HomeMy WebLinkAboutCity Council - 98-99 RESOLUTION NO. 98-99
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH
AMENDING ITS DEFERRED COMPENSATION PLAN
WHEREAS, the City of Huntington Beach (the "City")has employees rendering valuable
services; and
The City has established a deferred compensation plan for such employees that serves the
interest of the City by enabling it to provide reasonable retirement security for its employees,by
providing increased flexibility in its personnel management system, and by assisting in the
attraction and retention of competent personnel; and
The City has determined that the continuance of the deferred compensation plan will
serve these objectives; and
.Amendments to the Internal Revenue Code ("IRC")have been enacted that require
changes to the structure of and allow enhancements of the benefits of the deferred compensation
plan, including the addition of IRC Section 457(g); and
A major purpose of IRC Section 457(g) is to protect the deferred compensation assets of
government employees from the creditors of their governmental employers; and
A deferred compensation plan will become an "ineligible plan" if it does not comply with
the IRC Section 457(g)requirement by January 1, 1999; and
The effect of becoming an"ineligible plan"is to subject covered employees to liability
for income taxes on vested amounts deferred under the plan and to cause the City to be liable for
the amount of income tax which should have been withheld on deferred amounts; and
It has come to the attention of the City that its deferred compensation plan may not be in
compliance with IRC Section 457(g);
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
resolve as follows:
Section 1. The above recitals are true and correct.
Section 2. In accordance with Section 457(g) of the Internal Revenue Code, all
amounts of compensation deferred pursuant to the Plan, all property and rights purchased with
such amounts, and all income attributable to such amounts,property, or rights shall be held in
trust for the exclusive benefit of participants and beneficiaries under the Plan. To implement
said trust,the City Council hereby amends and restates the Plan as set forth in Exhibit A.
1
SF-Mesolt:DefComp
12110/98-#2
Aes. 9'6'- 99
Section 3. This Resolution shall be effective immediately upon its adoption.
Section 4. The City Clerk shall certify the adoption of this Resolution and certify this
record to be a full true, correct copy of the action taken.
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the 9, day of December , 1998.
Mayor
ATTEST: APPROVED AS TO FORM:
CL
City Clerk
REVIEWED AND APPROVED: INITIATED AND PROVE
V62� _ r
City Ad inistrator Act' g eputy City Administrator/
Director of Administrative Services
2
Si;-Mesolt:DefComp
1211 G198-#2
Res. 98. 99
EXHIBIT A
4 s 7 Defe►rere. C 0 H, P C n s a t i o n V 1 an an
No ❑embcr 1996 (�
DEFERRED COMPENSATION PLAN & TKUST 2.04 Beneficiary. The person or persons designated by
the Participant in his Joinder Agreement who shall
ARTICLE 1. PURPOSE receive any benefits payable hereunder in the event of
the Participant's death. In the event that the Participant
The Employer hereby establishes the Employer's De- names two or more Beneficiaries, each Beneficiary shall
ferred Compensation Plan and Trust, hereafter referred be entitled to equal shares of the benefits payable at the
to as the "Plan." The Plan consists of the provisions set Participant's death, unless otherwise provided in the
forth in this document. Participant's Joinder Agreement. If no beneficiary is
designated in the Joinder Agreement, if the Designated
The primary purpose of this Plan is to provide retirement Beneficiary predeceases the Participant, or if the desig-
income and other deferred benefits to the Employees of the nated Beneficiary does not survive the Participant for a
.Employer and the Employees' Beneficiaries in accordance period of fifteen.(15) days, then the estate of the Par-
with the provisions of Section 457 of the Internal Rev- ticipant shall be the Beneficiary.
enue Code of 1986, as amended (the "Code").
2.05 Deferred Compensation: The amount of Normal
This Plan shall be.an agreement solely between the Compensation otherwise payable to the Participant
Employer and participating Employees. The Plan and which the Participant and the Employer mutually agree
Trust forming a part hereof are established and shall be to defer hereunder, any amount credited to a
maintained for the exclusive benefit of eligible Employ- Participant's Account by reason of a transfer under
ees and their Beneficiaries. No part of the corpus or section 6.09, or any other amount which the Employer
income of the Trust shall revert to the Employer or be agrees to credit to a Participant's Account,
used for or diverted to purposed other than the exclu-
sive benefit of Participants and their Beneficiaries. 2.06 Employee: Any individual who provides services
for the Employer, whether as an employee of the
ARTICLE 11. DEFINITIONS Employer or as an independent contractor, and who has
been designated by the Employer as eligible to partici-
2.01 Account: The bookkeeping account maintained for pate in the Plan.
each Participant reflecting the cumulative amount of the
Participant's Deferred Compensation, including any 2.07 .Includible Compensation: The amount of an
income, gains, losses, or increases or decreases in market Employee's compensation from the Employer for a
value attributable to the Employer's investment of the taxable year that is attributable to services performed for
Participant's Deferred Compensation, and further the Employer and that is includible in the Employee's
reflecting any distributions to the Participant or the gross income for the taxable year for federal income tax
Participant's Beneficiary and any fees or expenses purposes; such term does not include any amount
charged against such Participant's Deferred Compensa- excludable from gross income under this Plan or any
Lion. other plan described in Section 457(b) of the Code or
any other amount excludable from gross income for
2.02 Accounting Date: Each business day chat the New federal income tax purposes. Includible Compensation
York Stock Exchange is open for trading, as provided in shall be determined without regard to any community
Section 6.06 for valuing the Trust's assets. property laws.
2.03 Administrator: The person or persons named to 2.08 Joinder Agreement: An agreement entered.into
carry out certain nondiscretionary administrative func- between an Employee and the Employer, including any
tions under the Plan, as hereinafter described. The amendments or modifications thereof. Such agreement
Employer may remove any person as Administrator shall fix the amount of Deferred Compensation, specify
upon 60 days' advance notice in writing to such person, a preference among the investment alternatives desig-
in which case the Employer shall name another person nated by the Employer, designate the Employee's
or persons to act as Administrator. The Administrator Beneficiary or Becieficiaries, and incorporate the terms,
may resign upon 60 days' advance notice in writing to conditions, and provisions of the Plan by reference.
the Employer, in which case the Employer shall name
another person or persons to act as Administrator.
