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Resolution No. 77531 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 7753 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON AMENDING RESOLUTION NO. 7635 WHICH ADOPTED THE CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND APPROVED AND AUTHORIZED THE EXECUTION OF THE CITY OF VERNON TRUST UNDER SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AND AUTHORIZED THE CITY ADMINISTRATOR TO EXECUTE ANY ADDITIONAL DOCUMENTS ON BEHALF OF THE CITY TO ".. IMPLEMENT THE PLAN AND COMPLY WITH THE REQUIREMENTS OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED WHEREAS, the City Council of the City of Vernon has approved by prior -resolution, in calendar year 2000, the City of Vernon Supplemental Executive Retirement Plan (the "Plan") and the City of Vernon Trust Under Supplemental Executive Retirement Plan (the "Trust Agreement"), in order to retain key employees by providing them additional funds for retirement; and WHEREAS, the financial institution chosen by the City, to act as a trustee under the Trust Agreement, did not accept the duties required by the Trust Agreement, Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"), and Sections 53635 and 53652 of the Government Code of the State of California (the "Government Code"); and WHEREAS, the City did not establish the Plan or the Trust pursuant to the Plan and the Trust Agreement, did not deposit any monies with any .financial institution, and did not make any contribution to any unfunded account on behalf of any Plan Participant; and WHEREAS, the City has appointed a qualified financial institution, to act as Trustee for the Plan under the Trust Agreement, r r . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 hereby orders said Plan Document to.be received and filed by the City IClerk. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor and the City Clerk to execute the Plan Document for, and on behalf of the City, intending this execution to be operative with respect to the Plan. SECTION 4: The City Council of the City of Vernon hereby approves"the City of Vernon Trust Under Supplemental Executive Retirement Plan (the "Trust Agreement"), presented to the City Council concurrently with this Resolution, and the City Council hereby orders said Trust Agreement to be received and filed by the City Clerk. SECTION 5: The City Council of the City of Vernon hereby authorizes the Mayor and City Clerk to execute the Trust Agreement, for, and on behalf of the City, intending this execution to be operative with respect to the Trust Agreement.- SECTION 6: The City Council of the City of Vernon hereby authorizes the City Administrator, or his authorized designee, to execute any additional documents on behalf of the City to implement the Plan, establish the Trust and comply with the requirements of the Internal Revenue Code of 1986, as amended. SECTION 7: The City Council of the City of Vernon hereby authorizes the City Administrator, or his authorized designee, to make whatever changes, upon advice of counsel, to the Plan Document, the Trust Agreement, and all other documents necessary to implement the Plan and carryout the intent of this Resolution. SECTION 8: This Resolution replaces City Council Resolution No. 7635 in its entirety. 1 / / t / r SECTION 9: The City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 2nd day of May, 2001. LEONIS C. MALBURG, Mayor ATTEST: BRUCE V. MALKENHORST, City Clerk f 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ) ) ss COUNTY OF LOS ANGELES ) I, BRUCE V. MALKENHORST, City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 7753, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Wednesday, May 2, 2001, and thereafter was duly signed by the Mayor of the City of Vernon. BRUCE V. MALKENHORST, City Clerk r r 1.8 EFFECTIVE DATE means the effective date of the Plan, which shall be May 2, 2001. 1.9 ELIGIBLE EMPLOYEE means, for any Plan Year (or applicable portion thereof), a person employed by the Employer and whose name is set forth in Schedule A. By each November 1, the Employer shall notify those individuals, if any, who will be Eligible Employees for the next Plan Year. If the Employer determines that an individual first becomes an Eligible Employee during a Plan Year, the Employer shall notify such individual of its determination and of the date during the Plan Year on which the individual shall first become an Eligible Employee. 1.10 EMPLOYER means the City of Vernon, California, a tax-exempt entity, and public body, corporate and politic, and its successors and assigns unless otherwise herein provided, or any other tax-exempt corporation or business organization that, with the consent of the City of Vernon or its successors or assigns, assumes the Employer's obligations hereunder, or any other tax-exempt corporation or business organization that agrees with the consent of the City of Vernon, to become a party to the Plan. 1.11 ENTRY DATE with respect to an individual means the first day of a pay period following the date on which the individual becomes an Eligible Employee. 1.12 PARTICIPANT means any person so designated in accordance with the provisions of Article H, including, where appropriate according to the context of the Plan, any former employee who is or may become (or whose Beneficiaries may become) eligible to receive a benefit under the Plan. 1.13 PARTICIPANT ENROLLMENT AND ELECTION FORM means the form (or forms) on which a participant elects to defer Compensation hereunder on which the Participant elects the forfeiture provisions that shall be applicable to such deferred amount and amounts that may be contributed by the Employer hereunder, on which the Participant makes elections concerning the time and manner of payment of amounts attributable to such election, and on which the Participant makes certain other designations as required thereon. 1.14 PLAN means this City of Vernon Supplemental Executive Retirement Plan, as amended from time to time. 1.15 PLAN YEAR means the twelve (12) month period ending on the December 31 of each year during which the Plan is in effect. 1.16 EMPLOYEE CONTRIBUTION CREDIT ACCOUNT is defined in Section 3.1. 1.17 EMPLOYER CONTRIBUTION CREDITS means those Employer Contribution Credits described in Section 3.1. 1.18 TRUST means the City of Vernon Trust Under Supplemental Executive Retirement Plan established pursuant to the Plan. 1.19 TRUSTEE means the trustee named in the agreement establishing the Trust and such successor and/or additional trustees as may be named pursuant to the terms of the agreement establishing the Trust. 1.20 VALUATION DATE means the December 31 of each Plan Year or such other date as is selected by the Employer for valuing benefits hereunder, in its discretion. ARTICLE 11— ELIGIBILITY AND PARTICIPATION 2.1. REQUIREMENTS. Every Eligible Employee on the Effective Date shall be eligible to become a Participant on the Effective Date. Every other Eligible Employee shall be eligible to become a Participant on the first Entry Date occurring on or after the date on which he or she becomes an Eligible Employee with respect to ' any Plan Year. No individual shall become a Participant, however, if he or she is not an Eligible Employee on the date his or her participation is to begin. Participation in the Compensation Deferral Account portion of the Plan is voluntary. In order to participate in the Compensation Deferral Account portion of the Plan an otherwise Eligible Employee must make written application in such manner as may be required by Section 3.2 and by the Employer and must agree to make Compensation Deferrals as provided in Article III. Participation in the Employer Contribution Credit Account portion of the Plan is automatic for all Participants. 