FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF
TRUST OF ▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL TAX-EXEMPT TRUST
Dated: June 21, 1995
FIRST AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
Index
RECITALS .........................................................1
ARTICLE I THE TRUST ...............................................2
SECTION 1.1 Name ....................................................2
SECTION 1.2. Location ................................................2
SECTION 1.3. Nature of Trust .........................................2
SECTION 1.4. Definitions .............................................2
SECTION 1.5. Real Property to be Converted into Personal Property ....5
ARTICLE 2 PURPOSE OF THE TRUST ....................................5
ARTICLE 3 POWERS OF THE TRUSTEES ..................................6
SECTION 3.1. Powers in General .......................................6
(a) Investments .....................................................7
(b) Disposition of Assets ...........................................7
(c) Ownership Powers ................................................7
(d) Form of Holding .................................................7
(e) Reorganization, etc. ............................................7
(f) Voting Trusts, etc. .............................................7
(g) Contracts, etc. .................................................8
(h) Guarantees, etc. ................................................8
(i) Partnerships, etc. ..............................................8
(j) Insurance .......................................................8
(k) Pensions, etc. ..................................................8
(I) Power of Collection and Litigation ..............................8
(m) Issuance and Repurchase of Shares ...............................9
(n) Offices .........................................................9
(o) Expenses ........................................................9
(p) Agents, etc. ....................................................9
(q) Accounts ........................................................9
(r) Valuation .......................................................9
(s) Indemnification .................................................9
(t) General .........................................................9
SECTION 3.2. Borrowings; Financings; Issuance of Securities ..........10
i
SECTION 3.3. Deposits ................................................10
SECTION 3.4. Allocations .............................................10
SECTION 3.5. Further Powers; Limitations .............................10
ARTICLE 4 TRUSTEES AND OFFICERS ...................................11
SECTION 4.1. Number, Designation, Election, Term, etc. ...............11
(a) Initial Trustee .................................................11
(b) Number ..........................................................11
(c) Election and Term ...............................................11
(d) Resignation and retirement ......................................12
(e) Removal .........................................................12
(f) Vacancies .......................................................12
(g) Acceptance of Trusts ............................................12
(h) Effect of Death, Resignation, etc. ..............................12
(i) Conveyance ......................................................12
(j) No Accounting ...................................................13
SECTION 4.2. Trustees' Meetings; Participation by Telephone, etc. ....13
SECTION 4.3. Committees; Delegation ..................................13
SECTION 4.4. Officers ................................................13
SECTION 4.5. Compensation of Trustees and Officers ...................13
SECTION 4.6. Ownership of Shares and Securities of the Trust .........14
SECTION 4.7. Right of Trustees and Officers to Own Property or to Engage
in Business; Authority of Trustees to Permit Others to Do
Likewise ................................................14
SECTION 4.8. Reliance on Experts .....................................14
SECTION 4.9. Surety Bonds ............................................15
SECTION 4.10. Apparent Authority of Trustees and Officers .............15
SECTION 4.11. Other Relationships Not Prohibited ......................15
SECTION 4.12. Payment of Trust Expenses ...............................15
SECTION 4.13. 0wnership of the Trust Property .........................16
ii
SECTION 4.14. By-Laws .................................................16
ARTICLE 5 DELEGATION OF MANAGERIAL RESPONSIBILITIES ...............16
SECTION 5.1. Appointment; Action by Less than All Trustees ...........16
SECTION 5.2. Certain Contracts .......................................16
(a) Advisory ........................................................17
(b) Administration ..................................................17
(c) Underwriting ....................................................17
(d) Custodian .......................................................17
(e) Transfer and Dividend Disbursing Agent ..........................18
(f) Shareholder Servicing ...........................................18
(g) Accounting ......................................................18
Section 5.3. Distribution Arrangements ...............................18
Section 5.4. Service Arrangements ....................................18
ARTICLE 6 SERIES AND SHARES .......................................18
SECTION 6.1. Description of Series and Shares ........................18
(a) General .........................................................18
(b) Establishment, etc. of Series; Authorization of Shares ..........19
(c) Character of Separate Series and Shares Thereof .................19
(d) Consideration for Shares ........................................19
(e) Assets Belonging to Series ......................................20
(f) Liabilities of Series ...........................................20
(g) Dividends .......................................................20
(h) Liquidation .....................................................21
(i) Voting ..........................................................21
(j) Redemption by Shareholder .......................................21
(k) Redemption at the Option of the Trust ...........................22
(I) Net Asset Value .................................................22
(m) Transfer ........................................................22
(n) Equality ........................................................23
(o) Rights of Fractional Shares .....................................23
(p) Conversion Rights ...............................................23
SECTION 6.2. Ownership of Shares .......................................24
SECTION 6.3. Investments in the Trust.................................. 24
SECTION 6.4. No Pre-emptive Rights..................................... 24
iii
SECTION 6.5. Status of Shares ........................................24
ARTICLE 7 SHAREHOLDERS' VOTING POWERS AND MEETINGS ................24
SECTION 7.1. Voting Powers ...........................................24
SECTION 7.2. Number of Votes and Manner of Voting; Proxies ...........25
SECTION 7.3. Meetings ................................................25
SECTION 7.4. Record Dates ............................................26
SECTION 7.5. Quorum and Required Vote ................................26
SECTION 7.6. Action by Written Consent ...............................26
SECTION 7.7. Inspection of Records ...................................27
SECTION 7.8. Additional Provisions ...................................27
ARTICLE 8 LIMITATION OF LIABILITY; INDEMNIFICATION ................27
SECTION 8.1. Trustees, Shareholders, etc. Not Personally Liable; Notice.27
SECTION 8.2. Trustees' Good Faith Action; Expert Advice; No Bond
or Surety ..............................................27
SECTION 8.3. Indemnification of Shareholders ........................ 28
SECTION 8.4. Indemnification of Trustees, Officers, etc. .............28
SECTION 8.5. Compromise Payment ......................................29
SECTION 8.6. Indemnification Not Exclusive, etc. .....................29
SECTION 8.7. Liability of Third Persons Dealing with Trustees ........29
ARTICLE 9 DURATION; REORGANIZATION; INCORPORATION; AMENDMENTS .....30
SECTION 9.1. Duration of Trust .......................................30
SECTION 9.2. Termination of Trust ....................................30
SECTION 9.3. Reorganization ..........................................30
SECTION 9.4. Incorporation ..........................................31
iv
SECTION 9.5. Amendments; etc. ..........................................31
SECTION 9.6. Filing of Copies of Declaration and Amendments ............31
ARTICLE 10 MISCELLANEOUS .............................................32
SECTION 10.1. Notices.................................................. 32
SECTION 10.2. Governing Law ........................................... 32
SECTION 10.3. Counterparts ........................................... 32
SECTION 10.4. Reliance by Third Parties .............................. 32
SECTION 10.5. References; Headings..................................... 32
SECTION 10.6. Provisions in Conflict With Law or Regulation ........... 32
SECTION 10.7. Use of the Name "▇▇▇ ▇▇▇▇▇▇ American Capital" ........... 33
Signature ........................................................... 34
Acknowledgments ...................................................... 35
v
AGREEMENT AND DECLARATION OF TRUST
OF
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL TAX-EXEMPT TRUST
As amended and restated as of June 21, 1995
This CONSENT TO AMENDMENT AND RESTATEMENT, made as of this 21st day
of June, 1995, by the Trustees whose signatures are set forth below:
W I T N E S S E T H T H A T:
WHEREAS, the AGREEMENT AND DECLARATION OF TRUST of ▇▇▇ ▇▇▇▇▇▇
American Capital Tax-Exempt Trust, a trust organized as a business trust
under Delaware law (the "Trust"), was signed and delivered on May 10, 1995,
by ▇▇▇ ▇▇▇▇▇▇ American Capital, Inc. as Settlor (the "Settlor"), and ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ as trustee (the "Initial Trustee"), in the city of Oakbrook
Terrace, Illinois; and
WHEREAS, a Certificate of Trust relating to the Trust was thereafter
filed in the offices of the Secretary of State of the State of Delaware; and
WHEREAS, Article IX, Sections 9.5 and 9.6 of the Declaration provide
certain procedures for the amendment and restatement thereof; and
WHEREAS, the Trustees have determined that it is desirable and in the
best interests of the Trust and the Shareholders that the Declaration be
amended and restated as herein provided.
NOW, THEREFORE, the undersigned, being at least a Majority of the
Trustees, do hereby consent, pursuant to Section 9.5 of the Declaration, to
the first amendment and restatement of the Agreement and Declaration of
Trust, and hereby declare, for the benefit of all Persons who shall hereafter
become holders of Shares of the Trust (or of any Series thereof), that the
Trustees will hold the sum delivered to the Initial Trustee upon his
execution of the Declaration, and all other and further cash, securities and
other property of every type and description which they may in any way
acquire in their capacity as such Trustees, together with the income
therefrom and the proceeds thereof, IN TRUST NEVERTHELESS, to manage and
dispose of the same for the benefit of the holders from time to time of the
Shares being issued and to be issued hereunder and in the manner and subject
to the provisions hereof, to wit:
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ARTICLE I
THE TRUST
SECTION 1.1 Name. The name of the Trust shall be
"▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL TAX-EXEMPT TRUST"
and so far as may be practicable, the Trustees shall conduct the
Trust's activities, execute all documents and ▇▇▇ or be sued under that name,
which name (and the word "Trust" wherever used in this Agreement and
Declaration of Trust, except where the context otherwise requires) shall
refer to the Trustees in their capacity as Trustees, and not individually or
personally, and shall not refer to the officers, agents or employees of the
Trust or of such Trustees, or to the holders of the Shares of the Trust or
any Series. If the Trustees determine that the use of such name is not
practicable,
legal or convenient at any time or in any jurisdiction, or if the Trust is
required to discontinue the use of such name pursuant to Section 10.7 hereof,
then subject to that Section, the Trustees may use such other designation, or
they may adopt such other name for the Trust as they deem proper, and the
Trust may hold property and conduct its activities under such designation or
name.
SECTION 1.2. Location. The Trust shall maintain a registered office
in the State of Delaware and may have such other offices or places of
business as the Trustees may from time to time determine to be necessary or
expedient.
SECTION 1.3. Nature of Trust. The Trust shall be a trust with
transferable shares under the laws of The State of Delaware, of the type
defined in Title 12, Chapter 38, Section 3801 of the Delaware Code as a
business trust. The Trust is not intended to be, shall not be deemed to be,
and shall not be treated as, a general partnership, limited partnership,
joint venture, corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder.
SECTION 1.4. Definitions. As used in this Agreement and Declaration
of Trust, the following terms shall have the meanings set forth below unless
the context thereof otherwise requires:
"Accounting Agent" shall have the meaning designated in Section
5.2(g) hereof.
"Administrator" shall have the meaning designated in Section 5.2(b)
hereof.
"Affiliated Person" shall have the meaning assigned to it in the 1940
Act.
"By-Laws" shall mean the By-Laws of the Trust, as amended from time
to time.
"Certificate of Designation" shall have the meaning designated in
Section 6.1 hereof.
"Certificate of Termination" shall have the meaning designated in
Section 6.1 hereof.
"Class" or "Classes" shall mean, with respect to the Trust (of any
Series thereof), any unissued Shares of the Trust (or such Series) in respect
of which the Trustees shall from time to time fix and determine any special
provisions relating to sales charges, any rights of redemption and the price,
terms and manner of redemption, special and relative rights as to dividends
and other distributions and on
2
liquidation, sinking or purchase fund provisions, conversion rights,
and conditions under which the Shareholders of such Class shall have separate
voting rights or no voting rights.
"Commission" shall have the same meaning as in the 1940 Act.
"Contracting Party" shall have the meaning designated in the preamble
to Section 5.2 hereof.
"Conversion Date" shall mean with respect to Shares of any Class that
are convertible automatically into Shares of any other Class of the Trust (or
Series thereof) the date fixed by the Trustees for such conversion.
"Covered Person" shall have the meaning designated in Section 8.4
hereof.
"Custodian" shall have the meaning designated in Section 5.2(d)
hereof.
"Declaration" and "Declaration of Trust" shall mean this Agreement
and Declaration of Trust and all amendments or modifications thereof as from
time to time in effect. This Agreement and Declaration of Trust is the
"governing instrument" of the Trust within the meaning of the laws of the
State of Delaware with respect to Delaware Business Trusts. References in
this Agreement and Declaration of Trust to "hereof", "herein" and "hereunder"
shall be deemed to refer to the Declaration of Trust generally, and shall not
be limited to the particular text, Article or Section in which such words
appear.
"Disabling Conduct" shall have the meaning designated in Section 8.4
hereof.
"Distributor" shall have the meaning designated in Section 5.2(c)
hereof.
"Dividend Disbursing Agent" shall have the meaning designated in
Section 5.2(e) hereof.
"General Items" shall have the meaning defined in Section 6.2(a)
hereof.
"Initial Trustee" shall have the meaning defined in the preamble
hereto.
"Investment Advisor" shall have the meaning defined in Section 5.2(a)
hereof.
"Majority of the Trustees" shall mean a majority of the Trustees in
office at the time in question. At any time at which there shall be only one
(1) Trustee in office, such term shall mean such Trustee.
"Majority Shareholder Vote," as used with respect to (a) the election
of any Trustee at a meeting of Shareholders, shall mean the vote for the
election of such Trustee of a plurality of all outstanding Shares of the
Trust, without regard to Series, represented in person or by proxy and
entitled to vote thereon, provided that a quorum (as determined in accordance
with the By-Laws) is present, (b) any other action required or permitted to
be taken by Shareholders, shall mean the vote for such action of the holders
of that majority of all outstanding Shares (or, where a separate vote of
Shares of any particular Series is to be taken, the affirmative vote of that
majority of the outstanding Shares of that Series) of the Trust which
consists of: (i) a majority of all Shares (or of Shares of the particular
Series) represented in person or by proxy and entitled to vote on such action
at the meeting of Shareholders at which such action is to be taken, provided
that a quorum (as determined in accordance with the By-Laws) is present; or
(ii) if such action is to be taken by written consent of Shareholders, a
majority of all Shares (or of Shares of the particular Series) issued and
outstanding and entitled to vote on such action; provided that (iii) as used
3
with respect to any action requiring the affirmative vote of "a
majority of the outstanding voting securities," as the quoted phrase is
defined in the 1940 Act, of the Trust or of any Series, "Majority Shareholder
Vote" means the vote for such action at a meeting of Shareholders of the
smallest majority of all outstanding Shares of the Trust (or of Shares of the
particular Series) entitled to vote on such action which satisfies such 1940
Act voting requirement.
"1940 Act" shall mean the provisions of the Investment Company Act of
1940 and the rules and regulations thereunder, both as amended from time to
time, and any order or orders thereunder which may from time to time be
applicable to the Trust.
"Person" shall mean and include individuals, as well as corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, banks, trust companies, land trusts, business trusts
or other organizations established under the laws of any jurisdiction,
whether or not considered to be legal entities, and governments and agencies
and political subdivisions thereof.
"Principal Underwriter" shall have the meaning designated in Section
5.2(c) hereof.
"Prospectus," as used with respect to the Trust (or the Shares of a
particular Series), shall mean the prospectus relating to the Trust (or such
Series) which constitutes part of the currently effective Registration
Statement of the Trust under the Securities Act of 1933, as such prospectus
may be amended or supplemented from time to time.
"Securities" shall have the same meaning ascribed to that term in
the Securities Act of 1993.
"Series" shall mean one or more of the series of Shares authorized by
the Trustees to represent the beneficial interest in one or more separate
components of the assets of the Trust which are now or hereafter established
and designated under or in accordance with the provisions of Article 6
hereof.
"Settlor" shall have the meaning defined in the preamble hereto.
"Shareholder" shall mean as of any particular time any Person shown
of record at such time on the books of the Trust as a holder of outstanding
Shares of any Series, and shall include a pledgee into whose name any such
Shares are transferred in pledge.
"Shareholder Servicing Agent" shall have the meaning designated in
Section 5.2(f) hereof.
"Shares" shall mean the transferable units into which the beneficial
interest in the Trust and each Series of the Trust (as the context may
require) shall be divided from time to time, and includes fractions of Shares
as well as whole Shares. All references herein to "Shares" which are not
accompanied by a reference to any particular Series or Class shall be deemed
to apply to outstanding Shares without regard to Series or Class.
"Single Class Voting," as used with respect to any matter to be acted
upon at a meeting or by written consent of Shareholders, shall mean a style
of voting in which each holder of one or more Shares shall be entitled to one
vote on the matter in question for each Share standing in his name on the
records of the Trust, irrespective of Series or Class of a Series, and all
outstanding Shares of all Series vote as a single class.
4
"Statement of Additional Information," as used with respect to the
Trust (or any Series), shall mean the statement of additional information
relating to the Trust (or such Series) which constitutes part of the
currently effective Registration Statement of the Trust under the Securities
Act of 1933, as such statement of additional information may be amended or
supplemented from time to time.
"Transfer Agent" shall have the meaning defined in Section 5.2(e)
hereof.
"Trust" shall mean the trust named in Section 1.1 hereof.
"Trust Property" shall mean, as of any particular time, any and all
property which shall have been transferred, conveyed or paid to the Trust or
the Trustees, and all interest, dividends, income, earnings, profits and
gains therefrom, and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation thereof, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, and
which at such time is owned or held by, or for the account of, the Trust or
the
Trustees, without regard to the Series to which such property is allocated.
"Trustees" shall mean, collectively, the Initial Trustee, so long as
he shall continue in office, and all other individuals who at the time in
question have been duly elected or appointed as Trustees of the Trust in
accordance with the provisions hereof and who have qualified and are then in
office. At any time at which there shall be only one (I) Trustee in office,
such term shall mean such single Trustee.
SECTION 1.5. Real Property to be Converted into Personal Property.
Notwithstanding any other provision hereof, any real property at any time
forming part of the Trust Property shall be held in trust for sale and
conversion into personal property at such time or times and in such manner
and upon such terms as the Trustees shall approve, but the Trustees shall
have power until the termination of this Trust to postpone such conversion as
long as they in their uncontrolled discretion shall think fit, and for the
purpose of determining the nature of the interest of the Shareholders
therein, all such real property shall at all times be considered as personal
property.
