SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to
Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.a-11(c) or ss. 240.a-12 [ ]
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
ZWEIG SERIES TRUST
(Name of Registrant as Specified In Its Charter
and Person Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party of the controversy pursuant to Exchange Act Rule
14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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Zweig Series Trust
5 Hanover Square--17th Floor
New York, New York 10004
[______] __, 1996
DEAR ZWEIG CASH FUND SHAREHOLDER:
We are pleased to invite you to a Special Meeting of Shareholders of Zweig
Series Trust to be held on April __, 1996.
The purpose of the meeting is to approve a unified modernization program which
will allow the Trust to adapt to changing market, economic and regulatory events
rapidly. As part of this program, the Trust is seeking to change its domicile
from Massachusetts to Delaware.
Most publicly-traded companies are not organized in the state in which their
headquarters are located, but rather are organized in a state which is conducive
to the legal needs of the company. Mutual funds are no different. In recent
years a number of mutual funds have reorganized as Delaware business trusts to
minimize operating expenses and to have various operational flexibilities which
are favorable to mutual funds. Your Fund would like to do the same and is
seeking your vote for approval of a new organizational structure as a Delaware
business trust.
After reviewing each matter carefully, the Board of Trustees unanimously
recommends that you vote FOR each of the proposals.
Your vote is important, regardless of the number of shares you own. Detailed
information about the proposals and the reasons for them are contained in the
proxy statement. Please take the time to review this material, cast your vote on
the enclosed Proxy Card and return the Proxy Card in the enclosed postage-paid
envelope.
The Trust is using Shareholder Communications Corporation, a professional proxy
solicitation firm, to assist shareholders in the voting process. As the date of
the meeting approaches, if we have not already heard from you, you may receive a
telephone call from Shareholder Communications reminding you to exercise your
right to vote.
Thank you very much for your assistance.
Sincerely,
EUGENE J. GLASER
Chairman and Chief Executive Officer
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Zweig Series Trust
5 Hanover Square--17th Floor
New York, New York 10004
TO THE SHAREHOLDERS OF ZWEIG CASH FUND:
Notice is hereby given that a Special Meeting (including any
adjournments thereof, the "Meeting") of the Shareholders (the "Shareholders") of
Zweig Series Trust, a Massachusetts business trust (the "Trust"), will be held
at the offices of the Trust, 5 Hanover Square, 17th Floor, New York, New York,
at [10:00 a.m.], on April __, 1996, to consider a program, unanimously
recommended by the Board, that would promote the ability of the Trust to adapt
to possible future economic, market and regulatory changes without the expense
and delay of costly additional Shareholders' meetings, while preserving the
basic investment characteristics and management style of the Trust. Separate
proxy documents that include materials relating to additional proposals, which
do not apply to Zweig Cash Fund, are being sent to Shareholders of Zweig
Strategy Fund, Zweig Appreciation Fund, Zweig Managed Assets and Government
Securities Series (together with Zweig Cash Fund, the "Series").
As part of this program, Shareholders of Zweig Cash Fund will be asked:
A. To consider and act upon proposals:
1. To ratify Coopers & Lybrand L.L.P. as independent accountants
for the Trust; and
2. To approve a plan providing for the conversion of the Trust
into a Delaware business trust; and
B. To transact such other business as may properly come before the Meeting.
The Board of Trustees has fixed the close of business on February 9,
1996 as the record date for the determination of shareholders entitled to notice
of and to vote at the meeting.
By Order of the Board of Trustees
EUGENE J. GLASER
Chairman and Chief Executive Officer
[_______] __, 1996
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE REQUESTED TO
COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
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Preliminary Copy
Subject to Completion, Dated February 1, 1996
Zweig Series Trust
5 Hanover Square, New York, New York 10004
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PROXY STATEMENT
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This Proxy Statement and enclosed form of proxy are being furnished in
connection with the solicitation of proxies on behalf of the Board of Trustees
(the "Board" or "Board of Trustees") of Zweig Series Trust, a Massachusetts
business trust (the "Trust"), for use at the Special Meeting of Shareholders to
be held on April __, 1996, at [10:00 a.m.] on the 17th Floor, 5 Hanover Square,
New York, New York (including any adjournments thereof, the "Meeting"), for the
purposes set forth in the accompanying Notice of Special Meeting of the
Shareholders. This statement is expected to be mailed on or about February __,
1996 to Shareholders of record on February 9, 1996.
The Trust is an open-end, diversified management investment company
organized as a Massachusetts business trust, and is authorized to issue its
shares of beneficial interest in separate series, each with its own investment
objective and policies. Each series may issue shares in one or more classes.
Currently there are five series. Each series issues Class A Shares, Class B
Shares and Class C Shares. The Zweig Cash Fund also issues Class M Shares. For
purposes of this Proxy Statement, the term "Series" includes Zweig Cash Fund,
Zweig Strategy Fund, Zweig Appreciation Fund, Zweig Managed Assets and
Government Securities Series. A separate proxy statement which addresses
Proposals ONE and TWO and certain other proposals is being sent to the
Shareholders of Zweig Strategy Fund, Zweig Appreciation Fund, Zweig Managed
Assets and Government Securities Series.
You can obtain a copy of the most recent Annual Report of the Trust
without charge by calling 1-800-272-2700 or by writing to the Trust at 5 Hanover
Square, 17th Floor, New York, New York 10004.
THE FACT THAT THIS PROXY STATEMENT, FORM OF PROXY OR OTHER SOLICITING MATERIAL
HAS BEEN FILED WITH OR EXAMINED BY THE SEC SHALL NOT BE DEEMED A FINDING BY THE
SEC THAT SUCH MATERIAL IS ACCURATE OR COMPLETE OR NOT FALSE OR MISLEADING, OR
THAT THE SEC HAS PASSED UPON THE MERITS OF OR APPROVED ANY STATEMENT CONTAINED
THEREIN OR ANY MATTER TO BE ACTED UPON BY SHAREHOLDERS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
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Introduction
This Proxy Statement is being furnished to Shareholders in connection
with the Meeting called by the Board of Trustees for the purposes set forth in
the accompanying Notice of Special Meeting of Shareholders. Any proxy given
pursuant to such solicitation and received in time for the Meeting will be voted
as specified in such proxy. If no instructions are given, proxies will be voted
FOR approval of each proposal as to which the shares represented by proxy are
entitled to vote, and in the discretion of the proxies named on the proxy card
with respect to any other matters properly brought before the Meeting or any
adjournment thereof. You can revoke the enclosed proxy at any time prior to the
exercise thereof by submitting a written notice of revocation or subsequently
executed proxy to the Trust at any time prior to the Meeting or at the Meeting
to the Secretary of the Meeting. Signing and mailing the proxy will not affect
your right to give a later proxy or to attend the Meeting and vote your shares
in person.
In addition to the solicitation of proxies by mail, the Trust may
utilize the services of officers and employees of the Trust, Zweig/Glaser
Advisers, the Trust's investment manager ("ZGA"), and Zweig Securities Corp, the
Trust's distributor, none of whom will receive any compensation therefor, to
solicit proxies by telephone, telegraph and personal interview, and may also
provide shareholders with a procedure for recording their votes by telegraph,
facsimile, telephone or other electronic means. In addition, the Trust has
retained Shareholder Communications Corporation (a proxy solicitation firm) to
assist in soliciting proxies. The estimated costs of solicitation of proxies,
including the estimated cost of $__________ plus out-of-pocket expenses of the
proxy solicitation firm, are expected to be $__________ and will be borne by the
Trust. The Trust may request brokers, custodians, nominees and fiduciaries to
forward proxy material to the beneficial owners of shares of record. Persons
holding shares as nominees will, upon request, be reimbursed for their
reasonable expenses incurred in sending soliciting material to their principals.
On February 9, 1996, the date for determination of Shareholders
entitled to receive notice of and to vote at the Meeting, there were _____
shares of Zweig Cash Fund, each entitled to one vote. To the Trust's knowledge,
except for [name and address of 5% owners of Zweig Cash Fund Class A shares],
which owns [___]% of Zweig Cash Fund Class A shares [(sole dispositive and
voting power)], no person is the beneficial owner of 5% or more of the
outstanding voting shares of any class of shares of any Series of the Trust. [As
of December 31, 1995, [except for _____ owned by __________] the trustees (the
"Trustees") and officers of the Trust, as a group, owned less than 1% of any
Series of the Trust.]
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Proposals
At meetings held on December 19, 1995 and January 24, 1996, the Board
of Trustees adopted resolutions proposing and declaring it advisable to, among
other things, move the domicile of the Trust to Delaware from Massachusetts to
take advantage of the favorable business environment provided by Delaware laws
and Delaware courts.
This Proxy Statement contains two proposals (the "Proposals"). Proposal
ONE requires for its approval the affirmative vote of a majority of votes cast
at the Meeting by Shareholders of the Trust. Proposal TWO requires for its
approval the affirmative "vote of a majority of the outstanding voting
securities" of the Series for which the change is proposed, as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), as the lesser of
(a) 67% of a Series' voting securities present at a meeting, if the holders of
more than 50% of the Series' outstanding voting securities are present or
represented by proxy, or (b) more than 50% of the Series' outstanding voting
securities. If the Shareholders of each Series do not approve Proposal TWO, the
Trust will continue to operate as a Massachusetts business trust with regard to
those Series which have not approved the Conversion and may (but would not be
obligated to) transfer the assets of some or all of those Series which have
approved the Conversion.
Proposal ONE:
PROPOSAL TO RATIFY SELECTION OF COOPERS & LYBRAND L.L.P.
AS INDEPENDENT ACCOUNTANTS FOR THE TRUST
By a vote of the non-interested Trustees, the firm of Coopers & Lybrand
L.L.P., 1301 Avenue of the Americas, New York, New York 10019, has been selected
as independent accountants for the Trust for the next fiscal year to certify any
financial statements of the Trust required by any law or regulation to be
certified by an independent accountant and filed with the SEC or any state. As
required by the 1940 Act, the vote of the Board of Trustees is subject to the
right of the Trust, by vote of a majority of its outstanding voting securities
at any meeting called for the purpose of voting on such action, to terminate
such employment without penalty. Coopers & Lybrand L.L.P. has advised the Trust
that it has no direct or material indirect ownership interest in the Trust.
Coopers & Lybrand L.L.P. served as the independent auditors for the
Trust during the most recent fiscal year. Services performed by Coopers &
Lybrand L.L.P. during such time have included (i) the audit of annual financial
statements and limited review of unaudited semiannual financial statements; (ii)
assistance and consultation in connection with filings with the SEC; and (iii)
the preparation of federal income tax returns filed on behalf of the Trust. In
recommending the selection of the Trust's accountants, the Board of Trustees
reviewed the nature and scope of the services to be provided (including
non-audit services) and whether the performance of such services would affect
the accountant's independence.
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Representatives of Coopers & Lybrand L.L.P. are not expected to be present at
the Meeting, but have been given the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
The ratification of the selection of Coopers & Lybrand L.L.P. as the
independent accountants of the Trust requires the affirmative vote of a majority
of votes cast at the Meeting by Shareholders of the Trust.
Conclusion. The Board of Trustees unanimously recommends that
Shareholders vote FOR the ratification of the selection of Coopers & Lybrand
L.L.P. as independent accountants to the Trust.
Proposal TWO:
PROPOSAL TO APPROVE A PLAN PROVIDING FOR THE CONVERSION
OF THE TRUST INTO A DELAWARE BUSINESS TRUST
The Board of Trustees has approved an Agreement and Plan of Conversion
and Termination (the "Plan of Conversion") in substantially the form attached to
this Proxy Statement as Exhibit A. The Plan of Conversion provides for a
conversion (the "Conversion") of the Trust, a Massachusetts business trust (the
"Massachusetts Trust" or the "Current Trust"), to a Delaware business trust (the
"Delaware Trust" or the "Successor Trust").
The current investment objectives, policies and limitations of the
Trust will not change except for the limited waivers related to the Conversion
as described on pages __. Therefore, the principal risk factors of an investment
in the Successor Trust are the same as those pertaining to an investment in the
Current Trust. The Successor Trust will have the same Trustees, manager,
distributor, custodian, transfer agent, legal counsel and independent
accountants as the Current Trust. The conversion from the Current Trust to the
Successor Trust will not affect the account number of a Shareholder or the
Shareholder's privileges such as reinvestment options, telephone redemption and
exchange privileges, nor will it have any affect on ZGA, which is not changing
its location or domicile. For a discussion of the principal differences between
the Massachusetts and Delaware business trust forms of organization, see
"Comparison of the Current Trust and the Successor Trust" on page __ and in
Schedule 1.
Description of the Successor Trust
Advantages of a Delaware Business Trust. The Trust is presently
organized as a Massachusetts business trust with five series of shares (the
"Current Series"). The Trustees unanimously recommend conversion of the
Massachusetts Trust to a Delaware Trust that will
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succeed to the business of the Massachusetts Trust. The Successor Trust would be
established pursuant to a trust instrument under the laws of Delaware
substantially in the form attached as Exhibit B (the "Delaware Trust
Instrument"). As a Delaware business trust, the Successor Trust's operations
will be governed by the Delaware Trust Instrument, the Successor Trust's Bylaws
and applicable Delaware law rather than by the Current Trust's Declaration of
Trust (the "Massachusetts Trust Instrument"), the Current Trust's Bylaws and
applicable Massachusetts law. Except as described in this Proposal, the
Conversion will not affect the operations of the Trust, which will continue to
have the same investment objectives and policies and be subject to the
provisions of the 1940 Act, the rules and regulations of the SEC thereunder, and
those of applicable state securities laws.
The Delaware Business Trust Act, adopted in 1988 (the "Delaware Act"),
provides that a shareholder of a Delaware business trust shall be entitled to
the same limitation of personal liability extended to stockholders of Delaware
corporations. It is believed that no similar statutory or other authority
limiting business trust shareholder liability exists in Massachusetts or in most
other states. (To guard against the risk that a court of another state would
apply that state's law on this point, the Delaware Trust Instrument will
continue the provisions of the Massachusetts Trust Instrument that written
obligations of the Trust contain a statement that such obligation may only be
enforced against the assets of the Trust and provides for indemnification out of
the Successor Trust.) Delaware law provides that, upon compliance with certain
statutory requirements with which the Successor Trust intends to comply, each
series shall not be liable for the debts of any other series of a trust; another
potential, although remote, risk in the case of a Massachusetts business trust.
Delaware has obtained a favorable national reputation for its business
laws and business environment. The Delaware courts, which may be called upon to
interpret the Delaware Act, are among the nation's most highly respected and
have an expertise in corporate matters which in part grew out of the fact that
Delaware corporate legal issues are concentrated in the Court of Chancery where
there are no juries and where judges issue written opinions explaining their
decisions. Thus, there is a well established body of precedent which may be
relevant in deciding issues pertaining to a Delaware business trust.
Under Delaware law, the Successor Trust will have greater flexibility
to respond to future business contingencies. In addition, the Trustees will have
the power to incorporate the Successor Trust, to merge or consolidate it with
another entity, to cause each series to become a separate trust and to change
the Successor Trust's domicile without a shareholder vote. This flexibility
could help to assure that the Successor Trust operates under the most advanced
form of organization and could reduce the expense and frequency of future
shareholder meetings for non-investment related issues.
For example, the Delaware Trust Instrument would permit the Trust to
develop so-called "master-feeder" fund structures when permitted by the policies
for the Series implementing such a structure. A number of mutual funds have
developed so-called "master- feeder" fund structures under which several
"feeder" funds invest all of their assets in a single pooled "master" fund (a
"Pooled Fund"). A Pooled Fund Structure (i.e., a structure
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where a Series would invest its assets in another investment company with
substantially the same investment objectives and policies) might, for example,
enable an institutional equity fund with a high initial minimum investment
amount for large investors to pool its investments with a retail equity fund
with lower minimum investment requirements. This structure allows several feeder
funds with the same investment objective but different distribution and
servicing features to combine their investments and manage them as one master
pool instead of managing them separately. The feeder funds combine their
investments by investing all of their assets in one master pooled fund that
would be organized as an open-end management investment company (mutual fund).
(Each feeder fund invested in a single master pooled investment retains its own
characteristics, but is able to achieve operational efficiencies and economies
of scale by investing together with the other feeder funds in the Pooled Fund
Structure.) Such structures can facilitate international distribution of mutual
funds, which currently is restricted by U.S. tax impediments to direct
investment by non-U.S. shareholders in U.S. funds, and also provide
distributional and operational advantages without disrupting basic investment
approaches. This Proposal TWO would provide the Trustees with the flexibility to
authorize the conversion to a Pooled Fund Structure.
