1
EXHIBIT (a)(1)
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
-----------------------------------------
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
March 16, 1989
--------------
2
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
-------------------------------------------
AGREEMENT AND DECLARATION OF TRUST
------------------------------------------
AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 16th
day of March, 1989, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an investment
company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
----
SECTION 1. This Trust shall be known as "Colonial Investment Grade
Municipal Trust" 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.
Definitions
-----------
SECTION 2. Whenever used herein, unless otherwise required by the context
or specifically provided:
(a) The "Trust" refers to the Massachusetts business trust
established by this Agreement and Declaration of Trust, as amended from
time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV;
3
(c) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest in the Trust shall be divided
from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The 111940 Act" refers to the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section 2(a)
(42) of the 1940 Act, whichever may be applicable) shall have the
applicable meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust as amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from
time to time.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors a managed investment
primarily in securities, commodities and debt instruments.
ARTICLE III
SHARES
Division of Beneficial Interest
-------------------------------
SECTION 1. The beneficial interest in the Trust shall at all times be
divided into Shares of a single series, without par value, each of which shall
represent an equal proportionate interest in the Trust with each other Share,
none having priority or preference over another. The number of Shares authorized
shall be unlimited, and the Shares so authorized may be represented in part by
fractional shares. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust.
Ownership of Shares
-------------------
SECTION 2. The ownership of Shares shall be recorded on the books of the
Trust or its transfer or similar agent. No certificates certifying the ownership
of Shares shall be issued except as the 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
4
Shares and similar matters. The record books of the Trust as kept by the Trust
or any transfer or similar agent of the Trust, as the case may be, shall be
conclusive as to who are the Shareholders and as to the number of Shares held
from time to time by each Shareholder.
Investments in the Trust
------------------------
SECTION 3. The Trustees shall accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they from time to time authorize.
No Preemptive Rights
--------------------
SECTION 4. Shareholders shall have no preemptive or other right to receive,
purchase or subscribe for any additional Shares or other securities issued by
the Trust.
Status of Shares and Limitation of Personal Liability
-----------------------------------------------------
SECTION 5. 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 and to have become a party
hereto. The death of a Shareholder during the continuance of the Trust shall not
operate to terminate the same 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
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 partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust, shall have any power to bind
personally any Shareholder, 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.
ARTICLE IV
THE TRUSTEES
Number of Trustees and Term of Office
-------------------------------------
SECTION 1. The number of Trustees shall be such number as shall be fixed
from time to time by a written instrument signed by a majority of the Trustees,
provided, however, that the number of Trustees shall in no event be less than
three (3) nor more than fifteen (15). No reduction in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his term unless the Trustee is specifically removed pursuant to
Section 2 of this Article at the time of the decrease. The Board of
5
Trustees shall be divided into three classes. Within the limits above specified,
the number of Trustees in each class shall be determined by resolution of the
Board of Trustees. The initial Trustees, each of whom shall serve until the
first meeting of Shareholders at which Trustees are elected and until his or her
successor is elected and qualified, or until he or she sooner dies, resigns or
is removed, shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and such other persons as the Trustee
or Trustees then in office shall, prior to any sale of Shares pursuant to a
public offering, appoint. The term of office of all of the initial Trustees
shall expire on the date of the first annual meeting of shareholders or special
meeting in lieu thereof, which annual or special meeting shall be called to be
held not more than fifteen months after Shares are first sold pursuant to a
public offering. The term of office of the first class shall expire on the date
of the second annual meeting of shareholders or any special meeting in lieu
thereof. The term of office of the second class shall expire on the date of the
third annual meeting of shareholders or any special meeting in lieu thereof. The
term of office of the third class shall expire on the date of the fourth annual
meeting of shareholders or any special meeting in lieu thereof. Upon expiration
of the term of office of each class as set forth above, the number of Trustees
in such class, as determined by the Board of Trustees, shall be elected for a
term expiring on the date of the third annual meeting of shareholders or any
special meeting in lieu thereof following such expiration to succeed the
Trustees whose terms of office expire. The Trustees shall be elected at an
annual meeting of the shareholders or a special meeting in lieu thereof, except
as provided in Section 2 of this Article.
