CC Resolution No. 98-292RESOLUTION NO. 98-292
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CUPERTINO ADOPTING A DEFERRED COMPENSATION
PLAN AND TRUST/CUSTODIAL DOCUMENT
WHEREAS, the City of Cupertino (Employer) has employees currently participating in a
457 deferred compensation retirement savings plan administered by Washington Mutual
Bank; and
WHEREAS, the Employer wishes to adopt the FundSelect Specimen Plan and
Trust/Custodial Document which includes those statutory revisions made to IRC Section
457 by the Small Business Job Protection Act of 1996; and
WHEREAS, Washington Mutual Bank/FundSelect Advisers are able to administer the
deferred compensation plan for the Employer in accordance with the terms of their
respective agreements.
NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS:
1. The Employer hereby establishes the deferred compensation plan and adopts the 457
Plan and Trust/Custodial Document.
The assets of the Plan shall be held in a Trust/Custodial Fund, with the Employer
or/its designated officer serving as trust/custodian, for the exclusive benefit of the
Plan participants and their beneficiaries, and the assets shall not be diverted for any
other purpose. The Employer's beneficial ownership of Plan assets held in
Washington Mutual Bank shall be held for the further exclusive benefit of the Plan
participants and the beneficiaries.
The Employer or its designated officer is hereby authorized to execute all necessary
agreements with FundSelect Advisers, Inc. and Washington Mutual Bank incidental
to the administration of the Plan, and shall do all things necessary and proper to
implement this Resolution.
This Amended and Restated Plan and Trust/Custodial Document adopted by the
Employer hereby supersedes and replaces any prior plan.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 7th day of December, 1998 by the following vote:
VOTE MEMBERS OF THE CITY COUNCIL
AYES: BURNETT, CHANG, JAMES,
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
STATTON, DEAN
ATTEST:
City~~
APPROVED:
Ma[orT'Cityo~/penino
DEFERRED COMPENSATION PLAN
AMENDED AND RESTATED PLAN AND TRUST/CUSTODIAL DOCUMENT
Section 1. Name: The name of this Plan and Trust/Custodial Document is the City of
Cupertino Deferred Compensation Plan, hereinafter referred to as the "Plan." This Plan
is the continuation in restated form of the City of Cupertino Deferred Compensation Plan
most recently established pursuant to Resolution No. 8050.
Section 2. Purpose: The primary purpose of the Plan is to attract and retain
personnel by permitting them to enter into agreements with the Employer that will
provide for deferral of payment of a portion of their current compensation until death,
disability, retirement, termination of employment, or other events as provided herein, in
accordance with applicable provisions of State law, and Section 457 and other applicable
Sections of the Internal Revenue Code. Except as otherwise stated herein, this amended
and restated Plan shall become effective December 7, 1998.
Section 3. Definitions: For the purposes of this Plan when used and capitalized
herein the following words and phrases shall have the meanings set forth below.
3.1
"Account" means the book account maintained in accordance with Sub-
section 6.4 for the purpose of recording Deferred Compensation and
investment gains or losses allocated thereto.
3.2
"Administrator" means the service provider or providers with whom the
Employer contracts either investment, record-keeping, or other manage-
ment services for the Plan.
3.3
"Beneficiary" means the person or persons a Participant designates to
receive his interest under the Plan after the Participant's death (provided
that a married Participant may designate someone other than his spouse as
his Beneficiary only with his spouse's consent.) The designation may be
made, and may be revoked and changed, only by a written instrument
signed by the Participant, consented to by the Participant" spouse, if
necessary, and filed with the Employer prior to the participant" death, or if
no designated Beneficiary survives the Participant, his Beneficiary shall be
his spouse if he is married, or, if not, his estate.
3.4 "Code" means the Internal Revenue Code of 1986, as amended.
3.5
"Compensation" means the total of all amounts of salary or wages which
would be paid by the Employer to or for the benefit of an Employee (if he
were not a Participant in the Plan) for services performed during the
period that the Employee is a Participant, including any amounts of
Deferred Compensation that may be credited to the Participant's
Account. Compeasagon shall be taken into account at its present value and its amount
shall be det~,,~ted without regard to any community property la~ws.
