Exhibit 10.8
PUTNAM INVESTMENTS LLC
EXECUTIVE DEFERRED BONUS PLAN
SECTION 1. PURPOSE
The purpose of this Putnam Investments LLC Executive Deferred Bonus Plan
is to foster and promote the long-term financial success of Putnam and MMC and
to increase materially stockholder value by (A) enabling Putnam to retain the
services of an outstanding management team on whose judgment, interest and
special effort the successful conduct of its operations is dependent and (B)
motivating superior performance by participants in the Plan.
SECTION 2. DEFINITIONS
(a) DEFINITIONS. Whenever used herein, the following terms shall
have the respective meanings set forth below.
(i) "Account" means the account established pursuant to and
administered in accordance with Section 5.
(ii) "Accredited Investor" means an "accredited investor" under the
individual net worth test set forth in paragraph (a)(5) of Rule 501 ("Rule
501") of Regulation D under the Securities Act of 1933 ("Securities Act"),
the individual net income test set forth in paragraph (a)(6) of Rule 501
or any provision which the Committee may determine is a successor or
comparable provision to said paragraphs (a)(5) or (a)(6).
(iii) "AFR" shall mean the fixed rate of return equal to the
long-term "applicable federal rate" (within the meaning of section 1274(d)
of the Code and the Treasury Regulations thereunder), compounded
semiannually, and in effect at the time Putnam makes a capital
contribution with respect to the initial Related Investment.
(iv) "Beneficiary" means the person or persons named by the
Participant pursuant to Section 12(b).
(v) "Board" means the Board of Directors of Putnam.
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(vi) "Cause" means misappropriation of assets of Putnam or any
Subsidiary, willful misconduct in the performance of the duties of the
Participant's position, refusal to perform the duties of the Participant's
position, violation of the Participant's Non-Solicitation Agreement or
Confidentiality Agreement or other restrictive covenant with Putnam or any
Subsidiary, violation of the Putnam Code of Ethics, violation of rules and
regulations issued by any regulatory authority, breach of fiduciary duty
or breach of trust, willful violation of an important Putnam policy,
conviction of a felony, imprisonment for any crime, or any other action
likely to bring substantial discredit to Putnam.
(vii) "Change in Control of MMC" means the first to occur of the
following events after the Effective Date:
a) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than MMC, any trustee or other fiduciary
holding securities under an employee benefit plan of MMC or any
corporation owned, directly or indirectly, by the stockholders of
MMC in substantially the same proportions as their ownership of
stock of MMC), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of MMC representing 50% or more of the combined voting
power of MMC's then outstanding voting securities; or
b) during any period of two consecutive years, individuals
who at the beginning of such period constitute the MMC Board, and
any new director (other than a director designated by a person who
has entered into an agreement with MMC to effect a transaction
described in clause a), c), or d) of this definition) whose election
by the MMC Board or nomination for election by MMC's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least
a majority thereof; or
c) the stockholders of MMC approve a merger or
consolidation of MMC with any other corporation, other than (I) a
merger or consolidation which would result in the voting
securities of
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MMC outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving or parent entity) more than 50% of the
combined voting power of the voting securities of MMC or such
surviving or parent entity outstanding immediately after such a
merger or consolidation or (II) a merger or consolidation effected
to implement a recapitalization of MMC (or similar transaction)
in which no "person" (as herein above defined) acquired 50% or more
of the combined voting power of MMC's then outstanding securities;
or
d) the stockholders of MMC approve a plan of complete
liquidation of MMC or an agreement for the sale or disposition by
MMC of all or substantially all of MMC's assets (or any transaction
having a similar effect).
(viii) "Change in Control of Putnam" means the first to occur of the
following events after the Effective Date:
a) MMC approves a plan of complete liquidation of Putnam,
or a sale or other disposition of all or substantially all of its
assets to an entity of which MMC holds less than 50% of the voting
power of securities; or
b) MMC, together with its subsidiaries, trustees or other
fiduciaries holding securities of Putnam under an employee benefit
plan maintained by MMC or by a subsidiary of MMC, ceases for any
reason (including by reason of a sale or other disposition,
including a spinoff or public offering) to be a beneficial owner of
securities of Putnam representing more than 50% of the voting power
of the securities of Putnam.
