INDEMNIFICATION AGREEMENT
Exhibit
h 4
This Indemnification Agreement (the
“Agreement”) is made as of the date set forth on the signature page by and
between MainStay Funds Trust, a Delaware statutory trust (the “Trust”), and the
trustee of the Trust whose name is set forth on the signature page (the
“Trustee”).
WHEREAS, the Trustee is a trustee of
the Trust, and the Trust wishes the Trustee to continue to serve in that
capacity; and
WHEREAS, the Declaration of Trust,
dated as of April 8, 2009 (as amended, amended and restated, supplemented, or
otherwise modified from time to time, the “Declaration of Trust”), and Bylaws of
the Trust and applicable laws permit the Trust to contractually obligate itself
to indemnify the Trustee to the fullest extent permitted by law;
NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual agreements set forth herein, the parties
hereby agree as set forth below.
1. Definitions. For
purposes of this Agreement, the following terms shall have the following
meanings:
(a) “Board” means the Board
of Trustees of the Trust.
(b) “Change
in Control” means during any period of two consecutive years (or less), a
majority of the existing members of the Board of Trustees of the Trust at the
commencement of that period cease, for any reason, to constitute at least a
majority of the Board of Trustees.
(c) “Disabling
Conduct” shall be as defined in Section 2 below.
(d) “Expenses” shall include
without limitation all judgments, penalties, fines, amounts paid or to be paid
in settlement, ERISA excise taxes, liabilities, losses, interest, expenses of
investigation, attorneys’ fees, retainers, court costs, transcript costs, fees
of experts and witnesses, expenses of preparing for and attending depositions
and other proceedings, travel expenses, duplicating costs, printing and binding
costs, computerized legal research costs, telephone charges, postage, delivery
service fees, and all other costs, disbursements or expenses of the type
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or acting as a witness in a
Proceeding.
(e) “Final decision” or
“final judgment” shall mean a final adjudication by court order or judgment of
the court or other body before which a matter is pending.
(f) “Independent counsel”
shall mean a law firm, or a member of a law firm, that is experienced in matters
of investment company law and neither at the time of designation is, nor in the
five years immediately preceding such designation was, retained to represent (A)
the Trust or the Trustee in any matter material to either, or (B) any other
party to the Proceeding giving rise to a claim for indemnification or
advancements hereunder. Notwithstanding the foregoing, however, the
term “Independent Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Trust or the Trustee in an
action to determine the Trustee’s rights pursuant to this Agreement, regardless
of when the Trustee’s act or failure to act occurred.
(g) “Independent Trustee”
shall mean a trustee of the Trust who is neither an “interested person” of the
Trust as defined in Section 2(a)(19) of the Investment Company Act of 1940, as
amended (the “Investment Company Act”), nor a party to the Proceeding with
respect to which indemnification or advances are sought.
(h) The term “Proceeding”
shall include without limitation any threatened, pending or completed claim,
demand, threat, discovery request, request for testimony or information, action,
suit, arbitration, alternative dispute resolution mechanism, investigation,
hearing, or other proceeding, including any appeal from any of the foregoing,
whether civil, criminal, administrative or investigative, whether formally or
informally initiated, and shall also include any proceeding brought by the
Trustee against the Trust if, but only if, the Trustee is the prevailing party
in such proceeding against the Trust.
(i) The Trustee’s “service
to the Trust” shall include without limitation the Trustee’s service as a
trustee, officer, employee, agent or representative of the Trust, and his or her
service at the request of the Trust as a director, officer, employee, agent or
representative of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise.
2. Indemnification. The Trust shall
indemnify and hold harmless the Trustee against any Expenses actually and
reasonably incurred by the Trustee in any Proceeding arising out of or in
connection with the Trustee’s service to the Trust, to the maximum extent
permitted by the Delaware Statutory Trust Act, (the “Delaware Law”), the
Investment Company Act, and the Declaration of Trust as now or hereafter in
force, subject to the conditions set forth in subparagraphs (a) and (b)
below:
(a) Disabling
Conduct. The Trustee shall be indemnified pursuant to this
Section 2 against any Expenses unless: (i) the Trustee incurred such Expenses by
reason of the Trustee’s willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his or her office as
defined in Section 17(h) of the Investment Company Act; or (ii) the Trustee did
not act in good faith in the reasonable belief that such Trustee’s actions were
in or not opposed to the best interests of the Trust (the conduct described in
the foregoing clauses (i) and (ii) shall hereinafter be referred to as
“Disabling Conduct”).
