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1981-228-Approving Revised Deferred Compensation Agreements (1) Custodian Agreement And (2) Agreement For Third Party Administrator, And Authorizing Town Manager To Execute SameRESOLUTION NO. 1981 -228 A RESOLUTION APPROVING REVISED DEFERRED COMPEN- SATION AGREEMENTS (1) CUSTODIAN AGREEMENT AND (2) AGREEMENT FOR THIRD PARTY ADMINISTRATOR, AND AUTHORIZING TOWN MANAGER TO EXECUTE SAME. BE IT RESOLVED, and it is hereby resolved that the Town Council of the Town of Los Gatos does hereby approve those revised agreements entitled (1) CUSTODIAN AGREEMENT, and (2) AGREEMENT FOR THIRD PARTY ADMINISTRATOR (copies attached hereto); and BE IT FURTHER RESOLVED that the Town Manager is hereby authorized and directed to execute said agreements on behalf of the Town of Los Gatos. PASSED AND ADOPTED AT A regular meeting of the Town Council of the Town of Los Gatos, California, held this 2 day of November 1981, by the following vote: AYES: 4 COUNCIL MEMBERS Ruth Cannon, Thomas J. Ferrito, Marlyn J. Rasmussen and Peter W. Siemens NOES: None COUNCIL MEMBERS ABSENT: COUNCIL MEMBERS Brent N. Ventura ABSTAIN: None COUNCIL MEMBERS SIGNED: NIAYOR, TOWN OE LOS GATOS ATTEST: U CLERK UP THE TOWN OF Lr OS GAL, S CUSTODIAN AGREEMENT T9V MATF 1. The date of this Agreement is THE PARTIES 2. The parties to this Agreement are THE TOWN OF LOS GATOS, a political sbudivision of the State of California, (hereinafter called the "EMPLOYER "), and CENTRAL BANK, a Cali- fornia corporation (hereinafter called "CUSTODIAN "). THE BACKGROUND 3. The background of this Agreement is as follows: 3.1 The EMPLOYER on , has adopted a Deferred Compensation Plan for its employees. 3.2 Pursuant to the terms of such Deferred Compensa- tion Plan, each participating employee will execute and file with the EMPLOYER a Participation Agreement and a Payroll Reduction Form designating the amount of the Employee's compensation which is deferred. 3.3 The amount of the employees' deferred compensation will be held by the Custodian for the account of the EMPLOYER (hereinafter called "Deferred Compensation Account ") to be invested, reinvested and paid out in accordance with the terms of the Custodian Agreement and the Deferred Compensation Plan. THE TERMS The terms of this Custodian Agreement are as follows: 4. THE EMPLOYER'S DUTIES 4.1 The EMPLOYER shall deposit with the Custodian the amount of the employees' deferred compensation in accordance with the provisions of the Payroll Reduction Agreements, the Partici- pation Agreement and the Plan; and shall have such other duties as are set forth in or necessarily incidental to this Agreement. 4.2 The EMPLOYER has selected a Plan Administrator who will be responsible for Plan design and implementation, coord- ination of all Plan functions, and for the day -to -day Plan admin- istration in accordance with the Agreement for Plan Administrator (Exhibit "A). The EMPLOYER agrees to keep the Custodian informed as to the identity of the Plan Administrator. 5. STATUS OF THE DEFERRED COMPENSATION ACCOUNT 5.1 The value of the Deferred Compensation Account maintained by the Custodian shall be the measure of a general obligation of the EMPLOYER to employees participating in the Plan. With respect to such obligation, the Employee shall be a general credit of the EMPLOYER and the Employee shall not have a vested interest in such account or have a secured or preferred position with regard to such account. 5.2 All investments in the Deferred Compensation Account shall be registered in the name of the EMPLOYER or the Custodian's nominee and shall be the sole property of the EMPLOYER until the time of discharge of the EMPLOYER'S obligation by the distribution to the Employee in accordance with the provisions of the Plan. -2- 6. CUSTODIAN'S DUTIES 6.1 Custodian will provide safekeeping for such agreements concerning, or evidences of title to, assets held hereunder as are delivered to it. 6.2 Custodian will collect income, collect proceeds of maturing or called securities, and exchange temporary security certificates for permanent security certificates. 6.3 Custodian will remit funds to investment media, and to other organizations providing investments to the EMPLOYER in accordance with instructions received from the Plan Admini- istrator. 6.4 Custodian will maintain a record of all trans- actions performed by the Custodian; and provide a monthly report thereof to the EMPLOYER and Plan Administrator. 6.5 The Custodian agrees to receive and remit all distributions of benefits directly to the participants or to an account in their names. In the performance of this function, Custodian shall receive detailed instructions from the Plan Administrator, including the amount to be paid to each participant, the amount of income taxes to be withheld and forwarded to the State and Federal Government, and any other instructions needed to disburse benefits according to the provisions of the Deferred Compensation Plan. The Plan Administrator will maintain tax records and prepare and submit necessary reports for the taxing authorities and for the participants. The Custodian shall prepare checks according to said instructions, mail or deliver them to the appropriate party, and report such transactions to -3- the Plan Administrator and the EMPLOYER as a part of the report provided for in paragraph 6.4 hereof. 