HomeMy WebLinkAbout1998-12-14 City Council (27)TO:
FROM:
City of Palo Alto
City Manager’s Report
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: HUMAN RESOURCES
3
DATE:DECEMBER 14, 1998 CMR: 460:98
SUBJECT:RESOLUTION ADOPTING AN AMENDED DEFERRED
COMPENSATION PLAN FOR REGULAR EMPLOYEES, AND
APPROVING AND AUTHORIZING EXECUTION OF A TRUST
AGREEMENT FOR SAID PLAN, AND RESOLUTION DESIGNATING
CO-TRUSTEES FOR THE DEFERRED COMPENSATION PLAN AND
TRUST FOR HOURLY EMPLOYEES, TO REFLECT CHANGES
MADE TO SECTION 457 OF THE INTERNAL REVENUE CODE.
RECOMMENDATION
This report recommends Council take the following action which is required to amend the
.Deferred Compensation Plan to reflect changes made to Section 457 of the Internal Revenue
Code 0RC) by the Small Business Job Protection Act of 1996 (SBJPA) and the Taxpayer
Relief Act of-t997(TRA ’97). ..................
Adopt a Resolution adopting an Amended Deferred Compensation Plan for regular
employees and approving and authorizing the execution of a trust agreement for said
plan.
Adopt a Resolution designating co-trustees for the Deferred Compensation Plan and
Trust for Part-Time, Temporary and Seasonal Employees (retirement plan for Hourly
employees).
BACKGROUND
The City of Palo Alto has provided regular City employees with. a deferred compensation
planset up under Section 457 of the Internal Revenue Code 0RC) since 1977. The plan
permits employees, on a voluntary basis, to defer receiving a portion of their current salary
and the invested earnings for payment at a later date. Neither the deferred salary, amounts
or earnings are subject to federal or state income taxes. Taxes become payable when
CMR:460:98 Page 1 of 4
deferred compensation is distributed to the employee upon termination, presumably at
retirement.
In addition to the deferred compensation plan (also referred to as the "457 plan") for regular
employees, the City, since 1994, has had a deferred compensation plan for hourly employees,
which is mandatory and is in lieu of Social Security.
DISCUSSION
The SBJPA and TRA ’97 made a number of changes to the ]RC that impact the design ofa~d
participation in various retirement arrangements, including 457 deferred compensation plans.
The amendments update the City of Pal. Alto’s plan documents to reflect changes in the
IRC. For the regular employee plan, changes are highlighted on the attached copy of the
plan and summarized below. The Hourly Plan is an ICMA document, which the City
adopted in 1994, and is updated regularly by ICMA without further Council approval. It has
been changed by ICMA to reflect the latest IRS changes.
.!n~Service Distributions Of Smaller Amounts. IRC Section 457(e)(9)(A), as
amended, permits certain in-service lump sum distributions from a 457 plan if the total
amount payable to the participant does not exceed.a specified dollar amount. The
specified dollar amount is increased from $3,500 to $5,000. Each participant may be
granted only one such distribution from the plan, and only if no amount has been
deferred under the plan for the participant during the two-year period ending on the
date of the distribution. In addition, the City can make such a distribution without the
consent of the employee.
Additional Deferral Election. Section 457(e)(9)(B), as amended by the SBJPA,
allows the participant to make an additional (one time only) election to defer the
commencement of distributions, so long as this additional one-time additional election
is made before distributions begin. The additional deferral election permits the
participant to defer distributions under the plan, but does not permit the acceleration
of distributions underthe plan.
Cost-of-Living Adjustments in Maximum Deferral Amount. Previously, Section
457(b)(2)and Section 457(c)(1) limited the maximum deferrals during any taxable
year to $7,500. As amended, Section 457(e)(15)provides for cost-of-living
adjustments of this maximum deferral amount (in $500 increments).
.Trust Requirements. Section 457(g), as amended, requires that as of January 1,
1999, all assets and income under a plan maintained by a state Or local government
employer be held either.in a trust, a custodial account or an annuity contract for the
CMR:460:98 Page 2 of 4
exclusive benefit of plan participants and beneficiaries. To satisfy the trust
requirement, a trust, must be established-pursuant to a written agreement that
constitutes a valid trust under State law. The ~ of the trust must makeit impossible ......
for any part ofthe assets and income of the trust to be used for, or diverted to, purposes
other than for the exclusive benefit of the plan p .articipants and their beneficiaries.
The existence of a trust will not change the administration, create any additional
liabilities or fiduciary responsibilities for the City, or change the plan structure, except
to add a layer of protection for.money set aside for the employee against the claims of
the City’s creditors.
Under California State law, only natural persons who have the capacity to hold
property and enter into contracts, or Certified Trust Companies may serve as trustee
for any trust to be administered in California. Upon consultation with legal counsel,
staffrecommends that the City Manager and Director of Administrative Services serve
as co-trustees for both plans. The City Attorney has advised designating co-trustees
because the plan designates the City Manager as Plan Executive, and an additional
trustee will ensure an extra check and balance. The trustees will hold record title to
trust assets and permit deposits and payments from individual accounts maintained by
the record keeper, according to the provisions of the plan document or plan
administrator. Under the trust agreements, the City indemnifies the trustees. An
insurance policy will be purchased to cover these indemnities.
The Internal Revenue Code requires that the trust agreements be adopted no later than
December31; 1998. The co-trustees have each signified their acceptance-by-signing the
trust agreement.
RESOURCE IMPACT
There are nodirect City costs for the plan amendments.
POLICY IMPLICATIONS
This report does not represent any change to existing City policies.
REvmw
This is not a project under the California Environment Quality Act (CEQA).
ATTACHMENTS
Attachment A
Attachment B
Resolution: Plan - Trust Agreement (Regular employees)
Resolution: Plan - (Hourly employees)
CMR:460:98 Page 3 of 4
PREPARED BY:Leonard Zuck~E_m~loyee B~efits Manager
Director of Human Resources
EMIL~ HARRISON --
Assistant City Manager
CMR:460:98 Page 4 of 4
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO
ADOPTING AN AMENDED CITY OF PALO ALTO DEFERRED
COMPENSATION PLAN FOR REG~ EMPLOYEES AND
APPROVING AND AUTHORIZING EXECUTION OF A TRUST
AGREEMENT FOR SAID PLAN
WHEREAS, pursuant to Resolution No. 7603, adopted June 14,
1-996, the City Council amended and restated "City of Palo Alto
Deferred Compensation Plan" (the "Plan")as the exclusive Deferred
Compensation Plan for regular employees; and
WHEREAS, the Council desires to amend the Plan to conform
with changes in the federal law brought about by the Small Business
Jobs Protection Act of 1996 and the Taxpayer Relief Act of 1997
.(collectively, ~the Acts"), requiring, among other things, that
within the time prescribed by such Act, eligible deferred
compensation plans established and maintained by governmental
employers be amended to provide that all assets of the plan be held
in trust, or under one or more appropriate annuity contracts or
custodial accounts, for the exclusive benefit of plan participants
and their beneficiaries; and
WHEREAS, the Council desires to effectuate_this requirement
~ap~v~ng and~uth0rizing execution of a trust agreement between
the city and co-trustees, the City Manager and Director of
Administrative Services; and
WHEREAS, it is also the desire of the Council to amend the
Plan in order to provide employees with certain other advantages
brought about by the Acts, including indexed limitation of deferred
amounts and certain elections with respect to the commencement of
distribution under the Plan; and
NOW, THEREFORE, the Council of the City of Palo Alto does.
RESOLVE as follows:
~J~_i. The Council hereby adopts the ~City of Palo
Alto Deferred Compensation Plan" as amended January I, 1997, as the
exclusive deferred compensation plan for regular employees for all
deferred compensation plan administrators for the City of Palo
Alto.
9812O7 la~ 003208O
~F~7iLLQ~_~. The .Council hereby approves and authorizes
execution of that certain agreement entitled ~Trust Agreement for
City of Palo Alto Deferred Compensation Plan,." by and between the
City of Palo Alto and co-trustees, June Fleming, City Manager and
Carl Yeats, Director of Administrative Services, The co-trustees
have each signified their approval and acceptance of their
designation as co-trustees for the Plan by signing the agreement.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVEDAS TO FORM:
Senior Asst. City Attorney
Mayor
City Manager
Director of Administrativ@
Services
Director of Human Resources
981207 lac 0032080
2
CITY OF PALO ALTO
DEFERRED COMPENSATION PLAN
AS AMENDED EFFECTIVE JANUARY 1, 1997
Section 1.01. Name. The name of this plan shall be the City of Pale Alto Deferred
Compensation Plan. It may be, and sometimes hereinafter is, refuted to as the "Plan" or the
"Deferred Compensation Plan." The Plan was adopted on September 27, 1982, was amended and
restated on December 12, 1983 and August 17, 1987, and September 18, 1989. It is hereby
amended and restated, effective January 1, 1997, to comply with the requirements of Section 457
of the Internal Revenue Code of 1986, as amended (the "Code"), as well as to allow for other
permissible changes generally effective on the date(s) otherwise set forth in this document.
Section 1.02. Purpose. The purpose of this Plan is to extend to Employees of the
Employer certain benefits which ordinarily accrue from participation in a deferred compensation
plan. The Employer does not and cannot represent or guarantee that any particular federal or
state income, payroll or other tax consequence will occur by reason of an Employee’s
participation in this Plan. The Employee wishing to participate in the Plan should consult with
his/her own attomey or other representative regarding all tax or other consequences of
participation in this Plan.
Section 1.03.
(a) "Account" means the book account to which there are credited the
amounts deferred by a Participant pursuant to Section 2.01 hereof, and any interest, dividends,
gains, losses or the like thereon.
