CC Resolution No. 8051 (2)�A
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RESOLUTION NO. 8051
RESOLUTION OF i CITY COUNCIL OF i OF -E-TIN•
XMORIZING EXECUTION OF ER • D COMPENSATION PLAN Ad- MICI
WMH GREAT EI-
WHEREAS, the City of Cupertino, pursuant to and in campliance with
Internal Revenue Code Section 457, has established a Deferred Compensation
Plan; and
WHEREAS, the City of Cupertino desires to utilize Great Western in the
performance of certain services in connection with the administration of
the Plan; and
WHEREAS, Great Western desires to provide such services subject to the
terms and conditions set forth in the Deferred Ccmpensation Plan
Agreement, attached hereto and made part hereof; and
WHEREAS, said agreement has been presented to the City Council; and
said agreement having been approved by the City Manager and the City
Attorney;
NOW, THEREFORE, BE IT RESOLVED, that the City Manager and the City
Clerk are hereby authorized to execute the agreement herein referred to in
behalf of the City of Cupertino.
PASSED AND ADOPTED 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 City Council
AYES: Goldman, Koppel, Szabo, Rogers
NOES: None
ASSENT: Sorensen
ABSTAIN: None
ATTEST:
/s/ Roberta A. Wolfe
Deputy City Clerk
APPROVED:
THIS IS TO CERTIFY THAT THE WITHIN
INSTRUMENT IS ATRUE AND CORRECT COPY
OF THE ORIGINAL ON FILE IN THIS OFFICE.
ATTEST .. , '2i L
A 19 y'0
CITY CL K OF THE C1 4Y OF CUPERTINO
/s/ Barbara A. Rogers
Mayor, City of Cupertino
CITY CLERK
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This Agreement is effective this 1st day of March, 1990, by and between GREAT
WESTERN BANK, a Federal Savings Bank, hereinafter referred to as GREAT WESTERN,
and the QTY OF CUPERTIlaD hereinafter referred to as AGENCY.
WHEREAS, AGENCY, pursuant to and in ccnpliance with Internal Revenue Code
Section 457, has established a Deferred Cation Plan, hereinafter referred
to as PIAN; and
WHEREAS, AGENCY desires to utilize GREAT WESTERN in the performance of certain
services in connection with the administration of the PLAN; and
WHEREAS, GREAT WESTERN desires to provide such services subject to the terms
and conditions set forth herein;
Now therefore, AGENCY and GREAT WESTERN agree as follows:
1. TERM: This Agreement shall remain in effect for a period of five years
from the effective date hereof, and shall not be terminated prior to that
time except for "Cause" as that term is hereinafter defined. For purposes
of this Agreement, the term "Cause" shall mean the failure of either party
to perform any or all of its obligations as defined herein. The
non - defaulting party shall give the defaulting party written notice which
shalli- specify the particulars of the default. If such default is not cured
within sixty (60) days fr n the end of the month in which notice of
default is given, the non - defaulting party may terminate the Agreement
effective thirty (30) days after the end of the sixty (60) day period.
For purposes of this Agreement, "Contract Year" shall mean the period of
time between the effective date of the Contract, and 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 end
on the last day of a calendar month.
2. TERMINATION: Upon the effective date of termination of this Agreement,
other than for Cause as defined above, the following shall occur:
a. GREAT WESTERN shall issue reports to AGENCY detailing the status of
PLAN assets no later than twenty (20) business days after the end of
the month in which termination becomes effective.
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b. AGENCY may request liquidation and withdrawal of PLAN assets. If
termination is for Cause, GREAT WESTERN shall disburse those
funds deposited in GREAT WESTERN, not subject to penalty for
early withdrawal, within thirty (30) days of the effective date
of termination. Funds deposited in GREAT WESTERN, subject to
penalty for early withdrawal, shall be disbursed according to
written instructions fran AGENCY. Funds invested in mutual funds
or annuity products shall be disbursed as mutually agreed in
writing by AGENCY and GRFAT WEMW.
