Resolution 1988-42
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RESOLUTION NO. 88-42
RESOLUTION OF THE COUNCIL OF THE CITY OF
GILROY ADOPTING A REVISED DEFERRED
COMPENSATION PLAN
WHEREAS, after study and consultation the Deferred
Compensation Plan Advisory Committee and staff has prepared
and recommended adoption of the attached Deferred Compensation
Plan for the City of Gilroy in order to comply with tax code
provisions, and good cause appearing therefor,
NOW, THEREFORE, BE IT RESOLVED that the Council of
the City of Gilroy approves the attached Deferred Compensation
Plan consisting of thirteen pages, and adopts the same to define
benefits and procedures for personnel of the City of Gilroy.
PASSED AND ADOPTED this 20th day of June 1988, by the
following vote:
AYES:
COUNCILMEMBERS:
GAGE, HALE, KLOECKER,
MUSSALLEM, VALDEZ AND
PALMERLEE
NONE
HUGHAN
NOES:
ABSENT:
COUNCILMEMBERS:
COUNCILMEMBERS
APPROVE~
iL n"-i:~em
ATTEST:
RESOLUTION NO. 88-42
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CITY OF GILROY
DEFERRED COMPENSATION PLAN
As Adopted
By the City Council,
City of Gilroy
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DEFERRED COMPENSATION PLAN
FOR
CITY OF GILROY
SECTION 1. NAME:
The name of the Plan is the City of Gilroy Deferred Compensation Plan
(hereinafter referred to as the Plan).
SECTION 2. PURPOSE:
The primary purpose of the Pl an is to attract and hol d personnel by
permitting them to enter into agreements with the City of Gilroy which will
provide for deferral of payment of a portion of their current compensation
until death, disabil ity, retirement, termination of employment or other
events as prov i ded herei n. The emp 1 oyer 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. A Participant should consult with his own attorney or other
representative regarding all tax or other consequences of participation in
thi s Pl an.
SECTION 3. DEFINITIONS:
For the purposes of this Pl an, certain words and phrases used herein
wil 1 have the following meanings:
3.1 "Admi ni strator" shall mean the person appoi nted by the emp 1 oyer to
admi ni ster the Pl an.
3.2 The term "Annuity Contracts" referred to in this Plan means an
annu ity contract (fi xed and/or v ari ab 1 e) issued by an A.M. Best
rated A+, A or B+ Life Insurance Company.
3.3 "Beneficiary" means any person designated by the Participant to
receive a pension, annuity, death benefit, or other benefit under
the provisions of this Plan, by reason for such Participant's
death.
3.4 "Compensation" means all wages or salaries to be paid to an
Employee for services rendered, without deduction for any portion
thereof deferred under the provisions of this Plan or for any
amounts contributed to any program estab 1 i shed pursuant to IRC
Sections 403(b), 40Hk), 408(k)(6), or 50Hc)(18).
3.5 "Deferred Compensation" means that porti on of an Emp 1 oyee's com-
pensation which said Employee has elected to defer in accordance
with the provisions of this Deferred Compensation Plan.
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3.6 "Deferred Retirement Date" means the date beyond the Normal
Retirement Date specified in 3.12 which is designated by the
Participant. Such date shall not exceed the earl ier of (1) the
attainment of the Employer's mandatory retirement age, if any, or
(ii) the date on which the Participant incurs a Termination of
Employment.
3.7 "Disability shall mean the complete and permanent inability of a
participant to engage in his usual occupation by reason of a
medically determinable physical or mental impairment as determined
solely by the Employer on the basis of advice from a physician or
physicians.
3.8 "Eligible Deferred Compensation Plan" has the meaning given it by
the Internal Revenue Code Section 457 and the regul ations
thereunder.
3.9 "Employer" means the City of Gilroy, a political subdivison.
3.10 "Employee" means any individual defined as eligible by standards
set forth by the Employer.
3.11 "Includible Compensation" means the remuneration for services
performed for the Employer which is currently includible in gross
income.
