<PAGE>
Registration No. 2-11466
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ___
Post-Effective Amendment No. 73 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 23
(Check appropriate box or boxes.)
CENTURY SHARES TRUST
(Exact Name of Registrant as Specified in Charter)
One Liberty Square, Boston, Massachusetts 02109
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (617) 482-3060
Richard F. Cook, Jr., Secretary
One Liberty Square, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering April 30, 1999
It is proposed that this filing will become effective (check appropriate box)
____ immediately upon filing pursuant to paragraph (b)
_X__ on April 30, 1999, pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
____ on [date], pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on [date] pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
____ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CENTURY SHARES TRUST
April 30, 1999
The investment objective of Century Shares Trust (the "Trust") is long-term
growth of principal and income. The Trust seeks to achieve this objective by
investing in a diversified portfolio of stocks of insurance companies, banks,
insurance brokers, and other companies providing services to, or closely related
to, insurance companies and banks.
The United States Securities and Exchange Commission has not approved or
disapproved the Trust's shares or passed on the adequacy of this Prospectus, nor
has any state securities commission done so. Any contrary representation is a
criminal offense.
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INFORMATION IN THIS PROSPECTUS
Important Information About the Trust .......................................
Investment Objective ...................................................
Principal Investment Strategies ........................................
Principal Investment Risks .............................................
Trust Performance ...........................................................
Trust Fees and Expenses .....................................................
Investment Strategies and Related Risks .....................................
Strategies to Meet the Trust's Goals ...................................
Risks of Investing in Insurance and Financial Services Companies .......
Management of the Trust .....................................................
Shareholder Information .....................................................
Pricing of Trust Shares ................................................
Purchasing Shares ......................................................
Redeeming Shares .......................................................
Shareholder Account ....................................................
Dividends and Distributions ............................................
Tax Consequences .......................................................
Financial Highlights ........................................................
<PAGE>
IMPORTANT INFORMATION ABOUT THE TRUST
INVESTMENT OBJECTIVE
The Trust's goal is long-term growth of principal and income.
PRINCIPAL INVESTMENT STRATEGIES
The Trust concentrates its investments in equity securities issued by insurance
companies and brokers, banks, and other companies providing services to, or
closely related to, such companies. While not required, the Trust's investments
in recent years have been predominantly in insurance companies.
The Trust's investment adviser, Century Capital Management, Inc. (the
"Adviser"), purchases securities primarily for investment, rather than with a
view to trading profits, which results in a low turnover ratio. The Adviser
seeks to keep the Trust invested in companies with good long-term results and
attractive valuations compared to the markets generally.
PRINCIPAL INVESTMENT RISKS
You take on investment risk when you purchase shares of the Trust. The market
prices of shares in which the Trust invests fluctuate with changes in the
financial condition of the companies and with changing investor perceptions.
General economic and political factors also affect market prices. The share
price of the Trust may change daily, and when shares are sold they may be worth
more or less than their original cost. As a result, you risk losing money by
investing in the Trust.
Because the Trust concentrates its investments in stocks issued by insurance,
banking and other financial services companies, you are subject to risks
particularly affecting those industries. These risks include the effect of
changes in interest rates and government regulations or of claims activity due,
for example, to natural disasters or changing demographic factors. These and
other factors are described in more detail in "Investment Strategies and Related
Risks" below.
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TRUST PERFORMANCE
The Trust's annual returns for each of the last ten calendar years were as
follows:
1989 41.64%
1990 (7.84)%
1991 31.51%
1992 26.99%
1993 (0.36)%
1994 (3.90)%
1995 35.23%
1996 17.16%
1997 50.13%
1998 7.00%
During these 10 years, the Trust's highest return for any quarter was 19.89% (Q2
1997) and the lowest return was -18.83% (Q3 1990).
The Trust's average annual returns for the 1, 5, and 10 year periods ending
December 31, 1998, compared with the Standard & Poor's 500 Stock Index over the
same periods, were as follows:
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
Century Shares Trust 7.00% 19.59% 18.18%
S&P 500 Index 28.58% 24.06% 19.21%
The returns shown in the chart and table above include reinvestment of all
dividends and capital gains distributions and reflect fund expenses. This
information provides some indication of the risks of investing in the Trust by
showing changes in the Trust's performance from year to year and by showing how
the Trust's average annual returns have compared with those of a broad measure
of market performance. (Of course, the S&P 500 does not incur expenses as the
Trust does.)
A discussion of Trust performance is included in the Trust's annual report. The
Trust provides a copy of the annual report to shareholders and, upon request and
without charge, to each person to whom this Prospectus is delivered. As with any
mutual fund, past performance of the Trust is not necessarily an indication of
future performance.
TRUST FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you buy
and hold shares of the Trust.
SHAREHOLDER FEES (fees paid directly from your investment):
o Maximum Sales Charge (Load) Imposed on Purchases NONE
o Maximum Deferred Sales Charge (Load) NONE
o Maximum Sales Charge (Load) Imposed on Reinvested
Dividends or other Distributions NONE
o Redemption Fee (as a percentage of amount redeemed) NONE*
o Exchange Fee NONE
* The Trust may reduce the price you receive upon redeeming shares by up to
one percent but has never done so. If the Trust imposed this redemption
fee, you would receive prior notice.
ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Trust
assets):
o Management Fees 0.66%
o Distribution and Service (12b-1) Fees 0 %
o Other Expenses 0.12%
o Total Annual Fund Operating Expenses 0.78%
o Example. This EXAMPLE is intended to help you compare the cost of investing in
the Trust with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Trust for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Trust's operating expenses remain the same. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$80 $249 $433 $966
INVESTMENT STRATEGIES AND RELATED RISKS
STRATEGIES TO MEET THE TRUST'S GOALS
The Trust's investment objective is long-term growth of principal and income.
The Adviser seeks to achieve this objective through investment in a diversified
portfolio of equity securities of insurance companies and brokers, banks, and
other companies providing services to, or in a business closely related to, the
insurance and banking industriess.
The Trust invests in major insurance and banking companies in order to
participate in the basic growth of those industries. It also invests in many
other, smaller companies, including insurance brokers and service providers to
the insurance and banking industries, that the Adviser believes will offer
superior prospects, seeking with this portfolio mix to produce above-average
results over the longer term.
The Adviser focuses on factors such as the following:
o The long-term results of a company are important. A key measure is the
ability to grow book value plus dividends per share at a meaningful rate
over an extended period. In recent years the Adviser has used a target
measure of 15% per year compounded over rolling five-year periods.
o A company's ability and willingness to raise dividends regularly is
valued.
o The Adviser seeks out companies with superior management.
o As a general rule, the Adviser attempts to buy shares of companies when
their prices are temporarily out of favor or their valuation is lower than
that of securities generally.
The Adviser purchases securities for the Trust primarily for investment, rather
than with a view to trading profits. Accordingly, the Trust expects to have a
low rate of portfolio turnover and associated trading costs, which should result
in a lower current tax burden for shareholders compared to investing in a fund
with higher turnover. The average portfolio turnover ratio was 4.4% over the
past five years.
RISKS OF INVESTING IN INSURANCE AND FINANCIAL SERVICES COMPANIES
In addition to the general market, economic, and political risks of investing in
stocks, some of which are described in "Summary of Important Information" above,
the Trust's principal investment strategies expose investors to the particular
risks of investing in the insurance and financial services industries. Various
factors directly affect the value of insurance and banking stocks. These
include:
o marketing competition
o pricing of products
o general economic conditions
o claims activity
o changes in interest rates
o governmental regulation.
Particular types of insurance companies will be affected by different risk
factors. For example:
o exposure to natural disasters and other catastrophes may reduce the
earnings of property-casualty insurance companies
o changing mortality and morbidity rates affect life and health insurer
profits.
Individual companies may be adversely affected by inadequate reserves or the
inability to collect from reinsurance carriers. Risks also exist in the nature
and degree of governmental regulation of the companies in which the Trust may
invest. For example:
o Rate regulation or tax law changes may adversely affect insurance
companies.
o The lowering of historical regulatory barriers between insurance and
banking companies presents challenges to management of these companies
that may adversely affect their performance.
In addition, although the Adviser takes steps to assess the status of so-called
"Year 2000" problem compliance as reported by the Trust's portfolio companies,
this review is necessarily limited by the varied quality of their Year 2000
reporting. In addition, insurance companies may be adversely affected by the
Year 2000 problems of their insureds. Despite the Adviser's efforts, you should
understand that the Year 2000 issue may have a material adverse effect on the
companies held in the portfolio and, in any event, may materially affect the
securities markets and the economy generally.
MANAGEMENT OF THE TRUST
Century Capital Management, Inc. is the Trust's investment adviser. The
Adviser's address is One Liberty Square, Boston, Massachusetts 02109. The
Adviser, which is owned by its officers and certain related persons, was
organized in April 1992, and became the Trust's investment adviser on July 1,
1994. Before that date and since the Trust's inception in 1928, the Trust was
internally managed under the direction of its Trustees. The Trust is the
Adviser's first and only mutual fund client. The Adviser also is the investment
adviser to several limited partnerships, the investors in which are principally
institutions.
The Adviser has discretionary authority to invest the Trust's assets. The
Trust's investments are managed by an investment committee of individuals who
are officers of the Adviser. The Adviser also performs (or arranges for the
performance of) certain management and administrative services necessary for the
Trust's operation. Such services include providing office space, equipment and
facilities, supervising relations with service providers (such as the Trust's
custodian, transfer agent, accountants and attorneys), preparing shareholder
communications, conducting shareholder relations, maintaining the Trust's
existence and records, and maintaining the Trust's registration and
qualification for sale of its shares.
The Trust pays the Adviser a fee, monthly in arrears, based on a percentage of
the Trust's net asset value. For the year ended December 31, 1998, the aggregate
fee paid to the Adviser was 0.66% of average net assets.
Based on a review of its equipment and software and the information provided by
the Trust's custodian and shareholder servicing firm, the Adviser currently
believes that the services it provides the Trust will not be materially affected
by Year 2000 problems with its computer systems or those of its vendors.
However, failure by the Adviser or any other party to address all Year 2000
issues affecting their systems could disrupt the Trust's functions, such as
calculations of net asset value, purchases and redemptions, or shareholder
reporting, which could have a material adverse effect on the Trust and its
shareholders.
SHAREHOLDER INFORMATION
PRICING OF TRUST SHARES
The price of Trust shares is based on the Trust's daily net asset value. Net
asset value is the market value of the Trust's investments plus cash,
receivables and any other Trust assets, less liabilities. (Market value is the
closing (last sale) price on the principal exchange for securities listed on
national exchanges and the bid price for unlisted securities.) The Trust's net
asset value divided by the number of shares outstanding is the net asset value
per share.
The net asset value per share is computed by the Trust's custodian bank, State
Street Bank and Trust Company, as of the close of trading on the New York Stock
Exchange (normally 4:00 p.m., New York City time) each day that the Exchange is
open for trading. Net asset value would be computed on other days if there were
a sufficient degree of trading in the Trust's portfolio securities that current
net asset value might be materially affected. The price at which you purchase or
redeem Trust shares is the net asset value per share as next determined after
you place your order.
PURCHASING SHARES
You may purchase shares of the Trust by check or wire transfer. If you are
already a shareholder, you may purchase additional shares by telephone. The
Trust is a "no-load" fund, so you pay no sales commissions on a purchase
directly from the Trust. The minimum initial investment is $1,000; the minimum
investment for subsequent purchases is $50.
o Delivery Instructions. To make an initial investment, you must complete and
sign the Application to purchase shares and deliver it with your payment as
follows:
By Regular Mail By Overnight Express or Hand Delivery
--------------- -------------------------------------
Century Shares Trust Boston Financial Data Services
P.O. Box 8329 Attention: Century Shares Trust
Boston, MA 02266-8329 2 Heritage Drive
North Quincy, MA 02171
Your purchase request will be completed and your shares will be purchased at the
net asset value per share next computed after the Trust receives your
Application and investment in proper form.
o Purchases by Check. You should make your check payable to Century Shares Trust
for the requested purchase amount. The Trust will not accept cash, third party
checks, or checks drawn on banks located outside of the United States. If your
purchase order for shares is cancelled because your check does not clear, you
will be responsible for any loss incurred by the Trust; existing shareholders
may have shares redeemed from their account to reimburse any loss.
o Wire and Electronic Transfers. You may purchase shares by having your bank
send a wire transfer to the Trust's custodian bank. Your bank may charge you a
fee for a wire transfer. If you wish to send a wire transfer, notify us before
the funds are wired by telephone: 800-321-1928 or 617-482-3060. Use the
following wire transfer instructions:
State Street Bank and Trust Company
ABA # 011000028; DDA # 99046583
Credit Century Shares Trust
[insert your Shareholder Registration Name and Account Number]
You may purchase additional shares of the Trust by having your bank account
automatically drafted on a periodic basis. For more information and to receive
the documentation required for this program, call the Trust.
o Telephone Purchases. If you currently have an active account, you may make
subsequent investments by telephone in accordance with policies established by
the Trust. You can call us at 800-303-1928 or 617-482-3060 to inquire about a
telephone purchase or to place your order. The purchase price will be the net
asset value per share next computed after receiving your order. Payment for
shares purchased by telephone must be received within seven days or the order is
subject to cancellation. At its discretion, the Trust may accept telephone
orders from non-shareholders or securities dealers.
o Transactions Through Intermediaries. You may purchase or redeem shares of the
Trust through intermediaries such as certain broker-dealers, "fund
supermarkets," banks, investment professionals, retirement accounts or other
vehicles. An intermediary may charge you a fee for its service, and it may have
procedures for purchasing and redeeming shares and account features differing
from those that would apply if you deal directly with the Trust.
An intermediary may be a designated agent of the Trust. If so, orders it accepts
at any time until the daily computation of the Trust's net asset value per share
would receive that price. The agent will segregate orders received on a business
day after the daily computation time and transmit those orders to the Trust
separately for execution at the net asset value next computed after that
business day.
o General Policies. The Trust reserves the right to reject any order to purchase
shares. In particular, the Trust may reject orders from investors whose trading
practices are not considered to be consistent with the long-term investment
objectives of the Trust. If your order to purchase shares is accepted and
processed, you may not cancel or revoke the purchase, but you may redeem the
shares purchased.