(ix) "Code" means the Internal Revenue Code of 1986, as amended.
(x) "Committee" means a committee appointed by the Board which
shall consist of two or more members of the Board, including the Chief
Executive Officer of Putnam and one or more other members of the Board who
shall be appointed and serve at the pleasure of the Board.
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(xi) "Confidentiality Agreement" means the Confidentiality
Agreement or any similar agreement or provision in effect from time to
time between the Participant and the Employer.
(xii) "Deferred Bonus" has the meaning given in Section 3.
(xiii) "Effective Date" means the date specified as such by the
Board when it approves the Plan.
(xiv) "Employee" means any executive or senior officer or other key
employee of Putnam or any Subsidiary who is an Accredited Investor, or,
subject to the determination by the Committee, who is not an Accredited
Investor, but whose designation as an Employee would not cause the Plan or
any related transactions not to qualify for the exemption from
registration provided by Regulation D promulgated under the Securities
Act.
(xv) "Employer" means the Putnam entity that employs the
Participant.
(xvi) "Fund" means the Putnam Investments Employees' Securities
Company II LLC that is being separately offered to Participants.
(xvii) "MMC" means Marsh & McLennan Companies, Inc., a Delaware
corporation, and any successor thereto.
(xviii)"Non-Solicitation Agreement" means the Non-Solicitation
Agreement or any similar agreement or provision in effect from time to
time between the Participant and the Employer.
(xix) "Participant" means any Employee designated by the Committee
to receive a Deferred Bonus pursuant to Section 3.
(xx) "Plan" means this Putnam Investments Executive Deferred Bonus
Plan, as in effect and as may be amended from time to time.
(xxi) "Putnam" means Putnam Investments LLC, a Delaware limited
liability company, and any successor thereto.
(xxii)"Related Investment" means a portfolio investment by the Fund,
which investment is designated by the Committee as relating to all or a
portion of a Deferred Bonus under the Plan.
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(xxiii)"Retirement" means, as to a Participant, a termination of
the Participant's employment under circumstances that the Committee
determines as qualifying as retirement for purposes of the Plan and not
inconsistent with the treatment of the Participant under other Putnam
plans.
(xxiv) "Special Termination" means termination of a Participant's
employment by reason of Participant's death, Total Disability or
Retirement.
(xxv) "Subsidiary" means any corporation, limited liability company
or other entity a majority of whose outstanding voting securities is
owned, directly or indirectly, by Putnam.
(xxvi) "Total Disability" means, as to any Participant, a total
disability within the meaning of any long-term disability plan maintained
for the benefit of the Participant or, if the Participant is not covered
by such a disability plan, then as determined by the Committee. A person
will be considered to have terminated employment due to his "Total
Disability" as of the first day of his continuous absence from work on
account of the disability supporting his certification as having a Total
Disability.
(b) GENDER AND NUMBER. Except where the context indicates
otherwise, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural and the plural shall
include the single.
SECTION 3. DEFERRED BONUS
The Committee may grant a bonus to any Employee selected by the Committee
and in such amount as determined by the Committee, which bonus shall be required
to be deferred and shall be payable to the Participant, if at all, only in
accordance with the terms of the Plan and on the date or dates provided for
herein (the "Deferred Bonus").
SECTION 4. ELIGIBILITY TO INVEST IN THE FUND
In connection with the grant of a Deferred Bonus to an Employee under this
Plan, a Participant must agree to subscribe for a Profits Interest in the Fund
in a capital commitment amount equal to the Participant's Deferred Bonus. An
Employee who elects to become a Participant shall agree to do so by entering
into such agreement or agreements as the Committee determines appropriate.
