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CC Resolution No. 8051 f/5 RESOIIJTION NO. 8051 A RESOIIJTION OF 'IfJE CITY CXXJNCIL OF 'IfJE CITY OF CUPERI'Il'fO AUIHORIZlliG EXEaJrION OF DEFERRED CX)MFENSATION PIAN AGREEMENT WITH GREAT WESTERN BANK WHEREAS, the City of CUpertino, pursuant to and in compliance with Internal Revenue Ccxie section 457, has established a Deferred Compensation Plan; am . WHEREAS, the City of CUpertino desires to utilize Great Western in the performance of certain services in connection with the administration of the Plan; am WHEREAS, Great Western desires to provide such services subj ect to the tenus am conditions set forth in the Deferred Compensation Plan Agreement, attached hereto am made part hereof; am WHEREAS, said agreement has been presented to the City Council; am said agreement having been approved by the City Manager and the City Attomey; NOW, THEREFORE, BE IT RESOLVED, that the City Manager am the City Clerk are hereby authorized to execute the agreement herein referred to in behalf of the City of CUpertino. PASSED AND .AIX)P!'ED at a regular meeting of the City Council of the City of CUpertino this 20th day of February, 1990 by the following vote: Vote Members of the ci tv Council AYES: Goldman, Koppel, Szabo, Rogers APPROVED: -I'ln!,;, 1\:1 1'0 CERTIFY '-HAT THE WITHIN 1~\SnWMti:NT IS A TRUE AND CORRECT COpy OF iHt:L OAIGINAL. ON FILE IN THIS OFFiCe::. 1 I DO ATTEST " L-/"..v~ 2- Z-- . 19-L CITY CL.~K OF THE 01 Y OF CUPERTINI3 y~/- r ,:J~ 4- I3Y " U-'C/' {/f i- ~ CITY CLERK NOES: None ABSENT: Sorensen ABSTAIN: None /s/ Barbara A. Rogers Mayor, City of CUpertino A'lTEST: /s/ Roberta A. Wolfe Deputy City Clerk AGREEMENT DEFERRED COMPENSATION CITY OF CUPERTINO GREAT WESTERN ~~ ~ ~CIf PIAN ~ '!his Agreement is effective this 1st day of March, 1990, by and between GREAT WESTERN BANK, a Federal SavinJs Bank, hereinafter referred to as GREAT WESTERN, and the Cl'lY OF CIJPERl'IlI) hereinafter referred to as AGENCY. WHEREAS, AGENCY, pursuant to am in c::atpliance with Internal Revenue Ccxie section 457, has established a Deferred Compensation Plan, hereinafter referred to as PIAN; am WHEREAS, AGENCY desires to utilize GREAT W~l1!:l<N in the performance of certain services in connection with the administration of the PIAN; am WHEREAS, GREAT WESTERN desires to provide such services subj ect to the tenus and conditions set forth herein; Now therefore, AGENCY am GREAT WESTERN agree as follows: 1. TERM: '!his Agreement shall remain in effect for a period of five years from the effective date hereof, am shall not be tenninated prior to that time except for "Cause" as that tenn is hereinafter defined. For purposes of this Agreement, the tenn "Cause" shall nean the failure of either party to perfonn any or all of its obligations as defined herein. '!he non-defaulting party shall give the defaulting party written notice which shall specify the particulars of the default. If such default is not cured within sixty (60) days from the em. of the month in which notice of default is given, the non-defaulting party may tenninate the Agreement effective thirty (30) days after the em. of the sixty (60) day period. For purposes of this Agreement, "Contract Year" shall nean the period of time between the effective date of the Contract, am the same day of the month in each succeeding year; the first Contract Year, however, shall be extended, if necessary in order to ensure that every Contract Year will em. on the last day of a calerrlar month. 2. TERMINATION: Up:>n the effective date of tennination of this Agreement, other than for Cause as defined above, the followirg shall occur: a. GREAT WESTERN shall issue reports to AGENCY detailirg the status of PIAN assets no later than twenty (20) business days after the em. of the month in which tennination becomes effective. - 1 - b. AGENCY may request liquidation am withdrawal of PIAN assets. If tennination is for Cause, GREAT WESTERN shall disburse those fu:rx:ls deposited in GREAT WESTERN, not subject to penalty for early withdrawal, within thirty (30) days of the effective date of tennination. F'llrrls deposited in GREAT WESTERN, subject to penalty for early withdrawal, shall be disbursed according to written instructions from AGENCY. F'llrrls invested in mutual fu:rx:ls or annuity