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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
THE PRAIRIE FUND
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(Exact Name of Registrant as Specified in Charter)
1111 Lincoln Road, #740, Miami Beach, Florida 33139
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(Address of Principal Executive Offices)
(305) 532-5044
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(Registrant's Telephone Number, including Area Code)
Matthew Zuckerman, President of Zuckerman Management Associates, Inc.
1111 Lincoln Road, #740, Miami Beach, Florida 33139
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(Name and Address of Agent for Service)
WITH COPIES TO:
Ethan W. Johnson
Morgan, Lewis & Bockius LLP
5300 First Union Financial Center
200 South Biscayne Boulevard
Miami, Florida 33131-2339
EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant pursuant to Section
8(b) of the Investment Company Act of 1940, as amended (the "1940 Act").
However, beneficial interests in the Registrant are not being registered under
the Securities Act of 1933, as amended (the "1933 Act"), since such interests
will be issued solely in private placement transactions which do not involve any
"public offering" within the meaning of Section 4(2) of the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any beneficial interest in the Registrant.
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THE PRAIRIE FUND
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PROSPECTUS
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THE PRAIRIE FUND IS A NO-LOAD MUTUAL FUND
ADVISED BY ZUCKERMAN MANAGEMENT ASSOCIATES, INC.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF AN
OFFER TO BUY, ANY BENEFICIAL INTEREST IN THE PRAIRIE FUND. THIS PROSPECTUS HAS
BEEN PREPARED SOLELY FOR THE INFORMATION OF THE INVESTOR TO WHOM IT HAS BEEN
DELIVERED ON BEHALF OF THE PRAIRIE FUND AND MAY NOT BE REPRODUCED OR USED FOR
ANY OTHER PURPOSE.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR PASSED UPON THE ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
[Date]
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TABLE OF CONTENTS
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About the Fund .................................................................................................... 1
Principal Risks ................................................................................................... 2
Fund Fees and Expenses ............................................................................................ 3
Fund Management ................................................................................................... 3
Purchasing and Redeeming Shares ................................................................................... 4
Taxes and Distributions ........................................................................................... 6
Addresses ......................................................................................................... 7
</TABLE>
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ABOUT THE FUND
INVESTMENT OBJECTIVE
The Prairie Fund's (the "Fund") investment objective is to seek long-term
capital appreciation.
INVESTMENT STRATEGIES AND POLICIES
The Fund invests in common stock issued by U.S. companies that Zuckerman
Management Associates, Inc. (the "Investment Adviser") believes will present
attractive long-term investment opportunities. The Investment Adviser buys and
holds common stock of "quality" U.S. companies for long-term investment. In this
context, "quality" refers to demonstrated earning power, sound finances, solid
competitive position, and capable executive leadership. The Investment Adviser
does not trade for quick profits. Stock market trends are largely ignored and no
effort is made to forecast the market or time the Fund's investments to profit
from the perceived outlook. Ordinarily the Fund will be fully invested.
Investments are not limited to any particular capitalization size. Investments
will not be limited either by a maximum percentage of assets that may be
invested in a position or in a particular industry. The Fund generally will not
hold positions in more than 15 companies at any one time. The Investment Adviser
generally will sell positions when there are negative long term developments in
the fundamental outlook of a company, such as a decrease in its growth rate or
profitability.
The Investment Adviser believes that value exists in businesses, not the stock
market. Consequently, a thorough analysis of the underlying fundamentals of
companies, and determinations based on these fundamentals, such as of whether or
not the companies are undervalued or overvalued in the marketplace, are the
essential elements of the Investment Adviser's approach. The Investment Adviser
also takes into account the industry in which the company participates, the
position of the company within that industry and the general business climate.
The Investment Adviser seeks to capitalize on the values that accumulate in such
enterprises over long periods. Quality companies that have fallen from investor
favor are often of interest because the price of their shares may fail to
reflect the business's intrinsic value. In such cases the Investment Adviser
seeks to determine whether the seemingly low price reflects temporary problems
or a serious impairment of economic value. Investments are made only when it is
believed that a company's long-term outlook is sound and the shares are fairly
priced.
The Fund's goals and investment strategy may be changed without shareholder
approval.
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WHO SHOULD INVEST
The Fund is intended for long term investors. Investors in search of
unrealistically high returns, quick profits, income distributions, or to whom
quarterly performance is important, should not invest in the Fund.
PRINCIPAL RISKS
There is no guarantee that the Fund will meet its investment objective. It is
possible for an investor to lose money on an investment in the Fund
MARKET RISK. Since it purchases common stock of companies, the Fund is subject
to the risks that stock prices both individually and market-wide will fall over
short or extended periods of time and that prices of the Fund's shares may
fluctuate from day-to-day. Historically, the stock markets have moved in cycles.
Individual companies may report poor results or be negatively affected by
industry and/or economic trends and developments. The stock prices of these
companies may suffer a decline in response. These factors contribute to price
volatility. Therefore, in order to be successful, investors must accept the fact
that although the stocks of good companies generally will rise over long
periods, they can trade at virtually any price in the short run. In addition,
the Fund's share price, yield and return may vary.
NO PRIOR HISTORY RISK. The Fund is a new Fund. As such, no prior history is
available to provide investors with a reflection of past performance.
MANAGEMENT RISK. Investors in the Fund face the risk that the Investment
Adviser's business analyses may prove faulty. The Fund usually holds between 10
and 15 stocks. If the fundamentals of a number of large holdings are misjudged,
shareholders may suffer losses even during a time when the general market and
many other funds are rising.
NON-DIVERSIFICATION RISK. The Fund is "non-diversified," which means that it
invests its assets in a smaller number of issuers than many other funds. Funds
that invest in a relatively small number of issuers are more susceptible to
risks associated with a single economic, political or regulatory occurrence than
a more diversified fund might be.
HOLIDAY RISK. The Fund's Investment Adviser does not trade on the principal
Jewish holidays of Yom Kippur, Succoth, Passover and Shavuoth. Trading may
nevertheless continue on the securities exchanges. Investors in the Fund face
the risk that the Fund may not fully realize investment opportunities which
arise on these holidays or may not protect the existing investments against loss
resulting from market downturns on these holidays.
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FUND FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
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SHAREHOLDER TRANSACTION FEES
(fees paid directly from your investment) ............................................................... None
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets as a percentage of average net assets)
Management Fees............................................................................................... 2.00%
Other Expenses(1)............................................................................................. 0.45%
Total Annual Fund Operating Expenses.......................................................................... 2.45%
</TABLE>
(1) "Other Expenses" are based on estimated amounts for the current fiscal year.
EXAMPLE
This example is intended to help you compare the cost of investing in the Fund
with the cost of investing in other mutual funds. This example uses the same
assumptions that are in all SEC-registered mutual funds: a $10,000 investment
for the time periods indicated, a 5% return each year and fund operating
expenses that remain the same each year. The figures shown in this example are
entirely hypothetical. They are not representations of past or future
performance or expenses. Your actual costs and returns may be higher or lower.
1 YEAR 3 YEARS
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$243 $ 249
FUND MANAGEMENT
INVESTMENT ADVISER
The Fund's Investment Adviser is Zuckerman Management Associates, Inc., 1111
Lincoln Road, # 740, Miami Beach, Florida 33139. Dr. Matthew M. Zuckerman is the
president and sole owner of the Investment Adviser which was incorporated in May
1999. The Investment Adviser applied for registration with the Securities and
Exchange Commission on [Date] and provides investment
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advice and portfolio management services and oversees the administration of the
Fund. Dr. Zuckerman manages and has managed trust portfolios for 40 years. His
investment management style has been to target stocks of "quality" U.S.
companies for long-term investment. In this context, "quality" refers to
demonstrated earning power, sound finances, solid competitive position, and
capable executive leadership. The Investment Adviser does not trade for quick
profits. Stock market trends are largely ignored and no effort is made to
forecast the market or time the Fund's investments to profit from the perceived
outlook. His principal occupation has been dentistry. Dr. Zuckerman graduated
from NYU in 1949. He received his degree in dentistry in 1954 from NYU College
of Dentistry. As of March 31, 2000 the Investment Adviser had approximately
$3.7 million in net assets under management.
The Investment Adviser will charge an annual investment management fee of two
percent of the Fund's daily average net asset value paid quarterly. From the
Management Fee, the Investment Adviser will pay the custody, administrative and
transfer agent fees, amounting to 0.25% in the aggregate.
The Fund will be responsible for paying any brokerage fees or commissions
incurred on its behalf. The Investment Adviser will have the right to determine
which brokers and dealers the Fund will use.
PURCHASING AND REDEEMING SHARES
PRICING FUND SHARES
The Fund will determine its net asset value on each business day ("Business
Day"). As used herein, the term "Business Day" means every day other than
Saturdays, Sundays and other days on which the New York Stock Exchange is closed
for trading. Orders to buy or redeem shares that are received in good order
prior to 4:00 P.M. Eastern Time on a Business Day will be processed at the net
asset value calculated that day. Net asset value per share is calculated by
dividing the Fund's net assets by the number of shares outstanding at the Fund's
close of business on each Business Day. In calculating net asset value, the Fund
generally values its portfolio at market price. If market prices are unavailable
or the Fund thinks that they are unreliable, fair value prices may be determined
in good faith using methods approved by the Board of Trustees.
HOW TO BUY SHARES
You may buy shares of the Fund on a no-load basis on any Business Day by
completing an account application and enclosing a check payable to "The Prairie
Fund." No interest is paid to subscribers on subscription funds held by the
Fund.
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The minimum initial purchase is $5,000. Orders and redemptions are accepted for
fractional shares. You should send your check payable to "The Prairie Fund" with
a completed account application to Mutual Shareholder Services, LLC (the
"Administrator") at the following address:
Mutual Shareholder Services, LLC
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
ADDITIONAL INVESTMENTS
Additional purchases can be made for $1,000 or more and should be mailed to the
Administrator at the above address. Please remember to include your account
number on your check.
To open an account for a spouse or child you may be asked to present additional
documents as proof of the relationship in addition to an account application.
You will also be asked to provide your existing account number and taxpayer
identification number. You should use caution when giving these numbers to
another person because that person may be able to gain access to your account or
other confidential financial information.
o The Fund will not accept third-party checks (i.e., any checks which are not
made payable to the order of the Fund, DST or a retirement account
custodian).
o You may make fixed, periodic investments into the Fund by means of
automatic money transfers from your bank checking accounts. To establish
automatic money transfers, you may contact the Administrator.
HOW TO REDEEM SHARES
You may redeem your shares on any Business Day either in writing or by telephone
if you elected the telephone redemption privilege on your account application.
You should submit your written redemption request directly to:
Mutual Shareholder Services, LLC
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
(877) 593-8637
If your account is held in the name of a corporation, as a fiduciary or agent,
or as a surviving joint owner, you may be required to provide additional
documents with your redemption request. Please remember that all redemption
requests must include your name and account number.
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ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
The Fund reserves the following rights as they relate to purchases and
redemptions:
o To redeem your shares if your account balance falls below $5,000 or for
any other reason set forth herein. You will receive 30 days notice to
increase the value of your account to $5,000 before the account is
closed;
o To refuse any purchase order;
o To refuse third-party checks for purchases of shares;
o To change or waive the Fund's investment minimums;
o To suspend the right to redeem and delay redemption proceeds during
times when trading on the New York Stock Exchange is restricted or
halted, or otherwise as permitted by the board of trustees when it
deems suspension or delay in the best interest of shareholders;
o To require a signature guaranty for fund redemptions sent to an address
different from the address of record; and
o To require a signature guaranty for some fund redemptions and IRA
transfers.
Shareholders should be aware that purchase and redemption requests mailed to the
Administrator will not be processed until they are received by the Fund at the
address above. You can avoid delays by faxing requests for purchases and
redemptions directly to the Administrator at (216) 736-7500. Orders for
purchasing shares will not be executed unless accompanied by a check in the
amount of the request and which have cleared the bank against which such funds
have been drawn.
