1984-064-Approving Revised Deferred Compensation Plan; Approving A Change In Custodian Services For The Assessor Of Said Plan; And The Authorizing Town Manager To Execute The Appointment Of Successor CustodianRESOLUTION NO. 1984 -64
A RESOLUTION APPROVING REVISED DEFERRED COMPENSATION PLAN;
APPROVING A CHANGE IN CUSTODIAN SERVICES FOR THE ASSESSOR
OF SAID PLAN; AND AUTHORIZING TOWN MANAGER TO EXECUTE THE
APPOINTMENT OF SUCCESSOR CUSTODIAN
BE IT RESOLVED, and it is hereby resolved that the Town Council of the
Town of Los Gatos does hereby approve the revised Town Deferred Compensation Plan
(a copy of which is attached hereto); further approves the participation of
Management employees in said plan; and further approves the Appointment of Suc-
cessor Custodian for the assets of said plan from Central Bank to Hibernia Bank;
and
BE IT FURTHER RESOLVED that the Town Manager is hereby authorized and
directed to execute the Appointment of Successor Custodian 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 held on the 7th day of May 1984 by the
following vote:
AYES: COUNCILMEMBERS Joanne Benjamin, Eric D. Carlson,
Terrence J. Daily, Brent N. Ventura and Mayor
s J. Ferrito
NOES: COUNCILMEMBERS None
ABSTAIN: COUNCILMEMBERS None
ABSENT: COUNCIILLMEMBERS None
SIGNED:
MAYOR OF THE OF LOS GA TO
v
ATTEST:
CL K OF HE i OOF ( 0A ler
DEFERRED COMPENSATION PLAN
Section 1. Name: The name of this Plan is the Town of Los
Gatos Deferred Compensation Plan, hereinafter referred to as the
"Plan ".
Section 2. Purpose: The primary purpose of the Plan is to
attract and retain personnel by nermittin2 them to enter into
agreements with the Employer which will provide for deferral of
nayment of a Portion of their current Compensation until death,
disahility, retirement, termination of employment, or other event as
Provided herein, in accordance with the provisions of sections 53212 -
53214 of the Government Code of the State of California, and section
457 and other anolicable sections of the Internal Revenue Code. This
amended Plan becomes effective
Section 3. Definitions: For the Durposes of this Plan when
used and capitalized herein the following words and phrases shall have
the meaning set forth below.
3.1 "Employer" shall be the Town of Los Gatos.
3.2 "Eligible Emplovee," hereinafter referred to as "Employee"
means anv officer or full -time employee of the Town of Los Gatos.
Employee also means anv permanent Part -time employee working half -time
or more.
3.3 "Participant" shall mean any Employee who fulfills the
requirements under Section 4.
3.4 "Participation Agreement" shall mean the agreement executed
and filed by an Employee with the Employer pursuant to Section 4, by
which the Emplovee elects to become a Participant in the Plan.
3.5 "Compensation" shall mean the total of all amounts which
would he 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 anv amounts
that may be credited to the Participant's account in accordance with
Section 8 of the Plan. Compensation shall be taken into account at
its present value and its amount shall be determined without regard to
any community property laws.
3.6 "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 January 1 shall he the
period beginninq with the date of employment and ending on December 31
Of the same year.
3.7 "Custodian" means the bank or trust company.anpointed by the
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..Mn, .over tc 'ave c::st o° its assets held nur" nt to the terms oP
the Pian.
3.8 "Normal Retirement Acre" means the date a Participant attains
age 70 -1/2 or, at the election of the Participant, any earlier date
that is no earlier than the earliest age at which the Participant has
the right to retire under the Employer's basic pension plan.
3.9 "Includable Compensation" means Compensation for service
performed for the Employer which (taking into account the provisions
of section 403 (b) and section 457 of the Ineernal Revenue Code of
1954, as amended) is currently includahle in gross income for federal
income tax purposes.
3.10 "Committee" means the Deferred Compensation Plan Committee.
Section 4. Participation in the Plan:
4.1 (a) Each Emplovee may elect to become a Participant in the
Plan and defer payment of Compensation not yet earned by executing a
written Participation Agreement and filing it with the Emnloyer not
later than sixty (50) days from the date of employment with the Town.
