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HomeMy WebLinkAboutResolution - 2096 RESOLUTION NO. 2096 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JACINTO, CALIFORNIA, AMENDING THE CITY' S DEFERRED COMPENSATION PLAN AS PREVIOUSLY AMENDED BY RESOLUTION NO . 1931 . WHEREAS, the City of San Jacinto desires that the investment of funds held under its deferred compensation plan be administered by ICMA Retirement Corporation, and Lincoln National Life Insurance Company, and that such funds be held in trust established by public employers for the collective investment of funds held under their deferred compensation plans and money purchase retirement plans; NOW THEREFORE BE IT RESOLVED, that the City of San Jacinto hereby adopts the "Deferred Compensation Plan" , attached here to as Appendix A. Be IT FURTHER RESOLVED that the Finance Director of the City of San Jacinto shall be the coordinator for this program and shall receive necessary reports, notices, etc. from the contracts issued to ICMA Retirement Trust and Lincoln National Life Insurance Company, and shall cast on behalf of the City of San Jacinto, any required votes under the programs . APPROVED AN ADOPTED this 19th day of January, 1993 . CITY OF SAN JACINTO M or ATTEST : DLpu y City M AYES: Councilrnembers, Ford, Leahy, Solorio, W-_lliams, Mayor Ilafliger NOES: None ABSENT: None DEFERRED COMPENSATION PLAN !INTRODUCTION In accordance with the provisions of SEC 501(C) and as provided in Section 457 of the Internal Revenue Code of 1986, CITY OF SAN JACiNTO hereby establishes the Deferred Compensation Plan of CITY OF SAN JACINTO hereinafter referred to as the "Plan." Nothing contained in this Plan shall be deemed to constitute an employment agreement between any Participant and the Employer and nothing contained herein shall be deemed to give a Participant any right to be retained in the employ of the Employer. II. DEFINITIONS 2.01 'ADMINISTRATOR'shall mean the person or persons, if any, appointed by the Employer to administer the Plan. 2.02'BENEFiCIARY'shall mean the persons orentities designated bya Participant pursuant to section 5.02. 2.03 'CODE' shall mean the Internal Revenue Code of 1986, as amended, or any future United States internal revenue law. References herein to specific section numbers shall be deemed to refer to corresponding provisions of any future United States internal revenue law. 2.04 'COMPENSATION'shall mean all payments made to an Employee by the Employer as remuneration for services rendered, including salaries and fees. 2.05 'DEFERRED COMPENSATION' shall mean the amount of Compensation not yet earned which the Participant and the Employer mutually agree will be deferred. 2.06 'EMPLOYEE'shall mean any employee who performs services for and receives any type of Compensation from the Employer for whom services are rendered. 2.07 'EMPLOYER'shall mean CITY OF SAN JACINTO. 2.08 'INCLUDIBLE COMPENSATION'shall mean, for purposes of the limitation set forth in section 4.02, Compensation for services performed for the Employer that Is currently includible in the Participant's gross Income for Federal income tax purposes, determined without regard to any community property laws. includible Compensation thus does not include Compensation excludible from the Participant's gross Income under Section 457 of the Code as a result of deferrals under this Plan or under other provisions of the Code (for example, Section 911). 2.09 'NORMAL RETIREMENT AGE'shall mean, with respect to each Participant, the later of: (a) The age designated by the Participant between (i) the earliest age at which the Participant has the right to file for and receive benefits from the Employer's basic retirement plan without the Employer's consent and to receive immediate retirement benefit without actuarial or similar reduction because of early retirement, and (ii) age 70 112, or (b) The age at which the Participant terminates his service with Employer: Provided, however, that the Participant's election to defer amounts in excess of the maximum deferral allowed by Section 4.02 but within the limited catch-up permitted by Section 4.03 shall constitute a designation of an age pursuant to subsection (a). 2.10 `PARTICIPANT' shall mean any Employee who executes a Participation Agreement with the Administrator assenting to the provisions of the Plan, once the Agreement has been approved by the Administrator. Except for purposes of Articles 1V, Vll,and XIV, "participant"shall include former Participants. The Administrator, if otherwise eligible, may participate in the Plan. 2.11 'PARTICIPATION AGREEMENT'shall mean the agreement executed and filed by an Employee with the Employer pursuant to section 4.01, in which the Employee elects to become a Participant in the Plan. 2.12 'PLAN YEAR'shall mean the calendar year. 2.13 'SEPARATION OF SERVICE' shall mean the Participant's termination from service with Employer, occurring other than by reason of death, within the meaning of Section 402(e)(4)(Ifi) of the Code, or on account of the Participant's death or retirement. 