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Exhibit (a)(1)
COLONIAL INTERMEDIATE HIGH INCOME FUND
AGREEMENT AND DECLARATION OF TRUST
May 24, 1988
COLONIAL INTERMEDIATE HIGH INCOME FUND
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AGREEMENT AND DECLARATION OF TRUST
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AGREEMENT AND DECLARATION OF TRUST made at Boston, Massachusetts, this 24th day
of May, 1988, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an investment
company; and
WHEREAS, the Trustees have agreed to manage all property coming into their hands
as trustees of a Massachusetts business trust in accordance with the provisions
hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets, which they may from time to time acquire in any
manner, as Trustees hereunder IN TRUST, to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
NAME AND DEFINITIONS
Name
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Section 1. This Trust shall be known as "Colonial Intermediate High Income Fund"
and the Trustees shall conduct the business of the Trust under that name or any
other name as they may from time to time determine.
Definitions
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Section 2. Whenever used herein, unless otherwise required by the context or
specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established by this
Agreement and Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or elected in
accordance with Article IV;
(c) "Shares" means the equal proportionate transferable units of interest into
which the beneficial interest in the Trust shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and the Rules
and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission", "Interested
Person", "Principal Underwriter" and "Majority Shareholder Vote" (the 67% or 50%
requirement of the third sentence of Section 2(a) (42) of the 1940 Act,
whichever may be applicable) shall have the meanings given them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Agreement and Declaration of Trust as
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amended or restated from time to time; and
(h) "By-Laws" shall mean the By-Laws of the Trust as amended from time to time.
ARTICLE II
PURPOSE
The purpose of the Trust is to provide investors a managed investment primarily
in securities, commodities and debt instruments.
ARTICLE III
SHARES
Division of Beneficial Interest
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Section 1. The beneficial interest in the Trust shall at all times be divided
into Shares of a single series, without par value, each of which shall represent
an equal proportionate interest in the Trust with each other Share, none having
priority or preference over another. The number of Shares authorized shall be
unlimited, and the Shares so authorized may be represented in part by fractional
shares. The Trustees may from time to time divide or combine the Shares into a
greater or lesser number without thereby changing the proportionate beneficial
interests in the Trust.
Ownership of Shares
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Section 2. The ownership of Shares shall be recorded on the books of the Trust
or its transfer or similar agent. No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise determine from time
to time. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent
of the Trust, as the case may be, shall be conclusive as to who are the
Shareholders and as to the number of Shares held from time to time by each
Shareholder.
Investments in the Trust
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Section 3. The Trustees shall accept investments in the Trust from such persons
and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as they from time to time authorize.
No Preemptive Rights
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Section 4. Shareholders shall have no preemptive or other right to receive,
purchase or subscribe for any additional Shares or other securities issued by
the Trust.
Status of Shares and Limitation of Personal Liability
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Section 5. Shares shall be deemed to be personal property giving only the rights
provided in this instrument. Every Shareholder by virtue of having become a
Shareholder shall be held to have expressly assented and agreed to the terms
hereof and to have become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle the
representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares shall not entitle
the Shareholder to any title in or to the whole or any part of the Trust
property or right to call for a partition or division of the same or for an
accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or agent
of the Trust, shall have any power to bind personally any Shareholder, nor
except as specifically provided herein to call upon any Shareholder for the
payment of any sum of money or assessment whatsoever other than such as the
Shareholder may at any time personally agree to pay.
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ARTICLE IV
THE TRUSTEES
Number of Trustees and Term of Office
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Section 1. The number of Trustees shall be such number as shall be fixed from
time to time by a written instrument signed by a majority of the Trustees,
provided, however, that the number of Trustees shall in no event be reduced to
less than three (3) nor increased to more than fifteen (15). No reduction in the
number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term unless the Trustee is specifically removed
pursuant to Section 2 of this Article at the time of the decrease. The Board of
Trustees shall be divided into three classes.
