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Resolution 12860CITY OF ALAMEDA RESOLUTION NO. 12860 AMENDING AND RESTATING THE ICMA DEFERRED COMPENSATION PLAN IN THE FORM OF THE ICMA RETIREMENT CORPORATION DEFERRED COMPENSATION PLAN AND TRUST FOR THE STRENGTHENING OF BENEFITS TO CITY EMPLOYEES WHEREAS, the City of Alameda has employees rendering valuable services; and WHEREAS, 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 WHEREAS, the City has determined that the continuance of the deferred compensation plan will serve these objectives; and WHEREAS, amendments to the Internal Revenue Code have been enacted that require changes to the structure of and allow for the strengthening of the benefits and protections of the deferred compensation plan: NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ALAMEDA that the City hereby amends and restates the ICMA Deferred Compensation Plan in the form of the ICMA Retirement Corporation Deferred Compensation Plan and Trust, attached hereto as Appendix A. BE IT FURTHER RESOLVED that the assets of the Plan shall be held in trust, with the City of Alameda serving as trustee, for the exclusive benefit of the Plan participants and their beneficiaries, and the assets shall not be diverted to any other purpose. The City's beneficial ownership of Plan assets held in the ICMA Retirement Trust shall be held for the further exclusive benefit of the Plan participants and their beneficiaries; BE IT FURTHER RESOLVED that the Plan will not permit loans; BE IT FURTHER RESOLVED that the City hereby agrees to serve as trustee under the Plan. ICI RETIREMENT CORPORA ON This deferred compensation plan has been submitted to the Internal Revenue Service by a public employer for a Private Letter Ruling. The IRS has not yet issued a Ruling on the plan and may require changes in this document prior to issuing a Ruling. If changes are required in the document, you will be notified of the changes. Appendix A 457 De red Compensation Plan and Tr f Document November 1996 DEFERRED COMPENSATION PLAN & TRUST ARTICLE I. PURPOSE The Employer hereby establishes the Employer's De- ferred Compensation Plan and Trust, hereafter referred to as the "Plan." The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer and the Employees' Beneficiaries in accordance with the provisions of Section 457 of the Internal Rev- enue Code of 1986, as amended (the "Code "). This Plan shall be an agreement solely between the Employer and participating Employees. The Plan and Trust forming a part hereof are established and shall be maintained for the exclusive benefit of eligible Employ- ees and their Beneficiaries. No part of the corpus or income of the Trust shall revert to the Employer or be used for or diverted to purposed other than the exclu- sive benefit of Participants and their Beneficiaries. • ARTICLE II. DEFINITIONS 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cumulative amount of the Participant's Deferred Compensation, including any income, gains, losses, or increases or decreases in market value attributable to the Employer's investment of the Participant's Deferred Compensation, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expenses charged against such Participant's Deferred Compensa- tion. 2.02 Accounting Date: Each business day that the New York Stock Exchange is open for trading, as provided in Section 6.06 for valuing the Trust's assets. 2.03 Administrator: The person or persons named to carry out certain nondiscretionary administrative func- tions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. 2.04 Beneficiary: The person or persons designated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Participant's death, unless otherwise provided in the Participant's Joinder Agreement. If no beneficiary is designated in the Joinder Agreement, if the Designated Beneficiary predeceases the Participant, or if the desig- nated Beneficiary does not survive the Participant for a period of fifteen (15) days, then the estate of the Par- ticipant shall be the Beneficiary. 2.05 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under section 6.09, or any other amount which the Employer agrees to credit to a Participant's Account. 2.06 Employee:Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, and who has been designated by the Employer as eligible to partici- pate in the Plan. 2.07 Includible Compensation: The amount of an Employee's compensation from the Employer for a taxable year that is attributable to services performed for the Employer and that is includible in the Employee's gross income for the taxable year for federal income tax purposes; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income tax purposes. Includible Compensation shall be determined without regard to any community property laws. 2.08 Joinder Agreement: An agreement entered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a preference among the investment alternatives desig- nated by the Employer, designate the Employee's Beneficiary or Beneficiaries, and incorporate the terms, conditions, and provisions of the Plan by reference. T w o I MA RETIREMENT COR PO'' 2.09 Normal Compensation: The amount of compensa- tion which would be payable to a Participant by the Employer for a taxable year if no Joinder Agreement were in effect to defer compensation under this Plan. 2.10 Normal Retirement Age: Age 70 -1/2, unless the Participant has elected an alternate Normal Retirement Age by written instrument delivered to the Administra- tor prior to Separation from Service. A Participant's Normal Retirement Age determines the period during which a Participant may utilize the catch -up limitation of Section 5.02 hereunder. Once a Participant has to any extent utilized the catch -up limitation of Section 5.02, his Normal Retirement Age may not be changed. A Participant's alternate Normal Retirement Age may not be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits under the Employer's basic retire- ment plan covering the Participant and may not be later than the date the Participant will attain age 70 -1/2. If a Participant continues employment after attaining age 70 -1/2, not having previously elected alternate.Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by the Employer, or the age at which the Participant actually separates from service if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan main- tained by the Employer, the Participant's alternate Normal Retirement Age may not be earlier than age 55 and may not be later than age 70 -1/2. 2.11 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article IV. 2.12 Plan Year: The calendar year. 2.13 Retirement: The first date upon which both of the following shall have occurred with respect to a partici- pant: Separation from Service and attainment of age 65. 2.14 Separation From Service: Severance of the Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(d)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to have severed his employment with the Employer for purposes of this Plan when, in accordance with the established practices of the Employer, the employment relationship is considered TIC)N to have actually terminated. In the case of a Participant who is an independent contractor of the Employer, Separation from Service shall be deemed to have oc- curred when the Participant's contract under which services are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Participant's services, and is not antici- pated that the Participant will become an Employee of the Employer. 2.15 Trust: The Trust created under Article VI of the Plan which shall consist of all compensation deferred tinder the Plan, plus any income and gains thereon, less any losses, expenses and distributions to Participants and Beneficiaries. ARTICLE 111. ADMINISTRATION 3.01 Duties of the Employer: The Employer shall have the authority to make all discretionary decisions affect- ing the rights or benefits of Participants which may be required in the administration of this Plan. The Employer's decisions shall be afforded the maximum deference permitted by applicable law. 3.02 Duties of Administrator: The Administrator, as agent for the Employer, shall perform nondiscretionary administrative functions in connection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. ARTICLE IV. PARTICIPATION IN THE PLAN 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned. 4.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of compensation not yet earned which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restrictions as may result from the nature of terms of any investment made by the Em- ployer). Such amendment shall become effective as of Tlr re 457_ Defer Cnmpencnrion I'1J11 dn 4 'fru5 N o v e m b e r 1 9 9 6 the beginning of the calendar month commencing after the date the amendment is executed. A Participant may at any time amend his Joinder Agreement to change the designated Beneficiary, and such amendment shall become effective immediately. ARTICLE V. LIMITATIONS ON DEFERRALS 5.01 Normal Limitation: Except as provided in section 5.02, the maximum amount of Deferred Compensation for any Participant for any taxable year shall not exceed the lesser of $7,500.00, as adjusted for the cost -of- living in accordance with Code section 457(e)(15) for taxable years beginning after December 31, 1996 (the "dollar limitation "), or 33-1/3 percent of the Participant's Includible Compensation for the taxable year. This limitation will ordinarily be equivalent to the lesser of the dollar limitation in effect for the taxable year or 25 percent of the Participant's Normal Compensation. 5.02 Catch -Up Limitation: For each of the last three (3) taxable years of a Participant ending before his attain- ment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of: (1) $15,000 or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if (i) the Participant was eli- gible to participate in the Plan for such year (or in any other eligible deferred compensation plan established under Section 457 of the Code which is properly taken into account pursuant to regulations under section 457), and (ii) compensation (if any) deferred under the Plan (or such other plan) was subject to the deferral limita- tions set forth in Section 5.01 5.03 Other Plans: The amount excludable from a Participant's gross income under this Plan or any other eligible deferred compensation plan under section 457 of the Code shall not exceed $7,500.00 (or such greater amount allowed under Sections 5.01 or 5.02 of the Plan), less any amount excluded from gross income under section 403(b), 402(a)(8), or 402(h)(1)(B) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organiza- tion described in section 501(c)(18) of the Code. 0 C n rn C n 1 . ARTICLE VI. TRUST AND INVESTMENT OF ACCOUNTS 6.01 Investment of Deferred Compensation: A Trust is hereby created to hold all the assets of the Plan for the exclusive benefit of Participants and Beneficiaries, except that expenses and taxes may be paid from the Trust as provided in Section 6.03. The trustee shall be the Employer or such other person which agrees to act in that capacity hereunder. 