While neither the Board nor the Trust has determined that any Series
should invest in a master fund, the Trustees believe it could be in the best
interests of each Series to adopt such a structure at a future date. At present,
certain of each Series' fundamental policies and limitations would prevent each
Series from investing all of its assets in another investment company, and would
require a vote of the Shareholders before such a structure could be adopted. To
the extent that any of the fundamental policies of any of the Series could be
construed as restricting the ability of the Trust to develop a "master-feeder"
structure, a vote to approve this Proposal TWO will also constitute a vote to
approve a revision of each Series' fundamental policies to the extent necessary
to effect a "master-feeder" structure, provided that the investment objectives
and the fundamental and other investment policies of the related series of the
master fund are substantially the same as the analogous series of any feeder
fund.
ZGA may manage a number of mutual funds with similar investment
objectives, policies, and limitations but with different features and services
(the "Comparable Funds"). Were these Comparable Funds to pool their assets,
operational efficiencies could be achieved, offering the opportunity to reduce
costs. Similarly, ZGA anticipates that a Pooled Fund Structure could facilitate
the introduction of new Zweig mutual funds, increasing the investment options
available to Shareholders. Each Series' method of operation and shareholder
services would not be materially affected by its investment in a Pooled Fund,
except that the assets would be managed as part of a larger pool. Were any
Series to invest all of its assets in a Pooled Fund, it would hold only a single
investment security, and the Pooled Fund would directly invest in individual
securities pursuant to this investment objective. The Pooled Fund would be
managed by ZGA or an affiliate. The Trustees would retain the right to withdraw
a Series' investments from a Pooled Fund at any time and would do so if the
Pooled Fund's investment objective and policies were no longer appropriate for
the Series. The Series would then resume investing directly in individual
securities as it does currently. Whenever a Series is asked to vote at a
shareholder meeting of the Pooled Fund,
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the Series will hold a meeting of its shareholders if required by applicable law
or the Series' policies to vote on the matters to be considered at the Pooled
Fund's shareholder meeting. The Series will vote all its shares at the Pooled
Fund meeting in the same proportion as the Series' shareholders voted theirs.
The Series would otherwise continue its normal operations. At present, the
Trustees have not considered any specific proposal to authorize pooling of
assets. The Trustees will authorize investing a Series' assets in a Pooled Fund
only if they determine that pooling is in the best interests of the Series and
if, upon advice of counsel, they determine that the investment will not have
material adverse tax consequences to the fund or its shareholders. In
determining whether to invest in a Pooled Fund, the Trustees will consider,
among other things, the opportunity to reduce costs and to achieve operational
efficiencies.
The ability of mutual funds to invest in other investment companies is
restricted by the 1940 Act and some state blue sky laws. If it determines in the
future to invest on a Pooled Fund basis, the Trust intends, to the extent
required, to seek federal and state regulatory approval in order to allow the
Series to invest in Pooled Funds. There is, of course, no assurance that all
necessary regulatory approvals will be obtained, or that cost reductions or
increased efficiencies will be achieved.
Description of the Delaware Trust Instrument. The provisions of the
Delaware Trust Instrument are similar to those of the Massachusetts Trust
Instrument, but various ambiguities and deficiencies have been addressed and
clarified in the Delaware Trust Instrument. In addition, the Delaware Trust
Instrument provides more details and additional flexibility as to certain
matters that were not addressed or were treated more restrictively by the
Massachusetts Trust Instrument. For example, the shareholder quorum and voting
requirements, including provisions pertaining to record dates for meetings and
adjournments, have been clarified and liberalized in order to provide increased
flexibility. Ambiguities formerly existing as to voting requirements have been
removed. Shareholders will be deemed to have preauthorized certain changes which
the Board could adopt for the structural form for each Series (which would, for
example, allow the Board to convert a Series into "master/feeder" format).
Schedule 1 to this proxy statement highlights certain similarities and
differences between the provisions of the current Declaration of Trust and the
proposed Delaware Trust Instrument. Although this summary is intended to
highlight important differences, it is based upon a summary of the Delaware
Trust Instrument's provisions and is therefore qualified by the provisions of
the complete Delaware Trust Instrument and the Successor Trust's Bylaws.
Certain of the differences between the Massachusetts Trust Instrument
and the Delaware Trust Instrument are not related to converting from a trust
instrument governed by Massachusetts law to a trust instrument governed by
Delaware law but are instead intended to alter certain terms in the Current
Trust. For example, as further described under "Comparison of the Current Trust
and the Successor Trust", the Delaware Trust Instrument provides for (i)
dollar-based voting as opposed to voting based upon one-share, one-vote, (ii)
elimination of the need for shareholder votes in certain instances (including
conversion to a master-feeder structure), (iii) voting in the aggregate as
opposed to voting by individual Series in certain instances, (iv) different
mechanics with respect to the termination of the
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Trust, a Series or a Class, (v) a broader ability of the Trustees to redeem
Shares of a Series or Class than under the Massachusetts Trust Instrument, and
(vi) the increased flexibility to permit the Trustees to provide for the
charging of expenses on a per account basis.
Comparison of the Current Trust and the Successor Trust
Although the Conversion would result in certain changes which are
described in this Proxy Statement, most aspects of administering the Successor
Trust as a Delaware business trust will remain unchanged.
Dollar-Based Voting Rights for Shareholders of the Trust. The Delaware
Trust Instrument provides voting rights based on a Shareholder's total dollar
interest in a fund or Series (dollar-based voting), rather than on the number of
shares owned as is provided in the Massachusetts Trust Instrument, for all
Shareholder votes. As a result, voting power would be allocated in proportion to
the value of each Shareholder's investment.
The original intent of the one-share, one-vote provision was to provide
equitable voting rights as required by the 1940 Act. In the case where a trust
has several series or funds, such as Zweig Series Trust, voting rights may have
become disproportionate since the net asset value per share ("NAV") of the
separate funds diverge over time. The Staff of the SEC has issued a "no-action"
letter permitting a trust to seek shareholder approval of a dollar-based voting
system. The proposed voting structure in the Delaware Trust Instrument will
comply with the conditions stated in the no-action letter.
Dollar-based voting will provide a more equitable distribution of
voting rights than the one-share, one-vote system currently in effect for
certain votes. The voting power of shareholders would be commensurate with the
value of the Shareholder's dollar investment rather than with the number of
shares held.
Under the Current Trust's voting provisions, an investment in a fund
with a lower NAV may have significantly greater voting power than the same
dollar amount invested in a fund with a higher NAV. Accordingly, a one-share,
one-vote system may provide certain Shareholders with a disproportionate ability
to affect the vote relative to Shareholders of other funds in the Trust.
On matters requiring trust-wide votes where all Series are required to
vote, Shareholders who own shares with a lower NAV than other funds in the trust
would be giving other Shareholders in the Trust more voting "power" than they
currently have. On matters affecting only one Series or Class, only shareholders
of that Series or Class vote on the issue. In this instance, under both the
Current Trust and Successor Trust, all Shareholders of the Series would have
substantially the same voting rights, since the NAV is substantially the same
for all Shares of a particular Series (the NAV of different Classes of a given
Series will also differ over time).
Management by the Board of Trustees. The Trust will continue to be
managed by or under the direction of its Trustees, who serve indefinite terms
and who shall have
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substantially the same responsibilities, powers and fiduciary duties as the
Trustees of the Current Trust. The Trustees of the Successor Trust are expected
to be the Current Trustees of the Trust. The Trustees of the Successor Trust
intend to elect the individuals currently serving as the officers of the Current
Trust to be the officers of the Successor Trust.
Issuance of Shares in Separate Series. The Delaware Trust Instrument
will establish separate series of shares (each, a "Successor Series") and
classes of each Successor Series to correspond to each of the Current Series and
Classes thereof. As is presently the case, the Trustees of the Successor Trust
may establish additional Series, designate the relative rights and preferences
of each Series, and may divide the shares of any Series into Classes. Shares of
each Series shall represent equal proportionate interests in the assets of that
Series only and each share of a particular Series shall be equal to each other
share of that Series (subject to any rights and preferences as may have been
established with respect to classes of shares within such Series). The
liabilities of each Series shall be borne solely by that Series, and no Series
will be responsible for the liabilities of another Series. Each Series may issue
an unlimited number of shares, and all shares issued will be fully paid and
nonassessable. Shares will have no subscription or preemptive rights or other
right to subscribe to any additional shares and only such conversion or exchange
rights as the Trustees may grant in their discretion.
Shareholder Meetings and Voting. Under the Delaware Trust Instrument,
Shareholders vote as a single class on all matters except (i) when required by
the 1940 Act, shares shall be voted by individual Series, (ii) when the Board of
Trustees has determined that the matter affects only the interests of one or
more Series, or (iii) when otherwise required by the provisions of the Delaware
Trust Instrument, then only Shareholders of such Series shall be entitled to
vote thereon. Under the Successor Trust there will normally be no meetings of
Shareholders for the purposes of electing Trustees unless and until such time as
less than a majority of the Trustees have been elected by the Shareholders, at
which time, to the extent required by the 1940 Act, the Trustees then in office
will call a Shareholders' meeting for the election of Trustees. Under the
Massachusetts Trust Instrument all Shares are voted by individual Series, except
(i) when required by the 1940 Act, Shares are voted in the aggregate and not by
individual Series; and (ii) when the Trustees have determined that the matter
affects only the interest of one or more Series, then only the Shareholders of
such Series shall be entitled to vote thereon. Under the Massachusetts Trust
Instrument the Shareholders may elect Trustees at any meeting of the
Shareholders called by the Trustees for that purpose. Thus, the essential
difference in voting as between the trusts is that, in the case of the Current
Trust, unless otherwise required by the 1940 Act or so determined by the
Trustees, voting is conducted by individual Series, while in the case of the
Successor Trust, voting is conducted in the aggregate, unless otherwise required
by the 1940 Act or so determined by the Trustees. The Shareholder voting
provisions of the Delaware Trust Instrument and Massachusetts Declaration of
Trust are summarized in Schedule 1.
Liability of Trustees. The Delaware Trust Instrument provides that a
Trustee, when acting in such capacity, shall not be personally liable for any
act or omission as Trustee, but nothing protects a Trustee against liability to
the Successor Trust or to its shareholders to
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which he or she 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 or her office. Furthermore, a Trustee is entitled to
indemnification against liability and to all reasonable expenses, under certain
conditions, to be paid from the assets of the Successor Trust; provided that no
indemnification shall be provided to any Trustee who has been found to be liable
to the Successor Trust or the shareholders by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office or not to have acted in good faith in the
reasonable belief that his or her action was in the best interest of the
Successor Trust.
The Current Declaration of Trust provides that Trustees shall not be
responsible for or liable in any event for neglect or wrongdoing of any Trustee
or any other officer, agent, employee or investment adviser, principal
underwriter, transfer agent or custodian of the Trust, provided that they have
exercised reasonable care and have acted under the reasonable belief that their
actions are in the best interest of the Trust; but nothing in the Massachusetts
Declaration of Trust shall protect any Trustee against any liability to which he
or she 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 or her office.
Termination of the Trust. Under the Current Trust, the vote of a
majority of the outstanding Shares (within the meaning of the 1940 Act) of any
affected Series or, if applicable, a vote of a majority of the outstanding
Shares (within the meaning of the 1940 Act) of the Trust is required (i) to sell
or convey the assets of the Trust or any affected Series to another trust,
partnership, association or corporation organized under the laws of any state
which is a diversified open-end management investment company as defined in the
1940 Act, for adequate consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or contingent, of
the Trust or any affected Series, and which may include shares of beneficial
interest or stock of such trust, partnership, association or corporation or (ii)
to sell and convert at any time into money all of the assets of the Trust or any
affected Series.
Under the Successor Trust, the Trust or any Series or Class may be
terminated at any time by vote of a majority of, in the case of a termination of
the Trust, the Shares of each Series entitled to vote voting separately by
Series, or, in the case of a termination of any Series of Shares or Class, the
Shares of such Series or Class entitled to vote. The Trust or any Series or
Class may also be terminated by the Trustees by written notice to the
Shareholders of the Trust or the Shareholders of the affected Series or Class.
Upon the requisite Shareholder vote or action by the Trustees to terminate the
Trust or any one or more Series of Shares or any Class thereof, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, of the Trust or of the particular Series or any
Class thereof as may be determined by the Trustees, the Trust shall in
accordance with such procedures as the Trustees consider appropriate reduce the
remaining assets of the Trust or of the affected Series or Class to
distributable form in cash or Shares (if any Series remain) or other securities,
or any combination thereof, and distribute the proceeds to the Shareholders of
the Series or Classes involved, ratably according to the number of Shares of
such Series or Class held by the several Shareholders
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of such Series or Class on the date of distribution. Thereupon, the Trust or any
affected Series or Class shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties relating thereto or
arising therefrom, and the right, title and interest of all parties with respect
to the Trust or such Series or Class shall be canceled and discharged.
Redemption. Except as permitted by the 1940 Act, both the Massachusetts
Trust Instrument and the Delaware Trust Instrument require the Current Trust and
the Successor Trust, respectively, to purchase such shares as are offered by any
Shareholder for redemption upon the presentation of a proper instrument of
transfer; and the Trust will pay therefor the net asset value thereof, subject
to any applicable sales charges.
Under the Successor Trust, the rights of the Trustees to redeem Shares
are broader than under the Current Trust. The Current Trust, upon 60 days' prior
written notice to the Shareholder, is entitled to liquidate involuntarily any
Shareholder's account if the aggregate Net Asset Value of the Shares held in the
account is less than $100. Under the Delaware Trust Instrument, the Board of
Trustees, subject to the requirements of the 1940 Act, may cause the Trust to
redeem Shares of any Series or Class held by any Person (i) if such Person is no
longer qualified to hold such Shares in accordance with such qualifications as
may be established by the Trustees, (ii) if the net asset value of such Shares
is below the minimum investment amount determined by the Trustees, or (iii) if
otherwise deemed by the Trustees to be in the best interest of the Trust or that
particular Series (or Class) as a whole.
Payment of Expenses by Shareholders. Under the Delaware Trust
Instrument the Trustees shall have the power to cause each Shareholder, or each
Shareholder of any particular Series or Class, to pay directly, in advance or
arrears, for charges of the Trust's custodian or transfer, Shareholder servicing
or similar agent, an amount fixed from time to time by the Trustees, by setting
off such charges due from such Shareholder from declared but unpaid dividends
owed such Shareholder and/or by reducing the number of Shares in the account of
such Shareholder by that number of full and/or fractional Shares which
represents the outstanding amount of such charges due from such Shareholder.
Under the Massachusetts Trust Instrument, expenses of a particular Series are
charged against the assets of that Series. There is no language in the
Massachusetts Trust Instrument regarding whether or not expenses of a Series may
be charged to a Shareholder in advance of their incurrence or that such charges
may be effected through the reduction of the number of Shares in the account of
a Shareholder.
The Plan of Conversion
Summary of the Plan of Conversion. The following discussion summarizes
the important terms of the Plan of Conversion. This summary is qualified in its
entirety by reference to the Plan of Conversion itself, which is included as
Exhibit A to this Proxy Statement.
Prior to the Conversion, a Delaware certificate of trust will be filed
and the Successor Trust established as a Delaware entity. The Delaware Trust
will be formed as a Delaware
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business trust pursuant to the Delaware Trust Instrument and such certificate of
Trust. Each Successor Series will have only nominal assets and no liabilities.
On the Exchange Date of the Conversion (the "Exchange Date"), the
Massachusetts Trust will assign, transfer and convey the assets of each Current
Series (and relevant class thereof), including all securities and cash held by
each Current Series and liabilities attributable to each such Current Series
(and relevant class thereof) to the corresponding Successor Series (and relevant
class thereof), and each such Successor Series (and relevant class thereof) will
acquire all of the assets of each corresponding Current Series (and relevant
class thereof) and the liabilities attributable to each such Current Series in
exchange for shares of beneficial interest of such Successor Series (the
"Delaware Trust Shares") equal in number and class thereof to the corresponding
number and class of the outstanding shares of each Current Series of the
Massachusetts Trust. In lieu of delivering certificates for the Delaware Trust
Shares, the Delaware Trust shall credit the Delaware Trust Shares to the
Massachusetts Trust's account on the share record books of the Delaware Trust
and shall deliver a confirmation thereof to the Massachusetts Trust. The
Massachusetts Trust shall then deliver written instructions to the Delaware
Trust's transfer agent to establish accounts for the shareholders of the
respective Current Series on the share record books relating to each
corresponding Successor Series. UPON COMPLETION OF THE CONVERSION, EACH OF THE
TRUST'S CURRENT SHAREHOLDERS WILL BE THE OWNER OF FULL AND FRACTIONAL DELAWARE
TRUST SHARES OF THE SAME SERIES AND CLASS EQUAL IN NUMBER, DENOMINATION, AND
AGGREGATE NET ASSET VALUE TO HIS OR HER MASSACHUSETTS TRUST SHARES.