2.2 REEMPLOYMENT. If a Participant whose employment with the Employer is terminated is subsequently reemployed with the Employer, he or she shall become a Participant in accordance with the provisions of Section 2.1. ARTICLE III — CONTRIBUTIONS AND CREDITS 3.1 EMPLOYER CONTRIBUTION CREDITS. There shall be established and maintained a separate Employer Contribution Credit Account in the name of each Participant that shall become vested in the Participant as specified below, and to which shall be credited or debited, as applicable, (a) amounts equal to the Employer's Contribution Credits and (b) any deemed earnings and losses allocated to the account. For purposes of this Section, the Employer's Contribution Credits with respect to a Participant shall be an amount determined by the Employer and credited to the Participant's account either in a single credit or ratably over the applicable period. 11 Prior to the crediting of an Employer Contribution Credit, the Participant shall designate the date on which such Employer Contribution Credit shall vest in the Participant. Such vesting date shall be a January 1 that is no earlier than the January 1 of the fourth calendar year following the calendar year in which the Employer Contribution Credit is credited. A Participant may agree, on a form and in a manner prescribed by the Employer, to delay for a period of at least two years the vesting date for any Employer Contribution Credits, so long as such agreement is entered into by the Employer and the Participant by the June 30 preceding the original (or deferred) vesting date. Amounts equal to the Employer Contribution Credits will be paid by the Employer to the Trustee with reasonable promptness after the total of such Credits during any month or other applicable period has been determined. 3.2 PARTICIPANT COMPENSATION DEFERRALS. In accordance with rules established by the Employer, a Participant may elect to defer Compensation that is due to be earned and that would otherwise be paid to the Participant, in any fixed periodic dollar amounts designated by the Participant. Amounts so deferred will be considered a Participant's "Compensation Deferrals." At the time of such election, the Participant shall designate the date on which such deferred Compensation shall vest in the Participant. Such vesting date shall be a January 1 that is no earlier than the January 1 of the fourth calendar year following the calendar year of the deferral. Ordinarily, a Participant shall make such elections with respect to a coming twelve (12) month Plan Year during the period beginning on the September 1 and ending on the November 30 of the prior Plan Year, or during such other period as is established by the Employer. Compensation Deferrals shall be made through, and only through, regular payroll deductions. The Participant may reduce his or her payroll deduction Compensation Deferral amount as of; and by written notice delivered to the Employer at least thirty-five (35) days prior to, the beginning of any regular payroll period, with such reduction being first effective for Compensation to be earned in that payroll period. Once made, a Compensation Deferral payroll deduction election (including any provisions of such election concerning the vesting date for the Compensation Deferrals and the timing and form of distributions hereunder attributable to such election), shall continue in force indefinitely, until changed by the Participant on a subsequent Participant Enrollment and Election Form. Compensation Deferrals shall be deducted by the Employer from the pay of a deferring Participant and shall be credited to the Account of the deferring Participant. Amounts equal to the Compensation Deferrals will be paid by the Employer to the Trustee with reasonable promptness after the total of such Compensation Deferrals during any month has been determined. Notwithstanding the foregoing, a Participant and the Employer may agree, on a form and in a manner prescribed by the Employer, to delay the vesting date previously elected by _ 4, 1 1 the Participant for any Compensation Deferrals, so long as such agreement is entered into by the Employer and the Participant and is received by the Employer by the June 30 preceding the original vesting date. There shall be established and maintained by the Employer a separate Compensation Deferral Account in the name of each Participant, which shall become vested in the Participant as specified in the Participant's Vesting Election Form (as the same may be amended by any permissible renegotiation between the Participant and the Employer pursuant to this Section or Section 3.1), and to which shall be credited or debited, as applicable: (a) amounts equal to the Participant's Compensation Deferrals; and (b) any deemed earnings and losses allocated to such deferral account. ARTICLE IV — ALLOCATION OF FUNDS 4.1 ALLOCATION OF DEEMED EARNINGS OR LOSSES ON ACCOUNTS. Pursuant to Section 4.5 and if elected by the Employer, each Participant shall have the right to direct the Employer as to how amounts in his or her Plan Account shall be deemed to be invested in the deemed investment options made available under the Plan. The Employer shall direct the Trustee to invest the account maintained in the Trust on behalf of a Participant pursuant to the deemed investment directions the Employer has received from that Participant. As of each Valuation Date, the Participant's Account will be credited or debited to reflect the Participant's deemed pro rata portion of the value of the Trust, as described in the Plan. 4.2 ACCOUNTING FOR DISTRIBUTIONS. As of the date of any distribution hereunder, the distribution made hereunder to a Participant or his or her Beneficiary or Beneficiaries shall be charged to such Participant's Account. Such amounts shall be charged on a pro rata basis against the investment options in which the Participant's Account is deemed to be invested. 4.3 ALLOCATION NOT EQUIVALENT OF VESTING. The fact that an allocation has been made, as hereinabove provided, will not operate. to vest in a Participant any right, title or interest in or to any benefit under the Plan. Vesting of such benefits shall occur only as herein set forth. 