Effective as of
, 1997
AGREEMENT AND DECLARATION OF TRUST
of
FRANKLIN FLOATING RATE TRUST
a Delaware Business Trust
Principal Place of Business:
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TABLE OF CONTENTS
Page
ARTICLE I....................................................................1
Name and Definitions...................................................1
Section 1. Name.................................................1
Section 2. Definitions..........................................1
(a) Trust...........................................1
(b) Trust Property..................................1
(c) Trustees........................................1
(d) Shares..........................................2
(e) Shareholder.....................................2
(f) Person..........................................2
(g) 1940 Act........................................2
(h) Commission and Principal
Underwriter....................................2
(i) Declaration of Trust............................2
(j) By-Laws.........................................2
(k) Interested Person...............................2
(1) Investment Manager..............................2
(m) Series..........................................2
ARTICLE II...................................................................3
Purpose of Trust.......................................................3
ARTICLE III..................................................................3
Shares.................................................................3
Section 1. Division of Beneficial Interest......................3
Section 2. Ownership of Shares..................................4
Section 3. Investments in the Trust.............................4
Section 4. Status of Shares and Limitation of
Personal Liability.................................4
Section 5. Power of Board of Trustees to Change
Provisions Relating to Shares......................5
Section 6. Establishment and Designation of
Shares.............................................5
(a) Assets Held with Respect to a Particular Series......5
(b) Liabilities Held with Respect to a Particular Series.6
(c) Dividends, Distributions, Redemptions, and Repurchases
7
(d) Voting...............................................7
(e) Equality.............................................7
(f) Fractions............................................7
(g) Exchange Privilege...................................8
(h) Combination of Series................................8
(i) Elimination of Series................................8
Section 7. Indemnification of Shareholders......................8
ARTICLE IV...................................................................8
The Board of Trustees..................................................8
Section 1. Number, Election and Tenure..........................8
Section 2. Effect of Death, Resignation, etc. of
a Trustee..........................................9
Section 3. Powers...............................................9
Section 4. Payment of Expenses by the Trust....................13
Section 5. Payment of Expenses by Shareholders.................13
Section 6. Ownership of Assets of the Trust....................14
Section 7. Service Contracts...................................14
ARTICLE V...................................................................16
Shareholders' Voting Powers and Meetings..............................16
Section 1. Voting Powers.......................................16
Section 2. Meetings............................................16
Section 3. Quorum and Required Vote............................16
Section 4. Action by Written Consent...........................17
Section 5. Record Dates........................................17
Section 6. Additional Provisions...............................17
ARTICLE VI..................................................................18
Net Asset Value, Distributions, and Redemptions.......................18
......Section 1. Determination of Net Asset Value, Net
Income, and Distributions.........................18
ARTICLE VII.................................................................18
Compensation and Limitation of Liability of Trustees..................18
Section 1. Compensation........................................18
Section 2. Indemnification and Limitation of
Liability.........................................18
Section 3. Trustee's Good Faith Action, Expert
Advice, No Bond or Surety.........................19
Section 4. Insurance...........................................19
ARTICLE VIII................................................................19
Miscellaneous.........................................................19
......Section 1. Liability of Third Persons Dealing
with Trustees.....................................19
Section 2. Termination of Trust or Series......................19
Section 3. Merger and Consolidation............................20
Section 4. Amendments..........................................20
Section 5. Filing of Copies, References, Headings..............21
Section 6. Applicable Law......................................21
Section 7. Provisions in Conflict with Law or
Regulations.......................................21
Section 8. Business Trust Only.................................22
Section 9. Use of the name "Franklin"..........................22
ARTICLE IX..................................................................22
Certain Transactions..................................................22
AGREEMENT AND DECLARATION OF TRUST
OF
FRANKLIN FLOATING RATE TRUST
WHEREAS, THIS AGREEMENT AND DECLARATION OF TRUST is made and
entered into as of the date set forth below by the Trustees named hereunder
for the purpose of forming a Delaware business trust in accordance with the
provisions hereinafter set forth,
NOW, THEREFORE, the Trustees hereby direct that a Certificate of
Trust be filed with the office of the Secretary of State of the State of
Delaware and do hereby declare that the Trustees will hold IN TRUST all cash,
securities and other assets which the Trust now possesses or may hereafter
acquire from time to time in any manner and manage and dispose of the same
upon the following terms and conditions for the PRO RATA benefit of the
holders of Shares in this Trust.
ARTICLE I.
Name and Definitions
SECTION 1. NAME. This trust shall be known as "Franklin
Floating Rate Trust" and the Trustees shall conduct the business of the Trust
under that name or any other name as they may from time to time determine.