Of course, the value of a Shareholder's investment will fluctuate
thereafter, based on the investment performance of the Successor Trust.
If the Conversion is approved, the Successor Trust will be held of
record by the Current Trust on the Exchange Date pending distribution to
Shareholders. Approval by Shareholders of this Proposal TWO will be deemed to
authorize the Current Trust (as sole initial shareholder of the Successor Trust
on the Exchange Date) to vote in favor of each of the Proposals set forth in
this Proxy Statement and approved by the Shareholders, so that the approval of
the respective Proposals may be made effective with respect to the Successor
Trust as well as the Current Trust. In addition, an approval of this Proposal
TWO by Shareholders of any Series will be deemed to authorize the Current Trust
(as shareholder on the Exchange Date) to render approval on such matters as may
be necessary, for regulatory purposes, in order to adopt or enter into any
agreements or plans on behalf of the Successor Fund that had previously been
approved by Shareholders of the Current Trust and are then in effect with
respect to the Current Trust. In addition, the Plan of Conversion contemplates
that the Current Trust as the then sole initial Shareholder of the Successor
Trust will approve (i) the management agreement with ZGA for the Successor Trust
(the "New Management Agreement"), (ii) the Distribution Agreement with Zweig
Securities Corp. and Distribution and Service Plans (the "New Plans") under Rule
12b-1 with respect to the Successor Trust in each case identical in duration and
all other respects to the contract or plan, as the case may be, currently in
effect with the Current Trust, (iii) the Zweig Series Trust Rule 18f-3
Multi-Class Plan identical in all respects to the plan currently in effect with
respect to the Current Trust, (iv) the election of Trustees of the Current Trust
as the Trustees of the Successor Trust, (v) such matters as may be necessary,
for regulatory purposes, in order to adopt or enter into any agreements or plans
on behalf of the Delaware Trust that had previously been approved by
shareholders of the Massachusetts Trust and are then in effect with respect to
the Massachusetts Trust, and (vi) all other contracts and agreements currently
in effect with the Current Trust, including, but not limited to, accounting,
custody, transfer agency, service, procedural and
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safekeeping and repurchase agreements, and approval of the proposed conversion
of the Current Trust to the Delaware Trust shall constitute approval of each of
the foregoing actions, including approval of the continuation of each contract
and plan, as the case may be, with the Delaware Trust.
Each Delaware Trust Trustee will hold office without limit in time
until such Trustee resigns, dies, is declared bankrupt or incompetent by a court
of appropriate jurisdiction or is removed by two-thirds of the Trustees, or a
vote of two-thirds of the outstanding shares of the Trust at a meeting, with or
without cause. Whenever there shall be fewer than the designated number of
Trustees, until additional Trustees are elected or appointed as provided in the
Delaware Trust Instrument to bring the total number of Trustees equal to the
designated number, the Trustees in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Delaware Trust Instrument. If, at any time,
less than a majority of the Trustees holding office has been elected by
shareholders, the Trustees then in office shall call a Shareholders' meeting for
the purpose of electing a Board of Trustees. Otherwise, there will normally be
no meeting of Shareholders for the purpose of electing Trustees. The initial
Trustees will be deemed to have been elected by the Shareholders pursuant to the
mechanism described above.
Assuming the Plan of Conversion is approved, it is currently
contemplated that the Conversion will become effective at the close of business
on April __, 1996, unless the Trustees of the Successor Trust determine that it
would not be in the best interests of the Shareholders to do so at that time or
at all. The Plan of Conversion will only apply to those Current Series whose
Shareholders render the requisite vote to approve the Plan of Conversion;
therefore, the Current Trust may (but would not be obligated to) transfer the
assets of only some of the Current Series.
The obligations of the Massachusetts Trust and the Delaware Trust under
the Plan of Conversion are subject to various conditions as stated therein.
Notwithstanding the approval of the Plan of Conversion by the Current Trust's
Shareholders, the Plan of Conversion may be terminated or amended at any time
prior to the transfer of assets on the Exchange Date by action of the Trustees
to provide against unforeseen events, if (i) there is a material breach by the
other party of any representation, warranty or agreement contained in the Plan
of Conversion, (ii) it reasonably appears that a party cannot meet a condition
of the Plan of Conversion, or (iii) circumstances should develop that, in the
opinion of either the Board of Trustees of the Massachusetts Trust or of the
Delaware Trust, make proceeding with the Plan of Conversion in its current form
inadvisable; provided that no amendment may have a material adverse effect upon
the benefits intended under the Plan of Conversion and would be consistent with
the best interests of the Current Trust Shareholders. The Massachusetts Trust
and the Delaware Trust may at any time waive compliance with any of the
covenants and conditions contained in, or may amend, the Plan of Conversion,
provided that such waiver or amendment does not materially adversely affect the
interests of the Current Trust's Shareholders.
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Name Change for Government Securities Series. The Successor Series to
which the assets of the Government Securities Series will be assigned by the
Current Trust will be named Zweig Government Fund, rather than Government
Securities Series. This is being done to conform the style of the name of this
Series to that of the other Series of the Trust.
Continuation of Fund Shareholder Accounts and Plans. The Current
Trust's transfer agent will establish an account for the Successor Trust's
Shareholders containing the appropriate number and denominations of Delaware
Trust Shares to be received by each Shareholder under the Plan of Conversion.
Such accounts will be identical in all material respects to the accounts
currently maintained by the Current Trust's transfer agent for the Current
Trust's Shareholders. Current Trust Shareholders who are receiving payment under
a withdrawal plan with respect to Massachusetts Trust Shares will retain the
same rights and privileges as to Delaware Trust Shares under the Plan of
Conversion. Similarly, no further action will be necessary in order to continue
any automatic investment plan or retirement plan currently maintained by a
Current Trust Shareholder with respect to Massachusetts Trust Shares.
Expenses. The Current Trust and the Successor Trust shall each be
responsible for all of their respective expenses of the Conversion, estimated at
$______ in the aggregate.
Temporary Waiver of Fundamental Policies. Certain fundamental policies
of the Current Trust (e.g., those which (i) prohibit the Current Trust from
making investments for the purpose of exercising control over or management of
an issuer, (ii) restrict the percentage of a Series' total assets that may be
invested in any one industry, (iii) require diversification of investments, and
(iv) restrict investments of certain Series in issuers with limited operating
histories), might be construed as restricting the Current Trust's ability to
carry out the Conversion. To the extent that any of the fundamental policies of
any of the Series could be construed as restricting the ability of the Trust to
effect the Conversion, a vote to approve the Plan of Conversion will also
constitute a vote to waive, to the extent necessary to effect the Conversion,
any such fundamental policy.
Tax Consequences of the Conversion. The Massachusetts Trust and the
Delaware Trust have been advised by their counsel, Shearman & Sterling, that no
gain or loss will be recognized for federal income tax purposes by the Current
Trust, the Delaware Trust or the Current Trust's Shareholders upon (i) the
transfer of the Current Trust's assets in exchange solely for the Delaware Trust
Shares and the assumption by the Delaware Trust of the Current Trust's
liabilities, or (ii) the distribution of Delaware Trust Shares to the Current
Trust Shareholders in liquidation of their Massachusetts Trust Shares. The
opinion further provides, among other things, that (i) the basis for federal
income tax purposes of the Delaware Trust Shares to be received by each of the
Current Trust's Shareholders will be the same as that of his or her
Massachusetts Trust Shares, and (ii) a Current Trust's Shareholder's holding
period for his or her Massachusetts Trust Shares will include a Current Trust's
Shareholder's holding period for his or her Massachusetts Trust Shares, provided
that said Massachusetts Shares were held as capital assets on the date of the
exchange.
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Evaluation by the Current Trust's Trustees
Based on a recommendation by ZGA, the Board reviewed the potential
benefits associated with the proposed Conversion and adoption of the proposed
Delaware Trust Instrument. In this regard, the Trustees considered the
following:
(1) the disadvantages described above which apply to operating
the Trust as a Massachusetts business trust, including, for example,
the possibility, however remote, of personal liability of a Shareholder
for the liabilities of the Trust, or a Series or Class thereof;
(2) the advantages described above which apply to managing the
Successor Trust as a Delaware business trust, including, for example,
the increased flexibility afforded to the Trustees to direct the
operations of the Trust;
(3) the advantages to be gained by restating the Trust's
entire trust instrument and adopting the new Trust Instrument under
Delaware law;
(4) that the Conversion itself will not affect the investment
advisory arrangements applicable to the Trust, nor will it affect the
identity of the Trustees, manager, distributor, custodian, transfer
agent, legal counsel and independent accountants of the Current Trust,
the investment objectives or policies of any Series or Class thereof,
or otherwise affect in any significant manner the general
characteristics of any Series or Class thereof or a Shareholder's
investment therein, except to the extent the policies of the Trust are
amended pursuant to Shareholder vote at this meeting;
(5) the expected federal tax consequences to the Current
Series, the Successor Series and Shareholders resulting from the
proposed Conversion, and the likelihood that there will be no
recognition of income, gain or loss for federal income tax purposes to
the Current Series, the Successor Series or Shareholders; and
(6) that the interests of the Shareholders of the Current
Series will not be diluted as a result of the proposed Conversion.
Conclusion. The Board of Trustees has concluded that the proposed
agreement and plan to convert the Trust into a Delaware business trust is in the
best interest of the Trust's Shareholders and unanimously recommends a vote FOR
the approval of the Plan of Conversion as described above. A vote in favor of
the Plan of Conversion is deemed to be a vote in favor of the conversion of the
Current Trust to a Delaware business trust; a vote to approve a revision of each
Series' fundamental policies to the extent necessary to effect a "master-feeder"
structure; temporary waiver of certain investment limitations of the Current
Trust to permit the Conversion (see "Temporary Waiver of Fundamental Policies"
on page __); authorization of the Current Trust to approve (i) a management
agreement for the Successor Trust between the Trust and ZGA, (ii) a distribution
agreement between the Trust and Zweig Securities and Distribution and Service
Plans under Rule 12b-1 identical to the
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current contracts or plans, as the case may be, currently in effect with
the Current Trust, (iii) the Zweig Series Trust Rule 18f-3 Multi-Class Plan
identical in all respects to the plan currently in effect with respect to the
Current Trust, (iv) the election of Trustees of the Current Trust as the
Trustees of the Successor Trust, (v) such matters as may be necessary, for
regulatory purposes, in order to adopt or enter into any agreements or plans on
behalf of the Delaware Trust that had previously been approved by shareholders
of the Massachusetts Trust and are then in effect with respect to the
Massachusetts Trust, and (vi) all other contracts and agreements currently in
effect with the Current Trust, including, but not limited to, accounting,
custody, transfer agency, service, procedural and safekeeping and repurchase
agreements. If approved, the Plan of Conversion will take effect on the Exchange
Date. If the Plan of Conversion is not approved, the Current Trust will continue
to operate as a Massachusetts business trust with regard to those Series which
have not approved the Conversion and may (but would not be obligated to)
transfer the assets of some or all of those Series which have approved the
Conversion.
Appraisal rights are not available to Current Trust Shareholders with
respect to the Conversion. However, Shareholders retain the right to redeem
their Shares at net asset value at any time (subject to any applicable sales
charges).
IN VIEW OF THE FOREGOING, THE BOARD OF TRUSTEES RECOMMENDS THAT THE
SHAREHOLDERS OF ZWEIG CASH FUND VOTE FOR THE ADOPTION OF THE CONVERSION PLAN AND
THE DELAWARE TRUST INSTRUMENT.
* * *
Other Matters
The Trust does not know of any other matters to be presented at the
Special Meeting of Shareholders. If any other business should come before the
Meeting, the proxies will vote thereon in accordance with their best judgment.
If you cannot attend the Meeting in person, please complete, sign and
return the enclosed proxy in the envelope provided so that the Meeting may be
held and action taken with the greatest possible number of shares participating.
Shareholder Proposals for Subsequent Meetings
Neither the Series nor the Trust holds regular annual meetings of
Shareholders. Any Shareholder who wishes to submit proposals to be considered at
a subsequent meeting of Shareholders should send such proposals to the Trust at
5 Hanover Square, 17th Floor, New York, New York 10004. It is suggested that
proposals be submitted by certified mail, return receipt requested.
Investment Manager
Zweig/Glaser Advisers, 5 Hanover Square, 17th Floor, New York, New York
10004, serves as the investment manager for the Trust.
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Principal Distributor
Zweig Securities Corp., 5 Hanover Square, 17th Floor, New York, New
York 10004, serves as the principal distributor of the Trust.
Revocation of Proxies
You can revoke the enclosed proxy at any time prior to the exercise
thereof by submitting a written notice of revocation or subsequently executed
proxy to the Trust at any time prior to the Meeting or at the Meeting to the
Secretary of the Meeting. Signing and mailing the proxy will not affect your
right to give a later proxy or to attend the Meeting and vote your shares in
person.
Voting Information
Proxies are being solicited by the Board of Trustees for the Special
Meeting of Shareholders to be held on April __, 1996, at the Trust's offices at
5 Hanover Square, 17th Floor, New York, New York 10004, at [10:00 a.m.]. A proxy
may be revoked at any time before the Meeting by oral or written notice to the
Fund. Valid proxies will be voted in accordance with the specification thereon
or, in the absence of specification, FOR approval of the Proposals.
In the event that a quorum is not present at the Meeting, the persons
named as proxies intend to propose one or more adjournments of the Meeting to
permit further solicitations of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the adjourned
Meeting in person or by proxy.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE
URGED TO COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD IN THE
ENCLOSED ENVELOPE.
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EXHIBIT A
ZWEIG SERIES TRUST
PLAN OF CONVERSION
FORM OF AGREEMENT AND PLAN OF CONVERSION AND TERMINATION
THIS AGREEMENT AND PLAN OF CONVERSION AND TERMINATION (the
"Agreement") is made and entered into as of [March] __, 1996, by and between
Zweig Series Trust, a Massachusetts business trust having an office at 5 Hanover
Square, New York, New York 10004 (the "Massachusetts Trust"), and Zweig Series
Trust, a Delaware business trust having an office at 5 Hanover Square, New York,
New York 10004 (the "Delaware Trust").
WHEREAS, the Board of Trustees of the Massachusetts Trust and
the Board of Trustees of the Delaware Trust have determined that it is in the
best interests of the Massachusetts Trust and the Delaware Trust, respectively,
that the assets of the Massachusetts Trust be acquired by the Delaware Trust
pursuant to this Agreement and in accordance with the applicable statutes of the
Commonwealth of Massachusetts and the State of Delaware; and
WHEREAS, the parties desire to enter into a plan of exchange
pursuant to Section 351 of the Internal Revenue Code of 1986, as amended:
NOW, THEREFORE, in consideration of the premises and of the
covenants and agreements hereinafter set forth, the parties hereto agree as
follows:
1. Plan Of Exchange.
(a) Subject to the requisite approval of the
shareholders of the Massachusetts Trust and to the terms and conditions
contained herein, on the Exchange Date (as defined herein), the
Massachusetts Trust shall assign, transfer and convey the assets of
each of its series identified on Schedule I hereto (collectively, the
"Current Series" and each individually, a "Current Series") (and
relevant class thereof) or all of those Series which have approved the
Conversion, including all securities and cash held by each Current
Series, and the liabilities attributable to each such Current Series
(and relevant class thereof) or all of those Series which have approved
the Conversion, to the corresponding series of the Delaware Trust
identified on Schedule I hereto (collectively, the "Successor Series"
and each individually, a "Successor Series") (and relevant class
thereof) or all of those Series which have approved the Conversion, and
each such Successor Series (and relevant class thereof) or all of those
Series which have approved the Conversion shall acquire all of the
assets of each corresponding Current Series (and relevant class
thereof) or all of those Series which have approved the Conversion, and
the liabilities attributable to each such Current Series (and relevant
class thereof) or all of those Series which have approved the
Conversion, in exchange for shares of beneficial interest of such
Successor Series (the "Delaware Trust Shares") equal in number and
class thereof to the corresponding number and class of the outstanding
shares of each Current Series. In lieu of delivering certificates for
the Delaware Trust Shares, the Delaware Trust shall credit the Delaware
Trust Shares to the Massachusetts Trust's account on the share record
books of the Delaware Trust and shall deliver a confirmation thereof to
the Massachusetts Trust. The Massachusetts Trust shall then deliver
written instructions to the Delaware Trust's transfer agent to
establish accounts for the shareholders of the
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respective Current Series on the share record books relating to each
corresponding Successor Series.
