CC Resolution No. 6455 RESOLUTION N0. 6455
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AMENDING RESOLUTION N0. 4082
The City Council of the City of Cupertino resolves that Resolution
No. 4082 is amended per attached Exhibit "A".
Passed and adopted at a regular meeting of the City Council of
the City of Cupertino this 4th day of February , 1985 by the
following vote:
Vote Members of the City Council
AYES: Gatto, Plungy, Rogers, Sparks, Johnson
NOES: IJone
ABSENT: None
ABSTAIN: None
ATTEST: APPROVED:
Dorothy Cornelius /s/ Phil N. Johnson
City Clerk Mayor, City of Cupertino
GXH1B1'i
~ RESOL[1T10N N0. 6455
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AMENDING RESOLUTION :JO. 4082
The City Council of the City of Cupertino resolves that Resolution No. 4082
is amended as follows:
SECTION l. NAh1~:
The name of the Plan is CiCy of Cupertino lleferred Compensation
Plan hereinafter referred to as the "Plan".
SECTION 2. PURPOSE:
The primary purpose of the Plan is to attract and hold personnel
by permitting them to enter into agreemenCs with the City of
Ciipertino Deferred Compensation Plan which will provide future pay-
ments in lieu of deferred current income upon death, disability,
retirement, or other termination of employment. The Plan is
intended to qualify as an eligible State Deferred Compensation Pla~i
within the meaning of Section 457 of the Internal Revenue Code bf
1954, as amended (hereinafter referred to as the "Code").
SECTION 3. DGFINITIONS:
For Che purposes of this Plan, certain words or phrases used herein
will have the following meanings:
3.1 "Employer" shall mean the City of Cupertino.
3.2 "Employee" shall mean a management, supervisory or other full-
time or permanent part-Cime employee, City Council member or
CiCy AtCorney of the Employer who has been designated by the
Employer.
3.3 "Participant° shall mean an employee who has elected to parti-
cipace in the Plan. Only individuals who perCurm service for
the Employer may be participants.
3.4 "Parti.cipation Agreement" shall. mean the agreement execuCed e~nd
filed by an Employee with the F,mployer pursuant to Section 4,
in which the Employee elects to become a participanC in Lhe
Plan.
3.5 "Compensation" shall mean the salary of wages which would be
paid by the F.mployer to or for the benefit of an employee (if
they were not a Participant in the Plan) for actual services
performed by the Employee.
• 3.6 "Includible Compensation" shall mean compensation
received from the Employer that is attributable
to services performed for the Employer and that
is includible in the Participant's gross income
for the taxable year. Accordingly, a
Participant's ineludible compensation for a
taxable year does not include any amount payable
by the Employer that is excludible from the
Participant's gross income under Section 457,
Section 403(b), Section 105(d) and Section 971 of
the Code. A Participant's includible
compensation for a taxable year is determined
without regard to any Community Property laws.
3•7 "Deferred Compensation" shall mean the amount of
Compensation which the Participant and the
Employer mutually agree shall be deferred in
accordance with the provisions of this Plan.
3•8 "Disability" means the inability of a Participant
to engage in his/her usual occupation by reason
of a medically determinable physical or mental
impairment as determined by the Employer on the
basis of advice from a physician or physicians.
3•9 "Normal Retirement Age" shall mean, as to each
participant, the age designated by the
Participant in the range of ages ending with
70 1/2 years and beginning with the earliest age
at which Participant could retire with no
actuarial reduction in benefits under the
retirement plan, but in any event not later than
the date or age which Participant separates from
the service of the Employer.
3.10 "Normal Retirement" shall mean retirement from
service with the Employer which becomes effective
on the Participant's attainment of Normal
Retirement Age.
3.11 "Early Retirement" shall mean retirement from
service with the Employer which becomes effeetive
on the first day of the calendar month after the
Participant meets the age requirements for early
retirement specified in the Employer's qualified
retirement plan.
