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HomeMy WebLinkAbout01390 - GREAT WESTERN SAVINGS DEFFERED COMP PLAN 6 0 AMENDMENT TO CUSTODIAL AGREEMENT The following is hereby agreed to as an amendment to the Custodial Agreement between Great Western Savings, a Federal Savings and Loan Association and the below identified Agency. "Great Western Savings will pledge and maintain collateral against any Deferred Compensation. Plan funds held on deposit by Agency with Great Western Savings that is not covered by Federal Savings and Loan Insurance Corporation (FSLIC) insurance of accounts with deeds of trust on commercial , residential , and industrial property. The unpaid principal balance of such deeds of trust shall at all times equal or exceed 125% of the funds not covered by FSLIC insurance. Great Western Savings will not charge a fee nor shall this service have any effect upon the interest rate paid on the funds. " "Great Western Savings guarantees that the minimum interest rate paid on the Agency' s Deferred Compensation Plan funds on deposit with Great Western Savings shall be 10% compounded monthly. " CITY OF PALM SPRINGS Scott Montgomery, Name of Agency Assistant Vice Ptesid'n Manager, Deferred Compensation Great Western Savings Authorized Signature CHAIRMAN, DEFERRED CONPENSATION ADVISORY COMMITTEE H c % July 6, 1982 Date Date ,c 12 a 2 DEFERRED COMPENSATION PROGRAM Great Western Savings & Loan - SAVINGS PRODUCT AGREEMEN2 to admin savings aect por of Deferred Comp Pln AGREEMENT #1390 (orig 10-1-77) MO 2535, 4-19-78 THIS AGREEMENT is entered into on --October 1 , 197 7 , between the City of Palm Springs , a City. , hereafter , referred to as "Political Subdivision" and GREAT WESTERN SAVINGS AND LOAN ASSOCIATION, a California corporation , hereafter referred to as "Great Western. " R E C I T A L S A. Political Subdivision, pursuant to Resolution No. 11292 of its governing body has established an Employees ' Deferred Compensation Plan ("Plan" ) , a copy of which is attached as Exhibit A hereto. The Plan applies to each employee of Political Subdivision who executes a participa- tion agreement in accordance with the Plan and files it with the Treasurer of Political Subdivision ( "Participant" ) . B. This Agreement sets forth the manner by which Political Subdivision will invest Plan funds with Great Western and Great Western will accept such funds for invest- ment and will account for such funds on a regular basis. C. This Agreement also sets forth the manner in which he the Plan will /administered as determined by Political Subdivision in conjunction with the entity selected by Political Subdivision to perform the necessary administrative services ( "Administrator" ) : The division of responsibility for performing such administrative services as between Great Western and Administrator is set forth in Exhibit B attached hereto. THEREFORE, the parties agree as follows : 1 . Great Western agrees to accept for deposit funds deliv- ered to Great Western by Political Subdivision under the Plan. 2. Great Western will place such funds as received in one or more public unit certificate accounts ( "Account" ) having a term of thirty days. Such accounts currently earn interest at the rate of 7 . 75 per annum compounded daily. Great Western shall at all times pay interest on each Account at a rate which will result in the highest return which Great Western is then offering on thirty-day public unit certificate accounts. Each Account shall be automatically renewed at the end of every thirty-day term, except as herein provided and except to the extent funds are required to meet withdrawals under the Plan. 3. Each Account shall be titled "The City of Palm Springs Deferred Compensation Plan. " Ownership of each Account shall be vested in Political Subdivision. Political Subdivision shall have the sole custody of all passbooks or other indices of ownership for each Account and no additions to or withdrawals of funds from an Account shall be -made except by Administrator . 4 . On a regular basis, Political Subdivision through Administrator will prepare one check representing the total 12 a 3 -2- 12 a 4 amount of deferments for the period applicable for all Participants in the Plan and a list indicating to whom these deferments should be attributed and the amount to be invested in each Account. Said items will be sent promptly to Great Western, which upon receipt thereof will make the appropriate credits to each applicable Account. 5. Great Western will furnish to Administrator no more frequently than monthly a statement of activity for each Account. 6 . Political Subdivision shall have the same rights and obligations in connection with each Account as any other savings account holder having the same type of savings account with Great Western. 7. Great Western will disburse funds from each Account solely as directed by Administrator and shall have no duty or obligation to ensure that any deposit or withdrawal is authorized by the Plan. 8. Great Western shall not be in privity of contract with or have any direct, indirect or third party beneficiary obligation or relationship to any Participant. Great Western shall not be required to accept or honor any instructions or requests that may be submitted by any Participant or to provide any information to the Participant or any other person or entity regarding an Account or any Account transactions of any kind except upon the written instructions of Political -3- Subdivision, Administrator or as otherwise required by applicable law, regulation or court order . 9. If Political Subdivision or Administrator should submit any written presentation to be made to employees describing the Plan or setting forth the matter of investment of Plan funds, or if Political Subdivision or Administrator should conduct or permit to be carried on any educational meetings or programs for similar purposes , Great Western shall be afforded reasonable opportunity to participate in such presentation or program to the same extent as any other -authorized Plan investment vehicle. 10. This 'Agreement shall continue in effect until terminated by either party upon six months prior written notice. 