EXHIBIT 1
AGREEMENT AND DECLARATION OF TRUST
PROVIDIAN SERIES TRUST
TABLE OF CONTENTS
-----------------
Page
----
RECITAL
ARTICLE I
THE TRUST
SECTION 1.1 Name............................................................1
SECTION 1.2 Location........................................................2
SECTION 1.3 Nature of Trust.................................................2
SECTION 1.4 Definitions.....................................................2
ARTICLE II
POWERS OF TRUSTEES
SECTION 2.1 General.........................................................3
SECTION 2.2 Investments.....................................................4
SECTION 2.3 Legal Title.....................................................4
SECTION 2.4 Disposition of Assets...........................................5
SECTION 2.5 Taxes...........................................................5
SECTION 2.6 Rights as Holder of Securities..................................5
SECTION 2.7 Delegation; Committees..........................................6
SECTION 2.8 Collection......................................................6
SECTION 2.9 Expenses........................................................6
SECTION 2.10 Borrowing.......................................................7
SECTION 2.11 Deposits........................................................7
SECTION 2.12 Allocation......................................................7
SECTION 2.13 Valuation.......................................................7
SECTION 2.14 Fiscal Year.....................................................7
SECTION 2.15 Concerning the Trust and Certain Affiliates.....................7
SECTION 2.16 Power to Contract...............................................9
SECTION 2.17 Insurance.......................................................9
SECTION 2.18 Pension and Other Plans........................................10
SECTION 2.19 Seal...........................................................10
SECTION 2.20 Charitable Contributions.......................................10
SECTION 2.21 Indemnification................................................10
SECTION 2.22 Remedies.......................................................10
SECTION 2.23 Separate Accounting............................................10
SECTION 2.24 Further Powers.................................................11
i
ARTICLE III
ADVISER AND DISTRIBUTOR
SECTION 3.1 Appointment....................................................11
SECTION 3.2 Provisions of Agreement........................................11
ARTICLE IV
INVESTMENTS
SECTION 4.1 Statement of Investment Objectives and Policies................11
SECTION 4.2 Restrictions...................................................11
SECTION 4.3 Percentage Restrictions........................................12
SECTION 4.4 Amendment of Investment Objectives and Policies and of Investment
Limitations....................................................12
ARTICLE V
LIMITATIONS OF LIABILITY
SECTION 5.1 Liability to Third Persons.....................................12
SECTION 5.2 Liability to Trust or to Shareholders..........................12
SECTION 5.3 Indemnification................................................12
SECTION 5.4 Surety Bonds...................................................15
SECTION 5.5 Apparent Authority.............................................15
SECTION 5.6 Recitals.......................................................15
SECTION 5.7 Reliance on Experts, etc.......................................15
SECTION 5.8 Liability Insurance............................................15
ARTICLE VI
CHARACTERISTICS OF SHARES
SECTION 6.1 General........................................................15
SECTION 6.2 Division of Beneficial Interest................................16
SECTION 6.3 Evidence of Share Ownership....................................17
SECTION 6.4 Death of Shareholders..........................................18
SECTION 6.5 Repurchase of Shares...........................................18
SECTION 6.6 Trustees as Shareholders.......................................18
SECTION 6.7 Redemption and Stop Transfers for Tax Purposes;
Redemption to Maintain Constant Net Asset Value................18
SECTION 6.8 Information from Shareholders..................................19
SECTION 6.9 Redemptions....................................................19
SECTION 6.10 Suspension of Redemption; Postponement of Payment..............19
SECTION 6.11 Power of Trustees to Change Provisions Relating to Shares......20
SECTION 6.12 Establishment and Designation of Series and Classes............21
ii
ARTICLE VII
RECORD AND TRANSFER OF SHARES
SECTION 7.1 Share Register.................................................24
SECTION 7.2 Transfer Agent.................................................24
SECTION 7.3 Owner of Record................................................24
SECTION 7.4 Transfers of Shares............................................25
SECTION 7.5 Limitation of Fiduciary Responsibility.........................25
SECTION 7.6 Notices........................................................25
ARTICLE VIII
SHAREHOLDERS
SECTION 8.1 Meetings of Shareholders.......................................25
SECTION 8.2 Quorums........................................................26
SECTION 8.3 Notice of Meetings.............................................26
SECTION 8.4 Record Date for Meetings.......................................26
SECTION 8.5 Proxies, etc...................................................26
SECTION 8.6 Reports........................................................27
SECTION 8.7 Inspection of Records..........................................27
SECTION 8.8 Shareholder Action By Written Consent..........................27
SECTION 8.9 Voting Rights of Shareholders..................................27
ARTICLE IX
TRUSTEES
SECTION 9.1 Number and qualification.......................................27
SECTION 9.2 Term and Election..............................................28
SECTION 9.3 Resignation and Removal........................................28
SECTION 9.4 Vacancies......................................................29
SECTION 9.5 Meetings.......................................................29
SECTION 9.6 Officers.......................................................30
SECTION 9.7 By-laws........................................................30
ARTICLE X
DISTRIBUTIONS TO SHAREHOLDERS AND
DETERMINATION OF NET ASSET VALUE AND NET INCOME
SECTION 10.1 General........................................................31
SECTION 10.2 Retained Earnings..............................................31
SECTION 10.3 Source of Distributions........................................31
SECTION 10.4 Net Asset Value................................................31
SECTION 10.5 Power to Modify Valuation Procedures...........................32
iii
ARTICLE XI
CUSTODIAN
SECTION 11.1 Appointment and Duties.........................................32
SECTION 11.2 Central Certificate System.....................................33
ARTICLE XII
RECORDING OF DECLARATION OF TRUST
SECTION 12.1 Recording......................................................33
ARTICLE XIII
AMENDMENT OR TERMINATION OF TRUST
SECTION 13.1 Amendment or Termination.......................................33
SECTION 13.2 Power to Effect Reorganization.................................35
SECTION 13.3 Other Amendments...............................................35
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Governing Law..................................................35
SECTION 14.2 Counterparts...................................................35
SECTION 14.3 Reliance by Third Parties......................................35
SECTION 14.4 Provisions in Conflict with Law or Regulations.................36
SECTION 14.5 Section Headings...............................................36
SECTION 14.6 Construction of 1940 Act.......................................36
SECTION 14.7 Action of Prospectus or Proxy Statement........................36
ARTICLE XV
DURATION OF TRUST
SECTION 15.1 Duration.......................................................37
iv
PROVIDIAN SERIES TRUST
AGREEMENT AND DECLARATION OF TRUST
This Agreement and Declaration of Trust is made the 21st day of October,
1996 by the Trustee(s) hereunder and holders of shares of beneficial interest
issued hereunder and to be issued hereunder as hereinafter provided.
WITNESSETH that:
WHEREAS, the Trustee(s) desire to establish an unincorporated voluntary
association commonly known as a business trust, as described in the provisions
of Chapter 182 of the General Laws of Massachusetts, for the principal purpose
of the investment and reinvestment of funds contributed thereto; and
WHEREAS, the Trustee(s) desire that such trust be a registered open-end
investment company under the Investment Company Act of 1940; and
WHEREAS, it is proposed that the beneficial interest in the trust's assets
shall be divided into transferable shares of beneficial interest, which shall be
evidenced by the Share Register maintained by the trust or its agent, as
hereinafter provided;
NOW, THEREFORE, the Trustee(s) hereby declare that they will hold all
property of every type and description which they are acquiring or may hereafter
acquire as such Trustees, together with the proceeds thereof, in trust, to
manage and dispose of the same for the benefit of the holders of record from
time to time of the Shares being issued and to be issued hereunder and in the
manner and subject to the provisions hereof.
ARTICLE I
THE TRUST
1.1 Name. The name of the trust created by this Declaration of Trust
shall be Providian Series Trust (hereinafter called the "Trust") and so far as
may be practicable the Trustees shall conduct the Trust's activities, execute
all documents and ▇▇▇ or be sued under that name, which name (and the word
"Trust" wherever used in this Declaration of Trust, except where the context
otherwise requires) shall refer to the Trustees in their capacity as Trustees,
and not individually or personally and shall not refer to the officers, agents,
employees or Shareholders of the Trust or of such Trustees. Should the Trustees
determine that the use of such name is not practicable, legal or convenient,
they may use such other designation or they may adopt such other name for the
Trust as they deem proper and the Trust may hold property and conduct its
activities under such designation or name.
1.2 Location. The principal office of the Trust, currently located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, shall be located
henceforth within or without the Commonwealth Massachusetts, as the Trustees may
from time to time determine.
1.3 Nature of Trust. The Trust shall be of the type commonly termed a
business trust. The Trust is not intended to be, shall not be deemed to be and
shall not be treated as, a general partnership, limited partnership, joint
venture, corporation or joint stock company. The Shareholders shall be
beneficiaries and their relationship to the Trustees shall be solely in that
capacity in accordance with the rights conferred upon them hereunder. The Trust
is intended to have the status of a registered open-end investment company under
the Investment Company Act of 1940 and of a "regulated investment company" as
that term is defined in Section 851 of the Internal Revenue Code of 1986, as
amended, and this Declaration of Trust and all actions of the Trustees hereunder
shall be construed in accordance with such intent.
1.4 Definitions. As used in this Declaration of Trust, the following
terms shall have the following meanings unless the context hereof otherwise
requires:
(a) "1940 Act" shall mean the Investment Company Act of 1940, as amended
from time to time.
(b) "Adviser" and "Distributor" shall mean any Person or Persons
appointed, employed or contracted with by the Trustee under the applicable
provisions of Section 3.1 hereof.
(c) "Affiliate" shall have the same meaning as the term Affiliated Person
under the 1940 Act.
(d) "Assignment," "Commission," and "Prospectus" shall have the meanings
given them in the 1940 Act.
(e) "Declaration of Trust" shall mean this Agreement and Declaration of
Trust as may be amended, restated, or modified from time to time.
References in this Declaration of Trust to "Declaration," "hereof,"
"herein," "hereby" and "hereunder" shall be deemed to refer to the
Declaration of Trust and shall not be limited to the particular text,
article, or section in which such words appear.
(f) "Person" shall mean and include individuals, corporations, limited
partnerships, general partnerships, joint stock companies or associations,
joint ventures, associations, companies, trusts, banks, trust companies,
land trusts, business trusts or other entities whether or not legal
entities and governments and agencies and political subdivisions thereof.
2
(g) "Securities" shall mean any stock, shares, voting trust certificates,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise or, in general, any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for,
guarantees of, or any right to subscribe to, purchase or acquire any of the
foregoing.
(h) "Shareholders" shall mean, as of any particular time, all holders of
record of outstanding Shares at such time.
(i) "Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in the Trust or in the Trust
property belonging to any series of the Trust or in any class of Shares of
the Trust (as the context may require) shall be divided from time to time,
as described in Article VI.
(j) "Series Company" shall mean the form of registered open-end investment
company described in Section 18(f)(2) of the 1940 Act or in any successor
statutory provision.
