1998-202 - Approve Revised Deferred Comp Plan, Amend & Restate the Plan & Trust Custodial Document, Revise the Investment Alternatives through ICMARESOLUTION 1998 - 202
RESOLUTION OF THE TOWN OF LOS GATOS
APPROVING A REVISED TOWN OF LOS GATOS DEFERRED COMPENSATION PLAN:
AMENDING AND RESTATING THE PLAN AND TRUST CUSTODIAL DOCUMENT;
AND REVISING THE INVESTMENT ALTERNATIVES AVAILABLE THROUGH ICMA
RETIREMENT CORPORATION
WHEREAS, the Town has employees rendering valuable services; and
WHEREAS, the Town has established a deferred compensation plan for such
employees that serves the interests of the Town by enabling it to provide reasonable retirement
security for its employees, by providing increased flexibility in its personnel management system, and
by assisting in the attraction and retention of competent personnel; and
WHEREAS, the Town has determined that the continuance of the deferred
compensation plan will serve those objectives; and
WHEREAS, amendments to the Internal Revenue Code have been enacted that
require changes to the structure of and allow enhancements of the benefits of the deferred
compensation plan;
RESOLVED, by the Town Council of the Town of Los Gatos, County of Santa
Clara, State of California, that the Town of Los Gatos amend the Town's Deferred Compensation
Plan as outlined in Exhibit A;
BE IT FURTHER RESOLVED, the assets of the Plan shall be held in trust
with the Town serving as the trustee, for the exclusive benefit of the Plan participants and their
beneficiaries, and the assets shall not be diverted to any other purpose. The Trustee's beneficial
ownership of Plan assets held in the ICMA Retirement Trust shall be held for the further exclusive
benefit of the Plan participants and their beneficiaries;
BE IT FURTHER RESOLVED, that the Plan will not permit loans.
BE IT FURTHER RESOLVED, that the investment options available through
ICMA Retirement Corporation shall be expanded as identified in Attachment A.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town
of Los Gatos, California, held on the 21st day of December, 1998 by the following vote:
COUNCIL MEMBERS:
AYES: Randy Attaway, Steven Blanton, Linda Lubeck, Joe Pirzynski,
Mayor Jan Hutchins
NAYS: None
ABSENT: None
ABSTAIN: None
SIGNED
ATTTE�ST: X17
vl CZJ�� r v v
CLERK OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
EXHIBIT A
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. moose: The primary purpose of the Plan is to attract and retain personnel by
permitting them to enter into agreements with the Employer which will provide for
deferral of payment of a portion of their current Compensation until death, disability,
retirement, termination of employment, or other event as provided herein, in
accordance with the provisions of Section 53212 - 53214 of the Government Code of
the State of California, and Section 457 and other applicable sections of the Internal
Revenue Code. This amended Plan becomes effective upon adoption.
Section 3. Definitions: For the purposes 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 Employee ", hereinafter referred to as "Employee" means any
officer of full -time employee of the Town of Los Gatos. Employee also
means any 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
Employee elects to become a Participant in the Plan..
3.5 "Compensation" shall mean the total of all amounts which would be 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 any 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.
N:MGMGROGERS�UCOMPMefCOMP. PW 12116198
Section 4. Participation in the Plan:
4.1(a) Each 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 not later than sixty (60) days from the date of
employment with the Town. Thereafter,
4.1(b) 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 prior 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 be
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 Compensation which may be deferred by 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 $3gg— RR nnn as adjusted for the cost of living in
accordance with Code Section 457(8)(15) for taxable years
beizinning after December 31 1996 (the "dollar limitation).
or 33 1/3 percent of the Participant's Includable Compensation
for the taxable year. The minimum amount a Participant may
defer is $10.00 biweekly.
N:MGRWROGERSI EFCOMP�dc -Ml Pl- 12/16/98
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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
$10.00 biweekly.
Section 5. Deferral of Compensation: During each Employment Period in which the Employee
is a Participant in the Plan, the Employer shall defer payment of such part of the
Participant's Compensation as is specified by the Employee in the Participation
Agreement which the Participant has executed and filed with the Employer.
Section 6. Administration of the Plan:
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
tetras, 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 change his investment objective by filing a
modification, and such investment objective shall apply to (i)
all amounts credited to the Participant's deferred
Compensation book account after the date of filing the
modification or (ii) any or all amounts credited to the
Participant's deferred Compensation book 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 shall include only those
investments specified in Attachment A.