REDEEMING SHARES
You may redeem shares of the Trust by sending a written request for redemption
to the Trust. The request should be delivered as follows:
By Regular Mail By Overnight Express or Hand Delivery
--------------- -------------------------------------
Century Shares Trust Boston Financial Data Services
P.O. Box 8329 Attention: Century Shares Trust
Boston, MA 02266-8329 2 Heritage Drive
North Quincy, MA 02171
In your written request, you must (1) indicate the number of shares or dollar
amount to be redeemed, (2) provide your shareholder account number, and (3) have
each record owner sign the request exactly as the shares are registered (e.g., a
trustee or custodian must sign as such). The Trust does not permit redemption by
telephone, fax, or email. You also may redeem shares through intermediaries as
described above in "Purchasing Trust Shares."
Redemption orders are processed at the net asset value per share next computed
after the Trust receives your order in good form. The price you receive in a
redemption may be more or less than the price you paid when you purchased your
shares and may result in a taxable capital gain or loss.
o Required Documentation. Certain redemption requests must include a signature
guarantee, which is an established commercial practice designed to protect you
and the Trust from fraud. You must include a signature guarantee if: (1) you
wish to sell more than $10,000 worth of shares, (2) you wish to have the
redemption proceeds sent to an address different than that registered in your
account, (3) you have changed your registered address within the last 60 days,
or (4) you wish to have the redemption proceeds made payable to a person who is
not the registered account owner. The signature guarantee must apply to the
signature of each record owner on your account. You may obtain a signature
guarantee from a participant in the Medallion signature guarantee program, such
as a bank, credit union, or securities broker-dealer. A notary public cannot
provide a signature guarantee.
Shares owned by corporations, trusts, partnerships, estates or other entities
are subject to special rules regarding documentation required for redemption.
These shareholders should call the Trust at 800-303-1928 or 617-482-3060 to
obtain specific instructions for their situation.
o Payment for Redeemed Shares. Your redemption will normally be paid by check
sent to you not later than seven days from the effective redemption date.
The Trust may reduce the redemption price by an amount up to 1%, but has never
done so. If such a redemption fee were imposed in the future, the Trust would
give prior notice to all shareholders. The Trust may announce redemption
policies and procedures that might, for example, apply any redemption fee
selectively based on the length of time of share ownership, or the size of
shareholder account or redemption amount.
The Trust is permitted to deliver assets in kind (in whole or in part) instead
of cash for large redemptions pursuant to Rule 18f-1 under the Investment
Company Act of 1940. This election might apply if, over any 90-day period, any
one shareholder redeemed shares for an amount in excess of $250,000 or 1% of the
total net asset value of the Trust, whichever is less. A shareholder receiving
a redemption in kind may incur brokerage costs in converting securities received
into cash.
o Possible Redemption Delays. If you have recently purchased shares and you wish
to redeem those shares within 15 days of the purchase date, the Trust may delay
payment of the redemption proceeds to you. The delay allows the Trust to verify
that payment for the recently purchased shares has been received and collected.
The Trust may suspend redemptions and defer payment when the New York Stock
Exchange is closed (other than weekends or holiday) or trading on that Exchange
is restricted, as permitted by the Securities and Exchange Commission, or during
any emergency making it impractical for the Trust to dispose of its securities
or value its assets.
SHAREHOLDER ACCOUNT
The Trust bears the cost to maintain your shareholder account. However, the
Trust may charge you a fee to cover its additional costs if you request a
duplicate confirmation statement of a transaction or a historical transcript of
your account. The Trust reserves the right on 60 days' prior written notice to
impose charges to cover other administrative costs.
You will not receive share certificates from the Trust unless you specifically
request them in writing. If you do hold issued certificates, they must be
returned to the Trust with a redemption request for the shares they represent.
If you lose issued certificates, you must pay for a surety bond obtained by the
Trust on your behalf for the Trust's protection.
Because small accounts result in relatively higher administration costs, the
Trust reserves the right to redeem shares in any account the value of which
falls below $500 following any redemption by you. The Trust will notify you
before doing so in order to allow you to increase your account balance above the
minimum level. The Trust also may at any time redeem your shares if you have
failed to provide required taxpayer identification number certification.
DIVIDENDS AND DISTRIBUTIONS
The Trust distributes to shareholders its net investment income in the form of
income dividends. Net investment income represents the dividends, interest and
other income earned from its investments, less its expenses. The Trust normally
makes income dividend payments in June and December.
The Trust also distributes to shareholders its net realized capital gains in the
form of capital gain distributions. These distributions represent capital gains
realized by the Trust on its investments, less any capital losses. The capital
gain distribution is normally made in December.
The Trust will reinvest your income dividends and capital gain distributions in
additional shares of the Trust unless you choose one of the following options:
o Income Option - you will receive income dividends in cash and have capital
gain distributions reinvested; or
o Cash Option - you will receive both income dividends and capital gain
distributions in cash.
You should indicate your choice in the Application you complete with your
initial share purchase. You may change your choice at any time by writing the
Trust.
TAX CONSEQUENCES
Your investment in the Trust may result in tax consequences to you. (If you are
investing through a tax-advantaged retirement account, you should consult your
tax advisor as to your tax situation.)
Income dividends and capital gains distributions are generally subject to
federal income tax, and may also be subject to state or local taxes. Capital
gain distributions may be taxable at different rates, depending on the length of
time the Trust holds its assets. At the present time, for federal tax purposes
both income dividends and short-term capital gains distributions are taxable to
you as ordinary income. Long-term capital gain distributions are generally
taxable to you as long-term capital gains regardless of the length of time you
have owned Trust shares. Any taxable distributions you receive will generally be
taxable whether you receive them in cash or reinvest them in shares of the
Trust.
o If you purchase shares of the Trust shortly before a distribution, you will be
"buying a dividend" and you will effectively receive back a portion of your
investment in the form of a taxable income dividend or capital gains
distribution.
When you redeem shares you may realize a taxable capital gain or loss for
federal income tax purposes. You will realize a taxable capital gain if the
price you receive on redemption is greater than the cost of the shares that you
redeem.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Trust's
financial performance for the past 5 years. Certain information reflects
financial results for a single Trust share. The total returns in the table
represent the rate than an investor would have earned (or lost) on an investment
in the Trust (assuming reinvestment of all dividends and distributions). This
information has been audited by Deloitte & Touche LLP, whose report, along with
the Trust's financial statements, are included in the Trust's annual report,
which is available upon request.
<TABLE>
<CAPTION>
Year Ended December 31,
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of year $44.66 $31.30 $28.07 $21.77 $24.04
Income (Loss) from Investment Operations:
Net investment income $0.41 $0.39 $0.46 $0.41 $0.44
Net realized and unrealized gain (loss) 2.71 15.25 4.34 7.22 (1.38)
------ ------ ------ ------ ------
Total from investment operations $3.12 $15.64 $4.80 $7.63 ($0.94)
Less Distributions:
From net investment income ($0.40) ($0.38) ($0.46) ($0.41) ($0.45)
From net realized gain (2.72) (1.90) (1.11) (0.92) (0.88)
Returns of capital -- -- -- -- --
------ ------ ------ ------ ------
Total distributions ($3.12) ($2.28) ($1.57) ($1.33) ($1.33)
Net Asset Value, end of year $44.66 $44.66 $31.30 $28.07 $21.77
====== ====== ====== ====== ======
Total Return 7.00% 50.10% 17.20% 35.20% -3.90%
Ratios/Supplemental Data:
Net assets, end of year (in millions) $415 $415 $271 $267 $206
Ratio of expenses to average net assets 0.78% 0.82% 0.87% 0.94% 1.01%
Ratio of net income to average net assets 0.88% 1.04% 1.58% 1.60% 1.93%
Portfolio Turnover Rate 6% 6% 3% 5% 2%
</TABLE>
<PAGE>
A Statement of Additional Information ("SAI") for the Trust dated April 30,
1999, includes additional information about the Trust. The SAI is incorporated
by reference into this Prospectus. Information about the Trust's investments is
also available in its annual and semi-annual reports to shareholders. The
Trust's most recent annual report provides a discussion of the market conditions
and investment strategies that significantly affected the Trust's performance
during its last fiscal year.
The SAI and the Trust's annual and semi-annual reports and other information are
available, without charge, upon request to the Trust. Investors may contact the
Trust by calling 1-800-321-1928, by sending e-mail to "[email protected]" or
by writing to:
Century Shares Trust
One Liberty Square
Boston, Massachusetts 02109
Information about the Trust (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information on the operation of the Public Reference Room may be obtained
by calling the Commission at 1-800-SEC-0330. Reports and other information about
the Trust are available on the Commission's Internet site at http://www.sec.gov;
copies of this information may be obtained, upon payment of a duplicating fee,
by writing the Public Reference Section of the Commission, Washington, D.C.
20549-6009.
Investment Company Act File Number 811-00019
<PAGE>
CENTURY SHARES TRUST
One Liberty Square
Boston, Massachusetts 02109
800-321-1928 or 617-482-3060
[email protected]
PART B
STATEMENT OF ADDITIONAL INFORMATION
April 30, 1999
This Statement of Additional Information supplements the Trust's Prospectus
dated April 30, 1999. You may obtain a copy of the Prospectus free of charge by
writing, calling or sending an email to the Trust. This Statement of Additional
Information is not a Prospectus.
-----------------------------
TABLE OF CONTENTS
The Trust....................................................................X
Management of the Trust......................................................X
Control Persons and Principal Holders of Securities..........................X
Investment Advisory and Other Services.......................................X
Brokerage Allocation and Other Practices.....................................X
Capital Stock and Other Securities...........................................X
Purchase, Redemption and Pricing of Shares...................................X
Taxation of the Trust........................................................X
Calculation of Performance Data..............................................X
Financial Statements.........................................................X
-----------------------------
THE TRUST
Century Shares Trust is a "Massachusetts trust" organized under the laws of
Massachusetts in March 1928. Wiesenberger Investment Companies Service, 1985
Ed., a recognized independent compilation of mutual fund industry statistics,
lists the organization dates of "virtually all mutual funds registered for sale
in the United States," and indicates that nine mutual funds in addition to the
Trust were organized in or prior to 1928. Several of the largest shareholders of
the Trust are insurance companies, owning shares directly or through nominees.
The Trust operates as a diversified, open-end management investment company.
In pursuing its investment objectives described in the Prospectus, the Trust may
invest in stock of the types of entities described in the Prospectus and holding
companies or subsidiaries of such entities, as well as in securities convertible
into or exercisable for such stock. The Trust also may invest in debt
instruments of domestic governmental and non-governmental issuers of investment
grade at the time of purchase.
The Trust may not:
o issue senior securities;
o borrow money, except temporary borrowing that does not cause the outstanding
indebtedness of the Trust to exceed 10% of its gross assets (valued at
market) or of its liquidating value, whichever is lower (Any temporary
borrowings also would be subject to the 300% asset coverage requirement of
the Investment Company Act of 1940. If the Trust were to borrow temporarily,
this could require it to liquidate portfolio securities at a disadvantageous
time.);
o act as underwriter of securities;
o invest more than 5% of its gross assets (valued at market) in the securities
of any one issuer
o hold more than 10% of any class of the securities of any one issuer;
o purchase or sell real estate, commodities, or commodity contracts, except in
satisfaction of a debt or in connection with a merger, consolidation,
reorganization, or other activities of the Trust;
o make loans;
o invest in debt securities other as described above;
o invest in the securities of other investment companies, except by purchase in
the open market that does not require any commission or result in any profit
to an underwriter or dealer, other than customary brokers' commissions;
o invest in the securities of companies that have a record (including the
record of any predecessors) of fewer than three years' continuous operation;
o invest for the purpose of exercising control or management;
o purchase securities on margin or sell short; or
o purchase or retain in its portfolio any securities of an issuer if the
officers or Trustees of the Trust that own beneficially more than 0.5% of the
securities of such issuer together own more than 5% of the securities of such
issuer.
The principal investment objectives of the Trust and the limitations listed
above may not be changed without the vote or written approval of a majority of
the outstanding shares of the Trust
Additionally, the Trustees currently have a policy that will not allow
investments in convertible securities to exceed 5% of total investments.
MANAGEMENT OF THE TRUST
The Trustees named below are responsible for setting policy and overseeing the
Trust's activities. The Trustees hire and supervise the performance of the
companies that provide services to the Trust, such as the investment adviser,
the independent accountants, and the custodian. The Trustees elect their
successors.
The following table provides information regarding each Trustee and officer of
the Trust:
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION(S) HELD WITH TRUST PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
--------------------- --------------------------- -------------------------------------------
<S> <C> <C>
William O. Bailey Trustee o Terra Nova (Bermuda) Holdings Ltd.,
7 Victoria Street Chairman, President & CEO (Insurance Holding
Hamilton Bermuda Co.)
