Plan Details

The Professional Golfers’ Association of America

Deferred Compensation Retirement Plan

(Effective April 2023)

The purpose of this Deferred Compensation Retirement Plan (the “Plan”) is to provide deferred compensation retirement benefits to members of The Professional Golfers’ Association of America (the “PGA”) who significantly contribute to the PGA’s mission of promoting enjoyment and involvement in the sport of golf and contributing to its growth by providing services to golf professionals and the golf industry.

1. Eligibility to Participate

All PGA members in good standing who are not employees of the PGA and have earned at least 200 points, in any Plan Year (as defined below) shall be eligible to participate in the Plan and considered plan participants (“Participants”). For this purpose, Class F members are ineligible to earn points while in Class F status.

2. Commitments to the Plan

(a) Prior to the start of each year, the PGA or its designee (the “Designated Representative”) will determine an amount or range of funds the PGA will commit to the Plan with regard to that year. The amount of funds committed each year shall not exceed the greater of $15 million ($15,000,000) or five percent (5%) of the PGA’s average revenue for the past four fiscal years. For purposes of the Plan a year shall run from April 1st through March 31st of the following calendar year (a “Plan Year”) unless otherwise stated. In determining the annual Plan funding commitment, PGA or the Designated Representative shall consider the following factors: the revenues of the PGA for the preceding year, projected revenues for the upcoming year, and the anticipated future needs of the PGA for funds, market issues impacting PGA and other relevant factors.
(b) No later than one hundred twenty (120) days after the conclusion of each Plan Year, the PGA will purchase investments with a cost to the PGA substantially equal to the amount or within the range of the PGA’s commitment to the Plan with regard to the previous Plan Year as determined by the Designated Representative in accordance with paragraph (a), provided that the Designated Representative may at its discretion direct the PGA to purchase and maintain several investment portfolios with regard to the Plan, with each portfolio reflecting different investment objectives such as, without limitation, a money market portfolio, a fixed income portfolio, a domestic equity portfolio, an international equity portfolio, and any other portfolio as deemed appropriate by the Designated Representative. Any such investment portfolio may consist, in whole or in part, of shares of one or more mutual funds. The investments purchased every year by the PGA for the Plan, together with income from, and proceeds of, those investments will constitute the funds (collectively the “Funds”) intended to provide the PGA with the sums it will need to fulfill its obligations under the Plan. The Designated Representative may from time to time change the investments constituting the Funds, or any part thereof, and invest and/or reinvest any cash in the Funds. The Funds will, at all times, be the property of the PGA, and no Participant in the Plan or other person will have any ownership interest in, or right to, the Funds. Nothing contained in the Plan, and no action taken pursuant to the provisions of the Plan, shall create or be construed to create a trust or fiduciary relationship of any kind between the PGA, its officers or the Designated Representative, on the one hand, and the Participants, or any other person or entity, on the other.

