FORM OF AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
FORM
OF
AMENDED
AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT
WHEREAS, [Name of
Fund] (the “Fund”), is a [State of Formation] [corporation/business trust]
registered under the Investment Company Act of 1940, as amended (the “1940
Act”), as an open-end diversified investment company that offers Class C shares;
Class F-1 shares, Class F-2 shares (together, the “Class F shares”); Class
R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares, Class R-5
shares, and Class R-6 shares (collectively, the “Class R shares”); and Class
529-A shares, Class 529-B shares, Class 529-C shares, Class 529-E shares, and
Class 529-F-1 shares (collectively, the “Class 529 shares”); and
WHEREAS, Capital
Research and Management Company (the “Investment Adviser”), is a Delaware
corporation registered under the Investment Advisers Act of 1940, as amended,
and is engaged in the business of providing investment advisory and related
services to the Fund and to other investment companies; and
WHEREAS, the Fund
wishes to have the Investment Adviser arrange for and coordinate, monitor,
oversee and assist with the provision of transfer agent and shareholder services
(“transfer agent services”) and certain other administrative services (other
than those provided pursuant to any other agreement with the Fund), including
but not limited to recordkeeping, transactional services, tax information
returns and reports, fund communication and shareholder communication
(collectively “administrative services”) for the Fund’s Class C shares, Class F
shares, Class R shares and Class 529 shares; and
WHEREAS, the
Investment Adviser is willing to perform or to cause to be performed such
transfer agent services and administrative services for the Fund’s Class C
shares, Class F shares, Class R shares and Class 529 shares on the terms and
conditions set forth herein; and
WHEREAS, the Fund
and the Investment Adviser wish to enter into an Administrative Services
Agreement (“Agreement”) whereby the Investment Adviser would perform or cause to
be performed such transfer agent services and administrative services for the
Fund’s Class C shares, Class F shares, Class R shares and Class 529
shares;
NOW, THEREFORE, the
parties agree as follows:
1. Services. During
the term of this Agreement, the Investment Adviser shall perform or cause to be
performed the transfer agent services and administrative services set forth in
Exhibit A hereto, as such exhibit may be amended from time to time by mutual
consent of the parties. The Fund and Investment Adviser acknowledge
that the Investment Adviser will contract with third parties, including American
Funds Service Company (“AFS”), to perform such transfer agent services and
administrative services. In selecting third parties to perform
transfer agent and administrative services, the Investment Adviser shall select
only those third parties that the Investment Adviser reasonably believes have
adequate facilities and personnel to diligently perform such
services. The Investment Adviser shall monitor, coordinate, oversee
and assist with the activities performed by third parties with which it or AFS
contracts to ensure shareholders receive high-quality service. In doing so the
Investment Adviser shall establish procedures to monitor the activities of such
third parties. These procedures may, but need not, include
monitoring: (i) telephone queue wait times; (ii) telephone abandon
rates; (iii) website and voice response unit downtimes; (iv) downtime of the
third party’s shareholder account recordkeeping system; (v) the accuracy and
timeliness of financial and non-financial transactions; (vi) to ensure
compliance with the Fund prospectus; and (vii) with respect to Class 529 shares,
compliance with the CollegeAmerica program description.
2. Fees.
(a) Transfer Agent
Fees. In consideration of transfer agent services performed or
caused to be performed by the Investment Adviser for the Fund’s Class C shares,
Class F shares and Class R shares, the Fund shall pay the Investment Adviser
transfer agent fees according to the fee schedule contained in the Shareholder
Services Agreement, as amended from time to time, between the Fund and
AFS. No Transfer Agent Fees shall be paid in respect of accounts that
are held in other than street name or a networked environment. No
fees shall be paid under this paragraph 2(a) for services provided by third
parties other than AFS. All fund-specific charges from third
parties—including DST charges, postage, NSCC transaction charges and similar
out-of-pocket expenses—will be passed through directly to the
Fund. Transfer agent fees shall be paid within 30 days after receipt
of an invoice for transfer agent services performed the preceding
month.
