DEFERRED FEE AGREEMENT
THIS AGREEMENT dated December 31, 1998, by and between Royce
Capital Fund (the "Trust"), a management investment company
organized as a Delaware business trust, with offices at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and
________________ ("Trustee"), currently residing at
__________________________________.
W I T N E S S E T H:
WHEREAS, Trustee currently serves as a trustee or director
of the Trust and receives remuneration ("Trustee's Fees") from
the Trust in that capacity; and
WHEREAS, Trustee desires that an arrangement be established
with the Trust under which Trustee may defer receipt of Trustee's
Fees that may otherwise become payable to Trustee and that relate
to services performed after the date hereof; and
WHEREAS, the Trust is agreeable to such an arrangement.
NOW, THEREFORE, it is agreed as follows:
1. Trustee irrevocably elects to defer receipt, subject to
the provisions of this Agreement, of [all] [$ ] [___%]
of Trustee's Fees which may otherwise become payable to Trustee
for the calendar year 1999 and which relate to services to be
performed during such year. Such election shall continue in
effect with respect to such Trustee's Fees which may otherwise
become payable to Trustee for any calendar year subsequent to
1999 and which relate to services to be performed during such
subsequent year (which, together with the calendar year 1999, are
referred to herein as "Deferred Years" and individually as a
"Deferred Year"), unless prior to January 1 of a subsequent year,
Trustee shall have delivered to the President or the Secretary of
the Trust a written revocation or modification of such election
with respect to all or any portion of such Trustee's Fees which
may otherwise become payable to him for such subsequent year and
which relate to services to be performed during such subsequent
year. Trustee's Fees with respect to which Trustee shall have
elected to defer receipt (and shall not have revoked such
election) as provided above are hereinafter referred to as
"Deferred Trustee's Fees".
2. During any Deferred Year, the Trust shall credit the
amount of Deferred Trustee's Fees to a book reserve account (the
"Deferred Fee Account") based on the rate(s) of such Trustee's
Fees in effect from time to time during such year.
3 The "Underlying Securities" for the Deferred Fee
Account shall be Investment Class shares of up to any three (3)
series of The Royce Fund, a Delaware business trust, as the
Trustee may from time to time designate in writing as the
Underlying Securities.
4. The value of the Deferred Fee Account as of any date
shall be equal to the value such account would have had as of
such date if the amounts credited thereto had been invested and
reinvested in the Underlying Securities from and after the date
such Underlying Securities
were designated. In addition, the
Deferred Fee Account shall be credited or debited, as the case
may be, with all gains, losses, interest, dividends and earnings
that would have been realized had the Deferred Fee Account been
invested in such Underlying Securities from and after the date
such Underlying Securities were designated.
5. The Trust's obligation to make payments of the Deferred
Fee Account shall be a general obligation of the Trust, and such
payments shall be made from the Trust's general assets and
property. Trustee's relationship to the Trust under this
Agreement shall be only that of a general unsecured creditor, and
neither this Agreement nor any action taken pursuant hereto shall
create or be construed to create a trust or fiduciary
relationship of any kind between the Trust and Trustee, Trustee's
designated beneficiary or any other person, or a security
interest of any kind in any property of the Trust in favor of
Trustee or any other person. The Trust shall not be required to
purchase, hold or dispose of any investments pursuant to this
Agreement; provided, however, that if in order to cover its
obligations hereunder the Trust elects to purchase any
investments (including, without limitation, investments in the
Underlying Securities), the same shall continue for all purposes
to be a part of the general assets and property of the Trust,
subject to the claims of its general creditors, and no person
other than the Trust shall by virtue of the provisions of this
Agreement have any interest in such assets other than an interest
as a general creditor. The Trust shall provide an annual
statement to Trustee showing such information as is appropriate,
including the aggregate amount in the Deferred Fee Account, as of
a reasonably current date, which amount may increase or decrease
from time to time as a result of gains, losses, interest,
dividends and earnings, in accordance with Paragraph 4 above.
6. Trustee hereby elects to have payments made, upon
termination of Trustee's service as a trustee, out of Trustee's
Deferred Fee Account
/ / in a lump sum;
/ / in _____ annual installments (not to exceed 10); or
/ / in _____ quarterly installments (not to exceed 40).
Otherwise, payment shall be made to Trustee in such number of
annual installments as shall be determined by the Trust in its
sole discretion. The Trust may consult with Trustee prior to
such determination. Each annual installment payment shall be
made as of January 31, beginning with the January 31st following
the termination of Trustee's service as a trustee or director.
Until complete payment of amounts credited to the Deferred Fee
Account, the unpaid balance shall be credited or debited, as the
case may be, with all gains, losses, interest, dividends and
earnings in accordance with Paragraph 4 above. The Trust in its
sole discretion reserves the right to accelerate payment of
amounts in Trustee's Deferred Fee Account at any time after
termination of Trustee's service as a trustee or director.
