Exhibit 2
[Revised and Effective August 1, 2001]
AMENDED AND RESTATED
BY-LAWS
OF
SOMERSET EXCHANGE FUND
ARTICLE I
Agreement and Declaration of Trust and Principal Office
1.1. Agreement and Declaration of Trust. These By-Laws shall be
subject to the Agreement and Declaration of Trust, as from time to time in
effect (the "Declaration of Trust"), of the above-captioned Delaware business
trust established by the Declaration of Trust (the "Trust").
1.2. Principal Office of the Trust. The principal office of the
Trust shall be located in Plainsboro, New Jersey.
ARTICLE II
Meetings of Trustees
2.1. Regular Meetings. Regular meetings of the Trustees may be
held without call or notice at such places and at such times as the Trustees
from time to time may determine, provided that notice of the first regular
meeting following any such determination shall be given to absent Trustees.
2.2. Special Meetings. Special meetings of the Trustees may be
held at any time and at any place designated in the call of the meeting when
called by the President or the Treasurer or by two or more Trustees,
sufficient notice thereof being given to each Trustee by the Secretary or an
Assistant Secretary or by the officer or the Trustees calling the meeting.
2.3. Notice of Special Meetings. It shall be sufficient notice
to a Trustee of a special meeting to send notice by mail at least forty-eight
hours or by telegram at least twenty-four hours before the meeting addressed
to the Trustee at his or her usual or last known business or residence address
or to give notice to him or her in person or by telephone at least twenty-four
hours before the meeting. Notice of a meeting need not be given to any Trustee
if a written waiver of notice, executed by him or her before or after the
meeting, is filed with the records of the meeting, or to any Trustee who
attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting nor a waiver of
a notice need specify the purposes of the meeting.
2.4. Notice of Certain Actions by Consent. If in accordance with
the provisions of the Declaration of Trust any action is taken by the Trustees
by a written consent of less than all of the Trustees, then prompt notice of
any such action shall be furnished to each Trustee who did not execute such
written consent, provided that the effectiveness of such action shall not be
impaired by any delay or failure to furnish such notice.
ARTICLE III Officers
3.1. Enumeration; Qualification. The officers of the Trust shall
be a President, one or more Vice Presidents, that may be Executive Vice
Presidents, Senior Vice Presidents or Vice Presidents, a Treasurer, a
Secretary, and such other officers, if any, as the Trustees from time to time
may in their discretion elect. The Trust also may have such agents as the
Trustees from time to time may in their discretion appoint. Officers may be
but need not be a Trustee or shareholder. Any two or more offices may be held
by the same person.
3.2. Election. The President, the Treasurer and the Secretary
shall be elected by the Trustees upon the occurrence of any vacancy in any
such office. Other officers, if any, may be elected or appointed by the
Trustees at any time. Vacancies in any such other office may be filled at any
time.
3.3. Tenure. The President, Treasurer and Secretary shall hold
office in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent
shall retain authority at the pleasure of the Trustees.
3.4. Powers. Subject to the other provisions of these By-Laws,
each officer shall have, in addition to the duties and powers herein and in
the Declaration of Trust set forth, such duties and powers as commonly are
incident to the office occupied by him or her as if the Trust were organized
as a Delaware corporation or such other duties and powers as the Trustees may
from time to time designate.
3.5. President. Unless the Trustees otherwise provide, the
President shall preside at all meetings of the shareholders and of the
Trustees. Unless the Trustees otherwise provide, the President shall be the
chief executive officer.
3.6. Vice President. Each Vice President shall have such powers
and perform such duties as the Board of Trustees or the President may from
time to time prescribe.
3.7. Treasurer. The Treasurer shall be the chief financial and
accounting officer of the Trust, and, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing
or similar agent, shall be in charge of the valuable papers, books of account
and accounting records of the Trust, and shall have such other duties and
powers as may be designated from time to time by the Trustees or by the
President.
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3.8. Secretary. The Secretary shall record all proceedings of
the shareholders and the Trustees in books to be kept therefor, which books or
a copy thereof shall be kept at the principal office of the Trust. In the
absence of the secretary from any meeting of the shareholders or Trustees, an
Assistant Secretary, or if there be none or if he or she is absent, a
temporary Secretary chosen at such meeting shall record the proceedings
thereof in the aforesaid books.
3.9. Resignations and Removals. Any Trustee or officer may
resign at any time by written instrument signed by him or her and delivered to
the President or Secretary or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time. The Trustees may remove any officer elected by them with or without
cause. Except to the extent expressly provided in a written agreement with the
Trust, no Trustee or officer resigning and no officer 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.
