Amended and Restated
AGREEMENT AND DECLARATION OF TRUST
of
GARTMORE VARIABLE INSURANCE TRUST
a Delaware Statutory Trust
(Formerly, Gartmore Variable Insurance Trust, a Massachusetts Business Trust)
(Formed as of September 30, 2004)
(Amended and Restated as of October ___, 2004)
TABLE OF CONTENTS
Page
ARTICLE I. NAME; OFFICES; REGISTERED AGENT; DEFINITIONS...........................................1
SECTION 1. NAME...................................................................................1
SECTION 2. OFFICES OF THE TRUST...................................................................1
SECTION 3. REGISTERED AGENT AND REGISTERED OFFICE.................................................1
SECTION 4. DEFINITIONS............................................................................1
ARTICLE II. PURPOSE OF TRUST.......................................................................4
ARTICLE III. SHARES.................................................................................7
SECTION 1. DIVISION OF BENEFICIAL INTEREST........................................................7
SECTION 2. OWNERSHIP OF SHARES....................................................................8
SECTION 3. SALE OF SHARES.........................................................................8
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY..................................9
SECTION 5. POWER OF BOARD OF TRUSTEES TO MAKE TAX STATUS ELECTION.................................9
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SERIES AND CLASSES....................................9
(a) Assets Held with Respect to a Particular Series..............................10
(b) Liabilities Held with Respect to a Particular Series or Class................10
(c) Dividends, Distributions and Redemptions.....................................11
(d) Voting.......................................................................12
(e) Equality.....................................................................12
(f) Fractions....................................................................12
(g) Exchange Privilege...........................................................12
(h) Combination of Series........................................................12
(i) Dissolution or Termination...................................................12
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS.......................................................12
ARTICLE IV. THE BOARD OF TRUSTEES.................................................................13
SECTION 1. NUMBER, ELECTION, TERM, REMOVAL AND RESIGNATION.......................................13
SECTION 2. TRUSTEE ACTION BY WRITTEN CONSENT WITHOUT A MEETING...................................14
SECTION 3. POWERS AND OTHER BUSINESS INTERESTS...................................................14
(a) Powers.......................................................................14
(b) Other Business Interests.....................................................16
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST......................................................16
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS...................................................17
SECTION 6. OWNERSHIP OF TRUST PROPERTY...........................................................17
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SECTION 7. SERVICE CONTRACTS.....................................................................17
ARTICLE V. SHAREHOLDERS' VOTING POWERS AND MEETINGS..............................................18
SECTION 1. VOTING POWERS.........................................................................18
SECTION 2. QUORUM AND REQUIRED VOTE..............................................................18
SECTION 3. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING...............................19
SECTION 4. RECORD DATES..........................................................................19
SECTION 5. ADDITIONAL PROVISIONS.................................................................21
ARTICLE VI. NET ASSET VALUE; DISTRIBUTIONS; REDEMPTIONS; TRANSFERS................................21
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS........................21
SECTION 2. REDEMPTIONS AT THE OPTION OF A SHAREHOLDER............................................22
SECTION 3. REDEMPTIONS AT THE OPTION OF THE TRUST................................................23
SECTION 4. TRANSFER OF SHARES....................................................................23
ARTICLE VII. LIMITATION OF LIABILITY AND INDEMNIFICATION OF AGENT..................................23
SECTION 1. LIMITATION OF LIABILITY...............................................................23
SECTION 2. INDEMNIFICATION.......................................................................25
(a) Indemnification by Trust.....................................................25
(b) Exclusion of Indemnification.................................................25
(c) Required Approval............................................................26
(d) Advancement of Expenses......................................................26
(e) Other Contractual Rights.....................................................26
(f) Fiduciaries of Employee Benefit Plan.........................................27
SECTION 3. INSURANCE.............................................................................27
SECTION 4. DERIVATIVE ACTIONS....................................................................27
ARTICLE VIII. CERTAIN TRANSACTIONS..................................................................28
SECTION 1. DISSOLUTION OF TRUST OR SERIES........................................................28
SECTION 2. MERGER OR CONSOLIDATION; CONVERSION; REORGANIZATION...................................29
(a) Merger or Consolidation......................................................29
(b) Conversion...................................................................29
(c) Reorganization...............................................................30
SECTION 3. MASTER FEEDER STRUCTURE...............................................................31
SECTION 4. ABSENCE OF APPRAISAL OR DISSENTERS' RIGHTS............................................31
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ARTICLE IX. AMENDMENTS............................................................................31
SECTION 1. AMENDMENTS GENERALLY..................................................................31
ARTICLE X. MISCELLANEOUS.........................................................................32
SECTION 1. REFERENCES; HEADINGS; COUNTERPARTS....................................................32
SECTION 2. APPLICABLE LAW........................................................................32
SECTION 3. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS........................................32
SECTION 4. STATUTORY TRUST ONLY..................................................................32
SECTION 5. USE OF THE NAMES "NATIONWIDE" AND/OR "GARTMORE".......................................33
iii
Amended and Restated
AGREEMENT AND DECLARATION OF TRUST
OF
GARTMORE VARIABLE INSURANCE TRUST
Amended and Restated AGREEMENT AND DECLARATION OF TRUST made as of this
____ day of October 2004, by the Trustees hereunder, and by the holders of
Shares to be issued by the Trust hereunder as hereinafter provided.
WITNESSETH:
WHEREAS this Trust is being formed to carry on the business of an open-end
management investment company as defined in the 1940 Act; and
WHEREAS this Trust is authorized to issue its Shares in separate Series,
to divide Shares of any Series into two or more Classes and to issue Classes of
any Series, all in accordance with the provisions hereinafter set forth; and
WHEREAS the Trustees have agreed to manage all property coming into their
hands as trustees of a Delaware statutory trust in accordance with the
provisions of the Delaware Statutory Trust Act, as amended from time to time,
and the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets that they may from time to time acquire in any
manner as Trustees hereunder IN TRUST and will manage and dispose of the same
upon the following terms and conditions for the benefit of the holders from time
to time of Shares created hereunder as hereinafter set forth.
ARTICLE I.
NAME; OFFICES; REGISTERED AGENT; DEFINITIONS
Section 1. Name. This Trust shall be known as "Gartmore Variable Insurance
Trust" and the Board of Trustees shall conduct the business of the Trust under
that name, or any other name as it may from time to time designate.
Section 2. Offices of the Trust. The Board may at any time establish
offices of the Trust at any place or places where the Trust intends to do
business.
Section 3. Registered Agent and Registered Office. The name of the
registered agent of the Trust and the address of the registered office of the
Trust are as set forth in the Trust's Certificate of Trust.
Section 4. Definitions. Whenever used herein, unless otherwise required by
the context or specifically provided:
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(a) "1940 Act" shall mean the Investment Company Act of 1940 and the
rules and regulations thereunder, all as adopted or amended from time to time;
(b) "Affiliate" shall have the same meaning as "affiliated person"
as such term is defined in the 1940 Act when used with reference to a specified
Person, as defined below;
(c) "Board of Trustees" shall mean the governing body of the Trust,
that is comprised of the number of Trustees of the Trust fixed from time to time
pursuant to Article IV hereof, having the powers and duties set forth herein;
(d) "By-Laws" shall mean By-Laws of the Trust, as amended or
restated from time to time in accordance with Article VIII therein. Such By-Laws
may contain any provision not inconsistent with applicable law or this
Declaration of Trust, relating to the governance of the Trust;
(e) "Certificate of Trust" shall mean the certificate of trust of
the Trust to be filed with the office of the Secretary of State of the State of
Delaware as required under the Delaware Statutory Trust Act, as amended from
time to time, to form the Trust, as such certificate shall be amended or
restated from time to time and filed with such office;
(f) "Class" shall mean each class of Shares of the Trust or of a
Series of the Trust established and designated under and in accordance with the
provisions of Article III hereof;
(g) "Code" shall mean the Internal Revenue Code of 1986 and the
rules and regulations thereunder, all as adopted or amended from time to time;
(h) "Commission" shall have the meaning given that term in the 1940
Act;
(i) "DSTA" shall mean the Delaware Statutory Trust Act (12 Del. C.
ss. 3801, et seq.), as amended from time to time;
(j) "Declaration of Trust" shall mean this Agreement and Declaration
of Trust, as amended or restated from time to time;
(k) "General Liabilities" shall have the meaning given it in Article
III, Section 6(b) of this Declaration Trust;
(l) "Interested Person" shall have the meaning given that term in
the 1940 Act;
(m) "Investment Adviser" or "Adviser" shall mean a Person, as
defined below, furnishing services to the Trust pursuant to any investment
advisory or investment management contract described in Article IV, Section 7(a)
hereof;
(n) "National Financial Emergency" shall mean the whole or any part
of any period during (i) which an emergency exists as a result of which disposal
by the Trust of securities or other assets owned by the Trust is not reasonably
practicable; (ii) which it is not reasonably practicable for the Trust fairly to
determine the net asset value of its assets; or (iii) such other period as the
Commission may by order permit for the protection of investors;
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(o) "Person" shall mean a natural person, partnership, limited
partnership, limited liability company, trust, estate, association, corporation,
organization, custodian, nominee or any other individual or entity in its own or
any representative capacity, in each case, whether domestic or foreign, and a
statutory trust or a foreign statutory or business trust;
(p) "Principal Underwriter" shall have the meaning given that term
in the 1940 Act;
(q) "Series" shall mean each Series of Shares established and
designated under and in accordance with the provisions of Article III hereof;
(r) "Shares" shall mean the transferable shares of beneficial
interest into which the beneficial interest in the Trust shall be divided from
time to time, and shall include fractional and whole Shares;
(s) "Shareholder" shall mean a record owner of Shares pursuant to
the By-Laws;
(t) "Trust" shall mean the Delaware statutory trust formed pursuant
to this Declaration of Trust and the filing of the Certificate of Trust with the
office of the Secretary of State of the State of Delaware;
(u) "Trust Property" shall mean any and all property, real or
personal, tangible or intangible, which is owned or held by or for the account
of the Trust, or one or more of any Series thereof, including, without
limitation, the rights referenced in Article X, Section 5 hereof;
(v) "Trustee" or "Trustees" shall mean each Person who signs this
Declaration of Trust as a trustee and all other Persons who may, from time to
time, be duly elected or appointed, qualified and serving on the Board of
Trustees in accordance with the provisions hereof and the By-Laws, so long as
such signatory or other Person continues in office in accordance with the terms
hereof and the By-Laws. Reference herein to a Trustee or the Trustees shall
refer to such Person or Persons in such Person's or Persons' capacity as a
trustee or trustees hereunder and under the By-Laws; and
(w) "vote of a majority of the outstanding voting securities" shall
have the meaning provided under Subsection 2(a)(42) of the 1940 Act or any
successor provision thereof, which Subsection, as of the date hereof, provides
as follows: the vote, at a meeting of the Shareholders, (i) of sixty-seven
percent (67%) or more of the voting securities present in person or represented
by proxy at such meeting, if the holders of more than fifty percent (50%) of the
outstanding voting securities of the Trust are present or represented by proxy;
or (ii) of more than fifty percent (50%) of the outstanding voting securities of
the Trust, whichever is the less; provided that if any matter affects only the
interests of some but not all Series or Classes and only the Shareholders of
such affected Series or Classes shall be entitled to vote on the matter, as
provided in Article III, Section 6(d) hereof, then for purposes of the foregoing
vote, the foregoing respective percentages shall be percentages of the voting
securities of such Series or Classes rather than the voting securities of the
Trust.