(b) "Administrator" means the contractor(s) retained by the Employer to
account for deferrals, the investment and disbursement of fimds, withholding of taxes and to
make proper reports to participants, annuitants and governmental agencies under the Plan.
(c) "Advisory Committee" shall mean a committee consisting of seven
persons elected by the Participants. The primary function of the Advisory Committee shall be to
make recommendations regarding hardship withdrawals and to give advice to the Plan Executive
on such matters pertaining to the Plan including, but not limited to, investment and payout
options, and the charging of administrative costs at such times as the Plan Executive may
request, Members of the Advisory Committee must be Participants in the Plan.
(d) "Annuity Contract" has the meaning set forth in Section 4.01(c)(2) herein.
(e)"Annuity Notice" has the meaning set forth in Section 4.01 (e)(1) herein.
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1160335-90010011
(f) "Beneficiary" means any person designated by the Participant to receive a
pension, annuity, death benefit, or other benefit under the provisions of this Deferred
Compensation Plan.
(g) "Benefits" means the benefits payabl~ to a Participant arising out of such
Participant’s participation in this Plan, and shall be determined in the manner set forth in Section
4.01(a)(1) hereof.
"Compensation":
(1) "Gross Compensation" for a calendar year means all compensation
for services performed for the Employer paid to or on behalf of an Employee during the calendar
year;
(2) "Deferred Compensation" means that portion of an Employee’s
Gross Compensation which said Employee has elected to defer in accordance with the provisions
of this Deferred Compensation Plan;
(3) "~elu~ble*.Ltagl.ll~b~ Compensation" means Gross
Compensation of an Employee less: all amounts with respect to such Employee deferred under
Section 2.01 hereof and any other eligible deferred compensation plan under Section 457 of the
Code for the calendar year; all amounts payable to such Employee for the calendar year by the
Employer with respect to any wage continuation plans, which amounts are excludable from such
Employee’s gross income under Section 105(d) of the Code; and all amounts payable to such
Employee for the calendar year by the Employer as a citizen of the United States living abroad,
which amounts are excludable from such Employee’s gross income under Section 911 of the
Code.
(i) "Employee" means any full-time regular employee, part-time regular
employee, or elected otfieial of the Employer.
(j) "Employer" means the City of Palo Alto.
(k) "Investment Election" of a Participant as of any date shall mean those
investments included in the Investment Options in which such Participant has as of such date
elected to have the assets credited to his/her Account invested pursuant to Section 2.03 hereof.
(1) "Investment Options" as of any date shall mean those alternative
investments designated by the Employer in which the assets credited to a Participant’s Account
may be invested pursuant to Section 2.03.
(m) "Normal Retirement Age" of a Participant means any age of a Participant
in the following range: beginning with the first age over age 50 in which such Participant has
5 years ofPERS-eredited se~ice, andending no later than age 70 1/2 years; provided, however,
that if a Participant continues to be employed by the Employer after age 70 1/2 years, the Normal
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1160335-90010011 2
Retirement Age shall be such age or date as may be specified by the Participant, but not later
than the age or date the Participant terminates his or her employment with the Employer.
(n) "Participant" means any Employee who voluntarily elects to participate in
this Plan by filing a duly executed Participation Authorization with the Employer.
(o) "Participation Authorization" means the Employee’s election to participate
and authorization to defer Compensation pursuant to the provisions of this Plan, as set forth on
the form provided by the City pursuantto Section 3.04 herein.
(p) "PERS" means the Public Employees’ Retirement System as set forth in
sections 20000 et ~ of the California Government Code as adopted by the Gi.ty ~
pursuant to a contract dated March 9, 19.42 as amended from time to time.
(q) "Plan Executive" means the City Manager or the duly authorized designee
of the City Manager. The discretion or other functions given to the Employer under the terms of
the Plan shall be exercised by the Plan Executive as the Employer’s authorized agent.
(r)"Plan Year" means the calendar year.
(s)"Separation from Service" means a termination of a Participant’s
employment with the Employer resulting from resignation, discharge, retirement upon or after
the Participant’s attainment of Normal Retirement Age, disability, or the Participant’s death.
(t) "Severe Financial Hardship" shall have the meaning set forth in
Section 4.02 hereof.
(u) "Terminating Participant" means any Participant who separates from
service with the Employer and accepts employment with’a new employer.
Section 2.01. Participation.
Operation of Plan
(a) Any Employee may eleet to become a Participant in the Plan and to defer
payment of part of his/her Gross Compensation by executing a written Participation
Authorization and filing it in the manner set forth in Article 3 hereof. The dollar amount
deferred must be at least $10.00 per pay p .eriod or such larger amount as may be designated by
the Plan Executive from time to time. The maximum that may be deferred under the Plan for the
Participant’s taxable year by a Participant shall not exceed the lesser of (a) $7,500 as adjusted for
changes in the cost of living in accordance with Code Section 415(e)(15) for years beginning
after December 31, 1996, or (b) 33-1/3% of the Participant’s ~clu~Ic ~
Compensation (25% of a Participant’s Gross Compensation); provided however, that during one
1PA~585730.4
1160335-90010~[1
or more of a Participant’s last.three taxable years ending before such Participant attains Normal
Re~ent Age, the maximum amount that may be deferred under the Plan shall be the lesser of
(a) $15,000 or (b) the sum of(i) plus (ii), where (i) is ~ual to the lesser of(A) $7500 or (B) 33-
I/2 % of the Participant’s ~c!’.’-~._b!e ~,,~.b,a.~ Compensation and (ii) is e~lUal to the total
amount set forth under (i) for all Plan Years prior to the cur~nt Plan Year, less the aggregate of
amounts actually deleted under this Plan for such years (the "Catch-up Deferrals"), The amount
a Participant elects to defer may be changed only in accordance with Section 3.05 herein.
(b) The maximum amount which a Participant may elect to defer during a
Plan Year pursuant to Section 2.01(a) shall be reduced by any amounts excluded from gross
income pursuant to Section 403(b) of the Code during such Plan Year. Furthermore, beginning
January 1, 1989, the maximum amount which a Participant may elect to defer during a Plan Year
pursuant to Section 2.1(a) shall also be:.
(1) Reduced by any amounts excluded from gross income through
salary reduction arrangements pursuant to Section 402(e)(3) (for Plan Years beginning atter
December 31, 1992);
(2) Reduced by any amounts excluded from gross income through a
salary reduction arrangement pursuant to Section 402(a)(8) (for Plan Years beginning prior to
January 1, 1993);
(3) Reduced by any amounts excluded from gross income under
Section 4020a)(1)(B) or Section 402(k) of the Code during such Plan Year; or
Deducted from-gro~ income ~ugh contributiom to ~-~
exempt from federal income taxation pursuant to Section 501(e)(18) of the Code during such
Plan Year.
Section 2.02. Deferral of Compensation. Employer and Participant mutually
acknowledge that the Compensation of each Employee as set forth in the annual salary
regulations or resolutions of the Employer includes the dollar amount of funds deferred under the
terms of this Plan. Employee compensation shall be paid bi-weekly or as otherwise provided,
except that during each year in which the Employee is a Partieipant in the Plan, that portion of
his/her said Compensation which is specified by the Employee in the Participation Authorization ¯
shall be deferred and paid in accordance with the provisions of this Plan.
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1160335-90010011 4
Section 2.03. Investment of Amounts Credited to Participants’ Accounts.
(a) From time to time, the Plan Executive shall designate alternative
investments (the "Investment Options") in which amounts c/edited toa Participant’s Account
may be invested under the Plan. The Administrator shall notify each Participant in writing of the
Investment Options available as of the date of such notice.
(b) The amounts credited to a Participant’s Account shall be invested in such
Investment Option or Options and in such proportions as the Participant shall elect (the
"Investment Election") subject to the provisions of this subsection (b). A Participant’s
Investment Election, and any change in such Investment Election, shall be made in writing on
such forms and at such times and in accordance with such procedures as the Plan Executive may
prescribe; provided that such forms and procedures shall be communicated to all Participants and
shall be uniformly applied to all Participants in a non-discriminatory manner.
(c) In the absence of a Participant’s Investment Election, amounts credited to
such Participant’s Account may be invested in such manner as the Administrator may determine.
Section 2.04. Employer Responsibili _ty. The designation of any Investment Option by
the Employer shall not be considered to be an endorsement or guarantee of such Investment
Option.. Further, neither the Employer, the Plan Executive, nor the Advisory Committee shall be
held responsible for any investment results, either gains or losses, from any Investment Options
in which a Participant elects to have the amounts credited to his/her Account invested.
Section 2.05. Administration of the Plan. The Plan shdll be directed-by-the-Plan ....
Executive who shall have the sole authority for the operation of the Plan in accordance with its
terms and shall rule on all questions arising out of the administration, interpretation and
application of the Plan, which determination shall be conclusive and binding on all Participants.
Section 2.06. ~’L~:.’r.e~.2e efDef..-’rre~ .~’:’..e"..~t:. A!! ~_~e"~t~
Defe~ed Amoun~ Held in TNst No~thstanding any con~a~ pro~sion of the Plan, in
accordance ~th see~on 457~i... of the Cod~ all amonn~ of eompen.sa~on dege~e~ p~t
~e PI~ " --~
Ng~ purchased ~ such amount, and all income a~butable to sneh amount,
nrooe~, or ri~hN shall be held in ~st for the exclusive benefit of oa~cinanN and
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1160335-90010011 5
~.~: n_, ÷,.,~.~.,~- ,~t under the Plan shall be established nursuant to a.written am’eement
that constitutes a valid tr~st under the law of the state of California.