Vacancies; Removal
------------------
SECTION 2. Any vacancies occurring in the Board of Trustees may be filled
by the Trustees if, immediately after filling any such vacancy, at least
two-thirds of the Trustees then holding office shall have been elected to such
office by the Shareholders. In the event that at any time less than a majority
of the Trustees then holding office were elected to such office by the
Shareholders, the Trustees shall call a meeting of Shareholders for the purpose
of electing Trustees. At any meeting called for such purpose, a Trustee may be
removed, with or without cause, by vote of a majority of the outstanding shares.
By vote of a majority of the Trustees then in office, the Trustees may remove a
Trustee with or without cause.
Effect of Death, Resignation, etc. of a Trustee
-----------------------------------------------
SECTION 3. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one 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.
Powers
------
SECTION 4. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility.
Without limiting the foregoing, the Trustees may adopt By-Laws not inconsistent
with this Declaration of Trust providing for the conduct of the
6
business of the Trust and may amend and repeal them to the extent that such
By-Laws do not reserve that right to the Shareholders; they may fill vacancies
in their number, including vacancies resulting from increases in their number,
and may elect and remove such officers and appoint and terminate such agents as
they consider appropriate; they may appoint from their own number, and
terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine; they may appoint an advisory board, the members of which
shall not be Trustees and need not be Shareholders; they may employ one or more
custodians of the assets of the Trust and may 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, retain a transfer agent or a
Shareholder services agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, 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 or underwriter.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) 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;
(d) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities;
(e) To hold any security or 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 in the name of a custodian,
subcustodian or other depository or a nominee or nominees or otherwise;
(f) 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; 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;
(g) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
7
committee, depositary 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,
depositary or trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust on any matter in controversy, including but not
limited to claims for taxes;
(i) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(j) To borrow funds;
(k) 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;
(l) 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 of the Trust, 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, investment advisers or
managers, principal underwriters or independent contractors 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 as Shareholder, Trustee, officer, employee, agent, investment
adviser or manager, 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 such liability; and
(m) 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 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.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in 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
the Trustees (a quorum being present), within or without Massachusetts,
including any meeting held by means of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time and participation by such
8
means shall constitute presence in person at a meeting, or by written consents
of a majority of the Trustees then in office.
Payment of Expenses by Trust
----------------------------
SECTION 5. 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, 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, auditor, 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.
Ownership of Assets of the Trust
--------------------------------
SECTION 6. Title to all of the assets of the Trust shall at all times be
considered as vested in the Trustees.
Advisory, Management and Distribution
-------------------------------------
SECTION 7. Subject to a favorable Majority Shareholder Vote, the Trustees
may, at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with Colonial Management Associates, Inc., a
Massachusetts corporation, or any other corporation, trust, association or other
organization (the "Adviser"), every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time 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. The Trustees may also, at any time and from time to time, contract
with the Adviser or any other corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such requirements
and restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
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
corporation, trust, association or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract
or transfer, shareholder services or other agency contract may have been
9
or may hereafter be made, or that any 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 or management contract or principal underwriter's or
distributor's contract or transfer, shareholder services or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or distributor's contract
or transfer, shareholder services or other agency 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.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Voting Powers
-------------
SECTION 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any Adviser as provided in Article IV, Section 7, (iii) with respect
to any termination of this Trust to the extent and as provided in Article IX,
Section 4, (iv) with respect to any amendment of this Declaration of Trust to
the extent and as provided in Article IX, Section 7, (v) to the same extent as
the stockholders of a Massachusetts business 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 the Shareholders,
(vi) with respect to such additional matters relating to the Trust as may be
required by law, this Declaration of Trust, the By-Laws or any registration of
the Trust with the Securities and Exchange Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable. 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. There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy. A proxy with respect to Shares held in the
name of two 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.
