EXHIBIT (i)(1)
FORM OF
XXX XXXXXX FUNDS
AMENDED AND RESTATED
DEFERRED COMPENSATION AGREEMENT
This amended and restated DEFERRED COMPENSATION AGREEMENT, effective
as of January 1, 2005 by and between each of the Xxx Xxxxxx Funds listed on
Exhibits A-1 and A-2 attached hereto, as may be amended from time to time
(collectively the "Funds" or individually the "Fund"), and
_________________________, (the "Trustee").
WHEREAS, each Fund and the Trustee desire to enter into an agreement
whereby such Fund will provide to the Trustee a vehicle under which the Trustee
can defer receipt of trustees' or directors' fees payable by such Fund.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, each Fund and the Trustee hereby agree
as follows:
1. DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions. Unless a different meaning is plainly implied by the
context, the following terms as used in this Agreement shall have the following
meanings:
(a) "Beneficiary" shall mean such person or persons designated
pursuant to Section 4.3 hereof to receive benefits after the death of the
Trustee.
(b) "Beneficiary Designation and Distribution Election Form"
shall mean the written instrument to be executed by each Trustee which shall
designate the person or persons to receive benefits after the death of the
Trustee and a form of which is attached as Exhibit B thereto.
(c) "Board of Trustees" shall mean the Board of Trustees or Board
of Directors, as the case may be, of the Fund.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute.
(e) "Compensation" shall mean the amount of trustee's or
director's fees paid by the Fund to the Trustee during a Deferral Year prior to
reduction for Compensation Deferrals made under this Agreement.
(f) "Compensation Deferral" shall mean the amount or amounts (i)
of the Trustee's Compensation deferred under the provisions of Section 3 of this
Agreement, or (ii) transferred from any Retirement Plan pursuant to the terms of
such Retirement Plan or any deferral election made thereunder by the Trustee.
(g) "Deferral Account" shall mean the account maintained to
reflect the Trustee's Compensation Deferral made pursuant to Section 3 hereof or
any Retirement Plan or related deferral election, all other amounts deferred
pursuant to Section 3 or any Retirement Plan or related deferral election and
any other credits or debits thereto.
(h) "Deferral Year" shall mean each calendar year during which
the Trustee makes, or is entitled to make, a Compensation Deferral under Section
3 hereof or during which the Trustee's Deferral Account has Compensation
Deferral from the Retirement Plan.
(i) "Disability" or "Disabled" shall have the meaning set forth
in Section 409A(a)(2)(C) of the Code, or any successor thereto.
(j) "Fund Transfer" shall mean a transfer of the assets of the
Fund to a successor fund pursuant to a liquidation, dissolution or winding up of
the Fund or a distribution of all or substantially all of the Fund's assets and
property to a successor fund.
(k) "Retirement Plan" shall mean any Retirement Plan for a Fund,
and any successor thereto.
(l) "Trustee" shall mean a member of the Board of Trustees or the
Board of Directors, as the case may be, of a Fund.
(m) "Valuation Date" shall mean any day upon which the Fund makes
a valuation of the Deferral Account and shall, at a minimum, be the last
business day of each calendar quarter.
1.2 Plurals and Gender. Where appearing in this Agreement the singular
shall include the plural and the masculine shall include the feminine, and vice
versa, unless the context clearly indicates a different meaning.
1.3 Headings. The headings and subheadings in this Agreement are
inserted for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
2. PERIOD DURING WHICH COMPENSATION DEFERRALS ARE PERMITTED
2.1 Commencement of Compensation Deferrals. The Trustee may
2
commence participation under this Agreement by electing to participate on a form
provided by, and submitted to, the President of the Fund, which election will
become effective pursuant to Section 3.1 hereof, but in no event earlier than
the later of (i) the date this Agreement is executed, and (ii) the date such
form is submitted to the President of the Fund. Participation with respect to
Compensation Deferrals from the Retirement Plan shall become effective on the
later of (i) the date this Agreement is executed and (ii) the date such deferral
is transferred to this Agreement.
2.2 Termination of Deferrals. The Trustee shall not be eligible to
make Compensation Deferrals after the earlier of the following dates:
(a) The date of which he ceases to serve as a Trustee of the
Fund; or
(b) The effective date of the termination of this Agreement.
3. COMPENSATION DEFERRALS
3.1 Compensation Deferral Elections and Transferred Compensation
Deferrals.
