<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. 72 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 22
(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)
____ on April 30, 1998, pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
X on April 30, 1999, 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.
<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
looks for 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 are described in more
detail in "Investment Strategies and Related Risks" below.
<PAGE>
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 closely related to, insurance
companies and banks.
The Adviser purchases securities for the Trust primarily for investment, rather
than with a view to trading profits. Accordingly, the Trust expects to continue
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.
The Trust invests in major insurance and banking companies in order to
participate in the basic growth of those sectors. 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.
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 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 changes in interest rates
o pricing of products
o claims activity
o marketing competition
o general economic conditions
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 be paid by a check drawn on
the Boston bank account of the Trust. This check will normally be sent to you
not later than seven days from the effective redemption date. The Trust may, in
the exercise of its sole discretion, make payment by an alternative method.
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, and must make payments at
least annually.
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)
------ ------ ------ ------ ------
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 002-11466
<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 herewith as Exhibit 23(d).
(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 herewith as
Exhibit 23(g).
(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 herewith as Exhibit 23(h).
(i) Opinion of counsel as to legality of shares being registered and
consent to the use thereof, filed as Exhibit 10 with the Seventy-First
Post Effective Amendment to Registration Statement No. 2-11466, is
incorporated herein by reference.
(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
herewith as Exhibit 23(n).
(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
Incas, 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, Corp. 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
</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-Second Post-Effective Amendment to Registration Statement No.
2-11466 under Rule 485(a) under the Securities Act and has duly caused this
Seventy-Second Post-Effective Amendment to Registration Statement No. 2-11466 to
be signed on its behalf by the undersigned, duly authorized, in this City of
Boston, and Commonwealth of Massachusetts on this 16th day of February, 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-Second
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
- --------- ----- ----
Trustee February __, 1999
- --------------------------
William O. Bailey
/s/ John E. Beard Trustee February 16, 1999
- --------------------------
John E. Beard
/s/ William W. Dyer, Jr. Trustee February 16, 1999
- --------------------------
William W. Dyer, Jr.
/s/ Allan W. Fulkerson Trustee and February 16, 1999
- --------------------------
Allan W. Fulkerson Chairman
/s/ Michael J. Poulos Trustee February 16, 1999
- --------------------------
Michael J. Poulos
/s/ Ernest E. Monrad Trustee February 16, 1999
- --------------------------
Ernest E. Monrad
/s/ Jerry S. Rosenbloom Trustee February 17, 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 herewith.
23(g) Copy of Custodian Contract between State Street Bank and Trust Company
and the Trust. Filed herewith.
23(h) Copy of Transfer Agency and Service Agreement between State Street Bank
and Trust Company and the Trust. Filed herewith.
23(i) Opinion of counsel and consent. Incorporated herein by reference.
23(j) Consent of certified public accountants. Filed herewith.
23(n) Financial Data Schedule. Filed herewith.
<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.
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 23(d)
INVESTMENT ADVISORY AND MANAGEMENT SERVICES AGREEMENT
AGREEMENT made as of July 1, 1994 by and between Century Shares Trust,
a Massachusetts trust (the "Trust") and Century Capital Management, Inc., a
Massachusetts corporation (the "Adviser").
RECITALS
WHEREAS, the Trustees of the Trust (the "Trustees") desire to employ an
investment adviser and management services provider for the Trust, and the
Adviser desires to be so employed;
NOW THEREFORE, the parties hereto intending to be legally bound hereby
agree as follows:
1. Services Undertaken By Adviser.
(a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser to the Trust and shall, subject to the supervision of the
Trustees, invest and reinvest the Trust's property and otherwise direct the
investments of the Trust in accordance with the investment objectives, policies
and limitations as provided in the Trust's Declaration of Trust, Prospectus or
other governing instruments, as amended from time to time, the Investment
Company Act of 1940 and rules thereunder, as amended from time to time (the
"1940 Act"), and such other limitations as the Trust may impose by notice in
writing to the Adviser. The Adviser is authorized, in its discretion and without
prior consultation with the Trust, (i) to buy, sell, exchange, convert, lend and
otherwise trade in any stocks, bonds, convertible instruments, and other
securities, assets and investment instruments on behalf of the Trust and (ii) to
place orders and negotiate the commissions (if any) for the execution of
transactions in securities with or through such brokers, dealers, underwriters,
agents, issuers or others as the Adviser may select. The investment policies and
all other actions of the Trust are and shall at all times be subject to the
control and direction of the Trustees. The Adviser shall furnish such reports,
evaluations, information or analyses regarding investment advisory matters to
the Trust as the Trustees may request from time to time or as the Adviser may
deem to be desirable. The Adviser shall make recommendations to the Trustees as
to policies regarding the Trust and shall carry out such policies as are adopted
by the Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance of) the management and administrative services necessary for the
operation of the Trust. The Adviser shall, subject to the supervision of the
Trustees, perform various services for the Trust, including but not limited to:
(i) providing the Trust with office space, equipment and facilities; (ii) on
behalf of the Trust, supervising relations with, and monitoring the performance
of, custodians, depositories, pricing agents, transfer agents, accountants,
attorneys, underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Trust's existence and its records;
and (vi) during such times as shares are publicly offered, maintaining the
registration and qualification of the Trust's shares under federal and state
securities laws.
(c) Other Services and Undertakings. The Adviser shall furnish such
other services as the Adviser shall from time to time determine to be necessary
or useful to perform its obligations under this Agreement. The Adviser shall
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust.