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SECTION 5. ACCOUNT
(a) ESTABLISHMENT OF ACCOUNT. Putnam shall establish a book entry
Account for each Participant. The Account is notional and shall be used for
recordkeeping purposes only. Neither Putnam nor the Employer nor any other
person shall be required to fund any Accounts or set aside funds for this
purpose. Each Participant's Account (I) shall be increased by (V) the amount of
any Deferred Bonus granted to such Participant under this Plan, (W) any notional
earnings credited to such Participant under this Plan and (X) any other credits
authorized under this Plan as determined by the Committee in its sole and
absolute discretion and (II) shall be decreased by (Y) any payments made to such
Participant under this Plan and (Z) any other debits authorized under this Plan
as determined by the Committee in its sole and absolute discretion. As of the
end of each calendar quarter, Putnam shall provide each Participant with a
statement of his Account reflecting debits and credits to such Account since the
prior statement.
(b) NOTIONAL EARNINGS ON ACCOUNT. The portion of a Participant's
Account designated by the Committee as corresponding to a Related Investment
shall be credited with the AFR commencing on the date such Related Investment is
made through the date that Fund's "Managing Member" has received the "AFR
Return" (in each case as defined in the Limited Liability Company Agreement of
the Fund), and the balance of the Account shall be credited with the rate of
earnings applicable from time to time to a short-term investment vehicle
designated by the Committee.
(c) PAYMENTS. A Participant's Account shall be reduced by any
payment made to or on behalf of the Participant in reference to the
Participant's Account as of the date such payment is made.
(d) VESTING AND FORFEITURE. Unless determined otherwise by the
Committee, and except as otherwise provided in Section 7 and Section 8, a
Participant shall, subject to his or her continuous employment with Putnam or
one of its Subsidiaries, vest in his Account in accordance with the table
attached as SCHEDULE A hereto. A Participant's Account will be reduced by the
amount of any forfeitures hereunder.
SECTION 6. PAYMENTS IN RESPECT OF AN ACCOUNT.
Except to the extent otherwise expressly provided herein, no payment shall
be made in reference to a Participant's Account until the earlier of (I) the
eighth
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anniversary of the date a Deferred Bonus is credited to the Participant's
Account or (II) any date determined by the Committee that is at least one year
after the date as of which the Deferred Bonus was credited to the Participant's
Account. In making a determination under the preceding sentence, the Committee
may take into consideration any factors it deems relevant in its sole and
absolute discretion. Unless otherwise determined by the Committee, any payment
in reference to a Participant's Account shall be made in a single lump sum in
cash as soon as practicable following the date such amount is first payable
under the preceding sentence.
SECTION 7. TERMINATION OF EMPLOYMENT
(a) SPECIAL TERMINATION. Unless otherwise determined by the
Committee, in the event that a Participant's employment with Putnam and the
Subsidiaries terminates by reason of a Special Termination, subject to such
conditions as the Committee may prescribe (including forfeiture of all or any
portion of the Participant's Account upon violation of the Participant's
Non-Solicitation or Confidentiality Agreement), the Participant shall be fully
vested in his Account as of the date of such termination, and payments equal to
the balance of the Participant's vested Account shall be made in accordance with
Section 6 (such balance determined as of the date of such payment).
(b) TERMINATION FOR CAUSE. Unless otherwise determined by the
Committee, in the event that a Participant's employment with Putnam and the
Subsidiaries is terminated for Cause, the Participant shall forfeit his entire
Account.
(c) OTHER TERMINATIONS. Except as otherwise provided herein, and
unless otherwise determined by the Committee, in the event that a Participant's
employment with Putnam, its parent, the Participant's Employer or any other
Subsidiary terminates for any reason other than a Special Termination or a
termination for Cause, subject to such conditions as the Committee may prescribe
(including forfeiture of all or any portion of the Participant's Account upon
violation of the Participant's Non-Solicitation or Confidentiality Agreement),
payments equal to the balance of the Participant's vested Account shall be made
in accordance with Section 6 (such balance determined as of the date of such
payment) and any portion of the Account which is not vested as of the date of
such termination shall be forfeited as of such date.
(d) BREACH OF NON-SOLICITATION AGREEMENT. Unless otherwise
determined by the Committee, in the event that a Participant breaches such
Participant's Non-Solicitation Agreement, such Participant shall forfeit his
entire Account and shall return to the Employer 50% of any amounts that the
Participant may have previously received with respect to his Account.