(a) Prior to the first day of a calendar year in which the
deferred Compensation is to become vested or, in a Trustee's first year of
eligibility, within thirty days after he or she becomes eligible, the Trustee
may elect, on the form described in Section 2.1 hereof, to defer the receipt of
all or a portion of the Compensation for such Deferral Year; provided that in a
Trustee's first year of eligibility, the Trustee shall only be permitted to
defer Compensation for services to be performed subsequent to the election. Such
form shall set forth the amount of such Compensation Deferral (in whole
percentage amounts). Such election shall continue in effect for all subsequent
Deferral Years unless it is canceled or modified as provided below.
(b) Compensation Deferrals shall be withheld from each payment of
Compensation by the Fund to the Trustee based upon the percentage amount elected
by the Trustee under Section 3.1(a) hereof.
(c) The Trustee may cancel or modify the amount of his
Compensation Deferrals prior to the last permissible date for making such
Deferral election by submitting to the President of the Fund a revised
Compensation Deferral election form. Such change will be effective as of the
first day of a Deferral Year following the date such revision is submitted to
the President of the Fund. Notwithstanding the foregoing, the Trustee may make a
subsequent modification to his or her Deferral election (a "Subsequent
Modification") on a prospective basis provided that: (i) such Subsequent
Modification will not take effect until at least twelve (12) months after the
date on which the Subsequent Modification is made; (ii) the payment with respect
to such Subsequent Modification is deferred for a period of not less than five
(5)
3
years from the date such payment would otherwise have been paid (or, in the case
of (x) a life annuity or (y) installment payments treated as a single payment,
five (5) years from the date the first amount was scheduled to be paid); and
(iii) any Subsequent Modification related to a payment to be made at a specified
time or pursuant to a fixed schedule is made not less than twelve (12) months
before the date the payment is scheduled to be paid (or, in the case of (x) a
life annuity or (y) installment payments treated as a single payment, twelve
(12) months before the date the first amount was scheduled to be paid).
(d) The Trustee's Deferral Account shall also include any and all
amounts deferred on the Trustee's behalf that were transferred to such account
from the Retirement Plan, and which shall be deemed to be deferrals under this
Agreement for purposes of this Agreement; provided, however, that such deferrals
shall be governed by the terms of the deferral election made by the Trustee
under the Retirement Plan, and all references to deferral elections in this
Agreement that relate to these transferred deferrals shall refer to the election
made under the Retirement Plan, unless and until a timely and effective election
relating to such deferrals has been made under this Agreement. Notwithstanding
the foregoing, to the extent permitted pursuant to Section 409A of the Code,
from and following the effective date of any such transfer, the deferrals from
the Retirement Plan shall be governed by the terms of this Agreement, including
any deferral elections in effect under this Agreement if a valid election under
the Retirement Plan has not been properly executed or such election has been
superseded by an election under this Agreement.
3.2 Valuation of Deferral Account.
(a) The Fund shall establish a bookkeeping Deferral Account to
which will be credited an amount equal to the Trustee's Compensation Deferrals
under this Agreement. Compensation Deferrals shall be allocated to the Deferral
Account on the first business day following the date such Compensation Deferrals
are withheld from the Trustee's Compensation, or if later, transferred to this
Agreement. The Deferral Account shall be debited to reflect any distributions
from such Account. Such debits shall be debited to the Deferral Account as of
the date such distributions are made.
(b) As of each Valuation Date, income, gain and loss equivalents
(determined as if the Deferral Account is invested in the manner set forth
herein) attributable to the period following the immediately preceding Valuation
Date shall be credited to and/or deducted from the Trustee's Deferral Account.
3.3 Investment of Deferral Account Balance.
(a) (1) The Trustee may select, from various options made
available by the Fund, from time to time, pursuant to Section 3.3(a)(3), the
investment media in which all or part of his Deferral Account shall be deemed to
be invested.
