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CC Resolution No. 5962 RESOLUTIOtd TIO. 5962 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO AMENDIPIG THE CITY OF CUPERTINO DEFERRED COMPENSATION PLAN WHEREAS, the City as the employer has certain officers and employees rendering to it valuable services; and WHEREAS, the City is able to provide such officers and employees with certain benefits under such a Deferred Compensation Plan which assists those participating officers and employees in developing reasonable retirement security; and WHEP.EAS, the City receives benefits from said Plan by increasing its , ability to attract and retain competent personnel; and WHEREAS, the Plan document needs to be in conformity with Internal Revenue Service regulations. NOW, TH~REFOP.E, EE IT RESOLVED by the City Council of the City of Cupertino that the Cupertino Deferred Compensation Plan, attached hereto and made a part ! hereof, is hereby adopted as amended. PASSED AND ADOPTED at a regular meeting of the City Council of the City of Cupertino this 4th day of October , 1982, by the following vote: Vote riembers of the City Council AYES: Johnson, Rogers, Sparks, Gatto NOES: None ABSENT: Plungy ABSTAIN: None APPP.OVED : M ' layo , City of Cup tino ATTEST: City Clerk ~1.~~ l. 1 . NMi~: The name of the Plan is City of Cupertino Deferred 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 agreements with the City of Cupertino Deferred Compensation Plan which will provide future payments 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 Plan within the meaning of Section 457 of the Internal Revenue Code of 1954, as amended (here- inafter referred to as the "Code"). SECTION 3. DEFINITIONS: For the purposes of thi_s Plar., certain ~-erds or phrases used herein will have the following meanings: _ ' 3.1 "Employer" shall mean the City of Cupertino Deferred Compensation Plan. 3.2 "Employee" shall mean a mana~ement, supervisory or other full permanent part time, Citv Councilmember and City Attorney,employee of the Employer who has been designated by the Employer. , 3.3 "Participant" shall mean an employee who has elected to participate , in the Plan. Only individuals who perform service for the Employer r~ay be participants. 3.4 "Participation Agreement" shall Mean the agreement executed and filed by an Employee with the Employer pursuant to Section 4, in which the Employee elects to become a participant in the Plan. ~ 3.5 "Compensation" shall mean the salary or wages which would be paid by the Employer to or for the benefit of an Employee (if they were ~ not a Participant in the Plan) for actual services performed by the Employer. 3.6 "Incl_udible Compensation" shal_t mean the compensation received by an Employee for service. 3.7 "Deferred Compensation" shall mean the amount of Comoensation which the Participant and the Emp].oyer 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 usual occupation by reason of a medically determinable physi- cal 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 the first day of the calendar I month after the Participant meets the age and service requirements • for normal retirement specified in the Employer's qualified retire- ~ • ment plan. -1- 3.10 "Normal RetireMent" shall mean retirement from service with the Employer which becomes effective on the Participant's attain- ment of Normal Retirement Age. 3.11 "Early Retirement" shall mean retirement from service with the • Employer which becomes effective 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 severance of the Parti- cipant'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 part of this Compensation by executing and deliver- ing to the Employer a written Participation Agreement. At the Employer's option, there may be established one or more entry dates during the year. If such entry dates are established, each Partici- , pation Agreement shall be deemed effective as of the entry date ~ next succeeding the date on which it is executed and delivered to 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 their Participation Agreement by filing with the Employer an executed written notice of revocation for ~ that portion which they voluntarily defer. In the event revocation has been filed, no further Compensation shall be deferred tiereunder commencing as of the beginning of ttle first month that commences at ~ least thirty (30) days after such notice is delivered to the Employer, and continuing until the Employee executes and delivers a new Parti- cipation Agreement in accordance with Section 4.1. No amounts shall be payable to an employee upon revocation of their Participation Agreement unless otherwise due pursuant to Seciton 10. SECTION 5. DEFERRAL OF COMPENSATION: 5.1 For eac}i mont}i in which a Participation Agreement of an Employee is in effect, the Employer shall not pay the Employee his full com- pensation, but shall defer payment of such part of his 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 $7,500 or 25 percent of such Participant`s Compensation for such taxable year. -2- 5.3 For any one or more of a Participant's last three (3) taxable years ending before sucli 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 Section), plus so much of the maximum amount that could be deferred for all prior taxable years under Section 5.2 above ~ (without regard to this Section) as has not theretofore been • deferred. In no event may the amount of Deferred Compensation 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. 5.4 If an individual is a Participant in ~ore than one eligible State Deferred Compensation Plan established pursuant to • Section 457 of the Code, the amount of C~mpensation deferred under this Plan when added to the Compensation deferred under , all such other Plans, may not exceed the maximum amounts set forth in Sections 5.2 and 5.3 above. 