SECTION 2. DEFINITIONS. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) The "Trust" refers to the Delaware business trust
established by this Agreement and Declaration of Trust, as amended from time
to time;
(b) The "Trust Property" means any and all property,
real or personal, tangible or intangible, which is owned or held by or for
the account of the Trust, including without limitation the rights referenced
in Article VIII, Section 9 hereof;
(c) "Trustees" refers to the persons who have signed
this Agreement and Declaration of Trust, so long as they continue in office
in accordance with the terms hereof, and all other persons who may from time
to time be duly elected or appointed to serve on the Board of Trustees in
accordance with the provisions hereof, and reference herein to a Trustee or
the Trustees shall refer to such person or persons in their capacity as
trustees hereunder;
(d) "Shares" means the shares of beneficial interest
into which the beneficial interest in the Trust shall be divided from time to
time and includes fractions of Shares as well as whole Shares;
(e) "Shareholder" means a record owner of outstanding
Shares;
(f) "Person" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures, estates and
other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof, whether domestic or foreign;
(g) The 1940 Act" refers to the Investment Company Act
of 1940 and the Rules and Regulations thereunder, all as amended from time to
time;
(h) The terms "Commission" and "Principal Underwriter"
shall have the respective meanings given them in Section 2(a)(7) and Section
(2)(a)(29) of the 1940 Act;
(i) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust, as amended or restated from time to time;
(j) "By-Laws" shall mean the By-Laws of the Trust as
amended from time to time and incorporated herein by reference;
(k) The term "Interested Person" has the meaning given
it in Section 2(a)(19) of the 1940 Act;
(l) "Investment Manager" or "Manager" means a party
furnishing services to the Trust pursuant to any contract described in
Article IV, Section 7(a) hereof;
(m) "Series" refers to each Series of Shares established
and designated under or in accordance with the provisions of Article III and
shall mean an entity such as that described in Section 18(f)(2) of the 1940
Act, and subject to Rule 18f-2 thereunder.
ARTICLE II.
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on the
business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities.
ARTICLE III.
Shares
SECTION 1. DIVISION OF BENEFICIAL INTEREST. The beneficial
interest in the Trust shall at all times be divided into an unlimited number
of Shares, with a par value of $ .01 per Share. The Trustees may authorize
the division of Shares into separate Series and the division of Series into
separate classes of Shares. The different Series shall be established and
designated, and the variations in the relative rights and preferences as
between the different Series shall be fixed and determined, by the Trustees.
If only one or no Series (or classes) shall be established, the Shares shall
have the rights and preferences 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.
Subject to the provisions of Section 6 of this Article III, each
Share shall have voting rights as provided in Article V hereof, and holders
of the Shares of any Series shall be entitled to receive dividends, when, if
and as declared with respect thereto in the manner provided in Article VI,
Section 1 hereof. No Shares shall have any priority or preference over any
other Share of the same Series with respect to dividends or distributions
upon termination of the Trust or of such Series made pursuant to Article
VIII, Section 2 hereof. All dividends and distributions shall be made
ratably among all Shareholders of a particular (class of a) Series from the
assets held with respect to such Series according to the number of Shares of
such (class of such) Series held of record by such Shareholder on the record
date for any dividend or distribution or on the date of termination, as the
case may be. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
any Series. The Trustees may from time to time divide or combine the Shares
of any particular Series into a greater or lesser number of Shares of that
Series without thereby materially changing the proportionate beneficial
interest of the Shares of that Series in the assets held with respect to that
Series or materially affecting the rights of Shares of any other Series.
SECTION 2. OWNERSHIP OF SHARES. The ownership of Shares shall
be recorded on the books of the Trust or a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each
Series (or class). No certificates certifying the ownership of Shares shall
be issued except as the Board of Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider appropriate for
the transfer of Shares of each Series (or class) and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar
agent, as the case may be, shall be conclusive as to who are the Shareholders
of each Series (or class) and as to the number of Shares of each Series (or
class) held from time to time by each.
SECTION 3. INVESTMENTS IN THE TRUST. Investments may be
accepted by the Trust from such Persons, at such times, on such terms, and
for such consideration as the Trustees from time to time may authorize. Each
investment shall be credited to the individual Shareholder's account in the
form of full and fractional Shares of the Trust, of such Series (or class) as
the purchaser shall select, at the net asset value per Share next determined
for such Series (or class) after receipt of the investment; provided,
however, that the Trustees may, in their sole discretion, impose a sales
charge upon investments in the Trust.
SECTION 4. STATUS OF SHARES AND LIMITATION OF PERSONAL
LIABILITY. Shares shall be deemed to be personal property giving only the
rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to
the terms hereof and to have become a party hereto. The death of a
Shareholder during the existence of the Trust shall not operate to terminate
the Trust, nor entitle the representative of any deceased Shareholder to an
accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but entitles such representative only to the rights of said
deceased Shareholder under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
Property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders as
partners. Neither the Trust nor the Trustees, nor any officer, employee or
agent of the Trust shall have any power to bind personally any Shareholders,
nor, except as specifically provided herein, to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay.
SECTION 5. POWER OF BOARD OF TRUSTEES TO CHANGE PROVISIONS
RELATING TO SHARES. Notwithstanding any other provisions of this Declaration
of Trust and without limiting the power of the Board of Trustees to amend the
Declaration of Trust as provided elsewhere herein, the Board of Trustees
shall have the power to amend this Declaration of Trust, at any time and from
time to time, in such manner as the Board of Trustees may determine in their
sole discretion, without the need for Shareholder action, so as to add to,
delete, replace or otherwise modify any provisions relating to the Shares
contained in this Declaration of Trust, provided that before adopting any
such amendment without Shareholder approval the Board of Trustees shall
determine that it is consistent with the fair and equitable treatment of all
Shareholders or that Shareholder approval is not otherwise required by the
1940 Act or other applicable law. If Shares have been issued, Shareholder
approval shall be required to adopt any amendments to this Declaration of
Trust which would adversely affect to a material degree the rights and
preferences of the Shares of any Series (or class) or to increase or decrease
the par value of the Shares of any Series (or class).