11. Except as hereinafter provided, any written notice (including any periodic statements to be given, under this Agreement) must be sent by first class mail , postage prepaid, addressed as follows: Political Subdivision: City of Palm Springs P.O. Box 1786 Palm Springs , California 9226 Great Western• Great Western Savings and Loan Association 8484 Wilshire Boulevard Beverly Hills , California 90211 Attention: Deferred Compensation Department _4_ 12 a 5 12 a 6 with a copy to: Great Western Savings and Loan Association Any notice of termination of this Agreement shall be sent by certified or registered mail, return receipt requested, and shall be deemed received upon the date of execution of the return receipt by the addressee. IN WITNESS WHEREOF, the within parties have hereunto set their hands and seals the day and year first above written. DATE BY:��y.% � °Y' o ti 1�11; of Palm Springs , CEPIfornia ATTEST: ' e -1 `. �� REVIEWED & APPROVED C ' y Attorney GREAT WESTERN SAVINGS AND LOAN ASSOCIATION' Byon1� �. LAp-oory J.P. -5- Phone Contact: Mr. E.L. Kennedy Phone Number: (202) 964-4751 Internal Revenue Sarwi;c� Vr.;p:�llnrii����,;:�ikN (ill, p,,r In reply refer to MAR 4 1975 l_T.T ,T .�. q Raymond E. Ott City Attorney City of Palm Springs, California 3200 E. Tahquitz-McCallum Way Palm Springs , California 92262 Dear Mr. Ott: This is in reply to your letter of February 11, 1975, in which you request a ruling concerning the Federal income tax consequences to participants in a nonqualified deferred compensation plan adopted by the City of Palm Springs on January 2, 1975. The information presented in that letter and the provisions of the plan as submitted with your letter of February 11, 1975, are incorporated herein by reference. Based solely on the information and documents submitted and provided they are as represented, it is held that if income is reported on the cash receipts and disbursements method of accounting, the amounts payable under the terms of the plan will be includible in gross income in the taxable year during which they are paid or otherwise made available, which- ever is earlier, to the participant, his beneficiary, or his estate. This ruling is based on the condition that there is no limitation or restriction on the City's use of the amounts deferred and that any assets purchased with the deferred amounts will at all times remain an unrestricted asset of the City, subject to the claims of its general creditors, and available for its use for whatever purposes desired. In view of the provisions of section 7.7 of the plan, this ruling is further based on the condition that payment of benefits will be made in accordance with the payout option elected by the participant at the time of initial enrollment in the plan. If the plan is modified or amended in any manner, this ruling will not necessarily remain applicable. Sincerely yours, Chief, ndividual I omee Tax Branch October 5, 1983 CITY OF PALM SPRINGS DEFERRED COMPENSATION PLAN SECTION 1 . NAME: The name of this Plan is the City of Palm Springs Deferred Compensation Plan (hereinafter referred to as the Plan). SECTION 2. PURPOSE: The primary purpose of the Plan is to attract and hold personnel by permitting them to enter into agreements with the City of Palm Springs which will provide for deferral of payment of a portion of their current compensation until death, disability, retirement, termination of employment, or other event as provided herein, in accordance with the provisions of Sections 53212 - 53214 of the Government Code of the State of California, and the applicable provisions of the Internal Revenue Code, primarily Section 457 of the 1954 IRS Code. SECTION 3. DEFINITIONS: For the purposes of this Plan, certain words or phrases used herein will have the following meanings: 3.1 "Employer" shall be the City of Palm Springs, California. 3.2 "Employee" shall mean all officers and employees of the City of Palm Springs. 3.3 "Participant" shall mean any employee who fulfills the requirements of enrollment into this Plan as designated eligible by the City of Palm Springs. 3.4 "Participation Agreement" shall mean the agreement executed and filed by an employee with the employer pursuant to Section 4, in which the employee elects to become a participant in the Plan. 3.5 "Includable Compensation" shall mean any compensation for services performed for the employer which (taking into account the provisions of Sections 457 and 403 (b) of the Internal Revenue Code) is currently includable in gross income. Amounts of compensation shall be determined without regard to any community property laws. 3.6 "Employment Period" shall mean any calendar month. 3.7 "Disability" shall mean the 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 "Normal Retirement Age" shall mean the range of ages ending no later than age 702, and beginning no earlier than age 63 for non sworn employees, and age 55 for sworn employees. In the case of a participant who continues to work beyond these ages, normal retirement age shall be that date or age designated by the participant, but such date or age shall not be later than the date or age at which the participant separates from the service with the employer. 3.9 "Committee" shall mean the Deferred Compensation Advisory Committee as duly constituted from time to time by the City Council , acting upon recommendations by the City Manager. 3.10 "Taxable Year" means a year ending December 31st. 10 -G-8'3 3.11 "Distribution Event" means Retirement, Termination, Disability, or Death of a Participant, or other circumstances resulting in a permanent separation from service. SECTION 4. PARTICIPAT.ION IN THE PLAN: 4.1 Each employee may elect to become a participant in the Plan and defer payment of part of his compensation by executing a written Participation Agreement and filing it with the employer no later than the day before the beginning of any employment period. 4.2 A Participation Agreement shall be effective for the first employment period following its execution and filing, except when it is executed and filed by a new employee pursuant to Section 4.1 , in which case it shall be effective for that part of the employment period following its execution and filing. In either situation, the Participation Agreement shall continue from period to period and remain in full force and effect unless terminated as provided in Section 4.3 below. 