3.6 "Trustee/Custodian" means a bank, trust company, financial institution, or other
legally authorized entity appointed by the Employer to have custody of asset~ in the
Investment and Tmsl/Custodial Fund.
3.7 "Delco'ed Compensation" means the amount of Compensation which the
Parti.ci. pant defers pursuant to bis Participation Agreement in accordance with the
prov~,vons of this Plan.
3.8 "Disability~ means the inability ora Partidpant to engage in his usual occupation
by reason of& medically de~t'.dnable physical or mental impairment as determined by the
Employer on the basis of advice from a physician or physicians.
3.9 "Election ~ means the 5g-day period ~ separation from service with the
Employcr during which a Participant may elect to defer commencement of henefit
3.10 "~ploy~" rae~ any otTaeer, employee or elected o~d~l of the Employer;
including all extra-help or temporary employee~ and/or any independent contractor
employee who bas been designated by the Employer for particip~on in the Plan.
3.11 "Employer" meansthe City of Cupertino
Employer Contnbut~on means the eontnbuuon made by the Employer pursuant
to Subsection 5.2 of the Plan.
3.13 "Employment Period" means a period from January 1 through December 31 of the
same year, except that the first Employment Period of an Employee hired on any date
other than Jan,,,ry I shall be the pvaiod beginning with the date of employment and ending
on December 31 of the same year.
3.14 "In ' ' ......
dudible Compensauon means Compeo=u~on which (taking into account the
provisions of the Code, including Section 403(b) and $eetion 457) is currently includible
in gross income for f'edenfl income tax proposes.
3.15 "Investment and Trust/Custodial Fund" means a fund established by the Employer
as a convenient method of setting aside at portion of its a.ssets to meet its obligattions undew
the Plan, as provided in Subsection 6. I.
3.16 'Normal Retirement Age" means the date a Participant attaias age 70-112 or, at
the election of the Pardcipent. any earlier date that is no earlier than the earliest age at
which the Parfidpant has ~e fight to rede under the?ublic Employees '
Retirement Plan and to receive immediate retirement benefits calcuhtted without actuarial
reduction, but in any event not Inter than rite date or age at which the Participant separates
from service with the Employer. Ifa Participant is employed by the Employer beyond age
70-1/2, his Nomad Relirement Age may be the age at which he separate~ from service
with the Employer, provided that the distribution requirements of Subsection 7.5 are still
satisfied with respect to the Participant, and provided further that a Participant who has
utilized the catch.up deferral provisions of Subsection 5.3(0) may not therea/ter change
his Normal Ketirement A~e.
3.17 "Partidpant' means any Employee who fulfills the participation requirements
under Section 4.
3.18 "Participation A~reement" means the agreement exeaaed and filed by an
Employee with the Employer pursuant to Section 4, under which ~he Employee elects to
become a Participant in the Plan and to defer Compensation thereunder.
Scion 4. ~ in th__e plan
4.1 ~. Each Employee may elect to become a Participant in the Phn anti
defer payment of Compaumfion not yet e~ned by executing a written Participation
Agreement and filing it with the Employer at any time during active employment with the
Employer. Compensation sludl be deferred for any calendar month only if a Participation
Agreement providing for such deferral has been entered into and is effective before the
beginning of such month.
4.2 ~ g_fDJ~. A Parficipnfion Agreement shall remain in effect until it
is terminated or modified. A Participant may modif~ an existing Participation Agreement
to effea subsequent deferrals in accordance with rules established by the Employer. Such
modification must be filed by the Patfic~ with the Employer prior to the beginning of
the month for which the modification is to be effective.
4.3 ~ 9~'~. A Participant may terrninnte further deferral of
Compensation under the Plan effective at the beginning of any month by filing with thc
Employer an executed notice oftemlination of'his Participation Agreement prior to the
effective date of termination. Once further defemd of Compensation is terminated, n
Participant may rejoin the Plan in accordance whh rules established by the Employer. No
3
previously deferred amounts shall be payable to an Employee upon terminating further
deferral of'Compensation under the Plan unless mherwise clue pursuant to Section ?