Age: 72 o MBIA, Inc., Director and Former CEO
(Insurance Co.)
o Business Men's Assurance Co. of America,
Director
John E. Beard Trustee o Ropes & Gray, Partner (Attorneys)
One International Place
Boston, Massachusetts
Age: 66
William W. Dyer, Jr.* Trustee o Century Capital Management, Inc., Managing
One Liberty Square (Prior to July 1994, also Director and Director#
Boston, Massachusetts Vice President) o CCP Capital, Inc., Vice President and
Age: 64 Director (Management Services)#
o CCP Capital II, LLC, Managing Member
(Management Services)#
o Prior to October 1994, Massachusetts
Fiduciary Advisors, Inc., Director and Senior
Vice President (Investment Adviser)#
Allan W. Fulkerson* Chairman of the Trustees o Century Capital Management, Inc., President
One Liberty Square (Prior to July 1994, also and Director#
Boston, Massachusetts President and Managing o CCP Capital, Inc., President and Director
Age: 65 Trustee) (Management Services)#
o CCP Capital II, LLC, Managing Member
(Management Services)#
o Massachusetts Fiduciary Advisors, Inc.,
President and Director (Investment Adviser)#
Ernest E. Monrad Trustee o Northeast Investors Trust, Chairman of the
50 Congress Street Trustees (Investment Company)
Boston, Massachusetts
Age: 66
Michael J. Poulos Trustee o Western National Corporation (Holding
3 Riverway Plaza Company) and Western National Life Insurance
Houston, Texas Company, Chairman, President and Chief
Age: 68 Executive Officer
Jerry S. Rosenbloom Trustee o The Wharton School, University of
304 Colonial Penn Center Pennsylvania, Professor of Insurance and Risk
3641 Locust Walk Management
Philadelphia, Pennsylvania
Age: 60
Richard F. Cook, Jr. Secretary o Century Capital Management, Inc., Managing
One Liberty Square Director, Treasurer, Clerk and Director#
Boston, Massachusetts o CCP Capital, Inc., Vice President,
Age: 48 Treasurer, Clerk and Director (Management
Services)#
o CCP Capital II, LLC, Managing Member
(Management Services)#
o Massachusetts Fiduciary Advisors, Inc.,
Senior VP, Treasurer and Clerk (Investment
Adviser)#
- -------------
* Indicates Trustees who are interested persons of the Trust.
# Indicates a position with an entity that may be deemed an "affiliated person" of the Trust.
</TABLE>
During the fiscal year ended December 31, 1998 the following persons received
the indicated amounts from the Trust:
PENSION OR
RETIREMENT TOTAL
AGGREGATE BENEFITS ACCRUED COMPENSATION
NAME OF PERSON, COMPENSATION AS PART OF TRUST FROM TRUST
POSITION FROM THE TRUST EXPENSES (1) PAID TO TRUSTEES
-------- -------------- ------------ ----------------
William O. Bailey, $20,000 -- $20,000
Trustee
John Beard, $20,000 -- $20,000
Trustee
William W. Dyer, Jr., -- -- --
Trustee (2)
Allan W. Fulkerson, -- -- --
Trustee (2)
Ernest E. Monrad, $20,000 -- $20,000
Trustee
Michael J. Poulos, $10,000 -- $10,000
Trustee
Jerry S. Rosenbloom, $15,000 -- $15,000
Trustee
(1) The Trust neither sponsors nor pays pension or retirement benefits to
Trustees or officers of the Trust.
(2) Any Trustee or officer of the Trust who also is an officer of the Adviser
receives no remuneration from the Trust.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of February 8, 1999, the Trustees and officers as a group owned less than 1%
of the outstanding shares of the Trust. As of February 8, 1999, Charles Schwab &
Co. Inc., 101 Montgomery Street, San Francisco, CA, 94104 was the record owner
of two accounts with a combined share balance equal to approximately 7.9% of the
Trust's outstanding shares. The Trust believes these accounts hold shares
beneficially owned by clients of Charles Schwab & Co., Inc. As of February 8,
1999, CUDD & Co., c/o Chase Manhattan Bank, N.A., 1211 Sixth Avenue, New York,
NY, 10036-8701 was the record owner of an account with a share balance equal to
approximately 5.9% of the Trust's outstanding shares.
INVESTMENT ADVISORY AND OTHER SERVICES
Investment Adviser. Century Capital Management, Inc., the Trust's investment
adviser, is solely owned by its officers and certain related persons. Allan W.
Fulkerson, who exercises voting control over the Adviser, is both Chairman of
the Trustees of the Trust and President and a Director of the Adviser. William
W. Dyer, Jr., is a Trustee of the Trust, and he and Richard F. Cook, Jr.,
Secretary of the Trust, each serve as Managing Director and Director of the
Adviser.
The Trust pays the Adviser a fee, monthly in arrears, equal to one-twelfth
(1/12th) of the sum of seven-tenths of one percent (0.7%) of the first $250
million and six-tenths of one percent (0.6%) of the amount exceeding $250
million, of the net asset value of the Trust at the end of each month. The
Trust's advisory agreement with the Adviser provides that the Adviser's fee will
be reduced by an amount necessary to prevent the Trust's aggregate expenses from
exceeding the most restrictive of the expense limitation imposed by any state
securities commission in states in which the Trust's shares are registered or
qualified for sale. For the years 1998, 1997 and 1996, the Trust paid the
Adviser total fees of $2,776,322, $2,281,156, and $1,756,532, respectively.
As investment adviser to the Trust, the Adviser acts with discretionary
authority to invest the Trust's assets. The Adviser also performs (or arranges
for performance of) certain management and administrative services necessary for
the operation of the Trust. These services include providing office space,
equipment and facilities, supervising relations with the Trust's custodian,
transfer agent, accountants, attorneys and other third-party service providers,
preparing shareholder communications, conducting shareholder relations,
maintaining the Trust's existence and records and maintaining the Trust's
registration and qualification for sale of its shares. The Adviser may be
reimbursed by the Trust for the allocated cost of the Adviser's employees'
providing shareholder, transfer agent and accounting services to the Trust. The
Trust pays its other expenses. Expenses of the Trust for compensation, office
rental and other office expenses, and investment advisory, statistical and
research services are subject to an annual overall limitation in the Declaration
of Trust of 1.5% of average quarterly net assets up to $30,000,000 and 1% of
average net quarterly assets over that amount.
Transfer Agent and Dividend Paying Agent. State Street Bank and Trust Company,
through its subsidiary Boston Financial Data Services, Inc., 2 Heritage Drive,
North Quincy, Massachusetts, acts as the Trust's transfer agent and dividend
paying agent. Charles Schwab Trust Company, 101 Montgomery Street, San
Francisco, CA 94104 may act as transfer agent with respect to certain retirement
plans of which it is trustee.
Custodian. State Street Bank and Trust Company, 2 Heritage Drive, North Quincy,
Massachusetts, acts as the custodian of the Trust's cash and investment
securities. The custodian also is responsible for receipt and delivery of the
Trust's investment securities, as well as other matters specified in the
custodial agreement.
Accountants. Deloitte & Touch LLP, 125 Summer Street, Boston, Massachusetts,
acts as the independent accountants for the Trust. The independent accountants
are responsible for auditing the Trust's financial statements.
BROKERAGE ALLOCATION AND OTHER PRACTICES
The Trust's portfolio transactions are executed by broker-dealers and banks
selected by the Adviser. During the years 1998, 1997 and 1996, brokerage
commissions were $33,953, $28,059 and $12,804, respectively. The lower
commissions in 1996 compared with the two years since then resulted from fewer
transactions requiring brokerage payments during that year.
The Adviser selects broker-dealers to execute Trust investment transactions
based on many factors, including the size and type of the transaction, the
reputation, experience, and quality of services rendered by the broker-dealer in
other transactions, and the reasonableness of the commission, if any. Execution
at the most favorable prices and in the most effective manner possible are the
primary considerations. To minimize brokerage charges, the Adviser seeks to
execute portfolio transactions with a primary market maker in over-the-counter
transactions, except in those circumstances where better prices and execution
are available elsewhere. Purchases from market makers or other dealers will
include the spread between the bid and the asked price.
When more than one broker-dealer firm meets the foregoing criteria for a
particular transaction, the Adviser may give consideration to those firms that
supply research services that may contribute to the overall performance of the
Trust and of the Adviser's other client accounts, and not all of these services
may be used in connection with the Trust. The research services may include
analysis, quotations and statistical or other information, and the Adviser may
at times pay a higher commission rate than might have been available elsewhere
in recognition of the value of such services; however, the transaction will
always meet the Adviser's overall criteria for obtaining best execution.
Investment decisions for the Trust are made independently from those for other
clients of the Adviser and suitability is always a paramount consideration.
Nevertheless, it is possible that at times the same securities will be
acceptable for the Trust and for one or more other client accounts. The Adviser
or its personnel may have interests in one or more of those client accounts. The
Adviser has adopted allocation procedures designed to allocate securities and
prices fairly between the Trust and the Adviser's various other accounts.
CAPITAL STOCK AND OTHER SECURITIES
Ownership of the Trust is represented by shares of $1.00 par value. The number
of shares is not limited. Each share has the same rights as every other share.
Shares have no preemptive rights and are fully paid and non-assessable. Shares
may be redeemed at any time at net asset value. The Trust may redeem shares in
any account valued at less than $500 after any redemption by the shareholder to
minimize the disproportionately high administrative costs associated with small
account balances.
SHAREHOLDERS HAVE NO RIGHT TO VOTE IN THE SELECTION OF TRUSTEES OR OTHER MATTERS
RELATING TO THE MANAGEMENT OF THE TRUST (EXCEPT THAT A TRUSTEE MAY BE REMOVED
FROM OFFICE AS PROVIDED IN THE INVESTMENT COMPANY ACT); PROVIDED THAT THE
DECLARATION OF TRUST MAY BE AMENDED OR TERMINATED WITH THE WRITTEN CONSENT OF
THE HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES.
The Trust may create and issue additional series of shares, subject to the
Investment Company Act of 1940, when, as and if the Trustees may determine,
without further action by the shareholders. The Declaration of Trust gives the
Trustees authority to fix and determine the relative rights and preferences as
between different series as to dividends and other distributions and on
liquidation or termination of the Trust, and also to determine provisions
concerning investment, reinvestment, sinking or purchase Trusts, conversion
rights, the manner of determining Trustee remuneration with respect to such
series, and conditions under which the several series shall have separate voting
rights or no voting rights.
PURCHASE, REDEMPTION AND PRICING OF SHARES
Purchase and Redemption of Shares. The Trust offers its shares directly to the
public without any sales charge, as described in the Prospectus. The shares also
may be purchased through broker-dealers, banks, and "fund supermarkets," which
may charge a fee for this service. The Trust may from time to time issue its
shares in exchange for securities held in the portfolio of another investment
company, trust, or securities owner. Such a transaction would generally involve
the issuance of trust shares at net asset value, based upon the value of the
securities acquired.
A broker-dealer or other intermediary may be a designated agent of the Trust. If
so, orders that it accepts for the purchase of shares at any time until the
daily computation of the Trust's net asset value would receive that value as the
purchase price per share. (The agent would then segregate any orders received
after the daily computation and transmit those separately to the Trust for
execution at the net asset value as determined at the end of the next trading
day.) A purchase made through an intermediary that is not a designated agent of
the Trust is made at the net asset value next determined after the order is
actually received by the Trust.
Share redemptions may be made directly from the Trust or through an
intermediary, which may charge a fee for the service. The Trust is authorized to
reduce the redemption price by up to one percent, but has never done so. The
Trust has the right to suspend redemption when the New York Stock Exchange is
closed (other than on weekends or holidays) or trading on the New York Stock
Exchange is restricted during any period permitted by order of the Securities
and Exchange Commission for the protection of investors.
The Trust is permitted to deliver assets in kind (in whole or in part) in lieu
of cash for large redemptions pursuant to Rule 18f-1 under the Investment
Company Act of 1940. The Trustees are obligated to redeem shares solely in cash
up to the lesser of $250,000 or 1% of the liquidating value of the Trust, during
any 90-day period for any one shareholder, but may make redemptions in kind
above that limitation. Shareholders receiving redemptions in kind may incur
brokerage costs in converting securities received in cash.
Offering Price. The offering price of the Trust's shares is the net asset value
per share. Net asset value of the Trust is determined by the Trust's custodian
as described in the Prospectus. Equity securities traded on a national
securities exchange or Nasdaq are valued at the last sale price on the national
securities exchange on which such securities are primarily traded or Nasdaq, as
the case may be. Securities for which there were no transactions on a given day
or securities not listed on an exchange or Nasdaq are valued at the most recent
bid prices. Other exchange-traded securities (generally foreign securities) will
generally be valued based on market quotations.
Short-term obligations, maturing in 60 days or less, are valued at amortized
cost, which approximates value. Other debt securities are valued by a pricing
service that utilized electronic date processing techniques to determine values
for normal institutional-sized trading units of debt securities without regard
to sale or bid prices when such techniques are believed to more accurately
reflect the fair market value for such securities. Otherwise, sale or bid prices
are used. Any securities or other assets for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Trustees of the Trust.
Securities quoted in foreign currency, if any, are valued in U.S. dollars at the
foreign currency exchange rate prevailing at the time the net asset value per
share is determined.
TAXATION OF THE TRUST
For 1998, the Trust qualified as a "regulated investment company" under the
Internal Revenue Code and it intends to be so qualified throughout 1999. This
special tax status means that the Trust will not be liable for federal tax on
income and capital gains distributed to shareholders. In order to preserve its
tax status, the Trust must comply with certain requirements. If the Trust fails
to meet these requirements in any taxable year, it will be subject to tax on its
taxable income at corporate rates, and all distributions from earnings and
profits, including any distributions of net tax-exempt income and net long-term
capital gains, will be taxable to shareholders as ordinary income. In addition,
the Trust could be required to recognize unrealized gains, pay substantial taxes
and interest, and make substantial distributions before regaining its tax status
as a regulated investment company.
CALCULATION OF PERFORMANCE DATA
The Trust may from time to time present its investment performance in
advertisements, shareholder reports or other communications. In those
communications, the Trust may compare its performance to (a) indexes of groups
of unmanaged stocks, such as the Standard and Poor's Stock Indexes and the Dow
Jones Averages, (b) indexes of mutual funds prepared by independent
organizations such as Lipper Analytical Services, Inc. and Morningstar, and (c)
the Consumer Price Index demonstrating changes in the average cost of living.
The investment performance of the Trust or such indexes may be calculated,
ranked, rated or otherwise described by independent publications or analysts
such as Barron's, Business Week, Forbes, Fortune, Investor's Business Daily,
Lipper Analytical Services, Inc., Money Magazine, Morningstar, Mutual Trust
Forecaster, No Load Trust X, The Value Line Mutual Trust Survey, The Wall Street
Journal, and Wiesenberger Investment Companies Service, and such information may
also be presented.
