Exhibit H(16)
INDEMNIFICATION AGREEMENT
This agreement is entered into as of ____________________, 2004
("AGREEMENT"), by and between Gartmore Mutual Funds, an Ohio business trust (the
"TRUST"), and the undersigned trustee and/or officer ("INDEMNITEE").
Recitals
WHEREAS, it is essential to the Trust to retain and attract as trustees
and officers the most capable persons available; and
WHEREAS, through its Declaration of Trust, the Trust provides for the
indemnification of its trustees and officers; and
WHEREAS, the vagaries of amendments to and/or interpretations of legal
doctrines, statutes, and the Declaration of Trust and By-Laws of the Trust may
render uncertain the indemnification provided to the trustees and officers of
the Trust; and
WHEREAS, the board of trustees of the Trust (the "BOARD") has concluded
that such uncertainty and the continuation of present trends in litigation
against investment company trustees and officers inevitably will result in less
effective direction and supervision of the Trust's business affairs, and deems
such consequences to be so detrimental to the best interest of the Trust that it
is not only reasonable and prudent but necessary for the Trust contractually to
obligate itself to indemnify in a reasonable and adequate manner its trustees
and officers, and to establish procedures and presumptions with respect thereto
to make the process of indemnification more timely, efficient, and certain; and
WHEREAS, the Ohio Revised Code (including without limitation chapter 1746
thereof), under which the Trust is formed, does not prohibit an Ohio business
trust from indemnifying its trustees and officers; and
WHEREAS, the Trust desires to have Indemnitee serve or continue to serve
as a trustee and/or officer for the convenience of or to represent the interests
of the Trust free from undue concern for unpredictable, inappropriate, or
unreasonable claims for damages and related costs and expenses by reason of
Indemnitee's Corporate Status (as defined below), and Indemnitee desires to
serve or continue to serve as a trustee and/or officer provided that Indemnitee
is furnished the indemnity and other rights provided for hereinafter;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which the parties hereby acknowledge, the Trust and Indemnitee do
hereby covenant and agree as follows:
Section 1. Definitions. For purposes of this Agreement:
(a) "CHANGE IN CONTROL" means: (i) the acquisition of the Trust by another
entity, or the merger of the Trust into another entity, such that the Trust is
not the surviving entity, or the consolidation of the Trust with another entity,
or the acquisition of all or substantially all the assets of the Trust by
another entity, unless such acquisition, merger, consolidation or acquisition
1
of all or substantially all the assets, of the Trust, is completed merely for
the purpose of effecting a redomestication or reincorporation of the Trust into
another business form or jurisdiction; or (ii) the appointment of a receiver,
conservator, trustee, liquidator, rehabilitator, or any similar official for or
with respect to the Trust. Notwithstanding and without limiting the foregoing, a
"Change in Control" shall include a change in the membership of the Board that
is opposed by a majority of the then-current trustees of the Trust who are not
"interested persons" of the Trust, as that term is defined by Section 2(a)(19)
of the Investment Company Act of 1940, as amended (the "1940 ACT"), or who are
"interested persons" solely by reason of being an officer of the Trust.
(b) "CORPORATE STATUS" means the status as a trustee or officer of the
Trust of a person who is or was a trustee or officer of the Trust.
(c) "DISABLING CONDUCT" for the purposes of this Agreement means (i) a
final adjudication that an act or omission of Indemnitee, in the performance of
Indemnitee's duties as a trustee or officer of the Trust that gave rise to the
claims, issues, or matters asserted against Indemnitee in a Proceeding, was
committed in bad faith or was the result of active or deliberate dishonesty, or
that Indemnitee actually received an improper benefit in money, property, or
services, or in the case of a criminal proceeding, that Indemnitee had
reasonable cause to believe that the act or omission was unlawful; (ii) with
respect to any liability of Indemnitee to the Trust or its shareholders, a final
adjudication, or other determination in accordance with Sections 5(b) and 6
hereof, that Indemnitee, in the performance of Indemnitee's duties as a trustee
or officer of the Trust that gave rise to the claims, issues, or matters
asserted against Indemnitee in a Proceeding, engaged in willful misfeasance, bad
faith, gross negligence, or reckless disregard of Indemnitee's duties as a
trustee and/or officer of the Trust as described in Section 17(h) and (i) of the
1940 Act; or (iii) a final adjudication of any act or conduct by Indemnitee in a
Corporate Status that would make Indemnitee ineligible for service with an
investment company under Section 9(a)(1) or 9(a)(2) of the 1940 Act.
(d) "DISINTERESTED TRUSTEE" means a trustee of the Trust (i) who is not
and was not a party to the Proceeding in respect of which indemnification or
advancement of Expenses is sought by Indemnitee and (ii) who is not an
"interested person" of the Trust as that term is defined by Section 2(a)(19) of
the 1940 Act, or who is an "interested person" solely by reason of being an
officer of the Trust.
