revoke such rules and regulations concerning their respective functions as are consistent with this Plan and which are necessary to implement and maintain this

Plan.

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The Plan Administrator, the State Investment Council, the Division of Investment or their agents shall have the authority to require such supportive information, documents or evidence as they deem necessary to carry out their responsibilities under this Plan.

The Board may rule on any matter involving the construction of the Plan and the interpretation of its terms and may exercise such authority in cases involving prior rulings or interpretations by any agent, representative or designee of the Board, acting pursuant to authority delegated by the terms of this Plan or by the Board. Any Board decision or any such matter shall be final and binding upon the terms of all parties.

4.8 Certain Duties of the Administrator

Whenever a deferral of a Participant’s Includible Compensation becomes effective, the Participant shall receive from the Plan Administrator a confirmation stating the amount of the deferral. This amount shall not be included as a part of his/her compensation for federal income tax purposes.

Information describing this Plan and the available Investment Funds shall be prepared by the Plan Administrator or by its agent, subject to the approval of the Board. Such information shall be provided to newly eligible Employees, and to other eligible Employees and

Participants from time to time as determined by the Plan Administrator, and shall be available to

Participants or eligible Employees upon request.

If a Participant claims a Disability and is not a member of a retirement system, the

Plan Administrator or its agent shall provide for a disability determination based on the requirements established for the retirement system in which the Participant would otherwise be required to participate.

4.9 Administrative and Investment Costs

It is the intent of this Plan that it shall not be implemented or administered so as to be an expense to the State of New Jersey other than for the State’s obligation to pay the Deferred

Compensation as provided hereunder.

All expenses associated with this Plan, including but not limited to, administrative and investment costs, shall be charged against the Plan’s Participants, to the extent and in the manner as determined by the Board. Within this regard, the Participating Employers, the Plan

Administrator and the Division of Investment shall report their respective costs so that the Board can enumerate these costs together with the Board’s own costs. Included in such costs shall be the costs of:

(a) making investments, if any;

(b) collecting the Deferred Compensation; and

(c) providing information to Participants, Employees and State agencies.

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DMEAST #9080985 v7 16

4.10 Participants’ Financial Statements

Accounts will be maintained by the Trustee/Custodian(s) at the direction of the

Plan Administrator for each Participant in the Plan. Each Participant shall receive periodic reports, not less frequently than quarterly, showing the then current value of his/her Account.

Investment Funds will be audited annually by independent accountants. An

Annual Report of the Plan will be available to all Participants from the Plan Administrator.

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ARTICLE 5: PARTICIPANT’S ACCOUNT, INVESTMENTS AND

DISTRIBUTIONS

5.1 Establishment of Account; Valuation of Accounts

The Plan Administrator shall establish an Account for each Participant that shall be credited as of the date that the Participants’ Includible Compensation is deferred. Each

Participant’s Account shall be adjusted from time to time for (a) any income, gains, losses, or increases or decreases in market value attributable to the Plan’s investment of the Participant’s

Deferred Compensation (and any transferred or rolled-over amounts (see Article 6) credited to the Participant’s Account), (b) the Account’s share of Plan administration expenses (c) any transfer or rollovers to and from the Account and (d) any distribution made to the Participant or the Participant’s Beneficiary.

As of each Valuation Date, a Participant’s Account shall be valued by adjusting the value of the Account to reflect the fair market value of the investment option(s) credited to the Participant’s Account. Each Participant’s gains and losses shall only be allocated to him or her and shall not be allocated to the Account of any other Participant.

A Participant’s Account shall reflect the amount and value of the investments or other property obtained by the Plan through the investment of the Participant’s Account pursuant to Section 5.3. It is anticipated that the Plan’s investments with respect to a Participant will conform to the investment preference specified in the Participant’s Enrollment Agreement, but nothing herein shall be construed to require the Plan to make any particular investment of a

Participant’s Accounts.

5.2 Assets Held In Trust

The assets of the Plan, whether in cash or investments (including life insurance policies and annuity contracts), shall at all times be held in Trust for the exclusive benefit of the

Plan’s Participants and their Beneficiaries, except that expenses and taxes may be paid from the

Trust. A Participant and his/her Beneficiary shall not have any property interest whatsoever in any specific Trust asset because of his/her election to defer any Compensation under this Plan.

The State is only under a contractual obligation to make payments under the Plan in accordance with the provisions of the Enrollment Agreement as payments become due. The

State is not a guarantor of the Plan. The State and its instrumentalities, agents and employees, including but not limited to the Board, members of the Board, employees of the State of New

Jersey Department of the Treasury (including Division Directors and employees of the

Divisions), and the State Investment Council and its members, shall not be liable for any claims raised by an Employee by reason of participation in the Plan.