Within the limits above specified, the number of Trustees in each class shall be
determined by resolution of the Board of Trustees. The initial Trustees, each of
whom shall serve until the first meeting of Shareholders at which Trustees are
elected and until his or her successor is elected and qualified, or until he or
she sooner dies, resigns or is removed, shall be ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and such
other persons as the Trustee or Trustees then in office shall, prior to any sale
of Shares pursuant to a public offering, appoint. The term of office of all of
the initial Trustees shall expire on the date of the first annual meeting of
shareholders or special meeting in lieu thereof, which annual or special meeting
shall be called to be held not more than one year after Shares are first sold
pursuant to a public offering. The term of office of the first class shall
expire on the date of the second annual meeting of shareholders or any special
meeting in lieu thereof. The term of office of the second class shall expire on
the date of the third annual meeting of shareholders or any special meeting in
lieu thereof. The term of office of the third class shall expire on the date of
the fourth annual meeting of shareholders or any special meeting in lieu
thereof. Upon expiration of the term of office of each class as set forth above,
the number of Trustees in such class, as determined by the Board of Trustees,
shall be elected for a term expiring on the date of the third annual meeting of
shareholders or any special meeting in lieu thereof following such expiration to
succeed the Trustees whose terms of office expire. The Trustees shall be elected
at an annual meeting of the shareholders or a special meeting in lieu thereof,
except as provided in Section 2 of this Article.
Vacancies; Removal
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Section 2. Any vacancies occurring in the Board of Trustees may be filled by the
Trustees if, immediately after filling any such vacancy, at least two-thirds of
the Trustees then holding office shall have been elected to such office by the
Shareholders. In the event that at any time less than a majority of the Trustees
then holding office were elected to such office by the Shareholders, the
Trustees shall call a meeting of Shareholders for the purpose of electing
Trustees. At any meeting called for such purpose, a Trustee may be removed, with
or without cause, by vote of a majority of the outstanding shares. By vote of a
majority of the Trustees then in office, the Trustees may remove a Trustee with
or without cause.
Effect of Death, Resignation, etc. of a Trustee
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Section 3. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
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Section 4. Subject to the provisions of this Declaration of Trust, the business
of the Trust shall be managed by the Trustees, and they shall have all powers
necessary or convenient to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt By-Laws not inconsistent with this Declaration
of Trust providing for the conduct of the business of the Trust and may amend
and repeal them to the extent that such By-Laws do not reserve that right to the
Shareholders; they may fill vacancies in their number, including vacancies
resulting from increases in their number, and may
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elect and remove such officers and appoint and terminate such agents as they
consider appropriate; they may appoint from their own number, and terminate, any
one or more committees consisting of two or more Trustees, including an
executive committee which may, when the Trustees are not in session, exercise
some or all of the power and authority of the Trustees as the Trustees may
determine; they may appoint an advisory board, the members of which shall not be
Trustees and need not be Shareholders; they may employ one or more custodians of
the assets of the Trust and may authorize such custodians to employ
subcustodians and to deposit all or any part of such assets in a system or
systems for the central handling of securities, retain a transfer agent or a
Shareholder services agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent or employee of the
Trust or to any such custodian or underwriter.