4.4 Selection ~~ ~. The Participation Agreement shall also provide
for the selection, pursuant to Subsection 6.1t, ofune or more investment options in the
Investment and Trust/Custodial Fund to which the Panidpant's Deferred Compensalion
shall be allocated; provided that any amoums so allocated equal or exceed a minimum of
$10.00 per pay period. The employer shall invest the Participant's deferrals in accordance
with such selection.
Seaion 5. Amo~llt ltl'Deferrals: Deferral o_f~:
Employee is a Participant in the Plan, the Employer shall defer payment of such part of fiae
Participant's Compev_-~6on as is spec/fled by the Parfidpant in ',he Participation
Agreement which the Participant has execoted and filed with the Employer.
5.2 m~_~~. During ,.~,q~ Employment Period in which an Employee is
a Participant in the Plan, the Employer may make an Employer Conuibution to thc
Participant's Account equal to the percantase ofthe Participant's Compensation specified
by resokn/on or labor conu~ct approved by the Employer.
5.3 Limhsfion. The amount of Compensation wh/ch may be deferred by a Participant
and the amount of employer Contributions, if any, made to a Participant's Account are
subject to the following limitations:
(a)
~ ~. Except as provided in Paragraph (b) below, the maximum
amount that a Participant may defe~ during an Employment Period, when added to
the amount of any Employer Contrilmtion for such Participant during thc
Employment Pmiod, shall not exceed the lesser of $8,000 (or as may be adjusted
for cost-of-living by the Secretary. of the Treasury) or :311-1/3% of lbe Participant's
Includible Compensation. Thc minimum mnount that a Participant may defer is
St0.00 per pay period.
~ l~lhi!lih. For one or more of a Participant's ~ three Employment
Peal.ods evai%o bdore the Participant aitalm Normal Retirement Age, the
mammum amouni a Participant may defer during the Employment Period, when
added to the amount of any Employer Contribution for such Participant during the
Emp. loyment Period established in paragraph (a) above, plus so much of such
mammum amours det~mined under such Para~h (a) for Employment Periods
beginniu8 alter December 31, 1978 but before the current Employment Period in
which the Participant was eligible to participate in the Plan (or in another eligible
4
(c)
deferred compe~ation plan under Section 457Lb) of the Code) Ices the amount of
competlSafion ~-*ttlai]y de~ ~d under' such Paragraph (a) for such prior
Employment Periods sha~l not exceed $15,000 per ench of ~uch three Employmcn!
Periods. The provisions ofthls Paragraph Lb) shall not apply moro thaa once to
each Pmicip .
Section
~ o__fPlaus. In applying Paragraphs (a) ~nd Lb) above, thc amount that
may be deferred by a Participant under the Plan for any Employment Period shall
be reduced by (i) ~he amount deferred by the Participant for such Employment
Period under any other eligible deferred compensation plan under Section 457Lb)
ortho Code, (ii) any Employment Period under Section 403(b) of the Code, (iii)
any amount excluded from the Participa~'s gross income for such F-,mployment
Period under Section 402(aX8) or Section 402~XB) of the Code. *.'id (iv) any
amount with resp~t to wl~ch a deduction is allowable for such Employment
Period by reason of a contributicm on behalf of the Participant to a~ orga~zation
described ia Section 501(CX!8) of the Code. The Participant shall inform the
Employer of his participazion in any of the above-listed plans and is solely
responsible for any violation of this Paragraph (C).
Investmentend~Fund~:
6.1 !nvestment end ~~F_qtld. The Employer shall estabtish an Investment
and Trust/Custodial Fund for the purpose of investing amounts of Deferred Compensation
and Employer Com~'butions, if eny, credited to Participant Accounts. Such Participants
Accounts shall at all times be held by the Trustee/Custodian for the exclusive benefit of the
Participant or Bemeficiary.