An investment in shares of the Trust with all dividends reinvested would have
provided the average annual compounded rate of return ("Average Annual Total
Return") listed below for each of the indicated periods:
Average Annual
Investment Period Total Return
----------------- ------------
One Year Ending December 31, 1998 7.00%
Five Years Ending December 31, 1998 19.59%
Ten Years Ending December 31, 1998 18.18%
Average Annual Total Return is computed as follows. A hypothetical investment of
$1,000 ("Invested Amount") is assumed to have been made at the beginning of the
investment period, resulting in the purchase of a certain number of shares at
the effective net asset value. All income dividend and capital gain
distributions made by the Trust over such period are assumed to have been
reinvested in additional shares at the then effective net asset value, thereby
increasing share holdings. At the end of the investment period, the number of
shares then assumed held is multiplied by the ending net asset value, resulting
in the amount which the assumed investment would have been worth on redemption
at that time ("Redeemed Amount"). The Redeemed Amount is then compared to the
Invested Amount, and the average annual compounded rate of return is derived for
the period by application of a standard compound interest rate calculation.
The Average Annual Total Return figures provided above are computed by finding
the average annual compounded rates of return over the 1, 5 and 10 year periods
that would equate the initial amount invested to the ending redeemable value,
according to the formula P(1 + T)n = ERV, where:
P = a hypothetical initial payment of $1,000,
T = average annual total return,
n = number of years, and
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the 1, 5 or 10 year
periods (or fractional portion thereof).
<PAGE>
FINANCIAL STATEMENTS
The Trust's financial statements appearing in the Trust's annual report for 1998
and the report thereon of Deloitte & Touche LLP, independent accountants, also
appearing therein, are incorporated by reference into this Statement of
Additional Information. You may obtain a copy of the annual report without
charge upon request to the Trust.
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS.
(a) Copy of Declaration of Trust as amended to July 1, 1994, filed
herewith as Exhibit 23(a).
(b) None.
(c) None.
(d) Copy of Investment Advisory and Management Services Agreement between
the Trust and Century Capital Management, Inc., effective July 1,
1994, filed as Exhibit 23(d) with the Seventy-Second Post Effective
Amendment to Registration Statement No. 2-11466, is incorporated
herein by reference.
(e) Not applicable.
(f) Not applicable.
(g) Copy of the Custodian Contract, dated as of November 1, 1993, between
State Street Bank and Trust Company and the Trust, filed as
Exhibit 23(g) with the Seventy-Second Post Effective
Amendment to Registration Statement No. 2-11466, is incorporated
herein by reference.
(h) Copy of the Transfer Agency and Service Agreement, dated as of
November 1, 1993, between State Street Bank and Trust Company and the
Trust, filed as Exhibit 23(h) with the Seventy-Second Post Effective
Amendment to Registration Statement No. 2-11466, is incorporated
herein by reference.
(i) (1) Opinion of Palmer & Dodge LLP as to legality of shares being
registered, filed as Exhibit 10 with the Seventy-First Post
Effective Amendment to Registration Statement No. 2-11466, is
incorporated herein by reference.
(2) Consent of Palmer & Dodge LLP. Filed herewith.
(j) Written consent of certified public accountants, filed herewith as
Exhibit 23(j).
(k) None.
(l) None.
(m) None.
(n) Financial Data Schedule meeting the requirements of Rule 483, filed
as Exhibit 23(n) with the Seventy-Second Post Effective
Amendment to Registration Statement No. 2-11466, is incorporated
herein by reference.
(o) Not applicable.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRUST.
There are no subsidiaries of, or other persons controlled by, the Trust. The
following persons may be deemed to be under common control with the Trust as a
result of direct or indirect control by shareholders of Century Capital
Management, Inc., the investment adviser to the Trust.
State of
Person Organization Basis of Control
Century Capital Management, Inc. MA Ownership of more than 25% of
voting stock by Allan W.
Fulkerson, a Trustee of the
Trust.
CCM Ventures, L.P. DE Century Capital Management,
Inc. is the general partner of
CCM Ventures, L.P.
CCP Capital, Inc. MA Ownership of more than 25% of
voting stock by each of
Messrs. Fulkerson and William
W. Dyer, Jr., a Trustee of the
Trust.
CCP Capital II, LLC DE Ownership of more than 25% of
member interests by Mr.
Fulkerson.
Massachusetts Fiduciary MA Ownership of more than 25% of
Advisors, Inc. voting stock by Mr. Fulkerson.
MFA-MASTERS Limited Partnership MA Massachusetts Fiduciary
Advisors, Inc. is the general
partner of MFA-MASTERS Limited
Partnership.
ISF Limited Partnership MD Century Capital Management,
Inc. is the general partner of
a general partner of, and the
investment adviser to, ISF
Limited Partnership.
Century Capital Partners, L.P. DE CCP Capital, Inc. is the
general partner of, and
Century Capital Management,
Inc. is the investment adviser
to, Century Capital Partners,
L.P.
Century Capital Partners II, L.P. DE CCP Capital II, LLC is the
general partner of, and
Century Capital Management,
Inc. is the investment adviser
to, Century Capital Partners
II, L.P.
Century Merchant Bankers LLC MD Century Capital Management,
Inc. and Mr. Fulkerson are the
sole members.
ITEM 25. INDEMNIFICATION.
Paragraphs 7 and 12 of the Trust's Declaration of Trust read as follows:
"7. The Trustees and officers shall not be liable for anything done or
omitted by them in good faith, and each of them shall be answerable and
accountable only for his own acts, receipts, neglects, and willful defaults,
and not for those of the others or of any agent employed by them, nor for
the acts, receipts, neglects, willful defaults or solvency of any bank,
trust company, or other person with whom or into whose hands any moneys or
securities may be deposited or come, nor for any defect in title of any
property acquired, nor for making or retaining any investment nor for any
loss unless it shall happen through his own willful default, and they shall
be entitled to indemnity out of the trust premises against any liability
incurred in the execution of the terms or provisions hereof. The Trustees
and officers shall be entitled to advice of counsel at the expense of the
Trust and shall not be liable for any action taken or omitted in good faith
on the advice of counsel. And no Trustee however appointed shall be obliged
to give any bond or surety or other security for the performance of any of
his duties in the said trusts, but no person shall be appointed to fill any
vacancy in the Board of Trustees unless he shall have agreed in writing to
be bound in all respects by the Declaration of Trust as it may from time to
time be amended, to the same extent as if he had been a Trustee at the date
of the execution hereof. Nothing herein shall protect any Trustee or officer
against any liability to the Trust or to its shareholders to which he would
otherwise be subject by reason of willful malfeasance, bad faith, gross
negligence, or by reckless disregard of the duties involved in the conduct
of his office."
"Limitations of Liability of Shareholders,
Trustees and Others; Indemnification
12. (a) No Shareholder shall be subject to any personal liability to any
person whatsoever in connection with trust property or the acts, obligations
or affairs of the Trust, unless the Shareholder's actions shall have created
or contributed to the creation of such liability, as determined by the
Trustees consistent with applicable law. No Trustee, officer, employee or
agent of the Trust shall be subject to any personal liability to any person
in connection with trust property or the affairs of the Trust, save only
that arising from willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office and
all such persons shall look solely to the trust property for satisfaction of
claims of any nature arising in connection with the affairs of the Trust.
(b) No Trustee, officer, employee or agent of the Trust, and no investment
adviser, administrator, custodian, transfer agent or other provider of
services to the Trust, shall be liable to the Trust, its Shareholders, or to
any Shareholder, Trustee, officer, employee or agent for any action or
failure to act (including the failure to compel in any way any former or
acting Trustee to redress any breach of trust), except upon a showing of bad
faith, willful misfeasance, gross negligence or reckless disregard of
duties.
(c) Every person who is or was a Trustee, officer or employee of the Trust
and, if the Trustees in their discretion so resolve consistent with the
provisions of the Investment Company Act of 1940, any person rendering or
having rendered investment advisory, management, administrative or other
services to the Trustees or the Trust and every officer, director, trustee,
shareholder, employee and agent of any such person (each such person
hereinafter referred to as a "Covered Person") shall have a right to be
indemnified by the Trust against all liability and reasonable expenses
incurred by him in connection with or resulting from any claim, action, suit
or proceeding in which he is or may become involved as a party or otherwise
by reason of his being or having been a Covered Person, provided (1) said
claim, action, suit or proceeding shall be prosecuted to a final
determination and he shall be vindicated on the merits, (2) in the absence
of such final determination vindicating him on the merits, it shall be
determined by the Trustees or counsel, as below provided, that he acted in
good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Trust and that such indemnification is in the
best interests of the Trust and, with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful;
said determination be made either by the Trustees by a majority vote of a
quorum consisting of disinterested Trustees, or, if such quorum is not
obtainable or if a quorum of disinterested Trustees so directs, by
independent legal counsel in a written opinion, in either case based upon a
review of readily available facts (as opposed to a full trial-type inquiry).
For purposes of the preceding paragraph:
(1) "liability and reasonable expenses" shall include, but not be
limited to, reasonable counsel fees and disbursements, amounts of any
judgment, fine or penalty, and reasonable amounts paid in settlement; (2)
"claim, action suit or proceeding" shall include every such claim, action
suit or proceeding, whether civil or criminal, derivative or otherwise,
administrative, judicial, or investigative and any appeal relating
thereto, and shall include any reasonable apprehension or threat of such a
claim, action, suit or proceeding; (3) a settlement, plea of nolo
contendere, consent judgment, adverse civil judgment, or conviction shall
not of itself create a presumption that the conduct of the person seeking
indemnification did not meet the standard of conduct set forth in the
preceding paragraph.
Notwithstanding the foregoing, the following additional limitations shall
apply with respect to any action by or in the right of the Trust; (1) no
indemnification shall be made in respect of any claim, issue or matter as to
which the Covered Person shall have been adjudged to be liable for gross
negligence or misconduct in the performance of his duty to the Trust unless
the court which made such a finding or any other court of equity in the
county where the Trust has its principal office determines that, despite the
adjudication of liability, such Covered Person is fairly and reasonably
entitled to indemnity for some or all of his expenses; and (2)
indemnification in such case shall extend only to disbursements, and shall
not include judgments or fines.
The right of indemnification shall extend to the legal representative and
heirs of any Covered Person otherwise entitled to indemnification. If a
Covered Person meets the requirements of this paragraph 12 with respect to
some matters in a claim, action, suit or proceeding, but not with respect to
others, he shall be entitled to indemnification as to the former. Expenses
incurred in defending an action, suit or proceeding may be paid by the Trust
in advance of the final disposition of such action, suit or proceeding as
authorized by the Trustees in the specific case either upon receipt of an
undertaking satisfactory to the Trustees by the Covered Person to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by the Trust as authorized in this paragraph, or, if the Trust
is at the time of such advance insured against losses arising by reason of
the advance.
This paragraph 12 shall not exclude any other rights of indemnification or
other rights to which any Covered Person may be entitled to by contract, or
as a matter of law."
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to Trustees, officers and controlling persons of the Trust
pursuant to the foregoing provisions, or otherwise, the Trust has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Trust of expenses incurred or
paid by a Trustee, officer or controlling person of the Trust in the successful
defense of any action, suit or proceeding), is asserted by such Trustee, officer
or controlling person in connection with the securities being registered, the
Trust will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Century Capital Management, Inc. (the "Adviser") is the investment adviser to
four investment limited partnerships.
During the Trust's last two fiscal years, the directors and officers of the
Adviser have been associated with the entities and in the capacities listed
opposite each such director's or officer's name in the following table.
<PAGE>
<TABLE>
<CAPTION>
Position Other
Name With Adviser Associated Company Address Position
- ---- ------------ ------------------ ------- --------
<S> <C> <C> <C> <C>
Allan W. Fulkerson President, Century Capital One Liberty Square President,
Director Management, Inc. Boston, MA Director
Massachusetts Fiduciary One Liberty Square President,
Advisors, Inc. Boston, MA Director
Century Shares Trust One Liberty Square Chairman,
Boston, MA Trustee
Century Merchant 300 East Lombard Street Director
Bankers LLC Suite 610A
Baltimore, MD
CCP Capital, Inc. One Liberty Square President,
Boston, MA Director
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
Lumber Mutual Insurance One Speen Street Director &
Company Framingham, MA Chairman of
Executive
Committee
North American Lumber One Speen Street Director &
Insurance Company Framingham, MA Chairman of
Executive
Committee
Seaco Insurance Co. One Speen Street Director &
Framingham, MA Chairman of
Executive
Committee
SCUUL, Limited Wesley Street Director
Hamilton, Bermuda
Investment Management One Liberty Square Director
Publications, Inc. Boston, MA
Mutual Risk Management 69 Front Street Director
Ltd. Hamilton, Bermuda
Great Northwest 2229 W. State Street Director
Holding Co., Inc. Boise, ID
Great Northwest 2229 W. State Street Director
Insurance Company Boise, ID
Tempest Reinsurance Clarendon House Director
Two Church Street
Hamilton, Bermuda
Terra Nova (Bermuda) 7 Victoria Street Director
Holdings, Inc. Hamilton, Bermuda
Risk Capital Holdings, Inc. 20 Horseneck Lane Director
Greenwich, CT
Wellington Underwriting plc 2 Minster Court Director
Mincing Lane, London
Cairnstone, Inc. 5201 Blue Lagoon Drive Director
Miami, FL
HCC Insurance Holdings, Inc. 13403 N.W. Freeway Director
Houston, TX
Ladd Financial Group, Inc. 246 Park Street Director
W. Springfield, MA
The Galtney Group, Inc. 820 Gessner Director
Houston, Texas
International Financial 800 Fifth Ave. Director
Group, Inc. New York, NY
Lua Seguros La Portena SA Bartolome Mitre 363 Director
Buenos Aires
Argentina
William W. Dyer, Jr. Managing Director, Century Capital One Liberty Square Managing
Director Management, Inc. Boston, MA Director,
Director
Century Shares Trust One Liberty Square Trustee
Boston, MA
Century Merchant 300 East Lombard Street Director
Bankers LLC Suite 610A
Baltimore, MD
CCP Capital, Inc. One Liberty Square Vice President,
Boston, MA Director
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
The Patriot Group, Inc. 5709 Linglestown Road Director
Harrisburg, PA
Sen-Tech International 111 John Street Director
Holdings, Inc. New York, NY
Seneca Insurance 111 John Street Director
Company, Inc. New York, NY
PFG, Inc. 980 Harvest Drive Director
Blue Bell, PA
CORE Insurance Holdings, Inc. 1010 Washington Boulevard Director
Stamford, CT
American Direct Business 5 Waterside Crossing Director
Insurance Agency, Inc. Windsor, CT
Richard F. Cook, Jr. Managing Director, Century Capital One Liberty Square Managing
Treasurer and Management, Inc. Boston, MA Director,
Clerk, Director Treasurer
and Clerk,
Director
Massachusetts Fiduciary One Liberty Square Senior V.P.,
Advisors, Inc. Boston, MA Treasurer
and Clerk and Clerk
Century Shares Trust One Liberty Square Secretary
Boston, MA
Century Merchant 300 East Lombard Street Director
Bankers LLC Suite 610A
Baltimore, MD
CCP Capital, Inc. One Liberty Square Vice President,
Boston, MA Treasurer
and Clerk, Director
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
The Patriot Group, Inc. 5709 Linglestown Road Director
Harrisburg, PA
Specialty Insurance The City Drive South Director
Service Orange, CA
Great Northwest 2229 W. State Street Director
Holding Co., Inc. Boise, ID
DP Mann Holdings Limited 6 London Street Director
London, England
Ineas, B.V. Entrada 123 Director
Amsterdam
The Netherlands
Richard J. Freeman Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
CCP Capital, Inc. One Liberty Square Vice President
Boston, MA
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
EQE International, Inc. 44 Montgomery Street Director
San Francisco, CA
Vista Information 5060 Shoreham Place Director
Solutions, Inc. San Diego, CA
Business Backers 4225 Executive Sq. Director
Management Corp. La Jolla, CA
InsWeb Corporation 1875 S. Grant St. Director
San Mateo, CA
RewardsPlus of America Corp. 100 S. Charles St. Director
Baltimore, MD
James B. Stradtner Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
Century Merchant 300 East Lombard Street President
Bankers LLC Suite 610A
Baltimore, MD
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
Kentucky Home Mutual Louisville, KY Director
Insurance Co.