3. Member Accounts

(a) A member earns points under the Plan pursuant to the achievement of certain specified performance objectives (the “Performance Objectives”). The Performance Objectives for each Plan Year shall be outlined in a separate agreement, the PGA Member Deferred Compensation Retirement Plan Point Summary or “Incentive Plan”. The PGA will select Performance Objectives that encourage PGA members to engage in activities that, in its judgement, further the PGA’s exempt function by promoting the golf profession and participation in the sport of golf. The Incentive Plan is expected to award points based on the nature, frequency, and positive impact that such incentivized activities have on meeting the PGA’s objectives. The Incentive Plan requires a member to earn a minimum number of 200 points to receive an allocation under the Plan.
(b) On an ongoing basis throughout the applicable Plan Year or as soon as practicable following the end of each Plan Year, each eligible member will attest to the Performance Objectives such member achieved during the relevant Plan Year and the total points earned by such member for the Plan Year. Such attestation must be counter-executed by another PGA member. Thereafter, the Designated Representative shall evaluate the extent to which each eligible member has met the Performance Objectives for the Plan Year. The PGA and/or the Designated Representative reserves the right to require additional evidence to demonstrate achievement of any Performance Objective.
(c) After the Designated Representative has determined that a member has earned at least 200 points in any Plan Year, the PGA will establish, or cause to be established, and maintain a bookkeeping account for each member for whom an allocation is made by the PGA under the Plan. Once an allocation is made to a member’s account, the member will become a Participant in the Plan. The establishment and maintenance of, and credits to and deductions from, each Participant’s account shall be mere bookkeeping entries, and shall not vest in the Participant any right, title or interest in or to any specific assets of the PGA.
(d) Within one hundred twenty (120) days of the end of a Plan Year, the Designated Representative will determine the value of each point by dividing the amount committed by PGA to the Plan during such Plan Year by the total number of points earned by all Participants during the Plan Year. Thereafter, the Designated Representative will allocate to each Participant’s account an amount equal to the product of (i) the number of points earned by such Participant during the Plan Year and (ii) the value of each point as determined by the Designated Representative in accordance with this subparagraph. The amount allocated to a particular Participant’s account shall not exceed the individual participant cap for the applicable Plan year. The individual participant cap for the 2023 Plan Year shall be $1,500 and shall increase at a rate of three percent (3%) per Plan Year.
(e) In the event the Designated Representative elects to maintain the Funds in several different investment portfolios as provided for in paragraph 2(b), each Participant in the Plan shall be permitted to designate the portfolio into which the amount in their account will be invested. Such designations shall not be binding, but nothing herein shall prevent the Designated Representative from following such designations in all cases and it is expected that they will do so. Participants shall be permitted to change their designations of investment portfolios as often as daily by giving notice in the form and manner prescribed by predetermined uniform procedures. Amounts corresponding to the amounts in the accounts of Participants who do not make such designations will be invested in a money market fund or as otherwise determined by the Designated Representative, in its sole discretion.
(f) Each Participant’s account will be credited (or debited) with net earnings (or losses) on the amounts in such account on a uniform basis (daily, monthly, quarterly, or otherwise, according to predetermined uniform procedures), at a rate equal to the Participant’s share of the return on the applicable investments earned in the preceding period (based on the manner in which the amounts corresponding to the amounts in the Participant’s account were actually invested as provided in paragraphs 2(b) and 3(d) above).

4. Vesting

(a) Beginning with the 2023 Plan Year, amounts allocated to a Participant’s account (as adjusted for earnings and losses thereon) will be fully vested upon active participation in the Plan during any Plan Year. Earning 200 points in a Plan Year shall constitute active participation.
(b) If a Participant dies with unvested amounts in their account or owed to their account, then such unvested amounts will become fully vested immediately upon receipt by the PGA of written notice of the Participant’s death. If a Participant is determined to be totally and permanently disabled based upon examination and review by a qualified and board certified physician so as to be rendered permanently unable to ever again engage in an occupation which is commensurate with their training, education and experience and has unvested amounts in their account or owed to their account on the date of such determination, then such unvested amounts will become fully vested on the date of such determination.

5. Retirement Benefits

(a) The Retirement Date will be the first of April following the time when a Participant becomes 65 years old within a year (the “Retirement Date”).
(b) After the Retirement Date, distributions will be made in accordance with paragraphs (c), (d), (e), (f), (g), (h) and (i) of this Section 5.
(c) Except as provided in (d), (f), and (g) below, Participants will receive Plan benefits in monthly installment payments over 10 years (the “Distribution Period”). The initial payments will be based upon the Retirement Date balance divided by the total payments to be made. Thereafter, the monthly distribution amount will be recalculated annually as the unpaid account balance divided by the remaining number of monthly installments to be paid. In no event shall a distribution be made in excess of the amount in a Participant’s account on the date of a monthly distribution. (d) Except as provided in paragraph (e), within 90 days after the Retirement Date, the Participant will receive monthly payments from the PGA equal to the monthly installment payments as described in 5(c) above.
(e) If the amount computed as provided in paragraph (c) with regard to a Participant does not exceed the applicable amount referenced in Section 402(g)(1)(B) of the Internal Revenue Code (the “Code”) as soon as administratively practicable after the Retirement Date, the PGA will pay the Participant a sum equal to the amount in the Participant’s account on the date of liquidation and the PGA will have no further obligation to make payments to the Participant under the Plan. The applicable amount referenced in Section 402(g)(1)(B) includes any corresponding cost of living adjustments made by the Internal Revenue Service.
(f) If a Participant becomes mentally or physically disabled, such Participant will be entitled to receive an amount equal to the total sum in such Participant’s account at the Retirement Date in a single lump sum payment. A Participant will be considered disabled if:
(i) They are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
(ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, they receive income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the service provider’s employer.
(g) A Participant who earns points during a Plan Year after such Participant’s Retirement Date shall receive a single lump sum distribution of the amount allocated to such Participant’s account for such Plan Year on August 1of the year following the end of such Plan Year
(h) Notwithstanding any other provision of the Plan, beginning in the 2023 Plan Year, a Participant may receive a distribution from their account with respect to amounts vested in their account in the event of an “Unforeseeable Emergency”. The term Unforeseeable Emergency shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The specific circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:
(i) through reimbursement or compensation by insurance or otherwise, or
(ii) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship.
Without limitation, the need to send a Participant’s child to college or the desire to purchase a home shall not constitute an Unforeseeable Emergency. Withdrawals of vested amounts because of an Unforeseeable Emergency shall be permitted only to the extent necessary to satisfy the Unforeseeable Emergency in addition to any amounts needed to pay taxes reasonably anticipated as a result of the distribution. PGA or its Designated Representative shall have sole and absolute discretion as to whether a “Unforeseeable Emergency” event has occurred and the amount any distribution upon such occurrence.