(a)
~ The Trustees/Custodian shall be, at any time the duly
appointed and authorized Human Resources Manager R, esi a-i
~ . . . gn ton,
emoval and appointment of such Trusteea/Custodmn, as well as compensation and
expens~ reimbursement of the Trustees/Custodian shall also be in accordance with
appropriate legal guidelines for resignation, removal, appointment, compensation
andexpellsesof t:he C±ty of Cupert±no
Lb)
The Trustees/Custodian ortbe Ea~ployer shall adopt various investment options
for the iavesunent of deferred amounts by Participants or thek Beneficiaries, and
shall monitor and evalo~te the appropriateness of continued offering by the Plan.
The ImstcedCustodian or the Employer may de-select options that are
determined to be no longer appropriate for offering. In adopting or de-selecting
such optiom, the Trustees/Custodian or Employer, the Partidpants or the/r
Benefic'utries shall be entitled to sdect from among the available options for
5
(c)
investment of'theirdeferred amounts. In the event options are de-selected, the
Trustees/Custodian or Employer may require Particlpants to move balances to a~
alte. mafive option offered by the Plan. If any Participants fail to act in resport~ to
the written notice~ the Trustees/Custodian or employer shall transfer monies out of
th~ de-se[~,ed option to an alterative option chosen by the Trustees/Custodian or
Employer. By exercising such right to select investment options or by tailing to
respond to notice to transfer ~om a de-selected option where the
Trustess/Cnstodian or employer move the monies on behalfot'such Participants,
the Participants, and their Beneficiaries agree that none ofthe Plan fiduciaries will
be liable for any investmeat losses, or lost investmeat opportunity in situations
where monies are moved by Trustees/Custodian or Employer, thai are experienced
by a Participant or Beneficiary in the investment option(s) they select or are
selected for them if they fail to take appropriate action in regard to de-selected
fund.
~o_.fFiduciades. The Employer, Administrator andTmstens/Custodian
and the persons they designate to carry out or help cany out their duties or
respon~'bilities are fldu~ries under the Plan. Each fiduciary has only those duties
or responsibilities specifically assigned to him under the Plan or delegated to him
by another fiduciary. ~a~h fiduchry may asinine that ~ direction, information of
action o£another fiduciary is proper and need not inquire into the propriety of any
such action, direction or infonuation. Except as provided by law, no fiduciary will
be responsible for the malfeasance, misfeasance or nonfeasance of any other
flduch.,y.
(D) ~ .~&9..~L~.
0)
The Trustees/Custodian and all other fiduciaries shall discharge their duties
with respect to this Plan solely in the imerest oflhe Participants and
Beneficiaries of the Plan. Such duties shall be discharged for the exclusive
purpose of providing benefits to the Participants and Beneficiaries and
defl'aying expenses of the Plan.
(ii)
Ail fiduciaries shall discharge their duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person
acting in lii~ capacit~ and familiar with such matters would use in the
conduct of an enterprise ora like character and with like aims, and a~
defined by applicable State law.
Trustees/Custodian's Powei's and Duties. The Trustees/Custodian's powers end
duties shall be those defined under applicable State law.
6
This Plan and lnveg~ment and Trus~/Custodial Fund is L,-~ended to be exempt from
u~xation under Section 501(a) of the Internal Revenue Code ("Code") and
intended to comply with Section 457(,g) of such code. The Trast~'~/Custodian
shall be empowered to submit or designate appropriate agents to submit this Plan
and Investment and Trast~Custoai,! Fund to the Internal Revenue Service for a
determination of the eligibility of the Plan under Section 45?, and the exempt
stalus oflhe Investment and Trust/Custodial Fund under Section 50 l(a), it'the
Trustees/Custodian conclude that such a determination is desirable.