2.14 TOTAL AMOUNT DEFERRED' shall mean, with respect to each Participant, the sum of all Compensation deferred under the Plan, plus income or less loss thereon calculated in accordance with section 4.08 by the method designated in the Participant's Participation Agreement(s) under which such Compensation was deferred and in any subsequent election(s) to change methods. 2.15 'UNFORESEEABLE EMERGENCY'shall mean severe financial hardship to a Participant resulting from a sudden and unexpected illness or accident 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 extraordinary and unforeseeable circumstances arising as result of events beyond the control of the Participant, The need to send a Participant's child to college or the desire to purchase a home shall not constitute Unforeseeable Emergencies. The Administrator shall determine in its sole discretion whether a hardship to a Participant constitutes an Unforeseeable Emergency. Ill. ADMINISTRATION 3.01 This Plan shall be administered by the Administrator, who shall represent the Employer in all matters concerning the administration of this Plan. (2) 3.02 Appointment and Termination of Administrator: The CiTY MANAGER of CITY OF SAN JACINTO shall be the Administrator. The rights, powers, privileges, and duties of the Administrator shall pass to each successor CITY MANANGER of CITY OF SAN JACINTO. 3.03 Subject to any applicable laws, the Administrator shall have full power and authority to adopt rules and regulations for the administration of the Plan, and to interpret, after, amend, or revoke any rules and regulations so adopted. 3.04 Every action taken by Administrator shall be presumed to be a fair and reasonable exercise of the authority vested in or the duties imposed upon it. The Administrator shall be deemed to have exercised reasonable care, diligence and prudence and to have acted impartially as to a//persons interested, unless the contrary be proven by affirmative evidence, The Administrator shall not be liable for amounts payable under the Plan. 3.05 For convenience and to facilitate the orderly administration of the Plan, the Administrator shall maintain a deferred compensation ledger account with respect to each Employee. 3.06 Subject to any applicable laws and any approvals required by the Employer, the Administrator may delegate any of or all of his, her or its powers and duties hereunder to another person, persons, or entity, and may pay reasonable compensation for such services as an administrative expense of the Plan, to the extent such compensation is not otherwise paid. iV. PARTICIPATION IN THE PLAN 4.01 ENROLLMENT IN THE PLAN. (a)An Employee may become a Participant by executing a Participation Agreement. Compensation will be deferred for any calendar month only if a Participation Agreement providing for such deferral is executed by the Participant and approved by the Administrator or its designee before the beginning of such month. (b) By signing the Participation Agreement, the Participant elects to participate in the Plan and consents to the deferral by the Employer of the amount specified in the Participation Agreement from the Participant's gross compensation for each pay period, The deferred amount must equal at least$10.00 bi-weekly. 4.02 Deferral Limitations: Except as provided in Section 4.03, the maximum that may be deferred under the Plan for any taxable year of a Participant shall not exceed the lesser of (a) $7,500 or (b) 33 113% of the Participant's Includible Compensation, each reduced by any amount excludable from the Participant's gross income for that taxable year under Section 403(b) or 401(k) of the Code on account of Employer contributions. In the case of a person who participates in more than one Deferred Compensation Plan governed by Section 457 of the Code, the limitations set forth in Sections 4.02 and 4.03 shall apply to all such plans considered together. (3) 4.03 Limited Catch-Up:For one or more of the Participant's last three taxable years ending before attaining Normal Retirement Age under the Plan, the maximum deferral shall be the lesser of (a)$15,000, reduced byanyamount excludable from the Participant's gross income for that taxable year under Section 403(b) or 401(k) of the Code on account of Employer contributions, or (b) the sum of (i) the limitations established for purposes of Section 4.02 of the Plan for such taxable year (determined without regard to this Section 4.03), plus (ii) so much of the Limitation established under Section 4.02 for prior taxable years (beginning after December 31, 1978 and during all or any portion of which the