(b) Administrative Services
Fees. In consideration of administrative services performed or
caused to be performed by the Investment Adviser for the Fund’s Class C shares,
Class F shares, Class R shares and Class 529 shares, the Fund shall pay the
Investment Adviser an administrative services fee (“administrative
fee”). For the Fund’s Class C shares, Class F-1 shares, Class F-2
shares, Class R-1 shares, Class R-2 shares, Class R-3 shares, Class R-4 shares
and Class 529 shares, the administrative fee shall accrue daily and shall be
calculated at the annual rate of 0.15% of the average net assets of those
shares. For the Fund’s Class R-5 shares, the administrative fee shall
accrue daily and shall be calculated at the annual rate of 0.10% of the average
net assets of the Class R-5 shares. For the Fund’s Class R-6 shares, the
administrative fee shall accrue daily and shall be calculated at the annual rate
of 0.05% of the average net assets of the Class R-6 shares. The
administrative fee shall be paid within 30 days after receipt of an invoice for
administrative services performed in the preceding month.
3. Effective Date and
Termination of Agreement. This Agreement shall become
effective on May 1, 2009, and unless terminated sooner it shall continue in
effect until [Month] [Day], 2010. It may thereafter be
continued from year to year only with the approval of a majority of those
[Directors/Trustees] of the Fund who are not “interested persons” of the Fund
(as defined in the 0000 Xxx) and have no direct or indirect financial interest
in the operation of this Agreement or any agreement related to it (the
“Independent [Directors/Trustees]”). This Agreement may be terminated
as to the Fund as a whole or any class of shares individually at any time by
vote of a majority of the Independent [Directors/Trustees]. The
Investment Adviser may terminate this agreement upon sixty (60) days’ prior
written notice to the Fund.
4. Amendment. This
Agreement may not be amended to increase materially the fees payable under this
Agreement unless such amendment is approved by the vote of a majority of the
Independent [Directors/Trustees].
5. Assignment. This
Agreement shall not be assignable by either party hereto and in the event of
assignment shall automatically terminate forthwith. The term
“assignment” shall have the meaning set forth in the 1940
Act. Notwithstanding the foregoing, the Investment Adviser is
specifically authorized to contract with third parties for the provision of
transfer agent, shareholder services, and administrative services on behalf of
the Fund.
6. Issuance of Series of
Shares. If the Fund shall at any time issue shares in more
than one series, this Agreement may be adopted, amended, continued or renewed
with respect to a series as provided herein, notwithstanding that such adoption,
amendment, continuance or renewal has not been effected with respect to any one
or more other series of the Fund.
7. Choice of
Law. This Agreement shall be construed under and shall be
governed by the laws of the State of California, and the parties hereto agree
that proper venue of any action with respect hereto shall be Los Angeles County,
California.
8. Limitation
on Fees. Notwithstanding
the foregoing, the portion of the administrative fees payable under this
Agreement retained by the Investment Adviser (after all permissible payments to
AFS and third party service providers) will be limited to no more than 0.05% of
average net assets per share class.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed in duplicate original by its officers
thereunto duly authorized, as of [Month] [Day], 2009.
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CAPITAL
RESEARCH AND MANAGEMENT COMPANY
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[NAME OF
FUND]
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By:
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By:
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Xxxxxxx X.
Xxxxxx, President
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[Name of
Officer], [Title]
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By:
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By:
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Xxxxxxx X.
Xxxxxx, Senior Vice President
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[Name],
Secretary
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and
Secretary
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EXHIBIT
A
to
the
Transfer Agent
Services
The Investment
Adviser or any third party with whom it may contract, including its affiliates
(the Investment Adviser and any such third-party are collectively referred to as
“Service Provider”), shall act, as necessary, as stock transfer agent, dividend
disbursing agent and redemption agent for the Fund’s Class C shares, Class F
shares, Class R shares and Class 529 shares, and shall provide such additional
related services as the Fund’s Class C shares, Class F shares, Class R shares
and Class 529 shares may from time to time require, all of which services are
sometimes referred to herein as "shareholder services."
Administrative
Services
1. Record
Maintenance
The Service
Provider shall maintain, and require any third parties with which it contracts
to maintain with respect to each Fund shareholder holding the Fund’s Class C
shares, Class F shares, Class R shares and/or Class 529 shares in a Service
Provider account (“Customers”) the following records:
a. Number
of Shares;
b. Date,
price and amount of purchases and redemptions (including dividend reinvestments)
and dates and amounts of dividends paid for at least the current year to
date;
c. Name
and address of the Customer, including zip codes and social security numbers or
taxpayer identification numbers;
d. Records
of distributions and dividend payments; and
e. Any
transfers of shares.