ARTICLE 2
PURPOSE OF THE TRUST
The purpose of the Trust shall be to (a) manage, conduct, operate and
carry on the business of an investment company; (b) subscribe for, invest in,
reinvest in, purchase or otherwise acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose of any and all
sorts of property, tangible or intangible, including but not limited to
Securities of any type whatsoever, whether equity or nonequity, of any
issuer, evidences of indebtedness of any person and any other rights,
interest, instruments or property of any sort to exercise any and all rights,
powers and privileges of ownership or interest in respect of any and all such
investment of every kind and description, including without limitation, the
right to consent and otherwise act with respect thereto, with power to
designate one or more Persons to exercise any of said rights, powers and
privileges in respect of any of said investments. The Trustees shall not be
limited by any law limiting the investments which may be made by fiduciaries.
5
ARTICLE 3
POWERS OF THE TRUSTEES
SECTION 3.1. Powers in General. The Trustees shall have, without
other or further authorization, full, entire, exclusive and absolute power,
control and authority over, and management of, the business of the Trust and
over the Trust Property, to the same extent as if the Trustees were the sole
owners of the business and property of the Trust in their own right, and with
such powers of delegation as may be permitted by this Declaration, subject
only to such limitations as may be expressly imposed by this Declaration of
Trust or by applicable law. The enumeration of any specific power or
authority herein shall not be construed as limiting the aforesaid power or
authority or any specific power or authority. Without limiting the foregoing;
they may select, and from time to time change, the fiscal year of the Trust;
they may adopt and use a seal for the Trust, provided that unless otherwise
required by the Trustees, it shall not be necessary to place the seal upon,
and its absence shall not impair the validity of, any document, instrument or
other paper executed and delivered by or on behalf of the Trust; they may
from time to time in accordance with the provisions of Section 6.1 hereof
establish one or more Series to which they may allocate such of the Trust
Property, subject to such liabilities, as they shall deem appropriate, each
such Series to be operated by the Trustees as a separate and distinct
investment medium and with separately defined investment objectives and
policies and distinct investment purposes, all as established by the
Trustees, or from time to time changed by them; they may as they consider
appropriate elect and remove officers and appoint and terminate agents and
consultants and hire and terminate employees, any one or more of the
foregoing of whom may be a Trustee; they may appoint from their own number,
and terminate, any one or more committees consisting of one or more Trustees,
including without implied limitation an Executive Committee, which may, when
the Trustees are not in session and subject to the 1940 Act, exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
in accordance with Section 5.2 they may employ one or more Investment
Advisers, Administrators and Custodians and may authorize any such service
provider to employ one or more other or service providers and to deposit all
or any part of such assets in a system or systems for the central handling of
Securities, retain Transfer, Dividend Disbursing, Accounting or Shareholder
Servicing Agents or any of the foregoing, provide for the distribution of
Shares by the Trust through one or more Distributors, Principal Underwriters
or otherwise, set record dates or times for the determination of Shareholders
entitled to participate in, benefit from or act with respect to various
matters; and in general they may delegate to any officer of the Trust, to any
Committee of the Trustees and to any employee, Investment Adviser,
Administrator, Distributor, Custodian, Transfer Agent, Dividend Disbursing
Agent, or any other agent or consultant of the Trust, such authority, powers,
functions and duties as they consider desirable or appropriate for the
conduct of the business and affairs of the Trust, including without implied
limitation the power and authority to act in the name of the Trust and of the
Trustees, to sign documents and to act as attorney-in-fact for the Trustees.
Without limiting the foregoing and to the extent not inconsistent with the
1940 Act or other applicable law, the Trustees shall have power and
authority:
(a) Investments. To subscribe for, invest in, reinvest in, purchase
or otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of any and all sorts of property,
tangible or intangible, including but not limited to Securities of any type
whatsoever, whether equity or nonequity, of any issuer, evidences of
indebtedness of any person and any other rights, interest, instruments or
property of any sort, to exercise any and all rights, powers and privileges
of ownership or
6
interest in respect of any and all such investments of every kind and
description, including without limitation the right to consent and otherwise
act with respect thereto, with power to designate one or more Persons to
exercise any of said rights, powers and privileges in respect of any of said
investments, in every case without being limited by any law limiting the
investments which may be made by fiduciaries;
(b) Disposition of Assets. Upon such terms and conditions as they
deem best, to lend, sell, exchange, mortgage, pledge, hypothecate, grant
security interests in, encumber, negotiate, convey, transfer or otherwise
dispose of, and to trade in, any and all of the Trust Property, free and
clear of all trusts, for cash or on terms, with or without advertisement, and
on such terms as to payment, security or otherwise, all as they shall deem
necessary or expedient;
(c) Ownership Powers. To vote or give assent, or exercise any and all
other rights, powers and privileges of ownership with respect to, and to
perform any and all duties and obligations as owners of, any Securities or
other property forming part of the Trust Property, the same as any individual
might do; to exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of Securities, and to receive powers of
attorney from, and to execute and deliver proxies or powers of attorney to,
such Person or Persons as the Trustees shall deem proper, receiving from or
granting to such Person or Persons such power and discretion with relation to
Securities or other property of the Trust, all as the Trustees shall deem
proper;
(d) Form of Holding. To hold any Security or other property in a form
not indicating any trust, whether in bearer, unregistered or other negotiable
form, or in the name of the Trustees or of the Trust, or of the Series to
which such Securities or property belong, or in the name of a Custodian,
subcustodian or other nominee or nominees, or otherwise, upon such terms, in
such manner or with such powers, as the Trustees may determine, and with or
without indicating any trust or the interest of the Trustees therein;
(e) Reorganizations etc. To consent to or participate in any plan for
the reorganization, consolidation or merger of any corporation or issuer, any
Security of which is or was held in the Trust or any Series; to consent to
any contract, lease, mortgage, purchase or sale of property by such
corporation or issuer, and to pay calls or subscriptions with respect to any
Security forming part of the Trust Property;
(f) Voting Trusts, etc. To join with other holders of any Securities
in acting through a committee, depository, voting trustee or otherwise, and
in that connection to deposit any Security with, or transfer any Security to,
any such committee, depository or trustee, and to delegate to them such power
and authority with relation to any Security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depository or trustee as the Trustees shall deem proper;
(g) Contracts. etc. To enter into, make and perform all such
obligations, contracts, agreements and undertakings of every kind and
description, with any Person or Persons, as the Trustees shall in their
discretion deem expedient in the conduct of the business of the Trust, for
such terms as they shall see fit, whether or not extending beyond the term of
office of the Trustees, or beyond the possible expiration of the Trust; to
amend, extend, release or cancel any such obligations, contracts, agreements
or understandings; and to execute, acknowledge, deliver and record all
written instruments which they may deem necessary or expedient in the
exercise of their powers;
(h) Guarantees. etc. To endorse or guarantee the payment of any notes
or other obligations of any Person; to make contracts of guaranty or
suretyship, or otherwise assume liability for payment thereof;
7
and to mortgage and pledge the Trust Property or any part thereof to secure
any of or all such obligations;
(i) Partnerships, etc. To enter into joint ventures, general or
limited partnerships and any other combinations or association;
(j) Insurance. To purchase and pay for entirely out of Trust Property
such insurance as they may deem necessary or appropriate for the conduct of
the business, including, without limitation, insurance policies insuring the
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, consultants, Investment Advisers,
managers, Administrators, Distributors, Principal Underwriters, or other
independent contractors, or any thereof (or any Person connected therewith),
of the Trust, individually, against all claims and liabilities of every
nature arising by reason of holding, being or having held any such office or
position, or by reason of any action alleged to have been taken or omitted by
any such Person in any such capacity, whether or not the Trust would have the
power to indemnify such Person against such liability;
(k) Pensions, etc. To pay pensions for faithful service, as deemed
appropriate by the Trustees, and to adopt, establish and carry out pension,
profit sharing, share bonus, share purchase, savings, thrift, deferred
compensation and other retirement, incentive and benefit plans, trusts and
provisions, including the purchasing of life insurance and annuity contracts
as a means of providing such retirement and other benefits, for any or all of
the Trustees, officers, employees and agents of the Trust;
(I) Power of Collection and Litigation. To collect, ▇▇▇ for and
receive all sums of money coming due to the Trust, to employ counsel, and to
commence, engage in, prosecute, intervene in, join, defend, compound,
compromise, adjust or abandon, in the name of the Trust, any and all actions,
suits, proceedings, disputes, claims, controversies, demands or other
litigation or legal proceedings relating to the Trust, the business of the
Trust, the Trust Property, or the Trustees, officers, employees, agents and
other independent contractors of the Trust, in their capacity as such, at law
or in equity, or before any other bodies or tribunals, and to compromise,
arbitrate or otherwise adjust any dispute to which the Trust may be a party,
whether or not any suit is commenced or any claim shall have been made or
asserted. Except to the extent required for a Delaware Business Trust, the
Shareholders shall have no power to vote as to whether or not a court action,
legal proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders.
(m) Issuance and Repurchase of Shares. To authorize, issue, sell,
repurchase, redeem, retire, cancel, acquire, hold, resell, reissue, dispose
of, transfer, and otherwise deal in Shares of any Series, and, subject to
Article 6 hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares of any Series, any of the assets
belonging to the Series to which such Shares relate, whether constituting
capital or surplus or otherwise, to the full extent now or hereafter
permitted by applicable law; provided that any Shares belonging to the Trust
shall not be voted, directly or indirectly;
(n) Offices. To have one or more offices, and to carry on all or any
of the operations and business of the Trust, in any of the States, Districts
or Territories of the United States, and in any and all foreign countries,
subject to the laws of such State, District, Territory or country;
8
(o) Expenses. To incur and pay any and all such expenses and charges
as they may deem advisable (including without limitation appropriate fees to
themselves as Trustees), and to pay all such sums of money for which they may
be held liable by way of damages, penalty, fine or otherwise;
(p) Agents, etc. To retain and employ any and all such servants,
agents, employees, attorneys, brokers, Investment Advisers, accountants,
architects, engineers, builders, escrow agents, depositories, consultants,
ancillary trustees, custodians, agents for collection, insurers, banks and
officers, as they think best for the business of the Trust or any Series, to
supervise and direct the acts of any of the same, and to fix and pay their
compensation and define their duties;
(q) Accounts. To determine, and from time to time change, the method
or form in which the accounts of the Trust or any Series shall be kept;
(r) Valuation. Subject to the requirements of the 1940 Act, to
determine from time to time the value of all or any part of the Trust
Property and of any services, Securities, property or other consideration to
be furnished to or acquired by the Trust, and from time to time to revalue
all or any part of the Trust Property in accordance with such appraisals or
other information as is, in the Trustees' sole judgment, necessary and
satisfactory;
(s) Indemnification. In addition to the mandatory indemnification
provided for in Article 8 hereof and to the extent permitted by law, to
indemnify or enter into agreements with respect to indemnification with any
Person with whom this Trust has dealings, including, without limitation, any
independent contractor, to such extent as the Trustees shall determine; and
(t) General. Subject to the fundamental policies in effect from time
to time with respect to the Trust, to do all such other acts and things and
to conduct, operate, carry on and engage in such other lawful businesses or
business activities as they shall in their sole and absolute discretion
consider to be incidental to the business of the Trust or any Series as an
investment company, and to exercise all powers which they shall in their
discretion consider necessary, useful or appropriate to carry on the business
of the Trust or any Series, to promote any of the purposes for which the
Trust is formed, whether or not such things are specifically mentioned
herein, in order to protect or promote the interests of the Trust or any
Series, or otherwise to carry out the provisions of this Declaration.
SECTION 3.2. Borrowings; Financings: Issuance of Securities. The
Trustees have power, subject to the fundamental policies in effect from time
to time with respect to the Trust, to borrow or in any other manner raise
such sum or sums of money, and to incur such other indebtedness for goods or
services, or for or in connection with the purchase or other acquisition of
property, as they shall deem advisable for the purposes of the Trust, in any
manner and on any terms, and to evidence the same by negotiable or
nonnegotiable Securities which may mature at any time or times, even beyond
the possible date of termination of the Trust; to issue Securities of any
type for such cash, property, services or other considerations, and at such
time or times and upon such terms, as they may deem advisable; and to
reacquire any such Securities. Any such Securities of the Trust may, at the
discretion of the Trustees, be made convertible into Shares of any Series, or
may evidence the right to purchase, subscribe for or otherwise acquire Shares
of any Series, at such times and on such terms as the Trustees may prescribe.
SECTION 3.3. Deposits. Subject to the requirements of the 1940 Act,
the Trustees shall have power to deposit any moneys or Securities included in
the Trust Property with any one or more banks, trust companies or other
banking institutions, whether or not such deposits will draw interest. Such
deposits
9
are to be subject to withdrawal in such manner as the Trustees may
determine, and the Trustees shall have no responsibility for any loss which
may occur by reason of the failure of the bank, trust company or other
banking institution with which any such moneys or Securities have been
deposited, except as provided in Section 8.2 hereof.
SECTION 3.4. Allocations. The Trustees shall have power to determine
whether moneys or other assets received by the Trust shall be charged or
credited to income or capital, or allocated between income and capital,
including the power to amortize or fail to amortize any part or all of any
premium or discount, to treat any part or all of the profit resulting from
the maturity or sale of any asset, whether purchased at a premium or at a
discount, as income or capital, or to apportion the same between income and
capital, to apportion the sale price of any asset between income and capital,
and to determine in what manner any expenses or disbursements are to be borne
as between income and capital, whether or not in the absence of the power and
authority conferred by this Section 3.4 such assets would be regarded as
income or as capital or such expense or disbursement would be charged to
income or to capital; to treat any dividend or other distribution on any
investment as income or capital, or to apportion the same between income and
capital; to provide or fail to provide reserves, including reserves for
depreciation, amortization or obsolescence in respect of any Trust Property
in such amounts and by such methods as they shall determine; to allocate less
than all of the consideration paid for Shares of any Series to surplus with
respect to the Series to which such Shares relate and to allocate the balance
thereof to paid-in capital of that Series, and to reallocate such amounts
from time to time; all as the Trustees may reasonably deem proper.
SECTION 3.5. Further Powers: Limitations. The Trustees shall have
power to do all such other matters and things, and to execute all such
instruments, as they deem necessary, proper or desirable in order to carry
out, promote or advance the interests of the Trust, although such matters or
things are not herein specifically mentioned. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees. The
Trustees shall not be required to obtain any court order to deal with the
Trust Property. The
Trustees may limit their right to exercise any of their powers through
express restrictive provisions in the instruments evidencing or providing the
terms for any Securities of the Trust or in other contractual instruments
adopted on behalf of the Trust.
ARTICLE 4
TRUSTEES AND OFFICERS
SECTION 4.1. Number. Designation, Election. Term, etc.
(a) Initial Trustee. Upon his execution of this Agreement and
Declaration of Trust dated May 10, 1995 or a counterpart hereof or some other
writing in which he accepted such Trusteeship and agreed to the provisions
hereof, the individual whose signature is affixed thereto as Initial Trustee
became the Initial Trustee thereof.
(b) Number. The Trustees serving as such, whether named above or
hereafter becoming Trustees, may increase (to not more than fourteen (14)) or
decrease the number of Trustees to a number other than the number theretofore
determined by a written instrument signed by a Majority
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(or a supermajority if required by the By-Laws) of the Trustees). No
decrease in the number of Trustees shall have the effect of removing any
Trustee from office prior to the expiration of his term, but the number of
Trustees may be decreased in conjunction with the removal of a Trustee
pursuant to subsection (e) of this Section 4.1.
(c) Election and Term. The Trustees shall be elected by the
Shareholders of the Trust at the first meeting of Shareholders immediately
prior to the initial issuance of shares of the Trust in a public offering and
the term of office of any Trustees in office before such election shall
terminate at the time of such election. Subject to Section 16(a) of the 1940
Act and to the preceding sentence of this subsection (c) and to any
requirements specified in the By-Laws, the Trustees shall have the power to
set and alter the terms of office of the Trustees, and at any time to
lengthen or shorten their own terms or make their terms of unlimited
duration, to elect their own successors and, pursuant to subsection (f) of
this Section 4.1, to appoint Trustees to fill vacancies; provided that
Trustees shall be elected by a Majority Shareholder Vote at any such time or
times as the Trustees shall determine that such action is required under
Section 16(a) of the 1940 Act or, if not so required, that such action is
advisable; and further provided that, after the initial election of Trustees
by the Shareholders, the term of office of any incumbent Trustee shall
continue until the termination of this Trust or his earlier death,
resignation, retirement, bankruptcy, adjudicated incompetency or other
incapacity or removal, or if not so terminated, until the election of such
Trustee's successor in office has become effective in accordance with this
subsection (c).
(d) Resignation and Retirement. Any Trustee may resign his trust or
retire as a Trustee, by a written instrument signed by him and delivered to
the other Trustees or to any officer of the Trust, and such resignation or
retirement shall take effect upon such delivery or upon such later date as is
specified in such instrument.
(e) Removal. Any Trustee may be removed: (i) with cause at any time
by written instrument, signed by at least two thirds (2/3) of the number of
Trustees prior to such removal, specifying the date upon which such removal
shall become effective; or (ii) by vote of Shareholders holding a majority of
the Shares of the Trust then outstanding, cast in person or by proxy at any
meeting called for the purpose; or (iii) by a written declaration signed by
Shareholders holding not less than a majority of the Shares of the Trust then
outstanding. Notwithstanding any other provisions set forth in this
Declaration of Trust, this Section 4.1(e) may not be amended (either directly
or indirectly
through a reorganization) without the approval of (i) 80% of the Trustees
then in office or (ii) by vote of Shareholders holding a majority of the
Shares of the Trust then outstanding.
(f) Vacancies. Any vacancy or anticipated vacancy resulting from
any reason, including an increase in the number of Trustees, may (but need
not unless required by the ▇▇▇▇ ▇▇▇) be filled by a Majority (or a
supermajority if required by the By-Laws) of the Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, through the appointment in
writing of such other individual as such remaining Trustees in their
discretion shall determine; provided that if there shall be no Trustees in
office, such vacancy or vacancies shall be filled by Majority Shareholders
Vote. Any such appointment or election shall be effective upon such
individual's written acceptance of his appointment as a Trustee and his
agreement to be bound by the provisions of this Declaration of Trust, except
that any such appointment in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in the number of Trustees to be effective
at a later date shall become effective only at or after the effective date of
said retirement, resignation or increase in the number of Trustees.