If termination is due to non - renewal of this Agreement, GREAT
WESTERN shall disburse those funds deposited in Great Western
Savings, not subject to penalty for early withdrawal, within
ninety (90) days of the effective date of termination. 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 Fund Shares shall be disbursed as mutually
agreed in writing by AGENCY and GREAT WESTERN. This clause shall
not serve to affect normal distributions to participants pursuant
to PLAN.
3. AGENCY agrees to:
a. Cause appropriate deductions to be made from such payroll(s) as
may be applicable.
b. Send by check or wire transfer the amount of the total
deductions to :
Great Western Bank
Deferred Coapensation Department
P.O. Box 6350
Northridge, California 91328
or to such other facility or in such other manner as may be
mutually agreed upon between GREAT WES'T'ERN and AGENCY.
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C. Provide, in such form as agreed upon by AGENCY and GREAT WESTERN, a
deferral listing with respect to participant sub - accounts to include
not less than the following:
1. Name of Participant
2. Social Security Number of participant
3. Amount to be credited to participant's
sub - accounts)
IM, ,15.14 - - -T _ •
d. Establish a sub- account for each participant.
e. Credit the amounts sent by AGENCY to the sub - accounts) of the various
participants and to selected investment vehicles in accordance with
the latest written instructions on file with GREAT WESTERN.
f. Funds invested in the option described herein as "GWBIA" will accrue
interest as of the date of receipt by GREAT WES'T'ERN.
g. Place mutual fund orders, if applicable, within three (3) business
days of the receipt of both, a deferral listing and check, in
accordance with the latest written instructions on file with GREAT
WESTERN.
4. RECORD FEEPTNG AND REPORTS: GREAT WESTERN agrees to furnish AGENCY, no
later than twenty (20) days following the end of each month and each
quarter a report regarding the status of the PLAN containing the following
information:
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 during the period
e. Withdrawals from each sub - account during the period
f. Interest /Earnings credited to each sub - account during the period
g. Total value of each sub- account
h. Summary totals of the PIAN
NOTE: Annuity transactions will not appear on the monthly /quarterly reports
and quarterly statements issued by Great Western. The AGENCY and
participants will receive quarterly reports and statements from the
insurance company.
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GREAT WESTERN agrees to provide quarterly statements to participants in the
PLAN, no later than twenty (20) days following the end of each calendar
quarter. Each statement shall identify the transactions which have occurred in
the participant's sub- account at the beginning and the end of the preceding
fie'
GREAT WESTERN agrees to maintain the records necessary to produce the above
mentioned reports, and agrees that all records shall be the property of AGENCY
and that, in the event this Agreement is terminated for any reason, GREAT
WESTERN will provide AGENCY a copy of such records, in hard cagy or such other
form as mutually agreed upon between GREAT WESTERN and AGENCY, within ninety
(90) days after the effective date of termination. AGENCY agrees that all
related computer tapes, discs and programs shall remain the property of GREAT
WESTERN.
GREAT WESTERN agrees that all information supplied to and all work processed or
completed by GREAT WESTERN shall be held to be confidential and will not be
disclosed to anyone other than AGENCY except as required by law.
5. DISTRIBUTIONS: Upon receipt of authorized written instructions from
AGENCY, in such form and with such authorization as mutually agreed upon by
GREAT WESTERN and AGENCY, GREAT WESTERN agrees to process the payment of
benefits to participants and beneficiaries in accordance with PLAN.
Distributions shall be made once a month, on the seventh (7th) calendar 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 WES'T'ERN, at its operations office
in Northridge, on and after the sixteenth (16th) calendar day of a month
will be processed the following month. If applicable, the distribution of
funds resulting from the liquidation of mutual fund shares will be made on
the next distribution date which falls at least five (5) business days
after the receipt of such funds by GREAT WESTERN. The above
notwithstanding, GREAT WESTERN will cooperate with AGENCY to not
unreasonably delay distribution requests in conjunction with "emergency
withdrawals", as defined in the PLAN.