(b) Delivery of the assets of each of the Current
Series to be transferred shall be made not later than the next business
day following the Exchange Date. Assets transferred shall be delivered
to The Bank of New York, the Delaware Trust's custodian (the
"Custodian"). Such delivery shall be made for the account of the
Delaware Trust and the Successor Series, with all securities not in
bearer or book entry form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form for
transfer, with signatures guaranteed, and with all necessary stock
transfer stamps, sufficient to transfer good and marketable title
thereto (including all accrued interest and dividends and rights
pertaining thereto) to the Custodian for the account of the Delaware
Trust and the Successor Series free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall
be in the form of immediately available funds payable to the order of
the Custodian for the account of the Delaware Trust and the Successor
Series. All assets delivered to the Custodian as provided herein shall
be allocated by the Delaware Trust to each Successor Series
corresponding to the Current Series from which, or on the account of
which, the assets were transferred. All of the liabilities of each
Current Series shall, on and as of the Effective Date, be deemed
liabilities of, and shall be deemed assumed by, the applicable
corresponding Successor Series.
(c) The Massachusetts Trust will pay or cause to be
paid to the Delaware Trust any interest received on or after the
Exchange Date with respect to assets transferred from any Current
Series to the corresponding Successor Series hereunder and the Delaware
Trust shall allocate any such interest to the appropriate Successor
Series. The Massachusetts Trust will transfer to the Delaware Trust any
distributions, rights or other assets received by the Massachusetts
Trust after the Exchange Date as distributions on or with respect to
the securities transferred from any Current Series to the corresponding
Successor Series hereunder. The Delaware Trust shall allocate any such
distributions, rights or other assets to the appropriate Successor
Series. All such assets shall be deemed included in assets transferred
to the Current Series on the Exchange Date and shall not be separately
valued.
(d) If the requisite number of shareholders of each
Current Series do not approve this Agreement, the Trust will continue
to operate as a Massachusetts business trust with regard to those
Current Series which have not approved the Conversion and may (but
would not be obligated to) transfer the assets of some or all of those
Current Series which have approved the Conversion in accordance with
the terms hereof with appropriate modifications hereto.
(e) The Exchange Date shall be April __, 1996, or
such earlier or later date as may be mutually agreed upon by the
parties.
(f) As soon as practicable after the Exchange Date,
and following distribution by the Massachusetts Trust of the Delaware
Trust Shares of each of the Successor Series received by it among the
shareholders of each corresponding Current Series in proportion to the
number of shares each such shareholder holds in each such Current
Series, the Massachusetts Trust will dissolve and terminate.
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2. The Massachusetts Trust's Representations And Warranties.
The Massachusetts Trust represents and warrants to and Delaware Trust as
follows:
(a) The Massachusetts Trust is a business trust duly
organized and validly existing under the laws of the Commonwealth of
Massachusetts and has power to own all of its properties and assets
and, subject to the approval of its shareholders as contemplated
hereby, to carry out this Agreement.
(b) The Massachusetts Trust and each Current Series
is registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end, diversified, management investment
company, and such registration has not been revoked or rescinded and is
in full force and effect.
(c) On the Exchange Date, the Massachusetts Trust
will have full right, power and authority to sell, assign, transfer and
deliver the assets to be transferred by it hereunder.
3. The Delaware Trust's Representations And Warranties. The
Delaware Trust represents and warrants to and agrees with the Massachusetts
Trust as follows:
(a) The Delaware Trust is a business trust duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has power to carry on its business and to carry
out this Agreement.
(b) At the Exchange Date, the Delaware Trust Shares
to be issued to the Massachusetts Trust (the only Series Shares to be
issued as of the Exchange Date) will have been duly authorized and,
when issued and delivered pursuant to this Agreement, will be legally
and validly issued and will be fully paid and non-assessable by the
Delaware Trust. No Delaware Trust or Successor Series shareholder will
have any preemptive right of subscription or purchase in respect
thereof.
4. The Delaware Trust's Conditions Precedent. The obligations
of the Delaware Trust hereunder shall be subject to the following conditions:
(a) The Massachusetts Trust shall have furnished to
the Delaware Trust a statement of the Massachusetts Trust's assets,
including a list of securities owned by the Massachusetts Trust with
their respective tax costs and values.
(b) As of the Exchange Date, all representations and
warranties of the Massachusetts Trust made in this Agreement shall be
true and correct as if made at and as of such date, and the
Massachusetts Trust shall have complied with all the
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agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to such date.
(c) A vote approving this Agreement and the
transactions and exchange contemplated hereby shall have been adopted
by the affirmative vote of at least a majority of the outstanding
shares (within the meaning of the 1940 Act) of the Massachusetts Trust
entitled to vote and the shareholders of the Massachusetts Trust and
each applicable Current Series shall have voted, by the vote specified
in the proxy materials of the Massachusetts Trust and the Current
Series relating to this Agreement, to direct the Massachusetts Trust to
vote, and the Massachusetts Trust shall have voted by or on the
Exchange Date, as sole shareholder of the Delaware Trust, (i) to vote
on each of the Proposals set forth in the Proxy Statements and approved
by the shareholders, so that the approval of the respective Proposals
may be made effective with respect to the Delaware Trust as well as the
Massachusetts Trust; (ii) to elect Clare B. Benenson, Richard E. Deems,
S. Leland Dill, Eugene J. Glaser, and Donald B. Romans as trustees of
the Delaware Trust; (iii) to render approval on such matters as may be
necessary, for regulatory purposes, in order to adopt or enter into any
agreements or plans on behalf of the Delaware Trust that had previously
been approved by shareholders of the Massachusetts Trust and are then
in effect with respect to the Massachusetts Trust; and (iv) to approve
all other contracts and agreements currently in effect with the Current
Trust, including, but not limited to, accounting, custody, transfer
agency, service, procedural and safekeeping and repurchase agreements.
5. The Massachusetts Trust's Conditions Precedent. The
obligations of the Massachusetts Trust hereunder shall be subject to the
condition that as of the Exchange Date all representations and warranties of the
Delaware Trust made in this Agreement shall be true and correct as if made at
and as of such date, and that the Delaware Trust shall have complied with all of
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such date.
6. The Delaware Trust's And The Massachusetts Trust's
Conditions Precedent. The obligations of both the Delaware Trust and the
Massachusetts Trust hereunder shall be subject to this Agreement and the
transactions contemplated hereby having been approved by the affirmative vote of
at least a majority of the outstanding shares (within the meaning of the 1940
Act) of the Massachusetts Trust entitled to vote as of the close of business on
[March] __, 1996, or such earlier or later date as may be mutually agreed upon
by the parties.
7. Amendment Or Termination Of Agreement. This Agreement and
the transactions contemplated hereby may be amended or terminated and abandoned
by resolution of the Board of Trustees of the Massachusetts Trust or the Board
of Trustees of the Delaware Trust, at any time prior to the transfer of assets
on the Exchange Date (and notwithstanding any vote of the shareholders of the
Massachusetts Trust) if (i) there is a material breach by the other party of any
representation, warranty or agreement contained in this Agreement, (ii) it
reasonably appears that a party cannot meet a condition of this Agreement or
(iii) circumstances
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should develop that, in the opinion of either the Board of Trustees of the
Massachusetts Trust or of the Delaware Trust, make proceeding with this
Agreement in its current form inadvisable.
In addition, prior to the transfer of assets on the Exchange
Date, any provision of this Agreement may be amended or modified by the Board of
Trustees of the Massachusetts Trust and the Board of Trustees of the Delaware
Trust if such amendment or modification would not have a material adverse effect
upon the benefits intended under this Agreement and would be consistent with the
best interests of the shareholders.
If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 7, this Agreement
shall become void and have no effect, without any liability on the part of any
party hereto or the trustees, officers or shareholders of the Delaware Trust or
the trustees, officers or shareholders of the Massachusetts Trust, in respect of
this Agreement.
8. Waiver. At any time prior to the Exchange Date, any of the
foregoing conditions may be waived by the Board of Trustees of the Massachusetts
Trust or the Board of Trustees of the Delaware Trust, if, in the judgment of the
waiving party, such waiver will not have a material adverse effect on the
benefits intended under this Agreement to the shareholders of the Massachusetts
Trust or the shareholders of the Delaware Trust, as the case may be.
9. No Survival Of Representations. None of the
representations and warranties included or provided for herein shall survive
consummation of the transactions contemplated hereby.
10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware;
provided, however, that the due authorization, execution and delivery of this
Agreement, in the case of the Massachusetts Trust, shall be governed and
construed in accordance with the internal laws of the Commonwealth of
Massachusetts.
11. Counterparts. This Agreement may be executed in
counterparts, each of which, when executed and delivered, shall be deemed to be
an original.
12. Capacity Of Trustees. With respect to the Massachusetts
Trust, the name "Zweig Series Trust" and the term "Trustees of the Massachusetts
Trust", refer, respectively, to the Massachusetts Trust created and the Trustees
of the Massachusetts Trust, as trustees but not individually or personally,
acting from time to time under an Amended and Restated Agreement and Declaration
of Trust dated April 11, 1986, as amended. The obligations of the Massachusetts
Trust entered into in the name and on behalf thereof by any of the Trustees of
the Massachusetts Trust, representatives or other agents, were not made
individually, but in such capacities, and are not binding upon any of the
Massachusetts Trustees, representatives or other agents, or the shareholders of
the Massachusetts Trust, but bind only
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the property of the Massachusetts Trust, and all persons dealing with any Series
or Class of shares of the Massachusetts Trust must look solely to the Trust
property belonging to such Series or Class for the enforcement of any claims
against the Massachusetts Trust.
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IN WITNESS WHEREOF, the Massachusetts Trust and the Delaware
Trust have caused this Agreement and Plan of Conversion and Termination to be
duly executed as of the day and year first above written.
Zweig Series Trust,
a Massachusetts Business Trust
By: ______________________________
Title:
Zweig Series Trust,
a Delaware Business Trust
By: ______________________________
Title:
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SCHEDULE I
Current Series Corresponding Successor Series
Zweig Strategy Fund Zweig Strategy Fund
Zweig Appreciation Fund Zweig Appreciation Fund
Zweig Managed Assets Zweig Managed Assets
Government Securities Series Zweig Government Fund
Zweig Cash Fund Zweig Cash Fund
<PAGE>
EXHIBIT B
AGREEMENT AND DECLARATION OF TRUST
OF
ZWEIG SERIES TRUST
THIS AGREEMENT AND DECLARATION OF TRUST is made and entered
into as of the date set forth below by the Trustee(s) named hereunder for the
purpose of forming a Delaware business trust in accordance with the provisions
hereinafter set forth,
NOW, THEREFORE, the Trustee(s) hereby direct that the
Certificate of Trust be filed with Office of the Secretary of State of the State
of Delaware and do hereby declare that the Trustee(s) will hold in trust all
cash, securities and other assets that the Trust now possesses or may hereafter
acquire from time to time in any manner and manage and dispose of the same upon
the following terms and conditions for the benefit of the holders of Shares in
the Trust.
ARTICLE I
Name and Definitions
Section 1. Name. This Trust shall be known as "Zweig Series
Trust" and the Trustee(s) shall conduct the business of the Trust under that
name or any other name as they may from time to time determine.
Section 2. Definitions. Whenever used herein, unless
otherwise required by the context or specifically provided:
(a) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time, which By-Laws are expressly herein incorporated by reference
as part of the "governing instrument" within the meaning of the Delaware Act;
(b) "Certificate of Trust" means the certificate of trust, as
amended or restated from time to time, filed by the Trustee(s) in the Office of
the Secretary of State of the State of Delaware in accordance with the Delaware
Act;
(c) "Class" means a class of Shares of a Series of the Trust
established in accordance with the provisions of Article III hereof;
(d) "Commission" and "Principal Underwriter" shall have the
meanings given them in the 1940 Act;
(e) "Declaration of Trust" means this Agreement and
Declaration of Trust, as amended or restated from time to time;
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(f) "Delaware Act" means the Delaware Business Trust Act, 12
Del. C. ss.ss. 3801 et seq., as amended from time to time;
(g) "Manager" means a party furnishing services to the Trust
pursuant to any contract described in Article IV, Section 7(a) hereof;
(h) "1940 Act" means the Investment Company Act of 1940 and
the Rules and Regulations thereunder, all as amended from time to time;
(i) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures, estates and other entities,
whether or not legal entities, and governments and agencies and political
subdivisions thereof, whether domestic or foreign;
(j) "Series" means each Series of Shares established and
designated under or in accordance with the provisions of Article III;
(k) "Shareholder" means a record owner of outstanding Shares;
(l) "Shares" means the Shares of beneficial interest into
which the beneficial interest in the Trust shall be divided from time to time
and includes fractions of Shares as well as whole Shares;
(m) "Trust" means the Delaware business trust established
under the Delaware Act by this Declaration of Trust and the filing of the
Certificate of Trust in the Office of the Secretary of State of the State of
Delaware;
(n) "Trust Property" means any and all property, real or
personal, tangible or intangible, that is from time to time owned or held by or
for the account of the Trust; and
(o) "Trustees" means the person or persons who have signed
this Declaration of Trust and all other Persons who may from time to time be
duly elected or appointed to serve as Trustees in accordance with the provisions
hereof, in each case so long as such Person shall continue in office in
accordance with the terms of this Declaration of Trust, and reference herein to
a Trustee or the Trustees shall refer to such Person or Persons in her or his or
their capacity as trustees hereunder.
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ARTICLE II
Purpose of Trust
The purpose of the Trust is to conduct, operate and carry on
the business of a management investment company registered under the 1940 Act
through one or more Series investing primarily in securities, and to carry on
such other business as the Trustees may from time to time determine pursuant to
their authority under this Declaration of Trust.
ARTICLE III
Shares
Section 1. Division of Beneficial Interest. The beneficial
interest in the Trust may be divided into one or more Series. Each Series may be
divided into one or more Classes. Subject to the further provisions of this
Article III and any applicable requirements of the 1940 Act, the Trustees shall
have full power and authority, in their sole discretion, and without obtaining
any authorization or vote of the Shareholders of any Series or Class thereof,
(i) to divide the beneficial interest in the Trust or in each Series or Class
thereof into Shares, with or without par value as the Trustees shall determine,
(ii) to issue Shares without limitation as to number (including fractional
Shares), to such Persons and for such amount and type of consideration,
including cash or securities, at such time or times and on such terms as the
Trustees may deem appropriate, (iii) to establish and designate and to change in
any manner any Series or Class thereof and to fix such preferences, voting
powers, rights, duties and privileges and business purpose of each Series or
Class thereof as the Trustees may from time to time determine, which
preferences, voting powers, rights, duties and privileges may be senior or
subordinate to (or in the case of business purpose, different from) any existing
Series or Class thereof and may be limited to specified property or obligations
of the Trust or profits and losses associated with specified property or
obligations of the Trust, (iv) to divide or combine the Shares of any Series or
Class thereof into a greater or lesser number, or issue dividends in Shares with
respect to Shares of any Series or Class, without thereby materially changing
the proportionate beneficial interest of the Shares of such Series or Class in
the assets held with respect to that Series or Class thereof, (v) to classify or
reclassify any issued Shares of any Series or Class thereof into Shares of one
or more Series or Classes thereof and (vi) to take such other action with
respect to the Shares as the Trustees may deem desirable.
Subject to the distinctions permitted among Classes or
otherwise in Shares of the same Series as established by the Trustees consistent
with the requirements of the 1940 Act, each Share of a Series of the Trust shall
represent an equal beneficial interest in the net assets of such Series, and
each holder of Shares of a Series shall be entitled to receive such holder's pro
rata share of distributions of income and capital gains, if any, made with
respect to such Series. Upon redemption of the Shares of any Series or Class
thereof, the applicable
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Shareholder shall be entitled to be paid solely out of, the funds and property
of such Series or Class thereof of the Trust.
All references to Shares in this Declaration of Trust shall be
deemed to be Shares of any or all Series or Classes thereof, as the context may
require. All provisions herein relating to the Trust shall apply equally to each
Series of the Trust and each Class thereof, except as the context otherwise
requires.
All Shares issued hereunder, including, without limitation,
Shares issued in connection with a dividend in Shares or a split or reverse
split of Shares, shall be fully paid and non-assessable. Except as otherwise
provided by the Trustees, Shareholders shall have no appraisal, preemptive or
other right to subscribe to any additional Shares or other securities issued by
the Trust.
Section 2. Ownership of Shares. The Ownership of Shares shall
be recorded on the books of the Trust or a transfer or similar agent for the
Trust, which books shall be maintained separately for the Shares of each Series
(or Class). No certificates certifying the ownership of Shares shall be issued
except as the Trustees may otherwise determine from time to time. The Trustees
may make such rules as they consider appropriate for the issuance of Share
certificates, the transfer of Shares of each Series (or Class) and similar
matters. The record books of the Trust as kept by the Trust or any transfer or
similar agent, as the case may be, shall be conclusive as to the identity of the
Shareholders of each Series (or Class) and as to the number of Shares of each
Series (or Class) held from time to time by each Shareholder.