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(g) Acceptance of Trusts. Whenever any conditions to the appointment
or election of any individual as a Trustee hereunder who was not, immediately
prior to such appointment or election, acting as a Trustee shall have been
satisfied, such individual shall become a Trustee and the Trust estate shall
vest in the new Trustee, together with the continuing Trustees, without any
further act or conveyance. Such new Trustee shall accept such appointment or
election in writing and agree in such writing to be bound by the provisions
hereof, but the execution of such writing shall not be requisite to the
effectiveness of the appointment or election of a new Trustee.
(h) Effect of Death. Resignation, etc. No vacancy, whether resulting
from the death, resignation, retirement, bankruptcy, adjudicated
incompetency, incapacity, or removal of any Trustee, an increase in the
number of Trustees or otherwise, shall operate to annul or terminate the
Trust hereunder or to revoke or terminate any existing agency or contract
created or entered into pursuant to the terms of this Declaration of Trust.
Until such vacancy is filled as provided in this Section 4.1, the Trustees in
office (if any), regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by this Declaration. Upon incapacity or death of any Trustee, his
legal representative shall execute and deliver on his behalf such documents
as the remaining Trustees shall require in order to effect the purpose of
this Paragraph.
(i) Convevance. In the event of the resignation or removal of a
Trustee or his otherwise ceasing to be a Trustee, such former Trustee or his
legal representative shall, upon request of the continuing Trustees, execute
and deliver such documents as may be required for the purpose of consummating
or evidencing the conveyance to the Trust or the remaining Trustees of any
Trust Property held in such former Trustee's name, but the execution and
delivery of such documents shall not be requisite to the vesting of title to
the Trust Property in the remaining Trustees, as provided in subsection (g)
of this Section 4.1 and in Section 4.13 hereof.
(j) No Accounting. Except to the extent required by the 1940 Act or
under circumstances which would justify his removal for cause, no Person
ceasing to be a Trustee (nor the estate of any such Person) shall be required
to make an accounting to the Shareholders or remaining Trustees upon such
cessation.
SECTION 4.2. Trustees' Meetings: Participation by Telephone. etc.
Annual and special meetings may be held from time to time, in each case, upon
the call of such officers as may be thereunto authorized by the By-Laws or
vote of the Trustees, or by any three (3) Trustees, or pursuant to a vote of
the Trustees adopted at a duly constituted meeting of the Trustees, and upon
such notice as shall be provided in the By-Laws. Any such meeting may be held
within
or without the state of Delaware. The Trustees may act with or without a
meeting, and a written consent to any matter, signed by all of the Trustees,
shall be equivalent to action duly taken at a meeting of the Trustees, duly
called and held. Except as otherwise provided by the 1940 Act or other
applicable law, or by this Declaration of Trust or the By-Laws, any action to
be taken by the Trustees may be taken by a majority of the Trustees present
at a meeting of Trustees (a quorum, consisting of at least a Majority of the
Trustees, being present), within or without Delaware. If authorized by the By-
Laws, all or any one or more Trustees may participate in a meeting of the
Trustees or any Committee thereof by means of conference telephone or similar
means of communication by means of which all Persons participating in the
meeting can hear each other, and participation in a meeting pursuant to such
means of communication shall constitute presence in person at such meeting.
The minutes of any meeting thus held shall be prepared in the same manner as
a meeting at which all participants were present in person.
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SECTION 4.3. Committees; Delegation. The Trustees shall have power,
consistent with their ultimate responsibility to supervise the affairs of the
Trust, to delegate from time to time to one or more other Committees, or to
any single Trustee, the doing of such things and the execution of such deeds
or other instruments, either in the name of the Trust or the names of the
Trustees or as their attorney or attorneys in fact, or otherwise as the
Trustees may from time to time deem expedient, and any agreement, deed,
mortgage, lease or other instrument or writing executed by the Trustee or
Trustees or other Person to whom such delegation was made shall be valid and
binding upon the Trustees and upon the Trust.
SECTION 4.4. Officers. The Trustees shall annually elect such
officers or agents, who shall have such powers, duties and responsibilities
as the Trustees may deem to be advisable, and as they shall specify by
resolution or in the By-Laws. Except as may be provided in the By-Laws, any
officer elected by the Trustees may be removed at any time with or without
cause. Any two (2) or more offices may be held by the same individual.
SECTION 4.5. Compensation of Trustees and Officers. The Trustees
shall fix the compensation of all officers and Trustees. Without limiting the
generality of any of the provisions hereof, the Trustees shall be entitled to
receive reasonable compensation for their general services as such, and to
fix the amount of such compensation, and to pay themselves or any one or more
of themselves such compensation for special services, including legal,
accounting, or other professional services, as they in good faith may deem
reasonable. No Trustee or officer resigning (except where a right to receive
compensation for a definite future period shall be expressly provided in a
written agreement with the Trust, duly approved by the Trustees) and no
Trustee or officer removed shall have any right to any compensation as such
Trustee or officer for any period following his resignation or removal, or
any right to damages on account of his removal, whether his compensation be
by the month, or the year or otherwise.
SECTION 4.6. Ownership of Shares and Securities of the Trust. Any
Trustee, and any officer, employee or agent of the Trust, and any
organization in which any such Person is interested, may acquire, own, hold
and dispose of Shares of any Series and other Securities of the Trust for his
or its individual account, and may exercise all rights of a holder of such
Shares or Securities to the same extent and in the same manner as if such
Person were not such a Trustee, officer, employee or agent of the Trust;
subject, in the case of Trustees and officers, to the same limitations as
directors or officers (as the case may be) of a Delaware business
corporation; and the Trust may issue and sell or cause to be issued and sold
and may purchase any such Shares or other Securities from any such Person or
any such organization, subject only to the general limitations, restrictions
or other provisions applicable to the sale or purchase of Shares of such
Series or other Securities of the Trust generally.
SECTION 4.7. Right of Trustees and Officers to Own Property or to
Engage in Business; Authority of Trustees to Permit Others to Do Likewise.
The Trustees, in their capacity as Trustees, and (unless otherwise
specifically directed by vote of the Trustees) the officers of the Trust in
their capacity as such, shall not be required to devote their entire time to
the business and affairs of the Trust. Except as otherwise specifically
provided by vote of the Trustees, or by agreement in any particular case, any
Trustee or officer of the Trust may acquire, own, hold and dispose of, for
his own individual account, any property, and acquire, own, hold, carry on
and dispose of, for his own individual account, any business entity or
business activity, whether similar or dissimilar to any property or business
entity or business activity invested in or carried on by the Trust, and
without first offering the same as an investment opportunity to the Trust,
and may exercise all rights in respect thereof as if he were not a Trustee or
officer of the Trust. The Trustees shall also have power, generally or in
specific cases, to permit
13
employees or agents of the Trust to have the same rights (or lesser
rights) to acquire, hold, own and dispose of property and businesses, to
carry on businesses, and to accept investment opportunities without offering
them to the Trust, as the Trustees have by virtue of this Section 4.7.
SECTION 4.8. Reliance on Experts. The Trustees and officers may
consult with counsel, engineers, brokers, appraisers, auctioneers,
accountants, investment bankers, securities analysts or other Persons (any of
which may be a firm in which one or more of the Trustees or officers is or
are members or otherwise interested) whose profession gives authority to a
statement made by them on the subject in question, and who are reasonably
deemed by the Trustees or officers in question to be competent, and the
advice or opinion of such Persons shall be full and complete personal
protection to all of the Trustees and officers in respect of any action taken
or suffered by them in good faith and in reliance on or in accordance with
such advice or opinion. In discharging their duties, Trustees and officers,
when acting in good faith, may rely upon financial statements of the Trust
represented to them to be correct by any officer of the Trust having charge
of its books of account, or stated in a written report by an independent
certified public accountant fairly to present the financial position of the
Trust. The Trustees and officers may rely, and shall be personally protected
in acting, upon any instrument or other document believed by them to be
genuine.
SECTION 4.9. Surety Bonds. No Trustee, officer, employee or agent of
the Trust shall, as such, be obligated to give any bond or surety or other
security for the performance of any of his duties, unless required by
applicable law or regulation, or unless the Trustees shall otherwise
determine in any particular case.
SECTION 4.10. Apparent Authority of Trustees and Officers. No
purchaser, lender, transfer agent or other Person dealing with the Trustees
or any officer of the Trust shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by such
officer, or to make inquiry concerning or be liable for the application of
money or property paid, loaned or delivered to or on the order of the
Trustees or of such officer.
SECTION 4.11. Other Relationships Not Prohibited. The fact that:
(i) any of the Shareholders, Trustees or officers of the
Trust is a shareholder, director, officer, partner, trustee,
employee, manager, adviser, principal underwriter or distributor or
agent of or for any Contracting Party (as defined in Section 5.2
hereof), or of or for any parent or affiliate of any Contracting
Party, or that the Contracting Party or any parent or affiliate
thereof is a Shareholder or has an interest in the Trust or any
Series, or that
(ii) any Contracting Party may have a contract providing for
the rendering of any similar services to one or more other
corporations, trusts, associations, partnerships, limited
partnerships
or other organizations, or have other business or interests,
shall not affect the validity of any contract for the performance and
assumption of services, duties and responsibilities to, for or of the Trust
and/or the Trustees or disqualify any Shareholder, Trustee or officer of the
Trust from voting upon or executing the same or create any liability or
accountability to the Trust or to the holders of Shares of any Series;
provided that, in the case of any relationship or interest referred to in the
preceding clause (i) on the part of any Trustee or officer of the Trust,
either (x) the material facts as to such relationship or interest have been
disclosed to or are known by the Trustees not having any such relationship or
interest and the contract involved is approved in good faith by a majority
14
of such Trustees not having any such relationship or interest (even
though such unrelated or disinterested Trustees are less than a quorum of all
of the Trustees), (y) the material facts as to such relationship or interest
and as to the contract have been disclosed to or are known by the
Shareholders entitled to vote thereon and the contract involved is
specifically approved in good faith by vote of the Shareholders, or (z) the
specific contract involved is fair to the Trust as of the time it is
authorized, approved or ratified by the Trustees or by the Shareholders.
SECTION 4.12. Payment of Trust Expenses. The Trustees are authorized
to pay or to cause to be paid out of the principal or income of the Trust, or
partly out of principal and partly out of income, and according to any
allocation to a particular Series and Class made by them pursuant to Section
6.1(f) hereof, all expenses, fees, charges, taxes and liabilities incurred or
arising in connection with the business and affairs of the Trust or in
connection with the management thereof, including, but not limited to, the
Trustees' compensation and such expenses and charges for the services of the
Trust's officers, employees, Investment Adviser, Administrator, Distributor,
Principal Underwriter, auditor, counsel, Custodian, Transfer Agent, Dividend
Disbursing Agent, Accounting Agent, Shareholder Servicing Agent, and such
other agents, consultants, and independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur.
SECTION 4.13. Ownership of the Trust Property. Legal title to all the
Trust Property shall be vested in the Trustees as joint tenants, except that
the Trustees shall have power to cause legal title to any Trust Property to
be held by or in the name of one or more of the Trustees, or in the name of
the Trust, or of any particular Series, or in the name of any other Person as
nominee, on such terms as the Trustees may determine; provided that the
interest of the Trust and of the respective Series therein is appropriately
protected. The right, title and interest of the Trustees in the Trust
Property shall vest automatically in each Person who may hereafter become a
Trustee. Upon the termination of the term of office of a Trustee as provided
in Section 4.1(c), (d) or (e) hereof, such Trustee shall automatically cease
to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed
and delivered pursuant to Section 4.1(i) hereof.
SECTION 4.14. By-Laws. The Trustees may adopt and from time to time
amend or repeal By-Laws for the conduct of the business of the Trust.
ARTICLE 5
DELEGATION OF MANAGERIAL RESPONSIBILITIES
SECTION 5.1. Appointment; Action by Less than All Trustees. The
Trustees shall be responsible for the general operating policy of the Trust
and for the general supervision of the business of the Trust conducted by
officers, agents, employees or advisers of the Trust or by independent
contractors, but
the Trustees shall not be required personally to conduct all the business of
the Trust and, consistent with their ultimate responsibility as stated
herein, the Trustees may appoint, employ or contract with one or more
officers, employees and agents to conduct, manage and/or supervise the
operations of the Trust, and may grant or delegate such authority to such
officers, employees and/or agents as the Trustees may, in their sole
discretion, deem to be necessary or desirable, without regard to whether such
authority is normally granted or delegated by trustees. With respect to those
matters of the operation and business of
15
the Trust which they shall elect to conduct themselves, except as
otherwise provided by this Declaration or the By-Laws, if any, the Trustees
may authorize any single Trustee or defined group of Trustees, or any
committee consisting of a number of Trustees less than the whole number of
Trustees then in office without specification of the particular Trustees
required to be included therein, to act for and to bind the Trust, to the
same extent as the whole number of Trustees could do, either with respect to
one or more particular matters or classes of matters, or generally.
SECTION 5.2. Certain Contracts. Subject to compliance with the
provisions of the 1940 Act, but notwithstanding any limitations of present
and future law or custom in regard to delegation of powers by trustees
generally, the Trustees may, at any time and from time to time in their
discretion and without limiting the generality of their powers and authority
otherwise set forth herein, enter into one or more contracts with any one or
more corporations, trusts, associations, partnerships, limited partnerships
or other types of organizations, or individuals ("Contracting Party"), to
provide for the performance and assumption of some or all of the following
services, duties and responsibilities to, for or on behalf of the Trust
and/or any Series, and/or the Trustees, and to provide for the performance
and assumption of such other services, duties and responsibilities in
addition to those set forth below, as the Trustees may deem appropriate:
(a) Advisory. An investment advisory or management agreement whereby
the agent shall undertake to furnish the Trust (or any Series thereof) such
management, investment advisory or supervisory, statistical and research
facilities and services, and such other facilities and services, if any, as
the Trustees shall from time to time consider desirable, all upon such terms
and conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the 1940 Act
or any applicable provisions of the By-Laws (any such agent being herein
referred to as an "Investment Adviser"). To the extent required by the 1940
Act, any such advisory or management agreement and any amendment thereto
shall be subject to approval by a Majority Shareholder Vote at a meeting of
the Shareholders of the Trust (or applicable Series). Notwithstanding any
provisions of this Declaration, the Trustees may authorize the Investment
Adviser (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
securities of the Trust on behalf of the Trustees or may authorize any
officer or employee of the Trust or any Trustee to effect such purchases,
sales, loans or exchanges pursuant to recommendations of the Investment
Adviser (and all without further action by the Trustees). Any such purchases,
sales, loans and exchanges shall be deemed to have been authorized by all of
the Trustees. The Trustees may, in their sole discretion, call a meeting of
Shareholders in order to submit to a vote of Shareholders of the Trust (or
applicable Series) at such meeting the approval of continuance of any such
investment advisory or management agreement.
(b) Administration. An agreement whereby the agent, subject to the
general supervision of the Trustees and in conformity with any policies of
the Trustees with respect to the operations of the Trust and each Series
thereof, will supervise all or any part of the operations of the Trust (or
any Series thereof), and will provide all or any part of the administrative
and clerical personnel, office space and office equipment and services
appropriate for the efficient administration and operations of the Trust (or
any Series thereof)
(any such agent being herein referred to as an "Administrator").
(c) Underwriting. An agreement providing for the sale of Shares of
the Trust (or any Series thereof) to net the Trust not less than the net
asset value per Share (as described in Section 6.1(l) hereof) and pursuant to
which the Trust may appoint the other party to such agreement as its
principal underwriter or sales agent for the distribution of such Shares. The
agreement shall contain such terms and
16
conditions as the Trustees may in their discretion determine to be not
inconsistent with this Declaration, the applicable provisions of the 1940
Act and any applicable provisions of the By-Laws (any such agent being
herein referred to as a "Distributor" or a "Principal Underwriter," as the
case may be).
(d) Custodian. The appointment of an agent meeting the requirements
for a custodian for the assets of Investment Companies contained in the
1940 Act as custodian of the Securities and cash of the Trust (or any
Series thereof) and of the accounting records in connection therewith (any
such agent being herein referred to as a "Custodian").
(e) Transfer and Dividend Disbursing Agent. An agreement with an
agent to maintain records of the ownership of outstanding Shares, the
issuance and redemption and the transfer thereof (any such agent being
herein referred to as a "Transfer Agent"), and to disburse any dividends
declared by the Trustees and in accordance with the policies of the
Trustees and/or the instructions of any particular Shareholder to reinvest
any such dividends (any such agent being herein referred to as a "Dividend
Disbursing Agent").
(f) Shareholder Servicing. An agreement with an agent to provide
service with respect to the relationship of the Trust and its Shareholders,
records with respect to Shareholders and their Shares, and similar matters
(any such agent being herein referred to as a "Shareholder Servicing
Agent").
(g) Accounting. An agreement with an agent to handle all or any part
of the accounting responsibilities, whether with respect to the Trust's
properties, Shareholders or otherwise (any such agent being herein referred
to as an "Accounting Agent").
In addition, the Trustees may from time to time cause the Trust (or any
Series thereof) to enter into agreements with respect to such other services
and upon such other terms and conditions as they may deem necessary,
appropriate or desirable. The same Person may be the Contracting Party for
some or all of the services, duties and responsibilities to, for and of the
Trust and/or the Trustees, and the contracts with respect thereto may contain
such terms interpretive of or in addition to the delineation of the services,
duties and responsibilities provided for, including provisions that are not
inconsistent with the 1940 Act relating to the standard of duty of and the
rights to indemnification of the Contracting Party and others, as the
Trustees may determine. Nothing herein shall preclude, prevent or limit the
Trust or a Contracting Party from entering into subcontractual arrangements
relative to any of the matters referred to in subsections (a) through (g) of
this Section 5.2.
Section 5.3. Distribution Arrangements. Subject to compliance with
the 1940 Act, the Trustees may adopt and amend or repeal from time to time
and implement one or more plans of distribution pursuant to Rule 12b-1 of the
1940 Act which plan(s) will provide for the payment of specified marketing,
distribution and shareholder relations expenses of the Trust and any or all
Series and their agents and the agents of such agents.
Section 5.4. Service Arrangements. Subject to compliance with the
1940 Act, the Trustees may adopt and amend or repeal from time to time and
implement one or more service plans which plans will provide for the payment
of ongoing services to holders of the shares of such Trust (or any Series
thereof)
and in connection with the maintenance of such shareholders' accounts.
17
ARTICLE 6
SERIES AND SHARES
SECTION 6.1. Description of Series and Shares.
