AMERICAN FUNDS TARGET DATE RETIREMENT SERIES, INC. ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE
SERVICES AGREEMENT
WHEREAS,
American
Funds Target Date Retirement Series, Inc. (the "Series"), is a Maryland
corporation registered under the Investment Company Act of 1940, as amended
(the
"1940 Act"), as an open-end diversified investment company that consists of
a
series of nine funds (each
a "Fund" and
collectively the "Funds") and may offer additional series of funds in the
future;
WHEREAS,
each Fund
offers Class A, Class R-1 shares, Class R-2 shares, Class R-3 shares, Class
R-4
shares and Class R-5 shares (collectively, the "Class A and R
shares");
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 Series and to other investment companies;
WHEREAS,
the Series
wishes to have the Investment Adviser arrange for and coordinate and monitor
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
each
Fund’s Class A and R shares;
WHEREAS,
the
Investment Adviser is willing to perform or to cause to be performed such
transfer agent services and administrative services for each Fund’s Class A and
R shares on the terms and conditions set forth herein; and
WHEREAS,
the Series
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 each
Fund’s Class A and R 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 Series 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 and oversee the activities of the 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; and (vi) to ensure compliance with the Series
prospectus;
2. Fees.
(a) Administrative
Services Fees.
In consideration
of administrative services performed or caused to be performed by the Investment
Adviser for each Fund’s Class A and R shares, the Series shall pay the
Investment Adviser an administrative services fee ("administrative fee"). The
Class A and R shares shall be subject to an administrative fee of 0.05% of
average net assets for all Class A and R shares, as set forth in the Series'
prospectus and SAI. The Funds Class R-5 shares shall not be subject to an
administrative fee. The administrative fee shall be paid within 30 days after
receipt of an invoice for administrative services performed in the preceding
month.
(b) Transfer
Agent Fees. In
calculating
transfer agent fees allocable to the Class A and R shares, the fees generated
from maintaining these accounts (determined using the fee schedule contained
in
the Shareholder Services Agreement between the Series and its transfer agent)
shall be allocated to a class of shares based on its aggregate net assets
relative to that class of shares. The fee thus determined shall be paid by
the
Investment Adviser from the Administrative Services Fee.
3. Effective
Date
and Termination of Agreement.
This Agreement
shall become effective on February
1,
2007,
and unless terminated sooner it shall continue in effect until
January
31,
2008.
It may thereafter be continued from year to year only with the approval of
a
majority of those Directors of the Series who are not "interested persons"
of
the Series (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"). This Agreement may be terminated as to the Series
as a
whole or any class of shares individually at any time by vote of a majority
of
the Independent Directors. The Investment Adviser may terminate this agreement
upon sixty (60) days’ prior written notice to the Series.
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.
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 Series.
6. Issuance
of
Additional Series of Funds.
This Agreement
shall apply to any funds added to the Series that offer Class A and R shares
unless the Series’ Independent Directors otherwise provide.
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.
IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in duplicate
original by its officers thereunto duly authorized, as of February
1,
2007.
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CAPITAL
RESEARCH AND
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AMERICAN
FUNDS TARGET DATE
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MANAGEMENT
COMPANY
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RETIREMENT
SERIES, INC.
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By:
/s/
Xxxxxxx
X. Xxxxxx
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By:
/s/
Xxxxxxx
X. Xxxxxx
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Xxxxxxx
X.
Xxxxxx
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Xxxxxxx
X.
Xxxxxx
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President
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President
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By:
/s/
Xxxx X.
Xxxxx, Xx.
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By:
/s/ Xxxxxx
X. Xxxxxxxx
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Xxxx
X.
Xxxxx, Xx.
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Xxxxxx
X.
Xxxxxxxx
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Vice
Chairman
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Secretary
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EXHIBIT
A
to
the
Administrative
Services Agreement
Transfer
Agent Services
The
Investment
Adviser or any third party with whom it may contract, including American Funds
Service Company (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 each
Fund’s Class A and R shares, and shall provide such additional related services
as each Fund’s Class A and R 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 A and
R 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 Series-related
materials the names and addresses of all Customers. The Series-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 Series-related materials to its
Customers.
b. Deliver
current
Series 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 A and R shares of each Fund owned by such Customer
and the net asset value of the Class A and R shares of each Fund as of a recent
date;
d. Produce
and deliver
to Customers confirmation statements reflecting purchases and redemptions of
Class A and R shares of the Funds;
e. Respond
to Customer
inquiries regarding, among other things, share prices, account balances,
dividend amounts and dividend payment dates;
f. If
the Service
Provider accepts transactions in the Funds’ Class A and 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(e) to
its
own Customers.