TAXES AND DISTRIBUTIONS
Distributions of investment company taxable income (which includes dividends,
taxable interest, taxable original issue discount and market discount income,
income from securities lending, net short-term capital gain in excess of
long-term capital loss, and any other taxable income other than net capital
gain) will be taxable to you as ordinary income, regardless of whether such
distributions are paid in cash or are reinvested in additional shares.
Distributions of the Fund's net capital gain will be taxable to you as long-term
capital gain, regardless of how long you have held the shares, and regardless of
whether such distributions are paid in cash or are reinvested in additional
shares. The Fund anticipates that it will distribute substantially all of its
investment company taxable income and net capital gain for each taxable year.
Distributions paid in January but declared by the Fund in the previous year may
be taxable to you in the previous year.
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ADDRESSES
INVESTMENT ADVISER
Zuckerman Management Associates
1111 Lincoln Road, #740
Miami Beach, FL 33139
CUSTODIAN
UMB Bank, N.A.
928 Grand Boulevard, 10th Floor
Kansas City, MO 64106
ADMINISTRATOR
Mutual Shareholder Services, LLC
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
TRANSFER AGENT
Mutual Shareholder Services, LLC
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
LEGAL COUNSEL
Morgan, Lewis & Bockius LLP
5300 First Union Financial Center
200 S. Biscayne Boulevard
Miami, Florida 33131
INDEPENDENT AUDITORS
Kaufman, Rossin & Co.
2699 South Bayshore Drive
Miami, Florida 33133
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HOW TO OBTAIN MORE INFORMATION
The Fund's Statement of Additional Information ("SAI"), dated [Date], contains
additional, more detailed information about the Fund. The SAI is incorporated by
reference into this Prospectus. This means that the SAI is legally a part of
this Prospectus.
The Fund publishes annual and semi-annual reports ("Shareholder Reports") which
contain additional information about the Fund's investments. In the Fund's first
annual report following the commencement of operations, you will find a
discussion of the market conditions and the investment strategies that
significantly affected the Fund's performance during its first fiscal year.
You may obtain the SAI and Shareholder Reports without charge by contacting the
Administrator toll-free at (877) 593-8637 or by writing to Zuckerman Management
Associates, Inc., 1111 Lincoln Road, #740, Miami Beach, Florida 33139.
Information about the Fund, including the SAI and Shareholder Reports, may be
obtained from the Securities and Exchange Commission in any of the following
ways, (1) In person: you may review and copy documents in the Commission's
Public Reference Room in Washington D.C. (for information call 1-800-SEC-0330);
(2) On-line: you may retrieve information from the Commission's web site at
http://www.sec.gov; (3) By mail: you may request documents, upon payment of a
duplicating fee, by writing to Securities and Exchange Commission, Public
Reference Section, Washington, D.C. 20549-0102; or (4) By e-mail: you may
request documents, upon payment of a duplicating fee, by e-mailing the
Securities and Exchange Commission at the following address: [email protected].
To aid you in obtaining this information, the Fund's Investment Company Act
registration number is 811-___________.
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THE PRAIRIE FUND
STATEMENT OF ADDITIONAL INFORMATION
[Date]
This Statement of Additional Information does not constitute an offer to sell,
or the solicitation of an offer to buy, any beneficial interest in The Prairie
Fund. This Statement of Additional Information has been prepared solely for the
information of the investor to whom it has been delivered on behalf of The
Prairie Fund and may not be reproduced or used for any other purpose.
This Statement of Additional Information is not a Prospectus. This Statement of
Additional Information should be read in conjunction with the Prospectus dated
[Date]. A copy of the Prospectus may be obtained by writing Zuckerman Management
Associates, Inc., 1111 Lincoln Road #740, Miami Beach, Florida 33139, or by
telephoning the Administrator at (877) 593-8637.
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TABLE OF CONTENTS
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FUND HISTORY....................................................................................................... 3
INVESTMENTS........................................................................................................ 3
INVESTMENT RESTRICTIONS............................................................................................ 3
MANAGEMENT OF THE FUND............................................................................................. 5
INVESTMENT ADVISER AND OTHER SERVICES.............................................................................. 6
BROKERAGE SERVICES................................................................................................. 8
FISCAL YEAR........................................................................................................ 9
REDEMPTION OF SHARES AND DETERMINATION OF NET ASSET VALUE.......................................................... 9
TAXES.............................................................................................................. 10
</TABLE>
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FUND HISTORY
The Prairie Fund (the "Fund") was organized on April 12, 2000 as a
Delaware business trust. The Fund is registered with the Securities and Exchange
Commission as a non-diversified open-end management investment company under the
Investment Company Act of 1940. Shares of beneficial interest of the Fund are
sold pursuant to Section 4(2) of the Securities Act of 1933, and are not
registered under that Act.
INVESTMENTS
Ordinarily the Fund will be fully invested in common stocks issued by
U.S. companies. However, during unusual economic or market conditions, or for
temporary defensive or liquidity purposes, the Fund may invest in any of the
following types of securities:
CERTIFICATES OF DEPOSIT. The Fund may invest in negotiable short-term
obligations issued by commercial banks or savings and loan associations against
funds deposited in the issuing institution (certificates of deposit). Variable
rate certificates of deposit are certificates of deposit on which the interest
rate is periodically adjusted prior to their stated maturity based upon a
specified market rate.
MUNICIPAL SECURITIES. The Fund may invest in fixed income securities
issued by local, state and regional governments that provide income that is
exempt from federal income taxes (municipal securities). Municipal securities
involve the risk that an issuer may call securities for redemption, which could
force the Investment Adviser to reinvest the proceeds at a lower rate of
interest.
U.S. TREASURY SECURITIES. The Fund is free to invest in U.S. Treasury
securities of varying maturities. There are usually no brokerage commissions, as
such, paid by the Fund in connection with the purchase of such instruments. The
value of such securities can be expected to vary inversely to the changes in
prevailing interest rates. Thus, if interest rates have increased from the time
a security was purchased, such security, if sold, might be sold at a price less
than its cost. Similarly, if interest rates have declined from the time a
security was purchased, such security, if sold, might be sold at a price greater
than its cost.
INVESTMENT RESTRICTIONS
The Fund is subject to the following restrictions which are fundamental
policies and may not be changed without a vote of the majority of the
outstanding voting securities of the Fund:
(1) Borrow money in excess of 5% of the value (taken at the lower of
cost or current value) of the Fund's total assets (not including the amount
borrowed) at the time the borrowing is made, and then only from banks as a
temporary measure to facilitate the meeting of redemption requests (and not for
leverage) or for extraordinary or emergency purposes.
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(2) Pledge, hypothecate, mortgage or otherwise encumber its assets
in excess of 10% of the Fund's total assets (taken at cost), and then only to
secure borrowings permitted by Restriction 1 above.
(3) Purchase securities on margin, except such short-term credits as
may be necessary for the clearance of purchases and sales of securities.
(4) Make short sales of securities or maintain a short position for
the account of the Fund unless at all times when a short position is open, the
Fund owns an equal amount of such securities or owns securities which, without
payment of any further consideration, are convertible into or exchangeable for
securities of the same issue as, and equal in amount to, the securities sold
short.
(5) Underwrite securities issued by other persons except to the
extent that, in connection with the disposition of its portfolio investments, it
may be deemed to be an underwriter under federal securities laws.
(6) Purchase or sell real estate, although it may invest in
securities of issuers, which deal in real estate, including securities of real
estate investment trusts, and may purchase securities, which are secured by
interests in real estate.
(7) Purchase or sell commodities or commodity contracts, including
future contracts.
(8) Make loans, except by purchase of debt obligations or by
entering into repurchase agreements.
(9) acquire any securities of companies within one industry, if, as
a result of such acquisition, more than 25% of the value of the Fund's total
assets would be invested in securities of companies within such industry.
It is contrary to the Fund's present policy, which may be changed by
the Board of Trustees without shareholder approval, to borrow money, pledge or
hypothecate its assets, make any short sales of securities, maintain any short
position for the account of the Fund, issue senior securities, or purchase
foreign securities which are not publicly traded in the United States. In
addition, it is contrary to the Fund's present policy to:
(1) Invest more than 10% of the Fund's net assets in securities,
which at the time of such investment are not readily marketable.
(2) Write (sell) or purchase options.
(3) Buy or sell oil, gas or other mineral leases, rights or royalty
contracts.
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(4) Make investments for the purpose of gaining control of a
company's management.
All percentage limitations on investments set forth herein and in the
Prospectus will apply at the time of the making of an investment and shall not
be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of such investment.
The phrase "shareholder approval," as used in the Prospectus, and the
phrase "vote of a majority of the outstanding voting securities," as used
herein, means the affirmative vote of the lesser of (1) more than 50% of the
outstanding voting shares of the Fund, or (2) 67% or more of the voting shares
of the Fund present at a meeting if more than 50% of the outstanding
shareholders are present at the meeting in person or represented by proxy.
MANAGEMENT OF THE FUND
The Management of the Fund is overseen by a board of trustees ("Board
of Trustees"). The Board of Trustees meets regularly to review the Fund's
activities, contractual arrangements and performance.
The Trustees and officers of the Fund and their principal occupations
during the past five years are as follows:
ELIAS M. HERSCHMANN, MD Age 62, Trustee; Gastroenterologist affiliated
with Miami Heart Institute in Miami Beach, Florida and Aventura
Hospital in Aventura, Florida. Dr. Herschmann was a Major in the United
States Air Force, Medical Corps, School of Aerospace Medicine. He was
the Chief of the Gastroenterology Section, Clinical Science Division,
United States Air Force School of Aerospace Medicine from 1968-1970.
Dr. Herschmann graduated from Yeshiva College in 1959 and received his
degree in medicine in 1963 from State University of New York, Downtown
Medical Center in Brooklyn, New York. Dr. Herschmann is presently a
Member of the City of Miami Bach Community Relations Board and
President of Young Israel of Miami Beach.
JACK LEVINE, CPA Age 50, Trustee; Certified Public Accountant in the
State of Florida. President of Jack Levine, PA, CPA's for more than 20
years. Member of the American Institute of Certified Public Accounts,
the Florida Institute of Certified Public Accountants and the New York
Society of Certified Public Accountants. He is director of numerous
civic and charitable organizations and was formerly director of Bankers
Savings Bank in Coral Gables, Florida.
NANCY Z. MARKOVITCH*, Age 40, Trustee, Treasurer and Secretary of the
Fund; Private Investor since 1990. Ms. Markovitch is a Trustee for
various trust funds for the benefit of her children and in this
capacity has been active in the management of investments over a number
of years. Ms. Markovitch is a member of the board of directors of the
Hillel Day
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School of Boca Raton. She was employed from 1980 to 1988 by Eric
Emmanuel Company, municipal bond investments, in New York City as a
registered broker, executive secretary and office manager.
JOSEPH WIESEL, Age 58, Trustee; Chief Financial Officer of Ivory
International, Inc. since 1995. Mr. Wiesel is active in The Hebrew
Academy and served two terms as president of Beth Israel Congregation
in Miami Beach. Mr. Wiesel is a 1962 graduate of City College of New
York.
MATTHEW M. ZUCKERMAN,* Age 70, Chairman of the Board of Trustees and
President of the Fund; Principal of Zuckerman Management Associates.
Mr. Zuckerman manages and has managed trust portfolios for 40 years.
His principal occupation is dentistry. Dr. Zuckerman graduated from NYU
in 1949. He received his degree in dentistry in 1954 from NYU College
of Dentistry.
* Trustees Markovitch and Zuckerman are deemed to be "interested
persons" of the Fund as that term is defined in the Investment Company
Act of 1940.
The mailing address of the trustees and officers is c/o the Fund, 1111
Lincoln Road, Suite 740, Miami Beach, Florida 33139.