products shall be disbursed as mutually agreed in writin;J by AGENCY am GREAT W~l'.tJ<N. If tennination is due to non-renewal of this Agreement, GREAT WESTERN shall disburse those fu:rx:ls deposited in Great Western savin;Js, not subject to penalty for early withdrawal, within ninety (90) days of the effective date of tennination. Funds deposited in Great Western Savings, subject to penalty for early withdrawal, shall be disbursed, after deduction of penalty, or left on deposit until maturity, according to written instructions from AGENCY. Mutual F'Urrl Shares shall be disbursed as mutually agreed in writing by AGENCY am GREAT WESTERN. '!his clause shall not serve to affect normal distributions to participants pursuant to PIAN. 3. AGENCY agrees to: a. Cause appropriate deductions to be made from such payroll (s) as may be applicable. b. Serrl by check or wire transfer the amount of the total deductions to : Great Western Bank Deferred Carpensation Deparbnent P.o. Box 6350 Northridge, California 91328 or to such other facility or in such other marmer as may be mutually agreed upon between GREAT WESTERN am AGENCY. - 2 - c. Provide, in such fonn as agreed upon by AGENCY am GREAT WESTERN, a deferral listin:J with respect to participant sub-accounts to include not less than the followin:J: 1. Name of Participant 2. Social Security Number of participant 3. A10cJlmt to be credited to participant's sub-account(s) GREAT WESTERN agrees to: d. Establish a sub-account for each participant. e. Credit the ancunts sent by AGENCY to the sub-account(s) of the various participants am to selected investment vehicles in accordance with the latest written instnlctions on file with GREAT WESTERN. f. FUnjs invested in the option described herein as "GWBIA" will accnle interest as of the date of receipt by GREAT WESTERN. g. Place mutual furrl orders, if applicable, within three (3) business days of the receipt of both, a deferral listin:J am check, in accordance with the latest written i.nstru.ctions on file with GREAT WESTERN . 4. RE<X>RD KEEPING AND REroRl'S: GREAT WESTERN agrees to furnish AGENCY, no later than twenty (20) days fOllowing the em. of each month am each quarter a report regarding the status of the PIAN containing the followin:J infonnation: a. Each participant's name b. Each participant's Social Security Number c. Each participant's sub-account number d. Deposit credited to each sub-account durin:J the period e. withdrawals from each sub-account during the period f. Interest/Ean1ings credited to each sub-account during the period g. 'Ibtal value of each sub-account h. SUImnary totals of the PIAN NOl'E: Armuity transactions will not appear on the monthly/quarterly reports am quarterly statements issued by Great Western. '!he AGENCY am participants will receive quarterly reports am statements from the insurance company. - 3 - GREAT WESTERN agrees to provide quarterly statements to participants in the PIAN, no later than twenty (20) days followin;J the em. of each calerrlar quarter. Each statement shall identify the transactions which have 0C'X:llrred in the participant's sub-account at the beginning am the em. of the preceding quarter . GREAT WESTERN agrees to maintain the records necessary to produce the above mentioned reports, am agrees that all records shall be the property of AGENCY and that, in the event this Agreement is tenninated for any reason, GREAT WESTERN will provide AGENCY a copy of such records, in hard copy or such other fonn as Imltually agreed upon between GREAT W~l'.ta<N am AGENCY, within ninety (90) days after the effective date of tennination. AGENCY agrees that all related computer tapes, discs am programs shall remain the property of GREAT WESTERN . GREAT WESTERN agrees that all infonnation supplied to am all work processed or corrpleted by GREAT WESTERN shall be held to be confidential am will not be disclosed to anyone other than AGENCY except as required by law. 5. DISIRIIUI'IONS: Upon receipt of authorized written i.nstn1ctions from AGENCY, in such fonn am with such authorization as Imltually agreed upon by GREAT WESTERN am AGENCY, GREAT WESTERN agrees to process the payment of benefits to participants am beneficiaries in accordance with PIAN. Distributions shall be made once a month, on the seventh (7th) calerrlar day before the last day of the month. If that day is a Saturday, sunday or Holiday, distributions shall be made on the next business day. Initial distribution requests received by GREAT WESTERN, at its operations office in Northridge, on am after the sixteenth (16th) calerrlar day of a month will be processed the followin;J month. If applicable, the distribution of funjs resul tin;J from the liquidation of Imltual furrl shares will be made on the next distribution date which falls at least five (5) business days after the receipt of such funjs by GREAT W~l'.ta<N. 