3.12 "Norma 1 Ret i rement Date" means the 1 ast day of the month in w h i ch
a Participant retires pursuant to the normal retirement practices
of the Employer. (Such age may be no later than age 70-1/2 and no
earlier than the earliest age at which a Participant has the right
to retire under the Employer's basic pension plan, without consent
of the Employer, and to receive immediate retirement benefits
without actuarial or simil ar reduction.)
3.13 "Participant" means any payroll Employee who elects to participate
in this Plan by filing a duly executed Participation Agreement
with the Emp 1 oyer.
3.14 "Participation Agreement" means the contract by which the Employee
and the Employer agree that some of the Employee's compensation
will be deferred in accordance with the provisions of the Plan.
3.15 "Participation Account" means the book account to which there is
credited the Participant's deferred compensation, together with
any interest, dividends, gains, losses, or the like thereon.
3.16 "Plan Year" means the calendar year during which the Plan becomes
effective, and each succeeding year during the existence of this
Pl an.
3.17 "Termination of Employment" means a payroll Employee who has
separated from employment with the City.
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3.18 "Unforeseeable Emergency" means 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
Internal Revenue Code Section 152(a)) of the Participant, 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. Unforeseeable
Emergencies do not include any hardships which have not occurred
or which are or may be relieved (A) by reimbursement for compensa-
tion by insurance or otherwise, (8) by 1 iquidation of the Partici-
pant's assets, to the extent the liquidation of such assets would
not itself cause severe financial hardship.
SECTION 4. OPERATION OF THE PLAN
4.1 Participation. Any payroll Employee, an elected or appointed
official may elect to become a Participant in the Plan and to
defer payment of part of his compensation by executing a written
Participation Agreement and filing it in the manner set forth in
Article IV hereof. Part-time employees may participate with the
approval of the Advisory Committee. The dollar amount deferred
must equa 1 at 1 east $50.00 per pay period, or such 1 arger amount
as may be designated by the Employer from time to time.
In addition to a Participant's election to participate pursuant to
the preceding paragraph, a Participant may transfer to this Plan
amounts previously deferred under another Eligible Deferred Com-
pensation Plan maintained by an Employer. Such amounts shall be
treated as if they had originally been deferred under this Plan
and all applicable provisions of this Plan shall apply.
4.2 Deferral of Compensation. Employer and Participant mutually
acknowledge that the Compensation of eac~ Employee is as
established by Contract or annual salary commitments of the
Employer and that said Compensation includes the dollar amount of
funds deferred under the terms of this Plan or set aside under any
program establ ished under IRC Section 403(b), 40lCk), 408(k)(6),
or 501(c)(18). Employee Compensation shall be paid monthly, or as
otherwise provided, except that during each employment year in
which the Employee is a Participant in the Plan, that portion of
his said Compensation which is specified by the Employee in the
Participation Agreement shall be deferred and paid in accordance
with the provisions of this Plan.
During each employment period in which the employee is a partici-
pant in the Pl an, the emp 1 oyer sha 11 defer any payment of such
part of his compensation as is specified by the employee in his
Participation Agreement provided that, except as provided in
this Section, the maximum that each participant may defer under
this Plan for any taxable year shall not exceed the lesser of:
a. $7,500.00, or
b. 33-1/3% of the participant's Includible Compensation.
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4.3 The maximum deferral described in SECTION 4.2 shall not be appli-
cable for one or more of the participant's last three taxable
years ending before the attainment of normal retirement age under
this Plan. In that instance, the maximum shall be the lesser of:
a. $15,000.00, or
b. The sum of
(1) The maximum deferral amount established for the purposes
of SECTION 4.2 for the taxab 1 e year (determi ned without
regard to this SECTION), plus
(2) So much of the maximum deferral amount established for
the purposes of SECTION 4.2 for taxable years before the
taxable year as has not theretofore been used under
SECTION 4.2 or under this SECTION.