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ARTICLE II.
PURPOSE OF TRUST
The purpose of the Trust is to conduct, operate and carry on the business
of a management investment company registered under the 1940 Act, directly, or
if one or more Series is established hereunder, through one or more Series,
investing primarily in securities, and to exercise all of the powers, rights and
privileges granted to, or conferred upon, a statutory trust formed under the
DSTA, including, without limitation, the following powers:
(a) To hold, invest and reinvest its funds, and in connection
therewith, to make any changes in the investment of the assets of the Trust, to
hold part or all of its funds in cash, to hold cash uninvested, to subscribe
for, invest in, reinvest in, purchase or otherwise acquire, own, hold, pledge,
sell, assign, mortgage, transfer, exchange, distribute, write options on, lend
or otherwise deal in or dispose of contracts for the future acquisition or
delivery of fixed income or other securities, and securities or property of
every nature and kind, including, without limitation, all types of bonds,
debentures, stocks, shares, units of beneficial interest, preferred stocks,
negotiable or non-negotiable instruments, obligations, evidences of
indebtedness, money market instruments, certificates of deposit or indebtedness,
bills, notes, mortgages, commercial paper, repurchase or reverse repurchase
agreements, finance paper, bankers' acceptances, and any options, certificates,
receipts, warrants, futures contracts or other instruments representing rights
to receive, purchase or subscribe for the same, or evidencing or representing
any other rights or interests therein or in any property or assets, and other
securities of any kind, as the foregoing are issued, created, guaranteed, or
sponsored by any and all Persons, including, without limitation, states,
territories, and possessions of the United States and the District of Columbia
and any political subdivision, agency, or instrumentality thereof, any foreign
government or any political subdivision of the U.S. Government or any foreign
government, or any international instrumentality, or by any bank or savings
institution, or by any corporation or organization organized under the laws of
the United States or of any state, territory, or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when issued"
contracts for any such securities;
(b) To exercise any and all rights, powers and privileges with
reference to or incident to ownership or interest, use and enjoyment of any of
such securities and other instruments or property of every kind and description,
including, but without limitation, the right, power and privilege to own, vote,
hold, purchase, sell, negotiate, assign, exchange, lend, transfer, mortgage,
hypothecate, lease, pledge or write options with respect to or otherwise deal
with, dispose of, use, exercise or enjoy any rights, title, interest, powers or
privileges under or with reference to any of such securities and other
instruments or property, the right to consent and otherwise act with respect
thereto, with power to designate one or more Persons, to exercise any of said
rights, powers, and privileges in respect of any of said instruments, and to do
any and all acts and things for the preservation, protection, improvement and
enhancement in value of any of such securities and other instruments or
property;
(c) To sell, exchange, lend, pledge, mortgage, hypothecate, lease or
write options with respect to or otherwise deal in any property rights relating
to any or all of the assets of the Trust or any Series, subject to any
requirements of the 1940 Act;
4
(d) To vote or give assent, or exercise any rights of ownership,
with respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such Person or Persons as the Trustees
shall deem proper, granting to such Person or Persons such power and discretion
with relation to securities or property as the Trustees shall deem proper;
(e) To exercise powers and right of subscription or otherwise which
in any manner arise out of ownership of securities and/or other property;
(f) To hold any security or property in a form not indicating that
it is trust property, whether in bearer, unregistered or other negotiable form,
or in its own name or in the name of a custodian or subcustodian or a nominee or
nominees or otherwise or to authorize the custodian or a subcustodian or a
nominee or nominees to deposit the same in a securities depository, subject in
each case to proper safeguards according to the usual practice of investment
companies or any rules or regulations applicable thereto;
(g) To consent to, or participate in, any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security which is held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer; and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a
committee, depositary, voting trustee or otherwise, and in that connection to
deposit any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority with
relation to any security (whether or not so deposited or transferred) as the
Trustees shall deem proper, and to agree to pay, and to pay, such portion of the
expenses and compensation of such committee, depositary or trustee as the
Trustees shall deem proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of
or against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships
and any other combinations or associations;
(k) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof;
(l) To purchase and pay for entirely out of Trust Property such
insurance as the Board of Trustees may deem necessary or appropriate for the
conduct of the business, including, without limitation, insurance policies
insuring the assets of the Trust or payment of distributions and principal on
its portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, Investment Advisers, Principal
Underwriters, or independent contractors of the Trust, individually against all
claims and liabilities of every nature arising by reason of holding Shares,
holding, being or having held any such office or position, or by reason of any
action alleged to have been taken or omitted by any such Person as Trustee,
officer, employee, agent, Investment Adviser, Principal Underwriter, or
independent contractor, to the fullest extent permitted by this Declaration of
Trust, the By-Laws and by applicable law;
5
(m) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust;
(n) To purchase or otherwise acquire, own, hold, sell, negotiate,
exchange, assign, transfer, mortgage, pledge or otherwise deal with, dispose of,
use, exercise or enjoy, property of all kinds;
(o) To buy, sell, mortgage, encumber, hold, own, exchange, rent or
otherwise acquire and dispose of, and to develop, improve, manage, subdivide,
and generally to deal and trade in real property, improved and unimproved, and
wheresoever situated; and to build, erect, construct, alter and maintain
buildings, structures, and other improvements on real property;
(p) To borrow or raise moneys for any of the purposes of the Trust,
and to mortgage or pledge the whole or any part of the property and franchises
of the Trust, real, personal, and mixed, tangible or intangible, and wheresoever
situated;
(q) To enter into, make and perform contracts and undertakings of
every kind for any lawful purpose, without limit as to amount;
(r) To issue, purchase, sell and transfer, reacquire, hold, trade
and deal in stocks, Shares, bonds, debentures and other securities, instruments
or other property of the Trust, from time to time, to such extent as the Board
of Trustees shall, consistent with the provisions of this Declaration of Trust,
determine; and to re-acquire and redeem, from time to time, its Shares or, if
any, its bonds, debentures and other securities;
(s) To engage in and to prosecute, defend, compromise, abandon, or
adjust, by arbitration, or otherwise, any actions, suits, proceedings, disputes,
claims, and demands relating to the Trust, and out of the assets of the Trust to
pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, to dismiss any
action, suit, proceeding, dispute, claim, or demand, derivative or otherwise,
brought by any Person, including a Shareholder in the Shareholder's own name or
the name of the Trust, whether or not the Trust or any of the Trustees may be
named individually therein or the subject matter arises by reason of business
for or on behalf of the Trust;
(t) To exercise and enjoy, in Delaware and in any other states,
territories, districts and United States dependencies and in foreign countries,
all of the foregoing powers, rights and privileges, and the enumeration of the
foregoing powers shall not be deemed to exclude any powers, rights or privileges
so granted or conferred; and
(u) In general, to carry on any other business in connection with or
incidental to its trust purposes, to do everything necessary, suitable or proper
for the accomplishment of such purposes or for the attainment of any object or
the furtherance of any power hereinbefore set
6
forth, either alone or in association with others, and to do every other act or
thing incidental or appurtenant to, or growing out of, or connected with, its
business or purposes, objects or powers.
The Trust shall not be limited to investing in obligations maturing before
the possible dissolution of the Trust or one or more of its Series. Neither the
Trust nor the Board of Trustees shall be required to obtain any court order to
deal with any assets of the Trust or take any other action hereunder.
The foregoing clauses shall each be construed as purposes, objects and
powers, and it is hereby expressly provided that the foregoing enumeration of
specific purposes, objects and powers shall not be held to limit or restrict in
any manner the powers of the Trust, and that they are in furtherance of, and in
addition to, and not in limitation of, the general powers conferred upon the
Trust by the DSTA and the other laws of the State of Delaware or otherwise; nor
shall the enumeration of one thing be deemed to exclude another, although it be
of like nature, not expressed.
ARTICLE III.
SHARES
Section 1. Division of Beneficial Interest.
(a) The beneficial interest in the Trust shall be divided into
Shares of beneficial interest, without par value. The number of Shares of
beneficial interest in the Trust authorized hereunder, and of each Series and
Class as may be established from time to time, is unlimited. The Board of
Trustees may authorize, in accordance with the 1940 Act, the division of Shares
into separate Classes of Shares and into separate and distinct Series of Shares
and the division of any Series into separate Classes of Shares. The different
Series and Classes shall be established and designated pursuant to Article III,
Section 6 hereof. If no separate Series or Classes of Series shall be
established, the Shares shall have the rights, powers and duties provided for
herein and in Article III, Section 6 hereof to the extent relevant and not
otherwise provided for herein, and all references to Series and Classes shall be
construed (as the context may require) to refer to the Trust. The fact that a
Series shall have initially been established and designated without any specific
establishment or designation of Classes (i.e., that all Shares of such Series
are initially of a single Class) shall not limit the authority of the Board of
Trustees to establish and designate separate Classes of said Series. The fact
that a Series shall have more than one established and designated Class, shall
not limit the authority of the Board of Trustees to establish and designate
additional Classes of said Series.
(b) The Board of Trustees shall have the power to issue authorized,
but unissued Shares of beneficial interest of the Trust, or any Series and Class
thereof, from time to time for such consideration paid wholly or partly in cash,
securities or other property, as may be determined from time to time by the
Board of Trustees, subject to any requirements or limitations of the 1940 Act.
The Board of Trustees, on behalf of the Trust, may acquire and hold as treasury
shares, reissue for such consideration and on such terms as it may determine, or
cancel, at its discretion from time to time, any Shares reacquired by the Trust.
The Board of Trustees may classify or reclassify any unissued shares of
beneficial interest or any shares of
7
beneficial interest of the Trust or any Series or Class thereof, that were
previously issued and are reacquired, into one or more Series or Classes that
may be established and designated from time to time. Notwithstanding the
foregoing, the Trust and any Series thereof may acquire, hold, sell and
otherwise deal in, for purposes of investment or otherwise, the Shares of any
other Series of the Trust or Shares of the Trust, and such Shares shall not be
deemed treasury shares or cancelled.
(c) Subject to the provisions of Section 6 of this Article III, each
Share shall entitle the holder to voting rights as provided in Article V hereof.
Shareholders shall have no preemptive or other right to subscribe for new or
additional authorized, but unissued Shares or other securities issued by the
Trust or any Series thereof. The Board of Trustees may from time to time divide
or combine the Shares of the Trust or any particular Series thereof into a
greater or lesser number of Shares of the Trust or that Series, respectively.
