EXHIBIT 99.(a)(1)
AGREEMENT AND DECLARATION OF TRUST
of
HOTCHKIS AND WILEY FUNDS
a Delaware Business Trust
Principal Place of Business:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
2
TABLE OF CONTENTS
AGREEMENT AND DECLARATION OF TRUST
ARTICLE I NAME AND DEFINITIONS......................................................... 1
Section 1. Name......................................................................... 1
Section 2. Definitions.................................................................. 1
(1) "By-Laws".................................................................... 2
(2) "Certificate of Trust"....................................................... 2
(3) "Class"...................................................................... 2
(4) "Commission"................................................................. 2
(5) "Declaration of Trust"....................................................... 2
(6) "Delaware Act"............................................................... 2
(7) "Initial Series"............................................................. 2
(8) "Interested Person".......................................................... 2
(9) "Investment Manager" or "Manager"............................................ 2
(10) "1940 Act"................................................................... 2
(11) "Person"..................................................................... 3
(12) "Principal Underwriter"...................................................... 3
(13) "Series"..................................................................... 3
(14) "Shareholder"................................................................ 3
(15) "Shares"..................................................................... 3
(16) "Trust"...................................................................... 3
(17) "Trust Property"............................................................. 3
(18) "Trustees"................................................................... 3
ARTICLE II PURPOSE OF TRUST............................................................. 4
ARTICLE III SHARES....................................................................... 4
Section 1. Division of Beneficial Interest.............................................. 4
Section 2. Ownership of Shares.......................................................... 5
Section 3. Transfer of Shares........................................................... 5
Section 4. Investments in the Trust..................................................... 5
Section 5. Status of Shares and Limitation of Personal Liability........................ 6
Section 6. Establishment and Designation of Series...................................... 6
(1) Assets Held with Respect to a Particular Series.............................. 7
(2) Liabilities Held with Respect to a Particular Series......................... 7
(3) Dividends, Distributions, Redemptions, and Repurchases....................... 8
(4) Equality..................................................................... 8
(5) Fractions.................................................................... 8
(6) Exchange Privilege........................................................... 8
(7) Combination of Series........................................................ 8
(8) Elimination of Series........................................................ 8
Section 7. Indemnification of Shareholders.............................................. 9
i
3
ARTICLE IV THE BOARD OF TRUSTEES........................................................ 9
Section 1. Number, Election and Tenure.................................................. 9
Section 2. Effect of Death, Resignation, etc. of a Trustee.............................. 9
Section 3. Powers...................................................................... 10
Section 4. Payment of Expenses by the Trust............................................ 14
Section 5. Payment of Expenses by Shareholders......................................... 15
Section 6. Ownership of Assets of the Trust............................................ 15
Section 7. Service Contracts........................................................... 15
Section 8. Trustees and Officers as Shareholders....................................... 17
ARTICLE V SHAREHOLDERS' VOTING POWERS AND MEETINGS.................................... 17
Section 1. Voting Powers, Meetings, Notice and Record Dates............................ 17
Section 2. Quorum and Required Vote.................................................... 18
Section 3. Record Dates................................................................ 18
Section 4. Additional Provisions....................................................... 19
ARTICLE VI NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS.............................. 19
Section 1. Determination of Net Asset Value, Net Income, and Distributions............. 19
Section 2. Redemptions and Repurchases................................................. 19
ARTICLE VII COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES........................ 20
Section 1. Compensation................................................................ 20
Section 2. Indemnification and Limitation of Liability................................. 21
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or Surety............... 21
Section 4. Insurance................................................................... 22
ARTICLE VIII MISCELLANEOUS............................................................... 22
Section 1. Liability of Third Persons Dealing with Trustees............................ 22
Section 2. Dissolution and Termination of Trust or Series or Classes................... 22
Section 3. Reorganization and Master/Feeder............................................ 23
Section 4. Amendments.................................................................. 25
Section 5. Filing of Copies, References, Headings, Rules of Construction............... 25
Section 6. Applicable Law.............................................................. 26
Section 7. Provisions in Conflict with Law or Regulations.............................. 26
Section 8. Business Trust Only......................................................... 27
Section 9. Derivative Actions.......................................................... 27
ii
4
AGREEMENT AND DECLARATION OF TRUST
OF
HOTCHKIS AND WILEY FUNDS
Dated: July 23, 2001
THIS AGREEMENT AND DECLARATION OF TRUST is made and entered into as of
the date set forth above by the Trustees named hereunder for the purpose of
forming a Delaware business trust in accordance with the provisions hereinafter
set forth.
WHEREAS, the Trustees desire to establish a business trust under the
Delaware Business Trust Act (the "Delaware Act") consisting of one or more
series or portfolios for the investment and reinvestment of funds contributed
thereto.
NOW, THEREFORE, the Trustees hereby direct that the Certificate of Trust
be filed with the Office of the Secretary of State of the State of Delaware and
do hereby declare that the Trustees will hold IN TRUST all cash, securities and
other assets which the Trust now possesses or may hereafter acquire from time to
time in any manner and manage and dispose of the same upon the following terms
and conditions for the benefit of the holders of Shares in this Trust.
ARTICLE I
NAME AND DEFINITIONS
Section 1. Name. This Trust shall be known as HOTCHKIS AND WILEY FUNDS
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine; provided that the Trustees
may, without Shareholder approval, change the name of the Trust or any Series or
Class thereof. In the event of any such change, the Trustees shall cause notice
to be given to the affected Shareholders within a reasonable time after the
implementation of such change.