4
(2) The Trustee shall make an investment designation on a
form provided by the President of the Fund which shall remain effective until
another valid direction has been made by the Trustee as herein provided. On the
investment designation form, the Trustee may select up to four underlying
investment securities in even multiples of 25% from the options made available
to the Trustee pursuant to Section 3.3(a)(1), or such other percentages as may
be determined from time to time pursuant to Section 3.3(a)(3). The Trustee may
amend the investment designation only once each calendar quarter by giving
written direction to the President of the Fund at least 30 days prior to the end
of such calendar quarter. Unless otherwise specified, a Trustee's amendment to
an investment designation applies only to future compensation Deferrals. A
Trustee may amend the investment designation for existing amounts in the
Trustee's Deferral Account provided, however, that such changes in investment
designation will only be valid and applied to the existing amounts in the
Trustee's Deferral Account if the Trustee provides sufficient instruction
regarding amounts to be exchanged. A change in investment designation will be
valid only if, after giving effect to such change in investment designation, the
Trustee has selected no more than four underlying investment securities from the
options made available to the Trustee pursuant to Section 3.3(a)(1). A timely,
valid change in a Trustee's investment designation shall become effective as of
the close of business on the last day of the calendar quarter following receipt
by the President of the Fund of an executed change in investment designation
form.
(3) The investment media deemed to be made available to the
Trustee, and any limitation on the maximum or minimum percentages of the
Trustee's Deferral Account that may be invested in any particular medium, shall
be the same as from time to time communicated to the Trustee by the President of
the Fund.
(b) Except as provided below, the Trustee's Deferral Account
shall be deemed to be invested in accordance with the investment designations,
provided such designations conform to the provisions of this Section. If:
(1) the Trustee does not furnish the President of the Fund
with written investment instructions,
(2) the written investment instructions from the Trustee are
unclear, or
(3) less than all of the Trustee's Deferral Account is
covered by such written investment instructions,
then the Trustee's Deferral Account shall be deemed to be invested in the Fund
until such time as the Trustee shall provide the President of the Fund with
complete investment instructions. Notwithstanding the above, the Board of
Trustees, in its sole discretion, may disregard the Trustee's election and
determine that all Compensation Deferrals shall be deemed to be invested in the
Fund.
5
The Fund shall provide an annual statement to the Trustee showing such
information as is appropriate, including the aggregate amount in the Deferral
Account, as of a reasonably current date.
4. DISTRIBUTIONS FROM DEFERRAL ACCOUNT; FUND TRANSFERS
4.1 In General; Fund Transfer. Distributions from the Trustee's
Deferral Account shall be paid in cash, in generally equal annual installments
over a period of five (5) years beginning on the later of (i) the date of the
Trustee's "separation from service" (as defined under Section 409A of the Code)
due to retirement or Disability and (ii) the date, if any, selected by the
Trustee on the Trustee's Beneficiary Designation and Distribution Election Form
pursuant to a valid deferral election. Notwithstanding the foregoing, in the
event of a Fund Transfer (regardless of whether such event constitutes a Change
in Control Event as defined in the regulations promulgated under Section 409A of
the Code or any successor thereto), any successor fund to a Fund shall
automatically assume this Agreement and succeed to all rights and obligations of
the Fund hereunder, and all terms of this Agreement and all current elections
thereunder shall continue, except that, to the extent the context permits,
references to the Fund, shall instead refer to the successor fund.
Notwithstanding the foregoing, in the event of the liquidation, dissolution or
winding up of the Fund or the distribution of all or substantially all of the
Fund's assets and property other than a Fund Transfer, all unpaid amounts in the
Deferral Account as of the effective date thereof shall be paid in a lump sum on
such effective date, pursuant to the requirements of Section 409A of the Code
for plan terminations and liquidations.
4.2 Death of Trustee. Upon the death of the Trustee prior to the
commencement of the distribution of the amounts credited to the Deferral
Account, the Deferral Account shall be distributed to the Beneficiary over the
number of years during which such amounts were distributable to the Trustee
under Section 4.1 hereof beginning as soon as practicable after the Trustee's
death. Similarly, in the event of the death of the Trustee after the
commencement of such distribution, but prior to the complete distribution of the
Deferral Account, the balance of the amounts in the Deferral Account shall be
distributed to the Beneficiary over the remaining period during which such
amounts were distributable to the Trustee under Section 4.1 hereof. In the event
the Trustee survives the designated Beneficiary, the balance of such Deferral
Account shall be paid in a lump sum to such Trustee's estate.
4.3 Designation of Beneficiary. For purposes of Section 4.2 hereof,
the Trustee's Beneficiary shall be the person or persons so designated by the
Trustee on the Beneficiary Designation and Distribution Election Form and
submitted to the President of the Fund. In the event the Trustee fails to
properly designate a Beneficiary, the balance of such Trustee's Deferred Account
shall be paid in a lump sum to such Trustee's estate.