Such division or combination shall not materially change the proportionate
beneficial interests of the holders of Shares of the Trust or that Series, as
the case may be, in the Trust Property at the time of such division or
combination that is held with respect to the Trust or that Series, as the case
may be.
(d) Any Trustee, officer or other agent of the Trust, and any
organization in which any such Person has an economic or other interest, may
acquire, own, hold and dispose of Shares of beneficial interest in the Trust or
any Series and Class thereof, whether such Shares are authorized but unissued,
or already outstanding, to the same extent as if such Person were not a Trustee,
officer or other agent of the Trust; and the Trust or any Series may issue and
sell and may purchase such Shares from any such Person or any such organization,
subject to the limitations, restrictions or other provisions applicable to the
sale or purchase of such Shares herein and the 1940 Act.
Section 2. Ownership of Shares. The ownership of Shares shall be recorded
on the books of the Trust kept by the Trust or by a transfer or similar agent
for the Trust, which books shall be maintained separately for the Shares of each
Series and Class thereof that has been established and designated. No
certificates certifying the ownership of Shares shall be issued except as the
Board of Trustees may otherwise determine from time to time. The Board of
Trustees may make such rules not inconsistent with the provisions of the 1940
Act as it considers appropriate for the issuance of Share certificates, the
transfer of Shares of the Trust and each Series and Class thereof, if any, and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent, as the case may be, shall be conclusive as to who are
the Shareholders of the Trust and each Series and Class thereof and as to the
number of Shares of the Trust and each Series and Class thereof held from time
to time by each such Shareholder.
Section 3. Sale of Shares. Subject to the 1940 Act and applicable law, the
Trust may sell its authorized but unissued Shares of beneficial interest to such
Persons, at such times, on such terms, and for such consideration as the Board
of Trustees may from time to time authorize. Each sale shall be credited to the
individual purchaser's account in the form of full or fractional Shares of the
Trust or such Series thereof (and Class thereof, if any), as the purchaser may
select, at the net asset value per Share, subject to Section 22 of the 1940 Act,
and the rules and regulations adopted thereunder; provided, however, that the
Board of Trustees may, in its sole discretion, permit the Principal Underwriter
to impose a sales charge upon any such sale. Every Shareholder by virtue of
having become a Shareholder shall be deemed to have expressly
8
assented and agreed to the terms of this Declaration of Trust and to have become
bound as a party hereto.
Section 4. Status of Shares and Limitation of Personal Liability. Shares
shall be deemed to be personal property giving to Shareholders only the rights
provided in this Declaration of Trust, the By-Laws, and under applicable law.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Subject to Article VIII, Section 1
hereof, the death, incapacity, dissolution, termination, or bankruptcy of a
Shareholder during the existence of the Trust and any Series thereof shall not
operate to dissolve the Trust or any such Series, nor entitle the representative
of any deceased, incapacitated, dissolved, terminated or bankrupt Shareholder to
an accounting or to take any action in court or elsewhere against the Trust, the
Trustees or any such Series, but entitles such representative only to the rights
of said deceased, incapacitated, dissolved, terminated or bankrupt Shareholder
under this Declaration of Trust. Neither the Trust nor the Trustees, nor any
officer, employee or agent of the Trust, shall have any power to bind personally
any Shareholder, nor, except as specifically provided herein, to call upon any
Shareholder for the payment of any sum of money other than such as the
Shareholder may at any time personally agree to pay. Each Share, when issued on
the terms determined by the Board of Trustees, shall be fully paid and
nonassessable. As provided in the DSTA, Shareholders shall be entitled to the
same limitation of personal liability as that extended to stockholders of a
private corporation organized for profit under the General Corporation Law of
the State of Delaware.
Section 5. Power of Board of Trustees to Make Tax Status Election. The
Board of Trustees shall have the power, in its discretion, to make such
elections as to the tax status of the Trust and any Series as may be permitted
or required under the Code, without the vote of any Shareholder.
Section 6. Establishment and Designation of Series and Classes. The
establishment and designation of any Series or Class thereof shall be effective,
without the requirement of Shareholder approval, upon the adoption of a
resolution by not less than a majority of the then Board of Trustees, which
resolution shall set forth such establishment and designation and may provide,
to the extent permitted by the DSTA, for rights, powers and duties of such
Series or Class thereof (including variations in the relative rights and
preferences as between the different Series and Classes thereof) otherwise than
as provided herein. Each such resolution shall be incorporated herein by
reference upon adoption. Any such resolution may be amended by a further
resolution of a majority of the Board of Trustees, and if Shareholder approval
would be required to make such an amendment to the language set forth in this
Declaration of Trust, such further resolution shall require the same Shareholder
approval that would be necessary to make such amendment to the language set
forth in this Declaration of Trust. Each such further resolution shall be
incorporated herein by reference upon adoption.
Each Series shall be separate and distinct from any other Series, separate
and distinct records on the books of the Trust shall be maintained for each
Series, and the assets and liabilities belonging to any such Series shall be
held and accounted for separately from the assets and liabilities of the Trust
or any other Series. Each Class of a Series shall be separate and distinct from
any other Class of the Series. As appropriate, in a manner determined by the
Board
9
of Trustees, the liabilities belonging to any such Class of the Series shall be
held and accounted for separately from the liabilities of the Trust, the Series
or any other Class of the Series and separate and distinct records on the books
of the Trust for the Class of the Series shall be maintained for this purpose.
Subject to Article II hereof, each such Series shall operate as a separate and
distinct investment medium, with separately defined investment objectives and
policies.
Shares of each Series (and Class thereof where applicable) established and
designated pursuant to this Section 6, unless otherwise provided to the extent
permitted by the DSTA, in the resolution establishing and designating such
Series or Class, shall have the following rights, powers and duties:
(a) Assets Held with Respect to a Particular Series. All
consideration received by the Trust for the issue or sale of Shares of a
particular Series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof from
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,
shall irrevocably be held with respect to that Series for all purposes, subject
only to the rights of creditors with respect to that Series, and shall be so
recorded upon the books of account of the Trust. Such consideration, assets,
income, earnings, profits and proceeds thereof, from whatever source derived,
including, 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 held with respect to" that Series. In the event that
there are any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as assets held with respect to any
particular Series (collectively "General Assets"), the Board of Trustees, or an
appropriate officer as determined by the Board of Trustees, shall allocate such
General Assets to, between or among any one or more of the Series in such manner
and on such basis as the Board of Trustees, in its sole discretion, deems fair
and equitable, and any General Asset so allocated to a particular Series shall
be held with respect to that Series. Each such allocation by or under the
direction of the Board of Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
(b) Liabilities Held with Respect to a Particular Series or Class.
The assets of the Trust held with respect to a particular Series shall be
charged with the liabilities, debts, obligations, costs, charges, reserves and
expenses of the Trust incurred, contracted for or otherwise existing with
respect to such Series. Such liabilities, debts, obligations, costs, charges,
reserves and expenses incurred, contracted for or otherwise existing with
respect to a particular Series are herein referred to as "liabilities held with
respect to" that Series. Any liabilities, debts, obligations, costs, charges,
reserves and expenses of the Trust which are not readily identifiable as being
liabilities held with respect to any particular Series (collectively "General
Liabilities") shall be allocated by the Board of Trustees, or an appropriate
officer as determined by the Board of Trustees, to and among any one or more of
the Series in such manner and on such basis as the Board of Trustees in its sole
discretion deems fair and equitable. Each allocation of liabilities, debts,
obligations, costs, charges, reserves and expenses by or under the direction of
the Board of Trustees shall be conclusive and binding upon the Shareholders of
all Series for all purposes. All Persons who have extended credit that has been
allocated to a particular Series, or who have a
10
claim or contract that has been allocated to any particular Series, shall be
limited exclusively to the assets of that particular Series as the source of
payment of such credit, claim, or contract. In the absence of an express
contractual agreement so limiting the claims of such creditors, claimants and
contract providers, each creditor, claimant and contract provider shall be
deemed nevertheless to have impliedly agreed to such limitation.
Subject to the right of the Board of Trustees in its discretion to
allocate General Liabilities as provided herein, the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to a particular Series, whether such Series is now authorized and
existing pursuant to this Declaration of Trust or is hereafter authorized and
existing pursuant to this Declaration of Trust, shall be enforceable against the
assets held with respect to that Series only, and not against the assets of any
other Series or the Trust generally and none of the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to the Trust generally or any other Series thereof shall be enforceable
against the assets held with respect to such Series. Notice of this limitation
on liabilities between and among Series shall be set forth in the Certificate of
Trust to be filed in the Office of the Secretary of State of the State of
Delaware pursuant to the DSTA, and upon the giving of such notice in the
Certificate of Trust, the statutory provisions of Section 3804 of the DSTA
relating to limitations on liabilities between and among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
Certificate of Trust) shall become applicable to the Trust and each Series.
Liabilities, debts, obligations, costs, charges, reserves and expenses
related to the distribution of, and other identified expenses that should or may
properly be allocated to, the Shares of a particular Class may be charged to and
borne solely by such Class. The bearing of expenses solely by a particular Class
of Shares may be appropriately reflected (in a manner determined by the Board of
Trustees) and may affect the net asset value attributable to, and the dividend,
redemption and liquidation rights of, such Class. Each allocation of
liabilities, debts, obligations, costs, charges, reserves and expenses by or
under the direction of the Board of Trustees shall be conclusive and binding
upon the Shareholders of all Classes for all purposes. All Persons who have
extended credit that has been allocated to a particular Class, or who have a
claim or contract that has been allocated to any particular Class, shall look,
and may be required by contract to look, exclusively to that particular Class
for payment of such credit, claim, or contract.
(c) Dividends, Distributions and Redemptions. Notwithstanding any other
provisions of this Declaration of Trust, including, without limitation, Article
VI hereof, no dividend or distribution including, without limitation, any
distribution paid upon dissolution of the Trust or of any Series with respect
to, nor any redemption of, the Shares of any Series or Class of such Series
shall be effected by the Trust other than from the assets held with respect to
such Series, nor, except as specifically provided in Section 7 of this Article
III, shall any Shareholder of any particular Series otherwise have any right or
claim against the assets held with respect to any other Series or the Trust
generally except, in the case of a right or claim against the assets held with
respect to any other Series, to the extent that such Shareholder has such a
right or claim hereunder as a Shareholder of such other Series. The Board of
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items shall be treated as income and which items as
capital; and each such determination and allocation shall be conclusive and
binding upon the Shareholders.
11
(d) Voting. On any matter submitted to a vote of the Shareholders,
all Shares shall be voted separately by individual Series, except: (i) when
required by the 1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and (ii) when the Trustees have determined that the matter
affects the interests of more than one Series, then the Shareholders of all such
Series shall be entitled to vote thereon. The Trustees may also determine that a
matter affects only the interests of one or more Classes of a Series, in which
case any such matter shall be voted on by such Class or Classes.
