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Exhibit 24(b)(7)
THE KENT FUNDS
DEFERRED COMPENSATION PLAN
1. Eligibility. Each Trustee of the Board of Trustees (the "Board") of
The Kent Funds (the "Trust") shall be eligible to participate in The Kent Funds
Deferred Compensation Plan (the "Plan").
2. Terms of Participation
(a) A Trustee may elect to participate in the Plan by signing the Deferred
Compensation Agreement (the "Agreement") in the form attached hereto and
incorporated by reference herein. A Trustee's participation will commence on
January 1 of the calendar year immediately following the year in which the
Trustee executed the Agreement, except that when a Trustee executes an
Agreement within 30 days of the Plan's initial effective date or within 30 days
of first becoming eligible to participate in the Plan, participation will
commence with respect to services to be performed subsequent to the date of the
Agreement.
(b) Participation in the Plan will continue until the Trustee furnishes
written notice to the Trust that the Trustee terminates his participation in
the Plan or until such time as the Trust terminates the Plan pursuant to
Section 6 below. Termination by a Trustee shall be made by written notice
delivered or mailed to the Treasurer of the Trust (the "Treasurer") (or his
delegate) no later than December 31 of the calendar year preceding the calendar
year in which such termination is to take effect.
(c) A Trustee who has terminated his participation may subsequently elect
to participate in the Plan by executing a new Agreement in accordance with
subsection (a) above.
(d) A Trustee may alter the amount of deferral for any future calendar
year, and/or elect a different method by which he will receive amounts deferred
for future calendar years, if the Trustee and the Trust enter into a new
Agreement on or before December 31 of the calendar year preceding the calendar
year for which the new Agreement is to take effect. For each new Agreement
which changes the method of receipt of deferred amounts, a new record account
(the "Deferred Compensation Account" or "Account") will be established for the
Trustee.
3. Deferred Compensation Account. While a Trustee participates in the
Plan pursuant to an Agreement, all deferred
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compensation payable by the Trust for the Trustee's services shall be credited
to the Trustee's Deferred Compensation Account under the applicable Agreement
at the end of the calendar quarter in which such amounts are otherwise payable.
A Trustee shall allocate amounts in his Account among the investment options
available under the Plan by submitting a written election to the Treasurer (or
his delegate) on such form as may be required by the Treasurer prior to the
date deferrals are scheduled to begin. The percentage allocated to an
investment option shall be a multiple of 5% and no less than 10%. The Board
shall specify from time to time the investment options available under the
Plan.
A Trustee may elect to change the investment allocation for future
deferrals by submitting a written request to the Treasurer (or his delegate) on
such form as may be required by the Treasurer. A Trustee may make such an
investment allocation change only once per calendar quarter and, as with a
Trustee's initial allocation, the percentage allocated to an investment option
shall be a multiple of 5% and no less than 10%. Such a change shall become
effective as of the end of the calendar quarter in which the Treasurer (or his
delegate) receives written notice of the change.
A Trustee may also transfer amounts previously allocated to one investment
option into one or more different investment options which are available at the
time of the transfer by submitting a written request to the Treasurer (or his
delegate) on such form as may be required by the Treasurer. A Trustee may make
such a transfer only once per calendar quarter and the transferred amount must
be in increments of $500. Such a transfer shall become effective as of the end
of the calendar quarter in which the Treasurer (or his delegate) receives
written notice of the transfer.
A Trustee's Account(s) will be credited with any income, gains and losses
that would have been realized if amounts equal to the deferred amounts had been
invested in accordance with the Trustee's allocation election on the date such
deferred amounts were credited to the Trustee's Account(s). For this purpose,
any amounts that would have been received, had amounts been invested as
described above, from a chosen investment option will be treated as if
reinvested in that option on the date such amounts would have been received.
4. Distribution. As of January 31 of the year following the year in which
a Trustee dies, retires, resigns, becomes disabled or otherwise ceases to be a
member of the Board, the total amount credited to the Trustee's Account under
the applicable Agreement shall be distributed to the Trustee (or upon his
death, to his designated beneficiary) in accordance with one of the
alternatives set forth below:
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(i) one single-sum payment; or
(ii) any number of annual installments (as calculated in the following
paragraph) for a period of two to 15 years. Installments shall be paid
annually as of January 31 until the balance in the Trustee's Account is
exhausted.