4.4 SEPARATE BOOKKEEPING ACCOUNTS. A separate bookkeeping account under the Plan shall be established and maintained by the Employer to reflect the Account for each Participant, with bookkeeping sub -accounts to show separately the Participant's Compensation Deferral Account and the Participant's Employer Contribution Credit Account. Each sub -account will separately account for the credits and debits described in Article III. 4.5 DEEMED INVESTMENT DIRECTIONS OF PARTICIPANTS. Subject to such limitations as may from time to time be required by law, imposed by the Employer or the Trustee, or contained elsewhere in the Plan, and subject to such operating rules and procedures as may be imposed from time to time by the Employer or the Trustee, prior to the Designation Date on which a direction will become effective each Participant may communicate to the Employer a direction as to how his or her Account should be deemed to be invested (in any whole percent multiples) among the deemed investment options. Such direction may separately designate deemed investments (i) for that portion of the Participant's Account attributable to amounts that will be credited to the Participant's Account prior to the Designation Date on which such direction shall become effective, and (ii) for that portion of the Participant's Account attributable to amounts that will be credited to the Participant's Account after the Designation Date on which such. -direction shall become effective. Such direction shall become effective subject to the following rules and procedures. (a) Any -initial or subsequent deemed investment direction shall be in writing, on a form supplied by and filed with the Employer, and shall be effective as of the next Designation Date that is at least ten (10) business days after such filing. (b) (i) All amounts credited to the Participant's Account shall be deemed to be invested in accordance with the then effective deemed investment direction, and (ii) as of the effective date of any new deemed investment direction, all or a portion of the Participant's Account at that date shall be reallocated among the designated deemed investment options according to the new deemed investment directions and according to the percentages specified in the new deemed investment direction unless and until a subsequent deemed investment direction shall be filed and become effective. (c) If. the Employer receives a deemed investment direction that it fords is incomplete, unclear, or improper, the Participant's deemed investment direction then in effect shall remain in effect (or, in the case of a deficiency in . an initial deemed investment direction, the Participant shall be deemed to have filed no deemed investment direction) until the next Designation Date, unless the Employer provides for and permits the application of, corrective action prior thereto. (d) If the Employer possesses at any time directions as to the deemed investment of less than all of a Participant's Account, the Participant shall be deemed to have directed that the undesignated portion of the Account be deemed to be invested in any investment option selected by the Employer, and the Employer shall not be liable for the investment option(s) selected by it in such circumstances (e) The Employer shall not be liable for any losses or damages of any kind relating to the deemed investment of a Participant's Account hereunder. 4.6 PAYMENT OF FEES AND EXPENSES. As of each Valuation Date, administration fees and Trustee fees of the Plan and the Trust and any expenses, incurred in connection with the Plan and the Trust since the last Valuation Date shall be paid by the Trustee out of the Trust, unless the Employer, in its discretion, pays such fees and expenses. If charged against the Trust, these fees and expenses shall be ratably charged against the investment options in which a Participant's Account is deemed to be invested. ARTICLE V — ENTITLEMENT TO BENEFITS 5.1 DISABILITY. If a Participant, at any time prior to the full vesting of his or her Account as provided herein, shall become totally and permanently disabled, and if proof of such disability satisfactory to the Employer shall be furnished, such Participant, as of the date of the determination of disability by the Employer, shall become fully vested in his or her Account, and such Account shall be valued and payable according to the provisions of Article VI. Total and permanent disability means a medically determinable physical or mental impairment that can be expected to result in death or to last at least twelve (12) months, and by reason of which the Participant will be prevented from performing his or her usual duties or any other similar duties available in the Employer's employ. 5.2 DEATH. If a Participant dies, the full value of his or her Account shall become fully vested, such Account shall be valued as provided in Article VI, and such Account shall become payable to the Participant's designated Beneficiary as provided in Article VI. 5.3 INVOLUNTARY TERMINATION OF EMPLOYMENT. - If a Participant's employment relationship with the Employer is involuntarily terminated, either actually or constructively, the full value of his or her Account shall become fully vested and such Account shall become valued and payable according to the provisions of Article VI. For purposes of this paragraph, involuntary termination of employment includes, but is not limited to, (a) a Participant's resignation at the request of the Employer at a time when he or she otherwise is willing to serve out his or her applicable vesting period(s) and (b) any termination of employment following a significant reduction in the scope of the Participant's authority as an executive or a significant reduction in the Participant's total compensation, which significant reduction in authority or compensation occurs within twelve (12) months after a substantial change in. control of the Employer. 5.4 OTHER TERMINATIONS., If a Participant terminates employment other than as described in Sections 5.1, 52, or 5.3, he or she will not vest in any then unvested amounts held in his or her Account. The vested portion of a Participant's Account at the date of a termination of employment shall be valued and payable according to the provisions of Article VI, and the unvested portion of the Participant's Account at the date of such a termination shall be forfeited. The aggregate of any forfeitures occurring in a Plan Year shall be returned to the Employer. 5.5 VESTING OF DEEMED EARNINGS. Participants shall at all times be fully vested in amounts credited to the sub -accounts of their Accounts which sub -accounts reflect deemed earnings on the Participant's Compensation Deferrals and Employer Contribution Credits. Such sub -accounts of Participant Accounts shall be valued and payable according to the provisions of Article VI. ARTICLE VI — DISTRIBUTION OF BENEFITS 6.1 AMOUNT. A Participant (or his or her Beneficiary) shall become entitled to receive, at such time or times as specified in the Participant's applicable Participant Enrollment and Election Form, a distribution from the Trust in an amount equal to the vested portion of the Participant's Account, which amount depending on the performance of the investment options deemed to be elected from time to time by the Participant (or directed by the Employer) and the expenses charged to the Participant's Account, may be less than, equal to, or greater than the aggregate vested amount of the Participant's Compensation Deferrals and Employer Contribution Credits. Determination of the amount to be distributed shall be based upon the valuation of the Plan Accounts made as of the distribution date. Any payment due hereunder from the Trust that is not paid by the Trust will be paid by the Employer. Each payment shall be charged ratably against each investment option in which the Participant's Account is deemed to be invested. 