(e) Equality. Each Share of any particular Series shall be equal to
each other Share of such Series (subject to the rights and preferences with
respect to separate Classes of such Series).
(f) Fractions. A fractional Share of a Series shall carry
proportionately all the rights and obligations of a whole Share of such Series,
including rights with respect to voting, receipt of dividends and distributions,
redemption of Shares and dissolution of the Trust or that Series.
(g) Exchange Privilege. The Board of Trustees shall have the
authority to provide that the holders of Shares of any Series shall have the
right to exchange said Shares for Shares of one or more other Series in
accordance with such requirements and procedures as may be established by the
Board of Trustees, and in accordance with the 1940 Act.
(h) Combination of Series. The Board of 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 held
with respect to any two or more Series into assets and liabilities held with
respect to a single Series; provided that upon completion of such combination of
Series, the interest of each Shareholder, in the combined assets and liabilities
held with respect to the combined Series shall equal the interest of each such
Shareholder in the aggregate of assets and liabilities held with respect to the
Series that were combined.
(i) Dissolution or Termination. Any particular Series shall be
dissolved upon the occurrence of the applicable dissolution events set forth in
Article VIII, Section 1 hereof. Upon dissolution of a particular Series, the
Trustees shall wind up the affairs of such Series in accordance with Article
VIII Section 1 hereof and thereafter, rescind the establishment and designation
thereof. The Board of Trustees shall terminate any particular Class and rescind
the establishment and designation thereof upon the vote of the holders of not
less than a majority of the Shares outstanding and entitled to vote of such
Class. In addition, at any time there are no Shares outstanding of a particular
Class, the Board of Trustees may terminate such Class and rescind the
establishment and designation thereof; provided, however, that upon the
rescission of the establishment and designation of any particular Series, every
Class of such Series shall thereby be terminated and its establishment and
designation rescinded. Each resolution of the Board of Trustees pursuant to this
Section 6(i) shall be incorporated herein by reference upon adoption.
Section 7. Indemnification of Shareholders. No Shareholder as such shall
be subject to any personal liability whatsoever to any Person in connection with
Trust Property or the acts, obligations or affairs of the Trust. If any
Shareholder or former Shareholder shall be exposed to
12
liability, charged or held personally liable for any obligation or liability of
the Trust, by reason of a claim or demand relating exclusively to his or her
being or having been a Shareholder of the Trust or a Shareholder of a particular
Series thereof, and not because of such Shareholder's actions or omissions, the
Trust (upon proper and timely request by the Shareholder) shall assume the
defense against such charge and satisfy any judgment or settlement thereon, and
such Shareholder or former Shareholder (or, in the case of a natural Person, his
or her heirs, executors, administrators, or other legal representatives or, in
the case of a corporation or other entity, its corporate or other general
successor) shall be entitled to be held harmless from and indemnified out of the
assets of the Trust or out of the assets of such Series thereof, as the case may
be, against all losses and expenses, including, without limitation, attorneys'
fees, arising from such claim or demand; provided, however, such indemnity shall
not cover (i) any taxes due or paid by reason of such Shareholder's ownership of
any Shares and (ii) expenses charged to a Shareholder pursuant to Article IV,
Section 5 hereof.
ARTICLE IV.
THE BOARD OF TRUSTEES
Section 1. Number, Election, Term, Removal and Resignation.
(a) The initial Board of Trustees shall be comprised of the initial
Trustee entering into this Declaration of Trust on the date first written above,
who shall hold office in accordance with paragraph (c) of this Section 1. The
initial Trustee shall (i) execute and file or cause to be filed the Certificate
of Trust with the office of the Secretary of State of the State of Delaware and
(ii) adopt the By-Laws. In accordance with Section 3801 of the DSTA, each
Trustee shall become a Trustee and be bound by this Declaration of Trust and the
By-Laws when such Person signs this Declaration of Trust as a trustee and/or is
duly elected or appointed, qualified and serving on the Board of Trustees in
accordance with the provisions hereof and the By-Laws, so long as such signatory
or other Person continues in office in accordance with the terms hereof.
(b) The number of Trustees constituting the entire Board of Trustees
may be fixed from time to time by the vote of a majority of the then Board of
Trustees; provided, however, that the number of Trustees shall in no event be
less than one (1) nor more than fifteen (15). The number of Trustees shall not
be reduced so as to shorten the term of any Trustee then in office.
(c) Each Trustee shall hold office for the lifetime of the Trust or
until such Trustee's earlier death, resignation, removal, retirement or
inability otherwise to serve, or, if sooner than any of such events, until the
next meeting of Shareholders called for the purpose of electing Trustees or
consent of Shareholders in lieu thereof for the election of Trustees, and until
the election and qualification of his or her successor.
(d) Any Trustee may be removed, with or without cause, by the Board
of Trustees, by action of a majority of the Trustees then in office, or by vote
of the Shareholders at any meeting called for that purpose.
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(e) Any Trustee may resign at any time by giving written notice to
the secretary of the Trust or to a meeting of the Board of Trustees. Such
resignation shall be effective upon receipt, unless specified to be effective at
some later time.
Section 2. Trustee Action by Written Consent Without a Meeting. To the
extent not inconsistent with the provisions of the 1940 Act, any action that may
be taken at any meeting of the Board of Trustees or any committee thereof may be
taken without a meeting and without prior written notice if a consent or
consents in writing setting forth the action so taken is signed by the Trustees
having not less than the minimum number of votes that would be necessary to
authorize or take that action at a meeting at which all Trustees on the Board of
Trustees or any committee thereof, as the case may be, were present and voted. A
consent transmitted by electronic transmission (as defined in the DSTA) by a
Trustee shall be deemed to be written and signed for purposes of this Section.
All such consents shall be filed with the secretary of the Trust and shall be
maintained in the Trust's records.
Section 3. Powers and Other Business Interests.
(a) Powers. Subject to the provisions of this Declaration of Trust,
the business of the Trust (including every Series thereof) shall be managed by
or under the direction of the Board of Trustees, and such Board of Trustees
shall have all powers necessary or convenient to carry out that responsibility.
The Board of Trustees shall have full power and authority to do any and all acts
and to make and execute any and all contracts and instruments that it may
consider necessary or appropriate in connection with the operation and
administration of the Trust (including every Series thereof). The Board of
Trustees shall not be bound or limited by present or future laws or customs with
regard to investments by trustees or fiduciaries, but, subject to the other
provisions of this Declaration of Trust and the By-Laws, shall have full
authority and absolute power and control over the assets and the business of the
Trust (including every Series thereof) to the same extent as if the Board of
Trustees was the sole owner of such assets and business in its own right,
including such authority, power and control to do all acts and things as it, in
its sole discretion, shall deem proper to accomplish the purposes of this Trust.
Without limiting the foregoing, the Board of Trustees may, subject to the
requisite vote for such actions as set forth in this Declaration of Trust and
the By-Laws:
(i) adopt By-Laws not inconsistent with applicable law or this
Declaration of Trust;
(ii) amend, restate and repeal such By-Laws, subject to and in
accordance with the provisions of such By-Laws;
(iii) fill vacancies on the Board of Trustees in accordance
with this Declaration of Trust, the By-Laws and the requirements of
the 1940 Act;
(iv) elect and remove such officers and appoint and terminate
such agents as it considers appropriate, in accordance with this
Declaration of Trust and the By-Laws;
(v) establish and terminate one or more committees of the
Board of Trustees pursuant to the By-Laws;
14
(vi) place Trust Property in custody as required by the 1940
Act, employ one or more custodians of the Trust Property and
authorize such custodians to employ sub-custodians and to place all
or any part of such Trust Property with a custodian or a custodial
system meeting the requirements of the 1940 Act;
(vii) retain a transfer agent, dividend disbursing agent, a
shareholder servicing agent or administrative services agent, or any
number thereof or any other service provider as deemed appropriate;
(viii) provide for the issuance and distribution of Shares of
beneficial interest in the Trust or other securities or financial
instruments directly or through one or more Principal Underwriters
or otherwise;
(ix) retain one or more Investment Adviser(s);
(x) re-acquire and redeem Shares on behalf of the Trust and
transfer Shares pursuant to applicable law;
(xi) set record dates for the determination of Shareholders
with respect to various matters, in the manner provided in Article
V, Section 4 of this Declaration of Trust;
(xii) declare and pay dividends and distributions to
Shareholders from the Trust Property, in accordance with this
Declaration of Trust and the By-Laws;
(xiii) establish, designate and redesignate from time to time,
in accordance with the provisions of Article III, Section 6 hereof,
any Series or Class thereof;
(xiv) hire personnel as staff for the Board of Trustees or,
for those Trustees who are not Interested Persons of the Trust, the
Investment Adviser, or the Principal Underwriter, set the
compensation to be paid by the Trust to such personnel, exercise
exclusive supervision of such personnel, and remove one or more of
such personnel, at the discretion of the Board of Trustees;
(xv) retain special counsel, other experts and/or consultants
for the Board of Trustees, for those Trustees who are not Interested
Persons of the Trust, the Investment Adviser, or the Principal
Underwriter, and/or for one or more of the committees of the Board
of Trustees, set the compensation to be paid by the Trust to such
special counsel, other experts and/or consultants, and remove one or
more of such special counsel, other experts and/or consultants, at
the discretion of the Board of Trustees;
(xvi) engage in and prosecute, defend, compromise, abandon, or
adjust, by arbitration, or otherwise, any actions, suits,
proceedings, disputes, claims, and demands relating to the Trust,
and out of the assets of the Trust to pay or to satisfy any debts,
claims or expenses incurred in connection therewith, including those
of
15
litigation, and such power shall include, without limitation, the
power of the Trustees, or any appropriate committee thereof, in the
exercise of their or its good faith business judgment, to dismiss
any action, suit, proceeding, dispute, claim or demand, derivative
or otherwise, brought by any person, including a shareholder in its
own name or in the name of the Trust, whether or not the Trust or
any of the Trustees may be named individually therein or the subject
matter arises by reason of business for or on behalf of the Trust;
and
(xvii) in general delegate such authority as it considers
desirable to any officer of the Trust, to any committee of the Trust
and to any agent or employee of the Trust or to any such custodian,
transfer, dividend disbursing, shareholder servicing agent,
Principal Underwriter, Investment Adviser, or other service
provider, to the extent authorized and in accordance with this
Declaration of Trust, the By-Laws and applicable law.
The powers of the Board of Trustees set forth in this Section 3(a) are without
prejudice to any other powers of the Board of Trustees set forth in this
Declaration of Trust and the By-Laws. Any determination as to what is in the
best interests of the Trust or any Series (or Class) thereof and its
Shareholders made by the Board of 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 Board of Trustees.