3. Transactional
Services
The
Service
Provider shall communicate to its Customers, as to Class A and R shares of
the
Funds, 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 Class A and R shares of the Funds, 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. Series
Communications
The
Service
Provider shall, upon request by the Series, on each business day, report the
number of Class A and R shares on which the administrative fee is to be paid
pursuant to this Agreement. The Service Provider shall also provide the Series
with a monthly invoice.
6. Monitoring
of
Service Providers
The
Investment
Adviser shall coordinate and monitor the activities of the Service Providers
with which it contracts to ensure that the shareholders of each Fund’s Class A
and R
shares receive
high-quality service. The Investment Adviser shall also ensure that Service
Providers deliver to Customers account statements and all Series-related
materials, including prospectuses, shareholder reports, and
proxies.
SHAREHOLDER
SERVICES AGREEMENT
1. The
parties to this
Agreement, which is effective as of February 1, 2007, are
American
Funds
Target Date Retirement Series, Inc. (hereinafter called “the Series”) and
American Funds Service Company, a California corporation (hereinafter called
“AFS”). AFS is a wholly owned subsidiary of Capital Research and Management
Company (hereinafter called “CRMC”). This Agreement will continue in effect
until amended or terminated in accordance with its terms.
2. The
Series hereby
employs AFS, and AFS hereby accepts such employment by the Series, 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 Series 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 Series’ implementation and compliance with the procedures
set forth in the Anti-Money Laundering (“AML”) Program of the Series and does
hereby agree to provide all records relating to the AML Program to any federal
examiner of the Series 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 Series, 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
Series,
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):
$0.57
per month for
each open account on AFS’ books or in Level 0, 2 or 4
Networking
($6.84
per year).
$0.06
per month for
each open account maintained in Street Name or
Level
1 or 3
Networking ($0.72 per year).
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.
Transaction
fees:
$1.55
per
non-automated transaction
$0.20
per automated
transaction
For
this purpose,
“transactions” shall include all types of transactions included in an “activity
index” as reported to the Review and Advisory Committee at least annually. AFS
will xxxx the Series monthly, on or shortly after the first of each calendar
month, and the Series 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 directors of the Series.
7. All
Series-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 Series 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 Series, either
in
fees payable to AFS hereunder or in other direct Series expenses, that AFS
reasonably anticipates would be realized by the Series 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
of the
Series and all participating investment companies.
9. This
Agreement may
be amended at any time by mutual agreement of the parties, with agreement
of the
Series to be evidenced by affirmative vote of a majority of the members of
the
board of directors/trustees of the Series.
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 Series will each extend full
cooperation in effecting a conversion to whatever successor shareholder service
provider(s) the Series may select, it being understood that all records relating
to the Series and its shareholders are property of the Series.
11. In
the event of a
termination of this Agreement by the Series, the Series will pay to AFS as
a
termination fee the Series' proportionate share of any costs of conversion
of
the Series' 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 Series and AFS, or between the Series 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 Series under this Agreement are not binding upon any of the directors,
trustees, officers, employees, agents or shareholders of the Series
individually, but bind only the Series itself. AFS agrees to look solely
to the
assets of the Series for the satisfaction of any liability of the Series
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.
IN
WITNESS WHEREOF,
the Series has caused this Plan to be executed by its officers thereunto
duly
authorized, as of February 1, 2007.
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AMERICAN
FUNDS SERVICE
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AMERICAN
FUNDS TARGET DATE
|
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COMPANY
|
RETIREMENT
SERIES, INC.
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By
/s/
J. Xxxxx
Xxxx
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By
/s/
Xxxxxxx
X. Xxxxxx
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J.
Xxxxx Xxxx
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Xxxxxxx
X.
Xxxxxx
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Chairman
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President
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By /s/
Xxxxxx X.
Xxxxxxxx
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By
/s/
Xxxxxx X.
Xxxxxxxx
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Xxxxxx
X.
Xxxxxxxx
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Xxxxxx
X.
Xxxxxxxx
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Secretary Secretary
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This
Indemnification Agreement (the “Agreement”) is made as of the date set forth on
the signature page by and between American Funds Target Date Retirement
Series,
Inc., a Maryland corporation (the “Series”), and the director of the Series
whose name is set forth on the signature page (the “Board Member”).