6.3. Investment !~l!i~.qt. Each Participant may allocate his Deferred COmpensation
and employer Contdbutioas, if any, among the investment options, it'any, provided under
the Plan. A Partioipant may cJmlge his investment options in _accordance with rul~
established by the Employer. Such modification may effe~ transfers of Compensation
alr,:* ~ay deferred and any Employer Contfibmions that may have already been made from
one investment option to another and/or may pros~y change the investments to
which future deferrals of Compenealion and Employer COntributions, if any, shall be
allocated, effective as soon as practicable aider the Participant makes the change.
6.4 Account. The F-,mployer shall maintain an Ac, count for each Participam to which
shall be credited any Employer Contnlmtions made for auch Participant and such
Participant's Deferred Compensation at such tim~ as it would have been payable but for
tho terms of his Participation Agreement. ~eh Participant's Account shall be revalued at
least quarterly to reflect the earnings, gains and losses creditable thereto or debitable
therefrom in accordance w/th the performance of the investment options selected by the
Participant pursuant lo Subsections 4.4, 6.2 and 6.3. The earnings, gains and losses
creditable to or debitable from an Account shall mean the a~tual earnings, gains and losses
of each investment option, on a pro rata basis among the Ar, counts of those Participants
who selected that invea'tment option.
Section 7. ~ ~f~enefi~:
7. I ~ on ~.~ from Service. Subject to the provisions of Subsection
7.5, upon a Participant's separation fxom service wi~ the Employer for any reason
(including di~bility), the entire amount credited to his Aocount (less any federal, state or
local income ~ax required ~o be withheld tl~refrom) shah be paid to him in equal monthly
installments over a period not to exceed 5 years besinning at, er the expkalion of the
Election Period; provided, however, that during such Election Period a Panidpant
(including a Participant who h~ ut~.~d the eatS.up deferral provisions of Subse~on
5.3(b) with an Account balance in exceas of an amount specified by the Employer, which
amount shall not exceed the amoum specified in Section 457(e)(9)(A) of the Code, as the
same may be adjusted from time-to-time, may irrevocably dect in writing (on a form
acceptable to the Employer) a specific later date for first receiving payment under the
Plan. In addition, a Participant may elect a different method ofpaymem as provided in
Subsection 7~, by ~ling the appropriate form with the Employer no later than ninety days
prior to the Participant's eleoted payment date. Thc Account bs!a~ce of'a Participam with
less than the amount specified by the Employer in his Account at the time of'his separation
from service shall be paid in a single lump sum to the Participant (less applicable taxes) ~s
soon as practicable following his separation from service.
A Participant who has elected a specific later date for first receiving a payment under the
Plan, as set forth above, may elect to further defer the date upon which such payment(s)
will begin. Such election to further deter payment may be made only once, to a later date,
as long as paymeats have not yet begun when such election is made.
7.2 ~ Forms .o..fBeaefit ~ Subject to the provisions ot'Secxion 7.~, as
an alterative to payment in a lump sum. a Participant whose Account balance exceeds the
amount specified by the Employer under Subsection 7.1 above, may elect to receive
payment under the Plan in the form of substantially equal monthly, quarterly, semiannual
or annual installments for a period not to exceed the life expectancy (which may be
recalculated annually) of the Participant or the joint life expecaancy of the Participant and
his Ben¢fir.~T;' provided that no single payment (other than the last scheduled payment) is
less than $I00.00. Any amount remaining in the Participant's Account at the end of'the
specified period shall be paid in a single lump sum payment. Alternatively, such a
Parlic~umt may elect an aonuily under any one of the settlement options offered in a
conun~rcial annuity contrael purcha__eed by the Employer for the purpose of providing
benefit payments for the life of the Participant or the joint lives of the Participant and his
Beneliciaty and once begun, periodic payments must be made not less frequently than
annually, in substantially non-increasing amounts.
7.3 ~ ~. Except as otherwise provided in Subsection 7.5,
distn'butions to or on beltalf of a Participant shall be made only in the event of' his
separation from service with the Employer, unless such Participant experiences an
unforeseeable emergency. 'Um%reseenble emergency" means a severe financial hardship
to the Participant resulting from (a) a sudden and unexpected illness or accident of the
Participant or a dependent of the Participant as defined in Section 152(a) of the Code, (b)
the Participant's loss of property due to casualty, or (c) other similar extraordinary and
unforeseeable cir~unstancea arising as a result of events beyond the control of the
Participant. Examples of events which may cause an "unforeseeable emergency" are
catastrophic illness, flood, fire, earthquake, death in the ~ or disabling injur/.
