DEFENSE AND INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made as of the
18th day of November, 2005, by and between Golden West Financial Corporation, a
Delaware corporation ("Golden West") and Xxxxx X. Xxxxx ("Trustee").
WHEREAS, Trustee is currently a member of the board of trustees of
Atlas Funds, a Delaware statutory trust, and of the board of trustees of Atlas
Insurance Trust, a Delaware statutory trust (each a "Fund" and collectively, the
"Funds"), each of which is an open-end registered investment company; and
WHEREAS, management of the Funds has indicated that the expenses of
the Funds could be reduced, to the benefit of the shareholders of the Funds, if
the Funds did not maintain a joint directors and officers errors and omissions
insurance policy; and
WHEREAS, Golden West is the parent corporation of Atlas Advisers,
Inc., the investment adviser to the Funds, and recognizes that highly competent
persons may be unwilling to serve as trustees of publicly-held registered
investment companies unless they are provided with adequate protection against
inordinate risks of claims and actions against them arising out of their service
to, and activities on behalf of, such companies, and that it is reasonable,
prudent and necessary to provide such persons with such protection; and
WHEREAS, Golden West desires that Trustee continue to serve as a member of the
board of trustees of each Fund;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, RECEIPT OF
WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. SERVICES BY TRUSTEE. Trustee agrees to continue to serve as a
trustee of each Fund for so long as Trustee is duly elected or appointed and
qualified or until such time as Trustee tenders his or her resignation in
writing or is removed as a trustee. This Agreement shall not impose any
obligation on Trustee or either Fund to continue Trustee's position with the
Fund beyond any period otherwise applicable.
2. DEFENSE AND INDEMNIFICATION OBLIGATION. Subject to the provisions
of Section 3, Golden West shall defend and indemnify Trustee with respect to any
Proceeding to which Trustee is a party, or is threatened to be made a party, by
reason of his or her Fund Status (as such terms are defined in Section 4). Under
this defense and indemnity obligation, Golden West shall pay directly all
Expenses actually and reasonably incurred by Trustee or on Trustee's behalf in
connection with any such Proceeding, without the requirement that Trustee
advance any funds for these purposes.
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3. REIMBURSEMENT OF PAYMENTS. Golden West shall defend and indemnify
Trustee pursuant to this Agreement with respect to any Proceeding, whether or
not Trustee is wholly or partially successful, on the merits or otherwise, as to
any or all claims, issues or matters in such Proceeding, and whether or not such
Proceeding is in whole or part terminated, dismissed, withdrawn or settled (with
or without prejudice), subject to the following:
(a) Golden West shall not be liable for any Expenses related to any
settlement or stipulated judgment by Trustee with respect to any Proceeding
without its written consent, which shall not be unreasonably withheld.
(b) Trustee shall reimburse Golden West for any Expenses paid by
Golden West pursuant to this Agreement with respect to any Proceeding, if the
court in which such Proceeding was brought shall have rendered a final judgment
that (i) the liability of Trustee in such Proceeding resulted from the Trustee
gaining any profit, remuneration or advantage to which he/she was not legally
entitled, or from the Trustee's fraudulent, dishonest or criminal acts, or
his/her intentional violation law, and (ii) in view of all the circumstances of
the Proceeding, Trustee is not fairly and reasonably entitled to indemnity for
such Expenses. The termination of any Proceeding by judgment, order, settlement,
conviction, or a plea of nolo contendre or its equivalent, shall not, of itself,
constitute such a judgment.
4. DEFINITIONS OF TERMS. As used in this Agreement, the following
terms shall have the following meanings:
(a) The term "Expenses" shall mean all expenses of the type
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, or investigating a Proceeding, including without limitation
attorneys' fees, judgments, fines and amounts paid in settlement, retainers,
court costs, transcript costs, fees of experts and witnesses, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage, and
delivery service fees
(b) The term "Proceeding" shall mean any threatened, pending or
completed legal proceeding (whether or not by or in the right of a Fund to
procure a judgment in its favor), including without limitation any claim,
action, suit, arbitration, alternative dispute resolution mechanism, formal or
informal investigation or examination, administrative hearing or other
proceeding, and any appeals from any of the foregoing, whether civil, criminal,
administrative or investigative; provided, however, that the term "Proceeding"
shall not include any such legal proceeding brought or made by Trustee against a
Fund.