(e) "EXPENSES" means all reasonable attorneys' fees and disbursements,
retainers, court costs, transcript costs, fees and expenses of experts, witness
fees and expenses, travel expenses, duplicating costs, computerized legal
research costs, printing and binding costs, telephone, facsimile, and other
technology charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, or investigating, or preparing to prosecute, defend, or investigate,
or being or preparing to be a witness in, a Proceeding.
(f) "INDEMNIFIED PARTIES" means Indemnitee's spouse, Indemnitee's heirs,
the executors, administrators, and other legal representatives of Indemnitee's
estate, the beneficiaries of Indemnitee's estate, including without limitation
any trust created by will, and the trustees and beneficiaries thereof.
2
(g) "INDEPENDENT COUNSEL" for the purposes of this Agreement means an
attorney who, or a law firm the attorneys of which, is selected or appointed in
accordance with Section 5(c) hereof and which: (i) has experience in matters of
corporate governance and investment company law; (ii) at the time of selection
as Independent Counsel is not currently representing, and within two (2) years
prior to that time has not represented, the Trust, Indemnitee, or any other
party to the Proceeding with respect to which Indemnitee seeks indemnification
or advancement of Expenses, in or with respect to any legal matter, other than
serving as counsel to the Trust or to Indemnitee in connection with the then
current Proceeding or a proceeding arising from the same or a similar set of
facts that gave rise to the Proceeding; and (iii) confirms in writing that the
attorney or law firm satisfies the above criteria and is aware of no conflict of
interest or other prohibition under the applicable standards of professional
conduct prevailing at that time that would result from or apply to the
attorney's or law firm's service as Independent Counsel with respect to such
Proceeding.
(h) "PROCEEDING" means any threatened, pending, or completed action, suit,
arbitration, alternative dispute resolution mechanism, investigation,
administrative or other hearing, or any other proceeding, whether civil,
criminal, administrative, or investigative, in which Indemnitee now or hereafter
is or was a party or is threatened to be made a party or a witness by reason of
Indemnitee's Corporate Status.
Section 2. Service by Indemnitee. Indemnitee agrees to serve and/or
continue to serve the Trust in a Corporate Status; provided however, Indemnitee
may at any time and for any reason resign from such position (subject to any
obligation under contract or by operation of law), and the Trust shall have no
obligation under this Agreement to continue Indemnitee in such position for any
period of time; provided further, following termination of Indemnitee's service
to the Trust in a Corporate Status at any time and for any reason, whether with
or without cause, Indemnitee and the Indemnified Parties shall be entitled to
all of the rights and benefits provided hereunder. The Trust acknowledges and
agrees that it has entered into this Agreement and assumed the obligations
imposed on the Trust hereunder in order to induce Indemnitee to serve and to
continue to serve in a Corporate Status, and acknowledges that Indemnitee is
relying on this Agreement in continuing to serve in such position.
Section 3. Indemnification.
(a) The Trust shall indemnify, and advance Expenses to, Indemnitee (i) as
specifically provided in this Agreement and (ii) otherwise to the fullest extent
permitted by Applicable Law (as defined below) in effect on the date hereof
and/or as amended from time to time; provided however, no change in Applicable
Law shall have the effect of reducing the rights and benefits available to
Indemnitee hereunder based on Applicable Law as in effect on the date hereof.
The rights of Indemnitee provided in this Section 3 shall include, but shall not
be limited to, the rights set forth in the other sections of this Agreement.
(b) Indemnitee shall be entitled to the rights of indemnification provided
in this Section 3(b) if Indemnitee is or is threatened to be made a party to a
Proceeding other than a Proceeding by or in the right of the Trust. In
accordance with this Section 3(b), the Trust shall indemnify Indemnitee for and
against any and all judgments, penalties, fines, and amounts paid in settlement,
and all Expenses actually and reasonably incurred by Indemnitee or on
3
Indemnitee's behalf in connection with a Proceeding, to the maximum extent not
expressly prohibited by Ohio law (including without limitation Chapter 1746 of
the Ohio Revised Code) or applicable federal securities law and regulations
(including without limitation Section 17(h) of the 1940 Act and the rules and
regulations issued with respect thereto by the U.S. Securities and Exchange
Commission) (together, "APPLICABLE LAW"), in effect as of the date of this
Agreement or at the time of the request for indemnification, whichever affords
greater rights of indemnification to Indemnitee.
(c) Indemnitee shall be entitled to the rights of indemnification provided
in this Section 3(c) if Indemnitee is or is threatened to be made a party to any
Proceeding brought by or in the right of the Trust to procure a judgment in its
favor. In accordance with this Section 3(c), the Trust shall indemnify
Indemnitee for and against any and all judgments, penalties, fines, and amounts
paid in settlement, and all Expenses actually and reasonably incurred by
Indemnitee or on Indemnitee's behalf in connection with a Proceeding brought by
or in the right of the Trust to procure a judgment in its favor, to the maximum
extent not expressly prohibited by Applicable Law in effect as of the date of
this Agreement or at the time of the request for indemnification, whichever
affords greater rights of indemnification to Indemnitee.