4.4 Payments Due Missing Persons. The Fund shall make a reasonable
effort to locate all persons entitled to benefits under this Agreement. However,
6
notwithstanding any provisions of this Agreement to the contrary, if, after a
period of five (5) years from the date such benefit shall be due, any such
persons entitled to benefits have not been located, their rights under this
Agreement shall stand suspended. Before this provision becomes operative, the
Fund shall send a certified letter to all such persons to their last known
address advising them that their benefits under this Agreement shall be
suspended. Any such suspended amounts shall be held by the Fund for a period of
three (3) additional years (or a total of eight (8) years from the time the
benefits first become payable) and thereafter, if unclaimed, such amounts shall
be forfeited.
4.5 Forfeitures. Any amounts in the Trustee's Deferral Account that
have been forfeited under Section 3.1 of the Retirement Plan shall be forfeited
hereunder, and shall not be distributed to or for the benefit of the Trustee.
5. AMENDMENTS AND TERMINATION
5.1 Amendments.
(a) The Fund and the Trustee may, by a written instrument signed
by both such parties, amend this Agreement at any time and in any manner.
(b) The Fund reserves the right to amend, in whole or in part,
and in any manner, any or all of the provisions of this Agreement by action of
its Board of Trustees for the purposes of complying with any provision of the
Code or any other technical or legal requirements, provided that:
(1) No such amendment shall make it possible for any part of
the Trustee's Deferral Account to be used for, or diverted to, purposes
other than for the exclusive benefit of the Trustee or the Beneficiaries,
except to the extent otherwise provided in this Agreement; and
(2) No such amendment may reduce the amount of the Trustee's
Deferral Account as of the effective date of such amendment.
(3) If the Board of Trustees determines that, as the result
of the application of Section 409A of the Code, the Trustee or any of the
Funds listed on Exhibit A is likely to suffer tax consequences that are
adverse to the tax consequences that the Board of Trustees intended at the
time of entry into this Agreement, all affected deferrals of Compensation
and the payment of distributions shall be subject to such modification
without the consent of the Trustee as the Board of Trustees shall deem
appropriate under the circumstances.
5.2 Termination. The Trustee and the Fund may, by written instrument
signed by both such parties, terminate this Agreement at any time. The rights of
the Trustee to the Deferral Account shall become payable as of the Valuation
Date
7
next following the effective date of the termination of this Agreement; provided
however, that to the extent required to avoid the imposition of taxes under
Section 409A of the Code, any distribution made pursuant to this Section 5.2
shall comply with the rules regarding plan aggregation and plan termination
under Section 409A of the Code, and in the absence of such compliance, such
distribution shall occur as otherwise scheduled pursuant to this Agreement.
6. MISCELLANEOUS.
6.1 Rights of Creditors.
(a) This Agreement is unfunded. Neither the Trustee nor any other
persons shall have any interest in any specific asset or assets of the Fund by
reason of any Deferral Account hereunder, nor any rights to receive distribution
of the Deferral Account except and as to the extent expressly provided
hereunder. The Fund shall not be required to purchase, hold or dispose of any
investments pursuant to this Agreement; however, if in order to cover its
obligations hereunder the Fund elects to purchase any investments the same shall
continue for all purposes to be a part of the general assets and property of the
Fund, subject to the claims of its general creditors and no person other than
the Fund shall by virtue of the provisions of this Agreement have any interest
in such assets other than an interest as a general creditor.
(b) The rights of the Trustee and the Beneficiaries to the
amounts held in the Deferral Account are unsecured and shall be subject to the
creditors of the Fund. With respect to the payment of amounts held under the
Deferral Account, the Trustee and the Beneficiaries have the status of unsecured
creditors of the Fund. This Agreement is executed on behalf of the Fund by an
officer of the Fund as such and not individually. Any obligation of the Fund
hereunder shall be an unsecured obligation of the Fund and not of any other
person.
6.2 Agents. The Fund may employ agents and provide for such clerical,
legal, actuarial, accounting, advisory or other services as it deems necessary
to perform its duties under this Agreement. The Fund shall bear the cost of such
services and all other expenses it incurs in connection with the administration
of this Agreement.
6.3 Liability and Indemnification. Except for its own gross
negligence, willful misconduct or willful breach of the terms of this Agreement,
the Fund shall be indemnified and held harmless by the Trustee against liability
or losses occurring by reason of any act or omission of the Fund or any other
person.