(b) Conditions to
Indemnification. The Trustee shall be indemnified pursuant to
this Section 2 if either:
(1) the court or other body before
which the Proceeding relating to the Trustee’s liability is brought shall have
rendered a final decision on the merits, finding that the Trustee is not liable,
is not liable by reason of Disabling Conduct, and/or is entitled to
indemnification;
(2) the Proceeding against
the Trustee shall have been dismissed for insufficiency of evidence of any
Disabling Conduct with which the Trustee has been charged; or
-2-
(3) in the absence of such a final
decision, dismissal or withdrawal, a determination shall have been made that the
Trustee is not liable by reason of Disabling Conduct, based upon a review of the
available facts, by either the vote of a majority of a quorum of Independent
Trustees or by Independent Counsel in a written opinion.
3. Advancement
of Expenses. The Trust shall
promptly advance funds to the Trustee to cover any and all Expenses the Trustee
incurs with respect to any Proceeding arising out of or in connection with the
Trustee’s service to the Trust, to the fullest extent permitted by the Delaware
Law, the Investment Company Act and the Declaration of Trust, as now or
hereafter in force, subject to the provisions of subparagraphs (a) and (b)
below.
(a) Affirmation of Conduct and
Undertaking. A request by the Trustee for advancement of funds
pursuant to this Section 3 shall be accompanied by the Trustee’s (i) written
affirmation of his or her good faith belief that he or she met the standard of
conduct necessary for indemnification, and (ii) (or on the Trustee’s behalf)
written undertaking to repay such advancements upon the occurrence of any of the
events barring indemnification set forth in subparagraphs 2(a) through
(c)
(b) Conditions to
Advancement. Funds shall be advanced to the Trustee pursuant
to this Section 3 if (1) the Trust is insured against losses arising by reason
of any such lawful advancements to the Trustee; (2) a determination is made by
the vote of a majority of a quorum of Independent Trustees, or by Independent
Counsel in a written opinion, based on a review of the readily available facts
then known (as opposed to a full trial-type inquiry), that there is reason to
believe that the Trustee ultimately will be found to be entitled to
indemnification pursuant to Section 1, or (3) in the absence of insurance or
such a determination by Independent Trustees or Independent Counsel,
such undertaking as required by Paragraph 3(a) above is secured by a surety bond
or other appropriate security provided by the Trustee. In any such
determination by the Independent Trustees or Independent Counsel pursuant to
subpart (2) of this subparagraph, the Trustee shall be afforded a rebuttable
presumption that the Trustee did not engage in Disabling Conduct.
4. Procedure
for Determination of Entitlement to Indemnification and Advancements. A request by the
Trustee for indemnification or advancement of Expenses shall be made in writing,
and shall be accompanied by such relevant documentation and information as is
reasonably available to the Trustee. The Secretary of the Trust shall
promptly advise the Board of such request.
(a) Methods of
Determination. Upon the Trustee’s request for indemnification
or advancement of Expenses, a determination with respect to the Trustee’s
entitlement thereto shall be made: (i) if there has been no change of
control, by a quorum of the Board consisting of Independent Trustees, or (if
such a quorum is not obtainable or such Independent Trustees so direct) by
Independent Counsel, or (ii) if there has been a change of control, by
Independent Counsel; provided in any event that with regard to advancements no
such determination shall be necessary if (x) the Trust shall have received
written confirmation in reasonably acceptable form that the Trust is insured
against all such losses arising by reason of any lawful advancements and that
the insurer will pay all Expenses of the Trustee in a reasonably prompt manner,
or (y) the Trustee has provided an adequate security interest in addition to his
affirmation and undertaking to repay (as required by Paragraph 3(a)
above). The Trustee shall cooperate with the person or persons making
such determination, including without limitation providing to such persons upon
reasonable advance request any documentation or information that is not
privileged or otherwise protected from disclosure and is reasonably available to
the Trustee and reasonably necessary to such determination. Any
Expenses incurred by the Trustee in so cooperating shall be borne by the Trust,
irrespective of the determination as to the Trustee’s entitlement to
indemnification or advancement of Expenses.
-3-
(b) Independent
Counsel. If the determination of entitlement to
indemnification or advancement of Expenses is to be made by Independent Counsel,
the Independent Counsel shall be selected by the Board, and the Trust shall give
written notice to the Trustee advising the Trustee of the identity of the
Independent Counsel selected. The Trustee may, within five days after
receipt of such written notice, deliver to the Trust a written objection to such
selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirement of independence
set forth in the definition of Independent Counsel in Section 1, and shall set
forth with particularity the factual basis of such assertion. Upon
receipt of such objection, the Board shall select another Independent
Counsel.