Section 2. Definitions. Whenever used herein, unless otherwise required
by the context or specifically provided:
1
5
(1) "By-Laws" shall mean the By-Laws of the Trust as amended from time
to time, which By-Laws are expressly herein incorporated by reference as part of
the "governing instrument" within the meaning of the Delaware Act;
(2) "Certificate of Trust" means the certificate of trust, as amended or
restated from time to time, filed by the Trustee in the Office of the Secretary
of State of the State of Delaware in accordance with the Delaware Act;
(3) "Class" means a class of Shares of a Series of the Trust established
in accordance with the provisions of Article III hereof;
(4) "Commission" shall mean the Securities and Exchange Commission;
(5) "Declaration of Trust" means this Agreement and Declaration of
Trust, as amended or restated from time to time;
(6) "Delaware Act" means the Delaware Business Trust Act, 12 Del. C.,
Sections 3801 et seq., as amended from time to time;
(7) "Initial Series" shall mean the initial Series of the Trust
established pursuant to Section 6 of Article III hereof;
(8) "Interested Person" shall have the meaning given it in Section
2(a)(19) of the 1940 Act;
(9) "Investment Manager" or "Manager" means a party furnishing services
to the Trust pursuant to any contract described in Article IV, Section 7(1)
hereof;
(10) "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time and any order or
orders thereunder which may from time to time be applicable to the Trust;
2
6
(11) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(12) "Principal Underwriter" shall have the meaning given it in the 1940
Act;
(13) "Series" means each Series of Shares established and designated
under or in accordance with Sections 3804 and 3806 of the Delaware Act and the
provisions of Article III hereof, each of which shall be accounted for and
maintained as a separate series or portfolio of the Trust;
(14) "Shareholder" means a record owner of outstanding Shares;
(15) "Shares" means the shares of beneficial interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares;
(16) "Trust" means the Delaware Business Trust established under the
Delaware Act by this Declaration of Trust and the filing of the Certificate of
Trust in the Office of the Secretary of State of the State of Delaware;
(17) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is from time to time owned or held by or for the
account of the Trust each and every asset of which shall be allocated and belong
to a specific series to the exclusion of all other series; and
(18) "Trustees" means the persons who have signed this Declaration of
Trust and all other Person or Persons who may from time to time be duly elected
or appointed to serve as Trustees in accordance with the provisions hereof, in
each case so long as such Person or Persons shall continue in office in
accordance with the terms of this Declaration of Trust, and reference herein to
a Trustee or the Trustees shall refer to such Person or Persons in his, her or
their capacities as trustee or trustees hereunder. Unless otherwise required by
the context or specifically provided, any reference herein to the Trustees shall
refer to the Trustee at any time that there is only one Trustee of the Trust.
3
6
ARTICLE II
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities, and to carry on
such other business as the Trustees may from time to time determine pursuant to
their authority under this Declaration of Trust.
ARTICLE III
SHARES
Section 1. Division of Beneficial Interest. The beneficial interest in
the Trust may be divided into one or more Series. Each Series may be divided
into two or more Classes. Subject to the further provisions of this Article III
and any applicable requirements of the 1940 Act, the Trustees shall have full
power and authority, in their sole discretion, and without obtaining any
authorization or vote of the Shareholders of any Series or Class thereof, (i) to
divide the beneficial interest in each Series or Class thereof into Shares, with
or without par value as the Trustees shall determine, (ii) to issue Shares
without limitation as to number (including fractional Shares), to such Persons
and for such amount and type of consideration, subject to any restriction set
forth in the By-Laws, including cash or securities, at such time or times and on
such terms as the Trustees may deem appropriate, (iii) to establish and
designate and to change in any manner any Series or Class thereof and to fix
such preferences, voting powers, rights, duties and privileges and business
purpose of each Series or Class thereof as the Trustees may from time to time
determine, which preferences, voting powers, rights, duties and privileges may
be senior or subordinate to (or in the case of business purpose, different from)
any existing Series or Class thereof and may be limited to specified property or
obligations of the Trust or profits and losses associated with specified
property or obligations of the Trust, (iv) to divide or combine the Shares of
any Series or Class thereof into a greater or lesser number without thereby
materially changing the proportionate beneficial interest of the Shares of such
Series or Class in the assets held with respect to that Series, (v) to classify
or reclassify any issued Shares of any Series or Class thereof into shares of
one or more Series or Classes thereof and (vi) to take such other action with
respect to the Shares as the Trustees may deem desirable.
Subject to the distinctions permitted among Classes of the same Series
as established by the Trustees consistent with the requirements of the 1940 Act,
each Share of a Series of the Trust shall represent an equal beneficial interest
in the net assets of such Series, and each holder of Shares of a Series shall be
entitled to receive such holder's pro rata share of distributions of income and
capital
4
8
gains, if any, made with respect to such Series. Upon redemption of the Shares
of any Series, the applicable Shareholder shall be paid solely out of the funds
and property of such Series of the Trust.
All references to Shares in this Declaration of Trust shall be deemed to
be Shares of any or all Series or Classes thereof, as the context may require.
All provisions herein relating to the Trust shall apply equally to each Series
of the Trust and each Class thereof, except as the context otherwise requires.
All Shares issued hereunder, including Shares issued in connection with
a dividend in Shares or a split or reverse split of Shares, shall be fully paid
and non-assessable. Except as otherwise provided by the Trustees, Shareholders
shall have no preemptive or other right to subscribe to any additional Shares or
other securities issued by the Trust.
Section 2. Ownership of Shares. The Ownership of Shares shall be
recorded on the books of the Trust or a transfer or similar agent for the Trust,
which books shall be maintained separately for the Shares of each Series (or
Class). No certificates certifying the ownership of Shares shall be issued
except as the Board of Trustees may otherwise determine from time to time. The
Trustees may make such rules as they consider appropriate for the issuance of
Share certificates, the transfer of Shares of each Series (or Class) and similar
matters. The record books of the Trust as kept by the Trust or any transfer or
similar agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series (or Class) and as to the number of Shares of each
Series (or Class) held from time to time by each Shareholder.
Section 3. Transfer of Shares. Except as otherwise provided by the
Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of each such execution and authorization and of such
other matters as may be required by the Trustees. Upon such delivery, and
subject to any further requirements specified by the Trustees or contained in
the By-Laws, the transfer shall be recorded on the books of the Trust. Until a
transfer is so recorded, the Shareholder of record of Shares shall be deemed to
be the holder of such Shares for all purposes hereunder and neither the Trustees
nor the Trust, nor any transfer agent or registrar or any officer, employee or
agent of the Trust, shall be affected by any notice of a proposed transfer.
Section 4. Investments in the Trust. Investments may be accepted by the
Trust from such Persons, at such times, on such terms, and for such
consideration as the Trustees from time to time may authorize.
5
9
Section 5. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving only the rights provided in this
instrument. Every Shareholder by virtue of having become a Shareholder shall be
held to have expressly assented and agreed to the terms hereof. The death,
incapacity, dissolution, termination or bankruptcy of a Shareholder during the
existence of the Trust shall not operate to terminate the Trust, nor entitle the
representative of any such Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Trust.
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 as partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholders, nor, except as specifically provided herein, to
call upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
Section 6. Establishment and Designation of Series. The establishment
and designation of any Series (or Class) of Shares (other than those established
hereby) shall be effective upon the adoption by a majority of the then Trustees
of a resolution that sets forth such establishment and designation whether
directly in such resolution or by reference to, or approval of, another document
that sets forth each such Series (or Class) including any registration statement
of the Trust, or as otherwise provided in such resolution. The Trustees hereby
establish four initial Series of the Trust (the "Initial Series"), to be known
as Hotchkis and Wiley Equity Fund for Insurance Companies, Hotchkis and Wiley
Large Cap Value Fund, Hotchkis and Wiley Mid-Cap Value Fund and Hotchkis and
Wiley Small Cap Value Fund. Each Initial Series other than Hotchkis and Wiley
Equity Fund for Insurance Companies shall consist of two Classes of Shares
designated Investor Class and Institutional Class. The relative rights and
preferences of each Initial Series and each Class thereof shall be as set forth
herein and as set forth in the Trust's registration statement or statements as
filed with the Commission, as from time to time in effect. The relative rights
and preferences of each Series and each Class thereof (other than the Initial
Series and each Class thereof) shall be as set forth herein and as set forth in
the Trust's registration statement or statements as filed with the Commission,
as from time to time in effect, unless otherwise provided in the resolution
establishing such Series or Class.