The Fund's Declaration of Trust provides that the Fund will indemnify
each of its Trustees against liabilities and expenses incurred in connection
with the litigation in which they may be involved because of their offices with
the Fund, except if it is determined in the manner specified in the Bylaws that
they have not acted in good faith in the reasonable belief that their actions
were in the best interests of the Fund.
Trustees may receive fees or reimbursements for attending Board
meetings. The salaries and expenses, if any, of each of the Fund's officers are
paid by the Investment Adviser. Matthew Zuckerman, as sole stockholder and
officers of the Investment Adviser, will benefit from the management fees paid
by the Fund.
INVESTMENT ADVISER AND OTHER SERVICES
THE INVESTMENT ADVISER.
Under a written advisory contract ("Investment Advisory Agreement")
between the Fund and the Investment Adviser, subject to such policies as the
Trustees of the Fund may determine, the Investment Adviser, at its expense,
furnishes an investment program for the Fund and makes investment decisions on
behalf of the Fund and places all orders for the purchase and sale of portfolio
securities subject always to applicable investment objectives, policies and
restrictions.
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Pursuant to the Investment Advisory Agreement and subject to the
oversight of the Trustees, the Investment Adviser also manages, supervises and
conducts the other affairs and business of the Fund, furnishes office space and
equipment, provides bookkeeping and certain clerical services and pays all fees
and expenses of the officers of the Fund. As indicated under "Portfolio
Transactions -- Brokerage and Research Services," the Fund's portfolio
transactions may be placed with brokers which furnish the Investment Adviser,
without cost, certain research, statistical and quotation services of value to
it or its affiliates in advising the Fund or their other clients. In so doing,
the Fund may incur greater brokerage commissions than it might otherwise pay.
The Investment Advisory Agreement has been approved by the Trustees of
the Fund. By its terms, the Investment Advisory Agreement has an initial term of
two years and will continue in force thereafter from year to year, but only so
long as its continuance is approved at least annually by the Trustees at a
meeting called for that purpose or by the vote of a majority of the outstanding
shares of the Fund. The Investment Advisory Agreement automatically terminates
on assignment, and is terminable upon notice by the Fund. In addition, the
Investment Advisory Agreement may be terminated on not more than 60 days' notice
by the Investment Adviser to the Fund.
The Fund pays, in addition to the management fee described above, all
expenses not borne by the Investment Adviser, including, without limitation,
fees and expenses of the Trustees, interest charges, taxes, brokerage
commissions, expenses of issue or redemption of shares, charges of custodians,
auditing and legal expenses, reports to shareholders, expenses of meetings of
shareholders, expenses of printing and mailing Prospectus, proxy statements and
proxies to existing shareholders, and insurance premiums. The Fund is also
responsible for such non-recurring expenses as may arise, including litigation
in which the Fund may be a party, and other expenses as determined by the
Trustees. The Fund may have an obligation to indemnify its officers and Trustees
with respect to such litigation.
The Investment Advisory Agreement provides that the Investment Adviser
shall not be subject to any liability in connection with the performance of its
services thereunder in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
The Investment Adviser is a Florida corporation organized on June 14,
1999. Approximately one hundred percent of the outstanding voting shares of the
Investment Adviser is owned by Matthew M. Zuckerman. The Investment Adviser
manages aggregate assets as of March 31, 2000 of approximately $3.7 million.
7
<PAGE> 19
DISTRIBUTIONS.
DISTRIBUTIONS FROM NET INVESTMENT INCOME. The Fund will pay out
substantially all of its net investment income, (I.E., dividends, interest it
receives from its investments, and short-term gains). It is the present policy
of the Fund to declare and pay distributions from net investment income
semi-annually.
DISTRIBUTIONS OF CAPITAL GAINS. The Fund's policy is to distribute
annually substantially all of the net realized capital gain, if any, after
giving effect to any available capital loss carryover. Net realized capital gain
is the excess of net realized long-term capital gain over net realized
short-term capital loss.
BROKERAGE SERVICES
Transactions on stock exchanges and other agency transactions involve
the payment by the Fund of negotiated brokerage commissions. Such commissions
vary among different brokers. Also, a particular broker may charge different
commissions according to such factors as the difficulty and size of the
transaction. There is generally no stated commission in the case of securities
traded in the over-the-counter markets but the price paid by the Fund usually
includes a dealer commission or mark-up. It is anticipated that most purchases
and sales of short-term portfolio securities will be with the issuer or with
major dealers in money market instruments acting as principals. In underwritten
offerings, the price paid includes a disclosed, fixed commission or discount
retained by the underwriter or dealer.
When the Investment Adviser places orders for the purchase and sale of
portfolio securities for the Fund and buys and sells securities for the Fund, it
is anticipated that such transactions will be effected through a number of
brokers and dealers. In so doing, the Investment Adviser intends to use its best
efforts to obtain for the Fund the most favorable price and execution available,
except to the extent that it may be permitted to pay higher brokerage
commissions as described below. In seeking the most favorable price and
execution, the Investment Adviser considers all factors it deems relevant,
including, by way of illustration, price, the size of the transaction, the
nature of the market for the security, the amount of commission, the timing of
the transaction taking into account market prices and trends, the reputation,
experience and financial stability of the broker/dealer involved and the quality
of service rendered by the broker/dealer in other transactions.
It has for many years been a common practice in the investment advisory
business for advisors of investment companies and other institutional investors
to receive research, statistical and quotation services from brokers which
execute portfolio transactions for the clients of such advisors. Consistent with
this practice, the Investment Adviser may receive research, statistical and
quotation services from brokers with which the Fund's portfolio transactions are
placed. These services, which in some instances could also be purchased for
cash, include such matters as general economic and security market reviews,
industry and company reviews, evaluations of securities and recommendations as
to the purchase and sale of securities. Some of these services may be of value
8
<PAGE> 20
to the Investment Adviser in advising several of its clients (including the
Fund), although not all of these services are necessarily useful and of value in
managing the Fund. The fees paid to the Investment Adviser are not reduced
because it receives such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934
(the "1934 Act") and the Investment Advisory Agreement, the Investment Adviser
may cause the Fund to pay a broker which provides "brokerage and research
services" (as defined in the 1934 Act) to the Investment Adviser an amount of
disclosed commission for effecting a securities transaction for the Fund in
excess of the commission which another broker would have charged for effecting
that transaction. The authority of the Investment Adviser to cause the Fund to
pay any such greater commissions is subject to such policies as the Trustees may
adopt from time to time.
FISCAL YEAR
The Fund's fiscal year ends on December 31 of each year.
REDEMPTION OF SHARES AND DETERMINATION OF NET ASSET VALUE
HOW TO REDEEM SHARES.
The procedures for redemption of Fund shares are summarized in the text
of the Prospectus following the caption "How to Redeem." Redemption requests
must be in good order, as defined in the Prospectus. Upon receipt of a
redemption request in good order, the Shareholder will receive a check equal to
the net asset value of the redeemed shares next determined after the redemption
request has been received. The proceeds of redemption may be more or less than
the shareholder's investment and thus may involve a capital gain or loss for tax
purposes. If the shares to be redeemed represent an investment made by check,
the Fund reserves the right not to forward the proceeds of the redemption until
the check has been collected. Mutual Shareholder Services LLC ("Administrator")
serves as Transfer Agent for the Fund.
The Fund may suspend the right of redemption and may postpone payment
only when the New York Stock Exchange (the "NYSE") is closed for other than
customary weekends and holidays, or if permitted by the rules of the Securities
and Exchange Commission during periods when trading on the Exchange is
restricted or during any emergency which makes it impracticable for the Fund to
dispose of its securities or for the Administrator to determine fairly the value
of the Fund's net assets, or during any other period permitted by order of the
Securities and Exchange Commission.
It is currently the Fund's policy usually to pay all redemptions in
cash. The Board of Trustees retains the right, however, to provide for
redemptions in whole or in part by a distribution in-kind of securities held by
the Fund in lieu of cash. Shareholders may incur brokerage charges on the sale
of any such securities so received in payment of redemptions.
9
<PAGE> 21
The Fund reserves the right to redeem shares and mail the proceeds to
the shareholder if at any time the net asset value of the shares in the
shareholder's account in the Fund falls below a specified level, currently set
at $5,000. Shareholders will be notified and will have 30 days to bring the
account up to the required level before any redemption action will be taken by
the Fund. The Fund also reserves the right to redeem shares in a shareholder's
account in excess of an amount set from time to time by the Trustees. No such
limit is presently in effect, but such a limit could be established at any time
and could be applicable to existing as well as future shareholders.
HOW NET ASSET VALUE IS DETERMINED.
The net asset value per share of the Fund is determined once on each
day on which the NYSE is open, at the Fund's close of business. The Fund expects
that the days, other than weekend days, that the Exchange will not be open are
New Year's Day, Martin Luther King, Jr. Day, President's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The Fund's portfolio securities for which market quotations are readily
available are valued at market value, which is determined by using the last
reported sale price, or, if no sales are reported -- and in the case of certain
securities traded over-the-counter -- the last reported bid price.
Certain securities and assets of the Fund may be valued at fair value
as determined in good faith by the Trustees or by persons acting at their
direction pursuant to guidelines established by the Trustees. Such valuations
and procedures are reviewed periodically by the Trustees. The fair value of such
securities is generally determined as the amount which the Fund could reasonably
expect to realize from an orderly disposition of such securities over a
reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Fund in connection with such disposition). In addition, such
specific factors are also generally considered as the cost of the investment,
the market value of any unrestricted securities of the same class (both at the
time of purchase and at the time of valuation), the size of the holding, the
prices of any recent transactions or offers with respect to such securities and
any available analysts' reports regarding the issuer.
The Administrator will calculate the Fund's daily net asset value of
the shares of the Fund and maintain accurate records of such valuation for the
Fund.
TAXES
The Fund intends to qualify under Subchapter M of the Internal Revenue
Code of 1986, as amended, for tax treatment as a regulated investment company.
In order to qualify as a regulated investment company, the Fund must satisfy
certain requirements relating to the source of its income, diversification of
its assets, and distributions of its income. First, the Fund must derive at
least 90% of its annual gross income (including tax-exempt interest) from
dividends, interest, payments with
10
<PAGE> 22
respect to securities loans, gains from the sale of or other disposition of
stock or securities, or certain other income derived with respect to its
business of investing in such stock or securities (the "90% gross income test").
Second, the Fund must diversify its holdings so that, at the close of each
quarter of its taxable year, (i) at least 50% of the value of its total assets
is comprised of cash, cash items, United States Government securities,
securities of other regulated investment companies and other securities limited
in respect of any one issuer to an amount not greater in value than 5% of the
value of the Fund's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of the
total assets is invested in the securities of any one issuer (other than United
States Government securities and securities of other regulated investment
companies) or two or more issuers controlled by the Fund and engaged in the
same, similar or related trades or businesses.
As a regulated investment company, the Fund will not be subject to
federal income tax in any taxable year for which it distributes at least 90% of
the sum of (i) its "investment company taxable income" (which includes
dividends, taxable interest, taxable original issue discount and market discount
income, income from securities lending, net short-term capital gain in excess of
long-term capital loss, and any other taxable income other than "net capital
gain" (as defined below) and is reduced by deductible expenses) and (ii) its net
tax-exempt interest (the excess of its gross tax-exempt interest income over
certain disallowed deductions). The Fund may retain for investment its net
capital gain (which consists of the excess of its net long-term capital gain
over its net short-term capital loss). However, if the Fund retains any net
capital gain or any investment company taxable income, it will generally be
subject to tax at regular corporate rates on the amount retained.
Distributions of investment company taxable income will be taxable to
you as ordinary income, regardless of whether such distributions are paid in
cash or are reinvested in additional shares, to the extent of the Fund's
earnings and profits. The Fund anticipates that it will distribute substantially
all of its investment company taxable income for each taxable year.