4.4 Ownership of Deferred Amounts. The Employer shall establish and
maintain a fund ("the investment fund") to provide a convenient
method of setting aside sufficient of its assets to meet its
future obligations under this Plan. The Employer shall at all
times be the legal and beneficial owner of all assets in the
investment fund and neither the existence of the Plan nor the
investment fund shall be deemed to create a trust or limit use by
the Emp 1 oyer of the funds therei n for general Emp 1 oyer pu rposes.
The obligation of the Employer to make payments pursuant to this
Plan is contractual only and no Participant or Beneficiary shall
have a preferred claim or lien on or to the assets of this
investment fund but shall have only the right to receive the
benefits payable under the Plan. Interests of a Participant who
changes employment may, under certain prescribed conditions, be
transferred to the Eligible Deferred Compensation Plan of a new
Employer.
SECTION 5. ADMINISTRATION AND ACCOUTNING
5.1 Administration by Employer. This Plan shall be administered by an
Advisory Committee appointed by the Employer, which shall pre-
scribe such forms, and adopt such ru 1 es and regu 1 ations as are
necessary to carry out the purposes of the Plan. The Employer may
employ investment counsel to provide advice concerning categories
of investment, investment guidelines and investment policy, pro-
vi ded, however, that the adv ice or recommendations of any such
investment counsel shall not be binding on the Employer, which
shall make the final determination concerning investment
categories, investment guidelines and policies. The Employer may
contract with a financially responsible independent contractor to
administer and coordinate the Plan under the direction of the
Employer. The Administrator shall have the right to designate a
Plan Coordinator or other party of its choice to perform such
services under this agreement as may be mutually agreed to between
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the Administrator and the Plan Coordinator or other party. Not-
withstanding any other provisions to the contrary, the
Administrator agrees that it shall be solely responsible to the
Emp 1 oyer for any and all serv ices performed by a subcontractor,
assignee, or designee under this agreement.
5.2 Election to Participate. An Employee's election to participate in
this Deferred Compensation Plan shall be made by filing a duly
executed Participation Agreement with the Employer, and not
otherwise.
5.3 Enrollment Periods. An Employee shall have the right to elect
participation during sp-ecified enrollment periods for the Plan
which will be held monthly. Such election shall only be effective
for pay periods commencing in the month subsequent to the month in
which the Employee makes the election to participate in the Plan.
5.4 Participation A9reement. The Plan Administrator shall establish a
form of Participation Agreement which shall contain, among other
provisions, the following:
a. A provision whereby the Participant specifies that portion of
his/her Compensation which is to be deferred.
b. A provision whereby the Participant shall indicate his
investment preference.
c. A provision whereby the Participant shall designate a Benefi-
ciary or Beneficiaries, including one or more contingent Bene-
ficiaries, to receive any benefits which may be payable under
this Plan on death of the participant.
d. A provision whereby the Participant shall acknowledge that his
salary, wage or other compensation is as set forth in any
salary ordinance or otherwise without deductions for amounts
deferred under the provisions of this plan.
e. A provision whereby the participant together with his heirs,
successors, and assigns hol d harml ess the Employer from any
1 i ab i 1 ity hereunder for a 11 acts performed in good fa ith,
including acts relating to the investment of deferred amounts
and/or the Emp 1 oyee's investment preference hereunder.
5.5 Amendment of Participation A9reement. The Participant may revoke
his election to participate and may change the amount of Compensa-
tion to be deferred, or his investment preference, by signing and
filing with the Employer a written revocation or amendment, on a
form approved by the Plan Administrator. Any such revocation or
amendment shall be effective prospectively only, beginning with
the first pay period of the subsequent month. The Participant may
amend his statement of investment preference by filing with the
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Employer a signed amendment on a form approved by the Plan Admini-
strator. Such amendment will, unless specifically stated other-
wise, apply only to future amounts deferred under the Plan. If a
Participant requests that amounts then held in a Participant's
Account also be invested in accordance with an amended investment
preference, the Employer may, if it deems it in the best interest
of the Participant to do so, approve such change. Any such change
shall be governed by the provisions of Section 4.3 hereof. All
contracts and other evidence of the investment of assets under
this Pl an shall be registered in the name of the Employer which
shall be the sole owner-benefici ary thereof.