Participant was eligible to participate in this Plan) as has not theretofore been used under Sections 4.02 or 4.03, plus (III) so much of the limitation established in accordance with Treasury Regulations 1.457- 2(e)(1) under an eligible state Deferred Compensation Plan (within the meaning of Section 457 of the Code and the regulations thereunder)sponsored by an entity other than the Employer (beginning after December 31, 1978 and during all or any portion of which the Participant was eligible to participate in such other plan) as has not theretofore been used under any other plan and this Section 4.03,Provided, however, that this Section 4.03 shall not apply with respect to any Participant who has previously utilized in whole or in part the limited catch-up under this plan (within the meaning of Section 457 of the Code and the regulations thereunder). 4.04 The Participant acknowledges the right of the Administrator to disallow deferral of Compensation under the Plan in excess of the limitations stated above. However, the Administrator shall have no liability to a Participant if the Administrator fails to disallow a deferral in excess of such limitations, if the Participant's Participation Agreement directed such deferral. 4.05 A Participant may modify the Participation Agreement with respect to future amounts once during each open enrollment period authorized by the Administrator. 4.06 A Participant may at any time revoke his agreement to defer Compensation by filing a written request for revocation with the Administrator on a form approved by the Administrator, at least 30 days prior to the effective date of the revocation, However, his Total Amount Deferred shall be distributed only as provided in Articles V and V1. A Participant's request for a distribution in the event of an Unforeseeable Emergency shall in addition be treated as a request for revocation of deferrals as of a date determined by the Administrator. 4.07 A Participant who has received all of his Total Amount Deferred as set forth in Article Vill or revokes his Participation Agreement as set forth in Section 4.06 above, may again become a Participant by executing in an open enrollment period authorized by the Administrator, a new Participation Agreement to defer Compensation not yet earned. 4.08 Choice of Investment:income will be accrued on amounts deferred under the Plan in accordance with the following procedure. The Administrator will in its sole discretion select certain investment options to be used to determine income to be accrued on deferrals. The investment options may include contracts issued through ICMA and the Lincoln National Life Insurance Company. (4) Each Participant will designate on his Participation Agreement the investment that will be used to determine the income to be accrued on amounts deferred by him. If the investment chosen by the Participant experiences a gain, the Participant's benefits under the Plan likewise will reflect income for that period. If the investment chosen by the Participant experiences a loss, the Participant's benefits under the Plan, likewise will reflect loss for that period. The Administrator may from time to time change the investment options under the Plan. if the Administrator eliminates a certain investment option, all Participants who had chosen that investment will select another option; the Participant will have no right to require the Administrator to select or retain any investment option. A Participant may from time to time (whether before or after payments have commenced under the Plan) change his choice of investment option. Any change with respect to investment options made by either the Administrator or a Participant, however, may affect only income to be accrued after that change. V. DISTRIBU77ON PROCEDURES 5.01 Upon Retirement-Distributions to a Participant who retires upon or after attaining Normal Retirement Age shall commence on the first day of the third month following his/her retirement;provided, however, that at least 60 days prior to such commencement day, the Participant may irrevocably elect to defer the commencement of benefit payments until a fixed or determinable date subsequent to the commencement date specified in this Section 5.01. in no event shall distribution commence later than the later of (i) 60 days after the close of the Plan Year in which the Participant or former Participant attains (or would have attained) Normal Retirement Age, or (ii) 60 days after the close of the Plan Year in which the Participant separates from service with the Employer. Distribution shall be made in one lump sum or in regularly scheduled payments as specified in the Participant's Participation Agreement or as otherwise specified by the Participant in writing to the Administrator no less than 60 days prior to the commencement of payments. The amount of such lump sum or scheduled payments, unless distributed as annuity or insurance contracts, shall equal the value of the Participant's account or on scheduled payment, value of account plus subsequent earnings. 