(b) Other Business Interests. The Trustees shall devote to the
affairs of the Trust (including every Series thereof) such time as may be
necessary for the proper performance of their duties hereunder, but neither the
Trustees nor the officers, directors, shareholders, partners or employees of the
Trustees, if any, shall be expected to devote their full time to the performance
of such duties. The Trustees, or any Affiliate, shareholder, officer, director,
partner or employee thereof, or any Person owning a legal or beneficial interest
therein, may engage in, or possess an interest in, any business or venture other
than the Trust or any Series thereof, of any nature and description,
independently or with or for the account of others. None of the Trust, any
Series thereof or any Shareholder shall have the right to participate or share
in such other business or venture or any profit or compensation derived
therefrom.
Section 4. Payment of Expenses by the Trust. Subject to the provisions of
Article III, Section 6 hereof, an authorized officer of the Trust shall pay or
cause to be paid out of the principal or income of the Trust or any particular
Series or Class thereof, or partly out of the principal and partly out of the
income of the Trust or any particular Series or Class thereof, and charge or
allocate the same to, between or among such one or more of the Series or Class
that may be established or designated pursuant to Article III, Section 6 hereof,
as such officer deems fair, all expenses, fees, charges, taxes and liabilities
incurred by or arising in connection with the maintenance or operation of the
Trust or a particular Series or Class thereof, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses, fees, charges, taxes and liabilities associated with the
services of the Trust's officers, employees, Investment Adviser(s), Principal
Underwriter, auditors, counsel, custodian, sub-custodian, transfer agent,
dividend disbursing agent, shareholder servicing agent, and such other agents or
independent contractors and such other expenses, fees, charges, taxes and
liabilities as the Board of Trustees may deem necessary or proper to incur.
16
Section 5. Payment of Expenses by Shareholders. The Board of Trustees
shall have the power, as frequently as it may determine, to cause any
Shareholder to pay directly, in advance or arrears, for charges of the Trust's
custodian or transfer, dividend disbursing, shareholder servicing or similar
agent for services provided to such Shareholder, an amount fixed from time to
time by the Board of Trustees, by setting off such amount due from such
Shareholder from the amount of (i) declared but unpaid dividends or
distributions owed such Shareholder, or (ii) proceeds from the redemption by the
Trust of Shares from such Shareholder pursuant to Article VI hereof.
Section 6. Ownership of Trust Property. Legal title to all of the Trust
Property shall at all times be vested in the Trust, except that the Board of
Trustees shall have the power to cause legal title to any Trust Property to be
held by or in the name of any Person as nominee, on such terms as the Board of
Trustees may determine, in accordance with applicable law.
Section 7. Service Contracts.
(a) Subject to this Declaration of Trust, the By-Laws and the 1940
Act, the Board of Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive investment advisory or investment management services
for the Trust or for any Series thereof with any corporation, trust, association
or other organization, including any Affiliate; and any such contract may
contain such other terms as the Board of Trustees may determine, including
without limitation, delegation of authority to the Investment Adviser to
determine from time to time without prior consultation with the Board of
Trustees what securities and other instruments or property shall be purchased or
otherwise acquired, owned, held, invested or reinvested in, sold, exchanged,
transferred, mortgaged, pledged, assigned, negotiated, or otherwise dealt with
or disposed of, and what portion, if any, of the Trust Property shall be held
uninvested and to make changes in the Trust's or a particular Series'
investments, or to engage in such other activities, including administrative
services, as may specifically be delegated to such party.
(b) The Board of Trustees may also, at any time and from time to
time, contract with any Person, including any Affiliate, appointing it or them
as the exclusive or nonexclusive placement agent, distributor or Principal
Underwriter for the Shares of beneficial interest of the Trust or one or more of
the Series or Classes thereof, or for other securities or financial instruments
to be issued by the Trust, or appointing it or them to act as the administrator,
fund accountant or accounting agent, custodian, transfer agent, dividend
disbursing agent and/or shareholder servicing agent for the Trust or one or more
of the Series or Classes thereof.
(c) The Board of Trustees is further empowered, at any time and from
time to time, to contract with any Persons, including any Affiliates, to provide
such other services to the Trust or one or more of its Series, as the Board of
Trustees determines to be in the best interests of the Trust, such Series and
its Shareholders.
(d) None of the following facts or circumstances shall affect the
validity of any of the contracts provided for in this Article IV, Section 7, or
disqualify any Shareholder, Trustee, employee or officer of the Trust from
voting upon or executing the same, or create any liability or accountability to
the Trust, any Series thereof or the Shareholders, provided that the
17
establishment of and performance of each such contract is permissible under the
1940 Act, and provided further that such Person is authorized to vote upon such
contract under the 1940 Act:
(i) the fact that any of the Shareholders, Trustees, employees
or officers of the Trust is a shareholder, director, officer,
partner, trustee, employee, manager, Adviser, placement agent,
Principal Underwriter, distributor, or Affiliate or agent of or for
any Person, or for any parent or Affiliate of any Person, with which
any type of service contract provided for in this Article IV,
Section 7 may have been or may hereafter be made, or that any such
Person, or any parent or Affiliate thereof, is a Shareholder or has
an interest in the Trust, or
(ii) the fact that any Person with which any type of service
contract provided for in this Article IV, Section 7 may have been or
may hereafter be made also has such a service contract with one or
more other Persons, or has other business or interests.
(e) Every contract referred to in this Section 7 is required to
comply with this Declaration of Trust, the By-Laws, the 1940 Act, other
applicable law and any stipulation by resolution of the Board of Trustees.
ARTICLE V.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers. Subject to the provisions of Article III,
Section 6 hereof, the Shareholders shall have the power to vote only (i) on such
matters required by this Declaration of Trust, the By-Laws, the 1940 Act, other
applicable law and any registration statement of the Trust filed with the
Commission, the registration of which is effective; and (ii) on such other
matters as the Board of Trustees may consider necessary or desirable. Subject to
Article III hereof, the Shareholder of record (as of the record date established
pursuant to Section 4 of this Article V) of each Share shall be entitled to one
vote for each full Share, and a fractional vote for each fractional Share.
Shareholders shall not be entitled to cumulative voting in the election of
Trustees or on any other matter.
Section 2. Quorum and Required Vote.
(a) A majority of the Shares entitled to vote at a Shareholders'
meeting, which are present in person or represented by proxy, shall constitute a
quorum at the Shareholders' meeting, except when a larger quorum is required by
this Declaration of Trust, the By-Laws, applicable law, or the requirements of
any securities exchange on which Shares are listed for trading, in which case
such quorum shall comply with such requirements. When a separate vote by one or
more Series or Classes is required, a majority of the Shares of each such Series
or Class entitled to vote at a Shareholders' meeting of such Series or Class,
which are present in person or represented by proxy, shall constitute a quorum
at the Shareholders' meeting of such Series or Class, except when a larger
quorum is required by this Declaration of Trust, the By-Laws, applicable law or
the requirements of any securities exchange on which Shares of such
18
Series or Class are listed for trading, in which case such quorum shall comply
with such requirements.
(b) Subject to any provision of this Declaration of Trust, the
By-Laws, the 1940 Act or other applicable law that requires a different vote:
(1) in all matters other than the election of Trustees, the affirmative "vote of
a majority of the outstanding voting securities" (as defined herein) of the
Trust entitled to vote at a Shareholders' meeting at which a quorum is present,
shall be the act of the Shareholders; and (2) Trustees shall be elected by not
less than a plurality of the votes cast of the holders of Shares entitled to
vote present in person or represented by proxy at a Shareholders' meeting at
which a quorum is present. Pursuant to Article III, Section 6(d) hereof, where a
separate vote by Series and, if applicable, by Class is required, the preceding
sentence shall apply to such separate votes by Series and Class.
(c) Abstentions and broker non-votes will be treated as votes
present at a Shareholders' meeting; abstentions will be treated as votes cast at
such meeting; but broker non-votes will not be treated as votes cast at such
meeting. Abstentions and broker non-votes, therefore (i) will be included for
purposes of determining whether a quorum is present; (ii) will have no effect on
proposals that require a plurality for approval; but (iii) will have the same
effect as a vote "against" on proposals requiring any percentage of (A) the
Shares of the Trust, Series or Class, as applicable, present, for approval, or
(B) the outstanding voting securities of the Trust, Series or Class, as
applicable, for approval.
Section 3. Shareholder Action by Written Consent Without a Meeting. Any
action which may be taken at any meeting of Shareholders may be taken without a
meeting if a consent or consents in writing setting forth the action so taken is
or are signed by the holders of a majority of the Shares entitled to vote on
such action (or such different proportion thereof as shall be required by law,
the Declaration of Trust or the By-Laws for approval of such action) and is or
are received by the secretary of the Trust either: (i) by the date set by
resolution of the Board of Trustees for the shareholder vote on such action; or
(ii) if no date is set by resolution of the Board, within 30 days after the
record date for such action as determined by reference to Article V, Section
4(b) hereof. The written consent for any such action may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
when taken together shall constitute one and the same instrument. A consent
transmitted by electronic transmission (as defined in the DSTA) by a Shareholder
or by a Person or Persons authorized to act for a Shareholder shall be deemed to
be written and signed for purposes of this Section. All such consents shall be
filed with the secretary of the Trust and shall be maintained in the Trust's
records. Any Shareholder that has given a written consent or the Shareholder's
proxyholder or a personal representative of the Shareholder or its respective
proxyholder may revoke the consent by a writing received by the secretary of the
Trust either: (i) before the date set by resolution of the Board of Trustees for
the shareholder vote on such action; or (ii) if no date is set by resolution of
the Board, within 30 days after the record date for such action as determined by
reference to Article V, Section 4(b) hereof.
Section 4. Record Dates.
(a) For purposes of determining the Shareholders entitled to notice
of, and to vote at, any meeting of Shareholders, the Board of Trustees may fix a
record date, which record date
19
shall not precede the date upon which the resolution fixing the record date is
adopted by the Board of Trustees, and which record date shall not be more than
one hundred and twenty (120) days nor less than ten (10) days before the date of
any such meeting. For purposes of determining the Shareholders entitled to vote
on any action without a meeting, the Board of Trustees may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted by the Board of Trustees, and which record date shall
not be more than ninety (90) days after the date upon which the resolution
fixing the record date is adopted by the Board of Trustees.
(b) If the Board of Trustees does not so fix a record date:
(i) the record date for determining Shareholders entitled to
notice of, and to vote at, a meeting of Shareholders shall be at the
close of business on the day next preceding the day on which notice
is given or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held; and
(ii) the record date for determining Shareholders entitled to
vote on any action by consent in writing without a meeting of
Shareholders, (1) when no prior action by the Board of Trustees has
been taken, shall be the day on which the first signed written
consent setting forth the action taken is delivered to the Trust, or
(2) when prior action of the Board of Trustees has been taken, shall
be at the close of business on the day on which the Board of
Trustees adopts the resolution taking such prior action.