5.3 Investment Options

(a) Initial Investment Direction -- Upon enrollment in the Plan under the provisions of Section 3.2 herein, each Participant must designate, as part of the Enrollment

Agreement or on such other form provided by the Plan Administrator for such purpose, the portion of his/her Account that will be invested in one or more Investment Funds. The

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Participant’s investment directions shall be in accordance with uniform and nondiscriminatory rules established by the Board, and shall not violate any investment restrictions established by the Division of Investment or the Plan Administrator. No amounts of Deferred Compensation will be credited to the Participant’s Account unless and until a completed Enrollment Agreement with investment elections is filed with the Plan Administrator.

(b) Amendment of Investment Direction -- A Participant, including a

Participant who has retired or terminated service and who is receiving installment payments or has deferred his/her payments from the Plan, may from time to time change his/her elections with respect to the Investment Funds in his/her Account. A Participant may make a new investment election with respect to future Deferred Compensation to be credited to his/her

Account, or may change the investment allocation of his/her Account (a transfer among

Investment Funds; see Section 6.1). To do so, he/she must file a revised Enrollment Agreement or other Change Request form authorized for this purpose with the Plan Administrator or its delegate. Investment changes may be made in written form or, if permitted by the Plan

Administrator, may be made by means of telephonic or electronic communication with the

Trustee/Custodian.

Changes in investment options or transfers among Investment Funds shall be implemented as soon as administratively practicable. The Plan Administrator may promulgate uniform rules with respect to the frequency with which Participants may change investment options, and the means by which said changes may be requested.

(c) Limitations on Investment Direction -- Each Participant may request that his/her Account be invested 100% in any of the available Investment Funds or in multiples of 1% thereof in any combination of those Investment Funds as long as the total equals 100%. A Participant must elect where his/her deferrals are to be invested. If a Participant fails to make an investment election or if the Participant’s investment election does not equal

100% of his/her deferral request, the Participant’s Enrollment Agreement will be rejected and returned to the Participant.

The Plan Administrator may, if it chooses, restrict a Participant’s ability to invest in certain Investment Funds, or to prohibit or restrict transfers between certain Investment

Funds, whether based on the underlying terms of the investment product or such other factors as the Plan Administrator may choose to take into account.

(d) Designation of Investment Funds -- In addition to the Common

Funds, there shall be a minimum of five designated Outside Funds, which funds shall offer

Participants a range of investment options with varying levels of risk and expected returns, and may include funds which invest primarily in domestic equity securities, international equity securities, domestic fixed income securities, and money market instruments. Notwithstanding anything in the Plan to the contrary, Investment Funds shall be limited to legal investments for fiduciaries of trust estates in the State.

The Plan Administrator shall communicate to new Participants making their initial Deferral Elections, and periodically to Participants generally, information to

Participants describing the designated Investment Funds and their risk and reward characteristics, (Page 20 of 35)

DMEAST #9080985 v7 19 any limitations on the amount that may be invested in a particular Fund or limitation on the transfer of amounts between or among certain Funds, and any asset-based fees or charges that may apply with respect to an Investment Fund. Such information may be provided by means of a then-current prospectus for an Investment Fund, if available.

The Board has the authority, after providing notice to the affected

Participants, to eliminate the availability of any or all of the Investment Funds under the Plan and may direct the Division of Investment to invest funds affected by such action in any manner consistent with the provisions of the Plan.

(e) Liability for Investment Directions -- Neither the State of New

Jersey, the Board, the Plan Administrator, the Trustee/Custodian, any Participating Employer, nor any other person shall be liable for any losses incurred by virtue of following such directions or (except as otherwise may be provided contractually with respect to a Trustee/Custodian) with any administrative delay in implementing such directions.

5.4 Mode of Distribution

(a) Commencement of Distributions -- Except as otherwise provided in this Article 5, the distribution of a Participant’s Account shall commence no later than a

Participant’s Automatic Distribution Date, and the distribution of such benefits shall be made in accordance with one of the distribution options described in paragraph (b) below.

Notwithstanding the foregoing, and except as otherwise provided in this Article 5, the Participant may elect following his/her Retirement or other Termination of Service to have the distribution of his/her Account commence on a fixed determinable date other than that described in the preceding sentence, but not later than April of the year following the year of the Participant’s

Retirement or attainment of age 70 ½, whichever is later. In such case, distribution shall commence as soon as administratively feasible following the Benefit Commencement Date selected by the Participant or Beneficiary.

(b) Distribution Options -- A Participant or Beneficiary may elect to have the value of the Participant’s Account distributed in accordance with one of the following distribution options, provided that such option is consistent with the limitations set forth in

Section 5.4(d).

(1) A lump sum payment consisting of all or a portion of the

Account;

(2) Equal monthly, quarterly,…