Shares of each Series (or Class) established pursuant to this Article
III, unless otherwise provided in the resolution establishing such Series, shall
have the following relative rights and preferences:
(1) Assets Held with Respect to a Particular Series. All consideration
received by the Trust for the issue or sale of Shares of a particular Series,
together with all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof from
6
10
whatever source derived, 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
irrevocably be held with respect to that Series for all purposes, subject only
to the rights of creditors of such Series, and shall be so recorded upon the
books of account of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, from whatever source derived, 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, are herein referred to as "assets held with respect 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
assets held with respect to any particular Series (collectively "General
Assets"), the Trustees shall allocate such General Assets to, between or among
any one or more of the Series in such manner and on such basis as the Trustees,
in their sole discretion, deem fair and equitable, and any General Assets so
allocated to a particular Series shall be held with respect to that Series. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes. Separate and distinct records shall
be maintained for each Series and the assets held with respect to each Series
shall be held and accounted for separately from the assets held with respect to
all other Series and the General Assets of the Trust not allocated to such
Series.
(2) Liabilities Held with Respect to a Particular Series. The assets of
the Trust held with respect to each particular Series shall be charged against
the liabilities of the Trust held with respect to that Series and all expenses,
costs, charges and reserves attributable to that Series. Any general liabilities
of the Trust which are not readily identifiable as being held with respect to
any particular Series shall be allocated and charged by the Trustees to and
among any one or more of the Series in such manner and on such basis as the
Trustees in their sole discretion deems fair and equitable. All liabilities,
expenses, costs, charges, and reserves so charged to a Series are herein
referred to as "liabilities held with respect to" that Series. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. All
liabilities held with respect to a particular Series shall be enforceable
against the assets held with respect to such Series only and not against the
assets of the Trust generally or against the assets held with respect to any
other Series and, except as otherwise provided in this Declaration of Trust,
none of the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to the Trust generally or any other
Series thereof shall be enforceable against the assets of such Series. Notice of
this contractual limitation on the liability of each Series shall be set forth
in the Certificate of Trust or in an amendment thereto prior to the issuance of
any Shares of a Series.
(3) Dividends, Distributions, Redemptions, and Repurchases.
Notwithstanding any other provisions of this Declaration of Trust, including
Article VI, no dividend or distribution, including any distribution paid upon
termination of the Trust or of any Series (or Class) with
7
11
respect to, nor any redemption or repurchase of, the Shares of any Series (or
Class) shall be effected by the Trust other than from the assets held with
respect to such Series, nor shall any Shareholder of any particular Series
otherwise have any right or claim against the assets held with respect to any
other Series except to the extent that such Shareholder has such a right or
claim hereunder as a Shareholder of such other Series. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to determine
which items shall be treated as income and which items as capital; and each such
determination and allocation shall be conclusive and binding upon the
Shareholders.
(4) Equality. All the Shares of each particular Series shall represent
an equal proportionate interest in the assets held with respect to that Series
(subject to the liabilities held with respect to that Series and such rights and
preferences as may have been established and designated with respect to Classes
of Shares within such Series), and each Share of any particular Series shall be
equal to each other Share of that Series.
(5) Fractions. Any fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of that Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and termination of the Trust.
(6) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series shall have the right to exchange said
Shares for Shares of one or more other Series of Shares in accordance with such
requirements and procedures as may be established by the Trustees.
(7) Combination of Series. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless otherwise required
by the 1940 Act, to combine the assets and liabilities held with respect to any
two or more Series into assets and liabilities held with respect to a single
Series.
(8) Elimination of Series. At any time that there are no Shares
outstanding of any particular Series (or Class) previously established and
designated, the Trustees may by resolution of a majority of the then Trustees
abolish that Series (or Class) and rescind the establishment and designation
thereof.
Section 7. Indemnification of Shareholders. If any Shareholder or former
Shareholder shall be exposed to liability by reason of a claim or demand
relating to such Person being or having been a Shareholder, and not because of
such Person's acts or omissions, the Shareholder
8
12
or former Shareholder (or such Person's heirs, executors, administrators, or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held harmless from
and indemnified out of the assets of the Trust against all loss and expense
arising from such claim or demand, but only out of the assets held with respect
to the particular Series of Shares of which such Person is or was a Shareholder
and from or in relation to which such liability arose.
ARTICLE IV
THE BOARD OF TRUSTEES
Section 1. Number, Election and Tenure. The number of Trustees shall
initially be three, who shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. and ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇. Hereafter, the number of Trustees shall at all times be at least
one and no more than fifteen as determined, from time to time, by the Trustees
pursuant to Section 3 of this Article IV. Each Trustee shall serve during the
continued lifetime of the Trust until the next meeting of Shareholders called
for the purpose of electing Trustees and until the election and qualification of
his or her successor or, if sooner, until he or she dies, resigns, retires, or
is removed as herein provided. If there is more than one Trustee, in the event
that less than the majority of the Trustees holding office have been elected by
the Shareholders, to the extent required by the 1940 Act, but only to such
extent, the Trustees then in office shall call a Shareholders' meeting for the
election of Trustees. Any Trustee may resign at any time by written instrument
signed by the Trustee and delivered to any officer of the Trust or to a meeting
of the Trustees. Such resignation shall be effective upon receipt unless
specified to be effective at some other time. Except to the extent expressly
provided in a written agreement with the Trust, no Trustee resigning and no
Trustee removed shall have any right to any compensation for any period
following the effective date of his or her resignation or removal, or any right
to damages on account of such removal. The Shareholders may elect Trustees at
any meeting of Shareholders called by the Trustees for that purpose. Any Trustee
may be removed at any meeting of Shareholders by the affirmative vote of the
majority of the outstanding Shares of the Trust with or without cause.
Section 2. Effect of Death, Resignation, etc. of a Trustee. The death,
declination to serve, resignation, retirement, removal, or incapacity of one or
more Trustees, or all of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration of Trust.