3.12 "Late Retirement" shall mean retirement from
service with the Employer which becomes effective
after the Participant has passed the Normal
Retirement Age.
3.13 "Termination of Employment" shall mean the
~@~@P~~~~ ~f bhe Pertioipant's employment with
the Employer prior to retirement.
SECTION 4. PARTICIPATION:
4.1 Each Employee may elect to become a Participant
• of the Plan and defer payment of his/her
Compensation by executing and delivering to the
Employer a written Participation Agreement. At
the Employer's option, there may be established
one or more entry dates during the year.
Deferral may not start until the calendar month
following the month in which the Participation
Agreement is executed and filed with the
Employer.
4.2 The Participation Agreement shall state the
amount of Compensation to be deferred pursuant to
the Plan, which shall not exceed the amounts
provided in Sections 5.2 and 5.3 below.
4.3 A Participant may revoke his/her Participation
Agreement by filing with the Employer an executed
written notice of revocation for that portion
which they voluntarily defer. In the event such
notice of revocation is filed, it will take
effect the first pay period of the following
month. A Participant who revokes his/her
voluntary deferral may not resume voluntary
deferrals until the next open enrollment period.
No amounts shall be payable to an Employee upon
revocation of his/her Participation Agreement
unless otherwise due pursuant to Section 10.
SECTION 5. DEFERRAL OF COMPENSATION:
5.1 For.each month in which a Participation Agreement
of an Employee is in effect, the Employer shall
not pay the Employee his/her full compensation,
but shall defer payment of such part of his/her
Compensation as is specified by the Employee in
the Participation Agreement.
5.2 Except as provided in Section 5.3, the maximum
amount that may be deferred under the Plan for
any taxable year of a Participant shall not
exceed the lesser of:
1. $7,500; or
2. 33 1/3 of the Participant's Includible
Compensation for the taxable year, reduced by
any amount excludible from the Participant's
gross income for the taxable year under
Section 403 (b) of the Code on account of
contributions made by the Employer. If the
Employer contributes additional amounts into
the Plan, the maximum amount that may be
deferred by the Participant shall be reduced
by the amount of the Employer's contribution.
• 5.3 For any one or more of a Participant's last three
~3) taxable years ending before such Participant
attains Normal Retirement Age, the maximum amount
~ that may be deferred under the Plan for any
taxable year of the Participant shall not exceed
the lesser of $15,000 or the sum of the maximum
amount that could be deferred for such taxable
year under Section 5•2 above (without regard to
this Seetion), plus so much of the maximum amount
that could be deferred for all prior taxable
years, beginning after December 31, 1978, under
Section 5.2 (without regard to this Section) as
has not theretofore been deferred. In no event
may the amount of Deferred Compensation for the
year exceed the total amount of Compensation for
the year. This Section shall be interpreted and
applied consistent with Section 457~b)(2) and (3)
of the Code.
5.~ If an individual is a Participant in more than
one eligible State Deferred Compensation Plan
established pursuant to Section 457 of the Code,
the amount of Compensation deferred under this
Plan when added to the Compensation deferred aJl
such other Plans, may not exceed the maximum
amounts set forth in Sections 5.2 and 5.3 above.
SECTION 6. ADMINISTRATION OF THE PLAN:
6.1 The Employer shall have full authority and power
to adopt the rules and regulations for the
administration of the Plan, and to interpret,
amend, alter, and revoke any rules and
regulations so adopted.
6.2 The Employer may, at its option, establish one or
more Deferred Compensation Plan Funds to which
Deferred Compensation is credited at such times
as the Compensation would have been payable to
individual employees if they were not
Participants in the Plan.
SECTION 7. EARNINGS OF THE FUND:
If a fund is established pursuant to Section 6.2, and
such fund is invested and reinvested in a manner
intended to increase Plan assets, the net earnings of
such fund may be accumulated and held in the fund,
provided that such assets remain the unrestrieted
assets of the Employer as set forth in Section 8 below.