T���
I U MA K t l 1 K t Nl t N 1 C. V It r v r: n 1 � IN
2.09 Normal Compensation: The amount of compensa- to have actually terminated. In the case of a Participant
tion which would be payable to a Participant by the who is an independent contractor of the Employer,
Employer for a taxable year if no joinder Agreement Separation from Service shall be deemed to have oc-
were in effect to defer compensation under this Plan. curred when the Participant's contract under which
services are performed has completely expired and
2.10 Normal Retirement Age: Age 70-1/2, unless the terminated, there is no foreseeable possibility that the
Participant has elected an alternate Normal Retirement Employer will renew the contract or enter into a new
Age by written instrument delivered to the Administra- contract for the Participant's services, and is not antici-
tor prior to Separation from Service. A Participant's ' pated that the Participant will become an Employee of
Normal Retirement Age determines the period during the Employer.
which a Participant may utilize the catch-up limitation
of Section 5.02 hereunder. Once a Participant has to 2.15 Trust: The Trust created under Article VI of the
any extent utilized the catch-up limitation of Section Plan .which shall consist of all compensation deferred
5.02, his Normal Retirement Age may not be changed. under the Plan, plus any income and gains thereon, less
any losses, expenses and distributions to Participants and
A Participant's alternate Normal Retirement Age may Beneficiaries.
not be earlier than the earliest date that the Participant
will become eligible to retire and receive unreduced ARTICLE III. ADMINISTRATION
retirement benefits under the Employer's basic retire-
ment plan covering the Participant and may not be later 3.01 Duties of the Employer: The Employer shall have
than the date the Participant will attain age 70-1/2, If a the authority to make all discretionary decisions affect-
Participant continues employment after attaining age ing the rights or benefits of Participants which may be
70-1/2, not having previously elected alternate Normal required in the administration of this Plan. The
Retirement Age, the Participant's alternate Normal Employer's decisions shall be afforded the maximum
Retirement Age shall not be later than the mandatory deference permitted by applicable law.
retirement age, if any, established by the Employer, or
the age at which the Participant actually separates from 3.02 Duties of Administrator: The Administrator, as
service if the Employer has no mandatory retirement agent For the Employer, shall perform nondiscrecionary
age. If the Participant will not become eligible to administrative functions in connection with the Plan,
receive benefits under a basic retirement plan main- including the maintenance of Participants' Accounts,
tained by the Employer, the Participant's alternate the provision of periodic reports of the status of each
Normal Retirement-Age may not be earlier than age 55 Account, and the disbursement of benefits on behalf
and may not be later than age 70-1/2. of the Employer in accordance with the provisions of
this Plan.
2.11 Participant: Any Employee who has joined the
Plan pursuant to the requirements of Article IV. ARTICLE IV. PARTICIPATION IN THE PLAN
2.12 Plan Year: The calendar year. 4.01 Initial Participation: An Employee may become a
Participant by entering into a Joinder Agreement prior
2.13 Retirement: The first date upon which both of the to the beginning of the calendar-month in which the
following shall have occurred with respect to a partici- Joinder Agreement is to become effective to defer
pant: Separation from Service and attainment of age 65. compensation not yet earned.
2.14 Separation From Service. Severance of the 4.02 Amendment of joinder Agreement: A Participant
Participant's employment with the Employer which may amend an executed joinder Agreement to change
constitutes a "separation from service" within the the amount of compensation not ,vet earned which is to
meaning of Section 402(d)(4)(A)(iii) of the Code. In be deferred (including the reduction of such future
general, a Participant shall be deemed to have severed deferrals to zero) or to change his investment preference
his employment with the Employer for purposes of this (subject to such restrictions as may result from the
Plan when, in accordance with the established practices of nature of terms of any investment made by the Em-
the Employer, the employment relationship is considered ployer). Such amendment shall become effective as of
.. . . . . .. . . . . . . . . . . .. . . . . .. .. . . .. . . . . . . . . . . . . . . . . ... . . . . .. . . . . . . . .. . . . . . . . .
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Ncvrrrrbrr 1996 Rcs, 98-179
the beginning of the calendar month commencing after ARTICLE V1. TRUST AND INVESTMENT
the date the amendment is executed. A Participant may OF ACCOUNTS
at any time amend his Joinder Agreement to change the
designated Beneficiary, and such amendment shall 6.01 Investment of Deferred Compensation: A Trust is
become effective immediately. hereby created to hold all the assets of the Plan for the
exclusive benefit of Participants and Beneficiaries,
ARTICLE V. LIMITATIONS ON DEFERRALS except that expenses and taxes may be paid from the
, Trust as provided in Section 6.03. The trustee shall be
5.01 Normal Limitation: Except as provided in section the Employer or such other person which agrees to act
5.02, the maximum amount of Deferred Compensation in that capacity hereunder.
for any Participant for any taxable year shall not exceed
the lesser of$7,500.00, as adjusted for the cost-of-living 6.02,Investment Powers: The trustee or the Plan Ad-
in accordance with Code section 457(e)(15) for taxable ministrator, acting as agent for the trustee, shall have
years beginning after December 31, 1996 (the "dollar the powers listed in this Section with respect to invest-
limitation"), or 33-1/3 percent of the_Participant's menc of Trust assets, except to the extent that the
Includible Compensation for the taxable year. This investment of Trust assets is directed by Participants,
limitation will ordinarily be equivalent to the lesser of pursuant to Section 6.05.