Montgomery Mutual Sandy Spring, MD Director
Insurance Co.
Legal Mutual Insurance Co. Baltimore, MD Director
Great Northwest Holding Baltimore, MD Director
Company, Inc.
Mastercare Cranford, NJ Director
National Healthcare 100 Woodbury Road Director
Resources, Inc. Woodbury, NY
American Direct 5 Waterside Crossing Director
Insurance Agency, Inc. Windsor, CT
CEM Associates, Inc. 1805 Highpoint Dr. Director
Naperville, IL
Frank R. Bazos Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
CCC Capital II, LLC One Liberty Square Managing
Boston, MA Member
ABN AMRO 280 South LaSalle St. Vice President
Chicago, Illinois
TA Associates 125 High Street Director of
Boston, MA Business
Development
Ivan E. Brown Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
Business Backers 4225 Executive Sq. Director
Management Corp. La Jolla, CA
Davis R. Fulkerson Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
CCP Capital II, LLC One Liberty Square Managing
Boston, MA Member
Automation Solutions, Inc. 1890 W. 4000 So. Director
Roy, Utah
CEM Associates, Inc. 1805 Highpoint Dr. Director
Naperville, IL
RewardsPlus of 100 S. Charles St. Director
America, Inc. Baltimore, MD
John L. Casey Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
Dowling & Partners 36 Trumbull Street Senior
Securities LLC Hartford, CT Analyst
Alexander L. Thorndike Managing Director Century Capital One Liberty Square Managing
Management, Inc. Boston, MA Director
William Blair and 222 West Adams Street Analyst
Company LLC Chicago, IL
</TABLE>
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All applicable accounts, books and documents required to be maintained by the
Trust by Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are in the possession and custody of the Trust, One
Liberty Square, Boston, Massachusetts 02109 and/or its custodian, State Street
Bank and Trust Company, One Heritage Drive, North Quincy, Massachusetts, 02171,
and/or its principal transfer agent and dividend paying agent, Boston Financial
Data Services, Two Heritage Drive, North Quincy, Massachusetts, 02171 and/or its
limited purpose co-transfer agent, Charles Schwab Trust Company ("CSTC"), 101
Montgomery Street, San Francisco, CA, 94104, and 320 Springside Drive, Suite
350, Akron, OH, 44333. Boston Financial Data Services, as the Trust's principal
transfer agent, maintains shareholder records with the exception of any
concerning certain retirement plans as to which CSTC is trustee, which would be
maintained by CSTC. The Trust also maintains portfolio trading documents and
certain corporate documents. The custodian maintains the general ledger,
supporting accounting data and all other accounts, books and documents.
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Not applicable.
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, the Trust certifies that it meets all of the requirements for effectiveness
of this Seventy-Third Post-Effective Amendment to Registration Statement No.
2-11466 under Rule 485(b) under the Securities Act and has duly caused this
amendment to be signed on its behalf by the undersigned, duly authorized, in
this City of Boston and Commonwealth of Massachusetts on this 28th day of April,
1999.
CENTURY SHARES TRUST
By: /s/ Allan W. Fulkerson
---------------------------
Allan W. Fulkerson,
Chairman
Attest: /s/ Richard F. Cook, Jr.
-----------------------
Richard F. Cook, Jr.,
Secretary
Pursuant to the requirements of the Securities Act, this Seventy-Third
Post-Effective Amendment to Registration Statement No. 2-11466 has been signed
below by the following persons in the capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/s/ William O. Bailey Trustee April 28, 1999
- --------------------------
William O. Bailey
/s/ John E. Beard Trustee April 28, 1999
- --------------------------
John E. Beard
/s/ William W. Dyer, Jr. Trustee April 28, 1999
- --------------------------
William W. Dyer, Jr.
/s/ Allan W. Fulkerson Trustee and April 28, 1999
- --------------------------
Allan W. Fulkerson Chairman
/s/ Michael J. Poulos Trustee April 28, 1999
- --------------------------
Michael J. Poulos
/s/ Ernest E. Monrad Trustee April 28, 1999
- --------------------------
Ernest E. Monrad
Trustee April 28, 1999
- --------------------------
Jerry S. Rosenbloom
<PAGE>
EXHIBIT INDEX
23(a) Copy of Declaration of Trust. Filed herewith.
23(d) Copy of Investment Advisory and Management Services Agreement between
the Trust and Century Capital Management, Inc. Filed with
post-effective amendment No. 72 and incorporated herein by reference.
23(g) Copy of Custodian Contract between State Street Bank and Trust Company
and the Trust. Filed with post-effective amendment No. 72 and
incorporated herein by reference.
23(h) Copy of Transfer Agency and Service Agreement between State Street Bank
and Trust Company and the Trust. Filed with post-effective amendment
No. 72 and incorporated herein by reference.
23(i)(1) Opinion of counsel. Filed with post-effective amendment No. 71 and
incorporated herein by reference.
23(i)(2) Consent of Palmer & Dodge LLP. Filed herewith.
23(j) Consent of certified public accountants. Filed herewith.
23(n) Financial Data Schedule. Filed with post-effective amendment No. 72 and
incorporated herein by reference.
<PAGE>
Exhibit 23(a)
- --------------------------------------------------------------------------------
CENTURY SHARES TRUST
DECLARATION OF TRUST
DATED MARCH 1, 1928
* * *
AMENDED AS OF
JULY 1, 1994
- --------------------------------------------------------------------------------
<PAGE>
CENTURY SHARES TRUST
* * *
AN AGREEMENT AND DECLARATION OF TRUST, herein called Declaration of Trust,
made at Boston in the Commonwealth of Massachusetts on the first day of
March, 1928, by and between LOUIS CURTIS, JR., ROBERT H. GARDINER and
CHARLES P. CURTIS, JR., all of the said Boston, DONALD C. WATSON of
Weston, in the said Commonwealth, CHARLES H. DICKEY of the City and
State of New York and ELLERY S. JAMES of Easthampton, New York,
(hereinafter called the Trustees, which expression shall extend to and
include the Trustees for the time being of these presents, and the word
"Trustee" shall apply to any one of the said Trustees, where the
context so admits), and such persons as may from time to time become
shareholders of the Trust by purchasing or otherwise acquiring shares
issued by the Trustees as hereinafter authorized.
WHEREAS the principal object of the Trust hereby established is to
enable investors to acquire through purchase of the shares a security
of moderate price which will be readily marketable and which will
represent a properly balanced investment in a diversified list of
shares or securities of the kinds herein specified to an extent
ordinarily available only to investors of large means,
Now THEREFORE the Trustees hereby agree and declare that they will hold
all moneys and other property and effects at any time paid, transferred to or
vested in them for the purposes of these presents (hereinafter called the trust
property) in trust to hold, manage, and deal with the same and to receive the
income thereof and accretions thereto for the benefit of the beneficiaries of
the Trust for the time being (hereinafter called the Shareholders) according to
the number and kind of shares authorized to be issued hereunder held by them
respectively and with and subject to the powers and provisions hereinafter
contained concerning the same.
THE TRUSTEES
1. All the property and effects for the time being subject to any of the
trusts of these presents shall be transferred to and vested in the Trustees as
joint tenants.
2. The Trustees shall have powers subject to the limitations and conditions
of these presents from time to time:
(a) To invest and reinvest the trust property in shares of the capital
stock, or in securities convertible into or evidencing the right to purchase
shares of the capital stock, of (i) any insurance company, bank or trust company
of the United States of America or of any state therein or of any foreign
country, (ii) any insurance broker or other company engaged in providing
services to, or in a business closely related to, the insurance and banking
industries, (iii) any subsidiary of any company described in clauses (i) or
(ii), or (iv) any company whose principal business is the management through
effective control by direct stock ownership of one or more of the businesses
described in clauses (i) and (ii); and, when market or other conditions make it
appear to the Trustees advisable to do so for the purpose of preserving or
enhancing principal or income, to invest and reinvest in any debt instruments of
domestic governmental and non-governmental issuers which are of investment grade
at the time of purchase. No investment or reinvestment shall be deemed improper
because of its speculative character. No investment shall be made if such
investment at the time thereof would cause an amount greater in value than five
per cent of the value of the total assets of the Trust to be invested in the
securities of any one issuer. The foregoing limitation shall be construed in
accordance with the provisions of the Investment Company Act of 1940 and rules
issued thereunder, as such Act and rules may be in effect from time to time,
which are applicable in determining whether the Trust is a "diversified
company". If such Act and rules shall permit more than one method of valuation
or other construction for that purpose, the method of valuation or other
construction of the foregoing limitation shall be that which the Trustees elect
in accordance with such Act and rules. No investment shall be made if such
investment would cause more than ten percent of any class of securities of any
issuer to be held by the Trust.
(b) To sell, exchange or otherwise dispose of the trust property or any
part thereof free and clear from all the provisions of this trust, for such
consideration whether money, securities or other property as they may see fit,
and to reinvest the proceeds thereof, or any part thereof, and so to invest and
reinvest during the existence of the Trust.
(c) To pay any or all taxes or any liens or assessments of whatsoever
nature or kind, imposed upon or against the trust property or any part thereof
or imposed upon the Trustees hereunder.
(d) To pay dividends or make any distribution in the nature of a dividend
payment in any fiscal year or within a reasonable time thereafter among the
Shareholders according to the number of shares held by them respectively at such
times as the Trustees may fix but only from
(1) the net investment income, defined as the net income determined in
accordance with good accounting practice and not including profits or
losses realized upon the sale of securities or other properties, plus or
less amounts set apart from the sale and purchase prices of shares of the
Trust, as described below,
(2) an undistributed balance of profits, less losses, realized from the
sales of investments during such fiscal year and previous years, and
(3) profits, less losses, realized from the sales of investments during
the current or preceding fiscal year.
Upon any sale or purchase of shares the Trustees may set apart from the sale or
purchase price such amount as will make the net investment income accrued or
earned in the current fiscal year to the date of such sale or purchase per share
outstanding immediately after such sale or purchase the same as the net
investment income per share outstanding immediately before such sale or
purchase. Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation of net investment income and profits
on the books of the Trust, the Trustees shall have power in their discretion to
distribute in any fiscal year amounts sufficient, in the opinion of the
Trustees, to enable the Trust as a regulated investment company to reduce or
avoid liability for Federal income tax in respect of that year. The Trustees may
declare stock dividends in such form and make such adjustments on the books of
the Trust in connection therewith as they deem advisable. And the Trustees,
consistently with accepted principles of accounting, and with the express
provisions of this Agreement and Declaration of Trust, may credit receipts and
charge payments to income or otherwise as to them may seem proper. The
Shareholders, except as required by paragraph 13 hereof, shall have no right to
any distribution except when and as declared by the Trustees. If any
distribution in the nature of a dividend payment is made to Shareholders from
any source other than
(1) the accumulated undistributed net investment income, as defined in
this paragraph 2(d), or
(2) such net investment income of the current or preceding fiscal year;
such payment shall be accompanied by a written statement which adequately
discloses the source or sources of such payment and the basis of calculation
thereof.
(e) To borrow money for the purposes of the Trust with or without
collateral security, on such terms as the Trustees in their uncontrolled
discretion may deem desirable, and to give proper securities or evidences for
the moneys so borrowed, which may mature at a time or times beyond the possible
termination of this Trust or at any earlier time or times, and to pledge,
mortgage, charge or hypothecate, or otherwise encumber the trust property as
security for a loan or loans, provided however, that no borrowing shall be made
which will cause the outstanding indebtedness of the Trust to exceed ten per
cent of the gross assets (taken at market) or of the liquidating value of the
Trust, whichever is lower, and that no borrowing shall be made except as a
temporary measure, and provided further that the Trustees shall not pledge,
mortgage, charge, or hypothecate, or otherwise encumber the assets of the Trust
(taken at market) to an extent more than fifteen per cent of the gross assets of
the Trust (taken at market).
