EXHIBIT (H)(I)(10)
FORM OF INDEMNIFICATION AGREEMENT
This Indemnification Agreement (the "Agreement") is made as of the date
set forth on the signature page by and between Eclipse Funds Inc., a Maryland
corporation (the "Corporation"), and the director of the Corporation whose name
is set forth on the signature page (the "Director").
WHEREAS, the Director is a director of the Corporation, and the
Corporation wishes the Director to continue to serve in that capacity; and
WHEREAS, the Charter and Bylaws of the Corporation and applicable laws
permit the Corporation to contractually obligate itself to indemnify the
Director to the fullest extent permitted by law;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual agreements set forth herein, the parties hereby agree as set forth below.
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Board" means the Board of Directors of the Corporation.
(b) "Change in Control" means during any period of two consecutive
years (or less), a majority of the existing members of the Board of Directors of
the Corporation at the commencement of that period cease, for any reason, to
constitute at least a majority of the Board of Directors.
(c) "Disabling Conduct" shall be as defined in Section 2 below.
(d) "Expenses" shall include without limitation all judgments,
penalties, fines, amounts paid or to be paid in settlement, ERISA excise taxes,
liabilities, losses, interest, expenses of investigation, attorneys' fees,
retainers, court costs, transcript costs, fees of experts and witnesses,
expenses of preparing for and attending depositions and other proceedings,
travel expenses, duplicating costs, printing and binding costs, computerized
legal research costs, telephone charges, postage, delivery service fees, and all
other costs, disbursements or expenses of the type customarily incurred in
connection with prosecuting, defending, preparing to prosecute or defend,
investigating, or acting as a witness in a Proceeding.
(e) "Final decision" or "final judgment" shall mean a final
adjudication by court order or judgment of the court or other body before which
a matter is pending.
(f) "Independent counsel" shall mean a law firm, or a member of a law
firm, that is experienced in matters of investment company law and neither at
the time of designation is, nor
in the five years immediately preceding such designation was, retained to
represent (A) the Corporation or the Director 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 Corporation or the Director in
an action to determine the Director's rights pursuant to this Agreement,
regardless of when the Director's act or failure to act occurred.
(g) "Independent Director" shall mean a director of the Corporation who
is neither an "interested person" of the Corporation 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.
(h) The term "Proceeding" shall include without limitation any
threatened, pending or completed claim, demand, threat, discovery request,
request for testimony or information, action, suit, arbitration, alternative
dispute resolution mechanism, investigation, hearing, or other proceeding,
including any appeal from any of the foregoing, whether civil, criminal,
administrative or investigative, whether formally or informally initiated, and
shall also include any proceeding brought by the Director against the
Corporation if, but only if, the Director is the prevailing party in such
proceeding against the Corporation.
(i) The Director's "service to the Corporation" shall include without
limitation the Director's service as a director, officer, employee, agent or
representative of the Corporation, and his or her service at the request of the
Corporation as a director, officer, employee, agent or representative of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise.
2. INDEMNIFICATION. The Corporation shall indemnify and hold harmless
the Director against any Expenses actually and reasonably incurred by the
Director in any Proceeding arising out of or in connection with the Director's
service to the Corporation, to the maximum extent permitted by the Maryland
General Corporation Law (the "MGCL") and the Investment Company Act of 1940, as
now or hereafter in force, subject to the conditions set forth in subparagraphs
(a) through (c) below:
(a) Disabling Conduct. The Director shall be indemnified pursuant to
this Section 2 against any Expenses unless the Director incurred such Expenses
by reason of the Director's willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his or her office as
defined in Section 17(h) of the Investment Company Act of 1940, as amended
("Disabling Conduct").
(b) Conditions to Indemnification. The Director shall be indemnified
pursuant to this Section 2 if either:
(1) the court or other body before which the Proceeding
relating to the Director's liability is brought shall have rendered a
final decision on the merits, finding that the Director is not liable,
is not liable by reason of Disabling Conduct, and/or is entitled to
indemnification;
(2) the Proceeding against the Director shall have been
dismissed for insufficiency of evidence of any Disabling Conduct with
which the Director has been charged; or
(3) in the absence of such a final decision, dismissal or
withdrawal, a determination shall have been made that the Director is
not liable by reason of Disabling Conduct, based upon a review of the
available facts, by either the vote of a majority of a quorum of
Independent Directors or by Independent Counsel in a written opinion.