6.6 Custodian shall carry out such other duties and services consistent with the purposes and intentions of this Agreement, as agreed upon between Custodian and EMPLOYER. 6.7 The Custodian may be required to execute proxies to vote shares in accordance with the instructions of the EMPLOYER. If the EMPLOYER shall desire to attend a meeting at which securities in the Employee's Deferred Compensation Account may be voted, the Custodian shall, at the EMPLOYER'S request, furnish an appropriate proxy. 6.8 Custodian agrees to distribute and credit such amounts to the appropriate investment media within six (6) days following receipt of disbursement instructions from the Plan Ad- ministrator. 7. LIABILITIES 7.1 The Custodian shall assume a fiduciary capacity to the EMPLOYER with respect to the cash and other securities from time to time in its custody, and shall exercise due diligence in carrying out its duties and functions as they are specifically enumerated under this Custodian Agreement. 7.2 The Custodian is not responsible under this Agreement to provide any investment supervision of securities held by it in its capacity as Custodian only, its duties being limited to those specifically set forth herein. The Custodian shall not be liable for any loss which may be suffered on any securities held in accounts by reason of fluctuations in market value. 8. TERMINATION 8.1 The Custodian may resign as Custodian hereunder by giving at least ninety (90) days written notice in advance to the EMPLOYER and EMPLOYER may remove the Custodian by giving at least ninety (90) days written notice in advance to the Custodian. However, the EMPLOYER agrees that prior to the effective date of such resignation or removal, which shall be stated in the notice, it will designate a successor Custodian willing to act in such capacity under this Agreement, unless the EMPLOYER will itself assume custody of the Deferred Compensation Account. The Custodian will, upon receipt of (a) evidence of the appointment of a suc- cessor Custodian, (b) written approval of the EMPLOYER, and (c) pursuant to the written instructions of the EMPLOYER, transfer to such successor Custodian, or the the EMPLOYER, the Deferred Compen- sation Account subject to the payment of any charges of the Cus- todian properly payable hereunder, whereupon all future responsi- bility or all future responsibility or liability of the Custodian with respect to the Deferred Compensation Account so transferred shall terminate. Pending such appointment of, and transfer to a successor Custodian, the Custodian will continue to hold and ad- minister the Deferred Compensation Account as provided herein, provided that the Custodian shall not be required or obligated to accept any payments of deferred compensation from the EMPLOYER beyond said ninety (90) days. 9. CUSTODIAN'S COMPENSATION 9.1 The Custodian's compensation for the services here- under shall be an annualized fee of .25 of the to of the market value of the Plans' assets. -5- Fees for custodian services shall be deducted from the Plans' assets pursuant to invoice prepared by the Plan Administrator and no charges are assessed the EMPLOYER. 10. INSURANCE 10.1 It is understood that the Custodian Bank shall maintain errors and omissions insurance in sufficient amounts to cover anticipated liabilities, however, in an amount not less than $500,000. The Custodian bank and the Administrator shall have all personnel involved in these accounts adequately bonded by fidelity bond, however, in an aggregate amount not less than $500,000. It is understood that the Custodian Bank shall be re- quired to deposit with a depository for the State of California Bank assets in sufficient quantity to satisfy the state require- ments for protecting trust assets. In addition to these insuring safeguards, the Custodian Bank shall establish a pooled account as directed by the Plan Administrator for all funds designated for investment in savings certificates and shall invest such funds in a manner to achieve the broadest insurance coverages permitted under FSLIC or FDIC regulations. 11. MISCELLANEOUS PROVISIONS 11.1 Construction, validity and administration of this Agreement shall be governed by the laws of the State of California. 