(a) General. The beneficial interest in the Trust shall be divided
into Shares (either full or fractional) with $.01 par value per Share, of
which an unlimited number may be issued. The Trustees shall have the
authority from time to time to establish and designate one or more separate,
distinct and independent Series of Shares (each of which Series shall
represent interests only in the asset attributed by the Trustees to such
Series), and to authorize separate Classes of Shares of the Trust (or any
such Series), as they deem necessary or desirable. All Shares shall be of one
class, provided that the Trustees shall have the power to classify or
reclassify any unissued Shares of any Series into any number of additional
Classes of such Series.
(b) Establishment. etc. of Series and Classes; Authorization of
Shares. The establishment and designation of any Series and the authorization
of the Shares thereof shall be effective upon the execution by a Majority of
the Trustees (or by an officer of the Trust pursuant to the vote of a
Majority of the Trustees) of an instrument setting forth such establishment
and designation and the relative rights and preferences of the Shares of such
Series or Class and the manner in which the same may be amended (a
"Certificate of Designation"), and may provide that the number of Shares of
such Series or Class which may be issued is unlimited, or may limit the
number issuable. At any time that there are no Shares outstanding of any
particular Series or Class previously established and designated, the
Trustees may by an instrument executed by a Majority of the Trustees (or by
an officer of the Trust pursuant to the vote of a Majority of the Trustees)
terminate such Series or Class and the establishment and designation thereof
and the authorization of its Shares (a "Certificate of Termination"). Each
Certificate of Designation, Certificate of Termination and any instrument
amending a Certificate of Designation shall have the status of an amendment
to this Declaration of Trust.
(c) Character of Separate Series and Shares Thereof. Each Series
established hereunder shall represent beneficial interests in a separate
component of the assets of the Trust. Holders of Shares of a Series shall be
considered Shareholders of such Series, but such Shareholders shall also be
considered Shareholders of the Trust for purposes of receiving reports and
notices and, except as otherwise provided herein or in the Certificate of
Designation of a particular Series, or as required by the 1940 Act or other
applicable law, the right to vote, all without distinction by Series. The
Trustees shall have exclusive power without the requirement of Shareholder
approval to establish and designate such separate and distinct Series, and to
fix and determine the relative rights and preferences as between the shares
of the respective Series, and as between the Classes of the Trust (or any
Series thereof), as to rights of redemption and the price, terms and manner
of redemption, special and relative rights as to dividends and other
distributions and on liquidation, sinking or purchase fund provisions,
conversion rights, and conditions under which the Shareholders of the several
Series or the several Classes of any Series of Shares shall have separate
voting rights or no voting rights. Except as otherwise provided as to a
particular Series herein, or in the Certificate of Designation therefor, the
Trustees shall have all the rights and powers, and be subject to all the
duties and obligations, with respect to each such Series and the assets and
affairs thereof as they have under this Declaration with respect to the Trust
and the Trust Property in general. Separate and distinct records shall be
maintained for each Series of Shares and the assets and liabilities
attributable thereto.
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(d) Consideration for Shares. The Trustees may issue Shares of the
Trust (or any Series thereof) for such consideration (which may include
property subject to, or acquired in connection with the assumption of,
liabilities) and on such terms as they may determine (or for no consideration
if pursuant to a Share dividend or split-up), all without action or approval
of the Shareholders. All Shares when so issued on the terms determined by the
Trustees shall be fully paid and nonassessable (but may be subject to
mandatory contribution back to the Trust (or applicable Series) as provided
in Section 6.1(l) hereof. The Trustees may classify or reclassify any
unissued Shares, or any Shares of the Trust (or any Series thereof)
previously issued and reacquired by the Trust, into Shares of the Trust or
one or more other Series that may be established and designated from time to
time.
(e) Assets Belonging to Series. Any portion of the Trust Property
allocated to a particular Series, and all consideration received by the Trust
for the issue or sale of Shares of such Series, together with all assets in
which such consideration is invested or reinvested, all interest, dividends,
income, earnings, profits and gains therefrom, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall be held by the Trustees in
trust for the benefit of the holders of Shares of that Series and shall
irrevocably belong to that Series for all purposes, and shall be so recorded
upon the books of account of the Trust, and the Shareholders of such Series
shall not have, and shall be conclusively deemed to have waived, any claims
to the assets of any Series of which they are not Shareholders. Such
consideration, assets, interest, dividends, income, earnings, profits, gains
and proceeds, together with any General Items allocated to that Series as
provided in the following sentence, are herein referred to collectively as
assets "belonging to" that Series. In the event that there are any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series (collectively,
"General Items"), the Trustees shall allocate such General Items to and among
any one or more of the Series established and designated from time to time in
such manner and on such basis as they, in their sole discretion, deem fair
and equitable; and any General Items so allocated to a particular Series
shall belong to and be part of the assets belonging to that Series. Each such
allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
(f) Liabilities of Series. The assets belonging to each particular
Series shall be charged with the liabilities in respect of that Series and
all expenses, costs, charges and reserves attributable to that Series, and
any general liabilities, expenses, costs, charges or reserves of the Trust
which are not readily identifiable as pertaining to any particular Series
shall be allocated and charged by the Trustees to and among any one or more
of the Series established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair and
equitable. The indebtedness, expenses, costs, charges and reserves allocated
and so charged to a particular Series are herein referred to as "liabilities
of" that Series. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes. Any creditor of any Series may
look only to the assets belonging to that Series to satisfy such creditor's
debt.
(g) Dividends. Dividends and distributions on Shares of a particular
Series may be paid with such frequency as the Trustees may determine, which
may be daily or otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may determine, to
the Shareholders of that Series, from such of the income, accrued or
realized, and capital gains,
19
realized or unrealized, and out of the assets belonging to that Series,
as the Trustees may determine, after providing for actual and accrued
liabilities of that Series. All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the Shareholders of that
Series in proportion to the number of such Shares held by such holders at
the
date and time of record established for the payment of such dividends or
distributions, except that the dividends and distributions of investment
income and capital gains with respect to each Class of Shares of a particular
Series shall be in such amount as may be declared from time to time by the
Trustees, and such dividends and distributions may vary as between such
Classes to reflect differing allocations of the expenses of the Series
between the Shareholders of such several Classes and any resultant
differences between the net asset value of such several Classes to such
extent and for such purposes as the Trustees may deem appropriate and further
except that, in connection with any dividend or distribution program or
procedure, the Trustees may determine that no dividend or distribution shall
be payable on Shares as to which the Shareholder's purchase order and/or
payment have not been received by the time or times established by the
Trustees under such program or procedure, or that dividends or distributions
shall be payable on Shares which have been tendered by the holder thereof for
redemption or repurchase, but the redemption or repurchase proceeds of which
have not yet been paid to such Shareholder. Such dividends and distributions
may be made in cash, property or Shares of any Class of that Series or a
combination thereof as determined by the Trustees, or pursuant to any program
that the Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or distribution to
that Shareholder. Any such dividend or distribution paid in Shares will be
paid at the net asset value thereof as determined in accordance with
subsection (l) of this Section 6.1.
(h) Liquidation. In the event of the liquidation or dissolution of
the Trust (or any particular Series), the Shareholders of the Trust (or that fF
Series) shall be entitled to receive, when and as declared by the Trustees,
the excess of the assets belonging to the Trust (or that Series) over the
liabilities of such Series. The assets so distributable to the Shareholders
of the Trust (or that Series) shall be distributed among such Shareholders in
proportion to the number of Shares of the Trust (or that Series) held by them
and recorded on the books of the Trust. The liquidation of the Trust (or any
particular Series) may be authorized by vote of a Majority of the Trustees,
subject to the affirmative vote of "a majority of the outstanding voting
securities" of that Series, as the quoted phrase is defined in the 1940 Act,
determined in accordance with clause (iii) of the definition of "Majority
Shareholder Vote" in Section 1.4 hereof.
(i) Voting. The Shareholders shall have the voting rights set forth
in or determined under Article 7 hereof.
(j) Redemption by Shareholder. Each holder of Shares of the Trust (or
a particular Series thereof) shall have the right at such times as may be
permitted by the Trust, but no less frequently than required by the 1940 Act,
to require the Trust (or such Series) to redeem all or any part of his Shares
of the Trust (or such Series) at a redemption price equal to the net asset
value per Share of the Trust (or Series) next determined in accordance with
subsection (l) of this Section 6.1 after the Shares are properly tendered for
redemption; provided, that the Trustees may from time to time, in their
discretion, determine and impose a fee for such redemption and that the
proceeds of the redemption of Shares (including a fractional Share) of any
Class of the Trust (or any Series thereof) shall be reduced by the amount of
any applicable contingent deferred sales charge or other sales charge, if any,
payable on such redemption to the distributor of Shares of such Class pursuant
to the terms of
20
the initial issuance of the Shares of such Class (to the extent
consistent with the 1940 Act or regulations or exemptions thereunder) and the
Trust shall promptly pay to such distributor the amount of such deferred sales
charge. Payment of the redemption price shall be in cash; provided, however,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in Securities or other assets
belonging to such Series at the value of such Securities or assets used in
such determination of net asset value. Notwithstanding the foregoing, the
Trust may
postpone payment of the redemption price and may suspend the right of the
holders of Shares of the Trust (or any Series thereof) to require the Trust
to redeem Shares of the Trust (or such Series) during any period or at any
time when and to the extent permissible under the 1940 Act.
(k) Redemption at the Option of the Trust. The Trustees shall have
the power to redeem Shares of the Trust (or any Series thereof) at a
redemption price determined in accordance with Section 6.1(j), if at any
time (i) the total investment in such account does not have a value of at
least such minimum amount as may be specified in the Prospectus for the Trust
(or such Series) from time to time (ii) the number of Shares held in such
account is equal to or in excess of a specified percentage of Shares of the
Trust or any Series as set forth from time to time in the applicable
Prospectus. In the event the Trustees determine to exercise their power to
redeem Shares provided in this Section 6.1(k), the Shareholder shall be
notified that the value of his account is less than the applicable minimum
amount and shall be allowed 30 days to make an appropriate investment before
redemption is processed.
(l) Net Asset Value. The net asset value per Share of the Trust (or
any Series or Class) at any time shall be the quotient obtained by dividing
the value of the net assets of the Trust (or such Series or Class) at such
time (being the current value of the assets belonging to the Trust (or such
Series or Class), less its then existing liabilities) by the total number of
Shares of the Trust (or such Series) then outstanding, all determined in
accordance with the methods and procedures, including without limitation
those with respect to rounding, established by the Trustees from time to time
in accordance with the requirements of the 1940 Act. The net asset value of
the several Classes of the Trust (or a particular Series) shall be separately
computed, and may vary from one another. The Trustees shall establish
procedures for the allocation of investment income or capital gains and
expenses and liabilities of a particular Series between the several Classes
of the Trust (or such Series). The Trustees may determine to maintain the net
asset value per Share of the Trust or any Series or Class at a designated
constant dollar amount and in connection therewith may adopt procedures not
inconsistent with the 1940 Act for the continuing declaration of income
attributable to the Trust or such Series or Class as dividends payable in
additional Shares of the Trust or such Series or Class at the designated
constant dollar amount and for the handling of any losses attributable to the
Trust or such Series or Class. Such procedures may provide that in the event
of any loss each Shareholder shall be deemed to have contributed to the
shares of beneficial interest account of the Trust or such Series or Class
his pro rata portion of the total number of Shares required to be canceled in
order to permit the net asset value per Share of the Trust or such Series or
Class to be maintained, after reflecting such loss, at the designated
constant dollar amount. Each Shareholder of the Trust shall be deemed to have
expressly agreed, by his investment in the Trust (or any Series thereof) with
respect to which the Trustees shall have adopted any such procedure, to make
the contribution referred to in the preceding sentence in the event of any
such loss.
(m) Transfer. All Shares of the Trust and each Series shall be
transferable, but transfers of Shares of the Trust or a particular Series
will be recorded on the Share transfer records of the Trust
21
applicable to the Trust or such Series only at such times as
Shareholders shall have the right to require the Trust to redeem Shares of
the Trust or such Series and at such other times as may be permitted by the
Trustees.
(n) Equality. All Shares of each particular Series shall represent an
equal proportionate interest in the assets belonging to that Series (subject
to the liabilities of that Series), and each Share of any particular Series
shall be equal to each other Share thereof; but the provisions of this
sentence shall not restrict any distinctions between the several Classes of a
Series permissible under this Section 6.1 or under Section 7. 1 hereof nor
any distinctions permissible under subsection (g) of this Section 6.1 that
may
exist with respect to dividends and distributions on Shares of the same
Series. The Trustees may from time to time divide or combine the Shares of
any class of particular Series into a greater or lesser number of Shares of
that class of a Series without thereby changing the proportionate beneficial
interest in the assets belonging to that Series or in any way affecting the
rights of the holders of Shares of any other Series.
(o) Rights of Fractional Shares. Any fractional Share of the Trust
(or any Series thereof) shall carry proportionately all the rights and
obligations of a whole Share of the Trust (or such Series), including rights
and obligations with respect to voting, receipt of dividends and
distributions, redemption of Shares, and liquidation of the Trust or of the
Series to which they pertain.
(p) Conversion Rights. (i) Subject to compliance with the
requirements of the 1940 Act, the Trustees shall have the authority to
provide that holders of Shares of any Series shall have the right to convert
said Shares into Shares of one or more other Series, that holders of any
Class of the Trust or a Series of Shares shall have the right to convert said
Shares of such Class into Shares of one or more other Classes of the Trust or
such Series, and that Shares of any Class of the Trust or a Series shall be
automatically converted into Shares of another Class of the Trust or such
Series, in each case in accordance with such requirements and procedures as
the Trustees may establish.
(ii) The number of Shares of into which a convertible Share
shall convert shall equal the number (including for this purpose fractions of
a Share) obtained by dividing the net asset value per Share for purposes of
sales and redemptions of the converting Share on the Conversion Date by the
net asset value per Share for purposes of sales and redemptions of the Class
of Shares into which it is converting on the Conversion Date.
(iii) On the Conversion Date, the Share converting into another
share will cease to accrue dividends and will no longer be deemed
outstanding and the rights of the holders thereof (except the right to
receive the number of target Shares into which the converting Shares have
been converted and declared but unpaid dividends to the Conversion Date) will
cease. Certificates representing Shares resulting from the conversion need
not be issued until certificates representing Shares converted, if issued,
have been received by the Trust or its agent duly endorsed for transfer.
(vi) The Trust will appropriately reflect the conversion of
Shares of one Class of the Trust (or a Series thereof) into Shares of another
Class of the Trust (or such Series) on the first periodic statements of
account sent to Shareholders of record affected which provide account
information with respect to a reporting period which includes the date such
conversion occurred.
SECTION 6.2. Ownership of Shares. The ownership of Shares shall be
recorded on the books of the Trust or of a Transfer Agent or similar agent
for the Trust, which books shall be maintained
22
separately for the Shares of each Series that has been authorized.
Certificates evidencing the ownership of Shares need not be issued except as
the Trustees may otherwise determine from time to time, and the Trustees
shall have power to call outstanding Share certificates and to replace them
with book entries. The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the use of facsimile
signatures, the transfer of Shares and similar matters. The record books of
the Trust as kept by the Trust or any Transfer Agent or similar agent, as the
case may be, shall be conclusive as to who are the Shareholders and as to the
number of Shares of the Trust and, if designated, each Series thereof held
from time to time by each such Shareholder.
The holders of Shares of the Trust and, if designated, each Series
thereof shall upon demand disclose to the Trustees in writing such
information with respect to their direct and indirect ownership of Shares of
the Trust or,
if designated, such Series as the Trustees deem necessary to comply with the
provisions of the Internal Revenue Code, or to comply with the requirements
of any other authority.
SECTION 6.3. Investments in the Trust. The Trustees may accept
investments in any Series of the Trust from such Persons and on such terms
and for such consideration, not inconsistent with the provisions of the 1940
Act, as they from time to time authorize. The Trustees may authorize any
Distributor, Principal Underwriter, Custodian, Transfer Agent or other Person
to accept orders for the purchase of Shares that conform to such authorized
terms and to reject any purchase orders for Shares, whether or not conforming
to such authorized terms.
SECTION 6.4. No Preemptive Rights. No Shareholder, by virtue of
holding Shares of the Trust or, if designated, any Series thereof, shall
have any preemptive or other right to subscribe to any additional Shares of
the Trust or such Series, or to any shares of any other Series, or any other
Securities issued by the Trust.
SECTION 6.5. Status of Shares. Every Shareholder, by virtue of having
become a Shareholder, shall be held to have expressly assented and agreed to
the terms hereof and to have become a party hereto. Shares shall be deemed to
be personal property, giving only the rights provided herein. Ownership of
Shares shall not entitle the Shareholder to any title in or to the whole or
any part of the Trust Property or right to call for a partition or division
of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the Trust or any
Series, nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decedent under this Declaration
of Trust.
ARTICLE 7
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.1. Voting Powers. The Shareholders shall have power to vote
only (i) for the election or removal of Trustees as provided in Sections
4.1(c) and (e) hereof, (ii) with respect to the approval or termination in
accordance with the 1940 Act of any contract with a Contracting Party as
provided in Section 5.2 hereof as to which Shareholder approval is required
by the 1940 Act, (iii) with respect to any termination or reorganization of
the Trust or any Series to the extent and as provided in Sections 9.2, 9.3
and 9.4 hereof, (iv) with respect to any amendment of this Declaration of
Trust to the extent and as provided in Section 9.5 hereof, (v) to the same
extent as the stockholders of a Delaware business
23
corporation as to whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class
action on behalf of the Trust or any Series, or the Shareholders of any of
them (provided. however, that a Shareholder of a particular Series shall not
in any event be entitled to maintain a derivative or class action on behalf
of any other Series or the Shareholders thereof), and (vi) with respect to
such additional matters relating to the Trust as may be required by the 1940
Act, this Declaration of Trust, the By-Laws or any registration of the Trust
with the Commission (or any successor agency) or any State, or as the
Trustees may consider necessary or desirable. If and to the extent that the
Trustees shall determine that such action is required by law or by this
Declaration, they shall cause each matter required or permitted to be voted
upon at a meeting or by written consent of Shareholders to be submitted to a
separate vote of the outstanding Shares of each Series entitled to vote
thereon; provided, that (i) when expressly required by the 1940 Act or by
other law, actions of Shareholders shall be taken by Single Class Voting of
all outstanding Shares
whose holders are entitled to vote thereon; and (ii) when the Trustees
determine that any matter to be submitted to a vote of Shareholders affects
only the rights or interests of Shareholders of one or more but not all
Series or of one or more but not all Classes of the Trust or a single Series
(including without limitation any distribution plan pursuant to Rule 12b-1 of
the 1940 Act applicable to such Class), then only the Shareholders of the
Series or Classes so affected shall be entitled to vote thereon. Any matter
required to be submitted to shareholders and affecting one or more Series
shall require separate approval by the required vote of Shareholders of the
Trust or each affected Series; provided, however, that to the extent required
by the 1940 Act, there shall be no separate Series votes on the election or
removal of Trustees, the selection of auditors for the Trust and its Series
or approval of any agreement or contract entered into by the Trust or any
Series. Shareholders of a particular Series shall not be entitled to vote on
any matter that affects only one or more other Series.