6.2 METHOD OF PAYMENT. (a) Cash Distributions. All distributions under the Plan shall be made in cash.. (b) Timing and Manner of Distribution. Subject to Sections 6.3 and 6.4, an amount equal to the vested portion of the Participant's Account will be paid by the Trust or the Employer, as provided by Section 6.1, in one of the following forms, as elected by the Participant: (i) a lump sum, (ii) a fixed number of annual installments, or (iii) in the form 'of an initial lump -sum distribution equal to the Participant's estimated federal, state, and local income tax liability arising under the Plan during the year of the initial lump -sum distribution because of (A) the vesting event and (B) the payment of the initial lump -sum distribution (assuming the Participant's taxes are calculated at the then highest marginal tax rates) followed by a fixed number of annual installments beginning in the year of the initial lump -sum distribution or in a subsequent year (which may be a year determined by reference to the Participant's vesting date) made or commencing at such time or times as elected by the Participant. When a Participant completes a Participant Enrollment and Election Form for particular Plan Year, he or she will elect the time at which and the manner in which the portion of his or her Account attributable to such Plan Year will be paid; provided, however, that no Participant may elect to receive any portion of his or her Account until such portion is vested, and if an attempt at such an election is made such election shall be deemed to be an election to make or commence the payment of such portion at the applicable vesting date. If a Participant fails to designate properly the form or timing of payment of any portion of the Participant's vested Account, such portion will be paid in a lump sum as soon as is practicable after the vesting date for such portion. If the whole or any part of a distribution hereunder by the Trustee or the Employer, as applicable, is to be in installments, any undistributed amount shall Continue to be deemed to be invested pursuant to Section 4.5 under such procedures as the Employer may establish, in which case any deemed earnings losses, fees, and charges attributable thereto shall be reflected in the installment distributions, in accordance with the terms of the Plan. 6.3 DEATH BENEFITS. If a Participant dies before the commencement of payments to the Participant hereunder, the entire value of the Participant's Account shall become fully vested and shall be paid to the person or persons designated in accordance with Section 7.1. Upon the death of a Participant after payments hereunder have begun but before he or she has received all payments to which he or she is entitled under the Plan, the remaining benefit payments shall be paid to the person or persons designated in accordance with Section 7.1. All death benefits payable hereunder shall be paid as soon as practicable after the date of death of the Participant and shall be paid Mi a single lump sum. ARTICLE VII — BENEFICIARIES; PARTICIPANT DATA 7.1 DESIGNATION OF BENEFICIARIES. Each Participant from time to time may designate any person or persons (who may be named contingently or 'successively) to receive such benefits as may be payable under the Plan upon or after the Participant's death, and such designation may be changed from time to time by the Participant by filing a new designation. Each designation will revoke all prior designations by the same Participant, shall be in the form prescribed by the Employer, and will be effective only when filed in writing with the Employer during the Participant's lifetime. In the absence of a valid Beneficiary designation, or it at the time any benefit payment is due to a Beneficiary, there is no living Beneficiary validly named by the Participant the Employer shall pay any such benefit payment to the Participant's estate. 7.2 INFORMATION TO BE FURNISHED BY PARTICIPANTS AND BENEFICIARIES; INABILITY TO LOCATE PARTICIPANTS OR BENEFICIARIES. Any communication, statement, or notice addressed to a Participant or to a Beneficiary at his or her last post office address as shown on the Employer's records shall be binding on the Participant or Beneficiary for all purposes of the Plan. Neither the Trustee nor the Employer shall be obliged to search for- any Participant or Beneficiary beyond the sending of a registered letter to such last known address. If the Employer notifies any Participant or Beneficiary that he or she is entitled to an amount under the Plan and the Participant or Beneficiary fails to claim such amount or make his or her location known to the Employer within three (3) years thereafter, then, except as otherwise required by law, the Employer shall direct distribution of such amount as follows. If the location of one or more of the next of kin of the Participant is known to the Employer, the Employer may direct distribution of such amount to any one or more or all of such next of kin, and in such proportions as the Employer determines. If the location of none of the foregoing persons can be determined, the Employer shall have the right to direct that the amount payable shall be deemed to be a forfeiture and paid to the Employer, except that the dollar amount of the forfeiture, unadjusted for deemed gains or losses in the interim, shall be paid by the Employer if a claim for the benefit subsequently is made by the Participant or the Beneficiary to whom it was payable. If a benefit payable to an unlocated Participant or Beneficiary is subject to escheat pursuant to applicable state law, neither the Trustee nor the Employer shall be liable to any person for any payment made in accordance with such law. ARTICLE VIII — ADMINISTRATION AND RECORDKEEPING 8.1 ADMINISTRATIVE AND RECORDKEEPING AUTHORITY. Except as otherwise specifically provided herein, the Employer shall have the sole responsibility for and the sole control of the operation, administration, and recordkeeping of the Plan and shall have the power and authority to take all action and to make all decisions and interpretations that may be necessary or appropriate in order to administer and operate the Plan, including, without limiting the generality of the foregoing the power, duty, and responsibility to: (a) Resolve and determine all disputes or questions arising under the Plan, including the power to determine the rights of Participants and Beneficiaries, and their respective benefits, and to remedy any ambiguities, inconsistencies, or omissions in the Plan. (b) Adopt such rules of procedure and regulations as in its opinion may be necessary for the proper and efficient administration of the Plan and as are consistent with the Plan. (c) Implement the Plan in accordance with its terms and the rules and regulations adopted as above. (d) Make determinations concerning the crediting and distribution of Participants Benefits. 8.2 UNIFORMITY OF DISCRETIONARY ACTS. Whenever in the administration or operation of the Plan discretionary actions by the Employer are required or permitted, such actions shall be consistently and uniformly applied to all persons similarly situated, and no such actions shall be taken that shall discriminate in favor of any particular person or group of persons. 