11.2 This Agreement and the provisions thereof shall be binding upon the respective parties and shall inure to the benefit of the same and to their successors and assignees. Q. IN WITNESS WHEREOF, the Resolution No. of the MAr thereunto, duly authorized, has caused the name of the Employer to be affixed hereto, and the Custodian has caused its name and seal to be hereunto affixed all in quadruplicate, the day and year first above written. Approved as to form and legality -7- THE TOWN OF LOS GATOS 0 CUSTODIAN M 0 AGREEMENT FOR THIRD PARTY ADMINISTRATOR THIS AGREEMENT made and entered into this day of , 1981, by and between The Town of Los Gatos, a political subdivision of the State of California (hereinafter called EMPLOYER), and CENTRECORP FINANCIAL SERVICES, INC., 2001 Franklin Street, Suite 200, Oakland, California 94612 (hereinafter called ADMINISTRATOR): RECITALS It is the desire of the EMPLOYER to contract for the services of the ADMINISTRATOR to perform for the EMPLOYER certain functions in the im- plementation and continuing operation of The Town of Los Gatos Deferred Compensation Plan (hereinafter referred to as the "Plan ") relating to the dissemination of information to employees and the enrollment of employees in the Plan by highly qualified personnel; the collection and disbursement of monies to the appropriate funding media; the implemen- tation of accounting procedures and records for periodic reporting to the EMPLOYER and its employees; and to retain legal counsel in the drafting of amendments to the Plan and /or attendant agreements neces- sary thereto so that said documents meet applicable regulatory require- ments. 1. TERM. The respective duties and obligations of the parties hereto shall commence on the date and year first above written. 2. PERFORMANCE OF SERVICES. Subject to the approval of the EMPLOYER, the ADMINISTRATOR shall have the right to designate a repre- sentative to perform such services under this agreement as may be mutually agreed upon by the ADMINISTRATOR and the designee, assignee or subcon- tractor. Notwithstanding any other provision to the contrary, the ADMINISTRATOR agrees that it shall be solely responsible to the EMPLOYER for any and all services performed by any subcontractor, assignee, or designee under this agreement. 3. REVIEW PLANS. The ADMINISTRATOR or its designated legal counsel agrees to review the approved Plan and to prepare and submit to the EMPLOYER any amendments necessary thereto and to prepare and submit to the EMPLOYER any attendant agreements, such as joinder agreements, necessary for the implementation of the Plan. Such amendments to or agreements prepared by counsel will be prepared in accordance with the rules and regulations of the Internal Revenue Service. The ADMINISTRATOR agrees, annually, to advise the EMPLOYER of any changes in federal or state rules and regulations that may affect the validity or feasibility of the Plan. 4. INVESTMENT VEHICLES. A. The ADMINISTRATOR agrees to assist the EMPLOYER in obtaining information regarding investment alternatives which may be made available to employees participating in the Plan which shall include, but not be limited to, bank accounts, fixed and /or variable annuities, mutual funds, and /or other investments which are permissible under the provisions of the Plan. B. The ADMINISTRATOR agrees, after the EMPLOYER has selected the investment alternatives, to design the bid specifications, and after approval by the EMPLOYER to solicit investment proposals from the major prospective funding agencies on a nation -wide basis. C. The ADMINISTRATOR agrees to review, evaluate and analyze all responses received from the investment agencies and submit its find- ings and recommendations to the EMPLOYER. D. The ADMINISTRATOR agrees, at least annually, to review, analyze, and evaluate the performance and status of the selected funding media together with their deferred compensation products and report to the EMPLOYER any recommendations concerning possible improvements in the investment contracts. E. The ADMINISTRATOR agrees that it will obtain information regarding new deferred compensation investment products and inform the EMPLOYER, annually, of the feasibility of including new investment products under the Plan. 5. ENROLLMENT SERVICES. A. The ADMINISTRATOR agrees to conduct the enrollment(s) of all employees who elect to participate in the Plan. The ADMINISTRATOR agrees to design and prepare a comprehensive educational and merchan- dising program for distribution to EMPLOYER employees. The ADMINISTRATOR agrees not to distribute the program until it has been approved by the EMPLOYER. -3- B. The ADMINISTRATOR agrees to conduct group presentations and provide individual counseling for EMPLOYER employees to explain the Deferred Compensation Program. The ADMINISTRATOR agrees that all per- sonnel responsible for enrolling employees into the Deferred Compensation Plan will possess whatever licenses are required by law, both State and Federal, and be adequately bonded to protect the EMPLOYER against mal- feasance or misfeasance in the performance of their duties. The licensed personnel shall have extensive experience in selling the kinds of invest- ment vehicles offered under the Deferred Compensation Plan and shall be