5.02 Upon death - in the event of a Participant's death prior to the distribution of all amounts credited to his account,such remaining amounts shall be paid to the Participant's Beneficiary commencing on the first day of the third month after the Participant's death. Such distribution shall be in the form of a single lump sum payment or regularly scheduled payments, at the election of the Participant in the Participation Agreement or(if there is no such election by the Participant) of the Beneficiary after the Participant's death, but at least 60 days prior to the commencement of benefit. Each Participant may designate in his Participation Agreement a Beneficiary or Beneficiaries to receive any amounts which may be distributed in the event of his death prior to the complete distribution of benefits. A Participant may change his designation of Beneficiaries at any time by filing a proper application with the Administrator. If no such designation is in effect on a Participant's death, or if the designated Beneficiary does not survive the Participant by 30 days, his Beneficiary shall be his Estate. 5.03 Upon Disability- In the event of a Participant's Disability, distributions shall commence as of the first day of the third month following his/her separation from service, provided, however, that at least 60 days prior to such commencement of benefit payments, the Participant may irrevocably elect to defer the commencement of benefit payments until a fixed or determinable date subsequent to the commencement date specified in this Section 5.03. In no event shall distribution commence later that the later of(i) 60 days after the close the Plan Year in which the Participant or former Participant attains (or would have attained) Normal Retirement Age or (ii) 60 days after the close of the Plan Year in which the Participant separates from service with the Employer. Distribution shall be made in one lump sum or in regularly scheduled payments as specified in the Participant's Participation Agreement or as otherwise specified by the Participant in writing to the Administrator not less than 60 days prior to the scheduled payments. The amount of such lump sum or scheduled payment, unless distributed as annuity or insurance contracts,shall equal the value of the Participant's account or on scheduled payment, value of account plus subsequent earnings. (5) 5.04 Upon Termination of Service-In the event of a Participant's separation from service in circumstances other than those described in Sections 5.01, 5.02, and 5.03 of this Plan, distributions shall commence on the first day of the third month following his/her separation from service, provided, however, that at least 60 days prior to such commencement date the Participant may irrevocably elect to defer the commencement of benefit payments until a fixed or determinable date subsequent to the commencement date specified in this Section 5.04. In no event shall distribution commence later than the later of (i) 60 days after the close of the Plan Year in which the Participant or former Participant attains (or would have attained), Normal Retirement Age, or (ii) 60 days after the close of the Plan Year in which the Participant separates from service with the Employer. Distribution shall be made in one lump sum or in regularly scheduled payments as specified by the Participant's Participation Agreement or otherwise specified by the Participant in writing to the Administrator not less than 60 days prior to the commencement of payments. The amount of such lump sum or scheduled payments, unless distributed as annuity or insurance contracts, shall equal the value of the Participant's Account or on scheduled payments, value of account plus subsequent earnings. 5.05 Required Beginning Date - The entire interest of the Participant will be distributed, or commence to be distributed, not later than the April 1 following the calendar year in which the Participant attains age 70 1/2 ("required beginning date'), in equal or substantially equal amounts over(1) the life of the Participant (if) the lives of the Participant and his Beneficiary, (iii) a period not extending beyond the life expectancy of the Participant and his Beneficiary, (fv) a period not extending beyond the joint and last survivor expectancy of the Participant and the Beneficiary, or(y) a combination of the foregoing. If the Participant has not retired, as of the required beginning date, distributions shall commence no later than 60 days after the close of the plan year in which he separates from service. 