Without limiting the foregoing, the Trustees shall have power and authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options on and
lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with respect to
stock or other securities or property; and to execute and deliver proxies or
powers of attorney to such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion with relation to
securities or property as the Trustees shall deem proper;
(d) To exercise powers and rights of subscription or otherwise which in any
manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any trust, whether
in bearer, unregistered or other negotiable form, or in the name of the Trustees
or of the Trust or in the name of a custodian, subcustodian or other depository
or a nominee or nominees or otherwise;
(f) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security of which is
or was held in the Trust; to consent to any contract, lease, mortgage, purchase
or sale of property by such corporation or issuer, and to pay calls or
subscriptions with respect to any security held in the Trust;
(g) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(h) To compromise, arbitrate or otherwise adjust claims in favor of or against
the Trust on any matter in controversy, including but not limited to claims for
taxes;
(i) To enter into joint ventures, general or limited partnerships and any other
combinations or associations;
(j) To borrow funds;
(k) To endorse or guarantee the payment of any notes or other obligations of any
person; to make contracts of guaranty or suretyship, or otherwise assume
liability for payment thereof; and to mortgage and pledge the Trust property or
any part thereof to secure any of or all of such obligations;
(l) To purchase and pay for entirely out of Trust property such insurance as
they may deem necessary or appropriate for the conduct of the business,
including, without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio investments,
and insurance policies insuring the Shareholders, Trustees, officers, employees,
agents, investment advisers or managers, principal underwriters or independent
contractors of the Trust individually against all claims and liabilities of
every nature arising by reason of holding, being in or having held any such
office or position, or by reason of any action alleged to have been taken or
omitted by any such person as Shareholder, Trustee, officer, employee, agent,
investment adviser or manager, principal underwriter or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
person against such liability; and
(m) To pay pensions for faithful service, as deemed appropriate by the Trustees,
and to adopt, establish and carry out pension, profit-sharing, share bonus,
share purchase, savings, thrift and other retirement, incentive and benefit
plans, trusts and provisions, including the purchasing of life insurance and
annuity contracts as a means of providing such retirement and other benefits,
for any or all of the Trustees, officers, employees and agents of the Trust.
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The Trustees shall not in any way be bound or limited by any present or future
law or custom in regard to investments by trustees. Except as otherwise provided
herein or from time to time in the By-Laws, any action to be taken by the
Trustees may be taken by a majority of the Trustees present at a meeting of the
Trustees (a quorum being present), within or without Massachusetts, including
any meeting held by means of a conference telephone or other communications
equipment by means of which all persons participating in the meeting can hear
each other at the same time and participation by such means shall constitute
presence in person at a meeting, or by written consents of a majority of the
Trustees then in office.
Payment of Expenses by Trust
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Section 5. The Trustees are authorized to pay or to cause to be paid out of the
principal or income of the Trust, or partly out of principal and partly out of
income, as they deem fair, all expenses, fees, charges, taxes and liabilities
incurred or arising in connection with the Trust, or in connection with the
management thereof, including, but not limited to, the Trustees' compensation
and such expenses and charges for the services of the Trust's officers,
employees, investment adviser or manager, principal underwriter, auditor,
counsel, custodian, transfer agent, Shareholder servicing agent and such other
agents or independent contractors as the Trustees may deem necessary or proper
to engage, and such other expenses and charges as the Trustees may deem
necessary or proper to incur.
Ownership of Assets of the Trust
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Section 6. Title to all of the assets of the Trust shall at all times be
considered as vested in the Trustees.
Advisory, Management and Distribution
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Section 7. Subject to a favorable Majority Shareholder Vote, the Trustees may,
at any time and from time to time, contract for exclusive or nonexclusive
advisory and/or management services with Colonial Management Associates, Inc., a
Massachusetts corporation, or any other corporation, trust, association or other
organization (the "Adviser"), every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested, and to make changes in the Trust's
investments. The Trustees may also, at any time and from time to time, contract
with the Adviser or any other corporation, trust, association or other
organization, appointing it exclusive or nonexclusive distributor or principal
underwriter for the Shares, every such contract to comply with such requirements
and restrictions as may be set forth in the By-Laws; and any such contract may
contain such other terms interpretive of or in addition to said requirements and
restrictions as the Trustees may determine.
The fact that
(i) any of the Shareholders, Trustees or officers of the Trust is a shareholder,
director, officer, partner, trustee, employee, manager, adviser, principal
underwriter, or distributor or agent of or for any corporation, trust,
association or other organization, or of or for any parent or affiliate of any
organization, with which an advisory or management contract, or principal
underwriter's or distributor's contract, or transfer, shareholder services or
other agency contract may have been or may hereafter be made, or that any
organization, or any parent or affiliate thereof, is a Shareholder or has an
interest in the Trust, or that
(ii) any corporation, trust, association or other organization with which an
advisory or management contract or principal underwriter's or distributor's
contract, or transfer, Shareholder services or other agency contract may have
been or may hereafter be made also has an advisory or management contract, or
principal underwriter's or distributor's contract, or transfer, shareholder
services or other agency contract with one or more other corporations, trusts,
associations or other organizations, or has other business or interests shall
not affect the validity of any such contract or disqualify any Shareholder,
Trustee or officer of the Trust from voting upon or executing the same or create
any liability or accountability to the Trust or its Shareholders.