The Adviser shall pay the salaries of all officers (if any) of the Trust, of all
Trustees who are employees of the Adviser and of all personnel of the Trust (if
any) or the Adviser performing services relating to research, statistical and
investment activities for the Trust. The Adviser shall make all payments coming
due to Allan W. Fulkerson and William W. Dyer, Jr. during the term of this
Agreement as supplemental payments after termination of employment by the Trust
or the Adviser as a result of early or normal retirement, death or disability
pursuant to undertakings of the Trust established by votes of the Trustees
passed on December 10, 1990.
2. Interested Persons. Status. It is understood that the Trustees,
officers, employees and shareholders of the Trust are or may become interested
in the Adviser as directors, officers, employees, stockholders or otherwise, and
that directors, officers, employees and stockholders of the Adviser are or may
become similarly interested in the Trust, and that the Adviser may become
interested in the Trust as a shareholder or otherwise. In acting hereunder, the
Adviser shall be an independent contractor. The Adviser shall not be an agent of
the Trust.
3. Compensation. For the services to be performed hereunder, the
Adviser shall receive a fee, payable in arrears as soon as practicable following
the last day of each month, equal to seven-tenths of one percent (0.7%) of the
first $250 million, and six-tenths of one percent (0.6%) of amounts exceeding
$250 million, of the net asset value of the Trust at the end of such month. The
Adviser in its sole discretion shall retain the right at any time to forego and
waive any monthly fee or part thereof.
4. Trust Expenses.
(a) General Expenses. It is understood that the Trust will pay all its
expenses other than those expressly stated to be payable by the Adviser under
Section 1 above, which expenses payable by the Trust shall include, without
limitation, (i) interest and taxes; (ii) brokerage commissions and other costs
in connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Trustees other than those who are
employees of the Adviser; (iv) legal and audit expenses; (v) custodian,
accounting services and registrar fees and expenses; (vi) fees, expenses and
costs related to transfer agent and shareholder services functions, whether
performed by the Trust, the Adviser, related persons or independent parties;
(vii) fees and expenses related to the registration and qualification of the
Trust and the Trust's shares for distribution under state and federal securities
laws; (viii) expenses of printing and mailing reports and notices and proxy
material (if any) to shareholders of the Trust; (ix) all other expenses
incidental to holding meetings of, or soliciting consents from, the Trust's
shareholders (if and whenever required), including proxy solicitations therefor;
(x) all expenses of bond, liability, fidelity and other insurance coverage
required by law or deemed advisable by the Trustees; (xi) any fees, dues, or
expenses related to the Trust's membership in any industry association or other
investment organization; (xii) expenses of printing and mailing Prospectuses and
Statements of Additional Information and supplements thereto; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those relating
to actions, suits or proceedings to which the Trust is a party and the legal
obligation which the Trust may have to indemnify the Trust's officers and the
Trustees with respect thereto.
(b) Transfer Agent and Shareholder Services Functions. Personnel of the
Adviser may assist the Trust in performing transfer agent and shareholder
services functions with respect to shares of the Trust. In this event, such
personnel would remain employees of the Adviser, and the Trust would reimburse
the Adviser, on demand, for an amount of salary, payroll tax and personnel
benefit payments made by the Adviser proportionate to the level of transfer
agent and shareholder services functions performed by such personnel. The amount
of such reimbursement would not constitute any part of, and would be paid in
addition to, the Adviser's fee provided for in paragraph 3 above.
(c) Financial, Accounting, Administrative and Clerical Services.
Personnel of the Adviser may assist the Trust in performing financial,
accounting, administrative and clerical services. In this event, such personnel
would remain employees of the Adviser, and the Trust would reimburse the
Adviser, on demand, for an amount of salary, payroll tax and personnel benefit
payments made by the Adviser proportionate to the level of such services
performed by such personnel. The amount of such reimbursement would not
constitute any part of, and would be paid in addition to, the Adviser's fee
provided for in paragraph 3 above.
5. Expense Limitation. The Adviser's fee provided for in paragraph 3
above will be reduced by, or the Adviser will reimburse the Trust for, any
amount necessary to prevent the aggregate expenses of the Trust provided for in
paragraphs 3 and 4 (exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and other expressly excludable items) from exceeding the
most restrictive of the expense limitations imposed by state securities
commissions of the states in which the Trust's shares are then registered or
qualified for sale. To determine the Adviser's liability for such excess
expenses, the Trust's expenses shall be annualized at each month end, and if
such annualized expense amount exceeds an effective state expense limit, the
Adviser's fee for such month shall be reduced by, or the Adviser will reimburse
the Trust for, the amount of the excess; provided, however, that an adjustment
shall be made in favor of the Adviser prior to the end of the last day of the
first month of the next succeeding fiscal year if the aggregate expenses for the
fiscal year do not exceed any state expense limitation.
6. Non-Exclusivity. The services of the Adviser to the Trust are not to
be deemed exclusive, the Adviser being free to render services to others and
engage in other activities; provided, however, that the Adviser will not
undertake any other conflicting duties of loyalty which would affect its prior
fiduciary duty to the Trust. For a period of five years from the effective date
of this Agreement, the Adviser will give the Trust advance notice in writing of
any proposed undertaking by it of material significance (including the taking on
of any new clients) and will provide to the Trust all information relevant to a
determination of the effect of such undertaking on the Adviser's ability to
carry out its obligations to the Trust under this Agreement.
7. Permitted Uses.
(a) The Trust and the Adviser each agree that the word "Century" as
used in the name of the Trust is a property right of the Trust. The Trust hereby
grants to the Adviser the right to use the word "Century" in its corporate name
and in performing its duties hereunder. The Adviser agrees that upon termination
of this Agreement and at the written request of the Trust, the Adviser will take
all action necessary to change its corporate name to eliminate the word
"Century" or otherwise develop a method to assure that any continuing
affiliation between the Adviser and the Trust could not reasonably be inferred
by a third party.