5.5 In applying the limits set forth in Sections 5.2, 5.3, and 5.4 above, an amount excluded from the Participant's gross income for the taxable year under Section 403(b) of the Code shall be treated as an amount deferred under this Plan. SECTION 6. ADMINISTRATION OF THE PLAN: ~ 6.1 The ~mployer shall have full auttiority 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 cre- dited 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 fimd is established pursuant to Section 6.2, and such fund is invested atld 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 unrestricted assets of the Employer as set forth in Section 8 below. -3- 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, property, or rights shall remain solely the pro- ' perty and rights of the Employer, subject only to the claims of the Employer's general creditors, until made available to the partici- pant 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 specific 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 account a11 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 that is then offered to the general public by such investment options. SECTION 10. DISTRIBUTION OF BENEFITS: ' Distribution of benefits to each Participant shall com~ence not later than thirty (30) days after the end of the calendar year following a distribution event, providing the Participant has sub- mitted written notification to the Employer requesting distribution. 10.1 Retirement: In the event of early, normal or late retirement, the amount credited to the Participant's book account shall be distributed to them in any one or more of the methods stated in Section 11, as selected in the Participant's Participation Agreement. 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 st~all be distributed to ttiem in any one or more of the methods as stated in Section 11, as selected in the Participant's Participation Agreement. 10.3 Disability: In the event of termination of employment by reason of disability distribution of all amounts in tl~e Participant's book account , shall be distributed to them in any o•ne or more of the methods . as stated in Section 11, as selected in the Participant's Participation Agreement. -4- ~ 10.4 Death: • In the event of the death of the Participant prior to the • commencement of distribution, all amounts. credited to their book account shall be distributed to the named beneficiary(ies) ' or estate in the manner designated in the Participation Agree-- ment. In the event of death of the Participant after commencement of ~ distribution, the Employer agrees to continue to pay the re- maining balance of the Participant's book account to the named beneficiary(ies) in the same manner in which distribution of benefits were being paid to the Participant prior to their death, provided such remaining distribution does not exceed the life expectancy of the named beneficiary(ies). SECTION 11. METHOD OF DISTRIBUTION: , 11.1 At the time the Employee executes a partic.ipant Agreement, a method for distribution of benefits payable by reason of re- tirement, disability or death, must be selected. 11.2 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: 11.2A In a lump sum. i 11.2B In monthl.y, quarterly, semi-annual or annual install- ments over ttie life expectancy of the Participant, or participant and his spouse. Life expectancy shall be determined by the funding agency based on the date the initial distribution shall begin. 11.3 Upon request of a Participant, the Gmployer may allow coc~mence- ment of distribution of the participant's book account to be ' delayed not later than thirty (30) days after the end of the calendar year upon which the Participant retires. SECTION 12. EMERGENCY WITHDRAWALS: If a Parti.cipant is faced with an er.ter~ency, t}le Participant may apply to the Empl.oyer for withdrawal from the Plan prior to retire- ment or other termination of t}ie Participant's service witt~ the Employer. Such withdrawals shall be ~~ermitted, in the Employer's discretion, only in circumstances of. limited emergencies wtiich are beyond the Participant's control, which would cause the Participant great financial hardship if early withdrawal were not permitted and which are ot}~erwise within the meaning of the term "unforeseeable emergency" as used in Section 457(b) (S) of the Code, and as inter- preted by such regulations as may be promulgated by the Secretary of the Treasury. -S- r~ ~ SECTION 13. TRANSFERS: _ - 13.1 Upon request of a Participant, the Employer may allow funds from other eligible State Deferred Compensation Plans estab- lished pursuant to Section 457 of the Code and/or Tax Sheltered ~ Annunities established pursuant to Section 403(b) of the Code to be added to the participant's book account within the Plan provided that all of the following conditions exist: 13.1A The funds so transferred were deferred by the Partici- pant from Compensation while employed by a political subdivision residing in the same State as the Employer, and; 13.1B The funds so transferred constitute the full amount of the participant's interest in such Plan, and; 13.1C The Participant has not constructively or otherwise received di-stribution of benefits from such Plan, ex- cluding emergency withdrawal. SECTION 14. EMPLOYER PARTICIPATION: Notwithstanding any other provision of this Plan, ttie 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. SECTION 15. NON-ASSIGNABILITY CLAUSE: It is agreed that neither t"he Participant nor his 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 oper- ation of law in event of bankruptcy or insolvency, except to the extent otherwise provided by law, notwithstanding the above clause. SECTION 16. COPIl~IUNICATION: Any notice, filing or communication directed to the Employer shall be mail.ed or delivered to the following address: City of Cupertino Deferred Compensation Fund 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. - 6- - ~ SECTION 17. AMENDMENT OR TERNdINATION OF PLAN: The Employer may, at any time, terminate this Plan for all Parti- ~ cipants. Upon such termination, each Participant in the Plan will . be deemed to have revoked his 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 pay- ment 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 amend- ment. This Plan is intended to qualify as an eligible State Deferred Compensation Plan under Section 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 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 amend~ents that are retro- active 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 inconsistent 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 P1an on the terms and conditions set for herein. DATE : /D - Z BY : • • ~ a r ty o Cuper no BY : Ci erk APPROVE AS FORM• ~ ~ ega Coun~e~ ) -7-