2. Shareholder
Communications
Service Provider
shall:
a. Provide
to a shareholder mailing agent for the purpose of delivering certain
Fund-related materials the names and addresses of all Customers. The
Fund-related materials shall consist of updated prospectuses and any supplements
and amendments thereto, annual and other periodic reports, proxy or information
statements and other appropriate shareholder communications. In the
alternative, the Service Provider may distribute the Fund-related materials to
its Customers.
b. Deliver
current Fund prospectuses and statements of additional information and annual
and other periodic reports upon Customer request, and, as applicable, with
confirmation statements;
c. Deliver
statements to Customers on no less frequently than a quarterly basis showing,
among other things, the number of Class C shares, Class F shares, Class R shares
and/or Class 529 shares of the Fund owned by such Customer and the net asset
value of the Class C shares, Class F shares, Class R shares and/or Class 529
shares of the Fund as of a recent date;
d. Produce
and deliver to Customers confirmation statements reflecting purchases and
redemptions of Class C shares, Class F shares, Class R shares and/or Class 529
shares of the Fund;
e. Respond
to Customer inquiries regarding, among other things, share prices, account
balances, dividend amounts and dividend payment dates;
f. With
respect to Class C and/or Class F shares of the Fund purchased by Customers
after the effective date of this Agreement, provide average cost basis reporting
to Customers to assist them in preparation of their income tax returns;
and
g. If
the Service Provider accepts transactions in the Fund’s Class C shares, Class F
shares and Class R shares from any brokers or banks in an omnibus relationship,
require each such broker or bank to provide such shareholder communications as
set forth in 2(a) through 2(f) to its own Customers.
3. Transactional
Services
The Service
Provider shall communicate to its Customers, as to Class C shares, Class F
shares, Class R shares and Class 529 shares of the Fund, purchase, redemption
and exchange orders reflecting the orders it receives from its Customers or from
any brokers and banks for their Customers. The Service Provider shall
also communicate to beneficial owners holding through it, and to any brokers or
banks for beneficial owners holding through them, as to shares of Class C
shares, Class F shares, Class R shares and Class 529 shares of the Fund,
mergers, splits and other reorganization activities, and require any broker or
bank to communicate such information to its Customers.
4. Tax Information Returns and
Reports
The Service
Provider shall prepare and file, and require to be prepared and filed by any
brokers or banks as to their Customers, with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting: (i) dividends and other distributions made; (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations; and (iii) gross
proceeds of sales transactions as required.
5. Fund
Communications
The Service
Provider shall, upon request by the Fund, on each business day, report the
number of Class C shares, Class F shares, Class R shares and Class 529 shares on
which the administrative fee is to be paid pursuant to this
Agreement. The Service Provider shall also provide the Fund with a
monthly invoice.
6. Coordination and Oversight
of Service Providers
The Investment
Adviser shall coordinate, monitor, oversee and assist with the activities
performed by the Service Providers with which it contracts to ensure that the
shareholders of the Fund’s Class C shares, Class F shares, Class R shares and
Class 529 shares receive high-quality service. The Investment Adviser
shall also ensure that Service Providers deliver to Customers account statements
and all Fund-related materials, including prospectuses, shareholder reports, and
proxies.
SHAREHOLDER
SERVICES AGREEMENT
1. The
parties to this Agreement, which is effective as of [DATE], 2009, are American
Funds Money Market Fund, a Delaware business trust (the “Fund”), and American
Funds Service Company, a California corporation (“AFS”). AFS is a
wholly owned subsidiary of Capital Research and Management Company (“CRMC”).
This Agreement will continue in effect until amended or terminated in accordance
with its terms.
2. The
Fund hereby employs AFS, and AFS hereby accepts such employment by the Fund, as
its transfer agent. In such capacity AFS will provide the services of
stock transfer agent, dividend disbursing agent, redemption agent, and such
additional related services as the Fund may from time to time require, all of
which services are sometimes referred to herein as “shareholder
services.” In addition, AFS assumes responsibility for the Fund’s
implementation and compliance with the procedures set forth in the Anti-Money
Laundering (“AML”) Program of the Fund and does hereby agree to provide all
records relating to the AML Program to any federal examiner of the Fund upon
request.