SECTION 8. ASSETS OF THE PLAN:
All amounts of Compensation deferred under the Plan,
' all property and rights purchased with such amounts,
and all income attributable to such amounts, or rights
shall remain solely the property and rights of the
Employer, subject only to the claims of the Employer's
general creditors, until made available to the
participant or other beneficiary. The obligation of
the Employer to a Participant for payment of the
Deferred Compensation and increments thereon referred
to in this Plan is a contractual obligation only and
Participants shall have no preferred or specific
interest by way of trust, escrow, annuity or otherwise,
in and to the specifie assets or funds that may be
established.
SECTION 9. MAINTENANCE OF BOOK ACCOUNTS:
A book account shall be maintained for each
Participant. There shall be credited to the book
aceount all amounts of Compensation deferred under the
Plan and all income attributable to such amounts. 'The
income attributable to an amount shall mean the actual
earnings of the fund established pursuant to Section
6.1 of the Plan if such a fund is established by the
Employer, allocated on a pro rata basis but in no event
less than the earnings that would have been earned if
the amounts deferred had been invested from time to
time in one or more of the various investment options
available within the Plan.
SECTION 10. DISTRIBUTION OF BENEFITS:
Distribution of benefits to each Participant shall
commence not later than sixty (60) days after the end
of the calendar year following a distribution event.
The Participant must elect a mode of distribution
irrevocably not less than thirty (30) days prior to the
date on which distribution is to commence. In the
event a distribution event occurs prior to the date the
Participant attains (or would have attained) Normal
Retirement Age the Participant may irrevocably elect,
prior to the time the amounts become payable, to defer
payment of some or all of such amounts until such time
as the Participant attains Normal Retirement Age.
10.1 Retirement:
In the event of early, normal or late retirement,
the amount credited to the Participant's book
aceount shall be distributed to them in any one
or more of the methods stated in Section 11.
. 10.2 Termination of Employment:
In the event of the Participant's termination of
employment with the Employer all amounts credited
to the Participant's book account shall be
distributed to them in any one or more of the
methods as stated in Section 11.
10.3 Disability:
In the event of termination of employment by
reason of disability distribution of all amounts
in the Participant's book account shall be
distributed to them in any one or more of the
methods as stated in Section 11.
10.4 Death:
In the event of the death of the Participant
prior to the commencement of distribution, all
amounts credited to his/her book account shall be
distributed to the named beneficiary(ies) or
estate. In the event death, beneficiary may, at
that time, elect distribution by all methods
which were available to Participant. The only
exception is that a non-spousal beneficiary must
take distribution over a period not to exceed
fifteen (15) years.
SECTION 11. METHOD OF DISTRIBOTION:
11.1 All funds credited to a Participant's book
account shall be distributed to them or their
beneficiary in the case of Death Benefits by any
one or more of the following methods:
11.1a. In a lump sum.
11.1b. In monthly, quarterly, semi-annual
or annual installments for a fixed
number of years, not to exceed the
life expectancy of the Participant,
or Participant and his/her spouse.
Life expectancy shall be determined
by the funding agency based on the
date the initial distribution shall
begin.
11.1c. A life annuity purchased by the
Employer.
11.2 Upon request of a Participant, the Employer may
allow commencement of distribution of the
Participant's book account to be delayed not
Q~@~ ~ays after the end of the
calendar year in which the Participant retires.
SECTION 12. EMERGENCY WITHDRAWALS:
If a Participant is faced with an emergency, the
Participant may apply to the Employer for withdrawal
from the Plan prior to retirement or other termination
of the Participant's service with the Employer. Such
withdrawals shall be permitted, in the Employer's
discretion, only in circumstances of severe emergencies
which are beyond the Participant's control, which would
cause the Participant great financial hardship if early
withdrawal were not permitted and which are otherwise
within the meaning of the term "unforeseeable
emergency" as defined in Section 457~b)(5) of the Code,
and as interpreted by such regulations as may be
promulgated by the Secretary of the Treasury.