Whenever there shall be fewer than the designated number of Trustees, until
additional Trustees are elected or appointed as provided herein to bring the
total number of Trustees equal to the designated number, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustee by this Declaration
of Trust. As conclusive evidence of such vacancy,
9
13
a written instrument certifying the existence of such vacancy may be executed by
an officer of the Trust or by a majority of the Trustees. In the event of the
death, declination, resignation, retirement, removal, or incapacity of all the
then Trustees within a short period of time and without the opportunity for at
least one Trustee being able to appoint additional Trustees to replace those no
longer serving, the Trust's Investment Manager(s) are empowered to appoint new
Trustees subject to the provisions of Section 16(a) of the 1940 Act.
Section 3. Powers. Subject to the provisions of this Declaration of
Trust, the business of the Trust shall be managed by the Trustees, and the
Trustees shall have all powers necessary or convenient to carry out that
responsibility including the power to engage in securities transactions of all
kinds on behalf of the Trust. Without limiting the foregoing, the Trustees may:
adopt By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may amend and repeal
them to the extent that such By-Laws do not reserve that right to the
Shareholders; enlarge or reduce their number; remove any Trustee with or without
cause at any time by written instrument signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective, and fill vacancies caused by enlargement of their number
or by the death, resignation or removal of a Trustee; elect and remove, with or
without cause, such officers and appoint and terminate such agents as they
consider appropriate; appoint from their own number and establish and terminate
one or more committees consisting of one or more Trustees which may exercise the
powers and authority of the Board of Trustees to the extent that the Trustees
determine; employ one or more custodians of the assets of the Trust and
authorize such custodians to employ subcustodians and to deposit all or any part
of such assets in a system or systems for the central handling of securities or
with a Federal Reserve Bank; retain a transfer agent or a shareholder servicing
agent, or both; provide for the issuance and distribution of Shares by the Trust
directly or through one or more Principal Underwriters or otherwise; redeem,
repurchase and transfer Shares pursuant to applicable law; set record dates for
the determination of Shareholders with respect to various matters; declare and
pay dividends and distributions to Shareholders of each Series from the assets
of such Series; and in general delegate such authority as they consider
desirable to any officer of the Trust, to any committee of the Trustees and to
any agent or employee of the Trust or to any such custodian, transfer or
Shareholder servicing agent, or Principal Underwriter. 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. Unless
otherwise specified herein or in the By-Laws or required by law, any action by
the Trustees shall be deemed effective if approved or taken by a majority of the
Trustees present at a meeting of Trustees at which a quorum (as defined in the
By-Laws as the same may be amended from time to time) of Trustees are present,
within or without the State of Delaware.
10
14
Without limiting the foregoing, the Trustees shall have the power and
authority to cause the Trust (or to act on behalf of the Trust):
(1) To invest and reinvest cash, to hold cash uninvested, and to
subscribe for, invest in, reinvest in, purchase or otherwise acquire, own, hold,
pledge, sell, assign, transfer, exchange, distribute, write options on, lend or
otherwise deal in or dispose of contracts for the future acquisition or delivery
of fixed income or other securities, and securities of every nature and kind,
including all types of bonds, debentures, stocks, negotiable or non-negotiable
instruments, obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers' acceptances, and
other securities of any kind, issued, created, guaranteed, or sponsored by any
and all Persons, including states, territories, and possessions of the United
States and the District of Columbia and any political subdivision, agency, or
instrumentality thereof, any foreign government or any political subdivision of
the U.S. Government or any foreign government, or any international
instrumentality, or by any bank or savings institution, or by any corporation or
organization organized under the laws of the United States or of any state,
territory, or possession thereof, or by any corporation or organization
organized under any foreign law, or in "when issued" contracts for any such
securities, to change the investments of the assets of the Trust; and to
exercise any and all rights, powers, and privileges of ownership or interest in
respect of any and all such investments of every kind and description, including
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 instruments;
(2) To sell, exchange, lend, pledge, mortgage, hypothecate, lease, or
write options (including, options on futures contracts) with respect to or
otherwise deal in any property rights relating to any or all of the assets of
the Trust or any Series;
(3) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and deliver
proxies or powers of attorney to such Person or Persons as the Trustees shall
deem proper, granting to such Person or Persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
(4) To exercise powers and right of subscription or otherwise which in
any manner arise out of ownership of securities;
(5) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in its own name or
in the name of a custodian or subcustodian or a nominee or nominees or
otherwise;
11
15
(6) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer of any security which is
held in the Trust; 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 held in the Trust;
(7) To join with other security holders 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;
(8) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including, but not limited to,
claims for taxes;
(9) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(10) To borrow funds or other property in the name of the Trust
exclusively for Trust purposes and in connection therewith issue notes or other
evidence of indebtedness; and to mortgage and pledge the Trust Property or any
part thereof to secure any or all of such indebtedness;
(11) 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; and to mortgage and pledge the
Trust Property or any part thereof to secure any of or all of such obligations;
(12) To purchase and pay for entirely out of Trust Property such
insurance as the Trustees may deem necessary or appropriate for the conduct of
the business, including insurance policies insuring the assets of the Trust or
payment of distributions and principal on its portfolio investments, and
insurance policies insuring the Shareholders, the Trustees, officers, employees,
agents, investment advisers, principal underwriters, or independent contractors
of the Trust, individually against all claims and liabilities of every nature
arising by reason of holding Shares, 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 as Trustee, officer, employee, agent, investment
12
16
adviser, principal underwriter, or independent contractor, including any action
taken or omitted that may be determined to constitute negligence, whether or not
the Trust would have the power to indemnify such Person against liability;
(13) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, 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;
(14) To operate as and carry out the business of an investment company,
and exercise all the powers necessary or appropriate to the conduct of such
operations;
(15) To enter into contracts of any kind and description;
(16) To employ one or more banks, trust companies or companies that are
members of a national securities exchange or such other entities as the
Commission may permit as custodians of any assets of the Trust subject to any
conditions set forth in this Declaration of Trust or in the By-Laws;
(17) To interpret the investment policies, practices or limitations of
any Series or Class;
(18) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act (including investment by means of transfer of part
or all of the Trust Property in exchange for an interest or interests in such
one or more investment companies) all without any requirement of approval by
Shareholders unless required by the 1940 Act. Any such other investment company
may (but need not) be a trust (formed under the laws of the State of Delaware or
of any other state) which is classified as a partnership for federal income tax
purposes;
(19) To establish one or more committees, to delegate any powers of the
Trustees to such committees and to adopt a committee charter providing for such
responsibilities, membership (including Trustees, officers or other agents of
the Trust therein) and other characteristics of such committees as the Trustees
may deem proper. Notwithstanding the
13
17
provisions of this Article IV, and in addition to such provisions or any other
provision of this Declaration of Trust or of the By-Laws, the Trustees may by
resolution appoint a committee consisting of fewer than the whole number of the
Trustees then in office, which committee may be empowered to act for and bind
the Trustees and the Trust, as if the acts of such committee were the acts of
all the Trustees then in office, with respect to any matter including the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding that may be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body;
(20) To provide for separate classes, groups or series of Trustees with
respect to any Series or Class thereof or any Trust Property having such
relative rights, powers and duties as the Trustees may determine; and
(21) Subject to the 1940 Act, to engage in any other lawful act or
activity in which a business trust organized under the Delaware Act may engage.