ARTICLE IV
Committees
4.1. Appointment. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees otherwise may
determine, any such committee may make rules for conduct of its business.
4.2. Quorum; Voting. A majority of the members of any Committee
of the Trustees shall constitute a quorum for the transaction of business, and
any action of such a Committee may be taken at a meeting by a vote of a
majority of the members present (a quorum being present).
ARTICLE V
Reports
The Trustees and officers shall render reports at the time and
in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
ARTICLE VI
Fiscal Year
The fiscal year of the Trust shall be fixed, and shall be
subject to change, by the Board of Trustees.
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ARTICLE VII
Seal
The seal of the Trust shall consist of a flat-faced die with the
word "Delaware," together with the name of the Trust and the year of its
organization cut or engraved thereon but, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on, and in its absence
shall not impair the validity of any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE VIII
Execution of Papers
Except as the Trustees generally or in particular cases may
authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President, any Vice President, or by the Treasurer and need not bear the
seal of the Trust.
ARTICLE IX
Issuance of Share Certificates
9.1. Sale of Shares. Except as otherwise determined by the
Trustees, the Trust will issue and sell for cash or securities from time to
time, full and fractional shares of its shares of beneficial interest, such
shares to be issued and sold at a price of not less than net asset value per
share as from time to time determined in accordance with the Declaration of
Trust and these By-Laws and, in the case of fractional shares, at a
proportionate reduction in such price. In the case of shares sold for
securities, such securities shall be valued in accordance with the provisions
for determining value of assets of the Trust as stated in the Declaration of
Trust and these By-Laws. The officers of the Trust are severally authorized to
take all such actions as may be necessary or desirable to carry out this
Section 9.1.
9.2. Share Certificates. In lieu of issuing certificates for
shares, the Trustees or the transfer agent either may issue receipts therefor
or may keep accounts upon the books of the Trust for the record holders of
such shares, who shall in either case, for all purposes hereunder, be deemed
to be the holders of certificates for such shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
The Trustees at any time may authorize the issuance of share
certificates. In that event, each shareholder shall be entitled to a
certificate stating the number of shares owned by him, in such form as shall
be prescribed from time to time by the Trustees. Such certificates shall be
signed by the President or Vice President and by the Treasurer or Assistant
Treasurer. Such signatures may be facsimile if the certificate is signed by a
transfer agent, or by a registrar, other than a Trustee, officer or employee
of the Trust. In case of any officer who has signed or whose facsimile
signature has been placed on such certificate shall cease to be such officer
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before such certificate is issued, it may be issued by the Trust with the same
force and effect as if he or she were such officer at the time of its issue.
9.3. Loss of Certificates. The Trust, or if any transfer agent
is appointed for the Trust, the transfer agent with the approval of any two
officers of the Trust, is authorized to issue and countersign replacement
certificates for the shares of the Trust which have been lost, stolen or
destroyed subject to the deposit of a bond or other indemnity in such form and
with such security, if any, as the Trustees may require.
9.4. Discontinuance of Issuance of Certificates. The Trustees at
any time may discontinue the issuance of share certificates and by written
notice to each shareholder, may require the surrender of share certificates to
the Trust for cancellation. Such surrender and cancellation shall not affect
the ownership of shares in the Trust.
ARTICLE X
Indemnification
10.1. Trustees, Officers, etc. To the fullest extent permitted
by law, the Trust shall indemnify each of its Trustees and officers (including
persons who serve at the Trust's request as directors, officers or trustees of
another person in which the Trust has any interest as a shareholder, creditor
or otherwise) (hereinafter referred to as a "Covered Person") against all
liabilities and expenses, including but not limited to amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and
counsel fees reasonably incurred by any Covered Person in connection with the
defense or disposition of any action, suit or other proceeding, whether civil,
criminal, administrative or investigative, before any court or administrative
or legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be or may have
been threatened, while in office or thereafter, in any way relating to the
Trust or by reason of being or having been such a Trustee or officer, except
with respect to any matter as to which such Covered Person shall have been
finally adjudicated in a decision on the merits in any such action, suit or
other proceeding not to have acted in good faith in the reasonable belief that
such Covered Person's action was in the best interests of the Trust and except
that no Covered Personal shall be indemnified against any liability to the
Trust or its Shareholders to which such Covered Person would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office. Expenses, including counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by the
Trust in advance of the final disposition of any such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid by the Trust if it is ultimately determined
that indemnification of such expenses is not authorized under this Article,
provided that (a) such Covered Person shall provide security for his
undertaking, (b) the Trust shall be insured against losses arising by reason
of such Covered Person's failure to fulfill his undertaking , or (c) a
majority of the Trustees who are disinterested persons and who are not
Interested Persons (as that term is defined in the Investment Company Act of
1940) (provided
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that a majority of such Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts (but not a full trial-type inquiry), that
there is reason to believe such Covered Person ultimately will be entitled to
indemnification.