Section 3. Transfer of Shares. Except as otherwise provided by
the Trustees, Shares shall be transferable on the books of the Trust only by the
record holder thereof or by his duly authorized agent upon delivery to the
Trustees or the Trust's transfer agent of a duly executed instrument of
transfer, together with a Share certificate if one is outstanding, and such
evidence of the genuineness of the execution and authorization thereof as may be
required by the Trustees and of such other matters as may be required by the
Trustees. Upon such delivery, and subject to any further requirements specified
by the Trustees or contained in the By-Laws, the transfer shall be recorded on
the books of the Trust. Until a transfer is so recorded, the Shareholder of
record of Shares shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor the Trust, nor any transfer
agent, Shareholder servicing agent or similar agent, any officer, employee or
agent of the Trust, shall be affected by any notice of a proposed transfer.
Section 4. Investments in the Trust. Investments may be
accepted by the Trust from such Persons, at such times, on such terms, and for
such consideration as the Trustees from time to time may authorize.
Section 5. Status of Shares and Limitation of Personal
Liability. Shares shall be deemed to be personal property giving only the rights
provided in this instrument. Every
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Shareholder by virtue of having become a Shareholder shall be held to have
expressly assented and agreed to the terms hereof. The death, incapacity,
dissolution, termination or bankruptcy of a Shareholder during the existence of
the Trust shall not operate to terminate the Trust, nor entitle the
representative of any such Shareholder to an accounting or to take any action in
court or elsewhere against the Trust or the Trustees, but entitles such
representative only to the rights of such Shareholder under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust Property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders as partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay. Except as specifically provided herein, no Shareholder shall be
personally liable for the debts, liabilities, obligations or expenses incurred
by, contracted for, or otherwise existing with respect to, the Trust or by or on
behalf of any Series or Class. Every note, bond, contract or other understanding
issued by or on behalf of the Trust or Trustees relating to the Trust or to a
Series or Class may include a recitation limiting the obligation represented
thereby to the Trust or to one or more Series or Class and its respective assets
(but the omission of such a recitation shall not operate to bind any Shareholder
or Trustee of the Trust).
Section 6. Establishment and Designation of Series (or Class).
Without obtaining any authorization or vote of the Shareholders of any Series or
Class thereof (except as otherwise required by the 1940 Act), the establishment
and designation of any Series (or Class) of Shares shall be effective upon the
adoption by a majority of the then Trustees of a resolution that sets forth such
establishment and designation and the relative rights and preferences of such
Series (or Class), whether directly in such resolution or by reference to
another document including, without limitation, any registration statement of
the Trust, or as otherwise provided in such resolution.
Shares of each Series (or Class) established pursuant to this
Article III, unless otherwise provided in the resolution establishing such
Series, shall have the following relative rights and preferences:
(a) Assets Held with Respect to a Particular Series (or
Class). All consideration received by the Trust for the issue or sale of Shares
of a particular Series or Class thereof, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof from whatever source derived, including, without limitation,
any proceeds derived from the sale, exchange or liquidation of such assets, and
any funds or payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably be held with respect to that Series (or
Class) for all purposes, subject only to the rights of creditors of such Series
(or Class thereof to the extent provided below), and shall be so recorded upon
the books of account of the Trust. Such consideration, assets, income, earnings,
profits and proceeds thereof, from
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whatever source derived, including, without limitation, any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or payments
derived from any reinvestment of such proceeds, in whatever form the same may
be, are herein referred to as "assets held with respect to" that Series (or
Class thereof). In the event that there are any assets, income, earnings,
profits and proceeds thereof, funds or payments that are not readily
identifiable as assets held with respect to any particular Series (and the
Classes thereof) (collectively "General Assets"), the Trustees shall allocate
such General Assets to, between or among any one or more of the Series (and the
Classes thereof) in such manner and on such basis as the Trustees, in their sole
discretion, deem fair and equitable, and any General Assets so allocated to a
particular Series (and the Classes thereof) shall be assets held with respect to
that Series and such Classes. Each such allocation by the Trustees shall be
conclusive and binding upon the Shareholders of all Series and Classes for all
purposes. Separate and distinct records shall be maintained for each Series (and
the Classes thereof) and the assets held with respect to each Series (and the
Classes thereof) shall be held and accounted for separately from the assets held
with respect to all other Series (and the Classes thereof) and the General
Assets of the Trust not allocated to such Series or Classes.
(b) Liabilities Attributable to a Particular Series (or
Class). The assets of the Trust held with respect to each particular Series (or
Class thereof) shall be charged exclusively with the liabilities of the Trust
attributable to that Series or Class and all expenses, costs, charges and
reserves attributable to that Series or Class. Any general liabilities of the
Trust that are not readily identifiable as being attributable to any particular
Series (and the Classes thereof) shall be allocated and charged by the Trustees
to and among any one or more of the Series (and the Classes thereof) in such
manner and on such basis as the Trustees in their sole discretion deem fair and
equitable. All liabilities, expenses, costs, charges, and reserves so charged to
a Series (and the Classes thereof) are herein referred to as "liabilities
attributable to" that Series (or Class thereof). Each allocation of liabilities,
expenses, costs, charges and reserves by the Trustees shall be conclusive and
binding upon the Shareholders of all Series and Classes for all purposes. All
liabilities attributable to a particular Series shall be enforceable against the
assets held with respect to such Series only and not against the assets of the
Trust generally or against the assets held with respect to any other Series.
Notice of this limitation on the liability of each Series shall be set forth in
the Certificate of Trust or in an amendment thereto prior to the issuance of any
Shares of a Series. To the extent that the Trustees, pursuant to Section 2 of
Article VII hereof, include a Class limitation on liability in any note, bond,
contract, instrument, certificate or undertaking made with respect to any Class,
the parties to such note, bond, contract, instrument, certificate or undertaking
shall look only to the assets of such Class in satisfaction of the liabilities
arising thereunder and not to the assets of any other Class of the applicable
Series.
(c) Dividends, Distributions, Redemptions and Repurchases.
Notwithstanding any other provision of this Declaration of Trust, including,
without limitation, Article VI, no dividend or distribution, including, without
limitation, any distribution paid upon termination of the Trust or of any Series
(or Class) thereof with respect to, nor any redemption or repurchase of, the
Shares of any Series (or Class thereof)
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shall be effected by the Trust other than from the assets held with respect to
such Series (or Class thereof), nor shall any Shareholder of any particular
Series (or Class thereof) otherwise have any right or claim against the assets
held with respect to any other Series or Class except to the extent that such
Shareholder has such a right or claim hereunder as a Shareholder of such other
Series or Class. The Trustees shall have full discretion, to the extent not
inconsistent with the 1940 Act, to determine which items shall be treated as
income and which items as capital; and each such determination and allocation
shall be conclusive and binding upon the Shareholders.
(d) Equality. All the Shares of each particular Series (or
Class thereof) shall represent an equal proportionate interest in the assets
held with respect to that Series (or Class thereof), and each Share of any
particular Series shall be equal to each other Share of that Series (subject to
the liabilities attributable to that Series and such rights and preferences as
may have been established and designated with respect to Classes, or otherwise,
of Shares within such Series).
(e) Fractions. Any fractional Share of a Series (or Class
thereof) shall carry proportionately all the rights and obligations of a whole
Share of that Series or Class, including rights with respect to voting, receipt
of dividends and distributions, redemption of Shares and termination of the
Trust.
(f) Combination of Series. The Trustees shall have the
authority, without the approval of the Shareholders of any Series (or Class
thereof), unless otherwise required by applicable law, to combine the assets and
liabilities attributable to any two or more Series (or Classes) into assets and
liabilities attributable to a single Series or Class.
(g) Elimination of Series. At any time that there are no
Shares outstanding of any particular Series (or Class) previously established
and designated, the Trustees may by resolution of a majority of the Trustees
abolish that Series (or Class) and rescind the establishment and designation
thereof and may thereafter establish a new Series (or Class) with such
designation and otherwise as herein provided.
Section 7. Indemnification of Shareholders. If any Shareholder
or former Shareholder shall be exposed to liability by reason of a claim or
demand relating to such Person being or having been a Shareholder, and not
because of such Person's acts or omissions, the Shareholder or former
Shareholder (or such Person's heirs, executors, administrators, or other legal
representatives or in the case of a corporation or other entity, its corporate
or other general successor) shall be entitled to be held harmless from and
indemnified out of the assets of the Trust against all cost and expense
reasonably incurred in connection with such claim or demand, but only out of the
assets held with respect to the particular Series (or Class thereof) of Shares
of which such Person is or was a Shareholder and from or in relation to which
such liability arose. The Series (or Class thereof) may, at its option and
shall, upon request by the Shareholder, assume the defense of any claim made
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against the Shareholder for any act or obligation of the Series and satisfy any
judgment thereon.
ARTICLE IV
Trustees
Section 1. Number, Election and Tenure. The number of Trustees
shall initially be five, who shall be Claire B. Benenson, Richard E. Deems, S.
Leland Dill, Eugene J. Glaser and Donald B. Romans. After the date of this
Declaration of Trust, the number of Trustees shall be five or such other number
as shall, from time to time, be determined by the Trustees pursuant to Section 3
of this Article IV. Each Trustee shall serve during the continued term of the
Trust until she or he dies, resigns, is declared bankrupt or incompetent by a
court of appropriate jurisdiction, or is removed, or, if sooner, until the next
meeting of Shareholders called for the purpose of electing Trustees and until
the election and qualification of her or his successor. In the event that less
than the majority of the Trustees holding office have been elected by the
Shareholders, to the extent required by the 1940 Act, the Trustees then in
office shall call a Shareholders' meeting for the election of Trustees. Any
Trustee may resign at any time by written instrument signed by her or him and
delivered to any officer of the Trust or to the Secretary of any meeting of the
Trustees. Such resignation shall be effective upon receipt unless specified to
be effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following her or his
resignation or removal, or any right to damages on account of such removal. The
Shareholders may elect Trustees at any meeting of Shareholders called by the
Trustees for that purpose. Any Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds of the outstanding Shares of the Trust.
Section 2. Effect of Death, Resignation, etc. of a Trustee.
The death, declination to serve, resignation, retirement, removal, or incapacity
of one or more Trustees, or all of them, shall not operate to annul the Trust or
to revoke any existing agency created pursuant to the terms of this Declaration
of Trust. Whenever there shall be fewer than the designated number of Trustees,
until additional Trustees are elected or appointed as provided herein to bring
the total number of Trustees equal to the designated number, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration of Trust. As conclusive evidence of such vacancy, a written
instrument certifying the existence of such vacancy may be executed by an
officer of the Trust or by a majority of the Trustees then in office. In the
event of the death, declination, resignation, retirement, removal, or incapacity
of all the then Trustees within a short period of time and without the
opportunity for at least one Trustee being able to appoint additional Trustees
to replace those no longer serving, the Trust's Manager(s) are empowered to
appoint new Trustees subject to the applicable provisions of the 1940 Act.
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Section 3. Powers. Subject to the provisions of this
Declaration of Trust, the business of the Trust shall be managed by the
Trustees; the Trustees shall have full power and authority to do any and all
acts and to make and execute any and all contracts and instruments that they may
consider necessary or appropriate in connection with the management of the
Trust, including the power to engage in securities transactions of all kinds on
behalf of the Trust. Without limiting the foregoing, the Trustees may: adopt
By-Laws not inconsistent with this Declaration of Trust providing for the
regulation and management of the affairs of the Trust and may amend and repeal
them to the extent that such By-Laws do not reserve that right to the
Shareholders; enlarge or reduce their number; remove any Trustee with or without
cause at any time by written instrument signed by at least two-thirds of the
number of Trustees prior to such removal, specifying the date when such removal
shall become effective and fill vacancies caused by enlargement of their number
or by the death, resignation or removal of a Trustee; elect and remove, with or
without cause, such officers and appoint and terminate such agents as they
consider appropriate; appoint from their own number and establish and terminate
one or more committees consisting of two or more Trustees which may exercise the
powers and authority of the Board of Trustees to the extent that the Board of
Trustees determine; deposit all or any part of such assets in a system or
systems for the central handling of securities or with a Federal Reserve Bank;
provide for the issuance and distribution of Shares by the Trust directly or
through one or more Principal Underwriters or otherwise; redeem, repurchase and
transfer Shares pursuant to applicable law; declare and pay dividends and
distributions to Shareholders from the assets available therefor; and in general
exercise, or delegate to any officer of the Trust, to any committee of the
Trustees and to any agent or employee of the Trust or to any such custodian,
transfer or Shareholder servicing agent, or Principal Underwriter, such
authority as they consider desirable. Any determination as to what is in the
interests of the Trust made by the Trustees in good faith shall be conclusive.
In construing the provisions of this Declaration of Trust, the presumption shall
be in favor of a grant of power to the Trustees. Unless otherwise specified
herein or in the By-Laws or required by law, any action by the Trustees shall be
deemed effective if approved or taken by a majority of the Trustees present at a
meeting of Trustees at which a quorum of Trustees is present, within or without
the State of Delaware.
Without limiting the foregoing, the Trustees shall have the
power and authority to cause the Trust (or to act on behalf of the Trust):
(a) To operate as and carry out the business of an investment
company, and exercise all the powers necessary or appropriate to the conduct of
such operations;
(b) To invest and reinvest cash, to hold cash uninvested, and
to subscribe for, invest in, reinvest in, purchase or otherwise acquire, own,
hold, pledge, sell, assign, transfer, exchange, distribute, purchase or write
options on, lend, enter into contracts for the future acquisition or delivery
of, or otherwise deal in or dispose of, securities, indices, currencies,
commodities or other property of every nature and kind, including, without
limitation, all types of bonds, debentures, stocks, negotiable or non-negotiable
instruments, obligations, evidences of indebtedness, certificates of deposit or
indebtedness, commercial
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paper, repurchase agreements, bankers' acceptances, and other securities,
commodities or contracts of any kind, issued, created, guaranteed, or sponsored
by any and all Persons, including, without limitation, states, territories, and
possessions of the United States and the District of Columbia and any political
subdivision, agency, or instrumentality thereof, the U.S. Government or any
foreign government or any political subdivision of the U.S. Government or any
foreign government, or any domestic or international instrumentality, or by any
bank or savings institution, or by any corporation or organization organized
under the laws of the United States or of any state, territory, or possession
thereof, or by any corporation or organization organized under any foreign law,
or in "when issued" contracts for any such securities; to change the investments
of the assets of the Trust; and to exercise any and all rights, powers, and
privileges of ownership or interest in respect of any and all such investments
of every kind and description, including, without limitation, the right to
consent and otherwise act with respect thereto, with power to designate one or
more Persons to exercise any of said rights, powers, and privileges in respect
of any of said instruments;
(c) To sell, exchange, lend, pledge, mortgage, hypothecate,
lease, or write options (including options on futures contracts) with respect to
or otherwise deal in any property rights relating to any or all of the assets of
the Trust or any Series or Class thereof;
(d) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or property; and to execute
and deliver proxies or powers of attorney to such Person or Persons as the
Trustees shall deem proper, granting to such Person or Persons such power and
discretion with relation to securities or property as the Trustees shall deem
proper;
(e) To set record dates for the determination of Shareholders
with respect to various matters, which, for purposes of determining the
Shareholders of any Series (or Class) who are entitled to receive payment of any
dividend or of any other distribution shall be on or before the date for the
payment of such dividend or such other payment, as the record date for
determining the Shareholders of such Series (or Class) having the right to
receive such dividend or distribution; without fixing a record date, the
Trustees may for distribution purposes close the register or transfer books for
one or more Series (or Classes) at any time prior to the payment of a
distribution; nothing in this subsection shall be construed as precluding the
Trustees from setting different record dates for different Series (or Classes);
(f) To exercise powers and rights of subscription or otherwise
which in any manner arise out of ownership of securities or other property;
(g) To hold any security or property in a form not indicating
any trust, whether in bearer, unregistered or other negotiable form, or in its
own name or in the name of a custodian or a nominee or nominees or otherwise;
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(h) To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or issuer of any
security or property which is held in the Trust; to consent to any contract,
lease, mortgage, purchase or sale of property by such corporation or issuer; and
to pay calls or subscriptions with respect to any security or property held in
the Trust;
(i) To join with other security or property holders in acting
through a committee, depositary, voting trustee or otherwise, and in that
connection to deposit any security or property with, or transfer any security or
property to, any such committee, depositary or trustee, and to delegate to them
such power and authority with relation to any security or property (whether or
not so deposited or transferred) as the Trustees shall deem proper, and to agree
to pay, and to pay, such portion of the expenses and compensation of such
committee, depositary or trustee as the Trustees shall deem proper;
(j) To compromise, arbitrate or otherwise adjust claims in
favor of or against the Trust or any matter in controversy, including, but not
limited to, claims for taxes;
(k) To enter into joint ventures, general or limited
partnerships and any other combinations or associations;
(l) To borrow funds or other property in the name of the Trust
or any Series thereof exclusively for Trust or the relevant Series purposes and
in connection therewith issue notes or other evidences of indebtedness; and to
mortgage and pledge the Trust Property or any part thereof to secure any or all
of such indebtedness;
(m) To endorse or guarantee the payment of any notes or other
obligations of any Person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust Property or any part thereof to secure any of or all of such obligations;
(n) To purchase and pay for entirely out of Trust Property
such insurance as the Trustees may deem necessary or appropriate for the conduct
of the business, including, without limitation, insurance policies insuring the
assets of the Trust or payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers, principal underwriters, or
independent contractors of the Trust, individually against all claims and
liabilities of every nature arising by reason of holding Shares, holding, being
in or having held any such office or position, or by reason of any action
alleged to have been taken or omitted by any such Person as Trustee, officer,
employee, agent, investment adviser, principal underwriter, or independent
contractor, including any action taken or omitted that may be determined to
constitute negligence, whether or not the Trust would have the power to
indemnify such Person against liability;
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(o) To adopt, establish and carry out pension, profit-sharing,
Share bonus, Share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;
(p) To enter into contracts of any kind and description;
(q) To interpret the investment policies, practices or
limitations of any Series or Class;
(r) To establish a registered office and have a registered
agent in the State of Delaware;
(s) To invest the assets of any Series in a single investment
company, including investment by means of transfer of such assets in exchange
for an interest or interests in such investment company;
(t) Subject to the 1940 Act, to engage in any other lawful act
or activity in which a business trust organized under the Delaware Act may
engage; and
(u) In general to carry on any other business in connection
with or incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the attainment of
any object or the furtherance of any power hereinbefore set forth, either alone
or in association with others, and to do every other act or thing incidental or
appurtenant to or growing out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed as objects and
powers, and the foregoing enumeration of specific powers shall not be held to
limit or restrict in any manner the general power of the Trustees. Any action by
one or more of the Trustees in their capacity as such hereunder shall be deemed
an action on behalf of the Trust or the applicable Series, and not an action in
an individual capacity.