(d) In addition to the indemnification provided under Sections 3(b) and
3(c) hereof, the Trust shall indemnify Indemnitee for and against any and all
judgments, penalties, fines, and amounts paid in settlement, and all Expenses
actually and reasonably incurred by or on behalf of Indemnitee in connection
with any Proceeding to which Indemnitee is made a party and with respect to
which Indemnitee is successful, in whole or in part, on the merits or otherwise,
in a final determination or result; provided however, if Indemnitee is
successful on the merits or otherwise, as to one or more but less than all
claims, issues, or matters in such Proceeding, the Trust shall indemnify
Indemnitee against any and all judgments, penalties, fines, and amounts paid in
settlement, and all Expenses actually and reasonably incurred by or on behalf of
Indemnitee in connection with each successfully resolved claim, issue, or matter
in the Proceeding. For purposes of this Section 3 and without limitation, the
termination of any claim, issue, or matter in such a Proceeding in favor of
Indemnitee (i) by dismissal, summary judgment, judgment on the pleadings, or
final judgment, with or without prejudice, or (ii) by agreement without any
payment or assumption or admission of liability by Indemnitee, shall be deemed a
successful determination or result with respect thereto. Also for purposes of
this Section 3 and without limitation, the termination of an investigation in a
Proceeding (i) that gives rise to no further claim, issue, or matter in such
Proceeding against Indemnitee or (ii) that gives rise to a claim, issue, or
matter in such Proceeding that is successfully resolved as provided in this
Section 3(d) shall be deemed a successful determination or result with respect
thereto.
(e) Notwithstanding any other provision of this Agreement to the contrary,
the Trust shall indemnify Indemnitee for and against all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with
any Proceeding to which Indemnitee is or is threatened to be made a witness but
not a party, within fifteen (15) days after receipt by the Trust of each
statement of Expenses from Indemnitee with respect thereto.
(f) Notwithstanding any other provision of this Agreement to the contrary,
the Trust shall not be liable for indemnification hereunder in connection with:
(i) any monetary settlement by or judgment against Indemnitee for xxxxxxx
xxxxxxx or disgorgement of profits by Indemnitee
4
pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended; or
(ii) any liability to the Trust or its shareholders with respect to a Proceeding
(other than a proceeding under Section 7(a) hereof, under circumstances in which
Indemnitee shall be entitled to payment or reimbursement under Section 7(f)
hereof), to which Indemnitee otherwise would be subject by reason of Disabling
Conduct by Indemnitee.
Section 4. Advancement of Expenses.
(a) Indemnitee shall be entitled to the rights of advancement of Expenses
provided in this Section 4(a) if Indemnitee is or is threatened to be made a
party to or a witness in a Proceeding. In accordance with this Section 4(a), the
Trust shall advance all Expenses incurred by or on behalf of Indemnitee in
connection with any Proceeding to which Indemnitee is or is threatened to be
made a party or a witness, to the maximum extent not expressly prohibited by
Applicable Law in effect as of the date of this Agreement or at the time of a
request for advancement of Expenses, whichever affords greater rights of
advancement of Expenses to Indemnitee.
(b) To receive advancement of Expenses in accordance with Section 4(a)
hereof, Indemnitee, at any point prior to, during, or following termination of a
Proceeding, shall submit to the Secretary of the Trust a notice and statement of
Expenses, which: (i) shall reasonably evidence the Expenses incurred by or on
behalf of Indemnitee in connection with the Proceeding; (ii) shall include or be
preceded or accompanied by a written affirmation of Indemnitee's good faith
belief that Indemnitee's conduct that gave rise to the claims, issues, or
matters asserted against Indemnitee in the Proceeding meets the standard of
conduct necessary for indemnification by the Trust in accordance with Sections
3, 5, and 6 hereof, and a written undertaking by or on behalf of Indemnitee to
repay any Expenses advanced if it shall ultimately be determined that Indemnitee
is not entitled to indemnification hereunder; and (iii) shall specify whether
any determination with respect thereto that may be made in accordance with
Sections 4(c) and (d) hereof shall be made by the Board or by Independent
Counsel. The Secretary of the Trust, promptly upon receipt of a notice and
statement of Expenses, shall advise the Board in writing that Indemnitee has
requested advancement of Expenses.