The Fund may either retain or distribute to you its net capital gains.
If such gains are distributed as a capital gains distribution, they are taxable
to you at a maximum rate of 20%, regardless of the length of time you have held
shares.
The Fund will provide a statement annually to you as to the federal tax
status of distributions paid (or deemed to be paid) by the Fund during the year.
Generally, gain or loss on the sale of shares will be capital gain or
loss that will be long-term if the shares have been held for more than twelve
months and otherwise will be short-term. For individuals, long-term capital
gains are currently taxed at a maximum rate of 20% and short-term capital gains
are currently taxed at ordinary income tax rates. However, if you realize a loss
on the sale or redemption of shares held for six months or less and have
previously received a capital gains distribution with respect to the shares (or
any
11
<PAGE> 23
undistributed net capital gains of the Fund with respect to such shares are
included in determining your long-term capital gains), you must treat the loss
as a long-term capital loss to the extent of the amount of the prior capital
gains distribution (or any undistributed net capital gains of the Fund that have
been included in determining your long-term capital gains). In addition, any
loss realized on a sale or other disposition of shares will be disallowed to the
extent you repurchase (or enter into a contract or option to repurchase) shares
within a period of 61 days (beginning 30 days before and ending 30 days after
the disposition of the shares).
If the Fund fails to qualify for any taxable year as a regulated
investment company, all of its taxable income will be subject to tax at regular
corporate income tax rate (without any deduction for distributions). In such
event, all distributions made by the Fund (whether or not derived from
tax-exempt interest) would be taxable to you as dividends to the extent of the
Fund's earnings and profits.
The foregoing relates only to federal income taxation. You may also be
subject to state and local taxes in connection with your investment in the Fund.
12
<PAGE> 24
PART C: OTHER INFORMATION
ITEM 23. EXHIBITS:
(a) Certificate and Declaration of Trust of Registrant, dated
April 12, 2000, is filed herewith.
(b) By-Laws of Registrant, to be filed as an amendment to this
registration.
(c) Not Applicable
(d) Investment Advisory Agreement between the Registrant and
Zuckerman Management Associates, Inc., to be filed as an
amendment to this registration.
(e) Not Applicable
(f) Not Applicable
(g) Custody Agreement between the Registrant and UMB Bank, N.A.,
to be filed as an amendment to this registration.
(h)(1) Accounting Services Agreement between the Registrant and
Mutual Shareholder Services, LLC , to be filed as an amendment
to this registration.
(h)(2) Transfer Agent Agreement between the Registrant and Mutual
Shareholder Services, LLC, to be filed as an amendment to this
registration.
(i) Not Applicable
(j) Not Applicable
(k) Not Applicable
(l) Not Applicable
(m) Not Applicable
(n) Not Applicable
13
<PAGE> 25
(o) Not Applicable
(p) Code of Ethics, to be filed as an amendment to this
registration.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Not Applicable
ITEM 25. INDEMNIFICATION
The Registrant is organized as a Delaware business trust and is operated
pursuant to a Declaration of Trust that permits the Registrant to indemnify its
trustees and officers under certain circumstances. Such indemnification,
however, is subject to the limitations imposed by the Investment Company Act of
1940, as amended. The Declaration of Trust of the Registrant provides that
officers and trustees of the Trust shall be indemnified by the Trust against
liabilities and expenses of defense in proceedings against them by reason of the
fact that they each serve as an officer or trustee of the Trust or as an officer
or trustee of another entity at the request of the entity. This indemnification
is subject to the following conditions:
(a) no trustee or officer of the Trust is indemnified against any
liability to the Trust or its security holders which was the
result of any willful misfeasance, bad faith, gross
negligence, or reckless disregard of his duties;
(b) officers and trustees of the Trust are indemnified only for
actions taken in good faith which the officers and trustees
believed were in or not opposed to the best interests of the
Trust; and
(c) expenses of any suit or proceeding will be paid in advance
only if the persons who will benefit by such advance undertake
to repay the expenses unless it subsequently is determined
that such persons are entitled to indemnification.
The Declaration of Trust of the Registrant provides that if indemnification is
not ordered by a court, indemnification may be authorized upon determination by
a court or other body approving the settlement, or by a majority vote of a
quorum of the trustees who were not parties to the proceedings or, if this
quorum is not obtainable, if directed by a quorum of disinterested trustees, or
by independent legal counsel in a written opinion, that the persons to be
indemnified have met the applicable standard.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
To be filed as an amendment to this registration.
14
<PAGE> 26
ITEM 27. PRINCIPAL UNDERWRITERS
Not Applicable
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books, and records required to be maintained and preserved by Section
31(a) of the Investment Company Act of 1940, as amended, and Rules 31a-1 and
31a-2 thereunder, are maintained as follows:
UMB Bank, N.A.
928 Grand Boulevard, 10th Floor
Attn: Bonnie Johnson
Kansas City, MO 64106
Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
Zuckerman Management Associates, Inc.
1111 Lincoln Road, #740
Miami Beach, FL 33139
(records relating to its function as investment adviser)
Mutual Shareholder Services
1301 East Ninth Street, Suite 1005
Cleveland, OH 44114
ITEM 29. MANAGEMENT SERVICES
Not Applicable
ITEM 30. UNDERTAKINGS
None
15
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, as amended,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, duly authorized in the City of Miami, and State of
Florida on the 5th day of May, 2000.
THE PRAIRIE FUND
By: /s/ Matthew M. Zuckerman
---------------------------------
Name: Matthew M. Zuckerman
Title: President
16
<PAGE> 28
EXHIBIT INDEX
<TABLE>
<CAPTION>
Name Exhibit #
- ---- ---------
<S> <C>
Certificate and Declaration of Trust of Registrant, dated April 12, 2000,
is filed herewith. Ex-99.a
By-Laws of Registrant, dated April 12, 2000, to be filed as an amendment to
this registration. Ex-99.b
Not Applicable Ex-99.c
Investment Advisory Agreement between the Registrant and Zuckerman Management
Associates, Inc., to be filed as an amendment to this registration. Ex-99.d
Not Applicable Ex-99.e
Not Applicable Ex-99.f
Custodian Agreement between the Registrant and UMB Bank, N.A., to be filed as
an amendment to this registration. Ex-99.g
Accounting Services Agreement between the Registrant and Mutual Shareholder
Services, LLC, to be filed as an amendment to this registration. Ex-99.h(1)
Transfer Agent Agreement between the Registrant and Mutual Shareholder Services,
LLC, to be filed as an amendment to this registration. Ex-99.h(2)
Not Applicable Ex-99.i
Not Applicable Ex-99.j
Not Applicable Ex-99.k
Not Applicable Ex-99.l
Not Applicable Ex-99.m
Not Applicable Ex-99.n
</TABLE>
17
<PAGE> 29
<TABLE>
<S> <C>
Not Applicable Ex-99.o
Code of Ethics, to be filed as an amendment to this registration. Ex-99.p
</TABLE>
18
<PAGE> 1
Exhibit 99.a
Page 1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
BUSINESS TRUST REGISTRATION OF "THE PRAIRIE FUND", FILED IN THIS OFFICE ON THE
TWELFTH DAY OF APRIL, A.D. 2000, AT 2:30 O'CLOCK P.M.
[SEAL]
/s/ Edward J. Freel
---------------------------------------
Edward J. Freel, Secretary of State
3212331 8100 AUTHENTICATION: 0381486
001187064 DATE: 04-14-00
<PAGE> 2
CERTIFICATE OF TRUST
OF
THE PRAIRIE FUND
This Certificate of Trust for The Prairie Fund, a business trust registered
under the Investment Company Act of 1940, is filed in accordance with the
provisions of the Delaware Business Trust Act (Del. Code Ann. tit.12, ss.3801
(1997) and sets forth the following:
1. The name of the trust is:
The Prairie Fund
2. As required by 12 Del. C Section 3807 and 3810(a)(1)b, The Prairie Fund's
business address of the registered office of the Trust and of the registered
agent of the Trust for service of process is:
The Corporation Trust Company
1209 Orange Street
Wilmington, Delaware 19801
County of New Castle
3. This certificate shall be effective upon filing.
This certificate is executed this 11th day of April 2000 in Miami, Florida upon
the penalties of perjury and constitutes the oath or affirmation that the facts
stated above are true to the undersigned trustees belief or knowledge.
/s/ Dr. Matthew M. Zuckerman
- ----------------------------------
Dr. Matthew M. Zuckerman
Initial Trustee
<PAGE> 3
THE PRAIRIE FUND
DECLARATION OF TRUST
DATED APRIL 12, 2000
<PAGE> 4
THE PRAIRIE FUND
Dated April 12, 2000
This DECLARATION OF TRUST (hereinafter "Trust Instrument") is made
April 12, 2000 (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with Article III hereof, the
"Trustees").
WHEREAS, the Trustees desire to establish a business trust for the
investment and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust hereunder shall be held and managed in trust under this
Trust Instrument as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.01. NAME. The name of the trust created hereby is the "The Prairie
Fund."
SECTION 1.02. DEFINITIONS. Wherever used herein, unless otherwise required by
the context or specifically provided:
(a) The term "By-Laws" means the By-Laws referred to in
Article IV, Section 4.01(e) hereof, as from time to time amended;
(b) The term "Commission" has the meaning given it in the 1940
Act (as defined below). The terms "Affiliated Person," "Assignment," "Interested
Person," and "Principal Underwriter" shall have the meanings given them in the
1940 Act, as modified by or interpreted by any applicable order or orders of the
Commission or any rules or regulations adopted by or interpretive releases of
the Commission thereunder;
(c) The term "Delaware Act" refers to Chapter 38 of Title 12
of the Delaware Code entitled "Treatment of Delaware Business Trusts," as it may
be amended from time to time;
(d) The term "Net Asset Value" means the net asset value of
the Trust (as defined below) determined in the manner provided in Article IX,
Section 9.03 hereof;
(e) The term "Outstanding Shares" means those Shares (as
defined below) shown from time to time in the books of the Trust or its Transfer
Agent as then issued and outstanding, but
1
<PAGE> 5
shall not include Shares which have been redeemed or repurchased by the Trust
and which are at the time held in the treasury of the Trust;
(f) The term "Shareholder" means a record owner of Outstanding
Shares of the Trust;
(g) The term "Shares" means the equal proportionate
transferable units of beneficial interest into which the beneficial interest of
the Trust or class thereof shall be divided and may include fractions of Shares
as well as whole Shares;
(h) The term "Trust" refers to the The Prairie Fund.
(i) The term "Trustee" or "Trustees" means the person or
persons who has or have signed this Trust Instrument, so long as he or they
shall continue in office in accordance with the terms hereof, and all other
persons who may from time to time be duly qualified and serving as Trustees in
accordance with the provisions of Article III hereof and reference herein to a
Trustee or to the Trustees shall refer to the individual Trustees in their
capacity as Trustees hereunder;
(j) The term "Trust Property" means any and all property, real
or personal, tangible or intangible, which is owned or held by or for the
account of one or more of the Trust, or the Trustees on behalf of the Trust.
(k) The term "1940 Act" refers to the Investment Company Act
of 1940, as amended from time to time.
ARTICLE II
BENEFICIAL INTEREST
SECTION 2.01. SHARES OF BENEFICIAL OWNERSHIP INTEREST. The beneficial interest
in the Trust shall be divided into such transferable Shares of one or more
separate and distinct classes as the Trustees shall from time to time create and
establish. The number of Shares of each class authorized hereunder is unlimited.
Each Share shall have no par value. All Shares issued hereunder, including
without limitation, Shares issued in connection with a dividend in Shares or a
split or reverse split of Shares, shall be fully paid and nonassessable.