All amounts of compensation deferred under the Plan shall be transferred to a trust
established under the Plan within a ~eriod that is not longer than is reasonable for the
proper administration of the accounts of narticipants. To comply with this requirement.
all amonnts of eom~ensafion deferred under the Plan shall be transferred to a tr~st
established under the Plan not later than 15 business days after the end ofthe..month in
which the eomnensafion would otherwise have been ~ai~i to the employee.
Administration and Accounting
Section 3.01, ~]~li]li~ll. The Plan Executive shall direct the Plan and will prescribe
such forms, and adopt such rules and regulations as necessary to carry out the purposes of the
Plan. Also, the Plan Executive may employ investment counsel to provide advice concerning
categories of investment, Investment Options, guidelines and investment policy; provided,
however, that the advice or recommendations of any such investment counsel shall not be
binding on the Plan Executive, who shall make the final determination concerning Investment
Options.
Section 3.02. Election to Participate. An Employee’s election to participate in this
Deferred Compensation Plan shall be made by filing a duly exeeut~_Par~i_’cipafion Autho~tion ......
with the Administrator, and not 0therwise.
Section 3.03. Enrollment Periods. Any Employee may effect an initial election to
participate under this Plan at any time. Participation in the Plan becomes effective on the first
day of the pay period following the date the Employee’s Participation Authorization is filed with
the Administrator.
Section 3.04. Participation Authorization. The Administrator shall establish a form of
Participation Authorization and other enrollment forms which shall contain, among other
provisions, the following:
(a) A provision whereby the Participant specifies the portion of his/her Gross
Compensation which is to be deferred.
(b)A provision whereby the Participant indicates his/her.Investment Election.
(c)A provision whereby the Participant designates a Beneficiary or
Beneficiaries, including one or more contingent Beneficiaries to receive any Benefits which may
be payable under this Plan on death of the Participant.
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1160335-90010011 6
(d) An acknowledgment by the Participant as to the amount of his/her Gross
Compensation without deductions for amounts deferred under the provisions of this Plan.
(e) A provision whereby the Participant, his/her heirs, successors and assigns
hold harmless the Employer, the Plan Executive and the Ad;cisory Committee from any liability
hereunder for all acts performed in good faith, including the acts relating to the investment of any
of the Deferred Amounts and/or the Participant’s Investment Elections hereunder.
Section 3.05. Amendment of Participation Authorization.
(a) The Participant may revoke his/her Participation Authorization at any time
by filing with the AdminisWator a written revocation. He/she may change the amount of
Compensation to be deferred at any time by signing and filing with the Administrator a written
amendment, on a form approved by the Administrator. Any such amendment shall be effective
prospectively only, on the first day of the pay period following the date the Employee’s
amendment is filed with the Administrator. A Participant may change his/her Investment
Election in accordance with the guidelines and procedures established by the Administrator and
communicated to all Participants.
(b) A Participant may not elect more than once to amend the Catch-Up
Deferrals described in Section 2.01(a).
"~ Section3.06. Participant’S Accounts.
(a) Establishment and Maintenance. A separate Account shall be maintained
for each Participant. The Employer shall cause to have credited to each such Account amounts
equal to the Compensation deferred by the Participant under the Plan as well as that portion, if
any, of monies being transferred from an eligible deferred compensation plan of a prior
employer. All interest, dividends, charges for premiums, capital or market changes with respect
to a Participant’s Investment Elections shall be credited or debited to the Participant’s Account as
they occur. For convenience, and to facilitate an orderly administration of the Plan, individual
Accounts for all Participants will be maintained by the Administrator showing the Participant’s
name with all applicable debit and credit balances. A written report of the status of the Account
of each Participant shall be furnished to such Participant at such regular intervals as the Plan
Executive shall determine.
(b)Transfers To and From a Participant’s Account.
(1) In the event a Participant (the "Terminating Participant") separates
from service and accepts employment with a new employer, upon written request to the
Administrator by such Participant, with the consent of the Plan Executive which may be granted
or denied in the absolute discretion of the Plan Executive, and subject to the conditions set forth
[PA~585730.4
1160335-90010011 7
below, the Employer shall cause to be transferred to the ownership and control of the new
employer’s eligible deferred compensation plan an amount equal to the amount credited to such
Participant’s Account as of the last day of the quarter which coincides with or next precedes the
date oftrausfer. Notwithstanding any other provision of this Plan, payment of Benefits to such a
Terminating Participant will not commence, and all amount~ credited to his account shall be
automatically transferred.
conditions:
(2)Transfers under Section 3.06(b)(1) will be subject to the following
(:B-) The new employer’s deferred compensation plan is an "eligible deferred compensation
plan" within the meaning of Section 457(b) of the Code and provides for the acceptance of
transferred accounts of transferring employees, and the new employer will accept the funds;
~ The new employer shall have agreed in writing with the
Employee to assume the continuing contractual liability to pay the Deferred Compensation so
transferred according to the provisions of the new employer’s plan;
(:D-)L(~ The Employee shall have agreed, in writing, to release the
Employer from any and all contractual obligations under the provisions of this Plan, upon
complefi0n of such transferto the new employer;
(3) Notwithstanding any provisions of Section 3.06(b), a Terminating
Participant may elect to leave the funds, assets, and accumulations in his/her Account until such
time as he/she would otherwise receive his/her Benefits in accordauee with his/her stated
preference as provided in Article 4 of this Plan;
(4) Notwithstanding any other provision of this Plan, with the consent
of the Plan Executive, which consent may be granted or denied in the sole and absolute
discretion of the Plan Executive, the Administrator shall be authorized to accept some or all of
the amounts held (whether by a trustee, enstodian or otherwise) on behalf of any other plan,
which satisfies the applicable requirements of Section 457 of the Code and applicable Treasury
regulations issued thereunder and which is maintained for the benefit of any persons who are or
are about to become Participants of this Plan. Upon the transfer of any assets of a Participant
pursuant to the preceding sentence, the Administrator shall credit the Account of such Participant
with the amounts so transferred as of the date of transfer. Thereafter any such transferred funds
shall be treated as any other assets in a Participant’s Account.
Section 3.07. Administrative Costs. The Plan Executive may determine, in a manner
deemed fair and equitable, the administrative costs associated with the withholding of Deferred
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Compensation pursuant to this Plan or in making investments or otherwise administering or
........... implementing the Plan. The Plan Executive may withhold or collect, or have withheld or
collected, such costs, in such manner as he deems equitable from the Deferred Compensation
pursuant to the Plan, or the income produced from any investment, and accordingly adjust the
Participants’ Accounts.
Section 3.08. Employer Liabili _ty. In no event shall the Employer’s liability to pay
benefits to a Participant under Article 3 exceed the value of the amounts credited to the
Participant’s Account; the Employer shall not be liable for losses arising from depreciation or
decline in the value of any investments acquired under this Plan.
Section 4.01. Benefits Generally. The Participant is entitled to have paid to him/her the
benefits created by his/her participation in this Deferred Compensation Plan, in accordance with
the provisions of this Article. Amounts paid to a Participant pursuant to this Article shall be
reported to a Participant as wages subject to withholding for federal and state income taxes and
reportable on Form W-2. All actions and determination of the Employer under this Article 4
shall be on a uniform and non-discriminatory basis.
--....--~-(a): Separation from Service or Attainment of Age 70-1/~.
(1)In the event of:
(A) a Participant’s Separation from Service with the Employer
resulting from resignation, discharge, retirement from service with the Employer upon attaining
Normal Retirement Age, disability or death of the Participant, or
03) a Participant’s election at any time after the beginning of
the calendar year in which the Participant attains age 70-1/2,
the amount credited to the Participant’s Account shall be determined as of the last day for valuing
Participants’ Accounts (whether such valuation is done quarterly or daily) next preceding
distribution and distributed to the Participant or his/her Beneficiary in accordance with the
provisions of Section 4.01 (c) below. Notwithstanding any other provision in. the Plan,
distribution of a Participant’s Benefits must commence no later than April 1 of the calendar year
following the calendar year in which the Participant attains age 70-1/2 or incurs a Separation
From Service, whichever is later.
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(2) If a Participant becomes disabled as defined by the disability
income provisions in the Employer’s retirement program applicable to the Participant, and if as a
result of such disability, the Participant separates from service and commences receiving
Benefits, the Administrator shall provide to such disabled Participant a written statement setting
forth the date of such disabled Participant’s Separation from Service and the fact that such
disabled Participant separated from service and began receiving Benefits because of a permanent
disability which required such Separation from Service.
(b) Severe Financial Hardship. In the event of severe financial hardship
resulting from an unforeseen emergency, Benefits shall be payable in accordance with
Section 4.02 hereof.
(c)Retirement Benefits and Elections on Separation from Service:
(1) Except as otherwise provided in Section 3.06(b) and this Article 4,
upon a Participant’s Separation from Service, distribution of the Benefits shall commence on the
date 90 days after the date of separation. Notwithstanding the foregoing, but subject to.
Section 4.01(c)(2), the Participant may irrevocably elect within 60 days following Separation
from Service to have the distribution of benefits commence on a fixed or determinable date other
than that described in the preceding sentence which is at least 60 days after the date such election
is delivered in writing to the Administrator listed in Section 4.01(d), below, but not later than the
date on which the Participant attains age 70-1/2 years. Benefits shall be payable to the
Participant in a single lump-sum payment, unless before the date 60 days after the separation, the-
Participant irrevocably elects in writing to the Administrator, (the "Annuity Notice") to have his
or her Benefits paid in one of the optional forms of Benefit payment listed in paragraph (c)(3) of
this Section 4.01(e)(3).