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(e) BREACH OF CONFIDENTIALITY AGREEMENT. Unless otherwise
determined by the Committee, in the event that a Participant breaches such
Participant's Confidentiality Agreement, such Participant shall forfeit his
entire Account.
SECTION 8. CHANGE IN CONTROL
In the event of a Change in Control of MMC or a Change in Control of
Putnam, each Participant shall be fully vested in his Account.
SECTION 9. TRANSFERABILITY
Neither a Participant nor such Participant's Beneficiary shall have the
right or power to sell, exchange, pledge, transfer, assign or otherwise encumber
or dispose of such Participant's or Beneficiary's rights or benefits under this
Plan (including, without limitation, any rights in respect of the Participant's
or Beneficiary's Account), other than in accordance with this Section 9. The
Participant's or Beneficiary's interest in the Participant's Account shall also
not be subject to seizure for the payment of any debt, judgment, alimony or
separate maintenance or be transferable by the operation of law in the event of
the Participant's or any Beneficiary's bankruptcy or insolvency. In the event of
a Participant's death, a payment in an amount equal to the value of the
Participant's Account shall be paid to the Beneficiary in accordance with
Section 6.
SECTION 10. ADMINISTRATION
(a) ADMINISTRATION. The administrator of the Plan shall be the
Committee. The Committee shall have the authority, subject to the terms of the
Plan, to interpret the Plan; to determine the amount of benefits payable to each
Participant under the Plan; to adopt, amend and rescind rules and regulations
for the administration of the Plan; and to make all determinations necessary or
advisable for the administration of the Plan. Whenever the Plan provides that
the Committee may make any determination or decision, or take any action, the
Committee shall be permitted to do so in its sole and absolute discretion. In
the exercise of its discretion hereunder, the Committee may treat different
Participants, including similarly situated Participants, differently, and may
treat the same Participant differently at different times, and in so exercising
its discretion, may take any factor or factors into account, and may disregard
any factor or factors, as it determines in its sole
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and absolute discretion. Any action taken or decision made by the Committee in
connection with the Plan, including, without limitation, the interpretation by
the Committee of any provision of the Plan, shall be final and binding on each
affected Employee, Participant or Beneficiary and any persons claiming
hereunder.
(b) ACTIONS BY PUTNAM OR THE EMPLOYER. Putnam shall be the sponsor
of the Plan, and any action taken by Putnam (or any of its officers, directors
or agents, including the members of the Board, but excluding the members of the
Committee solely when acting for the Committee) shall be taken solely in such
capacity. Any action required or permitted to be taken by Putnam pursuant to the
Plan may be taken by any authorized officer without further action of the Board
or the board of directors of the Employer (or any committee thereof). In no
event shall the consent of the Employer be required with respect to any action
(including any discretionary action) taken by Putnam or any of its officers,
directors or agents, including the members of the Board, pursuant to or in
accordance with the terms of the Plan.
SECTION 11. AMENDMENT AND TERMINATION
The Committee at any time may terminate or suspend the Plan, and may from
time to time amend or modify the Plan. No amendment, modification, termination
or suspension of the Plan shall in any manner materially adversely affect any
award theretofore granted under the Plan; PROVIDED that the Committee may amend
the Plan at any time without any such consent to the extent necessary to ensure
compliance with tax, securities or any other applicable laws.
SECTION 12. MISCELLANEOUS
(a) WITHHOLDING. Any payment made or other compensation provided
under the Plan shall be reduced by any amounts required to be withheld or paid
with respect to such payment or compensation under all applicable federal, state
and local tax and other laws and regulations which may be in effect as of the
date of such payment.
(b) BENEFICIARY DESIGNATION. Each Participant under the Plan may
from time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) by whom any right under the Plan is to be
exercised in case of his death. Each designation will revoke all prior
designations by the same Participant, shall be in a form reasonably prescribed
by the Committee, and will be effective only when filed by the Participant in
writing with the Committee during his
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lifetime. In absence of any designation, the Participant's Beneficiary shall be
his estate.