'Ihe above notwithstarrling, GREAT WESTERN will cooperate with AGENCY to not unreasonably delay distribution requests in oonjl.D1Ction with "emergency withdrawals", as defined in the PIAN. GREAT WESTERN agrees to withhold appropriate Federal am state inc::one taxes, according to instru.ctions set forth on fonn W-4 conpleted by the participant, to remit such withholdings to proper taxing authorities, am to issue net funjs to participant(s) or beneficiary(ies) in accordance with instru.ctions on the Distribution Request Fonn. GREAT WESTERN agrees to perfonn required monthly, quarterly am annual reporting of withholdinJs to appropriate taxing authorities. GREAT WESTERN agrees to issue appropriate annual wage am tax statements to those participants am beneficiaries who received distribution (s) during the preceding year am to retain a copy of such infonnation on file for the period required by law. GREAT WESTERN agrees to provide AGENCY a monthly report of all disbursements made during the previous month. -4- 6. INVES'IMENT VEHICIES: GREAT W~l1!:l<N agrees to provide the herein described services for AGENCY with the followirg invesbnent vehicles. A. Great Westen1 Bank Irrlexed Account ("GWBIA"). '!he invesbnent vehicle identified as GWBIA shall be savinJs acx::ounts with GREAT WESTERN. Each such acx::ount shall be subject to roles, regulations am statutes to which GREAT WESTERN is subject, as prarulgated by the Federal Harne Loan Bank Board (FHIBB), the Federal Deposit Insurance Corporation (FDIC) am other such regulato:ry authorities. GREAT WESTERN agrees to accept PIAN :fuOOs for invesbnent in GWBIA. PIAN :fuOOs will earn interest by whichever of the following methods results in the highest rate payable: (1) '!he rate of interest for all:fuOOs received durirg the tenn of the contract shall yield the over-the-counter annualized yield quotation for the five year united states Govennnent Treasw:y Note, detennined by reference to representative yields reported in the Wall street JOUDlal on the last business day of each calerrlar quarter. '!his effective annualized yield will be guaranteed for the succeeci:irg calerrlar quarter regardless of any subsequent change in the five year United states Treasw:y Note yield. '!he current rate/yield is: (T.B.D. ) Rate 7.56 % Yield 7.94 % (2) SUch other yield as declared by Great Westen1 am shall not be lower than A. (1) above. Interest will accrue daily, using the 365/360 day method, will be credited monthly, on the last day of the month, am will be automatically reinvested to allow for monthly COIl'IpOl.ll'rl. B. GREAT WESTERN BANK CERl'IFICATE OF DEroSIT (GWBCD) Great Western will also make available one am two year certificates of deposit (CD) whose yields are .irrlexed to representative, effective annual yield on one am two year United states Govennnent Treasw:y Notes. For example, a one year CD will have yield irrlexed to the one year Treasw:y Note; a two year CD will have a yield irrlexed to the two year treasmy Note. - 5 - In either case, the effective annualized yields for the one am two year Treasw:y Notes will be detennined by reference to representative yields reported in the Wall street Journal on the last business day of the calerrlar quarter. 'Ibis yield will l::lec:x:xne the effective annualized yield of the GWBCD for the follOVlin:J Quarter. Interest will aa::rue daily, using the 365/360 day method, will be credited monthly, on the last day of the month, am will be autanatically reinvested to allOVl for monthly cc:atpOllI'ili.. other guidelines are as follows: 1. One Year CD: $10,000 minimum deposit, 90 day interest penalty for early liquidation (separation from service or hardship excluded) 2. 