(2) Effective January 1, 1997, a Participant may elect to defer the
commencement of Benefit distribution to a fixed determinable date later than the date described
above, but not later than the April 1 of the year following the year of the Participant’s retirement
or attainment of age 70-1/2, whichever is later, provided that (a) such election is made after the
61st day following the Participant’s Separation From Service and before commencement of
Benefit distributions and (b) the Participant may make only one such election. Notwithstanding
the foregoing, the Administrator, in order to ensure the orderly administration of this provision,
may establish a deadline after which such election to defer the commencement of Benefit
distributions shall not be allowed ¯
(3) The following optional forms of Benefit payment are available in
addition to normal form of Benefit payment, which is a single lump-sum payment:
(A)Life annuity;
IPAk585730.4
160335-90010011 10
Life annuity with a period certain guaranteed;
Unit refund life annuity;
(D) Joint and survivor annuity; or
(E) Substantially extual monthly, quarterly, semi-annual or
annual payments in an amount chosen by the Participant, continuing until his Account is
exhausted;
(F) Substantially equal monthly, quarterly, semi-annual or
annual payments, calculated to continue for a period certain chosen by theParticipant;
(G) Annual payments equal to the minimum distributions
required under Section 401(a)(9) of the Code over the life expectancy of the Participant or over
the life expectancies of the Participant and his/her Beneficiary; or
(H) Any such other Benefit payment option deemed appropriate
by the Plan Executive from time to time.
(4) The options provided in Section 4.01(e)(3) above shall be
aetuarially equivalent to the single lump-sum payment to which the Participant would be entitled
under Section 4.01. Any annuities shall be provided under an annuity contract (the "Annuity
Contract") qualified for sale in California by such insurance company or other thirdparty as the
Administrator shall determine, subject to the Participant’s consent. Subject to the requirements _
set forth in the preceding sentenCe, an Annuity C0iatraetmay be altered, mended, changed or
substituted for, from time to time by action of the A .dministrator, and such altered, amended,
changed, or substituted contract or contracts thereafter may be used in the Plan.
(5) Notwithstanding any other provisions in the Plan to the contrary,
any Annuity Contract or other Benefit payment option made available to a Participant pursuant
to Section 4.01(c)(1) above, shall satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder and shall meet the following requirements:
(A) In any Annuity Contract or other Benefit payment option
which provides for payments beyond a Participant’s life, amounts payable to the Participant
under such Annuity Contract (as determined by the mortality tables of the entity providing the
annuity) or other Benefit payment option must exceed 50% of the maximum that could have
been payable to the Participant if no provision were made for payment to a Beneficiary. The
amounts payable with respect to the Participant under any Annuity Contract.or other Benefit
payment option made available, pursuant to Section 4.01(c)(3) above shall be paid in accordance
with such regulations, notices or other administrative guidance relating to incidental death
benefits, as may be issued by the Secretary of the Treasury pursuant to Code Section
457(d)(2)(B)(i)(I).
IPAk585730.4
¯1160335-90010011 11
03) If the distribution of Benefits to a Participant began before
the date of the Participant’s death, any Benefits payable to a Beneficiary must be paid ova:
(i) The life of the Beneficiary (or any shorter period), if
the Beneficiary is the Participant’s surviving spouse, or ¯ "
(ii) A period not in excess of 15 years, if the
Beneficiary is not the Participant’s surviving spouse.
(’ill) Notwithstanding the foregoing, any Benefits
payable to a Beneficiary must be distributed at least as rapidly as such Benefits would be
distributed to the Participant under the method of distribution being used at the time of the
Participant’s death.
(C) If the distribution of Benefits to a Participant had not begun
before the date of the Participant’s death, any Benefits payable to a Beneficiary must be paid
OVerl
(i) The life or the life expectancy of the Beneficiary (or
any shorter period), if the Beneficiary is the Participant’s surviving spouse, or
(ii) The shorter of(a) a period not to exceed 15 years, or
(13) the longer of(I) the period ending on the fit~ anniversary of the Participant’s death or (1/) the
period equal to Benefieiary’s life or life expectancy, if the Beneficiary is not the Participant’s
surviving spouse.
¯. ~ ? " - - S " ~ ¯ ??7 ~7 - ~-- ~----- ~ ~--~-~ ....
(I)) Payments under an Annuity Contract or other Benefit
payment option shall commence no later than the later of:
(i) 60 days after the close of the Plan Year in which
such Participant attains (or would have attained) Normal Retirement Age, or
(ii) 60 days after the close of the Plan Year of
Separation from Service by such Participant.
(iii) Notwithstanding the foregoing, payments under an
Annuity Contract or other Benefit payment option shall commence no later than:
(a) If the distribution is being made pursuant to
Section 4.01(e)(5)(C) to a Beneficiary who is not the Participant’s surviving spouse over such
Beneficiary’s life or life expectancy, the first anniversary of the date of the Participant’s death or
such later date permitted by regulations issued under Section 401(a)(9) of the Code, or
(b) If the distribution is being made pursuant to
Section 4.01(e)(5)(C) to a Beneficiary who is the Participant’s surviving spouse over such
[PAk585730.4
1160335-90010011 12
Beneficiary’s life or life expectancy, the date on wMch_~e__deceased Participant would have
attained age 70-I/2.
(c) If the Participant’s surviving spouse dies
before distribution of Benefits to such spouse begins pursuaht to Section 4.01(c)(5)~)(iii)(b)
above, the date on which the distribution of Benefits shall commence shall be determined as if
the deceased spouse were the Participant.
(E) Any distribution of Benefits payable over a period of more
than 1 year can be made only in substantiaily non-increasing amounts paid not less frequently
than annually.
(d)Distributions to B~neficiaries.
(1) The Participant has the fight to name and file with the Employer, a
written beneficiary form designating the person or persons (the ."Beneficiary(ies)") who shall
receive any remaining Benefits in the event of the Participant’s death. The form for this purpose
shall be provided by the Employer. It is not binding on the Employer until it is signed, filed with
the Employer by the Participant, and accepted by the Employer. Any Beneficiary designation
may be changed by the filing of a subsequent beneficiary designation form. If the Participant
dies without having a Beneficiary form on file, the Benefits shall be made to the properly
appointed fiduciary of the Participant’s probate estate.~ However, ira fiduciary has not been
appointed and qualified within 120 days after the Participant’s death, the Benefits shall be paid
first to the Participant’s surviving spouse, next to the Participant’s _sn~vi __ring chil_dr ~andthereaff~ to the surviving parent or parents of the Participant. The Participant accepts and
acknowledges that he/she has the burden for executing and filing with the Employer a proper
Beneficiary designation form.
(2) If a Participant dies before the distribution of Benefits has
commenced, the named Beneficiary shall have the right to designate that payments to such
Beneficiary shall be in accordance with one of the payment.options available to Participants
under Section 4.01(c) above. Such election by a Beneficiary shall be made in accordance with
the requirements for election of payment options by a Participant under.Section 4.01(c) above.
(3) If the Participant dies aiter the commencement of Benefit
payments to him pursuant to one of the payment options set forth in Section 4.01(1)(c)(3) above,
and before such Participant’s entitlement to payment of Benefits has been exhausted, then the
remaining Benefits payable shall be paid to the Participant’s designated Beneficiary in
accordance with the payment option selected by the Participant.
Section 4.02. Pa_vments for Severe Financial Hardship. Notwithstanding any other
provision herein, in the event of a severe financial hardship, a Participant may apply to the Plan
Executive to withdraw Benefits, in whole or in part, from the Plan prior to a Separation From
Service. Withdrawal of Benefits shall be limited strictly to that amount reasonably necessary to
~PA~585730.4
1160335o90010011.13
meet an unforeseen ~nergency situation which causes the severe financial hardship. Any
r~mai~iug Benefits shall be paid upon such Participant’s Separation From Service in accordance
,,J..,,.,.~,.~.v~.,~ ,.~..M.,~,,~ ~v _j.-~,..,~,~. ~,~,,,v~ ~,.~*v,~L ~ ~t.,~.~,~v~,~..~e..t.~-t~. ~ ~..,vL..~,~.~,,,,~,,~,va-,~ ,~. ~v~,,..~. t..~v,,. ¯ ~vv ~
Any withdrawal of Benefits for severe financial bar&hip reasons shall
be limited to those situations or circumstances that result from real and unforeseen emergencies
beyond the control of the Participant causing severe financial hardship if an early withdrawal of
Benefits were not permitted. Examples of severe financial hardship to the Participant include
those ~fioh hardship c/.’~-’-=Sen sRuations that may result from a sudden and unexpected illness
or accident of the Participant or of a dependent of the Participant or loss of the Participant’s
property due to casualty or other similar extraordinary and unforeseeable circumstances resulting
from events beyond the control of the Participant. In any event, no payments for severe financial
hardship shall be made to the extent such hardship is or may be relieved through reimbursement
or compensation by insurance or otherwise, by liquidation of the Participant’s assets to the extent
that liquidation of such assets would not itself cause severe financial hardship, or by a cessation
of deferrals under the Plan. Examples of circumstances that are not considered to be
unforeseeable emergencies include the need to send a Participant’s child to college or the desire
to purchase a home or automobile. The decision of the Plan Executive concerning severe
financial-hardship shall b~ made-after-review and reco~endation ~~ade b~ the Advis-~i--y
Committee and shall be final as to all Participants.
Section 4.03. Distribution of De Minirnis Accounts: Effective January 1, 1997, and
notwithstanding the foregoing provisions of this Article 4 and without regard for whether the
Participant has incurred a Separation From Service, if the value of a Participant’s Account does
not exceed $3500155.000 effective January. 1, 1998) and (a) no amount has been deferred under
the Plan with respect to the Participant during the 2-year period ending on the date of the
distribution and (b) there has been no prior distribution under the Plan to the Participant pursuant
to this Section 4.03, the Participant may deet to receive or the Employer may distribute the
Participant’s entire Aecount without the consent of the Participant, Such distribution shall be
made in a single Imp-sum payment.