(f) To make or to refrain from making an agreement with the Commissioner of
Corporations and Taxation of the Commonwealth of Massachusetts relative to the
payment of taxes by the Trust, and if permitted by law to withdraw from any such
agreement and again from time to time enter into like agreements as the
interests of the Trust may in the opinion of the Trustees require.
(g) To direct the opening of bank accounts with any bank, private banker,
or trust company, subject to the draft or order of the Custodian.
(h) To engage in and to prosecute, compound, compromise, abandon, or
adjust, by arbitration, or otherwise, any actions, suits, proceedings, disputes,
claims, demands, and things relating to the trust property, and out of the trust
property to cause to be paid, or to satisfy any debts, claims, or expenses
incurred in connection therewith, including those of litigation, upon any
evidence that the Trustees may deem sufficient. The powers aforesaid are to
include any actions, suits, proceedings, disputes, claims, demands and things
relating to the trust property wherein the Trustees may be named individually,
but the subject matter of which arises by reason of the trust property and their
trusteeship thereof, but are not to include any action or claim arising out of
their own adjudicated breach of trust for which they are answerable or
accountable according to the terms of this instrument.
(i) To carry the investments of the Trust in the name of Trustees of
Century Shares Trust or in the name or names of their nominees or of the
Custodian or of its nominees without disclosing any Trust.
(j) To appoint officers of the Trust and employ such agents and employees
as they shall think proper to assist the Trustees in conducting the business of
the Trust without the Trustees being answerable for the acts and defaults of
such officers, agents or employees, but the Trustees shall not employ a Manager
of the Trust, nor an Investment Adviser as defined in the Investment Company Act
of 1940, unless such Investment Adviser is employed under a contract approved by
the vote of a majority of the outstanding shares and complying with the
requirements of Section 15(a) of the Investment Company Act of 1940.
(k) To enter into arrangements that the payment of any sum of money or the
performance of anything that shall have been agreed upon shall be a floating
charge upon the said undertaking and the real and personal property for the time
being subject to the trusts of these presents in such manner that the Trustees
notwithstanding such charge may continue to carry on the said trusts and deal
with the said real and personal property by way of sale, mortgage, charge, lease
or otherwise or making distributions thereof in accordance with the trusts
hereof, and that the Trustees shall not be liable for the payment of any such
sum of money or for damages for non-performance of anything that shall have been
agreed upon except out of the trust property and only so far as the same shall
be sufficient for the purpose, and that no Trustee shall be in any way liable in
respect thereof after he ceases to be a Trustee of these presents, and every
such floating charge shall rank pari passu with every other such floating charge
unless otherwise specially agreed. And any agreement entered into in pursuance
of these presents in the name of Century Shares Trust shall without any express
provisions to that effect operate as an arrangement with the Trustees for such a
floating charge as above mentioned, and words may be added to any document
containing or relating to any such agreement or any part thereof to the effect
that contracts made in that name operate as a floating charge created by the
Trustees upon all the property comprised in these presents as herein provided,
and that the Trustees are not liable upon any such contract except for the
application of such property in accordance with the provisions hereof and that
no liability attaches to the Shareholders.
(l) In all matters and respects to sell, convey, and generally to deal with
the trust property and to manage and conduct the Trust hereby created
(including, without limiting the generality of the foregoing, the giving or
furnishing of proxies for voting at meetings in respect of any shares of stock,
bonds, or other security at any time included in the trust estate), as fully as
if the Trustees were the absolute owners of the Trust property, and to execute
any and all instruments and to do any and all things incidental to said Trust
not inconsistent with the provisions hereof, the execution or performance of
which the Trustees may deem expedient.
But the Trustees shall not have any power or authority to borrow money on
the credit or on behalf of the Shareholders personally, or to make any contract
binding the Shareholders personally for repayment of any money raised by
mortgage, pledge, or charge in pursuance of the provisions hereof, or to make
any contract or incur any liability whatever on behalf of the Shareholders
binding them personally. And every contract or instrument made or executed by
the Trustees creating any obligation shall be upon the understanding that the
Trustees are not liable thereon except for the application of the trust property
in accordance with the provisions hereof and that no liability attaches to the
Shareholders. Nothing herein contained shall be deemed to constitute the
Trustees or the Shareholders partners, and it is expressly declared that a trust
and not a partnership is hereby created.
(m) The Trustees shall not make loans to persons except at times when
market or other conditions make it appear to the Trustees necessary to do so in
order to preserve or enhance principal or income, and such loans shall be
confined to loans secured by collateral which in the opinion of the Trustees is
adequate security therefor. Loans shall not be made in excess of twenty-five per
cent of the gross assets of the Trust taken at cost. No loans shall be made to
Trustees or officers of the Trust, nor to the Underwriter or to officers or
directors of the Underwriter of the Trust. This paragraph 2(m) shall not be
deemed to impose any limitation on the power of the Trustees to invest cash
balances in commercial paper, domestic or foreign certificates of deposit or
time deposits, overnight funds use arrangements, bank acceptances and repurchase
obligations, U.S. treasury bills, money market funds and accounts and any other
cash equivalents which may from time to time be available to provide a return on
such cash balances.
(n) The Trustees shall not purchase or retain in the Trust any securities
issued by any issuer if any officer or Trustee of the Trust owns beneficially
more than one-half of one per cent of the shares or securities or both (all
taken at market value), of such issuer, and such persons owning more than
one-half of one per cent of such shares or securities together own beneficially
more than five per cent of such shares or securities or both (all taken at
market value).
(o) The Trustees shall, so far as they are in control of the situation,
prevent each officer and Trustee of the Trust, each officer and director of the
Underwriter of the Trust, and such Underwriter from taking long or short
positions in the securities issued by the Trust, provided that the foregoing
(1) shall not prevent the Underwriter from purchasing from the Trust
shares of the Trust, or from maintaining a market for the shares of the
Trust or from purchasing from others shares of the Trust either as agent
for the Trust or as principal for its own account provided that if the
Underwriter so purchases shares as principal it shall agree with the Trust
that, promptly upon communication to it of a new liquidating value, it will
purchase from or sell to the Trust at the liquidating value on which its
transactions with others than the Trust were based the number of shares
required to balance such transactions, and will make no purchases from or
sales to the Trust for any other purpose, nor prevent any officer or
Trustee of the Trust from acting as the Underwriter or from having a
financial interest in the Underwriter, and
(2) shall not prevent the purchase of shares issued by the Trust by any
officer or Trustee of the Trust, or by any officer or director of the
Underwriter of the Trust, solely for investment purposes, at the price
available to the public at the time of such purchase.
(p) Except as above provided in paragraph 2(o) the Trustees and officers of
the Trust shall not deal with themselves nor with any person of whom they are
affiliated persons (as defined in the Investment Company Act of 1940) as
principal in making purchases and sales of securities or other property for the
account of the Trust. Any Trustee or officer or any such affiliated person may
act as broker for the Trust in the purchase and sale of securities for the Trust
provided any commissions charged therefor do not exceed customary brokerage
charges for such services, and may act as legal counsel, or in any like capacity
provided only customary fees are charged for services rendered to or for the
benefit of the Trust. Subject to such limitation as to fees nothing herein shall
prevent the employment of any Custodian, transfer agent, registrar, dividend
disbursing agent or auditor having a partner, officer or director who is an
officer or trustee of the Trust. No part of any such commissions or fees shall
be deemed to be remuneration or compensation within the meaning of Paragraph 4
hereof.
(q) The Trustees shall not invest any of the Trust property in the
securities of other investment companies, except by purchase in the open market
where no commission or profit to an Underwriter or dealer results from such
purchase other than the customary broker's commission.
(r) The Trustees shall not invest any funds of the Trust in the securities
of companies which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual enterprise if the company whose securities
are proposed as an investment for funds of the Trust has come into existence as
a result of a merger, consolidation, reorganization, or the purchase of
substantially all of the assets of such predecessor company or companies,
partnership or individual enterprise.
(s) The Trustees shall not have the power to act as underwriter of
securities.
(t) The Trustees shall not use the funds of the Trust for the purpose of
buying any securities for the portfolio on margin, nor shall they sell or
contract to sell any security which it does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to obtain
securities equivalent in kind and amount to the securities sold and, if such
right is conditional, the sale is made upon the same conditions.
3. The Trustees shall not have any power to engage in the purchase or sale
of real estate, commodities, or commodity contracts except such as may be
conveyed to them in connection with a merger, consolidation, reorganization, or
in satisfaction of a debt, or incidental to or as a result of the other
activities of the Trust. All real estate at any time hereafter acquired by or
conveyed to the Trustees for any of the purposes of the said Trusts shall be
held by the Trustees or Trustee for the time being of these presents and their
heirs and assigns upon trust to sell or convert the same with all the powers in
that behalf of an absolute owner and out of the proceeds of such sale or
conversion to pay the expenses incurred in such sale or conversion and to hold
the rest of the said proceeds and the net rents and profits of the said real
estate until the same shall be sold upon the trusts and subject to the powers
and provisions concerning the same contained in this indenture.
4. The Trustees shall have power to incur and pay any expenses which in the
opinion of the Trustees are necessary to carry out any of the purposes of this
Declaration of Trust, and to pay reasonable compensation from the funds of the
Trust to themselves as Trustees. The Trustees may reimburse themselves for
expenses reasonably incurred by themselves on behalf of the Trust.
5. The Trustees shall have power at any time or times to increase or reduce
the number of the Trustees and to accept the resignation of or by vote of a
majority of all of the Trustees remove any Trustee and to appoint any new or
additional Trustee or Trustees but the number of Trustees shall not be less than
three nor more than nine. Any Trustee hereunder may resign at any time by a
written notice to that effect given to the remaining Trustees. Upon the death,
resignation or removal of any Trustee, the remaining Trustee or Trustees shall
unless the number of Trustees is then reduced, fill such vacancy. Anything in
this paragraph to the contrary notwithstanding, the Trustees shall comply, with
reference to the appointment, resignation and removal of Trustees, with the
applicable provisions of all laws of the United States of America and of the
Commonwealth of Massachusetts governing such matters. As soon as any Trustee so
appointed and approved shall have accepted this trust, his acceptance shall be
deposited with the Custodian and thereupon title to the trust property shall
vest in such Trustee as joint tenant with the continuing Trustees without any
further act or conveyance.
6. The receipts of the Trustees or any of them or of the Custodian for
moneys or things paid or delivered to any of them shall be effectual discharges
to the persons paying or delivering the same and no person from whom the
Trustees or the Custodian shall receive any money, property or other credit
shall be required to see to the application thereof. And no purchaser or person
dealing with the Trustees shall be bound to ascertain or inquire as to the
existence or occurrence of any event or purpose in or for which a sale,
mortgage, pledge, or charge is herein authorized or directed, or otherwise as to
the purpose or regularity of any of the acts of the Trustees, purporting to be
done in pursuance of any of the provisions or powers herein contained or as to
the regularity of the removal, resignation, or appointment of any Trustee.
7. The Trustees and officers shall not be liable for anything done or
omitted by them in good faith, and each of them shall be answerable and
accountable only for his own acts, receipts, neglects, and willful defaults, and
not for those of the others or of any agent employed by them, nor for the acts,
receipts, neglects, willful defaults or solvency of any bank, trust company,
broker, or other person with whom or into whose hands any moneys or securities
may be deposited or come, nor for any defect in title of any property acquired,
nor for making or retaining any investment, nor for any loss unless it shall
happen through his own willful default, and they shall be entitled to indemnity
out of the trust premises against any liability incurred in the execution of the
terms or provisions hereof. The Trustees and officers shall be entitled to
advice of counsel at the expense of the Trust and shall not be liable for any
action taken or omitted in good faith on the advice of counsel. And no Trustee
however appointed shall be obliged to give any bond or surety or other security
for the performance of any of his duties in the said trusts, but no person shall
be appointed to fill any vacancy in the Board of Trustees unless he shall have
agreed in writing to be bound in all respects by this Declaration of Trust as it
may from time to time be amended, to the same extent as if he had been a Trustee
at the date of the execution hereof. Nothing herein shall protect any Trustee or
officer against any liability to the Trust or to its shareholders to which he
would otherwise be subject by reason of willful malfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
8. The Trustees shall be required to render an accounting to the
Shareholders semiannually, and such accounts shall be based at least annually on
an audit by an independent public accountant and shall conform with the
applicable provisions of all laws of the United States of America and the
Commonwealth of Massachusetts governing such matters.
9. The Trustees may act with or without a meeting, and by proxy given
within six months of the date of any action taken thereunder, and the action of
a majority of the Trustees shall be valid and binding as the action of the
Trustees and all leases, contracts, orders, and other documents so authorized,
except conveyances of lands, executed personally by any two of the Trustees or
by any Trustee and by any other officer of the Trust thereunto duly authorized
by the Trustees shall be valid and as effectual and binding as if executed by
all the Trustees. And any Trustee may by power of attorney empower any other
Trustee to execute in his name and on his behalf any and all documents,
including conveyances of lands, for any of the purposes of these presents
without being responsible for loss. The Trustees shall keep proper records of
their proceedings.
DURATION OF THE TRUST
10. The trusts contained in these presents shall continue without
limitation of time in such manner that the Trustees shall have all the powers
and discretions expressed to be given to them respectively by these presents,
and that no Shareholder shall be entitled to put an end to the same or to
require a division of the trust property or any part thereof except as required
in paragraph 13 hereof. The power, however, is hereby expressly vested in the
Trustees with the approval of the holders of a majority of the outstanding
shares to terminate this Trust at any time.
