DEFERRED FEE AGREEMENT
THIS AGREEMENT dated December 31, 1998, by and between The Royce 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 Trust] [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.
THE ROYCE 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:________________________________