SECTION 2.02. ISSUANCE OF SHARES. The Trustees in their discretion may, from
time to time, without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, subject to
applicable law, including cash or securities, at such time or times and on such
terms as the Trustees may deem appropriate, and may in such manner acquire other
assets (including the acquisition of assets subject to, and in connection with,
the assumption of liabilities) and businesses.
2
<PAGE> 6
In connection with any issuance of Shares, the Trustees may issue fractional
Shares and Shares held in the treasury. The Trustees from time to time may
divide or combine the Shares into a greater or lesser number without thereby
changing the proportionate beneficial interests in the Trust. Contributions to
the Trust may be accepted for, and Shares shall be redeemed as, whole Shares
and/or 1/1,000th of a Share or integral multiples thereof.
SECTION 2.03. OWNERSHIP AND TRANSFER OF SHARES. The Trust or a transfer agent
for the Trust shall maintain a register containing the names and addresses of
the Shareholders of each class, the number of Shares of each class held by such
Shareholders, and a record of all Share transfers. The register shall be
conclusive as to the identity of Shareholders of record and the number of Shares
held by them from time to time. The Trustees may authorize the issuance of
certificates representing Shares and adopt rules governing their use. The
Trustees may make rules governing the transfer of Shares, whether or not
represented by certificates. Except as otherwise provided by the Trustees,
Shares shall be transferable on the books of the Trust only by the record holder
thereof or by his duly authorized agent upon delivery to the Trustees or the
Trust's transfer agent of a duly executed instrument of transfer, together with
a Share certificate if one is outstanding, and such evidence or the genuineness
of each such execution and authorization and of such other matters as may be
required by the Trustees. Upon such delivery, and subject to any further
requirements specified by the Trustees or contained in the By-laws, the transfer
shall be recorded on the books of the Trust. Until a transfer is so recorded,
the Shareholder of record of Shares shall be deemed to be the holder of such
Shares for all purposes hereunder and neither the Trustees nor the Trust, nor
any transfer agent or registrar or any officer, employee or agent of the Trust,
shall be affected by any notice of a proposed transfer.
SECTION 2.04. TREASURY SHARES. Shares held in the treasury shall, until reissued
pursuant to Section 2.02 hereof, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
SECTION 2.05. INVESTMENT IN THE TRUST. The Trustees shall accept investments in
the Trust from such persons and on such terms as they may from time to time
authorize. At the Trustees' discretion, such investments, subject to applicable
law, may be in the form of cash or securities, valued as provided in Article IX,
Section 9.03 hereof. Investments shall be credited to each Shareholder's account
in the form of full or fractional Shares at the Net Asset Value per Share next
determined after the investment is received; provided, however, that the
Trustees may, in their sole discretion, (a) fix the Net Asset Value per Share of
the initial capital contribution or (b) impose a sales charge upon investments
in the Trust in such manner and at such time as determined by the Trustees. The
Trustees shall have the right to refuse to accept investments at any time
without any cause or reason therefor whatsoever.
SECTION 2.06. NO PREEMPTIVE RIGHTS. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust or the Trustees.
3
<PAGE> 7
SECTION 2.07. PERSONAL LIABILITY OF SHAREHOLDERS. Each Shareholder of the Trust
shall not be personally liable for debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust.
The Trustees shall have no power to bind any Shareholder personally or 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 by way of subscription for any Shares or otherwise. Every note, bond,
contract or other undertaking issued by or on behalf of the Trust or the
Trustees relating to the Trust shall include a recitation limiting the
obligation represented thereby to the Trust and its or their assets (but the
omission of such a recitation shall not operate to bind any Shareholder or
Trustee of the Trust). Shareholders shall have the same limitation of personal
liability as is extended to shareholders of a private corporation for profit
incorporated in the State of Delaware. Every written obligation of the Trust
shall contain a statement to the effect that such obligation may only be
enforced against the assets of the Trust; however, the omission of such
statement shall not operate to bind or create personal liability for any
Shareholder or Trustee.
SECTION 2.08. ASSENT TO TRUST INSTRUMENT. Every Shareholder, by virtue of having
purchased a Share shall become a Shareholder and shall be held to have expressly
assented and agreed to be bound by the terms hereof.
ARTICLE III
THE TRUSTEES
SECTION 3.01. MANAGEMENT OF THE TRUST. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Trust Instrument. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices both within and without the State of Delaware, in any and
all states of the United States of America, in the District of Columbia, in any
and all commonwealths, territories, dependencies, colonies, or possessions of
the United States of America, and in any foreign jurisdiction and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although such things
are not herein specifically mentioned. 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 Trust Instrument, the presumption shall be
in favor of a grant of power to the Trustees.
The enumeration of any specific power in this Trust Instrument shall
not be construed as limiting the aforesaid power. The powers of the Trustees may
be exercised without order of or resort to any court.
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<PAGE> 8
Except for the Trustees named herein or appointed to fill vacancies
pursuant to Section 3.04 of this Article III, the Trustees shall be elected by
the Shareholders owning of record a plurality of the Shares voting at a meeting
of Shareholders. Such a meeting shall be held on a date fixed by the Trustees.
In the event that less than a majority of the Trustees holding office have been
elected by Shareholders, the Trustees then in office will call a Shareholders'
meeting for the election of Trustees.
SECTION 3.02. INITIAL TRUSTEES. The initial Trustees shall be the persons named
herein. On a date fixed by the Trustees, the Shareholders shall elect additional
Trustees subject to Section 3.06 of this Article III.
SECTION 3.03. TERM OF OFFICE OF TRUSTEES. The Trustees shall hold office during
the lifetime of this Trust, and until its termination as herein provided, except
that: (a) any Trustee may resign his trust by written instrument signed by him
and delivered to the other Trustees, which shall take effect upon such delivery
or upon such later date as is specified therein; (b) any Trustee may be removed
at any time by a vote of at least two-thirds of the number of Trustees prior to
such removal, specifying the date when such removal shall become effective;
(c) any Trustee who requests in writing to be retired or who has died, become
physically or mentally incapacitated by reason of disease or otherwise, or is
otherwise unable to serve, may be retired by written instrument signed by a
majority of the other Trustees, specifying the date of his retirement; and (d) a
Trustee may be removed at any meeting of the Shareholders of the Trust by a vote
of Shareholders owning at least two-thirds of the outstanding Shares.
SECTION 3.04. VACANCIES AND APPOINTMENT OF TRUSTEES. In case of the declination
to serve, death, resignation, retirement, removal, physical or mental incapacity
by reason of disease or otherwise, or a Trustee is otherwise unable to serve, or
an increase in the number of Trustees, a vacancy shall occur. Whenever a vacancy
in the Board of Trustees shall occur, until such vacancy is filled, the other
Trustees shall have all the powers hereunder and the certificate of the other
Trustees of such vacancy shall be conclusive. In the case of an existing
vacancy, the remaining Trustees shall fill such vacancy by appointing such other
person as they in their discretion shall see fit consistent with the limitations
under the 1940 Act. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by resolution of the Trustees,
duly adopted, which shall be recorded in the minutes of a meeting of the
Trustees, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees then in office
in anticipation of a vacancy to occur by reason of retirement, resignation or
increase in number of Trustees effective at a later date, provided that said
appointment shall become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As soon as any
Trustee appointed pursuant to this Section 3.04 shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power to appoint a Trustee pursuant to this
Section 3.04 is subject to the provisions of Section 16(a) of the 1940 Act.
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SECTION 3.05. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no case shall less than
two Trustees personally exercise the other powers hereunder except as herein
otherwise expressly provided.
SECTION 3.06. NUMBER OF TRUSTEES. The number of Trustees shall be at least three
(3), and thereafter shall be such number as shall be fixed from time to time by
a majority of the Trustees, provided, however, that the number of Trustees shall
in no event be more than fifteen (15).
SECTION 3.07. EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE. The declination
to serve, death, resignation, retirement, removal, incapacity, or inability of
the Trustees, or any one of them, shall not operate to terminate the Trust or to
revoke any existing agency created pursuant to the terms of this Trust
Instrument.
SECTION 3.08. OWNERSHIP OF ASSETS OF THE TRUST. The assets of the Trust shall be
held separate and apart from any assets now or hereafter held in any capacity
other than as Trustee hereunder by the Trustees or any successor Trustees. Legal
title in and beneficial ownership of all of the assets of the Trust and the
right to conduct any business shall at all times be considered as vested in the
Trustees on behalf of the Trust, except that the Trustees may cause legal title
to any Trust Property to be held by, or in the name of, the Trust, or in the
name of any person as nominee. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or any right of
partition or possession thereof, but each Shareholder shall have, except as
otherwise provided for herein, a proportionate undivided beneficial interest in
the Trust. The Shares shall be personal property giving only the rights
specifically set forth in this Trust Instrument. The Trust, or at the
determination of the Trustees one or more of the Trustees or a nominee acting
for and on behalf of the Trust, shall be deemed to hold legal title and
beneficial ownership of any income earned on securities of the Trust issued by
any business entities formed, organized, or existing under the laws of any
jurisdiction, including the laws of any foreign country. Upon the resignation or
removal of a Trustee, or his otherwise ceasing to be a Trustee, he shall execute
and deliver such documents as the remaining Trustees shall require for the
purpose of conveying to the Trust or the remaining Trustees any Trust Property
held in the name of the resigning or removed Trustee. Upon the incapacity or
death of any Trustee, his legal representative shall execute and deliver on his
behalf such documents as the remaining Trustees shall require as provided in the
preceding sentence.
SECTION 3.09. COMPENSATION. The Trustees as such shall be entitled to reasonable
compensation from the Trust, and they may periodically fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisery, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.
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ARTICLE IV
POWERS OF THE TRUSTEES
SECTION 4.01. POWERS. The 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 management of the Trust. The Trustees shall
not in any way be bound or limited by present or future laws or customs in
regard to trust investments, but shall have full authority and power to make any
and all investments which they, in their sole discretion, shall deem proper to
accomplish the purpose of this Trust without recourse to any court or other
authority. Subject to any applicable limitation in this Trust Instrument or the
By-Laws of the Trust, the Trustees shall have power and authority:
(a) To invest and reinvest cash and other property, and to
hold cash or other property uninvested, without in any event being bound or
limited by any present or future law or custom in regard to investments by
trustees, and to sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all the assets of the Trust;
(b) To operate as and carry on the business of an investment
company, and exercise all the powers necessary and appropriate to the conduct of
such operations;
(c) To borrow money and in this connection issue notes or
other evidence of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; to endorse, guarantee, or
undertake the performance of an obligation or engagement of any other Person and
to lend Trust Property;
(d) To provide for the distribution of interests of the Trust
either through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both, or otherwise pursuant to a plan of distribution of
any kind;
(e) To adopt By-Laws not inconsistent with this Trust
Instrument providing for the conduct of the business of the Trust and to amend
and repeal them to the extent that they do not reserve that right to the
Shareholders; such By-Laws shall be deemed incorporated and included in this
Trust Instrument;
(f) To elect and remove such officers and appoint and
terminate such agents as they consider appropriate;
(g) To employ one or more banks, trust companies or companies
that are members of a national securities exchange or such other entities as the
Commission may permit as custodians
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of any assets of the Trust subject to any conditions set forth in this Trust
Instrument or in the By-laws;
(h) To retain one or more transfer agents and shareholder
servicing agents, or both;
(i) To set record dates in the manner provided herein or in
the By-Laws;
(j) To delegate such authority as they consider desirable to
any officers of the Trust and to any investment adviser, manager, custodian,
underwriter or other agent or independent contractor;
(k) To sell or exchange any or all of the assets of the Trust,
subject to the provisions of Article XI, Section 11.04(b) hereof;
(l) 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 powers of attorney to such person or persons as the Trustee 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;
(m) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities;
(n) To hold any security or property in a form not indicating
any trust, whether in bearer, book entry, unregistered or other negotiable form;
or either in the name of the Trust or in the name of a custodian or a nominee or
nominees, subject in either case to proper safeguards according to the usual
practice of Delaware business trusts or investment companies;
(o) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or concern, any
security of which is held in the Trust; to consent to any contract, lease,
mortgage, purchase, or sale of property by such corporation or concern, and to
pay calls or subscriptions with respect to any security held in the Trust;
(p) 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;
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided;
(r) To establish, from time to time, a minimum investment for
Shareholders in the Trust or class, and to require the redemption of the Shares
of any Shareholders whose investment is less than such minimum upon giving
notice to such Shareholder;
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(s) To establish one or more committees, to delegate any of
the powers of the Trustees to said committees and to adopt a committee charter
providing for such responsibilities, membership (including Trustees, officers or
other agents of the Trust therein) and any other characteristics of said
committees as the Trustees may deem proper. Notwithstanding the provisions of
this Article IV, and in addition to such provisions or any other provision of
this Trust Instrument or of the By-Laws, the Trustees may by resolution appoint
a committee consisting of less than the whole number of Trustees then in office,
which committee may be empowered to act for and bind the Trustees and the Trust,
as if the acts of such committee were the acts of all the Trustees then in
office, with respect to the institution, prosecution, dismissal, settlement,
review or investigation of any action, suit or proceeding which shall be pending
or threatened to be brought before any court, administrative agency or other
adjudicatory body;
(t) To interpret the investment policies, practices, or
limitations of the Trust;
(u) To establish a registered office and have a registered
agent in the state of Delaware;
(v) In general to carry on any other business in connection
with or incidental to any of the foregoing powers, to do everything necessary,
suitable, or proper for the accomplishment of any purpose or the attainment of
any object or the furtherance of any power hereinbefore set forth, either alone
or in association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and power, and
the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees. Any action by one or
more of the Trustees in their capacity as such hereunder shall be deemed an
action on behalf of the Trust, and not an action in an individual capacity.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust.