adequately and uniformly compensated to insure that qualified personnel are retained on a continuing basis to provide experienced financial assistance on a local basis throughout the terms of this agreement so that participants or potential participants receive personal counseling. C. The ADMINISTRATOR agrees that in performing the services provided for hereunder by itself or through a designee it will conduct itself at all times with due regard to rules and regulations of the EMPLOYER and it further agrees not to do or commit any act that will reasonably tend to degrade the EMPLOYER or bring it into public contempt or ridicule or prejudice the maintenance of the good employee - employer relationship existing between the EMPLOYER and its employees. 6. RECORDKEEPING AND REPORTS. A. The ADMINISTRATOR agrees that an individual file will be established for each participating employee and contain information including, but not limited to, Social Security number, the specific amount of the participant's contribution, the allocation of the con- tribution to one or more funding media, the participant's home address, the participant's beneficiary designation, and other pertinent data necessary for the efficient administration of each participant's account. B. The ADMINISTRATOR agrees to provide whatever data is re- quired by the selected investment media to effect purchases from those investment media. C. The ADMINISTRATOR agrees to provide the processing, accounting, recordkeeping services, and reports, in accordance with and at the time stated in the "Operations Manual" prepared by the parties. 7. EMPLOYER SERVICES A. The EMPLOYER agrees to collect all deferred amounts and to remit said amounts within one (1) day to the custodian for appropriate distribution. B. The EMPLOYER agrees to transmit on a timely basis relevant information requested by the ADMINISTRATOR relating to each participating employee upon entry into the program and further agrees to transmit information relating to changes in an individual participant's account. C. The EMPLOYER agrees to transmit to the ADMINISTRATOR on a timely basis relevant information of a participant's withdrawal, termin- ation or request for distribution under the Plan including the method of timing of any distribution. 8. COMPENSATION. The ADMINISTRATOR shall be compensated for the services provided under this Agreement in accordance with the following fee schedule: 1/4 of 1% of the market value of the Plans' assets. $3.00 per participant per year per investment account. -5- These fees shall be deducted monthly from the earnings of the Plan pur- suant to invoices prepared by the Administrator and approved by the Trustee. No charges shall be assessed the Employer. The ADMINISTRATOR shall also be entitled to any standard commissions or fees paid by the investment media in connection with the purchase of investments for the Plans in accordance with written agreements between the investment media and the Administrator previously submitted to and approved by the Employer. Copies of all such agree- ments shall be submitted to the Employer. 9. EXPENSES. The ADMINISTRATOR agrees that the compensation provided for in paragraph 8 is in full payment for all services to be performed pursuant to this agreement and further agrees to pay all expenses incurred as a result of such services except as expressly set forth in paragraph 12. 10. TERMINATION. This agreement shall continue in force for a period of three (3) years and may be renewed thereafter by mutual con- sent of the parties. If this agreement is not renewed or earlier terminated, the ADMINISTRATOR agrees to transfer to the EMPLOYER or to a successor designated in writing by the EMPLOYER, within ninety (90) days of the date of termination, all records and documents relating to the services provided hereunder. The ADMINISTRATOR agrees to continue to hold and administer the accounts as provided herein until the transfer of the records and documents. Q�1' 11. TERMINATION OF AGREEMENT FOR CAUSE. If, through any cause, the Administrator shall fail to fulfill in timely and proper manner its obligations under this Agreement, or if the Administrator shall violate any of the convenants, agreements or stipulations of this Agreement, the Employer shall thereupon, as deter- mined by the Employer, have the right to terminate this Agreement by giving written notice to the Administrator of such termination and specifying the effective date thereof, at least five (5) days before the effective date of such termination. In such event, all finished or unfinished documents, data, studies, and reports prepared by the Admin- istrator under this Agreement shall, at the option of the Employer, become its property. Notwithstanding the above, the Administrator shall not be relieved of liability to the Employer for damages sustained by the Employer by virtue of any breach of the Agreement by the Administrator. 