ARTICLE V
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Voting Powers
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Section 1. The Shareholders shall have power to vote only (i) for the election
or removal of Trustees as provided in Article IV, Section 1, (ii) with respect
to any Adviser as provided in Article IV, Section 7, (iii) with respect to any
termination of this Trust to the extent and as provided in Article IX, Section
4, (iv) with respect to any amendment of this Declaration of Trust to the extent
and as provided in Article IX, Section 7, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or the Shareholders,
(vi) with respect to such additional matters relating to the Trust as may be
required by law, this Declaration of Trust, the By-Laws or any registration of
the Trust with the Securities and Exchange Commission (or any successor agency)
or any state, or as the Trustees may consider necessary or desirable. Each whole
Share shall be entitled to one vote as to any matter on which it is entitled to
vote and each fractional Share shall be entitled to a proportionate fractional
vote. There shall be no cumulative voting in the election of Trustees. Shares
may be voted in person or by proxy. A proxy with respect to Shares held in the
name of two or more persons shall be valid if executed by any one of them unless
at or prior to exercise of the proxy the Trust receives a specific written
notice to the contrary from any one of them. A proxy purporting to be executed
by or on behalf of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall rest on the
challenger. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.
Voting Power and Meetings
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Section 2. There shall be an annual meeting of the Shareholders on the date
fixed in the By-Laws at the office of the Trust in Boston, Massachusetts, or at
such other place as may be designated in the call thereof, which call shall be
made by the Trustees. In the event that such meeting is not held in any year on
the date fixed in the By-Laws, whether the omission be by oversight or
otherwise, a subsequent special meeting may be called by the Trustees and held
in lieu of the annual meeting with the same effect as though held on such date.
Special meetings may also be called by the Trustees from time to time for the
purpose of taking action upon any matter requiring the vote or authority of the
Shareholders as herein provided or upon any other matter deemed by the Trustees
to be necessary or desirable. Written notice of any meeting of Shareholders
shall be given or caused to be given by the Trustees by mailing such notice at
least seven days before such meeting, postage prepaid, stating the time, place
and purpose of the meeting, to each Shareholder at the Shareholder's address as
it appears on the records of the Trust. If the Trustees shall fail to call or
give notice of any meeting of Shareholders for a period of 30 days after written
application by Shareholders holding at least 10% of the Shares then outstanding
requesting a meeting to be called for a purpose requiring action by the
Shareholders as provided herein or in the By-Laws, then Shareholders holding at
least 10% of the Shares then outstanding may call and give notice of such
meeting, and thereupon the meeting shall be held in the manner provided for
herein in case of call thereof by the Trustees.
Quorum and Required Vote
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Section 3. Thirty per cent (30%) of the Shares entitled to vote shall be a
quorum for the transaction of business at a Shareholders' meeting. Any lesser
number, however, shall be sufficient for adjournments. Any adjourned session or
sessions may be held within a reasonable time after the date set for the
original meeting without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted shall decide any questions and a plurality shall
elect a Trustee.
Conversion
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Section 4. The Trustees shall, if the conditions set forth in the immediately
following sentence have been satisfied, submit to the Shareholders at the first
annual meeting of Shareholders, or special meeting in lieu thereof, held after
November 1, 1993, a proposal that the Trust, consistent with the 1940 Act as
then in effect, amend this Declaration of Trust to convert the Trust from a
"closed-end company" to an "open-end company" as those terms are defined in
Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act, as in effect from
time to time. The Trustees shall be required to submit such proposal at such
annual meeting of Shareholders or special meeting in lieu thereof only if both
(i) Shares have traded on the principal security exchange where listed at an
average discount from net asset value of more than 10%, determined on the basis
of the discount as of the end of the last trading day in each week during the
period of 12 calendar weeks preceding November 1, 1993, and (ii) during such
year the Trust receives at its principal executive office written requests from
the holders of
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10% or more of the outstanding Shares that such a proposal be submitted to the
Shareholders.