No one dealing with the Trustees shall be under any obligation to make
any inquiry concerning the authority of the Trustees, or to see to the
application of any payments made or property transferred to the Trustees or upon
their order.
SECTION 4.02. ISSUANCE AND REPURCHASE OF SHARES. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, and otherwise deal in Shares and, subject to the provisions
set forth in Article II and Article IX, to apply to any such repurchase,
redemption, retirement, cancellation, or acquisition of Shares any funds or
property of the Trust, with respect to which such Shares are issued.
SECTION 4.03. TRUSTEES AND OFFICERS AS SHAREHOLDERS. Any Trustee, officer, or
agent of the Trust may acquire, own, and dispose of Shares to the same extent as
if he were not a Trustee, officer, or
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agent; and the Trustees may issue and sell or cause to be issued and sold Shares
to and buy such Shares from any such person or any firm or company in which he
is interested, subject only to the general limitations herein contained as to
the sale and purchase of such Shares; and all subject to any restrictions which
may be contained in the By-Laws.
SECTION 4.04. ACTION BY THE TRUSTEES. The Trustees shall act by majority vote at
a meeting duly called or by written consent of a majority of the Trustees
without a meeting or by telephone meeting provided a quorum of Trustees
participate in any such telephone meeting, unless the 1940 Act requires that a
particular action be taken only at a meeting at which the Trustees are present
in person. At any meeting of the Trustees, three (3) of the Trustees shall
constitute a quorum. Meetings of the Trustees may be called orally or in writing
by the Chairman or by any two (2) other Trustees. Notice of the time, date and
place of all meetings of the Trustees shall be given by the party calling the
meeting to each Trustee by telephone, telefax, or telegram sent to his home or
business address at least twenty-four (24) hours in advance of the meeting or by
written notice mailed to his home or business address at least seventy-two (72)
hours in advance of the meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting. Any meeting conducted by
telephone shall be deemed to take place at the principal office of the Trust, as
determined by the By-Laws or by the Trustees. Subject to the requirements of the
1940 Act, the Trustees by majority vote may delegate to any one or more of their
number their authority to approve particular matters or take particular actions
on behalf of the Trust. Written consents or waivers of the Trustees may be
executed in one or more counterparts. Execution of a written consent or waiver
and delivery thereof to the Trust may be accomplished by telefax.
SECTION 4.05. CHAIRMAN OF THE TRUSTEES. The Trustees shall appoint one of their
number to be Chairman of the Board of Trustees. The Chairman shall preside at
all meetings of the Trustees, shall be responsible for the execution of policies
established by the Trustees and the administration of the Trust, and may be (but
is not required to be) the chief executive, financial, and/or accounting officer
of the Trust.
SECTION 4.06. PRINCIPAL TRANSACTIONS. Except to the extent prohibited by
applicable law, the Trustees, on behalf of the Trust, may, in a manner
consistent with applicable legal requirements, buy any securities from or sell
any securities to, or lend any assets of the Trust to, any Trustees or officer
of the Trust or any firm of which any such Trustee or officer is a member acting
as principal, or have any such dealings with any investment adviser, distributor
or transfer agent for the Trust or with any interested Person of such person;
and the Trust may employ any such person, or firm or company in which such
person is an Interested Person, as broker, legal counsel, registrar, investment
adviser, distributor, transfer agent, dividend disbursing agent, or custodian,
or in any other capacity upon customary terms.
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ARTICLE V
EXPENSES OF THE TRUST
SECTION 5.01. PAYMENT OF EXPENSES BY THE TRUST. The Trust may pay, or may
reimburse the Trustees from the assets of the Trust for their expenses and
disbursements, including, without limitation, fees and expenses of Trustees,
interest expense, taxes, fees and commissions of every kind, expenses of pricing
Trust portfolio securities, expenses of issue, repurchase and redemption of
shares, including expenses attributable to a program of periodic repurchases or
redemptions, expenses of registering and qualifying the Trust and its Shares
under Federal and State laws and regulations or under the laws of any foreign
jurisdiction, charges of third parties, including investment advisers, managers,
custodians, transfer agents, portfolio accounting and/or pricing agents, and
registrars, expenses of preparing and setting up in type prospectuses and
statements of additional information and other related Trust documents, expenses
of printing and distributing prospectuses sent to existing Shareholders,
auditing and legal expenses, reports to Shareholders, expenses of meetings of
Shareholders and proxy solicitations therefor, insurance expenses, association
membership dues and for such non-recurring items as may arise, including
litigation to which the Trust (or a Trustee acting as such) is a party, and for
all losses and liabilities by them incurred in administering the Trust, and for
the payment of such expenses, disbursements, losses and liabilities the Trustees
shall have a lien on the assets belonging to the Trust, prior to any rights or
interests of the Shareholders thereto. This section shall not preclude the Trust
from directly paying any of the aforementioned fees and expenses.
SECTION 5.02. PAYMENT OF EXPENSES BY SHAREHOLDERS. The Trustee shall have the
power, as frequently as they may determine, to cause each Shareholder, 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.
ARTICLE VI
CONTRACTS WITH SERVICE PROVIDERS
SECTION 6.01. INVESTMENT ADVISER. The Trustees may in their discretion, from
time to time, enter into an investment advisery or management contract or
contracts with respect to the Trust; provided, however, that the initial
approval and entering into of such contract or contracts shall be subject to a
"majority shareholder vote," as defined by the 1940 Act. Notwithstanding any
other provision of this Trust Instrument, the Trustees may authorize any
investment adviser (subject to such general or specific instructions as the
Trustees from time to time may adopt) to effect purchases, sales or exchanges of
portfolio securities, other investment instruments of the Trust, or other Trust
Property
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on behalf of the Trustees, or may authorize any officer, agent, or Trustee to
effect such purchases, sales, or exchanges pursuant to recommendations of the
investment adviser (and all without further action by the Trustees). Any such
purchases, sales, and exchanges shall be deemed to have been authorized by all
of the Trustees.
The Trustees may authorize, subject to applicable requirements of the
1940 Act, including those relating to Shareholder approval, the investment
adviser to employ, from time to time, one or more sub-advisers to perform such
of the acts and services of the investment adviser, and upon such terms and
conditions, as may be agreed upon between the investment adviser and sub-
adviser. Any reference in this Trust Instrument to the investment adviser shall
be deemed to include such sub-advisers, unless the context otherwise requires.
SECTION 6.02. PRINCIPAL UNDERWRITER. The Trustees may in their discretion from
time to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of Shares, whereby the Trust may either agree
to sell Shares to the other party to the contract or appoint such other party
its sales agent for such Shares. In either case, the contract shall be on such
terms and conditions, if any, as may be prescribed in the By-Laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article VI, or of the By-Laws; and
such contract may also provide for the repurchase or sale of Shares by such
other party as principal or as agent of the Trust.
SECTION 6.03. TRANSFER AGENT. The Trustees may in their discretion from time to
time enter into one or more transfer agency and shareholder service contracts
whereby the other party or parties shall undertake to furnish the Trustees with
transfer agency and shareholder services. The contract or contracts shall be on
such terms and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Trust Instrument or of the By-Laws.
SECTION 6.04. ADMINISTRATION AGREEMENT. The Trustees may in their discretion
from time to time enter into an administration agreement or, if the Trustees
establish multiple classes, separate administration agreements with respect to
each class, whereby the other party to such agreement shall undertake to manage
the business affairs of the Trust or class thereof of the Trust and furnish the
Trust or a class thereof with office facilities, and shall be responsible for
the ordinary clerical, bookkeeping and recordkeeping services at such office
facilities, and other facilities and services, if any, and all upon such terms
and conditions as the Trustees may in their discretion determine.
SECTION 6.05. SERVICE AGREEMENT. The Trustees may in their discretion from time
to time enter into service agreements with respect to one or more Classes of
Shares whereby the other parties to such Service Agreements will provide
administration and/or support services pursuant to administration plans and
service plans, and all upon such terms and conditions as the Trustees in their
discretion may determine.
SECTION 6.06. PARTIES TO CONTRACT. Any contract of the character described in
Sections 6.01, 6.02, 6.03, 6.04 and 6.05 of this Article VI or any contract of
the character described in Article VIII hereof
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may be entered into with any corporation, firm, partnership, trust, or
association, although one or more of the Trustees or officers of the Trust may
be an officer, director, trustee, shareholder, or member of such other party to
the contract, and no such contract shall be invalidated or rendered void or
voidable by reason of the existence of any such relationship, nor shall any
person holding such relationship be disqualified from voting on or executing the
same in his capacity as Shareholder and/or Trustee, nor shall any person holding
such relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable for
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article VI or
Article VIII hereof or of the By-Laws. The same person (including a firm,
corporation, partnership, trust or association) may be the other party to
contracts entered into pursuant to Sections 6.01, 6.02, 6.03, 6.04 and 6.05 of
this Article VI or pursuant to Article VIII hereof, and any individual may be
financially interested or otherwise affiliated with persons who are parties to
any or all of the contracts mentioned in this Section 6.06.
SECTION 6.07. PROVISIONS AND AMENDMENTS. Any contract entered into pursuant to
Sections 6.01 or 6.02 of this Article VI shall be consistent with and subject to
the requirements of Section 15 of the 1940 Act or other applicable Act of
Congress hereafter enacted with respect to its continuance in effect, its
termination, and the method of authorization and approval of such contract or
renewal thereof, and no amendment to any contract, entered into pursuant to
Section 6.01 of this Article VI shall be effective unless assented to in a
manner consistent with the requirements of said Section 15, as modified by any
applicable rule, regulation or order of the Commission.
ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 7.01. VOTING POWERS. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Article III, Section 3.01 and 3.02
hereof, (ii) for the removal of Trustees as provided in Article III, Section
3.03(d) hereof, (iii) with respect to any investment advisery or management
contract as provided in Article VI, Sections 6.01 and 6.07 hereof, and (iv) with
respect to such additional matters relating to the Trust as may be required by
law, by this Trust Instrument, or the By-Laws or any registration of the Trust
with the Commission or any other jurisdiction, or as the Trustees may consider
necessary or desirable.