the dollar limitation in effect for the taxable year or 25
percent of the Participant's Normal Compensation. (a) To invest and reinvest the Trust without dis-
tinction between principal and income in any form
5.02 Catch-Up Limitation: For each of the last three (3) of tangible or intangible property, real, personal, or
taxable years of a Participant ending before his attain- mixed, and wherever situated, including, but not by
ment of Normal Retirement Age, the maximum amount way of limitation, common or preferred stocks,
of Deferred Compensation shall be the lesser of. (1) shares of regulated investment companies and other
S15,000 or (2) the sum of(i) the Normal Limitation for mutual funds, bonds; loans, notes, debentures,
the taxable year, and (ii) the Normal Limitation for mortgages, certificates of deposit, interest, or par-
each prior taxable year of the Participant commencing ticipation. equipment trust certificates, commercial
after 1978 less the amount of the Participant's Deferred paper including but not limited to participation in
Compensation for such prior taxable years. A prior pooled commercial paper accounts, contracts with
taxable year shall be taken into account under the insurance companies including but not limited to
preceding sentence only if(i) the Participant was eh- insurance, individual or group annuity, deposit
gible to participate in the Plan for such year (or in any administration, and guaranteed interest contracts,
other eligible deferred compensation plan established deposits at reasonable rates of interest at banking
under Section 457 of the Code which is properly taken institutions including but not limited to savings
into account pursuant to regulations under section 457), accounts and certificates of deposit, and other forms
and (ii) compensation ('if any) deferred under the Plan of securities or investments of any kind, class, or
(or such other plan) was subject to the deferral limita- character whatsoever and representing interests in
tions set forth in Section 5.01 any form of enterprise, wherever it may be located,
organized or operated within or without the United
5.03 Other Plans: The amount excludable from a States of America, whether such investments are
Participant's gross income under this Plan or any other income producing or not, without being limited in
eligible deferred compensation plan under section 457 any respect by statute or court rule or decision of
of the Code shall not exceed S7,500.00 (or such greater any jurisdiction now or hereafter in force purport-
amount allowed under Sections 5.01 or 5.02 of the ing to limit or otherwise affect such investments.
Plan). less any amount excluded from gross income Assets of the Trust may be invested in securities or
under section 403(b), 402(a)(8), or 402(h)(1)(B) of the new ventures that involve a higher degree of risk
Code, or any amount with respect to which a deduction than investments that have demonstrated their
is allowable by reason`of a contribution to an organiza- investment performance over an extended period
tion described in section 501(c)(18) of the Code. of time.
.. . . . . . . . . . . . . . . . . . . . .... . . . .. . . . . .. . . . . .. . .. . .. . . . . .. nvr . . .
F
ICilIA 10ETIREhtENI C. U K PCB RA 1 t Q N
(b) To invest and reinvest all or any part of the otherwise dispose of any such property, without
assets of the Trust in any common, collective or regard to restrictions applicable to fiduciaries or
commingled trust fund that is maintained by a bank others and without the approval of any court.
or other institution and that is available to Em-
ployee plans described under sections 457 or 401 of (g) To sell for cash or credit, redeem, exchange for
.the .Cade, or any successor provisions thereto, and other property, convey, transfer, or otherwise
during the period of time that an investment dispose of any property held in the Trust in any
through any such medium shall exist, to the extent manner and at any time, by private contract or at
of participation of the Plan, the declaration of trust public auction or otherwise, and no other person
of such common, collective, or commingled trust shall be bound to see to the application of the
fund shall constitute a part of this Plan. purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other
(c) To invest and reinvest all or any part of the disposition.
assets of the Trust in any group annuity, deposit .
administration or guaranteed interest contract issued (h) To enter into contracts for or to make commit-
by an insurance company or other financial institu- merits either alone or in company with others to
tion on a commingled or collective basis with the purchase or sell at any future date any property
assets of any other 457 plan or trust qualified under acquired for the Trust.
section 401(a) of the Code or any other plan de-
scribed in section 401(a)(24) of the Code, and such (i) To vote or to refrain from voting any stocks,
contract may be held or issued in the name of the bonds, or other securities held in the Trust, to
Plan Administrator, or such custodian as the Plan exercise any other right appurtenant to any securi-
Administrator may appoint, as agent and nominee ties or other property held in the Trust, to give
for the Employer. During the period that an invest- general or special proxies or powers of attorney with
ment through any such contract shall exist, to the or without power of substitution with respect to
extent of participation of the Plan, the terms and such securities and other property, to exercise any
conditions of such contract shall constitute a part of conversion privileges, subscription rights, or other
the Plan. options or privileges with respect to such securities
and other property and make any payments inciden-
(d) To purchase part interests in real property or in cal rhereto, and generally to exercise, personally or
mortgages on real property, wherever such real by general or limited power of attorney, any of the
property may be situated, and to delegate to a powers of an owner with respect to stocks, bonds,
property manager or the holder or holders of a securities, or other property held in the Trust at
majority interest in such real property or mortgage any time.
on real property the management and operation of
any part interest in such real property or mortgages. (j) To oppose or to consent to and participate in
any organization, reorganization, consolidation,
(e) To hold cash awaiting investment and to keep merger, combination, readjustment of finances, or
such portion, of the Trust in cash or cash balances, similar arrangement with respect to any corporation,
%without liability for interest, in such amounts as may company, or association, any of the securities of
from time to time be deemed to be reasonable and which are held in the Trust, to do any act with
necessary- to meet obligations under the Plan or reference thereto, including the exercise of options,
otherwise to be in the best interests of the Plan. the making of agreements or subscriptions and the
payment of expenses, assessments, or subscriptions
( To retain, manage, operate, administer, divide, that may be deemed necessary or advisable in
subdivide, partition, mortgage, pledge, improve, connection therewith, and to accept, hold, and
alter, demolish, remodel, repair, and develop in any retain any securities or other property that may be
manner any property, or any part of or partial so acquired.
interest in any property, real or personal, held in the
Trust, to lease such property for any period of time,
and to grant options to sell, exchange, lease, or
.. . . .. . . .. ... . . . . . . . . . . . . . . . . . . . .. .. . . . ... . . . . . . . . . . . ..'r . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . ... . . . ..F.'
