Exhibit 10.5

Execution Copy
UNITED STATES COMMODITY FUNDS LLC
 
DIRECTOR DEFERRED COMPENSATION AGREEMENT
 
This DIRECTOR DEFERRED COMPENSATION AGREEMENT (“Agreement”) is effective as of
April 1, 2010, by and between United States Commodity Funds LLC, a Delaware
limited liability company (the “Company”), each of the Funds (as defined below),
and the undersigned director of the Company (the “Director”).
 
Recitals
 
A.           The board of directors of the Company has determined that it is in
the best interests of the Company and each commodity fund for which the Company
acts as the general partner (each a “Fund”, together, the “Funds”), including
United States Oil Fund, LP, United States 12 Month Oil Fund, LP, United States
Short Oil Fund, LP, United States Natural Gas Fund, LP, United States 12 Month
Natural Gas Fund, LP, United States Short Natural Gas Fund, LP, United States
Heating Oil Fund, LP, United States Gasoline Fund, LP and United States Brent
Oil Fund, LP, to assure that the Company and the Funds will have the continued
dedication and objectivity of the Director.
 
B.           The board of directors believes that it is important to provide the
Director with deferred compensation to provide sufficient incentive to the
Director to continue his service to the Company and the Funds.
 
In consideration of the mutual covenants herein contained, and in consideration
of the Director’s continuing service to the Company, the parties agree as
follows:
 
1.
Definition of Terms. The following terms referred to in this Agreement shall
have the following meanings:

 
 
A.
Cause.  “Cause” shall mean the Director’s gross negligence, willful misconduct
or failure to satisfy his fiduciary duties as a director.

 
 
B.
Deferred Compensation.  “Deferred Compensation” shall mean compensation in an
amount equal to two times the Director’s annual compensation for services as a
director (including compensation for service on any committee of the board of
directors) as of the date hereof.

 
 
C.
Disinterested Board. “Disinterested Board” shall mean the board of directors of
the Company excluding those members of the board of directors, if any, who are
parties to agreements or arrangements identical to or substantially similar to
this Agreement.

 
 
 

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D.
Resignation for Good Reason. “Resignation for Good Reason” shall mean the
Director’s resignation because (i) his compensation as a Director decreases
below the amount of compensation in effect on the date of this Agreement,
(ii) his expenses are not reimbursed at least to the same degree as they were
reimbursed during the period that he served as a director prior to the date of
this Agreement, (iii) there is any material adverse change in his duties as a
director of the Company from his current duties, or any material increase in the
amount of time (including travel time) necessary to perform such duties from the
amount of time currently spent by him, (iv) the Company fails to maintain
directors and officers errors and omissions insurance coverage at least
equivalent in amount and terms to the current coverage, (v) the Company breaches
this Agreement, or (vi) circumstances are imposed on him by the Company that
would, in his reasonable judgment, make him unable to perform his duties as a
director of the Company in an appropriate manner.

 
 
E.
Separation from Service.  “Separation from Service” shall mean the Director’s
separation from service as a member of the Board within the meaning of Section
409A of the Internal Revenue Code and the regulations thereunder.

 
2.
Deferred Compensation.

 
 
A.
Payment of Deferred Compensation. The Deferred Compensation shall be paid in the
manner set forth in Section 2.B and 2. C below on the earliest to occur of
(i) April 1, 2012, (ii) the Director’s Separation from Service, or (iii) the
Director’s death.  Notwithstanding the foregoing, upon the Director’s Separation
from Service prior to April 1, 2012 due to (A) the Director’s voluntary
resignation that is other than a Resignation for Good Reason or (B) Cause, the
Director shall forfeit and shall not be entitled to receive payment of his
Deferred Compensation.

 
 
B.
Timing of Payment of Deferred Compensation. The Deferred Compensation shall be
paid to the Director (or in the event of the Director’s death, (i) to his
beneficiary designated in accordance with procedures established by the Company
or (ii) if no such beneficiary is designated, to his estate) by the Funds in a
single lump sum within fourteen days after the date such Deferred Compensation
becomes due and payable to the Director pursuant to Section 2.A.

 
 
C.
Payment by the Funds.  Payment of the Deferred Compensation shall be apportioned
among the Funds in a manner consistent with the payment of fees and expenses of
the directors.

 
3.
Segregated Account.  An amount equal to the Deferred Compensation shall be
deposited within fourteen days of the effective date of this Agreement  and
maintained in a segregated account of the Funds to be held by the Funds’
custodian, Brown Brothers Harriman & Co., Inc. (“BBH”), on behalf of the Company
and the Funds.  However, the segregated account and any other assets of the
Company and the Funds shall not be treated as set aside for or dedicated to the
Director, and the Deferred Compensation is not intended to be treated as funded
for purposes of the Internal Revenue Code or otherwise.  The Director shall have
no interest in or claim on such segregated account or any other assets of the
Company or the Funds other than that of a general creditor.