On any matter submitted to a vote of the Shareholders, all Shares shall
be voted in the aggregate. Each whole share shall be entitled to one (1) 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 or
in any manner provided for in the By-Laws. A proxy may be given in writing. The
By-Laws may provide that proxies may also, or may instead, be given by any
electronic or telecommunications device or in any other manner. Notwithstanding
anything else herein or in the By-Laws, in the event
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a proposal by anyone other than the officers or Trustees of the Trust is
submitted to a vote of the Shareholders of the Trust, or in the event of any
proxy contest or proxy solicitation or proposal in opposition to any proposal by
the officers or Trustees of the Trust, Shares may be voted only in person or by
written proxy. Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required or permitted by law, this Trust
Instrument or any of the By-Laws of the Trust to be taken by Shareholders.
Meetings of Shareholders shall be called and notice thereof and record dates
therefor shall be given and set as provided in the By-Laws.
SECTION 7.02. QUORUM AND REQUIRED VOTE. One-third of Shares entitled to vote in
person or by proxy shall be a quorum for the transaction of business at a
Shareholders' meeting, except that where any provision of law or of this Trust
Instrument permits or requests that holders of any class shall vote as a class,
then one-third of the aggregate number of Shares of that class entitled to vote
shall be necessary to constitute a quorum for the transactions of business by
that class. Any lesser number 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 law or by any provision of this Trust
Instrument of the By-Laws, a majority of the Shares voted in person or by proxy
shall decide any questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Trust Instrument permits or requires that
the holders of any class shall vote as a class, then a majority of the Shares
present in person or by proxy of that class or, if required by law, subject to a
"majority shareholder vote", as defined by the 1940 Act, of that class, voted on
the matter in person or by proxy shall decide matter insofar as that class is
concerned. Shareholders may act by unanimous written consent. Actions taken by
class may be consented to unanimously in writing by Shareholders of that class.
ARTICLE VIII
CUSTODIAN
SECTION 8.01. APPOINTMENT AND DUTIES. The Trustees at all times shall employ a
bank, a company that is a member of a national securities exchange, or a trust
company, each having capital, surplus and undivided profits of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, as custodian with authority as its agent, but subject to such
restrictions, limitations, and other requirements, if any, as may be contained
in the By-Laws of the Trust:
(1) to hold the securities and other assets of the Trust and
deliver the same upon written order or oral order confirmed in
writing;
(2) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as
the Trustees may direct; and
(3) to disburse such funds upon orders or vouchers;
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and the Trust also may employ such custodian as its agent:
(4) to keep the books and accounts of the Trust or class and
furnish clerical and accounting services; and
(5) to compute, if authorized to do so by the Trustees, the Net
Asset Value of any class thereof, in accordance with the
provisions hereof; all upon such basis of compensation as may
be agreed upon between the Trustees and the custodian.
The Trustees also may authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian, and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank, a company that is a member of a
national securities exchange, a trust company or any other entity satisfying the
requirements of the 1940 Act.
SECTION 8.02. CENTRAL CERTIFICATE SYSTEM. Subject to such rules, regulations,
and orders as the Commission may adopt, the Trustees may direct the custodian to
deposit all or any part of the securities owned by the Trust in a system for the
central handling of securities established by a national securities exchange or
a national securities association registered with the Commission under the
Securities Exchange Act of 1934, as amended, or such other person as may be
permitted by the Commission, or otherwise in accordance with the 1940 Act,
pursuant to which system all securities of any particular class of any issuer
deposited within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such securities,
provided that all such deposits shall be subject to withdrawal only upon the
order of the Trust or its custodians, sub-custodians or other agents.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
SECTION 9.01. DISTRIBUTIONS.
(a) The Trustees from time to time may declare and pay
dividends or other distributions with respect to any class. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any class with respect to, nor any redemption or
repurchase of, the Shares of any class shall be effected by the Trust other than
from the assets held with respect to such class, nor shall any Shareholder of
any particular class otherwise have any right or claim against the assets held
with respect to any other class except to the extent that such Shareholder has
such a right or claim hereunder as a Shareholder of such other class. The
Trustees shall have full discretion to determine which items shall be treated as
income and which
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items as capital; and each such determination and allocation shall be conclusive
and binding upon the Shareholders. The amount of such dividends or distributions
and the payment of them and whether they are in cash or any other Trust Property
shall be wholly in the discretion of the Trustees.
(b) Dividends and other distributions may be paid or made to
the Shareholders of record at the time of declaring a dividend or other
distribution or among the Shareholders of record at such other date or time or
dates or times as the Trustees shall determine, which dividends or
distributions, at the election of the Trustees, may be paid pursuant to a
standing resolution or resolutions adopted only once or with such frequency as
the Trustees may determine. The Trustees may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans, or related plans
as the Trustees shall deem appropriate.
(c) Anything in this Trust Instrument to the contrary
notwithstanding, the Trustees at any time may declare and distribute a stock
dividend pro rata among the Shareholders of a particular class thereof, as of
the record date of that class fixed as provided in paragraph (b) of this Section
9.01.
SECTION 9.02. REDEMPTIONS. Each Shareholder of a class shall have the right at
such times as may be permitted by the Trustees to require the class to redeem
all or any part of his Shares at a redemption price per Share equal to the Net
Asset Value per Share at such time as the Trustees shall have prescribed by
resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the class of a
request for redemption in proper form less such charges as are determined by the
Trustees and described in the Trust's Registration Statement for that class
under the Securities Act of 1933. The Trustees may specify conditions, prices,
and places of redemption, may specify binding requirements for the proper form
or forms of requests for redemption and may specify the amount of any deferred
sales charge to be withheld from redemption proceeds. Payment of the redemption
price may be wholly or partly in securities or other assets at the value of such
securities or assets used in such determination of Net Asset Value, or may be in
cash. Upon redemption, Shares may be reissued from time to time. The Trustees
may require Shareholders to redeem Shares for any reason under terms set by the
Trustees, including, but not limited to, the failure of a Shareholder to supply
a taxpayer identification number if required to do so, or to have the minimum
investment required, or to pay when due for the purchase of Shares issued to
him. To the extent permitted by law, the Trustees may retain the proceeds of any
redemption of Shares required by them for payment of amounts due and owing by a
Shareholder to the Trust or any class or any governmental authority.
Notwithstanding the foregoing, the Trustees may postpone payment of the
redemption price and may suspend the right of the Shareholders to require any
class to redeem Shares during any period of time when and to the extent
permissible under the 1940 Act.
SECTION 9.03. DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO
ASSETS. The term "Net Asset Value" of any class shall mean that amount by which
the assets of that class exceed its liabilities, all as determined by or under
the direction of the Trustees. Such value shall be
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determined separately for each class and shall be determined on such days and at
such times as the Trustees may determine. The Trustees may delegate any of their
powers and duties under this Section 9.03 with respect to valuation of assets
and liabilities. The resulting amount, which shall represent the total Net Asset
Value of the particular class, shall be divided by the total number of shares of
that class outstanding at the time and the quotient so obtained shall be the Net
Asset Value per Share of that class. At any time the trustees may cause the Net
Asset Value per Share last determined to be determined again in similar manner
and may fix the time when such redetermined value shall become effective. If,
for any reason, the net income of any class, determined at any time, is a
negative amount, the Trustees shall have the power with respect to that class:
(i) to offset each Shareholder's pro rata share of such negative amount from the
accrued dividend account of such Shareholder; or (ii) to reduce the number of
Outstanding Shares of such class by reducing the number of Shares in the account
of each Shareholder by a pro rata portion of the number of full and fractional
Shares which represents the amount of such excess negative net income; or (iii)
to cause to be recorded on the books of such class an asset account in the
amount of such negative net income (provided that the same shall thereupon
become the property of such class with respect to such class and shall not be
paid to any Shareholder), which account may be reduced by the amount, of
dividends declared thereafter upon the Outstanding Shares of such class on the
day such negative net income is experienced, until such asset account is reduced
to zero; or (iv) to combine the methods described in clauses (i) and (ii) and
(iii) of the sentence; or (v) to take any other action they deem appropriate, in
order to cause (or in order to assist in causing) the Net Asset Value per Share
of such class to remain at a constant amount per Outstanding Share immediately
after each such determination and declaration. The Trustees also shall have the
power not to declare a dividend out of net income for the purpose of causing the
Net Asset Value per share to be increased. The Trustees shall not be required to
adopt, but at any time may adopt, discontinue, or amend the practice of
maintaining the Net Asset value per Share of the class at a constant amount. In
the event that any Shares are divided into classes, the provisions of this
Section 9.03, to the extent applicable as determined in the discretion of the
Trustees and consistent with applicable law, may be equally applied to each such
class.
SECTION 9.04. SUSPENSION OF THE RIGHT OF REDEMPTION. The Trustees may declare a
suspension of the right of redemption or postpone the date of payment as
permitted under the 1940 Act. Such suspension shall take effect at such time as
the Trustees shall specify but not later than the close of business on the
business day next following the declaration of suspension, and thereafter there
shall be no right of redemption or payment until the Trustees shall declare the
suspension at an end. In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or receive payment
based on the Net Asset Value per Share next determined after the termination of
the suspension.
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ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 10.01. LIMITATION OF LIABILITY. All persons contracting with or having
any claim against the Trust or a particular class shall look only to the assets
of all classes or such particular class for payment under such contract or
claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any class shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and officers of the Trust shall not be
responsible or liable for any act or omission or for neglect or wrongdoing of
them or any officer, agent, employee, investment adviser or independent
contractor of the Trust, but nothing contained in this Declaration or in the
Delaware Act shall protect any Trustee or officer of the Trust against liability
to the Trust or to Shareholders to which he 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.
SECTION 10.02. INDEMNIFICATION.
(a) Subject to the exceptions and limitations contained in
paragraph (b) below:
(i) every Person who is, or has been, a Trustee or
officer of the Trust (hereinafter referred to as a "Covered
Person") shall be indemnified by the Trust to the fullest
extent permitted by law against liability and against all
expenses reasonably incurred or paid by him in connection with
any claim, action, suit, or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or
incurred by hm in the settlement thereof; and
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits, or
proceedings (civil, criminal, or other, including appeals),
actual or threatened, while in office or thereafter, and the
words "liability" and "expenses" shall include, without
limitation, attorney's fees, costs, judgments, amounts paid in
settlement, fines, penalties, and other liabilities.
(b) No indemnification shall be provided hereunder to a
Covered Person:
(i) who shall have been adjudicated by a court or
body before which the proceeding was brought (A) to be liable
to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence, or reckless
disregard of the duties
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involved in the conduct of his office or (B) not to have acted
in good faith in the reasonable belief that his action was in
the best interest of the Trust; or
(ii) in the event of a settlement, unless there has
been a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of
his office:
(A) by the court or other body approving the
settlement;
(B) by at least a majority of those Trustees
who neither are Interested Persons of the Trust nor
are parties to the matter based upon a review of
readily-available facts (as opposed to a full
trial-type inquiry); or
(C) by written opinion of independent legal
counsel based upon a review of readily-available
facts (as opposed to a full trial-type inquiry);
provided, however, that any Shareholder, by
appropriate legal proceedings, may challenge any such
determination by the Trustees or by independent
counsel.
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be severable, shall
not be exclusive of or affect any other rights to which any Covered Person may
now or hereafter be entitled, shall continue as to a person who has ceased to be
a Covered Person and shall inure to the benefit of the heirs, executors, and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Covered Persons,
and other persons may be entitled by contract or otherwise under law.
