<PAGE> 1
BYLAWS
OF
LMI FUNDS
(Dated as of August 17, 2000)
ARTICLE 1
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
1.1 PRINCIPAL OFFICE OF THE TRUST. A principal office of the Trust
shall be located in Boston, Massachusetts. The Trust may have other principal
offices within or without Massachusetts as the Trustees may determine or as they
may authorize.
1.2 AGREEMENT AND DECLARATION OF TRUST. These Bylaws shall be subject
to the Agreement and Declaration of Trust, as amended and restated from time to
time (the "Declaration of Trust"), of LMI Funds, the Massachusetts business
trust established by the Declaration of Trust (the "Trust").
ARTICLE 2
MEETINGS OF TRUSTEES
2.1 REGULAR MEETINGS. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as the annual meeting of the shareholders.
2.2 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Board, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer or the Trustees calling the meeting.
2.3 NOTICE. It shall be sufficient notice to the Trustee of a special
meeting to send notice by mail at least forty-eight hours or by telegram, telex
or telecopy or other electronic facsimile transmission method at least
twenty-four hours before the meeting addressed to the Trustee at his or her
usual or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her, before or after the meeting, is filed with the
records of the meeting, or to any Trustee
-1-
<PAGE> 2
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.
2.4 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice to any Trustee who was present at the time of such adjournment; notice of
the time and place of any adjourned session of such meeting shall, however, be
given in the manner provided in Section 2.3 of these Bylaws to each Trustee who
was not present at the time of such adjournment.
2.5 ACTION BY VOTE. When a quorum is present at any meeting, a majority
of Trustees present may take any action, except when a larger vote is expressly
required by law, by the Declaration of Trust or by these Bylaws.
2.6 ACTION BY WRITING. Except as required by law, any action required
or permitted to be taken at any meeting of the Trustees may be taken without a
meeting if a majority of the Trustees (or such larger proportion thereof as
shall be required by any express provision of the Declaration of Trust or these
Bylaws) consent to the action in writing and such written consents are filed
with the records of the meetings of the Trustees. Such consent shall be treated
for all purposes as a vote taken at a meeting of Trustees.
2.7 PRESENCE THROUGH COMMUNICATIONS EQUIPMENT. Except as required by
law, the Trustees may participate in a meeting of Trustees by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence in person at a meeting.
2.8 RETIREMENT OF TRUSTEES. Any Trustee shall retire as Trustee at the
end of the calendar year in which the Trustee attains the age of 70 years.
ARTICLE 3
OFFICERS
3.1 ENUMERATION: QUALIFICATION. The officers of the Trust shall be a
Chairman of the Board, a President, a Treasurer, a Secretary, and such other
officers, if any, as the Trustees from time to time may in their discretion
elect. The Trust may also have such agents as the Trustees from time to time may
in their discretion appoint. Any officer may but need not be a Trustee or a
shareholder. Any two or more offices may be held by the same person.
3.2 ELECTION. The Chairman of the Board, the President, the Treasurer,
and the Secretary shall be elected annually by the Trustees. Other officers, if
any, may be elected or
-2-
<PAGE> 3
appointed by the Trustees at said meeting or at any other time. Vacancies in any
office may be filled at any time.
3.3 TENURE. The Chairman of the Board, the President, the Treasurer and
the Secretary shall hold office until their respective successors are chosen and
qualified, or in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office and each agent shall
retain authority at the pleasure of the Trustees.
3.4 POWERS. Subject to the other provisions of these Bylaws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.
3.5 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is
elected, he shall have the duties and powers specified in these Bylaws and shall
have such other duties and powers as may be determined by the Trustees.
3.6 PRESIDENT AND VICE PRESIDENTS. The President shall have the duties
and powers specified in these Bylaws and shall have such other duties and powers
as may be determined by the Trustees.
Any Vice Presidents shall have such duties and powers as shall be
designated from time to time by the Trustees.
3.7 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Trust
shall be the Chairman of the Board, the President or such other officer as is
designated by the Trustees and shall, subject to the control of the Trustees,
have general charge and supervision of the business of the Trust and, except as
the Trustees shall otherwise determine, preside at all meetings of the
shareholders and of the Trustees. If no such designation is made, the Chairman
of the Board shall be the Chief Executive Officer.