The Trust shall not be limited to investing in obligations maturing
before the possible termination of the Trust or one or more of its Series. The
Trust shall not in any way be bound or limited by any present or future law or
custom in regard to investment by fiduciaries. The Trust shall not be required
to obtain any court order to deal with any assets of the Trust or take any other
action hereunder.
Section 4. Payment of Expenses by the Trust. The Trustees are authorized
to pay or cause to be paid out of the principal or income of the Trust, or
partly out of the principal and partly out of income, as they deem fair, all
expenses, fees, charges, taxes and liabilities incurred or arising in connection
with 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 or manager,
Principal Underwriter, auditors, counsel, custodian, transfer agent, shareholder
servicing agent, and such other agents or independent contractors and such other
expenses and charges as the Trustees may deem necessary or proper to incur,
which expenses, fees, charges, taxes and liabilities shall be allocated in
accordance with Article III, Section 6 hereof.
Section 5. Payment of Expenses by Shareholders. The Trustees shall have
the power, as frequently as they may determine, to cause each Shareholder, or
each Shareholder of any particular Series, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid
14
18
dividends owed such Shareholder and/or by reducing the number of Shares in the
account of such Shareholder by that number of full and/or fractional Shares
which represents the outstanding amount of such charges due from such
Shareholder.
Section 6. Ownership of Assets of the Trust. Title to all of the assets
of the Trust shall at all times be considered as vested in the Trust, 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 in the name of any other Person as nominee, on such terms as the
Trustees may determine. 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 resignation, removal or death of a Trustee, he or she 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.
Section 7. Service Contracts.
(1) Subject to such requirements and restrictions as may be set forth
under federal law and in the By-Laws, including the requirements of Section 15
of the 1940 Act, the Trustees may, at any time and from time to time, contract
for exclusive or nonexclusive advisory, management and/or administrative
services for the Trust or for any Series (or Class thereof) with any
corporation, trust, association or other organization; and any such contract may
contain such other terms as the Trustees may determine, including authority for
the Investment Manager or administrator to delegate certain or all of its duties
under such contracts to qualified investment advisers and administrators and to
determine from time to time without prior consultation with the Trustees what
investments shall be purchased, held, sold or exchanged and what portion, if
any, of the assets of the Trust shall be held uninvested and to make changes in
the Trust's investments, or such other activities as may specifically be
delegated to such party.
(2) The Trustees may also, at any time and from time to time, contract
with any corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or Principal Underwriter for the Shares of
one or more of the Series (or Classes) or other securities to be issued by the
Trust. Every such contract shall comply with such requirements and restrictions
as may be set forth under federal law and in the By-Laws, including the
requirements of Section 15 of the 1940 Act; and any such contract may contain
such other terms as the Trustees may determine.
15
19
(3) The Trustees are also empowered, at any time and from time to time,
to contract with any corporations, trusts, associations or other organizations,
appointing it or them the custodian, transfer agent and/or Shareholder servicing
agent for the Trust or one or more of its Series. Every such contract shall
comply with such requirements and restrictions as may be set forth under federal
law and in the By-Laws or stipulated by resolution of the Trustees.
(4) Subject to applicable federal law, including the 1940 Act, the
Trustees are further empowered, at any time and from time to time, to contract
with any entity to provide such other services to the Trust or one or more of
the Series, as the Trustees determine to be in the best interests of the Trust
and the applicable Series.
(5) 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, distributor, or affiliate or
agent of or for any corporation, trust, association, or other
organization, or for any parent or affiliate of any organization with
which an advisory, management or administration contract, or principal
underwriter's or distributor's contract, or transfer, shareholder
servicing or other type of service contract may have been or may
hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any corporation, trust, association or other organization
with which an advisory, management or administration contract or
principal underwriter's or distributor's contract, or transfer,
shareholder servicing or other type of service contract may have been or
may hereafter be made also has an advisory, management or administration
contract, or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other service contract with one or
more other corporations, trusts, associations, or other organizations,
or has other business or interests, shall not affect the validity of any
such contract 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 its Shareholders, provided approval of
each such contract is made pursuant to the requirements of the 1940 Act.
Section 8. Trustees and Officers as Shareholders. Any Trustee, officer
or agent of the Trust may acquire, own and dispose of Shares to the same extent
as if he were not a Trustee, officer or agent; and the Trustees may issue and
sell and cause to be issued and sold Shares to,
16
20
and redeem such Shares from, any such Person or any firm or company in which
such Person is interested, subject only to the general limitations contained
herein or in the By-Laws relating to the sale and redemption of such Shares.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers, Meetings, Notice and Record Dates. The
Shareholders shall have power to vote only (i) for the election or removal of
Trustees as and to the extent provided in Article IV, Section 1, and (ii) with
respect to such additional matters relating to the Trust as may be required by
the 1940 Act, Section 4 of Article VIII of this Declaration of Trust, Section 2
of Article 10 or Article 13 of 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. As determined by the Trustees without the vote
or consent of Shareholders (except as required by the 1940 Act), on any matter
submitted to a vote of Shareholders, either (i) each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and each
fractional Share shall be entitled to a proportionate fractional vote or (ii)
each dollar of Net Asset Value (number of Shares owned times Net Asset Value per
share of such Series or Class, as applicable) shall be entitled to one vote on
any matter on which such Shares are entitled to vote and each fractional dollar
amount shall be entitled to a proportionate fractional vote. Without limiting
the power of the Trustees in any way to designate otherwise in accordance with
the preceding sentence, the Trustees hereby establish that each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of this Declaration of Trust, on any matter
submitted to a vote of the Shareholders, all Shares of the Trust then entitled
to vote shall be voted in aggregate, except (i) when required by the 1940 Act,
Shares shall be voted by individual Series; (ii) when the matter involves any
action that the Trustees have determined will affect only the interests of one
or more Series, then only Shareholders of such Series shall be entitled to vote
thereon; and (iii) when the matter involves any action that the Trustees have
determined will affect only the interests of one or more Classes, then only the
Shareholders of such Class or Classes shall be entitled to vote thereon. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy. A proxy may be given in writing. The By-Laws may provide
that proxies may also, or may instead, be given by any electronic or
telecommunications device or in any other manner. Notwithstanding anything else
contained herein or in the By-Laws, in the event a proposal by anyone other than
the officers or the Trustees of the Trust is submitted to a vote of the
shareholders of one or more Series or Classes thereof or of the Trust, or in the
event of any proxy contest or proxy solicitation or proposal in opposition to
any proposal by the officers or the Trustees of the Trust, Shares may be voted
only in person or by written proxy at a meeting. Until Shares are issued, the
Trustees may
17
21
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 the Shareholders.