Thereafter,
4.1 (h) Each eligible Employee may elect to become a Participant
in the Plan and defer payment of Compensation not yet earned by
executing a written Participation Agreement and filing it with the
Employer nrior to the beginning of the month for which the deferral is
to be applied during open enrollment periods.
4.1 (c) Modifications to existing Participation Agreements must he
filed with the Employer prior to the beginning of the month for which
the deferral is to be applied during open enrollment periods.
4.2 The amount of Comnensation which may be deferred hy_ a
Participant is subject to the following limitations:
4.2 (a) At the time of entering into an agreement hereunder to
defer Compensation or at the time of re -entry following a withdrawal
or at the time a change in the amount to be deferred is elected, the
maximum amount a Participant may defer during an Employment Period
shall not exceed the lesser of $7,500 or 33 -1/3 percent of the
Participant's Includable Compensation. The minimum amount a
Participant may defer is $25.00 monthly.
4.2 (b) For one (1) or more of a Participant's last three (3)
Employment Periods ending before the Participant attains Normal
Retirement Age the maximum amount a Participant may defer during_ the
Employment Period shall not exceed the lesser of $15,000 or the sum of
the maximum amount which could be deferred for the Employment Period
established in Section 4.2 (a) above, plus so much of such maximum
amounts determined under Section 4.2 (a) for Employment Periods after
the effective date of the Plan (only if it begins after December 31,
1978) but before the current employment year and in which the
Participant was eligible to parzicinate in the Plan, less the amount
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of Compensation as ha neretofore been used unn Section 4.2 (a),
Provisions of this paragranh shall not apply more than once.
4.2 (c) In applying paragraphs 4.2 (a) and 4.2 (b), an amount
deferred for a Participant during an Employment Period by an exempt
organization under a tax sheltered annuity program shall be treated as
an amount deferred for limitation purposes. Any Employee who is or
becomes a Participant in this Plan and any other similar plan shall be
solely responsible for any violation of this Section 4.2.
4.3 A Participation Agreement shall remain in effect until it is
terminated, amended, superseded or modified. During each Employment
Period, an existing Participation Agreement may be amended to effect
subsequent deferrals in accordance with rules established by the
Committee. The modification must be filed with the Employer prior to
the beginning of the month for which the deferral is to be applied.
4.4 A Participant may terminate further deferral of Compensation
under the Plan by filing with the Employer an executed notice of
termination at least thirty (30) days prior to the effective date of
termination. Once further deferral of Compensation is terminated, a
Participant may rejoin the Plan in accordance with rules established
by the Committee. No previously deferred amounts shall be payable to
an Employee upon terminating further deferral of Compensation under
the Plan unless otherwise due pursuant to Section 7 hereof.
4.5 A Participant may select, pursuant to Section 6, one or more
investment objectives provided that the amount deferred for each
objective equals or exceeds the minimum of not less than $25.00
monthly.
Section 5.
Period in which
Employer shall
Compensation as
Agreement which
Employer.
Section 6.
Deferral of Compensation:
the Employee is a Particinant
defer payment of such part of
is specified by the Employee
the Participant has executed
Administration of the Plan:
During each Employment
in the Plan, the
the Participant's
in the Participation
and filed with the
6.1 The Plan shall be administered by the Committee, which shall
have the sole authority to enforce the Plan and shall be responsible
for the operation of the Plan in accordance with its terms, and shall
determine all questions arising out of the administration,
interpretation and application of the Plan, such determinations shall
be conclusive and binding on all persons.
6.2 The Employer shall establish a deferred compensation book
account for each Participant to which shall be credited such
Participant's deferred compensation at such times as it would have
been payable but for the Participant's election to participate in the
Plan. On executing a Participation Agreement, the Employee shall
designate one or more investment objectives. The investment objective
shall be used to measure the increase or decrease in value of the
Participant's deferred compensation book account. A Participant may
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chance his investmer:. �" ^_rive by filing a mod > - cation, and such
investment objective 11 apply to (i) all amo _s credited to the
Participant's deferrer compensation hook account after the date of
filing the modification or (ii) any or all amounts credited to the
Participant's deferred compensation hook account before and after the
date of filing the modification but in such case only with respect to
periods after the date the modification is filed. As used herein,
"investment objective" means any investment specified from time to
time by the Employer solely for the purpose of measuring the value of
the Participant's deferred compensation book account and may include
the following: mutual fund shares, interest deposits with a savings
and loan association or banking institution, investments in debt
and /or equity instruments, an annuity contract with an insurance
company, or trust deeds.