3.8 TREASURER. The Treasurer shall be the chief financial and
accounting officer of the Trust, and shall, subject to the provisions of the
Declaration of Trust and to any arrangement made by the Trustees with a
custodian, investment adviser or manager, or transfer, shareholder servicing or
similar agent, be in charge of the valuable papers, books of account and
accounting records of the Trust, and shall have such other duties and power as
may be designated from time to time by the Trustees or by the President.
3.9 SECRETARY. The Secretary shall record all proceedings of the
shareholders and the Trustees in books to be kept therefor, which books or a
copy thereof shall be kept at the principal office of the Trust. In the absence
of the Secretary from any meeting of the shareholders or Trustees, an Assistant
Secretary, or if there be none or if he or she is absent, a
-3-
<PAGE> 4
temporary secretary chosen at such meeting shall record the proceedings thereof
in the aforesaid books.
3.10 RESIGNATIONS. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman, the President or
the Secretary or to a meeting of the Trustees. Such resignation shall be
effective upon receipt unless specified to be effective at some other time. The
Trustees may remove any officer with or without cause. Except to the extent
expressly provided in a written agreement with the Trust, no officer resigning
and no officer removed shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on account
of such removal.
ARTICLE 4
COMMITTEES
4.1 QUORUM; VOTING. Except as provided below or as otherwise
specifically provided in the resolutions constituting a Committee of the
Trustees and providing for the conduct of its meetings, a majority of the
members of any Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may be taken at a
meeting by a vote of a majority of the members present (a quorum being present)
or evidenced by one or more writings signed by such a majority. Members of a
Committee may participate in a meeting of such Committee by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.
With respect to a Valuation Committee of the Trustees, 50% of more of
the Committee members shall constitute a quorum for the transaction of business.
Except as specifically provided in the resolutions constituting a
Committee of the Trustees and providing for the conduct of its meetings, Article
2, Section 2.3 of these Bylaws relating to special meetings shall govern the
notice requirements for Committee meetings, except that it shall be sufficient
notice to a Valuation Committee of the Trustees to send notice by telegram,
telex or telecopy or other electronic means (including by telephone
voice-message or e-mail) at least fifteen minutes before the meeting.
ARTICLE 5
REPORTS
5.1 GENERAL. The Trustees and officers shall render reports at the time
and in the manner required by the Declaration of Trust or any applicable law.
Officers and Committees shall render such additional reports as they may deem
desirable or as may from time to time be required by the Trustees.
-4-
<PAGE> 5
ARTICLE 6
FISCAL YEAR
6.1 GENERAL. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, the subsequent fiscal
years shall end on such date in subsequent years.
ARTICLE 7
SEAL
7.1 GENERAL. The seal of the Trust shall consist of a flat faced die
with the word "Massachusetts", together with the name of the Trust and the year
of its organization cut or engraved thereon but, unless otherwise required by
the Trustees, the seal shall not be necessary to be placed on, and its absence
shall not impair the validity of, any document, instrument or other paper
executed and delivered by or on behalf of the Trust.
ARTICLE 8
EXECUTION OF PAPERS
8.1 GENERAL. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
contracts, notes and other obligations made by the Trustees shall be signed by
the President or by the Treasurer and need not bear the seal of the Trust.
ARTICLE 9
PROVISIONS RELATING TO THE CONDUCT OF THE TRUST'S BUSINESS
9.1 DETERMINATION OF NET ASSET VALUE PER SHARE. The net asset value per
share of each class and each series of shares of the Trust shall be determined
in accordance with the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder, and any related procedures adopted by the Trustees
from time to time.
