CC Resolution No. 6455 . , ~ ~
RESOLUTiON N0. 645~
A RESOLUTLON OF 'ftt~ CITY COUNCiL OF THE CLTY OF CUPERTINO
AAfENDiNG R1:SOLUTION N0. 4082
' The City Council of the Ci[y of Cupertino resolves [hat Resolu[ion
, No. 4082 is amended per attached Exhibit "A".
Passed and adopted at a regular meeting of the City Council of
' the City o[ Cupertino [his 4th ~ay o~ February , 1985 by [he
following vote:
I
, VoCe Members of the C1C~Council
I' ' AYES: Catto, Plungy, Etogcrs, 5parks, Jol~nson
NOES: I~one
I', ABSENT: ;1one
' ABS'fAiN: Nonc
ATTEST: APPROVED:
~
f /
G
. a ~ -
t lerk or, ity oE Cupertino
\
I
; ' • • • liXBLBl'f ~~A~~
RESOLU'PIOi~ K0. G455
' A RESOLUTIUN UF TIIG C1TY COUNCIL OF THE C1TY 0[' CUPERTINO
MiGNUING RESOLUTION ~~0. 4082
1'he Ci[y Councll of tl~e City uf Cupertlno resalves thal Resolulion No. 4082
is amended as follows:
SECT tON i . NM1E:
The name of Che Plan is City of Cupcrttno Ueferred Cumpensation
Plan hereinaf[er referred to as the "Plan".
5EC'1'ION "l. PURPOSE:
I
, The primary purpose of [he Plan is Co attract and hold personnel
' by permitting Chem to enter into agrcements with the City of
, Cupertino Deferred Compensation Plan which will provide future pay-
ments in licu of deferred current income upon death, dLsabilLty,
' retirement, or other termina[ion of employmen[. The Plan Ls
intended to qu~lify as an eligiblc StaCe Deferred CompenaatLon Plan
within the mcaning oC SecCion 457 of the Lnternal Revenue Code of
1954, as amended (hereinafter reEcrred to as thc "Code").
SECTION 3. UGFINIT'IONS:
For the purposes of [his Plan, cer[ain words or phrases used heceln
will have the tolluwing meanings:
3.1 "Employer" shnll mcan [I~c City uf Cupcrtinu.
3.2 "Bmplayee" shnll mcan a manatiemen[, supervisary or oCher full-
timc or perm:mcnt part-CIme employcc, Citv Council member or
City Aclurney uf the Empluycr who h:is been designatcd by thc
Employer.
3.3 "Participant" tihall mean an empluyee who h:~s elected to par[i-
cipate in [he Plan. Only individuals who perform service for
the F,mployer may be participants.
3.4 "Par[lr.ipation Agreement" sh;~l] mean the agrecmcnt executed :md
filed by an Emp]oyee with the I:mployer pursunnt to Section 4,
in whlch the Employee elects tu become a participanC in the
Pl:~n.
3.5 "Comp~nsatton" shall mcan the salary of wages which would bc
pald by the limploycr to or for the benefit of an employee (tf
they were not a Par[Icipant in the Plan) for actual services
performed by the timployee.
. . • ~
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. Aceordingly, a
Participant's includible 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 911 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 Partieipant
to engage in his/her usual occupation by reason
~ of a medically determinable physical or mental
impairment as determined by the Employcr~ on the
basis of advice from a physician or physicians.
3.9 "tJormal 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 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 effeetive
after the Participant has passed the Normal
Retirement Age.
3•13 "Termination of Employment" shall mean the
~@V@P~~ae ~f tho Partioipant's employment with
the Employer prior to retirement.
. ~ •
SECTION 4, PARTICIPATION:
~+.t 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 whieh the Participation
Agreement is executed and filed with the
Employer.
u.2 The Participation Agreement shall state the
amount of Compensation to be deferred pursuant to
the Plan, which shall not exceed the amounts
'I 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
deferrais 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 effeet, 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 Exeept as provided in Seetion 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
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 ott account of
conCributions 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 reduoed
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 exeeed
the lesser of $15,Q00 or the sum of the maximum
" amount that could be deferred for such taxable
j year under Section 5.2 above (without regard to
this 5ection), plus so mueh 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 Seetion) 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.
5.4 If an individual is a Participant in more than
, one eligible State Deferred Compensatio~ Plan
, established pursuant to Seetion 457 of the Code,
the amount of Compensation deferred under this
' Plan when added to the Compensation deferred all
sueh other Plans, may not exceed the maximum
amounts set forth in Seetions 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 eredited at such times
as the Compensation would have been payable to
individual employees if they were not
Participants in the Plan.
SECTION 7. EAANINGS 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 unrestricted
assets of the Employer as ~et 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, sub,ject only to the elaims 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 eontractual obligation only and
Participants shall have no preferred or specifie
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 aceount shall be maintained for each
Participant. There shall be cr
account all amounts of Compensationedeferred 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
commenee 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 oecurs prior to the date the
Participant atta3ns (or would have attained) Normal
Retirement Age the Partieipant 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
account 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 aceount shall be
distributed to them in any one or more of the
methods as stated in Secticn 11.
10.3 Disabilitv:
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
j methods as stated in Seetion 11.
I, 10.4 Death:
II 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
exeeption is that a non-spousal beneficiary must
take distribution over a period not to exceed
fifteen (15) years.
SECTION 11. METHOD OF DISTRIBUTION:
11.1 All funds credited to a Participant's book
aceount shall be distributed to them or their
beneficiary in the case of Death Benefits by any
one or more of the following methods:
' 11.ta. In a lurop 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 detec^mined
' 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
I, Participant's book account to be delayed not
~~~te4~ ~E4~~hl ~h~ip~~+ ~(~@a duys after the end of the
calendar year fn uhich the Participant retires.
„ . • • ~
SE~TION 12. EMERGENCY 47ITHDRAWALS:
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, whieh would
cause the Participant great financial hardship if early
I, withdrawal were not permitted and which are otherwise
i within the meaning of the term "unforeseeable
I emergency" as defined in Section 457(b)(5) of the Code,
I and as interpreted by such regulations as may be
promulgated by the Seeretary of the Treasury.
SECTION 13, TRANSFERS:
13•1 The Employer shall accept funds from other
eligible 5tate 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
aecept 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 xill
automatically be transferred.
13.2 Amounts deferred by a former Partieipant 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
anothar political subdivision located in the
~~~~@ @$ @~11~'~P?~i~~ payout Mill not commenee
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 meana 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 sub,ject to the limitations in Section 5.2.
SECTION 15. NON-ASSIGNABILITY CLAUSE:
i 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 liabil3ty 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 notiQe, 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 Partieipant
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 ;,~;ch
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 ad,justed 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 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
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 inconsistent with Section 457 of the Code, the
Employer shall correet such administration within the
period provided in Section 457(b) of the Code. The
I Employer reserves the right to take such action and do
' such things as are required to make the Plan, as
i administered, consistent with Seetion 457 of the Code.
! The Employer hereby establishes this Deferred
, Compensation Plan on the terms and conditions set forth
' herein.
DATE: _ Februarv 4 1985 BY: /s/ Robert W. Quinlan
City Manager
BY: _/s/ Dorothy Cornelius
City Clerk
APPROVED AS ,~b~FORMa
' ~ j~// ~i?~' %3
~r
` ity Attorney