Subject to the foregoing Paragraph, the Board of Trustees may
amend the Declaration of Trust to amend any of the provisions set forth in
paragraphs (a) through (i) of Section 6 of this Article III.
SECTION 6. ESTABLISHMENT AND DESIGNATION OF SHARES. The
establishment and designation of any Series (or class) of Shares shall be
effective upon the resolution by a majority of the then Trustees, adopting a
resolution which sets forth such establishment and designation and the
relative rights and preferences of such Series (or class). Each such
resolution shall be incorporated herein by reference upon adoption.
Shares of each Series (or class) established pursuant to this
Section 6, unless otherwise provided in the resolution establishing such
Series, shall have the following relative rights and preferences:
(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, 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 Trustees shall
allocate such General Assets to, between or among any one or more of the
Series in such manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable, and any General Asset so allocated to a
particular Series shall be held with respect to that Series. Each such
allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series for all purposes.
(b). LIABILITIES HELD WITH RESPECT TO A PARTICULAR
SERIES. The assets of the Trust held with respect to each particular Series
shall be charged against the liabilities of the Trust held with respect to
that Series and all expenses, costs, charges and reserves attributable to
that Series, and any general liabilities of the Trust which are not readily
identifiable as being held with respect to any particular Series shall be
allocated and charged by the Trustees to and among any one or more of the
Series in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. The liabilities, expenses, costs,
charges, and reserves so charged to a Series are herein referred to as
"liabilities held with respect to" that Series. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. All
Persons who have extended credit which has been allocated to a particular
Series, or who have a claim or contract which has been allocated to any
particular Series, shall look, and shall be required by contract to look
exclusively, to the assets of that particular Series for 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 will be deemed
nevertheless to have impliedly agreed to such limitation unless an express
provision to the contrary has been incorporated in the written contract or
other document establishing the claimant relationship.
(c). DIVIDENDS, DISTRIBUTIONS, REDEMPTIONS, AND
REPURCHASES. Notwithstanding any other provisions of this Declaration of
Trust, including, without limitation, Article VI, no dividend or distribution
including, without limitation, any distribution paid upon termination of the
Trust or of any Series (or class) with respect to, nor any redemption or
repurchase of, the Shares of any Series (or class) shall be effected by the
Trust other than from the assets 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 except to the extent
that such Shareholder has such a right or claim hereunder as a Shareholder of
such other Series. The Trustees shall have full discretion, to the extent
not inconsistent with the 1940 Act, to determine which items shall be treated
as income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders.
(d). VOTING. All Shares of the Trust entitled to
vote on a matter shall vote separately by Series (and, if applicable, by
class): that is, the Shareholders of each Series (or class) shall have the
right to approve or disapprove matters affecting the Trust and each
respective series (or class) as if the Series (or classes) were separate
companies. There are, however, two exceptions to voting by separate Series
(or classes). First, if the 1940 Act or the Declaration of Trust requires
all Shares of the Trust to be voted in the aggregate without differentiation
between the separate Series (or classes), then all the Trust's Shares shall
be entitled to vote on a one-vote-per-Share basis. Second, if any matter
affects only the interests of some but not all Series (or classes), then only
the Shareholders of such affected Series (or classes) shall be entitled to
vote on the matter.
(e). EQUALITY. All the Shares of each particular
Series shall represent an equal proportionate undivided interest in the
assets held with respect to that Series (subject to the liabilities held with
respect to that Series and such rights and preferences as may have been
established and designated with respect to classes of Shares within such
Series), and each Share of any particular Series shall be equal to each other
Share of that Series.
(f). FRACTIONS. Any fractional Share of a Series
shall carry proportionately all the rights and obligations of a whole share
of that Series, including rights with respect to voting, receipt of dividends
and distributions, redemption of Shares and termination of the Trust.
(g). EXCHANGE PRIVILEGE. The Trustees shall have
the authority to provide that the holders of Shares of any Series shall have
the right to exchange said Shares for Shares of one or more other Series of
Shares in accordance with such requirements and procedures as may be
established by the Trustees.
(h). COMBINATION OF SERIES. The Trustees shall have
the authority, without the approval of the Shareholders of any Series unless
otherwise required by applicable law, to combine the assets and liabilities
held with respect to any two or more series into assets and liabilities held
with respect to a single series.
(i). ELIMINATION OF SERIES. At any time that there
are no Shares outstanding of any particular Series (or class) previously
established and designated, the Trustees may by resolution of a majority of
the then Trustees abolish that Series (or class) and rescind the
establishment and designation thereof.