45 7 Deferred LOmpenfat ion !'[an and I ruf t L)0Cun. ent
November 1996 q8-9�
(k) To deposit any property held in the Trust with (o) To mak.e, execute, acknowledge, and deliver
any protective, reorganization, or similar commit- any and all deeds, leases, mortgages, conveyances,
tee, and to delegate discretionary power thereto and contracts, waivers, releases, or other instruments in
to pay and agree to pay part of its expenses and writing necessary or proper for the accomplishment
compensation and any assessments levied with of any of the foregoing powers.
respect to any such property so deposited.
(p) To open and maintain any bank account or
(1) To hold, to authorize the holding of, and to accounts in the name of the Plan, the Employer, or
register any investment to the Trust in the name of any nominee or agent of the foregoing, including
the Plan, the Employer, or any nominee or agent of the Plan Administrator, in any bank or banks.
any of the foregoing, including the Plan Administra-
tor, or in bearer form, to deposit or arrange for the (q) To do any and all other acts that may be
deposit of securities in a qualified central depository deemed necessary to carry out any of the powers set
even though, when so deposited, such securities may forth herein.
be merged and held in bulk in the name of the
nominee of such depository with other securities 6.03 Taxes and Expenses: All taxes of any and all kinds
deposited therein by any other person, and to whatsoever that may be levied or assessed under existing
organize corporations or trusts under the laws of any or future laws upon, or in respect to the Trust, or the
jurisdiction for the purpose of acquiring or holding income thereof, and all commissions or acquisitions or
title to any property for the Trust, all with or dispositions of securities and similar expenses of invest-
without the addition of words or other action to ment and reinvestment of the Trust, shall be paid from
indicate that property is held in a fiduciary or the Trust. Such reasonable compensation of the Plan
representative capacity but the books and records of Administrator, as may be agreed upon from time to time
the Plan shall at all times show that all such invest- by the Employer and the Plan Administrator, and
ments are part of the Trust. reimbursement for reasonable expenses incurred by the
Plan Administrator in performance of its duties hereun-
(m) Upon such terms as may be deemed advisable der (including but not limited to fees for legal, account-
by the Employer or the Plan Administrator, as the ing, investment and custodial services) shall also be paid
case may be, for the protection of the interests of from the Trust.
the Plan'or for the preservation of the value of an
investment, to exercise and enforce by suit for legal 6.04 Payment of Benefits: The payment of benefits
or equitable remedies or by other action, or to from the Trust in accordance with the terms of the Plan
waive any right or claim on behalf of the Plan or may be made by the Plan Administrator, or by any
any default in any obligation owing to the Plan, to custodian or other person so authorized by the Em-
renew, extend the time for payment of, agree to a ployer to make such disbursement. The P1an'Adminis-
reduction in the rate of interest on, or agree to any trator, custodian or other person shall not be liable with
other modification or change in the terms of any respect to any distribution of Trust assets made at the
obligation owing to the Plan, to settle, compromise, direction of the Employer.
adjust, or submit to arbitration any claim or right in
favor of or against the Plan, to exercise and enforce 6.05 Investment Funds: in accordance with uniform and
any and all rights of foreclosure, bid for property in nondiscriminatory rules established by the Employer and
foreclosure, and take a deed in lieu of foreclosure the Plan Administrator, the Participant may direct his/
with or without paying consideration therefor, to her Accounts to be invested in one (1) or more invest-
commence or defend suits or other legal proceedings ment funds available under the Plan; provided, how-
whenever any interest of the Plan requires it, and to ever, that the Participant's investment directions shall
represent the Plan in all suits or legal proceedings in not violate any investment restrictions established by the
any court of law or equity or before any body or Employer. Neither the Employer, the Administrator,
tribunal. nor any other person shall be liable for'any losses
incurred by virtue of following such directions or with
(n) To employ suitable consultants, depositories, any reasonable administrative delay in implementing
agents, and legal counsel on behalf of the Plan. such directions.
. .. . ... . . . . . . . .. . . . . . . . . . . . . . . . . . . .. . . .. . . . . .. . . . . . . I . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .... .. .. . . . . . . . . . . .. . .
ICMiA RETIREIviENT C ORP0RAT10N
6.06 Valuation of Accounts: As of each Accounting than cash, unless the Employer and the Administra-
Date, the Plan assets held in each investment fund for agree to hold such other assets under the Plan,
offered shall be valued at fair market value and the Any such transferred amount shall be treated as a
investment income and gains or losses for each fund deferral subject to the limitations of Article V.
shall be determined. Such investment income and gains except that, for purposes of applying the limitations
or losses shall be allocated proportionately among all of Sections 5.01 and 5.02, an amount deferred
Account balances on a fund-by-fund basis. The aIloca- during any taxable year under the plan from which
tion shall be in the proportion that each such Account the transfer is accepted shall be treated as if it has
balance as of the immediately preceding Accounting been deferred under this Plan during such taxable
Date bears to the total of all such Account balances as of year and compensation paid by the transferor ern-
that Accounting Date. For purposes of this Article, all ployer shall be treated as if it had been paid by the
Account balances include the Account balances of all Employer.
Participants and Beneficiaries.
(b) Outgoing Transfers: An amount may be trans-
6.07 Participant Loan Accounts: Participant Loan ferred to an eligible deferred compensation plan
Accounts shall be invested in accordance with Section maintained by another employer, and charged to a
8.03 of the Plan. Such Accounts shall not share in any Participant's Account under this Plan, if(I) the
investment income and gains or losses of the investment Participant has separated from service with the
funds described in Sections 6.05 and 6.06. Employer and become an employee of the other
employer, (ii) the other employer's plan provides
6.08 Crediting of Accounts: The Participant's Account that such transfer will be accepted, and (iii) the
shall reflect the amount and value of the investments or Participant and the employers have signed such
other property obtained by the Employer through the agreements as are necessary to assure that the
investment of the Participant's Deferred Compensation EmpIoyer's liability to pay benefits to the Partici-
pursuant to Sections 6.05 and 6,06. It is anticipated that pant has been discharged and assumed by the other
the Employer's investments with respect to a Participant employer. The Employer may require such docu-
will conform to the investment preference specified in mentation from the other plan as it deems necessary
the Participant's joinder Agreement, but nothing herein to effectuate the transfer, to confirm that such plan
shall be construed to require the Employer to make any is an eligible deferred compensation plan within the
particular investment of a Participant's Deferred Com- meaning of section 457 of the Code, and to assure
pensation. Each Participant shall receive periodic that transfers are provided for under such plan. Such
reports, not less frequently than annually, showing the transfers shall be made only under such circum-
then current value of his/her Account. stances as are permitted under section 457 of the
Code and the regulations thereunder.