(b) All books, records, databases (whether stored in printed,
electronic or other form), publications, other library materials and other
property (whether tangible or intangible) owned or in the possession of the
Trust or the Trustees for the benefit of the Trust as of the date hereof shall
be available for the use of the Adviser, and the Trust and the Trustees hereby
grant to the Adviser permission to use any or all such property during the term
of this Agreement.
8. Term.
(a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 9, this Agreement shall continue in force through June 30, 1996
and indefinitely thereafter, but only so long as the continuance after such date
shall be specifically approved at least annually by vote of the Trustees or by
vote of a majority of the outstanding voting securities of the Trust.
(b) This Agreement may be modified by mutual consent, such consent on
the part of the Trust to be authorized by vote of a majority of the outstanding
voting securities of the Trust.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 8, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees who are not
parties to the agreement or interested persons of any such party, cast in person
at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time, on sixty (60) days' prior
written notice to the other, terminate this Agreement, without payment of any
penalty, by action of the Trustees or vote of a majority of the outstanding
voting securities of the Trust (in the case of the Trust) or by action of the
Board of Directors (in the case of the Adviser). This Agreement shall terminate
automatically in the event of its assignment.
9. Limitation of Liability of Trustees and Shareholders. Pursuant to
Section 2(l) of the Declaration of Trust of Century Shares Trust, the Adviser is
hereby expressly put on notice that the Trustees are not liable under this
Agreement except for the application of the trust property in accordance with
such Declaration of Trust, and no liability attaches to the shareholders of the
Trust.
10. Limitation of Liability of Adviser. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any shareholder of the Trust or
to any other person for any act or omission or any mistake in judgment in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
11. Definitions. The terms "vote of a majority of the outstanding
voting securities," "assignment," and "interested persons," when used herein,
shall have the respective meanings specified in the 1940 Act, as now in effect
or as hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
12. Miscellaneous.
(a) This Agreement represents the entire understanding and agreement
between the parties and shall not be modified or amended except by an instrument
in writing signed by the parties.
(b) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
in their behalf by their respective officers thereunto duly authorized, all as
of the date written above.
CENTURY SHARES TRUST
By: /s/ Allan W. Fulkerson
------------------------------
Allan W. Fulkerson, Trustee
By: /s/ William W. Dyer, Jr.
------------------------------
William W. Dyer, Jr., Trustee
CENTURY CAPITAL MANAGEMENT, INC.
By: /s/ Allan W. Fulkerson
------------------------------
Allan W. Fulkerson, President
<PAGE>
EXHIBIT 23(g)
CUSTODIAN CONTRACT
Between
CENTURY SHARES TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
1. Employment of Custodian and Property to be Held by It....................1
2. Duties of the Custodian with Respect to Property of the Fund Held
By the Custodian.........................................................1
2.1 Holding Securities..............................................2
2.2 Delivery of Securities..........................................2
2.3 Registration of Securities......................................6
2.4 Bank Accounts...................................................6
2.5 Availability of Federal Funds...................................7
2.6 Collection of Income............................................7
2.7 Payment of Fund Monies..........................................8
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased......................................................10
2.9 Appointment of Agents..........................................10
2.10 Deposit of Fund Assets in Securities Systems...................10
2.11 Fund Assets Held in the Custodian's Direct PaPer System........13
2.12 Segregated Account.............................................14
2.13 Ownership Certificates for Tax Purposes........................15
2.14 Proxies........................................................15
2.15 Communications Relating to Fund Portfolio Securities...........15
3. Payments for Repurchases or Redemptions and Sales of Shares of the
Fund....................................................................16
4. Proper Instructions.....................................................16
5. Actions Permitted without Express Authority.............................17
6. Evidence of Authority...................................................18
7. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income...........................18
8. Records.................................................................19
9. Opinion of Fund's Independent Accountant................................19
10. Reports to Fund by Independent Public Accountants.......................19
11. Compensation of Custodian...............................................20
12. Responsibility of Custodian.............................................20
13. Effective Period; Termination and Amendment.............................21
14. Successor Custodian.....................................................22
15. Interpretive and Additional Provisions..................................23
16. Massachusetts Law to Apply..............................................24
17. Prior Contracts.........................................................24
18. Shareholder Communications Election.....................................24
19. Limitations of Liability of the Trustees and Shareholders...............25
<PAGE>
CUSTODIAN CONTRACT
This Contract between Century Shares Trust, a business trust organized
and existing under the laws of Massachusetts, having its principal place of
business at One Liberty Square, Boston, Massachusetts, 02109, hereinafter called
the "Fund", and State Street Bank and Trust Company, a Massachusetts trust
company, having its principal place of business at 225 Franklin Street, Boston,
Massachusetts, 02110, hereinafter called the "Custodian",
WITNESSETH, that in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the Fund's
assets pursuant to the provisions of the Declaration of Trust. The Fund agrees
to deliver to the Custodian all securities and cash owned by it, and all
payments of income, payments of principal or capital distributions received by
it with respect to all securities owned by the Fund from time to time, and the
cash consideration received by it for such new or treasury shares of beneficial
interest ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
4), the Custodian shall from time to time employ one or more sub-custodians, but
only in accordance with an applicable vote by the Trustees of the Fund, and
provided that the Custodian shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian so employed than any such sub-custodian has to the Custodian.