SECTION 7. INDEMNIFICATION OF SHAREHOLDERS. If any
Shareholder or former Shareholder shall be exposed to liability by reason of
a claim or demand relating to his or her being or having been a Shareholder,
and not because of his or her acts or omissions, the Shareholder or former
Shareholder (or his or her heirs, executors, administrators, or other legal
representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled to be held harmless
from and indemnified out of the assets of the Trust against all loss and
expense arising from such claim or demand.
ARTICLE IV.
The Board of Trustees
SECTION 1. NUMBER, ELECTION AND TENURE. The number of Trustees
constituting the Board of Trustees shall be fixed from time to time by a
written instrument signed, or by resolution approved at a duly constituted
meeting, by a majority of the 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 Board of Trustees, by action of a majority of the then
Trustees at a duly constituted meeting, may fill vacancies in the Board of
Trustees or remove Trustees with or without cause. Each Trustee shall serve
during the continued lifetime of the Trust until he or she dies, resigns, is
declared bankrupt or incompetent by a court of appropriate jurisdiction, or
is removed, or, if sooner, until the next meeting of Shareholders called for
the purpose of electing Trustees and until the election and qualification of
his or her successor. Any Trustee may resign at any time by written
instrument signed by him and delivered to any officer of the Trust or to a
meeting of the Trustees. Such resignation shall be effective upon receipt
unless specified to be effective at some other time. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee
resigning and no Trustee removed shall have any right to any compensation for
any period following his or her resignation or removal, or any right to
damages on account of such removal. The Shareholders may fix the number of
Trustees and elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. Any Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds of the outstanding Shares of the Trust.
A meeting of Shareholders for the purpose of electing or removing one or more
Trustees may be called (i) by the Trustees upon their own vote or (ii) upon
the demand of Shareholders owning 10% or more of the Shares of the Trust in
the aggregate.
SECTION 2. EFFECT OF DEATH, RESIGNATION, ETC. OF A
Trustee. The death, declination, resignation, retirement, removal, or
incapacity of one or more Trustees, or all of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to the
terms of this Declaration of Trust. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled as provided in Article IV,
Section 1, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration of Trust. As conclusive evidence of
such vacancy, a written instrument certifying the existence of such vacancy
may be executed by an officer of the Trust or by a majority of the Board of
Trustees. In the event of the death, declination, resignation, retirement,
removal, or incapacity of all the then Trustees within a short period of time
and without the opportunity for at least one Trustee being able to appoint
additional Trustees to fill vacancies, the Trust's Investment Manager(s) are
empowered to appoint new Trustees subject to the provisions of Section 16(a)
of the 1940 Act.
SECTION 3. POWERS. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the Board
of Trustees, and such Board shall have all powers necessary or convenient to
carry out that responsibility including the power to engage in securities
transactions of all kinds on behalf of the Trust. Trustees in all instances
shall act as principals, and are and shall be free from the control of the
Shareholders. The 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
they may consider necessary or appropriate in connection with the
administration of the Trust. Without limiting the foregoing, the Trustees
may: adopt By-Laws not inconsistent with this Declaration of Trust providing
for the regulation and management of the affairs of the Trust and may amend
and repeal them to the extent that such By-Laws do not reserve that right to
the Shareholders; fill vacancies in or remove from their number, and may
elect and remove such officers and appoint and terminate such agents as they
consider appropriate; appoint from their own number and establish and
terminate one or more committees consisting of two or more Trustees which may
exercise the powers and authority of the Board of Trustees to the extent that
the Trustees determine; employ one or more custodians of the assets of the
Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities or with a Federal Reserve Bank, retain a transfer
agent or a shareholder servicing agent, or both; provide for the issuance and
distribution of Shares by the Trust directly or through one or more Principal
Underwriters or otherwise; redeem, repurchase and transfer Shares pursuant to
applicable law; set record dates for the determination of Shareholders with
respect to various matters; declare and pay dividends and distributions to
Shareholders of each Series from the assets of such Series; establish from
time to time, in accordance with the provisions of Article III, Section 6
hereof, any Series (or class) of Shares, each such Series (or class) to
operate as a separate and distinct investment medium and with separately
defined investment objectives and policies and distinct investment purpose;
and in general delegate such authority as they consider desirable to any
officer of the Trust, to any committee of the Trustees and to any agent or
employee of the Trust or to any such custodian, transfer or shareholder
servicing agent, or Principal Underwriter. Any determination as to what is
in the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration of Trust, the
presumption shall be in favor of a grant of power to the Trustees. Unless
otherwise specified or required by law, any action by the Board of Trustees
shall be deemed effective if approved or taken by a majority of the Trustees
then in office. Any action required or permitted to be taken at any meeting
of the Board of Trustees, or any committee thereof, may be taken without a
meeting if all members of the Board of Trustees or committee (as the case may
be) consent thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of the Board of Trustees, or committee.