Voting Power and Meetings
-------------------------
10
SECTION 2. There shall be an annual meeting of the Shareholders on the date
fixed in the By-Laws at the office of the Trust in Boston, Massachusetts, or at
such other place as may be designated in the call thereof, which call shall be
made by the Trustees. In the event that such meeting is not held in any year on
the date fixed in the By-Laws, whether the omission be by oversight or
otherwise, a subsequent special meeting may be called by the Trustees and held
in lieu of the annual meeting with the same effect as though held on such date.
Special meetings may also 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 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. If the Trustees shall fail to call or
give notice of any meeting of Shareholders for a period of 30 days after written
application by shareholders holding at least 10% of the Shares then outstanding
requesting a meeting to be called for a purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding at
least 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.
Quorum and Required Vote
------------------------
SECTION 3. A majority of the Shares entitled to vote shall be a quorum for
the transaction of business at a Shareholders' meeting. Any lesser number,
however, 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. Except when a larger vote is required
by any provision of this Declaration of Trust or the By-Laws, a majority of the
Shares voted shall decide any questions and a plurality shall elect a Trustee.
Conversion
----------
SECTION 4. The Trustees shall, if the conditions set forth in the
immediately following sentence have been satisfied, submit to the Shareholders
at the first annual meeting of Shareholders, or special meeting in lieu thereof,
held after January 1, 1995, a proposal that the Trust, consistent with the 1940
Act as then in effect, amend this Declaration of Trust to convert the Trust from
a "closed-end company" to an "open-end company" as those terms are defined in
Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act, as in effect from
time to time. The Trustees shall be required to submit such proposal at such
annual meeting of Shareholders or special meeting in lieu thereof only if both
(i) Shares have traded on the principal security exchange where listed at an
average discount from net asset value of more than 10%, determined on the basis
of the discount as of the end of the last trading day in each week during the
period of 12 calendar weeks preceding January 1, 1995, and (ii) during such year
the Trust receives at its principal executive office written requests from the
holders of 10% or more of the outstanding Shares that such a proposal be
submitted to the Shareholders.
11
Notwithstanding any other provision of this Declaration of Trust, the
conversion of the Trust from a "closed-end company" to an "open-end company," as
those terms are defined in Sections 5(a)(2) and 5(a)(1), respectively, of the
1940 Act as in effect on January 1, 1989, shall require the affirmative vote or
consent of the holders of at least 66 2/3% of the Shares entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the Shares otherwise required by law or by any agreement between the
Trust and any national securities exchange.
Action by Written Consent
-------------------------
SECTION 5. 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 as shall be required by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Additional Provisions
---------------------
SECTION 6. The By-Laws may include further provisions for Shareholders' votes
and meetings and related matters.
12
ARTICLE VI
DISTRIBUTIONS AND DETERMINATION OF NET ASSET VALUE
Distributions
-------------
SECTION 1. The Trustees may, but need not, each year distribute to the
Shareholders such income and gains, accrued or realized, as the Trustees may
determine, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in accordance
with good accounting practices. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital and
their determination shall be binding upon the Shareholders. Distributions of
each year's income, if any be made, may be made in one or more payments, which
shall be in Shares, in cash or otherwise and on a date or dates and as of a
record date or dates determined by the Trustees. At any time and from time to
time in their discretion, the Trustees may distribute to the Shareholders as of
a record date or dates determined by the Trustees, in Shares, in cash or
otherwise, all or part of any gains realized on the sale or disposition of
property or otherwise, or all or part of any other principal of the Trust. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares held by the several Shareholders on the applicable record date
thereof, provided that no distribution need be made on Shares purchased pursuant
to orders received, or for which payment is made, after such time or times as
the Trustees may determine. Any such distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with Section 2 of this
Article VI, or at such other value as may be specified by the By-Laws or as the
Trustees may from time to time determine, subject to applicable laws and
regulations then in effect.