Selection of an alternative shall be made at the time the Trustee executes
the Agreement. Except as provided in the following paragraph, the amount of
each installment payment, other than the final payment, shall be equal to 1/n
multiplied by the balance in the Trustee's Account as of the previous December
31, where "n" equals the number of payments yet to be made. The final payment
will equal the balance in the Trustee's Account as of the final January 31
payment date, and such payment shall be made as soon as practicable after such
date. For example, if payments are to be made in ten annual installments
commencing on January 31, 2000, the first payment will be equal to 1/10th of
the December 31, 1999 balance in the Account, and the following year's payment
would be equal to 1/9th of the December 31, 2000 balance.
If the balance in the Trustee's Account as of the date of the first
scheduled payment is less than $2,000, the Trust shall instead pay such amount
in a single sum as of that date. Further, the Trustee may not select a period
of time which will cause an annual payment to be less than $1,000.
Notwithstanding the foregoing, in the event the Trustee ceases to be a Trustee
of the Trust and becomes a proprietor, officer, partner, or employee of, or
otherwise becomes affiliated with, any business or entity that is in
competition with the Trust, or becomes employed by any governmental agency
having jurisdiction over the affairs of the Trust, the Trust reserves the right
at the sole discretion of the Board to make an immediate single-sum payment to
the Trustee in an amount equal to the balance in the Trustee's Account at that
time.
Notwithstanding the preceding two paragraphs, the Trust may at any time
make a single sum payment to a Trustee (or surviving beneficiary) equal to a
part or all of the balance in the Trustee's Account upon a showing of an
unforeseeable (i.e., unanticipated) financial emergency caused by an event
beyond the control of the Trustee (or surviving beneficiary) which would result
in severe financial hardship to the Trustee (or surviving beneficiary) if such
payment were not made. The determination of whether such emergency exists
shall be made at the sole discretion of the Board (with the Trustee requesting
the payment not participating in the discussion or the decision). The amount
of the payment shall be limited to the amount necessary to meet the financial
emergency, and any remaining balance in the Trustee's Account shall thereafter
be paid at the time and in the manner otherwise set forth in this Section.
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If there is no beneficiary designation in effect at the Trustee's death or
the designated beneficiary is dead at the Trustee's death, any amounts in the
Trustee's Account shall be paid in a single sum to the Trustee's estate. If
the designated beneficiary dies after beginning to receive installment
payments, any amounts payable from the Trustee's Account shall be paid in a
single sum to the beneficiary's estate at the beneficiary's death.
5. Designation of Beneficiary. A Trustee may designate in writing any
person or legal entity as his beneficiary to receive any amounts payable from
his Account(s) upon his death. If the Trustee should die without effectively
designating a surviving beneficiary, his beneficiary shall be his estate.
6. Amendment and Termination of the Plan. The Trust reserves the right to
amend or terminate the Plan by a Board resolution. A written notice of any
such amendment or termination shall be delivered or mailed to each
participating Trustee no later than December 31 of the calendar year preceding
the calendar year in which the amendment or termination is to take effect. The
balance in the Trustee's Account(s) shall remain subject to the provisions of
the Plan and distribution will not be accelerated because of the termination of
the Plan.
7. Non-Assignability. The right of a Trustee or any other person to
receive payments under this Plan or any Agreement hereunder shall not be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Trustee or
any beneficiary.
8. Miscellaneous
(a) No Funding. The Trust shall not be required to fund or secure in any
way its obligations hereunder. Nothing in the Plan or in any Agreement
hereunder and no action taken pursuant to the provisions of the Plan or of any
Agreement hereunder shall be construed to create a trust or a fiduciary
relationship of any kind. Payments under the Plan and any Agreement hereunder
shall be made when due from the general assets of the Trust. Neither a Trustee
nor his designated beneficiary shall acquire any interest in such assets by
virtue of the Plan or any Agreement hereunder. This Plan constitutes a mere
promise by the Trust to make payments in the future, and to the extent that a
Trustee or his designated beneficiary acquires a right to receive any payment
from the Trust under the Plan, such right shall be no greater than the right of
any unsecured general creditor of the Trust. The Trust intends for this Plan
to be unfunded for tax purposes and for the purposes of Title I
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of the Employee Retirement Income Security Act of 1974, as amended.