1. The term "Series" refers to series of Shares established and
designated under or in accordance with the provisions of Article VI;
2. The term "Multi-Class Series" refers to series of Shares
established and designated as Multi-Class Series under or in
accordance with the provisions of Article VI; and
3. The terms "Class" and "Class of Shares" refer to the division of
Shares representing any Multi-Class Series into two or more classes in
accordance with the provisions of Article VI.
(k) "Trust Property" shall mean, as of any particular time, any and all
property, real, personal, or otherwise, tangible or intangible, which is
transferred, conveyed or paid to the Trust or Trustees and all income,
profits and gains therefrom and which at such time is owned or held by, or
for the account of, the Trust or the Trustees.
ARTICLE II
POWERS OF TRUSTEES
2.1 General. The Trustees shall have, without other or further
authorization, full, exclusive and absolute power, control and authority over
the Trust Property and over the business of the Trust to the same extent as if
the Trustees were the sole and absolute owners of the Trust Property and
business in their own right, and with such powers of delegation as may be
permitted by this Declaration of Trust. The Trustees may do and perform such
acts and things as in their sole
3
judgment and discretion are necessary and proper for conducting the business and
affairs of the Trust or promoting the interests of the Trust and the
Shareholders. The enumeration of any specific power or authority herein shall
not be construed as limiting the aforesaid power or authority or any specific
power or authority. The Trustees shall have the power to enter into commitments
to make any investment, purchase or acquisition, or to exercise any power
authorized by this Declaration of Trust. Such powers of the Trustees may be
exercised without order of or resort to any court.
2.2 Investments. The Trustees shall have power, subject in all respects
to Article IV hereof,
(a) to conduct, operate and carry on the business of an investment
company; and
(b) for such consideration as they may deem proper, to subscribe for,
invest in, reinvest in, purchase or otherwise acquire, hold, pledge,
sell, assign, transfer, exchange, distribute or otherwise deal in or
dispose of negotiable or nonnegotiable instruments, obligations,
evidences of indebtedness, bankers' acceptances, certificates of
deposit or indebtedness, commercial paper, securities subject to
repurchase agreements and other money market securities, including,
without limitation, those issued, guaranteed or sponsored by the
United States Government or its agencies or instrumentalities, or
international instrumentalities, or by any of the several states of
the United States of America or their political subdivisions, agencies
or instrumentalities, or any bank or savings institution, or by any
corporation organized under the laws of the United States or of any
state, territory or possession thereof, or by corporations organized
under foreign laws; marketable straight debt securities; securities
(payable in U.S. dollars) of, or guaranteed by, the government of
Canada or of a Province of Canada; common stock, securities
convertible into common stock, purchase rights, warrants and options;
and nothing herein shall be construed to mean the Trustees shall not
have the foregoing powers with respect to any Securities in which the
Trust may invest in accordance with Article IV hereof.
In the exercise of their powers, the Trustees shall not be limited,
except as otherwise provided hereunder, to investing in Securities
maturing before the possible termination of the Trust, nor shall the
Trustees be limited by any law now or hereafter in effect limiting the
investments which may be held or retained by trustees or other
fiduciaries, but they shall have full authority and power to make any
and all investments within the limitations of this Declaration of
Trust, that they, in their absolute discretion, shall determine, and
without liability for loss, even though such investments shall be of a
character or in amount not considered proper for the investment of
trust funds.
4
2.3 Legal Title. Legal title to all the Trust Property shall be vested in
the Trustees as joint tenants and held by and transferred to the Trustees,
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 with
suitable reference to their trustee status, or in the name of the Trust, or in
the name of any other Person as nominee, on such terms, in such manner and with
such powers as the Trustees may determine, so long as in their judgment the
interest of the Trust is adequately protected.
The right, title and interest of the Trustees in and to the Trust Property
shall vest automatically in all persons who may hereafter become Trustees upon
their due election and qualification without any further act. Upon the
resignation, removal or death of a Trustee, he (and in the event of his death,
his estate) shall automatically cease to have any right, title or interest in or
to any of the Trust Property, and the right, title and interest of such Trustee
in and to the Trust Property shall vest automatically in the remaining Trustees
without any further act. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
2.4 Disposition of Assets. Subject in all respects to Article IV hereof,
the Trustees shall have power to sell, lease, exchange or otherwise dispose of
or grant options with respect to any and all Trust Property free and clear of
any and all trusts, at public or private sale, for cash or on terms, without
advertisement, and subject to such restrictions, stipulations, agreements and
reservations as they shall deem proper, and to execute and deliver any deed or
other instrument in connection with the foregoing. The Trustees shall also have
the power, subject in all respects to Article IV hereof, to:
(a) rent, lease or hire from others for terms which may extend beyond
the termination of this Declaration of Trust any property or
rights to property, real, personal or mixed, tangible or
intangible, and, except for real property, to own, manage, use
and hold such property and such rights;
(b) give consents and make contracts relating to Trust Property or
its use;
(c) grant security interests in or otherwise encumber Trust Property
in connection with borrowings; and
(d) release any Trust Property.
2.5 Taxes. The Trustees shall have power to pay all taxes or assessments,
of whatever kind or nature, imposed upon or against the Trust or the Trustees in
connection with the Trust Property or upon or against the Trust Property or
income or any part thereof, to settle and compromise disputed tax liabilities
and, for the foregoing purposes, to make such returns and do all other such acts
and things as may be deemed by the Trustees to be necessary or desirable.
5
2.6 Rights as Holder of Securities. The Trustees shall have the power to
exercise all the rights, powers and privileges appertaining to the ownership of
all or any Securities or other property forming part of the Trust Property to
the same extent that any individual might, and, without limiting the generality
of the foregoing, to vote or give any consent, request or notice or waive any
notice either in person or by proxy or power of attorney with or without power
of substitution, to one or more Persons, which proxies and powers of attorney
may be for meetings or action generally or for any particular meetings or
action, and may include the exercise of discretionary powers.
2.7 Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust, the
conduct of its affairs and the management and disposition of Trust Property, to
delegate from time to time to such one or more of their number (who may be
designated as constituting a Committee of the Trustees) or to officers,
employees or agents of the Trust the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the Trustees or
as their attorney or attorneys or otherwise as the Trustees may from time to
time deem expedient.
2.8 Collection. The Trustees shall have power to collect, ▇▇▇ for,
receive and receipt for all sums of money or other property due to the Trust, to
consent to extensions of the time for payment, or to the renewal of any
Securities or obligations; to engage or intervene in, prosecute, defend,
compound, compromise, abandon or adjust by arbitration or otherwise any actions,
suits, proceedings, disputes, claims, demands or things relating to the Trust
Property; to foreclose any Security or other instrument securing any notes,
debentures, bonds, obligations or contracts, by virtue of which any sums of
money are owed to the Trust; to exercise any power of sale held by them, and to
convey good title thereunder free of any and all trusts, and in connection with
any such foreclosure or sale, to purchase or otherwise acquire title to any
property; to be parties to reorganization and to transfer to and deposit with
any corporation, committee, voting trustee or other Person any Securities or
obligations of any corporation, trust, association or other organization, the
Securities of which form a part of the Trust Property, for the purpose of any
reorganization of any such corporation, trust, association or other
organization, or otherwise, to participate in any arrangement for enforcing or
protecting the interests of the Trustees as the owners or holders of such
Securities or obligations and to pay any assessment levied in connection with
such reorganization or arrangement; to extend the time (with or without
security) for the payment or delivery of any debts or property and to execute
and enter into releases, agreements and other instruments; and to pay or satisfy
any debts or claims upon any evidence that the Trustees shall think sufficient.
2.9 Expenses. The Trustees shall have power to incur and pay any charges
or expenses which, in the opinion of the Trustees, are necessary or incidental
to or proper for carrying out any of the purposes of this Declaration of Trust,
and to reimburse others for the payment therefor, and to pay appropriate
compensation or fees from the funds of the Trust to themselves as Trustees and
to Persons with whom the Trust has contracted or transacted business. The
Trustees shall fix the compensation of all officers, employees and Trustees. The
Trustees may be paid reasonable compensation for their general services as
Trustees and officers hereunder, and the Trustees may pay themselves or any one
or more of themselves such compensation for special services, including legal
6
services, as they in good faith may deem reasonable and reimbursement for
expenses reasonably incurred by themselves or any one or more of themselves on
behalf of the Trust. Each Series or Class must pay the expenses directly
attributable to it. However, to the extent that the Trustees can effect cost
savings by the sharing of expenses they are authorized to do so. Such general
administrative expenses will be allocated on the basis of the asset size of the
respective Series or Class.
2.10 Borrowing. The Trustees shall have power to borrow money only to the
extent, for the purposes and in the manner authorized by Article IV hereof.
2.11 Deposits. The Trustees shall have power to deposit any monies or
Securities included in the Trust Property with one or more banks, trust
companies or other banking institutions whether or not such deposits will draw
interest. Such deposits are to be subject to withdrawal in such manner as the
Trustees may determine, and the Trustees shall have no responsibility for any
loss which may occur by reason of the failure of the bank, trust company or
other banking institution with whom the monies or Securities have been
deposited.
2.12 Allocation. The Trustees shall have power to determine whether
monies or other assets received by the Trust shall be charged or credited to
income or capital or allocated between income and capital, including the power
to amortize or fail to amortize any part or all of any premium or discount, to
treat any part or all the profit resulting from the maturity or sale of any
asset, whether purchased at a premium or at a discount, as income or capital or
apportion the same between income and capital, to apportion the sale price of
any asset between income and capital and to determine in what manner any
expenses or disbursements are to be borne as between income and capital, whether
or not in the absence of the power and authority conferred by this Section 2.12,
such assets would be regarded as income or as capital or such expense or
disbursement would be charged to income or to capital; to treat any dividend or
other distribution on any investment as income or capital or apportion the same
between income and capital; to provide or fail to provide reserves for
depreciation, amortization or obsolescence in respect of any Trust Property in
such amounts and by such methods and for such purposes as they shall determine,
and to allocate to the share of beneficial interest account less than all of the
consideration received for Shares and to allocate the balance thereof to paid-in
capital, all as the Trustees may reasonably deem proper.
2.13 Valuation. The Trustees shall have power to determine in good faith,
conclusively, the value of any of the Trust Property and of any services,
Securities, assets or other consideration hereafter to be acquired or disposed
of by the Trust, and to revalue the Trust Property.
2.14 Fiscal Year. The Trustees shall have power to determine the fiscal
year of the Trust and the method or form in which its accounts shall be kept
and, from time to time, to change the fiscal year or method or form of accounts.