Determination of Net Asset Value
--------------------------------
SECTION 2. The term "net asset value" of the Shares shall mean: (i) the
value of all the assets of the Trust; (ii) less the total liabilities of the
Trust; (iii) divided by the number of Shares outstanding, in each case at the
time of each determination. Any fractions involved in the computation of net
asset value per share shall be adjusted to the nearer cent unless the Trustees
shall determine to adjust such fractions to a fraction of a cent.
The Trustees, or any officer or officers or agent of the Trust designated
for the purpose by the Trustees, shall determine the net asset value of the
Shares, and the Trustees shall fix the times as of which the net asset value of
the Shares shall be determined and shall fix the periods during which any such
net asset value shall be effective as to sales and other transactions in the
Shares, except as such times and periods for any such transaction may be fixed
by other provisions of this Declaration of Trust or by the By-Laws.
In valuing the portfolio investments for determination of net asset value
per share, securities for which market quotations are readily available shall be
valued at prices which, in the opinion of the Trustees, or any officer or
officers or agent of the Trust designated for the purpose by the Trustees, most
nearly represent the market value of such securities, which may, but need not,
be the most recent bid price obtained from one or more of the market
13
makers for such securities; other securities and assets shall be valued at fair
value as determined by or pursuant to the direction of the Trustees.
Notwithstanding the foregoing, short-term debt obligations, commercial paper and
repurchase agreements may be, but need not be, valued on the basis of quoted
yields for securities of comparable maturity, quality and type, or on the basis
of amortized cost. In determination of net asset value, dividends receivable and
accounts receivable for investments sold and for Shares sold shall be stated at
the amounts to be received therefor; and income receivable accrued daily on
bonds and notes owned shall be stated at the amount to be received. Any other
assets shall be stated at fair value as determined by the Trustees or such
officer, officers or agent pursuant to the Trustees' authority, except that no
value shall be assigned to goodwill, furniture, lists, reports, statistics or
other noncurrent assets other than real estate. Liabilities for accounts payable
for investments purchased shall be stated at the amounts payable therefor. In
determining net asset value of the Trust, the person or persons making such
determination on behalf of the Trust may include in liabilities such reserves,
estimated accrued expenses and contingencies as such person or persons may in
its, his or their best judgment deem fair and reasonable under the
circumstances. Any income dividends and gains distributions payable by the Trust
shall be deducted as of such time or times on the record date therefor as the
Trustees shall determine.
The manner of determining the net assets of the Trust or of determining the
net asset value of the Shares may from time to time be altered as necessary or
desirable in the judgment of the Trustees to conform to any other method
prescribed or permitted by any applicable law or regulation.
Determinations under this Section 2 made in good faith and in accordance
with the provisions of the 1940 Act shall be binding on all parties concerned.
ARTICLE VII
COMPENSATION AND LIMITATION
OF LIABILITY OF TRUSTEES
Compensation
------------
SECTION 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their 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.
Limitation of Liability
-----------------------
SECTION 2. The Trustees shall not be responsible or liable in any event for
any neglect or wrongdoing of any officer, agent, employee, adviser or principal
underwriter of the Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
14
Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Trustees, Officers etc.
-----------------------
SECTION 1. The Trust shall indemnify each of its Trustees and officers
(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 referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably 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 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, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of wilful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including 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 the Trust in advance of the final disposition of any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article, PROVIDED
THAT (a) such Covered Person shall provide security for his undertaking, (b) the
Trust shall be insured against losses arising by reason of such Covered Person's
failure to fulfill his undertaking, or (c) a majority of the Trustees who are
disinterested persons and who are not Interested Persons (provided that a
majority of such Trustees then in office act on the matter), or independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts (but not a full trial-type inquiry), that there is
reason to believe such Covered Person ultimately will be entitled to
indemnification.