4.3 A participant may terminate his participation in the Plan and thereby terminate further deferral of his compensation by filing with the employer an executed written notice of termination at least 30 days prior to effective date of termination. Once terminated, a former participant cannot rejoin the Plan during the employment period in which termination occurred; however, he may elect to become a participant in subsequent employment periods. . No amounts shall be payable to an employee upon terminating his participation in the Plan unless otherwise due pursuant to Section 7. 4.4 A participant may select, pursuant to Section 6, one or more investment vehicles provided that the amount deferred for each vehicle equals or exceeds the minimum of not less than $10 'per bi-weekly pay period. 4. 5 a. If a participant is on approved leave of absence from the City with compensation, or an approved leave of absence without compensation for a period of not more than three (3) months, his participation in the Plan may continue. b. If a participant is on an approved leave of absence without compensation and such a leave of absence continues for more than three (3) months, said participant will be deemed to have withdrawn from. the ',Plan; however, said participant may request the Committee to permit him to leave the funds previously deferred in the Plan. Upon termination of leave without pay and return to active status, the participant may effect a new Participation Agreement, to be effective when permitted by the Plan. SECTION 5. DEFERRAL OF COMPENSATION: 5.1 During each employment period in which an employee is a participant in the Plan, the employer shall defer payment of such part of his compensation as is specified by the employee in his Participation Agreement provided that (except as provided in Section 5.2) the maximum that each participant may defer under this Plan for any taxable year shall not exceed the lesser of: e z . $7,500, or b. 33 1/3% of the participant' s includable compensation. (Generally, this is the same as 25% of gross salary before the deferral of any amount. ) 5.2 The maximum deferral described in Section 5.1 shall not be applicable for one or more of the participant' s last three (3) taxable years ending before the attainment of the normal retirement age under the Plan. In that instance, the maximum per year shall be the lesser of: a. $15,000, or b. The sum of: (1 ) The amount that the participant could defer for the taxable year under Section 5.1 , without regard to Section 5.2, plus (2) The amount or additional amount that could have been deferred by the participant in prior taxable years, starting with January 1 , 1979, but was not. 5.3 The participant acknowledges the right of the Committee or the Administrator to disallow contributions under the Plan in excess of the limitations stated above. In the case of a person who participates in more than one eligible State deferred compensation plan (governed by 26 USC, Section 457) , the amount of compensation deferred under this Plan when added to the compensation deferred under all such other plans, may not exceed the maximum amounts set forth in Sections 5.1 or 5.2, whichever is applicable. SECTION 6. ADMINISTRATION OF THE PLAN: 6.1 The Plan shall be administered by the Advisory Committee who shall have the sole authority to enforce the Plan and shall be responsible for the operation of the Plan in accordance with its terms, and shall determine all questions arising out of the administration, interpretation, and application of the Plan, which determination shall be conclusive and binding on all persons. 6.2 The employer shall establish a deferred compensation fund to which all deferred compensation shall be credited at such times as the compensation would have been payable to individual employees if not a participant of the Plan. Separate book accounts will be established for each employee participant which will show all amounts of deferred compensation, investments made, shares acquired and earnings and gains on investments. Each book account will be valued at least annually on a method as outlined in Section 6.3. 6. 3 On executing the Participation Agreement, the employee shall designate his investment objective, prospectively only. The employer will invest amounts of deferred compensation in mutual fund shares, or interest time deposits with a local savings and loan company or banking institution, or investments with a local stockbroker, or life insurance and/or fixed/variable annuity contract with an insurance company, whichever in the employer' s sole judgment will best achieve the employee' s objectives. The employer is the sole owner and beneficiary of all funds, investments, or other assets under this Plan. a. If a mutual fund is selected as the investment vehicle, all dividends and capital gains distributions will be reinvested in shares of said mutual fund. The total of full or fractional mutual fund shares purchased or acquired through reinvestment shall serve as a basis for measuring the value of the participant' s book account. Value will be the total number of full and fractional shares held times the net asset value per share reported by the fund on the valuation date. b. If interest time deposits in local savings and loan or banking institutions is selected as the investment vehicle, interest earnings will be credited to the participant' s book account when declared by the institution. Annual valuation will include all interest earned, whether paid or accrued. c. If investments are selected, dividends and interest earnings will be credited to the City of Palm Springs Deferred Compensation Plan Investment Account with the stockbroker. The market value of all investments and cash in the account shall be determined on December 31st each year and each participant' s share of the account shall be valued by any cash income, plus or minus any market action. New participants may join the account after existing participants' values are determined. d. If a variable annuity contract is selected as the investment vehicle, the value of participant' s individual account during the Employment Period shall be determined by the Insurance Company' s Accumulation Unit, which is a statistical index of the net investment results of the Variable Contract Account. 