(c) Indemnitee shall be entitled to advancement of Expenses in connection
with a Proceeding in accordance with Sections 4(a) and (b) hereof only if: (i)
the Trust is insured against losses arising by reason of the Trust's lawful
advancement of such Expenses (in which event the remaining provisions of this
Section 4(c) shall not apply with respect thereto); or (ii) Indemnitee gives
adequate security to the Trust for the undertaking to repay such amounts; or
(iii) a determination is made by a majority vote of a quorum of Disinterested
Trustees or by the written legal opinion of Independent Counsel that there is a
basis for a reasonable belief that Indemnitee ultimately will be found entitled
to indemnification for and with respect to the Proceeding, or the claims,
issues, or matters with respect thereto for which Indemnitee seeks advancement
of Expenses.
(d) A determination in accordance with Section 4(c)(iii) hereof shall be
made in accordance with the standards and presumptions in Sections 3 and 6
hereof, in a resolution adopted by a majority of a quorum of the Board
consisting of Disinterested Trustees or, at Indemnitee's option, by Independent
Counsel selected or appointed in accordance with
5
Section 5(c) hereof, in a written opinion submitted to the Board, a copy of
which shall be delivered to Indemnitee.
(e) If Indemnitee is entitled to advancement of Expenses in accordance
with Sections 4(a) through (d) hereof, the Trust shall pay or reimburse
Indemnitee for all Expenses for which a notice and statement of Expenses is
submitted in accordance with Section 4(b) hereof, within fifteen (15) days (i)
after receipt by the Trust of the notice and statement of Expenses, if Section
4(c)(i) applies thereto; (ii) after Indemnitee gives adequate security to the
Trust for the undertaking to repay such amounts, if Section 4(c)(ii) applies
thereto; or (iii) after a determination is made in accordance with Section
4(c)(iii), if that Section applies thereto.
Section 5. Indemnification Procedure; Payment; Cooperation.
(a) To obtain indemnification hereunder, Indemnitee shall submit a notice
to the Secretary of the Trust that identifies the Proceeding and/or the claims,
issues, or matters with respect thereto for which indemnification is sought, and
that specifies whether any determination with respect thereto that may be made
in accordance with Section 5(b) hereof shall be made by the Board or Independent
Counsel. The Secretary of the Trust, promptly upon receipt of such a request for
indemnification, shall advise the Board in writing that Indemnitee has requested
indemnification.
(b) Upon submission of a notice by Indemnitee in accordance with Section
5(a) hereof, a determination of Indemnitee's entitlement to indemnification
shall be made as follows:
(1) Indemnitee shall be entitled to indemnification hereunder
without a separate determination by or on behalf of the Trust, with respect to
any Proceeding and/or any claim, issue, or matter with respect thereto: (i)
which is resolved by agreement without any payment or assumption or admission of
liability by Indemnitee; or (ii) as to which a final decision on the merits has
been made by the court or other body with jurisdiction over the Proceeding, in
which Indemnitee was determined not to be liable with respect to such claim,
issue, or matter asserted against Indemnitee in the Proceeding or was determined
not to have engaged in any Disabling Conduct that gave rise to any liability; or
(iii) as to which a court or arbitrator determines upon application that,
despite such a determination of liability on the part of Indemnitee, but in view
of all the circumstances of the Proceeding and of Indemnitee's conduct in a
Corporate Status with respect thereto, Indemnitee is fairly and reasonably
entitled to indemnification for such judgments, penalties, fines, amounts paid
in settlement, and Expenses as such court or arbitrator shall deem proper;
provided however, such decision shall have been rendered in or with respect to
the Proceeding for which the Indemnitee seeks indemnification under this
Agreement.
(2) If Section 5(b)(1) hereof does not apply and a Change in Control
shall have occurred, Indemnitee shall be entitled to indemnification unless a
reasonable determination is made, in accordance with the standards and
presumptions in Sections 3 and 6 hereof, that the Trust is prohibited by
Applicable Law from providing the requested indemnification. The determination
shall be made, at Indemnitee's sole option, either: (i) by the Board in a
resolution adopted in accordance with Section 5(b)(3) hereof; or (ii) by
Independent Counsel in a written opinion submitted to the Board, a copy of which
shall be delivered to Indemnitee.
6
(3) If neither Section 5(b)(1) nor Section 5(b)(2) hereof applies
and a Change in Control has not occurred, Indemnitee shall be entitled to
indemnification unless a reasonable determination is made, in accordance with
the standards and presumptions in Sections 3 and 6 hereof, that the Trust is
prohibited by Applicable Law from providing the requested indemnification. The
determination shall be made either in a resolution adopted by the vote of a
majority of a quorum of the Board consisting of Disinterested Trustees or, if
such a quorum is not obtainable or even if obtainable but such quorum so
directs, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to Indemnitee; provided however, the Trust shall
provide notice to Indemnitee within thirty (30) days following receipt of notice
from Indemnitee in accordance with Section 5(a) hereof, if the Board directs
that such determination shall be made by Independent Counsel.