Compromise Payment
------------------
15
SECTION 2. As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication in a decision
on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person either (a) did not act in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust or (b) is liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office, indemnification shall
be provided if (a) approved as in the best interest of the Trust, after notice
that it involves such indemnification, by at least a majority of the Trustees
who are disinterested persons and are not Interested Persons (provided that a
majority of such Trustees then in office act on the matter), upon a
determination, based upon a review of readily available facts (but not a full
trial-type inquiry) that such Covered Person acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust and is not liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office, or (b) there has been
obtained an opinion in writing of independent legal counsel, based upon a review
of readily available facts (but not a full-trial type inquiry), to the effect
that such Covered Person appears to have acted in good faith in the reasonable
belief that such Covered Person's action was in the best interests of the Trust
and that such indemnification would not protect such Covered Person against any
liability to the Trust to which such Covered Person would otherwise be subject
by reason of wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office. Any approval
pursuant to this Section shall not prevent the recovery from any Covered Person
of any amount paid to such Covered Person in accordance with this Section 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 the best interests of the Trust or to
have been liable to the Trust or its Shareholders by reason of wilful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office.
Indemnification Not Exclusive
-----------------------------
SECTION 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and administrators, and a "disinterested person"
is a person against whom none of the actions, suits or other proceedings in
question or another action, suit or other proceeding on the same or similar
grounds is then or has been pending. Nothing contained in this Article 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 such person.
Shareholders
------------
16
SECTION 4. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her 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 against all loss and expense arising from
such liability.
ARTICLE IX
MISCELLANEOUS
Trustees, Shareholders etc. Not Personally Liable: Notice
---------------------------------------------------------
SECTION 1. All persons extending credit to, contracting with or having any
claim against the Trust shall look only to the assets of the Trust for payment
under such credit, contract or claim; and neither the Shareholders nor the
Trustees, nor any of the Trust's officers, employees or agents, whether past,
present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts and shall recite 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, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or officers or officer or Shareholders or Shareholder
individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
-------------------------------------------------------------
SECTION 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own wilful 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. 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 or 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.
Liability of Third Persons Dealing with Trustees
------------------------------------------------
17
SECTION 3. 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.
Duration and Termination of Trust
---------------------------------
SECTION 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least 66 2/3% of the Shares entitled to vote or by the
Trustees by written notice to the Shareholders.
Upon termination of the Trust, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be 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 or shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders, ratably according to
the number of Shares held by the several Shareholders on the date of
termination.
Filing of Copies, References, Headings
--------------------------------------
SECTION 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of The Commonwealth of Massachusetts and
with the Clerk of the City of Boston, as well as any other governmental office
where such filing may from time to time be required. Anyone dealing with the
Trust may rely on a certificate by an officer of the Trust as to whether or not
any such 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 amendments. In this instrument and in any such amendment,
references to this instrument, and all expressions like "herein", "hereof" and
"hereunder", shall be deemed to refer to this instrument as amended or affected
by any such 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. This instrument may be executed in
any number of counterparts, each of which shall be deemed an original.
Applicable Law
--------------
SECTION 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Amendments
----------
18
SECTION 7. (a) Except as provided in paragraph (b) of this Section 7, this
Declaration of Trust may be amended at any time by an instrument in writing
signed by a majority of the then Trustees when authorized so to do by a vote of
Shareholders holding a majority of the Shares entitled to vote. Amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
(b) No amendment may be made under this Section 7 which shall amend,
alter, change or repeal any of the provisions of Article IV, Section 1,
Article V, Section 4 or this paragraph (b) unless the amendment effecting
such amendment, alteration, change or repeal shall receive the affirmative
vote or consent of at least 66 2/3% of the Shares entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of
the holders of Shares otherwise required by law or by the terms of any
agreement between the Trust and any national securities exchange.
IN WITNESS WHEREOF, all of the Trustees as aforesaid do hereto set their hands
this 16th day of March, 1989.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK ) ss.
COUNTY OF SUFFOLK
Then personally appeared before me ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., who acknowledged the
foregoing instrument to be his free act and deed.
▇▇▇▇▇ ▇▇▇▇▇
Notary Public
My commission expires on: 3/2/95
March 16, 1989