8.3 LITIGATION. In any action or judicial proceeding affecting the Plan, it shall be necessary to join as a party only the Employer. Except as may be otherwise required by law, no Participant or Beneficiary shall be entitled to any notice or service of process, and any final judgment entered in such action shall be binding on all persons interested in, or claiming under, the Plan. 8.4 CLAIMS PROCEDURE. Any person claiming a benefit under the Plan (a Claimant) shall present the claim, in writing, to the Employer and the Employer shall respond in writing if the claim is denied, the written notice of denial shall state, in a manner calculated to be understood by the Claimant: (a) The specific reason or reasons for denial, with specific references to the Plan provisions on which the denial is based; (b) A description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or information is necessary; and (c) An explanation of the Plan's claims review procedure. The written notice denying or granting the Claimant's claim shall be provided to the Claimant within ninety (90) days after the Employer's receipt of the claim, unless special circumstances require an extension of time for processing the claim. If such an extension is required, written notice of the extension shall be furnished by the Employer to the Claimant within the initial ninety (90) day period, and in no event shall such an extension exceed a period of ninety (90) days from the end of the initial ninety (90) day period. Any extension notice shall indicate the special circumstances requiring the extension and the date on which the Employer expects to render a decision on the claim. Any claim not granted or denied within the period noted above shall be deemed to have been denied. Any Claimant (or such Claimant's authorized representative) whose claim is denied, or deemed to be -denied under the preceding sentence, may, within sixty (60) days after .the -- ■- t Claimant's receipt of notice of the denial, or after the date of the deemed denial, request a review of the denial by notice given, in writing, to the Employer. Upon such a request for review, the claim shall be reviewed by the Employer (or its designated representative), which may, but shall not be required to grant the Claimant a hearing. In connection with the review, the Claimant may have representation, may examine pertinent documents, and may submit issues and comments in writing. The decision on review normally shall be made within sixty (60) days of the Employer's receipt of the request for review. If an extension of time is required due to special circumstances, the Claimant shall be notified, in writing, by the Employer, and the time limit for the decision on review shall be extended to one hundred twenty (120) days. The decision on review shall be in writing and shall state, in a manner calculated to be understood by the Claimant, the specific reasons for the decision and shall include references to the relevant Plan provisions on which the decision is based. The written decision on review shall be given to the Claimant within the sixty (60) day (or, if applicable, the one hundred twenty (120) day) time limit discussed above. If the decision on review is -not communicated to the Claimant within the sixty (60) day (or, if applicable, the one hundred twenty (120) day) period discussed above the claim shall be deemed to have been denied upon review. All decisions on review shall be final and binding with respect to all concerned parties. ARTICLE IX — AMENDMENT 9.1 RIGHT TO AMEND. The Employer, by written instrument, shall have the right to amend the Plan at any time and with respect to any provisions hereof, and all parties hereto or claiming any interest hereunder shall be bound by such amendment; provided, however, that no such amendment shall deprive any Participant or Beneficiary of a right accrued hereunder prior to the date of the amendment, including the right to receive the payment of his or her Plan account(s) upon his or her vesting date, or earlier as provided herein. 9.2 AMENDMENT REQUIRED BY LAW. Notwithstanding the provisions of Section 9.1, the Plan may be amended at any time, retroactively if required, if found necessary, in the opinion of the Employer in order to ensure that the Plan is characterized as a non -tax -qualified plan of deferred compensation as described under Code Section 457(f), to ensure that the Trust is characterized as a grantor trust as described in CodeSections671 through 679, and to conform the Plan and the Trust to the provisions and requirements of any applicable law (including the Code). ARTICLE X TERMINATION 10.1 EMPLOYER'S RIGHT TO TERMINATE PLAN. The Employer reserves the right, at any time, to terminate the Plan provided, however, that no such termination shall deprive any Participant or Beneficiary of a right accrued hereunder prior to the ■ . " date of termination and provided that upon termination, each Participant shall become fully and immediately vested in his or her Plan account(s) and the full amount of his or her Plan account(s) shall become immediately distributable to him or her. 10.2 AUTOMATIC TERMINATION OF PLAN. The Plan shall terminate automatically upon the dissolution of the Employer or upon the Employer's merger into or consolidation with any other corporation or business organization that does not specifically adopt and agree to continue the Plan; provided, however, that no such termination shall deprive any Participant or Beneficiary of a right accrued hereunder prior to the date of termination and provided that, upon termination, each Participant shall become fully and immediately vested n his or her Plan account(s) and the full amount of his or her Plan account(s) shall become immediately distributable to him or her. 10.3 SUCCESSOR TO EMPLOYER. Any corporation or other business organization that is a successor to the Employer by reason of a consolidation, merger, or purchase of substantially all of the assets of the Employer shall have the right to become a party to the Plan by adopting the same by resolution of the entity's board of directors or other appropriate governing body. If, within thirty (30) days from.the effective date of such consolidation, merger, or sale of assets, such new entity does not become a party hereto, as above provided, the Plan shall be terminated automatically, and the provisions of the foregoing Sections shall become operative. ARTICLE XI — MISCELLANEOUS 11.1 LIMITATIONS ON LIABILITY OF EMPLOYER. Neither the establishment of the Plan nor any modification hereof, nor the creation of any account under the Plan, nor the payment of any benefits under the Plan, shall be construed as giving to any Participant or any other person any legal or equitable right against the Employer or any officer or employee thereof, except as provided by law or by any Plan provision. 11.2 CONSTRUCTION. If any provision of the Plan is held to be illegal or void, such illegality or invalidity shall not affect the remaining provisions of the Plan, but shall be fully severable, and the Plan shall be construed and enforced as if said illegal or invalid provisions had never been inserted herein. For all purposes of the Plan, where the context permits, the singular shall include the plural, and the plural shall include the singular. Headings of Articles and Sections herein are inserted only for convenience of reference and are not to be considered in the construction of the Plan. The laws of the State of California shall govern, control, and determine all questions of law arising with respect to the Plan and the interpretation and validity of its respective provisions, except where those laws are _ preempted by the laws of the United States. Participation under the Plan will not give a Participant the right to be retained in the service of the Employer nor any right or claim to any benefit under the Plan unless such right or claim has specifically accrued hereunder. The Plan is intended to be and at all times shall be interpreted and administered so as to qualify as an unfunded plan of deferred compensation, and no provision of this Plan shall be interpreted so as to give any individual any right in any assets of the Employer which right is greater than the rights of any general unsecured creditor of the Employer. 