'IWo Year CD: $10,000 mininn.nn deposit, 180 day interest penalty for early liquidation (separation from service or hardship excluded) 3. Participants may invest in no more than two (2) CD's per year. Plan funjs invested in the GWBIA or GWBCD options are backed by the full faith am credit of the u.s. Government am are also insured by the Federal Deposit Insurance Corporation, an agency of the Federal Government, up to $100,000 per participant. Great Western will collateralize any amounts invested in the GWBIA in excess of FDIC insurance limits by depositing first deeds of trust on suitable residential property (Le. one to four unit) with the Federal Home lDan Bank in san Francisco. '!he unpaid outstarrling principal balance of the collateral is adjusted quarterly, am shall in the aggregate, at all ti1nes equal or exceed one hurrlred fifty percent (l50%) of the amount of plan funjs invested in the GWBIA in excess of FDIC l:ilni.ts. C. MEI'ROIOLITAN LIFE INSURANCE a:MPANY GUARANTEED INVES'IMENT <X>NI'RAcr (GIC) GIC's are a contractual arrangerrent with an insurance company that are very similar to bank certificates of deposit. GIC's guarantee a specific rate of returrl on invested funjs over the life of the contract, with the insurance canpmy assuming all of the market credit, am interest rate risks on the urrlerlying invesbnents. rrhe GIC's in the Great Western deferred COIlJ'8I15ation program are urrlerwritten by Metropolitan Life Insurance Conpmy, the third largest life insurance c:x::arpany in the world. Metropolitan GIC's have one (calerrlar) year deposit "wirrlows", with three (3) year interest rate guarantees . - 6 - All :fuOOs dep:>sited in (calernar year) 1990 will be guaranteed a rate of interest through 1992 (1990, 1991, 1992); all :fuOOs deposited in 1991 will be guaranteed a rate of interest through 1993. etc. Principal am interest are guaranteed for the life of the contract by Metropolitan. Exanple: '!he rate/yield on all :fuOOs received in calernar year 1990 is: Rate 7.79% Yield 8.10%. '!he rate/yield on these:fuOOs is guaranteed through 1992. other guidelines are as follows: 1. For the deferred February , time. 1990 dep:>sit win::low, lump sum transfers of previously am invested :fuOOs will be accepted only through 1990. New deferrals may be allocated to the CIG at any 2. F\.Jrrls invested in the GIC may not be transferred (before maturity) to other investment options for any reason. 3. F\.Jrrls invested in the GIC may be paid to participants, without interest penalties, surrerrler charges, or aCCOWlt value reductions of any ki.rrl, for distribution events, hardship withdrawals, or plan-to-plan transfers (where pennitted). D. other investment vehicles which will be provided to the PIAN are described on the attached Schedule 1. (1) If applicable, PIAN :fuOOs invested in mutual furrl options will utilize Great Westen1 Financial Securities Corporation, a wholly owned subsidiary of Great Westen1 Financial Corporation, as the Broker/Dealer for such transactions. (2) If applicable, single Premium I1lm:!di.ate Annuities am other annuity products purchased by AGENCY pursuant to PIAN will be issued am guaranteed by Great Westen'1 Insurance Catpany, a wholly owned subsidiary of Great Western Financial Corporation, or such other life insurance c::atpany selected by Great Western. (3) Certain investment vehicles may i1rp:>se sales charges. '!hese sales charges will be disclosed in the prospectus or insurance contract, whichever is applicable. -7- (4) GREAT W~l'~ may, fran time to time, offer to perfonn the herein described savices for additional aOO;or alternate invesbnent vehicles upon written agreement between GREAT WESTERN am AGENCY. 7. ENROLIMENl' SERVICES: GREAT WESTERN agrees to process, or arraIge to have processed, the enrollment of eligible employees who elect to participate in material pursuant to the PIAN for distribution to employees of AGENCY, subject to approval of such material by AGENCY, such approval not to be distribution of such material to employees. GREAT WESTERN agrees to corrluct, or arraIge to have corrlucted, group presentations periodically for employees of AGENCY, to explain the PIAN. AGENCY agrees to facilitate the scheduli.n:J of such presentations am to provide facilities at which satisfactory attenjance can be expected. GREAT WESTERN agrees that qualified personnel will be made available periodically to discuss the PIAN with in:lividual employees of AGENCY. 