(i) This Section 5 is intended to comply with and shall at all times be administered in accordance with Section 1.409A-3 of the Treasury Regulations.
(j) The obligation of the PGA to pay retirement benefits to a Participant under the Plan will be a mere contractual obligation of the PGA to the Participant. If the PGA should fail to fulfill that obligation, the Participant will have whatever rights may accrue to the Participant at law or otherwise as a result of the PGA’s contractual obligation. However, neither the Participant nor their beneficiary will have a specific right to receive any portion of the Funds, any assets held for the Plan, or otherwise to any particular assets of the PGA.

6. Prohibition against Assignment; Incompetency or Death of Participant

(a) Participants may not assign or otherwise transfer any rights under this Plan including the right to receive retirement benefits. If any Participant attempts to assign or otherwise transfer rights under this Plan the PGA will not recognize that assignment or transfer and notwithstanding an attempted assignment or transfer, except as provided in the next paragraph, the PGA will make all payments due under this Plan to the Participant.
(b) If a Participant is adjudged incompetent, the lump sum payment described in Section 5(f) will be made to the Participant’s guardian. If a participant dies with a fully vested and outstanding account balance, or if such balance becomes vested upon their death pursuant to Section 5(b) herein, payments will be made to the Participant’s beneficiary in the same manner as they would otherwise be made to the Participant. Payments will be made to a Participant’s beneficiary as soon as administratively practicable following the receipt by the PGA of written notice of the Participant’s death. Written notice regarding a Participant’s death shall be mailed to the Designated Representative.

7. Effective Date

The Plan will become effective on April 1, 2023.

8. Amendment and Termination

The PGA may at any time amend, suspend or terminate this Plan. No amendment, suspension or termination of this Plan will, without the consent of the applicable Participant, adversely affect any rights a Participant has obtained prior to the amendment, suspension or termination of this Plan, except that upon termination of the Plan, the PGA may terminate its obligation to continue to credit interest to Participants’ accounts and to pay retirement benefits to Participants who are not already receiving retirement benefits by paying to each Participant, in cash, the amount in the Participant's account when the Plan is terminated. A change in the provisions of this Plan regarding the age at which Participants become eligible to receive retirement benefits or the period over which retirement benefits will be paid will be treated as adversely affecting the rights of everyone who is a Participant at the time of the change to whom the change will apply, whether the change accelerates or defers the age at which Participants become eligible to receive retirement benefits or increases or reduces the period over which retirement benefits will be paid.

9. Status of Plan

The Plan is intended to be a nonelective deferred compensation plan for nonemployees as described in Section 457(e)(12) of the Code. The Plan is not intended to result in recognition of income prior to Participants receiving actual distributions. While the payments provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A of the Code, in no event whatsoever shall the PGA or any of its subsidiaries be liable for any additional tax, interest, or penalties that may be imposed on a Participant as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
PGA may take any action or decide any matter under the terms of this Plan in its sole and absolute discretion. All disputes arising out of or related to the Plan shall be resolved on an individual basis, and not in a class action, representative action, class arbitration or similar proceeding.
By participating in the Plan, members agree to act with integrity and professionalism and failure to do so may be subject to review under the PGA’s Code of Ethics. Further, as a condition of participating in the Plan, each Participant consents to PGA providing information regarding the Participant’s confidential information to third parties to the extent necessary for PGA to administer and otherwise fulfill its obligations under the Plan.

10. Governing Law

All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the laws of the State of Florida without regard to any conflict of laws principles.