11.3 _SPENDTHRIFT PROVISION. No amount payabletoa Participant or any Beneficiary under the Plan will, except as otherwise specifically provided by law, be subject in any manner to anticipation, alienation, attachment, garnishment, sale, transfer, assignment `(either at law or in equity), levy, execution, pledge, encumbrance, charge, or 'any other legal or equitable process, and any attempt to do so will be void; nor will any benefit hereunder be in any manner liable for or subject to the debts, contracts, liabilities, engagements, or torts of the person entitled thereto. Further, (a) the withholding of taxes from Plan benefit payments, (b) the recovery under the Plan of overpayments of benefits previously made to a Participant or any Beneficiary, (c) if applicable, the transfer of benefit rights from the Plan to another plan, or (d) the direct deposit of Plan benefit payments to an account in a banking institution (if not actually part of an arrangement constituting an assignment or alienation) shall not be construed as an assignment or alienation. In the event that a Participant's or any Beneficiary's benefits hereunder are garnished or attached by order of any court, the Employer may bring an action for a declaratory judgment in a court of competent jurisdiction to determine the proper recipient of the benefits to be paid under the Plan. During the pendency of said action, any benefits that become payable shall be held as credited to a Participant's or Beneficiary's Account or, if the Employer prefers, paid into the court as they become payable, to be distributed by the court to the recipient as it deems proper at the close of said action. -14- ARTICLE XII — THE TRUST 12.1 ESTABLISHMENT OF TRUST. The Employer shall establish the Trust with the Trustee pursuant to such terms and conditions as are set forth in the Trust agreement to be entered into between the Employer and the Trustee. The Trust is intended to be treated as a grantor trust under the Code, and the establishment of the Trust is not intended to cause the Participant to realize current income on amounts contributed thereto, and the Trust shall be so interpreted. IN WITNESS WHEREOF, the Employer has caused this Plan to be executed and its seal to be affixed hereto, effective as of May 2, 2001. CITY OF VERNON (EMPLOYER) By: Leonis C. Malburg, Mayor ATTEST/WITNESS By: Bruce V. Malkenhorst, City Clerk [SEAL] APPROVED AS TO FORM By: Eric T. Fresch, Legal Counsel EMmupplement.ef Schedule A ELIGIBLE EMPLOYEES OF CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN 1. Bruce V. Malkenhorst City Administrator/City Clerk CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN BENEFICIARY DESIGNATION ELECTION FORM PARTICIPANT INFORMATION Name: Social Security Number: Address: Telephone Number: I hereby revoke any prior designations of death benefit beneficiary/ies under the Plan, and I hereby designate the following beneficiary/ies to receive any benefit payable on account of my death under the Plan, subject to my right to change this designation and subject to the terms of the Plan: A. Primary Beneficiary/ies Name, Address, Relationship % of Plan Date of Social Security Telephone Number to Participant Account Birth Number B. Contingent Beneficiary/ies (will receive indicated portions of Plan benefit if no Primary Beneficiary/ies survive the Participant) Name, Address, Relationship % of Plan Date of Social Security Telephone Number to Participant Account Birth Number Date rEA'�.h'i PardolpaiWs ftpatuve CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN FORM OF PAYMENT ELECTION FORM PARTICIPANT INFORMATION Name: Social Security Number: Address: Telephone Number: I hereby revoke any prior elections of the form in which my Plan benefit will be paid, and, until changed by me on a subsequent Election Form submitted prior to my termination of employment, I hereby elect to have my Plan benefit paid in the 'following form, subject to the applicable terms of the Plan. Form of Benefit (check one). [ ] Lump -sum distribution [ ] Substantially equal annual installments (adjusted for gains or losses) over a year period [ ] An initial lump -sum distribution paid in the year of vesting of my Plan account(s) equal to my estimated federal, state, and local income tax liability due to the vesting event and the initial lump -sum distribution, followed by substantially equal annual installments (adjusted for gains or losses) commencing as soon as practicable for a period of years Date EF#5:vesting Participant's Signature CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN DEEMED INVESTMENT ELECTION FORM PARTICIPANT INFORMATION Name: Social Security Number: Address: Telephone Number: I hereby revoke any prior elections of deemed investment designations for the amounts credited to my Plan account, and I hereby elect the following deemed investments for amounts credited to my Plan account, this election to be effective at the earliest date permissible under, and subject to all of the terms, of the Plan: Percentage of Deemed Investment Options Plan Account 1. % 2. % 3• % 4. % 5. % 6. % 7. % 8. % Date Participant's Signature EF#5:vesting CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN VESTING ELECTION FORM PARTICIPANT INFORMATION Name: Social Security Number: Address: Telephone Number: I hereby elect that the contributions credited to my currently unvested account(s) under the Plan remain subject to forfeiture in the event of my voluntary termination of employment with the City of Vernon occurring on or before January 1, , or, in the case of Employer Contribution Credits under the Plan, the later of such date or the date specified in the Plan for vesting of Employer Contribution Credits. The date I have entered in the previous sentence is no earlier than the January 1 of the fourth calendar year after the date of this election and, if this election is a renegotiation of a prior vesting date pursuant to an earlier Vesting Election Form, the -amounts subject to this election are currently forfeitable and would be forfeitable in the absence of this election for at least six full months following this date. I acknowledge that I have received a copy of the Plan and that I have read the Plan, and I understand that, if I terminate employment prior to the above -designated date for reasons other than my death, total and permanent disability (as defined in the Plan), or involuntary termination of employment (as defined in the Plan), I will forfeit all interest in all then-unvested Plan benefits. Date Approved: CITY OF VERNON Participant's Signature EF#S;v�sting CITY OF VERNON SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN VESTING ELECTION FORM PARTICIPANT INFORMATION Name: Social Security Number: Address: Telephone Number: Bruce V. Malkenhorst I hereby elect that the contributions credited to my currently unvested account(s) under the Plan remain subject to forfeiture in the event of my voluntary termination of employment with the City of Vernon occurring on or before January 1, 2004, or, in the case of Employer Contribution Credits under the Plan, the later of such date or the date specified in the Plan for vesting of Employer Contribution Credits. The date I have entered in the previous sentence is no earlier than the January 1 of the fourth calendar year after the date of this election and, if this election is a renegotiation of a prior vesting date pursuant to an earlier Vesting Election Form, the amounts subject to this election are currently forfeitable and would be forfeitable in the absence of this election for at least six full months following this date. I acknowledge that I have received a copy of the Plan and that I have read the Plan, and I understand that, if I