8. CXl>1PARABIE PIANS: Great Western agrees that the products, rates am services proposed for the PIAN are not less than what is currently provided for any public employee deferred compensation program. Should Great Western offer any improveroont in product or interest rates on irrlexes to other Deferred Compensation Plans within the state of California or additional ancillary benefits during the tenn of this agreement, or any extensions thereof, that Great Westem will automatically offer said improvements or ancillary benefits to Aqercy prospectively from the date same is offered to other Deferred Compensation Plans. Great western shall have the affinnative duty to notify Aqercy in writing of any such improveroont or ancillary benefits. 9. TITIE AND OONERSHIP: AGENCY shall at all times be the unrestricted owner of all PIAN assets, in accordance with IRe 47 provisions. GREAT WESTERN shall infonn the AGENCY of changes in the IRS code aOO;or regulations am requirements which could affect the AGENCY's Deferred Compensation Plan. We will assist the AGENCY in the inpleroontation of changes or ~ts to its Deferred Compensation Plan DJcument. 10. PRIVITY OF cx:>NTRAcr: GREAT WES'l'~ shall have no privity of contract with PIAN participants. GREAT WESTERN agrees not to acx::ept or honor instructions which may be subnitted by participants without written authorization from AGENCY. -8- 11. FEES AND EXPENSES: GREAT WESTERN, in consideration of its services urrler the Plan, shall receive an annual administration fee of Eight (8) dollars for the first am sec:x:ni years of the contract, Nine (9) dollars for the third am fourth years of the contract am Ten (10) dollars for the fifth year of the contract. GREAT WESTERN will deduct the administration fee from each Participant's sub-aocount in four equal installments at the em. of each calerrlar quarter. GREAT WESTERN will requires each participant to maintain a cash balance in the GWBIA sufficient to cover administration fees. other than at the tennination of the Agreement, if a Participant transfers their acx::ount, (leavi.n;J a zero balance), from GREAT WESTERN to another provider, other than GREAT WESTERN or a subsidiary of Great western Financial Corporation, a transfer fee in the annmt of twenty-five dollars ($25.00) will be assessed. SUch fee to be deducted fran the Participant's acx::ount prior to transfer of furrls. 12. TRANSFERS: A. From the GWBIA 'Ib other Great Western Investment Options GREAT WESTERN will allow the transfer of furrls in participant sub-acx::ounts from the GWBIA to other investroont options provided in the plan Agreement. SUch transfer will be allowed only upon express written agreeIOOnt between AGENCY, GREAT W~l'll<N' am the awlicable investment option am will be allowed throughout the tenn of this Agreeroont. F'Urxls will be transferred fran the GWBIA to the other investment option, within three (3) business days of receipt of written authorization from the AGENCY by GREAT WESTERN at its office in Northridge, Califoooa. b. From other Great Western Investment Options to GWBIA GREAT WESTERN will allow the transfer of furrls in participant sub-acx::ounts from other GREAT WESTERN investment options provided in the plan Agreement, (i.e. nultual furrls am annuities) to the GWBIA. SUch transfers will be allowed only upon express written agreeIOOnt between AGENCY, GREAT WESTERN am the applicable investment option am will be allowed throughout the tenn of this Agreement. '!he transfer will be initiated within two (2) business days of receipt of written authorization from the AGENCY by GREAT WESTERN at its office in Northridge, Califo:rnia. If a transfer involves the liquidation of nultual furrl shares, the proceeds from the sale of said nultual furrl shares, will be credited to the GWBIA upon receipt of the furrls by GREAT WESTERN from the investment c::atpany. -9- c. Fran Great Western to other Invesbnent Providers GREAT W~l'~ will allow the transfer of fun:ls in participant sub-ac:x:::amts to other invesbnent providers. SUch transfers will be allowed only upon express written agreement between AGENCY an:! GREAT W~l1!:l<N am will be allowed throughout the tenn of this Agreement. Transfers will be p~ in acx:oroance with the provisions of rnnnber 10. (Fees am Expenses) am l1.a. arrljor b. 13. CIRaJMSTANCES EXaJSING PERFORMANCE: 'Ihe perfonnance by the parties to this Agreement is subject to force majeure am is excused by fires, power failures, strikes, acts of God, restrictions i.np:>sed by govenunent, or delays beyorrl the delayed party's control. Failures of or defaults by invesbnent vehicles other than GREAT WESTERN shall excuse perfonnance by GREAT W~l1!:l<N thereby prevented. 