(c) Independent Counsel shall be selected to make a determination of
Indemnitee's entitlement to indemnification or advancement of Expenses as
follows:
(1) Indemnitee initially may select one or more but not more than
five alternate attorneys or law firms who satisfy the criteria in Section 1(g)
hereof, by providing notice of such selection, together with the written
confirmation provided for in Section 1(g)(iii) hereof, for each such attorney or
law firm, to the Secretary of the Trust, who shall promptly deliver copies of
the notice to all members of the Board.
(2) The Trust, by a vote of a majority of a quorum of the Board
consisting of Disinterested Trustees (or, if such a quorum cannot be obtained,
then by a majority vote of a committee of the Board consisting solely of two or
more trustees who are not at the time parties to the Proceeding and who were
duly designated to act in the matter by a majority vote of a quorum of the
Board, in which trustees who are parties to the Proceeding may participate; or,
if such a committee cannot be designated, then by a majority vote of a quorum of
the Board, in which trustees who are parties to the Proceeding may participate),
may reject one or more of the attorneys or law firms selected by Indemnitee for
cause, which shall be limited to a showing by the Trust that such attorney or
law firm fails to satisfy one or more of the criteria in Section 1(g) hereof;
provided however, the Trust may reject for cause a law firm (or an attorney
associated therewith) that has an AV rating by Martindale Xxxxxxx Law Directory
and fifty (50) or more attorneys only on the basis that the Trust has shown that
the attorney or law firm fails to satisfy the criteria in Section 1(g)(i), (ii),
or (iii) hereof.
(3) The Trust shall provide notice to Indemnitee, within thirty (30)
days following receipt of Indemnitee's notice of selection in accordance with
Section 5(c)(1) hereof, stating as to each attorney or law firm listed therein
either that the Trust does not object or that the Trust rejects such selection
for cause in accordance with Section 5(c)(2) hereof, and stating the grounds
therefore and providing a copy of the resolution of the Board evidencing such
rejection. The Trust will be deemed not to object to any attorney or law firm
initially selected by Indemnitee as to whom the Trust does not provide timely
notice of rejection in accordance herewith.
(4) In the event the Trust, in accordance with Sections 5(c)(2) and
(3) hereof, timely rejects for cause each of the attorneys or law firms
initially selected by Indemnitee: (i) Indemnitee may select one or more but no
more than five additional alternate attorneys or law
7
firms in accordance with Section 5(c)(1) hereof, which selection shall be
subject to the Trust's right of rejection for cause in accordance with Section
5(c)(2) hereof.
(5) Upon receipt of notice that the Trust does not object to one or
more attorneys or law firms initially selected by Indemnitee in accordance with
Sections 5(c)(1) through (4) hereof, Indemnitee shall confirm the selection of
one such attorney or law firm as Independent Counsel in a notice to the
Secretary of the Trust.
(6) In the event a final selection of Independent Counsel has not
occurred in accordance with Sections 5(c)(1) though (5) hereof, and upon receipt
of a demand in a notice from Indemnitee, the Trust shall immediately institute
an action in an appropriate court of the State of Ohio with jurisdiction over
the matter, naming Indemnitee as a party thereto, and shall petition said court
to appoint as Independent Counsel an attorney or law firm who satisfies the
criteria in Section 1(g) hereof, giving preference to the greatest extent
possible to attorneys or law firms initially selected by Indemnitee in
accordance with this Section 5(c), which selection shall be binding on
Indemnitee and the Trust. In any such court action, the Trust shall take all
necessary steps to expedite a determination by the court, and shall have the
burden of proof and persuasion to show, by clear and convincing evidence, that
rejection for cause in accordance with Section 5(c)(2) hereof is warranted as to
each of the attorneys or law firms initially selected by Indemnitee. The Trust
shall pay all attorneys' fees, costs, and expenses incurred by the Trust and/or
by Indemnitee in connection with any such court action.
(d) Upon the selection or appointment of Independent Counsel in accordance
with Section 5(c) hereof, the Trust: (i) shall execute such retention agreement
as Independent Counsel reasonably may require; and (ii) shall pay all retainers,
fees, and expenses charged by Independent Counsel for or in connection with
services provided in that capacity, within ten (10) days following receipt of an
itemized statement for the same; provided however, Independent Counsel shall not
be deemed to be disqualified from serving as such by virtue of the Trust's
compliance with this provision.
(e) Indemnitee and the Trust shall cooperate with the person(s) making a
determination of Indemnitee's entitlement to indemnification, including
providing to such person(s) upon any reasonable advance request, any
documentation or information that is not privileged and which is reasonably
available to Indemnitee or the Trust and reasonably necessary to such
determination; provided however, any and all documents or information provided
in response to such request that are deemed confidential by the submitting party
shall be held and used by the recipient on a confidential basis, and shall not
be disclosed other than to the Trust or Indemnitee or used for any purpose other
than to make such determination, except by order of court or in response to a
subpoena or other compulsory process; provided further the failure of Indemnitee
to provide such assistance shall not limit or otherwise affect Indemnitee's
right to indemnification or advancement or payment of Expenses hereunder in
connection with a specific Proceeding unless, and only to the extent, such
failure is shown by the Trust to have caused actual prejudice to the Trust with
respect thereto. Any costs or expenses (including reasonable attorneys' fees and
disbursements) incurred by Indemnitee in so cooperating with the person(s)
making such determination shall be paid directly by or reimbursed by the Trust,
irrespective of the determination as to Indemnitee's entitlement to
indemnification.