The Trust shall not be limited to investing in obligations
maturing before the possible termination of the Trust or one or more of its
Series or Classes thereof. The Trust shall not in any way be bound or limited by
any present or future law or custom in regard to investment by fiduciaries. The
Trust shall not be required to obtain any court order to deal with any assets of
the Trust or take any other action hereunder.
Section 4. Payment of Expenses by the Trust. The Trustees are
authorized to pay or cause to be paid out of the principal or income of the
Trust, or partly out of the principal and partly out of income, as they deem
fair, all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with the Trust, or in connection with the
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management thereof, including, but not limited to, the Trustees compensation and
such expenses and charges for the services of the Trust's officers, employees,
investment adviser or manager, Principal Underwriter, auditors, counsel,
custodian, transfer agent, Shareholder servicing agent, and such other agents or
independent contractors and such other expenses and charges as the Trustees may
deem necessary or proper to incur, which expenses, fees, charges, taxes and
liabilities shall be allocated in accordance with Article III, Section 6 hereof.
Section 5. Payment of Expenses by Shareholders. The Trustees
shall have the power to cause each Shareholder, or each Shareholder of any
particular Series or Class, to pay directly, at such intervals as the Trustees
may determine, in advance or arrears, for charges of the Trust's transfer agent,
Shareholder servicing or similar agent, an amount fixed from time to time by the
Trustees, by setting off such charges due from such Shareholder from declared
but unpaid dividends owed such Shareholder and/or by reducing the number of
Shares in the account of such Shareholder by that number of full and/or
fractional Shares which represents the outstanding amount of such charges due
from such Shareholder.
Section 6. Ownership of Assets of the Trust. The assets of the
Trust shall be held separate and apart from any assets now or hereafter held in
any capacity other than as Trustee hereunder by the Trustees. Title to all of
the assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees shall have power to cause legal title to any Trust
Property to be held by or in the name of one or more of the Trustees, or in the
name of any other Person as nominee, on such terms as the Trustees may
determine. The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each Person who may hereafter become a Trustee. Upon
the resignation, removal or death of a Trustee, she or he shall automatically
cease to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered.
Section 7. Service Contracts.
(a) Subject to such requirements and restrictions as may be
set forth under federal and/or state law and in the By-Laws, including, without
limitation, at the date hereof the requirements of Section 15 of the 1940 Act,
or any successor provision, the Trustees may, at any time and from time to time,
contract for exclusive or nonexclusive advisory, management and/or
administrative services for the Trust or for any Series (or Class thereof) with
any corporation, trust, association or other organization; and any such contract
may contain such other terms as the Trustees may determine, including, without
limitation, authority for the Manager or administrator to delegate certain or
all of its duties under such contracts to qualified investment advisers and
administrators and to determine from time to time without prior consultation
with the Trustees what investments shall be purchased, held, sold or exchanged
and what portion, if any, of the assets of the Trust shall be held
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uninvested and to make changes in the Trust's investments, or such other
activities as may specifically be delegated to such party.
(b) The Trustees may also, at any time and from time to time,
contract with any corporation, trust, association or other organization,
appointing it exclusive or nonexclusive distributor or Principal Underwriter for
the Shares of one or more of the Series (or Classes) or other securities to be
issued by the Trust. Every such contract shall comply with such requirements and
restrictions as may be set forth under federal and/or state law and in the
By-Laws, including, without limitation, at the date hereof the requirements of
Section 15 of the 1940 Act, or any successor provision; and any such contract
may contain such other terms as the Trustees may determine.
(c) The Trustees are also empowered, at any time and from time
to time, to contract with any corporations, trusts, associations or other
organizations, appointing it or them the custodian, transfer agent and/or
Shareholder servicing agent for the Trust or one or more of its Series (or
Classes). Every such contract shall comply with such requirements and
restrictions as may be set forth under federal and/or state law and in the
By-Laws or stipulated by resolution of the Trustees. The Trustees are empowered,
at any time and from time to time, to retain subagents (foreign or domestic) in
connection with any service provider to the Trust or one or more of its Series
(or Classes).
(d) Subject to applicable law, the Trustees are further
empowered, at any time and from time to time, to contract with any entity to
provide such other services, including without limitation accounting and pricing
services, to the Trust or one or more of the Series (or Classes thereof), as the
Trustees determine to be in the best interests of the Trust and the applicable
Series (or Class).
(e) The fact that:
(i) any of the Shareholders, Trustees, or officers of
the Trust is a Shareholder, director, officer, partner,
trustee, employee, Manager, adviser, Principal Underwriter,
distributor, or affiliate or agent of or for any corporation,
trust, association, or other organization, or for any parent
or affiliate of any organization, with which an advisory,
management or administration contract, or principal
underwriter's or distributor's contract, or transfer,
Shareholder servicing or other type of service contract may
have been or may hereafter be made, or that any such
organization, or any parent or affiliate thereof, is a
Shareholder or has an interest in the Trust, or that
(ii) any corporation, trust, association or other
organization with which an advisory, management or
administration contract or principal underwriter's or
distributor's
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contract, or transfer, Shareholder servicing or other type of
service contract may have been or may hereafter be made also
has an advisory, management or administration contract, or
principal underwriter's or distributor's contract, or
transfer, Shareholder servicing or other service contract with
one or more other corporations, trusts, associations, or other
organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same, or create any liability or accountability to the Trust or its
Shareholders, provided approval of each such contract is made pursuant to the
requirements of the 1940 Act.
Section 8. Trustees and Officers as Shareholders. Any Trustee,
officer or agent of the Trust may acquire, own and dispose of Shares to the same
extent as if he were not a Trustee, officer or agent; and the Trustees may issue
and sell and cause to be issued and sold Shares to, and redeem such Shares from,
any such Person or any firm or company in which such Person is interested,
subject only to the general limitations contained herein or in the By-Laws
relating to the sale and redemption of such Shares.
ARTICLE V
Shareholders' Voting Powers and Meetings
Section 1. Voting Powers, Meetings, Notice and Record Dates.
The Shareholders shall have power to vote only (i) for the election or removal
of Trustees to the extent and as provided in Article IV, Section 1, and (ii)
with respect to such additional matters relating to the Trust as may be required
by applicable law, this Declaration of Trust, the By-Laws or any registration of
the Trust with the Commission (or any successor agency) or any state, or as the
Trustees may consider necessary or desirable. Each Shareholder shall be entitled
to one vote for each dollar of net asset value (determined as of the applicable
record date) of each Share owned by such Shareholder (number of Shares owned
times net asset value per Share) on any matter on which such Shareholder is
entitled to vote and each fractional dollar amount shall be entitled to a
proportionate fractional vote. Notwithstanding any other provision of this
Declaration of Trust, on any matter submitted to a vote of the Shareholders, all
Shares of the Trust then entitled to vote shall be voted in aggregate, except
(i) when required by the 1940 Act, Shares shall be voted by individual Series or
Class; and (ii) when the matter involves the termination of a Series or Class or
any other action that the Trustees have determined will affect only the
interests of one or more Series or Classes, then only Shareholders of such
Series or Classes shall be entitled to vote thereon. There shall be no
cumulative voting in the election of Trustees. Shares may be voted in person or
by proxy. A proxy may be given in writing. The By-Laws may provide that proxies
may also, or may instead, be given by any electronic or telecommunications
device or in any other
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manner. Notwithstanding anything else contained herein or in the By-Laws, in the
event a proposal by anyone other than the officers or Trustees of the Trust is
submitted to a vote of the Shareholders of one or more Series or Classes thereof
or of the Trust, or in the event of any proxy contest or proxy solicitation or
proposal in opposition to any proposal by the officers or Trustees of the Trust,
Shares may be voted only in person or by written proxy at a meeting. Until
Shares are issued, the Trustees may exercise all rights of Shareholders and may
take any action required by law, this Declaration of Trust or the By-Laws to be
taken by the Shareholders. Meetings of the Shareholders shall be called and
notice thereof and record dates therefor shall be given and set as provided in
the By-Laws.
Section 2. Quorum and Required Vote. Except when a larger
quorum is required by applicable law, by the By-Laws or by this Declaration of
Trust, (i) thirty-three and one-third percent (33-1/3%) of the Shares entitled
to vote shall constitute a quorum at a Shareholders' meeting and (ii) when any
one or more Series (or Classes) is to vote as a single class separate from any
other Shares, thirty-three and one-third percent (33-1/3%) of the Shares of each
such Series (or Class) entitled to vote shall constitute a quorum at a
Shareholders' meeting of that Series (or Class). Except when a larger vote is
required by any provision of this Declaration of Trust or the By-Laws or by
applicable law, when a quorum is present at any meeting, a majority of the
Shares voted shall decide any questions and a plurality of the Shares voted
shall elect a Trustee, provided that where any provision of law or of this
Declaration of Trust requires that the holders of any Series shall vote as a
Series (or that holders of a Class shall vote as a Class), then a majority of
the Shares of that Series (or Class) voted on the matter (or a plurality with
respect to the election of a Trustee) shall decide that matter insofar as that
Series (or Class) is concerned.
Section 3. Additional Provisions. The By-Laws may include
further provisions for Shareholders' votes and meetings and related matters.
ARTICLE VI
Net Asset Value, Distributions and Redemptions
Section 1. Determination of Net Asset Value, Net Income, and
Distributions. Subject to applicable law and Article III, Section 6 hereof, the
Trustees, in their absolute discretion, may prescribe and shall set forth in the
By-Laws or in a duly adopted resolution of the Trustees such bases and time or
times for determining the net asset value of the Shares of any Series or Class,
the net income attributable to the Shares of any Series or Class, or the
declaration and payment of dividends and distributions on the Shares of any
Series or Class, as they may deem necessary or desirable from time to time.
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Section 2. Redemptions and Repurchases.
(a) The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of a proper instrument of
transfer together with a request directed to the Trust or a Person designated by
the Trust that the Trust purchase such Shares or in accordance with such other
procedures for redemption as the Trustees may from time to time authorize; and
the Trust will pay therefor the net asset value thereof as determined by the
Trustees (or on their behalf), in accordance with any applicable provisions of
the By-Laws and applicable law. Unless extraordinary circumstances exist,
payment for said Shares shall be made by the Trust to the Shareholder within
seven (7) days after the date on which the request is made in proper form. The
obligation set forth in this Section 2 is subject to the provision that in the
event that any time the New York Stock Exchange (the "Exchange") is closed for
other than weekends or holidays, or if permitted by the rules and regulations or
an order of the Commission during periods when trading on the Exchange is
restricted or during any emergency which makes it impracticable for the Trust to
dispose of the investments of the applicable Series or Class or to determine
fairly the value of the net assets held with respect to such Series or Class or
during any other period permitted by order of the Commission for the protection
of investors, such obligations may be suspended or postponed by the Trustees. In
the case of a suspension of the right of redemption as provided herein, a
Shareholder may either withdraw the request for redemption or receive payment
based on the net asset value per Share next determined after the termination of
such suspension.
(b) The redemption price may in any case or cases be paid
wholly or partly in kind if the Trustees determine that such payment is
advisable in the interest of the remaining Shareholders of the Series or Class
for which the Shares are being redeemed. The fair value, selection and quantity
of securities or other property so paid or delivered as all or part of the
redemption price may be determined by or under authority of the Trustees. In no
case shall the Trust be liable for any delay of any corporation or other Person
in transferring securities selected for delivery as all or part of any payment
in kind.
(c) If the Trustees shall, at any time and in good faith,
determine that direct or indirect ownership of Shares of any Series or Class has
or may become concentrated in any Person to an extent that would disqualify any
Series as a regulated investment company under the Internal Revenue Code of
1986, as amended (or any successor statute thereto), then the Trustees shall
have the power (but not the obligation) by such means as they deem equitable (i)
to involuntarily redeem any number, or principal amount, of Shares of such
Person sufficient to maintain or bring the direct or indirect ownership of
Shares into conformity with the requirements for such qualification, and (ii) to
refuse to transfer or issue Shares to any Person whose acquisition of the Shares
in question would result in such disqualification. Any such redemption shall be
effected at the redemption price and in the manner provided in this Article VI.
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(d) The holders of Shares shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of Shares as the Trustees deem necessary to comply with the provisions
of the Internal Revenue Code of 1986, as amended (or any successor statute
thereto), or to comply with the requirements of any other taxing or regulatory
authority.
(e) Subject to the requirements of the 1940 Act, the Board of
Trustees may cause the Trust to redeem, at the price and in the manner provided
in this Article VI, Shares of any Series or Class held by any Person (i) if such
Person is no longer qualified to hold such Shares in accordance with such
qualifications as may be established by the Trustees, (ii) if the net asset
value of such Shares is below the minimum investment amount which initially
shall be $_______ or such other amount as determined by the Trustees or (iii) if
otherwise deemed by the Trustees to be in the best interest of the Trust or that
particular Series (or Class) as a whole.
(f) Shares redeemed shall, upon redemption, be deemed to be
retired and restored to the status of unissued shares.
ARTICLE VII
Compensation and Limitation of
Liability of Trustees
Section 1. Compensation. The Trustees as such shall be
entitled to reasonable compensation from the Trust, and they may fix the amount
of such compensation. Nothing herein shall in any way prevent the employment of
any Trustee for advisory, management, legal, accounting, investment banking or
other services and payment for the same by the Trust.
Section 2. Indemnification and Limitation of Liability. A
Trustee, when acting in such capacity, shall not be personally liable to any
Person, other than the Trust or a Shareholder to the extent provided in this
Article VII, for any act, omission or obligation of the Trust, of such Trustee
or of any other Trustee. The Trustees shall not be responsible or liable in any
event for any neglect or wrongdoing of any officer, agent, employee, Manager or
Principal Underwriter of the Trust. The Trust (i) may indemnify an agent of the
Trust or any Person who is serving or has served at the Trust's request as an
agent of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise and (ii) shall indemnify each Person who is,
or has been, a Trustee, officer or employee of the Trust and any Person who is
serving or has served at the Trust's request as a director, officer, trustee, or
employee of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise, in the case of (i) and (ii), to the fullest
extent consistent with the 1940 Act and in the manner provided in the By-Laws;
provided that such indemnification shall not be available to any of the
foregoing Persons in connection with a
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claim, suit or other proceeding by any such Person against the Trust or a Series
(or Class) thereof.