6.02 Investment Powers: The trustee or the Plan Ad- ministrator, acting as agent for the trustee, shall have the powers listed in this Section with respect to invest- ment of Trust assets, except to the extent that the investment of Trust assets is directed by Participants, pursuant to Section 6.05. (a) To invest and reinvest the Trust without dis- tinction between principal and income in any form of tangible or intangible property, real, personal, or mixed, and wherever situated, including, but not by way of limitation, common or preferred stocks, shares of regulated investment companies and other mutual funds, bonds, Loans, notes, debentures, mortgages, certificates of deposit, interest, or par- ticipation, equipment trust certificates, commercial paper including but not limited to participation in pooled commercial paper accounts, contracts with insurance companies including but not limited to insurance, individual or group annuity, deposit administration, and guaranteed interest contracts, deposits at reasonable rates of interest at banking institutions including but not limited to savings accounts and certificates of deposit, and other forms of securities or investments of any kind, class, or character whatsoever and representing interests in any form of enterprise, wherever it may be located, organized or operated within or without the United States of America, whether such investments are income producing or not, without being limited in any respect by statute or court rule or decision of any jurisdiction now or hereafter in force purport- ing to limit or otherwise affect such investments. Assets of the Trust may be invested in securities or new ventures that involve a higher degree of risk than investments that have demonstrated their investment performance over an extended period of time. Foy„ I .A R E T I R E M E N T C O R P O R (b) To invest and reinvest all or any part of the assets of the Trust in any common, collective or commingled trust fund that is maintained by a bank or other institution and that is available to Em- ployee plans described under sections 457 or 401 of the Code, or any successor provisions thereto, and during the period of time that an investment through any such medium shall exist, to the extent of participation of the Plan, the declaration of trust of such common, collective, or commingled trust fund shall constitute a part of this Plan. (c) To invest and reinvest all or any part of the assets of the Trust in any group annuity, deposit administration or guaranteed interest contract issued by an insurance company or other financial institu- tion on a commingled or collective basis with the assets of any other 457 plan or trust qualified under section 401(a) of the Code or any other plan de- scribed in section 401(a)(24) of the Code, and such contract may be held or issued in the name of the Plan Administrator, or such custodian as the Plan Administrator may appoint, as agent and noin•inee for the Employer. During the period that an invest- ment through any such contract shall exist, to the extent of participation of the Plan, the terms and conditions of such contract shall constitute a part of the Plan. (d) To purchase part interests in real property or in mortgages on real property, wherever such real property may be situated, and to delegate to a property manager or the holder or holders of a majority interest in such real property or mortgage on real property the management and operation of any part interest in such real property or mortgages. (e) To hold cash awaiting investment and to keep such portion of the Trust in cash or cash balances, without liability for interest, in such amounts as may from time to time be deemed to be reasonable and necessary to meet obligations under the Plan or otherwise to be in the best interests of the Plan. (f) To retain, manage, operate, administer, divide, subdivide, partition, mortgage, pledge, improve, alter, demolish, remodel, repair, and develop in any manner any property, or any part of or partial 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 f I O N otherwise dispose of any such property, without regard to restrictions applicable to fiduciaries or others and without the approval of any court. (g) To sell for cash or credit, redeem, exchange for other property, convey, transfer, or otherwise dispose of any property held in the Trust in any manner and at any time, by private contract or at public auction or otherwise, and no other person shall be bound to see to the application of the purchase money or to inquire into the validity, expediency, or propriety of any such sale or other disposition. (h) To enter into contracts for or to make commit- ments either alone or in company with others to purchase or sell at any future date any property acquired for the Trust. (i) To vote or to refrain from voting any stocks, bonds, or other securities held in the Trust, to exercise any other right appurtenant to any securi- ties or other property held in the Trust, to give general or special proxies or powers of attorney with or without power of substitution with respect to such securities and other property, to exercise any conversion privileges, subscription rights, or other options or privileges with respect to such securities and other property and make any payments inciden- tal thereto, and generally to exercise, personally or by general or limited power of attorney, any of the powers of an owner with respect to stocks, bonds, securities, or other property held in the Trust at any time. (j) To oppose or to consent to and participate in any organization, reorganization, consolidation, merger, combination, readjustment of finances, or similar arrangement with respect to any corporation, company, or association, any of the securities of which are held in the Trust, to do any act with reference thereto, including the exercise of options, the making of agreements or subscriptions and the payment of expenses, assessments, or subscriptions that may be deemed necessary or advisable in connection therewith, and to accept, hold, and retain any securities or other property that may be so acquired. 