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EXHIBIT 7 (b)
THE GALAXY FUND
THE GALAXY VIP FUND
GALAXY FUND II
DEFERRED COMPENSATION PLAN
1. Eligibility. Each Trustee of the Boards of Trustees (the
"Board") of The Galaxy Fund, The Galaxy VIP Fund and Galaxy Fund II (the
"Trusts") shall be eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan").
2. Terms of Participation
(a) A Trustee may elect to participate in the Plan by
signing a 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 Trusts that the Trustee terminates his
participation in the Plan or until such time as the Trusts terminate 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 Trusts (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
Trusts 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.
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3. Deferred Compensation Account. While a Trustee participates
in the Plan pursuant to an Agreement, all deferred compensation payable by the
Trusts for the Trustee's services shall be credited to the Trustee's Deferred
Compensation Account 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 Boards shall specify from time to time the investment options
available under the Plan. The Galaxy VIP Fund's portfolios will not be offered
as investment options 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.
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 Boards, 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
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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 Trusts 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 Trusts and becomes a proprietor, officer, partner, or employee of, or
otherwise becomes affiliated with, any business or entity that is in competition
with any of the Trusts, or becomes employed by any governmental agency having
jurisdiction over the affairs of any of the Trusts, the Trusts reserve the right
at the sole discretion of the Boards 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 Trusts 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 Boards (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)
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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 Trusts reserve
the right to amend or terminate the Plan by a joint resolution of the Boards. 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 Trusts shall not be required to
fund or secure in any way their respective 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 Trusts. 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 Trusts 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 Trusts under the Plan, such right shall be no
greater than the right of any unsecured general creditor of the Trusts. The
Trusts intend 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 Trusts shall have full power
and authority to interpret, construe and administer this Plan and any Agreement
hereunder and their 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 Trusts shall not be liable to any person
for any action taken or omitted in connection with the interpretation and
administration of this
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Plan and any Agreement hereunder unless attributable to their own willful
misconduct or lack of good faith.
(c) Withholding. To the extent required by law, the
Trusts 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 Trusts 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 Trusts to have incurred expense for the person who is otherwise entitled to
payment, in such manner and proportions as the Trusts may determine. Any such
payment shall serve to discharge the liability of the Trusts 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 Trusts.
(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 Trusts 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 Trusts, their
respective 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 January 1, 1997. The Galaxy Fund Deferred Compensation Plan, The Galaxy VIP
Fund Deferred Compensation Plan and Galaxy Fund II Deferred Compensation Plan
(the "Original Plans") are hereby merged into the Plan. Any amounts which were
deferred
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under the Original Plans by a Trustee, and earnings thereon, shall be paid from
the Plan in accordance with the terms of the Trustee's elections under the
Original Plans.
Adopted: December 7, 1995 Adopted by the
Revised: December 5, 1996 Boards of Trustees
of The Galaxy Fund,
The Galaxy VIP Fund and
Galaxy Fund II
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THE GALAXY FUND/THE GALAXY VIP FUND/GALAXY FUND II
DEFERRED COMPENSATION PLAN AGREEMENT
This Agreement is entered into this ____ day of ___________, 19__,
between The Galaxy Fund (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), The Galaxy VIP Fund (consisting of the Money
Market Fund, Equity Fund, Asset Allocation Fund and High Quality Bond Fund),
Galaxy Fund II (together with The Galaxy Fund and The Galaxy VIP Fund, the
"Trusts") (consisting of the Large Company Index, Small Company Index, Utility
Index, U.S. Treasury Index and Municipal Bond Funds) and any other investment
portfolio that may be established by the Trusts in the future, and
____________________ (the "Trustee") pursuant to The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan").
WHEREAS, the Trustee will be rendering valuable services to the Trusts
as a member of the Boards of Trustees (the "Board"),
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and the Trusts are 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
Trusts 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 Trusts 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 Trusts 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.
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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 Plan. The Galaxy VIP
Fund's portfolios will not be offered as investment options
under 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
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 Trusts (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 Trusts intend to invest the amounts in the Trustee's
Account according to the Trustee's requests, the Trusts
reserve 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
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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 Trusts may use to pay benefits
hereunder, shall at all times remain in the Trusts, and the
Trustee and any designated beneficiary shall not have any
property interest whatsoever in any specific assets of the
Trusts.
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 Trusts
(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.
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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 Trusts 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 Trusts 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
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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 Trusts 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 Trusts.
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6. This Agreement constitutes a mere promise by the Trusts 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 Trusts. The Trusts 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 Trusts referred to in this Agreement
shall be made by mailing or delivering such notice to the
Trusts to the attention of the Treasurer, c/o Xxxxxxx Xxxxx,
First Data Investor Services Group, Inc., 0000 Xxxxxxxx Xxxxx,
Xxxxxxxx, XX 00000-0000. 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.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
THE GALAXY FUND
By:___________________________
Title:________________________
THE GALAXY VIP FUND
By:___________________________
Title:________________________
GALAXY FUND II
By:___________________________
Title:________________________
TRUSTEE
______________________________
(Signature of Trustee)
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THE GALAXY FUND/THE GALAXY VIP FUND/GALAXY FUND II
DEFERRED COMPENSATION PLAN
TRUSTEE ACCOUNT ALLOCATION REQUEST
I hereby request to have my Account(s) under the Galaxy Fund/The
Galaxy VIP Fund/Galaxy Fund II Deferred Compensation Plan (the "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 the 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:_________________________________, 1996 ______________________________