6.09 Transfers:
6.10 Employer Liability: In no event shall the
(a) Incoming Transfers: A transfer may be accepted Employer's liability to pay benefits to a Participant
from an eligible deferred compensation plan main- under this Plan exceed the value of the amounts cred-
tained.by another employer and credited to a iced to the Participant's Account; neither the Employer
Participant's Account under the Plan if(1) the nor the Administrator shall be liable for losses arising
Participant has separated from service with that from depreciation or shrinkage in the value of any
employer and become an Employee of the Em- investments acquired under this Plan.
ployer, and (ii) the other employer's plan provides
that such transfer .will be made. The Employer may
require such documentation from the predecessor
plan as it deems necessary to effectuate the transfer,
to confirm that such plan is an eligible deferred
compensation plan ■yithin the meaning of Section
457 of the Code, and to assure that transfers are
provided for under such plan. The Employer may
refuse to accept a transfer in the form of assets other
5r1,en
NavemGcr 1996
ARTICLE V11. BENEFITS (b) One lump-sum payment;
7.01 Retirement Benefits and Election on Separation (c) Approximately equal monthly, quarterly, semi-
from Service: Except as otherwise provided in this annual or annual payments, calculated to continue
Article VI1, the distribution of a Participant's Account for a period certain chosen by the Participant.
shall commence as of April 1 of the calendar year after
the Plan Year of the Participant's Retirement, and the (d) Annual Payments equal to the minimum distri-
distribution of such Retirement benefits shall be made butions required under Section 401(a)(9) of the
in accordance with one of the payment options de- Code over the life expectancy of the Participant or
scribed in Section 7.02. Notwithstanding the foregoing, over the life expectancies of the Participant and his
but subject to the following paragraph of this Section Beneficiary.
7.01, the Participant may irrevocably elect within 60
days following Separation from Service to have the (e) Payments equal to payments made.by the issuer
distribution of benefits commence on a fixed determin- of a retirement annuity policy acquired by the
able date other than that described in the preceding Employer.
sentence which is..,at least 61 days after Separation from .
Service, but not later than April 1 of the year following (f) A split distribution under which payments under
the year of the Participant's Retirement or attainment options (a), (b), (c) or (e) commence or are made at
of age 70-1/2, whichever is later. Notwithstanding the the same time, as elected by the Participant under
foregoing provisions of this Section 7.01, no election to Section 7.01, provided that all payments commence
defer the commencement of benefits after a separation (or are made) by the latest benefit commencement
from service shall operate to defer the distribution of date under Section 7.01 and that once a payment is
any amount in the Participant's Loan Account in the made subsequent payments will be made in substan-
event of a default of the Participant's loan. tially nonincreasing amounts.
Effective on or after January 1, 1997, the Participant (g) Any payment option elected by the Participant
may elect to defer the commencement of distribution of and agreed to by the Employer and Administrator,
benefits to a fixed determinable date later than the date provided that such option must provide for substan-
described above, but not later than April 1 of the year tially nonincreasing payments for any period after
following the year of the Participant's retirement or the benefit commencement date under Section 7.01.
attainment of age 70-1/2, whichever is later, provided
(a) such election is made after the 61st day following A Participant's or Beneficiary's selection of a payment
Separation from Service and before commencement of option made after December 31, 1995, under Subsec-
distributions and (b) the Participant may make only one tions (a), (c), or (g) above may include the selection of
(1) such election. Notwithstanding the foregoing, the an automatic annual cost-of-living increase. Such
Administrator, in order to ensure the orderly adminis- increase will be based on the rise in the Consumer Price
tration of this provision, may establish a deadline after Index for All Urban Consumers (CPI-U) from the third
which such election to defer the commencement of quarter of the last year in which a cost-of-living in-
distribution of benefits shall not be allowed. crease was provided to the third quarter of the current
year. Any increase will be made in periodic payment
7.02 Payment Options: As provided in Sections 7.01. checks beginning the following January. The first cost-
7.04 and 7.05, a Participant or Beneficiary may elect to of-living increase will be based on the rise in the GPI-U
have value of the Participant's Account distributed in from the third quarter of 1995 to the third quarter of
accordance with one of the following payment options, 1996, and will be applied to amounts paid beginning
provided that such option is consistent with the limita- January 1997.
tions set forth in Section 7.03.
A Participant's or Beneficiary's election of a payment
(a) Equal monthly, quarterly, semi-annual or annual option must be made at least 30 days before the pay-
payments in an amount chosen by the Participant, merit of benefits is to commence. If a Participant or
continuing until his/her Account is exhausted; Beneficiary fails to make a timely election of a payment
option, benefits shall be paid monthly under option (c)
. . . . . . .. . . . . . . . . . . . .... . . . . . .. . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . .. . . . . . . I . . . . . . . . . . . . . . . .. .. .