Without limiting the foregoing, the Trust shall have power and
authority:
(a). To invest and reinvest cash, to hold cash uninvested, and
to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own,
hold, pledge, sell, assign, transfer, exchange, distribute, write options on,
lend or otherwise deal in or dispose of contracts for the future acquisition
or delivery of fixed income or other securities, and securities of every
nature and kind, including, without limitation, all types of bonds,
debentures, stocks, preferred stocks, negotiable or non-negotiable
instruments, obligations, evidences of indebtedness, certificates of deposit
or indebtedness, commercial paper, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created guaranteed, or
sponsored by any and all Persons, including, 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, to change the
investments of the assets of the Trust; and to exercise any and all rights,
powers, and privileges of ownership or interest in respect of any and all
such investments of every kind and description, including, without
limitation, the right to consent and otherwise act with respect thereto, with
power to designate one or more Persons, to exercise any of said rights,
powers, and privileges in respect of any of said instruments;
(b) 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;
(c) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to
execute and deliver proxies or powers of attorney to such person or persons
as the Trustees shall deem proper, granting to such person or persons such
power and discretion with relation to securities or property as the Trustees
shall deem proper;
(d) To exercise powers and right of subscription or
otherwise which in any manner arise out of ownership of securities;
(e) To hold any security or property in a form not
indicating 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;
(f) 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;
(g) To join with other security holders in acting through
a committee, depositary, voting trustee or otherwise, and in that connection
to deposit any security with, or transfer any security to, any such
committee, depositary or trustee, and to delegate to them such power and
authority with relation to any security (whether or not so deposited or
transferred) as the Trustees shall deem proper, and to agree to pay, and to
pay, such portion of the expenses and compensation of such committee,
depositary or trustee as the Trustees shall deem proper;
(h) To compromise, arbitrate or otherwise adjust claims
in favor of or against the Trust or any matter in controversy, including but
not limited to claims for taxes;
(i) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(j) To borrow funds or other property in the name of the
Trust exclusively for Trust purposes;
(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 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, including any action taken or omitted
that may be determined to constitute negligence, whether or not the Trust
would have the power to indemnify such Person against liability; and
(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.
The Trust shall not be limited to investing in obligations
maturing before the possible termination of the Trust or one or more of its
Series. The Trust shall not in any way be bound or limited by any present or
future law or custom in regard to investment by fiduciaries. The Trust shall
not be required to obtain any court order to deal with any assets of the
Trust or take any other action hereunder.
SECTION 4. PAYMENT OF EXPENSES BY THE TRUST. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust or Series (or class), or partly out of the principal and partly out of
income, and to 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, as they deem fair, all expenses, fees, charges,
taxes and liabilities incurred or arising in connection with the Trust or
Series (or class), or in connection with the management thereof, including,
but not limited to, the Trustees' compensation and such expenses and charges
for the services of the Trust's officers, employees, investment adviser or
manager, principal underwriter, auditors, counsel, custodian, transfer agent,
Shareholder servicing agent, and such other agents or independent contractors
and such other expenses and charges as the Trustees may deem necessary or
proper to incur.
SECTION 5. PAYMENT OF EXPENSES BY SHAREHOLDERS. The
Trustees shall have the power, as frequently as they may determine, to cause
each Shareholder, or each Shareholder of any particular Series, to pay
directly, in advance or arrears, for charges of the Trust's custodian or
transfer, Shareholder servicing or similar agent, an amount fixed from time
to time by the Trustees, by setting off such charges due from such
Shareholder from declared but unpaid dividends owed such Shareholder and/or
by reducing the number of Shares in the account of such Shareholder by that
number of full and/or fractional Shares which represents the outstanding
amount of such charges due from such Shareholder.
SECTION 6. OWNERSHIP OF ASSETS OF THE TRUST. Title to all
of the assets of the Trust shall at all times be considered as vested in the
Trust, except that the Trustees shall have power to cause legal title to any
Trust Property to be held by or in the name of one or more of the Trustees,
or in the name of the Trust, or in the name of any other Person as nominee,
on such terms as the Trustees may determine. The right, title and interest
of the Trustees in the Trust Property shall vest automatically in each Person
who may hereafter become a Trustee. Upon the resignation, removal or death of
a Trustee he or she shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and interest of
such Trustee in the Trust Property shall vest automatically in the remaining
Trustees. Such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered.
SECTION 7. SERVICE CONTRACTS.
(a) Subject to such requirements and restrictions as nay
be set forth in the By-Laws, the Trustees may, at any time and from time to
time, contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series with any corporation,
trust, association or other organization; and any such contract may contain
such other terms as the Trustees may determine, including without limitation,
authority for the Investment Manager or administrator to determine from time
to time without prior consultation with the Trustees what investments shall
be purchased, held, sold or exchanged and what portion, if any, of the assets
of the Trust shall be held uninvested and to make changes in the Trust's
investments, or such other activities as may specifically be delegated to
such party.
(b) The Trustees may also, at any time and from time to
time, contract with any corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or
Principal Underwriter for the Shares of one or more of the Series (or
classes) or other securities to be issued by the Trust. Every such contract
shall comply with such requirements and restrictions as may be set forth in
the By-Laws; and any such contract may contain such other terms as the
Trustees may determine.
(c) The Trustees are also empowered, at any time and from
time to time, to contract with any corporations, trusts, associations or
other organizations, appointing it or them the custodian, transfer agent
and/or shareholder servicing agent for the Trust or one or more of its
Series. Every such contract shall comply with such requirements and
restrictions as may be set forth in the By-Laws or stipulated by resolution
of the Trustees.