5.06 Limitations on Distributions- Notwithstanding any other provision of this Plan, distributions shall be subject to the following limitations: (a) If distribution first commences under Section 5.01, 5.03, 5.04, or 5.06, such distribution shall be made In a form under which: (i) the amount distributed in each year commencing with the required beginning date must be either(A) a level amount determined by applying the Participants entire interest to the purchase of an annuity contract commencing payments at least annually on or before the required beginning date over a period consistent with Section 5.06 or (B) at least equal to the quotient obtained by dividing the Participant's then remaining interest by the life expectancy of the Participant or the joint and last survivor expectancy of the Participant and the Beneficiary, as relevant, (ii) if provision is made for the payment of a portion of the benefits to a Beneficiary, the amount payable to the Participant actuarially must exceed 1/2 of the maximum amount payable to the Participant had no provision been made for payments to the Beneficiary (determined as of the commencement of the distribution); and (iii) any amount not distributed to the Participant during his life will be distributed after the death of the Participant at least as rapidly as the rate being used under Section 5.06(a)(Y) as of the date of his death. (6) (b) If distribution first commences after the Participant's death under Section 5.02, the Participant's entire interest most be distributed over a period not to exceed (i) the Beneficiary's life or life expectancy, if the Beneficiary, is the Participant's surviving spouse and if distribution commences on or before the date the deceased Participant would have attained age 70 112, (1!) the lesser of 15 years or the life expectancy of the Beneficiary, if the Beneficiary is not the Participant's surviving spouse and if distributions commence within one year of the date of the Participants death in equal or substantially equal payments, or (lii) the lesser of 5 years from the date of the Participant's death or the Beneficiary's life expectancy, if subsections (b) (i) and (b) (ii) are inapplicable. For purposes of this subsection, any amount paid to a child of the Participant will be treated as if it had been paid to the surviving spouse if the remainder of the interest becomes payable to the surviving spouse when the child reaches the age of majority. (c) For purposes of Section 5.06, 5.06(a) and 5.06(b), life expectancies will be computed by use of the expected return multiples in Treasury Regulations 1.72-9 or, if distribution is to be effected through a contract issued by and insurance company, by use of the mortality tables of such company. For purposes of Section 5.06,5.06(a)(i), and 5.06(b)(i), the life expectancy of the Participant and the Participant's surviving spouse (if such spouse is the Beneficiary) may be recalculated annually. (d) Any distribution hereunder payable over a period in excess of one year can only be made in substantially nonincreasing amounts, paid not less frequently than annually, which Includes but is not limited to the method described in Section 5.06(a)(i)(A) and (B). VI. FORM OF DISTRIBUTION 6.01 Distributions of amounts under Article V of the Plan shall conform to the requirements of this Article V1. (a) Subject to the requirements of this Article Vl, each Participant may elect the settlement option and payment period for payments to be made with respect to each event described in Article V from among any alternatives offered by the Administrator. Such election may by made or modified until the date 30 days prior to the time that benefit payments are to commence. The settlement options and payment periods available under the Plan shall be: (1) A lump sum distribution; (2)Annual or more frequent(but not more frequently than monthly) installments as nearly equal as practicable over a definite period; and (3)A life annuity provided by an insurance company. (b) 1f the Total Amount Deferred is less than$1,750, or if a Participant has elected a settlement option for himself or his Beneficiary that require installment or annuity payments of less than $50.00 per month, determined as of the date benefit payments are to commence, then notwithstanding any election made pursuant to subsection (a), the Employer shall pay the total Amount Deferred to the Participant or his Beneficiary in a single payment on the date payments are to commence. (c) Subject to the provisions of this Article V1, if a Participant does not effectively elect a settlement option and payment period for benefits payable under Section 5.01, then such benefits shall be paid to the Participant in the form of a life or 15-year certain annuity. (7) if a Participant does not effectively elect a settlement option and payment period for benefits payable under Section 5.02, then such benefits shall be