 

 
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4.
Termination and Amendment of this Agreement.

 
 
A.
Termination. This Agreement shall terminate on the date that all obligations of
the parties hereunder have been satisfied.

 
 
B.
Form of Amendment. The form of any amendment of this Agreement shall be a
written instrument signed by the Director and by a duly authorized officer or
officers of the Company.  Any such amendment shall have been approved by the
Disinterested Board.

 
5.
Successors.  Any successor to the Company or any of the Funds (whether direct or
indirect and whether by purchase, merger, consolidation, liquidation or
otherwise) or to all or substantially all of the business and/or assets of the
Company or any of the Funds, as applicable, shall assume the obligations under
this Agreement.  For all purposes under this Agreement, the term “Company” or
“Fund” shall include any successor to the business and/or assets of the Company
or any Fund, as applicable, which becomes bound by the terms of this Agreement
by operation of law.

 
6.
Notice. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally
delivered or when mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid. In the case of the Director, mailed notices shall
be addressed to him at the home address that was most recently communicated to
the Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.

 
7.
Miscellaneous Provisions.

 
 
A.
Compliance with Section 409A.  This Agreement is intended to comply with Section
409A of the Internal Revenue Code and the regulations thereunder (“Section
409A”) and shall be interpreted and operated in accordance with such intent.  In
the event that a Director is a “specified employee” within the meaning of
Section 409A, any amounts payable under this Agreement that constitute deferred
compensation within the meaning of Section 409A and that become payable upon a
Separation from Service shall be delayed and paid upon the earlier of the first
day of the seventh  month following such Separation from Service or the
Director’s death, if such delay is necessary to comply with Section 409A.  Any
adverse tax consequences incurred by the Director under this Agreement, whether
a result of Section 409A or otherwise, are the sole responsibility of the
affected Director.

 
 
B.
Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed
by the Director and by an authorized officer of the Company.  No waiver by
either party of any breach of, or of compliance with, any condition or provision
of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

 
 
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C.
Whole Agreement. No agreements, representations or understandings (whether oral
or written and whether express or implied) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter hereof.

 
 
D.
Choice of Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the laws of the State of California.

 
 
E.
Severability. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision hereof, which shall remain in full force and effect.

 
 
F.
No Assignment of Benefits. The rights of any person to payments or benefits
under this Agreement shall not be made subject to option or assignment, either
by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor’s
process, and any action in violation of this subsection (E) shall be void.

 
 
G.
Assignment by Company and the Funds. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company or to the Company.  In the
event of any such assignment, the term “Company” when used in a section of this
Agreement shall mean the Company that the Director is actually associated
with.  No Fund may assign this Agreement without the prior written consent of
the Director.

 
 
H.
Headings. The headings of sections herein are included solely for convenience of
reference and shall not control the meaning or interpretation of any provisions
of this Agreement.

 
 
I.
Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and
the same instrument.

 
 
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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case
of the Company by its duly authorized officer, as of the day and year first
above written.
 

 
United States Commodity Funds LLC
       
By: 
  
   
Name:
   
Title:

 

 
United States Oil Fund, LP, by its general partner United
States Commodity Funds LLC 
       
By: 
  
   
Name:
   
Title:
       
United States 12 Month Oil Fund, LP, by its general
partner United States Commodity Funds LLC
       
By:
  
   
Name:
   
Title:
       
United States Short Oil Fund, LP, by its general partner
United States Commodity Funds LLC
       
By:
  
   
Name:
   
Title:
       
United States Natural Gas Fund, LP, by its general
partner United States Commodity Funds LLC
       
By: 
  
   
Name:
   
Title:

 
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United States 12 Month Natural Gas Fund, LP, by its
general partner United States Commodity Funds
LLC
       
By:
  
   
Name:
   
Title:
       
United States Short Natural Gas Fund, LP, by its
general partner United States Commodity Funds
LLC
       
By:
  
   
Name:
   
Title:
       
United States Heating Oil Fund, LP, by its general
partner United States Commodity Funds LLC
       
By:
  
   
Name:
   
Title:
       
United States Gasoline Fund, LP, by its general
partner United States Commodity Funds LLC
       
By:
  
   
Name:
   
Title:
       
United States Brent Oil Fund, LP, by its general
partner United States Commodity Funds LLC
       
By:
  
   
Name:
   
Title:
       
Director
       
  
 
Name:

 
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