(d) The Trustees are further empowered, at any tine and
from time to time, to contract with any entity to provide such other services
to the Trust or one or more of the Series, as the Trustees determine to be in
the best interests of the Trust and the applicable Series.
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers
of the Trust is a shareholder, director, officer, partner,
trustee, employee, Manager, adviser, Principal Underwriter,
distributor, or affiliate or agent of or for any corporation,
trust, association, or other organization, or for any parent or
affiliate of any organization with which an advisory, management
or administration contract, or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or
other type of service contract may have been or may hereafter be
made, or that any such organization, or any parent or affiliate
thereof, is a Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory, management or administration
contract or principal underwriter's or distributor's contract, or
transfer, shareholder servicing or other type of service contract
may have been or may hereafter be made also has an advisory,
management or administration contract, or principal underwriter's
or distributor's contract, or transfer, shareholder servicing or
other service contract with one or more other corporations,
trust, associations, or other organizations, or has other
business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing
the same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
ARTICLE V.
Shareholders' Voting Powers and Meetings
SECTION 1. VOTING POWERS. Subject to the provisions of Article
III, Section 6(d), the Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, and
(ii) with respect to such additional matters relating to the Trust as may be
required by this Declaration of Trust, the By-Laws or any registration of the
Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate fractional vote.
There shall be no cumulative voting in the election of Trustees. Shares may
be voted in person or by proxy. A proxy with respect to Shares held in the
name of two or more persons shall be valid if executed by any one of them
unless at or prior to exercise of the proxy the Trust receives a specific
written notice to the contrary from any one of them. A proxy purporting to
be executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise and the burden of proving invalidity
shall rest on the challenger.
SECTION 2. MEETINGS. Meetings of the Shareholders may be
called by the Trustees for the purpose of electing Trustees as provided in
Article IV, Section 1, and for such other purposes as may be prescribed by
law, by this Declaration of Trust or by the By-Laws. Meetings of the
Shareholders may also be called by the Trustees from time to tine for the
purpose of taking action upon any other matter deemed by the Trustees to be
necessary or desirable. A meeting of Shareholders may be held at any place
designated by the Trustees. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees in accordance with the
By-Laws.
SECTION 3. QUORUM AND REQUIRED VOTE. Except when a larger
quorum is required by applicable law, by the By-Laws or by this Declaration
of Trust, forty percent (40%) of the Shares entitled to vote shall constitute
a quorum at a Shareholders' meeting. When any one or more Series (or
classes) is to vote as a single class separate from any other Shares, forty
percent (40%) of the Shares of each such Series (or classes) entitled to vote
shall constitute a quorum at a Shareholder's meeting of that Series. Any
meeting of Shareholders may be adjourned from time to time by a majority of
the votes properly cast upon the question of adjourning a meeting to another
date and time, whether or not a quorum is present, and the meeting may be
held as adjourned as provided in the By-Laws. Subject to the provisions of
Article III, Section 6(d), when a quorum is present at any meeting, a
majority of the Shares voted shall decide any questions and a plurality shall
elect a Trustee, except when a larger vote is required by any provision of
this Declaration of Trust or the By-Laws or by applicable law.
SECTION 4. ACTION BY WRITTEN CONSENT. Any action taken by
Shareholders may be taken without a meeting if Shareholders holding a
majority of the Shares entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or by the By-Laws) and holding a majority (or such
larger proportion as aforesaid) of the Shares of any Series (or class)
entitled to vote separately on the matter consent to the action in writing
and such written consents are filed with the records of the meetings of
Shareholders. Such consent shall be treated for all purposes as a vote taken
at a meeting of Shareholders.
SECTION 5. RECORD DATES. For the purpose of determining
the Shareholders of any Series (or class) who are entitled to vote or act at
any meeting or any adjournment thereof or to give consent to any action
without a meeting, the Trustees may from time to time fix a date, which shall
be not more than ninety (90) days nor less than seven (7) days before the
date of any meeting of Shareholders, as the record date for determining the
Shareholders of such Series (or class) having the right to notice of and to
vote at such meeting and any adjournment thereof, and in such case only
Shareholders of record on such record date shall have such right,
notwithstanding any transfer of Shares on the books of the Trust after the
record date. For the purpose of determining the Shareholders of any Series
(or class) who are entitled to receive payment of any dividend or of any
other distribution, the Trustees may from time to time fix a date, which
shall be before the date for the payment of such dividend or such other
payment, as the record date for determining the Shareholders of such Series
(or class) having the right to receive such dividend or distribution.
Without fixing a record date the Trustees may for voting and/or distribution
purposes close the register or transfer books for one or more Series for all
or any part of the period between a record date and a meeting of Shareholders
or the payment of a distribution. Nothing in this Section shall be construed
as precluding the Trustees from setting different record dates for different
Series (or classes).
SECTION 6. ADDITIONAL PROVISIONS. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI.