5.6 Part i c i pat i on Accounts. A separate account ("Part i c i pati on
Account") shall be maintained for each Participant. Each Partici-
pation Account shall reflect the monies deferred, the investment
of the monies, and all consequences of the investment. For
convenience, and to facil itate an orderly administration of the
Plan, individual Participation Accounts for all Participants will
be maintained by the Employer showing the Participant's name with
all appl icable debit and credit balances. The Participant's
deferred account shall be credited each pay period with the amount
deferred from the preceding pay period. A written report of the
status of the Participation Account shall be furnished to Partici-
pants at 1 east annua 11 y. All interest, d i v i dends, charges for
premiums, capital gains, or market changes applicable to each
Participation Account shall be credited or debited to the account
as they occur. Credits to the Participant's Account shall be
subject to the Participant's then effective investment preference.
All reports to the Participant shall be based on the net fair
market value of the assets as of the reporting date as if the
deferred amount had been invested according to the investment
preference.
5.7 On executing the Participation Agreement, the employee shall
designate his investment objectives prospectively only. The
emp 1 oyer may in vest amou nts of deferred compensat ion in mutu a 1
fund shares; or interest deposits with a savings and loan company
or banking institutions, or trust deeds secured by real property,
or investments with a stockbroker; or life insurance and/or fixed
variable annuity contract with an insurance company, or other
financial institutions as may be allowed by 26 U.S.C., Section
457, whichever, in the employe~s sole judgment will best achieve
the employee's objectives. The employee's investment designations
are intended to be an exp ress i on of mere investment preferences
an d do not ob 1 i gate the emp 1 oyer to fo 11 ow the emp 1 oyee' s
designations.
5.8 The employer may, but is not required to, invest deferred compen-
sation at least monthly in the investment vehicles provided for in
this Plan. All amounts of deferred compensation, whether or not
invested by the employer, shall at all times be and remain an
asset of the employer. Any and all dividends, capital gains
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distributions, interest or other income payable on any of the
employer's investments of deferred compensation also shall be an
asset of the employer. The employer shall have the sole right to
vote any shares of stock which it may acquire by such investment.
5.9 Administrative Costs. The Employer shall determine, in a manner
deemed fair and equitable, the administrative costs associated
with the withholding of Deferred Compensation amounts pursuant to
this plan or in making investments or otherwise administering or
implementing the Plan. The Employer may withhold or collect, or
have withheld or collected, such costs, in such manner as he deems
equitabl e either (1) from the compensation deferred pursuant to
the Plan, the income produced from any investment, whether or not
augmented, or (2) from the organization receiving such investment
where required by law to collect therefrom or, if not so required,
where mutually satisfactory to such organization and the
Administrator. The Administrator may remit or direct the
remission of appropriate amounts so withheld or collected to the
Employer.
SECTION 6. BENEFITS
6.1 Benefits Generally. The Participant is entitled to have paid to
him the benefits created by his participation in this deferred
compensation plan, in accordance with the provisions of this
Article. Generally, distributions must commence no later than the
later of the April 1st next following the calendar year in which
the Participant attains age 70-1/2 or the calendar year in which
he retires. For plan years beginning on or after January 1, 1989,
benefits must commence no later than the April 1st following the
year in which the Participant attains age 70-1/2. Amounts paid to
a Participant shall be reported on appropriate tax reporting forms
to a Participant as wages subject to withholding for federal and
state income tax pruposes.
In the event of death of a Participant prior to the commencement
of benefits as called for under the Plan, the named Beneficiary of
Participant's Account shall have the right to designate that
payments to such Beneficiary shall be in accordance with one of
the available options provided under the Plan. Such selection
must be made within ninety (90) days after the close of the plan
year in which the Participant's death occurs. The entire amount
payab 1 e must be di stributed over a period not to exceed 15 years
except that if the beneficiary is the Participant's surviving
spouse, payments may be made over a peri od that does not exceed
the life expectancy of said surviving spouse. If the
Beneficiary fails to make such selection, payments shall be made
to the Beneficiary in accordance with the Option 2 over a 10 year
period.