10.2. Compromise Payment. As to any matter disposed of (whether
by a compromise payment, pursuant to a consent decree or otherwise) without an
adjudication in a decision on the merits by a court, or by any other body
before which the proceeding was brought, that such Covered Person either (a)
did not act in good faith in the reasonable belief that such Covered Person's
action was in the best interests of the Trust or (b) is liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office, indemnification shall be provided if (a) approved as in the
best interest of the Trust, after notice that it involves such
indemnification, by at least a majority of the Trustees who are disinterested
persons and are not Interested Persons (provided that a majority of such
Trustees then in office act on the matter), upon a determination, based upon a
review of readily available facts (but not a full trial-type inquiry) that
such Covered Person acted in good faith in the reasonable belief that such
Covered Person's action was in the best interests of the Trust and is not
liable to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office, or (b) there has been obtained an
opinion in writing of independent legal counsel, based upon a review of
readily available facts (but not a full trial-type inquiry) to the effect that
such Covered Person appears to have acted in good faith in the reasonable
belief that such Covered Person's action was in the best interests of the
Trust and that such indemnification would not protect such Covered Person
against any liability to the Trust to which such Covered Person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office. Any approval pursuant to this Section shall not prevent the recovery
from any Covered Person of any amount paid to such Covered Person in
accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust or to have been liable to the Trust or
its shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office.
10.3. Indemnification Not Exclusive. The right of
indemnification hereby provided shall not be exclusive of or affect any other
rights to which any such Covered Person may be entitled. As used in this
Article X, the term "Covered Person" shall include such person's heirs,
executors and administrators, and a "disinterested person" is a person against
whom none of the actions, suits or other proceedings in question or another
action, suit, or other proceeding on the same or similar grounds is then or
has been pending. Nothing contained in this article shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance
on behalf of such person.
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10.4. Limitation. Notwithstanding any provisions in the
Declaration of Trust and these By-Laws pertaining to indemnification, all such
provisions are limited by the following undertaking set forth in the rules
promulgated by the Securities and Exchange Commission:
In the event that a claim for indemnification is asserted
by a Trustee, officer or controlling person of the Trust in
connection with the registered securities of the Trust, the
Trust will not make such indemnification unless (i) the Trust
has submitted, before a court or other body, the question of
whether the person to be indemnified was liable by reason of
willful misfeasance, bad faith, gross negligence, or reckless
disregard of duties, and has obtained a final decision on the
merits that such person was no liable by reason of such conduct
or (ii) in the absence of such decision, the Trust shall have
obtained a reasonable determination, based upon a review of the
facts, that such person was not liable by virtue of such
conduct, by (a) the vote of a majority of Trustees who are
neither interested persons as such term in defined in the
Investment Company Act of 1940, nor parties to the proceeding
or (b) an independent legal counsel in a written opinion.
The Trust will not advance attorneys' fees or other
expenses incurred by the person to be indemnified unless the
Trust shall have (i) received an undertaking by or on behalf of
such person to repay the advance unless it is ultimately
determined that such person is entitled to indemnification and
one of the following conditions shall have occurred: (x) such
person shall provide security for his undertaking, (y) the
Trust shall be insured against losses arising by reason of any
lawful advances or (z) a majority of the disinterested,
non-party Trustees of the Trust, or an independent legal
counsel in a written opinion, shall have determined that based
on a review of readily available facts there is reason to
believe that such person ultimately will be found entitled to
indemnification.
ARTICLE XI
Shareholders
11.1. Meetings. A meeting of the shareholders shall be called by
the Secretary whenever ordered by the Trustees, or requested in writing by the
holder or holders of at least 10% of the outstanding shares entitled to vote
at such meeting. If the meeting is a meeting of the shareholders of one or
more series of shares, but not a meeting of all shareholders of the Trust,
then only the shareholders of such one or more series shall be entitled to
notice of an to vote at the meeting. If the Secretary, when so ordered or
requested refuses or neglects for more than five days to call such meeting,
the Trustees, or the shareholders so requesting may, in the name
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of the Secretary, call the meeting by giving notice thereof in the manner
required when notice is given by the Secretary.