6.3 Each Participant's deferred compensation book account shall
he revalued monthly to reflect the earnings, gains and losses which
would have been earned had the Particinant's account been invested in
the medium specified in his designated investment objective.
6.4 The Employer may, but is not required to, set aside funds
which may be held by the Custodian to meet the Employer's liabilities
hereunder. All such 'unds shall at all times he a general asset of
the Employer.
6.5 Neither this Plan nor any Participation Agreement nor any
hook account shall he deemed to create a trust or custodial account on
behalf of or for the benefit of any Participant of the Plan or such
Participant's beneficiaries. No Participant in the Plan nor his
beneficiaries shall have, by reason of the Plan, Participation
Agreement or book account, any secured or preferred interest in or to
any assets of the Employer and in the event of default of any payment
due under the Plan, the Participant or his beneficiaries shall have
the status of a general creditor of the Employer.
The Employer shall have only a contractual obligation to pay the
benefits due the Participant under the Plan.
Section 7. Distribution of Benefits:
7.1 Commencement of Distribution: Distributions under the Plan
shall commence no earlier than the date the Participant separates from
service with the Employer (within the meaning of Internal Revenue Code
section 1.457- 2(h)(2) and (3)) and no later that the later of (i) 60
days after the close of the Employment Period in which the Participant
(or former Participant) attains his Normal Retirement Age or (ii) 60
days after the close of the Employment Period in which the Participant
separates from service with the Employer. Subject to the approval of
the Employer, a Participant shall, prior to his Normal Retirement Age,
elect a time of commencement of his distribution from the Plan. If no
such election or approval is made or obtained, rilyments shall be made
in accordance with the instructions of the Employer.
7.2 Form and Duration of Distribution: Commencing with the date
determined pursuant to Section 7.1, the full amount credited to a
CIM
Participant's book ac int (re�lectinq investme earnings, gains or
losses), less any Federal or Sate income tax required to be withheld,
shall be distributed provided, however, that the amounts payable
during the Participant's remaining life expectancy (determined as of
the date of the initial distribution payment) shall be greater than
one -half of the full amount credited to the Participant's book
account:
7.2 (a) In a lump sum; or
7.2 (b) In monthly, quarterly, semiannual or annual installments.
Installment distributions shall be made in substantially equal
payments, but no payment shall have a value of less than (the smaller
of) One Hundred Dollars ($100.00) or the balance credited to the
Participant's book account. A Participant's book account balance may
continue to be invested until, in the Employer's sole judgement, cash
is to be withdrawn for payment of benefits.
7.2 (c) In the form of an annuity under any settlement option
offered in the annuity contract.
7.3 Distribution Eligibility: (a) Retirement - In the event of
retirement of the Employee from the Employer, form and duration of
distribution shall be as provided in Section 7.2.
(b) Termination of Emplovment - In the event of separation from
service of the Employee from the Employer, form and duration of
distribution shall be as provided in Section 7.2.
(c) Disability - In event of termination of employment by reason
of disability, form and duration of distribution shall be as provided
in Section 7.2.
(d) Death - In the event of the death of any Participant, either
before or after separation from service, the full amounts credited to
the Participant's book account, less any Federal or State income tax
required to be withheld, shall be distributed to the Participant's
heneficiary(ies) (as determined under Section 10.4) at the time and in
the manner designated in the Participant's Participation Agreement.
Choices of form of distribution of benefits shall be as provided in
Section 7.2. Notwithstanding the foregoing, such distribution shall
commence no later than the latest date determined pursuant to Section
7.1 as if the Participant had survived to such date, and the manner of
distribution must be such that the payments are made: (i) if the
beneficiary is the Participant's surviving spouse, over the spouse's
remaining life expectancy (determined as of the date of the initial
distribution payment to the spouse) or any shorter period; or (ii) if
the beneficiary is not the Participant's surviving spouse, over a
period not in excess of 15 years.