'
44
above for a period of five years or such shorter period of (b) if the designated Beneficiary does not continue
time necessary to ensure that the amount of any install- to live for the remaining period of payments under
nient is not less than 51,200 per year, without the the payment option, then the commuted value of
inclusion of a cost-of-living increase. any remaining payments under the payment option
shall be paid in'a lump sum to the estate of the
7.03 Limitation on Options: No payment option may be Beneficiary. In the event that the Participant's estate
selected by a Participant under subsections 7.02(a) or (c) is the Beneficiary, the commuted value of any
unless the amount of any installment is not less than remaining payments under the payment option shall
51,200 per year. No payment option may be selected be paid to the estate in a lump sum.
by a Participant or Beneficiary under Sections 7.02,
7.04, or 7.05 unless it satisfies the requirements of 7,05 Pre-retirement Death Benefits:
Sections 401(a)(9) and 457(d)(2) of the Code, including
that payments commencing before the death of the (a) Should the Participant die before he has begun
Participant shall satisfy the incidental death benefits to receive the benefits provided by Section 7.01, the
requirement under section 457(d)(2)(B)(i)(I). A cost-of- value of the Participant's Account shall be payable
living increase included as part of a payment option to the Beneficiary commencing within the 30-day
selected under Section 7.02 shall not be considered to period commencing on the 91st day after the
fail to satisfy the requirement under section 457(d)(2)(b) Participant's death, unless the Beneficiary elects a
that any distribution made over a period of more than 1 different fixed or determinable benefit-conimence-
year can only be made in substantially nonincreasing ment date within 90 days of the Participant's death.
amounts. Unless otherwise elected by the Participant Such benefit commencement date shall be not later
(or spouse, in the case of distributions described in than the later of(1) December 31 of the year fol-
Seetion 7.05 below) by the time distributions are lowing the year of the Participant's death, or (ii) if
required to begin, life expectancies shall be recalculated the Beneficiary is the Participant's spouse, Decem-
annually. Such election shall be irrevocable as to the ber 31 of the year in which the Participant would
Participant (or spouse) and shall apply to all subsequent have attained age 70-1/2.
years. The life expectancy of a nonspouse Beneficiary
may not be recalculated. (b) Unless a Beneficiary elects a different payment
option prior to the benefit commencement date,
death benefits under this Section shall be paid in
7.04 Post-retirement Death Benefits: approximately equal annual installments over five
years, or over such shorter period as':may be neces-
(a) Should the Participant die after he/she has begun sary to assure that the amount of any annual install-
to receive benefits under a payment option, the nient is not less than 53,500. A Beneficiary shall be
remaining payments, if any, under the payment treated as if he/she were a Participant for purposes
option shall be payable to the Participant's Benefi- of determining the payment options available under
ciary within the 30-day period commencing with Section 7.02, provided, however, that the payment
the 61st day after the Participant's death, unless the option chosen by the Beneficiary niust provide for
Beneficiary elects payment under a different pay- payments to the Beneficiary over a period no longer
ment option that is available under Section 7.02 than the life expectancy of the Beneficiary, and
within 60 days of the Participant's death. Any provided that such period may not exceed (15) years
different piynienr option elected by a Beneficiary if the Beneficiary is not the Participant's spouse.
under this section must provide for payments at a
rate that is at least as rapid under the payment (c) lit the event that the Beneficiary dies before the
option that was applicable to the Participant. In no paynieut of death benefits has commenced or been
event shall the Employer or Administrator be liable completed, the remaining value of the Participant's
to the Beneficiary for the amount of any payment Account shall be paid to the estate of the Benefi-
made in the narii�, of the Participant before ciary in a lump sum. In the event that the
the Administrator receives proof of death of the Participant's estate is the Beneficiary, payment shall
Participant. be made to the estate in a lump sum.
. . . .. . ... .. . . . . . . . . . . .. . . . . . . .. . . .. . . . . . . . . . . . . . . . . . . . ... . . . . . .. . . . ... . . . . . . . . . . .. . . . . ... . . . . . I .. . . . . . . . .. . .
Ni
457 Defer'-'d Co enpexsaIian Plan aitd TrwsF orU "text 9*-�
No 1996 ('
7.06 Unforeseeable Emergencies: ARTICLE Mill. LOANS TO PARTICIPANTS
(a) In the event an unforeseeable emergency occurs, 8.01 Availability of Loans to Participants:
a Participant may apply to the Employer to receive
that part of the value of his/her Account that is (a) Effective January 1, 1997, the Employer may
reasonably needed to satisfy the emergency need. If elect to make loans available to Participants in this
such an applicatign. is approved by the Employer, Plan. If the Employer has elected to make loans
the Participant shall be paid only such amount as the available to Participants, a Participant may apply for
Employer deems necessary to meet the emergency a loan from the Plan subject to the limitations and
need, but payment shall not be made to the extent other provisions of this.Article.
that the financial hardship may be relieved through
cessation of deferral under the Plan, insurance or (b) The Employer shall establish written guidelines
other reimbursement, or liquidation of other assets governing the granting of loans, provided that such
to the extent such liquidation would not itself cause guidelines are approved by the Plan Administrator
severe financial hardship. and are not inconsistent with the provisions of this
Article, and that loans are made available to all
(b) An unforeseeable emergency shall be deemed to Participants on a reasonably equivalent basis.
involve only circumstances of severe financial
hardship to the Participant resulting from a sudden 3.02 Terms and Conditions of Loans to Participants:
unexpected illness, accident, or disability of the Any loan by the Plan to a Participant under Section
Participant or of a dependent (as defined in section 8.01 of the Plan shall satisfy the following requirements:
152(a) of the Code) of the Participant, loss of the
Participant's property due to casualty, or other (a) Availability. Loans shall be made available to all
similar and extraordinary unforeseeable circum- Participants on a reasonably equivalent basis.
stances arising as a result of events beyond the
control of the Participant. -The need to send a (b) Interest Rate. Loans must be adequately secured
Participant's child to college or to purchase a new and bear a reasonable interest rate.
home shall not be considered unforeseeable emer-
gencies. The determination as to whether such an (c) Loan Limit. No Participant loan shall exceed the
unforeseeable emergency exists shall be based on the present value of the Participant's Account.
merits of each individual case.