Miscellaneous
Section 5.01. Leave of Absence. Ira Participant is on an approved leave of absence from
the Employer with Compensation, participation in this Plan will continue. If a Participant is on
an approved leave of absence without Compensation and such leave of absence continues for
~PA~585730.41160335-90010011 14
more than six (6) months, said Participant will be deemed to have terminated participation in the
Plan as of the end of such six (5) month period.~ Such termination of participation will not cause
distribution of Benefits. Upon return from such leave of absence, the Participant’s full
Compensation on a non-deferred basis will be thereupon restored. Such Employee may again
become a Participant by meeting the requirements for eligibility, as herein provided.
Section 5.02. Retirement System Inte_m~ation. Benefits payable by and deductions for
Employee contributions to, any retirement system of the Employer shall be computed without
reference to mounts deferred pursuant to this Deferred Compensation Plan and shall instead be
based upon Gross Compensation the Participant would receive ffhe/she had not elected to
participate in this Plan and to defer Compensation.
Section fi.03. AlI~h~mt. This Plan may be modified, amended or terminated in whole
or in part (including retroactive amendments) by the Employer at any time. No amendment or
termination of the Plan shall reduce or impair the rights of any Participant or Beneficiary which
have already accrued. Upon termination of the Plan, the Employer shall distribute all amounts
credited to each Account in accordance with the Participant’s payment option selected pursuant
to Article 4. All Participants shall be treated in the same manner.
Section 5.04. Creditors. A Participant may not assign, transfer, sell, hypothecate, or
otherwise dispose of any or all of his/her Account or any right which he/she may have under the
Plan, and any attempt to do so shall be void.
Section 5.05. Domestic Relations Order.
,(a) :-- ~loWanc~ Of Transfers: To the extent ~uired und~
decree, or order (including approval of a property settlement agreement) made pursuaut to a state
domestic relations law, any portion of a Participant’s Account may be paid or set aside for
payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the
terms of such an order, a s~parate Account shall be established with respect to the spouse, former
spouse, or child who shall be entitled to make investment selections with respect thereto in the
same manner as the Participant. Any amount so set aside for a spouse, former spouse, or child
shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant,
unless the order directs a different time or form of payment. Nothing in this Section shall be
construed to.authorize any amount to be distributed under the Plan at a time or in a form that is
not permitted under Section 457 of the Code. Any payment made to a person other than the
¯ Participant pursuant to this Section shall be reduced by required income tax withholding; the fact
that payment is made to a person other than the Participant may not prevent such payment from
being ~ck:~li$1c, includable in the gross income of the Participant for withholding and income
tax reporting purposes.
(b) Release from LiabiliW to Participant. The Employer’s liability to pay
benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside
for payment to a spouse, former spouse, or child pursuant to paragraph (a) of this Section. No
such transfer shall be effectuated unless the Employer or Administrator has been provided with
[PA~585730.4
1160335-90010011 15
satisfactory evidence that the Employer and the Administrator are released from any further
claim by the Participant with respect to such mounts, in any case in which (i) the Employer or
Administrator has been served with legal process or otherwise joined in a proceeding relating to
such transfer, (ii) the Participant has been notified of the pendency of such proceeding in the
manner prescribed by the law of the jurisdiction in which thb proceeding is pending for service of
process in such action or by mail from the Employer or Administrator to the Participant’s last ¯
known mailing address, and Off) the Participant fails to obtain an order of the court in the
proceeding relieving the Employer or Administrator from the obligation to comply with the
judgment, decree or order.
(c) Participation in Legal Proceedings. The Employer and Administrator shall
not be obligated to defend against or set aside any judgment, decree, or order described in
paragraph (a) or any legal order relating to the garnishment of a Participant’s benefits, unless the
fi~ expense of such legal action is borne by the Participant. In the event that the Participant’s
action (or inaction) nonetheless causes the Employer or Administrator to incur such expense, the
amount of the expense may be charged to the Participant’s Account and thereby reduce the
Employer’s obligation to pay benefits to the Participant. In the course of any proceeding relating
to divorce, separation, or child support, the Employer and Administrator shall be authorized to
disclose information relating to the Participant’s Account to the Participant’s spouse, former
spouse, or child (including the legal representatives of the spouse, former spouse, or child), or to
a court.
Section 5.05..r~. Participation in the Plan shall not be construed as giving any
Participant any right to continue his/her employment with the Employer.
............ Section 5.06~ ~Successors and Assi~s, The Plan shall be bindi~g-~pon and s~ in~e~o ....
the benefit of the Employer, its successors and assigns, all Participants and Beneficiaries and
their heirs and legal representatives.
Section 5.07. Written Notice. Any notice or other communication required or permitted
under the Plan shall be in writing, and if directed to the Employer or the Administrator shall be
sent to the designated office of the Employer, and, if directed to a Participant or to a Beneficiary,
shall be sent to such Participant or Beneficiary at either his/her last known address as it appears
on the Employer’s record or to the work site, at the Employer’s option.
Section 5.08. Facility_ of Payment. ffany Participant terminates employment with an
unpaid debt owing to the Employer, and neglects or refuses to liquidate the debt by any other
means when due and upon demand, the Employer shall be entitled to collect the amounts due
from the Benefits owed to the Participant under the Plan.
Section 5.09. Total A~eement. This Plan and the Participation Authorization, and any
subsequently adopted amendment thereof, shall constitute the total agreement or contract
between the Employer and the Participant regarding the Plan. No oral statement regarding the
Plan may be relied upon by the Participant.
~PA~585730.4
1160335-90010011 16
Section 5.10. Gend~. As used herein, the masculine shall include the neuter and the
f~m~uine where appropriate.
Section 5.11. Controlling Law. This Plan is created and shall be interpreted under the
laws of the State of California as the same shall be at the time any dispute or issue is raised.
IN WITNESS WHEREOF, the Employer has executed this amended and restated Plan.
CITY OF PALO ALTO
By:
Title:
ATTEST:
CITY CLERK
[PA~585730.4
1160335-900100[1 17
TRUST AGREEMENT FOR
CITY OF PALO ALTO
DEFERRED COMPENSATION PLAN
PA~586231.3
1160335-900100
TRUST AGREEMENT
THIS TRUST AGREEMENT is entered into effective as of the__ day of , ,
199__, by and between the City of Palo Alto (the "Employer"), and
and (collectively
hereafter referred to as "Trustee").
ARTICLE 1
1.1."Code" shall mean the Internal Revenue Code of 1986, as amended.
1.2."City Council" shall mean the City Council of the City of Palo Alto.
1.3. "Plan" shall mean the City of Palo Alto Deferred Compensation Plan, as
Amended January 1, 1997, a deferred compensation plan established and maintained pursuant to
Section 457 of the Code.
1.4. "Trust" or "Trust Fund" shall mean all of the assets held by the Trustee under the
Plan and this Trust Agreement.
1.5. All defined terms for which a definition is not set forth in this Trust Agreement
shall have the definition set forth in the Plan.
-ARTICLE 2 ........................................:~7 --
ESTABLISHMENT AND ACCEPTANCE OF TRUST
2.1. The Employer has duly adopted the Plan ~’or the benefit of such of its employees
as are eligible thereunder and such of their beneficiaries as may therein be described. A copy of
the Plan is attached hereto and made a part hereof. The Plan contemplates that money and other
property shall be transferred in trust to the Trustee to be held and administered by the Tnamee for
purposes of the Plan.
2.2. The Trustee shall receive from the Employer all deferred compensation
contributions in cash made under the Plan. All contributions so received, together with the
income and earnings therefrom and any increments thereto, shall be held, managed, and
administered in trust pursuant to the terms of this Trust Agreement, to provide benefits under the
Plan according to its terms.
2.3. The Trustee hereby accepts the trust created hereunder and agrees to hold and
administer the Trust Fund and to perform its duties pursuant to this Trust Agreement. In no
event, however, shall the Trustee have any duty to collect or enforce payment of any
contributions to the Trust Fund or any duty to compute any amount to be Wansferred or paid to
the Trustee by the Employer.
PAX586231.3
1160335-900100
2.4. The Plan shall be administered by th~e~p!_an__Executive, and the Trustee shall not be
responsible in any respect for the administration of the Plan, except as provided herein. It is
intended to state expressly in this Trust Agreement the powers, rights, duties and obligations of
the Trustee. No implied covenants shall be read into this Trust Agreement against the Trustee.
2.5. This Trust Agreement is made pursuant to the provisions of the Plan providing for
the investment and administration of contributions under the Plan. It is the intention of the
Employer that this Trust Agreement shall constitute part of the Plan and that the assets of the
Trust shall be held and invested for the exclusive benefit of Plan participants and their
beneficiaries pursuant to the provisiom of Section 457 of the Code.
ARTICLE 3
INVESTMENT AND ADM!NISTRATION OF THE TRUST FUND
3.1. Subject to section 3.4, section 3.5 and Article 4, the Trustee is hereby granted full
power and authority to invest and reinvest the principal and income of the Trust Fund, without
distinction between principal and income, in such investments as the Trustee, in its sole
discretion, may deem appropriate, including (without limiting the generality of the foregoing)
improved and unimproved real property, whether or not income producing, common and
preferred stocks, trust and participation certificates, bonds, debentures, mortgages, deeds of trust,
equipment trust certificates, insurance and annuity contracts, guaranteed interest contracts,
covered call options, notes secured by real or personal property, leases, ground leases, real or
personal property interests owned, developed or managed by joint ventures or limited
partnerships, obligations of governmental bodies, both domestic and foreign, notes, commercial
paper, and-other evidences-of~indebtedness, secured or unsecured,-including variable amount
notes, convertible securities of all types and kinds, mutual fund shares, and interest-bearing
savings or deposit accounts with any federally insured bank (including the Trustee if the Trustee
is a bank) or savings and loan association. In making such investments, the Trustee shall not be
restricted by any statutory limitations on investments by trustees which may now or hereafter be
in effect. No assets of this Trust shall be invested in a "collectible" (within the meaning of
section 408(m)(2) of the Code).