If within fourteen days after
submission by the Trustee of a written request for indemnification or
advancement of expenses no such Independent Counsel shall have been selected by
the Board (whether or not an objection by the Trustee is the cause of the
delay), then either the Trust or the Trustee may petition a court of competent
jurisdiction in Delaware for the appointment as Independent Counsel of a person
selected by the court or by such other person as the court shall designate, and
the person with respect to whom an objection is favorably resolved or the person
so appointed shall act as Independent Counsel.
The Trust shall pay all reasonable fees
and Expenses charged or incurred by Independent Counsel in connection with his
or her determinations pursuant to this Agreement, and shall pay all reasonable
fees and Expenses incident to the procedures described in this paragraph,
regardless of the manner in which such Independent Counsel was selected or
appointed.
(c) Failure to Make Timely
Determination. If the person or persons empowered or selected
under subparagraphs (a) or (b) to determine whether the Trustee is entitled to
indemnification or advancement of Expenses shall not have made such
determination within thirty days after receipt by the Trust of the request
therefore, the requisite determination of entitlement to indemnification or
advancement of Expenses shall be deemed to have been made, and the Trustee shall
be entitled to such indemnification or advancement, absent (i) an intentional
misstatement by the Trustee of a material fact, or an intentional omission of a
material fact necessary to make the Trustee’s statement not materially
misleading, in connection with the request for indemnification or advancement of
Expenses, or (ii) a prohibition of such indemnification or advancements under
applicable law; provided, however, that such period may be extended for a
reasonable period of time, not to exceed an additional thirty days, if the
person or persons making the determination in good faith require such additional
time to obtain or evaluate documentation or information relating
thereto.
-4-
(d) Payment Upon Determination
of Entitlement. If a determination is made pursuant to
Sections 2, 3, and 4 (a) through (c) above that the Trustee is entitled to
indemnification or advancement of Expenses, payment of any indemnification
amounts or advancements owing to the Trustee shall be made within ten days after
such determination (and, in the case of advancements of further Expenses, within
ten days after submission of supporting information).
(e) Arbitration Upon
Determination of Non-Entitlement. If a determination is made
that the Trustee is not entitled to indemnification or advancement of Expenses
pursuant to Sections 2 through 4(c) above, the Trustee shall be entitled to an
adjudication of the Trustee’s entitlement to such indemnification or advancement
by a single arbitrator appointed by the American Arbitration Association, New
York City Office, in an arbitration conducted pursuant to that Association’s
then-existing commercial arbitration rules. The Trustee shall
commence such arbitration seeking an adjudication within one year following the
date on which receives the determination denying indemnification or
advancement. In any such proceeding, the Trustee and the Trust shall
be bound by the determination of the arbitrator, subject to rights of appeal to
a court of competent jurisdiction to review such an arbitration award and to
vacate such an award only on one or more of the bases set forth in Sections 10
and 11 of the Federal Arbitration Act, 9 U.S.C. Sections 10 and
11. The Trust shall advance the costs of such an arbitration to the
American Arbitration Association but the arbitrator shall, as part of the award,
make a final award of such costs (including arbitrator’s fees) to the prevailing
party in the arbitration.
Section 5. General
Provisions.
(a) No Indemnification if
Otherwise Reimbursed. The Trust shall not be liable under this
Agreement to make any payment of amounts otherwise indemnifiable hereunder if
and to the extent that the Trustee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
(b) Continuation of
Provisions. This Agreement shall be binding upon and inure to
the benefit of all successors of the Trust, including without limitation any
transferee of all or substantially all assets of the Trust and any successor by
merger, consolidation, or operation of law, and shall inure to the benefit of
the Trustee’s spouse, heirs, assigns, devisees, executors, administrators and
legal representatives. No amendment of the Declaration of Trust or
Bylaws of the Trust shall limit or eliminate the right of the Trustee to
indemnification and advancement of expenses set forth in this
Agreement. Moreover, unless contrary to applicable law, the
procedures set forth in Paragraphs 3 through 5 of this Agreement shall be the
exclusive means by which the parties’ rights and obligations with regard to
indemnification and advancement of Expenses shall be determined, regardless of
whether those rights and obligations arise by operation of law, Declaration of
Trust or this Agreement.