7
2.15 Concerning the Trust and Certain Affiliates.
(a) The Trust may enter into transactions with any Affiliate of the Trust
or the Adviser or any Affiliate of any Trustee, director, officer or
employee of the Trust or of the Adviser if (i) each such transaction
has, after disclosure of such affiliation, been approved or ratified
by the affirmative vote of a majority of the Trustees, including a
majority of the Trustees who are not Affiliates of any Person (other
than the Trust) who is a party to the transaction with the Trust, (ii)
such transaction is, in the opinion of the Trustees, on terms fair and
reasonable to the Trust and the Shareholders and at least as favorable
to them as similar arrangements for comparable transactions (of which
the Trustees have knowledge) with organizations unaffiliated with the
Trust or with the Person who is a party to the transaction with the
Trust, and (iii) such transaction is in accordance with the 1940 Act
or an exemption granted thereunder.
(b) Except as otherwise provided by this Declaration of Trust and in the
absence of fraud, a contract, act or other transaction, between the
Trust and any other Person, or in which the Trust is interested, is
valid and no Trustee, officer, employee or agent of the Trust has any
liability as a result of entering into any such contract, act or
transaction even though (i) one or more of the Trustees, officers,
employees or agents of the Trust is directly or indirectly interested
in or affiliated with, or are trustees, partners, directors,
employees, officers or agents of such other Person, or (ii) one or
more of the Trustees, officers, employees or agents of the Trust,
individually or jointly with others, is a party or are parties to, or
directly interested in, or affiliated with, such contract, act or
transaction, provided that (A) such interest or affiliation is
disclosed to the Trustees and the Trustees authorized such contract,
act or other transaction by a vote of a majority of the unaffiliated
Trustees, or (B) such interest or affiliation is disclosed to the
Shareholders, and such contract, act or transaction is approved by the
Shareholders.
(c) Any Trustee or officer, employee or agent of the Trust may acquire,
own, hold and dispose of Shares for his individual account, and may
exercise all rights of a holder of such Shares to the same extent and
in the same manner as if he were not such a Trustee or officer,
employee or agent. The Trustees shall use their best efforts to obtain
through the Adviser or other Persons a continuing and suitable
investment program, consistent with the policies and objectives of
each Series or Class. Any Trustee or officer, employee or agent of the
Trust may, in his personal capacity, or in a capacity as trustee,
officer, director, stockholder, partner, member, adviser or employee
of any Person, have business interests and engage in business
activities in addition to those relating to the Trust, which interests
and activities may be similar to those of
8
the Trust and include the acquisition, syndication, holding,
management, operation or disposition, of his own account or for the
account of such Person, and each Trustee, officer, employee and agent
of the Trust shall be free of any obligation to present to the Trust
any investment opportunity which comes to him in any capacity other
than solely as Trustee, officer, employee or agent of the Trust, even
if such opportunity is of a character which, if presented to the
Trust, could be taken by the Trust.
Subject to the provisions of Article III hereof, any Trustee or
officer, employee or agent of the Trust may be interested as Trustee,
officer, director, stockholder, partner, member, adviser or employee
of, or otherwise have a direct or indirect interest in, any Person who
may be engaged to render advice or services to the Trust, and may
receive compensation from such Person as well as compensation as
Trustee, officer, employee or agent of the Trust or otherwise
hereunder. None of the activities referred to in this paragraph shall
be deemed to conflict with his duties and powers as Trustee, officer,
employee or agent of the Trust. To the extent that any other provision
of this Declaration of Trust conflicts with, or is otherwise contrary
to, the provisions of this Section 2.15 the provisions of this Section
shall be deemed controlling.
2.16 Power to Contract. Subject to the provisions of Sections 2.7 and 3.1
hereof with respect to delegation of authority by the Trustees, the Trustees
shall have power to appoint, employ or contract with any Person (including one
or more of themselves) and any corporation, partnership or trust of which one or
more of them may be an Affiliate, subject to the applicable, requirements of
Section 2.15 hereof as the Trustees may deem necessary or desirable for the
transaction of the business of the Trust, including any Person, who, under the
supervision of the Trustees, may, among other things: serve as the Trust's
investment adviser and consultant in connection with policy decisions made by
the Trustees; furnish reports to the Trustees and provide research, economic and
statistical data in connection with the Trust's investments; act as consultants,
accountants, technical advisers, attorneys, brokers, underwriters, corporate
fiduciaries, escrow agents, depositories, custodians or agents for collection,
insurers or insurance agents, transfer agents or registrars for Shares or in any
other capacity deemed by the Trustees necessary or desirable; investigate,
select, and, on behalf of the Trust, conduct relations with Persons acting in
such capacities and pay appropriate fees to, and enter into appropriate
contracts with, or employ, or retain services performed or to be performed by,
any of them in connection with the investments acquired, sold, or otherwise
disposed of, or committed, negotiated, or contemplated to be acquired, sold or
otherwise disposed of; substitute any other Person for any such Person; act as
attorney-in-fact or agent in the purchase or sale or other disposition of
investments, and in the handling, prosecuting or settling of any claims of the
Trust, including, the foreclosure or other enforcement of any lien or security
securing investments; and assist in the performance of such ministerial
functions necessary in the management of the Trust as may be agreed upon with
the Trustees or officers of the Trust.
9
2.17 Insurance. The Trustees shall have the power to purchase and pay
for, entirely out of Trust Property, insurance policies insuring the
Shareholders, Trustees, officers, employees, agents, investment advisers,
including the Adviser 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 independent contractor,
including any action taken or omitted that may be determined to constitute
negligence. However, such policies shall not pay or reimburse any director,
officer, investment adviser or principal underwriter for any liability arising
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties. Such policies are to set forth a reasonable and fair means
for determining whether payment or reimbursement shall be made.
2.18 Pension and Other Plans. The Trustees shall have the power to pay
pensions for faithful service, as deemed appropriate by the Trustees, and to
adopt, establish and carry out pension, profit-sharing, savings, thrift and
other retirement, incentive and benefit plans, trust, and provisions, including,
without limitation, 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.
2.19 Seal. The Trustees shall have the power to adopt and use a seal for
the Trust, but, unless otherwise required by the Trustees, it shall not be
necessary for the seal to be placed on, and its absence shall not impair the
validity of, any document, instrument or other paper executed and delivered by
or on behalf of the Trust.
2.20 Charitable Contributions. The Trustees shall have the power to make
donations, irrespective of benefit to the Trust, for the public welfare or for
community fund, hospital, charitable, religious, educational, scientific,
literary, civic or similar purpose and, in time of war or other national
emergency, in aid thereof.
2.21 Indemnification. In addition to the mandatory indemnification
provided for in Section 5.3 hereof, the Trustees shall have power, to the extent
permitted by law, to indemnify or enter into agreements with respect to
indemnification with any Person with whom the Trust has dealings, including,
without limitation, any investment adviser, including the Adviser, or any
principal underwriter, including the Distributor, or independent contractor, to
such extent as the Trustees shall determine.
2.22 Remedies. Notwithstanding any provision in this Declaration of
Trust, when the Trustees deem that there is a significant risk that an obligor
to the Trust may default or is in default under the terms of any obligation to
the Trust, the Trustees shall have power to pursue any remedies permitted by law
which, in their sole judgment, are in the interests of the Trust, and the
Trustees shall have the power to enter into any investment, commitment or
obligation of the Trust resulting from the pursuit of such remedies as are
necessary or desirable to dispose of property acquired in the pursuit of such
remedies.
10
2.23 Separate Accounting. The Trustees shall establish the books and
records for each Series and maintain such records separately as if each Series
were a separate legal entity.
2.24 Further Powers. The Trustees shall have power to do all such other
matters and things and execute all such instruments as they deem necessary,
proper or desirable in order to carry out, promote or advance the interests of
the Trust although such matters or things are not herein specifically mentioned.
Any determination as to what is in the best interests of the Trust made by the
Trustees in good faith shall be conclusive. In construing the provisions of this
Declaration of Trust, the presumption shall be in favor of a grant of power to
the Trustees. The Trustees will not be required to obtain any court order to
deal with the Trust Property.
ARTICLE III
ADVISER AND DISTRIBUTOR
3.1 Appointment. The Trustees are responsible for the general investment
policy of the Trust, the distribution of its Shares and for the general
supervision of the business of the Trust conducted by officers, agents,
employees, investment advisers, distributors or independent contractors of the
Trust. However, the Trustees are not required personally to conduct all of the
business of the Trust and, consistent with their ultimate responsibility as
stated herein, the Trustees may appoint, employ or contract with an investment
adviser (the "Adviser") and/or a distributor and underwriter for the Trust's
Shares (the "Distributor"), and may grant or delegate such authority to the
Adviser and/or Distributor (pursuant to the terms of Section 2.16 hereof) or to
any other Person the services of whom are obtained by the Adviser or
Distributor, as the Trustees may, in their sole discretion, deem to be necessary
or desirable, without regard to whether such authority is normally granted or
delegated by trustees.
3.2 Provisions of Agreement. The Trustees shall not enter into any
agreement with the Adviser or Distributor pursuant to the provisions of Section
3.1 hereof unless such agreement is consistent with the provisions of Section 15
of the 1940 Act.
ARTICLE IV
INVESTMENTS
4.1 Statement of Investment Objectives and Policies. The Trustees shall
be guided in their actions by the Investment Objectives and Policies as set
forth in the most current effective registration statement for the Trust as
filed with the Securities and Exchange Commission. Because the Trust is divided
into separate Series, the Trustees shall supervise the investments and the
record-keeping for each Series within the Trust as if it was a separate legal
entity. In addition to any other power granted to the Trustees, the Trustees
may, as they deem appropriate, provide for additional Series or Classes in a
manner consistent with the Investment Company Act.
4.2 Restrictions. Notwithstanding anything in this Declaration of Trust
which may be deemed to authorize the contrary, the Trust, with respect to each
Series, shall conduct its affairs in
11
accordance with the Investment Limitations (Restrictions) as set forth in the
most current, effective registration statement for the Trust as filed with the
Securities and Exchange Commission.
4.3 Percentage Restrictions. If the percentage restrictions as set forth
in the Investment Limitation described in Section 4.2 above are adhered to at
the time of each investment, a later increase or decrease in percentage
resulting from a change in the value of a Series' assets is not a violation of
such investment restrictions.
4.4 Amendment of Investment Objectives and Policies and of Investment
Limitations. The Investment Objectives and policies and the Investment
Limitations are deemed to be fundamental policies and may not be changed without
the approval of the holders of a majority of the outstanding voting Shares of
each Series affected which, for purpose herein, shall mean the lesser of (i) 67%
of the Shares represented at a meeting which more than 50% of the outstanding
Shares are represented or (ii) more than 50% of the outstanding Shares. A change
in policy affecting only one Series may be effected only with the approval of a
majority of the outstanding Shares of such Series.