12. LIABILITY. A. The ADMINISTRATOR agrees to indemnify the EMPLOYER, its officers and employees against liability for injury or damage caused by an negligent act or omission of any of the ADMINISTRATOR'S employees or agents in the performance of this Agreement and shall hold the EMPLOYER harmless from any loss occasioned as a result of the ADMINISTRATOR'S performance of this agreement except and to the extent as expressly hereinafter provided. B. The ADMINISTRATOR shall not be liable for any damages, loss of data, delay or other loss caused by power failure, except that the ADMINISTRATOR agrees to reconstruct any records thereby destroyed, in whole or in part at the expense of the ADMINISTRATOR. -7- C. The EMPLOYER agrees to use its best efforts to insure the accuracy of all data and information furnished the ADMININISTRATOR through its designated representative and agrees to pay the reasonable expense incurred by the ADMINISTRATOR as the result of erroneous data or information transmitted by the EMPLOYER to the ADMINISTRATOR. 13. CIRCUMSTANCES EXCUSING PERFORMANCE. The execution by the parties of this contract is subject to force majeure and is contingent upon fires and power failures, strikes, accidents, acts of God, weather conditions or restrictions imposed by any government or governmental agency, other delays beyond the delayed part's control or defaults by participants or employers. Failures of or defaults of participants, employers, associations or trustees shall excuse performance thereby prevented by the ADMINISTRATOR. 14. OWNERSHIP OF RECORDS. The ADMINISTRATOR agrees that all records including written procedures and other supporting items shall be the property of the EMPLOYER and further agrees that the EMPLOYER shall have a royalty -free, non - exclusive, and irrevocable license to reproduce, publish, use, and authorize others to do so, all writings, . sound recordings, pictorial reproductions, drawings and other works of similar nature produced in the course of or under this agreement. 15. INSPECTION OF RECORDS. The ADMINISTRATOR agrees to keep full and accurate records and accounts and shall follow the accounting methods and practices customarily employed in business of like character. All dealings and transactions relating to the performance of services -8- hereunder shall be duly entered therein in the usual and ordinary course of business and the EMPLOYER, or its duly authorized representatives, shall have full and free access to said records and accounts and may inspect the same at reasonable times during the normal business hours of the ADMINISTRATOR. 16. CONFIDENTIALITY. All information supplied to, and all work processed or completed by the ADMINISTRATOR (including outside process- ing, if any) will be held to be confidential and private and will not be disclosed to anyone other than the EMPLOYER or those persons, corpor- ations or governmental agencies who have a lawful right to such informa- tion under the terms of the Plan and then only after permission to re- lease such information has been given by the EMPLOYER. 17. ASSIGNABILITY. No party to this agreement shall assign the same without the written consent of the other party thereto, such consent not to be unreasonably withheld. Unless agreed to by the parties, no assignment shall relieve any party to this agreement of any duties or liabilities hereunder. 18. NOTICES. All notices and demands to be given under this agreement by one party to another shall be given by certified mail, addressed to the party to be noticed or upon whom a demand is being made at the respective address set forth in this Agreement or such other place as either party shall from time to time designate in writing. The date of service of a notice or demand shall be the receipt date on any certified mail receipt. 19. PARTIES BOUND. This agreement and the provisions thereof shall be binding upon the respective parties and shall inure to the benefit of the same and to their successors and assigns. 20. APPLICABLE LAW. This agreement shall be construed in accord- ance with the laws of the State of California. 21. UNLAWFUL PROVISIONS. In the event any provision 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 illegality or invalid provisions had never been inserted herein or therein. 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 violative of any laws, rules or regulations relating thereto. 22. PERFORMANCE. A. The ADMINISTRATOR agrees to maintain errors and omissions insurance in an amount of not less than $500,000 during the term of this agreement. B. The ADMINISTRATOR agrees to maintain a fidelity bond in an amount of not less than $500,000 during the term of this agreement. 23. AMENDMENTS. This agreement may be amended in writing at any time during the term hereof by the mutual consent of the parties. IN WITNESS WHEREOF, the within parties have hereunto set hands and seals the day and year first above written. THE TOWN OF LOS GATOS IM CENTRECORP FINANCIAL SERVICES, INC. [)'1 102281 -10-