GREAT WESTEIV agrees to withhold appropriate Federal and State incc¢ne
taxes, according to instructions set forth on form W -4 completed by the
participant, to remit such withholdings to proper taxing authorities, and
to issue net funds to participant(s) or beneficiary(ies) in accordance with
instructions on the Distribution Request Form. GREAT WESTERN agrees to
perform required monthly, quarterly and annual reporting of withholdings to
appropriate taxing authorities. GREAT WET agrees to issue appropriate
annual wage and tax statements to those participants and beneficiaries who
received distribution(s) during the preceding year and to retain a copy of
such information 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.
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6. INVES'IIMEffT VESIICLFS: GREAT WES"P W agrees to provide the herein described
services for AGENCY with the following investment vehicles.
A. Great Western Bank Indexed Account (nGWBIAn).
The investment vehicle identified as GWBIA shall be savings accounts
with GREAT WESTERN. Each such account shall be subject to rules,
regulations and statutes to which GREAT WESTERN is subject, as
prawlgated by the Federal Home Loan Bank Board (F[MBB), the Federal
Deposit Insurance Corporation (FDIC) and other such regulatory
authorities.
GREAT WE MIM agrees to accept PLAN funds for investment in GWBIA. PLAN
funds will earn interest by whichever of the following methods results in
the highest rate payable:
(1) The rate of interest for all funds received during the term of the
contract shall yield the over- the - counter annualized yield quotation
for the five year United States Government Treasury Note, determined
by reference to representative yields reported in the Wall Street
Journal on the last business day of each calendar quarter. This
effective annualized yield will be guaranteed for the succeeding
calendar quarter regardless of any subsequent change in the five year
United States Treasury Note yield.
The current rate /yield is: Rate 7.56 $ Yield 7.94 $
(T.B.D.)
(2) Such other yield as declared by Great Western and 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, and will be automatically reinvested
to allow for monthly ccnpounding.
Great Western will also make available one and two year certificates
of deposit (CD) whose yields are indexed to representative, effective
annual yield on one and two year United States Government Treasury
Notes. For example, a one year CD will have yield indexed to the one
year Treasury Note; a two year CD will have a yield indexed to the two
year treasury Note.
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In either case, the effective annualized yields for the one and two
year Treasury Notes will be determined by reference to representative
yields reported in the Wall Street Journal on the last business day of
the calendar quarter. This yield will became the effective annualized
yield of the GWBCD for the following Quarter.
Interest will accrue daily, using the 365 /360 day method, will be
credited monthly, on the last day of the month, and will be
automatically reinvested to allow for monthly cm pounding.
Other guidelines are as follows:
1. One Year CD: $10,000 minim= deposit, 90 day interest penalty for
early liquidation (separation from service or hardship excluded)
2. Two Year CD: $10,000 minimum 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 funds invested in the GWBIA or GWBCD options are backed by the
full faith and credit of the U.S. Government and are also insured by
the Federal Deposit Insurance Corporation, an agency of the Federal
Government, up to $100,000 per participant. Great Western will
eollateralize any amounts invested in the GWBIA in excess of FDIC
insurance limits by depositing first deeds of trust on suitable
residential property (i.e. one to four unit) with the Federal Harm
Loan Bank in San Francisco. The unpaid outstanding principal balance
of the collateral is adjusted quarterly, and shall in the aggregate,
at all times equal or exceed one hundred fifty percent (150 %) of the
amount of plan funds invested in the GWBIA in excess of FDIC limits.
GIC's are a contractual arrangement with an insurance carnpany that are
very similar to bank certificates of deposit. GIC's guarantee a
specific rate of return on invested funds over the life of the
contract, with the insurance ecapany assuming all of the market
credit, and interest rate risks on the underlying investments. The
GIC's in the Great Western deferred carqDensation program are
underwritten by Metropolitan Life Insurance Company, the third largest
life insurance ccnpany in the world. Metropolitan GIC's have one
(calendar) year deposit "windows ", with three (3) year interest rate
guarantees.
10
ale: All funds deposited in (calendar year) 1990 will be
guaranteed a rate of interest through 1992 (1990, 1991,
1992); all funds deposited in 1991 will be guaranteed a
rate of interest through 1993. etc.
Principal and interest are guaranteed for the life of the contract by
Metropolitan.
The rate /yield on all funds received in calendar year 1990 is:
Rate 7.79% Yield 8.10%. The rate /yield on these funds is
guaranteed through 1992.