SECTION 13. TRANSFERS:
13.1 The Employer shall accept funds from other
eligible State Deferred Compensation Plans
established pursuant to Section 457 of the Code
to be transferred and added to the Participant's
book account within the Plan provided that all of
the following conditions exist:
13.1 a. The funds so transferred were deferred
by the Participant from Compensation
while employed by a political
subdivision located in the State of
California and;
13•2 b. The funds so transferred are from a plan
that provides that if the Participant
separates from services in order to
accept employment with another political
subdivision located in the State of
California, payout will not commence
upon separation from service, regardless
of any other provision of the plan, and
amounts previously deferred will
automatically be transferred.
13•2 Amounts deferred by a former Participant shall be
transferred to another eligible plan of which the
former Participant has become a participant
provided that the other plan is sponsored by an
entity within the same State as the Employer and
the plan receiving such amounts provides for the
acceptance of the amounts.
13•3 Regardless of any other provision of the Plan, if
the Participant separates from service with the
Employer in order to accept employment with
another political subdivision located in the
~~~~@ @~ ~~~~~~~~~~s ~a~out ~ill not commence
upon separation from service and amounts
previously deferred will automatically be
transferred.
SECTION 14. EMPLOYER PARTICIPATION:
Notwithstanding any other provision of this Plan, the
~ Employer may, by means of additional deposits in any
Deferred Compensation Plan fund or otherwise, provide
for additional Deferred Compensation for the services
rendered by any Employee to the Employer during any
year, but is subject to the limitations in Section 5.2.
SECTION 15. NON-ASSIGNABILITY CLAUSE:
It is agreed that neither the Participant nor his/her
beneficiary, nor any other designee, shall have any
right to commute, sell, assign, transfer, or otherwise
convey the right to receive any payments hereunder,
which payments and right thereto are expressly declared
to be non-assignable and non-transferable, and in the
event of any attempted assignment or transfer, the
Employer shall have no further liability hereunder nor
shall any payments be transferable by operation of law
in event of bankruptcy or insolvency, except to the
extent otherwise provided by law, notwithstanding the
above clause.
SECTION 16. COMMUNICATION:
Any notice, filing or communication directed to the
Employer shall be mailed or delivered to the following
address:
City of Cupertino Deferred Compensation Plan
10300 Torre Avenue
Cupertino, California 95014
Any notice or communication directed to any Participant
shall be mailed or delivered to the address provided in
his Participation Agreement.
SECTION 17. AMENDMENT OR TERMINATION OF PLAN:
The Employer may, at any time, terminate this Plan for
all Participants. Upon such termination, each
Participant in the Plan will be deemed to have revoked
his/her Participation Agreement as of the date of such
termination.
The Employer may also amend the provisions of this Plan
at any time; provided, however, that no amendment shall
affect the rights of the Participants or their
beneficiaries to the receipt of payment of benefits, to
the extent of any compensation deferred at the time of
the amendment as adjusted for income attributable to
such Deferred Compensation prior to and subsequent to
the amendment.
This Plan is intended to qualify as an eligible State
Deferred Compensation Plan under Section 457 of the
Code, and sh`all be interpreted and administered in a
' manner consistent with such qualification. The
Employer reserves the right to amend the Plan to the
extent that may be necessary to conform the Plan to the
requirements of Section 457 of the Code and any other
applicable law, regulation or ruling, including
amendments that are retroactive to the effective date
of the Plan. In the event that the Plan is deemed by
the Internal Revenue Service to be administered in a
manner ineonsistent with Section 457 of the Code, the
Employer shall correct such administration within the
period provided in Section 457~b) of the Code. The
Employer reserves the right to take such action and do
such things as are required to make the Plan, as
administered, consistent with Section 457 of the Code.
The Employer hereby establishes this Deferred
Compensation Plan on the terms and conditions set forth
herein.
~
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DATE: ? 1 3 BY:
,
~ity Manager
BY: /f`., ~~f
f ~i ri,~/ ~~li-~
Citiy Clerk
APPR011ED AS,,3~~ ORMc
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" ity Attorney