Notwithstanding any other provision of this Declaration of Trust, the conversion
of the Trust from a "closed-end company" to an "open-end company," as those
terms are defined in Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act
as in effect from time to time, shall require the affirmative vote or consent of
the holders of at least 66 2/3% of the Shares entitled to vote. Such affirmative
vote or consent shall be in addition to the vote or consent of the holders of
the Shares otherwise required by law or by any agreement between the Trust and
any national securities exchange.
Action by Written Consent
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Section 5. Any action taken by Shareholders may be taken without a meeting if a
majority of Shareholders entitled to vote on the matter (or such larger
proportion thereof as shall be required by any express provision of this
Declaration of Trust or the By-Laws) consent to the action in writing and such
written consents are filed with the records of the meetings of Shareholders.
Such consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Additional Provisions
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Section 6. The By-Laws may include further provisions for Shareholders' votes
and meetings and related matters.
ARTICLE VI
DISTRIBUTIONS AND DETERMINATION OF NET ASSET VALUE
Distributions
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Section 1. The Trustees may, but need not, each year distribute to the
Shareholders such income and gains, accrued or realized, as the Trustees may
determine, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in accordance
with good accounting practices. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital and
their determination shall be binding upon the Shareholders. Distributions of
each year's income, if any be made, may be made in one or more payments, which
shall be in Shares, in cash or otherwise and on a date or dates and as of a
record date or dates determined by the Trustees. At any time and from time to
time in their discretion, the Trustees may distribute to the Shareholders as of
a record date or dates determined by the Trustees, in Shares, in cash or
otherwise, all or part of any gains realized on the sale or disposition of
property or otherwise, or all or part of any other principal of the Trust. Each
distribution pursuant to this Section 1 shall be made ratably according to the
number of Shares held by the several Shareholders on the applicable record date
thereof, provided that no distribution need be made on Shares purchased pursuant
to orders received, or for which payment is made, after such time or times as
the Trustees may determine.
Any such distribution paid in Shares will be paid at the net asset value thereof
as determined in accordance with Section 2 of this Article VII, or at such other
value as may be specified by the By-Laws or as the Trustees may from time to
time determine, subject to applicable laws and regulations then in effect.
Determination of Net Asset Value
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Section 2. The term "net asset value" of the Shares shall mean: (i) the value of
all the assets of the Trust; (ii) less total liabilities of the Trust; (iii)
divided by the number of Shares outstanding, in each case at the time of each
determination. Any fractions involved in the computation of net asset value per
share shall be adjusted to the nearer cent unless the Trustees shall determine
to adjust such fractions to a fraction of a cent.
The Trustees, or any officer or officers or agent of this Trust designated for
the purpose by the Trustees, shall determine the net asset value of the Shares,
and the Trustees shall fix the times as of which the net asset value of the
Shares shall be determined and shall fix the periods during which any such net
asset value shall be effective as to sales and other transactions in the Shares,
except as such times and periods for any such transaction may be fixed by other
provisions of this Declaration of Trust or by the By-Laws.