457 Dcfe d Compensation Plan and Tru November 1996 (k) To deposit any property held in the Trust with any protective, reorganization, or similar commit- tee, and to delegate discretionary power thereto and to pay and agree to pay part of its expenses and compensation and any assessments levied with respect to any such property so deposited. (1) To hold, to authorize the holding of, and to register any investment to the Trust in the name of the Plan, the Employer, or any nominee or agent of any of the foregoing, including the Plan Administra- tor, or in bearer form, to deposit or arrange for the deposit of securities in a qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by any other person, and to organize corporations or trusts under the laws of any jurisdiction for the purpose of acquiring or holding title to any property for the Trust, all with or without the addition of words or other action to indicate that property is held in a fiduciary or representative capacity but the books and records of the Plan shall at all times show that all such invest- ments are part of the Trust. (m) Upon such terms as may be deemed advisable by the Employer or the Plan Administrator, as the case may be, for the protection of the interests of the Plan or for the preservation of the value of an investment, to exercise and enforce by suit for legal or equitable remedies or by other action, or to waive any right or claim on behalf of the Plan or any default in any obligation owing to the Plan, to renew, extend the time for payment of, agree to a reduction in the rate of interest on, or agree to any other modification or change in the terms of any obligation owing to the Plan, to settle, compromise, adjust, or submit to arbitration any claim or right in favor of or against the Plan, to exercise and enforce any and all rights of foreclosure, bid for property in foreclosure, and take a deed in Lieu of foreclosure with or without paying consideration therefor, to commence or defend suits or other legal proceedings whenever any interest of the Plan requires it, and to represent the Plan in all suits or legal proceedings in any court of law or equity or before any body or tribunal. (n) To employ suitable consultants, depositories, agents, and legal counsel on behalf of the Plan. Dorunirut (o) To make, execute, acknowledge, and deliver any and all deeds, leases, mortgages, conveyances, contracts, waivers, releases, or other instruments in writing necessary or proper for the accomplishment of any of the foregoing powers. (p) To open and maintain any bank account or accounts in the name of the Plan, the Employer, or any nominee or agent of the foregoing, including the Plan Administrator, in any bank or banks. (q) To do any and all other acts that may be deemed necessary to carry out any of the powers set forth herein. 6.03 Taxes and Expenses: All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect to the Trust, or the income thereof, and all commissions or acquisitions or dispositions of securities and similar expenses of invest- ment and reinvestment of the Trust, shall be paid from the Trust. Such reasonable compensation of the Plan Administrator, as may be agreed upon from time to time by the Employer and the Plan Administrator, and reimbursement for reasonable expenses incurred by the Plan Administrator in performance of its duties hereun- der (including but not limited to fees for legal, account- ing, investment and custodial services) shall also be paid from the Trust. 6.04 Payment of Benefits: The payment of benefits from the Trust in accordance with the terms of the Plan may be made by the Plan Administrator, or by any custodian or other person so authorized by the Em- ployer to make such disbursement. The Plan Adminis- trator, custodian or other person shall not be liable with respect to any distribution of Trust assets made at the direction of the Employer. 6.05 Investment Funds: In accordance with uniform and nondiscriminatory rules established by the Employer and the Plan Administrator, the Participant may direct his/ her Accounts to be invested in one (1) or more invest- ment funds available under the Plan; provided, how- ever, that the Participant's investment directions shall not violate any investment restrictions established by the Employer. Neither the Employer, the Administrator, nor any other person shall be liable for any losses incurred by virtue of following such directions or with any reasonable administrative delay in implementing such directions. Six I C k R E T I R E M E N T C O R P O R A 6.06 Valuation of Accounts: As of each Accounting Date, the Plan assets held in each investment fund offered shall be valued at fair market value and the investment income and gains or losses for each fund shall be determined. Such investment income and gains or losses shall be allocated proportionately among all Account balances on a fund -by -fund basis. The alloca- tion shall be in the proportion that each such Account balance as of the immediately preceding Accounting Date bears to the total of all such Account balances as of that Accounting Date. For purposes of this Article, all Account balances include the Account balances of all Participants and Beneficiaries. 6.07 Participant Loan Accounts: Participant Loan Accounts shall be invested in accordance with Section 8.03 of the Plant. Such Accounts shall not share in any investment income and gains or losses of the investment funds described in Sections 6.05 and 6.06. 6.08 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the investments or other property obtained by the Employer through the investment of the Participant's Deferred Compensation pursuant to Sections 6.05 and 6.06. It is anticipated that the Employer's investments with respect to a Participant will conform to the investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be construed to require the Employer to make any particular investment of a Participant's Deferred Com- pensation. Each Participant shall receive periodic reports, not less frequently than annually, showing the then current value of his /her Account. 