(c) For the purpose of determining the Shareholders of the Trust or
any Series or Class thereof who are entitled to receive payment of any dividend
or of any other distribution of assets of the Trust or any Series or Class
thereof (other than in connection with a merger, consolidation, conversion, or
reorganization, which is governed by Article VIII of the Declaration of Trust),
the Board of Trustees may
(i) from time to time fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall not be more than
sixty (60) days before the date for the payment of such dividend
and/or such other distribution;
(ii) adopt standing resolutions fixing record dates and
related payment dates at periodic intervals of any duration for the
payment of such dividend and/or such other distribution; and/or
(iii) delegate to an appropriate officer or officers of the
Trust the determination of such periodic record and/or payments
dates with respect to such dividend and/or such other distribution.
Nothing in this Section shall be construed as precluding the Board of Trustees
from setting different record dates for different Series or Classes.
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Section 5. Additional Provisions. The By-Laws may include further
provisions for Shareholders' votes, meetings and related matters.
ARTICLE VI.
NET ASSET VALUE; DISTRIBUTIONS;
REDEMPTIONS; TRANSFERS
Section 1. Determination of Net Asset Value, Net Income and Distributions.
(a) Subject to Article III, Section 6 hereof, the Board of Trustees
shall have the power to determine from time to time the offering price for
authorized, but unissued, Shares of beneficial interest of the Trust or any
Series or Class thereof, respectively, that shall yield to the Trust or such
Series or Class not less than the net asset value thereof, in addition to any
amount of applicable sales charge to be paid to the Principal Underwriter or the
selling broker or dealer in connection with the sale of such Shares, at which
price the Shares of the Trust or such Series or Class, respectively, shall be
offered for sale, subject to any other requirements or limitations of the 1940
Act.
(b) Subject to Article III, Section 6 hereof, the Board of Trustees
may, subject to the 1940 Act, prescribe and shall set forth in the By-Laws, this
Declaration of Trust or in a resolution of the Board of Trustees such bases and
time for determining the net asset value per Share of the Trust or any Series or
Class thereof, or net income attributable to the Shares of the Trust or any
Series or Class thereof or the declaration and payment of dividends and
distributions on the Shares of the Trust or any Series or Class thereof, as it
may deem necessary or desirable, and such dividends and distributions may vary
between the Classes of a Series to reflect differing allocations of the expenses
of the Trust between such Classes to such extent and for such purposes as the
Trustees may deem appropriate.
(c) With respect to any Series or Classes, dividends and
distributions on Shares of a particular Series or Class may be paid or credited
in such manner and with such frequency, which may be daily or otherwise, as the
Board of Trustees may determine pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Board of Trustees may determine.
Such dividends and distributions may be paid or credited to the holders of
Shares of that Series or Class, from such of the income and capital gains,
accrued or realized, from the assets belonging to that Series, as the Board of
Trustees may determine after providing for actual and accrued liabilities
belonging to that Series or Class or after retaining such amounts as the Board
of Trustees may deem desirable to use in the conduct of the Trust's current or
future business requirements. All dividends and distributions on Shares of a
particular Series or Class shall be distributed pro rata to the holders of that
Series or Class in proportion to the number of Shares of that Series or Class
held by such holders at the date and time of record established for the payment
of such dividends or distributions, except that in connection with any dividend
or distribution program or procedure the Board of Trustees may determine that no
dividend or distribution shall be payable on Shares as to which the
Shareholder's purchase order and/or payment have not been received by the time
or times established by the Board of Trustees under such program or procedure.
Such dividends and distributions may be made in cash or Shares or a combination
thereof as determined by the Board of Trustees or pursuant to any program that
21
the Board of Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or distribution to that
Shareholder. Any such dividend or distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with this Article VI,
Section 1. No Share shall have any priority or preference over any other Share
of the same Series with respect to dividends or distributions paid in the
ordinary course of business or distributions upon dissolution of the Trust or of
such Series made pursuant to Article VIII, Section 1 hereof; provided however,
that if the Shares of a Series are divided into Classes thereof, no Share of a
particular Class shall have any priority or preference over any other Share of
the same Class with respect to dividends or distributions paid in the ordinary
course of business or distributions upon dissolution of the Trust or of such
Series made pursuant to Article VIII, Section 1 hereof.
(d) Before payment of any dividend there may be set aside out of any
funds of the Trust, or the applicable Series thereof, available for dividends
such sum or sums as the Board of Trustees may from time to time, in its absolute
discretion, think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the Trust,
or any Series thereof, or for such other lawful purpose as the Board of Trustees
shall deem to be in the best interests of the Trust, or the applicable Series,
as the case may be, and the Board of Trustees may abolish any such reserve in
the manner in which the reserve was created.
Section 2. Redemptions at the Option of a Shareholder. Unless otherwise
provided in the prospectus of the Trust relating to the Shares, as such
prospectus may be amended from time to time:
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a Person designated by
the Trust that the Trust purchase such Shares and/or in accordance with such
other procedures for redemption as the Board of Trustees may from time to time
authorize. If certificates have been issued to a Shareholder, any request for
redemption by such Shareholder must be accompanied by surrender of any
outstanding certificate or certificates for such Shares in form for transfer,
together with such proof of the authenticity of signatures as may reasonably be
required on such Shares and accompanied by proper stock transfer stamps, if
applicable.
(b) The Trust shall pay for such Shares the net asset value thereof
(excluding any applicable redemption fee or sales load), in accordance with this
Declaration of Trust, the By-Laws, the 1940 Act and other applicable law.
Payments for Shares so redeemed by the Trust shall be made in cash, except
payment for such Shares may, at the option of the Board of Trustees, or such
officer or officers as it may duly authorize in its complete discretion, be made
in kind or partially in cash and partially in kind. In case of any payment in
kind, the Board of Trustees, or its authorized officers, shall have absolute
discretion as to what security or securities of the Trust or the applicable
Series shall be distributed in kind and the amount of the same; and the
securities shall be valued for purposes of distribution at the value at which
they were appraised in computing the then current net asset value of the Shares,
provided that any Shareholder who cannot legally acquire securities so
distributed in kind by reason of the prohibitions of the 1940 Act or the
provisions of the Employee Retirement Income Security Act of 1974, as amended,
or any other applicable law, shall receive cash. Shareholders shall bear the
22
expenses of in-kind transactions, including, but not limited to, transfer agency
fees, custodian fees and costs of disposition of such securities.
(c) Payment by the Trust for such redemption of Shares shall be made
by the Trust to the Shareholder within seven days after the date on which the
redemption request is received in proper form and/or such other procedures
authorized by the Board of Trustees are complied with; provided, however, that
if payment shall be made other than exclusively in cash, any securities to be
delivered as part of such payment shall be delivered as promptly as any
necessary transfers of such securities on the books of the several corporations
whose securities are to be delivered practicably can be made, which may not
necessarily occur within such seven-day period. In no case shall the Trust be
liable for any delay of any corporation or other Person in transferring
securities selected for delivery as all or part of any payment in kind.
(d) The obligations of the Trust set forth in this Section 2 are
subject to the provision that such obligations may be suspended or postponed by
the Board of Trustees (1) during any time the New York Stock Exchange (the
"Exchange") is closed for other than weekends or holidays; (2) if permitted by
the rules of the Commission, during periods when trading on the Exchange is
restricted; or (3) during any National Financial Emergency. The Board of
Trustees may, in its discretion, declare that the suspension relating to a
National Financial Emergency shall terminate, as the case may be, on the first
business day on which the Exchange shall have reopened or the period specified
above shall have expired (as to which, in the absence of an official ruling by
the Commission, the determination of the Board of Trustees shall be conclusive).
(e) The right of any Shareholder of the Trust or any Series or Class
thereof to receive dividends or other distributions on Shares redeemed and all
other rights of such Shareholder with respect to the Shares so redeemed, except
the right of such Shareholder to receive payment for such Shares, shall cease at
the time the purchase price of such Shares shall have been fixed, as provided
above.
Section 3. Redemptions at the Option of the Trust. At the option of the
Board of Trustees the Trust may, from time to time, without the vote of the
Shareholders, but subject to the 1940 Act, redeem Shares or authorize the
closing of any Shareholder account, subject to such conditions as may be
established from time to time by the Board of Trustees.
Section 4. Transfer of Shares. Shares shall be transferable in accordance
with the provisions of the By-Laws.
ARTICLE VII.
LIMITATION OF LIABILITY
AND INDEMNIFICATION OF AGENT
Section 1. Limitation of Liability.
(a) For the purpose of this Article,
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(i) "Agent" means any Person who is or was a Trustee, officer,
employee or other agent of the Trust or is or was serving at the
request of the Trust as a trustee, director, officer, employee or
other agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise;
(ii) "Disinterested Trustee" is one (x) who is not an
"Interested Person" of the Trust (as defined in the 1940 Act,
including anyone who has been exempted from being an "Interested
Person" by any rule, regulation or order of the Commission), and (y)
against whom none of such actions, suits or other Proceedings or
another action, suit or other Proceeding on the same or similar
grounds is then or had been pending;
(iii) "Expenses" include without limitation attorneys' fees
and any expenses of establishing a right to indemnification under
this Article; and
(iv) "Proceeding" means any threatened, pending or completed
action or proceeding, whether civil, criminal, administrative or
investigative.
(b) An Agent, when acting in the Agent's capacity as such, shall be
liable to the Trust and to any Shareholder solely for such Agent's own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Agent (such conduct referred to herein as
"Disqualifying Conduct"), and for nothing else; and, subject to the foregoing, a
Trustee shall not be liable for errors of judgment or mistakes of fact or law.
Subject to the foregoing, and to the fullest extent that limitations on the
liability of Agents are permitted by the DSTA or other applicable law, an Agent
shall not be responsible or liable in any event for any act, omission, neglect
or wrongdoing of any other Agent, and/or of any officer, employee, consultant,
Investment Adviser, Principal Underwriter, administrator, fund accountant or
accounting agent, custodian, transfer agent, dividend disbursing agent and/or
shareholder servicing agent of the Trust.
(c) No Agent, when acting in the Agent's capacity as such, shall be
personally liable to any Person, other than the Trust or a Shareholder to the
extent provided in subsections (b) of this Section 1, for any act, omission or
obligation of the Trust or any Trustee thereof.
(d) Each Trustee, officer and employee of the Trust shall, in the
performance of his or her 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 Investment Adviser, the Principal Underwriter, any other
Agent, selected dealers, accountants, appraisers or other experts or consultants
selected with reasonable care by the Trustees, officers or employees of the
Trust, regardless of whether such counsel or expert may also be a Trustee. The
officers and Trustees may obtain the advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, the By-Laws,
applicable law and their respective duties as officers or Trustees. No such
officer or Trustee shall be liable for any act or omission in accordance with
such advice, records and/or reports and no inference concerning liability shall
arise from a failure to follow such advice, records and/or reports.
24
(e) The officers and Trustees shall not be required to give any bond
hereunder, nor any surety if a bond is required by applicable law.
(f) The limitation on liability contained in this Article applies to
events occurring at the time a Person serves as an Agent whether or not such
Person is an Agent at the time of any Proceeding in which liability is asserted.