(c) Maryland Law Restrictions. In accordance with the MGCL, the
Director shall not be indemnified and held harmless pursuant to this Section 2
upon entry of a final judgment that:
(1) the Director's act or omission was material to the matter
giving rise to the proceeding and was committed in bad faith or was the
result of active and deliberate dishonesty;
(2) the Director actually received an improper personal
benefit in money, property or services;
(3) in the case of a criminal proceeding, the Director had
reasonable cause to believe his or her conduct was unlawful; or
(4) if the proceeding is an action by or in the right of the
Corporation, the Director is adjudged liable to the Corporation.
Notwithstanding the foregoing sentence, a court of appropriate
jurisdiction, upon application of the Director and such notice as the
court shall require, may order such indemnification as the court shall
deem proper if it determines that the Director is fairly and reasonably
entitled to indemnification in view of all the relevant circumstances,
whether or not the Director (i) has met the standards of conduct set
forth in this Section 2(c), or (ii) has been adjudged liable for
receipt of an improper personal benefit under Section 2-418(c) of the
MGCL. However, such court-ordered indemnification with respect to any
Proceeding by or in the right of the Company or in which liability
shall have been adjudged in the circumstances described in Section
2-418(c) of the MGCL shall be limited to Expenses actually and
reasonably incurred by him in connection with a Proceeding.
3. ADVANCEMENT OF EXPENSES. The Corporation shall promptly advance
funds to the Director to cover any and all Expenses the Director incurs with
respect to any Proceeding arising
out of or in connection with the Director's service to the Corporation, to the
fullest extent permitted by the laws of the State of Maryland and the Investment
Company Act of 1940, as such statutes are now or hereafter in force, subject to
the provisions of subparagraphs (a) and (b) below.
(a) Affirmation of Conduct and Undertaking. A request by the Director
for advancement of funds pursuant to this Section 3 shall be accompanied by the
Director's (i) written affirmation of his or her good faith belief that he or
she met the standard of conduct necessary for indemnification, and (ii) (or on
the Director's behalf) written undertaking to repay such advancements upon the
occurrence of any of the events barring indemnification set forth in
subparagraphs 2(a) through (c)
(b) Conditions to Advancement. Funds shall be advanced to the Director
pursuant to this Section 3 if (1) the Corporation is insured against losses
arising by reason of any such lawful advancements to the Director; (2) a
determination is made by the vote of a majority of a quorum of Independent
Directors, or by Independent Counsel in a written opinion, based on a review of
the readily available facts then known (as opposed to a full trial-type
inquiry), that there is reason to believe that the Director ultimately will be
found to be entitled to indemnification pursuant to Section 1, or (3) in the
absence of insurance or such a determination by the Independent Directors or
Independent Counsel, such undertaking as required by Paragraph 3(a) above is
secured by a surety bond or other appropriate security provided by the Director.
In any such determination by the Independent Directors or Independent Counsel
pursuant to subpart (2) of this subparagraph, any Director shall be afforded a
rebuttable presumption that the Director did not engage in Disabling Conduct.
4. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION AND
ADVANCEMENTS. A request by the Director 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 Director. The
Secretary of the Corporation shall promptly advise the Board of such request.
(a) Methods of Determination. Upon the Director's request for
indemnification or advancement of Expenses, a determination with respect to the
Director's entitlement thereto shall be made: (i) if there has been no change of
control, by a quorum of the Board consisting of Independent Directors, or (if
such a quorum is not obtainable or such Independent Directors so direct) by
Independent Counsel, or (ii) if there has been a change of control, by
Independent Counsel; provided in any event that with regard to advancements no
such determination shall be necessary if (x) the Corporation shall have received
written confirmation in reasonably acceptable form that the Corporation is
insured against all such losses arising by reason of any lawful advancements and
that the insurer will pay all the Expenses of the Director in a reasonably
prompt manner, or (y) the Director has provided an adequate security interest in
addition to his affirmation and undertaking to repay (as required by Paragraph
3(a) above). The Director 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 Director and reasonably necessary
to such determination. Any Expenses incurred by the Director in so cooperating
shall be borne by the Corporation, irrespective of the determination as to the
Director'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 Independent Counsel shall be selected by the Board, and the Corporation
shall give written notice to the Director advising the Director of the identity
of the Independent Counsel selected. The Director may, within five days after
receipt of such written notice, deliver to the Corporation a written objection
to such selection. Such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirement of independence
set forth in the definition of Independent Counsel in Section 1, and shall set
forth with particularity the factual basis of such assertion. Upon receipt of
such objection, the Board shall select another Independent Counsel.