All persons extending credit to, contracting with or having
any claim against the Trust or the Trustees shall look only to the assets of the
appropriate Series (or Class thereof if the Trustees have included a Class
limitation on liability in the agreement with such person as provided below),
or, if the Trustees have yet to establish Series, of the Trust for payment under
such credit, contract or claim; and neither the Trustees nor the Shareholders,
nor any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees by any of them in connection with the Trust
shall conclusively be deemed to have been executed or done only in or with
respect to his or their capacity as Trustee or Trustees, and such Trustee or
Trustees shall not be personally liable thereon. At the Trustees' discretion,
any note, bond, contract, instrument, certificate or undertaking made or issued
by the Trustees or by any officer or officers may give notice that the
Certificate of Trust is on file in the Office of the Secretary of State of the
State of Delaware and that a statutory limitation on liability of Series exists
and such note, bond, contract, instrument, certificate or undertaking may, if
the Trustees so determine, recite that the same was executed or made on behalf
of the Trust by a Trustee or Trustees in such capacity and not individually or
by an officer or officers in such capacity and not individually and that the
obligations of such instrument are not binding upon any of them or the
Shareholders individually but are binding only on the assets and property of the
Trust or a Series thereof, and may contain such further recital as such Person
or Persons may deem appropriate including, without limitation, a requirement, in
any note, bond, contract, instrument, certificate or undertaking made with
respect to one or more Classes of any Series that the parties thereto look only
to the assets of such Class or Classes in satisfaction of the liabilities
arising thereunder. The omission of any such notice or recital shall in no way
operate to bind any Trustees, officers or Shareholders individually.
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond
or Surety. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
to the Trust and to any Shareholder solely for her or his own willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee, and shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration of Trust, and shall be under no liability for any act or omission in
accordance with such advice nor for failing to follow such advice. The Trustees
shall not be required to give any bond as such, nor any surety if a bond is
required.
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Section 4. Insurance. The Trustees shall be entitled and
empowered to the fullest extent permitted by law to purchase with Trust assets
insurance for liability and for all expenses reasonably incurred or paid or
expected to be paid by a Trustee, officer, employee or agent of the Trust in
connection with any claim, action, suit or proceeding in which she or he becomes
involved by virtue of her or his capacity or former capacity with the Trust.
ARTICLE VIII
Miscellaneous
Section 1. Liability of Third Persons Dealing with Trustees.
No Person dealing with the Trustees shall be bound to make any inquiry
concerning the validity of any transaction made or to be made by the Trustees or
to see to the application of any payments made or property transferred to the
Trust or upon its order.
Section 2. Termination of Trust or Series.
(a) Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of a majority of the Shares of each Series entitled to vote, voting
separately by Series, or by the Trustees by written notice to the Shareholders.
Any Series of Shares or Class thereof may be terminated at any time by vote of a
majority of the Shares of such Series or Class entitled to vote or by the
Trustees by written notice to the Shareholders of such Series or Class.
(b) Upon the requisite Shareholder vote or action by the
Trustees to terminate the Trust or any one or more Series of Shares or any Class
thereof, after paying or otherwise providing for all charges, taxes, expenses
and liabilities, whether due or accrued or anticipated, of the Trust or of the
particular Series or any Class thereof as may be determined by the Trustees, the
Trust shall in accordance with such procedures as the Trustees consider
appropriate reduce the remaining assets of the Trust or of the affected Series
or Class to distributable form in cash or Shares (if any Series remain) or other
securities, or any combination thereof, and distribute the proceeds to the
Shareholders of the Series or Classes involved, ratably according to the number
of Shares of such Series or Class held by the several Shareholders of such
Series or Class on the date of distribution. Thereupon, the Trust or any
affected Series or Class shall terminate and the Trustees and the Trust shall be
discharged of any and all further liabilities and duties relating thereto or
arising therefrom, and the right, title and interest of all parties with respect
to the Trust or such Series or Class shall be canceled and discharged.
(c) Upon termination of the Trust, following completion of
winding up of its business, the Trustees shall cause a certificate of
cancellation of the Trust's Certificate of Trust to be filed in accordance with
the Delaware Act, which certificate of cancellation may be signed by any one
Trustee.
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Section 3. Reorganization.
(a) Notwithstanding anything else herein, the Trustees may,
without any Shareholder approval or vote unless such approval or vote is
required by applicable law, in order to change the form or jurisdiction of
organization of the Trust or for any other purpose (i) cause the Trust to merge
or consolidate with or into one or more trusts (or series thereof to the extent
permitted by law), partnerships, associations, corporations or other business
entities (including trusts, partnerships, associations, corporations or other
business entities created by the Trustees to accomplish such merger or
consolidation), (ii) cause the Shares to be exchanged under or pursuant to any
state or federal statute to the extent permitted by law or (iii) cause the Trust
to reorganize under the laws of any state or other political subdivision of the
United States, if such action is determined by the Trustees to be in the best
interests of the Trust. Any agreement of merger or consolidation or exchange or
certificate of merger may be signed by a majority of the Trustees and facsimile
signatures conveyed by electronic or telecommunication means shall be valid.
(b) Pursuant to and in accordance with the provisions of
Section 3815(f) of the Delaware Act, and notwithstanding anything to the
contrary contained in this Declaration of Trust, an agreement of merger or
consolidation approved by the Trustees in accordance with this Section 3 may
effect any amendment to the governing instrument of the Trust or effect the
adoption of a new trust instrument of the Trust if the Trust is the surviving or
resulting trust in the merger or consolidation.
(c) The Trustees may, without any Shareholder approval or vote
unless such approval or vote is required by applicable law, create one or more
business trusts to which all or any part of the assets, liabilities, profits or
losses of the Trust or any Series or Class thereof may be transferred and may
provide for the conversion of Shares in the Trust or any Series or Class thereof
into beneficial interests in any such newly created trust or trusts or any
series or classes thereof.
Section 4. Amendments. Except as specifically provided in this
section, the Trustees may, without Shareholder vote, restate, amend or otherwise
supplement this Declaration of Trust. Shareholders shall have the right to vote
(i) on any amendment that would affect their right to vote granted in Article V,
Section 1 hereof, (ii) on any amendment to this Section 4 of Article VIII, (iii)
on any amendment that may be required to be approved by Shareholders by
applicable law or by the Trust's registration statement filed with the
Commission, and (iv) on any amendment submitted to them by the Trustees. Any
amendment required or permitted to be submitted to the Shareholders that, as the
Trustees determine, shall affect the Shareholders of one or more Series (or
Classes thereof) shall be authorized by a vote of the Shareholders of each
Series or Class affected and no vote of Shareholders of a Series or Class not
affected shall be required. Notwithstanding anything else herein, no amendment
hereof shall limit the rights to insurance provided by Article VII, Section 4
with respect to any acts or omissions of Persons covered thereby prior to such
amendment nor shall any such amendment limit the rights to indemnification
referenced in
B-21
<PAGE>
Article VII, Section 2 hereof as provided in the By-Laws with respect to any
actions or omissions of Persons covered thereby prior to such amendment. The
Trustees may, without Shareholder vote, restate, amend, or otherwise supplement
the Certificate of Trust as they deem necessary or desirable.
Section 5. Filing of Copies, References, Headings. The
original or a copy of this instrument and of each restatement and/or amendment
hereto shall be kept at the office of the Trust where it may be inspected by any
Shareholder. Anyone dealing with the Trust may rely on a certificate by an
officer of the Trust as to whether or not any such restatements and/or
amendments have been made and as to any matters in connection with the Trust
hereunder; and, with the same effect as if it were the original, may rely on a
copy certified by an officer of the Trust to be a copy of this instrument or of
any such restatements and/or amendments. In this instrument and in any such
restatements and/or amendments, references to this instrument, and all
expressions such as "herein", "hereof" and "hereunder", shall be deemed to refer
to this instrument as amended or affected by any such restatements and/or
amendments. Headings are placed herein for convenience of reference only and
shall not be taken as a part hereof or control or affect the meaning,
construction or effect of this instrument. Whenever the singular number is used
herein, the same shall include the plural; and the neuter, masculine and
feminine genders shall include each other, as applicable. This instrument may be
executed in any number of counterparts each of which shall be deemed an
original.
Section 6. Applicable Law.
(a) The Trust is created under, and this Declaration of Trust
is to be governed by, and construed and enforced in accordance with, the laws of
the state of Delaware. The Trust shall be of the type commonly called a business
trust, and without limiting the provisions hereof, the Trust specifically
reserves the right to exercise any of the powers or privileges afforded to
business trusts or actions that may be engaged in by business trusts under the
Delaware Act, and the absence of a specific reference herein to any such power,
privilege or action shall not imply that the Trust may not exercise such power
or privilege or take such actions.
(b) Notwithstanding the first sentence of Section 6(a) of this
Article VIII, there shall not be applicable to the Trust, the Trustees or this
Declaration of Trust (x) the provisions of section 3540 of Title 12 of the
Delaware Code or (y) any provisions of the laws (statutory or common) of the
state of Delaware (other than the Delaware Act) pertaining to trusts that relate
to or regulate: (i) the filing with any court or governmental body or agency of
trustee accounts or schedules of trustee fees and charges, (ii) affirmative
requirements to post bonds for trustees, officers, agents or employees of a
trust, (iii) the necessity for obtaining a court or other governmental approval
concerning the acquisition, holding or disposition of real or personal property,
(iv) fees or other sums applicable to trustees, officers, agents or employees of
a trust, (v) the allocation of receipts and expenditures to income or principal,
(vi) restrictions or limitations on the permissible nature, amount or
B-22
<PAGE>
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding of trust assets, or (vii) the establishment
of fiduciary or other standards or responsibilities or limitations on the acts
or powers of trustees that are inconsistent with the limitations or liabilities
or authorities and powers of the Trustees set forth or referenced in this
Declaration of Trust.
Section 7. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration of Trust are severable,
and if the Trustees shall determine, with the advice of counsel, that any of
such provisions is in conflict with the 1940 Act, the regulated investment
company provisions of the Internal Revenue Code of 1986, as amended (or any
successor statute thereto), and the regulations thereunder, with the Delaware
Act or with other applicable laws and regulations, the conflicting provision
shall be deemed never to have constituted a part of the Declaration of Trust;
provided, however, that such determination shall not affect any of the remaining
provisions of the Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
(b) If any provision of the Declaration of Trust shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of the Declaration of Trust in any jurisdiction.
Section 8. Business Trust Only. It is the intention of the
Trustees to create a business trust pursuant to the Delaware Act. It is not the
intention of the Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of legal
relationship other than a business trust pursuant to the Delaware Act. Nothing
in this Declaration of Trust shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
IN WITNESS WHEREOF, the Trustee named below does hereby make
and enter into this Declaration of Trust as of _______________ __, 199_.
TRUSTEE[S]
----------------------------------
_______________, as Trustee
[---------------------------------]
_______________, as Trustee
B-23
<PAGE>
[---------------------------------]
_______________, as Trustee
[---------------------------------]
_______________, as Trustee
[---------------------------------]
_______________, as Trustee
[---------------------------------]
_______________, as Trustee
B-24
<PAGE>
AGREEMENT AND DECLARATION OF TRUST
OF
ZWEIG SERIES TRUST
TABLE OF CONTENTS
Page
ARTICLE I Name and Definitions...................................... 1
ARTICLE II Purpose of Trust.......................................... 3
ARTICLE III Shares.................................................... 3
Section 1. Division of Beneficial Interest.......................... 3
Section 2. Ownership of Shares...................................... 4
Section 3. Transfer of Shares....................................... 4
Section 4. Investments in the Trust................................. 4
Section 5. Status of Shares and Limitation of Personal Liability.... 4
Section 6. Establishment and Designation of Series (or Class)....... 5
Section 7. Indemnification of Shareholders......................... 7
ARTICLE IV Trustees.................................................. 8
Section 1. Number, Election and Tenure.............................. 8
Section 2. Effect of Death, Resignation, etc. of a Trustee......... 8
Section 3. Powers.................................................. 9
Section 4. Payment of Expenses by the Trust........................ 13
Section 5. Payment of Expenses by Shareholders..................... 13
Section 6. Ownership of Assets of the Trust........................ 14
Section 7. Service Contracts....................................... 14
Section 8. Trustees and Officers as Shareholders................... 15
ARTICLE V Shareholders' Voting Powers and Meetings................. 16
Section 1. Voting Powers, Meetings, Notice and Record Dates........ 16
Section 2. Quorum and Required Vote................................ 16
Section 3. Additional Provisions................................... 17
(B-i)
<PAGE>
ARTICLE VI Net Asset Value, Distributions and Redemptions........... 17
Section 1. Determination of Net Asset Value, Net Income, and
Distributions........................................... 17
Section 2. Redemptions and Repurchases............................. 17
ARTICLE VII Compensation and Limitation of Liability of Trustees..... 19
Section 1. Compensation............................................ 19
Section 2. Indemnification and Limitation of Liability............. 19
Section 3. Trustee's Good Faith Action, Expert Advice, No Bond or
Surety.................................................. 20
Section 4. Insurance............................................... 20
ARTICLE VIII Miscellaneous............................................ 20
Section 1. Liability of Third Persons Dealing with Trustees........ 20
Section 2. Termination of Trust or Series.......................... 21
Section 3. Reorganization.......................................... 21
Section 4. Amendments.............................................. 22
Section 5. Filing of Copies, References, Headings.................. 22
Section 6. Applicable Law.......................................... 23
Section 7. Provisions in Conflict with Law or Regulations.......... 23
Section 8. Business Trust Only..................................... 24
(B-ii)
<PAGE>
SCHEDULE 1
The following is a comparison of the provisions of the existing
Declaration of Trust and Code of Regulations of the Current Trust and the
proposed Delaware Trust Instrument and By-Laws of the Delaware Trust (the
"By-Laws"):
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Summary of the The Massachusetts Trust was The Delaware trust will be
Trust established on _____, 1984 formed as a Delaware business
Instrument................. and operates pursuant to an trust pursuant to the
Amended and Restated Delaware Trust Instrument and
Agreement and Declaration a certificate of trust. The
of Trust dated April 11, purpose of the Trust will be
1986, as further amended by to conduct, operate and carry
several amendments through on the business of a
October 3, 1991. The management investment company
Massachusetts Trust's registered under the 1940 Act
fiscal year end is December through one or more Series
31. The Trustees may, investing primarily in
without Shareholder securities, and to carry on
approval, change the fiscal such other business as the
year of the Trust. The Trustees may from time to
Massachusetts Trust's time determine pursuant to
operations are governed by their authority under the
the Massachusetts Trust Delaware Trust Instrument.
Instrument, the Bylaws, The investment objective,
applicable Massachusetts policies, and limitations of
law and the provisions of the successor fund will be
the 1940 Act, the rules and the same as those of the
regulations of the SEC current fund, including the
thereunder and applicable revised policies and
state securities laws. limitations, if approved,
adopted by Shareholders pursuant to
Proposals THREE- FIFTEEN. The
Delaware Trust's fiscal year end is
also December 31, which is that of
the Massachusetts Trust. The
Trustees may change the fiscal year
end of the Delaware Trust at their
discretion in the future. Prior to
the Conversion, the Successor Trust
will not have any assets or
liabilities. During the Conversion,
the Current Trust will be the sole
shareholder of the Successor Trust
immediately prior to the
distribution of Delaware Trust
Shares to Current Trust
Shareholders. As a Delaware
business trust, the Delaware
Trust's operations will be governed
by the Delaware Trust Instrument,
the By-Laws and applicable Delaware
law, including the Delaware
Business Trust Act (the "Delaware
Act"). The operations of the
Delaware Trust will continue to be
subject to the provisions of the
1940 Act, the rules and regulations
of the SEC thereunder, and
applicable state securities laws.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Trustees and The business and affairs of Subject to the provisions of
Officers................. the Trust are managed under the Delaware Trust
the direction of the Instrument, the business of
Trustees, who serve the Delaware Trust shall be
indefinite terms and who supervised by its Trustees,
have all powers necessary who serve indefinite terms
and desirable to carry out and who have all powers
that responsibility. The necessary or convenient to
Trustees, in all instances, carry out that
act as principals, and are responsibility, including the
free from the control of power to engage in securities
the Shareholders. The transactions of all kinds on
Trustees have full power behalf of the Trust. The
and authority to do any and responsibilities, powers, and
all acts and to make and fiduciary duties of the
execute any and all Trustees of the Delaware
contracts and instruments Trust will be substantially
that they may consider the same as those of the
necessary or appropriate in Trustees of the Massachusetts
connection with the Trust. It is expected that
management of the Trust. the Trustees of the Delaware
The Trustees are not in any Trust will be those persons
way bound or limited by who currently serve as
present or future laws or Trustees of the Massachusetts
customs in regard to trust Trust.
investments, but have full
authority and power to make
any and all investments
which they, in their
uncontrolled discretion,
deem proper to accomplish
the purpose of this Trust.