(d) Foreclosure. In the event of default on any
7.07 Transitional Rule for Pre-1989 Benefit Elections: installment payment, the outstanding balance of the
In the event that, prior to January 1, 1989, a Participant loan shall be a deemed distribution. In such event,
or Beneficiary has commenced receiving benefits under an actual distribution of a plan loan offset amount
a payment option or has irrevocably elected a payment will not occur until a distributable event occurs in
option or benefit commencement date, then that pay- the Plan.
ment option or election shall remain in effect nocwith-
standing any other provision of the Plan. (e) Reduction of Account. Notwithstanding any
ocher provision of this Plan, the portion of the
7.08 De Minimis Accounts: Notwithstanding the fore- Participant's Accounc balance used as a security
going provisions of this Article, if the value of a interest held by the Platt by reason of a loan out-
Participant's Account does not exceed 53,500 and (a) no standing to the Participant shall be taken into
amount has been deferred tinder the Plan with respect account for purposes of determining the amount of
to the Participant during the 2-year period ending on the Account balance payable at the time of death or
the date of the distribution and (b) there has been no distribution, but only if the reduction is used as
prior distribution under the Plan to the Participant repayment of the loan.
pursuant co this Section 7.08, the Participant may elect
to receive or the Employer may distribute the Participant's
entire Account without the consent of the Participant.
Such distribution shall be made in a lump sum.
.. . . .. .. . . . . . . . . . . . . . .. . . . . .. . . . . .. . . . . . . . . . . . . . . . . . . .. .. . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . .
— -- T r x —
ICMA_ R-ETIREMENT C0RP0RAT(I_0N Re's, 9?-4?
(f) Amount of Loan. At the time the loan is made, (within such term) instituted at the end of such
the principal amount of the loan plus the outstand- period of suspension.
ing balance (principal plus accrued interest) due on
any other outstanding loans to the Participant from (i) Prepayment. The Participant shall be permitted
the PIan and from all other plans of the Employer to repay the loan in whole or in part at any time
that are qualified employer plans under section prior to maturity, xithour penalty.
72(p)(4) of the Code shall not exceed the least of.
0) Promissory Note. The loan shall be evidenced
(1) S50,000, reduced by the excess (if any) of by a promissory note executed by the Participant
and delivered to the Employer, and shall bear
(a) The highest outstanding balance of loans interest at a reasonable rate determined by the
from the Plan during the one (1) year Employer,
period ending on the day before the date
on which the loan is made, over (k) Security. The loan shall be secured by an
assignment of the Participant's right, title and
(b) The outstanding balance of loans from the interest in and to his/her Account.
Plan on the date on which such loan is
made; or (1) Assignment or Pledge. For the purposes of
paragraphs (0 and (g), assignment or pledge of any
(2) One-half of the value of the Participant's portion of the Participant's interest in the Plan and a
interest in all of his/her Accounts under loan, pledge, or assignment with respect to any
this Plan. insurance contract purchased under the Plan, will be
treated as a loan.
(g) Application for Loan. The Participant must
give the Employer adequate written notice, as (m) Other Terms and Conditions. The Employer
determined by the Employer, of the amount and shall fix such other terms and conditions of the loan
desired time for receiving a loan. No more than as,it deems necessary to comply with legal require-
one (1) loan may be made by the Plan to a Partici- ments, to maintain the qualification of the Plan and
pant in any calendar year. No loan shall be ap- Trust under section 457 of the.Code, or to prevent
proved if an existing loan from the Plan to the the treatment of the loan for tax purposes as a
Participant is in,default to any extent. distribution to the Participant. The Employer, in
its discretion for any reason, may fix other terms
(h) Length of Loan. Any loan issued shall require and conditions of the loan, not inconsistent with
the Participant to repay the loan in substantially the provisions of this Article and section 72(p) of
equal installments of principal and interest, at least the Code.
monthly, over a period that does not exceed five (5)
years from the date of the loan; provided, however, 8.03 Participant Loan Accounts-
that if the proceeds of the loan,are applied by the
Participant to acquire any dwelling unit that is to be (a) Upon approval of a loan to a Participant by the
used within a reasonable time (determined at the Employer, an amount not in excess of the loan shall
time the loan is made) after the loan is made as the be transferred from the Participant's other invest-
principal residence of the Participant, the five (5) nient fund(s), described in Section 6.05 of the Plan,
year limit shall not apply. In this event, the period to the Participant's Loan Account as of the Account-
of repayment shall not exceed a reasonable period ing Dace immediately preceding the agreed upon
determined by the Employer. Principal installments date on which the loan is to be made.
and interest payments otherwise due may be sus-
pended for up to one (1) year during an authorized (b) The assets of a Participant's Loan Account may
leave of absence, if the promissory note so provides, be invested and reinvested only in promissory notes
but not beyond the original term permitted under teceived by the Plan from the Participant as consid-
this Subsection (h), with a revised payment schedule eration for a loati permitted by Section 8,01 of the
Plan or in cash. Uninvested cash balances in a
457 Deferr eJl. Co nap en saf fa it Plats and Trust Da a U In eltl p�
November 1996 �� /CGS. 8
Participant's Loan Account shall not bear interest. Nothing in this Section shall be construed to autho-
Neither the Employer, the Administrator, nor any rize any amount to be distributed under the Plan at
other person shall be liable for any loss, or by reason a time or in a form that is not permitted under
of any breach, that results from the Participant's Section 457 of the Code. Any Payment made to a
exercise of such control. person other than the Participant pursuant to this
Section shall be reduced by required income tax
(c) Repayment of principal and payment of interest withholding; the fact that payment is made to a
shall be made by payroll deduction or, where person other than the Participant may not prevent
repayment cannot be made by payroll deduction, by such payment from being includible in the gross
check, and shall be invested in one (1) or more income of the Participant for withholding and
other investment funds, in accordance with Section income tax reporting purposes.