(c) The term "Fund Status" shall mean the status of a person who is
or was or has agreed to become a trustee of a Fund, or is or was an officer,
employee, agent or fiduciary of a Fund or any other corporation, trust,
partnership, joint venture, employee benefit plan or other enterprise that such
person is or was serving at the request of the Fund or Golden West.
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5. OTHER RIGHTS. The defense and indemnification of Trustee pursuant
to this Agreement shall not be deemed exclusive of any other rights to which
Trustee may be entitled from a Fund or under any law (common or statutory),
agreement, vote of stockholders or disinterested directors or otherwise. Golden
West shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Trustee has
otherwise actually received such payment under any insurance policy, contract,
agreement, or otherwise. If payment is made under this Agreement, Golden West
shall be subrogated to the extent of such payment to all of the rights of
recovery of Trsutee, who shall execute all papers reasonably required and take
all action reasonably necessary to secure such rights.
6. REPRESENTATIONS OF GOLDEN WEST. Golden West hereby represents and
warrants to Trustee that (a) Golden West has full corporate power and authority
to enter into this Agreement; (b) this Agreement does not violate any provision
of any statute, rule or regulation known to Golden West by which it is bound or
to which it is subject; (c) this Agreement has been duly authorized, executed
and delivered to Trustee by Golden West; and (d) this Agreement is the legal,
valid and binding obligation of Golden West, enforceable against Golden West in
accordance with its terms.
7. TERMINATION. This Agreement shall continue with respect to each
office held by Trustee after Trustee ceases to hold such office. This Agreement
may be terminated with respect to a Fund (a) by Trustee at any time and for any
reason, upon thirty (30) days' notice to Golden West, and (b) by Golden West at
any time and for any reason, upon one hundred twenty (120) days' notice to
Trustee; provided, however, that no such termination by Golden West shall become
effective with respect to a Fund until the Fund shall have obtained a policy or
policies of trustees and officers errors and omissions insurance coverage
reasonably acceptable to the board of trustees of the Fund. No such termination
shall affect the right of Trustee to obtain indemnification under this Agreement
with respect to any Proceeding based upon or relating to matters occurring prior
to the date of termination, nor shall it affect the right of Golden West to
obtain reimbursement of Expenses.
8. ARBITRATION. Any claim or controversy arising out of or relating
to this Agreement which is not settled by agreement of the parties shall be
settled by arbitration in Oakland, California before a panel of three
arbitrators in accordance with the commercial arbitration rules of the American
Arbitration Association then in effect. The parties agree that such arbitration
shall be the exclusive remedy hereunder, and each party expressly waives any
right it may have to seek redress in any other forum. Each party shall bear such
party's own expenses of arbitration, and the expenses of the arbitrators and of
a transcript of any arbitration proceeding shall be divided equally between the
parties, subject to any determination of the arbitrators that such expenses
should be borne otherwise. Any decision and award of the arbitrators shall be
binding upon the parties, and judgment thereon may be entered in the Superior
Court of the State of California or any other court having jurisdiction. If
litigation is commence to enforce any such award, the prevailing party will be
entitled to recover reasonable attorneys' fees and costs.
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9. MODIFICATION AND WAIVER. No modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision hereof, nor shall any such waive
constitute a continuing waiver. This Agreement shall be binding upon Golden West
and its successors and assigns, and shall inure to the benefit of Trustee and
Trustee's estate, heirs executors, administrators and assigns.
10. NOTICE OF PROCEEDINGS. Trustee shall promptly notify Golden West
and the relevant Fund in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to any
Proceeding or matter that may be subject to defense and indemnification
hereunder; provided, however, that the failure to give any such notice shall not
disqualify Trustee from receiving the defense and indemnification hereunder if
such failure does not materially prejudice Golden West.
11. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given to a
party if delivered personally, by telecopy (with confirmation of receipt) or
overnight courier service, or three days after deposit in the United States mail
with postage prepaid, and addressed to the address set forth under the party's
signature to this Agreement, or to such other address as may have been furnished
by like notice to the other party.
12. GOVERNING LAW. The parties agree that this Agreement shall be
governed by the laws of the State of California, and that any disputes arising
out of this Agreement shall be resolved within the State of California, whether
by arbitration or litigation within the court system.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first set forth above.
GOLDEN WEST
FINANCIAL CORPORATION TRUSTEE
By: /s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxx
Chairman and Chief Executive Officer
Address: 0000 Xxxxxxxx Xxxxxx Address: 0000 Xxxxxxx
Xxxxxxx, XX 00000 Xxxxxx, Xxxxx 00000
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