In valuing the portfolio investments for determination of net asset value per
share, securities for which market quotations are readily available shall be
valued at prices which, in the opinion of the Trustees, or any officer or
officers or agent of the Trust designated for the
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purpose by the Trustees, most nearly represent the market value of such
securities, which may, but need not, be the most recent bid price obtained from
one or more of the market makers for such securities; other securities and
assets shall be valued at fair value as determined by or pursuant to the
direction of the Trustees. Notwithstanding the foregoing, short-term debt
obligations, commercial paper, and repurchase agreements may be, but need not
be, valued on the basis of quoted yields for securities of comparable maturity,
quality and type, or on the basis of amortized cost. In determination of net
asset value, dividends receivable and accounts receivable for investments sold
and for Shares sold shall be stated at the amounts to be received therefor; and
income receivable accrued daily on bonds and notes owned shall be stated at the
amount to be received. Any other assets shall be stated at fair value as
determined by the Trustees or such officer, officers or agent pursuant to the
Trustees' authority, except that no value shall be assigned to good will,
furniture, lists, reports, statistics or other noncurrent assets other than real
estate. Liabilities for accounts payable for investments purchased shall be
stated at the amounts payable therefor. In determining net asset value of the
Trust, the person or persons making such determination on behalf of the Trust
may include in liabilities such reserves, estimated accrued expenses and
contingencies as such person or persons may in its, his or their best judgment
deem fair and reasonable under the circumstances. Any income dividends and gains
distributions payable by the Trust shall be deducted as of such time or times on
the record date therefor as the Trustees shall determine.
The manner of determining the net assets of the Trust or of determining the net
asset value of the Shares may from time to time be altered as necessary or
desirable in the judgment of the Trustees to conform to any other method
prescribed or permitted by any applicable law or regulation.
Determinations under this Section 2 made in good faith and in accordance with
the provisions of the 1940 Act shall be binding on all parties concerned.
ARTICLE VII
COMPENSATION AND LIMITATION OF LIABILITY OF TRUSTEES
Compensation
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Section 1. The Trustees as such shall be entitled to reasonable compensation
from the Trust; they may fix the amount of their compensation. Nothing herein
shall in any way prevent the employment of any Trustee for advisory, management,
legal, accounting, investment banking or other services and payment for the same
by the Trust.
Limitation of Liability
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Section 2. The Trustees shall not be responsible or liable in any event for any
neglect or wrongdoing of any officer, agent, employee, adviser or principal
underwriter of the Trust, nor shall any Trustee be responsible for the act or
omission of any other Trustee, but nothing herein contained shall protect any
Trustee against any liability to which he or she would otherwise be subject by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate, Share or undertaking and
every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.
ARTICLE VIII
INDEMNIFICATION
Trustees, Officers, etc.
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Section 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Trustee
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or officer, except that no Covered Person shall be indemnified against any
liability to the Trust or its Shareholders to which such Covered Person would
otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office. Expenses, including counsel fees so incurred by any
such Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), may be paid from time to time by the Trust
in advance of the final disposition of any such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Covered Person to repay
amounts so paid to the Trust if it is ultimately determined that indemnification
of such expenses is not authorized under this Article, provided that (a) such
Covered Person shall provide security for his undertaking, (b) the Trust shall
be insured against losses arising by reason of such Covered Person's failure to
fulfill his undertaking, or (c) a majority of the Trustees who are disinterested
persons and who are not Interested Persons (provided that a majority of such
Trustees then in office act on the matter), or independent legal counsel in a
written opinion, shall determine, based on a review of readily available facts
(but not a full trial-type inquiry), that there is reason to believe such
Covered Person ultimately will be entitled to indemnification.
Compromise Payment
------------------
Section 2. As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication in a decision
on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person is liable to the Trust or its Shareholders by
reason of wilful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of such Covered Person's office,
indemnification shall be provided if (a) approved as in the best interest of the
Trust, after notice that it involves such indemnification, by at least a
majority of the Trustees who are disinterested persons and are not Interested
Persons (provided that a majority of such Trustees then in office act on the
matter), upon a determination, based upon a review of readily available facts
(but not a full trial-type inquiry) that such Covered Person is not liable to
the Trust or its Shareholders by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of such
Covered Person's office, or (b) there has been obtained an opinion in writing of
independent legal counsel, based upon a review of readily available facts (but
not a full-trial type inquiry) to the effect that such indemnification would not
protect such Covered Person against any liability to the Trust to which such
Covered Person would otherwise be subject by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his office. Any approval pursuant to this Section shall not prevent
the recovery from any Covered Person of any amount paid to such Covered Person
in accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisidiction to have been
liable to the Trust or its Shareholders by reason of wilful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
Indemnification Not Exclusive
-----------------------------
Section 3. The right of indemnification hereby provided shall not be exclusive
of or affect any other rights to which any such Covered Person may be entitled.