2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian
2.1 Holding Securities. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, including all
securities owned by the Fund, other than (a) securities which are
maintained pursuant to Section 2.10 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as a
"Securities System" and (b) commercial paper of an issuer for which
State Street Bank and Trust Company acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct
Paper System of the Custodian pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver
securities owned by the Fund held by the Custodian or in a Securities
System account of the Custodian or in the Custodian's Direct Paper book
entry system account ("Direct Paper Account") only upon receipt of
Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Section 2.9 or into the name or nominee
name of any sub-custodian appointed pursuant to Section 1; or
for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units; provided that, in any such case, the new
securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom;
provided that in any such case, the Custodian shall have no
responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Custodian's own
negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered
to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund,
which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is
to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the
delivery of securities owned by the Fund prior to the receipt of
such collateral;
11) For delivery as security in connection with any borrowings by
the Fund requiring a pledge of assets by the Fund, but only
against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the Fund's currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares
for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Trustees or of a duly authorized committee of
the Trustees signed by a Trustee or an officer of the Fund and
certified by the Secretary or an Assistant Secretary, specifying
the securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose to be
a proper purpose of the Fund, and naming the person or persons
to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Fund or
in the name of any nominee of the Fund or of any nominee of the
Custodian, which nominee shall be assigned exclusively to the Fund,
unless the Fund has authorized in writing the appointment of a nominee
to be used in common with other registered investment companies having
the same investment adviser as the Fund, or in the name or nominee name
of any agent appointed pursuant to Section 2.9 or in the name or
nominee name of any sub-custodian appointed pursuant to Section 1. All
securities accepted by the Custodian on behalf of the Fund under the
terms of this Contract shall be in "street name" or other good delivery
form. If, however, the Fund directs the Custodian to maintain
securities in "street name", the Custodian shall utilize its best
efforts only to collect timely income due the Fund on such securities
and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the name of the Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Contract,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company Act
of 1940. Funds held by the Custodian for the Fund may be deposited by
it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every
such bank or trust company shall be qualified to act as a custodian
under the Investment Company Act of 1940 and that each such bank or
trust company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Trustees
of the Fund. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only
in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund
and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions, make federal funds available to the Fund as of specified
times agreed upon from time to time by the Fund and the Custodian in
the amount of checks received in payment for Shares of the Fund which
are deposited into the Fund's account.
2.6 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The Custodian
will have no duty or responsibility in connection therewith, other than
to provide the Fund with such information or data as may be necessary
to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Fund is properly entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the Fund but
only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts, to the Custodian (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended,
to act as a custodian and has been designated by the Custodian
as its agent for this purpose) registered in the name of the
Fund or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the
case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.10 hereof;
(c) in the case of a purchase involving the Direct Paper System,
in accordance with the conditions set forth in Section 2.11; (d)
in the case of repurchase agreements entered into between the
Fund and the Custodian, or another bank, or a broker-dealer
which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of the receipt
evidencing purchase by the Fund of securities owned by the
Custodian along with written evidence of the agreement by the
Custodian to repurchase such securities from the Fund or (e) for
transfer to a time deposit account of the Fund in any bank,
whether domestic or foreign; such transfer may be effected prior
to receipt of a confirmation from a broker and/or the applicable
bank pursuant to Proper Instructions from the Fund as defined in
Section 4;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as
set forth in Section 3 hereof;
4) For the payment of any expense or liability incurred by the
Fund, including but not limited to the following payments for
the account of the Fund: interest, taxes, management,
accounting, transfer agent and legal fees, and operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends or distributions declared
pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a
resolution of the Trustees or of a duly authorized committee of
the Fund signed by a Trustee or an officer of the Fund and
certified by its Secretary or an Assistant Secretary, specifying
the amount of such payment, setting forth the purpose for which
such payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom such
payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and
every case where payment for purchase of securities for the account of
the Fund is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions
from the Fund to so pay in advance, the Custodian shall be absolutely
liable to the Fund for such securities to the same extent as if the
securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such
of the provisions of this Article 2 as the Custodian may from time to
time direct; provided, however, that the appointment of any agent shall
not relieve the Custodian of its responsibilities or liabilities
hereunder, and provided further, that the Custodian shall give written
notice to the Fund of any such appointment.
2.10 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by the Fund in a clearing agency
registered with the Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System," in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account
of the Fund. The Custodian shall transfer securities sold for
the account of the Fund upon (i) receipt of advice from the
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on
the records of the Custodian to reflect such transfer and
payment for the account of the Fund. Copies of all advices from
the Securities System of transfers of securities for the account
of the Fund shall identify the Fund, be maintained for the Fund
by the Custodian and be provided to the Fund at its request. The
Custodian shall furnish the Fund confirmation of each transfer
to or from the account of the Fund in the form of a written
advice or notice and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund;
4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Section 13 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian or
any of its agents or of any of its or their employees or from
failure of the Custodian or any such agent to enforce
effectively such rights as it may have against the Securities
System; the Fund, at its election, shall be entitled to be
subrogated to the rights of the Custodian with respect to any
claim against the Securities System or any other person which
the Custodian may have as a consequence of any such loss or
damage if and to the extent that the Fund has not been made
whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian
may deposit and/or maintain securities owned by the Fund in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct
Paper System only if such securities are represented in an
account ("Account") of the Custodian in the Direct Paper System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for
customers;
3) The records of the Custodian with respect to securities of the
Fund which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account
of the Fund upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to
the account of the Fund. The Custodian shall transfer securities
sold for the account of the Fund upon the making of an entry on
the records of the Custodian to reflect such transfer and
receipt of payment for the account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund, in the form of a
written advice or notice, of Direct Paper on the next business
day following such transfer and shall furnish to the Fund copies
of daily transaction sheets reflecting each day's transactions
in the Securities System for the account of the Fund;
6) The Custodian shall provide the Fund with any report on its
system of internal accounting control as the Custodian shall
obtain, or as the Fund may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Fund, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Fund, (ii) for purposes of segregating cash or
government securities in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purpose of compliance by
the Fund with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts
by registered investment companies and (iv) for other proper corporate
purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of
the Trustees or of any authorized committee signed by a Trustee or an
officer of the Fund and certified by the Secretary or an Assistant
Secretary, setting forth the purpose or purposes of such segregated
account and declaring such purposes to be proper corporate purposes.