3. AFS
has entered into substantially identical agreements with other investment
companies for which CRMC serves as investment adviser. (For the
purposes of this Agreement, such investment companies, including the Fund, are
called “participating investment companies.”)
4. AFS
has entered into an agreement with DST Systems, Inc. (hereinafter called “DST”),
to provide AFS with electronic data processing services sufficient for the
performance of the shareholder services referred to in paragraph 2.
5. The
Fund, together with the other participating companies, will maintain a Review
and Advisory Committee, which Committee will review and may make recommendations
to the boards of the participating investment companies regarding all fees and
charges provided for in this Agreement, as well as review the level and quality
of the shareholder services rendered to the participating investment companies
and their shareholders. Each participating investment company may
select one director or trustee who is not affiliated with CRMC, or any of its
affiliated companies, or with Washington Management Corporation or any of its
affiliated companies, to serve on the Review and Advisory
Committee.
6. AFS
will provide to the participating investment companies the shareholder services
referred to herein in return for the following fees:
Annual account
maintenance fee (paid monthly):
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Fee per account (annual
rate)
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Rate
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Broker
controlled account (networked and street)
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$0.84
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Full service
account
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$18.00
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No annual fee will
be charged for a participant account underlying a 401(k) or other defined
contribution plan where the plan maintains a single account on AFS’ books and
responds to all participant inquiries.
AFS will xxxx the
Fund monthly, on or shortly after the first of each calendar month, and the Fund
will pay AFS within five business days of such billing.
Any revision of the
schedule of charges set forth herein shall require the affirmative vote of a
majority of the members of the board of trustees of the Fund.
7. All
fund-specific charges from third parties -- including DST charges, payments
described in the next sentence, postage, NSCC transaction charges and similar
out-of-pocket expenses -- will be passed through directly to the Fund or other
participating investment companies, as applicable. AFS, subject to
approval of its board of directors, is authorized in its discretion to negotiate
payments to third parties for account maintenance and/or transaction processing
services provided such payments do not exceed the anticipated savings to the
Fund, either in fees payable to AFS hereunder or in other direct Fund expenses,
that AFS reasonably anticipates would be realized by the Fund from using the
services of such third party rather than maintaining the accounts directly on
AFS' books and/or processing non-automated transactions.
8. It
is understood that AFS may have income in excess of its expenses and may
accumulate capital and surplus. AFS is not, however, permitted to
distribute any net income or accumulated surplus to its parent, CRMC, in the
form of a dividend without the affirmative vote of a majority of the members of
the boards of directors/trustees of the Fund and all participating investment
companies.
9. This
Agreement may be amended at any time by mutual agreement of the parties, with
agreement of the Fund to be evidenced by affirmative vote of a majority of the
members of the board of trustees of the Fund.
10. This
Agreement may be terminated on 180 days' written notice by either
party. In the event of a termination of this Agreement, AFS and the
Fund will each extend full cooperation in effecting a conversion to whatever
successor shareholder service provider(s) the Fund may select, it being
understood that all records relating to the Fund and its shareholders are
property of the Fund.
11. In
the event of a termination of this Agreement by the Fund, the Fund will pay to
AFS as a termination fee the Fund's proportionate share of any costs of
conversion of the Fund's shareholder service from AFS to a
successor. In the event of termination of this Agreement and all
corresponding agreements with all the participating investment companies, all
assets of AFS will be sold or otherwise converted to cash, with a view to the
liquidation of AFS when it ceases to provide shareholder services for the
participating investment companies. To the extent any such assets are
sold by AFS to CRMC and/or any of its affiliates, such sales shall be at fair
market value at the time of sale as agreed upon by AFS, the purchasing company
or companies, and the Review and Advisory Committee. After all assets
of AFS have been converted to cash and all liabilities of AFS have been paid or
discharged, an amount equal to any capital or paid-in surplus of AFS that shall
have been contributed by CRMC or its affiliates shall be set aside in cash for
distribution to CRMC upon liquidation of AFS. Any other capital or
surplus and any assets of AFS remaining after the foregoing provisions for
liabilities and return of capital or paid-in surplus to CRMC shall be
distributed to the participating investment companies in such proportions as may
be determined by the Review and Advisory Committee.