(c) Selection of
Counsel. The Trustee agrees to choose Counsel to represent
him/her in any Proceeding for which indemnification is claimed in a manner
designed to minimize Expenses, consistent with the goal of vigorously defending
the Trustee. In that regard, the Trustee shall seek joint
representation by Counsel with other Trustee defendants in any such Proceeding
to the extent such Trustees’ interests may be jointly represented by Counsel
consistent with the applicable canons of ethics regarding conflicts of
interest. Moreover, where the Trust and the Trustee are both
defendants in a Proceeding, the Trustee and Trust shall agree to be jointly
represented by Counsel to the extent consistent with the applicable canons of
ethics regarding conflicts of interest
-5-
(d) D&O
Insurance. For a period of six years after the Trustee has
ceased to provide services to the Trust, the Trust shall purchase and maintain
in effect one or more policies of insurance on behalf of the Trustee which
collectively provide limits of coverage for claims made against the Trustee in
the event of the insolvency of the Trust which are consistent with the limits of
coverage available for that Trustee in such circumstances when he or she ended
service as a Trustee, unless (1) such insurance is not reasonably available, or
(2) (i) the limits of coverage which the Trustee had upon the termination of his
service as a Trustee is in excess of that provided to any of the current
Trustees and (ii) the current Board of Trustees provides the coverage to the
Trustee at least equal to the highest limit available to those current
Trustees.
(e) Subrogation. In
the event of any payment by the Trust pursuant to this Agreement, the Trust
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Trustee, who shall, upon reasonable written request by the Trust
and at the Trust’s expense, execute all such documents and take all such
reasonable actions as are necessary to enable the Trust to enforce such
rights. Nothing in this Agreement shall be deemed to diminish or
otherwise restrict the right of the Trust or the Trustee to proceed or collect
against any insurers and to give such insurers any rights against the Trust
under or with respect to this Agreement, including without limitation any right
to be subrogated to the Trustee’s rights hereunder, unless otherwise expressly
agreed to by the Trust in writing, and the obligation of such insurers to the
Trust and the Trustee shall not be deemed to be reduced or impaired in any
respect by virtue of the provisions of this Agreement.
(f) Notice of
Proceedings. The Trustee shall promptly notify the Trust in
writing upon being served with any summons, citation, subpoena, complaint,
indictment, information or other document commencing any Proceeding which may be
subject to indemnification or advancement of expense pursuant to this Agreement,
but no delay in providing such notice shall in any way limit or affect the
Trustee’s rights or the Trust’s obligations under this
Agreement. Thereafter, the Trustee, and/or his Counsel, shall work
with the representative(s) of the Trust to keep the Trust informed of the status
of the Proceeding and the positions taken by the parties to the Proceeding as
the matter progresses.
(g) Notices. All
notices, requests, demands and other communications to a party pursuant to this
Agreement shall be in writing, addressed to such party (and/or designated
representative) at the address(es) specified on the signature page of this
Agreement (or such other address as may have been furnished by such party by
notice in accordance with this paragraph), and shall be deemed to have been duly
given when delivered personally (with a written receipt signed by the addressee
or his/her representative) or two days after being sent (1) by certified or
registered mail, postage prepaid, return receipt requested, or (2) by nationally
recognized overnight courier service.
(h) Severability. If
any provision of this Agreement shall be held to be invalid, illegal, or
unenforceable, in whole or in part, for any reason whatsoever, (1) the validity,
legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any provision that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby, and (2) to the fullest
extent possible, the remaining provisions of this Agreement shall be construed
so as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
-6-
(i) Modification and
Waiver. This Agreement supersedes any existing or prior
agreement between the Trust and the Trustee pertaining to the subject matter of
indemnification, advancement of expenses and insurance and any such prior
written or oral agreement shall be of no further force or effect. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both parties or their respective successors or legal
representatives. Any waiver by either party of any breach by the
other party of any provision contained in this Agreement to be performed by the
other party must be in writing and signed by the waiving party or such party’s
successor or legal representative, and no such waiver shall be deemed a waiver
of similar or other provisions at the same or any prior or subsequent
time.
(j) Headings. The
headings of the Sections of this Agreement are for convenience only and shall
not be deemed to control or affect the meaning or construction of any provision
of this Agreement.
(k) Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be an
original, and all of which when taken together shall constitute one
document.
(l) Applicable
Law. This Agreement shall be governed by and construed and
enforce in accordance with the laws of the State of Delaware without reference
to principles of conflict of laws of the State of Delaware.
(The
remainder of this page has been left intentionally blank. The
signature page follows.)
-7-
IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the date set forth below.
Dated: 4/8,
2009
|
a
Delaware statutory trust
|
||
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
|
|
Name:
Xxxxxxx X. Xxxxxx
|
||
|
Title:
President
|
||
|
Address
for notices:
|
||
|
New
York Life Investment Management LLC
|
||
|
000
Xxxxxxxxxx Xxxxxx
|
||
(The
remainder of this page has been left intentionally blank.)