(g) No amendment or repeal of this Article shall adversely affect
any right or protection of an Agent that exists at the time of such amendment or
repeal.
Section 2. Indemnification.
(a) Indemnification by Trust. The Trust shall indemnify, out of
Trust Property, to the fullest extent permitted under applicable law, any
Trustee or officer of the Trust who was or is a party or is threatened to be
made a party to any Proceeding by reason of the fact that such Person is or was
a Trustee or officer of the Trust, against Expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred in connection
with such Proceeding if such Person acted in good faith or in the case of a
criminal proceeding, had no reasonable cause to believe the conduct of such
Person was unlawful. The termination of any Proceeding by judgment, order or
settlement shall not of itself create a presumption that such Person did not act
in good faith or that such Person had reasonable cause to believe that such
Person's conduct was unlawful.
(b) Exclusion of Indemnification. Notwithstanding any provision to
the contrary contained herein, there shall be no right to indemnification for
any liability arising by reason of the Disqualifying Conduct of the Trustee or
officer of the Trust, and in accordance therewith, no indemnification shall be
provided hereunder to a Trustee or officer of the Trust:
(i) against any liability to the Trust or the Shareholders by
reason of a final adjudication by the court or other body before
which the Proceeding was brought that the Trustee or officer engaged
in Disqualifying Conduct;
(ii) with respect to any matter as to which the Trustee or
officer shall have been finally adjudicated not to have acted in
good faith or in the reasonable belief that the action of the
Trustee or officer was in, or not opposed to, the best interest of
the Trust; or
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraphs (b)(i) or
(b)(ii) above resulting in a payment by a Trustee or officer, unless
there has been a determination that such Trustee or officer did not
engage in Disqualifying Conduct
(A) by the court or other body approving the settlement
or other disposition or by a reasonable determination, based
upon a review of readily available facts (as opposed to a full
trial-type inquiry) that the Trustee or officer did not engage
in such conduct;
25
(B) by vote of a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or
(C) by written opinion of independent legal counsel.
(c) Required Approval. Any indemnification under this Article shall
be made by the Trust if authorized in the specific case on a determination that
indemnification of the Trustee or officer is proper in the circumstances by a
majority vote of Disinterested Trustees then in office, even though such number
of Trustees shall be less than a quorum; a committee of such Trustees designated
by majority vote of such Disinterested Trustees then in office even though such
number of Trustees shall be less than a quorum; or by independent legal counsel
in a written opinion.
(d) Indemnification by Trust of Agents. Agents and employees of the
Trust who are not Trustees or officers of the Trust may be indemnified under the
same standards and procedures described above, at the discretion of the
Trustees.
(e) Advancement of Expenses. Expenses incurred by an Agent in
defending any Proceeding may be advanced by the Trust before the final
disposition of the Proceeding on receipt of an undertaking by or on behalf of
the Agent to repay the amount of the advance if it shall be determined
ultimately that the Agent is not entitled to be indemnified as authorized in
this Article; provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then
in office act on the matter) or an independent legal counsel in a
written opinion, shall determine, based upon a review of readily
available facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the recipient ultimately will be
found entitled to indemnification.
(f) Other Contractual Rights. Nothing contained in this Article
shall affect any right to indemnification to which Persons may be entitled by
contract, to the extent not inconsistent with applicable law, or otherwise under
law. Nothing contained in this Article shall affect the power of the Trust to
purchase and maintain liability insurance on behalf of any such Person. As used
in this Article, Trustee or officer shall include such Person's heirs, executors
and administrators.
(i) Notwithstanding any provision to the contrary contained
herein, the terms and conditions of any contract entered into
between the Trust and any independent contractor that is or may be
deemed an Agent, as a consequence of providing services or products
to the Trust pursuant to such contract, shall take precedence over
the provisions of this Article and govern with respect to
26
(A) the liability of such independent contractor to the
Trust, any Shareholder or any other Person,
(B) the indemnification of, or advancement of Expenses
to, such independent contractor by the Trust, and
(C) any other contractual rights or obligations of such
independent contractor under such contract
to the extent that the provisions of, and the rights and obligations
under, such contract are in conflict with, or are not addressed by,
the provisions of this Article.
(ii) Subject to the foregoing Sections and subsections of this
Article, all Persons extending credit to, contracting with or having
any claim against the Trust shall look only to the assets of the
Trust for payment under such credit, contract or claim; and neither
the Shareholders nor the Trustees, nor any of the Trust's officers,
employees or Agents, whether past, present or future, shall be
personally liable therefor. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking, and
every other act or thing whatsoever executed in connection with the
Trust shall be conclusively presumed to have been executed or done
by the executors thereof only in their capacity as Trustees of the
Trust or in their capacity as officers, employees or Agents of the
Trust and not personally.
(g) Fiduciaries of Employee Benefit Plan. This Article does not
apply to any Proceeding against any trustee, investment manager or other
fiduciary of an employee benefit plan in that Person's capacity as such, even
though that Person may also be an Agent of the Trust as defined in Section 1 of
this Article. Nothing contained in this Article shall limit any right to
indemnification to which such a trustee, investment manager, or other fiduciary
may be entitled by contract or otherwise which shall be enforceable to the
extent permitted by applicable law other than this Article.
Section 3. Insurance. To the fullest extent permitted by applicable law,
the Board of Trustees shall have the authority to purchase with Trust Property,
insurance for liability and for all Expenses reasonably incurred or paid or
expected to be paid by an Agent in connection with any Proceeding in which such
Agent becomes involved by virtue of such Agent's actions, or omissions to act,
in its capacity or former capacity with the Trust, whether or not the Trust
would have the power to indemnify such Agent against such liability.
Section 4. Derivative Actions. Subject to the requirements set forth in
Section 3816 of the DSTA, a Shareholder or Shareholders may bring a derivative
action on behalf of the Trust only if the Shareholder or Shareholders first make
a pre-suit demand upon the Board of Trustees to bring the subject action unless
an effort to cause the Board of Trustees to bring such action is excused. A
demand on the Board of Trustees shall only be excused if a majority of the Board
of Trustees, or a majority of any committee established to consider the merits
of such action, has a material personal financial interest in the action at
issue. A Trustee shall not be deemed to have
27
a material personal financial interest in an action or otherwise be disqualified
from ruling on a Shareholder demand by virtue of the fact that such Trustee
receives remuneration from his or her service on the Board of Trustees of the
Trust or on the boards of one or more investment companies with the same or an
affiliated investment adviser or underwriter.
ARTICLE VIII.
CERTAIN TRANSACTIONS
Section 1. Dissolution of Trust or Series. The Trust and each Series shall
have perpetual existence, except that the Trust (or a particular Series) shall
be dissolved:
(a) With respect to the Trust, (i) upon the vote of the holders of
not less than a majority of the Shares of the Trust entitled to vote, or (ii) at
the discretion of the Board of Trustees either (A) at any time there are no
Shares outstanding of the Trust, or (B) upon at least thirty (30) days' prior
written notice to the Shareholders of the Trust; or
(b) With respect to a particular Series, (i) upon the vote of the
holders of not less than a majority of the Shares of such Series entitled to
vote, or (ii) at the discretion of the Board of Trustees either (A) at any time
there are no Shares outstanding of such Series, or (B) upon at least thirty (30)
days' prior written notice to the Shareholders of such Series; or
(c) With respect to the Trust (or a particular Series), upon the
occurrence of a dissolution or termination event pursuant to any other provision
of this Declaration of Trust (including Article VIII, Section 2) or the DSTA; or
(d) With respect to each of the Series, upon any event that causes
the dissolution of the Trust.
Upon dissolution of the Trust (or a particular Series, as the case may
be), the Board of Trustees shall (in accordance with Section 3808 of the DSTA)
pay or make reasonable provision to pay all claims and obligations of the Trust
and/or each Series (or the particular Series, as the case may be), including all
contingent, conditional or unmatured claims and obligations known to the Trust,
and all claims and obligations which are known to the Trust, but for which the
identity of the claimant is unknown. If there are sufficient assets held with
respect to the Trust and/or each Series of the Trust (or the particular Series,
as the case may be), such claims and obligations shall be paid in full and any
such provisions for payment shall be made in full. If there are insufficient
assets held with respect to the Trust and/or each Series of the Trust (or the
particular Series, as the case may be), such claims and obligations shall be
paid or provided for according to their priority and, among claims and
obligations of equal priority, ratably to the extent of assets available
therefor. Any remaining assets (including, without limitation, cash, securities
or any combination thereof) held with respect to the Trust and/or each Series of
the Trust (or the particular Series, as the case may be) shall be distributed to
the Shareholders of the Trust and/or each Series of the Trust (or the particular
Series, as the case may be) ratably according to the number of Shares of the
Trust and/or such Series thereof (or the particular Series, as the case may be)
held of record by the several Shareholders on the date for such dissolution
distribution; provided, however, that if the Shares of a Series are divided into
Classes
28
thereof, any remaining assets (including, without limitation, cash, securities
or any combination thereof) held with respect to such Series shall be
distributed to each Class of such Series according to the net asset value
computed for such Class and within such particular Class, shall be distributed
ratably to the Shareholders of such Class according to the number of Shares of
such Class held of record by the several Shareholders on the date for such
dissolution distribution. Upon the winding up of the Trust in accordance with
Section 3808 of the DSTA and its termination, any one (1) Trustee shall execute,
and cause to be filed, a certificate of cancellation, with the office of the
Secretary of State of the State of Delaware in accordance with the provisions of
Section 3810 of the DSTA.
Section 2. Merger or Consolidation; Conversion; Reorganization.
(a) Merger or Consolidation. Pursuant to an agreement of merger or
consolidation, the Board of Trustees, by vote of a majority of the Trustees, may
cause the Trust to merge or consolidate with or into one or more statutory
trusts or "other business entities" (as defined in Section 3801 of the DSTA)
formed or organized or existing under the laws of the State of Delaware or any
other state of the United States or any foreign country or other foreign
jurisdiction. Any such merger or consolidation shall not require the vote of the
Shareholders unless such vote is required by the 1940 Act; provided however,
that the Board of Trustees shall provide at least thirty (30) days' prior
written notice to the Shareholders of such merger or consolidation. By reference
to Section 3815(f) of the DSTA, any agreement of merger or consolidation
approved in accordance with this Section 2(a) may, without a Shareholder vote,
unless required by the 1940 Act, the requirements of any securities exchange on
which Shares are listed for trading or any other provision of this Declaration
of Trust or the By-Laws, effect any amendment to this Declaration of Trust or
the By-Laws or effect the adoption of a new governing instrument if the Trust is
the surviving or resulting statutory trust in the merger or consolidation, which
amendment or new governing instrument shall be effective at the effective time
or date of the merger or consolidation. In all respects not governed by the
DSTA, the 1940 Act, other applicable law or the requirements of any securities
exchange on which Shares are listed for trading, the Board of Trustees shall
have the power to prescribe additional procedures necessary or appropriate to
accomplish a merger or consolidation, including the power to create one or more
separate statutory trusts to which all or any part of the assets, liabilities,
profits or losses of the Trust may be transferred and to provide for the
conversion of Shares into beneficial interests in such separate statutory trust
or trusts. Upon completion of the merger or consolidation, if the Trust is the
surviving or resulting statutory trust, any one (1) Trustee shall execute, and
cause to be filed, a certificate of merger or consolidation in accordance with
Section 3815 of the DSTA.