12. In
the event of disagreement between the Fund and AFS, or between the Fund and
other participating investment companies as to any matter arising under this
Agreement, which the parties to the disagreement are unable to resolve, the
question shall be referred to the Review and Advisory Committee for
resolution. If the Review and Advisory Committee is unable to resolve
the question to the satisfaction of both parties, either party may elect to
submit the question to arbitration; one arbitrator to be named by each party to
the disagreement and a third arbitrator to be selected by the two arbitrators
named by the original parties. The decision of a majority of the
arbitrators shall be final and binding on all parties to the
arbitration. The expenses of such arbitration shall be paid by the
party electing to submit the question to arbitration.
13. The
obligations of the Fund under this Agreement are not binding upon any of the
directors, trustees, officers, employees, agents or shareholders of the Fund
individually, but bind only the Fund itself. AFS agrees to look
solely to the assets of the Fund for the satisfaction of any liability of the
Fund in respect to this Agreement and will not seek recourse against such
directors, trustees, officers, employees, agents or shareholders, or any of them
or their personal assets for such satisfaction.
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AMERICAN
FUNDS SERVICE COMPANY
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By
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By
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President
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,
President
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and Principal
Executive Officer
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By
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By
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Secretary
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,
Secretary
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INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (the “Agreement”) is made as of the date set forth on
the signature page by and between American Funds Money Market Fund, a Delaware
statutory trust (the “Fund”), and the trustee of the Fund whose name is set
forth on the signature page (the “Board Member”).
WHEREAS, the Board
Member is a trustee of the Fund, and the Fund wishes the Board Member to
continue to serve in that capacity; and
WHEREAS, the
Agreement and Declaration of Trust of the Fund (the “Trust Instrument”) and
By-Laws of the Fund and applicable federal and Delaware laws permit the Fund to
contractually obligate itself to indemnify and hold the Board Member harmless 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. Certain
capitalized terms used herein are defined in Section 5.
1. Indemnification. The Fund shall
indemnify and hold harmless the Board Member against any liabilities or Expenses
(collectively, “Liability”) actually and reasonably incurred by the Board Member
in any Proceeding arising out of or in connection with the Board Member’s
service to the Fund, to the fullest extent permitted by the Trust Instrument and
By-Laws of the Fund and the laws of the State of Delaware, the Securities Act of
1933, and the Investment Company Act of 1940, as now or hereafter in force,
subject to the provisions of paragraphs (a), (b) and (c) of this Section
1. The Fund’s Board of Trustees shall take such actions as may be
necessary to carry out the intent of these indemnification provisions and shall
not amend the Fund’s Trust Instrument or By-laws to limit or eliminate the right
to indemnification provided herein with respect to acts or omissions occurring
prior to such amendment or repeal.
(a) Special
Condition. With respect to Liability to the Fund or its
shareholders, and subject to applicable state and federal law, the Board Member
shall be indemnified pursuant to this Section 1 against any Liability unless
such Liability arises by reason of the Board Member’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 such Section 17(h) of the Investment
Company Act of 1940, as amended (“Disabling Conduct”).
(b) Special Process
Condition. With respect to Liability to the Fund or its
shareholders, no indemnification shall be made unless a determination has been
made by reasonable and fair means that the Board Member has not engaged in
Disabling Conduct. Such reasonable and fair means shall be
established in conformity with then applicable federal and Delaware law and
administrative interpretations. In any determination with respect to
Disabling Conduct, a trustee requesting indemnification who is not an
“interested person” of the Fund, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended, shall be afforded a rebuttable
presumption that such trustee did not engage in such conduct while acting in his
or her capacity as a trustee.
(c) State Law
Restrictions. In accordance with the Delaware Statutory Trust
Act, the Board Member shall not be indemnified and held harmless pursuant to
this Section 1 if the substantive and procedural standards for indemnification
under such law have not been met.
2. Advancement
of Expenses. The Fund shall
promptly advance funds to the Board Member to cover any and all Expenses the
Board Member incurs with respect to any Proceeding arising out of or in
connection with the Board Member’s service to the Fund, to the fullest extent
permitted by the laws of the State of Delaware, the Securities Act of 1933, and
the Investment Company Act of 1940, as such statutes are now or hereafter in
force, subject to the provisions of paragraphs (a) and (b) of this Section
2.