6.4 The employer may, but is not required to, invest deferred compensation 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 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. 6.5 Neither this Plan nor any Participation Agreement nor any book account shall be deemed to create a trust or custodial account on behalf of or for the benefit of any participant of the Plan or his beneficiaries. No participant of the Plan or his beneficiaries shall have, by reason of the Plan Participation Agreement, or book account, any secured or preferred interest in or to any assets of the employer. The employer shall have only a contractual obligation to pay the benefits due the participant under the Plan. SECTION 7. DISTRIBUTION OF BENEFITS: 7.1 Within sixty (60) days after a distribution event, and at least thirty (30) days before distribution is to start, a participant, or upon the participant' s death, the primary beneficiary, must irrevocably elect the method and starting date of the distribution of benefits, subject to the limitations of Section 7.2 or 7.3, whichever is relevant. If no election is made within the sixty (60) day limit, a lump sum distribution will be made within sixty (60) days after the limit expires. 7.2 Retirement, Disability, or Other Termination - The full benefits credited to participant' s book account plus or minus subsequent investment gains or losses, but less any Federal or State Income Taxes required to be withheld, shall be distributed to him in any one or more of the following ways: a. In a lump sum. b. In monthly, quarterly, semi-annual or annual installments over a period not to exceed the later of ten (10) years from date distribution began or over a period established by the employer not greater than the life expectancy of the participant. Life expectancy shall be determined once by the employer, on the date of the initial installment distribution. Installment distributions will be made in substantially equal payments, but no payment shall have a value of less than (the smaller of) $50 or the balance credited to the participant' s book account. c. Upon a distribution event, and at the participant' s election, the distribution of benefits may be postponed to a fixed future date, commencing not later than the later of: (1 ) Sixty (60) days after the close of the taxable year in which the participant or former participant attains (or would have attained) age 702, or (2) Sixty (60) days after the close of the taxable year in which the participant separates from service with the employer. d. Participant' s book account balances will continue to be invested until (in the employer' s sole judgment) cash is to be withdrawn for payment of benefits. Payment of benefits will commence on the first day of the second month following termination of employment. 7.3 Death - In the event of the death of a participant all amounts credited to his book account shall be distributed to the named beneficiary(ies) or estate over a period not greater than: a. The life expectancy of the beneficiary, if the beneficiary is the participant' s surviving spouse, or b. Fifteen (15) years, if the beneficiary is not the participant' s surviving spouse. 7.4 Financial Catastrophe - In the event of a financial Catastrophe affecting a participant, where the withdrawal of funds would be necessary to prevent great hardships to the participant and the amount of withdrawal requested by the participant is only the amount necessary to meet that financial catastrophe, and is not reimbursed by insurance, a participant may apply to the employer for withdrawal of such amount from the Plan prior to retirement or to termination of participant' s employment with the City. Examples of such need under the foregoing criteria may be catastrophic illness, flood, fire, earthquake, death in the family, or disabling injury, and examples of similar import. Withdrawals for expenditures normally, budgetable, such as down payment on a home or purchase of an automobile, or college expenses, will not be permitted. Any amount so approved hereunder for withdrawal shall be paid to participant in a lump sum. The withdrawal shall be effective at the later of the dates specified in the participant' s application or the date approved by the employer. 7. 5 Other Distributions - Notwithstanding any other provisions of the Plan, the employer may change the time or methods of benefit payments pursuant to this Plan. SECTION 8. PLAN TO PLAN TRANSFERS: 8.1 The Employer shall accept funds from other eligible State deferred compensation plans established pursuant to Section 457 of the Cade to be transferred and added to the participant' s book account within the Plan provided that all of the following conditions exist: a. The funds so transferred were deferred by the participant from compensation while employed by a political subdivision residing in the State of California, and; b. The funds so transferred are from a plan that provides that if the participant separates from service in order to accept employment with another such entity, payout will not commence upon separation from service, regardless of any other provision of the Plan, and amounts previously deferred will automatically be transferred. 8.2 Amounts deferred by a former participant shall be transferred to another eligible plan of which the former participant has become a participant provided that the other plan is sponsored by an entity within the State of California, and the plan receiving such amounts provides for the acceptance of the amounts. 