N:MGR \GR0GMU)EFC0MMddC0 -F.pi" 12116198
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Except as otherwise provided in this Section.
the distribution
of a Participant's Account shall commence as
of April 1 of the
calendar year after the Plan Year of
the Participant's
Retirement and the distribution of such Retirement
benefits
shall be made in accordance with one of the
payment options
# f -I
the foregoing. but
m gmwj v m =0 I NOTMAM
Except as otherwise provided in this Section.
the distribution
of a Participant's Account shall commence as
of April 1 of the
calendar year after the Plan Year of
the Participant's
Retirement and the distribution of such Retirement
benefits
shall be made in accordance with one of the
payment options
described in Section 7.2. Notwithstanding
the foregoing. but
subject to the following paragraph of this
Section 7.1. the
Participant may irrevocably elect within
60 days following
Separation from Service to have the distribution
of benefits
commence on a fixed determinable date
other than that
described in the preceding sentence which
is at least 61 days
after Separation from Service but not later
than April 1 of the
year following the year of the Participant's
Retirement or
attainment ofa2e 70 -1/2. whichever is later.
Effective on or after January 1 1997 the Participant may elect
to defer the commencement of distribution of benefits to a fixed
determinable date later than the date described above, but not
later than April 1 of the year following the year of the
Participant's retirement or attainment of age 70 -1/2, whichever
is later. provided (a) such election is made after the 61st day
following Separation from Service and before commencement
of distributions and (b) the Participant may make only on (1)
such election Notwithstanding the foregoing. the
Administrator in order to ensure the orderly administration of
this provisio^ may establish a deadline after which such
election to defer the commencement of distribution of benefits
shall not be allowed
N: MGRWROGERSOEFCOMPNdd @.mp.pi 12116/98
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(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 beneficiary(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 Participant or of a dependent
(as defined in Section 152(a) of the Internal Revenue
Code) of the Participant's, loss 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 budgetable, 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 relived: (i) through reimbursement or
Compensation by insurance of otherwise, (ii) by
N :MGR %GROGERSMEFCOMP\d -r mP.PW 12116M
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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.
10.3 Governing Law - This Plan shall be 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 paid to the beneficiary or beneficiaries
designated in his last will, or if no will, then to the heirs at
law of the Participant.
N: MGR\GROGERS \DEFCOMPWefcomp.pN 12/16/98
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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, provided,
however, the Employer shall not have the right to reduce or
affect the value of any Participant's book account or any rights
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 Section 11. 1, the value of all Participant's book
accounts shall be distributed to the Participant or their
beneficiaries in lump sum by the ninetieth (90th) day after
termination of the Plan.
Section 12. Employer Not Responsible: The Employer may, but is not required to, invest
amounts equal to the deferred compensation credited to a Participant's book
account pursuant 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 any investment, nor shall it be considered to attest to the
financial soundness or the suitability of any investment for the purpose of
meeting future obligations as provided in Section 7 of this Plan.
Section 13. Deferred CompgLasation Plan Committee:
13.1 The Deferred Compensation Plan Committee, hereinafter
referred to as the "Committee ", shall consist of individuals
who are designated by the Employer.
N MGR\GROGERADEFCOMP \AefcOmP.Pi W16I98
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(f) Appointment of such agents, advisors, counsel and
delegates as may be necessary and appropriate 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
(g) 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.
N MGMGROGERSDEFCOMPWC&OMP.PW 12/16198
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ATTACHMENT A (CONT.)
\L u`yYvl�i`►YII:�IEIF�TIIlI' /_x. • : ' \
WASHINGTON MUTUAL BANK THROUGH FUNDSELECT ADVISORS INC. (CONT.)
American Century Balanced*
American Century Growth*
American Century Select*
American Century Ultra*
Fidelity Equity Income*
Fidelity Retirement Growth*
Fidelity Puritan*
Fidelity Magellan*
Fidelity Overseas*
Investment Company of America*
Growth Fund of America*
Bond Fund of America*
Income Fund of America*
Oppenheimer Growth Fund* (Closed to new deferrals)
*Investment Options Previously Approved by Town Council
N:MGMGR0GE881DEFC0MPWefcomp,pW 12/16/98
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