6.09 Transfers: (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan main- tained by another employer and credited to a Participant's Account under the Plan if (I) the Participant has separated from service with that employer and become an Employee of the Em- 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 within 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 I O N than cash, unless the Employer and the Administra- tor agree to hold such other assets under the Plan. Any such transferred amount shall be treated as a deferral subject to the limitations of Article V, except that, for purposes of applying the limitations of Sections 5.01 and 5.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been deferred under this Plan during such taxable year and compensation paid by the transferor em- ployer shall be treated as if it had been paid by the Employer. (b) Outgoing Transfers: An amount may be trans- ferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (I) the Participant has separated from service with the Employer and become an employee of the other employer, (ii) the other employer's plan provides that such transfer will be accepted, and (iii) the Participant and the employers have signed such agreements as are necessary to assure that the Employer's liability to pay benefits to the Partici- pant has been discharged and assumed by the other employer. The Employer may require such docu- mentation from the other plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of section 457 of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circum- stances as are permitted under section 457 of the Code and the regulations thereunder. 6.10 Employer Liability: In no event shall the Employer's liability to pay benefits to a Participant under this Plan exceed the value of the amounts cred- ited to the Participant's Account; neither the Employer nor the Administrator shall be liable for losses arising from depreciation or shrinkage in the value of any investments acquired under this Plan. S,'ve„ 457 De.fe d Compensation Plan and 1'r14 1) oc14 nienr N o v e m b e r 1 9 9 6 ARTICLE VII. BENEFITS 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article VII, the distribution of a Participant's Account shall commence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, and the distribution of such Retirement benefits shall be made in accordance with one of the payment options de- scribed in Section 7.02. Notwithstanding the foregoing, but subject to the following paragraph of this Section 7.01, the Participant may irrevocably elect within 60 days following Separation from Service to have the distribution of benefits commence on a fixed determin- able date other than that described in the preceding sentence which is at least 61 days after Separation from Service, but not later than April 1 of the year following the year of the Participant's Retirement or attainment of age 70 -1/2, whichever is later. Notwithstanding the foregoing provisions of this Section 7.01, no election to defer the commencement of benefits after a separation from service shall operate to defer the distribution of any amount in the Participant's Loan Account in the event of a default of the Participant's loan. Effective on or after January 1, 1997, the Participant may elect to defer the commencement of distribution of benefits to a fixed determinable date later than the date described above, but not later than April 1 of the year following the year of the Participant's retirement or attainment of age 70-1/2, whichever is later, provided (a) such election is made after the 61st day following Separation from Service and before commencement of distributions and (b) the Participant may make only one (1) such election. Notwithstanding the foregoing, the Administrator, in order to ensure the orderly adminis- tration of this provision, may establish a deadline after which such election to defer the commencement of distribution of benefits shall not be allowed. 7.02 Payment Options: As provided in Sections 7.01, 7.04 and 7.05, a Participant or Beneficiary may elect to have value of the Participant's Account distributed in accordance with one of the following payment options, provided that such option is consistent with the limita- tions set forth in Section 7.03. (a) Equal monthly, quarterly, semi - annual or annual payments in an amount chosen by the Participant, continuing until his /her Account is exhausted; (b) One lump -sum payment; (c) Approximately equal monthly, quarterly, semi- annual or annual payments, calculated to continue for a period certain chosen by the Participant. (d) Annual Payments equal to the minimum distri- butions required under Section 401(a)(9) of the Code over the life expectancy of the Participant or over the life expectancies of the Participant and his Beneficiary. (e) Payments equal to payments made by the issuer of a retirement annuity policy acquired by the Employer. (f) A split distribution under which payments under options (a), (b), (c) or (e) commence or are made at the same time, as elected, by the Participant under Section 7.01, provided that all payments commence (or are made) by the latest benefit commencement date under Section 7.01 and that once a payment is made subsequent payments will be made in substan- tially nonincreasing amounts. (g) Any payment option elected by the Participant and agreed to by the Employer and Administrator, provided that such option must provide for substan- tially nonincreasing payments for any period after the benefit commencement date under Section 7.01. A Participant's or Beneficiary's selection of a payment option made after December 31, 1995, under Subsec- tions (a), (c), or (g) above may include the selection of an automatic annual cost -of- living increase. Such increase will be based on the rise in the Consumer Price Index for All Urban Consumers (CPI -U) from the third quarter of the last year in which a cost -of- living in- crease was provided to the third quarter of the current year. Any increase will be made in periodic payment checks beginning the following January. The first cost - of- living increase will be based on the rise in the CPI -U from the third quarter of 1995 to the third quarter of 1996, and will be applied to amounts paid beginning January 1997. A Participant's or Beneficiary's election of a payment option must be made at least 30 days before the pay- ment of benefits is to commence. If a Participant or Beneficiary fails to make a timely election of a payment option, benefits shall be paid monthly under option (c) E i g h I C M RETIREMENT CORPORA T above for a period of five years or such shorter period of time necessary to ensure that the amount of any install- ment is not less than $1,200 per year, without the inclusion of a cost -of- living increase. 