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Exhibit 7
THE GALAXY FUND
DEFERRED COMPENSATION PLAN
1. Eligibility. Each Trustee of the Board of Trustees (the "Board") of The
Galaxy Fund (the "Trust") shall be eligible to participate in The Galaxy Fund
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 compensation payable by the Trust for
the Trustee's services shall be credited to the Trustee's Deferred Compensation
Account
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under the applicable Agreement. A Trustee shall allocate amounts in his
Account(s) among the investment options available under the Plan by submitting a
written request 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 Board shall specify from time to time the investment options available under
the Plan. The Trustee may request that the investment allocation of his Account,
including past as well as future deferrals, be changed by submitting a written
request to the Treasurer (or his delegate) on such form as may be required by
the Treasurer, or by telephoning the Treasurer (or his delegate); provided that
a Trustee may make an investment allocation change only once per calendar
quarter. Such changes shall become effective as soon as administratively
feasible after the Treasurer (or his delegate) receives such request.
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The 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 the
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:
(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
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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 the 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.
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
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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 the 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 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
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governmental agency or agencies with such reports, statements or information as
may be required in connection with such payments.
(d) In Capacity 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 the Trustee to be or
remain a Trustee of the Trust or to receive any particular amount of Trustee's
fees.
(g) Binding Notice. 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.
(i) Effective Date. This Plan shall be effective as of March 1, 1996.
Date: December 7, 1995 Adopted by the
Board of Trustees
of The Galaxy Fund
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THE GALAXY FUND
DEFERRED COMPENSATION AGREEMENT
This Agreement is entered into this _____ day of _________, 19___, between The
Galaxy Fund (the Trust ) (consisting of the Institutional Treasury Money Market,
Money Market, Government Tax-Exempt, Connecticut Municipal Money Market,
Massachusetts Municipal Money Market, U.S. Treasury, Equity Value, Equity
Growth, Equity Income, International Equity, Small Company Equity, Asset
Allocation, Small Cap Value, Growth and Income, Short-Term Bond, Intermediate
Government Income, Corporate Bond, High Quality Bond, Tax-Exempt Bond, New York
Municipal Bond, Connecticut Municipal Bond, Massachusetts Municipal Bond and
Rhode Island Municipal Bond Funds) and any other investment portfolio that may
be established by the Trust in the future, and _________________________ (the
Trustee ).
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 day such amount
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 may request that all or a portion of the amount in his
Account be allocated among one or more of the investment options offered
by the Board under The Galaxy Fund Deferred Compensation Plan (the
Plan). The initial allocation request may be made at the time of
enrollment. Once made, an investment allocation request shall remain
in effect for all future amounts
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allocated to the Trustee's Account until changed by the Trustee. The
Trustee may change his investment allocation for past deferrals and
future deferrals by submitting a written request to the Treasurer of the
Trust (the Treasurer ) (or his delegate) on such form as may be required
by the Treasurer or by telephoning the Treasurer (or his delegate);
provided that, the Trustee may make an investment allocation change
only once per calendar quarter. Such changes shall become effective as
soon as administratively feasible after the Treasurer (or his delegate)
receives such request. Although the Trust intends to invest the
amounts in the Trustee's Account according to the Trustee's requests,
the Trust reserves the right to invest the amounts in the Trustee's
Account without regard to such requests.
The Trustee agrees on behalf of the Trustee and any designated
beneficiary to assume all risks in connection with the investment
performance of any amounts which are invested or which continue to be
invested in accordance with the investment directions of the Trustee.
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 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 equaling the then remaining balance in the Trustee s
Account.
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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
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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
Xxxx Xxxxxxx, First Data Investor Services Group, Inc., 0000 Xxxxxxxx
Xxxxx, Xxxxxxxx, XX 00000-0000 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 GALAXY FUND
BY: ______________________________
Title: ___________________________
_________________________, TRUSTEE
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(Signature of Trustee)
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THAT GALAXY FUND DEFERRED COMPENSATION PLAN
TRUSTEE ACCOUNT ALLOCATION REQUEST
I hereby request to have my Account(s) under The Galaxy Fund Deferred
Compensation Plan invested in the following investment options in the
percentages indicated as soon as administratively feasible. This request
supersedes any prior requests I have made with respect to such Plan, and applies
to amounts deferred in the past under the Plan as well as to future deferrals. I
hereby agree to assume all risks in connection with the investment performance
of the amounts which are invested in accordance with this election.
Percentage
Invested Investment Option
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100% U.S. Treasury Bills
------------- Account (two-year rate,
adjusted quarterly)
100%
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DATED: ______________________, 19______ ___________________