8.3 Regardless of any other provision of the Plan, if the participant separates from service with the employer in order to accept employment with another such entity, payout will not commence upon separation from service and amounts previously deferred will automatically be transferred. SECTION 9. EMPLOYER PARTICIPATION: Notwithstanding any other provisions Of this Plan, the employer may make additional deposits in the deferred compensation fund as additional compensation for the , services rendered by the employee to the employer during an employment period, provided 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. • SECTION 10. NONASSIGNABILITY: Subject to Section 10, to the fullest extent permitted y -law, the interest of a participant in the contractual obligation of the employer, established by the Plan, shall not be assignable in whole or in part, directly or by operation of law or otherwise, in any manner, and no right or interest of a participant in the employer' s contractual obligation shall be liable for or subject to any obligation or liability of such participant. SECTION 11 . FACILITY OF PAYMENT: If any participant terminates his employment or dies or retires, 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. SECTION 12. MISCELLANEOUS: 12.1 Status of Participants - Neither the establishment of Plan nor any modification thereof, nor the establishment of any book account, nor the payment of any benefits, shall be construed as giving to any participant or other person any legal or equitable right against the employer except as herein provided; and, in no event, shall the terms of employment of any employee or participant be modified or in any way affected hereby. 12.2 Condition of Plan - It is a condition of this Plan, and each employee by participating herein expressly agrees, that he shall look solely to the general assets of the employer for the payment of any benefit to which he is entitled under the Plan. 12.3 Governing Law - This Plan shall be construed, administered and enforced This to the laws of the State of California. 12.4 Designation of Beneficiaries - Each participant shall have the right, by written notice to the employer, to designate beneficiaries to receive any benefit to which said participant may be entitled in the event of his death prior to the complete distribution of benefits. If no such designation is in effect on a participant' s death, his beneficiary shall be his estate, or, if no executor or administrator is appointed within sixty (60) days after the participant' s death, the employer shall direct said benefits to be paid to the beneficiary or beneficiaries designated in his last will , or, if there be no will , then to the heirs at law of the participant. SECTION 13. AMENDMENT AND TERMINATION: 13.1 The Deferred Compensation Advisory Committee may, at any time and from time to time, modify, amend, or terminate the Plan in whole or in part (including retroactive amendments) or cease deferring compensation pursuant to the Plan by delivering to each participant a written copy of each modification, amendment, or termination or a notice that it ceases deferring compensation; provided however, the Deferred Compensation Advisory Committee shall not have the right to reduce or effect the value of any participant' s book account or any rights accrued under the Plan prior to such modification, amendment, termination or cessation. 13.2 In the event of the termination of the Plan by the employer under Section 12.1 , the value of all participants' book accounts shall be distributed to the participants or their beneficiaries in lump sums on , the sixtieth (60th) day after termination of the Plan. SECTION 14. EMPLOYER NOT RESPONSIBLE: The employer may, but is not required to, invest funds held pursuant to agreements between participants and the employer in accordance with the requests made by each participant at the time of enrollment or change in enrollment, prospectively only. The employer shall retain the right to approve or disapprove such investment requests. Any action by the employer in investing funds, or approving of any such investment of funds, shall not be considered to be either an endorsement or guarantee of any investment, nor shall, it be considered to attest to the financial soundness or the suitability of any investment for the purpose of meeting future obligations as provided in Section 7 of this Plan. 0 0 RESOLUTION NO. 14730 OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS APPROVING A REVISED DEFERRED COMPENSATION PLAN. WHEREAS the City Council originally approved a Deferred Compensation Plan for City employees on January 2, 1975, and WHEREAS the various rules and regulations affecting such plans has changed substantially over the years, and WHEREAS it is simpler to rescind the old plan and adopt it as part of a new one than to amend the old one, NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs, as follows: Section 1 . That Resolution 11292, as amended, be rescinded. Section 2. That the "City of Palm Springs Deferred Compensation Plan," dated October 5, 1983, which is on file in the office of the City Clerk, is hereby approved. ADOPTED this 6th day of October , 1983. AYES: Councilmembers Doyle, Foster, Maryanov, Smith and Mayor Bogert NOES: None ABSENT: None ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVVIIEWE�D & APPROVED CITY OF PALM SPRINGS DEFERRED COMPENSATION PLAN 12-10-74 4 a 1 CITY OF PALM SPRINGS DEFERRED COMPENSATION PLAN SECTION 1 . NAME: The name of this Plan is the City of Palm Springs Deferred Compensation Plan (hereinafter referred to as the Plan) . SECTION 2. PURPOSE: The primary purpose of the Plan is to attract, and hold personnel by permitting them to enter into agreements with the City of Palm Springs which will provide for deferral of payment of a portion of their current compensation until death , disability, retirement, termina- tion of employment, or other event as provided herein, in accordance with the provisions of Sections 53212 - 53214 of the Government Code of the State of California, and the applicable provisions of the Internal Revenue Code. SECTION 3. DEFINITIONS: For the purposes of this Plan certain words or phrases used herein will have the following meanings : 3.1 "Employer" shall be the City of Palm Springs , California. 3.2 "Employee" shall mean all officers and employees of the City of Palm Springs . 3.3 "Participant" shall mean any employee who fulfills the re- quirements of enrollment into this plan. 3.4 "Participation Agreement" shall mean the agreement executed and filed by an employee with the employer pursuant to Section 4, in which the employee elects to become a participant in the plan. 3.5 "Compensation" shall mean the total of all amounts which would be paid by the employer to or for the benefit of an employee (if he were not a participant in the Plan) for actual services for the period that he is a participant. 3.6 "Employment Period" means a period from January 1 through Dec- ember 31 of the same year, except that the first year of an employee hired in mid-period shall be the period beginning with the date of employment and ending on December 31 . 