(b) Interpretation. The Trust shall have full power and authority to
interpret, construe and administer this Plan and any Agreement hereunder and
its interpretation and construction thereof, and actions hereunder, including
any valuation of the Trustee's Account(s), or the amount or recipients of the
payment to be made therefrom, shall be binding and conclusive on all persons
for all purposes. The Trust shall not be liable to any person for any action
taken or omitted in connection with the interpretation and administration of
this Plan and any Agreement hereunder unless attributable to its own willful
misconduct or lack of good faith.
(c) Withholding. To the extent required by law, the Trust shall withhold
federal or state income or employment taxes from any payments under the Plan or
any Agreement hereunder and shall furnish the Trustee (or beneficiary) and the
applicable governmental agency or agencies with such reports, statements or
information as may be required in connection with such payments.
(d) Incapacity of Payee. If the Trust shall find that any person to whom
any payment is payable under this Plan or any Agreement hereunder is unable to
care for his affairs because of illness or accident, or is a minor, any payment
due (unless a prior claim therefor shall have been made by a duly appointed
guardian, committee or other legal representative) may be paid to the spouse, a
parent, or a brother or sister, or to any person deemed by the Trust to have
incurred expense for the person who is otherwise entitled to payment, in such
manner and proportions as the Trust may determine. Any such payment shall
serve to discharge the liability of the Trust under this Agreement to make
payment to the person who is otherwise entitled to payment.
(e) Expenses. All expenses incurred in administering this Plan and any
Agreement hereunder shall be paid by the Trust.
(f) No Additional Rights. Nothing in this Plan or any Agreement hereunder
shall be construed as conferring any right on the part of a Trustee to be or
remain a Trustee of the Trust or to receive any particular amount of Trustee's
fees.
(g) Binding Nature. This Plan and any Agreement hereunder shall be
binding upon, and inure to the benefit of, the Trust, its successors and
assigns, and each Trustee and his heirs, executors, administrators and legal
representatives.
(h) Governing Law. This Plan and any Agreement hereunder shall be
governed by and construed under the laws of the Commonwealth of Massachusetts.
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(i) Effective Date. This Plan shall be effective as of April 30, 1996.
Date: April 30, 1996 Adopted by the
Board of Trustees
of The Kent Funds
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THE KENT FUNDS
DEFERRED COMPENSATION AGREEMENT
This Agreement is entered into this ____ day of ___________, 19__, between
The Kent Funds (the "Trust") (consisting of several separate investment
portfolios) and _______________________ (the "Trustee") under The Kent Funds
Deferred Compensation Plan (the "Plan").
WHEREAS, the Trustee will be rendering valuable services to the Trust as a
member of the Board of Trustees (the "Board"), and the Trust is willing to
accommodate the Trustee's desire to be compensated for such services on a
deferred basis;
NOW, THEREFORE, the parties hereto agree as follows:
1. With respect to services performed by the Trustee for the
Trust on and after _____________, 19__, the Trustee shall defer
____% of the amounts otherwise payable to the Trustee for serving as
a Trustee. The deferred compensation shall be credited to a book
reserve maintained by the Trust in the Trustee's name, together with
credited amounts in the nature of income, gains and losses (the
"Account"). The Account maintained for the Trustee shall be paid to
the Trustee on a deferred basis in accordance with the terms of this
Agreement.
2. The Trust shall credit the Trustee's Account as of the end of
the calendar quarter in which such amounts would be paid to the
Trustee if this Agreement were not in effect. Such Account shall be
valued at fair market value as of the last day of the calendar year
and such other dates as are necessary for the proper administration
of this Agreement, and the Trustee shall receive a written
accounting of his Account balance following such valuation.