6.4 Incapacity. If the Fund shall receive evidence satisfactory to it
that the Trustee or any Beneficiary entitled to receive any benefit under the
Agreement is, at the time when such benefit becomes payable, a minor, or is
physically or mentally incompetent to receive such benefit and to give a valid
release therefor, and that another person or an institution is then maintaining
or has custody of the Trustee or Beneficiary and that no guardian, committee or
other representative of the estate of the Trustee or
8
Beneficiary shall have been duly appointed, the Fund may make payment of such
benefit otherwise payable to the Trustee or Beneficiary to such other person or
institution, including a custodian under the Uniform Gifts to Minors Act or
corresponding legislation (such custodian shall be an adult, a guardian of the
minor or a trust company), and the release of such other person or institution
shall be a valid and complete discharge for the payment of such benefit.
6.5 Cooperation of Parties. All parties to this Agreement and any
person claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable for
carrying out this Agreement or any of its provisions.
6.6 Governing Law. This Agreement is made and entered into in the
State of Illinois, and all matters concerning its validity, construction and
administration shall be governed by the laws of the State of Illinois.
6.7 Nonguarantee of Trusteeship. Nothing contained in this Agreement
shall be construed as a contract or guarantee of the right of the Trustee to be,
or remain as, a trustee of the Fund or to receive any, or any particular rate
of, Compensation.
6.8 Counsel. The Fund may consult with legal counsel with respect to
the meaning or construction of this Agreement or its obligations or duties
hereunder or with respect to any action or proceeding or any question of law,
and it shall be fully protected with respect to any action taken or omitted by
it in good faith pursuant to the advice of legal counsel.
6.9 Spendthrift Provision. The Trustee's and Beneficiaries' interests
in the Deferral Account may not be anticipated, sold, encumbered, pledged,
mortgaged, charged, transferred, alienated, assigned nor become subject to
execution, garnishment or attachment, and any attempt to do so by any person
shall render the Deferral Amount immediately forfeitable.
6.10 Notices. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or mailed by United
States registered or certified mail, return receipt requested, postage prepaid,
or by nationally recognized overnight delivery service providing for a signed
return receipt, addressed to the Trustee at the home address set forth in the
Fund's records and to the Fund at the address set forth in the Fund's documents,
provided that all notices to the Fund shall be directed to the attention of the
President of the Fund or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
6.11 Entire Agreement. This Agreement and the applicable provisions of
the Retirement Plan contain the entire understanding between the Fund and the
Trustee
9
with respect to the payment of non-qualified elective deferred compensation by
the Fund to the Trustee.
6.12 Interpretation of Agreement. Interpretations of, and
determinations related to, this Agreement made by the Fund in good faith,
including any determinations of the amounts of the Deferral Account, shall be
conclusive and binding upon all parties; and the Fund shall not incur any
liability to the 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.
6.13 Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the Fund and its successors and assigns and to
the Trustee and such Trustee's heirs, executors, administrators and personal
representatives.
6.14 Severability. In the event any one or more provisions of this
Agreement are held to be invalid or unenforceable, such illegality or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof and such other provisions shall remain in full force and
effect unaffected by such invalidity or unenforceability.
6.15 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
6.16 Section 409A of the Code. For purposes of this Agreement, each
amount to be paid or benefit to be provided shall be construed as a separate
identified payment for purposes of Section 409A of the Code. Notwithstanding any
provision to the contrary in this Agreement, to the extent required to avoid the
imposition of taxes under Section 409A of the Code, no payment or distribution
under this Agreement which becomes payable by reason of the Trustee's
termination of employment or service with the Fund will be made to the Trustee
unless the Trustee's termination of employment or service constitutes a
"separation from service" (as such term is defined in Treasury Regulations
issued under Section 409A of the Code). It is intended that this Agreement shall
comply with the provisions of Section 409A of the Code so as not to subject any
Trustee to the payment of additional taxes and interest under Section 409A of
the Code. In furtherance of this intent, this Agreement shall be interpreted,
operated, and administered in a manner consistent with these intentions.
10
IN WITNESS WHEREOF, the parties hereto have caused this Deferred
Compensation Agreement to be executed as of the day and year first above
written.
On behalf of the Funds listed on
Exhibit A attached hereto:
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
On behalf of the Trustee listed
on page 1 hereto:
----------------------------------------
Trustee Signature
11