3. 7 "Disability" means the inability of a participant to engage in his usual occupation by reason of a medically determinable physical or mental impairment as determined by the employer on the basis of advice from a physician or physicians. 12-10-74 4 a 2 DEFERRED COMPENSATION PLAN - Page 2 SECTION 4. PARTICIPATION IN THE PLAN: 4.1 Each employee may elect to become a participant of the Plan and defer payment of part of his compensation by executing a written Participation Agreement and filing it with the employer no later than the day before the beginning of any employment period; or in the case of a new employee, not later than 30 days after commencement of employment. 4.2 A Participation Agreement shall be effective for the first employment period following its execution and filing, except when it is executed and filed by a new employee pursuant to Section 4.1 , in which case it shall be effective for that part of the employment period following its execution and filing. In either situation, the Participation Agreement shall continue from period to period and remain in full force and effect unless terminated as provided in Section 4.3 below. 4.3 A participant may terminate his participation in the Plan and thereby terminate further deferral of his compensation by filing with the employer an executed written notice of termination at least 30 days prior to effective date of termination. Once terminated, a former participant cannot rejoin the Plan during the employment period in which termination occurred; however, he may elect to become a participant in subsequent employment periods . No amounts shall be payable to an employee upon terminating his participation in the Plan unless otherwise due pursuant to Section 7. 4.4 A participant may select pursuant to Section 6, one or more investment objectives provided that the amount deferred for each objective equals or exceeds the minimum of not less than $10 per bi-weekly pay period. SECTION 5. DEFERRAL OF COMPENSATION: During each employment period in which the employee is a participant in the Plan, the employer shall defer payment of such part of his compensation as is specified by the employee in the Participation Agreement which he has executed and filed with the employer. SECTION 6. ADMINISTRATION OF THE PLAN: 6.1 The Plan shall be administered by the City Manager or his designated appointees and an advisory committee made up of one (1 ) member from each of the three employee organizations , who shall have the sole authority to enforce the Plan and shall be responsible for the operation of the Plan in accordance with its terms , and shall determine all questions arising out of the administration , interpretation, and application of the Plan, which determinations shall be conclusive and binding on all persons . . 4 a 3 ti DEFERRED COMPENSATION PLAN - Page 3 6 .2 The employer shall establish a deferred compensation fund to which all deferred compensation shall be credited at such times as the compensation would have been payable to individual employees if not a participant of the Plan. Separate book accounts will be established for each employee participant which will show all amounts of deferred compensation, investments made, shares acquired and earnings and gains on investments . Each book account will be valued at least annually on a method as outlined in Section 6.3. 6.3 On executing the Participation Agreement, the employee shall designate his investment objective, prospectively only. The employer will invest amounts of deferred compensation in mutual fund shares , or interest time deposits with a local savings and loan company or banking institution , or investments with a local stockbroker, or life insurance and/or fixed/variable annuity contract with an insurance company, whichever in the employer's sole judgment will best achieve the employee 's ob- jectives . The employer is the sole owner and beneficiary of all funds, investments , or other assets under this Plan. 6.3(a) If a mutual fund is selected as the investment vehicle, all dividends and capital gains dis- tributions will be reinvested in shares of said mutual fund. The total of full or fractional mutual fund shares purchased or acquired through reinvestment shall serve as a basis for measuring the value of the participant's book account. Value will be the total number of full and fractional shares held times the net asset value per share reported by the fund on the valuation date. 6 .3(b) If interest time deposits in local savings and loan or banking institutions is selected as the investment vehicle, interest earnings will be credited to the participant's book account when declared by the institution. Annual valuation will include all interest earned , whether paid or accrued. 6.3(c) If investments are selected, dividends and interest earnings will be credited to the City of Palm Springs Deferred Compensation Plan Investment Account with the stockbroker. The market value of all investments and cash in the account shall be determined on December 31st each year and each participant' s share of the account shall be valued by any cash income, plus or minus any market action. New participants may join the Account after existing participants values are determined. 4 a 4 DEFERRED COMPENSATION PLAN - Page 4 6.3(d) If a variable annuity contract is selected as the investment vehicle, the value of participant's individual account during the Employment Period shall be determined by the Insurance Company's Accumulation Unit, which is a statistical index of the net investment results of the Variable Contract Account. At retirement, the amount of annuity payments shall be determined by the Insurance Company's last Annuity Unit, which is a statistical index of the net investments results of the Variable Contract Account. 6.4 The employer may, but is not required to, invest deferred compensation 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 distributions , interest or other income payable on any of the employer's invest- ments 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. 