2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of the Fund held by it and in
connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Fund such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 Communications Relating to Fund Portfolio Securities. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including, without limitation, pendency
of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or
sold by the Fund) received by the Custodian from issuers of the
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Fund desires to take action
with respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
3. Payments for Repurchases or Redemptions and Sales of Shares of the Fund
From such funds as may be available for tie purpose but subject 1o the
limitations of the Declaration of Trust and any applicable votes of the Trustees
of the Fund pursuant thereto, the Custodian shall, upon receipt of instructions
from the Transfer Agent, make funds available for payment to holders of Shares
who have delivered to the Transfer Agent a request for redemption or repurchase
of their Shares. In connection with the redemption or repurchase of Shares of
the Fund, the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commercial bank designated by the
redeeming shareholders. In connection with the redemption or repurchase of
Shares of the Fund, the Custodian shall honor checks drawn on the Custodian by a
holder of Shares, which checks have been furnished by the Fund to the holder of
Shares, when presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between the Fund and the
Custodian.
The Custodian shall receive from the distributor for the Fund's Shares
or from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received forShares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
4. Proper Instructions
Proper Instructions as used herein means a writing signed or initialled
by one or more person or persons as the Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction or type
of transaction involved, including a specific statement of the purpose for which
such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Upon receipt of a certificate of the Secretary or an Assistant Secretary as to
the authorization by the Trustees of the Fund accompanied by a detailed
description of procedures approved by the Trustees, Proper Instructions may
include communications effected directly between electro-mechanical or
electronic devices provided that the Trustees and the Custodian are satisfied
that such procedures afford adequate safeguards for the Fund's assets. For
purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.12.
5. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be
identified in writing and accounted for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in
connection with the sale, exchange, substitution, purchase,
transfer and other dealings with the securities and property of
the Fund except as otherwise directed by the Trustees or
officers of the Fund.
6. Evidence of Authority
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed by
it to be genuine and to have been properly executed by or on behalf of the Fund.
The Custodian may receive and accept a certified copy of a vote of the Trustees
of the Fund as conclusive evidence (a) of the authority of any person to act in
accordance with such vote or (b) of any determination or of any action by the
Trustees pursuant to the Declaration of Trust as described in such vote, and
such vote may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
7. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Trustees of the Fund to keep the books
of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by a Trustee or an officer of the Fund to
do so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value per
share and the daily income of the Fund shall be made at the time or times
described from time to time in the Funds currently effective prospectus.
8. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by the Fund and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.
9. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to obtain from year to year favorable opinions from the
Fund's independent accountants with respect to its activities hereunder in
connection with the preparation of the Fund's Form N-lA, and Form N-SAR or other
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
10. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on futures contracts, including
securities deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian under this Contract; such reports shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Fund, to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
11. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Fund and the Custodian.
12. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable
care, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Contract and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care in carrying out the provisions of this Contract, but
shall be kept indemnified by and shall be without liability to the Fund for any
action taken or omitted by it in good faith without negligence. It shall be
entitled to rely on and may act upon advice of counsel (who may be counsel for
the Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but not limited
to securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of Fund assets to the
extent necessary to obtain reimbursement.
13. Effective Period; Termination and Amendment
This Contract shall become effective as of its execution, shall
continue in full force and effect until terminated as hereinafter provided, may
be amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid to the other party, such termination to take effect not sooner
than thirty (30) days after the date of such delivery or mailing; provided,
however that the Custodian shall not act under Section 2.10 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Trustees of the Fund have approved the initial use of a
particular Securities System and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Trustees have reviewed the use by
the Fund of such Securities System, as required in each case by Rule 17f-4 under
the Investment Company Act of 1940, as amended and that the Custodian shall not
act under Section 2.11 hereof in the absence of receipt of an initial
certificate of the Secretary or an Assistant Secretary that the Trustees have
approved the initial use of the Direct Paper System and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Trustees have
reviewed the use by the Fund of the Direct Paper System; provided, further,
however, that the Fund shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Fund may at any time
by action of its Trustees (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
14. Successor Custodian
If a successor custodian shall be appointed by the Trustees of the
Fund, the Custodian shall, upon termination, deliver to such successor custodian
at the office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Trustees of
the Fund, deliver at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Trustees shall have, been delivered to the
Custodian on or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the Investment Company Act of 1940, doing
business in Boston, Massachusetts, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $25,000,000, all securities, funds and other properties held by
the Custodian and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of the
Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Trustees to appoint a successor custodian, the Custodian shall be entitled
to fair compensation for its services during such period as the Custodian
retains possession of such securities, funds and other properties and the
provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
15. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Contract.
16. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
17. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
18. Shareholder Communications Election
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Funds name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using the Fund's name and address for any purpose
other than corporate communications. Please indicate below whether the Fund
consents or objects by checking one of the alternatives below.