ARTICLE V
LIMITATIONS OF LIABILITY
5.1 Liability to Third Persons. No Shareholder shall be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any other
Person or Persons in connection with the Trust Property or the affairs of the
Trust; and no Trustee, officer, employee or agent of the Trust shall be subject
to any personal liability whatsoever, in tort, contract or otherwise; to any
other Person or Persons in connection with Trust Property or the affairs of the
Trust, except for that arising from his bad faith, willful misconduct, gross
negligence or reckless disregard of his duties or for his Failure to act in good
faith in the reasonable belief that his action was in the best interest of the
Trust; and all such other Persons shall look solely to the Trust Property for
satisfaction of claims of any nature arising in connection with the affairs of
the Trust. If any Shareholder, Trustee, officer, employee or agent, as such, of
the Trust is made a party to any suit or proceedings to enforce any such
liability, he shall not on account thereof be held to any personal liability.
5.2 Liability to Trust or to Shareholders. No Trustee, officer, employee
or agent of the Trust shall be liable to the Trust or to any Shareholder,
Trustee, officer, employee or agent of the Trust for any action or failure to
act (including, without limitation, the failure to compel in any way any former
or acting Trustee to redress any breach of trust) except for his own bad faith,
willful misfeasance, gross negligence or reckless disregard for his duties.
12
5.3 Indemnification.
---------------
(a) The Trust shall indemnify and hold each Shareholder harmless from
and against all claims and liabilities, whether they proceed to
judgment or are settled or otherwise brought to a conclusion, to which
such Shareholder may become subject by reason of his being or having
been a Shareholder, and shall reimburse such Shareholder for all legal
and other expenses reasonably incurred by him in connection with any
such claim or liability. The rights accruing to a Shareholder under
this Section 5.3 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or reimburse a
Shareholder in any appropriate situation even though not specifically
provided herein; provided, however, that the Trust shall have no
liability to reimburse Shareholders for taxes assessed against them by
reason of their ownership of Shares, nor for any losses suffered by
reason of changes in the market value of Shares.
(b) (1) As used in this subsection (b) of this Section 5.3, the
following terms shall have the meanings set forth below:
(i) the term "indemnitee" shall mean any present or former
Trustee, officer or employee of the Trust, any present or former
Trustee or officer of another trust or corporation whose
securities are or were owned by the Trust or of which the Trust
is or was a creditor and who served or serves in such capacity at
the request of the Trust, any present or former investment
adviser, sub-adviser or principal underwriter of the Trust and
the heirs, executors, administrators, successors and assigns of
any of the foregoing; however, whenever conduct by an indemnitee
is referred to, the conduct shall be that of the original
indemnitee rather than that of the heir, executor, administrator,
successor or assignee;
(ii) the term "covered proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, to which an indemnitee
is or was a party or is threatened to be made a party by reason
of the fact or facts under which he or it is an indemnitee as
defined above;
(iii) the term "disabling conduct" shall mean willful
misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of the office in question;
13
(iv) the term "covered expenses" shall mean expenses (including
attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by an indemnitee in connection
with a covered proceeding; and
(v) the term "adjudication of liability" shall mean, as to any
covered proceeding and as to any indemnitee, an adverse
determination as to the indemnitee whether by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent.
(2) The Trust shall not indemnify any indemnitee for any covered
expenses in any covered proceeding if there has been an adjudication
of liability against such indemnitee expressly based on a finding of
disabling conduct.
(3) Except as set forth in (2) above, the Trust shall indemnify any
indemnitee for covered expenses in any covered proceeding, whether or
not there is an adjudication of liability as to such indemnitee, if a
determination has been made that the indemnitee was not liable by
reason of disabling conduct by (i) a final decision of the court or
other body before which the covered proceeding was brought; or (ii) in
the absence of such decision, a reasonable determination, based on a
review of the facts, by either (A) the vote of a majority of a quorum
of Trustees who are neither "interested persons", as defined in the
1940 Act nor parties to the covered proceeding or (B) an independent
legal counsel in a written opinion; provided that such Trustees or
counsel, in reaching such determination, may but need not presume the
absence of disabling conduct on the part of the indemnitee by reason
of the manner in which the covered proceeding was terminated.
(4) Covered expenses incurred by an indemnitee in connection with a
covered proceeding shall be advanced by the Trust to an indemnitee
prior to the final disposition of a covered proceeding upon the
request of the indemnitee for such advance and the undertaking by or
on behalf of the indemnitee to repay the advance unless it is
ultimately determined that the indemnitee is entitled to
indemnification thereunder, but only if one or more of the following
is the case: (i) the indemnitee shall provide a security for each
undertaking; (ii) the Trust shall be insured against losses arising
out of any lawful advances; or (iii) there shall have been a
determination, based on a review of the readily available facts (as
opposed to a full trial-type inquiry) that there is a reason to
believe that the indemnitee ultimately will be found entitled to
indemnification by either independent legal counsel in a written
opinion or by the vote of a majority of a quorum of trustees who are
neither
14
"interested persons" as defined in the 1940 Act nor parties to the
covered proceeding.
(5) Nothing herein shall be deemed to affect the right of the Trust
and/or any indemnitee to acquire and pay for any insurance covering
any or all indemnitees to the extent permitted by the 1940 Act or to
affect any other indemnification rights to which any indemnitee may be
entitled to the extent permitted by the ▇▇▇▇ ▇▇▇.
5.4 Surety Bonds. No Trustee shall, as such, be obligated to give any
bond or surety or other security for the performance of his duties.
5.5 Apparent Authority. No purchaser, lender, transfer agent or other
Person dealing with the Trustees or any officer, employee or agent of the Trust
shall be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by such officer, employee or agent or
make inquiry concerning or be liable for the application of money or property
paid, loaned or delivered to or on the order of the Trustees or of such officer,
employee or agent.
5.6 Recitals. Any written instrument creating an obligation of the Trust
shall be conclusively taken to have been executed or done by a Trustee or
Trustees or an officer, employee or agent of the Trust only in their or his
capacity as Trustees or Trustee under this Declaration of Trust or in the
capacity of officer, employee or agent of the Trust. Any written instrument
creating an obligation of the Trust shall refer to this Declaration of Trust and
contain a recital to the effect that the obligations thereunder are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, Shareholders, officers, employees or agents of the Trust, but
the Trust Property or a specific portion thereof only shall be bound, and may
contain any further recital which they or he may deem appropriate, but the
omission of such recital shall not operate to impose personal liability on any
of the Trustees, Shareholders, officers, employees or agents of the Trust.
5.7 Reliance on Experts, etc. Each Trustee and each officer of the Trust
shall, in the performance of his duties, be fully and completely justified and
protected with regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the Trust, upon an
opinion of counsel or upon reports made to the Trust by any of its officers or
employees or by the Adviser, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees or officers of the
Trust, regardless of whether such counsel or expert may also be a Trustee.
5.8 Liability Insurance. The Trustees shall, at all times, maintain
insurance for the protection of the Trust Property, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover all foreseeable tort liability to the extent available at
reasonable rates.
15
ARTICLE VI
CHARACTERISTICS OF SHARES
6.1 General. The ownership of the Trust Property of every description and
the right to conduct any business hereinbefore described are vested exclusively
in the Trustees, and the Shareholders shall have no interest therein other than
the beneficial interest conferred by their Shares, and they shall have no right
to call for any partition or division of any property, profits, rights or
interests of the Trust nor can they be called upon to share or assume any losses
of the Trust or suffer an assessment of any kind by virtue of their ownership of
Shares, except as provided in Section 10.5 hereof. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration of
Trust.
6.2 Division of Beneficial Interest. The beneficial interest in the Trust
shall at all times be divided into an unlimited number of transferable Shares,
having no par value. The Shares of the Trust shall be issued in one or more
Series or Classes, as the Trustees may, without Shareholder approval, authorize.
The Shares shall have the characteristics set forth in (a) through and including
(f) below. The Trustees may from time to time divide or combine the Shares of
each Series or Class into a greater or lesser number without thereby changing
the proportionate beneficial interest of that Series or Class in the assets
belonging to that Series or Class, attributable to that Series or Class, or in
any way affecting the rights of Shares of any other Series or Class. Except as
provided in Section 6.12 of this Article VI, with respect to Shares of Multi-
Class Series, no Share shall have priority of preference over another.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or multiple thereof. The Board of
Trustees may classify unissued Shares into one or more additional Series or
Classes which shall, together with the issued Shares of each Series or Class,
have such designations as the Trustees may determine and shall, subject to any
applicable rule, regulation or order of the Commission or other applicable law
or regulation, have the characteristics set forth in (a) through and including
(f) below.
(a) All consideration received by the Trust for the issue or sale of
Shares of each Series or Class, together with all income, earnings,
profits and proceeds thereof, including any proceeds derived from the
sale, exchange or liquidation thereof, and any funds or payments
derived from any reinvestment of such proceeds in whatever form the
same may be, shall, for all purposes, irrevocably belong to the Series
or Class with respect to which such assets, payments, or funds were
received by the Trust, subject only to the rights of creditors, and
shall be so handled upon the books of account of the Trust. Such
assets, income, earnings, profits and proceeds thereof, any asset
derived from any reinvestment of such proceeds, in whatever form the
same may be, are herein referred to as "assets belonging to" such
Series or Class.
16
(b) Dividends or distributions on Shares of any Series or Class, whether
payable in Shares or cash, shall be paid only out of earnings, surplus
or other assets belonging to such Series or Class.
(c) In the event of the liquidation or dissolution of the Trust,
Shareholders of each such Series or Class shall be entitled to
receive, as a class, out of the assets of the Trust available for
distribution to Shareholders, but other than general assets not
belonging to any particular Series or Class, the assets belonging to
such Series or Class; and the assets so distributable to the
Shareholders of any such Class shall be distributed among such
Shareholders in proportion to the number of Shares of such Series or
Class held by them and recorded on the books of the Trust. In the
event that there are any general assets not belonging to any
particular Series or Class and available for distribution, such
distribution shall be made to the holders of Shares of all Series and
Classes in proportion to the asset value of the respective Series or
Class.
(d) The assets belonging to any such Series or Class shall be charged with
the liabilities in respect to such Series or Class and shall be
charged with their share of the general liabilities of the Trust. The
determination of the Trustees shall be conclusive as to the amount of
liabilities, including accrued expenses and reserves, and as to the
allocation of the same as to a given Series or Class, and as to
whether the same, or general assets of the Trust, are allocable to one
or more Series or Class. The liabilities so allocated are herein
referred to as "liabilities belonging to" such Series or Class.
(e) At all meetings of Shareholders, each Shareholder of each Share of
each Series or Class shall be entitled to one vote for each Share,
irrespective of the Series or Class, standing in his name on the books
of the Trust, except that where a vote of the holders of the Shares of
any Series or Class, or of more than one Series or Class, voting by
Series or Class, is required by the 1940 Act and/or Massachusetts law
as to any proposal, only the holders of such Series or Class(es),
voting by Series or Class, shall be entitled to vote upon such
proposal and the holders of any other Series or Class(es) shall not be
entitled to vote thereon. Any fractional Share, if any such fractional
Shares are outstanding, shall carry proportionately all the rights of
a whole Share, including the right to vote and the right to receive
dividends. There shall be no cumulative voting rights with respect to
any Shares or Series or Class of the Trust.