Withdrawals w~l not be permitted for expenditures normally budget able, such as a down
payment on a home, purdnase of an automobile, or education expenses. Withdrawal will
not be allowed to the extent that the hardship may be relieved (l) through reimbursement
or compensation by insurance or otherwise, (ii) by liquidation et'the Participant's assets
(to ~ extent such liquidation would not itself cause severe financial hardship), or (iii) by
cessauon or temporary suspension of deferrals under the Plan. Withdrawals of amounts
because of an unforeseeable emergency will be permitted only to the extent reasonably
8
n~ded to .~t!__~ the emergency. Former Employees Who have not yet r~eived
dlstr/bution oftheh' entire Account balan~s shall also be elig/bl¢ for emergency
withdrawals under the same condilions as active Participants. A Participant or former
Employee who experiences such an unforeseeable emergency may apply to the Employer
for a withdrawal which shall be permitted, in the discretion of the Employer. only to the
extent it Complies with the requirements of this Subsection 7.3. Any anaount approved
hereunder for emergency withdrawal shall be paid to the Participant in a single lump sum
(less any applicable withholding taxes). The withdrawal shall be effective at the later of
the date specified in the Participant's application or the date approved by the Employer.
7.4 Pavment,s on the Denth o__ft.t Pani__Pa~i. -_~.~l!fl!l!'
(a)
Co)
7.5
Death Afl~r~~ If the Participznt die~ after having begun to
receive illstallment payments in aec~cl~ with Section 7.2, payment of the
remainder ogsuch sdRxinled payments shall be suspeaded for a period of sixty
days after the Participant's death. During each s'mty-day suspension period, the
BendiSat~j of'such Participant may elect, subject to the distribution requirements
.of Subset/on 7.5, to receive the balance then credited to the Participant's Account
tn a single lump sum or in insts!lments as specified under Section 7.2, provided
that the Participant's Account will be disWibuted to the Benefidaty at least as
rapidly aa under the method of distriCt, ion being used prior to the Participant's
death. If no such election is made by the Beneficiary by the end of thc sixty-day
suspension period, the remaining/nstalLment paymenLs selected by the Participant
(adjusted, if necessary, to comply with the distribution requirements of Subsection
7.5) shall be paid to the Beneficiary.
Death Prior _to_ Benefit Commencement. Subject to the provisions of Section 7.5,
if the Participant dies before distribution of his Account commences, his
Beneficiary shall receive distn'butinn of such Participant's Account as provided
under Section 7.1, treating the Beneficiary as if he were the Participant; provided,
however, that if the Beneficiary elects installment payments, the Participant's entire
Account shall be distributed over a period not to exceed 15 years (or the life
expectancy oftbe Participant's surviving spouse, if such spouse is the Participant's
Beneficiary).
Provisions Remiir to Code
O)
Notwithstand/n8 any of the foregoing, distribution of a Participant's entire
.Account shall commer~co not later than April 1 following the calendar year
m which he attains age 70-1/2 or retires from service, which ever is later.
Unless the form of dism'bution is a single lump sum payment, distrilmtions
9
shall be made ovar a period not exc_e~__ing the life expectancy of the
Particlpa~t, or the joint life expec:umcy of tl~.e Pm-ti¢ipant and
Beneficiary.
(2)
ffthe Participant's entire Ar,~ount is to be distn~0uted in a form other than a
single lump sum payment, then the amount to be distributed each year musi
be at least an amount equal to the quotient obtained by dividing the
Participant's entire Account balance (determined as ofthe last valuation
d~te of the p ~r~_eding calendar year) by the life expectancy of the
Participant or (.fi'applicable) the jo'mt life expectancy of the Panic/pant and
his d~/smted Beneflcia,,y. Life expectancy and joint l/re expectancy shall
be computed by the use of the return multiples contained in Section 1.72~-9
of the Treasury Regulations.