14. INDElv1NIFICATION: Notwithstan:ling any other provlslon herein to the contrary, GREAT WESTERN agrees to be solely responsible to AGENCY for any am all services perfonned by GREAT WESTERN or its employees urrler this Agreem3nt. GREAT WESTERN shall be responsible for any error or negligence committed by GREAT WESTERN or its employees. AGENCY shall be responsible for any error or negligence committed by AGENCY or its employees. GREAT WESTERN shall not be liable for investment performance, except as expressly provided for in this Agreement 15. ASSIGNABILITY: No party to this Agreement shall assign the same without the express written consent of the other party, such consent not to be unreasonably withheld. Unless agreed to by the parties, no such assigrnnent shall relieve any party to this Agreement of any duties or responsibilities herein. 16. PARrIES IOJNI): '!his Agreem3nt an:! the provisions thereof shall be b.inii.nj upon am shall inure to the benefit of the successors am assigns of the respective parties. 17. APPLICABIE lAW: 'Ibis Agreem3nt shall be construed in acx:oroance with the laws operating within the state of Califonlia. As such, this agreement must be signed by the Treasurer of the Agercy. - 10- 18. UNIAWFUL IIDVISIONS: In the event any provisions of this Agreement shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaini.rq parts of the Agreene1t, but the same shall be construed am enforced as if said illegal or invalid provision had never been inserted herein. Notwit:l1staIili.D3' any1:hirg cxmtained herein to the contrary, no party to this Agreene1t will be required to perfonn or remer any services hereurxler, the perfonnance or renlition of which 'WOUld be in violation of any laws relatirg thereto. 19. mDIFICATION: '!his writing is interrled both as the final expression of the Agreene1t between the parties hereto with respect to the included tenrLS am as a c::atplete an:l exclusive statement of the tenns of the Agreement, pursuant to Califonlia Ccxie of civil Procedures Section 1856 or its successor(s). No m:xlification of this Agreement shall be effective unless am until such m:xlification is evidenced by a writirg signed by both parties . 20. NOI'ICES: All notices am demarrl to be given urrler this Agreement by one party to another shall be given by certified or United states mail, addressed to the party to be notified or upon whom a demarrl is being made, at the respective addresses set forth in this Agreene1t or such other place as either party may, from time to time, designate in writing to the other party. Notice shall be deemed to be effective on the day the notice is received by GREAT WESTERN or the Aqerq. If to GREAT W~l.tl<N GREAT WESTERN BANK Deferred CalqJensation Department P.o. Box 6350 Northridge, Califonlia 91328 If to AGENCY CITY OF aJPERrINO 10300 Torre Avenue CUpertino, CA 95014 Attn: I:bnald Brown -11- IN WI'INESS WffEREX)F, the parties hereto have executed this 1lgreenelt effective on the date first above written. AGENCY GREAT WESTERN ~~~} lEGAL CXXJNSEL BY: ~..1. VVr DATE SIGNED: ~ .110 BY ~zr o;rrCER: wU1 ~' I I ~ " ~ c ------- 1flyA~.t- (j, 0 u;. / -12- SammIE 1 Pursuant to Section 6 of this Agreement, other invesbnent vehicles available urrler this Agreement are as follows: AMERICAN MUIUAL F\JNIlS Invesbnent Callpmy of America (ICA) GrcMth F\lrrl of America (GFA) Boni F\lrrl of America (BFA) Incx:ma F\lrrl of America (IFA) 'IWENTIEIH CENIURY INVES'IORS. INC. Select F\lrrl Growth F\lrrl Ultra F\lrrl Balanced F\lrrl FIDELITY INVES'IMENl'S Fidelity Magellan Fidelity Equity-Incorre Fidelity Freedom Fidelity High Incx:ma GREAT WESTERN SIERRA 'lRJST F\JNIlS Global Money Market F\lrrl U. S. Government Money Market F\lrrl Growth am Incx:ma F\lrrl U. S. Government Securities F\lrrl MEI'ROFOLITAN - ANNUITIES Single Premium Immediate Annuity GUARANTEED INVES'lMENT OPl'ION (GIC) -13-