(f) When the Trust has more than one Series or Class: (i) the redemption
rights provided to the holders of the Trust's Shares in Section 6.9
shall be deemed to apply only to the assets belonging to the Series or
Class in question; and
17
(ii) the net asset value per Share computation as provided for in
Section 10.4 shall be applied as if each Series or Class were the
Trust as referred to in such computation, but with its assets limited
to the assets belonging to such Series or Class and its liabilities
limited to the liabilities belonging to such Series or Class.
6.3 Evidence of Share Ownership. Evidence of Share ownership shall be
reflected in the Share register maintained by or on behalf of the Trust pursuant
to Section 7.1 hereof, and the Trust shall not be required to issue certificates
as evidence of Share ownership; provided, however, that the Trustees may, in
their discretion, authorize the use of certificates as a means of evidencing the
ownership of Shares by setting forth in the Trust's By-laws or in a resolution,
provisions for the form of certificates and regulations governing their
execution, issuance and transfer. Subject to Section 6.7 hereof, such
certificates shall be treated as negotiable and title thereto and to the Shares
represented thereby shall be transferred by delivery thereof to the same extent
in all respects as a stock certificate, and the Shares represented thereby, of a
Massachusetts business corporation.
6.4 Death of Shareholders. The death of a Shareholder during the
continuance of the Trust shall not terminate this Declaration of Trust nor give
such Shareholder's legal representatives a right to an accounting or to take any
action in the courts or otherwise against other Shareholders or the Trustees or
the Trust Property, but shall simply entitle the legal representatives of the
deceased Shareholder to require the recordation of such legal representative's
ownership of or rights in the deceased Shareholder's Shares, and, upon the
acceptance thereof, such legal representative shall succeed to all the rights of
the deceased Shareholder under this Declaration of Trust.
6.5 Repurchase of Shares. The Trustees may, on behalf of the Trust,
purchase or otherwise acquire outstanding Shares from time to time for such
consideration and on such terms as they may deem proper. Shares so purchased or
acquired by the Trustees for the account of the Trust shall not, so long as they
belong to the Trust, receive distributions (other than, at the option of the
Trustees, distributions in Shares) or be entitled to any voting rights. Such
Shares may, in the discretion of the Trustees, be canceled and the number of
Shares issued thereby reduced, or such Shares may, in the discretion of the
Trustees, be held in the treasury and may be disposed of by the Trustees at such
time or times, to such party or parties and for such considerations as the
Trustees may determine.
6.6 Trustees as Shareholders. Any Trustee in his individual capacity may
purchase and otherwise acquire or sell and otherwise dispose of Shares or other
Securities issued by the Trust, and may exercise all the rights of a Shareholder
to the same extent as though he were not a Trustee.
6.7 Redemption and Stop Transfers for Tax Purposes; Redemption to Maintain
Constant Net Asset Value. If the Trustees shall, at any time and in good faith,
be of the opinion that direct or indirect ownership of Shares or other
Securities of the Trust has or may become concentrated in any person to an
extent which would disqualify the Trust as a regulated investment company under
the Internal Revenue Code, then the Trustees shall have the power by lot or
other means deemed
18
equitable by them (i) to call for redemption a number, or principal amount, of
Shares or other Securities of the Trust sufficient, in the opinion of the
Trustees, to maintain or bring the direct or indirect ownership of Shares or
other Securities of the Trust into conformity with the requirements for such
qualification and (ii) to refuse to transfer or issue Shares or other Securities
of the Trust to any Person whose acquisition of the Shares or other Securities
of the Trust in question would, in the opinion of the Trustees, result in such
disqualification. The redemption shall be effected at a redemption price
determined in accordance with Section 6.9.
The Shares of the Trust shall also be subject to redemption pursuant to the
procedure for reduction of outstanding Shares set forth in Section 10.5 hereof
in order to maintain the constant net asset value per Share.
6.8 Information from Shareholders. The holders of Shares or other
securities of the Trust shall, upon demand, disclose to the Trustees in writing
such information with respect to direct and indirect ownership of Shares or
other Securities of the Trust, as the Trustees reasonably deem necessary, to
comply with the provisions of the Internal Revenue Code, or to comply with the
requirements of any other taxing authority.
6.9 Redemptions. All outstanding Shares may be redeemed at the option of
the holders thereof, upon and subject to the terms and conditions provided in
this Declaration of Trust. The Trust shall, upon application of any Shareholder,
redeem or repurchase from such Shareholder outstanding Shares for an amount per
Share determined by the application of a formula adopted for such purpose by the
Trustees (which formula shall be consistent with the 1940 Act and the rules and
regulations promulgated thereunder); provided that such amount per Share shall
not exceed the cash equivalent of the proportionate interest of each Share in
the assets of the Trust at the time of the purchase or redemption. The
procedures for effecting redemption shall be as adopted by the Trustees and set
forth in the Prospectus from time to time.
6.10 Suspension of Redemption: Postponement of Payment. The Trustees may
suspend the right of redemption or postpone the date of payment for the whole or
any part of any period (i) during which the New York Stock Exchange is closed
other than customary weekend and holiday closings, (ii) during which trading on
the New York Stock Exchange is restricted, (iii) during which an emergency
exists as a result of which disposal by the Trust of Securities owned by it is
not reasonably practicable or it is not reasonably practicable for the Trust to
determine fairly the value of its net assets, or (iv) during any other period
when the Securities and Exchange Commission (or any succeeding governmental
authority) may for the protection of security holders of the Trust by order
permit suspension of the right of redemption or postponement of the date of
payment on redemption; provided that applicable rules and regulations of the
Commission (or any succeeding governmental authority) shall govern as to whether
the conditions prescribed in (ii), (iii) or (iv) exist. Such suspensions shall
take effect at such time as the Trustees shall specify but not later than the
close of business on the business day next following the declaration of
suspension, and thereafter there shall be no right of redemption or payment
until the Trustees shall declare the suspension at an end, except that the
suspension shall terminate in any event on the first day on which said stock
19
exchange shall have reopened or the period specified in (ii), (iii), or (iv)
shall have expired (as to which in the absence of an official ruling by said
Commission or succeeding authority, the determination of the Trustees shall be
conclusive). In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the net asset value existing after the termination of the suspension.
6.11 Power of Trustees to Change Provisions Relating to Shares.
---------------------------------------------------------
(a) Notwithstanding any other provisions of this Declaration of Trust and
without limiting the power of the Trustees to amend the Declaration of
Trust as provided elsewhere herein, the Trustees shall have the power
to amend this Declaration of Trust, at any time and from time to time,
in such manner as the Trustees may determine in their sole discretion,
without the need for Shareholder action, so as to add to, delete,
replace or otherwise modify any provisions relating to the Shares
contained in this Declaration of Trust for the purpose of responding
to or complying with any regulations, orders, rulings or
interpretations of any governmental agency or any laws, now or
hereafter applicable to the Trust, provided that before adopting any
such amendment without Shareholder approval the Trustees shall
determine that it is consistent with the fair and equitable treatment
of all Shareholders.
(b) The Trustees may designate or establish Series or Classes of Shares.
The establishment and designation of any Series or Class of Shares
shall be effective upon the adoption by vote or written consent of a
majority of the then Trustees of a resolution setting forth such
establishment and designation and the relative rights and preferences
of such Series or Class and such eligibility requirements for
investment therein as the Trustees may determine, or as otherwise
provided in such resolution. Without limiting the generality of the
foregoing, the Trustees may, for the above-stated purposes:
(i) create one or more Series or Classes of Shares (in addition to
any Series or Class(es) already existing or otherwise) with
such rights and preferences and such eligibility requirements
for investment therein as the Trustees shall determine and
reclassify any or all outstanding Shares as shares of
particular Series or Classes in accordance with such
eligibility requirements;
(ii) amend any of the provisions set forth in paragraphs (a) through
(i) of Section 6.12 of this Article VI;
(iii) combine one or more Series or Classes of Shares into a single
Series or Class on such terms and conditions as the Trustees
shall determine;
20
(iv) change or eliminate any eligibility requirements for investment
in Shares of any Series or Class, including without limitation,
the power to provide for the issuance of Shares of any Series
or Class in connection with any merger or consolidation of the
Trust with another trust or company or any acquisition by the
Trust of part or all of the assets of another trust or company;
(v) change the designation of any Series or Class of Shares;
(vi) change the method of allocating dividends among the various
Series and Classes of Shares;
(vii) allocate any specific assets or liabilities of the Trust or any
specific items of income or expense of the Trust to one or more
Series or Classes of Shares;
(viii) terminate any Series or Class of Shares by written notice to
the Shareholders of such Series or Class; and
(ix) specifically allocate assets to any or all Series or Classes of
Shares or create one or more additional Series or Classes of
Shares which are preferred over all other Series or Classes of
Shares in respect of assets specifically allocated thereto or
any dividends paid by the Trust with respect to any net income,
however determined, earned from the investment and reinvestment
of any assets so allocated or otherwise and provide for any
special voting or other rights with respect to such Series or
Classes.
6.12 Establishment and Designation of Series and Classes. Shares of each
Series shall have the following rights and preferences relative to Shares of
each other Series, and Shares of each Class of a Multi-Class Series shall have
such rights and preferences relative to other Classes of the same Series as are
set forth below, together with such other rights and preferences relative to
such other Classes as are set forth in any resolution of the Trustees
establishing and designating such Class of Shares:
(a) Assets Belonging to Series. Subject to the provisions of paragraph (c)
of this Section 6.12:
All consideration received by the Trust for the issuance 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 whatever source derived,
including without limitation, any proceeds derived from the sale,
exchange or liquidation of such assets,
21
and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to
that Series for all purposes, subject only to the rights of creditors,
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 without limitation, 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 belonging to" that Series. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular Series (collectively "General Assets"), the Trustees shall
allocate such General Assets to, between or among any one or more of
the Series established and designated from time to time in such manner
and on such basis as they, in their sole discretion, deem fair and
equitable, and any General Asset so allocated to a particular Series
shall belong to that Series. Each such allocation by the Trustees
shall be conclusive and binding upon the Shareholders of all Series
for all purposes.
(b) Liabilities Belonging to Series. Subject to the provisions of
paragraph (c) of this Section 6.12:
The assets belonging to each particular Series shall be charged
solely with the liabilities of the Trust in respect to that Series,
expenses, costs, charges and reserves attributable to that Series, and
any general liabilities of the Trust which are not readily
identifiable as belonging to any particular Series but which are
allocated and charged by the Trustees to and among any one or more of
the Series established and designated from time to time in a manner
and on such basis as the Trustees in their sole discretion deem fair
and equitable. The liabilities, expenses, costs, charges and reserves
so charged to a Series are herein referred to as "liabilities
belonging 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.