(b) Conversion. The Board of Trustees, by vote of a majority of the
Trustees, may cause (i) the Trust to convert to an "other business entity" (as
defined in Section 3801 of the DSTA) formed or organized under the laws of the
State of Delaware as permitted pursuant to Section 3821 of the DSTA; (ii) the
Shares of the Trust or any Series to be converted into beneficial interests in
another statutory trust (or series thereof) created pursuant to this Section 2
of this Article VIII, or (iii) the Shares to be exchanged under or pursuant to
any state or federal statute to the extent permitted by law. Any such statutory
conversion, Share conversion or Share exchange shall not require the vote of the
Shareholders unless such vote is required by the 1940 Act; provided however,
that the Board of Trustees shall provide at least thirty (30) days' prior
written notice to the Shareholders of the Trust of any conversion of Shares of
the Trust pursuant to Subsections (b)(i) or (b)(ii) of this Section 2 or
exchange of Shares of the Trust pursuant to Subsection (b)(iii) of this Section
2, and at least thirty (30) days' prior
29
written notice to the Shareholders of a particular Series of any conversion of
Shares of such Series pursuant to Subsection (b)(ii) of this Section 2 or
exchange of Shares of such Series pursuant to Subsection (b)(iii) of this
Section 2. In all respects not governed by the DSTA, the 1940 Act, other
applicable law or the requirements of any securities exchange on which Shares
are listed for trading, the Board of Trustees shall have the power to prescribe
additional procedures necessary or appropriate to accomplish a statutory
conversion, Share conversion or Share exchange, including the power to create
one or more separate statutory trusts to which all or any part of the assets,
liabilities, profits or losses of the Trust may be transferred and to provide
for the conversion of Shares of the Trust or any Series thereof into beneficial
interests in such separate statutory trust or trusts (or series thereof).
(c) Reorganization. The Board of Trustees, by vote of a majority of
the Trustees, may cause the Trust to sell, convey and transfer all or
substantially all of the assets of the Trust ("sale of Trust assets") or all or
substantially all of the assets associated with any one or more Series ("sale of
such Series' assets"), to another trust, statutory trust, partnership, limited
partnership, limited liability company, corporation or other association
organized under the laws of any state, or to one or more separate series
thereof, or to the Trust to be held as assets associated with one or more other
Series of the Trust, in exchange for cash, shares or other securities
(including, without limitation, in the case of a transfer to another Series of
the Trust, Shares of such other Series) with such sale, conveyance and transfer
either (i) being made subject to, or with the assumption by the transferee of,
the liabilities associated with the Trust or the liabilities associated with the
Series the assets of which are so transferred, as applicable, or (ii) not being
made subject to, or not with the assumption of, such liabilities. Any such sale,
conveyance and transfer shall not require the vote of the Shareholders unless
such vote is required by the 1940 Act; provided, that the Board of Trustees
shall provide at least thirty (30) days' prior written notice to the
Shareholders of the Trust of any such sale of Trust assets, and at least thirty
(30) days' prior written notice to the Shareholders of a particular Series of
any such sale of such Series' assets. Following such sale of Trust assets, the
Board of Trustees shall distribute such cash, shares or other securities ratably
among the Shareholders of the Trust (giving due effect to the assets and
liabilities associated with and any other differences among the various Series
the assets associated with which have been so sold, conveyed and transferred,
and due effect to the differences among the various Classes within each such
Series). Following a sale of such Series' assets, the Board of Trustees shall
distribute such cash, shares or other securities ratably among the Shareholders
of such Series (giving due effect to the differences among the various Classes
within each such Series). If all of the assets of the Trust have been so sold,
conveyed and transferred, the Trust shall be dissolved, and if all of the assets
of a Series have been so sold, conveyed and transferred, such Series shall be
dissolved. In all respects not governed by the DSTA, the 1940 Act or other
applicable law, the Board of Trustees shall have the power to prescribe
additional procedures necessary or appropriate to accomplish such sale,
conveyance and transfer, including the power to create one or more separate
statutory trusts to which all or any part of the assets, liabilities, profits or
losses of the Trust may be transferred and to provide for the conversion of
Shares into beneficial interests in such separate statutory trust or trusts.
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Section 3. Master Feeder Structure. If permitted by the 1940 Act, the
Board of Trustees, by vote of a majority of the Trustees, and without a
Shareholder vote, may cause the Trust or any one or more Series to convert to a
master feeder structure (a structure in which a feeder fund invests all of its
assets in a master fund, rather than making investments in securities directly)
and thereby cause existing Series of the Trust to either become feeders to a
master fund, or to become master funds to which other funds are feeders.
Section 4. Absence of Appraisal or Dissenters' Rights. No Shareholder
shall be entitled, as a matter of right, to relief as a dissenting Shareholder
in respect of any proposal or action involving the Trust or any Series or Class
thereof.
ARTICLE IX.
AMENDMENTS
Section 1. Amendments Generally. This Declaration of Trust may be restated
and/or amended at any time by approval
(a) By vote of the Shareholders in accordance with Article III,
Section 6 hereof and Article V hereof; or
(b) By vote of not less than a majority of the Board of Trustees at
a properly convened meeting or by an instrument in writing signed by not less
than a majority of the Board of Trustees; provided that, to the extent that this
Declaration of Trust, the 1940 Act or the requirements of any securities
exchange on which Shares are listed for trading, requires, in addition to, or
apart from, such approval by action of the Board of Trustees, approval of such
restatement or amendment by the Shareholders, such restatement or amendment is
also approved by vote of the Shareholders in accordance with Article III,
Section 6 hereof and Article V hereof.
Notwithstanding any provision to the contrary in this Article IX, except as
otherwise expressly provided in this Declaration of Trust and/or the By-Laws, no
restatement or amendment may be made to this Declaration of Trust or the By-Laws
that would change any rights with respect to any Shares by reducing the amount
payable thereon upon the liquidation of the Trust or by diminishing or
eliminating any voting rights pertaining to reducing the amount payable thereon
upon liquidation of the Trust, except with the vote or consent of the holders of
two-thirds of the Shares outstanding and entitled to vote. Any such restatement
and/or amendment hereto shall be effective immediately upon execution and
approval or upon such future date and time as may be stated therein. The
Certificate of Trust shall be restated and/or amended at any time by the Board
of Trustees, without Shareholder approval, to make any change therein to conform
the Certificate of Trust to any amendment in the Declaration of Trust or By-Laws
or to correct any inaccuracy contained in the Certificate of Trust. Any such
restatement and/or amendment of the Certificate of Trust shall be executed by at
least one (1) Trustee and shall be effective immediately upon its filing with
the office of the Secretary of State of the State of Delaware or upon such
future date as may be stated therein.
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ARTICLE X.
MISCELLANEOUS
Section 1. References; Headings; Counterparts. In this Declaration of
Trust and in any restatement hereof and/or amendment hereto, references to this
instrument, and all expressions of similar effect to "herein," "hereof' and
"hereunder," shall be deemed to refer to this instrument as so restated and/or
amended. Headings are placed herein for convenience of reference only and shall
not be taken as a part hereof or control or affect the meaning, construction or
effect of this instrument. Whenever the singular number is used herein, the same
shall include the plural; and the neuter, masculine and feminine genders shall
include each other, as applicable. Any references herein to specific sections of
the DSTA, the Code or the 1940 Act shall refer to such sections as amended from
time to time or any successor sections thereof. This instrument may be executed
in any number of counterparts, each of which shall be deemed an original.
Section 2. Applicable Law. This Declaration of Trust is created under and
is to be governed by and construed and administered according to the laws of the
State of Delaware and the applicable provisions of the 1940 Act and the Code.
The Trust shall be a Delaware statutory trust pursuant to the DSTA, and without
limiting the provisions hereof, the Trust may exercise all powers which are
ordinarily exercised by such a statutory trust.
Section 3. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration of Trust are severable, and
if the Board of Trustees shall determine, with the advice of counsel, that any
of such provisions is in conflict with the 1940 Act, the Code, the DSTA, or with
other applicable laws and regulations, the conflicting provision shall be deemed
not to have constituted a part of this Declaration of Trust from the time when
such provisions became inconsistent with such laws or regulations; provided,
however, that such determination shall not affect any of the remaining
provisions of this Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision 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 affect such provision in any other jurisdiction or any
other provision of this Declaration of Trust in any jurisdiction.
Section 4. Statutory Trust Only. It is the intention of the Trustees to
create hereby a statutory trust pursuant to the DSTA, and thereby to create the
relationship of trustee and beneficial owners within the meaning of the DSTA
between, respectively, the Trustees and each Shareholder. It is not the
intention of the Trustees to create a general or limited partnership, limited
liability company, joint stock association, corporation, bailment, or any form
of legal relationship other than a statutory trust pursuant to the DSTA. Nothing
in this Declaration of Trust shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
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Section 5. Use of the Names "Nationwide" and/or "Gartmore".(a) The Board
of Trustees expressly agrees and acknowledges that the names "Nationwide" and
"Gartmore" are the sole property of Nationwide Mutual Insurance Company
("Nationwide"). Nationwide has granted to the Trust a non-exclusive license to
use such names as part of the name of the Trust now and in the future. The Board
of Trustees further expressly agrees and acknowledges that the non-exclusive
license granted herein may be terminated by Nationwide if the Trust ceases to
use Nationwide or one of its Affiliates as Investment Adviser or to use other
Affiliates or successors of Nationwide for such purposes. In such event, the
nonexclusive license may be revoked by Nationwide and the Trust shall cease
using the names "Nationwide" and/or "Gartmore," or any name misleadingly
implying a continuing relationship between the Trust and Nationwide or any of
its Affiliates, as part of its name unless otherwise consented to by Nationwide
or any successor to its interests in such names.
The Board of Trustees further understands and agrees that so long as
Nationwide and/or any future advisory Affiliate of Nationwide shall continue to
serve as the Trust's Investment Adviser, other registered open- or closed-end
investment companies ("funds") as may be sponsored or advised by Nationwide or
its Affiliates shall have the right permanently to adopt and to use the names
"Nationwide" and/or "Gartmore" in their names and in the names of any series or
class of shares of such funds.
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IN WITNESS WHEREOF, the Trustee named below does hereby make and enter
into this Agreement and Declaration of Trust as of the date first written above.
_______________________________
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IN WITNESS WHEREOF, the Trustees named below do hereby make and enter into
this Agreement and Declaration of Trust as of the date first written above.
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