3.2. Notwithstanding any other provision of this Trust Agreement (except section 3.4,
section 3.5, and Article 4), the Trustee may invest and reinvest the assets of this Trust in any of
the following forms of collective investment:
(a) Any common, conective or commingled trust fund that is maintained by a
bank or other institution and that is available for the investment of funds of employee benefit
trusts meeting the requirements of sections 401(a) or 457 of the Code and any successor
provisions thereto, and during the period of time that an investment through any such medium
shall exist, to the extent of participation of the Plan, the declaration of trust of such common,
collective,-or commingled trust fund shall constitute a part of this Plan.
PAk586231.3
1160335-9O0100 2
(b) Any mutual fund which is registered as an investment company under the
Investment Company Act of 1940, including any such mutual fund established and maintained or
managed by a fiduciary (or its affiliate), with respect to which this Trust is an eligible investor.
(e) Any insurance policy or contract providing for allocation of amounts
received by the insurance company thereunder to one or more of its separate accounts maintained
for the collective investment of funds of employee benefit trusts meeting the requirements of
sections 401(a) or 457 of the Code; provided, however, that the Plan Executive shall appoint
such insurance company as an Investment Manager with respect to any Plan assets so invested.
(d) Any investment companies or trusts, including any investment company or
trust which has an investment advisory or other agreement with the Trustee or another fiduciary
(or its affiliate), with respect to which this Trust is an eligible investor.
3.3. Subject to section 3.4, section 3.5 and Article 4, the Trustee shall have the
following additional powers and authority in the administration of the Trust Fund:
hereunder.
(a)To hold and retain any and all property coming into its possession
(b)To vote, and to give proxies to vote, any securities having voting fights.
(e)To pay any assessment levied upon stock and to exercise any fight or
option of subscription or otherwise which may at any time attach, belong or be given to the
holders of any stocks, bonds, securities or other instruments in the nature thereof forming part of
the Trust Fund, and to join in any plan of lease, mortgage, consolidation, reorganization, of_th~ ........
property-oi~ssets thereof,~eiuding ~e de~0sit of bonds, s~urities and stock with any
bondholders, stockholders, or protective committee, and to take and hold any seeurit~es issued
under such plan and to pay any assessments thereunder.
(d) To enforce any mortgage or deed of trust or pledge held hereunder and to
purchase at any sale thereunder any property subject thereto.
(e) To cause any securities or other property held as p.art of the TrustFund to
be registered in its own name or in the name of one or more of its nominees and to hold any
investments in bearer form, but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund.
(f) To keep such portion of the Trust Fund in cash or cash balances as the
Trustee may from time to time deem to be in the best interests of this Trust without liability for
interest thereon.
(g) To deposit any moneys at any time held by it in any savings bank or in the
savings department of any bank, including a Trustee bank if the Trustee is a bank.
PA~586231.3
1160335-900100 3
(h) To borrow money and to sell at public or private sale (for cash or on
terms), improve, develop, lease (without restriction or limitations as to terms), rent, mortgage,
convey in trust, pledge, hypothecate, lease or contract with reference to oil, gas or other minerals
or natm~al resources and mineral fights and mineral royalties which may be part of the Trust
Fund, transfer, exchange, subdivide, partition, compromise, grant options at such times, in such
manner and upon such terms and conditions as the Trustee shall deem advisable and to otherwise
deal with the whole or any part of the Trust Fund upon such terms and conditions as the Trustee
in its discretion may deem advisable.
(i) To provide itself with public liability insurance in customary forms at
Trustee’s expense, or, at the option of the Employer, at the exp~nse of the Employer.
(J)
and compensation.
To employ suitable agents and counsel and to pay for reasonable expenses
(k) To pay out of the Trust Fund all estate, inheritance, income or other taxes
of any kind levied or assessed against the Trust Fund, to the extent such taxes are not paid from
other sources. The Trustee shall not be personally liable for such taxes. Moreover, the Trustee
may require, prior to making any payment or distribution from this Trust under this instrument,
such releases or other documents from any lawful taxing authority as it shall consider advisable.
(1) To do all such acts, take all such proceedings, and exercise all such rights
.and privileges, although not specifically mentioned herein, as the Trustee may deem necessary to
administer the Trust Fund and to carry out the purposes of this Trust.
............. ~.4. _.The pow ~ers_gran~edto_the Trustee under section 3.1, section 3.2 and
subsections (a)-(h), and subsection (j) of section3.3 0fthis Article shall be exercised by ~e
Trustee only at the written direction of the Plan Executive. The Trustee shall as promptly as
possible comply with all such directions as it receives from the Plan Executive which axe made in
accordance with the terms of the Plan. The Trustee shall retain and administer such investments
directed by the Plan Executive without any duty to review or make re~’~ommendations with
respect to such investments. The Trustee shall have no right, duty or power to dispose of any
investment directed by the Plan Executive until so instructed in writing by the Plan Executive.
3.5. If the Employer has elected to maintain Participant-directed accounts,
notwithstanding any other provision of this Trust Agreement, each Participant shall direct the
Plan Executive, who in turn shall direct the Trustee as to the investment of the amounts in all of
his or her Account(s), and the Trustee shall retain and administer such Participant-directed
investments without any duty to review or make recommendations with respect to such
investments. In no event shall the Trustee borrow any money at the direction of a Participant
(whether or not made indirectly through thePlan Executive) unless no assets of the Plan shall be
liable for the repayment of such borrowing other than assets allocated to the Account(s) of the
Participant giving (whether directly or indirectly) such direction. The Trustee shall have no
right, duty, or power to dispose of any Participant-directed investment until so instructed by the
Plan Executive at the direction of the Participant.
PA~586231.3
1160335-900100 4.
3.6. The Trustee has no obligation to determine the existence of any conversion,
redemption, exchange, subscription or other fight relating to any securities the Trustee is directed
to purchase for the Trust Fund of which notice was given prior to the purchase of such securities.
Nor does the Trustee have any obligation to exercise any such right unless it is informed of the
existence of the right and is instructed to exercise such right~ in writing, by the Investment
Manager, or Plan Executive (at the direction of the Participant) making or directing the
investment in such securities, within a reasonable time prior to the expiration of such right.
3.7. If the Trustee is directed to purchase, retain, or sell securities issued by any
foreign government or corporation, the Plan Executive, Investment Manager, or Participant
directing the investment in such securities (whether directly or indirectly) is responsible for
advising the Trustee in writing regarding any laws or regulations of any foreign countries or any
United States territories or possession that may apply to such securities including, without
limitation, laws and regulations affecting dividends or interest on such securities.
3.8. The Trustee shall from time to time, on the written directions of the Plan
Executive, make payments out of the Trust Fund to such persons, in such manner, in such
amounts, and for such purposes as may be specified by the Plan Executive. The Trustee shall not
be responsible in any way for the purpose or application of such payments, for inquiring as to
whether or not such payments are in accordance with the terms of the Plan, or for the adequacy
of the Trust Fund to meet and discharge any and all liabilities under the Plan.
3.9. With the consent of the Plan Executive, the Trustee shall accept all or any of the
assets held (whether by a trustee, enstodian or otherwise) on behalf of any other plan which
satisfies the applicable requirements of section 457 of the Code, and which is maintained for the
benefit of any individuals who are Participants o~are eligible to become Participants of the Plan~-
3.10. The Plan Executive shall state to the Trustee and each Investment Manager in
writing from time to time the funding policy and method established for the Plan. In investing.
and reinvesting the Trust Fund, the Trustee and each Investment Manager shall have due regard
for the funding policy and method of the Plan but in no event shall the Trustee or any Investment
Manager have any responsibility for the establishment or adequacy of such funding policy and
method.
3.11. When there is more than one Trustee appointed under this Trust Agreement they
shall jointly control and manage the Trust Fund, except, however, the Trustees may agree
amongst themselves and may authorize and delegate any one or more of the Trustees, either
individually, or in concert, to exercise the powers provided for in this Trust Agreement.
ARTICLE 4
INVESTMENT MANAGER
4.1. Whenever one or more Investment Managers are appointed by the Plan Executive,
if any, each Investment Manager shall have the power to manage, including the power to acquire
or dispose of, that portion of the Trust Fund which is assigned to it as provided herein. The Plan
PAk586231.3
1160335-900100 5
Executive shall notify the Trustee of the identity of the Investment Manages so appointed, and
shall promptly deliver to the Trustee a copy of the Investment Manages written ...............................
acknowledgment of fiduciary status. The Trustee shall be entitled to rely upon the fact that an
Investment Manager is at all times qualified as such and is authorized to invest and reinvest
assets of this Trust until the Trustee is notified to the contr~ by the Plan Executive.
4.2. Upon the appointment of one or more Investment Managers, the Trustee shall
segregate any portion of the Trust Fund assigned in writing to an Investment Manager into one or
more separate accounts to be known as"Investment Manager Accounts." An Investment
Manager shall be appointed in writing for each such account and written notice of said
appointment shall be given contemporaneously to the Trustee, specifying those assets of the
Trust Fund to be managed by the Investment Manager and instructing the Trustee as to what to
do with respect thereto. The selection of an Investment Manager shall be in the sole and absolute
discretion of the Plan Executive. The Trustee shall follow the directions of the Investment
Manager in exercising the powers granted to the Trustee in Article 3.1, 3.2 and subsections (a)-
(h) and subsection (j) of Article 3.3 of this Trust Agreement.