Meetings of the Shareholders shall be called and notice thereof and record dates
therefor shall be given and set as provided in the By-Laws.
Section 2. Quorum and Required Vote. Except when a larger quorum is
required by federal law, including the 1940 Act, by the By-Laws or by this
Declaration of Trust, the holders of Shares entitled to cast one-third of the
votes, present in person or by proxy, shall constitute a quorum at a
Shareholders' meeting. When any one or more Series (or Class) is to vote as a
single class separate from any other Shares, the holders of Shares of each such
Series (or Class) entitled to cast one-third of the votes, present in person or
by proxy, shall constitute a quorum at a Shareholders' meeting of that Series
(or Class). Except when a larger vote is required by any provision of this
Declaration of Trust or the By-Laws or by federal law, including the 1940 Act,
when a quorum is present at any meeting, a majority of the Shares voted shall
decide any questions and a plurality of the Shares voted shall elect a Trustee,
provided that where any provision of federal law, including the 1940 Act, or of
this Declaration of Trust requires or permits the holders of any Series to vote
as a Series (or that holders of a Class shall vote as a Class), then a majority
of the Shares of that Series (or Class) voted on the matter (or a plurality with
respect to the election of a Trustee) shall decide that matter insofar as that
Series (or Class) is concerned.
Section 3. Record Dates. For the purpose of determining the Shareholders
of any Series (or Class) who are entitled to receive payment of any dividend or
of any other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other payment,
as the record date for determining the Shareholders of such Series (or Class)
having the right to receive such dividend or distribution. Without fixing a
record date, the Trustees may for distribution purposes close the register or
transfer books for one or more Series (or Classes) at any time prior to the
payment of a distribution. Nothing in this Section shall be construed as
precluding the Trustees from setting different record dates for different Series
(or Classes).
Section 4. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
NET ASSET VALUE, DISTRIBUTIONS AND REDEMPTIONS
18
22
Section 1. Determination of Net Asset Value, Net Income, and
Distributions. Subject to applicable law and Article III, Section 6 hereof, the
Trustees, in their absolute discretion, may prescribe and shall set forth in a
duly adopted vote of the Trustees such bases and time for determining the per
Share or net asset value of the Shares of any Series (or Class) or net income
attributable to the Shares of any Series (or Class), or the declaration and
payment of dividends and distributions on the Shares of any Series (or Class),
as they may deem necessary or desirable.
Section 2. Redemptions and Repurchases.
(1) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a Person designated by
the Trust that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof as determined by the
Trustees (or on their behalf), in accordance with any applicable provisions of
the By-Laws and applicable law, less any fees imposed on such redemption. Unless
extraordinary circumstances exist, payment for said Shares shall be made by the
Trust to the Shareholder within seven (7) days after the date on which the
request is made in proper form. The obligation set forth in this Section 2 is
subject to the provision that in the event that any time the New York Stock
Exchange (the "Exchange") is closed for other than weekends or holidays, or if
permitted by the rules and regulations or an order of the Commission during
periods when trading on the Exchange is restricted or during any emergency which
makes it impracticable for the Trust to dispose of the investments of the
applicable Series or to determine fairly the value of the net assets held with
respect to such Series or during any other period permitted by order of the
Commission for the protection of investors, such obligations may be suspended or
postponed by the Trustees. In the case of a suspension of the right of
redemption as provided herein, a Shareholder may either withdraw the request for
redemption or receive payment based on the net asset value per share next
determined after the termination of such suspension, less any fees imposed on
such redemption.
(2) The redemption price may in any case or cases be paid wholly or
partly in kind if the Trustees determine that such payment is advisable in the
interest of the remaining Shareholders of the Series for which the Shares are
being redeemed. Subject to the foregoing, the fair value, selection and quantity
of securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other Person
in transferring securities selected for delivery as all or part of any payment
in kind.
19
23
(3) The Trustees may require any Shareholder or any group of
Shareholders (including some or all of the Shareholders of any Series or Class)
to redeem Shares for any reason under terms set by the Trustees, including (i)
the determination of the Trustees that direct or indirect ownership of Shares of
any Series has or may become concentrated in such Shareholder to an extent that
would disqualify any Series as a regulated investment company under the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), (ii) the
failure of a Shareholder to supply a tax identification number if required to do
so, or to have the minimum investment required (which may vary by Series), or
(iii) the failure of a Shareholder to pay when due for the purchase of Shares
issued to him. Any such redemption shall be effected at the redemption price and
in the manner provided in this Article VI.
(4) The holders of Shares shall upon demand disclose to the Trustees in
writing such information with respect to direct and indirect ownership of Shares
as the Trustees deem necessary to comply with the provisions of the Internal
Revenue Code of 1986, as amended (or any successor statute thereto), or to
comply with the requirements of any other taxing authority.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Section 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and the Trustees may fix the amount of
such compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of Liability. A Trustee, when
acting in such capacity, shall not be personally liable to any Person, other
than the Trust or a Shareholder to the extent provided in this Article VII, for
any act, omission or obligation of the Trust, of such Trustee or of any other
Trustee. The Trustees shall not be responsible or liable in any event for any
neglect or wrongdoing of any officer, agent, employee, Manager, adviser,
sub-adviser or Principal Underwriter of the Trust. The Trust shall indemnify
each Person who is, or has been, a Trustee, officer, employee or agent of the
Trust and any Person who is serving or has served at the Trust's request as a
director, officer, trustee, employee or agent of another organization in which
the Trust has any interest as a shareholder, creditor or otherwise to the extent
and in the manner provided in the By-Laws. All persons extending credit to,
contracting with or having any claim against the Trust or the Trustees shall
look only to the assets of the Series that such person
20
24
extended credit to, contracted with or has a claim against, or, if the Trustees
have yet to establish Series, of the Trust for payment under such credit,
contract or claim; and neither the Trustees nor the Shareholders, nor any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every note, bond, contract, instrument, certificate
or undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees by any of them in connection with the Trust
shall conclusively be deemed to have been executed or done only in or with
respect to his or her capacity as Trustee or Trustees and such Trustee or
Trustees shall not be personally liable thereon. At the Trustees' discretion,
any note, bond, contract, instrument, certificate or undertaking made or issued
by the Trustees or by any officer or officers may give notice that the
Certificate of Trust is on file in the Office of the Secretary of State of the
State of Delaware and that a limitation on liability of Series exists and such
note, bond, contract, instrument, certificate or undertaking may, if the
Trustees so determine, recite that the same was executed or made on behalf of
the Trust by a Trustee or Trustees in such capacity and not individually or by
an officer or officers in such capacity 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 on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such Person
or Persons may deem appropriate. The omission of any such notice or recital
shall in no way operate to bind any Trustees, officers or Shareholders
individually.