The Trustee's Account shall be credited with earnings or losses as
if the amounts credited to the Account were invested in accordance
with the Trustee's election. The Board will periodically decide
which investment options will be available under the Plan. The
initial allocation election must be made at the time of enrollment.
Once made, an investment allocation election shall remain in
effect for all future amounts allocated to the Trustee's Account
until changed by the Trustee. The Trustee may change his
investment allocation for past deferrals and/or future deferrals by
submitting a written request to the
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Treasurer of the Trust (the "Treasurer") (or his delegate) on such
form as may be required by the Treasurer. The Trustee may make such
an investment allocation change only once per calendar quarter. Such
changes shall become effective as of the end of the calendar quarter
in which the Treasurer (or his delegate) receives such request.
The Trustee agrees on behalf of the Trustee and any designated
beneficiary to assume all risks in connection with the investment
performance of any chosen investment options.
Title to and beneficial ownership of any assets, whether cash or
investments, which the Trust may use to pay benefits hereunder, shall
at all times remain in the Trust, and the Trustee and any designated
beneficiary shall not have any property interest whatsoever in any
specific assets of the Trust.
3. As of January 31 of the calendar year following the calendar
year in which the Trustee dies, retires, resigns, becomes disabled
or otherwise ceases to be a member of the Board, the Trust (subject
to the terms of the Plan) shall: [check one]
[ ] pay the Trustee (or his beneficiary) a single-sum amount equal to the
balance in the Trustee's Account on that date; or
[ ] commence making annual payments to the Trustee (or his beneficiary)
for a period of __ [insert a whole number from two through 15] years.
If the second box is selected, such payments shall be made on January
31st of each year in approximately equal annual installments as
adjusted and computed by the Trust in accordance with the terms of
the Plan, with the final payment equalling the then remaining balance
in the Trustee's Account.
4. In the event the Trustee dies before payments have commenced
or been completed under Section 3, the Trust shall make payment in
accordance with Section 3 to the Trustee's designated beneficiary,
whose name, address, and Social Security number are:
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______________________________________
______________________________________
______________________________________
______________________________________
If there is no beneficiary designation in effect at the Trustee's
death or the designated beneficiary is dead at the Trustee's death,
any amounts in the Trustee's Account shall be paid in a single sum
to the Trustee's estate. If the designated beneficiary dies after
beginning to receive installment payments, any amounts payable from
the Trustee's Account shall be paid in a single sum to the
beneficiary's estate at the beneficiary's death.
5. This Agreement shall remain in effect with respect to the
Trustee's compensation for services performed as a Trustee of the
Trust in all future years unless terminated on a prospective basis
in writing in accordance with the terms of the Plan. The Trustee
may subsequently elect to defer his compensation by executing a new
Deferred Compensation Agreement. If a new Agreement is entered into
which changes the manner in which deferred amounts will be
distributed, a new Trustee's Account will be established for
purposes of crediting deferrals, income, gains, and losses under the
new Agreement. Any new Agreement shall relate solely to
compensation for services performed after the new Agreement becomes
effective and shall not alter the terms of this Agreement with
respect to the deferred payment of compensation for services
performed during any calendar year in which this Agreement was in
effect. Notwithstanding the foregoing, the Trustee may at any time
amend the beneficiary designation hereunder by written notice to the
Trust.
6. This Agreement constitutes a mere promise by the Trust to
make benefit payments in the future, and the right of any person to
receive such payments under this Agreement shall be no greater than
the right of any unsecured general creditor of the Trust. The Trust
and Trustee intend for this Agreement to be unfunded for tax
purposes and for the purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended.
7. Any written notice to the Trust referred to in this Agreement
shall be made by mailing or delivering such notice to the Trust, c/o
BISYS Funds Services, 3435
00
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 to the attention of the
Treasurer. Any written notice to the Trustee referred to in this
Agreement shall be made by delivery to the Trustee in person or by
mailing such notice to the Trustee at his last known residential or
business address.
8. This Agreement is subject to all of the terms contained in
the Plan as attached hereto and incorporated by reference herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
THE KENT FUNDS
By:___________________________
Title:________________________
_____________________, TRUSTEE
______________________________