Net Asset Value, Distributions, and Redemptions
SECTION 1. DETERMINATION OF NET ASSET VALUE, NET INCOME, AND
DISTRIBUTIONS. Subject to Article III, Section 6 hereof, the Trustees, in
their absolute discretion, may prescribe and shall set forth in the By-Laws
or in a duly adopted vote of the Trustees such bases and time for determining
the per Share or net asset value of the Shares of any Series or net income
attributable to the Shares of any Series, or the declaration and payment of
dividends and distributions on the Shares of any Series, as they may deem
necessary or desirable.
ARTICLE VII.
Compensation and Limitation of Liability of Trustees
SECTION 1. COMPENSATION. The Trustees as such shall be entitled
to reasonable compensation from the Trust, and they may fix the amount of
such compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment banking
or other services and payment for the same by the Trust.
SECTION 2. INDEMNIFICATION AND LIMITATION OF LIABILITY.
The Trustees shall not be responsible or liable in any event for any neglect
or wrong-doing of any officer, agent, employee, Manager or Principal
Underwriter of the Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, and the Trust out of its assets shall
indemnify and hold harmless each and every Trustee from and against any and
all claims and demands whatsoever arising out of or related to each Trustee's
performance of his or her duties as a Trustee of the Trust; provided that
nothing herein contained shall indemnify, hold harmless or protect any
Trustee from or against any liability to the Trust or any Shareholder to
which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his or her office.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever issued, executed or done
by or on behalf of the Trust or the Trustees or any of them in connection
with the Trust shall be conclusively deemed to have been issued, executed or
done only in or with respect to their or his or her capacity as Trustees or
Trustee, and such Trustees or Trustee shall not be personally liable thereon.
SECTION 3. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND
OR SURETY. The exercise by the Trustees of their powers and discretion
hereunder shall be binding upon everyone interested. A Trustee shall be
liable to the Trust and to any Shareholder solely for his or her own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may take advice
of counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission
in accordance with such advice nor for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor any surety if a
bond is required.
SECTION 4..INSURANCE. The Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase with Trust
assets insurance for liability and for all expenses reasonably incurred or
paid or expected to be paid by a Trustee in connection with any claim,
action, suit or proceeding in which he or she becomes involved by virtue of
his or her capacity or former capacity with the Trust, whether or not the
Trust would have the power to indemnify him or her against such liability
under the provisions of this Article.
ARTICLE VIII.
Miscellaneous
SECTION 1. LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEES. No
Person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees
or to see to the application of any payments made or property transferred to
the Trust or upon its order.
SECTION 2. TERMINATION OF TRUST OR SERIES. Unless
terminated as provided herein, the Trust shall continue without limitation of
time. The Trust may be terminated at any time by vote of a majority of the
Shares of each Series entitled to vote, voting separately by Series, or by
the Trustees by written notice to the Shareholders. Any Series may be
terminated at any time by vote of a majority of the Shares of that Series or
by the Trustees by written notice to the Shareholders of that Series.
Upon termination of the Trust (or any Series, as the case may
be), after paying or otherwise providing for all charges, taxes, expenses and
liabilities held, severally, with respect to each Series (or the applicable
Series, as the case may be), whether due or accrued or anticipated as may be
determined by the Trustees, the Trust shall, in accordance with such
procedures as the Trustees consider appropriate, reduce the remaining assets
held, severally, with respect to each Series (or the applicable Series, as
the case may be), to distributable form in cash or shares or other
securities, or any combination thereof, and distribute the proceeds held with
respect to each Series (or the applicable Series, as the case nay be), to the
Shareholders of that Series, as a Series, ratably according to the number of
Shares of that Series held by the several Shareholders on the date of
termination.
SECTION 3. MERGER AND CONSOLIDATION. The Trustees may cause (i)
the Trust or one or more of its Series to the extent consistent with
applicable law to be merged into or consolidated with another business trust
or any other business entity, (ii) the Shares of the Trust or any Series to
be converted into beneficial interests in another business trust (or series
thereof) created pursuant to this Section 3 of Article VIII, or (iii) the
Shares to be exchanged under or pursuant to any state or federal statute to
the extent permitted by law. Such merger or consolidation, Share conversion
or Share exchange must be authorized by vote of a majority of the outstanding
Shares of the Trust, as a whole, or any affected Series, as may be
applicable; provided that in all respects not governed by statute or
applicable law, the Trustees shall have power to prescribe the procedure
necessary or appropriate to accomplish a sale of assets, merger or
consolidation including the power to create one or more separate business
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 into beneficial interests in such separate
business trust or trusts (or series thereof).
SECTION 4. AMENDMENTS. This Declaration of Trust may be
restated and/or amended at any time by an instrument in writing signed by a
majority of the then Trustees and, if required, by approval of such amendment
by Shareholders in accordance with Article V, Section 3 hereof. Any such
restatement and/or amendment hereto shall be effective immediately upon
execution and approval. The Certificate of Trust of the Trust may be
restated and/or amended by a similar procedure, and any such restatement
and/or amendment shall be effective immediately upon filing with the Office
of the Secretary of State of the State of Delaware or upon such future date
as may be stated therein.