(a) Affirmation of
Conduct. A request by the Board Member for advancement of
funds pursuant to this Section 2 shall be accompanied by the Board Member’s
written affirmation of his or her good faith belief that he or she met the
standard of conduct necessary for indemnification, and such other statements,
documents or undertakings as may be required under applicable federal and
Delaware law.
(b) Special Conditions to
Advancement. With respect to Liability to the Fund or its
shareholders, and subject to applicable state and federal law, the Board Member
shall be entitled to advancements of Expenses pursuant to this Section 2 against
any Liability to the Fund or its shareholders if (1) the Fund has obtained
assurances to the extent required by applicable federal and Delaware law, such
as by obtaining insurance or receiving collateral provided by the Board Member,
to the reasonable satisfaction of the Board, that the advance will be repaid if
the Board Member is found to have engaged in Disabling Conduct, or (2) the Board
has a reasonable belief that the Board Member has not engaged in Disabling
Conduct and ultimately will be entitled to indemnification. In
forming such a reasonable belief, the Board of Trustees shall act in conformity
with then applicable federal and Delaware law and administrative
interpretations, and shall afford a trustee requesting an advance who is not an
“interested person” of the Fund, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended, a rebuttable presumption that such
trustee did not engage in Disabling Conduct while acting in his or her capacity
as a trustee.
3. Procedure
for Determination of Entitlement to Indemnification and Advancements. A request by the
Board Member 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 Board Member. The Secretary of the
Fund shall promptly advise the Board of such request.
(a) Methods of
Determination. Upon the Board Member’s request for
indemnification or advancement of Expenses, a determination with respect to the
Board Member’s entitlement thereto shall be made by the Board or Independent
Counsel in accordance with applicable federal and Delaware law. The
Board Member shall have the right, in his or her sole discretion, to have
Independent Counsel make such a determination. The Board Member 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 Board Member and reasonably
necessary to such determination. Any Expenses incurred by the Board
Member in so cooperating shall be borne by the Fund, irrespective of the
determination as to the Board Member’s entitlement to indemnification or
advancement of Expenses.
(b) Independent
Counsel. If the determination of entitlement to
indemnification or advancement of Expenses is to be made by Independent Counsel,
the Board of Trustees shall select the Independent Counsel, and the Secretary of
the Fund shall give written notice to the Board Member advising the Board Member
of the identity of the Independent Counsel selected. The Board Member
may, within five days after receipt of such written notice, deliver to the
Secretary of the Fund 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 Section 4,
and shall set forth with particularity the factual basis of such
assertion. Upon such objection, the Board of Trustees, acting in
conformity with applicable federal and Delaware law, shall select another
Independent Counsel.
If
within fourteen days after submission by the Board Member of a written request
for indemnification or advancement of Expenses no such Independent Counsel shall
have been selected without objection, then either the Board or the Board Member
may petition the Chancery Court of the State of Delaware or any other court of
competent jurisdiction for resolution of any objection that shall have been made
to the selection of Independent Counsel and/or 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 Fund 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
to determine whether the Board Member is entitled to indemnification or
advancement of Expenses shall not have made such determination within thirty
days after receipt by the Secretary of the Fund of the request therefor, the
requisite determination of entitlement to indemnification or advancement of
Expenses shall be deemed to have been made, and the Board Member shall be
entitled to such indemnification or advancement, absent (i) an intentional
misstatement by the Board Member of a material fact, or an intentional omission
of a material fact necessary to make the Board Member’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 federal and Delaware 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.
(d) Payment Upon Determination
of Entitlement. If a determination is made pursuant to Section
1 or Section 2 (or is deemed to be made pursuant to paragraph (c) of this
Section 3) that the Board Member is entitled to indemnification or advancement
of Expenses, payment of any indemnification amounts or advancements owing to the
Board Member 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). If such payment is not made when due, the
Board Member shall be entitled to an adjudication in a court of competent
jurisdiction of the Board Member’s entitlement to such indemnification or
advancements. The Board Member shall commence such proceeding seeking
an adjudication within one year following the date on which he or she first has
the right to commence such proceeding pursuant to this paragraph
(d). In any such proceeding, the Fund shall be bound by the
determination that the Board Member is entitled to indemnification or
advancements, absent (i) an intentional misstatement by the Board Member of a
material fact, or an intentional omission of a material fact necessary to make
his or her statement not materially misleading, in connection with the request
for indemnification or advancements, or (ii) a prohibition of such
indemnification or advancements under applicable federal and Delaware
law.