Notwithstanding the foregoing, in the event of the liquidation,
dissolution or winding up of the Trust or the distribution of all
or substantially all of the Trust's assets and property relating
to one or more series of its shares, if any, to shareholders of
such series (for this purpose a sale, conveyance or transfer of
the Trust's assets to a trust, partnership, association or other
entity in exchange for cash, shares or other securities with the
transfer being made subject to, or with the assumption by the
transferee of, the liabilities of the Trust shall not be deemed a
termination of the Trust or such a distribution), all unpaid
amounts in the Deferred Fee Account as to such series as of the
effective date thereof shall be paid in a lump sum on such
effective date.
7. Payment of amounts credited to the Deferred Fee Account
shall be made in the form of a check. Such payments shall be
made to Trustee, except that:
(a) In the event that Trustee shall be determined by a
court of competent jurisdiction to be incapable of managing
Trustee's financial affairs, and if the Trust has actual notice
of such determination, payment shall be made to Trustee's
personal representative(s); and
(b) In the event of Trustee's death, payment shall be
made to the last beneficiary designated by Trustee for purposes
of receiving such payment in such event in a written notice
delivered to the President or the Secretary of the Trust;
provided that if such beneficiary has not survived Trustee,
payment shall instead be made to Trustee's estate. (Trustee
hereby designates _____________________ as the initial
beneficiary for purposes of receiving such payment in such
event.)
The Trust may deduct from the payment of amounts in the
Deferred Fee Account any amounts required for purposes of
withholding for Federal, state and/or local income and employment
tax or any similar tax or levy.
8. Amounts in the Deferred Fee Account shall not in any
way be subject to the debts or other obligations of Trustee and
may not be voluntarily sold, transferred, pledged or assigned by
him, except as provided in Paragraph 7(b) above.
9. This Agreement shall not be construed to confer any
right on the part of Trustee to be or remain a trustee or
director of the Trust or to receive any, or any particular rate
of, Trustee's Fees.
10. Interpretations of, and determinations related to, this
Agreement made by the Trust, including any determinations of the
amounts in the Deferred Fee Account, shall be made by the Board
of Trustees or Directors of the Trust (excluding trustees or
directors who are personally interested in such interpretations
and/or determinations) and, if made in good faith, shall be
conclusive and binding upon all parties; and the Trust shall not
incur any liability to Trustee for any such interpretation or
determination so made or for any other action taken by it in
connection with this Agreement in good faith.
11. This Agreement contains the entire understanding and
agreement between the parties with respect to the subject matter
hereof, and may not be amended, modified or supplemented in any
respect except by subsequent written agreement approved by the
Board of Trustees or Directors of the Trust (excluding trustees
or directors who are personally interested therein) and entered
into by both parties.
12. This Agreement shall be binding upon, and shall inure
to the benefit of, the Trust and its successors and assigns and
Trustee and Trustee's heirs, executors, administrators and
personal representatives.
13. This Agreement is being entered into in, and shall be
construed in accordance with the internal laws of, the State of
New York, without regard to conflicts of law provisions thereof.
14. Notice is hereby given that this Agreement is executed
on behalf of the Trust by an officer of the Trust as an officer
and not individually, and that the obligations of or arising out
of this Agreement are not binding upon any of the Trustees,
officers, shareholders, employees or agents of the Trust
individually but are binding only upon the assets and property of
the Trust.
IN WITNESS WHEREOF, the Trust has caused this Agreement to
be executed on its behalf by its duly authorized officer and
Trustee has executed this Agreement, on the date first written
above.
ROYCE CAPITAL FUND
By:____________________________
Name:
Title:
_______________________________
Trustee
DEFERRED FEE AGREEMENT
Election Form
1. Election to Defer
I hereby elect to defer $_________ or __________% of
Trustee's Fees for services rendered after _______, 199_.
2. Underlying Securities
I hereby elect the following series of The Royce Fund (not
to exceed three (3)) to serve as my Underlying Securities
under the Deferred Fee Agreement and allocate the respective
percentages of Deferred Trustee's Fees to each such series,
as follows:
Percent of Deferred
Name of Series Trustee's Fee Allocated
3. Payment Selection
I hereby elect to receive the amounts credited to my
Deferred Fee Account, upon termination of my service as a
Trustee, as follows:
/ / in a lump sum;
/ / in ______ annual installments (not to exceed 10); or
/ / in ______ quarterly installments (not to exceed 40).
4. Beneficiary Designation
I hereby designate the following as my initial beneficiary
for purposes of receiving deferred fee payments in the event
of my death:
Name:
Address:
Social Security Number:
5. Acknowledgment
I understand that the above election shall take effect with
respect to Trustee's Fees earned after December 31, 1998. I
acknowledge that the election to defer may be revoked or
modified with respect to Trustee's Fees to be earned on or
after the following January 1 so long as I deliver a written
revocation or modification to the President or the Secretary
of the Trust prior to such January 1.
Executed this ____ day of ___________, 1998.
By:________________________________