YES [X] The Custodian is authorized to release
the Fund's name, address, and share
positions.
NO [ ] The Custodian is not authorized to release
the Fund's name, address, and share
positions.
19. Limitations of Liability of the Trustees and Shareholders
Notice is hereby given that this instrument is executed on behalf of
the Trustees of the Trust as Trustees and not individually and that the
obligations of this instrument are not binding upon any of the Trustees or
Shareholders individually but are binding only upon the assets and property of
the Fund.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 1st day of November, 1993.
ATTEST CENTURY SHARES TRUST
By /s/ Richard F. Cook, Jr. By /s/ Allan W. Fulkerson
-------------------- -----------------------
Richard F. Cook, Jr. Allan W. Fulkerson
Secretary Trustee
By /s/ William W. Dyer, Jr.
-----------------------
William W. Dyer, Jr.
Trustee
STATE STREET BANK AND TRUST COMPANY
By /s/ Russell E. Logan
-----------------------
Russell E. Logan
Executive Vice President
<PAGE>
EXHIBIT 23(h)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
CENTURY SHARES TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
Article 1 Terms of Appointment; Duties of the Bank........................1
Article 2 Fees and Expenses...............................................5
Article 3 Representations and Warranties of the Bank......................5
Article 4 Representations and Warranties of the Fund......................6
Article 5 Data Access and Proprietary Information.........................7
Article 6 Indemnification.................................................9
Article 7 Standard of Care...............................................11
Article 8 Covenants of the Fund and the Bank.............................11
Article 9 Termination of Agreement.......................................12
Article 10 Assignment.....................................................13
Article 11 Amendment......................................................13
Article 12 Massachusetts Law to Apply.....................................13
Article 13 Force Majeure..................................................13
Article 14 Consequential Damages..........................................14
Article 15 Merger of Agreement............................................14
Article 16 Limitations of Liability of the Trustees and Shareholders......14
Article 17 Counterparts...................................................14
<PAGE>
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of November, 1993, by and between
CENTURY SHARES TRUST, a Massachusetts business trust, having its principal
office and place of business at One Liberty Square, Boston, Massachusetts 02109
(the "Fund"), and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company having its principal office and place of business at 225 Franklin
Street, Boston, Massachusetts 02110 (the "Bank").
WHEREAS, the Fund desires to appoint the Bank as its transfer agent,
dividend disbursing agent, custodian of certain retirement plans and agent in
connection with certain other activities, and the Bank desires to accept such
appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of the Bank
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby employs and appoints the Bank to act as, and the Bank agrees to
act as its transfer agent for the Fund's authorized and issued shares of its
beneficial interest ("Shares"), dividend disbursing agent, custodian of certain
retirement plans and agent in connection with any accumulation, open-account or
similar plans provided to the shareholders of the Fund ("Shareholders") and set
out in the currently effective prospectus and statement of additional
information ("prospectus") of the Fund, including without limitation any
periodic investment plan or periodic withdrawal program.
1.02 The Bank agrees that it will perform the following services:
(a) In accordance with procedures established from time to time
by agreement between the Fund and the Bank, the Bank shall:
(i) Receive for acceptance orders for the purchase of Shares
(by way of direct purchase or reinvestment of income
dividend or capital gain distributions), and promptly
deliver payment and appropriate documentation thereof to
the Custodian of the Fund authorized pursuant to the
Declaration of Trust of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the appropriate
Shareholder account;
(iii) Receive for acceptance redemption requests and
redemption directions and deliver the appropriate
documentation thereof to the Custodian;
(iv) In respect to the transactions in items (i), (ii) and
(iii) above, the Bank shall execute transactions
directly with broker-dealers authorized by the Fund who
shall thereby be deemed to be acting on behalf of the
Fund;
(v) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(vi) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vii) Prepare and transmit payments for dividends and
distributions declared by the Fund;
(viii) Issue replacement certificates for those certificates
alleged to have been lost, stolen or destroyed upon
receipt by the Bank of indemnification satisfactory to
the Bank and protecting the Bank and the Fund, and the
Bank at its option, may issue replacement certificates
in place of mutilated stock certificates upon
presentation thereof and without such indemnity;
(ix) Maintain records of account for and advise the Fund and
its Shareholders as to the foregoing; and
(x) Record the issuance of shares of the Fund and maintain
pursuant to SEC Rule l7Ad-l0(e) a record of the total
number of shares of the Fund which are authorized, based
upon data provided to it by the Fund, and issued and
outstanding. The Bank shall also provide the Fund on a
regular basis with the total number of shares which are
authorized and issued and outstanding and shall have no
obligation, when recording the issuance of shares, to
monitor the issuance of such shares or to take
cognizance of any laws relating to the issue or sale of
such shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and neither in lieu nor in contravention of
the services set forth in the above paragraph (a), the Bank shall: (i)
perform the customary services of a transfer agent, dividend disbursing
agent, custodian of certain retirement plans and, as relevant, agent in
connection with accumulation, open-account or similar plans (including
without limitation any periodic investment plan or periodic withdrawal
program), including but not limited to: maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, mailing
Shareholder reports and prospectuses to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts,
preparing and filing all required U.S. Treasury Department Forms with
respect to Shareholder accounts and activity therein, including,
without limitation, U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions
by federal authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders for all
purchases and redemptions of Shares and other confirmable transactions
in Shareholder accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information and (ii)
provide a system which will enable the Fund to monitor the total number
of Shares sold in each State.