11. Upon termination of this Trust the Trustees
(a) with the consent of the holders of a majority of the shares, may convey
the trust property to new or other Trustees or to a corporation on first being
indemnified to their satisfaction against outstanding liabilities accrued or
contingent, and upon the execution of releases satisfactory to the Trustees may
distribute the net proceeds in kind at valuations fixed by the Trustees, among
the Shareholders ratably according to the number and kind of shares held by them
respectively, or may in their discretion, turn such proceeds received into money
for the purpose of such distribution, or may distribute part in kind and part in
money, or
(b) may sell and convert into money the whole of the trust property and
after payment of all proper charges and debts of the Trust, and upon receipt of
such releases and indemnity, if any, as the Trustees may deem necessary for
their protection, shall distribute the net proceeds among the Shareholders
ratably according to the number and kind of shares held by them respectively.
Upon any such final distribution the Trustees shall be discharged from any
and all further liabilities and duties hereunder and the right, title and
interest of all parties shall cease and be cancelled and discharged.
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS; INDEMNIFICATION
12. (a) No Shareholder shall be subject to any personal liability to any
person whatsoever in connection with trust property or the acts, obligations or
affairs of the Trust, unless the Shareholder's actions shall have created or
contributed to the creation of such liability, as determined by the Trustees
consistent with applicable law. No Trustee, officer, employee or agent of the
Trust shall be subject to any personal liability to any person in connection
with trust property or the affairs of the Trust, save only that arising from
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office, and all such persons shall look
solely to the trust property for satisfaction of claims of any nature arising in
connection with the affairs of the Trust.
(b) No Trustee, officer, employee or agent of the Trust, and no investment
adviser, administrator, custodian, transfer agent or other provider of services
to this Trust, shall be liable to the Trust, its Shareholders, or to any
Shareholder, Trustee, officer, employee or agent for any action or failure to
act (including the failure to compel in any way any former or acting Trustee to
redress any breach of trust), except upon a showing of bad faith, willful
misfeasance, gross negligence or reckless disregard of duties.
(c) Every person who is or was a Trustee, officer or employee of the Trust
and, if the Trustees in their discretion so resolve consistent with the
provisions of the Investment Company Act of 1940, any person rendering or having
rendered investment advisory, management, administrative or other services to
the Trustees or the Trust and every officer, director, trustee, shareholder,
employee and agent of any such person (each such person hereinafter referred to
as a "Covered Person") shall have a right to be indemnified by the Trust against
all liability and reasonable expenses incurred by him in connection with or
resulting from any claim, action, suit or proceeding in which he is or may
become involved as a party or otherwise by reason of his being or having been a
Covered Person, provided (1) said claim, action, suit or proceeding shall be
prosecuted to a final determination and he shall be vindicated on the merits, or
(2) in the absence of such final determination vindicating him on the merits, it
shall be determined by the Trustees or counsel, as below provided, that he acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Trust and that such indemnification is in the best
interests of the Trust and, with respect to any criminal action or proceeding,
he had no reasonable cause to believe his conduct was unlawful; said
determination to be made either by the Trustees by a majority vote of a quorum
consisting of disinterested Trustees, or, if such quorum is not obtainable or if
a quorum of disinterested Trustees so directs, by independent legal counsel in a
written opinion, in either case based upon a review of readily available facts
(as opposed to a full trial-type inquiry).
For purposes of the preceding paragraph:
(1) "liability and reasonable expenses" shall include, but not be
limited to, reasonable counsel fees and disbursements, amounts of any
judgment, fine or penalty, and reasonable amounts paid in settlement; (2)
"claim, action, suit or proceeding" shall include every such claim, action,
suit or proceeding, whether civil or criminal, derivative or otherwise,
administrative, judicial, or investigative and any appeal relating thereto,
and shall include any reasonable apprehension or threat of such a claim,
action, suit or proceeding; (3) a settlement, plea of nolo contendere,
consent judgment, adverse civil judgment, or conviction shall not of itself
create a presumption that the conduct of the person seeking indemnification
did not meet the standard of conduct set forth in the preceding paragraph.
Notwithstanding the foregoing, the following additional limitations shall
apply with respect to any action by or in the right of the Trust; (1) no
indemnification shall be made in respect of any claim, issue or matter as to
which the Covered Person shall have been adjudged to be liable for gross
negligence or misconduct in the performance of his duty to the Trust unless the
court which made such a finding or any other court of equity in the county where
the Trust has its principal office determines that, despite the adjudication of
liability, such Covered Person is fairly and reasonably entitled to indemnity
for some or all of his expenses; and (2) indemnification in such case shall
extend only to disbursements, and shall not include judgments or fines.
The right of indemnification shall extend to the legal representative and
heirs of any Covered Person otherwise entitled to indemnification. If a Covered
Person meets the requirements of this paragraph 12 with respect to some matters
in a claim, action, suit or proceeding, but not with respect to others, he shall
be entitled to indemnification as to the former. Expenses incurred in defending
an action, suit or proceeding may be paid by the Trust in advance of the final
disposition of such action, suit or proceeding as authorized by the Trustees in
the specific case either upon receipt of an undertaking satisfactory to the
Trustees by the Covered Person to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified by the Trust as authorized
in this paragraph, or, if the Trust is at the time of such advance insured
against losses arising by reason of the advance.
This paragraph 12 shall not exclude any other rights of indemnification or
other rights to which any Covered Person may be entitled to by contract or as a
matter of law.
SHARES AND SHAREHOLDERS
13. The beneficial interest of the Shareholders hereunder shall be
represented by shares and fractions of shares (herein collectively referred to
as shares). Each share shall have a par value of one dollar each. All shares
shall be of the same class and each share shall be equal to every other share,
but the Trustees shall have the authority from time to time to divide the class
of shares into two or more series (hereinafter referred to as series) of shares
as they deem necessary or desirable, to establish and designate such series, and
to fix and determine the relative rights and preferences as between the
different series of shares as to dividends and other distributions and on
liquidation or on termination of the Trust, sinking or purchase fund provisions,
conversion rights, manner of determining Trustee remuneration with respect to
such series and conditions under which the several series shall have separate
voting rights or no voting rights. Except as aforesaid, all shares of the
different series shall be identical. All references to shares in the Declaration
of Trust shall be deemed to be to shares of any or all series, as the context
may require.
If the Trustees shall divide the shares of the Trust into two or more
series, the following provisions shall be applicable:
A. The number of authorized shares and the number of shares of each series
that may be issued shall be unlimited. The Trustees may classify or reclassify
any unissued shares or any shares previously issued and reacquired of any series
into one or more series that may be established and designated from time to
time. The Trustees may hold as treasury shares (of the same or some other
series), reissue for such consideration and on such terms as they may determine,
or cancel any shares of any series reacquired by the Trust at their discretion
from time to time.
B. The power of the Trustees to invest and reinvest the trust property
shall be governed by paragraph 2 (a) of this Trust with respect to any one or
more series which represents the interests in the assets of the Trust
immediately prior to the establishment of two or more series and the power of
the Trustees to invest and reinvest assets applicable to any other series shall
be as set forth in the instrument of the Trustees establishing such series which
is hereinafter described.
C. All consideration received by the Trust for the issue or sale of shares
of a particular series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
derived from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever form the
same may be, shall irrevocably belong to that series for all purposes, subject
only to the rights of creditors, and shall be so recorded upon the books of
account of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series, the Trustees shall allocate
them among any one or more of the series established and designated from time to
time in such manner and on such basis as they, in their sole discretion, deem
fair and equitable. Each such allocation by the Trustees shall be conclusive and
binding upon the shareholders of all series for all purposes.
D. The assets belonging to each particular series shall be charged with the
liabilities of the Trust in respect of that series and all expenses, costs,
charges and reserves attributable to that series, and any general liabilities,
expenses, costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular series shall be allocated and
charged by the Trustees to and among any one or more of the series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all series for all purposes. The
Trustees shall have full discretion, to the extent not inconsistent with the
Investment Company Act of 1940, to determine which items shall be treated as
income and which items as capital; and each such determination and allocation
shall be conclusive and binding upon the shareholders.
E. The power of the Trustees to pay dividends and make distributions shall
be governed by paragraph 2 (d) of this Trust with respect to any one or more
series which represents the interests in the assets of the Trust immediately
prior to the establishment of two or more series. With respect to any other
series, dividends and distributions on shares of a particular series may be paid
with such frequency as the Trustees may determine, which may be daily or
otherwise, pursuant to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine, to the holders of shares of
that series, from such of the income and capital gains, accrued or realized,
from the assets belonging to that series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that series. All
dividends and distributions on shares of a particular series shall be
distributed pro rata to the holders of that series in proportion to the number
of shares of that series held by such holders at the date and time of record
established for the payment of such dividends or distributions.
The establishment and designation of any series of shares shall be
effective upon the execution by a majority of the then Trustees of an instrument
setting forth such establishment and designation and the relative rights and
preferences of such series, or as otherwise provided in such instrument. At any
time that there are no shares outstanding of any particular series previously
established and designated, the Trustees may by an instrument executed by a
majority of their number abolish that series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration of Trust.
During each fiscal year or within a reasonable time thereafter the Trustees
shall distribute among the Shareholders according to the number of shares held
by them respectively the net investment income of such year as defined in
paragraph 2(d) hereof, and may make additional distributions from other sources
as provided in said paragraph 2(d).
The number of shares shall not be limited and shares may be issued from
time to time by the Trustees to such persons, firms, corporations or
associations and in such amounts and for such consideration as the Trustees may
determine, except that if issued for cash no shares shall be sold at less per
share than the liquidating value of a share, as defined in this paragraph 13, in
effect at the time of sale or contract to sell, or if shares are issued for
property the property received per share therefor shall in the opinion of the
Trustees be of a value not less than the said liquidating value of a share. The
Trustees may issue shares of the Trust to the shareholders pro rata according to
the number of shares held by each, without the payment of any consideration. The
shares issued by the Trustees hereunder or the proceeds thereof may be applied
by them to the payment or discharge of any expenses or obligations incurred or
assumed by them in connection with the acquisition of trust property or to any
object deemed by them to be beneficial to the Trust.
The Trustees may buy and retire from time to time shares of the Trust in
such amounts and at such prices as may seem to them desirable, provided that the
price paid for any share shall in no event exceed the liquidating value thereof
as defined in this paragraph 13 in effect at the time of the purchase or
contract to purchase. The Trustees shall be required to buy and pay in cash for
shares of the Trust tendered to it for purchase at a price equal to the
liquidating value at the close of business on the day on which shares are
tendered for redemption less, if the Trustees shall decide, an amount not
exceeding 1 per cent of such liquidating value; provided, however, that the
Trustees may suspend the right of redemption or postpone the date of payment
subject to the conditions enumerated below, in which event the liquidating value
for the purpose of redemption shall be the liquidating value at the close of
business on the day on which such suspension is removed; and provided further,
that if the Trustees determine, which determination shall be conclusive, that
conditions exist which make payment wholly in cash unwise or undesirable, the
Trust may make payment wholly or partly in securities or other assets belonging
to the series of which the shares being redeemed are part, at the value of such
securities or assets used in such determination of liquidating value. The
conditions referred to are as follows:
(1) the Trustees may not suspend the right of redemption or postpone
the date of payment or satisfaction upon redemption for more than seven
days after the day upon which the shares are tendered except (a) for any
period during which the New York Stock Exchange is closed (other than
customary week-end and holiday closings) or during which trading on the New
York Stock Exchange is restricted; (b) for any period during which an
emergency exists as a result of which disposal by the Trust of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Trust fairly to determine the value of its net assets;
(c) for such other periods as the Securities and Exchange Commission may by
order permit for the protection of security holders of the Trust.
(2) that the Trustees be advised by the Transfer Agent, Registrar or
Custodian or by some bank, private banker or trust company acceptable to
the Trustees that certificates for the shares so tendered properly endorsed
in blank for transfer have been deposited with such Transfer Agent,
Registrar, Custodian, bank, private banker or trust company, together with
irrevocable instructions in writing directing the delivery of the said
certificates to the Trustees upon payment therefor at the price so
determined. Shares purchased shall be cancelled.
As used in this Declaration of Trust, the "liquidating value" of the Trust
shall mean the "current net assets" of the Trust and the "liquidating value" of
a share of the Trust shall mean the "current net asset value" of a share of the
Trust as those terms are used in the Investment Company Act of 1940 and rules
issued thereunder, as such Act and rules may be in effect from time to time.
Subject to any conflicting requirements of such Act and rules, which
requirements shall control, the liquidating value of the Trust shall be the sum,
which, in the opinion of the Trustees, would be payable to the shareholders at
the time of determination if the Trust were then terminated, with or without, as
the Trustees shall deem appropriate, such allowance for expenses and taxes as
the Trustees determine would be incurred if the Trust were then liquidated.
Liquidating value shall be computed according to accepted principles of
accounting, valuing the investments of the Trust at their quoted bid prices as
determined by the Trustees, but, if, in the opinion of the Trustees, any
investment shall not have an active market or the quoted bid price does not
represent a fair price for such investment, the Trustees may determine the price
to be used in valuing such investment. The liquidating value of a share of the
Trust shall mean the liquidating value of the Trust divided by the number of
outstanding shares.
Subject to any conflicting requirement of the Investment Company Act of
1940, as amended and rules issued thereunder, which requirement shall control,
the liquidating value of shares of the Trust shall be determined by the Trustees
or an agent designated by them on each day during which the New York Stock
Exchange is open for trading on such Exchange, and may be determined at such
other times as the Trustees consider appropriate. The time as of which or the
period of time for which a liquidating value shall be effective with respect to
the issue, sale, purchase or redemption of shares of the Trust or with respect
to any other transaction or for any other purpose shall be determined in
accordance with the requirements of the Investment Company Act of 1940, as
amended, and rules issued thereunder, as such Act and rules may be in effect
from time to time. To the extent that there are no such requirements or that
such requirements permit alternatives, such time or period of time shall be
determined by the Trustees, subject to any provision of this Declaration of
Trust requiring effectiveness as of a particular time or for a particular period
of time.
Shares issued hereunder need not be offered to the holders of the
outstanding shares.