(e) Unforeseeable Emergency - In the event of an unforeseeable
emergency affecting a Participant, the Participant may apply to the
committee for withdrawal of such amount from the Plan. "Unforeseeable
emergency" means a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the
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Participant or of a d, ,ndent (as def i, in se .on 152(a) o` the
Internal Revenue Code. of the Participant °s, 10. of the Participant's
property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the
control of the Participant. Examples of events which may involve an
"unforeseeable emergency" are catastrophic illness, flood, fire,
earthquake, death in the family or disabling injury. Withdrawals will
not be permitted for expenditures normally budqetable, such as down
payment on a home, purchase of an automobile, or college expenses.
Withdrawal will not be allowed to the extent that the hardship may be
relieved: (i) through reimbursement or compensation by insurance or
otherwise, (ii) by liquidation of the Participant's assets (to the
extent such liquidation would not itself cause severe financial
hardship), or (iii) by cessation of deferrals under the Plan.
Withdrawals of amounts because of an unforeseeable emergency will he
permitted only to the extent reasonably needed to satisfy the
emergency need. Any amount so approved hereunder for withdrawal shall
be paid to the Participant in a lump sum. The withdrawal shall be
effective at the later of the dates specified in the Participant's
application or the date approved by the Committee.
Section B. Employer Participation: Notwithstanding any other
Provision of this Plan, the Employer may, subject to the limitations
of Section 4, make additional deposits to a Participant's deferred
compensation book account as additional Compensation for the services
rendered by the Employee to the Employer during any Employment Period,
Provided the Employee has elected to have such additional Compensation
deferred, invested, and distributed, pursuant to this Plan, prior to
the period in which the Compensation will be earned. The Employer may
make such further deposits to the Plan as the Employer may deem
advisable, subject, however, to the limitations set forth in Section
4.
Section 9. Nonassianability: The interest of a Participant in
the contractual obligation of the Employer, established by the Plan,
shall not be assignable in whole or in part, directly or by operation
of law or otherwise, in any manner and no right or interest of a
Participant in the Employer's contractual obligation shall be liable
for or subject to any obligation or liability of such Participant.
Section 10. Miscellaneous:
10.1 Status of Participants - Neither the establishment of the
Plan nor any modification thereof, nor the establishment of any book
account, nor the agreement between the Employer and the Custodian, nor
the payment of any benefits, shall be construed as giving to any
Participant or other person any legal or equitable right against the
Employer except as herein provided: and, in no event, shall the terms
of employment of any Employee or Participant be modified or in any way
affected hereby.
10.2 Condition of the Plan - It is a condition of this Plan, and
each Employee by participating herein expressly agrees, that he shall
look solely to the general assets of the Employer for the payment of
any benefit to which he is entitled under the Plan.
ME
10.3 Governina Law - This Plan shall he construed, administered
and enforced according to the constitution and laws of the State of
California.
10.4 Designation of Beneficiaries - Each Participant shall have
the right, by written notice to the Employer, to designate one or more
beneficiaries to receive any benefit to which said Participant may be
entitled in the event of his death prior to the complete distribution
of benefits under the Plan. Each Participant shall also have the
right, by written notice to the Employer, to change or revoke their
beneficiary designation without notice to any beneficiary. If no such
designation is in effect on a Participant's death, or if no designated
beneficiary survives the Participant, his beneficiary shall be his
estate. If no executor or administrator is appointed within six (6)
months after the Participant's death, the Employer shall direct said
benefits to be nail to the beneficiary or beneficiaries designated in
his last will, or if no will, then to the heirs at law of the
Participant.
10.5 Plan -to -Plan Transfers: (a) A Participant who is no longer
an Employee and who subsequently becomes a participant in another plan
qualified under section 457 of the Internal Revenue Code which is
maintained by an employer located in California may elect, if the
Participant is employed in California, to have the amount credited to
his deferred compensation book account transferred to his account in
the plan of his new employer, provided that the plan of the new
employer provides for the receipt of such transferred amounts. If a
Participant's deferred compensation hook account has been transferred
to such plan, the Participant shall not be entitled to receive any
benefit under this Plan, anvthinq in Section 7 to the contrary
notwithstanding.