(c) Apportionment of Assets etc. in Case of Multi-Class Series. In the
case of any Multi-Class Series, to the extent necessary or appropriate
to give effect to the relative rights and preferences of any Classes
of Shares of such Series, (i) any assets, income, earnings, profits,
proceeds, liabilities, expenses, charges, costs and reserves belonging
or attributable to that Series may be allocated or attributed to a
particular Class of Shares of that Series or apportioned among two or
more Classes of Shares of that Series; and (ii) Shares of any Class of
such Series may have priority or preference over
22
Shares of other Classes of such Series with respect to dividends or
distributions upon termination of the Trust or termination of such
Series or Class or otherwise, provided that no Share shall have any
priority or preference over any other Shares of the same Class and
that all dividends and distributions to Shareholders of a particular
Class shall be made ratably among all Shareholders of such Class
according to the number of Shares of such Class held of record by such
Shareholders on the record date for any dividend or distribution or on
the date of termination, as the case may be.
(d) Dividends, Distributions, Redemptions and Repurchases. Notwithstanding
any other provisions of this Declaration, including without
limitation, Article X, no dividend or distribution (including without
limitation, any distribution paid upon termination of the Trust or of
any Series or Class) with 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 belonging to such Series or attributable to
such Class, nor shall any Shareholder of any particular Series or
Class otherwise have any right or claim against the assets belonging
to any other Series or attributable to any other Class except to the
extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series or Class.
(e) Voting. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Article VIII, the
Shareholders of any particular Series or Class shall not be entitled
to vote on any matters as to which such Series or Class is not
affected. On any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual
Series, unless otherwise required by the 1940 Act or other applicable
law.
(f) Equality. Except to the extent necessary or appropriate to give
effect to the relative rights and preferences of any Classes of Shares
of a Multi-Class Series, all the Shares of each particular Series
shall represent an equal proportionate interest in the assets
belonging to that Series (subject to the liabilities belonging to that
Series), and each Share of any particular Series shall be equal to
each other Share of that Series. All the Shares of each particular
Class of Shares within a Multi-Class Series shall represent an equal
proportionate interest in the assets belonging to such Series that are
attributable to such Class (subject to the liabilities attributable to
such Class), and each Share of any particular Class within a Multi-
Class Series shall be equal to each other Share of such Class.
(g) Fractions. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligations of a whole share of
that Series
23
or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of
the Trust.
(h) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series or Class shall have the right
to exchange said Shares for Shares of one or more other Series or
Classes of Shares in accordance with such requirements and procedures
as may be established by the Trustees.
(i) Combination of Series. The Trustees shall have the authority, without
the approval of the Shareholders of any Series unless otherwise
required by applicable law, to combine the assets and liabilities
belonging to any two or more Series into assets and liabilities
belonging to a single Series or Class.
(j) Certain Redemptions of Shares. The Trustees shall have the authority,
without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to establish and modify the
minimum investment level for each Series or Class of Shares and to
require Shareholders to maintain at least the minimum investment
level. If any Shareholder fails to maintain at least the minimum
investment level, his or her Shares may be subject to mandatory
involuntary redemption in accordance with the instructions of the
Trustees.
ARTICLE VII
RECORD AND TRANSFER OF SHARES
7.1 Share Register. One or more registers shall be kept by or on behalf
of the Trustees, under the direction of the Trustees, which shall contain the
names and addresses of the Shareholders and the number of Shares held by them
respectively and a record of all transfers thereof. A separate register shall
be maintained for each Series and Class. Each such register shall be conclusive
as to who are the holders of the Shares. Only Shareholders whose ownership of
Shares is recorded on such register shall be entitled to vote or to receive
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive any distribution, nor to have notice
given to him as herein provided, until he has given his address to a transfer
agent or such other officer or agent of the Trust as shall keep the register for
entry thereon.
7.2 Transfer Agent. The Trustees shall have power to employ, within or
without the Commonwealth of Massachusetts, a transfer agent or transfer agents
and, if they so determine, a registrar or registrars. The transfer agent or
transfer agents may keep the register(s) and record therein the original issues
and transfers of Shares. Any such transfer agents and registrars shall perform
the duties usually performed by transfer agents and registrars of certificates
and shares of stock in a corporation, except as modified by the Trustees.
24
7.3 Owner of Record. Any person becoming entitled to any Share in
consequence of the death, bankruptcy or insolvency of any Shareholder, or
otherwise, by operation of law, shall be recorded as holder of such Shares. But
until such record is made, the Shareholder of record shall be deemed to be the
holder of such Shares for all purposes hereof and neither the Trustees nor any
transfer agent or registrar nor any officer or agent of the Trust shall be
affected by any notice of such death, bankruptcy, insolvency or other event.
7.4 Transfers of Shares. Shares shall be transferable on the records of
the Trust (other than by operation of law) only by the record holder thereof or
by his agent thereunto duly authorized in writing upon delivery to the Trust or
a transfer agent of the Trust of a duly executed instrument of transfer,
together with such evidence of the genuineness of execution and authorization
and of other matters as may reasonably be required by the Trust or the transfer
agent. Upon such delivery, the transfer shall be recorded on the register(s) of
the Trust. But until such record is made, the Shareholder of record shall be
deemed to be the holder of such Shares for all purposes hereof and neither the
Trustees nor the Trust nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of the proposed transfer.
This Section 7.4 and Section 7.3 hereof are subject in all respects to the
provisions of Section 6.7 hereof.
7.5 Limitation of Fiduciary Responsibility. The Trustees shall not, nor
shall the Shareholders or any officer, transfer agent or other agent of the
Trust, be bound to see to the execution of any trust, express, implied or
constructive, or of any charge, pledge or equity to which any of the Shares or
any interest therein are subject, or to ascertain or inquire whether any sale or
transfer of any such Shares or interest therein by any such Shareholder or his
personal representative is authorized by such trust, charge, pledge or equity,
or to recognize any Person as having any interest therein except the Persons
recorded as such Shareholders. The receipt of the Person in whose name any
Share is recorded, or, if such Share is recorded in the names of more than one
Person, the receipt of any one such Persons or of the duly authorized agent of
any such Person shall be a sufficient discharge for all money, Securities and
other property payable, issuable or deliverable in respect of such Share and
from all liability to see the proper application thereof.
7.6 Notices. Any and all notices to which Shareholders hereunder may be
entitled, and any and all communications, shall be deemed duly served or given
if mailed, postage prepaid, addressed to Shareholders of record at their last
known post office addresses as recorded on the Share register provided for in
Section 7.1 hereof.
ARTICLE VIII
SHAREHOLDERS
8.1 Meetings of Shareholders. Meetings of the Shareholders (to mean,
hereafter, only Shareholders of the Class(es) or Series as may be appropriate
under the circumstances) may be called at any time by a majority of the Trustees
and shall be called by any Trustee upon written request of Shareholders holding
in the aggregate not less than ten (10%) percent of the outstanding Shares
having voting rights, such request specifying the purpose or purposes for which
such meeting is to
25
be called. Any such meeting shall be held within or without the Commonwealth of
Massachusetts on such day and at such time as the Trustees shall designate. In
the event that the number of Trustees elected by vote of the Shareholders shall,
at any time, fall below a majority a Special Meeting shall be called at the
earliest practicable time for the election of Trustees; provided, however, that
such meeting shall, in any event be held within sixty (60) days of the date of
the number of Trustees elected by vote of the Shareholders falls below a
majority.
8.2 Quorums. The holders of a majority of outstanding Shares, entitled to
vote at such a meeting, present in person or by proxy shall constitute a quorum
at any meeting of Shareholders.
8.3 Notice of Meetings. Notice of all meetings of the Shareholders
entitled to vote at such a meeting, stating the time, place and purposes of the
meeting, shall be given by the Trustees by mail to each Shareholder at his
registered address, mailed at least ten (10) days and not more than sixty (60)
days before the meeting. Only the business stated in the notice of the meeting
shall be considered at such meeting. Any adjourned meeting may be held as
adjourned without further notice.
8.4 Record Date for Meetings. For the purposes of determining the
Shareholders who are entitled to vote or act at any meeting or any adjournment
thereof, or who are entitled to participate in any dividend or distribution, or
for the purpose of any other action, the Trustees may from time to time close
the transfer books for such period, not exceeding thirty (30) days, as the
Trustees may determine; or without closing the transfer books, the Trustees may
fix a date not more than sixty (60) days prior to the date of any meeting of
Shareholders or other actions as a record date for the determination of
Shareholders entitled to vote at such meeting or any adjournment thereof or to
be treated as Shareholders of record for purposes of such other action, except
for dividend payments which shall be governed by Section 10.1, and any
Shareholder who was a Shareholder at the time so fixed shall be entitled to vote
at such meeting or any adjournment thereof, even though he has since that date
disposed of his Shares, and no Shareholder becoming such after that date shall
be so entitled to vote at such meeting or any adjournment thereof or to be
treated as a Shareholder of record for purposes of such other action.
8.5 Proxies, etc. At any meeting of Shareholders, any holder of Shares
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for the verification prior to the time at which such vote shall be
taken. Pursuant to a resolution of a majority of the Trustees, proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust. Only Shareholders of record shall be entitled to vote and each full
Share shall be entitled to one vote and fractional Shares shall be entitled to
fractional votes. When any Share is held jointly by several persons, any one of
them may vote at any meeting in person or by Proxy in respect of such Share, but
if more than one of them shall be present at such meeting in person or by Proxy,
and such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged
26
at or prior to its exercise, and the burden of proving invalidity shall rest on
the challenger. If the holder of any such Share is a minor or a person of
unsound mind, and subject to guardianship or to the legal control of any other
person as regards the charge or management of such Share, he may vote by his
guardian or such other person appointed or having such control, and such vote
may be given in person or by proxy.
8.6 Reports. The Trustees shall, to the extent required by the 1940 Act,
cause to be prepared at least annually a report of operations containing a
balance sheet and statements of income and undistributed income of the Trust
prepared in conformity with generally accepted accounting principles and an
opinion of an independent certified public accountant on such financial
statements based on an examination of the books and records of the Trust, and
made in accordance with generally accepted auditing standards. A signed copy of
such report and opinion shall be filed with the Trustees, and copies of such
reports shall be mailed or delivered to all Shareholders within the time
required by the 1940 Act. The Trustees also shall, to the extent required by
the 1940 Act, furnish to the Shareholders, at least semi-annually, an interim
report containing an unaudited balance sheet of the Trust as at the end of such
semi-annual period and a statement of income and surplus for the period from the
beginning of the current fiscal year to the end of such semi-annual period.
8.7 Inspection of Records. The records of the Trust shall be open to
inspections by Shareholders to the same extent as is permitted shareholders of a
Massachusetts business corporation.
8.8 Shareholder Action By Written Consent. 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) consent to the
action in writing and the 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.
8.9 Voting Rights of Shareholders. The Shareholders shall be entitled to
vote only upon the following matters: (a) election of Trustees as provided in
Section 9.2 and Section 9.4 hereof; (b) amendment of the Declaration of Trust or
termination of this Trust as provided in Section 4.4 and Section 13.1 hereof;
(c) reorganization of this Trust as provided in Section 13.2 hereof; and (d) all
matters for which the approval of the Shareholders of the Trust is required by
the Investment Company Act of 1940, as amended. Except with respect to the
foregoing matters specified in this Section 8.9, no action taken by the
Shareholders at any meeting shall in any way bind the Trustees.