SECTION 7.2. Number of Votes and Manner of Voting: Proxies. On each
matter submitted to a vote of the Shareholders, each holder of Shares of the
Trust or, if applicable, any Series shall be entitled to a number of votes
equal to the number of Shares of the Trust or such Series standing in his
name on the books of the Trust. There shall be no cumulative voting in the
election or removal of Trustees. Shares may be voted in person or by proxy. A
proxy with respect to Shares held in the name of two (2) or more Persons
shall be valid if executed by any one of them unless at or prior to exercise
of the proxy the Trust receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required by law, this Declaration of Trust or the By-
Laws to be taken by Shareholders.
SECTION 7.3. Meetings. Meetings of Shareholders may be called by the
Trustees from time to time for the purpose of taking action upon any matter
requiring the vote or authority of the Shareholders as herein provided, or
upon any other matter deemed by the Trustees to be necessary or desirable.
Written notice of any meeting of Shareholders shall be given or caused to be
given by the Trustees by mailing such notice at least seven (7) days before
such meeting, postage prepaid, stating the time, place and purpose of the
meeting, to each Shareholder at the Shareholder's address as it appears on
the records of the Trust. The Trustees shall promptly call and give notice of
a meeting of Shareholders for the purpose of voting upon removal of any
Trustee of the Trust when requested to do so in writing by Shareholders
holding not less than ten percent (10%) of the Shares then outstanding. If
the Trustees shall fail to call or give notice of any meeting of Shareholders
for a period of thirty (30) days after written application by Shareholders
holding at least ten percent (10%) of the Shares then outstanding requesting
that a
24
meeting be called for any other purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding
at least ten percent (10%) of the Shares then outstanding may call and give
notice of such meeting, and thereupon the meeting shall be held in the manner
provided for herein in case of call thereof by the Trustees. Any meetings
may be held within or without The State of Delaware. Shareholders may only
act with respect to matters set forth in the notice to Shareholders.
SECTION 7.4. Record Dates. For the purpose of determining the
Shareholders who are entitled to vote or act at any meeting or any
adjournment thereof, or who are entitled to participate in any dividend or
distribution, or for the purpose of any other action, the Trustees may from
time to time close the transfer books for such period, not exceeding thirty
(30) days (except at or in connection with the termination of the Trust), as
the Trustees may determine; or without closing the transfer books the
Trustees may fix a date and time not more than ninety (90) days prior to the
date of any meeting of Shareholders or other action as the date and time of
record for the
determination of Shareholders entitled to vote at such meeting or any
adjournment thereof or to be treated as Shareholders of record for purposes
of such other action, and any Shareholder who was a Shareholder at the date
and time so fixed shall be entitled to vote at such meeting or any
adjournment thereof or to be treated as a Shareholder of record for purposes
of such other action, even though he has since that date and time disposed of
his Shares, and no Shareholder becoming such after that date and time shall
be so entitled to vote at such meeting or any adjournment thereof or to be
treated as a Shareholder of record for purposes of such other action.
SECTION 7.5. Quorum and Required Vote. A majority of the Shares
entitled to vote shall be a quorum for the transaction of business at a
Shareholders' meeting, but any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a
reasonable time after the date set for the original meeting without the
necessity of further notice. A Majority Shareholder Vote at a meeting of
which a quorum is present shall decide any question, except when a different
vote is required or permitted by any provision of the 1940 Act or other
applicable law or by this Declaration of Trust or the By-Laws, or when the
Trustees shall in their discretion require a larger vote or the vote of a
majority or larger fraction of the Shares of one or more particular Series.
SECTION 7.6. Action By Written Consent. Subject to the provisions of
the 1940 Act and other applicable law, any action taken by Shareholders may
be taken without a meeting if a majority of Shareholders entitled to vote on
the matter (or such larger proportion thereof or of the Shares of any
particular Series as shall be required by the 1940 Act or by any express
provision of this Declaration of Trust or the By-Laws or as shall be
permitted by the Trustees) consent to the action in writing and if the
writings in which such consent is given are filed with the records of the
meetings of Shareholders, to the same extent and for the same period as
proxies given in connection with a Shareholders' meeting. Such consent shall
be treated for all purposes as a vote taken at a meeting of Shareholders.
SECTION 7.7. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
stockholders of a Delaware business corporation under the Delaware business
corporation law.
SECTION 7.8. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters not
inconsistent with the provisions hereof.
25
ARTICLE 8
LIMITATION OF LIABILITY: INDEMNIFICATION
SECTION 8.1. Trustees. Shareholders. etc. Not Personally Liable;
Notice. The Trustees, officers, employees and agents of the Trust, in
incurring any debts, liabilities or obligations, or in limiting or omitting
any other actions for or in connection with the Trust, are or shall be deemed
to be acting as Trustees, officers, employees or agents of the Trust and not
in their own capacities. No Shareholder shall be subject to any personal
liability whatsoever in tort, contract or otherwise to any other Person or
Persons in connection with the assets or the affairs of the Trust or of any
Series, and subject to Section 8.4 hereof, no Trustee, officer, employee
or agent of the
Trust shall be subject to any personal liability whatsoever in tort,
contract, or otherwise, to any other Person or Persons in connection with the
assets or affairs of the Trust or of any Series, save only that arising from
his own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office or the
discharge of his functions. The Trust (or if the matter relates only to a
particular Series, that Series) shall be solely liable for any and all debts,
claims, demands, judgments, decrees, liabilities or obligations of any and
every kind, against or with
respect to the Trust or such Series in tort, contract or otherwise in
connection with the assets or the affairs of the Trust or such Series, and
all Persons dealing with the Trust or any Series shall be deemed to have
agreed that resort shall be had solely to the Trust Property of the Trust or
the Series Assets of such Series, as the case may be, for the payment or
performance thereof.
The Trustees shall use their best efforts to ensure that every note,
bond, contract, instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer shall give notice that a Certificate
of Trust in respect of the Trust is on file with the Secretary of the state
of Delaware and shall recite to the effect that the same was executed or made
by or on behalf of the Trust or by them as Trustees or Trustee or as officers
or officer, and not individually, and that the obligations of such instrument
are not binding upon any of them or the Shareholders individually but are
binding only upon the assets and property of the Trust, or the particular
Series in question, as the case may be, but the omission thereof shall not
operate to bind any Trustees or Trustee or officers or officer or
Shareholders or Shareholder individually, or to subject the Series Assets of
any Series to the obligations of any other Series.
SECTION 8.2. Trustees' Good Faith Action; Expert Advice: No Bond or
Surety. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. Subject to Section 8.4
hereof, a Trustee shall be liable for his own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of the office of Trustee, and for nothing else, and shall not be liable for
errors of judgment or mistakes of fact or law. Subject to the foregoing, (i)
the Trustees shall not be responsible or liable in any event for any neglect
or wrongdoing of any officer, agent, employee, consultant, Investment
Adviser, Administrator, Distributor or Principal Underwriter, Custodian or
Transfer Agent, Dividend Disbursing Agent, Shareholder Servicing Agent or
Accounting Agent of the Trust, nor shall any Trustee be responsible for the
act or omission of any other Trustee; (ii) the Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust and their duties as Trustees, and shall be under no
liability for any act or omission in accordance with such advice or for
failing to follow such advice; and (iii) in discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the books
of account of the Trust and upon written reports made to the Trustees by any
officer appointed by them, any independent public accountant, and (with
respect to the subject matter of the contract involved) any officer, partner
or
26
responsible employee of a Contracting Party appointed by the Trustees
pursuant to Section 5.2 hereof. The Trustees as such shall not be required to
give any bond or surety or any other security for the performance of their
duties.
SECTION 8.3. Indemnification of Shareholders. If any Shareholder (or
former Shareholder) of the Trust shall be charged or held to be personally
liable for any obligation or liability of the Trust solely by reason of being
or having been a Shareholder and not because of such Shareholder's acts or
omissions or for some other reason, the Trust (upon proper and timely request
by the Shareholder) may assume the defense against such charge and satisfy
any judgment thereon or may reimburse the Shareholders for expenses, and the
Shareholder or former Shareholder (or the heirs, executors, administrators or
other legal representatives thereof, or in the case of a corporation or other
entity, its corporate or other general successor) shall be entitled (but
solely out of the assets of the Series of which such Shareholder or former
Shareholder is or was the holder of Shares) to be held harmless from and
indemnified against all loss and expense arising from such liability.
SECTION 8.4. Indemnification of Trustees. Officers, etc. Subject to
the limitations, if applicable, hereinafter set forth in this Section 8.4,
the Trust shall indemnify (from the assets of one or more Series to which the
conduct in question relates) each of its Trustees, officers, employees and
agents (including Persons who serve at the Trust's request as directors,
officers or trustees of another organization in which the Trust has any
interest as a shareholder, creditor or otherwise (hereinafter, together with
such Person's heirs, executors, administrators or personal representative,
referred to as a "Covered Person")) against all liabilities, including but
not limited to amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and expenses, including reasonable accountants' and
counsel fees, incurred by any Covered Person in connection with the defense
or disposition of any action, suit or other proceeding, whether civil or
criminal, before any court or administrative or legislative body, in which
such Covered Person may be or may have been involved as a party or otherwise
or with which such Covered Person may be or may have been threatened, while
in office or thereafter, by reason of being or having been such a Trustee or
officer, director or trustee, except with respect to any matter as to which
it has been determined that such Covered Person (i) did not act in good faith
in the reasonable belief that such Covered Person's action was in or not
opposed to the best interests of the Trust; (ii) had acted with willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office (iii) for a criminal
proceeding, had reasonable cause to believe that his conduct was unlawful
(the conduct described in (i), (ii) and (iii) being referred to hereafter as
"Disabling Conduct"). A determination that the Covered Person is entitled to
indemnification may be made by (i) a final decision on the merits by a court
or other body before whom the proceeding was brought that the Covered Person
to be indemnified was not liable by reason of Disabling Conduct, (ii)
dismissal of a court action or an administrative proceeding against a Covered
Person for insufficiency of evidence of Disabling Conduct, or (iii) a
reasonable determination, based upon a review of the facts, that the
indemnitee was not liable by reason of Disabling Conduct by (a) a vote of a
majority of a quorum of Trustees who are neither "interested persons" of the
Trust as defined in Section 2(a)(19) of the 1940 Act nor parties to the
proceeding (the "Disinterested Trustees"), or (b) an independent legal
counsel in a written opinion. Expenses, including accountants' and counsel
fees so incurred by any such Covered Person (but excluding amounts paid in
satisfaction of judgments, in compromise or as fines or penalties), may be
paid from time to time by one or more Series to which the conduct in question
related in advance of the final disposition of any such action, suit or
proceeding; provided that the Covered Person shall have undertaken to repay
the amounts so paid to such Series if it is ultimately determined that
indemnification of such expenses is not authorized under this Article 8 and
(i) the Covered Person shall
27
have provided security for such undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of a quorum of the Disinterested Trustees, or an independent legal
counsel in a written opinion, shall have determined, based on a review of
readily available facts (as opposed to a full trial type inquiry), that there
is reason to believe that the Covered Person ultimately will be found
entitled to indemnification.
SECTION 8.5. Compromise Payment. As to any matter disposed of by a
compromise payment by any such Covered Person referred to in Section 8.4
hereof, pursuant to a consent decree or otherwise, no such indemnification
either for said payment or for any other expenses shall be provided unless
such indemnification shall be approved (i) by a majority of a quorum of the
Disinterested Trustees or (ii) by an independent legal counsel in a written
opinion. Approval by the Trustees pursuant to clause (i) or by independent
legal counsel pursuant to clause (ii) shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with
either of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered Person's
action was in or not opposed to the best interests of the Trust or to have
been liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the
Covered Person's office.
SECTION 8.6. Indemnification Not Exclusive, etc. The right of
indemnification provided by this Article 8 shall not be exclusive of or
affect any other rights to which any such Covered Person or shareholder may
be entitled. As used in this Article 8, a "disinterested" Person is one
against whom none of the actions, suits or other proceedings in question, and
no other action, suit or other proceeding on the same or similar grounds is
then or has been pending or threatened. Nothing contained in this Article 8
shall affect any rights to indemnification to which personnel of the Trust,
other than Trustees and officers, and other Persons may be entitled by
contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such Person.
SECTION 8.7. Liability of Third Persons Dealing with Trustees. No
person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees
or to see to the application of any payments made or property transferred to
the Trust or upon its order.
ARTICLE 9
DURATION: REORGANIZATION: INCORPORATION; AMENDMENTS
SECTION 9.1. Duration of Trust. Unless terminated as provided herein,
the Trust shall have perpetual existence.
SECTION 9.2. Termination of Trust. The Trust may be terminated at any
time by a Majority of the Trustees, subject to the favorable vote of the
holders of not less than a majority of the Shares outstanding and entitled to
vote of each Series of the Trust, or by an instrument or instruments in
writing without a meeting, consented to by the holders of not less than a
majority of such Shares, or by such greater or different vote of Shareholders
of any Series as may be established by the Certificate of Designation by
which such Series was authorized. Upon termination, after paying or otherwise
providing for all charges, taxes, expenses and liabilities, whether due or
accrued or anticipated as may be
28
determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets
to distributable form in cash, Securities or other property, or any
combination thereof, and distribute the proceeds to the Shareholders, in
conformity with the provisions of Section 6.1(h) hereof. After termination of
the Trust or any Series and distribution to the Shareholders as herein
provided, a majority of the Trustees shall execute and lodge among the
records of the Trust an instrument in writing setting forth the fact of such
termination. Upon termination of the Trust, the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and the rights
and interests of all Shareholders shall thereupon cease. Upon termination of
any Series, the Trustees shall thereupon be discharged from all further
liabilities and duties with respect to such Series, and the rights and
interests of all Shareholders of such Series shall thereupon cease.
SECTION 9.3. Reorganization. The Trustees may sell, convey and
transfer all or substantially all of the assets of the Trust, or the assets
belonging to any one or more Series, to another trust, partnership,
association, corporation or other entity organized under the laws of any
state of the United States, or may transfer such assets to another Series of
the Trust, in exchange for cash, Shares or other Securities (including, in
the case of a transfer to another Series of the Trust, Shares of such other
Series), or to the extent permitted by law then in effect may merge or
consolidate the Trust or any Series with any other Trust or any corporation,
partnership, or association organized under the laws of any state of the
United States, all upon such terms and conditions and for such consideration
when and as authorized by vote or written consent of a Majority of the
Trustees and approved by the affirmative vote of the holders of
not less than a majority of the Shares outstanding and entitled to vote of
each Series whose assets are affected by such transaction, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of not less than a majority of such Shares, and/or by such other vote
of any Series as may be established by the Certificate of Designation with
respect to such Series. Following such transfer, the Trustees shall
distribute the cash, Shares or other Securities or other consideration
received in such transaction (giving due effect to the assets belonging to
and indebtedness of, and any other differences among, the various Series of
which the assets have so been transferred) among the Shareholders of the
Series of which the assets have been so transferred; and if all of the assets
of the Trust have been so transferred, the Trust shall be terminated. Nothing
in this Section 9.3 shall be construed as requiring approval of Shareholders
for the Trustees to organize or assist in organizing one or more
corporations, trusts, partnerships, associations or other organizations, and
to sell, convey or transfer less than substantially all of the Trust Property
or the assets belonging to any Series to such organizations or entities.
SECTION 9.4. Incorporation. Upon approval by Majority Shareholder
Vote, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or to carry on any business in which the Trust shall directly
or indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, association or organization, in
exchange for the shares or securities thereof, or otherwise, and to lend
money to, subscribe for the shares of securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization in which the Trust holds or is about to acquire shares or any
other interests. The Trustees may also cause a merger or consolidation
between the Trust or any successor thereto and any such corporation, trust,
partnership, association or other organization if and to the extent permitted
by law, as provided under the law then in effect. Nothing contained herein
shall be construed as requiring approval of Shareholders for the Trustees to
organize or assist in organizing one or more corporation, trusts,
29
partnerships, associations or other organizations and selling, conveying or
transferring a portion of the Trust Property to such organizations or
entities.
SECTION 9.5. Amendments; etc. All rights granted to the Shareholders
under this Declaration of Trust are granted subject to the reservation of the
right to amend this Declaration of Trust as herein provided, except that no
amendment shall repeal the limitations on personal liability of any
Shareholder or Trustee or the prohibition of assessment upon the Shareholders
(otherwise than as permitted under Section 6.1(l)) without the express
consent of each Shareholder or Trustee involved. Subject to the foregoing,
the provisions of this Declaration of Trust (whether or not related to the
rights of Shareholders) may be amended at any time, so long as such amendment
does not adversely affect the rights of any Shareholder with respect to which
such amendment is or purports to be applicable and so long as such amendment
is not in contravention of applicable law, including the 1940 Act, by an
instrument in writing signed by a Majority of the Trustees (or by an officer
of the Trust pursuant to the vote of a Majority of the Trustees). Any
amendment to this Declaration of Trust that adversely affects the rights of
all Shareholders may be adopted at any time by an instrument in writing
signed by a Majority of the Trustees (or by an officer of the Trust pursuant
to a vote of a Majority of the Trustees) when authorized to do so by the vote
in accordance with Section 7.I hereof of Shareholders holding a majority of
all the Shares outstanding and entitled to vote, without regard to Series, or
if said amendment adversely affects the rights of the Shareholders of less
than all of the Series, by the vote of the holders of a majority of all the
Shares entitled to vote of each Series so affected. Notwithstanding any
other provisions set forth in this Declaration of Trust, a provision in this
Declaration of Trust requiring shareholder approval of any action may be
amended only with like shareholder approval.