Section 3. Trustee's 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. A Trustee shall be liable to the
Trust and to any Shareholder solely for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and shall not be liable for errors of judgment
or mistakes of fact or law. The Trustees may take advice of counsel or other
experts with respect to the meaning and operation of this Declaration of Trust,
and shall be under no liability for any act or omission in accordance with such
advice nor for failing to follow such advice. The Trustees shall not be required
to give any bond as such, nor any surety if a bond is required.
Section 4. Insurance. The Trustees shall be entitled and empowered to
the fullest extent permitted by law to purchase with Trust assets insurance for
liability and for all expenses reasonably incurred or paid or expected to be
paid by a Trustee, officer, employee or agent of the Trust in connection with
any claim, action, suit or proceeding in which he or she becomes involved by
virtue of his or her capacity or former capacity with the Trust.
ARTICLE VIII
MISCELLANEOUS
21
25
Section 1. 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.
Section 2. Dissolution and Termination of Trust or Series or Classes.
(1) Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be dissolved at any time by the
Trustees by written notice to the Shareholders. Any Series of Shares may be
dissolved at any time by the Trustees by written notice to the Shareholders of
such Series. Any Class of any Series of Shares may be terminated at any time by
the Trustees by written notice to the Shareholders of such Class. Any action to
dissolve the Trust shall be deemed to also be an action to dissolve each Series
and each Class thereof.
(2) Upon the requisite action by the Trustees to dissolve the Trust or
any one or more Series of Shares, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated,
of the Trust or of the particular Series as may be determined by the Trustees,
the Trust shall in accordance with such procedures as the Trustees consider
appropriate reduce the remaining assets of the Trust or of the affected Series
to distributable form in cash or Shares (if the Trust has not dissolved) or
other securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Trust or Series involved, ratably according to the number of
Shares of the Trust or such Series held by the several Shareholders of such
Series on the date of distribution. Thereupon, any affected Series shall
terminate and the Trustees and the Trust shall be discharged of any and all
further liabilities and duties relating thereto or arising therefrom, and the
right, title and interest of all parties with respect to such Series shall be
canceled and discharged. Upon the requisite action by the Trustees to terminate
any Class of any Series of Shares, the Trustees may, to the extent they deem it
appropriate, follow the procedures set forth in this Section 2(2) with respect
to such Class that are specified in connection with the dissolution and winding
up of the Trust or any Series of Shares. Alternatively, in connection with the
termination of any Class of any Series of Shares, the Trustees may treat such
termination as a redemption of the Shareholders of such Class effected pursuant
to Section 2(3) of Article VI of this Declaration of Trust provided that the
costs relating to the termination of such Class shall be included in the
determination of the net asset value of the Shares of such Class for purposes of
determining the redemption price to be paid to the Shareholders of such Class
(to the extent not otherwise included in such determination).
22
26
(3) Following completion of winding up of the Trust's business, the
Trustees shall cause a certificate of cancellation of the Trust's Certificate of
Trust to be filed in accordance with the Delaware Act, which certificate of
cancellation may be signed by any one Trustee. Upon termination of the Trust,
the Trustees shall be discharged of any and all further liabilities and duties
relating thereto or arising therefrom, and the right, title and interest of all
parties with respect to the Trust shall be canceled and discharged.
Section 3. Reorganization and Master/Feeder.
(1) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by the 1940 Act, (i) cause
the Trust to convert into or merge or consolidate with or into one or more
trusts partnerships, limited liability companies, associations, corporations or
other business entities (or a series of any of the foregoing to the extent
permitted by law) (including trusts, partnerships, limited liability companies,
associations, corporations or other business entities created by the Trustees to
accomplish such conversion, merger or consolidation) so long as the surviving or
resulting entity is an open-end management investment company under the 1940
Act, or is a series thereof to the extent permitted by law, and that, in the
case of any trust, partnership, limited liability company, association,
corporation or other business entity created by the Trustees to accomplish such
conversion, merger or consolidation, will succeed to or assume the Trust's
registration under the 1940 Act and that, in any case, is formed, organized or
existing under the laws of the United States or of a state, commonwealth,
possession or colony of the United States, (ii) cause the Shares to be exchanged
under or pursuant to any state or federal statute to the extent permitted by
law, (iii) cause the Trust to incorporate under the laws of Delaware, (iv) sell
or convey all or substantially all of the assets of the Trust or any Series or
Class to another Series or Class of the Trust or to another trust, partnership,
limited liability company, association, corporation or other business entity (or
a series of any of the foregoing to the extent permitted by law) (including a
trust, partnership, limited liability company, association, corporation or other
business entity created by the Trustees to accomplish such sale and conveyance),
organized under the laws of the United States or of any state, commonwealth,
possession or colony of the United States so long as such trust, partnership,
limited liability company, association, corporation or other business entity is
an open-end management investment company under the 1940 Act and, in the case of
any trust, partnership, limited liability company, association, corporation or
other business entity created by the Trustees to accomplish such sale and
conveyance, will succeed to or assume the Trust's registration under the 1940
Act, for adequate consideration as determined by the Trustees, which may include
the assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series or Class, and which
may include Shares of such other Series or Class of the Trust or shares of
beneficial interest, stock or other ownership interest of such trust,
partnership, limited liability company, association, corporation or other
23
27
business entity (or series thereof) or (v) at any time sell or convert into
money all of the assets of the Trust or any Series or Class thereof. Any
agreement of merger or consolidation or exchange or conversion or certificate of
merger or certificate of conversion may be signed by a majority of the Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.
(2) Pursuant to and in accordance with the provisions of Section 3815(f)
of the Delaware Act, and notwithstanding anything to the contrary contained in
this Declaration of Trust, an agreement of merger or consolidation approved by
the Trustees in accordance with this Section 3 may effect any amendment to the
governing instrument of the Trust or effect the adoption of a new trust
instrument of the Trust if the Trust is the surviving or resulting trust in the
merger or consolidation.
(3) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval unless such approval is required by the 1940 Act, create
one or more business trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust or any Series or Class thereof may be transferred
and may provide for the conversion of Shares in the Trust or any Series or Class
thereof into beneficial interests in any such newly created trust or trusts or
any series or classes thereof.