terminate employment prior to the above -designated date for reasons other than my death, total and permanent disability (as defined in the Plan), or involuntary termination of employment (as defined in the Plan), I will forfeit all interest in all then-unvested Plan benefits. Date Approved: CITY OF VERNON Leonis C. Malburg, Mayor Bruce V. Malkenhorst, Participant "Westing of CITY OF VERNON TRUST UNDER SUPPLEMENTAL EXECUTIVE RETRUENIENT PLAN This Trust Agreement is made this 2nd day of May, 2001, by and between the City of Vernon, California, a tax-exempt entity, and public body, corporate and politic (hereinafter the "City" or "City of Vernon") and Wells Fargo Bank, N.A. (hereinafter the "Trustee"). RECITALS WHEREAS, the City of Vernon, California (hereinafter the "City") has adopted the City of Vernon Supplemental Executive Retirement Plan (hereinafter the "Plan") as listed in Appendix A; and WHEREAS, the City wishes to establish a trust (hereinafter called "Trust") and to contribute to the Trust assets that shall be held therein, subject to the claims of the City's creditors in the event of the City's insolvency, as herein defined, until paid to the Plan participant (thereafter called "Plan- Participants") and theirbeneficiaries in such manner and at such times as specified in the Plan; and WHEREAS, the City has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan; and WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of employees; and WHEREAS, it is the intention of the City to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan. NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows: SECTION 1.0 ESTABLISHMENT OF TRUST 1.1 The City hereby deposits with Trustee in trust the amount of Fifty Thousand and No/100 Dollars ($50,000.00), which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement. 1.2 The Trust hereby established shall be irrevocable. -1- 1.3 The Trust is intended to be a grantor trust, of which the City is the grantor, within the meaning of subpart E, part I, subchapter 3, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly. 1.4 The principal of the Trust, and any earnings thereon shall be held separate and apart from other Funds of the City and shall be used exclusively for the uses and purposes of Plan Participants and general creditors as herein set forth. Plan Participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan Participants and their beneficiaries against the City. Any assets held by the Trust will be subject to the claims of the City's general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein. 1.5 The City, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan Participant or beneficiary shall have any right to compel such additional deposits. SECTION 2.0 PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES 2.1 The City shall deliver to Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Plan Participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan Participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the City. 2.2 The entitlement of a Plan Participant or his or her beneficiaries to benefits under the Plan shall be determined by the City or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan. 2.3 The City may make payment of benefits directly to Plan Participants or their beneficiaries as they become due under the terms of the Plan. The Cityshall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition if the principal of the Trust, and any earnings thereon, 'are not sufficient to make payments of benefits in accordance with the terms of 'the" -_ Plan, the City shall make the balance of each such payment as it falls due. Trustee shall notify the City where principal and earnings are not sufficient. -2:- SECTION 3.0 TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN THE CITY IS INSOLVENT 3.1 Trustee shall cease payment of benefits to Plan Participants and their beneficiaries if the City is insolvent. The City shall be considered "insolvent" for purposes of this Trust Agreement if (i) the City is unable to pay its debts as they become due, or (ii) the City is subject to a pending proceeding as a debtor under the United States Bankruptcy Code, or (iii) the City is determined to be insolvent by the State of California. 3.2 At all times during the continuance of this Trust, as provided in Section 1.4 hereof, the principal and income of the Trust shall be subject to claims of general creditors of the City under federal and state law as set forth below. 3.2.1 The City Council and the City Administrator of the City shall have the duty to inform Trustee in writing of the City's insolvency. If a person claiming to be a creditor of the City alleges in writing to Trustee that the City has become insolvent, Trustee shall determine whether the City is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to Plan Participants or their beneficiaries. 3.2.2 Unless Trustee has actual knowledge of the City's insolvency, or has received notice from the City or a person claiming to be a creditor alleging that the City is Insolvent, Trustee shall have no duty to inquire whether the City is Insolvent. Trustee may in all events rely on such evidence concerning the City's solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning the City's solvency. 3.2.3 If at any time Trustee has determined that the City is insolvent, Trustee shall discontinue payments to Plan Participants or their beneficiaries and shall hold the assets of the Trust for the benefit of the City's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan Participants or their beneficiaries to pursue their rights as general creditors of the City with respect to benefits due under the Plan or otherwise. 3.2.4 Trusteeshallresume the payment of benefits to Plan Participants or their beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that the City is not insolvent (or is no longer insolvent). 3.3 Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to Section 3.2 hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan Participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan Participants or their beneficiaries by the City in lieu of the payments provided for hereunder during any such period of discontinuance. _ -3- SECTION 4.0 PAYMENTS TO THE CITY 4.1 Except as provided in Section 3.0 hereof, after the Trust has become irrevocable, the City shall have no right or power to direct Trustee to return to the City or to divert to others any of the Trust assets before all payment of benefits have been made to Plan Participants and their beneficiaries pursuant to the terms of the Plan. SECTION 5.0 INVESTMENT AUTHORITY 5.1 All rights associated with the assets of the Trust shall be exercised by the Trustee or the person designated by the Trustee, and shall in no event be exercisable by or rest with Plan Participants. SECTION 6.0 DISPOSITION OF INCOME 6.1 During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested. SECTION 7.0 ACCOUNTING BY TRUSTEE Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the City and Trustee. Within 30 days following the close of each calendar year and within 30 days after the removal or resignation of Trustee, Trustee shall deliver to the City a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be. SECTION 8.0 RESPONSIBILITY OF TRUSTEE 8.1 Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the City which is contemplated by, and in conformity with, the terms of the Plan or this Trust and is given in writing by the City. In the event of a dispute between the City and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute. 8.2 If Trustee undertakes or defends any litigation arising in connection with this Trust, the City agrees to indemnify Trustee against Trustee's costs, expenses and liabilities (including, without limitation, attorneys, fees and expenses) relating thereto and to be -4- r primarily liable for such payments. If the City does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust. 8.3 Trustee may consult with legal counsel (who may also be counsel for the City generally) with respect to any of its duties or obligations hereunder. 