4.3. All directions given by an Investment Manager to the Trustee shall be in writing,
provided that the Trustee may in its sole discretion accept oral directions for the purchase or sale
of securities subject to confirmation in writing. The Trustee shall be under no duty to question,
or make inquiries as to, any act or direction of any Investment Manager taken as provided herein,
or any failure to give directions, or to review the securities held in any Investment Manager
Account, or to make any suggestions to the Investment Manager with respect to investment and
reinvestment of, or disposing investments in, any Investment Manager Account. The Trustee
shall not be liable for any acts or omissions of any Investment Manager, or be under any
obligation to invest or otherwise manage any assets of the Trust Fund which is subject to the ....
management of an Investment Manager as herein provided. Accordingly, the Trustee shall be
under no liability for any loss of any kind which may result by reason of any act or failure to act,
provided such act or failure to act is in accordance with any directions of any Investment
Manager or is by reason of inaction in the absence of written direction from an Investment
Manager.
4.4. No Investment Manager and no Trustee having power and authority to invest and
reinvest any portion of the Trust Fund shall have any obligation to invest or otherwise manage
any asset of the Trust Fund which is subject to the management of another Investment Manager
or Trustee.
ARTICLE 5
COMPENSATION. EXPENSES AND TAXES
5.1. The Trustee shall be paid such reasonable compensation and reimbursement for
expenses out of the Trust Fund, or at the election of the Employer, by the Employer, as shall
from time to time be agreed to in writing between the Employer and the Trustee. The Trustee
shall be entitled to withdraw its compensation and expense reimbursement from the Trust Fund
PA~586231.3
1160335-900100 6
after sixty (60) days after the Trustee sends an appropriate billing unless such mount is paid by
the Employer prior to that time. However, no Trustee who is ~ employee 6ftheEmpi0yer shall ....
receive any compensation or expense reimbursement from the Trust.
5.2. All taxes of any and all kinds whatsoever that may be levied or assessed under
existing or future laws upon, or in respect of, the Trust Fund or the income thereof and all
commissions or acquisitions or dispositions of securities and similar expenses of investment and
reinvestment of the Trust shall be paid from the Trust Fund. Any taxes unpaid at the termination
of the Trust shall constitute a charge against the Trust Fund.
5.3. All costs and expenses relating to the administration or investment of the Plan’s
assets, to the extent not covered by section 5.1 or section 5.2, shall be paid out of the Trust Fund.
ARTICLE 6
ACCOUNTING AND VALUATION
6.1. The Trustee shall keep accurate and detailed accounts of all investments, receipts,
disbursements and other transactions hereunder. All accounts, books and records relating to such
transactions shall be open to inspection and audit at reasonable times by any person designated
by the Plan Executive. The books and records of the Trust shall be kept upon the basis of the
Plan’s Plan Year.
6.2. No later than one hundred twenty (120) days following the end of each fiscal year
of the Trust and within ninety (90) days after the removal or resignation of the Trustee as
provided in Article 7 hereof, the Trustee shall file_with the Plan Exeeufivea written accounting
setting forth ~ investments, receipts, disbursements and other ~actions executed by the
Trustee during such fiscal year or during the period from the commencement of the last fiscal
year to the date of such removal or resignation, and settle, g forth the fair market value of the
Trust assets as of the close of said fiscal year or the effective date of such removal or resignation,
as the ease may be, shall be a Valuation Date.
6.3. Valuation of the Trust Fund shall be made at more frequent intervals than
provided in Section 6.2 ffthe Plan Executive shall so direct. The Trustee, ff such Trustee is not
an employee of the Employer, shall be entitled to receive additional and adequate compensation
for any additional valuation so directed.
6.4. Notwithstanding any other provision of this Article 6, if the Trustee shall
determine that the Trust Fund consists in whole or in part of property not traded freely on a
recognized market, or that information necessary to ascertain the fair market value thereof is not
readily available to the Trustee, the Trustee shall request the Plan Executive to instruct the
Trustee as to the value of such property for all purposes under the Plan and this Trust Agreement,
and the Plan Executive shall comply with such request. The value placed upon such property by
the Plan Executive in its instructions to the Trustee shall be conclusive and binding upon the
Employer, the Plan Executive, Participants, Beneficiaries, and all other persons with an interest
herein. If the Plan Executive shall fail or refuse to instruct the Trustee as to the value of such
PAk586231.3
1160335-900100 7
prope~y within a reasonable time affor receipt of the Trustee’s request so to do, the Trustee shall
engage a competent appraiser to fix the fair market value of such prepay for all purposes
hereunder. The determination of any such property shall be conclusive upon all parties interested
therein and the Trustee shall have no liability in connection therewith. The reasonable fees and
expenses incurred for any such appraisal shall be paid by th~ Trustee out of the Trust Fund or, at
the option of the Employer, by the Employer. Any reasonable fees or expenses unpaid at the
termination of the Trust shall constitute a charge against the Trust Fund.
ARTICLE 7
REMOVAL. RESIGNATION. AND APPOINTMENT
OF A SUCCESSOR TRUSTEE
7.1. The Trustee may be removed by the City Council at any time upon sixty (60) days
notice in writing to the Trustee, unless a shorter p~riod is acceptable to the Trustee. The Trustee
may resign at any time upon sixty (60) days notice in writing to the City Council, unless a
shorter period is acceptable to the City Council; provided, however, that upon receipt of
instructions or directions from the Employer or the City Council with which the Trustee is unable
or unwilling to comply, the Trustee may resign upon giving written notice to the City Council
within a reasonable time after receipt of such instructions or directions, and, notwithstanding any
other provision hereof, in that event the Trustee shall have no liability to the Employer, the City
Council, or any other person interested herein for failure to comply with such instructions or
directions.
7.2. Upon such removal or resignation of the Trustee, the City Council shall appoint a
successor trustee who shall have the same powers and duties as those conferred upon the Trustee-
¯ hereunder. Upon acceptance of such appointment by the successor trustee, the Trustee shall "
assign, transfer and pay over to such successor trustee the funds and properties which then
constitute the Trust Fund and shall be released and discharged from all further liability with
respect to the Trust. The Trustee is authorized, however, to reserve such sum of money, as to it
may seem advisable, for payment of its fees hereunder and any balance of such reserve remaining
after the payment of such fees shall be paid over to the successor trustee.
7.3. Notwithstanding any other provision of this Article 7,.where the Trustee is a
designated position of the Employer, the termination of employment or resignation of the
individual occupying such designated position shall constitute the automatic resignation by such
individual as Trustee. The successor to such designated position shall be appointed as Trustee by
the City Council, subject to such sueeessor’s acceptance in writing to such appointment.
ARTICLE 8
AMENDMENT AND TERMINATION
8.1. This Trust is declared to be irrevocable and except as otherwise provided in this
Article 8, the Employer has no reversion in the Trust Fund. However, although the Employer
has established the Trust with the bona fide intention and expectation that it will be able to make
PA~586231.3
1160335-900100
contributions to it indefinitely, the Employer is not_ aud_. S_~ n_o_t _b_e__und~_a~_y obligation or
liability whatsoever to continue its contributions or to maintain the Plan for any given length of
time. The Employer may in its sole and absolute discretion discontinue its contributions or
terminate the Trust in whole or in part in accordance with the provisiom of the Plan at any time
without any liability whatsoever for such discontinuance orcomplete or partial termination.
From and after the date of termination of the Plan and Trust, and until further distribution of the
Trust, the Trustee shall continue to have all the powers provided under this Trust Agreement as
are necessary and expedient for the orderly liquidation and distribution of the Trust.
8.2. In addition, to provide for contingencies which may require or make advisable the
clarification, modification, or amendment of this Trust Agreement, the Employer reserves the
fight to amend this Trust Agreement at any time and from time to time, in whole or in part, in
¯ accordance with the provisions of the Plan. However, no such amendment shall
(a) cause any part of the Trust Fund to revert to or be recoverable by the
Employer or be used for or diverted to purposes other than the exclusive benefit of Participants
(including former Participants) and Beneficiaries except that a contribution or a portion thereof,
made by the Employer by a mistake of fact, shall be returned to the Employer within one year
after the payment of such contribution to the extent permitted by Code section 457.
(b)
any benefit; or
deprive any Participants (including former Participants) or Beneficiaries of
(c) increase the duties, powers or liabilities of the Trustee hereunder without
the Trustee’s written consent.
ARTICLE 9
PROTECTION OF TRUSTI~E
9.1. In any event, in any matter in which the Investment Manager is permitted to
exercise any power or authority hereunder, the Trustee shall be fully protected in relying in good
faith on the directions of such Investment Manager or in refusing to take action in the absence of
receipt of such direction, notwithstanding any loss to or diminution of the Trust Fund which may
thereby result.
9.2. In any event, in any matter in which the Plan Executive is permitted or required to
direct or approve the exercise by the Trustee of any power or authority hereunder, the Trustee
shall be fully protected in relying in good faith on such direction or approval or in refusing to
take action in the absence of receipt of such direction or approval, notwithstanding any loss to or
diminution of the Trust Fund which may thereby result.
9.3. The Trustee shall be fully protected in acting upon any instruction or document
believed by it in good faith to be genuine and to be presented or signed by the person or persons
duly authorized so to do, and the Trustee shall be under no duty to make any investigation or
inquiry as to the correemess of such instruction or document.