SECTION 9.6. Filing of Copies of Declaration and Amendments. The
original or a copy of this Declaration and of each amendment hereto
(including each Certificate of Designation and Certificate of Termination)
shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A restated Declaration, integrating into a single instrument
all of the provisions of this Declaration which are then in effect and
operative, may be executed from time to time by a Majority of the Trustees
and shall, upon execution, be conclusive evidence of all amendments contained
therein and may thereafter be referred to in lieu of the original Declaration
and the various amendments thereto. A Certificate of Trust shall be filed in
the office of the Secretary of State of the State of Delaware.
ARTICLE 10
MISCELLANEOUS
SECTION 10.1. Notices. Any and all notices to which any Shareholder
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Shareholder of
record at his last known address as recorded on the applicable register of
the Trust.
SECTION 10.2. Governing Law. This Declaration of Trust is, with
reference to the laws thereof, and the rights of all parties and the
construction and effect of every provision hereof shall be, subject to and
construed according to the laws of said The State of Delaware.
SECTION 10.3. Counterparts. This Declaration of Trust and any
amendment thereto may be simultaneously executed in several counterparts,
each of which so executed shall be deemed to be an
30
original, and such counterparts, together, shall constitute but one and
the same instrument, which shall be sufficiently evidenced by any such
original counterpart.
SECTION 10.4. Reliance by Third Parties. Any certificate executed by
an individual who, according to the records of the Trust is a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration of Trust, (e) the form of any By-Law
adopted, or the identity of any officers elected, by the Trustees, (f) the
existence or nonexistence of any fact or facts which in any manner relate to
the affairs of the Trust, or (g) the name of the Trust or the establishment
of a Series shall be conclusive evidence as to the matters so certified in
favor of any Person dealing with the Trustees, or any of them, and the
successors of such Person.
SECTION 10.5. References; Headings. The masculine gender shall
include the feminine and neuter genders. Headings are placed herein for
convenience of reference only and shall not be taken as a part of this
Declaration or control or affect the meaning, construction or effect hereof.
SECTION 10.6. Provisions in Conflict With Law or Regulation. (a)
The provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of
the Internal Revenue Code of 1986 or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior
to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any
manner affect such provision in any other jurisdiction or any other provision
of this Declaration in any jurisdiction.
SECTION 10.7. Use of the Name "▇▇▇ ▇▇▇▇▇▇ American Capital". ▇▇▇
▇▇▇▇▇▇ American Capital, Inc. ("▇▇▇ ▇▇▇▇▇▇ American Capital") has consented
to the use by the Trust and by each Series and each Series thereof to the
identifying words "▇▇▇ ▇▇▇▇▇▇" or "Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇" or any combination
thereof in the name of the Trust and of each Series and Series thereof. Such
consent is conditioned upon the Trust's employment of ▇▇▇ ▇▇▇▇▇▇ American
Capital, its successors or a subsidiary or affiliate thereof as investment
adviser to the Trust and to each Series and each Series thereof. As between
▇▇▇ ▇▇▇▇▇▇ American Capital and the Trust, ▇▇▇ ▇▇▇▇▇▇ American Capital shall
control the use of such name insofar as such name contains the identifying
words "▇▇▇ ▇▇▇▇▇▇" or "Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇". ▇▇▇ ▇▇▇▇▇▇ American Capital may
from time to time use the identifying words "American Capital," "▇▇▇ ▇▇▇▇▇▇"
or "Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇" in other connections and for other purposes,
including without limitation in the names of other investment companies,
corporations or businesses that it may manage, advise, sponsor or own or in
which it may have a financial interest. ▇▇▇ ▇▇▇▇▇▇ American Capital may
require the Trust or any Series or Series thereof to cease using the
identifying words "▇▇▇ ▇▇▇▇▇▇" or "Van ▇▇▇▇▇▇ ▇▇▇▇▇▇▇" in the name of the
Trust or any Series or any Series thereof if the Trust or any Series or
Series thereof ceases to employ ▇▇▇ ▇▇▇▇▇▇ American Capital, its successors
or a subsidiary or affiliate thereof as investment adviser.
31
IN WITNESS WHEREOF, the undersigned, being at least a majority of the
Trustees of the Trust, have set their hands and seal, for themselves and
their assigns, unto this First Amended and Restated Agreement and Declaration
of Trust of ▇▇▇ ▇▇▇▇▇▇ American Capital Tax-Exempt Trust, as of the day and
year first above written.
/s/ J. MILES ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________ ___________________________________
J. Miles ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________ ___________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________________ ___________________________________
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________ ___________________________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
32
A C K N O W L E D G M E N T
STATE OF TEXAS )
) ss
COUNTY OF ▇▇▇▇▇▇ )
June 21,
1995
_____________________
_ (Date)
Then personally appeared the above named individuals and each one
acknowledged the foregoing instrument to be his free act and deed.
Before me,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
_______________________________
(Notary Public)
My commission expires: 9-3-97
33
EXHIBIT
1.2
CERTIFICATE OF AMENDMENT DATED SEPTEMBER 7, 1995
TO
FIRST AMENDED AND RESTATED AGREEMENT
AND DECLARATION OF TRUST DATED JUNE 21, 1995
WHEREAS, the Trustees of ▇▇▇ ▇▇▇▇▇▇ American Capital Tax-Exempt
Trust, a Delaware business trust (the "Trust") have approved the amendment of
the Trust's First Amended and Restated Agreement and Declaration of Trust
dated June 21, 1995 ("Declaration of Trust") in accordance with Section 9.5
thereof;
WHEREAS, the Trustees have authorized the proper officers of the
Trust, including the officer whose name appears below, to effect such
amendment;
NOW, THEREFORE, the Declaration of Trust is amended as follows:
1. The first sentence of Section 4.1(b) is amended and restated in its
entirety to read as follows:
(b) Number. The Trustees serving as such, whether named
above or hereafter becoming Trustees, may increase (to not
more than fifteen (15)) or decrease the number of Trustees
to a number other than the number theretofore determined by
a written instrument signed by a Majority (or a
supermajority if required by the By-Laws) of the Trustees
(or by an officer of the Trust pursuant to the vote of a
Majority (or a supermajority if required by the By-Laws) of
the Trustees).
2. Section 4.1(e) is amended and restated in its entirety to read as
follows:
(e) Removal. Any Trustee may be removed: (i) with cause at
any time by written instrument, signed by at least two-
thirds (2/3) of the number of Trustees prior to such
removal, specifying the date upon which such removal shall
become effective; or (ii) without cause at any time by
written instrument, signed by at least two-thirds (2/3) of
the number of Trustees prior to such removal, specifying the
date upon which such removal shall become effective; or
(iii) by vote of shareholders holding a majority of the
Shares of the Trust then outstanding, cast in person or by
proxy at any meeting called for the purpose; or (iv) by a
written declaration signed by Shareholders holding not less
than a majority of the Shares of the Trust then outstanding.
Notwithstanding any other provisions set forth in this
Declaration of Trust, this Section 4.1(e)
may not be amended (either directly or indirectly through a
reorganization) without the approval of (i) two-thirds (2/3) of the
Trustees then in office or (ii) by vote of Shareholders holding a
majority of the Shares of the Trust then outstanding.
EXECUTED, to be effective as of September 7, 1995
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇,
Secretary
EXHIBIT
2
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
TAX-EXEMPT TRUST
AMENDED AND RESTATED BYLAWS
(AS AMENDED SEPTEMBER 7,
1995)
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL TAX-EXEMPT TRUST Amended
and Restated Bylaws
(As Amended September 7, 1995)
Index
ARTICLE 1 SHAREHOLDERS AND SHAREHOLDERS' MEETINGS . . . . . . . . . . .1
Section 1.1. Meetings . . . . . . . . . . . . . . . . . . . . .1
Section 1.2. Presiding Officer; Secretary . . . . . . . . . . .1
Section 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws . . 1
Section 1.4. Voting; Quorum . . . . . . . . . . . . . . . . . .2
Section 1.5. Inspectors . . . . . . . . . . . . . . . . . . . .2
Section 1.6 Records at Shareholder Meetings . . . . . . . . .2
Section 1.7. Shareholders Action in Writing . . . . . . . . . .2
ARTICLE 2 TRUSTEES AND TRUSTEES' MEETINGS . . . . . . . . . . . . . . .2
Section 2.1. Number of Trustees . . . . . . . . . . . . . . . .2
Section 2.2. Regular Meetings of Trustees . . . . . . . . . . . 2
Section 2.3. Special Meetings of Trustees . . . . . . . . . . . 3
Section 2.4. Notice of Meetings . . . . . . . . . . . . . . . . 3
Section 2.5. Quorum; Presiding Trustee . . . . . . . . . . . . 3
Section 2.6. Participation by Telephone . . . . . . . . . . . . 3
Section 2.7. Location of Meetings . . . . . . . . . . . . . . . 3
Section 2.8. Actions by Trustees . . . . . . . . . . . . . . . 3
Section 2.9. Rulings of Presiding Trustee . . . . . . . . . . . 4
Section 2.10. Trustees' Action in Writing . . . . . . . . . . . 4
Section 2.11. Resignations . . . . . . . . . . . . . . . . . . . 4
Section 2.12. Tenure of Trustees . . . . . . . . . . . . . . . . 4
ARTICLE 3 OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.1. Officers of the Trust . . . . . . . . . . . . . . 4
Section 3.2. Time and Terms of Election . . . . . . . . . . . . 5
Section 3.3. Resignation and Removal . . . . . . . . . . . . . 5
Section 3.4. Fidelity Bond . . . . . . . . . . . . . . . . . . 5
Section 3.5. President . . . . . . . . . . . . . . . . . . . . 5
Section 3.6. Vice Presidents . . . . . . . . . . . . . . . . . 5
Section 3.7. Treasurer and Assistant Treasurers . . . . . . . . 5
Section 3.8. Controller and Assistant Controllers . . . . . . . 6
Section 3.9. Secretary and Assistant Secretaries . . . . . . . 6
Section 3.10. Substitutions . . . . . . . . . . . . . . . . . . 6
Section 3.11. Execution of Deeds, etc. . . . . . . . . . . . . . 6
Section 3.12. Power to Vote Securities . . . . . . . . . . . . . 6
ARTICLE 4 COMMITTEES . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Power of Trustees to Designate Committees . . . . 7
Section 4.2. Rules for Conduct of Committee Affairs . . . . . 7
Section 4.3. Trustees May Alter, Abolish, etc., Committees . . 7
Section 4.4. Minutes; Review by Trustees . . . . . . . . . . . 7
ARTICLE 5 SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 6 SHARES .......................................... . . . . . . 8
Section 6.1. Issuance of Shares . . . . . . . . . . . . . . . . 8
Section 6.2. Uncertificated Shares . . . . . . . . . . . . . . 8
Section 6.3. Share Certificates . . . . . . . . . . . . . . . . 8
Section 6.4. Lost, Stolen, etc., Certificates . . . . . . . . 8
ARTICLE 7 STOCK TRANSFERS . . . . . . . . . . . . . . . . . . . . . . . 9
Section 7.1. Transfer Agents, Registrars, etc. . . . . . . . . 9
Section 7.2. Transfer of Shares . . . . . . . . . . . . . . . . 9
Section 7.3. Registered Shareholders . . . . . . . . . . . . . 9
ARTICLE 8 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8.1. Bylaws Subject to Amendment . . . . . . . . . . 9
Section 8.2. Notice of Proposal to Amend Bylaws Required . . . ▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇▇ TRUST
AMENDED AND RESTATED BYLAWS
(AS AMENDED SEPTEMBER 7, 1995)
These are the Bylaws of ▇▇▇ ▇▇▇▇▇▇ American Capital Tax-Exempt
Trust, a trust with transferable shares established under the laws of The
State of Delaware (the "Trust"), pursuant to an Agreement and Declaration of
Trust of the Trust (the "Declaration") made the 10th day of May, 1995, as
amended, and a Certificate of Trust filed in the office of the Secretary of
State pursuant to Section 3810 of The Delaware Business Trust Act, Title 12,
Chapter 38 of the Delaware Code. These Bylaws have been adopted by the
Trustees pursuant to the authority granted by Section 4.14 of the
Declaration.
All words and terms capitalized in these Bylaws, unless
otherwise defined herein, shall have the same meanings as they have in the
Declaration.
ARTICLE 1
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
SECTION 1.1. Meetings. A meeting of the Shareholders of the Trust
shall be held whenever called by the Chairman, the President or a majority of
the Trustees and whenever election of a Trustee or Trustees by Shareholders
is required by the provisions of the 1940 Act. Meetings of Shareholders
shall also be called by the Trustees when requested in writing by
Shareholders holding at least ten percent (10%) of the Shares then
outstanding for the
purpose of voting upon removal of any Trustee, or if the Trustees shall fail
to call or give notice of any such meeting of Shareholders for a period of
thirty (30) days after such application, then Shareholders holding at least
ten percent (10%) of the Shares then outstanding may call and give notice of
such meeting. Notice of Shareholders' meetings shall be given as provided
in the Declaration.
SECTION 1.2. Presiding Officer; Secretary. The President shall
preside at each Shareholders' meeting as chairman of the meeting, or in the
absence of the President, the Trustees present at the meeting shall elect one
of their number as chairman of the meeting. Unless otherwise provided for by
the Trustees, the Secretary of the Trust shall be the secretary of all
meetings of Shareholders and shall record the minutes thereof.
SECTION 1.3. Authority of Chairman of Meeting to Interpret
Declaration and Bylaws. At any Shareholders' meeting the chairman of the
meeting shall be empowered to determine the construction or interpretation
of the Declaration or these Bylaws, or any part thereof or hereof, and their
ruling shall be final.
SECTION 1.4. Voting; Quorum. At each meeting of Shareholders,
except as otherwise provided by the Declaration, every holder of record of
Shares entitled to vote shall be entitled to a number of votes equal to the
number of Shares standing in his name on the Share register of the Trust on
the record date of the meeting. Shareholders may vote by proxy and the form
of any such proxy may be prescribed from time to time by the Trustees. A
quorum shall exist if the holders of a majority of the outstanding Shares of
the Trust entitled to vote are present in person or by proxy, but any
lesser
1
number shall be sufficient for adjournments. At all meetings of the
Shareholders, votes shall be taken by ballot for all matters which may be
binding upon the Trustees pursuant to Section 7.1 of the Declaration. On
other matters, votes of Shareholders need not be taken by ballot unless
otherwise provided for by the Declaration or by vote of the Trustees, or as
required by the 1940 Act, but the chairman of the meeting may in his
discretion authorize any matter to be voted upon by ballot.
SECTION 1.5. Inspectors. At any meeting of Shareholders, the
chairman of the meeting may appoint one or more Inspectors of Election or
Balloting to supervise the voting at such meeting or any adjournment thereof.
If Inspectors are not so appointed, the chairman of the meeting may, and on
the request of any Shareholder present or represented and entitled to vote
shall, appoint one or more Inspectors for such purpose. Each Inspector,
before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of Inspector of Election or Balloting,
as the case may be, at such meeting with strict impartiality and
according to the best of his ability. If appointed, Inspectors shall
take charge of the polls and, when the vote is completed, shall make a
certificate of the result of the vote taken and of such other facts as may be
required by law.
SECTION 1.6. Records at Shareholder Meetings. At each meeting of
the Shareholders there shall be open for inspection the minutes of the last
previous Meeting of Shareholders of the Trust and a list of the Shareholders
of the Trust, certified to be true and correct by the Secretary or other
proper agent of the Trust, as of the record date of the meeting or the date
of closing of transfer books, as the case may be. Such list of Shareholders
shall contain the name of each Shareholder. Shareholders shall have such
other rights and procedures of inspection of the books and records of the
Trust as are granted to shareholders of a Delaware corporation.
SECTION 1.7. Shareholders' Action in Writing. Nothing in this
Article
1 shall limit the power of the Shareholders to take any action by means of
written instruments without a meeting, as permitted by Section 7.6 of the
Declaration.
ARTICLE 2
TRUSTEES AND TRUSTEES' MEETINGS
SECTION 2.1. Number of Trustees. The number of Trustees shall be
fifteen (15), provided that such number shall be reduced upon the death,
resignation or retirement of any Trustee until the number of Trustees is
eight (8), unless the Trustees shall find by a majority vote that such
reduction is not in the best interest of the Fund's shareholders, in which
case the number of Trustees shall not be reduced and a vacancy shall be
created upon such death, resignation or retirement of such Trustees.
SECTION 2.2. Regular Meetings of Trustees. Regular meetings of the
Trustees may be held without call or notice at such places and at such times
as the Trustees may from time to time determine; provided, that notice of
such determination, and of the time and place of the first regular meeting
thereafter, shall be given to each absent Trustee in accordance with Section
2.4 hereof.
SECTION 2.3. Special Meetings of Trustees. Special meetings of the
Trustees may be held at any time and at any place when called by the
President or the Treasurer or by three (3) or more
2
Trustees, or if there shall be less than three (3) Trustees, by any Trustee;
provided, that notice of the time and place thereof is given to each Trustee
in accordance with Section 2.4 hereof by the Secretary or an Assistant
Secretary or by the officer or the Trustees calling the meeting.
SECTION 2.4. Notice of Meetings. Notice of any regular or special
meeting of the Trustees shall be sufficient if given in writing to each
Trustee, and if sent by mail at least five (5) days, by a nationally
recognized overnight delivery service at least two (2) days or by facsimile
at least twenty-four (24) hours, before the meeting, addressed to his usual
or last known business or residence address, or if delivered to him in person
at least twenty-four (24) hours before the meeting. Notice of a special
meeting need not be given to any Trustee who was present at an earlier
meeting, not more than thirty-one (31) days prior to the subsequent meeting,
at which the subsequent meeting was called. Unless statute, these bylaws or
a resolution of the Trustees might otherwise dictate, notice need not state
the business to be transacted at or the purpose of any meeting of the Board
of Trustees. Notice of a meeting may be waived by any Trustee by written
waiver of notice, executed by him or her before or after the meeting, and
such waiver shall be filed with the records of the meeting. Attendance by a
Trustee at a meeting shall constitute a waiver of notice, except where a
Trustee attends a meeting for the purpose of protesting prior thereto or at
its commencement the lack of notice. No notice need be given of action
proposed to be taken by unanimous written consent.