paid, beginning on the first day of the third month following the Participant's death, in the following form: (1) Benefits payable to the Participant's surviving spouse shall be paid in the form of a life annuity or a "Systematic-type"distribution under Section 401(a)(9) IRC; (2) Benefits payable to the Participant's Estate shall be paid in a lump-sum distribution; (3) Benefits payable to any other Beneficiary shall be paid in the form of a 15-year certain annuity, VII. FINANCIAL HARDSHIP Notwithstanding any other provision herein, in the event of an Unforeseeable Emergency as defined in Section 2.15 hereof, a Participant may make a request to the Administrator that the Employer pay all or a portion of the Total Amount Deferred to the date of payment. If the application for payment is approved by the Administrator, payment will be made within 60 days following such approval. Payment shall be limited strictly to that amount reasonably necessary to meet the situation constituting the Unforeseeable Emergency, and payments may not be made to the extent that a hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant's assets(to the extent such liquidation does not itself cause severe financial hardship), or by cessation of deferrals under the Plan. Any remaining amounts shall be paid in accordance with Articles V and VI of the Plan. Vlll. LEAVE OF ABSENCE 8.01 if a Participant is on an approved leave of absence from the Employer with compensation, or on approved leave of absence without compensation for a period of not more than three months (which period may be extended by the Employer), his participation in the Plan may continue. 8.02 if a Participant is on an approved leave of absence without compensation and such leave of absence continues beyond the period specified in Section 8.01, said Participant shall have terminated employment with the Employer, provided, however, that prior to the expiration of the period specified in Section 8.01, said Participant may request the Administrator 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 execute a new Participation Agreement to be effective when permitted by the Plan. IX. AMENDMENT OR TERMINATION OF PLAN 9.01 The Employer may at any time terminate its participation in this Plan. Upon such termination, each Participant in the Plan will be deemed to have revoked his agreement to defer future compensation as provided in Section 4.06 as of the date of such termination. Each Participant's full Compensation on a non- deferred basis shall thereupon be restored. 9.02 The Employer may also amend the provisions of the Plan (including those provisions with respect to its duties and responsibilities hereunder) at any time;provided, however, that no amendment shaft affect the amount of benefits which at the time of such amendment shall have accrued for Participants or Beneficiaries, to the extent of any Compensation deferred before the time of the amendment and income thereon accrued to the date of the amendment, calculated In accordance with Section 4.08. (8) X. RELATIONSHIP TO OTHER PLANS It is intended that, pursuant to Section 457 of the Code, the amount of Deferred Compensation will not be considered current compensation for purposes of Federal income taxation. Such amounts will, however, be included as compensation to the extent required under the Federal Insurance Contributions Act(FICA). Payments under this Plan will supplement retirement and death benefits payable under the Employer's group insurance and retirement plans, if any. Xl. NON ASSIGNABILITY It is agreed that neither the Participant nor his Beneficiary, nor any other designee shall have any right to commute, sell, assign, transfer, or otherwise convey the right to receive any payments hereunder, which payments and right thereto are expressly declared to be non-assignable and non-transferable;and in the event of attempt to assign or transfer, the Employer shall have no further liability hereunder, nor shall any unpaid amounts be subject to attachment, garnishment or execution, or be transferable by operation of law in event of bankruptcy, insolvency, except to the extent otherwise required by law. XII. ASSETS All amounts of Compensation deferred under the Plan, all property and rights purchased with such amounts, and a//income attributable to such amounts,property or rights, shall remain (until made available to the Participant or his Beneficiary) solely the property and rights of the Employer subject only to the claims of the Employer's general creditors. XIiI. PARTICIPATION BY ADMINISTRATIVE MEMBERS The Administrator may participate in the Plan under the same terms and conditions as apply to other Participants but shall not have the power to participate in any administrative action taken with respect to his participation without approval of the Board of Directors of the