Other guidelines are as follows:
1. For the 1990 deposit window, lump stun transfers of previously
deferred and invested funds will be accepted only through
February, 1990. New deferrals may be allocated to the CIG at any
time.
2. Funds invested in the GIC may not be transferred (before
maturity) to other investment options for any reason.
3. Funds invested in the GIC may be paid to participants, without
interest penalties, surrender charges, or account value
reductions of any kind, for distribution events, hardship
withdrawals, or plan-to-plan transfers (where permitted).
Other investment vehicles which will be provided to the PLAN are
described on the attached Schedule 1.
(1) If applicable, PIAN funds invested in mutual fund options will
utilize Great Western Financial Securities Corporation, a wholly
owned subsidiary of Great Western Financial Corporation, as the
Broker /Dealer for such transactions.
(2) If applicable, Single Premium Immediate Annuities and other
annuity products purchased by AGENCY pursuant to PLAN will be
issued and guaranteed by Great Western Insurance Company, a
wholly awned subsidiary of Great Western Financial Corporation,
or such other life insurance company selected by Great Western.
(3) Certain investment vehicles may impose sales charges. These
sales charges will be disclosed in the prospectus or insurance
contract, whichever is applicable.
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(4) GREAT WESTERN may, from time to time, offer to perform the herein
described services for additional and/or alternate investment
vehicles upon written agreement between GREAT WESTERN and AGENCY.
7. ENROLMENT SERVICES: GREAT WESTERN agrees to process, or arrange to have
processed, the enrollment of eligible employees who elect to participate in
material pursuant to the PLAN 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 conduct, or arrange to have conducted, group
presentations periodically for employees of AGENCY, to explain the PLAN.
AGENCY agrees to facilitate the scheduling of such presentations and to
provide facilities at which satisfactory attendance can be expected. GREAT
WESTERN agrees that qualified personnel will be made available periodically
to discuss the PLAN with individual employees of AGENCY.
8. COMPARABLE PLANS: Great Western agrees that the products, rates and
services proposed for the PLAN are not less than what is currently provided
for any public employee deferred compensation program. Should Great
Western offer any improvement in product or interest rates on indexes to
other Deferred Compensation Plans within the State of California or
additional ancillary benefits during the term of this agreement, or any
extensions thereof, that Great Western will automatically offer said
improvements or ancillary benefits to Agency prospectively fram the date
same is offered to other Deferred Compensation Plans. Great Western shall
have the affirmative duty to notify Agency in writing of any such
improvement or ancillary benefits.
9. TITLE AND OWNERSHIP: AGENCY shall at all times be the unrestricted owner
of all PLAN assets, in accordance with IRC 47 provisions. GREAT WESTERN
shall inform the AGENCY of changes in the IRS code and,/or regulations and
requirements which could affect the AGENCY's Deferred Compensation Plan.
We will assist the AGENCY in the implementation of changes or amendments to
its Deferred CmTpensation Plan Document.
10. PRIVITY OF OONTRACT: GREAT WESTERN shall have no privity of contract with
PLAN participants. GREAT WESTERN agrees not to accept or honor
instructions which may be submitted by participants without written
authorization from AGENCY.
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11. FEES AND EXPENSES: GREAT WESTERN, in consideration of its services under
the Plan, shall receive an annual administration fee of Eight (8) dollars
for the first and second years of the contract, Nine (9) dollars for the
third and fourth years of the contract and Ten (10) dollars for the fifth
year of the contract. GREAT WESTERN will deduct the administration fee
from each Participant's sub- aocouult in four equal installments at the end
of each calendar quarter. GREAT WESTERN will requires each participant to
maintain a cash balance in the GWBIA sufficient to cover administration
fees.
Other than at the termination of the Agreement, if a Participant transfers
their account, (leaving 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 amount of twenty -five dollars
($25.00) will be assessed. Such fee to be deducted from the Participant's
account prior to transfer of funds.
12. TRANSFERS:
A. From the GWBIA To Other Great Western Investment Options
GREAT WESTERN will allow the transfer of funds in participant
sub- accounts from the GWBIA to other investment options provided in
the plan Agreement.