8
(f) If Indemnitee is determined to be entitled to indemnification in
accordance with Section 5(b) hereof, or is deemed to be entitled to
indemnification in accordance with Section 6(b) hereof, the Trust, within thirty
(30) days after such determination: (i) shall pay all judgments, penalties,
fines, amounts paid in settlement, and Expenses for which Indemnitee seeks
indemnification and which have not already been paid or advanced by the Trust;
(ii) shall provide Indemnitee with written evidence of satisfaction of such
obligations; and (iii) shall issue a written release to Indemnitee with respect
to any undertaking previously provided by Indemnitee in accordance with Section
4(b) hereof to repay Expenses advanced by the Trust. The Trust shall pay any and
all additional amounts for which Indemnitee is entitled to indemnification
within thirty (30) days after such amounts become due and payable.
Section 6. Presumptions and Effect of Certain Proceedings.
(a) Any person(s) making a determination of whether Indemnitee is entitled
to indemnification or advancement of Expenses hereunder: (i) shall do so based
on a rebuttable presumption that Indemnitee is entitled to indemnification or
advancement of Expenses hereunder, that Indemnitee has not engaged in Disabling
Conduct, that Indemnitee's actions in a Corporate Status were based on
Indemnitee's determination that those actions were in the best interests of the
Trust, and that no other controlling standard applies that would prohibit the
Trust under Applicable Law from providing indemnification or advancement of
Expenses under the standard in Sections 3 or 4 hereof; and (ii) shall require
that, to overcome such presumption and to make any contrary determination, the
Trust shall bear the burden of proof and persuasion to show, by clear and
convincing evidence, that the Trust is prohibited by Applicable Law from
providing indemnification or advancement of Expenses under the standard in
Sections 3 or 4 hereof, either due to Disabling Conduct that gave rise to the
claim, issue, or matter for which indemnification or advancement of Expenses is
sought and which is asserted against Indemnitee in the Proceeding, or based on
application of another controlling standard that is recognized by Applicable Law
and which is shown to apply with respect to the request for indemnification or
advancement or Expenses.
(b) In the event the Board is required to make a determination of
Indemnitee's entitlement to indemnification or advancement of Expense in
accordance with Sections 4(d), 5(b)(2), or 5(b)(3) hereof, but does not provide
notice to Indemnitee of such determination within the later of (i) forty-five
(45) days after receipt by the Trust of Indemnitee's notice in accordance with
Sections 4(b) and/or 5(a) hereof, or (ii) with respect to a request for
indemnification, thirty (30) days after Indemnitee substantially complies with a
request for information in accordance with Section 5(e) hereof, Indemnitee will
be deemed to be entitled to such indemnification or advancement of Expenses,
absent a prohibition under Applicable Law against providing indemnification or
advancement of Expenses on this basis.
(c) Notwithstanding any other provision of this Agreement to the contrary,
the termination of any Proceeding, or of any claim, issue, or matter related
thereto, by judgment, order or settlement in which Indemnitee is found to have
engaged in Disabling Conduct shall be deemed a sufficient ground (i) to deny a
request for indemnification or advancement of Expenses submitted in accordance
with this Agreement, and (ii) to create a presumption that Indemnitee engaged in
Disabling Conduct and, with respect to any criminal Proceeding, that Indemnitee
had reasonable cause to believe that Indemnitee's conduct was unlawful.
9
(d) Except as otherwise expressly provided in this Agreement, the
termination of any Proceeding, or of any claim, issue, or matter related
thereto, by judgment, order, settlement, or conviction, or of any plea of nolo
contendere or its equivalent, shall not be deemed a sufficient ground (i) to
deny a request for indemnification or advancement of Expenses submitted in
accordance with this Agreement, or (ii) to create a presumption that Indemnitee
engaged in Disabling Conduct or is not entitled to indemnification or
advancement of Expenses based on application of another controlling standard
which is recognized by Applicable Law, or, with respect to any criminal
Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee's
conduct was unlawful.
Section 7. Remedies of Indemnitee.