(e) Appeal of Adverse
Determination. If a determination is made that the Board
Member is not entitled to indemnification or advancements, the Board Member
shall be entitled to an adjudication of such matter in any court of competent
jurisdiction. Alternatively, the Board Member, at his or her option,
may seek an award in arbitration to be conducted by a single arbitrator pursuant
to the rules of the American Arbitration Association. The Board
Member shall commence such proceeding or arbitration within one year following
the date on which the adverse determination is made. Any such
judicial proceeding or arbitration shall be conducted in all respect as a de
novo trial or arbitration on the merits, and the Board Member shall not be
prejudiced by reason of such adverse determination.
(f) Expenses of
Appeal. If the Board Member seeks a judicial adjudication of
or an award in arbitration to enforce his or her rights under, or to recover
damages for breach of, the indemnification or Expense advancement provisions of
this Agreement, the Board Member shall be entitled to recover from the Fund, and
shall be indemnified by the Fund against, any and all Expenses actually and
reasonably incurred by the Board Member in such judicial adjudication or
arbitration, but only if the Board Member prevails therein. If it
shall be determined in such judicial adjudication or arbitration that the Board
Member is entitled to receive part but not all of the indemnification or
advancement of Expenses sought, the Expenses incurred by the Board Member in
connection with such judicial adjudication or arbitration shall be prorated as
the court or arbitrator determines to be appropriate.
(g) Validity of
Agreement. In any judicial proceeding or arbitration commenced
pursuant to this Section 3, the Fund shall be precluded from asserting that the
procedures and presumptions set forth in this Agreement are not valid, binding
and enforceable against the Fund, and shall stipulate in any such court or
before any such arbitrator that the Fund is bound by all the provisions of this
Agreement.
4. General
Provisions.
(a) Non-Exclusive
Rights. The provisions for indemnification of, and advancement
of Expenses to, the Board Member set forth in this Agreement shall not be deemed
exclusive of any other rights to which the Board Member may otherwise be
entitled. Notwithstanding the previous sentence, the indemnification
provided for in this Agreement is in lieu of, and not in addition to, the
indemnification set forth in the Trust Instrument. The Fund shall not
be liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that the Board Member has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.
(b) Continuation of
Provisions. This Agreement shall be binding upon all
successors of the Fund, including without limitation any transferee of all or
substantially all assets of the Fund and any successor by merger, consolidation,
or operation of law, and shall inure to the benefit of the Board Member’s
spouse, heirs, assigns, devisees, executors, administrators and legal
representatives. The provisions of this Agreement shall continue
until the later of (1) ten years after the Board Member has ceased to provide
any service to the Fund, and (2) the final termination of all Proceedings in
respect of which the Board Member has asserted, is entitled to assert, or has
been granted rights of indemnification or advancement of Expenses hereunder and
of any proceeding commenced by the Board Member pursuant to Section 3 relating
thereto. Unless required by applicable federal or Delaware law, no
amendment of the Trust Instrument or By-Laws of the Fund shall limit or
eliminate the right of the Board Member to indemnification and advancement of
Expenses set forth in this Agreement with respect to acts or omissions occurring
prior to such amendment or repeal. In the event the Fund or any
successor shall discontinue its operations within the term of this Agreement,
adequate provision shall be made to honor the Fund’s obligations under this
Agreement.
(c) Selection of
Counsel. Counsel selected by the Board shall be entitled to
assume the defense of any Proceeding for which the Board Member seeks
indemnification or advancement of Expenses under this
Agreement. However, counsel selected by the Board Member shall
conduct the defense of the Board Member to the extent reasonably determined by
such counsel to be necessary to protect the interests of the Board Member, and
the Fund shall indemnify the Board Member therefor to the extent otherwise
permitted under this Agreement, if (1) the Board Member reasonably determines
that there may be a conflict in the Proceeding between the positions of the
Board Member and the positions of the Fund or the other parties to the
Proceeding that are indemnified by the Fund and not represented by separate
counsel, or the Board Member otherwise reasonably concludes that representation
of both the Board Member, the Fund and such other parties by the same counsel
would not be appropriate, or (2) the Proceeding involves the Board Member but
neither the Fund nor any such other party and the Board Member reasonably
withholds consent to being represented by counsel selected by the
Fund. If the Board has not selected counsel to assume the defense of
any such Proceeding for the Board Member within thirty days after receiving
written notice thereof from the Board Member, the Fund shall be deemed to have
waived any right it might otherwise have to assume such defense.