O)
ffthc Panidpant dies aRer having begun to receive installmem payments in
accordance with Subaection 7.:2, the remaining portion of such
Participant's Account shall continue to be distribated at least as rapidly as
under the methxl of distribution being used prior to the Participant's death.
(2)
If the Participant dies before distn'bution of his Account commences, the
Participant's en~e Account shall be distributed in one of the distribution
options provided under Subsections 7.1 and 7.2 no later than December 3 I
of the calendar year which contains the fifth ara:iversary of the Participant's
denth except
(i) that ii'the beneficiary is not the Participant's spouse, and such non-
spousal beneficimy elects to commence distribution by December 31, of the
year following the year the Participant died, such non-spousal beneficiary
may elect a periodic payment not exceeding 15 years, as set forth in Sec.
7.4(b) above; or
('fi) tha~ it'the designated Beneficiary is the Participant's surviving spouse,
such spouse may elect to receive distribution of the Participant's entire
Account in substamially equal monthly, quarterly, semiannual or annual
ir~stallment payments over the life eXl~'~ancy of the surviving spouse.
Such distributions are required to commence en or before the later of(i)
December 31 of the cal~daryear immediately following the year in which
the Participant died, or ('ti) December :31 oftha calendar year in which the
Participant would have attained age 70-1/2. Ii'the spouse dies before such
payments begin, subsequent distributions shall be made as if the spouse had
been the Participant. For purposes of this subparagraph, payments will be
10
calculated by use of the return multiples spec/fled in Section 1.72-9 oFth~
Treasury Regulations.
(c) ~. Thc provisions ofth/s Subsection 7.5 shall override any
dls~/bution options in the Plan that a~e inconsistent w/th th/$ Subsection. All
distributions uadcr the Plan shall be made in ~¢cordnoce with Treasury Regulations
issued under Section 401(aXg) of the Code. The provisions of this Subsection
shall be effective as of'January I, 1989.
7.6 .Effect !Lf~ Ifa Partidpant who soparate~ from service again
becomes an Employ~ no distributions shall be made or continued to the Participant wt~ile
he is so employed. Any amounts wh/dl the Partic/pant was entitled to receive on his prior
separation from seo~ce shall be held until the Participant or his Beneficiary is again
entitled to a distribution under t~ terms of the Plan.
7.7 De~~. Notwithstanding any other provision of the PlarL if the
Participant has not deferred any amount for a 2-year period and the tolai amount of the
Participant's Account under the Plan does not exceed $5,000, a Participant may elect to
receive, or the Plan may elect to distribute without the Participant's consent, the entire
value ofthe Participant's AccoulR in a [tlmp sum distn~oution. No subsequent distribution
under this provision to such Paxticipant may be made, once such distribution occurs.
Semion 8. ~: The interest ora Participant in the contractual obligation oftbe
Employer, established by the Plan, shall not be assignable in whole or in pan, directly or by
operation of'law or otherwise, in any manner.
Section 9. lVfiscellaneous:
9. ! No Effect on ~. Neither the establishment of thc Plan nor any
modification thereof; nor the establishment of an Account, nor any agreement between the
Employer and the Custodian, nor the payment of any benefiti, shall be construed as giving
to any Participant or other pe~on any legal or equitable right against the Employer excep:
as herein provided, and in no event shall the terms of employment of the Employee or
Participant be modified or in any way affected hereby.
9.2 ~. This Plan shall be construed, administered and enforced according
to the Constitution and laws of the State of California
9.3 Plan-to-Plan Transfers. Plan-to-plan uansfers shall be permitted as follows:
(a) Tran..T~g~/from Plan. To thc extem and in the manner perrakted under Section
· 457(e)(10) of the Code and the Treasury Regulations thereunder, the balance in
the Account ora Part/c/pant who is no longer an Employee and who subsequently
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(b)
Section 10.
becomes a participant in anoflm- elil0'ble deferred cOmpeosa6on plan under Section
457(b) oF~he Code ~al! be ~ax~fe~Ted to his account in ~he plan ofh/s new
employer; provided that such plan provides for the receipt of such transferred
amounts. Ifa Participant's Account has bee~ transferred to such plan, the
Participant shall not be entitled to receive any benefit under this Plan,
notwithstanding anything in this Plan to the contrary.