6.5 Neither this Plan nor any Participation Agreement nor any book account shall be deemed to create a trust or custodial account on behalf of or for the benefit of any participant of the Plan or his beneficiaries . No participant of the Plan or his beneficiaries shall have, by reason of the Plan Participation Agreement, or book account, any secured or preferred interest in or to any assets of the employer. The employer shall have only a contractual obligation to pay the benefits due the participant under the Plan. SECTION 7. DISTRIBUTION OF BENEFITS: 7.1 Election - Each participating employee must elect the payout options and the payout periods for each event stated in Sections 7.2, 7.3 , 7.4, and 7.5, at the time of signing each Participation Agreement. 7.2 Retirement - In event of retirement, the full benefits credited to participant's book account plus or minus subsequent investment gains or losses , but less any Federal or State Income Taxes required to be withheld, shall be distributed to him in any one or more of the following ways: 7.2(a) In a lump sum. 4 a 5 ti DEFERRED COMPENSATION PLAN - Page 5 7.2(b) In monthly, quarterly, semi-annual or annual installments over a period not to exceed ten ( 10) years from date distribution began or over a period established by the employer not greater than the life expectancy of the participant. Life expectancy shall be determined once by the employer, on the date of the initial installment distribution. Installment distirutions will be made in substantially equal payments , but no payment shall have a value of less than (the smaller of) $50 or the balance credited to the participant's book account. Participant's book account balances will continue to be invested until -- in the employer's sole judgment -- cash is to be withdrawn for payment of benefits . Payment of benefits will commence on the first day of the second month following termination of employment. 7.3 Disability - In event of termination of employment by reason of disability distribution of benefits will be as provided in Section 7.2. 7.4 Other Termination - In event of termination of employment for reason other than those specified in Sections 7.2 and 7.3, then the full benefits credited to participant's book account plus or minus subsequent investment gains or losses , but less any Federal or State income taxes re- quired to be withheld , shall be distributed to him in any one or more of the following ways : 7.4(a) In a lump sum. 7.4(b) In monthly, quarterly, semi -annual , or annual installments of substantially equal payments over a period not to exceed seven (7) years from date distribution began, but no payment shall have a value of less than (the smaller of) $50 or the balance credit to the partici- pant's book account. 7.4(c) Postpone payments under 7.4(a) and (b) above until participant reaches his 50th, 60th, or 65th birthday. 4 a 6 DEFERRED COMPENSATION PLAN - Page 6 The employee shall elect the method of distribution at the time of signing each Participation Agreement. The employer shall make distribution by any of the foregoing methods or combinations thereof. Participant's book account balances will continue to be invested until - in the employer's sole judgment - cash is to be withdrawn for payment of benefits. Payment of benefits under Sections 7.4(a) and 7.4(b) will commence on the first day of the second month following termination of employment. Payment of benefits under Section 7.4(c) will commence on the first day of the month following the participant's birthday. 7.5 Death - In event of the death of any participant, either before or after termination of employment, then the full benefits credited to his book account, less any Federal or State Withholding Taxes required by law, shall be distributed to his beneficiaries in the manner designated in the participant's Participation Agreement. The employer shall make payment in a lump sum 90 days after notification of death of the participant, in compliance with any State laws governing the payments of death benefits . 7.6 Financial Catastrophe - In the event of a financial catastrophe affecting a participant, where the withdrawal of funds would be necessary to prevent great hardships to the participant and the amount of withdrawal requested by the participant is only the amount necessary to meet that financial cat- astrophe, and is not reimbursed by insurance, a participant may apply to the employer for withdrawal of such amount from the Plan prior to retirement or to termination of participant's employment with the City. Examples of such need under the foregoing criteria may be catastrophic illness , flood , fire, earthquake , death in the family, or disabling injury, and examples of similar import. Withdrawals for expenditures normally budgetable, such as down payment on a home or purchase of an automobile, or college expenses , will not be permitted. Any amount so ap- proved hereunder for withdrawal shall be paid to participant in a lump sum. The withdrawal shall be effective at the later of the dates specified in the participant 's application or the date approved by the employer. 7.7 Other Distributions - Notwithstanding any other provisions of the Plan , the employer may change the time or methods of benefit payments pursuant to this Plan. 4 a 7 DEFERRED COMPENSATION PLAN - Page 7 SECTION 8. EMPLOYER PARTICIPATION: Notwithstanding any other provisions of this Plan, the employer may make additional deposits in the deferred compensation fund as additional compensation for the services rendered by the employee to the employer during an employment period, provided 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. SECTION 9. NONASSIGNABILITY: Subject to Section 10, to the fullest extent permitted by law, the interest of a participant in the contractual obligation of the employer, established by the Plan , shall not be assignable in whole or in part, directly or by operation of law or otherwise , in any manner and no right or interest of a participant in the employer's contractual obligation shall be liable for or subject to any obligation or liability of such participant. SECTION 10. FACILITY OF PAYMENT: If any participant terminates his employment or dies or retires , 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. SECTION 11 . MISCELLANEOUS: 11 .1 Status of Participants - Neither the establishment of the Plan nor any modification thereof, nor the establishment of any book account, nor the payment of any benefits , shall be construed as giving to any participant or other person any legal or equitable right against the employer except as herein provided; and, in no event, shall the terms of employment of any employee or participant be modified or in any way affected hereby. 