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A distribution beginning before the death of the Participant shall
be in a form under which at least two-thirds of the total amount
payabl e with respect to the Participant will be paid during the
life expectancy of said Participant.
In the event of death of a Participant after commencement of
payments, the balance of a Participant's Account shall be paid to
the Beneficiary in accordance with the payment option selected by
the Partici pant.
Any distributions made over a period extending beyond one year
must be made in periodic payments not less frequently than
annually.
a. Retirement. Upon the Participant's reaching the Normal
Retirement Age or the Deferred Retirement Date, he may receive
the benefits provided under this Plan. Such benefits shall be
paid in accordance with the payment Options 1, 2, 3, 4 or 5 as
selected by the Participant pursuant to Subsection (f) of this
section. Any credits remaining in the deferred account of a
Participant receiving benefits under this paragraph who dies,
shall be paid in accordance with Subsection (c) of this
section.
b. Termination of Employment. If the Participant incurs a
Termination of Employment (other than for retirement) benefits
shall be paid in accordance with payment Option 1 or 2 as
irrevocably elected by the Participant not later than 90 days
after such Termination of Employment pursuant to Subsection
(f) of this section. However, a former Participant may elect
to have prev i ous 1 y deferred amounts transferred to another
Eligible Deferred Compensation Plan provided that (1) the
other plan provides for accepting such amounts and (2) the
former Participant has become a participant in the other
Eligible Deferred Compensation Plan. A transfer of previously
deferred amounts will automatically be made, at the time
benefits would have commenced under Section 6.1 (f) if no
transfer were being made, if a Participant incurs a Termina-
tion of Employment in order to accept employment with another
employer maintaining an Eligible Deferred Compensation Plan
and the conditions of (1) and (2) above are met.
Alternatively, a Participant who incurs a Termination of
Employment and whose deferred amounts are not required to be
transferred to another Eligible Deferred Compensation Plan may
irrevocably elect, not later than 90 days after such
Termination of Employment, to receive the benefits under this
Pl an in accordance with Section 6.1 above.
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c. Death. Benefits otherwise payable under this Plan will be
paid to the Participant's Beneficiary as provided in (1) or
(2) below, whichever is appl icable. Provided, however, that
in the case of benefits payable to a Beneficiary, other than
the spouse of the Participant, the entire amount payable shall
be paid out over fifteen years.
(1) Before benefits are paid for retirement, disability or
termination of service.
If the Participant dies while employed with the Employer
and before the payment of retirement and disabil ity or
Termination of Service benefits to him under this Plan,
the benefits otherwise payable under this Plan shall be
paid to his designated Beneficiary pursuant to payment
Option 1, or 2, or, in the case of a spousal beneficiary,
payment Option 1, 2 or 3 of Subsection (f) of this
section.
(2) After benefits are beinQ paid for retirement, disability
or termination of service.
If the Participant dies while benefits are being paid to
him under this Plan pursuant to payment Option 2 or 4 and
before such benefits have been exhausted, then the
remaining benefits payable shall be paid to the
Participant's designated Beneficiary in accordance with
Subsection (3) of this section.
6.2 Designated beneficiary.
The Participant has the right to name and file with the Employer,
a written Beneficiary or change of Beneficiary form, designating
the person or persons who shall receive the benefits payable under
this Plan 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. If the Participant
dies without having a Beneficiary form on file, the payments shall
be made to the properly appointed fiduciary of the Participant's
probate estate. However, if a fiduciary has not been appointed
and qualified within one hundred twenty (120) days after the
death, the payment may be made first, to a surviving spouse,
second, to a surviving child or children, and third, to a
surviving parent or parents. The Participant accepts and acknow-
ledges that he has the burden for executing and filing, with the
Employer, a proper Beneficiary designation form.