(c) In addition, the Fund shall (i) identify to the Bank in
writing those transactions and assets to be treated as exempt from blue
sky reporting for each State and (ii) verify the establishment of
transactions for each State on the system prior to activation and
thereafter monitor the daily activity for each State. The
responsibility of the Bank for the Fund's blue sky State registration
status is solely limited to the initial establishment of transactions
subject to blue sky compliance by the Fund and the reporting of such
transactions to the Fund as provided above.
(d) Procedures as to who shall provide certain of these
services in Article 1 may be established from time to time by agreement
between the Fund and the Bank in accordance with the attached service
responsibility schedule. The Bank may at times perform only a portion
of these services and the Fund or its agent may perform these services
on the Fund's behalf.
The Bank shall provide additional services on behalf of the Fund (e.g.,
escheatment services) which may be agreed upon in writing between the Fund and
the Bank.
Article 2 Fees and Expenses
2.01 For performance by the Bank pursuant to this Agreement, the Fund
agrees to pay the Bank an annual maintenance fee for each Shareholder account as
set out in the initial fee schedule attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between the Fund and the Bank.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse the Bank for reasonable out-of-pocket expenses, including
but not limited to confirmation production, postage, forms, telephone,
microfilm, microfiche, tabulating proxies, records storage, or advances incurred
by the Bank for the items set out in the fee schedule attached hereto. In
addition, any other reasonable expenses incurred by the Bank at the request or
with the consent of the Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses within
five days following the receipt of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to the Bank by the Fund at least seven
(7) days prior to the mailing date of such materials.
Article 3 Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.01 It is a trust company duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth
of Massachusetts.
3.03 It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
Article 4 Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust to enter into and perform this Agreement.
4.03 All proceedings required by said Declaration of Trust have been
taken to authorize it to enter into and perform this Agreement.
4.04 It is an open-end and diversified management investment company
registered under the Investment Company Act of 1940, as amended.
4.05 A registration statement under the Securities Act of 1933, as
amended, is currently effective and will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares of the Fund being offered for sale.
Article 5 Data Access and Proprietary Information
5.01 The Fund acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Bank as part of the Fund's ability to
access certain Fund-related data ("Customer Data") maintained by the Bank on
data bases under the control and ownership of the Bank or other third party
("Data Access Services") constitute copyrighted, trade secret, or other
proprietary information (collectively, "Proprietary Information") of substantial
value to the Bank or other third party. In no event shall Proprietary
Information be deemed Customer Data. The Fund agrees to treat all Proprietary
Information as proprietary to the Bank and further agrees that it shall not
divulge any Proprietary Information to any person or organization except as may
be provided hereunder. Without limiting the foregoing, the Fund agrees for
itself and its employees and agents:
(a) to access Customer Data solely from locations as may be
designated in writing by the Bank and solely in accordance with the
Bank's applicable user documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any
portion of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such fact and
dispose of such information in accordance with the Bank's instructions;
(d) to refrain from causing or allowing third-party data
acquired hereunder to be retransmitted to any other computer facility
or other location, except with the prior written consent of the Bank;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties;
(f) to honor all reasonable written requests made by the Bank
to protect at the Bank's expense the rights of the Bank in Proprietary
Information at common law, under federal copyright law and under other
federal or state law.
Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this Article 5. The obligations of this Article
shall survive any earlier termination of this Agreement.
5.02 If the Fund notifies the Bank that any of the Data Access Services
do not operate in material compliance with the most recently issued user
documentation for such services, the Bank shall endeavor in a timely manner to
correct such failure. Organizations from which the Bank may obtain certain data
included in the Data Access Services are solely responsible for the contents of
such data and the Fund agrees to make no claim against the Bank arising out of
the contents of such third-party data, including, but not limited to, the
accuracy thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. THE BANK EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE
EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Fund include the ability to
originate electronic instructions to the Bank in order to (i) effect the
transfer or movement of cash or Shares or (ii) transmit Shareholder information
or other information, then in such event the Bank shall be entitled to rely on
the validity and authenticity of such instruction without undertaking any
further inquiry as long as such instruction is undertaken in conformity with
security procedures established by the Bank from time to time.
Article 6 Indemnification
6.01 The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, reasonable counsel fees, payments, expenses and
liability arising out of or attributable to:
(a) All actions of the Bank or its agent or subcontractors
required to be taken pursuant to this Agreement, provided that such
actions are taken in good faith and without negligence or willful
misconduct.
(b) The Fund's lack of good faith, negligence or willful
misconduct which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services which (i)
are received by the Bank or its agents or subcontractors, and (ii) have
been prepared, maintained or performed by the Fund or any other person
or firm on behalf of the Fund including but not limited to any previous
transfer agent or registrar.
(d) The reliance on, or the carrying out by the Bank or its
agents or subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws
or regulations of any state or in violation of any stop order or other
determination or ruling by any federal agency or any state with respect
to the offer or sale of such Shares in such state.
6.02 At any time the Bank may apply to any trustee or officer of the
Fund for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the Bank under
this Agreement, and the Bank and its agents or subcontractors shall not be
liable and shall be indemnified by the Fund for any action taken or omitted by
it in reliance upon such instructions or upon the opinion of such counsel. The
Bank, its agents and subcontractors shall be protected arid indemnified in
acting upon any paper or document furnished by or on behalf of the Fund
reasonably believed to be genuine and to have been signed by the proper person
or persons, or upon any instruction, information, data, records or documents
provided the Bank or its agents or subcontractors by machine readable input,
telex, CRT data entry or other similar means authorized by the Fund, and shall
not be held to have notice of any change of authority of any person until
receipt of written notice thereof from the Fund. The Bank, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar.
6.03 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which the Fund may be
required to indemnify the Bank, the Bank shall promptly notify the Fund of such
assertion, and shall keep the Fund advised with respect to all developments
concerning such claim. The Fund shall have the option to participate with the
Bank in the defense of such claim or to defend against said claim in its own
name or in the name of the Bank, in which latter event the Fund shall not be
responsible for legal or other expenses of defense incurred by the Bank. The
Bank shall in no case confess any claim or make any compromise in any case in
which the Fund may be required to indemnify the Bank except with the Fund's
prior written consent.
Article 7 Standard of Care
7.01 The Bank shall at all times act in good faith and agrees to use
its best efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement, but assumes no responsibility and shall riot be
liable for loss or damage due to errors unless said errors are caused by its
negligence, bad faith, or willful misconduct or that of its employees.
Article 8 Covenants of the Fund and the Bank
8.01 The Fund shall promptly furnish to the Bank the following:
(a) A certified copy of the resolution of the Trustees of the
Fund authorizing the appointment of the Bank and the execution and
delivery of this Agreement.
(b) A copy of the Declaration of Trust of the Fund and all
amendments thereto.
8.02 The Bank hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
8.03 The Bank shall keep records relating to the services to be
performed hereunder in such form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request. The Bank
shall perform all services hereunder in full compliance with all applicable laws
and regulations, including (without limitation) those set forth in or adopted
pursuant to the Investment Company Act of 1940, as amended, and the Securities
Exchange Act of 1934, as amended.
8.04 The Bank and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, the Bank will endeavor to notify the Fund and
to secure instructions from a trustee or an authorized officer of the Fund as to
such inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
Article 9 Termination of Agreement
9.01 This Agreement may be terminated by either party hundred twenty
(120) days written notice to the other.
9.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, the Bank reserves the right to charge for any other
reasonable expenses associated with such termination.
Article 10 Assignment
10.01 Except as provided in Section 10.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
10.03 The Bank may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A(c) (1) of the Securities Exchange Act of
1934, as amended ("Section 17A(c)(l)"), (ii) a BFDS subsidiary duly registered
as a transfer agent pursuant to Section 17A(c) (1) or (iii) a BFDS affiliate so
registered; provided, however, that the Bank shall be as fully responsible to
the Fund for the acts and omissions of any subcontractor as it is for its own
acts and omissions. Article 11 Amendment
11.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Trustees of the Fund.
Article 12 Massachusetts Law to Apply
12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
Article 13 Force Majeure
13.01 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable to the other for
any damages resulting from such failure to perform or otherwise from such
causes.
Article 14 Consequential Damages
14.01 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
consequential damages arising out of any act or failure to act hereunder.
Article 15 Merger of Agreement
15.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
Article 16 Limitations of Liability of the Trustees and Shareholders
16.01 A copy of this Agreement and Declaration of Trust of the Trust is
on file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or Shareholders individually
but are binding only upon the assets and property of the Fund.
Article 17 Counterparts
17.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
CENTURY SHARES TRUST
By: /s/ Allan W. Fulkerson
------------------------
Allan W. Fulkerson
By: /s/ William W. Dyer, Jr.
------------------------
William W. Dyer, Jr.
ATTEST:
/s/ Richard F. Cook, Jr.
----------------------
Richard F. Cook, Jr.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Russell E. Logan
------------------------
Russell E. Logan
Executive Vice President
<PAGE>
EXHIBIT 99.23(j)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in Post-Effective Amendment No. 72 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 reference
to us under the heading "Financial Highlights" appearing in the Prospectus,
which also is a part of such Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Boston, Massachusetts
February 17, 1999
<PAGE>
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] DEC-31-1998
[INVESTMENTS-AT-COST] 117,023,500
[INVESTMENTS-AT-VALUE] 420,193,142
[RECEIVABLES] 845,896
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 421,039,038
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 5,910,103
[TOTAL-LIABILITIES] 5,910,103
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 112,358,967
[SHARES-COMMON-STOCK] 9,295,373
[SHARES-COMMON-PRIOR] 9,283,204
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 311,434
[ACCUMULATED-NET-GAINS] 0
[OVERDISTRIBUTION-GAINS] 88,240
[ACCUM-APPREC-OR-DEPREC] 303,169,642
[NET-ASSETS] 415,128,935
[DIVIDEND-INCOME] 6,233,563
[INTEREST-INCOME] 727,838
[OTHER-INCOME] 0
[EXPENSES-NET] 3,280,174
[NET-INVESTMENT-INCOME] 3,681,227
[REALIZED-GAINS-CURRENT] 24,282,825
[APPREC-INCREASE-CURRENT] (176,974)
[NET-CHANGE-FROM-OPS] 27,787,078
[EQUALIZATION] (41,282)
[DISTRIBUTIONS-OF-INCOME] 3,609,921
[DISTRIBUTIONS-OF-GAINS] 24,160,837
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,893,592
[NUMBER-OF-SHARES-REDEEMED] 2,354,844
[SHARES-REINVESTED] 473,421
[NET-CHANGE-IN-ASSETS] 553,413
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 270,152
[OVERDIST-NET-GAINS-PRIOR] 88,240
[GROSS-ADVISORY-FEES] 2,776,322
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 3,280,174
[AVERAGE-NET-ASSETS] 420,338
[PER-SHARE-NAV-BEGIN] 44.66
[PER-SHARE-NII] 0.41
[PER-SHARE-GAIN-APPREC] 2.71
[PER-SHARE-DIVIDEND] 0.40
[PER-SHARE-DISTRIBUTIONS] 2.72
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 44.66
[EXPENSE-RATIO] 0.78
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