(d) D&O
Insurance. For a period of at least six years after the Board
Member has ceased to provide services to the Fund, the Fund shall purchase and
maintain in effect, through “tail” or other appropriate coverage, one or more
policies of insurance on behalf of the Board Member to the maximum extent of the
coverage provided to the active members of the Board of Trustees of the
Fund.
(e) Subrogation. In
the event of any payment by the Fund pursuant to this Agreement, the Fund shall
be subrogated to the extent of such payment to all of the rights of recovery of
the Board Member, who shall, upon reasonable written request by the Fund and at
the Fund’s expense, execute all such documents and take all such reasonable
actions as are necessary to enable the Fund to enforce such
rights. Nothing in this Agreement shall be deemed to diminish or
otherwise restrict the right of the Fund or the Board Member to proceed or
collect against any insurers and to give such insurers any rights against the
Fund under or with respect to this Agreement, including without limitation any
right to be subrogated to the Board Member’s rights hereunder, unless otherwise
expressly agreed to by the Fund in writing, and the obligation of such insurers
to the Fund and the Board Member 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 Board Member shall promptly notify the
Secretary of the Fund in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to 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 Board Member’s rights or the Fund’s obligations under
this Agreement.
(g) Notices. All
notices, requests, demands and other communications to a party pursuant to this
Agreement shall be in writing, addressed to such party at the address 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 by the addressee) or two days after being sent (1) by certified or
registered mail, postage prepaid, return receipt requested, (2) by nationally
recognized overnight courier service or (3) by tested electronic
means.
(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.
(i) Modification and
Waiver. This Agreement supersedes any existing or prior
agreement between the Fund and the Board Member pertaining to the subject matter
of indemnification, advancement of Expenses and insurance. 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.
5. Definitions. For
purposes of this Agreement, the following terms shall have the following
meanings:
(a) “Board”
means the board of trustees of the Fund, excluding those members of the board of
trustees who are not eligible under applicable federal or Delaware law to
participate in making a particular determination pursuant to Section 3 of this
Agreement; provided, however, that if no two members of the Board of Trustees
are eligible to participate, Board shall mean Independent Counsel.
(b) “Disabling
Conduct” shall be as defined in Section 1.
(c) “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, 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.
(d) “Final
termination of a Proceeding” shall mean a final adjudication by court order or
judgment of the court or other body before which a matter is pending, from which
no further right of appeal or review exists.
(e) “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 Fund or the Board Member 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 Fund or the Board
Member in an action to determine the Board Member’s rights pursuant to this
Agreement, regardless of when the Board Member’s act or failure to act
occurred.
(f) “Independent
Board Member” shall mean a trustee of the Fund who is neither an “interested
person” of the Fund as defined in Section 2(a)(19) of the Investment Company Act
of 1940, as amended, nor a party to the Proceeding with respect to which
indemnification or advances are sought.
(g) “Liability
shall be as defined in Section 1.
(h) “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 mechanism, investigation, hearing, or
other proceeding, including any appeal from any of the foregoing, whether civil,
criminal, administrative or investigative, and shall also include any proceeding
brought by the Board Member against the Fund.
(i) The
Board Member’s “service to the Fund” shall include without limitation the Board
Member’s service as a trustee, officer, employee, agent or representative of the
Fund, and his or her service at the request of the Fund as a director, trustee,
officer, employee, agent or representative of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise.
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date set
forth below.
Dated:
a Delaware Statutory Trust
By:
Name:
Title: Secretary
Address for
notices:
000 Xxxxx Xxxx
Xxxxxx
Xxx Xxxxxxx, XX
00000-0000
Name: «FirstName» «LastName»
Address for
notices:
«Company»
«PreferredAddress»
«CityStZip»