11 .2 Condition of Plan - It is a condition of this Plan , and each employee by participating herein expressly agrees , that he shall look solely to the general assets of the employer for the payment of any benefit to which he is entitled under the Plan. 11 .3 Governing Law - This Plan shall be construed, administered and enforced according to the laws of the State of California. 11 .4 Designation of Beneficiaries - Each participant shall have the right, by written notice to the employer, to designate bene- ficiaries to receive any benefit to which said participant may be entitled in the event of his death prior to the complete distribution of benefits . If no such designation is in effect on a participant's death, his beneficiary shall be his estate or if no executor or administrator is appointed within six (6) months after the participant's death , the employer shall direct said benefits to be paid to the beneficiary or beneficiaries designated in his last will or if there be no will , then to the heirs at law of the participant. 4 a 8 DEFERRED COMPENSATION PLAN - Page 8 SECTION 12. AMENDMENT AND TERMINATION 12.1 The employer may at any time and from time to time modify, amend , or terminate the Plan in whole or in part (including retroactive amendments) or cease deferring compensation pur- suant to the Plan , by delivering to each participant a written copy of such modification, amendment, or termination or of a notice that it ceases deferring compensation; provided, how- ever, the employer shall not have the right to reduce or affect the value of any participant's book account or any rights accrued under the Plan prior to such modification, amendment, termination or cessation. 12.2 In the event of the termination of the Plan by the employer under Section 12.1 , the value of all participants ' book accounts shall be distributed to the participants or their beneficiaries in lump sums on the sixtieth day after termination of the Plan. SECTION 13. EMPLOYER NOT RESPONSIBLE: The employer may, but is not required to, invest funds held pursuant to agreements between participants and the employer in accordance with the requests made by each participant at the time of enrollment or change in enrollment, prospectively only. The employer shall retain the right to approve or disapprove such investment requests . Any action by the employer in investing funds , or approving of any such investment of funds , shall not be considered to be either an endorsement or guarantee of any invest- ment, nor shall it be considered to attest to the financial sound- ness or the suitability of any investment for the purpose of meet- ing future obligations as provided in Section 7 of this Plan. 4 a 9 DEFERRED COMPENSATION PLAN PARTICIPATION AGREEMENT THIS AGREEMENT, made by and between the City of Palm Springs, California hereinafter referred to as "Employer" and , hereinafter referred to as "Participating Employee" , WHEREAS, the Employer has established the "CITY OF PALM SPRINGS DEFERRED COMPENSATION PLAN" , hereinafter referred to as "Plan" for the benefit of its employees, and WHEREAS, the Plan provides that any employee, subject to the limitations established in the Plan of the Employer, may elect to join and become a Member of the Plan on executing and filing with the Employer a Participation Agreement, and WHEREAS, the Participating Employee desires to join and become a Vember of the Plan, NOW, THEREFORE, the Employer and the Participating Employee agree as follows: 1 . The Employer has provided the Participating Employee with a current copy of the Plan. 2. The Participating Employee hereby elects to become a Member of the Plan and to defer payments pursuant to the Plan as follows: a. Amount of Bi-Weekly compensation: $ (not less than $10. ) 3. The Participating Employee agrees that his rights to the deferred compensation shall be governed by all terms and conditions of the Plan. 4. The Participating Employee designates his investment objectives to be: a• ($) b. ($) C. ($) d. ($) 4 a 10 PARTICIPATION AGREEI C - Page 2 5. Under Section 7 of the Plan, the Participating Employee elects the following distribution of benefits: a. Retirement (1) Lump Sum o . (2) L� Installments payable over years (3) Life Annuity (Choose One Only) 120 Months Certain and Life. 180 Months Certain and Life. 240 Months Certain and Life. L J Life Annuity Only. b. Other Termination (1) Lump Sum Postpone to Age SO. Postpone to Age 60. Postpone to Age 65. (2) Installments payable over years a. Postpone to Age 50. Postpone to Age 60. Postpone to Ago 65 . C. Death (1) Lump Sum (2) — Installments payable over years o (3) Life Annuity (Choose One Only) 120 Months Certain and Life. .180 Months Certain and Life. 240 Months Certain and Life. Life Annuity Only. 4 a 11 ti PARTICIPATION AGREEMENT - Page 3 6. The Participating Employee designated the following persons as his Beneficiaries to receive, in the event of his death, any benefits to which he is entitled under the Plan : Name of Beneficiary Address of Beneficiary a. b. c. d. If more than one person is named as a Beneficiary, any payments to which they may be entitled shall be paid as follows : (Choose one) In equal shares , to such of the designated persons, survivor, or survivors, as shall then be living, or /% Wholly, to the first designated person who survives me I hereby reserve the right to change or revoke this Beneficiary without notice to any Beneficiary. 7. A monthly administrative charge (not to exceed $1 ,00) will be made to Participating Employees and will be deducted from the deferred payments indicated in Paragraph 2 of the Participation Agreement. If there are any expenses connected with the invest- ment vehicles selected to insure investment objectives , these will be explained and idientified in the descriptive literature. Dated: 19 CITY OF PALM SPRINGS rRFU9y_1T By Its PARTICIPATING EMPLOYEE I hereby agree to the designation of Beneficiary as shown above. SPOUSE OF PARTICIPATING EMPLOYEE 4 a 12