7.03 Limitation on Options: No payment option may be selected by a Participant under subsections 7.02(a) or (c) unless the amount of any installment is not less than S1,200 per year. No payment option may be selected by a Participant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of Sections 401(a)(9) and 457(d)(2) of the Code, including that payments commencing before the death of the Participant shall satisfy the incidental death benefits requirement under section 457(d)(2)(B)(i)(1). A cost -of- living increase included as part of a payment option selected under Section 7.02 shall not be considered to fail to satisfy the requirement under section 457(d)(2)(b) that any distribution made over a period of more than 1 year can only be made in substantially nonincreasing amounts. Unless otherwise elected by.the Participant (or spouse, in the case of distributions described in Section 7.05 below) by the time distributions are • required to begin, life expectancies shall be recalculated annually. Such election shall be irrevocable as to the Participant (or spouse) and shall apply to all subsequent years. The life expectancy of a nonspouse Beneficiary may not be recalculated. 7.04 Post - retirement Death Benefits: (a) Should the Participant die after he /she has begun to receive benefits under a payment option, the remaining payments, if any, under the payment option shall be payable to the Participant's Benefi- ciary within the 30 -day period commencing with the 61st day after the Participant's death, unless the Beneficiary elects payment under a different pay- ment option that is available under Section 7.02 within 60 days of the Participant's death. Any different payment option elected by a Beneficiary .under this section must provide for payments at a rate that is at (east as rapid under the payment option that was applicable to the Participant. In no event shall the Employer or Administrator be liable to the Beneficiary made in the name the Administrator Participant. for the amount of any payment of the Participant before receives proof of death of the 1N (b) If the designated Beneficiary does not continue to live for the remaining period of payments under the payment option, then the commuted value of any remaining payments under the payment option shall be paid in a lump sum to the estate of the Beneficiary. In the event that the Participant's estate is the Beneficiary, the commuted value of any remaining payments under the payment option shall be paid to the estate in a lump sum. 7.05 Pre - retirement Death Benefits: (a) Should the Participant die before he has begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary commencing within the 30 -day period commencing on the 91st day after the Participant's death, unless the Beneficiary elects a different fixed or determinable benefit commence- ment date within 90 days of the Participant's death. Such benefit commencement date shall be not later than the later of (I) December 31 of the year fol- lowing the year of the Participant's death, or (ii) if the Beneficiary is the Participant's spouse, Decem- ber 31 of the year in which the Participant would have attained age 70-1/2. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be paid in approximately equal annual installments over five years, or over such shorter period as may be neces- sary to assure that the amount of any annual install- ment is not less than $3,500. A Beneficiary shall be treated as if he /she were a Participant for purposes of determining the payment options available under Section 7.02, provided, however, that the payment option chosen by the Beneficiary must provide for payments to the Beneficiary over a period no longer than the life expectancy of the Beneficiary, and provided that such period may not exceed (15) years if the Beneficiary is not the Participant's spouse. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant's Account shall be paid to the estate of the Benefi- ciary in a lump sum. In the 'event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. 1 , e 457 Defer C m perrsa1ion P1,in a ud l r u s November 1996 7.06 Unforeseeable Emergencies: (a) In the event an unforeseeable emergency occurs, a Participant may apply to the Employer to receive that part of the value of his /her Account that is reasonably needed to satisfy the emergency need. If such an application is approved by the Employer, the Participant shall be paid only such amount as the Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessation of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. (b) An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden unexpected illness, accident, or disability of the Participant or of a dependent (as defined in section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar and extraordinary unforeseeable circum- stances arising as a result of events beyond the control of the Participant. The need to send a Participant's child to college or to purchase a new home shall not be considered unforeseeable emer- gencies. The determination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. 