ARTICLE IX
TRUSTEES
9.1 Number and Qualification. The number of Trustees shall be fixed from
time to time by resolution of a majority of the Trustees then in office,
provided, however, that the number of Trustees shall in no event be less than
three (3) or more than fifteen (15). A vacancy on the Board
27
of Trustees may be filled by the appointment of an individual having the
qualifications described in this Section 9.1 made by a resolution of a majority
of the Trustees then in office, so long as two-thirds of the members of the
resulting Board of Trustees have been elected by vote of the Shareholders. The
appointment of a new Trustee shall not become effective, however, until the
individual named in the resolution of appointment shall have accepted in writing
such appointment and agreed in writing to be bound by the terms of this
Declaration of Trust. No reduction in the number of Trustees shall have the
effect of removing any Trustee from office prior to the expiration of his term.
Whenever a vacancy in the number of Trustees shall occur, until such vacancy is
filled as provided in Section 9.4 hereof, the Trustees or Trustee continuing in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration of Trust. A Trustee shall be an individual at least twenty-one (21)
years of age who is not under legal disability. The Trustees, in their capacity
as Trustees, shall not be required to devote their entire time to the business
and affairs of the Trust.
9.2 Term and Election. Each Trustee named herein, or elected or appointed
as provided in Section 9.1 and 9.4 hereof shall (except in the event of
resignations or removals or vacancies pursuant to Sections 9.3 or 9.4 hereof)
hold office until his successor has been elected and has qualified to serve as
Trustee. Election of Trustees shall be by a plurality of the votes cast. The
election of any Trustee (other than an individual who was serving as a Trustee
immediately prior to such election) pursuant to this Section 9.2 shall not
become effective unless and until such person shall have in writing accepted his
election and agreed to be bound by the terms of this Declaration of Trust.
Trustees may, but need not, own Shares.
9.3 Resignation and Removal. Any Trustee may resign (without need for
prior of subsequent accounting) by an instrument in writing signed by him and
delivered or mailed to the Chairman, the President or the Secretary (referred to
in Section 9.6 hereof) and such resignation shall be effective upon such
delivery, or at a later date according to the terms of the notice. Any of the
Trustees may be removed (provided the aggregate number of Trustees after such
removal shall not be less than the number required by Section 9.1 hereof) with
cause, by the action of two-thirds (2/3) of the remaining Trustees. Upon the
resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining Trustees shall
require for the purpose of conveying to the Trust or the remaining Trustees any
Trust Property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
No natural person shall serve as Trustee after the holders of record of not
less than two-thirds of the outstanding Shares of beneficial interest in the
Trust have declared that he be removed from that office either by declaration in
writing filed with the Custodian of the securities of the Trust or by votes cast
in person or by proxy at a meeting called for the purpose.
28
The Trustees shall promptly call a meeting of Shareholders for the purpose
of voting upon the question of removal of any such Trustee or Trustees if
requested in writing so to do by the record holders of not less than ten (10)
per centum of the outstanding Shares.
Whenever ten or more Shareholders of record, who have been such for at
least six months preceding the date of application, and who hold in the
aggregate either Shares having a net asset value of at least $25,000 or at least
one (1) per centum of the outstanding Shares, whichever is less, shall apply to
the Trustees in writing, stating that they wish to communicate with other
Shareholders with a view to obtaining signatures to a request for a meeting for
the purposes of removing Trustee(s) and accompanied by a form of communication
and request which they wish to transmit, the Trustees shall, within five (5)
business days after receipt of such application, either
(a) afford to such applicants access to a list of the names and addresses
of all Shareholders as recorded on the books of the Trust; or
(b) inform such applicants as to the approximate number of Shareholders of
record, and the approximate cost of mailing to them the proposed
communication and form of request.
If the Trustees elect to follow the course specified in (b) above, upon the
written request of such applicants, accompanied by a tender of the material to
be mailed and of the reasonable expenses of mailing, shall, with reasonable
promptness, mail such material to all Shareholders of record at their addresses
as recorded on the books, unless within five (5) business days after such tender
the Trustees shall mail to such applicants and file with the Securities and
Exchange Commission, together with a copy of the material to be mailed, a
written statement signed by at least a majority of the Trustees to the effect
that in their opinion either such material contains untrue statements of fact or
omits to state facts necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and specifying the basis
of such opinion.
9.4 Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to exercise the duties of the
office, or removal of a Trustee. No such vacancy shall operate to annul this
Declaration of Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust, and title to any Trust Property held in the
name of any Trustee alone, jointly with one or more of the other Trustees or
otherwise, shall, in the event of the death, resignation, removal, bankruptcy,
adjudicated incompetence or other incapacity to exercise the duties of the
office of such Trustee, vest in the continuing or surviving Trustees without
necessity of any further act or conveyance. In the case of an existing vacancy
(other than by reason of increase in the number of Trustees) the holders of at
least a majority of the Shares entitled to vote, acting at any meeting of
Shareholders called for the purpose, or a majority of the Trustees continuing in
office acting by resolution, may fill such vacancy, and any Trustee so elected
by the Trustees shall hold office until his successor has been elected and has
qualified to serve as Trustee. Upon the effectiveness of any such appointment
as provided in this Section, the Trust Property shall vest in such new Trustee
29
jointly with the continuing or surviving Trustees without the necessity of any
further act or conveyance; provided, however, that no such election or
appointment as provided in this Section 9.4 shall become effective unless or
until the new Trustee shall have accepted in writing his appointment and agreed
to be bound by the terms of this Declaration of Trust.
9.5 Meetings. Meetings of the Trustees shall be held from time to time
upon the call of the Chairman, the President, the Secretary or any two Trustees.
Regular meetings of the Trustees may be held without call or notice at a time
and place fixed by the By-laws or by resolution of the Trustees. Notice of any
other meeting shall be mailed or otherwise given not less than forty-eight (48)
hours before the meeting but may be waived in writing by any Trustee either
before or after such meeting. The attendance of a Trustee at a meeting shall
constitute a waiver of such meeting except where a Trustee attends a meeting for
the express purpose of objecting to the transaction of any business on the
ground that the meeting has not been lawfully called or convened. The Trustees
may act with or without a meeting. A quorum for all meetings of the Trustees
shall be a majority of the Trustees. Subject to Section 2.15 hereof and unless
specifically provided otherwise in this Declaration of Trust, any action of the
Trustees may be taken at a meeting by vote of a majority of the Trustees present
(a quorum being present) or, without a meeting, by written consents of a
majority of the Trustees. Any agreement, or other instrument or writing
executed by one or more of the Trustees or by any authorized Person shall be
valid and binding upon the Trustee and upon the Trust when authorized or
ratified by action of the Trustees as provided in this Declaration of Trust.
Any committee of the Trustees, including an Executive Committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless otherwise
specifically provided in this Declaration of Trust, any action of any such
committee may be taken at a meeting by vote of a majority of the members present
(a quorum being present) or, without a meeting, by written consent of a majority
of the members.
With respect to actions of the Trustees and any committee thereof, Trustees
who are affiliated within the meaning of Section 2.15 hereof or otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 9.5 and shall be entitled to vote to the extent permitted by the
1940 Act.
All or any one or more Trustees may participate in a meeting of the
Trustees or any committee thereof by utilizing conference, telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and, to the extent permitted under the 1940 Act,
participation in a meeting pursuant to such communications shall constitute
presence in person at such meeting. The minutes of any meeting of Trustees held
by utilizing such communications equipment shall be prepared in the same manner
as those of a meeting of Trustees held in person.
9.6 Officers. The Trustees shall elect a Chairman from among their number
and shall appoint a President, Secretary and Treasurer and such other officers
as they deem necessary or
30
appropriate to carry out the business of the Trust. Such officers shall be
appointed and hold office in accordance with By-law provisions.
9.7 By-laws. The Trustees may adopt and, from time to time, amend or
repeal By-laws for the conduct of the business of the Trust, and in such By-laws
may define the duties of the respective officers, agents, employees and
representatives.
ARTICLE X
DISTRIBUTIONS TO SHAREHOLDERS AND
DETERMINATION OF NET ASSET VALUE AND NET INCOME
10.1 General. The Trustees may, from time to time, declare and pay to the
Shareholders, in proportion to their respective ownership of Shares, out of the
earnings, net profits or surplus (including paid-in capital), capital or assets
in the hands of the Trustees, such dividends or other distributions as they may
determine. Except as otherwise permitted by paragraph (c) of Section 6.12 of
Article VI in the case of Multi-Class Series, distributions of each year's
income of each Series shall be made pro rata to Shareholders of a Series in
proportion to the number of Shares of such Series held by each of them. The
declaration and payment of such dividends or other distributions and the
determination of earnings, profits, surplus (including paid-in capital) and
capital available for dividends and other purposes shall lie wholly in the
discretion of the Trustees and no Shareholder shall be entitled to receive or be
paid any dividends or to receive any distribution except as determined by the
Trustees in the exercise of said discretion. The Trustees may, in addition,
from time to time in their discretion, declare and pay as dividends or other
distributions such additional amounts, whether or not out of earnings, profits
and surplus available therefor, sufficient to enable the Trust to avoid or
reduce its liability for Federal income taxes, inasmuch as the computations of
net income and gains for Federal income tax purposes may vary from the
computations thereof on the books of the Trust. Any of all such dividends or
other distributions may be made, in whole or in part, in cash, property or other
assets or obligations of the Trust, as the Trustees may in their sole discretion
from time to time determine. The Trustees may also distribute to the
Shareholders, in proportion to their respective ownership of Shares, additional
Shares issuable hereunder in such manner and on such terms as they may deem
proper. Any or all such dividends or distributions may be made among the
Shareholders of record at the time of declaring a distribution or among the
Shareholders of record at such later date as the Trustees shall determine.
10.2 Retained Earnings. The Trustees, except as provided in Section 10.1
hereof, may always retain from the net profits such amount as they may deem
necessary to pay the debts or expenses of the Trust, to meet obligations of the
Trust, to establish reserves or as they may deem desirable to use in the conduct
of its affairs or to retain for future requirements or extensions of the
business of the Trust.
10.3 Source of Distributions. Shareholders shall receive annually a
statement in writing advising the Shareholders of the source of the funds so
distributed so that distributions of ordinary income, return of capital and
capital gains income will be clearly distinguished.
31
10.4 Net Asset Value. The net asset value of each outstanding Share of
the Trust shall be determined once on each business day, as of the close of
trading on the New York Stock Exchange or at any other time as the Trustees, by
resolution, may determine and which is in compliance with the 1940 Act. The
method of determination of net asset value shall be determined by the Trustees
and shall be set forth in the Prospectus. The power and duty to make the daily
calculations may be delegated by the Trustees to the Adviser, the Custodian, the
Transfer Agent, the Distributor or such other person as the Trustees by
resolution may determine. The Trustees may suspend the daily determination of
net asset value to the extent permitted by the ▇▇▇▇ ▇▇▇.