6.05 of the Plan, as of the next Accounting Date
after payment thereof to the Trust. The amount so (b) Release from Liability to Participant: The
invested shall be deducted from the Participant's Employer's liability to pay benefits to a Participant
Loan Account. shall be reduced to the extent that amounts have
been paid or set aside for payment to a spouse,
(d) The Employer shall have the authority to former spouse, or child pursuant to paragraph (a) of
establish other reasonable rules, not inconsistent the Section. No such transfer shall be effectuated
with the provisions of the Plan, governing the unless the Employer or Administrator has been
establishment and maintenance of Participant Loan provided with satisfactory evidence that the Ern-
Accounts. ployer and the Administrator are released from any
further claim by the Participant with respect to such
ARTICLE IX NON-ASSIGNABILITY amounts. The Participant shall be deemed to have
released the Employer and the Administrator from
9.01 In General: Except as provided in Article V111 any claim with respect to such amounts, in any case
and Section 9.02, no Participant or Beneficiary shall in which (i) the Employer or Administrator has been
have any right to commute, sell, assign, pledge, transfer served with legal process or otherwise joined in a
or otherwise convey or encumber the right to receive proceeding relating to such transfer, (ii) the Partici-
any payments hereunder, which payments and rights pant has been notified of the pendency of such
are expressly declared to be non-assignable and proceeding in the manner prescribed by the law of
non-transferable. the jurisdiction-in which the proceeding is pending
for service of process in such action or by mail from
9.02 Domestic Relations Orders: the Employer or Administrator to the Participant's
last known mailing address, and (iii) the Participant
(a) Allowance of Transfers: To the extent required fails to obtain an order of the court in the proceed-
under final judgement, decree, or order (including ing relieving the Employer or Administrator from
approval of a property settlement agreement) made the obligation to comply with the judgment, decree,
pursuant to a state domestic relations law, any or order.
portion of a Participant's Account may be paid or
set aside for payment to a spouse, former spouse, or (c) Participation in Legal Proceedings: The Em-
child of the Participant. Where necessary to carry ployer and Administrator shall not be obligated to
out the terms of such an order, a separate Account defend against or set aside any judgement, decree, or
shall be established with respect to the spouse, order described in paragraph (a) any legal order
Cornier spouse, or child who shall be entitled to relating to the garnishment of a Participant's ben-
make investment selections with respect thereto in efits, unless the full expense of such legal action is
the same manner as the Participanc; any amount so borne by the. Participant. In the event that the
set aside for a spouse, former spouse, or child shall Participant's action (or inaction) nonetheless causes
be paid out in a lump sum at the earliest date that the Employer or Administrator to incur such ex-
benefics may be paid to the Participant, unless the pense, the amount of the expense may be charged
order directs a different time or form of payment.. against the Participant's Account and thereby reduce
the Employer's obligation to pay benefits to the
. . ... . . . .. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. ... ... . .. .. . .. . . . . . . . . . . . . . . . . . . . . . . . . I .. . . . . .. . . .�. . . . . .—
- I C h1 A RETIREMENT C ORPORAT ION Rs6 qe-q?
Participant. In the course of any proceeding relating Except as may be required to maintain the status of the
to divorce, separation, or child support, the Em- Plan as an eligible deferred compensation plan under
ployer and Administrator shall be authorized to section 457 of the Code or to comply with other
disclose information relating to the Participant's applicable laws, no amendment or termination of the
Account to the Participant's spouse, former spouse. Plan shall divest any Participant of any rights with
or child (including the legal representatives of the respect to compensation deferred before the date of the
spouse, former spouse, or child), or to a court. amendment or termination.
ARTICLE X. RELATIONSHIP TO OTHER PLANS ARTICLE XII. APPLICABLE LAW
AND EMPLOYMENT AGREEMENTS
This Plan and Trust shall be construed under the laws of
This Plan serves in addition to any other retirement, the state where the Employer is located and is estab-
pension, or benefit plan or system presently in existence lished with the intent that it meet the requirements of
or hereinafter established for the benefit of the - an "eligible deferred compensation plan" under Section
Employer's employees, and participation hereunder shall 457 of the Code, as amended, The provisions of this
not affect benefits receivable under any such plan or Plan and Trust shall be interpreted wherever possible in
system. Nothing contained in this Plan shall be deemed conformity with the requirements of that section.
to constitute an employment contract or agreement -
between any Participant and the Employer or to give ARTICLE XIII. GENDER AND NUMBER
any Participant the right to be retained in the employ of
the Employer. Nor shall anything herein be construed The masculine pronoun, whenever used herein, shall
to modify the terms of any employment contract or include the feminine pronoun, and the singular shall
agreement between a Participant and the Employer. include the plural, except where the context requires
otherwise.
ARTICLE X1. AMENDMENT OR TERMINATION
OF PLAN
The Employer may at any time amend this Plan pro-
vided that it transmits such amendment in writing to the
Administrator at least 30 days prior to the effective date
of the amendment. The consent of the Administrator
shall not be required in order for such amendment to
become effective, but the Administrator shall be under
no obligation to continue acting as Administrator
hereunder if it disapproves of such amendment. The
Employer may at any time terminate this Plan.
The Administrator may at any time propose an amend-
ment to the Plan by an instrument in writing transmit-
ted to the Employer at least 30 days before the effective
date of the amendment. Such amendment shall become
effective unless, within such 30-day period, the Em-
ployer notifies the Administrator in writing that it
disapproves such amendment, in which case such
amendment shall not become effective. In the event
of such disapproval, the Administrator shall be under
no obligation to continue acting as Administrator
hereunder.
. . . . . . . ... . . . . . . . . . . . .. . . . . . . . . . . .. . .. . . . . . . . .. . . . . . . . . . . . . . ..... . .
Th rtrr'+
Res. No. 98-99
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, the duly elected, qualified City Clerk of
the City of Huntington Beach, and ex-officio Clerk of the City Council of said City,
do hereby certify that the whole number of members of the City Council of the City
of Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on the 2 l st day of December, 1998 by the
following vote:
AYES: Bauer, Garofalo, Green, Dettloff, Harman, Sullivan
NOES: None
ABSENT: Julien
City Clerk and ex-officio Clerk of the
City Council of the City of Huntington
Beach, California