If within fourteen days after submission by the Director of a written
request for indemnification or advancement of expenses no such Independent
Counsel shall have been selected by the Board (whether or not an objection by
the Director is the cause of the delay), then either the Corporation or the
Director may petition a court of competent jurisdiction in Maryland 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 Corporation shall pay all reasonable fees and Expenses charged or
incurred by Independent Counsel in connection with his or her determinations
pursuant to this Agreement, and shall pay all reasonable fees and Expenses
incident to the procedures described in this paragraph, regardless of the manner
in which such Independent Counsel was selected or appointed.
(c) Failure to Make Timely Determination. If the person or persons
empowered or selected under subparagraphs (a) or (b) to determine whether the
Director is entitled to indemnification or advancement of Expenses shall not
have made such determination within thirty days after receipt by the Corporation
of the request therefor, the requisite determination of entitlement to
indemnification or advancement of Expenses shall be deemed to have been made,
and the Director shall be entitled to such indemnification or advancement,
absent (i) an intentional misstatement by the Director of a material fact, or an
intentional omission of a material fact necessary to make the Director'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 Sections 2, 3, and 4 (a) through (c) above that the Director is
entitled to indemnification or advancement of Expenses, payment of any
indemnification amounts or advancements owing to the Director shall be made
within ten days after such determination (and, in the case of advancements of
further Expenses, within ten days after submission of supporting information).
(e) Arbitration Upon Determination of Non-Entitlement. If a
determination is made that the Director is not entitled to indemnification or
advancement of Expenses pursuant to Sections 2 through 4(c) above, the Director
shall be entitled to an adjudication of the Director's entitlement to such
indemnification or advancement by a single arbitrator appointed by the American
Arbitration Association, New York City Office, in an arbitration conducted
pursuant to that Association's then-existing commercial arbitration rules. The
Director shall commence such arbitration seeking an adjudication within one year
following the date on which receives the determination denying indemnification
or advancement. In any such proceeding, the Director and the Corporation shall
be bound by the determination of the arbitrator, subject to rights of appeal to
a court of competent jurisdiction to review such an arbitration award and to
vacate such an award only on one or more of the bases set forth in Sections 10
and 11 of the Federal Arbitration Act, 9 U.S.C. Sections 10 and 11. The
Corporation shall advance the costs of such an arbitration to the American
Arbitration Association but the arbitrator shall, as part of the award, make a
final award of such costs (including arbitrator's fees) to the prevailing party
in the arbitration.
SECTION 5. GENERAL PROVISIONS.
(a) No Indemnification if Otherwise Reimbursed. The Corporation shall
not be liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder if and to the extent that the Director has otherwise
actually received such payment under any insurance policy, contract, agreement
or otherwise.
(b) Continuation of Provisions. This Agreement shall be binding upon
and inure to the benefit of all successors of the Corporation, including without
limitation any transferee of all or substantially all assets of the Corporation
and any successor by merger, consolidation, or operation of law, and shall inure
to the benefit of the Director's spouse, heirs, assigns, devisees, executors,
administrators and legal representatives. No amendment of the Charter or Bylaws
of the Corporation shall limit or eliminate the right of the Director to
indemnification and advancement of expenses set forth in this Agreement.
Moreover, unless contrary to applicable law, the procedures set forth in
Paragraphs 3 through 5 of this Agreement shall be the exclusive means by which
the parties' rights and obligations with regard to indemnification and
advancement of Expenses shall be determined, regardless of whether those rights
and obligations arise by operation of law, the Articles of Incorporation, Bylaws
or this Agreement.