Employer. XN. EMPLOYER PARTICIPATION Notwithstanding any other provisions of this Plan, the Employer may add to the amounts payable to any Participant under the Plan additional Deferred Compensation for services to be rendered by the Participant to the Employer during a calendar month, provided: (a) The Participant has elected to have such additional Compensation deferred, invested, and distributed pursuant to this Plan, prior to the calendar month in which the Compensation is earned, and (b) Such additional Compensation deferred, when added to all other Compensation deferred under the Plan, does not exceed the maximum deferral permitted by Article iV. XV. DISCLAIMER WITH RESPECT TO INVESTMENTS The Employer, the Board of Directors and the Administrator, if one has been appointed, make no endorsement,guarantee or any other representation and shall not be liable to the Plan or to any Participant, Beneficiary, or any other person with respect to the financial soundness, investment performance, fitness or suitability(for meeting a Participant's objectives, future obligations under the Plan, or any other purpose) of (a) any investment vehicle offered as a standard for measuring income on amounts deferred under the Plan under Section 4.08, or (b) any investment vehicle in which amounts deferred under the Plan are actually invested. (9) XVI. PLAN-TO-PLAN TRANSFERS 17.01 Transfers to the Plan: If a Participant was formerly a participant in an eligible state deferred compensation plan (within the meaning of Section 457 of the Code and the regulations thereunder) and if such plan permits the direct transfer of the Participant's interest therein to the Plan, then the Plan shall accept assets representing the value of such interest;provided,however,that the Administrator may require in his sole discretion that some or all of such interest be transferred in cash or its equivalent. Such amount shall be held, accounted for, administered and otherwise treated in the same manner as Compensation deferred by the Participant under the Plan including, without limitation, for purposes of Section 4.01 except that (a) only the amount, if any, transferred to this Plan which was deferred under the transferror plan in the taxable year when transfer occurs shall be treated as Compensation deferred under the Plan in such year for purposes of Sections 4.01 and 4.02 and 4.03 and (b) such amount shall remain subject to, and shall be administered in accordance with, any Irrevocable elections made under the transferror plan with respect to such amount. 17.02 Transfers from the Plan: The amounts credited to the account of a former Participant in the Plan may be transferred to another eligible state deferred compensation plan (within the meaning of Section 457 of the Code and the regulations thereunder) and in which the former Participant currently participates, and If such plan provides for the acceptance of such amounts; provided, however, that if a Participant terminates his service with the Employer in order to accept employment with the entity sponsoring such plan and if such plan accepts transferred amounts, then payment of benefits under the Plan will not commence,regardless of any other provision of the Plan, and the deferrals will automatically be transferred to such plan. 17.03 Application for Transfer: If the conditions in Section XVI are met and the Participant wishes to transfer his/her account, he/she shall complete any application form and/or other documents as may be required by the Administrator. 17.04 Administrative Rules: The Administrator shall prescribe such rules consistent with the provisions of Sections 17.01 and 17.02 concerning plan-to-plan transfers as in its sole judgement deems desirable for the orderly administration of the Plan. XVO_ INTERPRETATION 18.01 This Plan shall be construed under the laws of the State of California. 18.02 This Plan is intended to be an eligible state deferred compensation plan with the meaning of Section 457 of the Code, and shall be interpreted so as to be consistent with such Section and all regulations promulgated thereunder. 18.03 Word Usage: Words used herein in the singular shall include the plural and the plural the singular where applicable, and one gender shall include the other gender where appropriate. 18.04 Headings: The headings of articles, sections or other subdivisions hereof are included solely for convenience of reference, and If there is any conflict between such headings and the text of the Plan, the text shall control. (10) 18.05 Counterparts: This instrument may be executed in several counterparts, each of which shall be deemed an original and said counterparts shall constitute but one and the same instrument, which may be sufficiently evidenced by the counterparts. PASSED AND ADOPTED this day of 19 By: i ayor ATTEST. Y- Dep City Clete k -