SECTION 5. FILING OF COPIES, REFERENCES, HEADINGS. The
original or a copy of this instrument and of each restatement and/or
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. Anyone dealing with the Trust may rely on a
certificate by an officer of the Trust as to whether or not any such
restatements and/or amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were
the original, may rely on a copy certified by an officer of the Trust to be a
copy of this instrument or of any such restatements and/or amendments. In
this instrument and in any such restatements and/or amendment, references to
this instrument, and all expressions like "herein," "hereof" and "hereunder,"
shall be deemed to refer to this instrument as amended or affected by any
such restatements and/or amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or
control or affect the meaning, construction or effect of this instrument.
Whenever the singular number is used herein, the same shall include the
plural; and the neuter, masculine and feminine genders shall include each
other, as applicable. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 6. 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 Delaware Business
Trust Act, as amended from time to time (the "Act"). The Trust shall be a
Delaware business trust pursuant to such Act, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a business trust.
SECTION 7. PROVISIONS IN CONFLICT WITH LAW OR REGULATIONS.
(a) The provisions of the Declaration of Trust are
severable, and if the Trustees shall determine, with the advice of counsel,
that any of such provisions is in conflict with the 1940 Act, the regulated
investment company provisions of the Internal Revenue Code of 1986, as
amended (or any successor statute) or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have
constituted a part of the Declaration of Trust; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration of Trust or render invalid or improper any action taken or
omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be
held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or
any other provision of the Declaration of Trust in any jurisdiction.
SECTION 8. BUSINESS TRUST ONLY. It is the intention of
the Trustees to create a business trust pursuant to the Act and thereby to
create only the relationship of trustee and beneficial owners within the
meaning of the Act between the Trustees and each Shareholder. It is not the
intention of the Trustees to create a general partnership, limited
partnership, joint stock association, corporation, bailment, or any form of
legal relationship other than a business trust pursuant to the Act. 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.
SECTION 9. USE OF THE NAME "FRANKLIN". The name
"Franklin" and all rights to the use of the name "Franklin" belongs to
Franklin Resources, Inc. ("Franklin"), the sponsor of the Trust. Franklin
has consented to the use by the Trust of the identifying word "Franklin" and
has granted to the Trust a non-exclusive license to use the name "Franklin"
as part of the name of the Trust and the name of any Series of Shares. In
the event Franklin or an affiliate of Franklin is not appointed as Manager
and/or Principal Underwriter or ceases to be the Manager and/or Principal
Underwriter of the Trust or of any Series using such names, the non-exclusive
license granted herein may be revoked by Franklin and the Trust shall cease
using the name "Franklin" as part of its name or the name of any Series of
Shares, unless otherwise consented to by Franklin or any successor to its
interests in such names.
ARTICLE IX.
Certain Transactions
Notwithstanding any other provision of the Declaration of Trust
to the contrary and subject to the exception provided in this Article IX, the
transactions described in this Article IX shall require the affirmative vote
or consent of the holders of sixty-six and two-thirds percent (66_%) of the
outstanding Shares. Notwithstanding any other provision in the Declaration
of Trust, such affirmative vote shall be in addition to, and not in lieu of,
the vote or consent of the Shareholders otherwise required by law (including
any separate vote by Series (or class) that may be required by the 1940 Act),
by the terms of any Series (or class) that is now or hereafter authorized, or
between the Trust and any national securities exchange.
For purposes of this Article IX, the term "Principal Shareholder"
shall mean any Person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934), which is the beneficial owner, directly or
indirectly, of more than five percent (5%) of the outstanding Shares of the
Trust and shall include any affiliate or associate, as such terms are defined
in clause (2) below, of a Principal Shareholder. For the purposes of this
Article IX, in addition to the Shares which a Person or group beneficially
owns directly, any Person or group shall be deemed to be the beneficial owner
of any Shares (1) which it has the right to acquire pursuant to any agreement
or upon exercise of conversion rights or warrants, or otherwise or (2) which
are beneficially owned, directly or indirectly (including Shares deemed owned
through application of clause (1) above), by any other Person or group with
which it or its "affiliate" or "associate," as those terms are defined in
Rule 12b-2 under the Securities Exchange Act of 1934, has any agreement,
arrangement, or understanding for the purpose of acquiring, holding, voting,
or disposing of Shares, or which is its "affiliate" or "associate" as so
defined. For purposes of this Article IX, calculation of the outstanding
Shares shall not include Shares deemed owned through application of clause
(1) above.
This Article IX shall apply to the following transactions:
1. Merger, consolidation or statutory Share exchange of the
Trust with or into any other business trust or other business entity;
2. Issuance of any securities of the Trust to any Person for
cash;
3. Sale, lease, or exchange of all or any substantial part of
the assets of the Trust to any Person (except assets having an aggregate fair
market value of less than $1,000,000); or
4. Sale, lease, or exchange to the Trust, in exchange for
securities of the Trust, of any assets of any Person (except assets having an
aggregate fair market value of less than $1,000,000).
The provisions of this Article IX shall not apply to any
transaction described above if the Board of Trustees authorizes such
transaction by an affirmative vote of a majority of the Trustees, including a
majority of the Trustees who are not "interested persons" of the Trust, as
that term is defined in the 1940 Act.
IN WITNESS WHEREOF, the Trustees named below do hereby make and
enter into this Declaration of Trust as of the day of , 1997.
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