a. Commencement of Payment. The payment of benefits to the
Participant shall begin on the first day of the month next
following ninety (90) days after the occurrence of the event
that gives rise to the beginning of the payment of benefits,
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except that payment of benefits to an independent contractor
on account of Termi nati on of Emp 1 oyment, for other than
retirement, shall not commence until the first day of the
month next following a twelve-month period after Termination
of Emp 1 oyment and then on 1 y if the Part i c i pant has not
performed serv ices for the Emp 1 oyer as an Emp 1 oyee or
independent contractor within such period.
b. Short-term or Lump Sum Settlement. Notwithstanding anything
in this Section to the contrary, except Section 6.1 (e), if at
any time the total amounts held under this Plan in the account
maintained for the Participant or his Beneficiary, total to a
credit of $5,000 or less and for any reason the Participant
has incurred a termination of employment, the Employer is
authorized to deviate from the restrictions imposed by the
paragraphs in this Section and effect a lump sum settlement.
c. Options. The following options are available for selection by
Participant. However, any option selected must be such that
benefits payabl e to a Participant wi 11 equal or exceed two-
thirds of the maximum that could have been payable to the
Participant if no provision were made for payment to a Benefi-
ciary. If the Participant fails to select a payment option
for any event which causes payment of benefits to begin, he
shall be deemed to have elected to have the benefits payable
upon occurrence of such event as if he had el ected payments
for a specified period of ten (10) years as provided for in
Option 2.
(1) Payment Options.
As provided in Subsections (a) through (d) of this sec-
tion, Participant may select:
Option 1. Lump sum payment The total benefits payable
in one cash payment.
Option 2. Payments for a specified period. Amounts
payable in installments over a period of three (3) to
th i rty (30) years.
Option 3. Life annuity. An annuity payable during the
lifetime of the Participant or his Beneficiary (if this
option is sel ected under Section 5.01(c)(3) of this sec-
tion).
Option 4. Life annuity with period certain Quaranteed.
An annuity payable during the 1 ifetime of the Partici-
pant, or his Beneficiary, if this option is selected
under Subsection (d) of this Section, with the guarantee
that if at his death payments have not been made for the
guaranteed period as elected, payments will continue to
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the Beneficiary. The guaranteed period to be elected
must be either ten (10), fifteen (15) or twenty (20)
years.
Option 5. Joint and survivor annuity. An annuity pay-
ment during the 1 ifetime of the Participant and a
secondary payee named by the Participant.
(2) Method of payment options.
If the Participant has selected a payment option
requiring installment payments, the Participant may also
elect to have such payment made either quarterly, semi-
annua 1 1 y or annua 1 1 y.
Monthly payments are available under the life insurance
annuity options when provided by the annuity insurer.
6.3 Notwithstanding any other provisions herein, a Participant may
make a withdrawal from the Plan prior to retirement or any other
Termination of Employment as set forth below.
A Participant may apply to the Employer to make a withdrawal
from the Plan for "unforeseeable emergencies/financial hardship."
If the application for withdrawal is approved by the Employer, the
withdrawal shall be effected as of the first day of the month next
following such approval being given. Benefits to be paid upon any
withdrawal shall be limited strictly to that amount necessary to
meet the unforeseeable emergency/financial hardship situation.
Any remaining benefits shall be paid upon retirement, Termination
of Employment, or death in accordance with Section 6.1 above. The
decision of the Employer concerning Unforeseeable Emergencies
shall be final as to all participants.
SECTION 7. MISCELLANEOUS
7.1 Leave of Absence. If a 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 more than six (6) months, said Partictpantwll 1 be deemed to
have terminated participation in the Pl an as of the end of such
six (6) month period. Such termination of participation wi 11 not
cause distribution of benefits. Upon return from such 1 eave 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.
7.2 Retirement System InteQration. Benefits payable by, and deduc-
tions for Employee contributions to, any retirement system of the
Employer shall be computed without reference to amounts deferred
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pursuant to this Plan and shall instead be based upon gross
compensation the Participant woul d receive if he had not el ected
to participate in this Plan and to defer compensation.