(a) Indemnitee may institute an action in an appropriate court of the
State of Ohio, or in any other court of competent jurisdiction, to enforce
Indemnitee's rights to indemnification or payment or advancement of Expenses
hereunder, and/or to obtain a declaration of Indemnitee's entitlement to
indemnification or advancement of Expenses hereunder, upon the happening of any
one or more of the following events: (i) a determination is made in accordance
with Section 5 hereof that Indemnitee is not entitled to indemnification; (ii) a
determination is made in accordance with Section 4 hereof that Indemnitee is not
entitled to advancement of Expenses, or advancement of Expenses is not made
within the time provided therein; (iii) payment of indemnification is not made
in accordance with Section 5(f) hereof within the time provided therein; (iv)
payment of indemnification is not made in accordance with Section 3(e) hereof
within the time provided therein; or (v) at any other time that Indemnitee is
threatened by a loss of any right hereunder, or by the Trust's failure to
perform its obligations in accordance herewith. Alternatively, Indemnitee, at
Indemnitee's sole option, may seek an award in arbitration to enforce such
rights and/or obtain such declaration, which shall be conducted by a single
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association at a location selected by Indemnitee (or, if Indemnitee
makes no selection, at a location determined in accordance with such rules).
(b) If a determination shall have been made in accordance with Section 4
hereof that Indemnitee is not entitled to advancement of Expenses, or in
accordance with Section 5 hereof that Indemnitee is not entitled to
indemnification, any judicial or arbitration proceeding commenced in accordance
with this Section 7 shall be conducted in all respects as a de novo trial or
arbitration on the merits, and such adverse determination shall not be
introduced as evidence or otherwise used in said proceeding as a basis for
ruling on the merits of Indemnitee's right to indemnification or advancement of
Expenses.
(c) If a determination has been made or deemed to have been made in
accordance with Sections 4, 5, and 6 hereof that Indemnitee is entitled to
indemnification or advancement of Expenses, the Trust shall be bound by such
determination in any judicial or arbitration proceeding commenced in accordance
with this Section 7, unless the court or arbitrator rules that entry of an order
requiring indemnification or advancement of Expenses on the basis of this
provision is prohibited by Applicable Law in effect at the date of this
Agreement or at the time of such ruling, whichever affords greater rights of
indemnification or advancement of Expenses to Indemnitee.
10
(d) The Trust and Indemnitee shall be precluded from asserting in any
judicial or arbitration proceeding commenced in accordance with this Section 7
that the procedures and presumptions of this Agreement are not valid, binding,
and enforceable, and shall stipulate in any such proceeding that the Trust and
Indemnitee are bound by all the provisions of this Agreement.
(e) If Indemnitee institutes a judicial or arbitration proceeding to
enforce or declare Indemnitee's rights under, or to recover damages for breach
of, this Agreement, Indemnitee shall be entitled to recover from the Trust, and
shall be indemnified by the Trust against, any and all Expenses actually and
reasonably incurred by Indemnitee in such proceeding (including any appeal
therefrom or other court proceeding to enforce an arbitrator's ruling and
award), but only if Indemnitee substantially prevails therein; provided however,
if it is determined in such a proceeding that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of Expenses sought, the
Trust shall pay a portion of the Expenses incurred by Indemnitee in connection
with such proceeding, prorated based on the percentage of Expenses awarded to
Indemnitee, or the percentage of claims, issued, or matters as to which
indemnification or advancement of Expenses is awarded to Indemnitee, whichever
is more favorable to Indemnitee.
(f) The Trust shall pay or reimburse Indemnitee for all Expenses to which
Indemnitee is entitled in accordance with Section 7(e) hereof (including all
such Expenses incurred in connection with any appeal therefrom or other court
proceeding to enforce an arbitrator's ruling and award), within fifteen (15)
days following the later of (i) entry of a final judgment by the trial court or
a final ruling by the arbitrator or (ii) receipt by the Trust of each notice and
statement of Expense with respect thereto; provided however, any such payment of
Expenses shall be subject to Indemnitee's written undertaking in accordance with
Section 4(b) hereof to repay any Expenses advanced if it shall ultimately be
determined that Indemnitee is not entitled to indemnification hereunder or, as
described in Section 3(d) hereof, if Indemnitee is not wholly successful.
Section 8. Non-Exclusivity; Insurance; Subrogation.
(a) Indemnitee's rights of indemnification and advancement of Expenses
hereunder shall not be deemed exclusive of any other rights to which Indemnitee
may at any time be entitled under Applicable Law, the Declaration of Trust and
Bylaws of the Trust, any other agreement, any insurance policy, a vote of
shareholders, a resolution of the Board, or otherwise. No amendment, alteration,
or repeal of this Agreement or of any provision hereof shall limit or restrict
any right of Indemnitee hereunder with respect to any action taken or omitted by
Indemnitee in a Corporate Status prior to such amendment, alteration, or repeal.
(b) To the extent that the Trust maintains liability insurance for
trustees and officers of the Trust, Indemnitee shall be covered by such policy
or policies in accordance with its or their terms, to the maximum extent of the
coverage available (including coverage after Indemnitee is no longer serving in
a Corporate Status for acts and omissions while serving in such Corporate
Status), for any such trustee or officer under such policy or policies.