(d) To the maximum extent permitted by applicable law,
expenses in connection with the preparation and presentation of a defense to any
claim, action, suit, or proceeding of the character described in paragraph (a)
of this Section 10.02 may be paid by the Trust or a Class from time to time
prior to final disposition thereof upon receipt of any undertaking by or on
behalf of such Covered Person that such amount will be paid over by him to the
Trust or a Class if it ultimately is determined that he is not entitled to
indemnification under this Section 10.02; provided, however, that either (a)
such Covered Person shall have provided appropriate security for such
undertaking; (b) the Trust is insured against losses arising out of any such
advance payments, or (c) either a majority of the Trustees who are neither
Interested Persons of the Trust nor parties to the matter, or independent legal
counsel in a written opinion, shall have determined, based upon a review of
readily-available facts (as opposed to a trial-type inquiry or full
investigation), that there is a reason to believe that such Covered Person will
be found entitled to indemnification under this Section 10.02.
SECTION 10.03. SHAREHOLDERS. In case any Shareholder or former Shareholder of
any class shall be held to be personally liable solely by reason of his being or
having been a Shareholder of such class
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and not because of his acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his 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 out of the assets
belonging to the applicable class to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust, on behalf
of the affected class, shall assume, upon request by the Shareholder, the
defense of any claim made against the Shareholder for any act or obligation of
the class and satisfy any judgment thereon from the assets of the class.
SECTION 10.04. NO BOND REQUIRED OF TRUSTEES. No Trustee shall be obligated to
give any bond or other security for the performance of any of his duties
hereunder.
SECTION 10.05. NO DUTY OF INVESTIGATION; NOTICE IN TRUST INSTRUMENTS, ETC No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or undertaking, and every other
act or thing whatsoever executed in connection with the Trust shall be
conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security of the Trust or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust under any such instrument are not binding upon
any of the Trustees or Shareholders individually, but bind only the Trust
Property, and may contain any further recital which they may deem appropriate,
but the omission of such recital shall not operate to bind the Trustees
individually. The Trustees shall at all times maintain insurance for the
protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
SECTION 10.6. RELIANCE ON EXPERTS, ETC. Each Trustee, officer or employee of the
Trust shall, in the performance of his duties, powers and discretions hereunder
be fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Trust, upon an opinion of counsel, or upon reports made
to the Trust by any of its officers or employees or by the Investment Adviser,
the Administrator, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.01. TRUST NOT A PARTNERSHIP. It is hereby expressly declared that a
trust and not a partnership is created hereby. No Trustee hereunder shall have
any power to bind personally either the Trust's officers or any Shareholder. All
persons extending credit to, contracting with, or having any claim against the
Trust for payment under such credit, contract, or claim; and neither the
Shareholders nor the Trustees, nor any of their agents, whether past, present,
or future, shall be personally liable therefore. Nothing in this Trust
Instrument shall protect a Trustee against any liability to which the Trustee
otherwise would be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of the
office of Trustee hereunder.
SECTION 11.02. TRUSTEE ACTION. The exercise by the Trustees of their powers and
discretions hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article X hereof and to Section 11.01 of this Article XI,
the Trustees shall not be liable for errors of judgment or mistakes of fact or
law.
SECTION 11.03. ESTABLISHMENT OF RECORD DATES. For the purpose of determining the
Shareholders of any 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 class having the
right to receive such dividend or distribution. Without fixing a record date,
the Trustees may for distribution purposes close the register or transfer books
for one or more classes any time prior to the payment of a distribution. Nothing
in this Section shall be construed as precluding the Trustees from setting
different record dates for different classes. The Trustees may fix in advance a
date, to be determined by the Trustees and no longer than that permitted by
applicable law, before the date of any Shareholders' meeting, or the date for
the payment of any dividends or other distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of such dividend or other distribution, or to
receive any such allotment of rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares.
SECTION 11.04. TERMINATION OF TRUST.
(a) This Trust shall continue without limitation of time but
subject to the provisions of paragraph (b) of this Section 11.04.
(b) The Trustees, subject to a majority shareholder of the
Trust, and subject to a vote of a majority of the Trustees, may:
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(i) sell and convey all or substantially all of the
assets of the Trust to another trust, partnership,
association, or corporation, organized under the laws of any
state, which trust, partnership, association, or corporation
is an open-end management investment company as defined in the
1940 Act, or is a series thereof, for adequate consideration
which may include the assumption of all outstanding
obligations, taxes, and other liabilities, accrued or
contingent, of the Trust, and which may include shares of
beneficial interest, stock, or other ownership interests of
such trust, partnership, association, or corporation; or
(ii) at any time, sell and convert into money all of
the assets of the Trust.
Upon making reasonable provision, in the determination of the
Trustees, for the payment of all such liabilities in either (i) or (ii) of this
Section 11.04(b), by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) of each class ratably
among the holders of Shares of that class then outstanding.
(c) The Trustees may take any of the actions specified in this
Section 11.04(b)(i) and (ii) above without obtaining the approval of
shareholders if a majority of the Trustees determines that the continuation of
the Trust or class is not in the best interests of the Trust, such class, or
their respective Shareholders as a result of factors or events adversely
affecting the ability of the Trust or such class to conduct its business and
operations in an economically viable manner. Such factors and events may include
the inability of the Trust to maintain its assets at an appropriate size,
changes in laws or regulations governing the Trust or affecting assets of the
type in which the Trust invests, or economic developments or trends having a
significant adverse impact on the business or operations of the Trust.
(d) Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in paragraph (b) of this Section
11.04, the Trust shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties hereunder and the
right, title, and interest of all parties with respect to the Trust shall be
canceled and discharged.
Upon termination of the Trust, following completion of winding up of
the Trust's business, the Trustees shall cause a certificate of cancellation of
the Trust's certificate of trust to be filed in accordance with the Delaware
Act, which certificate of cancellation may be signed by any one Trustee.
SECTION 11.05. REORGANIZATION. Notwithstanding anything else herein, the
Trustees, in order to change the form of organization of the Trust, may, without
prior Shareholder approval, (i) cause the Trust to merge or consolidate with or
into one (1) or more trusts, partnerships, associations, or corporations so long
as the surviving or resulting entity is an open-end management investment
company under the 1940 Act, or is a series thereof, that will succeed to or
assume the Trust's registration under that Act and which is formed, organized,
or existing under the laws of a state, commonwealth, territory, possession, or
colony of the United States or (ii) cause the Trust to
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incorporate under the laws of State of Delaware. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signature conveyed by electronic or telecommunication means shall
be valid.
Pursuant to and in accordance with the provisions of Section 3815(f) of
the Delaware Act, and notwithstanding anything to the contrary contained in this
Trust Instrument, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 11.05 may effect any amendment to the
Trust Instrument or effect the adoption of a new trust instrument of the Trust
if the Trust is the surviving or resulting trust in the merger or consolidation.
SECTION 11.06. FILING OF COPIES; REFERENCES; HEADINGS. The original or a copy of
this Trust Instrument and the original or a copy of each amendment hereof or
Trust Instrument supplemental 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 or Trustee of the Trust as to whether or not
any such amendments or supplements 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 or Trustee of the Trust to
be a copy of this Trust Instrument or of any such amendment or supplemental
Trust Instrument, and references to this Trust Instrument, and all expressions
such as or similar to "herein," "hereof," and "hereunder" shall be deemed to
refer to this Trust Instrument as amended or affected by any such supplemental
Trust Instrument. All expressions such as or similar to "his," "he," and "him"
shall be deemed to include the feminine and neuter, as well as masculine,
genders. Headings are placed herein for convenience of reference only and, in
case of any conflict, the text of this Trust Instrument, rather than the
headings, shall control. This Trust Instrument may be executed in any number of
counterparts each of which shall be deemed an original.
SECTION 11.07. APPLICABLE LAW. The trust set forth in this instrument is made in
the State of Delaware, and the Trust and this Trust Instrument, and the rights
and obligations of the Trustees and Shareholders hereunder, are to be governed
by and construed and administered according to the Delaware Act and the laws of
said State; provided, however, that there shall not be applicable to the trust,
the Trust, the Trustee or this Trust Instrument (a) the provisions of Section
3540 of Title 12 of the Delaware Code or (b) any provisions of he laws
(statutory or common) of the State of Delaware (other than the Delaware Act)
pertaining to trusts which relate to or regulate (i) the filing with any court
or governmental body or agency of trustee accounts or schedules of trustee fees
and charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents, or employees of a trust, (iii) the necessity for obtaining court or
other governmental approval concerning the acquisition, holding, or disposition
of real or personal property, (iv) fees or other sums payable to trustees,
officers, agents, or employees of a trust, (v) the allocation of receipts and
expenditures to income and principal, (vi) restrictions or limitations on the
permissible nature, amount, or concentration of trust investments or
requirements relating to the titling, storage, or other manner of holding of
trust assets, or (vii) the establishment of fiduciary or other standards or
responsibilities or limitations on the acts or powers of trustees, which are
inconsistent with the limitations or liabilities or authorities and powers of
the Trustees set forth or referenced in this Trust Instrument.
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The Trust shall be of the type commonly called a "Delaware business trust," and,
without limiting the provisions hereof, the Trust may exercise all powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege, or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.
SECTION 11.08. AMENDMENTS. Except as specifically provided herein, the Trustees,
without shareholder vote, may amend or otherwise supplement this Trust
Instrument by making an amendment, a Trust Instrument supplemental hereto, or an
amended and restated trust instrument. Shareholders shall have the right to vote
(i) on any amendment which would affect their right to vote granted in Section
7.01 of the Article VII hereof, (ii) on any amendment to this Section 11.08,
(iii) on any amendment as may be required by law or by the Trust's registration
statement filed with the Commission, and (iv) on any amendment submitted to the
Shareholders by the Trustees. Any amendment required or permitted to be
submitted to Shareholders which, as the Trustees determine, shall affect the
Shareholders of one or more classes shall be authorized by vote of the
Shareholders of each class affected and no vote of Shareholders of a class not
affected shall be required. Notwithstanding anything else herein, any amendment
to Article X hereof shall not limit the rights to indemnification or insurance
provided therein with respect to action or omission of Covered Persons prior to
such amendment.
SECTION 11.09. DERIVATIVE ACTIONS. In addition to the requirements set forth in
Section 3816 of the Delaware Act, a Shareholder may bring a derivative action on
behalf of the Trust only if the following conditions are met:
(a) Shareholders eligible to bring such derivative action
under the Delaware Act who hold at least 10% of the Outstanding Shares of the
Trust, or 10% of the Outstanding Shares of the class to which such action
relates, shall join in the request for the Trustees to commence such action; and
(b) The Trustees must be afforded a reasonable amount of time
to consider such shareholder request and to investigate the basis of such claim.
The Trustees shall be entitled to retain counsel or other advisers in
considering the merits of the request and shall require an undertaking by the
Shareholders making such request to reimburse the Trust for the expense of any
such advisers in the event that the Trustees determine not to bring such action.
SECTION 11.10. FISCAL YEAR. The fiscal year of the Trust shall end on a
specified date as set forth in the By-Laws, provided, however, that the
Trustees, without Shareholder approval, may change the fiscal year of the Trust.
SECTION 11.11. PROVISIONS IN CONFLICT WITH LAW. The provisions of this Trust
Instrument 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, with
the regulated investment company provisions of the Internal Revenue Code or with
other applicable laws and regulations, the conflicting provision shall be
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deemed never to have constituted a part of this Trust Instrument; provided,
however, that such determination shall not affect any of the remaining
provisions of this Trust Instrument or render invalid or improper any action
taken or omitted prior to such determination. If any provision of this Trust
Instrument shall be held invalid or improper, unenforceability shall attach only
to such provision in such jurisdiction and shall not in any manner affect such
provisions in any other jurisdiction or any other provision of this Trust
Instrument in any jurisdiction.
IN WITNESS WHEREOF, the undersigned, being the initial Trustee
of the Trust, has executed this instrument this 12th day of April, 2000.
/s/ Dr. Matthew M. Zuckerman
-------------------------------
Dr. Matthew M. Zuckerman,
as Trustee and not individually
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