7.3 Amendment. Th i s Pl an may be mod i f i ed, amended or termi nated in
whole or in party by the Employer at any time. No amendment or
termination of the Plan shall reduce or impair the rights of any
Participant or his Beneficiary which have already accrue~ Upon
termination of the Plan, the Employer shall distribute all amounts
credited to each Participation Account in accordance with the
Participant's payment option selected.
7.4 Creditors. A Participant may not assign, transfer, sell, hypothe-
cate, or otherwise dispose of any or all of his investment account
or any right which he may have under the Plan, and any attempt to
do so shall be null and void.
7.5 Employment. Participation in the Plan shall not be construed as
giving any Participant any right to continue his employment with
the Emp 1 oyer.
7.6 Successors and Assigns. The Plan shall be binding upon and shall
inure to the benefit of the Employer, its successors and assigns,
all Participants and Beneficiaries and their heirs and legal
representatives.
7.7 Written Notice. Any notice or other communication required or
permitted under the Plan shall be in writing, and if directed to
the Employer 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 "his last known
address as it appears on the Emp loyer's record.
7.8 Facility of Payment. If any Participant terminates his 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
deferred compensation owed to the Participant under the Plan.
7.9 Employer Participation. Notwithstanding any other provisions of
this Plan, the employer may make additional deposits in the defer-
red compensation fund as additional compensation for services to
be rendered by the employee to the employer during an employment
period, provided:
a. The employee has elected to have such additional compensation
deferred, invested, and distributed, pursuant to this Plan,
prior to the employment period in which the compensation will
be earned, and
b. That such additional deposit shall not exceed the maximum
deferral permitted by Section 5.
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7.10 Purchase of Annuity by Emplover. In connection with the financing
of any distribution under Section 6.01 by an annuity not otherwise
provided for as an eligible investment pursuant to Section 5.08 of
this Plan, the Employer may cause to be purchased from an insur-
ance company of Employer's choice a fixed or variable annuity
policy at such time as the Participant becomes eligible for
month 1 y d i stri buti ons. The Emp 1 oyer sha 1 1 be the owner of such
annuity policy, and the rights of the Participant shall be limited
to the right to receive monthly payments pursuant to such policy.
All obligations of the Employer with respect to the Plan shall be
frozen in amount at the time the annuity pol icy is del ivered to
the Employer. '
7.11 Withholdin9 of Taxes. Notwithstanding any other provision in this
Plan, upon distribution of benefits the Employer shall not with-
hold federal or state income taxes unless the Participant is
subject to backup withholding. A form W-9 must be completed and
on file for all Participants receiving distributions.
7.12 Total A9reement. This Pl an and the Participation Agreement, and
any subsequently adopted amendment thereof, shall constitute the
total agreement or contract between the Employer and the Partici-
pant regarding the Plan. No oral statement regarding the Plan may
be relied upon by the Participant.
7.13 Gender. As used herein the masculine shall include the neuter and
the feminine where appropriate.
7.14 Controlling Law. This Plan is created and shall be interpreted
under the 1 aws of the State of domici 1 e of the Emp 1 oyer as the
same shall be at the time any dispute or issue is raised.
In Witness Whereof, the Employer has executed this Plan document this 20th
day of
June
, 19~.
SEAL
City of Gilroy
(Name of Employer)
by i2UJk<-
Attest: j/lt4
Mayor Protempore
<Titl e)
City Clerk
Title
(Wi~~O~J
13.
'I" '.' " ,t
.
.
f .'
1..l- . ~.
I, SUSANNE E. STEINMETZ, City Clerk of the City of Gilroy, do
hereby certify that the attached Resolution No. 88-42
is an original
resolution, duly adopted by the Council of the City of Gilroy at a regular
meeting of said Council held on the
20th
day of
June
, ]9~,
at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the
Official Seal of the City of Gilroy this 23rd day of
June
19 88.
dUd~~
(City Clerk of the City of Gilroy
(Seal)