SECTION 2.5. Quorum: Presiding Trustee. At any meeting of the
Trustees, a Majority of the Trustees shall constitute a quorum. Any meeting
may be adjourned from time to time by a majority of the votes cast upon the
question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Unless the Trustees shall otherwise elect,
generally or in a particular case, the Chairman shall be the presiding
Trustee at each meeting of the Trustees or in the absence of the Chairman,
the
President shall preside over the meeting. In the absence of both the
Chairman and the President, the Trustees present at the meeting shall elect
one of their number as presiding Trustee of the meeting.
SECTION 2.6. Participation by Telephone. One or more of the
Trustees
may participate in a meeting thereof or of any Committee of the Trustees by
means of a conference telephone or similar communications equipment allowing
all persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.
SECTION 2.7. Location of Meetings. Trustees' meetings may be held
at
any place, within or without the State of Delaware.
SECTION 2.8. Actions by Trustees. Unless statute, the charter or
By-laws requires a greater proportion, action of a majority of the Trustees
present at a meeting at which a quorum is present is action of the Board of
Trustees. The results of all voting shall be recorded by the Secretary in
the minute book.
3
SECTION 2.9. Rulings of Presiding Trustee. All other rules of
conduct
adopted and used at any Trustees' meeting shall be determined by the
presiding Trustee of such meeting, whose ruling on all procedural matters
shall be final.
SECTION 2.10. Trustees' Action in Writing. Nothing in this Article
2
shall limit the power of the Trustees to take action by means of a written
instrument without a meeting, as provided in Section 4.2 of the Declaration.
SECTION 2.11. Resignations. Any Trustee may resign at any time by
written instrument signed by him and delivered to the Chairman, the President
or the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
SECTION 2.12. Tenure of Trustees. Notwithstanding any other
provision herein to the contrary, through June 30, 1996, the term of office
of each Trustee shall end at the time such Trustee reaches the age of
seventy-six and one-half years (76 1/2) or seventy-four and one-half years
(74 1/2) for each person who had not been elected before January 1, 1986 as a
trustee or director of any open end investment company managed by ▇▇▇ ▇▇▇▇▇▇
American Capital Asset Management, Inc. (formerly American Capital Asset
Management, Inc. and, prior thereto, American General Capital Management,
Inc.) and on and after July 1, 1996, the term of office of each Trustee shall
end at the time such Trustee reaches the age of seventy-six and one-half
years (76 1/2) or seventy-two and one-half years (72 1/2) for each person who
had not been elected before January 1, 1986 as a trustee or director of any
open end investment company managed by ▇▇▇ ▇▇▇▇▇▇ American Capital Asset
Management, Inc.; provided that the term of office of each Trustee shall end
on December 31st of the year in which such Trustee reaches the age of seventy-
five years (75) for each person first elected on or after July 1, 1995 and
prior to December 1, 1995 as a Trustee who was over the age of seventy-two
and one half (72 1/2) and under the age of seventy-five (75) at the time of
such election; and further provided that the term of office of each Trustee
first elected on or after July 1, 1995 and prior to December 1, 1995 who is
seventy-five years (75) of age at the time of such election shall expire as
of the date such Trustees reaches the age of seventy-six years (76).
SECTION 2.13. Chairman of the Board. The Trustees shall from time
to
time elect one of the Trustees to serve as Chairman of the Board of Trustees,
provided that the chairman shall be a Trustee who is not an "interested
person" of the Trust or the Trust's investment adviser, within the meaning of
the 1940
Act.
ARTICLE 3
OFFICERS
SECTION 3.1. Officers of the Trust. The officers of the Trust shall
consist of a President, a Treasurer and a Secretary, and may include a
Controller and one or more Vice Presidents, Assistant Treasurers and
Assistant Secretaries, and such other officers as the Trustees may designate.
Any person may hold more than one office.
SECTION 3.2. Time and Terms of Election. The President, the
Treasurer
and the Secretary shall be elected by the Trustees at their first meeting and
thereafter at the annual meeting of the Trustees, as provided in Section 4.2
of the Declaration. Such officers shall hold office until the next
4
annual meeting of the Trustees and until their successors shall have been
duly elected and qualified, and may be removed at any meeting by the
affirmative vote of a Majority of the Trustees. All other officers of the
Trust may be elected or appointed at any meeting of the Trustees. Such
officers shall hold office for any term, or indefinitely, as determined by
the Trustees, and shall be subject to removal, with or without cause, at any
time by the Trustees.
SECTION 3.3. Resignation and Removal. Any officer may resign at any
time by giving written notice to the Trustees. Such resignation shall take
effect at the time specified therein, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to
make it effective. If the office of any officer or agent becomes vacant by
reason of death, resignation, retirement, disqualification, removal from
office or otherwise, the Trustees may choose a successor, who shall hold
office for the unexpired term in respect of which such vacancy occurred.
Except to the extent expressly provided in a written agreement with the
Trust, no officer resigning or removed shall have any right to any
compensation for any period following such resignation or removal, or any
right to damage on account of such removal.
SECTION 3.4. Fidelity Bond. The Trustees may, in their
discretion,
direct any officer appointed by them to furnish at the expense of the Trust a
fidelity bond approved by the Trustees, in such amount as the Trustees may
prescribe.
SECTION 3.5. President. The President shall be the chief
executive
officer of the Trust and, subject to the supervision of the Trustees, shall
have general charge and supervision of the business, property and affairs of
the Trust and such other powers and duties as the Trustees may prescribe.
SECTION 3.6. Vice Presidents. In the absence or disability of the
President, the Vice President or, if there shall be more than one, the Vice
Presidents in the order of their seniority or as otherwise designated by the
Trustees, shall exercise all of the powers and duties of the President. The
Vice Presidents shall have the power to execute bonds, notes, mortgages and
other contracts, agreements and instruments in the name of the Trust, and
shall do and perform such other duties as the Trustees or the President shall
direct.
SECTION 3.7. Treasurer and Assistant Treasurers. The Treasurer
shall
be the chief financial officer of the Trust, and shall have the custody of
the Trust's funds and Securities, and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Trust and shall
deposit all moneys, and other valuable effects in the name and to the credit
of the
Trust, in such depositories as may be designated by the Trustees, taking
proper vouchers for such disbursements, shall have such other duties and
powers as may be prescribed from time to time by the Trustees, and shall
render to the Trustees, whenever they may require it, an account of all his
transactions as Treasurer and of the financial condition of the Trust. If no
Controller is elected, the Treasurer shall also have the duties and
powers of the Controller, as provided in these Bylaws. Any Assistant
Treasurer shall have such duties and powers as shall be prescribed from time
to time by the Trustees or the Treasurer, and shall be responsible to and
shall report to the Treasurer. In the absence or disability of the Treasurer,
the Controller shall have the powers and duties of the Treasurer. If no
Controller is elected, the Assistant Treasurer or, if there shall be more
than one, the Assistant Treasurers in the order of their seniority or as
otherwise designated by the Trustees or the Chairman, shall have the
powers and duties of the Treasurer.
5
SECTION 3.8. Controller and Assistant Controllers. If a
Controller is elected, the Controller shall be the chief accounting officer
of the Trust and shall be in charge of its books of account and accounting
records and of its accounting procedures, and shall have such duties and
powers as are commonly incident to the office of a controller, and such other
duties and powers as may be prescribed from time to time by the Trustees.
The Controller shall be responsible to and shall report to the Trustees, but
in the
ordinary conduct of the Trust's business, shall be under the supervision of
the Treasurer. Any Assistant Controller shall have such duties and powers
as shall be prescribed from time to time by the Trustees or the Controller,
and shall be responsible to and shall report to the Controller. In the
absence or disability of the Controller, the Assistant Controller or, if
there shall be more than one, the Assistant Controllers in the order of
their seniority or as otherwise designated by the Trustees, shall have the
powers and duties of the Controller.
SECTION 3.9. Secretary and Assistant Secretaries. The
Secretary shall, if and to the extent requested by the Trustees, attend all
meetings of the Trustees, any Committee of the Trustees and/or the
Shareholders and record all votes and the minutes of proceedings in a book to
be kept for that purpose, shall give or cause to be given notice of all
meetings of the Trustees, any Committee of the Trustees, and of the
Shareholders and shall perform such other duties as may be prescribed by the
Trustees. The Secretary, or in his absence any Assistant Secretary, shall
affix the Trust's seal to any instrument requiring it, and when so affixed,
it shall be attested by the signature of the Secretary or an Assistant
Secretary. The Secretary shall be the custodian of the Share records and all
other books, records and papers of the Trust (other than financial) and shall
see that all books, reports, statements, certificates and other documents and
records required by law are properly kept and filed. In the absence or
disability of the Secretary, the Assistant Secretary or, if there shall be
more than one, the Assistant Secretaries in the order of their seniority or
as otherwise designated by the Trustees, shall have the powers and duties of
the Secretary.
SECTION 3.10. Substitutions. In case of the absence or disability
of any officer of the Trust, or for any other reason that the Trustees may
deem sufficient, the Trustees may delegate, for the time being, the powers or
duties, or any of them, of such officer to any other officer, or to any
Trustee.
SECTION 3.11. Execution of Deeds, etc. Except as the Trustees may
generally or in particular cases otherwise authorize or direct, all deeds,
leases, transfers, contracts, proposals, bonds, notes, checks, drafts and
other obligations made, accepted or endorsed by the Trust shall be signed or
endorsed on behalf of the Trust by its properly authorized officers or agents
as
provided in the Declaration.
SECTION 3.12. Power to Vote Securities. Unless otherwise ordered
by the Trustees, the Treasurer shall have full power and authority on behalf
of the Trust to give proxies for, and/or to attend and to act and to vote at,
any meeting of stockholders of any corporation in which the Trust may hold
stock, and at any such meeting the Treasurer or his proxy shall possess and
may exercise any and all rights and powers incident to the ownership of such
stock which, as the owner thereof, the Trust might have possessed and
exercised if present. The Trustees, by resolution from time to time, or, in
the absence thereof, the Treasurer, may confer like powers upon any other
person or persons as attorneys and proxies of the Trust.
6
ARTICLE 4
COMMITTEES
SECTION 4.1. Power of Trustees to Designate Committees. The
Trustees, by vote of a Majority of the Trustees, may elect from their number
an Executive Committee and any other Committees and may delegate thereto some
or all of their powers except those which by law, by the Declaration or by
these Bylaws may not be delegated; provided, that an Executive Committee
shall not be empowered to elect the President, the Treasurer or the
Secretary, to amend the Bylaws, to exercise the powers of the Trustees under
this Section 4.1 or under Section 4.3 hereof, or to perform any act for which
the action of a Majority of the Trustees is required by law, by the
Declaration or by these Bylaws. The members of any such Committee shall
serve at the pleasure of the Trustees.
SECTION 4.2. Rules for Conduct of Committee Affairs. Except as
otherwise provided by the Trustees, each Committee elected or appointed
pursuant to this Article 4 may adopt such standing rules and regulations for
the conduct of its affairs as it may deem desirable, subject to review and
approval of such rules and regulations by the Trustees at the next
succeeding meeting of the Trustees, but in the absence of any such action or
any contrary provisions by the Trustees, the business of each Committee shall
be conducted, so far as practicable, in the same manner as provided herein
and in the Declaration for the Trustees.
SECTION 4.3. Trustees May Alter, Abolish, etc., Committees Trustees
may at any time alter or abolish any Committee, change membership of any
Committee, or revoke, rescind, waive or modify action of any Committee or
the authority of any Committee with respect to any matter or class of
matters; provided, that no such action shall impair the rights of any third
parties.
SECTION 4.4. Minutes: Review by Trustees. Any Committee to which
the Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees.
ARTICLE 5
SEAL
The seal of the Trust, if any, may be affixed to any instrument, and
the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if had been
imprinted and affixed manually in the same manner and with the same force and
effect as if
done by a Delaware corporation. Unless otherwise required by the Trustees,
the seal shall not be necessary to be placed on, and its absence shall not
impair the validity of, any document, instrument or other paper executed and
delivered by or on behalf of the Trust.
ARTICLE 6
SHARES
SECTION 6.1. Issuance of Shares. The Trustees may issue an
unlimited number of Classes of Shares of any or all Series either in
certificated or uncertificated form, they may issue certificates to the
7
holders of a Class of Shares of a Series which was originally issued in
uncertificated form, and if they have issued Shares of any Series in
certificated form, they may at any time discontinue the issuance of Share
certificates for such Series and may, by written notice to such Shareholders
of such Series require the surrender of their Share certificates to the Trust
for cancellation, which surrender and cancellation shall not affect the
ownership of Shares for such Series.
SECTION 6.2. Uncertificated Shares. For any Class of Shares for
which the Trustees issue Shares without certificates, the Trust or the
Transfer Agent may either issue receipts therefor or may keep accounts upon
the books of the Trust for the record holders of such Shares, who shall in
either case be deemed, for all purposes hereunder, to be the holders of such
Shares as if they had received certificates therefor and shall be held to
have expressly assented and agreed to the terms hereof and of the
Declaration.
SECTION 6.3. Share Certificates. For any Class of Shares for which
the Trustees shall issue Share certificates, each Shareholder of such Class
shall be entitled to a certificate stating the number of Shares owned by him
in such form as shall be prescribed from time to time by the Trustees. Such
certificate shall be signed by the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Trust. Such signatures may be facsimiles if the certificate
is countersigned by a Transfer Agent, or by a Registrar, other than a
Trustee, officer or employee of the Trust. In case any officer who has signed
or whose facsimile signature has been placed on such certificate shall cease
to be such officer before such certificate is issued, it may be issued by the
Trust with the same effect as if he were such officer at the time of its
issue.
SECTION 6.4. Lost, Stolen, etc., Certificates. If any
certificate for certificated Shares shall be lost, stolen, destroyed
or mutilated, the Trustees may authorize the issuance of a new certificate of
the same tenor and for the same number of Shares in lieu thereof. The
Trustees shall require the surrender of any mutilated certificate in respect
of which a new certificate is issued, and may, in their discretion, before
the issuance of a new certificate, require the owner of a lost, stolen or
destroyed certificate, or the owner's legal representative, to make an
affidavit or affirmation setting forth such facts as to the loss, theft or
destruction as they deem necessary, and to give the Trust a bond in such
reasonable sum as the Trustees direct, in order to indemnify the Trust.
ARTICLE 7
TRANSFER OF SHARES
SECTION 7.1. Transfer Agents, Registrars, etc. As approved in
Section 5.2(e) of the Declaration, the Trustees shall have the authority to
employ and compensate such transfer agents and registrars with respect to the
Shares of the Trust as the Trustees shall deem necessary or desirable. In
addition, the Trustees shall have the power to employ and compensate such
dividend dispersing agents, warrant agents and agents for reinvestment of
dividends as they shall deem necessary or desirable. Any of such agents
shall have such power and authority as is delegated to any of them by the
Trustees.
SECTION 7.2 Transfer of Shares. The Shares of the Trust shall be
transferable on the books of the Trust only upon delivery to the Trustees or
a transfer agent of the Trust of proper documentation as provided in Section
6.1(m) of the Declaration. The Trust, or its transfer agents, shall be
authorized to
8
refuse any transfer unless and until presentation of such evidence as may be
reasonably required to show that the requested transfer is proper.
SECTION 7.3 Registered Shareholders. The Trust may deem and treat
the holder of record of any Shares the absolute owner thereof for all
purposes and shall not be required to take any notice of any right or claim
of right of any other person.
ARTICLE 8
AMENDMENTS
SECTION 8.1. Bylaws Subject to Amendment. These Bylaws may be
altered, amended or repealed, in whole or in part, at any time by vote of the
holders of a majority of the Shares issued, outstanding and entitled to vote.
The Trustees, by vote of a Majority of the Trustees (unless a greater vote is
required by Section 2.8 hereof), may alter, amend or repeal these Bylaws, in
whole or in part, including Bylaws adopted by the Shareholders, except with
respect to any provision hereof which by law, the Declaration or these Bylaws
requires action by the Shareholders. Bylaws adopted by the Trustees may be
altered, amended or repealed by the Shareholders.
SECTION 8.2. Notice of Proposal to Amend Bylaws Required. No
proposal to amend or repeal these Bylaws or to adopt new Bylaws shall be
acted upon at a meeting unless either (i) such proposal is stated in the
notice or in the waiver of notice, as the case may be, of the meeting of the
Trustees or Shareholders at which such action is taken, or (ii) all of the
Trustees or Shareholders, as the case may be, are present at such meeting and
all agree to consider such proposal without protesting the lack of notice.
9
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 31st day of July, 1995, by and between ▇▇▇ ▇▇▇▇▇▇
AMERICAN CAPITAL TAX-EXEMPT TRUST, a Delaware business trust, hereinafter
referred to as the "TRUST," and ▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL ASSET MANAGEMENT,
INC., a Delaware corporation, hereinafter referred to as the "ADVISER".
The TRUST and the ADVISER agree as follows:
1. Appointment
a. The TRUST hereby appoints the ADVISER to act as investment adviser to the
TRUST'S High Yield Municipal Fund and Insured Municipal Fund ("Initial
Funds"), for the period and on the terms set forth in this Agreement. The
ADVISER accepts such appointment and agrees to furnish the services herein
set forth for the compensation herein provided.
b. In the event that the TRUST establishes one or more portfolios other than
the Initial Funds with respect to which it desires to retain the ADVISER to
act as investment adviser hereunder, it shall notify the ADVISER in writing.
If the ADVISER is willing to render such services it shall notify the TRUST
in writing whereupon such portfolio shall become a Fund hereunder and the
compensation payable by such new portfolio to the ADVISER will be as agreed
in writing at the time.
2. Services Rendered and Expenses Paid by ADVISER
The ADVISER, subject to the control, direction and supervision of the TRUST's
Trustees and in conformity with applicable laws, the TRUST's Declaration of
Trust, Bylaws, registration statement, prospectus and the stated investment
objectives, policies and restrictions of each Fund, shall:
a. manage the investment and reinvestment of the TRUST's assets including,
by way of illustration, the evaluation of pertinent economic, statistical,
financial and other data, determination of the industries and companies to be
represented in each of the TRUST'S Funds, and formulation and implementation
of investment programs;
b. maintain a trading desk and place all orders for the purchase and sale of
portfolio investments for the account of each Fund of the TRUST with brokers
or dealers selected by the ADVISER;
c. conduct and manage the day-to-day operations of the TRUST including, by
way of illustration, the preparation of registration statements,
prospectuses, reports, proxy solicitation materials and amendments thereto,
the furnishing of legal services except for services provided by outside
counsel to the TRUST selected by the Trustees, and the supervision of the
TRUST's Treasurer and the personnel working under his direction; and
d. furnish to the TRUST office space, facilities, equipment and personnel
adequate to provide the services described in paragraphs a., b., and c. above
and pay the compensation of each TRUST trustee and TRUST officer who is an
affiliated person of the ADVISER, except the compensation of the TRUST's
Treasurer and related expenses as provided below.