14. A register or registers shall be kept by or under the direction of the
Trustees which shall contain the names and addresses of the Shareholders and the
number of shares held by them respectively and a like record of all future
transfers thereof. No shareholder shall be entitled to have any notice given to
him as herein provided until he has given his address to the Trustees to be
entered in the register.
15. The Trustees shall have power but shall not be required to employ one
or more Transfer Agents or Registrars or both, which shall in each case be a
bank, private banker or trust company, to keep the register of its shares and
Shareholders. All transfers of shares shall be recorded by a Transfer Agent or
person keeping such register and all certificates for shares issued by the
Trustees shall be registered by a Registrar, if there shall be one, and
otherwise by a Transfer Agent or person keeping such register to the persons
entitled to the same after transfer of such shares or otherwise.
16. Every Shareholder shall be entitled to receive from the Trustees a
certificate signed by one of the Trustees in such form as the Trustees shall
approve specifying the number of shares of any series held by him, and every
certificate of shares shall be countersigned by the Transfer Agent, if any, and
shall have on it a certificate of the Registrar, if any, that it has been so
registered, and in case there shall at any time be a Transfer Agent but no
Registrar, the Transfer Agent shall certify to such registration. The signature
of a Trustee may be by facsimile if the certificate is countersigned by a
Transfer Agent. Any Transfer Agent or any Registrar may be removed by the
Trustees or may resign at any time by a writing to that effect delivered to the
Trustees, which shall take effect upon such delivery or at the time specified in
the writing, and thereupon the Trustees may appoint a new Transfer Agent or
Registrar having the qualifications hereinbefore required.
17. Every transfer of any share (otherwise than by operation of law) shall
be in writing under the hand of the transferor and, upon delivery thereof with
the existing certificate for such share to a Transfer Agent or to the person
keeping the register of the shares and Shareholders, shall be recorded in the
register, and a new certificate therefor shall be issued in the name of the
transferee, and in case of a transfer of only a part of the shares mentioned in
any certificate a new certificate for the residue thereof shall be issued in the
name of the transferor. Until the transfer shall be so delivered and recorded,
the transferor shall be deemed to be the holder of the share or shares comprised
therein for all the purposes hereof, and the Trustees shall not be affected by
any notice of the transfer. The register may in the discretion of the Trustees
be closed for a period not exceeding 30 days (during which no transfers shall be
registered) prior to the making of any distribution. Except as herein provided,
the Trustees shall not impose any restrictions upon the transfer of the shares
of the Trust.
18. In case of the reported loss, mutilation or destruction of any
certificate for shares, the Trustees may under such terms as they deem
expedient, issue a new certificate or certificates in place of the one so lost,
mutilated or destroyed.
19. Any person becoming entitled to any share in consequence of the death,
bankruptcy, or insolvency of any Shareholder or in any way other than by a
transfer in accordance with paragraph 17 hereof shall be recorded in the
register as the holder of the said share and receive a new certificate for the
same upon production of the proper evidence thereof and delivery of the existing
certificate to the Trustees or their Transfer Agent or Registrar.
20. Two or more persons holding any share shall be joint tenants of the
entire interest therein, and no entry shall be made in the register or in any
certificate that any person is entitled to any future, limited, or contingent
interest in any share. But any person registered as the holder of any share may,
subject to the provisions hereinafter contained, be described therein as a
trustee of any kind, and any words may be added to the description to identify
the trust.
21. The Trustees shall not, nor shall any Transfer Agent or any Registrar
or other agent of the Trustees, be bound to take notice or be affected by notice
of any trust whether express, implied, or constructive or any charge or equity
to which any of the said shares or the interests of any of the Shareholders in
the trusts of these presents may be subject, or to ascertain or inquire whether
any sale or transfer of any such share or interest by any such Shareholder or
his personal representatives is authorized by such trust, charge, or equity or
to recognize any person as having any interest therein except the persons
registered as such Shareholders. And the receipt of the person in whose name any
share is registered or, if such share is registered in the names of more than
one person, the receipt of any one of such persons shall be a sufficient
discharge for all distributions and other moneys payable in respect of such
share and from all liability to see to the application thereof.
22. Every notice to the Shareholders required or provided for in these
presents may be given to them personally or by sending it to them through the
postoffice in a prepaid letter addressed to each of them respectively at his
address specified in the register and shall be deemed to have been given at the
time when it was posted. But in respect of any share held jointly by several
persons notice so given to anyone of such persons shall be sufficient notice to
all of them. And any notice so sent to the registered address of any Shareholder
shall be deemed to have been duly sent in respect of any such share whether held
by him solely or jointly with others notwithstanding he be then deceased and
whether the Trustees or any person sending such notice have knowledge or not of
his death until some other person or persons shall be registered as holders. And
the certificate of the person or persons giving such notice shall be sufficient
evidence thereof and shall protect all persons acting in good faith in reliance
on such certificate.
22A. The Trustees may fix in advance a time, which shall be not more than
sixty days before the date of any meeting of shareholders or the date for the
payment of any dividend or the making of any distribution to shareholders or the
last day on which the consent or dissent of shareholders may be effectively
expressed for any purpose, as the record date for determining the shareholders
having the right to notice of and to vote at such meeting and any adjournment
thereof or the right to receive such dividend or distribution or the right to
give such consent or dissent, and in such case only shareholders of record on
such record date shall have such right notwithstanding the sale or redemption of
shares after the record date; or without fixing such record date the Trustees
may for any of such purposes close the transfer books for all or any part of
such period.
THE CUSTODIAN
23. The Trustees shall at all times, except as hereinafter provided, employ
a Custodian which shall be a bank or trust company (which may include a firm of
private bankers subject to examination or regulation by federal or state
authorities of the United States) having an aggregate capital, surplus and
undivided profits as shown by its last published report of at least $2,000,000.
The Trustees shall keep this Declaration of Trust and all amendments thereto,
and all of the securities and other intangible properties and moneys of the
Trust at all times in the possession of the Custodian unless no such Custodian
can be found who is willing to act and unless the holders of a majority of the
shares shall have consented in writing to the Trustees functioning without a
Custodian. Such Custodian shall be employed under a contract providing that the
Custodian shall among other things have authority as Agent of the Trustees, but
subject to the limitations of this Paragraph 23:
(1) to hold the securities owned by the Trust and deliver the same upon
written orders of the Trust;
(2) to receive and receipt for any funds of the Trust representing the
proceeds from sales of securities owned by the Trust and of shares issued
by the Trust and payments of principal upon securities owned by the Trust
and capital distributions in respect of shares owned by the Trust, and to
deposit the same in its own banking department, or elsewhere, as the Trust
may direct, in any bank or trust company organized under the laws of the
United States of America or of any state thereof approved by the Custodian,
provided that all such deposits shall be subject only to the draft or order
of the Custodian;
(3) to disburse such funds upon orders of the Trust.
The Trust will cause to be delivered to the Custodian all securities owned
by the Trust or to which it may become entitled, and will order the same to be
delivered by the Custodian only in completion of a sale, exchange, redemption,
retirement, conversion, transfer, pledge, or other disposition thereof for any
purpose of the Trust, against receipt by the Custodian of the consideration
therefor or a certificate of deposit, or a receipt of an issuer or of its
transfer agent or of a broker in accordance with the "street delivery" custom,
or other proper receipt therefor, all as the Trustees may generally or from time
to time require or approve, or to a successor Custodian, and the Trust will
cause all funds of the character described above to be paid to the Custodian,
and will order the same disbursed only against delivery of shares of the Trust
repurchased or of investments purchased, or for subscriptions or other such
payments relating to investments of the Trust, or in payment of expenses and
liabilities of the Trust, Trustees' remuneration, and distribution to
shareholders; or to a successor Custodian.
Subject as aforesaid and to the limitation hereinafter contained the
Trustees shall at all times reserve the power to terminate any such contract and
to require the delivery to them of the documents, securities, properties and
moneys belonging to the Trust. The limitation is that the Trustees shall not
exercise their power to require such delivery unless the holders of a majority
of the shares shall have consented in writing to the Trustees functioning
without a Custodian.
A certificate signed by a majority of the Trustees reciting that any
consent required by this paragraph 23 has been received shall be deposited with
the Custodian and shall be conclusive evidence of such fact.
THE UNDERWRITER
24. The Trustees may in their discretion from time to time enter into a
contract with any person as an Underwriter, providing for public offering and
sale of the shares of the Trust. By such contract, the Trustees may either agree
to sell the shares to the Underwriter or appoint the Underwriter to be their
agent in a public offering and sale of the shares, and such contract may be
either exclusive or not exclusive and may be upon such terms and conditions as
the Trustees may in their discretion determine, subject, however, to all
applicable provisions of the laws of the United States of America and of the
Commonwealth of Massachusetts. Such contract shall require the Underwriter to
bear all expenses (a) of printing and distributing any prospectus other than the
expense of preparing and setting up in type and distributing to Shareholders of
the Trust any prospectus or report or other communication required under Federal
law to be filed with the Securities and Exchange Commission or to be distributed
to Shareholders, (b) of preparing, printing and distributing any other
literature used by the Underwriter or dealers in connection with the offering of
the shares for sale to the public, (c) any expense of advertising in connection
with such offering, and (d) the expenses (other than auditing expense) of
qualification of the shares for sale, and, if necessary or advisable in
connection therewith of qualifying the Trust as a dealer or broker, in such
states or other jurisdictions as shall be selected by the Underwriter and the
fees payable to each such state or other jurisdiction for continuing the
qualification therein until the Underwriter notifies the Trust that it does not
wish such qualification continued; provided, however, that to the extent that
qualification of a particular number of shares for sale in a state or other
jurisdiction shall be required in connection with a transaction with respect to
which the Underwriter receives no compensation, either as principal or agent,
the expense of such qualification may be borne by the Trust.
The public offering price of a share shall be the liquidating value thereof
as defined in paragraph 13 hereof plus a sales charge, if any, not to exceed
nine per cent of the offering price which charge may be reduced or eliminated
with respect to particular transactions or types of transactions to the extent
permitted by the Investment Company Act of 1940 and rules thereunder.
MISCELLANEOUS PROVISIONS
25. The Trust provided for in these presents may be designated for all the
purposes thereof as Century Shares Trust, and under that name so far as
practicable all the affairs of the Trust may be conducted by the Trustees. The
Trustees may be referred to as Trustees of Century Shares Trust.
26. In the construction of these presents words in the singular number
include the plural number and vice versa, and words denoting males include
females, and the word person or persons may include firms, associations, trusts,
and corporations and the term Trust shall mean Century Shares Trust unless a
contrary intention is to be inferred from the subject-matter or context.
27. This instrument is executed and delivered by the Trustees in the
Commonwealth of Massachusetts and with reference to the laws thereof, all rights
and duties in relation thereto and the construction and effect thereof shall be
subject to and be construed according to the laws of said Commonwealth.
28. The Transfer Agent or the Registrar shall not have any duties or
responsibilities from, arising out, or on account of any of the terms or
provisions of these presents except as herein expressly provided, and shall not
be responsible or liable in any manner in acting as Transfer Agent or Registrar
in signing and delivering the share certificates hereinbefore provided for,
except for its own neglect or default. The Transfer Agent, or the Registrar,
shall be entitled to advice of counsel on any matters connected with its duties
or obligations hereunder, and shall be fully protected in relying and acting
upon advice so given to it. The Transfer Agent or the Registrar shall be held
harmless and indemnified against all loss, cost, damage and expense which it may
suffer or incur in connection with or incident to the performance of its duties
as Transfer Agent or Registrar except such as may arise because of its own
willful default or neglect and shall be paid reasonable compensation for
services rendered by it.
29. The Trustees may amend this Declaration of Trust with the consent of
the holders of a majority of the shares, except as otherwise provided to the
contrary in paragraph 13 hereof, and if the shares of the Trust shall have been
divided into series and an amendment requires the approval of the holders of a
majority of one or more series under the Investment Company Act of 1940, with
the consent of the holders of a majority of such series. An instrument setting
forth any amendment together with a certificate signed by a majority of the
Trustees reciting that such amendment has been duly adopted by the Trustees and
that the consent of the holders of any required majority of the shares has been
received shall be deposited with the Custodian, and shall be conclusive evidence
of such facts. Within three months thereafter, notification thereof shall be
given to the Shareholders.
30. This instrument is executed in two counterparts, each of which shall be
deemed an original.
<PAGE>
IN WITNESS WHEREOF the parties hereto have set their hands and seals at
Boston in the Commonwealth of Massachusetts the day and year first above
written.
LOUIS CURTIS, JR. ( SEAL )
ROBERT H. GARDINER ( SEAL )
CHARLES P. CURTIS, JR. ( SEAL )
DONALD C. WATSON ( SEAL )
CHARLES D. DICKEY ( SEAL )
ELLERY S. JAMES ( SEAL )
The Trustees on July 1, 1994 were as follows:
ALLAN W. FULKERSON
WILLIAM O. BAILEY
JOHN E. BEARD
ERNEST E. MONRAD
WILLIAM W. DYER, JR.
<PAGE>
EXHIBIT 99.23(i)(2)
PALMER & DODGE LLP
ONE BEACON STREET, BOSTON, MA 02108-3190
TELEPHONE: (617) 573-0100 FACSIMILE: (617) 227-4420
April 28, 1999
Century Shares Trust
One Liberty Square
Boston, Massachusetts 02109
We hereby consent to the incorporation by reference into Post-Effective
Amendment No. 73 to the Registration Statement on Form N-1A of the Trust (File
No. 811-00019) of our opinion filed with Post-Effective Amendment No. 71, and to
any reference to our firm in such Registration Statement.
Very truly yours,
/s/ PALMER & DODGE LLP
PALMER & DODGE LLP
<PAGE>
EXHIBIT 99.23(j)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in Post-Effective Amendment No. 73 to Registration
Statement No. 2-11466 of Century Shares Trust of our report dated February 5,
1999, included in the Statement of Additional Information and to the references
to us under the heading "Financial Highlights" appearing in the Prospectus and
the heading "Financial Statements" appearing in the Statement of Additional
Information, which are included in such Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Boston, Massachusetts
April 29, 1999