(4) Notwithstanding anything else herein, the Trustees may, without
Shareholder approval, invest all or a portion of the Trust Property of any
Series, or dispose of all or a portion of the Trust Property of any Series, and
invest the proceeds of such disposition in interests issued by one or more other
investment companies registered under the 1940 Act. Any such other investment
company may (but need not) be a trust (formed under the laws of the State of
Delaware or any other state or jurisdiction) (or subtrust thereof) which is
classified as a partnership for federal income tax purposes. Notwithstanding
anything else herein, the Trustees may, without Shareholder approval unless such
approval is required by the 1940 Act, cause a Series that is organized in the
master/feeder fund structure to withdraw or redeem its Trust Property from the
master fund and cause such series to invest its Trust Property directly in
securities and other financial instruments or in another master fund.
Section 4. Amendments. Except as specifically provided in this Section,
the Trustees may, without Shareholder vote, restate, amend or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote
(i) on any amendment that is required to be approved by Shareholders by the 1940
Act or by the Trust's registration statement filed with the Commission and (ii)
on any amendment submitted to them by the Trustees. Any amendment required or
permitted to be submitted to the Shareholders that, as the Trustees determine,
shall only affect the
24
28
Shareholders of one or more Series or one or more Classes shall be authorized by
a vote of only the Shareholders of each Series or Class affected and no vote of
Shareholders of a Series or Class not affected shall be required.
Notwithstanding anything else herein, no amendment hereof shall limit the rights
to insurance provided by Article VII, Section 4 of this Declaration of Trust
with respect to any acts or omissions of Persons covered thereby prior to such
amendment nor shall any such amendment limit the rights to indemnification
referenced in Article VII, Section 2 of this Declaration of Trust or as provided
in the By-Laws with respect to any actions or omissions of Persons covered
thereby prior to such amendment. The Trustees may, without Shareholder vote,
restate, amend, or otherwise supplement the Certificate of Trust as the Trustees
deem necessary or desirable.
Section 5. Filing of Copies, References, Headings, Rules of
Construction. The original or a copy of this instrument and of each restatement
and/or amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such restatements and/or amendments. In this
instrument and in any such restatements and/or amendments, references to this
instrument, and all expressions such as "herein", "hereof" and "hereunder",
shall be deemed to refer to this instrument as amended or affected by any such
restatements and/or amendments. Headings are placed herein for convenience of
reference only and shall not be taken as a part hereof or control or affect the
meaning, construction or effect of this instrument. Whenever the singular number
is used herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original. The terms "include," "includes" and "including" and any comparable
terms shall be deemed to mean "including, without limitation."
Section 6. Applicable Law.
(1) The Trust is created under, and this Declaration of Trust is to be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
25
29
(2) Notwithstanding the first sentence of Section 6(1) of this Article
VIII, there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust, the provisions of Section 3540 of Title 12 of the Delaware
Code or any provisions of the laws (statutory or common) of the State of
Delaware (other than the Delaware Act) pertaining to trusts that relate to or
regulate: (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the necessity for obtaining a court or other governmental approval
concerning the acquisition, holding or disposition of real or personal property,
(iv) fees or other sums applicable to trustees, officers, agents or employees of
a trust, (v) the allocation of receipts and expenditures to income or principal,
(vi) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding of trust assets, or (vii) the establishment
of fiduciary or other standards or responsibilities or limitations on the acts
or powers of trustees that are inconsistent with the limitations or liabilities
or authorities and powers of the Trustees set forth or referenced in this
Declaration of Trust.
Section 7. Provisions in Conflict with Law or Regulations.
(1) The provisions of the Declaration of Trust are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such provision
is in conflict with the 1940 Act, the regulated investment company provisions of
the Internal Revenue Code of 1986, as amended (or any successor statute
thereto), and the regulations thereunder, the Delaware Act or with other
applicable laws and regulations, the conflicting provision shall be deemed never
to have constituted a part of the Declaration of Trust; provided, however, that
such determination shall not affect any of the remaining provisions of the
Declaration of Trust or render invalid or improper any action taken or omitted
prior to such determination.
(2) If any provision of the Declaration of Trust 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 the
Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the Trustees to
create a business trust pursuant to the Delaware Act. It is not the intention of
the Trustees to create a general partnership, limited partnership, joint stock
association, corporation, bailment, or any form of legal relationship other than
a business trust pursuant to the Delaware Act. Nothing in this
26
30
Declaration of Trust shall be construed to make the Shareholders, either by
themselves or with the Trustees, partners or members of a joint stock
association.
Section 9. Derivative Actions. In addition to the requirements set forth
in Section 3816 of the Delaware Act, a Shareholder may bring a derivative action
on behalf of the Trust only if the following conditions are met:
(1) The Shareholder or Shareholders must make a pre-suit demand upon the
Trustees to bring the subject action unless an effort to cause the Trustees to
bring such an action is not likely to succeed. For purposes of this Section
9(1), a demand on the Trustees shall only be deemed not likely to succeed and
therefore excused if a majority of the Board of Trustees, or a majority of any
committee established to consider the merits of such action, is composed of
Trustees who are not "independent trustees" (as that term is defined in the
Delaware Act).
(2) Unless a demand is not required under paragraph (1) of this Section
9, Shareholders eligible to bring such derivative action under the Delaware Act
who collectively hold at least 10% of the Outstanding Shares of the Trust, or
who collectively hold at least 10% of the Outstanding Shares of the Series or
Class to which such action relates, shall join in the request for the Trustees
to commence such action; and
(3) Unless a demand is not required under paragraph (1) of this Section
9, the Trustees must be afforded a reasonable amount of time to consider such
shareholder request and to investigate the basis of such claim. The Trustees
shall be entitled to retain counsel or other advisors in considering the merits
of the request and shall require an undertaking by the Shareholders making such
request to reimburse the Trust for the expense of any such advisors in the event
that the Trustees determine not to bring such action.
For purposes of this Section 9, the Board of Trustees may designate a
committee of one Trustee to consider a Shareholder demand if necessary to create
a committee with a majority of Trustees who do not have a personal financial
interest in the transaction at issue. The Trustees shall be entitled to retain
counsel or other advisors in considering the merits of the request and may
require an undertaking by the Shareholders making such request to reimburse the
Trust for the expense of any such advisors in the event that the Trustees
determine not to bring such action.
27
31
IN WITNESS WHEREOF, the Trustees named below do hereby make and enter
into this Declaration of Trust as of the 23 day of July, 2001.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
THE PRINCIPAL PLACE OF BUSINESS OF THE TRUST IS:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
28