8.4 Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder. 8.5 Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy. 8.6 Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and Administrative. Regulations promulgated pursuant to the Internal Revenue Code. SECTION 9.0 COMPENSATION AND EXPENSES OF TRUSTEE 9.1 The City shall pay all administrative and Trustee's fees and expenses. If not so paid, the fees and expenses shall be paid from the Trust. SECTION 10.0 RESIGNATION AND REMOVAL OF TRUSTEE 10.1 Trustee may resign at any time by written notice to the City, which shall be effective 30 days after receipt of such notice unless the City and Trustee agree otherwise. 10.2 Trustee may be removed by the City on 30 days notice or upon shorter notice accepted by Trustee. 10.3 Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within 30 days after receipt of notice of resignation, removal or transfer, unless the City extends the time limit. 10.4 If Trustee resigns or is removed, . a successor shall be appointed, in accordance with Section H. hereof, by the effective date of resignation or removal under paragraphs 10.1 or 10.2 of this section. If no such appointment has been.,made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust. _5, a ' � SECTION 11.0 APPOINTMENT OF SUCCESSOR 11.1 If Trustee resigns or is removed in accordance with Section 10.1 or 10.2 hereof, the City may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the City or the successor Trustee to evidence the transfer. 11.2 The successor Trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 7.0 and 8.0 hereof. The successor Trustee shall not be responsible for and the City shall indemnify and defend the successor Trustee from any claim -or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee. SECTION 12.0 AMENDMENT OR TERMINATION 12.1 This Trust may be amended by a written instrument executed by Trustees and the City. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan or shall make the Trust revocable after it has become irrevocable in accordance with Section 1.2 hereof. 12.2 The Trust shall not terminate until the date on which Plan Participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the' Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to the City. SECTION 13.0 MISCELLANEOUS 13.1 Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof. 13.2 Benefits payable to Plan Participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process. 13.3 This Trust Agreement shall be governed by and construed in accordance with the laws of California. _6_ 4 � � R { E ! L J SECTION 14.0 EFFECTIVE DATE 14.1 The effective date of this Trust Agreement shall be May 2, 200E Agreed and Accepted: CITY OF VERNON By: Leonis C. Malburg, Mayor Date: Attest/Witness By: Bruce V. Malkenhorst,'City Clerk [SEAL] MNDC-Titus. -7- Date: WELLS FARGO BANK, N.A. By: Date: SUPPORTING DOCUMENTS CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro-Tem WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 April 26, 2001 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 Mr. Bruce V. Malkenhorst City Administrator City Of Vernon 4305 Santa Fe Avenue Vernon, California 90058 EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 STEVEN E. PARKER Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 Re: City Council Adoption of Supplemental Executive Retirement Plan and Trust Dear Bruce: I recommend the City Council amend, in its entirety, Resolution No. 7635, adopted last September 19, 2000, and adopt a resolution approving a new Supplemental Executive Retirement Plan and a new Trust Agreement. Wells Fargo Bank, N.A. has committed to act as Trustee under the Trust Agreement and comply with the requirements of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code") and with Sections 53635 and 53652 of the California Government Code (the "Government Code"). Wells Fargo shall accept the responsibilities of the Trust Agreement, and on the City's behalf, make the Code required payments under the Plan to the Plan Participants. The Bank shall comply with the Government Code provisions concerning the requirement to pledge securities for deposits consisting of funds held in trust for employees of a local government as compensation deferred from income taxation pursuant to the terms of the Code. tl .f Mr. Bruce V. Malkenhorst April 26, 2001 Page 2 I look forward to discussing this matter with you at your earliest convenience. Sincerely, Eric resc Legal Counsel EF: j 1 cc: Eddie Olivo CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro —Tern WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 April 26, 2001 EDUARDO OLIVO City Attorney FAX: (562) 927-8722 KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 STEVEN E. PARKER Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 City Council City of Vernon Honorable Members: On September 19, 2000, this legislative body approved a new Supplemental Executive Retirement Plan and a new Trust Agreement under the Internal Revenue Code of 1986 (the Code). The code has been amended and it is recommended by our Special Counsel that the City's Plan and Trust Agreement be amended to have Wells Fargo Bank, N.A. act as Trustee under the Trust Agreement and comply with the requirements of Section 457 of the Internal Revenue Code of 1986, as amended with Sections 53635 and 53652 of the California Government Code. Very truly yours, Bruce V. Malkenhorst City Administrator/City Clerk BVM/ng CITY COUNCIL LEONIS C. MALBURG Mayor THOMAS A. YBARRA Mayor Pro -Ter WM. 'BILL" DAVIS Councilman H. "LARRY" GONZALES Councilman W. MICHAEL MCCORMICK Councilman BRUCE V. MALKENHORST City Administrator / City Clerk FAX (323) 581-7924 June 14, 2001 CITY HALL 4305 SANTA FE AVENUE, VERNON, CALIFORNIA 90058 TELEPHONE (323) 583-8811 VIA FEDERAL EXPRESS Mr. Bart Ballinger Vice President Institutional Trust Group Wells Fargo Bank 707 Wilshire Blvd., loth Floor Los Angeles, CA 90017 EDUARDO OLIVO City Attorney FAX: (562) 927-8722 ,r KEVIN WILSON Director of Community Services & Water FAX: (323) 588-2761 KENNETH J. DeDARIO Director of Municipal Utilities FAX: (323) 583-1983 STEVEN E. PARKER Fire Chief FAX: (323) 581-1385 BRUCE W. OLSON Police Chief FAX: (323) 583-5236 f�01,0111 '1\ V/ 3 Re: Execution of City of Vernon Trust Under Su Executive Retirement Plan Dear Bart: lemental I enclose an executed copy of the City's Supplemental Executive Retirement Plan, for your records. I also enclose two (2) copies of the Trust documents for execution by Wells Fargo Bank, as Trustee, under the Plan. Please sign both and return one copy to us. The City will be funding the Trust in early July, 2001. Please send whatever account information the City needs to set up the Plan. The Plan participant's beneficiary and investment elections will be sent to you upon the funding of the Trust. Thank you for your time and help in this matter. Sincerely, Eric Fresch Legal Counsel EF: j 1 Enclosures cc: o Encls.) Eddie Olivo (w/o Encls.)