In performing the services described in paragraph b. above, the ADVISER shall
use its best efforts to obtain for the TRUST and each Fund the most favorable
price and execution available and shall maintain records adequate to
demonstrate compliance with this requirement. Subject to prior authorization
by the TRUST's Trustees of appropriate policies and procedures, the ADVISER
may, to the extent authorized by law, cause the TRUST to pay a broker or
dealer that provides brokerage and research services to the ADVISER an amount
of commission for effecting a portfolio investment transaction in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction. In the event of such authorization and to the
extent authorized by law the ADVISER shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of such action.
Except as otherwise agreed, or as otherwise provided herein, the TRUST shall
pay, or arrange for others to pay, all its expenses other than those
expressly stated to be payable by the ADVISER hereunder, which expenses
payable by the
TRUST shall include (i) interest and taxes; (ii) brokerage commissions and
other costs in connection with the purchase and sale of portfolio
investments; (iii) compensation of its trustees and officers other than those
who are affiliated persons of the ADVISER; (iv) compensation of its
Treasurer, compensation of personnel working under the Treasurer's direction,
and expenses of office space, facilities, and equipment used by the Treasurer
and such personnel in the performance of their normal duties for the TRUST
which consist of maintenance of the accounts, books and other documents which
constitute the record forming the basis for the TRUST's financial statements,
preparation of such financial statements and other TRUST documents and
reports of a financial nature required by federal and state laws, and
participation in the production of the TRUST's registration statement,
prospectuses, proxy solicitation materials and reports to shareholders; (v)
fees of outside counsel to and of independent accountants of the TRUST
selected by the Trustees; (vi) custodian, registrar and shareholder service
agent fees and expenses; (vii) expenses related to the repurchase or
redemption of its shares including expenses related to a program of periodic
repurchases or redemptions; (viii) expenses related to the issuance of its
shares against payment therefor by or on behalf of the subscribers thereto;
(ix) fees and related expenses of registering and qualifying the TRUST and
its shares for distribution under state and federal securities laws; (x)
expenses of printing and mailing of registration statements, prospectuses,
reports, notices and proxy solicitation materials of the TRUST; (xi) all
other expenses incidental to holding meetings of the TRUST's shareholders
including proxy solicitations therefor; (xii) expenses for
2
servicing shareholder accounts; (xiii) insurance premiums for fidelity
coverage and errors and omissions insurance; (xiv) dues for the TRUST's
membership in trade associations approved by the Trustees; and (xv) such
nonrecurring expenses as may arise, including those associated with actions,
suits, or proceedings to which the TRUST is a party and the legal obligation
which the TRUST may have to indemnify its officers and trustees with respect
thereto. To the extent that any of the foregoing expenses are allocated
between the TRUST and any other party, such allocations shall be pursuant to
methods approved by the Trustees.
3. Role of ADVISER
The ADVISER, and any person controlled by or under common control with the
ADVISER, shall be free to render similar services to others and engage in
other activities, so long as the services rendered to the TRUST are not
impaired.
Except as otherwise required by the Investment Company Act of l940 any of the
shareholders, trustees, officers and employees of the TRUST may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the ADVISER, and in any person controlled by or under common control with the
ADVISER, and the ADVISER, and any person controlled by or under common
control with the ADVISER, may have an interest in the TRUST.
Except as otherwise agreed, in the absence of willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties hereunder on the
part of the ADVISER, the ADVISER shall not be subject to liability to the
TRUST, or to any shareholder of the TRUST, for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
4. Compensation Payable to ADVISER
The TRUST shall pay to the ADVISER, as compensation for the services
rendered, facilities furnished and expenses paid by the ADVISER, with respect
to the Funds set forth below, a monthly fee computed at the following annual
rates:
.60% on the first $300 million of the TRUST's average daily net assets; .55%
on the next $300 million of the TRUST's average daily net assets; and .50% of
any excess over $600 million.
For purposes of this calculation, assets of such Funds shall be combined in
calculating the investment advisory fee. Each Fund shall bear its pro rata
share of such fee based upon its average daily net assets.
Average daily net assets shall be determined by taking the average of the net
assets for each business day during a given calendar month, calculated in the
manner provided in the TRUST's Declaration of Trust. Such fee shall be
payable for each calendar month as soon as practicable after the end of that
month.
3
The fees payable to the ADVISER by the TRUST pursuant to this Section 4 shall
be reduced by any commissions, tender solicitation and other fees, brokerage
or similar payments received by the ADVISER, or any other direct or indirect
majority owned subsidiary of VK/AC Holding, Inc., in connection with the
purchase and sale of portfolio investments of the TRUST, less any direct
expenses incurred by such person, in connection with obtaining such
commissions, fees, brokerage or similar payments. The ADVISER shall use its
best efforts to recapture all available tender offer solicitation fees and
exchange offer fees in connection with each of the TRUST's portfolio
transactions and shall advise the Trustees of any other commissions, fees,
brokerage or similar payments which may be possible for the ADVISER or any
other direct or indirect majority owned subsidiary of VK/AC Holding, Inc. to
receive in connection with the TRUST's portfolio transactions or other
arrangements which may benefit the TRUST.
In the event that the ordinary business expenses of the TRUST for any fiscal
year should exceed .95% of average daily net assets, the compensation due the
ADVISER for such fiscal year shall be reduced by the amount of such excess.
The ADVISER's compensation shall be so reduced by a reduction or a refund
thereof, at the time such compensation is payable after the end of each
calendar month during such fiscal year of the TRUST, and if such amount
should exceed such monthly compensation, the ADVISER shall pay the TRUST an
amount sufficient to make up the deficiency, subject to readjustment during
the TRUST's fiscal year. For purposes of this paragraph, all ordinary
business expenses of the TRUST include the investment advisory fee and other
operating expenses paid by the TRUST except (i) for interest and taxes; (ii)
brokerage commissions; (iii) as a result of litigation in connection with a
suit involving a claim for recovery by the TRUST; (iv) as a result of
litigation involving a defense against a liability asserted against the
TRUST, provided that, if the ADVISER made the decision or took the actions
which resulted in such claim, it acted in good faith without negligence or
misconduct; (v) any indemnification paid by the TRUST to its officers and
trustees and the ADVISER in accordance with applicable state and federal laws
as a result of such litigation; (vi) amounts paid to ▇▇▇ ▇▇▇▇▇▇ American
Capital Distributors, Inc., the distributor of the TRUST's shares, in
connection with a distribution plan adopted by the TRUST's Trustees pursuant
to Rule 12b-1 under the Investment Company Act of 1940; and (vii) insurance
premiums paid by the Fund to insure the timely payment of principal and
interest on its portfolio obligations.
If the ADVISER shall serve for less than the whole of any month, the
foregoing compensation shall be prorated.
5. Books and Records
In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
ADVISER hereby agrees that all records which it maintains for the TRUST are
the
property of the TRUST and further agrees to surrender promptly to the TRUST
any of such records upon the TRUST's
4
request. The ADVISER further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the Act.
6. Duration and Termination
This Agreement will become effective with respect to the initial Funds on the
date hereof, and with respect to any additional Funds, on the date of receipt
by the TRUST of notice from the ADVISER in accordance with Section 1(b)
hereof that the ADVISER is willing to serve as investment adviser with
respect to such Fund, provided that this Agreement (as supplemented by the
terms specified in any notice and agreement pursuant to Section 1(b) hereof)
shall have been approved by the shareholders of each Fund subject to this
Agreement, in accordance with the requirements under the 1940 Act, and,
unless sooner terminated as provided herein, shall continue in effect for an
initial period of two years. Thereafter, if not terminated, this Agreement
shall continue in effect as to a particular Fund for successive periods of
twelve months each, provided such continuance is specifically approved at
least annually, (a) by the vote of a majority of those members of the TRUST's
Trustees who are not interested persons of any party to this Agreement, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) by the TRUST's Trustees or by vote of a majority of the outstanding
voting securities of such Fund. Not withstanding the foregoing, this
Agreement may be terminated as to any Fund at any time, without the payment
of any penalty, by the TRUST (by vote of the TRUST's Trustees or by vote of a
majority of the outstanding voting securities of such Fund), or by the
ADVISER, on sixty days' written notice. This Agreement will immediately
terminate in the event of its assignment.
7. Miscellaneous Provisions
For the purposes of this Agreement, the terms "affiliated person,"
"assignment," "interested person," and "majority of the outstanding voting
securities" shall have their respective meanings defined in the Investment
Company Act of l940 (the "1940 Act") and the Rules and Regulations
thereunder, subject, however, to such exemptions as may be granted to either
the ADVISER or the TRUST by the Securities and Exchange Commission, or such
interpretive positions as may be taken by the Commission or its staff, under
said Act, and the term "brokerage and research services" shall have the
meaning given in the Securities Exchange Act of l934 and the Rules and
Regulations thereunder.
It is understood and agreed that the ADVISER may engage a subadviser to
assist it in the performance of its duties hereunder.
The execution of this Agreement has been authorized by the Trust's Trustees
and by the sole shareholder. This Agreement is executed on behalf of the
Trust or the Trustees of the Trust as Trustees and not individually and that
the obligations of this Agreement are not binding upon any of the Trustees,
officers or shareholders of the Trust individually but are binding only upon
the assets and
5
property of the Trust. The TRUST is composed of multiple Portfolios. All
obligations of the TRUST under this Agreement shall apply only on a Fund by
Fund basis and the assets of one Fund shall not be liable for the obligations
of any other Fund. A Certificate of Trust in respect of the fund is on file
with the Secretary of the State of Delaware.
The parties hereto each have caused this Agreement to be signed in duplicate
on its behalf by its duly authorized officer on the above date.
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL TAX-EXEMPT TRUST
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ------------------------
-----------
Its: Vice President ------------------------
------------
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL ASSET MANAGEMENT,
INC.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ------------------
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ------------------
-----------------
Its: Vice President ------------------------
-----------
▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇-▇▇▇▇▇▇ TRUST
HIGH YIELD MUNICIPAL FUND
SUBADVISORY AGREEMENT
THIS AGREEMENT is made this 31st day of July, 1995, by and between ▇▇▇ ▇▇▇▇▇▇
AMERICAN CAPITAL ASSET MANAGEMENT, INC., a Delaware corporation (the
"Adviser") and ▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL ADVISORS, INC., a Delaware
corporation (the "Subadviser").
WHEREAS, ▇▇▇ ▇▇▇▇▇▇ American Capital Tax-Exempt Trust (the "Trust") is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as an open-end, diversified management investment company, consisting of
multiple series of investment portfolios;
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940,
as amended, as an investment adviser and engages in the business of acting as
an investment adviser;
WHEREAS, the Subadviser is registered under the Investment Advisers Act of
1940, as amended, as an investment adviser;
WHEREAS, the Agreement and Declaration of Trust authorizes the Trustees of
the Trust to classify or reclassify authorized but unissued shares of the
Trust, and as of the date of this Agreement, the Trust's Trustees have
authorized the issuance of two series of shares representing interests in two
investment portfolios--the Insured Municipal Fund and the High Yield
Municipal Fund (such portfolios and any other portfolios hereafter added to
the Trust being referred
to collectively herein as the "Funds");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated
_______________ __, 1995, with the Trust (the "Investment Advisory
Agreement"), pursuant to which the Adviser shall act as investment adviser
with respect to the Portfolios; and
WHEREAS, the securities sought for the investment portfolio of the High Yield
Municipal Fund (the "Fund") are sold in a highly specialized market and the
Adviser is desirous to engage a subadviser in an effort to improve its access
to that market and enhance its ability to acquire investment securities that
meet the Fund's investment objectives;
WHEREAS, the Adviser wishes to retain the Subadviser for purposes of
rendering such advisory services to the Adviser in connection with the Fund
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt whereof is hereby
acknowledged, the parties hereto agree as follows:
1. Appointment of Subadviser. The Adviser hereby appoints the
Subadviser to render investment research and advisory services to the Adviser
with respect to the Fund, under the supervision of the Adviser and subject to
the approval and direction of the Trust's Trustees, and the Subadviser hereby
accepts such appointment, all subject to the terms and conditions contained
herein.
2. Investment Analysis. The duties of the Subadviser shall include:
a. obtaining and evaluating pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign
or otherwise, whether affecting the economy generally or the Fund, and
whether concerning the individual issuers whose securities are included in
the Fund or the activities in which such issuers engage, or with respect to
securities which the Subadviser considers desirable for inclusion in the
Fund's investment portfolio;
b. determining which issuers and securities shall be represented in the
Fund's investment portfolio and regularly reporting thereon to the Adviser
and, at the request of the Adviser, to the Trust's Trustees; and
c. formulating and implementing continuing programs for the purchases and
sales of the securities of such issuers and regularly reporting thereon to
the Adviser and, at the request of the Adviser, to the Trust's Trustees.
3. Control by Trustees. Any investment program undertaken by the Subadviser
pursuant to this Agreement, as well as any other activities undertaken by the
Subadviser with respect to the Fund, shall at all times be subject to any
directives of the Trust's Trustees.
4. Compliance with Applicable Requirements. In carrying out its obligations
under this Agreement, the Subadviser shall at all times conform to:
a. all applicable provisions of the Act and any rules and regulations
adopted thereunder;
b. the provisions of the registration statement of the Trust, as the same
may be amended from time to time, under the Securities Act of 1933 and the
Act;
c. the provisions of the Investment Advisory Agreement;
d. the provisions of the Agreement and Declaration of Trust of the Trust, as
the same may be amended from time to time;
2
e. the provisions of the by-laws of the Trust, as the same may be amended
from time to time; and
f. any other applicable provisions of state or federal law.
5. Compensation. The Adviser shall pay the Subadviser, as compensation for
services rendered hereunder, an annual fee, payable monthly, which for the
initial one-year term of this Agreement shall be paid according to the
following fee schedule: 0.40% of the first $20 million of the Fund's average
daily net assets, 0.25% of the next $30 million of the Fund's average daily
net assets and 0.15% of the excess over $50 million of the Fund's average
daily net assets. The average daily net assets of the Fund shall be
determined by taking the average of the net assets for each business day
during a given calendar month, calculated in the manner provided in the
Trust's Agreement and Declaration of Trust. After the termination of the
initial term of this Agreement, such fee schedule shall be subject to annual
adjustment concurrently with renewal of this Agreement for an additional one-
year term. Each annual renewal shall be deemed to be at the fee schedule in
effect immediately prior to the expiration of the most recent term unless a
new fee schedule is set prior to renewal in writing signed by the Adviser and
the Subadviser, in which case the renewal will be deemed to be at the fee
schedule set forth in such writing.
6. Expenses of the Fund. All of the ordinary business expenses incurred in
the operations of the Fund and the offering of its shares shall be borne by
the Fund unless specifically provided otherwise in the Investment Advisory
Agreement.
7. Non-Exclusivity. The services of the Subadviser to the Adviser with
respect to the Trust and the Fund are not to be deemed to be exclusive, and
the Subadviser shall be free to render investment advisory and administrative
or other services to others (including other investment companies) and to
engage in other activities. It is understood and agreed that officers or
directors of the Subadviser may serve as officers or directors/trustees of
the Adviser or of the Trust, and that officers or directors/trustees of the
Adviser or of the Trust may serve as officers or directors of the Subadviser
to the extent permitted by law; and that the officers and directors of the
Subadviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.
8. Term and Approval. This Agreement shall have an initial term of two years
and may be continued from year to year thereafter, provided that the
continuation of the Agreement is specifically approved at least annually:
a. (i) by the Trust's Trustees or (ii) by the vote of "a majority
3
of the outstanding voting securities" of the Fund (as defined in Section
2(a)(42) of the Act); and
b. by the affirmative vote of a majority of the trustees who are not parties
to this Agreement or "interested persons" (as defined in the Act) of a party
to this Agreement (other than as Trustees of the Trust), by votes cast in
person at a meeting specifically called for such purpose.
9. Termination. This Agreement may be terminated as to the Fund at any time,
without the payment of any penalty, by vote of the Trust's Trustees or by
vote of a majority of the Fund's outstanding voting securities, or by the
Adviser, or by the Subadviser on sixty (60) days' written notice to the other
party and to the Trust. The notice provided for herein may be waived by
either party. This Agreement shall automatically terminate in the event of
its assignment, the term "assignment" for purposes of this paragraph having
the meaning defined in Section 2(a)(4) of the Act.
10. Liability of Subadviser. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Subadviser or any of its officers, directors or
employees, the Subadviser shall not be subject to liability to the Adviser
for any act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the purchase,
holding or sale of any security.
11. Notices. Any notices under this Agreement shall be in writing, addressed
and delivered or mailed postage paid to such address as may be designated for
the receipt of such notice, with a copy to the Trust. Until further notice,
it is agreed that the address of the Trust, that of the Adviser and that of
the Subadviser shall be ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
12. Questions of Interpretation. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the Act shall be resolved by reference to such
term or provision of the Act and to interpretations thereof, if any, by the
United States courts or in the absence of any controlling decision of any
such court, by rules, regulations or orders of the Securities and Exchange
Commission issued pursuant to the Act. In addition, where the effect of a
requirement of the Act reflected in any provision of the Agreement is revised
by rule, regulation or order of the Securities and Exchange Commission, such
provision shall be deemed to incorporate the effect of such rule, regulation
or order.
13. Miscellaneous Provisions
The execution of this Agreement has been authorized by the Trust's Trustees
and by the sole shareholder. This Agreement is executed
4
on behalf of the Trust or the Trustees of the TRUST as Trustees and not
individually and that the obligations of this Agreement are not binding upon
any of the Trustees, officers or shareholders of the TRUST individually but
are binding only upon the assets and property of the TRUST. A Certificate of
Trust in respect of the Fund is on file with the Secretary of State of
Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL ASSET MANAGEMENT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Its: Vice President
-----------------------------------
-
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL ADVISORS,
INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its: Vice President
------------------------------------
5