PA~586231.3
1160335-900100 9
9.4. The Trustee may consult with legal counsel of its choice (who may or may not be
counsel for the Employer) upon any question or matter arising hereunder and shall be fully
protected in acting in good faith upon advice of such counsel, notwithstanding any power
otherwise vested in the Employer or the Plan Executive to construe this Trust Agreement or
adjudicate questions arising hereunder. ’"
9.5. It is the intent of the parties to this Trust Agreement that each fiduciary shall be
solely respomible forhis or its own acts or omissions. No fiduciary has a duty to question
whether any other fiduciary is fulfilling all of the responsibilities imposed upon such other
fiduciary by any regulations, nalings or other administrative promulgations under the Code, and
no fiduciary shall have any liability for another fidueiaxy’s breach of fiduciary responsibility with
respect to the Plan or the Trust Fund unless such fiduciary: (a) participates knowingly insueh
breach, (b) has actual knowledge of such breach and fails to make efforts reasonable under the
circumstances to remedy such breach; or (e) through his or its failure to perform his or its own
specific fiduciary responsibilities with respect to the Plan or the Trust Fund, has enabled such
other fiduciary to commit a breach of the latter’s fiduciary responsibilities with respect to the
Plan or the Trust Fund.
9.6. The Employer hereby agrees to indemnify and hold harmless each Trustee who is
an individual from and against all liabilities, claims, demands, and costs, including reasonable
attorneys’ fees and expenses of legal proceedings, arising as a result of an alleged breach in the
performance of the responsibilities of the Trustee under this Trust Agreement, unless the Trustee
commits a breach of its duties by reason of its willful misconduct, bad faith or criminal act.
Notwithstanding the foregoing, the Trustee shall have no right to indemnification if the Trustee is
covered as a named insured at the Employer’s expense under a fiduciary liability insurance policy
for the period-in which the claim of breach by the Trustee is made. The Employer may satisfy-its
obligation under this section 9.6, in whole or in part, through the purchase of insurance. An
individual Trustee shall be entitled to indemnity under this section 9.6 only from the Employer
and shall not be entitled to payment directly or indirectly from the Trust Fund.
ARTICLE 10
MISCELLANEOUS
10.1. During the term of this Trust Agreement, the interest of each Partieipant or his or
her Beneficiary shall consist of the right of such Participant to receive such payments or
distributions as the Trustee may, from time to time, be directed to make by the Plan Executive as
provided herein.
10.2. Except as hereinafter provided, neither the Plan Executive nor the Trustee shall
recognize any transfer, mortgage, pledge, hypothecation, order or assignment, by any Participant
or Beneficiary of all or part of his interest hereunder; and such interest shall not be subject in any
manner to transfer by operation of law, and shall be exempt from the claims of creditors or other
claimants from all orders, decrees, levies, garnishments, and/or executions and other legal or
equitable process or proceedings against such Participant or Beneficiary.to the fullest extent
PA~586231.3tt~033~-900~0o 10
permitted by law. Notwithstanding the foregoing, if any Participant’s participation in the Plan
terminates at a time when the Participant owes money to the Trust as a result of loans made to
the Participant, the Plan Executive may direct payment to the Trust from the vested portion of the
Participant’s Account(s) of any mount so owing. In addition, this provision shall not apply to a
qualified domestic relations order with respect to a Participant.
10.3. This Trust Agreement and the Trust hereby created shall be construed,
administered, and governed in all respects under and by Section 457 of the Code, and to the
extent allowed by the Code in accordance with the laws of the State of California; provided,
however, that if any provision is susceptible of more than one interpretation, such interpretation
shall be given thereto as is consistent with the Plan and this Trust being a qualified deferred
compensation plan within the meaning of Section 457 of the Code. If any provision of this
instrument shall be held by a court of competent jurisdiction to be invalid or unenf0reeable, the
remaining provisions hereof shall continue to be fully effective.
10.4. Headings in this Trust Agreement are inserted for convenience of reference only.
They constitute no part of the Trust Agreement.
10.5. This Trust Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts, when taken together, shall constitute but one
and the same instrument which may be sufficiently evidenced by any one counterpart.
10.6. This Trust Agreement shall inure to the benefit of and be binding upon the parties
hereto and their successor and assigns.
_ !.0._7._ _ Reference_to a specific law in this.Trust Agreement shall include such law, any
valid regulation promulgated thereunder, any comparable provision of any future legislation
amending, supplementing or superseding such law.
10.8. This Trust shall be held, managed, adminihtered, maintained at all times as a
domestic trust in the United States, and, except as authorized by regulations promulgated by the
United states Secretary of Labor, no indicia of ownership of any of this Trust Fund shall be
maintained at a location outside the jurisdiction of the district courts of the United States.
10.9. All notices, directions and other communications by any person pursuant to this
Trust Agreement ("Directions") shall be given or made in writing and shall be deemed effective
upon receipt by the addressee; provided, however, that the transmission of Directions by
photostatic teletransmission with duplicate or facsimile signatures shall be an authorized method
of communication until the recipient gives notice that the use of such device is no longer
authorized; and provided, further, that the transmission of Directions by telephone shall also be
an authorized method of communication until the recipient gives notice to the contrary. Any
Direction transmitted by telephone shall be promptly confirmed by a written instrument. The
recipient shall be entitled to act upon and settle any investment transaction in reliance upon a
Direction transmitted by telephone as duly recorded and transcribed in the normal course. If the
recipient fails to receive a written confirmation of a Direction transmitted by telephone within
five (5) business days following the date of receipt of the Direction, or if a written confirmation
PAk586231.3
1160335-900100 I 1
received conflicts with the oral Direction received by telephone, the recipient shall promptly
notify the person giving the Direction orally of such fact and request (a) delivery of such written
confirmation forthwith, if it has not been received or (b) an additional Direction if there is a
conflict between the oral Direction and the written confirmation.
10.10. The masculine gender shall include the feminine and the singular number shall
include the plural unless the context clearly indicates otherwise.
IN WITNESS WHEREOF, theEmployer and the Trustee have executed and accepted
this Trust Agreement effective as of the date first above written.
EMPLOYER:
ATTEST:CITY OF PALO ALTO
City Clerk
APPROVED AS TO FORM:
By: Mayor
Senior Asst. City Attorney
ity
Title
Manager
TRUSTEE:
/
Director of Administrative
Title
Serv.
PA~586231.3
1160335-900100 12
RESOLUTION. NO.
RESOLUTION OF THE. COUNCIL OF THE CITY OF PALO ALTO
DESIGNATING CO-TRUSTEES FOR THE DEFERRED COMPENSATION
PLAN AND TRUST (RETIREMENT PLAN) FOR HOURLY EMPLOYEES
WHEREAS, pursuant to Resolution No. 7319, adopted June 13,
1994, the City Council adopted a deferred compensation plan (the
~Plan") administered by the ICMARetirement Corporation ("ICMA") in
accordance with Section 457 of the Internal Revenue Code, as the
retirement plan for the CitY’s hourly employees; and
WHEREAS, pursuant to Resolution No. 7639 adopted
December 16, 1996, the City Council approved an amendment to the
Plan, which established a trust as required by changes to the
Internal Revenue Code, and further approved an agreement with ICMA
for administration of the plan and trust; and
WHEREAS, the Plan and trust provide that the employer shall
serve as trustee unless the employer ha~ designated an alternate
trustee; and
WHEREAS, state law requires that the City designate a
natural person or persons to serve as trustee; and
WHEREAS, the City Manager and the Director of
Administrative Services will be serving as co-trustees of the
deferred compensation trust for regular employees, and it is the
desire of the..Council _~o designate_them~o_serveas~co~trustees for
the deferred compensation trust for hourly employees; and
WHEREAS, the City Manager and the Director of
Administrative Services have agreed to-serve as co-trustees~ for the
deferred compensation trust for hourly employees.
NOW, THEREFORE, the Council of the City of Palo Alto does
RESOLVE as follows:
~. The Council hereby designates the City Manager
and the Director of Administrative Services as co-trustees for the
retirement plan for hourly employees administered by ICMA, which
plan is entitled ~457 Deferred Compensation Plan and Trust for
Part-Time, Temporary and Seasonal Employees."
IIII
II
II
IIIi
II
II
981209 la~ 0032081
.............~LQ~_~. City Manager, June Fleming and Director of
Administrative Services, Carl Yeats, have signified their
acceptance of the designation made in Section 1 by signing Exhibit
~A", attached hereto and incorporated herein by reference.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk Mayor
APPROVED AS TO FORM:
City Manager
Senior Asst. City Attorney
Director of Human Resources
981209 la~ 0032081 2 ~ ~ /
EXHIBIT ~’A"
to
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO"ALTO
DESIGNATING CO-TRUSTEES FOR THE DEFERRED
COMPENSATION PLAN AND TRUST (RETIREMENT PLAN) FOR
HOURLY EMPLOYEES
WHEREAS, the Internal Revenue Code requires the City to
establish a trust for the protection of 457 deferred compensation
plan assets; and
WHEREAS, the City has two deferred compensation plans, one
for regular employees and one for hourly employees; and
WHEREAS, the City has entered into a trust agreement
between the. undersigned City Manager and Director of Administrative
Services, whereby those individuals will serve as co-trustees of
the trust for the deferred compensation plan for regular employees;
and
WHEREAS, the City Council desires to designate the City
Manager and the Director of Administrative Services to also serve
as trustees of the trust for the deferred compensation plan for
hourly employees; and
WHEREAS, the undersigned agree to serve in that capacity.
NOW, .THEREFORE, the undersigned, City Manager June Fleming,
and Director of Administrative Services Carl Yeats, hereby agree to
serve as co-trustees for the trust for the .deferred compensation
plan for houri’
;
Date:December ~__, 1998
Carl Yeats, Dilector of
Administrative Services
Date: December 9, 1998
981209 la~ 0032082