(b) If prior to becoming an Employee an Employee participated in
a plan qualified under section 457 of the Internal Revenue Code which
was maintained by an employer located in California and who employed
such Employee in California, such Employee may elect to have any
amount credited to his deferred compensation account under such
predecessor plan transferred to the Employer, in which case the
Employer shall establish for the Employee a deferred compensation book
account under the Plan to which an amount shall be credited equal to
the amount so transferred. In all respects such amount shall be
treated as an amount deferred under and subject to the terms of the
Plan, except that the limitation set forth in Section 4.2 shall not
apply.
Section 11. Amendment and Termination:
11.1 The Employer may at any time and from time to time by action
of its appropriate body as evidenced by an instrument in writing duly
executed by the Employer modify, amend, suspend, or terminate the Plan
in whole or in part (including retroactive amendments) or cease
deferring Compensation pursuant to the Plan, by delivering to each
Participant a written copy of such modification, amendment, or
termination or of a notice that it ceases deferring Compensation,
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provided, however, th mplover shall not have
affect the value of ar., Participant's book acccu..c orCanytriahzsce or
accrued under the Plan prior to such modification, amendment,
termination or cessation.
11.2 In the event of the complete termination of the Plan by the
Employer under Section 11.1, the value of all Participant's book
accounts shall be distributed to the Participants or their
beneficiaries in lump sum by the ninetieth (90th) day after
termination of the Plan.
Section 12. Emplover Not Responsible: The Employer may, but is
not required to, invest amounts equal to the deferred compensation
credited to a Participant's hook account nursuant to the Plan in
accordance with the requests made by each Participant at the time of
enrollment or change in enrollment. The Employer shall retain the
right to approve, disapprove, amend or revise such investment
requests. Any action by the Employer in investing funds, or approving
of any such investment of funds, shall not be considered to be either
an endorsement of guarantee of anv investment, nor shall it he
considered to attest to the financial soundness or the suitability of
any investment for the nurpose of meeting future obligations as
provided in Section 7 of this Plan.
Section 13. Deferred Compensation Plan Committee:
13.1 The Deferred Compensation Plan Committee, hereinafter
referred referred to as the "Committee," shall consist of individuals who are
desiqnated by the Employer.
The Committee Chairman shall certify to the Administrator the
names and specimen signatures of the members of the Committee. As
members are replaced and appointed, such changes shall be certified to
the Administrator in the same manner. The Administrator may rely in
good faith on any directions signed by a majority of the members, or
any Person(s) designated to represent them.
13.2 The Committee may adopt rules and regulations for the
administration of the Plan consistent with the terms of the Plan. The
Committee may take action at a meeting or by written resolution. The
action of the Committee shall be final and conclusive regarding the
exercise of its authority under the terms of the Plan.
13.3 The Committee shall have all powers to perform all duties
necessary to exercise its functions includinq, but not limited to,
the:
(a) Determination of Employees' eligibility, participation and
benefits under the Plan;
(b) Establishment and maintenance of written records showinq at
any time the interest of a Participant in his deferred compensation
book account;
(c) Interpretation and construction of the provisions of the
��
Plan;
(d) Direction of the Employer (or the Custodian on behalf of the
Employer) to make disbursement of benefits under the Plan;
(e) Selection and review of any investment currently offered or
under consideration to be offered as an investment objective under the
Plan,
(f) Appointment of such agents, advisors, counsel and delegates
as may be necessary and appronriate for the administration and
operation of this Plan and the delegation to such agent, advisors,
counsel and delegates of any of its discretionary and ministerial
powers and duties in accordance with this Section; and
(q) Composition of and provision to Participants of all forms as
described in this Plan.
Section 14. Gender and Plurals: The masculine Gender shall
include the feminine and neuter gender, the masculine pronoun shall
include feminine and neuter, the singular number the plural, and
conversely, whenever appropriate.
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