Such transfer will be allowed only upon express written agreement
between AGENCY, GREAT WESTERN and the applicable investment option and
will be allowed throughout the term of this Agreement. Funds will be
transferred from 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, California.
b. From Other Great Western Investment Options to GWBIA
GREAT WESTERN will allow the transfer of funds in participant
sub- accounts from other GREAT WESTERN investment options provided in
the plan Agreement, (i.e. mutual funds and annuities) to the GWBIA.
Such transfers will be allowed only upon express written agreement
between AGENCY, GREAT WESTERN and the applicable investment option and
will be allowed throughout the term of this Agreement. The 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, California. If a transfer involves the liquidation of
mutual fund shares, the proceeds from the sale of said mutual mind
shares, will be credited to the GWBIA upon receipt of the funds by
GREAT WESTERN from the investment many.
C. Fran Great Western to Other Investment Providers
GREAT WESTERN will allow the transfer of funds in participant
sub - accounts to other investment providers. Such transfers will be
allowed only upon express written agreement between AGENCY and GREAT
WESTERN and will be allowed throughout the term of this Agreement.
Transfers will be processed in accordance with the provisions of
number 10. (Fees and Expenses) and ll.a. and/or b.
13. CIRCUMSTANCES EXCUSING PERFORMANCE: The performance by the parties to this
Agreement is subject to force maj eure and is excused by fires, power
failures, strikes, acts of God, restrictions imposed by government, or
delays beyond the delayed party's control. Failures of or defaults by
investment vehicles other than GREAT WESTERN shall excuse performance by
GREAT WESTERN thereby prevented.
14. INDEMNIFICATION: Notwithstanding any other provision herein to the
contrary, GREAT WESTERN agrees to be solely responsible to AGENCY for any
and all services performed by GREAT WESTERN or its employees under this
Agreement. GREAT WET 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 assignment
shall relieve any party to this Agreement of any duties or responsibilities
herein.
16. PARTIES BOUND: This Agreement and the provisions thereof shall be binding
upon and shall inure to the benefit of the successors and assigns of the
respective parties.
17. APPLICABLE LAW: This Agreement shall be construed in accordance with the
laws operating within the State of California. As such, this agreement
must be signed by the Treasurer of the Agency.
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18. UNLAWFUL PROVISIONS: 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 remaining parts of the Agreement, but the same shall be
construed and enforced as if said illegal or invalid provision had never
been inserted herein. Notwithstanding anything contained herein to the
contrary, no party to this Agreement will be required to perform or render
any services hereunder, the performance or rendition of which would be in
violation of any laws relating thereto.
19. MODIFICATION: This writing is intended both as the final expression of the
Agreement between the parties hereto with respect to the included terms and
as a complete and exclusive statement of the terms of the Agreement,
pursuant to California Code of Civil Procedures Section 1856 or its
successor(s). No modification of this Agreement shall be effective unless
and until such modification is evidenced by a writing signed by both
parties.
20. NOTICE'S: All notices and demand to be given under 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 wham a demand is being made,
at the respective addresses set forth in this Agreement 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 Agency.
If to GREAT WESTERN GREAT WESTERN BANK
Deferred Cmpensation
P.O. Box 6350
Northridge, California
If to AGENCY CITY OF C UPE RTINO
10300 Torre Avenue
Cupertino, CA 95014
Attn: Donald Brown
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91328
IN WI'ISS VMMF, the parties hereto have executed this Agreement effective
on the date first above written.
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Pursuant to Section 6 of this Agreement, other investment vehicles available
under this Agreement are as follows:
Investment Ccpany of America (ICA)
Growth Fund of America (GFA)
Bond Fund of America (BEA)
Income Fund of America (IFA)
Select Fund
Growth Fund
Ultra Fund
Balanced Fund
Fidelity Magellan
Fidelity Equity-Income
Fidelity Freedom
Fidelity High Income
GREAT WESTERN SIERRA TRUST FUNDS
Global Money Market Fund
U.S. GoverrmLent Money Market Fund
Growth and Income Fund
U.S. Government Securities Fund
Single Premium ImTediate Annuity
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