(c) Selection of Counsel. The Director agrees to choose Counsel to
represent him/her in any Proceeding for which indemnification is claimed in a
manner designed to minimize Expenses, consistent with the goal of vigorously
defending the Director. In that regard, the
Director shall seek joint representation by Counsel with other Director
defendants in any such Proceeding to the extent such Directors' interests may be
jointly represented by Counsel consistent with the applicable canons of ethics
regarding conflicts of interest. Moreover, where the Corporation and the
Director are both defendants in a Proceeding, the Director and Corporation shall
agree to be jointly represented by Counsel to the extent consistent with the
applicable canons of ethics regarding conflicts of interest
(d) D&O Insurance. For a period of six years after the Director has
ceased to provide services to the Corporation, the Corporation shall purchase
and maintain in effect one or more policies of insurance on behalf of the
Director which collectively provide limits of coverage for claims made against
the Director in the event of the insolvency of the Corporation which are
consistent with the limits of coverage available for that Director in such
circumstances when he or she ended service as a Director, unless (1) such
insurance is not reasonably available, or (2) (i) the limits of coverage which
the Director had upon the termination of his service as a Director is in excess
of that provided to any of the current Directors and (ii) the current Board of
Directors provides the coverage to the Director at least equal to the highest
limit available to those current Directors.
(e) Subrogation. In the event of any payment by the Corporation
pursuant to this Agreement, the Corporation shall be subrogated to the extent of
such payment to all of the rights of recovery of the Director, who shall, upon
reasonable written request by the Corporation and at the Corporation's expense,
execute all such documents and take all such reasonable actions as are necessary
to enable the Corporation to enforce such rights. Nothing in this Agreement
shall be deemed to diminish or otherwise restrict the right of the Corporation
or the Director to proceed or collect against any insurers and to give such
insurers any rights against the Corporation under or with respect to this
Agreement, including without limitation any right to be subrogated to the
Director's rights hereunder, unless otherwise expressly agreed to by the
Corporation in writing, and the obligation of such insurers to the Corporation
and the Director 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 Director shall promptly notify the
Corporation in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document commencing any Proceeding
which may be subject to indemnification or advancement of expense pursuant to
this Agreement, but no delay in providing such notice shall in any way limit or
affect the Director's rights or the Corporation's obligations under this
Agreement. Thereafter, the Director, and/or his Counsel, shall work with the
representative(s) of the Corporation to keep the Corporation informed of the
status of the Proceeding and the positions taken by the parties to the
Proceeding as the matter progresses.
(g) Notices. All notices, requests, demands and other communications to
a party pursuant to this Agreement shall be in writing, addressed to such party
(and/or designated representative) at the address(es) specified on the signature
page of this Agreement (or such other address as may have been furnished by such
party by notice in accordance with this
paragraph), and shall be deemed to have been duly given when delivered
personally (with a written receipt signed by the addressee or his/her
representative) or two days after being sent (1) by certified or registered
mail, postage prepaid, return receipt requested, or (2) by nationally recognized
overnight courier service.
(h) Severability. If any provision of this Agreement shall be held to
be invalid, illegal, or unenforceable, in whole or in part, for any reason
whatsoever, (1) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, each portion of any
Section of this Agreement containing any provision that is not itself invalid,
illegal or unenforceable) shall not in any way be affected or impaired thereby,
and (2) to the fullest extent possible, the remaining provisions of this
Agreement shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.
(i) Modification and Waiver. This Agreement supersedes any existing or
prior agreement between the Corporation and the Director pertaining to the
subject matter of indemnification, advancement of expenses and insurance and any
such prior written or oral agreement shall be of no further force or effect. No
supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both parties or their respective successors or legal
representatives. Any waiver by either party of any breach by the other party of
any provision contained in this Agreement to be performed by the other party
must be in writing and signed by the waiving party or such party's successor or
legal representative, and no such waiver shall be deemed a waiver of similar or
other provisions at the same or any prior or subsequent time.
(j) Headings. The headings of the Sections of this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
(k) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original, and all of which when taken
together shall constitute one document.
(l) Applicable Law. This Agreement shall be governed by and construed
and enforce in accordance with the laws of the state of Maryland without
reference to principles of conflict of laws of the State of Maryland.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth below.
Dated:
ECLIPSE FUNDS INC.
-----------------------------------
a Maryland corporation
By: _______________________________
Name:
Title: President
Address for notices:
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
DIRECTOR:
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Print Name: _______________________
Address for notices:
__________________________________
__________________________________