ARTICLE 10
INDEMNIFICATION
10.1 TRUSTEES, OFFICERS, ETC. The Trust shall indemnify each of its
Trustees and officers (including persons who serve at the Trust's request as
directors, officers or trustees of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) (hereinafter referred to
as a "Covered Person") against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person
-5-
<PAGE> 6
may be or may have been involved as a party or otherwise or with which such
Covered Person may be or may have been threatened, while in office or
thereafter, by reason of any alleged act or omission as a Trustee or officer or
by reason of his or her being or having been such a Trustee or officer, except
with respect to any matter as to which such Covered Person shall have been
finally adjudicated in any such action, suit or other proceeding not to have
acted in good faith in the reasonable belief that such Covered Person's action
was in the best interest of the Trust and except that no Covered Person shall be
indemnified against any liability to the Trust or its shareholders to which such
Covered Person would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office. Expenses, including counsel fees so
incurred by any such Covered Person, may be paid from time to time by the Trust
in advance of the final disposition of any such action, suit or proceeding on
the condition that the amounts so paid shall be repaid to the Trust if it is
ultimately determined that indemnification of such expenses is not authorized
under this Article; PROVIDED, HOWEVER, that (1) such Covered Person shall
provide a security for his undertaking to repay the advance if it is ultimately
determined that indemnification is not authorized under this Article, (2) the
Trust shall be insured against losses arising by reason of any lawful advances,
or (3) a majority of a quorum of disinterested, non-party directors of the
Trust, or an independent legal counsel in a written opinion, shall determine,
based on a review of readily available facts, that there is reason to believe
that such Covered Person ultimately will be found entitled to indemnification
under this Article. In the case of such a determination or opinion, the relevant
disinterested, non-party directors or independent legal counsel, as the case may
be, shall afford the Covered Person a rebuttable presumption that he has not
engaged in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's office.
10.2 COMPROMISE PAYMENT. As to any matter disposed of by a compromise
payment by any such Covered Person referred to in Section 4.1 above, pursuant to
a consent decree or otherwise, no such indemnification either for said payment
or for any other expenses shall be provided unless such compromise shall be
approved as in the best interests of the Trust, after notice that it involved
such indemnification, (a) by a disinterested majority of the Trustees then in
office; or (b) by a majority of the disinterested Trustees then in office; or
(c) by any disinterested person or persons to whom the question may be referred
by the Trustees, provided that in the case of approval pursuant to clause (b) or
(c) there has been obtained an opinion in writing of independent legal counsel
to the effect that such Covered Person appears to have acted in good faith in
the reasonable belief that his or her action was in the best interests of the
Trust and that such indemnification would not protect such person against any
liability to the Trust or its shareholders to which such person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of office; or (d) by
vote of shareholders holding a majority of the Shares entitled to vote thereon,
exclusive of any Shares beneficially owned by any interested Covered Person.
Approval by the Trustees pursuant to clause (a) or (b) or by any disinterested
person or persons pursuant to clause (c) of this Section shall not prevent the
-6-
<PAGE> 7
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with any of such clauses as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have acted
in good faith in the reasonable belief that such Covered Person's action was in
the best interests of the Trust or to have been liable to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office.
10.3 INDEMNIFICATION NOT EXCLUSIVE. The right of indemnification hereby
provided shall not be exclusive of or affect any other rights to which any such
Covered Person may be entitled. As used in this Article 4, the term "Covered
Person" shall include such person's heirs, executors and administrators; an
"interested Covered Person" is one against whom the action, suit or other
proceeding in question or another action, suit or other proceeding on the same
or similar grounds is then or has been pending; and a "disinterested Trustee" or
"disinterested person" is a Trustee or a person against whom none of such
actions, suits or other proceedings or another action, suit or other proceeding
on the same or similar grounds is then or has been pending. Nothing contained in
this Article shall affect any rights to indemnification to which personnel of
the Trust, other than Trustees and officers, and other persons may be entitled
by contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person.
ARTICLE 11
AMENDMENT TO THE BYLAWS
11.1 GENERAL. These Bylaws may be amended or repealed, in whole or
part, by a majority of the Trustees then in office at any meeting of the
Trustees, or by one or more writings signed by such a majority.
ARTICLE 12
MISCELLANEOUS
12.1 PROXY INSTRUCTIONS TRANSMITTED BY TELEPHONIC OR ELECTRONIC MEANS.
The placing of a shareholder's name on a proxy pursuant to telephonic or
electronically transmitted instructions obtained pursuant to procedures
reasonably designed to verify that such instructions have been authorized by
such shareholder shall constitute execution of such proxy by or on behalf of
such shareholder.
-7-