(c) NO GUARANTEE OF EMPLOYMENT OR PARTICIPATION. Nothing in the
Plan or any agreement or document evidencing an award hereunder shall interfere
with or limit in any way the right of Putnam, MMC or any Subsidiary to terminate
any Participant's employment at any time, or confer upon any Participant any
right to continue in the employ of Putnam, MMC or any Subsidiary. No Employee
shall have a right to be selected as a Participant or, having been so selected,
to receive any bonus or other compensation that may be deferred hereunder.
(d) NO RIGHTS TO CORPORATE ASSETS. The Plan is an unfunded plan of
deferred compensation, and nothing in the Plan shall give a Participant, the
Participant's Beneficiaries or any other person any interest of any kind in the
assets of the Employer, Putnam or any affiliates of either or create a trust or
fiduciary relationship of any kind between the Employer, Putnam or any
affiliates of either and any such person. Notwithstanding anything in the Plan
to the contrary, nothing in this Plan shall be construed to limit the right of
the Fund to sell, exchange, pledge, assign, transfer or otherwise encumber or
dispose of any Related Investment it shall hold from time to time. The
obligations hereunder to any Participant shall be the sole responsibility of
Putnam.
(e) NO LIMIT ON CORPORATE ACTIONS. Except as otherwise provided in
Section 11, nothing contained in the Plan shall prevent an Employer from taking
any action which is deemed by the Employer to be appropriate or in its best
interest, whether or not such action would have any adverse effect on the Plan
or any Participant's interests under the Plan. No Participant, Beneficiary or
other person shall have any claim against such Employer as a result of any such
action.
(f) COMPLIANCE WITH APPLICABLE LAWS. An Employer shall not be
required to take any action, including the making of any payment under the Plan,
if such action would violate any applicable federal or state law.
(g) INDEMNIFICATION. Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless
by Putnam to the fullest extent permitted by law from and against any and all
losses, costs, liabilities and expenses (including any related attorneys' fees
and advances thereof) in connection with, based upon or arising or resulting
from any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
the Plan and from and
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against any and all amounts paid by him in settlement thereof, with Putnam's
approval, or paid by him in satisfaction of any judgment in any such action,
suit or proceeding against him, provided that he shall give Putnam an
opportunity, at its own expense, to defend the same before he undertakes to
defend it on his own behalf. The foregoing right of indemnification shall not be
exclusive and shall be independent of any other rights of indemnification to
which such persons may be entitled under Putnam's Articles of Organization or
By-laws, by contract, as a matter of law, or otherwise.
(h) NO LIMITATION ON COMPENSATION. Nothing in the Plan shall be
construed to limit the right of Putnam, MMC or any Subsidiary to establish other
plans or to pay compensation to its employees, in cash or property, in a manner
that is not expressly authorized under the Plan.
(i) SECURITIES LAWS COMPLIANCE. The Plan shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required. No
interest shall be granted in or under the Plan, if such grant or issuance would
result in a violation of applicable law, including the federal securities laws
and any applicable state securities laws.
(j) RIGHT OF OFFSET. Notwithstanding anything else contained in
this Plan to the contrary, as a condition of participation in the Plan, each
Participant agrees and acknowledges that any amount due from his Employer or
Putnam may, at the discretion of the Employer or Putnam (as the case may be), be
reduced to the maximum extent permitted by applicable law by any and all amounts
due and owing from the Participant to Putnam or the Employer (but excluding any
obligations owed by the Participant to a private investment fund that has made a
Related Investment).
(k) GOVERNING LAW. The Plan, and all agreements thereunder, shall
be construed in accordance with and governed by the laws of the Commonwealth of
Massachusetts.
(l) SECTION HEADINGS. Titles and headings to sections are for the
purpose of reference only, and in no way limit or otherwise affect the meaning
or interpretation of any provision of the Plan.
(m) NO THIRD PARTY BENEFICIARIES. Nothing expressed or implied in
this Plan is intended or shall be construed to confer upon or give to any person
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(other than a Participant or Beneficiary) any rights or remedies under or by
reason of this Plan.
PUTNAM INVESTMENTS LLC
Sole Member, Putnam Investments Trust,
By:
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Lawrence J. Lasser
President