7.07 Transitional Rule for Pre -1989 Benefit Elections: In the event that, prior to January 1, 1989, a Participant or Beneficiary has commenced receiving benefits under a payment option or has irrevocably elected a payment option or benefit commencement date, then that pay- ment option or election shall remain in effect notwith- standing any other provision of the Plan. 7.08 De Minimis Accounts: Notwithstanding the fore- going provisions of this Article, if the value of a Participant's Account does not exceed $3,500 and (a) no amount has been deferred under the Plan with respect to the Participant during the 2 -year period ending on the date of the distribution and (b) there has been no prior distribution under the Plan to the Participant pursuant to this Section 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. 10[14 111 9.19 ARTICLE VIII. LOANS TO PARTICIPANTS 8.01 Availability of Loans to Participants: (a) Effective January 1, 1997, the Employer may elect to make loans available to Participants in this Plan. If the Employer has elected to make loans available to Participants, a Participant may apply for a loan from the Plan subject to the limitations and other provisions of this Article. (b) The Employer shall establish written guidelines governing the granting of loans, provided that such guidelines are approved by the Plan Administrator and are not inconsistent with the provisions of this Article, and that loans are made available to all Participants on a reasonably equivalent basis. 8.02 Terris and Conditions of Loans to Participants: Any loan by the Plan to a Participant under Section 8.01 of the Plan shall satisfy the following requirements: (a) Availability. Loans shall be made available to all Participants on a reasonably equivalent basis. (b) Interest Rate. Loans must be adequately secured and bear a reasonable interest rate. (c) Loan Limit. No Participant loan shall exceed the present value of the Participant's Account. (d) Foreclosure. In the event of default on any installment payment, the outstanding balance of the loan shall be a deemed distribution. In such event, an actual distribution of a plan loan offset amount will not occur until a distributable event occurs in the Plan. (e) Reduction of Account. Notwithstanding any other provision of this Plan, the portion of the Participant's Account balance used as a security interest held by the Plan by reason of a loan out- standing to the Participant shall be taken into account for purposes of determining the amount of the Account balance payable at the time of death or distribution, but only if the reduction is used as repayment of the loan. T r 14 I C I R E T I R E M E N T C O R P O R A (f) Amount of Loan. At the time the loan is made, the principal amount of the loan plus the outstand- ing balance (principal plus accrued interest) due on any other outstanding loans to the Participant from the Plan and from all other plans of the Employer that are qualified employer plans under section 72(p)(4) of the Code shall not exceed the least of: (1) $50,000, reduced by the excess (if any) of (a) The highest outstanding balance of loans . from the Plan during the one (1) year period ending on the day before the date on which the loan is made, over (b) The outstanding balance of loans from the Plan on the date on which such loan is made; or (2) One-half of the value of the Participant's interest in all of his /her Accounts under this Plan. (g) Application for Loan. The Participant must give the Employer adequate written notice, as determined by the Employer, of the amount and desired time for receiving a loan. No more than one (1) loan may be made by the Plan to a Partici- pant in any calendar year. No loan shall be ap- proved if an existing loan from the Plan to the Participant is in default to any extent. (h) Length of Loan. Any loan issued shall require the Participant to repay the loan in substantially equal installments of principal and interest, at least monthly, over a period that does not exceed five (5) years from the date of the loan; provided, however, that if the proceeds of the loan are applied by the Participant to acquire any dwelling unit that is to be used within a reasonable time (determined at the time the loan is made) after the loan is made as the principal residence of the Participant, the five (5) year limit shall not apply. In this event, the period of repayment shall not exceed a reasonable period determined by the Employer. Principal installments and interest payments otherwise due may be sus- pended for up to one (1) year during an authorized leave of absence, if the promissory note so provides, but not beyond the original term permitted under this Subsection (h), with a revised payment schedule ON (within such term) instituted at the end of such period of suspension. (i) Prepayment. The Participant shall be permitted to repay the loan in whole or in part at any time prior to maturity, without penalty. (j) Promissory Note. The loan shall be evidenced by a promissory note executed by the Participant and delivered to the Employer, and shall bear interest at a reasonable rate determined by the Employer. (k) Security. The loan shall be secured by an assignment of the Participant's right, title and interest in and to his /her Account. (1) Assignment or Pledge. For the purposes of paragraphs (f) and (g), assignment or pledge of any portion of the Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance contract purchased under the Plan, will be treated as a loan. (m) Other Terms and Conditions. The Employer shall fix such other terms and conditions of the loan as it deems necessary to comply with legal require- ments, to maintain the qualification of the Plan and Trust under section 457 of the Code, or to prevent the treatment of the loan for tax purposes as a distribution to the Participant. The Employer, in its discretion for