Transfer~ to Ban. If prior to becoming an Employee, an individual panidpated in
another eligible deferred compensation plan under Section 457(b) of the Code, the
Employer may in ks discretion accept transfer of any amount credited to the
deferred co~fion account ofsuch F. raployee under that plan and, in the event
of such transfer, shall establish for the Employee an Account under the Plan to
which such amount shall be Ixeated as an amount deferred under and subject ~ the
!enns oftbe Plan, except that no amount so ~ansferred
tn applying the deferral limitations set forth in will be taken into account
Subsection 5. I,
10.1 ~--_..~and~. The Employer may at any time and fi-om time to
time by action of~ governing or appoiming board as evidenced by an instrument in
writing duly e~eeuted by the Employer modify, amend, suspend, or terminate the Plan in
whole or in part (in¢ludin8 retroactive amendments) or cease deferring Compensation
pursuant to the Plan for some or all Participants. In the event of such an action, the
Etnployer shah deliver to each affected Participant a notice of such modification,
amendment or termination or a notice that it shall cease deferring Compensation;
provided, however, that the Employer shall not have the fight to reduce or affect the value
of any Participant's Account or any rights accrued under the Plan prior to such
modification, amendment, termination or cessation.
10.2 ~. This Plan is intended to qualify as an eligible deferred
compensation plan under Se~ion 457 of the Code, and shall be interpreted and
administered in a manner consistent with such qualification. The Employer reserves the
right, to amend the Plan to the extent that it may be necessary to conform the Plan to the
reqmrements of Rectlon 457 of the Code and any other applicable law, regulation or
ruling, including amendments that are retroactive to the effee~ve date of the Plan. In the
event that the Plan is deemed by the Internal Reverme Service to be administered in a
manner inconsistent with Section 457 of the Code, the Employer shall correct such
administration within the period provided in Section 457 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.
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! 1. ! Adrnini~tra~g. The Plan shall be maintained by the Employer, which may
recommend rules and regulations for the administration of the Plan consistent with the
terms oftbe Plan. All rules and regulations recommended by the Employer shall be final
and conclusive upon adoption by resolution of the governing or appoint/ng Board of the
Employer.
11.2 Powers. The Employer shall have all powers to perform all duties necessary to
exercise its fimctions including, but not limited to, the:
(a) Determination of F..mployees' eli~/bility, participation and benefits under the Plan;
(b) Establishment and maintenance of written record~ showing at any time the interest
of a Participant in his book Account;
(c) Interpretation and construction of the provisions oft. he Plan;
(d) Direction of the Employer (or the Trustee/Custodian on behalf o£tbe Employer) to
make disbursement ofbendits under the Pla~;
(e) Appoir~ment of such agents, advisors, counselors and delegates including an
Administrator as may be noceraary nnd appropriate for the administration and
operation of this Plan and the delegation te such agent, advisors, counselors and
delegates ofeny of/ts discretionasy and ministerial powers and duties in
accordance wilh this Section; and
(0 Composition of any provision to Participants of all forms as described in this Plan.
11.3 ~ef~Acti°n- Any action taken by the Employer with
respect to the rights or benef~ under the Plan of any person shall be revocable by the
Employer as to payments or distributions not theretofore made pursuant to such actions
and appropriate adjustments may be made in future payments or distributions to a
Participant or Bene/iciaty to o/fset any excess payment or underpayment theretofere made
to such Participant or Bendic/aty.
Section 12. :'~]S~--~nd-P~L.~. The
the masculine pronoun shall include masculine gender shall include the feminine and neuter,
conversely, whenever appropriate, the feminine and neuter, the singular number the plural, and
13