(c) In the event of any payment under this Agreement, the Trust shall be
subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all
11
papers required and take all action necessary to secure such rights, including
execution of such documents as are necessary to enable the Trust to bring suit
to enforce such rights.
Section 9. Duration of Agreement. All agreements and obligations of the
Trust as provided in this Agreement shall continue during the period Indemnitee
serves in a Corporate Status and thereafter for such time as Indemnitee is, may
be, or is threatened to be made a party to or a witness in a Proceeding, or a
judicial or arbitration proceeding commenced by Indemnitee in accordance with
Section 7 hereof.
Section 10. Binding Effect; Assumption of Liability; Limitation of Actions
and Release of Claims. This Agreement shall be binding upon the Trust, its
successors and assigns, shall continue as to Indemnitee after termination of
Indemnitee's service to the Trust in a Corporate Status, and shall inure to the
benefit of Indemnitee and any and all Indemnified Parties.
Section 11. Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal, or unenforceable for any reason
whatsoever: (a) the validity, legality, and enforceability of the remaining
provisions of this Agreement (including, without limitation, each other
provision of any section of this Agreement containing a provision or provisions
held to be invalid, illegal, or unenforceable, that is not itself invalid,
illegal, or unenforceable) shall not in any way be affected or impaired thereby;
and (b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each other provision of any section of this
Agreement containing a provision or provisions held to be invalid, illegal, or
unenforceable, that is not itself invalid, illegal, or unenforceable) shall be
construed so as to give effect to the intent manifested thereby.
Section 12. Assignment. The parties hereto may assign their rights, and
delegate their obligations, hereunder, without the consent of the other party,
but no such delegation of obligations shall relieve the delegating party of the
obligations created hereunder, except that the Trust may delegate, without
consent, its obligations hereunder and shall be relieved of its obligations
hereunder in connection with a redomestication of the Trust or in connection
with a reorganization of the Trust in which all or substantially all of the
Trust's assets and liabilities are acquired by another entity.
Section 13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original for all purposes
but all of which together shall constitute one and the same Agreement. Only one
such counterpart signed by the party against whom enforceability is sought needs
to be produced to evidence the existence of this Agreement. The parties agree to
accept copies of the executed originals of this Agreement, and of any notice
provided in accordance herewith, as and in place of such originals.
Section 14. Headings and Recitals. The headings of the sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof. The
recitals set forth above shall be construed as substantive in nature, and are an
integral part of this Agreement.
Section 15. Modification and Waiver. No supplement, modification, or
amendment of this Agreement shall be binding unless in writing executed by both
the Trust and Indemnitee.
12
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provisions hereof (whether or not similar),
nor shall such waiver constitute a continuing waiver.
Section 16. Notices. All notices, requests, demands, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand or by courier service and receipted for by
or on behalf of the party to whom said notice or other communication shall have
been directed, (ii) delivered by facsimile or e-mail, or (iii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed, as follows:
(a) If to Indemnitee, to the last known address, facsimile number, or
e-mail address for Indemnitee in the records of the Trust, and to
the address, facsimile number, or e-mail address set forth below the
signature line for Indemnitee at the end of this Agreement, with a
copy to:
______________________________
______________________________
______________________________
Telephone: ___.___.___
Facsimile: ___.___.___
E-Mail: __________@__________
(b) If to the Trust, to the then-current facsimile number or e-mail
address for the Secretary of the Trust or to:
Xxxx X. Xxxxxx
River Park 2
0000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
E-Mail: xxxxxx00@xxxxxxxx.xx
with a copy to:
Xxxxxxx X. Xxxxxxx
0000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
E-Mail: xxxxxxx@xxxxxxxx.xx
Or to such other address as may have been furnished to Indemnitee by the Trust,
or to the Trust by Indemnitee, as the case may be, in a notice delivered in
accordance with this Section 16.
13
Section 17. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Ohio,
without regard to the choice of law or conflicts of law principles thereof.
Section 18. Miscellaneous. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors. The
Trust is a business trust formed under Chapter 1746 of the Ohio Revised Code and
under a Declaration of Trust dated as of October 30, 1997, to which reference is
hereby made a copy of which is on file at the office of the Secretary of State
of Ohio, and to any and all amendments thereto so filed or hereafter filed. The
obligations of the Trust entered into in the name of on behalf thereof by any of
the Trust's trustees, officers, employees or agents are not made individually,
but only in their capacities with respect to the Trust. Such obligations are not
binding upon any of the trustees, officers, or shareholders of the Trust
personally, but bind only the assets of the Trust, as set forth in Section
1746.13(A) of the Ohio Revised Code.
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
INDEMNITEE: FOR THE TRUST:
GARTMORE MUTUAL FUNDS
By: By:
------------------------------- -------------------------------
Printed Name: Printed Name:
--------------------- ---------------------
Address: Title:
-------------------------- ----------------------------
--------------------------
Facsimile:
------------------------
E-Mail:
---------------------------
15