any reason, may fix other terms and conditions of the loan, not inconsistent with the provisions of this Article and section 72(p) of the Code. 8.03 Participant Loan Accounts: (a) Upon approval of a loan to a Participant by the Employer, an amount not in excess of the loan shall be transferred from the Participant's other invest- ment fund(s), described in Section 6.05 of the Plan, to the Participant's Loan Account as of the Account- ing Date immediately preceding the agreed upon date on which the loan is to be made. (b) The assets of a Participant's Loan Account may be invested and reinvested only in promissory notes received by the Plan from the Participant as consid- eration for a loan permitted by Section 8.01 of the Plan or in cash. Uninvested cash balances in a 4 5 7 1) clef red ( onr pensatio❑ P1 a' aad Trust Doi unrest nNo veer brr 1 9 9 6 Participant's Loan Account shall not bear interest. Neither the Employer, the Administrator, nor any other person shall be liable for any loss, or by reason of any breach, that results from the Participant's exercise of such control. (c) Repayment of principal and payment of interest shall be made by payroll deduction or, where repayment cannot be made by payroll deduction, by check, and shall be invested in one (1) or more other investment funds, in accordance with Section 6.05 of the Plan, as of the next Accounting Date after payment thereof to the Trust. The amount so invested shall be deducted from the Participant's Loan Account. (d) The Employer shall have the authority to establish other reasonable rules, not inconsistent with the provisions of the Plan, governing the establishment and maintenance of Participant Loan Accounts. ARTICLE IX NON - ASSIGNABILITY 9.01 In General: Except as provided in Article VIII and Section 9.02, no Participant or Beneficiary shall have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non - assignable and non- transferable. 9.02 Domestic Relations Orders: (a) Allowance of Transfers: To the extent required under final judgement, decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto in the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to autho- rize any amount to be distributed under the Plan at a time or in a form that is not permitted under Section 457 of the Code. Any Payment made to a person other than the Participant pursuant to this Section shall be reduced by required income tax withholding; the fact that payment is made to a person other than the Participant may not prevent such payment from being includible in the gross income of the Participant for withholding and income tax reporting purposes. (b) Release from Liability to Participant: The Employer's liability to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of the Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Em- ployer and the Administrator are released from any further claim by the Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Partici- pant has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Administrator to the Participant's last known mailing address, and (iii) the Participant fails to obtain an order of the court in the proceed- ing relieving the Employer or Administrator from the obligation to comply with the judgment, decree, or order. (c) Participation in Legal Proceedings: The Em- ployer and Administrator shall not be obligated to defend against or set aside any judgement, decree, or order described in paragraph (a) any legal order relating to the garnishment of a Participant's ben- efits, unless the full expense of such legal action is borne by the Participant. In the event that the Participant's action (or inaction) nonetheless causes the Employer or Administrator to incur such ex- pense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the T w e l v e IC A R E T I R E M E N T C O R P O R I O N Participant. In the course of any proceeding relating to divorce, separation, or child support, the Em- ployer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse, or child (including the legal representatives of the spouse, former spouse, or child), or to a court. ARTICLE X. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS This Plan serves in addition to any other retirement, pension, or benefit plan or system presently in existence or hereinafter established for the benefit of the Employer's employees, and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Participant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Employer. ARTICLE XI. 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 Adrninistrator hereunder. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under section 457 of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation deferred before the date of the amendment or termination. ARTICLE XII. APPLICABLE LAW This Plan and Trust shall be construed under the laws of the state where the Employer is located and is estab- lished with the intent that it meet the requirements of an "eligible deferred compensation plan" under Section 457 of the Code, as amended. The provisions of this Plan and Trust shall be interpreted wherever possible in conformity with the requirements of that section. ARTICLE XIII. GENDER AND NUMBER The masculine pronoun, whenever used herein, shall include the feminine pronoun, and the singular shall include the plural, except where the context requires otherwise. I, the undersigned, hereby certify that the foregoing Resolution was duly and regularly adopted and passed by the Council of the City of Alameda in regular meeting assembled on the 1st day of April , 1997, by the following vote to wit: AYES: Councilmembers Daysog, DeWitt, Kerr, Lucas and President Appezzato - 5. NOES: None. ABSENT: None. ABSTENTIONS: None. IN WITNESS, WHEREOF, I have hereunto set my hand and affixed the official seal of said City this 2nd day of April , 1997. 5P4,01 Diane Felsch, City Clerk City of Alameda