As used in this Article VIII, the term "Covered Person" shall include such
person's heirs, executors and administrators, and a "disinterested person" is a
person against whom none of the actions, suits or other proceedings in question
or another action, suit or other proceeding on the same or similar grounds is
then or has been pending. Nothing contained in this article shall affect any
rights to indemnification to which personnel of the Trust, other than Trustees
and officers, and other persons may be entitled by contract or otherwise under
law, nor the power of the Trust to purchase and maintain liability insurance on
behalf of such person.
Shareholders
------------
Section 4. In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expense arising from
such liability.
ARTICLE IX
MISCELLANEOUS
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Trustees, Shareholders, etc. Not Personally Liable: Notice
----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having any claim
against the Trust shall look only to the assets of the Trust for payment under
such credit, contract or claim; and neither the Shareholders nor the Trustees,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor. Nothing in this Declaration of
Trust shall protect any Trustee against any liability to which such Trustee
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of the
office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officers or officer shall give notice that this
Declaration of Trust is on file with the Secretary of State of The Commonwealth
of Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or officers or officer or Shareholders or Shareholder
individually.
Trustee's Good Faith Action, Expert Advice, No Bond or Surety
-------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own wilful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
Duration and Termination of Trust
---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least 66 2/3% of the Shares entitled to vote or by the
Trustees by written notice to the Shareholders.
Upon termination of the Trust, after paying or otherwise providing for all
charges, taxes, expenses and liabilities, whether due or accrued or anticipated
as may be determined by the Trustees, the Trust shall in accordance with such
procedures as the Trustees consider appropriate reduce the remaining assets to
distributable form in cash or shares or other securities, or any combination
thereof, and distribute the proceeds to the Shareholders, ratably according to
the number of Shares held by the several Shareholders on the date of
termination.
Filing of Copies, References, Headings
---------------------------------------
Section 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Clerk of the City of Boston, as well as any other
governmental office where such filing may from time to time be required. Anyone
dealing with the Trust may rely on a certificate by an officer of the Trust as
to whether or not any such amendments have been made and as to any matters in
connection with the Trust hereunder; and, with the same effect as if it were the
original, may rely on a copy certified by an officer of the Trust to be a copy
of this instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof" and "hereunder", shall be deemed to refer to this instrument as amended
or affected by any such amendments. Headings are placed herein for
11
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts, each of which shall be
deemed an original.
Applicable Law
--------------
Section 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of said Commonwealth. The Trust shall be
of the type commonly called a Massachusetts business trust, and without limiting
the provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.
Amendments
----------
Section 7. (a) Except as provided in paragraph (b) of this Section 7, this
Declaration of Trust may be amended at any time by an instrument in writing
signed by a majority of the then Trustees when authorized so to do by a vote of
Shareholders holding a majority of the Shares entitled to vote.
Amendments having the purpose of changing the name of the Trust or of supplying
any omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
(b) No amendment may be made under this Section 7 which shall amend, alter,
change or repeal any of the provisions of Article IV, Section 1, Article V,
Section 4 or this paragraph (b) unless the amendment effecting such amendment,
alteration, change or repeal shall receive the affirmative vote or consent of at
least 66 2/3% of the Shares entitled to vote. Such affirmative vote or consent
shall be in addition to the vote or consent of the holders of Shares otherwise
required by law or by the terms of any agreement between the Trust and any
national securities exchange.
IN WITNESS WHEREOF, all of the Trustees as aforesaid do hereto set their hands
this 24th day of May, 1988.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
COMMONWEALTH OF MASSACHUSETS)
)
COUNTY OF SUFFOLK ) ss.
Then personally appeared before me ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., who acknowledged the
foregoing instrument to be his free act and deed.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Notary Public
My commission expires on: 12/9/94
May 24, 1988