11.2 Access to Trust Information. Shareholders of record may
apply to the Trustees for assistance in communicating with other shareholders
for the purpose of calling a meeting in order to vote upon the question of
removal of a Trustee. When ten or more shareholders of record who have been
such for at least six months preceding the date of application and who hold in
the aggregate shares having a net asset value of at least $25,000 or at least
1% of the outstanding shares, whichever is less, so apply, the Trustees shall
within five business days either:
(i) afford to such applicants access to a list of names and
addresses of all shareholders as recorded on the books of the Trust; or
(ii) inform such applicants of the approximate number of
shareholders of record and the approximate cost of mailing material to them
and, within a reasonable time thereafter, mail, materials submitted by the
applicants, to all such shareholders of record. The Trustees shall not be
obligated to mail materials which they believe to be misleading or in
violation of applicable law.
(i) To the fullest extent permitted by law, this Section
11.2 shall be the exclusive means of shareholder access to any information set
forth in Section 3819(a)(2) and (4) of the Delaware Business Trust Act.
Notwithstanding the foregoing, the Trustees shall retain their rights under
Section 3819(c) of the Delaware Business Trust Act.
11.3 Record Dates. For the purpose of determining the
shareholders of any series who are entitled to vote or act at any meeting or
any adjournment thereof, or who are entitled to receive payment of any
dividend or of any other distribution, the Trustees from time to time may fix
a time, which shall be not more than 90 days before the date of any meeting of
shareholders or the date of payment of any dividend or of any other
distribution, as the record date for determining the shareholders or the date
of payment of any dividend or of any other distribution, as the record date
for determining the shareholders of such series having the right to notice of
and to vote at such meeting and any adjournment thereof or the right to
receive such dividend or distribution, 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; or without fixing
such record date the Trustees may for any such purposes close the register or
transfer books for all or part of such period.
11.4 Place of Meetings. All meetings of the shareholders shall
be held at the principal office of the Trust or at such other place within the
United States as shall be designated by the Trustees or the President of the
Trust.
11.5 Notice of Meetings. A written notice of each meeting of
shareholders, stating the place, date and hour and the purposes of the
meeting, shall be given at least ten days before the meeting to each
shareholder entitled to vote thereat by leaving such notice with him or
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at his residence or usual place of business or by mailing it, postage prepaid,
and addressed to such shareholder at his address as it appears in the records
of the Trust. Such notice shall be given by the Secretary or an Assistant
Secretary or by an officer designated by the Trustees. No notice of any
meeting of shareholders need be given to a shareholder if a written waiver of
notice, executed before of after the meeting by such shareholder or his
attorney thereunto duly authorized, is filed with the records of the meeting.
11.6 Ballots. No ballot shall be required for any election
unless requested by a shareholder present or represented at the meeting and
entitled to vote in the election.
11.7 Proxies. A Shareholder may cast or authorize the casting of
a vote by filing a written appointment of a proxy with an officer of the Trust
at or before the meeting at which the appointment is to be effective. A
Shareholder may also authorize the casting of a vote by proxy pursuant to
telephonic or electronically transmitted instructions (including, without
limitation, instructions transmitted over the Internet) obtained pursuant to
procedures which are reasonably designed to verify that such instructions have
been authorized by such Shareholder. The appointment of a proxy is valid for
eleven months, unless a longer period is expressly provided in the
appointment. No appointment is irrevocable unless the appointment is coupled
with an interest in the Shares or in the Trust. Any copy, facsimile
telecommunication or other reliable reproduction of a proxy may be substituted
for or used in lieu of the original proxy for any and all purposes for which
the original proxy could be used, provided that such copy, facsimile
telecommunication or other reproduction shall be a complete reproduction of
the entire original proxy or the portion thereof to be returned by the
Shareholder. [Shareholders entitled to vote may vote either in person or by
proxy in writing dated not more than six months before the meeting named
therein, which proxies shall be filed with the Secretary or other person
responsible to record the proceedings of the meeting before being voted.
Unless otherwise specifically limited by their terms, such proxies shall
entitle the holders thereof to vote at any adjournment of such meeting but
shall not be valid after the final adjournment of such meeting.]
ARTICLE XII
Amendments to the By-Laws
These By-Laws may be amended or repealed, in whole or in part,
by a majority of the Trustees then in office at any meeting of the Trustees,
or by one or more writing signed by such a majority.
Date: June 5, 1996
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