10.5 Power to Modify Valuation Procedures. Notwithstanding any of the
foregoing provisions of this Article X, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the per share
net asset value of the Trust's Shares or net income, or the declaration and
payment of dividends and distributions as they may deem necessary or desirable
to enable the Trust to comply with any provision of the 1940 Act, or any rule or
regulation thereunder, including any rule or regulation adopted pursuant to
Section 22 of the 1940 Act by the Commission or any securities association
registered under the Securities Exchange Act of 1934, or any order of exemption
issued by said Commission, all as in effect now or as hereafter amended or
modified.
ARTICLE XI
CUSTODIAN
11.1 Appointment and Duties. The Trustees shall, at all times, employ a
bank or trust company organized under the laws of the United States of America
or one of the several states thereof having a capital, surplus and undivided
profits of at least two million dollars ($2,000,000) as Custodian with authority
as its agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the By-laws of the Trust and the
1940 Act:
(a) to hold the securities owned by the Trust and deliver the same upon
written order;
(b) to receive and receipt for any monies due to the Trust and deposit the
same in its own banking department or elsewhere as the Trustees may
direct;
(c) to disburse such funds upon orders or vouchers;
(d) if authorized by the Trustees, to keep the books and accounts of the
Trust and furnish clerical and accounting services; and
(e) if authorized to do so by the Trustees, to compute the net income of
the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and Custodian. The Trust may also employ the Custodian as its agent for other
purposes.
32
The Trustees may also authorize the Custodian to employ one or more Sub-
Custodians from time to time to perform such of the acts and services of the
Custodian and upon such terms and conditions, as may be agreed upon between the
Custodian and such Sub-Custodian and approved by the Trustees, provided that, in
every case, such Sub-Custodian shall be a bank or trust company organized under
the laws of the United States of America or one of the several states thereof
and having capital, surplus and undivided profits of at least two million
dollars ($2,000,000).
11.2 Central Certificate System. Subject to such rules, regulations and
orders as the Commission may adopt, the Trustees may direct the Custodian to
deposit all or any part of the Securities owned by the Trust in a system for the
central handling of Securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act, pursuant to which
system all securities of any particular Class or Series of any issuer deposited
within the system are treated as fungible and may be transferred or pledged by
bookkeeping entry without physical delivery of such securities, provided that
all such deposits shall be subject to withdrawal only upon the order of the
Trust.
ARTICLE XII
RECORDING OF DECLARATION OF TRUST
12.1 Recording. This Declaration of Trust and any amendment hereto shall
be filed in the office of the Secretary of the Commonwealth of Massachusetts and
may also be filed or recorded in such other places as the Trustees deem
appropriate. Each amendment so filed shall be accompanied by a certificate
signed and acknowledged by a Trustee stating that such action was duly taken in
a manner provided herein; and unless such amendment or such certificate filed
with the Secretary of the Commonwealth of Massachusetts sets forth some earlier
or later time for the effectiveness of such amendment, such amendment shall be
effective upon its filing with the Secretary of said Commonwealth. An amended
Declaration, containing the original Declaration and all amendments theretofore
made, may be executed any time or from time to time by a majority of the
Trustees and shall, upon filing with the Secretary of the Commonwealth of
Massachusetts, be conclusive evidence of all amendments contained therein and
may thereafter be referred to in lieu of the original Declaration and the
various amendments thereto.
ARTICLE XIII
AMENDMENT OR TERMINATION OF TRUST
13.1 Amendment or Termination. The provisions of this Declaration of
Trust may be amended or altered (except as to the limitations on personal
liability of the Shareholders and Trustees and the prohibition of assessments
upon Shareholders), or the Trust (or any Series or Class of Shares) may be
terminated, at any meeting of the Shareholders called for the purpose, by the
affirmative vote of the holders of a majority of the Shares of such Series or
Class then outstanding and entitled to vote, or by an instrument or instruments
in writing, without a meeting, signed by a majority of the Trustees and the
holders of a majority of such Shares; provided, however, that the
33
Trustees may, from time to time by a two-thirds (2/3) vote of the Trustees, and
after fifteen (15) days prior written notice to the Shareholders, amend or alter
the provisions of this Declaration of Trust, without the vote or assent of the
Shareholders, to the extent deemed by the Trustees in good faith to be necessary
to conform this Declaration to the requirements of the regulated investment
company provisions of the Internal Revenue Code or the requirements of
applicable federal laws or regulations or any interpretation thereof by a court
or other governmental agency of competent jurisdiction but the Trustees shall
not be liable for failing so to do. Notwithstanding the foregoing, (i) no
amendment may be made pursuant to this Section 13.1 which would change any
rights with respect to any outstanding Shares of the Trust (or such Series or
Class, as the case may be) by reducing the amount payable thereon upon
liquidation of the Trust or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or written consent of the holders of
two-thirds (2/3) of the outstanding Shares entitled to vote thereon; and (ii) no
amendment may be made with respect to the investment restrictions contained in
Section 4.2 hereof without the affirmative vote of the holders of a majority (as
defined in the ▇▇▇▇ ▇▇▇) of the Shares of the Class of stock affected by such
change. Upon the termination of the Trust or any one or more Series or Classes
of Shares, as the case may be, pursuant to this Section 13.1:
(a) The Trust (or such Series or Class, as the case may be) shall carry
on no business except for the purpose of winding up its affairs.
(b) The Trustees shall proceed to wind up the affairs of the Trust (or
such Series or Class, as the case may be) and all of the powers of the
Trustees under this Declaration of Trust shall continue until the
affairs of the Trust, Series or Class shall have been wound up,
including the power to fulfill or discharge the contracts of the
Trust, Series or Class, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part of the
remaining Trust Property (belonging to the Trust or to such Series or
Class, as the case may be) to one or more persons at public or private
sale for consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all of the Trust
Property (belonging to the Trust or to such Series or Class, as the
case may be) shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by
affirmative vote of not less than a majority of all outstanding Shares
(of the Trust, Series or Class, as the case may be) entitled to vote.
(c) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property (belonging to the
Trust, Series or Class, as the case
34
may be), in cash or in kind or partly of each, among the Shareholders
(of the Trust, Series or Class, as the case may be) according to their
respective rights.
Upon termination of the Trust, Series or Class, as the case may be, and
distribution to the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination, and the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder (with respect to
the Trust or such Series or Class, as the case may be), and the right, title and
interest of all Shareholders (of the Trust, Series or Class, as the case may be)
shall cease and be canceled and discharged.
A certification in recordable form signed by a majority of the Trustees
setting forth an amendment and reciting that it was duly adopted by the
Shareholders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of Shares shall have become effective, this
Declaration of Trust may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
13.2 Power to Effect Reorganization. The Trustees, by vote or written
approval of a majority of the Trustees, may select or direct the organization
of a corporation, association, trust or other organization with which the Trust
may merge, or which shall take over the Trust Property and carry on the affairs
of the Trust, and after receiving an affirmative vote of not less than a
majority of the outstanding Shares entitled to vote at any meeting or
Shareholders, the notice for which included a statement of such proposed action,
the Trustees may effect such merger or may sell, convey and transfer the Trust
Property to any such corporation, association, trust or organization in exchange
for cash or shares or securities thereof, or beneficial interest therein upon
making provision for the payment of Trust liabilities, by assumption by the
transferee or otherwise; and thereupon the Trustees shall terminate the Trust
and deliver such cash, shares, securities or beneficial interest ratably among
the Shareholders of this Trust in redemption of their Shares.
13.3 Other Amendments. Amendments having the purpose of changing the name
or address of the Trust (or any Series of the Trust) or 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.
35
ARTICLE XIV
MISCELLANEOUS
14.1 Governing Law. This Declaration Trust is executed by the Trustees
and delivered in the Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of all parties and the validity, construction and
effect of every provision hereof shall be subject to and construed according to
the laws of said Commonwealth and reference shall be specifically made to the
Business Corporation Law of the Commonwealth of Massachusetts as to the
construction of matters not specifically covered herein or as to which an
ambiguity exists.
14.2 Counterparts. This Declaration of Trust may be simultaneously
executed in several counterparts, each of which so executed shall be deemed to
be an original, and such counterparts, together, shall constitute but one and
the same instrument, which shall be sufficiently evidenced by any such original
counterpart.
14.3 Reliance by Third Parties. Any certificate executed by an individual
who, according to the records of the Trust, or of any recording office in which
this Declaration may be recorded, appears to be a Trustee hereunder, certifying
to: (a) the number or identity of Trustees or Shareholders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Trustees or Shareholders, (d) the fact that the
number of Trustees or Shareholders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration of Trust, (e)
the form of any By-law adopted by or the identity of any officers elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any person dealing with the Trustees or any of them and
the successors of such person.
14.4 Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable and if the
Trustees shall determine, with the advice of counsel, that any one or
more of such provisions (the "Conflicting Provisions") are in
conflict with the regulated investment company provisions of the
Internal Revenue Code or with other applicable federal or state laws
and regulations, the Conflicting Provisions shall be deemed never to
have constituted a part of this Declaration of Trust; provided,
however, that such determination by the Trustees shall not affect or
impair any of the remaining provisions of this Declaration of Trust
or render invalid or improper any action taken or omitted (including,
but not limited to, the election of Trustees) prior to such
determination.
(b) If any provisions of this 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
36
affect or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of this Declaration of Trust in
any jurisdiction.
14.5 Section Headings. Sections headings have been inserted for
convenience only and are not a part of this Declaration of Trust.
14.6. Construction of 1940 Act. Whenever any action is taken under this
Declaration of Trust under any authorization to take action which is permitted
by the 1940 Act, such action shall be deemed to have been properly taken if such
action is in accordance with the construction of the 1940 Act then in effect as
expressed in "no action" letters of the staff of the Commission or any release,
rule, regulation or order under the 1940 Act or any decision of a court of
competent jurisdiction, notwithstanding that any of the foregoing shall later be
found to be invalid or otherwise reversed or modified by any of the foregoing.
14.7 Action of Prospectus or Proxy Statement. Any action which may be
taken by the Trustees under this Declaration of Trust or its By-laws may be
taken by the description thereof in the then effective prospectus relating to
the Shares under the Securities Act of 1933 or in any proxy statement of the
Trust rather than by formal resolution of the Board.
ARTICLE XV
DURATION OF TRUST
15.1 Duration. Subject to possible termination in accordance with the
provisions of Article XIII hereof, the Trust created hereby shall continue
without limitation of time.
IN WITNESS WHEREOF, the undersigned Trustee(s) of the Trust have caused these
presents to be executed as of the 21st day of October, 1996.
Position
Name With Trust Address
---- ---------- -------
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Trustee ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
----------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
37