WHEREAS,
the Board
Member is a director of the Series, and the Series wishes the Board Member
to
continue to serve in that capacity; and
WHEREAS,
the
Articles of Incorporation and By-Laws of the Series and applicable laws
permit
the Series 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 Series 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 Series, to the fullest extent permitted by the Articles
of
Incorporation and By-Laws of the Series and the laws of the State of Maryland,
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 Series’ Board of Directors shall take such actions as may be
necessary to carry out the intent of these indemnification provisions and
shall
not amend the Series’ Articles of Incorporation 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 Series 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 Series 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 law and administrative
interpretations. In any determination with respect to disabling conduct,
a
director requesting indemnification who is not an “interested person” of the
Series, as defined in Section 2(a)(19) of the Investment Company Act of
1940, as
amended, shall be afforded a rebuttable presumption that such director
did not
engage in such conduct while acting in his or her capacity as a
director.
(c)
State
Law
Restrictions.
In accordance
with the General Corporation Law of the State of Maryland, 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 Series 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 Series, to the fullest extent
permitted by the laws of the State of Maryland, 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 law.
(b)
Special
Conditions to Advancement.
With respect to
Liability to the Series 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 Series or its
shareholders if (1) the Series has obtained assurances to the extent required
by
applicable 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 Directors shall act in
conformity with then applicable law and administrative interpretations,
and
shall afford a director requesting an advance who is not an “interested person”
of the Series, as defined in Section 2(a)(19) of the Investment Company
Act of
1940, as amended, a rebuttable presumption that such director did not engage
in
disabling conduct while acting in his or her capacity as a
director.
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 Series
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 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 Series, 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 Directors shall select the
Independent Counsel, and the Secretary of the Series 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 Series 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 Directors, acting
in
conformity with applicable 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 Superior Court of the State of California 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
Series 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
Series 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 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 Series 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 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 Series, and shall be indemnified
by
the Series 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 Series
shall
be precluded from asserting that the procedures and presumptions set forth
in
this Agreement are not valid, binding and enforceable against the Series,
and
shall stipulate in any such court or before any such arbitrator that the
Series
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. The Series 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 Series, including without limitation
any transferee of all or substantially all assets of the Series 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 Series, 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 law, no amendment
of
the Articles of Incorporation or By-Laws of the Series 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 Series or any successor shall
discontinue its operations within the term of this Agreement, adequate
provision
shall be made to honor the Series’ 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 Series
shall indemnify the Board Member therefore 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 Series or the other parties to the Proceeding
that are
indemnified by the Series and not represented by separate counsel, or the
Board
Member otherwise reasonably concludes that representation of both the Board
Member, the Series and such other parties by the same counsel would not
be
appropriate, or (2) the Proceeding involves the Board Member but neither
the
Series nor any such other party and the Board Member reasonably withholds
consent to being represented by counsel selected by the Series. 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 Series 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
Series, the Series 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 Directors of the Series.
(e)
Subrogation.
In the event of
any payment by the Series pursuant to this Agreement, the Series 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 Series
and at
the Series’ expense, execute all such documents and take all such reasonable
actions as are necessary to enable the Series to enforce such rights. Nothing
in
this Agreement shall be deemed to diminish or otherwise restrict the right
of
the Series or the Board Member to proceed or collect against any insurers
and to
give such insurers any rights against the Series 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 Series
in
writing, and the obligation of such insurers to the Series 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 Series 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 Series’ 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, 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.
(i)
Modification
and
Waiver.
This Agreement
supersedes any existing or prior agreement between the Series 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 organization of the Series 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 directors of the Series, excluding those members of the board
of
directors who are not eligible under applicable federal or state 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 directors
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 Series 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 Series 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 director of the Series who is neither an “interested
person” of the Series 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 Series.
(i)
The Board
Member’s “service to the Series” shall include without limitation the Board
Member’s service as a director, officer, employee, agent or representative of
the Series, and his or her service at the request of the Series as a director,
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
Maryland corporation
By: /s/
Xxxxxx X.
Xxxxxxxx
Name:
Xxxxxx
X.
Xxxxxxxx
Title:
Secretary
Address
for
notices:
000
Xxxxx Xxxx
Xxxxxx
Xxx
Xxxxxxx, XX
00000-0000
Name:
Address
for
notices:
