As filed with the Securities and Exchange Commission on February 28, 1997
1940 Act File No. 811-1409
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 20 [ X ]
FIDUCIARY EXCHANGE FUND, INC.
(Exact Name of Registrant as Specified in Charter)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Address of Principal Executive Offices)
(617) 482-8260
(Registrant's Telephone Number including Area Code)
Alan R. Dynner
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Name and address of agent for service)
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Throughout this Registration Statement, information concerning Tax-Managed
Growth Portfolio (the "Portfolio") (File No. 811-7409) is incorporated by
reference from Amendment No. 33 to the Registration Statement of Eaton Vance
Mutual Funds Trust (File No. 2-90946 under the Securities Act of 1933 (the "1933
Act")) (the "Amendment"), which was filed electronically with the Securities and
Exchange Commission on January 30, 1997 (Accession No. 0000950156-97-000105).
The Amendment contains the prospectus and statement of additional information
("SAI") of EV Marathon Tax-Managed Growth Fund (the "Feeder Fund"), which
invests substantially all of its assets in the Portfolio.
PART A
Responses to Items 1 through 3 and 5A have been omitted pursuant to
Paragraph 4 of Instruction F of the General Instructions to Form N-1A.
Item 4. GENERAL DESCRIPTION OF REGISTRANT
(a) (i) The Registrant is an open-end diversified management investment
company organized on July 20, 1966, as a Massachusetts Corporation.
(ii) The investment objective of the Registrant is to achieve long-term,
after-tax returns for its shareholders through investing in a diversified
portfolio of equity securities. This objective is nonfundamental but the
Directors intend to submit any proposed change which would be material to
shareholders for approval.
Prior to July 1, 1996, the Registrant invested directly in a portfolio of
securities. Information provided herein for prior periods reflects this
investment practice. Commencing on July 1, 1996, the Registrant seeks to achieve
its investment objective by investing in the Portfolio. Registrant incorporates
by reference information concerning the Portfolio's investment objective and
investment practices from "The Registrant's Investment Objective" and
"Investment Policies and Risks" in the Feeder Fund prospectus.
Item 5. MANAGEMENT OF THE REGISTRANT
(a) The Board of Directors has overall responsibility for management of the
Registrant.
(b), (c) and (g) Registrant incorporates by reference information
concerning the Portfolio's management from "Management of the Registrant and the
Portfolio" in the Feeder Fund prospectus.
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(d) Eaton Vance Management ("Eaton Vance" or the "Administrator") acts as
Administrator of the Registrant, but currently receives no compensation for
providing administrative services to the Registrant. Under its agreement with
the Registrant, Eaton Vance has been engaged to administer the Registrant's
affairs, subject to the supervision of the Board of Directors, and shall furnish
for the use of the Registrant office space and all necessary office facilities,
equipment and personnel for administering the affairs of the Registrant.
(e) The transfer and dividend disbursing agent is First Data Investor
Services Group, P.O. Box 5123, Westborough, MA 01581-5123 (the "Transfer
Agent").
(f) The Registrant's ratio of expenses to average net assets for the period
ended October 31, 1996 was 0.81%, annualized.
(g) Not applicable
Item 6. CAPITAL STOCK AND OTHER SECURITIES
(a)(i), (ii) and (iii) The Registrant has one class of stock, consisting of
shares of common stock, par value $1.00 per share, all having equal voting
rights. All shares participate equally in earnings, dividends and assets. Shares
of the Registrant are fully paid, nonassessable and fully transferable and have
no pre-emptive or conversion rights.
Registrant incorporates by reference information concerning interests in
the Portfolio from "Organization of the Registrant and the Portfolio" in the
Feeder Fund prospectus.
(b) Not applicable
(c) Not applicable
(d) Not applicable
(e) Shareholder inquiries should be forwarded to the Registrant's office at
24 Federal Street, Boston, Massachusetts 02110.
(f) Distributions from net investment income are paid at least quarterly.
These distributions are paid in shares of the Registrant computed at net asset
value, subject to an option to each shareholder to elect to be paid in cash. Net
realized long-term capital gains are retained by the Registrant as described
below.
(g)(i) Since the Registrant intends to distribute substantially all of its
net investment income to shareholders, it is not expected that the Registrant
will be required to pay any federal income taxes on such income. However,
shareholders of the Registrant normally will have to pay federal income taxes
and any state or local taxes, on distributions from investment income.
<PAGE>
(ii) Since the Registrant retains any net realized long-term capital gain
and pays the federal tax thereon, shareholders include in their personal federal
income tax return their proportionate share of such gains (as allocated by the
Portfolio to the Registrant), take a credit for the payment of taxes thereon and
increase the tax cost basis of their shares by an amount equal to such gains
less the taxes paid. The Registrant provides each shareholder with information
regarding the shareholder's federal income tax treatment of any undistributed
realized long-term capital gain retained by the Registrant.
(iii) After the end of each calendar year, each shareholder receives
information for tax purposes regarding the distributions paid during the year
and the amount of any distributions eligible for the dividends received
deduction for corporations.
(iv) Registrant incorporates by reference information concerning the tax
consequences of certain of the Portfolio's tax consequences from "Distribution
and Taxes" in the Feeder Fund's prospectus.
(h) The Directors of the Registrant have considered the advantages and
disadvantages of investing the assets of the Registrant in the Portfolio, as
well as the advantages and disadvantages of the two-tier format. Such investment
affords the potential for economies of scale for the Registrant and may over
time result in lower expenses. In addition to selling an interest to the
Registrant, the Portfolio may sell interests to other affiliated and
non-affiliated mutual funds or institutional investors. Such investors may have
different fees than the Registrant, but will invest in the Portfolio on the same
terms and conditions and will pay a proportionate share of the Portfolio's
expenses. Information regarding other investors in the Portfolio may be obtained
by contacting Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA
02110 (617) 482-8260. Whenever the Registrant as an investor in the Portfolio is
requested to vote on matters pertaining to the Portfolio (other than the
termination of the Portfolio's business, which may be determined by the Trustees
of the Portfolio without investor approval), the Registrant will hold a meeting
of Fund shareholders and will vote its interest in the Portfolio for or against
such matters proportionately to the instructions to vote for or against such
matters received from the Registrant's shareholders. The Registrant shall vote
shares for which it receives no voting instructions in the same proportion as
the shares for which it receives voting instructions. Other investors in the
Portfolio may alone or collectively acquire sufficient voting interests in the
Portfolio to control matters relating to the operation of the Portfolio, which
may require the Registrant to withdraw its investment in the Portfolio or take
other appropriate action.
The Registrant may withdraw (completely redeem) all its assets from the
Portfolio at any time if the Board of Directors of the Registrant determines
that it is in the best interest of the Registrant to do so. In the event the
Registrant withdraws all of its assets from the Portfolio, or the Board of
Directors of the Registrant determines that the investment objective of the
Portfolio is no longer consistent with the investment objective of the
Registrant, such Directors would consider what action might be taken, including
investing the assets of the Registrant in another pooled investment entity or
retaining an investment adviser to manage the Registrant's assets in accordance
with its investment objective. The Registrant's investment performance may be
affected by a withdrawal of all its assets from the Portfolio.
Item 7. PURCHASE OF SECURITIES BEING OFFERED
(a), (c) - (g) Registrant does not offer its shares for sale.
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(b) The Registrant values its shares once on each day the New York Stock
Exchange (the "Exchange") is open for trading, as of the close of regular
trading on the Exchange (normally 4:00 p.m. New York time). The Registrant's net
asset value per share is determined by its custodian, Investors Bank & Trust
Company ("IBT"), (as agent for the Registrant) in the manner authorized by the
Directors of the Trust. Net asset value is computed by dividing the value of the
Registrant's total assets, less its liabilities, by the number of shares
outstanding. Because the Registrant invests its assets in an interest in the
Portfolio, the Registrant's net asset value will reflect the value of its
interest in the Portfolio (which, in turn, reflects the underlying value of the
Portfolio's assets and liabilities).
Registrant incorporates by reference information concerning the computation
of net asset value and valuation of Portfolio assets from "Valuing Registrant
Shares" in the Feeder Fund prospectus. For further information, see Item 19 of
Part B.
Item 8. REDEMPTION OR REPURCHASE OF REGISTRANT'S SHARES
A shareholder has the right to redeem fund shares by delivering to the
Transfer Agent during its business hours a written request in good order plus
any share certificates, or stock powers if no certificates have been issued.
Redemption will be made at the net asset value next computed after such
delivery. Good order means that all relevant documents must be endorsed by the
record owner(s) exactly as the shares are registered and the signature(s) must
be guaranteed by a member of either the Securities Transfer Association's STAMP
program or the New York Stock Exchange's Medallion Signature Program, or certain
banks, savings and loan institutions, credit unions, securities dealers,
securities exchanges, clearing agencies and registered securities associations
as required by a regulation of the Securities and Exchange Commission (the
"Commission") acceptable to the Transfer Agent. In addition, in some cases, good
order may require the furnishing of additional documentation if shares are
registered in the name of a corporation, partnership or fiduciary. Payment will
be made within seven days of the receipt of the aforementioned documents.
In addition to the redemption of shares in the manner described above, the
Registrant, for the convenience of its shareholders, has authorized Eaton Vance
to act as its agent in the repurchase of fund shares. Eaton Vance will normally
accept orders to repurchase shares by wire or telephone from investment dealers
for their customers at the net asset value next computed after receipt of the
order by the dealer if such order is received by Eaton Vance prior to its close
of business that day. It is the dealer's responsibility to transmit promptly the
repurchase order to Eaton Vance. These repurchase arrangements do not involve a
charge to the shareholder by either the Registrant or its agent; however,
investment dealers may make a charge to the shareholder. Payment will be made
within seven days of the receipt of an order to repurchase provided that the
certificates, or a stock power if no certificates have been issued, have been
delivered to the Transfer Agent in good order as described above.
The Registrant reserves the right to pay the redemption or repurchase price
of shares in whole or in part by a distribution of portfolio securities in lieu
of cash if, in the opinion of management, it seems advisable to do so; normally,
when the redemption or repurchase price equals or exceeds $2,500 portfolio
securities will be used by the Registrant. Any portfolio securities so
distributed will be valued at the figure at which they were appraised in
computing the net asset value of Registrant's shares. If the portfolio
securities so distributed are sold by the redeeming shareholder he will incur
brokerage commissions or other transaction costs in connection with such sale.
<PAGE>
The right to redeem shares of the Registrant can be suspended and the
payment of the redemption price deferred when the Exchange is closed (other than
for customary weekend and holiday closings), during periods when trading on the
Exchange is restricted as determined by the Commission, or during any emergency
as determined by the Commission which makes it impracticable for the Portfolio
or the Registrant to dispose of its securities or value its assets, or during
any other period permitted by order of the Commission for the protection of
investors.
Item 9. PENDING LEGAL PROCEEDING
Not applicable
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PART B
Item 10. COVER PAGE
Not applicable
Item 11. TABLE OF CONTENTS
Not applicable
Item 12. GENERAL INFORMATION AND HISTORY
Up to June 30, 1996, the Registrant invested in a portfolio of securities.
Since then, it has invested its assets in the Portfolio.
Item 13. INVESTMENT OBJECTIVES AND POLICIES
Registrant incorporates by reference additional information concerning the
investment policies of the Portfolio as well as information concerning the
investment restrictions of the Portfolio from "Additional Information about
Investment Policies" and "Investment Restrictions" in Part I of the Feeder
Registrant SAI. The Registrant is subject to the same investment restrictions as
the Portfolio. The Portfolio's portfolio turnover rate for the period from the
start of business December 31, 1995 to October 31, 1996 was 6%. The Registrant's
portfolio turnover rate for the six-months ended June 30, 1996 and for its
fiscal year ended December 31, 1995 were 1% and 3%, respectively.
(d) Not applicable
Item 14. MANAGEMENT OF THE REGISTRANT
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Trustees and Officers" in the Feeder Fund SAI.
Persons serving as officers and Trustees of the Portfolio hold the same
positions with the Registrant and the Board of Trustees of Registrant has the
same committees with the same composition as the committees of the Portfolio's
Board.
(c) The fees and expenses of those Directors of the Registrant and Trustees
of the Portfolio who are not members of the Eaton Vance organization
(noninterested Directors/Trustees) are paid by the Registrant and the Portfolio,
respectively. (The Directors of the Registrant and Trustees of the Portfolio who
are members of the Eaton Vance organization receive no compensation from the
Registrant or the Portfolio.) For the twelve months ended October 31, 1996, the
noninterested Directors of the Registrant and Trustees of the Portfolio earned
the following compensation in their capacities as Directors and/or Directors
from the funds in the Eaton Vance fund complex(1):
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Total Compensation
Aggregate Aggregate from Registrant
NAME FROM REGISTRANT FROM PORTFOLIO AND FUND COMPLEX
---- --------------- -------------- ----------------
Donald R. Dwight $1,130 (2) $1,617 (2) $142,500
Samuel L. Hayes, III 1,352 (3) 1,740 (3) 153,750
Norton H. Reamer 1,293 1,672 142,500
John L. Thorndike 1,385 1,773 147,500
Jack L. Treynor 1,314 1,772 147,500
(1) The Eaton Vance fund complex consists of 212 registered investment
companies or series thereof.
(2) Includes $443 of deferred compensation.
(3) Includes $446 of deferred compensation.
Trustees of the Portfolio that are not affiliated with the investment
adviser, BMR, may elect to defer receipt of all or a percentage of their annual
fees in accordance with the terms of a Trustees Deferred Compensation Plan (the
"Trustees' Plan"). Under the Trustees' Plan, an eligible Trustee may elect to
have his deferred fees invested by the Portfolio in the shares of one or more
funds in the Eaton Vance Family of Funds, and the amount paid to the Trustees
under the Plan will be determined based upon the performance of such
investments. Deferral of Trustees' fees in accordance with the Trustees' Plan
will have a negligible effect on the Portfolio's assets, liabilities, and net
income, and will not obligate the Portfolio to retain the services of any
Trustee or obligate the Portfolio to pay any particular level of compensation to
the Trustee. Neither the Registrant nor the Portfolio has a retirement plan for
Trustees.
Item 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(a) Not applicable
(b) As of January 31, 1997, the Directors and officers of the Registrant,
as a group, owned in the aggregate less than 1% of the outstanding shares of the
Registrant. To the knowledge of the Registrant no person of record or
beneficially owns 5% or more of its shares, except the following shareholders
who owned of record the percentage of outstanding shares indicated after their
names as of January 31, 1997: Bank of America Trustee for the benefit of
Benjamin P. Douglas u/a dated 4/4/50 Los Angeles, CA 6.38% and Dengel & Co., c/o
Fiduciary Trust Company of New York, New York 5.58%.
<PAGE>
Item 16. INVESTMENT ADVISORY AND OTHER SERVICES
(a) - (d) Registrant incorporates by reference information concerning
investment advisory and other services provided to the Portfolio from
"Investment Adviser and Administrator" in Part I of the Feeder Fund SAI.
Prior to investing in the Portfolio, the Registrant retained Eaton Vance as
investment adviser. The management fees paid by the Registrant to Eaton Vance
Management for the period from January 1, 1996 through June 30, 1996, and for
the fiscal years ended December 31, 1995 and 1994 were $182,843, $346,898 and
$331,349, respectively.
(e) - (g) Not applicable
(h) and (i) Investors Bank & Trust Company ("IBT"), 89 South Street,
Boston, Massachusetts, acts as custodian for the Registrant and the Portfolio.
IBT has custody of all cash and securities representing the Registrant's
interest in the Portfolio, has custody of all the Portfolio's assets, maintains
the general ledger of the Portfolio and the Registrant and computes the daily
net asset value of interests in the Portfolio and the net asset value of shares
of the Registrant. In such capacity it attends to details in connection with the
sale, exchange, substitution, transfer or other dealings with the Portfolio's
investments, receives and disburses all funds, and performs various other
ministerial duties upon receipt of proper instructions from the Registrant and
the Portfolio. IBT charges fees which are competitive within the industry. A
portion of the fee relates to custody, bookkeeping and valuation services and is
based upon a percentage of the Registrant's and the Portfolio's net assets and a
portion of the fee relates to activity charges, primarily the number of
portfolio transactions. These fees are then reduced by a credit for cash
balances of the particular investment company at the custodian equal to 75% of
the 91-day, U.S. Treasury Bill auction rate applied to the particular investment
company's average daily collected balances for the week. Landon T. Clay, a
Director of EVC and an officer, Trustee or Director of other members of the
Eaton Vance organization, owns approximately 13% of the voting stock of
Investors Financial Services Corp., the holding company parent of IBT. In view
of Mr. Clay's interest in IBT, the Registrant is treated as a self-custodian
pursuant to Rule 17f-2 under the Investment Company Act of 1940, and the
Registrant's investments held by IBT as custodian's are thus subject to the
additional examinations by the Registrant's independent certified public
accountants as called for by such Rule. For the fiscal year ended October 31,
1996 the Registrant and the Portfolio paid IBT $17,146 and $125,097,
respectively.
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts are the
independent certified public accountants for the Registrant and the Portfolio.
As such they provide customary professional services in connection with the
audit function for a management investment company, including services leading
to the expression of an opinion on the financial statements in the annual report
to shareholders and preparation of federal tax returns.
Item 17. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Security Transactions" in Part I of
the Feeder Fund SAI.
<PAGE>
Prior to investing in the Portfolio, the Registrant invested directly in
Securities. During the six-month period from January 1, 1996 through June 30,
1996 and the fiscal years ended December 31, 1995 and 1994, the Registrant paid
brokerage commissions of $4,800, $2,285 and $8,004, respectively, on portfolio
security transactions. Of the total brokerage commission of $4,800, $2,285 and
$8,004, respectively, paid during the fiscal years ended December 31, 1995 and
1994, approximately $4,800, $1,635 and $7,204, respectively, was paid in respect
of portfolio security transactions aggregating approximately $2,034,588,
$876,626 and $4,085,537, respectively, to firms which provided some research
services to Eaton Vance (although many of such firms may have been selected in
any particular transaction primarily because of their execution capabilities).
Item 18. CAPITAL STOCK AND OTHER SECURITIES
(a) The Registrant has one class of securities, i.e., shares of common
stock of the par value of $1.00 each, all of one class and all having equal
voting rights. Shareholders are entitled to dividends when and as declared by
the Board of Directors, and to participate equally in any liquidation or
dissolution of the Registrant. Shares when issued will be fully paid and
nonassessable and fully transferable. Shares have no pre-emptive, subscription
or conversion rights. There are no sinking fund provisions.
The rights of the holders of the Common Stock may be modified by a vote of
the holders of not less than a majority of the outstanding voting securities (as
that term is defined in the Investment Company Act of 1940).
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Directors
unless and until such time as less than a majority of the Trustees holding
office have been elected by investors. In such an event the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interest
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The Declaration of Trust of the Portfolio provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Registrant or any other
investor in the Portfolio, unless either the remaining investors, by a majority
vote at a meeting of such investors, or a majority of the Directors of the
Portfolio, by written instrument consented to by a majority of its investors,
agree to continue the business of the Portfolio. This provision is consistent
with treatment of the Portfolio as a partnership for federal income tax
purposes.
(b) Not applicable
<PAGE>
Item 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED
(a) The Registrant does not offer its shares for sale.
(b) Registrant incorporates by reference information concerning valuation
of the Portfolio's assets from "Determination of Net Asset Value" in Part I of
the Feeder Fund SAI.
(c) Not applicable
Item 20. TAX STATUS
The Registrant has met the requirements of subchapter M for the taxable
year ending October 31, 1996 and intends to meet such requirements for the
taxable year ending October 31, 1997. Accordingly, the Registrant intends to
satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute all of its net investment income
in accordance with the timing requirements imposed by the Code, so as to avoid
any federal income or excise tax on such income. The Registrant's treatment of
net realized long-term capital gains is discussed below. Because the Registrant
invests its assets in the Portfolio, the Portfolio normally must satisfy the
applicable source of income and diversification requirements in order for the
Registrant to satisfy them. The Portfolio will allocate at least annually among
its investors, including the Registrant, each investor's distributive share of
the Portfolio's net investment income and any other items of income, gain, loss,
deduction or credit (other than net realized long-term capital gain which is
discussed below). The Portfolio will make allocations to the Registrant in
accordance with the Code and applicable regulations and will make moneys
available for withdrawal at appropriate times and in sufficient amounts to
enable the Registrant to satisfy the tax distribution requirements that apply to
the Registrant and that must be satisfied in order to avoid federal income
and/or excise tax on the Registrant. For purposes of applying the requirements
of the Code regarding qualification as a RIC, the Registrant will be deemed (i)
to own its proportionate share of each of the assets of the Portfolio and (ii)
to be entitled to the gross income of the Portfolio attributable to such share.
Allocated net realized long-term capital gains are normally retained by the
Portfolio, and the Portfolio pays the federal tax thereon. When this is done,
the shareholder includes in his personal income tax return his proportionate
share of such gains (as allocated by the Portfolio to the Registrant), takes a
credit for the payment of taxes thereon, and increases the tax cost basis of his
shares by an amount equal to such gains less the taxes paid. Due to regulations
imposed by the Internal Revenue Service the Registrant is required to distribute
net realized long-term capital gains (computed on the basis of the one-year
period ending on October 31 of such year) and 100% of any income from the
present year that was not paid out during such year and on which the Registrant
was not taxed. The Registrant therefore reserves the right to distribute such
capital gains when required. Certain distributions, if declared in October,
November or December and paid the following January, will be taxed to
shareholders as if received on December 31 of the year in which they are
declared.
In order to avoid federal excise tax, the Code requires that the Registrant
distribute (or be deemed to have distributed) by December 31 of each calendar
year at least 98% of its ordinary income (not including tax-exempt income) for
such year, at least 98% of the excess of its realized capital gains over its
realized capital losses, generally computed on the basis of the one-year period
ending on October 31 of such year, after reduction by any available capital loss
<PAGE>
carryforwards, and 100% of any income and capital gains from the prior year
(as previously computed) that was not paid out during such year and on which the
Registrant was not taxed. Further, under current law, provided that the
Registrant qualifies as a RIC for federal income tax purposes and the Portfolio
is treated as a partnership for Massachusetts and federal tax purposes, neither
the Registrant nor the Portfolio is liable for any income, corporate excise or
franchise tax in the Commonwealth of Massachusetts.
Foreign exchange gains and losses realized by the Portfolio and allocated
to the Registrant in connection with the Portfolio's investments in foreign
securities and certain options, futures or forward contracts or foreign currency
may be treated as ordinary income and losses under special tax rules. Certain
options, futures or forward contracts of the Portfolio may be required to be
marked to market (i.e., treated as if closed out) on the last day of each
taxable year, and any gain or loss realized with respect to these contracts may
be required to be treated as 60% long-term and 40% short-term gain or loss.
Positions of the Portfolio in securities and offsetting options, swaps, futures
or forward contracts may be treated as "straddles" and be subject to other
special rules that may, upon allocation of the Portfolio's income, gain or loss
to the Registrant, affect the amount, timing and character of the Registrant's
distributions to shareholders. Certain uses of foreign currency and foreign
currency derivatives such as options, futures, forward contracts and swaps and
investment by the Portfolio in certain "passive foreign investment companies"
may be limited or a tax election may be made, if available, in order to preserve
the Registrant's qualification as a RIC or avoid imposition of a tax on the
Registrant.
The Portfolio will allocate at least annually to the Registrant and its
other investors their respective distributive shares of any net investment
income and net capital gains (except as described above) which have been
recognized for federal income tax purposes (including unrealized gains at the
end of the Portfolio's fiscal year on certain options and futures transactions
that are required to be marked-to-market). Such amounts will be distributed by
the Registrant to its shareholders in cash or additional shares, as they elect.
Shareholders of the Registrant will be advised of the nature of the
distributions.
Certain investors in the Portfolio, including the Registrant and other
RICs, have acquired interests in the Portfolio by contributing securities. Due
to tax considerations, during the first five years following the contribution of
securities to the Portfolio by an investor, such securities will not be
distributed to any investor other than the investor who contributed those
securities. Investors who acquire an interest in the Portfolio by contributing
securities and who redeem that interest within five years thereafter will
generally receive back one or more of the securities they contributed. In
partial redemptions by such investors during this period, the Portfolio will
attempt to accommodate requests to distribute initially those contributed
securities and share lots with the highest cost basis.
The Portfolio has significant holdings of highly appreciated securities
that were contributed to the Portfolio by investors other than the Registrant.
If such securities were to be sold, the resulting capital gain would be
allocated disproportionately among the Portfolio's investors, with the result
that the Registrant would not be subject to taxation on any gain arising prior
to the contribution of the securities to the Portfolio. If any appreciated
securities to be contributed to the Portfolio by the Registrant are sold, the
resulting capital gain would be allocated to the Registrant.
<PAGE>
Any loss realized upon the redemption or exchange of shares with a tax
holding period of 6 months or less will be treated as a long-term capital loss
to the extent of any distribution of net long-term capital gains with respect to
such shares. All or a portion of a loss realized upon a taxable disposition of
Registrant shares may be disallowed under "wash sale" rules if other shares of
the Registrant are purchased (whether through reinvestment or dividends or
otherwise) within 30 days before or after the disposition. Any disallowed loss
will result in an adjustment to the shareholder's tax basis in some or all of
the other shares acquired.
The Registrant will not be subject to Massachusetts income, corporate
excise or franchise taxation as long as it qualifies as a RIC under the Code.
Amounts paid by the Registrant to individuals and certain other
shareholders who have not provided the Registrant with their correct taxpayer
identification number and certain required certifications, as well as
shareholders with respect to whom the Registrant has received notification from
the Internal Revenue Service or a broker, may be subject to "backup" withholding
of federal income tax from the Registrant's taxable dividends and distributions
and the proceeds of redemptions (including repurchases and exchanges) at a rate
of 31%. An individual's taxpayer identification number is generally his or her
social security number.
Non-resident alien individuals, foreign corporations and certain other
foreign entities generally will be subject to a U.S. withholding tax at a rate
of 30% on the Registrant's distributions from its ordinary income and the excess
of its net short-term capital gain over its net long-term capital loss, unless
the tax is reduced or eliminated by an applicable tax treaty. Distributions from
the excess of the Registrant's net long-term capital gain over its net
short-term capital loss received by such shareholders and any gain from the sale
or other disposition of shares of the Registrant generally will not be subject
to U.S. Federal income taxation, provided that non-resident alien status has
been certified by the shareholder. Different U.S. tax consequences may result if
the shareholder is engaged in a trade or business in the United States, is
present in the United States for a sufficient period of time during a taxable
year to be treated as a U.S. resident, or fails to provide any required
certifications regarding status as a non-resident alien investor. Foreign
shareholders should consult their tax advisers regarding the U.S. and foreign
tax consequences of an investment in the Registrant.
Shareholders should consult their own tax advisers with respect to these or
other special tax rules that may apply in their particular situations, as well
as the state, local or foreign tax consequences of investing in the Registrant.
The foregoing discussion does not describe many of the tax rules applicable
to IRAs nor does it address the special tax rules applicable to certain other
classes of investors, such as other retirement plans, tax-exempt entities,
insurance companies and financial institutions. Shareholders should consult
their own tax advisers with respect to these or other special tax rules that may
apply in their particular situations, as well as the state, local or foreign tax
consequences of investing in the Registrant.
Item 21. UNDERWRITERS
Not applicable because Registrant does not make a continuous offering of
Registrants shares.
<PAGE>
Item 22. CALCULATION OF PERFORMANCE DATA
Not applicable
Item 23. FINANCIAL STATEMENTS
Registrant incorporates by reference the audited financial information for
the Registrant and the Portfolio contained in the Registrant's shareholder
report for the fiscal year ended October 31, 1996 as previously filed
electronically with the Commission on January 3, 1997 (Accession Number
0000950156-97-000024).
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) THE FOLLOWING FINANCIAL STATEMENTS ARE INCORPORATED BY
REFERENCE TO THE REPORT TO SHAREHOLDERS OF FIDUCIARY
EXCHANGE FUND, INC. DATED OCTOBER 31, 1996 (ACCESSION NO.
0000950156-97-000024):
Portfolio of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes In Net Assets
Financial Highlights For the last Five Years Ended
Notes to Financial Statements
Independent Auditor's Report
(b) Exhibits:
(1) (a) Articles of Organization incorporating all amendments
through June 26, 1996 filed herewith.
(b) Articles of Amendment dated June 27, 1996 filed
herewith.
(2) (a) By-Laws incorporating all amendments through June 3,
1996 filed herewith.
(b) Amendment to By-Laws dated June 4, 1996 filed
herewith.
(3) Not Applicable
(4) Not Applicable
(5) Not Applicable
<PAGE>
(6) Not Applicable
(7) The Securities and Exchange Commission has granted the
Registrant an exemptive order that permits the Registrant
to enter into deferred compensation arrangements with its
independent Directors. See in the Matter of Capital
Exchange Fund, Inc., Release No. IC-20671 (November 1,
1994).
(8) (a) Custodian Agreement dated December 17, 1990 filed
herewith.
(8) (b) Amendment to Custodian Agreement dated October 23,
1995 filed herewith.
(9) Administrative Services Agreement with Eaton Vance
Management dated July 1, 1996, filed herewith.
(10) Not Applicable
(11) Not Applicable
(12) Not Applicable
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable
Item 26. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Number of Record
TITLE OF CLASS HOLDERS
-------------- -------
Capital Stock 266
$1.00 Par Value as of January 31, 1997
<PAGE>
Item 27. INDEMNIFICATION
No change from the information set forth in Item 27 of Form N-1A, filed as
Post-Effective amendment No. 9 to the Registration Statement under the 1940 Act,
File No. 811-1409, which information is incorporated herewith by reference.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Registrant incorporates herein by reference the information set forth under
the caption "Investment Adviser and Administrator" from Part I of the Feeder
Fund's SAI.
Item 29. PRINCIPAL UNDERWRITERS
Not applicable because Registrant does not make a continuous offering of
its shares.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books, and documents required to be maintained by
Registrant by Section 31(a) of the Investment Company Act of 1940 and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02110,
and the Registrant's transfer agent, First Data Investor Services Group, 4400
Computer Drive, Westborough, Massachusetts 01581-5120, with the exception of
certain corporate documents and portfolio trading documents as prescribed and
listed in Rules 31a-1(b), (4), (5), (6), (7), (9), (10), and (11) which are in
the possession and custody of the Registrant's Treasurer at 24 Federal Street,
Boston, Massachusetts 02110. Registrant is informed that all applicable
accounts, books and documents required to be maintained by registered investment
advisers are in the custody and possession of the Portfolio's investment
adviser, BMR, 24 Federal Street, Boston, Massachusetts 02110.
Item 31. MANAGEMENT SERVICES
Not Applicable
Item 32. UNDERTAKINGS
Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Boston and Commonwealth of
Massachusetts, on the 28th day of February, 1997.
FIDUCIARY EXCHANGE FUND, INC.
By /S/ JAMES L. O'CONNOR
---------------------------------------
James L. O'Connor, Treasurer
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement.
EXHIBIT NO. DESCRIPTION
(1) (a) Articles of Organization incorporating all amendments through
June 26, 1996
(b) Articles of Amendment dated June 27, 1996
(2) (a) By-Laws incorporating all amendments through June 3, 1996
(b) Amendment to By-Laws dated June 4, 1996
(8) (a) Custodian Agreement dated December 17, 1990
(b) Amendment to Custodian Agreement dated October 23, 1995
(9) Administrative Services Agreement with Eaton Vance Management
dated July 1, 1996
The Commonwealth of Massachusetts
KEVIN H. WHITE
Secretary of the Commonwealth
STATE HOUSE
BOSTON, MASS.
ARTICLES OF ORGANIZATION
(Under G.L. Ch. 156B)
NAME POST OFFICE ADDRESS
We, Robert S. Swain 172 Beacon Street, Boston,
Arthur H. Haussermann 22 Allen Road, Wellesley,
Thomas Otis Pine Street, Dover, Mass.
do hereby associate ourselves as incorporators with the intention of forming a
corporation under the provisions of General Laws, Chapter 156B.
1. The name by which the corporation shall be known is
FIDUCIARY EXCHANGE FUND, INC. as of 11-1-66
2. The purposes for which the corporation is formed and the nature of the
business to be transacted by it are as follows:
To engage in the business of an incorporated investment company of the
management type, investing and reinvesting, in accordance with the provisions of
Article I of this Agreement of Association and Articles of Organization
(hereinafter sometimes called "these Articles") the proceeds of the sale of the
shares of its capital stock; and to do any and all acts and things, necessary or
incidental thereto, to the extent permitted to business corporations under the
provisions of Chapter 156 of the General Laws of Massachusetts as heretofore and
from time to time amended. The Corporation may sell its shares only in
accordance with the provisions of Article VI of these Articles and may buy its
own shares only in accordance with the provisions of Article VII of these
Articles. The Corporation may borrow money and pledge securities as collateral
security for such borrowings only to such extent and subject to such
restrictions and limitations as may be provided in the By-Laws.
<PAGE>
3. The total number of shares and the par value, if any, of each class of
stock which the corporation is authorized is as follows:
WITHOUT PAR VALUE WITH PAR VALUE PAR
CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES VALUE
Preferred
Common 5,005,000 $1.00
4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established:
NONE
5. The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are as follows:
NONE
6. Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or
for limiting, defining, or regulation the powers of the corporation, or of
its directors or stockholders, or of any class of stockholders:
See Continuation Sheets 2A through 2Q
<PAGE>
The following lawful provisions are inserted in the Articles of
Organization for the conduct and regulation of the business of the corporation,
for its voluntary dissolution, for limiting, defining or regulating the powers
of the corporation, its directors and shareholders.
ARTICLE I
Investments
The Corporation shall have authority from time to time, subject to any
restrictions and limitations which may be contained in these Articles or the
By-Laws with respect to the character of investments and the diversification
thereof, to invest in, own, hold for investment or otherwise, and to sell or
otherwise dispose of (1) any shares of stock or voting trust certificates issued
or created in respect of shares issued by any corporation, either public,
quasi-public or private, association, trust or other organization, domestic or
foreign, (2) any bonds, notes, certificates of indebtedness, or other negotiable
securities, however named or described, issued by such organizations, (3) any
bonds, notes, certificates of indebtedness or other negotiable securities,
however named or described, issued by governments, states, counties, cities,
towns or districts, or other governmental agencies, domestic or foreign, and (4)
deposits in any bank or trust company in good standing organized under the laws
of the United States of America or under the laws of any State thereof.
ARTICLE II
Management of Securities Owned
The Board of Directors on behalf of the Corporation shall have the
authority to exercise all of the rights of the Corporation as owner of any
securities which might be exercised by any individual owning such securities in
his own right, including without limitation the right to vote by proxy for any
and all purposes (including the right to authorize any officer to execute
proxies), to consent to the reorganization, merger or consolidation of any
company, or to consent to the sale or lease of all or substantially all of the
property and assets of any company to any other company; to exchange any of the
securities of any company for the securities, including shares of stock, issued
therefor upon any such reorganization, merger, consolidation, sale or lease; to
exercise any conversion privileges, rights, options, and warrants incident to
the ownership of any security owned by it or acquired therewith; and to hold any
securities acquired in the name of the Custodian, or in the name of its nominee
or a nominee of the Corporation, or in any manner permitted herein or in the
By-Laws.
ARTICLE III
Maintenance of Assets
The Corporation shall maintain custodial and depository arrangements for
its assets in the manner referred to in the By-laws. As used in these Articles,
the term "Custodian" shall mean the principal custodian of the Corporation
appointed by the Board of Directors.
<PAGE>
ARTICLE IV
Contracts
(a) The Board of Directors may in their discretion from time to time enter
into an exclusive or non-exclusive underwriting contract or contracts providing
for the sale of the shares of this Corporation to net the Corporation not less
than the amount provided for in Article VI hereof, whereby the Corporation may
either agree to sell the shares to the other party to the contract or appoint
such other party its sales agent for such shares (such other party being herein
sometimes called the "underwriter"), and in either case on such terms and
conditions as may be prescribed in the By-Laws, if any, and such further terms
and conditions as the Board of Directors may in their discretion determine not
inconsistent with the provisions of this Article IV, of Article VI hereof or of
the By-Laws; and such contract may also provide for the repurchase of shares of
this Corporation by such other party as agent of the Corporation.
(b) The Board of Directors may in its discretion from time to time inter
into an investment advisory or management contract whereby the other party to
such contract shall undertake to furnish to the Board of Directors such
management, investment advisory, statistical and research facilities and
services and such other facilities and services, if any, and all upon such terms
and conditions, as the Board of Directors may in its discretion determine.
(c) Any contract of the character described in paragraphs (a) or (b) or any
contract with a custodian or subcustodian may be entered into with any
corporation, firm, trust or association, although one or more of the Board of
Directors or officers of this Corporation may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Corporation under or
by reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV.
The same person (including a firm, corporation, trust or association) may be the
other party to contracts entered into pursuant to paragraphs (a) and (b) above,
and any individual may be financially interested or otherwise affiliated with
persons who are parties to any or all of the contracts mentioned in this
paragraph (c).
(d) Any contract entered into pursuant to paragraph (a) or (b) above shall
be consistent with and subject to the requirements of Section 15 of the
Investment Company Act of 1940 (including any amendment thereof or other
applicable Act of Congress hereafter enacted) with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof, and no amendment to any contract entered into
pursuant to paragraph (b) shall be effective unless assented to by affirmative
vote of a majority of the outstanding shares of the Corporation.
(ARTICLE V deleted)
<PAGE>
ARTICLE VI
Sale of Shares of the Corporation
The Board of Directors may offer for sale, issue and sell or cause to be
offered, issued and sold, an initial issue of shares consisting of such number
of shares at prices to net the Corporation, before paying any taxes in
connection with the issue and sale, such amount per share as may be specified,
from time to time, by the Board of Directors or its delegate, provided that no
change in said amount shall be made after the registration statement under the
Federal Securities Act of 1933 relating to such shares shall have become
effective. In connection with such initial issue and sale, the Board of
Directors may accept securities of other issuers at market value in lieu of
cash, notwithstanding that the Federal income tax basis to the Corporation of
any securities so acquired may be less than the market value, provided that the
securities so acquired are of the character in which the Board of Directors are
permitted to invest the funds of the Corporation, and provided that the
consideration for the shares to be issued shall in every case be paid or
delivered to the Custodian, as agent of the Corporation, before the delivery of
any certificate for such shares.
The Board of Directors may from time to time issue and sell or cause to be
issued and sold shares of the Corporation for cash, which shall in every case be
paid to the Custodian as agent of the Corporation before the delivery of any
certificate for such shares. The authorized shares, including additional shares
which may hereafter be authorized by vote of the shareholders, as well as any
shares which may have been repurchased by the Corporation (herein sometimes
referred to as "treasury shares") may be sold at a price which will net the
Corporation, before paying any taxes in connection with such issue or sale, not
less than the par value thereof and not less than the net asset value thereof
(as defined in Article VIII hereof) in effect when the sale is made.
When an underwriting contract is in effect pursuant to Article IV (a) the
time of sale shall be the time when an unconditional order is placed with the
underwriter, unless the order is an unconditional order to be executed at the
public offering price to be established by a calculation of net asset value
later to become effective, in which event the time of sale shall be the time
when such net asset value becomes effective. Such contract may provide for the
sale of shares either at a price based on the net asset value in effect when the
order is placed with the underwriter or at a price based on such later
ineffective net asset value. No shares need be offered to existing shareholders
before being offered to others. No shares shall be sold by the corporation
(although shares previously contracted to be sold may be issued upon payment
therefor) during any period when the determination of net asset value is
suspended by declaration of the Board of Directors pursuant to the provisions of
Article VIII hereof. In connection with the acquisition by merger or otherwise
of all or substantially all the assets of another investment company or trust
the Board of Directors may issue or cause to be issued shares of the Corporation
and accept in payment therefor such assets at market value in lieu of cash,
notwithstanding that the Federal income tax basis to the Corporation of any
assets so acquired may be less than the market value, provided that such assets
are of the character in which the Board of Directors are permitted to invest the
funds of the Corporation.
ARTICLE VII
Redemption and Repurchase of Shares
of the Corporation
(a) In case any shareholder in the Corporation at any time desires to
dispose of shares recorded in his name, he may deposit his certificate or
certificates therefor duly endorsed or accompanied by a proper instrument of
transfer at the office of the Custodian together with a request that the
Corporation purchase the shares represented thereby in accordance with this
Article VII(a). The shareholder so depositing his certificate or certificates
shall be entitled to require the Corporation to purchase, and the Corporation
shall purchase, his said shares, but only at the net asset value of such shares
(as defined in Article VIII hereof) determined by or on behalf of the Board of
Directors next after said deposit.
<PAGE>
Payment for such shares shall be made by the Corporation to the shareholder
of record within seven (7) days after the date upon which the shares are
deposited. If the determination of the purchase price is postponed beyond the
date on which it would normally occur by reason of a declaration by the Board of
Directors suspending determination of net asset value pursuant to said Article
VIII, the right of the shareholder to have his shares purchased by the
Corporation shall be similarly suspended, and he may withdraw his certificate or
certificates from deposit if he so elects; or, if he does not so elect, the
purchase price shall be the net asset value of the shares deposited, determined
next after termination of such suspension and payment therefor shall be made
within seven (7) days thereafter.
Payment for such shares may at the option of the Board of Directors, or
such officer or officers as they may duly authorize for the purpose, in their
complete discretion be made in cash, or in kind, or partially in cash and
partially in kind. In case of payment in kind the Board of Directors, or their
delegate, shall have absolute discretion as to what security or securities shall
be distributed in kind and the amount of the same, and the securities shall be
valued for purposes of distribution at the figure at which they were appraised
in computing the asset value of the Corporation's shares, provided that any
shareholder who cannot legally acquire securities so distributed in kind by
reason of the prohibitions of the Investment Company Act of 1940 shall receive
cash.
(b) The Corporation may purchase shares of the Corporation by agreement
with the owner thereof (1) at a price not exceeding the net asset value per
share determined next after the purchase or contract of purchase is made or (2)
at a price not exceeding the net asset value per share determined at some later
time, and may make payment in whole or in part in kind, as provided in paragraph
(a).
(c) Shares purchased by the Corporation either pursuant to paragraph (a) or
paragraph (b) of this Article VII shall be deemed treasury shares and may be
resold by the Corporation.
ARTICLE VIII
NET ASSET VALUE OF SHARES
The net asset value of each share of the Corporation outstanding shall be
determined by the Board of Directors or its delegate not less frequently than
once on each business day (which term shall, wherever it appears in this
instrument, be deemed to mean each day on which the net asset value of the
shares of the Corporation is required to be computed by the provisions of the
Investment Company Act of 1940, including any amendment thereof or other
applicable Act of Congress hereafter enacted [the "1940 Act"] or rules or
regulations promulgated thereunder) and the net asset value as so determined
shall become effective at such time as the Board of Directors or its delegate
may determine. The Board of Directors may delegate any of its powers and duties
under this Article VIII with respect to the determination of net asset value and
appraisal of assets and liabilities. The Board of Directors or its delegate may
cause the net asset value per share last determined to be determined again, and
may determine the time when such redetermined net asset value may become
effective. Any such redetermination may be made by appraisal, or by estimate
based upon changes in the market value of representative or selected securities
or in recognized market averages or in other standard market data since the last
determination. For the purposes of Articles VII and VIII any reference to the
time at which a determination of net asset value is made shall mean the time as
of which the determination is made.
<PAGE>
The Board of Directors may declare a suspension of the determination of net
asset value for the whole or any part of any period with respect to which an
open-end investment company may declare such a suspension not inconsistent with
the provisions of the 1940 Act or rules or regulations promulgated thereunder.
Such suspension shall take effect at such time as the Board of Directors shall
specify but not later than the close of business on the business day next
following the declaration, and thereafter there shall be no determination of net
asset value until the Board of Directors shall declare the suspension at an end,
except that the suspension shall terminate in any event when the conditions
precedent prescribed by the 1940 Act or rules or regulations promulgated
thereunder to the declaration of such a suspension shall have terminated
The net asset value of each share of the Corporation as of any particular
time shall be the quotient (adjusted to the nearer cent) obtained by dividing
the value, as of such time, of the net assets of the Corporation (i.e., the
value of the assets of the Corporation less its actual and accrued liabilities
exclusive of capital and surplus) by the total number of shares outstanding
(exclusive of treasury shares) at such time, all as determined by the Board of
Directors or its delegate. In appraising the liabilities of the Corporation the
Board of Directors or its delegate may include in liabilities such reserves for
taxes, estimated expenses and contingencies as the Board or its delegate deems
fair and reasonable under the circumstances. All securities for which market
quotations are readily available shall be appraised at their market value and
all other securities and assets shall be appraised at their fair value, in each
case pursuant to methods or procedures authorized or approved by the Board of
Directors or any duly authorized committee thereof. All determinations of net
asset value and appraisals of assets and liabilities made in good faith by the
Board of Directors or its delegate shall be binding and conclusive upon all
stockholders and other persons interested.
For the purposes of this Article VIII:
(i) Shares of the Corporation sold shall be deemed to become
outstanding immediately after the close of business on the day on which the
contract of sale is made, and the sale price thereof (less commission, if
any, and less any stamp or other tax payable by the Corporation in
connection with the issuance thereof) shall thereupon be deemed an asset of
the Corporation.
(ii) Shares of the Corporation tendered for purchase by the
Corporation under Article VII(a) shall be deemed to be outstanding at the
close of business on the day as of which the purchase price is determined,
and thereafter they shall be deemed treasury stock and, until paid, the
price thereof shall deemed to be a liability of the Corporation.
(iii) Shares of the Corporation purchased by the Corporation under
Article VII(b) shall be deemed to be outstanding at the close of business
on the day as of which the purchase price is determined, and thereafter the
shall be deemed treasury stock and, until paid, the price thereof shall be
deemed to be a liability of the Corporation.
(iv) Portfolio securities owned by the Corporation which the Board of
Directors or its delegate shall, pursuant to Article VII(a) have selected
for distribution in redemption or repurchase of shares of the Corporation
tendered to it pursuant to Article VII(a) or repurchased pursuant to
Article VII(b) at any time shall be included in determining the price of
such shares of the Corporation, and thereafter neither such securities nor
such shares of the Corporation shall be included in determinations of net
asset value pursuant to this Article VIII.
<PAGE>
ARTICLE IX
Dividends
(a) The total of distributions to shareholders paid in respect of any one
fiscal year, subject to the exceptions noted below, shall be approximately equal
to (A) the net income, exclusive of profits or losses realized upon the sale of
securities or other property, for such fiscal year, determined in accordance
with good accounting practice (which, if the Board of Directors so determine,
maybe adjusted for net amounts included as such accrued net income in the price
of shares of capital stock of the Corporation issued or repurchased), but if the
net income exceeds the amount distributed by less than one cent per share
outstanding at the record date for the final dividend, the excess shall be
treated as distributable income of the following year. Such total of
distributions may also include in the discretion of the Board of Directors an
additional amount (B) which shall not substantially exceed the excess or profits
over losses on sales of securities or other property for such fiscal year. The
decision of the Board of Directors as to what, in accordance with good
accounting practice, is income and what is principal shall be final, and except
as specifically provided herein the decision of the Board of Directors as to
what expenses and charges of the Corporation shall be charged against principal
and what against income shall be final, all subject to any applicable provisions
of the Investment Company Act of 1940 and rules and regulations of the
Securities and Exchange Commission promulgated thereunder. For the purposes of
the limitation imposed by this paragraph (a), shares issued pursuant to
paragraph (b) of this Article IX shall be valued at the amount of cash which the
shareholders would have received if they had elected to receive cash in lieu of
such shares.
Inasmuch as the computation of net income and gains for Federal income tax
purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give to the Board of Directors the power in
its discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient to
enable the Corporation to avoid or reduce liability for taxes. Any payment made
to shareholders pursuant to clause (B) shall be accompanied by a written
statement showing the source or sources of such payment, and the basis of
computation thereof.
(b) The Board of Directors shall have power, to the fullest extent
permitted by the laws of Massachusetts, but subject to the limitation as to cash
distributions imposed by paragraph (a) of this Article IX, at any time or from
time to time to declare and cause to be paid distributions payable at the
election of any of the shareholders (whether exercised before or after the
declaration of the distributions) either in cash or in shares of capital stock,
provided that the sum of (i) the cash distribution actually paid to any
shareholder and (ii) the net asset value of the shares which that shareholder
elects to receive, in effect at such time at or after the election as the Board
of Directors may specify, shall not exceed the full amount of cash to which that
shareholder would be entitled if he elected to receive only cash. In the case of
a distribution payable in cash or shares of capital stock at the election of a
shareholder, the Board of Directors may prescribe whether a shareholder failing
to express his election before a given time shall be deemed to have elected to
take shares rather than cash, or to take cash rather than shares, or to take
shares with cash adjustment of fractions.
(c) Anything in this instrument to the contrary notwithstanding, the Board
of Directors may at any time declare and distribute pro rata among the
shareholders a "stock dividend" out of either authorized but unissued or
treasury shares of the Corporation, or both.
<PAGE>
ARTICLE X
Dealings with Directors and Officers
The Board of Directors shall not on behalf of the Corporation buy any
securities (other than shares issued by the Corporation) from or sell any
securities (other than shares issued by the Corporation) to or lend any assets
of the Corporation to any director or officer of the Corporation or any firm of
which any such director or officer is a member acting as principal; or have any
such dealings with the other party to any contract entered into pursuant to
paragraph (a) or (b) or Article IV hereof or with any person interested in such
other party as director, partner, trustee or officer; but the Corporation may
employ any such other party or any such person or any firm or company in which
any such person is so interested as broker upon customary terms.
Any director, officer or other agent of the Corporation may acquire, own
and dispose of shares of the Corporation to the same extent as if he were not a
director, officer or agent; and the Board of Directors may issue and sell, or
cause to be issued and sold for cash, shares in the Corporation to, and buy such
shares for cash from, any such person or any firm or company in which he is
interested, subject only to the general limitations herein contained as to the
sale and purchase of such shares; and all subject to any restrictions which may
be contained in the By-Laws.
ARTICLE XI
Winding Up and Dissolution
In the event that the holders of a majority of the shares of the
Corporation vote to wind up and liquidate the Corporation, no further shares of
the Corporations shall be sold or redeemed or repurchased by the Corporation,
and the then Directors shall proceed to wind up its affairs, liquidate its
assets, pay its liabilities and expenses, distribute assets or the proceeds
thereof among the holders of the shares in proportion to their holdings of
shares, and do all acts necessary to secure the dissolution of the Corporation.
For the purpose of such winding up, liquidation, distribution and
dissolution, the then Directors shall continue in office until such duties have
been duly performed. During the period of liquidation and until all distribution
to the shareholders has been completed the Directors shall cause the asset value
of the shares to be determined as hereinbefore provided, and their compensation
shall be subject to the limitation contained in Article V hereof.
Article XII
By-Laws
The By-Laws of the Corporation may provide that the Board of Directors may
amend or repeal the By-Laws in whole or in part without the assent or vote of
the shareholders, except with respect to any provision of the By-Laws which by
law, the Articles of Organization (including any amendments thereof) or the
By-Laws requires action by the stockholders; provided, however, that any By-Law
adopted by the Board of Directors may be amended or repealed by the
<PAGE>
stockholders. The By-Laws may provide that meetings of the stockholders may
be held at any place in the United States. The By-Laws may also provide for the
conduct of meetings of the Board of Directors or Committees thereof by means of
a telephone conference circuit. without the assent or vote of the Shareholders.
The By-Laws may also provide for the conduct of meetings of the Board of
Directors or Committees thereof by means of a telephone conference circuit.
ARTICLE XIII
Liability of Directors
The Directors of the Corporation shall not be liable to the Corporation or
to any shareholder or creditor thereof because of any action taken by them in
good faith, and in taking any such action the Directors shall be full protect in
relying in good faith upon the books of account of the Corporation or statements
or reports prepared by any of its officials or employees or by others who they
believe in good faith are qualified to make such statements or reports.
Nothing contained in the preceding sentence or elsewhere in this
Agreement of Association shall protect any director or officer of this
Corporation against any liability to the Corporation or to its shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.
ARTICLE XIV
(a) Subject to the exceptions and limitations contained in paragraph (b),
below:
(i) every person who is, or has been, a director or officer of the
Corporation shall be indemnified by the Corporation to the
fullest extent permitted by law against liability and against all
expenses reasonable incurred or paid by him in connection with
any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having
been a director or officer and against amounts paid or incurred
by him in the settlement thereof;
(ii) the words 'claim', 'action', 'suit', or 'proceeding' shall apply
to all claims, actions, suits or proceedings (civil, criminal or
other, including appeals), actual or threatened, whether or not
based on any act or omission antedating adoption of this Article
XIV; and words 'liability' and 'expenses' shall include, without
limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a director or
officer:
(i) against any liability to the Corporation or its shareholders by
reason of wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office;
(ii) with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interests of the
Corporation;
<PAGE>
(iii) in the event of a settlement unless there has been a
determination that such director or officer did not engage in
wilful misfeasance, bad faith , gross negligence or reckless
disregard of the duties involved in the conduct of his office,
(A) by the court or other body approving the settlement; or
(B) by vote of a majority of the outstanding shares of the
Corporation not including any shares owned by any affiliated
person (as defined in Section 2 (a) (3) of the Investment
Company Act of 1940) of the Corporation; or
(C) by vote of two-thirds (2/3) of those members of the Board of
Directors of the Corporation, constituting at least a
majority of such Board, who are not themselves involved in
the claim, action, suit or proceeding; or
(D) by written opinion of independent counsel, provided,
however, that any shareholder may, by appropriate legal
proceedings, challenge any such determination by the Board
of Directors, or by independent counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Corporation, shall be severable, shall not affect any
other rights to which any director or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such director or officer and
shall inure to the benefit of the heirs, executors and administrators of such a
person. Nothing contained herein shall affect any rights to indemnification to
which corporate personnel other than directors and officers may be entitled by
contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Article XIV may be advanced by the Corporation prior to final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient,
guaranteed by a surety bond issued by an insurance company qualified to do
business in the Commonwealth of Massachusetts, to repay such amount if it is
ultimately determined that he is not entitled to indemnification under this
Article XIV.
<PAGE>
Diversification Fund, Inc.
111 Devonshire Street
BOSTON 9, MASSACHUSETTS
Second Diversification Fund, Inc.
111 Devonshire Street
Boston, Massachusetts 02109
and
The Secretary of the Commonwealth
Commonwealth of Massachusetts
Gentlemen:
The undersigned Diversification Fund, Inc., a Massachusetts corporation,
does hereby consent, pursuant to Section 11(a) of Chapter 156B of the General
Laws of Massachusetts, to the assumption and use of the name "Second
Diversification Fund, Inc." by Second Diversification Fund, Inc., a
Massachusetts corporation being organized under said Chapter 156B.
A copy of this written consent to the assumption and use of such name may
be filed with the Secretary of the Commonwealth of Massachusetts.
Very truly yours,
DIVERSIFICATION FUND, INC.
By /S/ ROBERT S. SWAIN
--------------------------------
Robert S. Swain, President
<PAGE>
7. The first meeting of the incorporators was duly held on the 20th day of
July, 1966 at which by-laws of the corporation were duly adopted and at
which the initial directors, president, treasurer and clerk, whose
names are set out below, were duly elected.
8. The following information shall not for any purpose be treated as a
permanent part of the Articles of Organization of the corporation.
a. The post office address of the initial principal office of the
corporation in Massachusetts is:
111 Devonshire Street, Boston, Massachusetts 02109
b. The name, residence, and post office address of each of the initial
directors and following officers of the corporation elected at the
first meeting are as follows:
NAME RESIDENCE POST OFFICE ADDRESS
President: Robert S. Swain 172 Beacon Street 111 Devonshire St.
Boston, Mass. Boston, Mass.
Treasurer: Arthur H. Haussermann 22 Allen Road "
Wellesley, Mass.
Clerk: Arthur H. Haussermann 22 Allen Road "
Wellesley, Mass.
Directors: Robert S. Swain 172 Beacon Street "
Boston, Mass.
Arthur H. Haussermann 22 Allen Road "
Wellesley, Mass.
Edward F. Ryan 110 Bridge Street "
Manchester, Mass.
c. The date initially adopted on which the corporation's fiscal year
ends is:
September 30
d. The date initially fixed in the by-laws for the annual meeting of
stockholders of the corporation is:
4th Wednesday in January
e. The name and business address of the registered agent, if
any, of the corporation are:
NONE
IN WITNESS WHEREOF, and under the penalties of perjury, we, the above-named
INCORPORATORS, hereto sign our names, this 20th day of July 1966.
/S/ ROBERT S. SWAIN
/S/ ARTHUR H. HAUSSERMANN
/S/ THOMAS OTIS
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
=====================================
I hereby certify that, upon an
examination of the within-written articles
of organization, duly submitted to me, it
appears that the provisions of the General
Laws relative to the organization of
corporations have been complied with, and I
hereby approve said articles; and the filing
fee in the amount of $ having been paid,
said articles are deemed to have been filed
with me this day of
/s/ Kevin H. White
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF ARTICLES OF ORGANIZATION TO BE SENT
TO:
Arthur H. Haussermann
c/o Vance, Sanders & Company, Inc.
111 Devonshire Street
Boston, Massachusetts 02109
FILING FEE: 1/20 of 1% of the total amount of the
authorized capital stock with par value, and one cent a
share for all authorized shares without par value, but
not less than $75. General Laws, Chapter 156B.
Copy Mailed
FEDERAL IDENTIFICATION
NO. 04-6145886
THE COMMONWEALTH OF MASSACHUSETTS
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
We, Landon T. Clay , President
-------------------------------------------------
and Janet E. Sanders , Assistant Clerk
-------------------------------------------------
of Fiduciary Exchange Fund, Inc.
--------------------------------------------------------------,
(Exact name of corporation)
located at 24 Federal Street, Boston, MA 02110
-------------------------------------------------------,
(Street address of corporation in Massachusetts)
certify that these Articles of Amendment effecting articles numbered:
6
- -------------------------------------------------------------------
(Number those articles 1,2,3,4,5 and/or 6 being amended)
of the Articles of Organization was duly adopted at a meeting held June 27,
1996, by vote of:
203,743.906 Common Stock 292,800.022
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
and
- ----------- shares of ------------ of ----------- shares outstanding,
(type, class & series, if any)
being at least two-thirds of each type, class or series outstanding and entitled
to vote thereon.
<PAGE>
The following other lawful provisions for the conduct and regulation of
the business of the Corporation, for its voluntary dissolution, for limiting,
defining or regulating the powers of the Corporation, its directors or
shareholders are amended as indicated below:
VOTED: That Article XI of the Articles of Organization
of the Corporation be and it hereby is amended to
read as follows:
ARTICLE VI
Winding Up and Dissolution
(a) In the event that the holders of a majority of the shares of the
Corporation vote to wind up and liquidate the Corporation, no further shares of
the Corporation shall be sold or redeemed or repurchased by the Corporation, and
the then Directors shall proceed to wind up its affairs, liquidate its assets,
pay its liabilities and expenses, distribute assets or the proceeds thereof
among the holders of the shares in proportion to their holdings of shares, and
do all acts necessary to secure the dissolution of the Corporation.
(b) The holders of a majority of the shares of the Corporation
outstanding and entitled to vote thereon at a meeting called for the purpose may
vote to authorize a reorganization providing for the sale, lease or exchange of
all or substantially all of the Corporation's property and assets to another
registered investment company.
(c) for the purpose of such winding up, liquidation, reorganization,
distribution and dissolution, the then Directors shall continue in office until
such duties have been duly performed. during the period of liquidation or
reorganization and until all distribution to the shareholders has been completed
the Directors shall cause the net asset value of the shares to be determined as
hereinbefore provided, and their compensation shall be subject to the limitation
contained in Article V hereof.
The foregoing amendment(s) will become effective when these Articles of
Amendment are filed in accordance with General Laws, Chapter 156B, Section 6
unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.
19th July 96
SIGNED UNDER THE PENALTIES OF PERJURY, this ---- day of ----, 19---.
/s/ Landon T. Clay
- -------------------------------------------------, President
/s/ Janet E. Sanders
- -------------------------------------------------, Assistant Clerk
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
(General Laws, Chapter 156B, Section 72)
------------------------------------------------
------------------------------------------------
I hereby approve the within Articles of Amendment and,
the filing fee in the amount of $100.00 having been paid,
said articles are deemed to have been filed with me this
24th day of July, 1996.
Effective date:_______________________________
/s/ William Francis Galvin
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
BY-LAWS
OF
FIDUCIARY EXCHANGE FUND, INC.
ARTICLE I.
Offices.
Section 1. Principal Office. Until changed by the Board of Directors, the
principal office of the Corporation in the Commonwealth of Massachusetts shall
be in the City of Boston, County of Suffolk.
Section 2. Other Offices. The corporation may have offices at such other
places without as well as within the Commonwealth as the Board of Directors may
from time to time determine.
ARTICLE II.
Meetings of Shareholders.
Section 1. Annual Meeting. A meeting of the shareholders for the purpose of
electing a Board of Directors, and for the transaction of such other business as
may properly be brought before the meeting, shall be held annually on the second
Wednesday of April at 10:00 A.M.,Boston Time, beginning in 1967, unless said day
be a legal holiday, in which case the annual meeting shall be held on the next
day thereafter not a legal holiday. The purposes for which the annual meeting is
to be held, in addition to those prescribed by law, the Articles of Organization
(hereinafter called "the Articles") or the ByLaws, may be specified by the
President or the Board of Directors.
In the event that such annual meeting is omitted by oversight or otherwise
on the date herein provided for, a subsequent meeting may be held in place
thereof and any business transacted or elections held at such meeting shall be
as valid as if transacted or held at the annual meeting. Such subsequent meeting
shall be called in the same manner and as provided for special shareholders'
meetings.
Section 2. Special Meetings. Special meetings of the shareholders may be
called at any time by the President; and shall be called by the President or any
Vice President or the Secretary at the request, in writing or by resolution, of
a majority of the Board of Directors, or at the written request of the holder or
holders of ten per cent (10%) or more of the total number of shares of the then
issued and outstanding capital stock of the corporation entitled to vote at such
meeting. Any such request shall state the purposes of the proposed meeting.
Section 3. Place of Meeting. Meetings of the shareholders of the
Corporation shall be held at the office of the Corporation in Boston,
Massachusetts or at such other place within the Commonwealth of Massachusetts as
may be specified or fixed in the respective notices or waivers of notice
thereof.
Section 4. Notice of Meetings. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Clerk of the Corporation to each shareholder entitled to
<PAGE>
vote thereat, and to each shareholder who under the By-Laws is entitled to
such notice, by mailing the same, postage prepaid, addressed to him at his
address as it appears upon the books of the Corporation, at least twenty (20)
days before the time fixed for the meeting, and the person giving such notice
shall make affidavit thereto. If any shareholder shall have failed to inform the
Corporation of his post office address, no notice need be sent to him. No notice
need be given to any stockholder if a written waiver of notice, executed before
or after the meeting by the stockholder or his attorney thereunto authorized, is
filed with the records of the meeting.
Section 5. Quorum. Except as otherwise provided by law, to constitute a
quorum for the transaction of any business at any meeting of shareholders, there
must be present, in person or by proxy, holders of a majority of the total
number of shares of the then issued and outstanding capital stock of the
Corporation entitled to vote at such meeting.
If a quorum, as above defined, shall not be present for the purpose of any
vote that may properly come before any meeting of shareholders at the time and
place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present entitled to vote on such matter may by vote adjourn the meeting from
time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.
Section 6. Organization. At every meeting of the shareholders, the Chairman
of the Board of Directors, or in his absence the President, or in the absence of
the Chairman of the Board of Directors and the President, a Vice President shall
act as chairman of the meeting. In the absence of the Chairman of the Board of
Directors and the President and the Vice Presidents, the holders of a majority
in number of shares of the shareholders present in person or by proxy shall by
vote elect a chairman of the meeting. The Clerk, or in his absence, an Assistant
Clerk, or in the absence of the Clerk and an Assistant Clerk, any person
appointed by the chairman of the meeting shall act as secretary of the meeting.
Section 7. Voting. At each meeting of the shareholders every shareholder of
the Corporation shall be entitled to one (1) vote in person or by proxy for each
share of the then issued and outstanding capital stock of the Corporation then
having voting power in respect of the matter upon which the vote is to be taken,
standing in his name on the books of the Corporation at the time of the closing
of the transfer books for the meeting, or, if the books be not closed for any
meeting, on the record date fixed as provided in Section 4 of Article VI of
these By-Laws for determining the shareholders entitled to vote at such meeting,
or if the books be not closed and no record date be fixed, at the time of the
meeting. The record holder of a fraction of a share shall be entitled in like
manner to a corresponding fraction of a vote.
All elections of Directors, Treasurer and Clerk shall be conducted in any
manner approved at the meeting of the shareholders at which said election is
held, but shall be by ballot. The persons receiving the greatest number of votes
shall be deemed and declared elected. Except as otherwise required by law or by
the Articles or by these By-Laws all matters shall be decided by a majority of
the votes cast, as hereinabove provided, entitled to vote thereon.
Section 8. Proxies. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy; but no proxy which is dated
more than six months before the meeting named therein shall be accepted and no
such proxy shall be valid after the final adjournment of such meting. Every
proxy shall be in writing subscribed by the shareholder or his duly authorized
attorney and shall be dated, but need not be sealed, witnessed or acknowledged.
<PAGE>
Proxies shall be delivered to the Clerk of the Corporation or person acting
as secretary of the meeting before being voted. A proxy with respect to stock
held in the name of two or more persons shall be valid if executed by one of
them unless at or prior to exercise of the proxy the Corporation receives a
specific written notice to the contrary from any one of them. A proxy purporting
to be executed by or on behalf of a stockholder shall be deemed valid unless
challenged at or prior to its exercise.
ARTICLE III.
Board of Directors.
Section 1. Number of Directors. The number of Directors of the Corporation
shall be fixed for the ensuing year at the first meeting of shareholders and at
each annual meeting or meeting held in lieu thereof, and shall be not less than
five nor more than fifteen. Directors need not be shareholders.
The number of Directors of the Corporation may, from time to time, be
increased or decreased within the above limits by vote of a majority of the
Directors; provided that no reduction in the number of Directors shall affect
any Director whose term of office shall not have expired.
The term of office of each Director shall be from the time of his election
and qualification until the annual meeting next succeeding his election and
until his successor shall have been duly elected and shall have qualified.
Section 2. Powers and Duties. The business, property and affairs of the
Corporation shall be managed and controlled by or under the direction of the
Board of Directors. In each year, at a meeting to be held as soon as practicable
after the election of Directors, the Board shall elect the officers of the
Corporation as provided in Section 1 of Article V hereof. In addition to the
powers and authority by these By-Laws expressly conferred upon it, the Board of
Directors may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute or by the Articles or by these ByLaws
directed or required to be exercised or done by the shareholders and may elect
or appoint or provide for the appointment of such other officers and agents as
it may deem necessary or desirable; provided, however, that the Board of
Directors may in its discretion leave vacant for any period any office or
offices other than those of President, Treasurer and Clerk.
Section 3. Organization. At every meeting of the Board of Directors, the
Chairman shall preside and in the absence of the Chairman, the President shall
preside. In the absence of both the Chairman and the President a chairman chosen
by a majority of the Directors present shall preside. The Secretary, or in his
absence, the Clerk, or an Assistant Secretary, or, in the absence of the Clerk
and an Assistant Secretary, any person appointed by the chairman of the meeting
shall keep the records of the meeting.
Section 4. Vacancies and Resignations. Any vacancy in the Board of
Directors because of death, resignation, increase in number or otherwise, may be
filled either by the Board of Directors at any meeting thereof by a vote of a
majority of the Directors in office at the time of such meeting or by vote of
the shareholders at an annual meeting or a special meeting called for that
purpose, but subject to compliance with Section 16(a) of the Investment Company
Act of 1940. Any Director may resign his office at any time by delivering his
resignation in writing to the President or to the Clerk or Secretary of the
Corporation.Such resignation shall take effect at the date of its receipt or at
any later time specified therein; and the acceptance of such resignation, unless
required by the terms thereof, shall not be necessary to make such resignation
effective.
<PAGE>
Section 5. Place of Meetings, Offices and Transfer Books. The Board of
Directors may hold its meetings and have an office or offices outside of the
Commonwealth of Massachusetts, and may, to the extent permitted by law, keep the
books and records of the Corporation, and provide for the issue, transfer and
registration of its stock, outside of said State at such places as may, from
time to time, be designated by the Board of Directors.
Section 6. Meetings of the Board. The Board of Directors may in its
discretion provide for regular or stated meetings of the Board of Directors.
Notice of regular or stated meetings need not be given. Meetings of the Board of
Directors other than regular or stated meetings shall be held whenever called by
the Chairman, or in the absence of the Chairman, by the President, or by any one
of the Directors at the time being in office. Notice of the time and place of
each meeting other than regular or stated meetings shall be mailed to each
Director at least two (2) days before the meeting, or shall be telegraphed,
cabled, or wirelessed to each Director at his business address or personally
delivered to him at least one (1) day before the meeting; but such notice may be
waived by all the Directors. If all of the members of the Board of Directors
shall be present at any meeting, such meeting shall be a legal meeting and any
business may be transacted thereat, even though no notice thereof shall have
been given. If it is impracticable for the Directors to meet in person the Board
may meet by means of a telephone conference circuit to which all Directors are
connected or of which all Directors shall have waived notice, which meetings
shall be deemed to have been held at a place designated by the Board at the
meeting.
Section 7. Quorum and Manner of Acting. A majority of the Directors in
office shall be present in person at any regular or special meeting of the Board
of Directors in order to constitute a quorum for the transaction of business at
such meeting and (except as otherwise required by the Articles, by these By-Laws
or by statute) the act of a majority of the Directors present at any such
meeting, at which a quorum is present, shall be the act of the Board of
Directors. In the absence of a quorum, a majority of the Directors present may
adjourn the meeting from time to time until a quorum shall be present. Notice of
any adjourned meeting need not be given.
Section 8. Removal of Directors. Any Director may be removed at any time
with or without cause, upon the affirmative vote of the holders of a majority of
the shares of the then issued and outstanding stock of the Corporation.
ARTICLE IV.
Committees and Advisory Board.
Section 1. Executive and Other Committees. The Board of Directors, by vote
of a majority of the whole Board, may elect an Executive Committee to consist of
not less than three to hold office until the annual meeting of the shareholders
next succeeding their election, which shall have the power to conduct the
current and ordinary business of the Corporation while the Board is not session,
including the purchase and sale of securities and the designation of securities
to be delivered upon redemption of shares of the Corporation, and such other
powers of the Board as the Board may, from time to time, delegate to them. The
Board may also elect from their own number other Committees from time to time,
the number composing such Committees, the powers conferred upon the same and he
term of membership on such Committees to be determined by vote of the Directors.
The Board of Directors may designate a Chairman for any such Committee; in the
absence of such designation the Committee may elect its own chairman.
<PAGE>
Section 2. Meetings, Quorum and Manner of Acting. The Board of Directors
may (1) provide for stated meetings of any Committee, (2) specify the manner of
calling and notice required for special meetings of any Committee, (3) specify
the number of members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified powers delegated
to such Committee, (4) authorize the taking of decisions to exercise specified
powers by written assent of the requisite number of members of a Committee
without a meeting, (5) authorize the members of a Committee to meet by means of
a telephone conference circuit to which all members are connected or of which
all members shall have waived notice. The Executive Committee shall keep regular
minutes of its meetings and records of decisions taken without a meeting, cause
them to be recorded in a book designated for that purpose and kept in the office
of the Corporation and shall submit such minutes and other records of their
proceedings to the Board of Directors at the regular or special meetings of the
Board.
Section 3. Advisory Board. The Directors may appoint an Advisory Board to
consist in the first instance of not less than three members. Members of such
Advisory Board shall not be directors or officers and need not be shareholders.
Members of this Board shall hold office for such period as the Directors may by
resolution provide. Any member of such Board may resign therefrom by a written
instrument signed by him which shall take effect upon delivery to the Directors.
The Advisory Board shall have no legal powers and shall not perform the
functions of directors in any manner, said Board being intended merely to act in
an advisory capacity. Such Advisory Board shall meet at such times and upon such
notice as the Board of Directors may by resolution provide.
ARTICLE V.
Officers.
Section 1. General Provisions. The Officers of the Corporation shall be a
Chairman of the Board of Directors, and a President, a Treasurer and a Clerk,
who shall be elected by the Board of Directors at the firs meeting of the Board
following the annual meeting of shareholders. The Board of Directors may elect
or appoint such other officers or agents as the business of the Corporation may
require including one or more Vice Presidents, a Secretary and one or more
Assistant Treasurers and one or more Assistant Secretaries and one or more
Assistant Clerks. The Board of Directors may delegate to any officer or
committee the power to appoint any subordinate officers or agents.
Section 2. Term of Office and Qualifications. Except as otherwise provided
by law, by the Articles or by the By-Laws, the President, the Treasurer and the
Clerk shall hold office until the first meeting of the Board of Directors
following the annual meeting of shareholders and thereafter until his successor
shall have been duly elected and qualified, and all other officers shall hold
office until such first meeting unless a shorter term is specified in the vote
electing or appointing them. The Chairman of the Board of Directors and the
President shall be Directors of the Corporation. The Clerk and Treasurer or the
Clerk and Secretary or all three may be the same person. A Vice President and
the Treasurer or a Vice President and the Clerk and the Secretary may be the
same person, but the offices of Vice President, Clerk and Treasurer shall not be
held by the same person. The President shall hold no other office. Except as
above provided, any two offices may be held by the same person.
Section 3. Removal. The Board of Directors, at a regular meeting or any
special meeting of the Board, may remove any director with cause and any officer
with or without cause. Any officer or agent appointed by any officer or
committee may be removed, either with or without cause, by such appointing
officer or committee. A director or officer may be removed for cause only after
a reasonable notice and opportunity to be heard before the body proposing to
remove him.
<PAGE>
Section 4. Powers and Duties of the President. In the absence of the
Chairman of the Board of Directors, the President shall preside at all meetings
of the shareholders. Subject to the Board of Directors and to any Committees of
the Board, within their respect spheres, as provided by the Board of Directors,
he shall at all times exercise a general supervision and direction over the
affairs of the Corporation. He shall have the power to employ attorneys and
counsel for the Corporation and to employ such subordinate officers, agents,
clerks and employees as he may find necessary to transact the business of the
Corporation. He shall also have the power to grant, issue, execute or a sign
such powers of attorney, proxies or other documents as may be deemed advisable
or necessary in furtherance of the interests of the Corporation. The President
shall have such other powers and duties as, from time to time, may be conferred
upon or assigned to him by Board of Directors.
Section 5. Chairman of the Board of Directors. The Chairman of the Board of
Directors shall be chosen from among the Directors of this Corporation. When
present he shall preside at the meetings of the shareholders and of the Board of
Directors. He may call meetings of the Board of Directors and of any committee
thereof whenever he deems it necessary. He shall be an executive officer of this
Corporation and shall have, with the President, general supervision over the
business and policies of this Corporation, subject to the limitations imposed
upon the President, as provided in Section 4 of this Article V.
Section 6. Powers and Duties of Vice Presidents. In the absence or
disability of the Chairman of the Board of Directors and the President, the Vice
President, or (if there be more than one Vice President) any Vice President
designated by the Board of Directors shall perform al the duties and may
exercise any of the powers of the President, subject to the control of the
Board. Each Vice President shall perform such other duties as may be assigned to
him, from time to time, by the Board or by the President.
Section 7. Powers and duties of the Treasurer. The Treasurer shall be the
principal financial and accounting officer of the Corporation. He shall maintain
the securities and similar investments of the Corporation in accordance with
Article XIII of these By-Laws. He shall render a statement of the condition of
the finances of the Corporation to the Board of Directors as often as it shall
require the same and he shall in general perform all the duties incident to the
office of Treasurer and such other duties as from time to time may be assigned
to him by the Board of Directors. The Treasurer shall give a bond for the
faithful discharge of his duties, if required so to do by the Board of
Directors, in such sum and with such surety or sureties as the Board of
Directors shall require.
Section 8. Powers and Duties of the Clerk. The Clerk shall be a resident of
the Commonwealth of Massachusetts unless the Corporation has a resident agent
appointed for the purpose of service of process. The Clerk shall keep the
minutes of all meetings of the shareholders, in proper books provided for that
purpose; he shall have custody of the corporate seal of the Corporation; he
shall have charge of the stock transfer books, lists and records unless the same
are in the charge of a transfer agent in the Commonwealth of Massachusetts
appointed pursuant to Section 3 of Article VI; he or the Secretary shall attend
to the giving and serving of all notices by the Corporation in accordance with
the provisions of these By-Laws and as required by law; and subject to these
By-Laws, he shall in general perform all duties incident to the office of Clerk
and such other duties as from time to time may be assigned to him by the Board
of Directors.
Section 9. Powers and Duties of Secretary. The Secretary, if any, shall be
sworn and shall keep the minutes of all meetings of the Board of Directors. He
shall perform such other duties and have such other powers in addition to those
specified in these By-Laws as the Board of Directors shall from time to time
designate. If there be no Secretary or Assistant Secretary, the Clerk shall
perform the duties of Secretary.
<PAGE>
Section 10. Powers and Duties of Assistant Treasurers. In the absence or
disability of the Treasurer, any Assistant Treasurer designated by the Board of
Directors shall perform all the duties, and may exercise any of the powers, of
the Treasurer; and the Assistant Treasurers shall perform such other duties as
for time to time may be assigned to them by the Board of Directors. Each
Assistant Treasurer shall give a bond for the faithful discharge of his duties,
if required so to do by the Board of Directors, in such sum and with such surety
or sureties as the Board of Directors shall require.
Section 11. Powers and Duties of Assistant Clerk. In the absence or
disability of the Clerk, any Assistant Clerk designated by the Board of
Directors shall perform all the duties, and may exercise any of the powers, of
the Clerk; and the Assistant Clerks shall perform such other duties as from time
to time may be assigned to them by the Board of Directors.
Section 12. Powers and Duties of Assistant Secretaries. In the absence or
disability of the Secretary, any Assistant Secretary designated by the Board of
Directors shall perform all of the duties, and may exercise any of the powers of
the Secretary; and the Assistant Secretaries shall perform such other duties as
from time to time may be assigned to them by the Board of Directors.
Section 13. Compensation of Officers, Directors and Members of Advisory
Board. Subject to Article V of the Articles the compensation of the officers,
Directors and members of the Advisory Board shall be fixed from time to time by
the Board of Directors or, in the case of officers, by any committee or officer
upon whom such power may be conferred by the Board of Directors. No officer
shall be prevented from receiving such compensation as such officer by reason of
the fact that he is also a Director of the Corporation.
ARTICLE VI.
Corporate Stock.
Section 1. Certificates of Stock. Certificates for shares of the capital
stock of the Corporation shall be in such form as shall be approved by the Board
of Directors. They shall be numbered in the order of their issue and shall be
signed by, or in the name of the Corporation by, the President or any of the
Vice Presidents and by the Treasurer or an Assistant Treasurer and may but need
not be sealed with its seal; provided, however, that where such certificate is
signed by a transfer agent or registrar, other than a director, officer or
employee of the corporation, the signature of any such President, Vice
President, Treasurer or Assistant Treasurer and the corporate seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature of signatures shall have been used on any such certificate
or certificates shall cease to be such officer or officers of the Corporation
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Corporation.
Section 2. Transfer of Stock. Transfers of shares of capital stock of the
Corporation shall be made only n the books of the Corporation by the holder
thereof or by his attorney thereunto authorized by a power of attorney duly
executed and filed with the Clerk of the Corporation or a transfer agent, and on
the surrender of the certificate or certificates for such shares.
<PAGE>
Section 3. Transfer Agent and Registrar; Regulations. The Corporation
shall, if and whenever the Board of Directors shall so determine, maintain one
or more transfer officers or agencies each in charge of a transfer agent
designated by the Board of Directors where the shares of the capital stock of
the Corporation shall be directly transferable, and also one or more registry
offices, each in charge of a registrar, designated by the Board of Directors
where such shares of stock shall be registered, and no certificate for shares of
the capital stock of the Corporation in respect of which a transfer agent and/or
registrar shall have been designated, shall be valid unless countersigned by
such transfer agent and/or registered by such registrar. The principal transfer
agent shall be in the Commonwealth of Massachusetts and shall have charge of the
stock transfer books, lists and records, which shall be kept in Massachusetts in
an office which shall be deemed to be the stock transfer office of the
Corporation. The Board of Directors may also make such additional rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of the capital stock of the Corporation.
Section 4. Closing of Transfer Books and Fixing Record Date. The Board of
Directors may fix in advance time which shall be not more than sixty (60) 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 any transfer of stock on the books
of the Corporation after the record date; or without fixing such record date the
Board of Directors may for any of such purposes close the transfer books for all
or any part of such period.
Section 5. Lost, Destroyed or Mutilated Certificates. The holder of any
stock of the Corporation shall immediately notify the Corporation of any loss,
destruction or mutilation of the certificate therefor, and the Board of
Directors may, in its discretion, cause a new certificate or certificates to be
issued to him, in case of mutilation of the certificate, upon the surrender of
the mutilated certificate, or, in case of loss or destruction of the
certificate, upon satisfactory proof of such loss or destruction, and, in any
case, if the Board of Directors shall so determine, upon the delivery of a bond
in such form and in such sum and with such surety or sureties as the Board may
direct, to indemnify the Corporation against any claim that may be made against
it on account of the alleged loss or destruction of any such certificate.
Section 6. Record of Holder of Stock. the Corporation shall be entitled to
treat the person in whose name any share of stock is registered on the books of
the Corporation as the owner thereof, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person.
ARTICLE VII.
Fiscal Year.
The fiscal year of the Corporation shall begin the first day of January in
each year and shall end on the thirty-first day of December in the following
calendar year provided that the Board of Directors may from time to time change
the fiscal year.
<PAGE>
ARTICLE VIII
Seal.
The Board of Directors shall adopt a corporate seal which shall be in such
form and shall have such inscription thereon as the Board of Directors may from
time to time prescribe.
ARTICLE IX.
Waivers of Notice.
Whenever any notice whatever is required to be given under the provisions
of any statute of the Commonwealth of Massachusetts, under the provisions of the
Articles or these By-Laws, a waiver thereof in writing, signed by the person or
persons entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto. A notice shall be deemed to have
been telegraphed, cabled or wirelessed for the purposes of these By-Laws when it
has been delivered to a representative of any telegraph, cable or wireless
company with instructions that it be telegraphed, cabled or wirelessed. Any
notice shall be deemed to be given at the time when the same shall be mailed,
telegraphed, cabled or wirelessed.
ARTICLE X.
Investments; Borrowing and Pledging.
Section 1. The authority of the Board of Directors to invest the funds of
the Corporation, to borrow money and to pledge securities as provided in the
statement of purposes contained in the Articles shall be subject to the
following restrictions and limitations:
(A) The Corporation shall not purchase the securities of any issuer if
such purchase at the time thereof would cause more than five per cent (5%)
of the total assets of the Corporation (taken at market value) to be
invested in the securities of such issuer. The foregoing limitation shall
not apply to investments in Government securities as defined in the
Investment Company Act of 1940.
(B) The Corporation shall not purchase securities of any issuer if
such purchase at the time thereof would cause more than ten per cent (10%)
of any class of securities of such issuer to be held by the Corporation.
For this purpose all outstanding bonds and other evidences of indebtedness
shall be deemed to be a single class of securities of the issuer, and all
kinds of stock of an issuer preferred over the common stock as to dividends
or in liquidation shall be deemed to constitute a single class regardless
of relative priorities, series designations, conversion rights and other
differences.
(C) The Corporation shall not purchase securities issued by any other
investment company or investment trust except by purchase in the open
market where no commission or profit to a sponsor or dealer results from
such purchase other than the customary broker's commission, or except when
such purchase, though not made in the open market, is part of a plan of
merger or consolidation.
<PAGE>
(D) The Corporation shall not purchase securities of any issuer which
has a record of less than three (3) years' continuous operation including,
however, in such three (3) years the operation of any predecessor company
or companies, partnership or individual enterprise if the issuer whose
securities are proposed as an investment for funds of the Corporation has
come into existence as a result of a merger, consolidation, reorganization,
or the purchase of substantially all the assets of such predecessor company
or companies, partnership or individual enterprise, provided that nothing
in this sub-paragraph D shall prevent
(1) the purchase of securities of a company substantially all of
whose assets are
(a) securities of one or more companies which have had
a record of three (3) years' continuous operation, or
(b) assets of an independent division of another
company, which division has had a record of three (3) years'
continuous operation;
(2) the purchase of securities of (a) a public utility subject
to supervision or regulation as to its rates or charges by a
commission or board or officer of the United States or of
any state or territory thereof, or of the government of
Canada or of any province or territory of Canada or (b)
companies operating or formed for the purpose of operating
pipe or transmission lines for the transmission of oil, gas
or electric energy or like products,
provided that no security shall be purchased pursuant to exception
(1) or (2) of this sub-paragraph D if such purchase at the time thereof
will cause more than five per cent (5%) of the total assets of the Fund
(taken at market value) to be invested in securities of companies which
wold not then be eligible for purchase but for those exceptions.
(E) The Corporation shall not purchase or retain in its portfolio any
securities issued by an issuer any of whose officers, directors, trustees,
or security-holders is an officer or Director of the Corporation, or is a
member, officer, director or trustee of the Investment Adviser of the
Corporation, if after the purchase of the securities of such issuer by the
Corporation one or more of such persons owns beneficially more than
one-half of one per cent (1/2%) 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 (1/2%) of such shares or securities together own
beneficially more than five per cent (5%) of such shares or securities, or
both (all taken at market value).
(F) The Corporation shall not borrow amounts in excess of ten per cent
(10%) of the gross assets of the Corporation taken at cost determined in
accordance with good accounting practice, and no borrowing shall be
undertaken except as a temporary measure for extraordinary or emergency
purposes.
(G) The Corporation shall not pledge, mortgage, or hypothecate the
assets of the Corporation.
(H) The Corporation shall not
(a) purchase any securities or evidences of interest therein on
"margin", that is to say in a transaction in which it has borrowed all
or a portion of the purchase price and pledged the purchased
securities of evidences of interest therein as collateral for the
amount so borrowed.
<PAGE>
(b) 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 provided that if such right is
conditional the sale is made upon the same conditions.
ARTICLE XI.
Miscellaneous.
(A) No officer, Director or member of the Advisory Board of the
Corporation, and no member, officer, director or trustee of the Investment
Adviser of the Corporation (as that term is defined in the Investment
Company Act of 1940) or of the underwriter of the Corporation, and no
Investment Adviser or underwriter of the Corporation shall take long or
short positions in the securities issued by the Corporation.
(1) The foregoing provision shall not prevent the underwriter
from purchasing from the Corporation shares of the Corporation if such
purchases are limited (except for reasonable allowances for clerical
errors, delays and errors of transmission and cancellation of orders)
to purchases for the purpose of filling orders for such shares
received by the underwriter, and provided that orders to purchase from
the Corporation are entered with the Corporation or the Custodian
promptly upon receipt by the underwriter of purchase orders for such
shares, unless the underwriter is otherwise instructed by its customer
(2) The foregoing provision shall not prevent the underwriter
from purchasing shares of the Corporation as agent for the account of
the Corporation.
(3) The foregoing provision shall not prevent the purchase from
the Corporation or from the underwriter of shares issued by the
Corporation by any officer, Director, or member of the Advisory Board
of the Corporation or by any member, officer, director or trustee of
the Investment Adviser of the Corporation or of the underwriter of the
Corporation at the price available to the public generally at the
moment of such purchase or, to the extent that any such person is a
shareholder, at the price available to shareholders of the Corporation
generally at the moment of such purchase.
(B) The Corporation shall not lend assets of the Corporation to any
officer, director or member of the Advisory Board of the Corporation, or to
any member, officer, director or trustee of, or person financially
interested in the Investment Adviser of the Corporation, or the underwriter
of the Corporation, or to the Investment Adviser of the Corporation or to
the underwriter of the Corporation.
(C) The Corporation shall not impose any restriction upon the transfer
of the shares of the Corporation but this requirement shall not prevent the
charging of customary transfer agent fees.
(D) In the event that at any time less than a majority of the
Directors of the corporation holding office at that time were elected by
the shareholders, the Board of Directors or any officer authorized by the
By-Laws to call a special meeting of the shareholders shall forthwith cause
to be held as promptly as possible and in any event within sixty days a
special meeting of the shareholders for the purpose of electing Directors
to fill any existing vacancies in the Board of Directors; provided,
however, that no such meeting need be held during the sixty-day period
preceding the date specified in the By-Laws for the holding of the annual
meeting of the shareholders of the Corporation, if permitted by an order of
the Securities and Exchange Commission or succeeding governmental authority
exempting the delay of such meeting from the prohibition contained in
Section 16(a) of the Investment Company Act of 1940.
ARTICLE XII.
Report to Shareholders.
The Board of Directors shall at least semi-annually submit to the
shareholders a written financial report of the transactions of the Corporation,
including financial statements which shall at least annually be certified by
independent public accountants. Such reports shall clearly set forth, in
addition to the information required by the Investment Company Act of 1940 to be
furnished to shareholders of registered open-end investment companies, a
statement of all amounts paid to any security dealers, legal counsel, transfer
agent, disbursing agent, registrar or custodian, where such payments are made to
a firm, association, trust or corporation having a member, officer, director or
trustee who is an officer, Director of a member of the Advisory Board of the
Corporation.
ARTICLE XIII.
Maintenance of Assets
The Corporation shall place and maintain its securities and similar
investments in the custody of one or more of the following:
(1) one or more banks, trust companies, banking institutions or other
qualified depositories,
(2) one or more companies each of which is a member of a national
securities exchange as defined in the Securities Exchange Act of 1934, or
(3) the Corporation,
in each case subject to the Investment Company Act of 1940 and all applicable
rules, regulations and orders as the Securities and Exchange Commission may from
time to time prescribe, adopt or issue. Any such custodian may be employed to
keep all or any part of the books and accounts of the Corporation, to furnish
clerical and accounting services to the Corporation and to determine or compute
the net asset value of the shares of the Corporation, and shall perform such
acts and services upon such terms and conditions as shall be approved from time
to time by the Board of Directors of the Corporation. The Corporation may also
employ one or more subcustodians or authorize any such custodian to employ one
or more subcustodians, in each case to perform such acts and services upon such
terms and conditions as shall be approved from time to time by the Board of
Directors of the Corporation. Subject to the Investment Company Act of 1940 and
all applicable rules, regulations and orders as said Commission may from time to
time prescribe, adopt or issue, the Corporation may (or permit any such
custodian or subcustodian to) deposit all or any part of the securities owned by
the Corporation in one or more systems for the central handling of securities
(including, without limitation, securities depositories, clearing agencies and
book-entry systems), pursuant to which system all securities of any particular
class or series of any issuer deposited within the system are treated as
fungible and may be transferred or pledged by bookkeeping entry without physical
delivery of such securities.
<PAGE>
ARTICLE XIV.
Amendments.
The By-Laws, or any of them, of the Corporation may be altered, amended or
repealed or new By-Laws may be adopted by the vote of the holders of a majority
in number of shares of the stock of the Corporation issued, outstanding and
entitled to vote, at any annual meeting, or at a special meeting called for the
purpose. The Board of Directors of the Corporation, at any regular or special
meeting of the Board, may, by a majority vote of the whole Board, adopt or amend
supplementary By-Laws provided that notice of the proposed supplementary By-Law
shall have been given at a previous meeting of the Board, and provided further
that no such supplementary By-Law shall alter, amend or repeal any By-Law in
effect at the time of such action. Any such action of the Board of Directors may
be amended or repealed by the shareholders, as aforesaid, at any annual meeting
or any special meeting called for that purpose.
AMENDMENT TO
BY-LAWS
OF
FIDUCIARY EXCHANGE FUND, INC.
June 4, 1996
Pursuant to ARTICLE XV of the BY-LAWS of Fiduciary Exchange Fund, Inc., (the
Fund") upon vote of the holders of a majority of the outstanding shares of stock
of the Fund entitled to vote at a Special Meeting in Lieu of the Annual Meeting
of Stockholders held on June 4, 1996 ARTICLE VII of the BYLAWS of the Fund was
amended to read as follows:
ARTICLE VII
Fiscal Year
Effective July 1, 1996, the fiscal year of the Corporation shall end on October
31st in each year.
****************
December 17, 1990
Fiduciary Exchange Fund, Inc. hereby adopts and agrees to become a party to
the attached Master Custodian Agreement between the Eaton Vance Group of Funds
and Investors Bank & Trust Company.
FIDUCIARY EXCHANGE FUND, INC.
By /S/ LANDON T. CLAY
-------------------------------
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /S/ HENRY M. JOYCE
- ---------------------------------
Title: Vice President
<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions.............................................................1-2
2. Employment of Custodian and Property to be held by it...................2-3
3. Duties of the Custodian with Respect to
Property of the Fund......................................................3
A. Safekeeping and Holding of Property...................................3
B. Delivery of Securities..............................................3-6
C. Registration of Securities............................................6
D. Bank Accounts.........................................................6
E. Payments for Shares of the Fund.......................................6
F. Investment and Availability of Federal Funds..........................6
G. Collections...........................................................7
H. Payment of Fund Moneys..............................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased.......................................9
J. Payments for Repurchases of Redemptions
of Shares of the Fund..............................................9-10
K. Appointment of Agents by the Custodian...............................10
L. Deposit of Fund Portfolio Securities in Securities Systems........10-11
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper.......................................12-13
N. Segregated Account................................................13-14
O. Ownership Certificates for Tax Purposes..............................14
P. Proxies..............................................................14
Q. Communications Relating to Fund Portfolio Securities.................14
R. Exercise of Rights; Tender Offers................................14-15
-i-
<PAGE>
S. Depository Receipts..................................................15
T. Interest Bearing Call or Time Deposits...............................15
U. Options, Futures Contracts and Foreign Currency Transactions......15-17
V. Actions Permitted Without Express Authority..........................17
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value..........................................17
5. Records and Miscellaneous Duties.........................................18
6. Opinion of Fund`s Independent Public Accountants.........................18
7. Compensation and Expenses of Bank........................................18
8. Responsibility of Bank................................................18-19
9. Persons Having Access to Assets of the Fund..............................19
10. Effective Period, Termination and Amendment; Successor Custodian.........20
11. Interpretive and Additional Provisions...................................20
12. Notices..................................................................21
13. Massachusetts Law to Apply...............................................21
14. Adoption of the Agreement by the Fund....................................21
-ii-
<PAGE>
MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian of
its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", 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 and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Participants Trust Company", 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 and which has been
specifically approved as a securities depository for the Fund by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic 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 BUT
ONLY if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(f) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for United
States and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
<PAGE>
(g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities BUT ONLY if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form BUT ONLY
if the Custodian has received a certified copy of a vote of the Board approving
the participation by the Fund in such system.
(i) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by Eaton Vance
Management to the Custodian through the Eaton Vance equity trading system and
the Eaton Vance fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote delegating
authority to any person or persons to give a particular class of instructions
specifically requires that the approval of any person, persons or committee
shall first have been obtained before the Custodian may act on instructions of
that class, the Custodian shall be under no obligation to question the right of
the person or persons giving such instructions in so doing. 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. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
<PAGE>
cash consideration received by it for such new or treasury shares
("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 by the Fund and not
delivered by the Fund to the Custodian. The Fund will also deliver to the Bank
from time to time copies of its currently effective charter (or declaration of
trust or partnership agreement, as the case may be), by-laws, prospectus,
statement of additional information and distribution agreement with its
principal underwriter, together with such resolutions, votes and other
proceedings of the Fund as may be necessary for or convenient to the Bank in the
performance of its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely
all property of the Fund and on behalf of the Fund shall from time
to time receive delivery of Fund property for safekeeping. The
Custodian shall hold, earmark and segregate on its books and records
for the account of the Fund all property of the Fund, including all
securities, participation interests and other assets of the Fund (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof,(3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred
to herein as a "Securities System", and (4) held by the Custodian
or by any subcustodian referred to in Section 2 hereof and
maintained in any Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
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 or participation interests for
the account of the Fund, BUT ONLY against receipt of payment
therefor; if delivery is made in Boston or New York City,
payment therefor shall be made in accordance with generally
accepted clearing house procedures or by use of Federal
Reserve Wire System procedures; if delivery is made
elsewhere payment therefor shall be in accordance with the
then current "street delivery" custom or in accordance with
such procedures agreed to in writing from time to time by
the parties hereto; if the sale is effected through a
Securities System, delivery and payment therefor shall be
<PAGE>
made in accordance with the provisions of Paragraph L
hereof; if the sale of commercial paper is to be effected
through an Approved Book-Entry System for Commercial Paper,
delivery and payment therefor shall be made in accordance
with the provisions of Paragraph M hereof; if the securities
are to be sold outside the United States, delivery may be
made in accordance with procedures agreed to in writing from
time to time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition
of a portfolio security (i) upon the exercise of an option
written by the Fund and (ii) upon the failure by the Fund to
make a successful bid with respect to a portfolio security,
the continued holding of which is contingent upon the making
of such a bid;
2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests 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 or any subcustodian employed pursuant to Section 2
hereof;
5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name or
nominee name of any subcustodian employed pursuant to
Section 2 hereof; 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 or participation interests
are to be delivered to the Custodian or any subcustodian
employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance
with the "street delivery" custom; PROVIDED that the
Custodian shall adopt such procedures as the Fund from time
to time shall approve to ensure their prompt return to the
Custodian by the broker in the event the broker elects not
to accept them;
7) 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 of 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 or any subcustodian
employed pursuant to Section 2 hereof;
<PAGE>
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with 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 or any subcustodian employed pursuant to Section 2
hereof;
9) For delivery in connection with any loans of securities made
by the Fund (such loans to be made pursuant to the terms of
the Fund's current registration statement), 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 securities 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
Treasury, the Custodian will not be held liable or
responsible for the delivery of securities loaned by the
Fund prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets by
the Fund (if then permitted under circumstances described in
the current registration statement of the Fund), provided,
that the securities shall be released only upon payment to
the Custodian of the monies borrowed, except that in cases
where additional collateral is required to secure a
borrowing already made, further securities may be released
for that purpose; upon receipt of proper instructions, the
Custodian may pay any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and upon
surrender of the note or notes evidencing the loan;
11) When required for delivery in connection with any redemption
or repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian employed
pursuant to Section 2 hereof) and a broker-dealer registered
under the Securities Exchange Act of 1934 and, if necessary,
the Fund, relating to compliance with the rules of The
Options Clearing Corporation or of any registered national
securities exchange, or of any similar organization or
organizations, regarding deposit or escrow or other
arrangements in connection with options transactions by the
Fund;
13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof), and a futures
commissions merchant, relating to compliance with the rules
of the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by the
Fund;
<PAGE>
14) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a certified
copy of a vote of the Board specifying the securities to be
delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery
of such securities shall be made.
C. REGISTRATION OF SECURITIES Securities held by the
Custodian (other than bearer securities) for the account of
the Fund 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, or in the name or nominee name of any agent
appointed pursuant to Paragraph K hereof, or in the name or
nominee name of any subcustodian employed pursuant to
Section 2 hereof, or in the name or nominee name of The
Depository Trust Company or Participants Trust Company or
Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided,
that securities are held in an account of the Custodian or
of such agent or of such subcustodian containing only assets
of the Fund or only assets held by the Custodian or such
agent or such subcustodian as a custodian or subcustodian or
in a fiduciary capacity for customers. All certificates for
securities accepted by the Custodian or any such agent or
subcustodian on behalf of the Fund shall be in "street" or
other good delivery form or shall be returned to the selling
broker or dealer who shall be advised of the reason thereof.
D. 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 in pursuant to the terms of this Agreement, 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 the Custodian 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 in writing by
two officers of the Fund. Such funds shall be deposited
by the Custodian in its capacity as Custodian and shall
be subject to withdrawal only by the Custodian in that
capacity.
E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make
appropriate arrangements with the Transfer Agent and the
principal underwriter of the Fund to enable the Custodian to
make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares
as may be issued or sold from time to time by the Fund, in
accordance with the governing documents and offering
prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.
<PAGE>
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement
between the Fund and the Custodian, the Custodian shall, upon
the receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties,
1) invest in such securities and instruments as
may be set forth in such instructions on the
same day as received all federal funds
received after a time agreed upon between
the Custodian and the Fund; and
2) 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.
G. COLLECTIONS The Custodian shall promptly collect 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
promptly collect 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 agent thereof and
shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in
connection with such prompt collections and, without limiting
the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other income items
requiring presentations;
2) Present for payment all securities which may mature or
be called, redeemed, retired or otherwise become
payable;
3) Endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a
Securities System or in an Approved Book-Entry System
for Commercial Paper at the time funds become available
to the Custodian; in the case of securities maintained
in The Depository Trust Company funds shall be deemed
available to the Fund not later than the opening of
business on the first business day after receipt of
such funds by the Custodian.
The Custodian shall notify the Fund as soon as reasonably
practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does
not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in
writing, enclosing copies of any demand letter, any written
response thereto, and memoranda of all oral responses thereto
and to telephonic demands, and await instructions from the
Fund; the Custodian shall in no case have any liability for
any nonpayment of such income provided the Custodian meets the
standard of care set forth in Section 8 hereof. The Custodian
shall not be obligated to take legal action for collection
unless and until reasonably indemnified to its satisfaction.
<PAGE>
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal
with the same pursuant to proper instructions relative
thereto.
H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions,
which may be continuing instructions when deemed appropriate
by the parties, the Custodian shall pay out moneys of the Fund
in the following cases only:
1) Upon the purchase of securities, participation
interests, options, futures contracts, forward
contracts and options on futures contracts purchased
for the account of the Fund but only (a) against the
receipt of
(i) such securities registered as provided in
Paragraph C hereof or in proper form for
transfer or
(ii) detailed instructions signed by an officer
officer of the Fund regarding the participation
interests to be purchased or
(iii) written confirmation of the purchase by
the Fund of the options, futures contracts,
forward contracts or options on futures
contracts
by the Custodian (or by a subcustodian employed pursuant to
Section 2 hereof or by a clearing corporation of a national
securities exchange of which the Custodian is a member or by any
bank, banking institution or trust company doing business in the
United States or abroad which is qualified under the Investment
Company Act of 1940 to act as a custodian and which has been
designated by the Custodian as its agent for this purpose or by
the agent specifically designated in such instructions as
representing the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through a
Securities System, upon receipt of the securities by the
Securities System in accordance with the conditions set forth in
Paragraph L hereof; (c) in the case of a purchase of commercial
paper effected through an Approved Book-Entry System for
Commercial Paper, upon receipt of the paper by the Custodian or
subcustodian in accordance with the conditions set forth in
Paragraph M hereof; (d) in the case of repurchase agreements
entered into between the Fund and another bank or a
broker-dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate form or
through an entry crediting the Custodian's segregated,
non-proprietary account at the Federal Reserve Bank of Boston
with such securities along with written evidence of the agreement
by the bank or broker-dealer to repurchase such securities from
the Fund; or (e) with respect to securities purchased outside of
the United States, in accordance with written procedures agreed
to from time to time in writing by the parties hereto;
2) When required in connection with the conversion,
exchange or surrender of securities owned by the Fund
as set forth in Paragraph B hereof;
<PAGE>
3) When required for the redemption or repurchase of
Shares of the Fund in accordance with the provisions of
Paragraph J 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: advisory fees,
distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent
and legal fees, and other 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 other distributions
to holders of Shares declared or authorized by the
Board; and
6) For any other proper corporate purpose, BUT ONLY upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board, 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 corporate purpose, and naming
the person or persons to whom such payment is to be
made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED 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 signed by
two officers of 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; EXCEPT that in the case of a repurchase
agreement entered into by the Fund with a bank which is a
member of the Federal Reserve System, the Custodian may
transfer funds to the account of such bank prior to the
receipt of (i) the securities in certificate form subject to
such repurchase agreement or (ii) written evidence that the
securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary
account of the Custodian maintained with the Federal Reserve
Bank of Boston or (iii) the safekeeping receipt, PROVIDED
that such securities have in fact been so transfered by
book-entry and the written repurchase agreement is received
by the Custodian in due course; AND EXCEPT that if the
securities are to be purchased outside the United States,
payment may be made in accordance with procedures agreed to
in writing from time to time by the parties hereto.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
From such funds as may be available for the purpose, but
subject to any applicable votes of the Board and the current
redemption and repurchase procedures of the Fund, the
Custodian shall, upon receipt of written instructions from
the Fund or from the Fund's transfer agent or from the
principal underwriter, make funds and/or portfolio
securities available for payment to holders of Shares who
have caused their Shares to be redeemed or repurchased by
the Fund or for the Fund`s account by its transfer agent or
principal underwriter.
<PAGE>
The Custodian may maintain a special checking account upon
which special checks may be drawn by shareholders of the
Fund holding Shares for which certificates have not been
issued. Such checking account and such special checks shall
be subject to such rules and regulations as the Custodian
and the Fund may from time to time adopt. The Custodian or
or the Fund may suspend or terminate use of such checking
account or such special checks (either generally or for one or
more shareholders) at any time. The Custodian and the Fund
shall notify the other immediately of any such suspension or
termination.
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at
any time or times in its discretion appoint (and may at any
time remove) any other bank or trust company (PROVIDED such
bank or trust company is itself qualified under the
Investment Company Act of 1940 to act as a custodian or is
itself an eligible foreign custodian within the meaning of
Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian
described in this Section 3 as the Custodian may from time
to time direct; PROVIDED, however, that the appointment of
any such agent shall not relieve the Custodian of any of its
responsibilities or liabilities hereunder, and as between
the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent.
For the purposes of this Agreement, any property of the Fund
held by any such agent shall be deemed to be held by the
Custodian hereunder.
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS
The Custodian may deposit and/or maintain securities owned
by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal
Reserve Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2 keep
securities of the Fund in a Securities System provided that
such securities are maintained in a non-proprietary account
("Account") of the Custodian or such subcustodian in the
Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than
assets held by the Custodian or such subcustodian as a
fiduciary, custodian, or otherwise for its customers.
<PAGE>
(b) 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, and the Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings
maintained in each such Securities System.
(c) The Custodian shall pay for securities purchased
in book-entry form for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
such securities have been transferred to the Account, and (ii)
the making of any 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 only upon (i) receipt of notice or 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 notices or
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 promptly
provided to the Fund at its request. The Custodian shall
promptly send to the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice
or notice of each such transaction, 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 on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to the Securities System's accounting
system, system of internal accounting controls or procedures
for safeguarding securities deposited in the Securities
System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's
internal accounting controls and procedures for safeguarding
securities deposited in any Securities System; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating
to the Fund's participation in each Securities System will at
all times during regular business hours be open to the
inspection of the Fund's authorized officers, employees or
agents.
(e) The Custodian shall not act under this Paragraph
L in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Securities System; the Custodian shall also obtain appropriate
assurance from the officers of the Fund that the Board has
annually reviewed the continued use by the Fund of each
Securities System, and the Fund shall promptly notify the
Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.
<PAGE>
(f) Anything to the contrary in this Agreement
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
subcustodians or of any of its or their employees or from any
failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the
Securities System or any other person; at the election of the
Fund, it 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.
M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY
SYSTEM FOR COMMERCIAL PAPER Upon receipt of proper
instructions with respect to each issue of direct issue
commercial paper purchased by the Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by
the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and
no-action correspondence, and at all times subject to the
following provisions:
(a) The Custodian may (either directly or through one
or more subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry System
for Commercial Paper, provided that such paper is issued in
book entry form by the Custodian or subcustodian on behalf of
an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such
paper is maintained in a non-proprietary account ("Account")
of the Custodian or such subcustodian in an Approved
Book-Entry System for Commercial Paper which shall not include
any assets of the Custodian or such subcustodian or any other
person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its
customers.
(b) The records of the Custodian with respect to
commercial paper of the Fund which is maintained in an
Approved Book-Entry System for Commercial Paper shall identify
by book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open for
inspection by authorized officers, employees or agents of the
Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately
and currently stating the Fund's holdings of commercial paper
maintained in each such System.
(c) The Custodian shall pay for commercial paper
purchased in book-entry form for the account of the Fund only
upon contemporaneous (i) receipt of notice or advice from the
issuer that such paper has been issued, sold and transferred
to the Account, and (ii) the making of an entry on the records
of the Custodian to reflect such purchase, payment and
transfer for the account of the Fund. The Custodian shall
transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund
only upon contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
<PAGE>
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and payment
for the account of the Fund. Copies of all notices, advices
and confirmations of transfers of commercial paper for the
account of the Fund shall identify the Fund, be maintained for
the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the
Fund in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any
report or other communication received or obtained by the
Custodian relating to each System's accounting system, system
of internal accounting controls or procedures for safeguarding
commercial paper deposited in the System; the Custodian shall
promptly send to the Fund any report or other communication
relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in
any Approved Book-Entry System for Commercial Paper; and the
Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to
such agent's or subcustodian's internal accounting controls
and procedures for safeguarding securities deposited in any
Approved Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph
M in the absence of receipt of a certificate of an officer of
the Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the Custodian
shall also obtain appropriate assurance from the officers of
the Fund that the Board has annually reviewed the continued
use by the Fund of each Approved Book-Entry System for
Commercial Paper, and the Fund shall promptly notify the
Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the
Fund, the Custodian will terminate the use of any such System
as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved
Book-Entry System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund or in
the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper
by book-entry.
(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund for
any loss or damage to the Fund resulting from use of any
Approved Book-Entry System for Commercial Paper by reason of
any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such
agent or subcustodian to enforce effectively such rights as it
may have against the System, the issuer of the commercial
paper or any other person; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the System, the
issuer of the commercial paper 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.
<PAGE>
N. 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 Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the
Fund, the Custodian and any registered broker-dealer (or any
futures commission merchant), relating to compliance with
the rules of the Options Clearing Corporation and of any
registered national securities exchange (or of the Commodity
Futures Trading Commission or of any contract market or
commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other
arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or
written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes 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 purposes, BUT ONLY, in the case of
clause (iv), upon receipt of, in addition to proper
instructions, a certificate signed by two officers of
the Fund, setting forth the purpose such segregated
account and declaring such purpose to be a proper
purpose.
O. 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.
P. PROXIES The Custodian shall, with respect to the securities
held by it hereunder, cause to be promptly delivered to the
Fund all forms of proxies and all notices of meetings and
any other notices or announcements or other written
information affecting or relating to the securities, and
upon receipt of proper instructions shall execute and
deliver or cause its nominee to execute and deliver such
proxies or other authorizations as may be required. Neither
the Custodian nor its nominee shall vote upon any of the
securities or execute any proxy to vote thereon or give any
consent or take any other action with respect thereto
(except as otherwise herein provided) unless ordered to do
so by proper instructions.
Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call
and maturities of securities and participation interests 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 and other persons
relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange
<PAGE>
offers, the Custodian shall deliver promptly to the Fund all
written information received by the Custodian from issuers
and other persons relating to the securities and
participation interests whose tender or exchange is sought
and from the party (or his agents) making the tender or
exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender
offers, similar offers to purchase or exercise rights
(including, without limitation, pendency of calls and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options and the maturity of futures
contracts) affecting or relating to securities and
participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for
promptly notifying the Fund of all such offers in accordance
with the standard of reasonable care set forth in Section 8
hereof. For all such offers for which the Custodian is
responsible as provided in this Paragraph R, the Fund shall
have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of
proper instructions, the Custodian shall timely deliver to
the issuer or trustee thereof, or to the agent of either,
warrants, puts, calls, rights or similar securities for the
purpose of being exercised or sold upon proper receipt
therefor and upon receipt of assurances satisfactory to the
Custodian that the new securities and cash, if any, acquired
by such action are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely
deposit securities upon invitations for tenders of
securities upon proper receipt therefor and upon receipt of
assurances satisfactory to the Custodian that the
consideration to be paid or delivered or the tendered
securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the
contrary, the Custodian shall take all necessary action,
unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or
compulsory exchanges, calls, tenders, redemptions, or
similar rights of security ownership, and shall thereafter
promptly notify the Fund in writing of such action.
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of
proper instructions, surrender or cause to be surrendered
foreign securities to the depository used by an issuer of
American Depository Receipts or International Depository
Receipts (hereinafter collectively referred to as "ADRs")
for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has
acknowledged receipt of instructions to issue with respect
to such securities ADRs in the name of a nominee of the
Custodian or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, for delivery to the
Custodian or such subcustodian at such place as the
<PAGE>
Custodian or such subcustodian may from time to time
designate. The Custodian shall, upon receipt of proper
instructions, surrender ADRs to the issuer thereof against a
written receipt therefor adequately describing the ADRs
surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver
the securities underlying such ADRs to the Custodian or to a
subcustodian employed pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall,
upon receipt of proper instructions, place interest bearing
fixed term and call deposits with the banking department of
such banking institution (other than the Custodian) and in
such amounts as the Fund may designate. Deposits may be
denominated in U.S. Dollars or other currencies. The
Custodian shall include in its records with respect to the
assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking
institution and other appropriate details and shall retain
such forms of advice or receipt evidencing the deposit, if
any, as may be forwarded to the Custodian by the banking
institution. Such deposits shall be deemed portfolio
securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the
collection of income from such accounts and the transmission
of cash to and from such accounts.
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS
1. OPTIONS. The Custodians shall, upon receipt of
proper instructions and in accordance with the
provisions of any agreement between the Custodian,
any registered broker-dealer and, if necessary, the
Fund, relating to compliance with the rules of the
Options Clearing Corporation or of any registered
national securities exchange or similar organization
or organizations, receive and retain confirmations or
other documents, if any, evidencing the purchase or
writing of an option on a security or securities
index or other financial instrument or index by the
Fund; deposit and maintain in a segregated account
for each Fund separately, either physically or by
book-entry in a Securities System, securities subject
to a covered call option written by the Fund; and
release and/or transfer such securities or other
assets only in accordance with a notice or other
communication evidencing the expiration, termination
or exercise of such covered option furnished by the
Options Clearing Corporation, the securities or
options exchange on which such covered option is
traded or such other organization as may be
responsible for handling such options transactions.
The Custodian and the broker-dealer shall be
responsible for the sufficiency of assets held in
each Fund's segregated account in compliance with
applicable margin maintenance requirements.
<PAGE>
2. FUTURES CONTRACTS The Custodian shall, upon
receipt of proper instructions, receive and retain
confirmations and other documents, if any, evidencing
the purchase or sale of a futures contract or an
option on a futures contract by the Fund; deposit and
maintain in a segregated account, for the benefit of
any futures commission merchant, assets designated by
the Fund as initial, maintenance or variation
"margin" deposits (including mark-to-market payments)
intended to secure the Fund's performance of its
obligations under any futures contracts purchased or
sold or any options on futures contracts written by
Fund, in accordance with the provisions of any
agreement or agreements among the Fund, the Custodian
and such futures commission merchant, designed to
comply with the rules of the Commodity Futures
Trading Commission and/or of any contract market or
commodities exchange or similar organization
regarding such margin deposits or payments; and
release and/or transfer assets in such margin
accounts only in accordance with any such agreements
or rules. The Custodian and the futures commission
merchant shall be responsible for the sufficiency of
assets held in the segregated account in compliance
with the applicable margin maintenance and
mark-to-market payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall,
pursuant to proper instructions, enter into or cause
a subcustodian to enter into foreign exchange
contracts or options to purchase and sell foreign
currencies for spot and future delivery on behalf and
for the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such
banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts and options shall be deemed to be
portfolio securities of the Fund; and accordingly,
the responsibility of the Custodian therefor shall be
the same as and no greater than the Custodian's
responsibility in respect of other portfolio
securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of
cash from the currency broker or banking or financial
institution with which the contract or option is
made, the maintenance of proper records with respect
to the transaction and the maintenance of any
segregated account required in connection with the
transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or
banking or financial institutions with which the Fund
deals or for their failure to comply with the terms
of any contract or option. Without limiting the
foregoing, it is agreed that upon receipt of proper
instructions and insofar as funds are made available
to the Custodian for the purpose, the Custodian may
(if determined necessary by the Custodian to
consummate a particular transaction on behalf and for
the account of the Fund) make free outgoing payments
of cash in the form of U.S. dollars or foreign
currency before receiving confirmation of a foreign
exchange contract or confirmation that the
countervalue currency completing the foreign exchange
<PAGE>
contact has been delivered or received. The
Custodian shall not be responsible for any costs and
interest charges which may be incurred by the Fund
or the Custodian as a result of the failure or
delay of third parties to deliver foreign exchange;
provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and
shall be liable to the Fund in accordance with,
the provisions of Section 8.
V. 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 Agreement, PROVIDED, that all
such payments shall be accounted for by the Custodian
to the Treasurer of 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 nondiscretionary 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 Fund.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS
OF NET ASSET VALUE
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.
<PAGE>
5. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to
its activities and obligations under this Agreement 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,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Fund may from
time to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
7. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services
as Custodian and Agent, as agreed upon from time to time between the Fund and
the Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable
care, the Bank as Custodian and Agent 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.
<PAGE>
The Bank as Custodian and Agent 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.
The Bank as Custodian and Agent shall be held to the exercise of
reasonable care in carrying out the provisions of this Agreement but shall be
liable only for its own negligent or bad faith acts or failures to act.
Notwithstanding the foregoing, nothing contained in this paragraph is intended
to nor shall it be construed to modify the standards of care and responsibility
set forth in Section 2 hereof with respect to subcustodians and in subparagraph
f of Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.
If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank 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.
9. PERSONS HAVING ACCESS TO ASSETS OF THE FUND
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees, representatives or agents of
the Custodian or other persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.
<PAGE>
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement 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 sixty (60) days after the date of such delivery or mailing; PROVIDED, that
the Fund may at any time by action of its Board, (i) substitute another bank or
trust company for the Custodian by giving notice as described above to the
Custodian, or (ii) immediately terminate this Agreement in the event of the
appointment of a conservator or receiver for the Custodian by the Federal
Deposit Insurance Corporation or by the Banking Commissioner of The Commonwealth
of Massachusetts 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 Agreement, 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.
Unless the holders of a majority of the outstanding Shares of the Fund
vote to have the securities, funds and other properties held hereunder delivered
and paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company 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
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. 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 governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
<PAGE>
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such
other address as the Fund may have designated to the Bank, in writing, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110,
shall be deemed to have been properly delivered or given hereunder to the
respective addressees.
13. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth of
Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. ADOPTION OF THE AGREEMENT BY THE FUND
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Fund and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Fund and duly authorized officer of the Bank. This Agreement shall be deemed
to be duly executed and delivered by each of the parties in its name and behalf
by its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
AMENDMENT TO
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
This Amendment, dated as of October 23, 1995, is made to the MASTER
CUSTODIAN AGREEMENT (the "Agreement") between each investment company for which
Eaton Vance Management acts as investment adviser or administrator which has
adopted the Agreement (the "Funds") and Investors Bank & Trust Company (the
"Custodian") pursuant to Section 10 of the Agreement.
The Funds and the Custodian agree that Section 10 of the Agreement
shall, as of October 23, 1995, be amended to read as follows:
Unless otherwise defined herein, terms which are defined in the
Agreement and used herein are so used as so defined.
10. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
----------------------------------------------------------------
This Agreement shall become effective as of its execution, shall
continue in full force and effect until terminated by either party after August
31, 2000 by an instrument in writing delivered or mailed, postage prepaid to the
other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; PROVIDED, that the Fund may at any
time by action of its Board, (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian in the event
the Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts 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 Agreement, 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).
This Agreement may be amended at any time by the written agreement of
the parties hereto. If a majority of the non-interested trustees of any of the
Funds determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of shareholders of any Fund or Funds or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to
-1-
<PAGE>
the non-interested trustees of the Funds. If the conditions of the preceding
sentence are not met then the Fund or Funds may terminate this Agreement on
sixty (60) days written notice.
The Board of the Fund shall, forthwith, upon giving or receiving notice
of termination of this Agreement, appoint as successor custodian, a bank or
trust company having the qualifications required by the Investment Company Act
of 1940 and the Rules thereunder. The Bank, as Custodian, Agent or otherwise,
shall, upon termination of the Agreement, deliver to such successor custodian,
all securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
Except as expressly provided herein, the Agreement shall remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first above
written.
CAPITAL EXCHANGE FUND, INC. EATON VANCE MUNICIPALS TRUST II
DEPOSITORS FUND OF BOSTON, INC. EATON VANCE MUTUAL FUNDS TRUST
DIVERSIFICATION FUND, INC. EATON VANCE PRIME RATE RESERVES
EATON VANCE EQUITY-INCOME TRUST EATON VANCE SPECIAL INVESTMENT TRUST
EATON VANCE GROWTH TRUST EV CLASSIC SENIOR FLOATING-RATE FUND
EATON VANCE INVESTMENT FUND, INC. FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE INVESTMENT TRUST SECOND FIDUCIARY EXCHANGE FUND, INC.
EATON VANCE MUNICIPAL BOND FUND L.P. THE EXCHANGE FUND OF BOSTON, INC.
EATON VANCE MUNICIPALS TRUST VANCE, SANDERS EXCHANGE FUND
By: /S/ JAMES L. O'CONNOR
---------------------------------
Treasurer
INVESTORS BANK & TRUST COMPANY
By: /S/ MICHAEL F. ROGERS
--------------------------------
-2-
FIDUCIARY EXCHANGE FUND, INC.
ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made this 1st day of July, 1996, between Fiduciary Exchange Fund,
Inc., a Massachusetts corporation (the "Fund") and Eaton Vance Management, a
Massachusetts business Trust, (the "Administrator").
1. DUTIES OF THE ADMINISTRATOR. The Fund hereby employs the Administrator
to act as administrator of the Fund and to administer its affairs, subject to
the supervision of the Directors of the Fund, for the period and on the terms
set forth in this Agreement.
The Administrator hereby accepts such employment, and undertakes to afford
to the Fund the advice and assistance of the Administrator's organization in the
administration of the Fund and to furnish for the use of the Fund office space
and all necessary office facilities, equipment and personnel for administering
the affairs of the Fund and to pay the salaries and fees of all officers and
Directors of the Fund who are members of the Administrator's organization and
all personnel of the Administrator performing services relating to
administrative activities. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, except as otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Fund. It is intended that the assets of
the Fund will be invested in an interest in Tax-Managed Growth Portfolio (the
"Portfolio"), a registered open-end investment company having substantially the
same investment objective, policies and restrictions as the Fund. Boston
Management and Research ("BMR"), an affiliate of the Administrator, currently
acts as investment adviser to the Portfolio under the Investment Advisory
Agreement dated October 23, 1995 between the Portfolio and BMR.
2. ALLOCATION OF CHARGES AND EXPENSES. The Administrator shall pay the
entire salaries and fees of all of the Fund's Directors and officers who devote
part or all of their time to the affairs of the Administrator, and the salaries
and fees of such persons shall not be deemed to be expenses incurred by the Fund
for purposes of this Section 2. Except as provided in the foregoing sentence,
the Administrator shall not pay any expenses relating to the Fund including,
without implied limitation, (i) expenses of maintaining the Fund and continuing
its existence, (ii) registration of the Fund under the Investment Company Act of
1940, (iii) commissions, fees and other expenses connected with the acquisition,
disposition and valuation of securities and other investments, (iv) auditing,
accounting and legal expenses, (v) taxes and interest, (vi) governmental fees,
(vii) expenses of issue, sale, repurchase and redemption of shares, (viii)
expenses of registering and qualifying the Fund and its shares under federal and
state securities laws and of preparing and printing prospectuses for such
purposes and for distributing the same to shareholders and investors, (ix)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefor, (x) expenses of reports to governmental
officers and commissions, (xi) insurance expenses, (xii) association membership
dues (xiii) fees, expenses and disbursements of custodians and subcustodians for
all services to the Fund (including without limitation safekeeping of funds,
securities and other investments, keeping of books and accounts and
determination of net asset values), (xiv) fees, expenses and disbursements of
transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to the Fund, (xv) expenses for servicing
<PAGE>
shareholder accounts, (xvi) any direct charges to shareholders approved by the
Directors of the Fund, (xvii) compensation and expenses of Directors of the Fund
who are not members of the Adviser's organization, and (xviii) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and the obligation of the Fund to indemnify
its Directors and officers with respect thereto.
3. COMPENSATION OF ADMINISTRATOR. The Board of Directors of the Fund have
currently determined that, based on the current level of compensation payable to
BMR by the Portfolio under the Portfolio's present Investment Advisory Agreement
with BMR, the Administrator shall receive no compensation from the Fund in
respect of the services to be rendered and the facilities to be provided by the
Administrator under this Agreement. If the Directors determine that the Fund,
should compensate the Administrator for such services and facilities, such
compensation shall be set forth in a new agreement or in an amendment to this
Agreement to be entered into by the parties hereto.
4. OTHER INTERESTS. It is understood that Directors and officers of the
Fund and shareholders of the Fund are or may be or become interested in the
Administrator as trustees, officers, employees, shareholders or otherwise and
that trustees, officers, employees and shareholders of the Administrator are or
may be or become similarly interested in the Fund, and that the Administrator
may be or become interested in the Fund as shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) which the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
which may include the words "Eaton Vance" or "Eaton & Howard" or "Vance Sanders"
or any combination thereof as part of their name, and that the Administrator or
its subsidiaries or affiliates may enter into advisory or management or
administration agreements or other contracts or relationships with such other
companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Fund are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any security or other
investment.
6. SUB-ADMINISTRATORS. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Directors of the Fund.
<PAGE>
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including February
28, 1997 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 1997 is specifically
approved at least annually (i) by the Board of Directors of the Fund and (ii) by
the vote of a majority of those Directors of the Fund who are not interested
persons of the Administrator or the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Directors of the Fund or the trustee of the Administrator,
as the case may be, and the Fund may, at any time upon such written notice to
the Administrator, terminate this Agreement by vote of a majority of the
outstanding voting securities of the Fund. This Agreement shall terminate
automatically in the event of its assignment.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a
writing signed by both parties hereto, provided that no amendment to this
Agreement shall be effective until approved (i) by the vote of a majority of
those Directors of the Fund who are not interested persons of the Administrator
or the Fund, and (ii) by vote of the Board of Directors of the Fund.
9. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
FIDUCIARY EXCHANGE FUND, INC. EATON VANCE MANAGEMENT
By /s/ Landon T. Clay By /s/ H. Day Brigham, Jr.
----------------------- ------------------------------
PRESIDENT VICE PRESIDENT AND NOT INDIVIDUALLY
<TABLE> <S> <C>
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<NAME> FIDUCIARY EXCHANGE FUND
<S> <C>
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<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 13,507,573
<INVESTMENTS-AT-VALUE> 61,790,616
<RECEIVABLES> 0
<ASSETS-OTHER> 0
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<DIVIDEND-INCOME> 808,629
<INTEREST-INCOME> 53,168
<OTHER-INCOME> (133,137)
<EXPENSES-NET> 262,923
<NET-INVESTMENT-INCOME> 465,737
<REALIZED-GAINS-CURRENT> 3,265,132
<APPREC-INCREASE-CURRENT> 6,619,131
<NET-CHANGE-FROM-OPS> 9,350,000
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 480,714
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 17,055
<SHARES-REINVESTED> 437
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<AVERAGE-NET-ASSETS> 59,158,486
<PER-SHARE-NAV-BEGIN> 188.44
<PER-SHARE-NII> 1.609
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