Series or Funds............ The Massachusetts Trust The Delaware Trust Instrument
Instrument permits the provides that the beneficial
Trustees to create one or interests in the Trust may be
more series or funds of the divided into one or more
Trust and, with respect to Series. Each Series may be
each series or fund, to divided into one or more
issue an unlimited number Classes. The Trustees have
of full or fractional full power and authority, in
shares of that series or their sole discretion, and
fund or of one or more of without obtaining any
that series' or fund's authorization or vote of the
classes. Each share of a Shareholders of any Series or
Series of the Massachusetts Class thereof, to create one
Trust represents an equal or more series or funds of
proportionate interest with the Trust, and with respect
each other share in that to each series or fund, to
series, none having issue an unlimited number of
priority or preference over full or fractional shares of
another. that series or fund or of one
or more of that series' or
fund's classes. The Trustees
have the authority to: (i)
divide the beneficial interest
in the Trust or in each Series
or Class thereof into Shares,
(ii) issue Shares without
limitation as to number
(including fractional Shares),
to such Persons and
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
for such amount and type of
consideration, including cash
or securities, at such time or
times and on such terms as the
Trustees may deem appropriate,
(iii) establish and designate
and to change in any manner
any Series or Class thereof
and to fix such preferences,
voting powers, rights, duties
and privileges and business
purpose of each Series or
Class thereof as the Trustees
may from time to time
determine, which preferences,
voting powers, rights, duties
and privileges may be senior
or subordinate to (or in the
case of business purpose,
different from) any existing
Series or Class thereof and
may be limited to specified
property or obligations of the
Trust or profits and losses
associated with specified
property or obligations of the
Trust, (iv) divide or combine
the Shares of any Series or
Class thereof into a greater
or lesser number, or issue
dividends in Shares with
respect to Shares of any
Series or Class, without
thereby materially changing
the proportionate beneficial
interest of the Shares of such
Series or Class in the assets
held with respect to that
Series or Class thereof, (v)
classify or reclassify any
issued Shares of any Series or
Class thereof into Shares of
one or more Series or Classes
thereof and (vi) take such
other action with respect to
the Shares as the Trustees may
deem desirable.
Treatment of Assets Assets of a series of a fund could The Delaware Act expressly provides that
and Liabilities of a potentially be required to be used to the trust may be organized into separate
Series..................... satisfy the debts of another series. classes or series of beneficial interests
which may hold different
assets and be governed by
different terms. Further, if
certain requirements are met,
the liabilities of one series
of a trust are, as a matter of
statute, only enforceable
against the assets held in
that series, and not against
the other assets held by the
Trust. Delaware law thus
affords greater protection
against subjecting the assets
of one series to be used to
satisfy the debts of another
series.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Shareholder Shareholders of a Massachusetts Generally, Delaware Trust shareholders
Liability................ business trust may, under certain are not personally liable for obligations of
circumstances, be held personally the Delaware Trust under Delaware law.
liable under Massachusetts law for the The Delaware Act provides that a
obligations of the Massachusetts Trust. shareholder of a Delaware business trust
The Trust believes the risk of shall be entitled to the same limitation of
Massachusetts Trust shareholder liability extended to shareholders of
liability is remote for shareholders of private corporations for profit organized
Massachusetts business trusts. The under the Delaware General Corporation
Massachusetts Trust Instrument, like Law. However, no similar statutory or
the Delaware Trust Instrument, other authority limiting business trust
contains an express disclaimer of shareholder liability applies in many other
shareholder liability and requires that states, including New York, the location
notice of such disclaimer be given in of ZGA, the Trust's adviser. As a result,
each agreement entered into or to the extent that the Delaware Trust or a
executed by the Massachusetts Trust or shareholder is subject to the jurisdiction of
the Trustees. The Massachusetts Trust courts in those states, the courts may not
Instrument also provides for apply Delaware law, and may thereby
indemnification out of Trust property. subject the Delaware Trust shareholders to
liability. To guard against
this risk, the Delaware Trust
Instrument (i) contains an
express disclaimer of
shareholder liability for acts
or obligations of the Delaware
Trust and requires that notice
of such disclaimer be given in
each agreement, obligation,
and instrument entered into as
executed by the Delaware Trust
or its Trustees and (ii)
provides for indemnification
out of series or fund property
of any shareholder held
personally liable for the
obligations of the Delaware
Trust. Thus, the risk of a
Delaware Trust shareholder
incurring financial loss
beyond his or her investment
because of shareholder
liability is limited to
circumstances in which (1) a
court refused to apply
Delaware law, (2) no
contractual limitation of
liability was in effect, and
(3) the series or fund itself
would be unable to meet its
obligations. In light of
Delaware law, the nature of
the Delaware trust's business,
and the nature of its assets,
the Trust believes that the
risk of personal liability to
a Delaware Trust shareholder
is extremely remote.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Liability of The Declaration of Trust provides that Under the Delaware Act and the
Trustees................. the Trustees and officers of the Trust provisions of the Delaware Trust
(together, "Covered Persons") shall not Instrument, a Trustee, when acting in
be responsible for or liable in any such capacity, shall not be personally
event for neglect or wrongdoing of any liable to any Person, other than the
Trustee or any other officer, agent, Delaware Trust or a Delaware Trust
employee or Investment Adviser, Shareholder, for any act, omission or
Principal Underwriter, transfer agent obligation of the Trust, of such Trustee or
or custodian of the Trust, provided that of any other Trustee. The Trustees shall
they have exercised reasonable care not be responsible or liable in any event
and have acted under the reasonable for any neglect or wrongdoing of any
belief that their actions are in the best officer, agent, employee, Manager or
interest of the Trust; but nothing in the Principal Underwriter of the Trust. The
Massachusetts Trust Instrument shall Trust may indemnify an agent and shall
protect any Trustee against any liability indemnify each Person who is, or has
to which he or she would otherwise be been, a Trustee, officer or employee of
subject by reason of willful the Trust and any Person who is serving
misfeasance, bad faith, gross or has served at the Trust's request as a
negligence or reckless disregard of the director, officer, trustee or employee of
duties involved in the conduct of his or another organization in which the Trust
her office. [No indemnification will has any interest as a Shareholder, creditor
be provided to any Covered Person in or otherwise to the fullest extent
the event of a settlement, unless there consistent with the 1940 Act and in the
has been a determination that such manner provided in the By-Laws;
Trustee or officer did not engage in provided that such indemnification shall
willful misfeasance, bad faith, gross not be available to any of the foregoing
negligence or reckless disregard of the Persons in connection with a claim, suit
duties involved in the conduct of his or other proceeding by any such Person
office, (A) by the court or other body against the Trust or a Series (or Class)
approving the settlement; (B) by at thereof. A Trustee shall be liable to the
least a majority of those Trustees who Trust and to any Shareholder solely for
are neither Interested Persons of the his or her own willful misfeasance, bad
Trust nor are parties to the matter faith, gross negligence or reckless
based upon a review of readily disregard of the duties involved in the
available facts (as opposed to a full conduct of the office of Trustee, and shall
trial-type inquiry); or (C) by written not be liable for errors of judgment or
opinion of independent legal counsel mistakes of fact or law. The Trustees
based upon a review of readily may take advice of counsel or other
available facts (as opposed to a full experts with respect to the meaning and
trial-type inquiry). Any Shareholder operation of the Delaware Trust
may, by appropriate legal proceedings, Instrument, and shall be under no liability
challenge any such determination by for any act or omission in accordance
the Trustees or by independent with such advice nor for failing to follow
counsel. Shareholders may, by such advice.
appropriate legal proceedings,
challenge any such determination by
the Trustees of by independent
counsel.]
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Voting in the On any matter submitted to a vote of The Delaware Trust Instrument provides
aggregate................ the Shareholders, all shares shall be that all Shares of the Trust then entitled to
voted by individual Series, except vote shall be voted in aggregate, except (i)
(i) when required by the 1940 Act, when required by the 1940 Act, Shares
Shares shall be voted in the aggregate shall be voted by individual Series or
and not by individual Series; and Class; and (ii) when the matter involves
(ii) when the Trustees have determined the termination of a Series or Class or any
that the matter affects only the interests other action that the Trustees have
of one or more Series, then only the determined will affect only the interests of
Shareholders of such Series shall be one or more Series or Classes, then only
entitled to vote thereon. Each whole Shareholders of such Series or Classes
Share shall be entitled to one vote as to shall be entitled to vote thereon. There
any matter on which it is entitled to shall be no cumulative voting in the
vote, and each fractional Share shall be election of Trustees. The Delaware Trust
entitled to a proportionate fractional Instrument provides voting rights based on
vote. a Shareholder's total dollar interest in a
fund or Series (dollar-based
voting). Each Shareholder shall be
entitled to one vote for each
dollar of net asset value
(determined as of the applicable
record date) of each Share owned by
such Shareholder (number of Shares
owned times net asset value per
Share) on any matter on which such
Shareholder is entitled to vote and
each fractional dollar amount shall
be entitled to a proportionate
fractional vote. As a result of
dollar- based voting under the
Delaware Trust Instrument, voting
power would be allocated in
proportion to the value of each
Shareholder's investment.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Quorum and A majority of Shares entitled to vote in Except when a larger quorum is required
Required Vote............ person or by proxy shall be a quorum by applicable law, by the By-Laws or
for the transaction of business at a Delaware Trust Instrument, (i) thirty-three
Shareholders' meeting, except that and one-third percent (33-1/3%) of the
where any provision of law or of the Shares entitled to vote shall constitute a
Declaration of Trust permits or quorum at a Shareholders' meeting and
requires that holders of any Shares (ii) when any one or more Series (or
shall vote as a Series, then a majority Classes) is to vote as a single class
of the number of Shares of that Series separate from any other Shares, thirty-
entitled to vote shall be necessary to three and one-third percent (33-1/3%) of
constitute a quorum for the transaction the Shares of each such Series (or Class)
of business by that Series. Except entitled to vote shall constitute a quorum
when a larger vote is required by law, at a Shareholders' meeting of that Series
any provision of the Massachusetts (or Class). Except when a larger vote is
Trust Instrument or the By-Laws, if required by any provision of the Delaware
any, a majority of the Shares voted in Trust Instrument, the By-Laws or by
person or by proxy shall decide any applicable law, when a quorum is present
questions and a plurality shall elect a at any meeting, a majority of the Shares
Trustee, provided that where any voted shall decide any questions and a
provision of law or of the Declaration plurality of the Shares voted shall elect a
of Trust permits or requires that the Trustee, provided that where any
holders of any Shares shall vote as a provision of law or of the Delaware Trust
Series, then a majority of the Shares of Instrument requires that the holders of any
that Series voted on the matter shall Series shall vote as a Series (or that
decide that matter insofar as that Series holders of a Class shall vote as a Class),
is concerned. then a majority of the Shares of that
Series (or Class) voted on the
matter (or a plurality with respect
to the election of a Trustee) shall
decide that matter insofar as that
Series (or Class) is concerned.
Shares may be voted in person or by
proxy. A proxy may be given in
writing. The By-Laws may provide
that proxies may also, or may
instead, be given by any electronic
or telecommunications device or in
any other manner. Notwithstanding
anything else in the Delaware Trust
Instrument or in the By-Laws, in
the event a proposal by anyone
other than
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
the officers or Trustees of the
Trust is submitted to a vote of the
Shareholders of one or more Series
or Classes thereof or of the Trust,
or in the event of any proxy
contest or proxy solicitation or
proposal in opposition to any
proposal by the officers or
Trustees of the Trust, Shares may
be voted only in person or by
written proxy at a meeting. Until
Shares are issued, the Trustees may
exercise all rights of Shareholders
and may take any action required by
law, the Delaware Trust Instrument
or the By-Laws to be taken by the
Shareholders.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Voting Powers.............. Shareholders shall have power to vote The Shareholders shall have power to vote
(i) for the election of Trustees, only (i) for the election or removal of
(ii) with respect to any investment Trustees to the extent and as provided in
advisory or management contract, the Delaware Trust Agreement, and (ii)
(iii) with respect to the amendment of with respect to such additional matters
the Declaration of Trust, (iv) to the relating to the Trust as may be required
same extent as the shareholders of a by applicable law, the Delaware Trust
Massachusetts business corporation, as Instrument, the By-Laws or any
to whether or not a court action, registration of the Trust with the SEC (or
proceeding or claim should be brought any successor agency) or any state, or as
or maintained derivatively or as a class the Trustees may consider necessary or
action on behalf of the Trust or the desirable.
Shareholders, provided, however, that
a Shareholder of a particular Series
shall not be entitled to bring any
derivative or class action on behalf of
any other Series of the Trust and (v)
with respect to such additional matters
relating to the Trust as may be required
or authorized by law, this Declaration
of Trust or the Bylaws of the Trust, if
any, or any registration of the Trust
with the SEC or any State, or as the
Trustees may consider desirable. Any
action taken by Shareholders may be
taken without a meeting if a majority of
Shareholders entitled to vote on the
matter (or such larger proportion
thereof as shall be required by any
express provision of law or the
Declaration of Trust or the Bylaws)
consent to the action in writing and
such written consents are filed with the
records of the meetings of Shareholders.
Such consent shall be treated for all
purposes as a vote taken at a meeting of
Shareholders.
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Redemption at the The Trust reserves the right, upon 60 Subject to the requirements of the 1940
Option of the Trust........ days' prior written notice to the Act, the Trustees may cause the Trust to
Shareholder, to liquidate involuntarily redeem Shares of any Series or Class held
any Shareholder's account if the by any Person (i) if such Person is no
aggregate Net Asset Value of the longer qualified to hold such Shares in
Shares held in the account is accordance with such qualifications as
less than $100. may be established by the Trustees, (ii) if
the net asset value of such Shares is below
the minimum investment amount
determined by the Trustees or (iii) if
otherwise deemed by the Trustees to be in
the best interest of the Trust or that
particular Series (or Class) as a whole.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Termination of Requires the vote of a majority of the The Trust may be terminated at any time
Trust.................... outstanding shares (within the meaning by vote of a majority of the Shares of
of the 1940 Act) of any Series of the each Series entitled to vote, voting
Trust to: (i) sell or convey the assets separately by Series, or by the Trustees
of the Trust or any affected Series to by written notice to the Shareholders.
another trust, partnership, association Any Series of Shares or Class thereof may
or corporation organized under the be terminated at any time by vote of a
laws of any state which is a diversified majority of the Shares of such Series or
open-end management investment Class entitled to vote or by the Trustees
company as defined in the 1940 Act, by written notice to the Shareholders of
for adequate consideration which may such Series or Class. Upon the requisite
include the assumption of all Shareholder vote or action by the Trustees
outstanding obligations, taxes and other to terminate the Trust or any one or more
liabilities, accrued or contingent, of the Series of Shares or any Class thereof,
Trust or any affected Series, and after paying or otherwise providing for all
which may include shares of beneficial charges, taxes, expenses and liabilities,
interest or stock of such trust, whether due or accrued or anticipated, of
partnership, association or corporation the Trust or of the particular Series or any
or (ii) sell and convert at any time into Class thereof as may be determined by the
money all of the assets of the Trust or Trustees, the Trust shall in accordance
any affected Series. Upon making with such procedures as the Trustees
provision for the payment of all such consider appropriate reduce the remaining
liabilities in either (i) or (ii), by such assets of the Trust or of the affected
assumption or otherwise, the Trustees Series or Class to distributable form in
shall distribute the remaining proceeds cash or Shares (if any Series remain) or
or the remaining assets (as the case other securities, or any combination
may be) ratably among the holders of thereof, and distribute the proceeds to the
the Shares of the Trust or any affected Shareholders of the Series or Classes
Series then outstanding. Upon involved, ratably according to the number
completion of the distribution of the of Shares of such Series or Class held by
remaining proceeds or the remaining the several Shareholders of such Series or
assets as provided above, the Trust or Class on the date of distribution.
any affected Series shall terminate and Thereupon, the Trust or any affected
the Trustees shall be discharged of any Series or Class shall terminate and the
and all further liabilities and duties Trustees and the Trust shall be discharged
hereunder and the right, title and of any and all further liabilities and duties
interest of all parties shall be cancelled relating thereto or arising therefrom, and
and discharged. the right, title and interest of all parties
with respect to the Trust or such
Series or Class shall be canceled
and discharged. Upon termination of
the Trust, following completion of
winding up of its business, the
Trustees shall cause a certificate
of cancellation of the Trust's
Certificate of Trust to be filed in
accordance with the Delaware Act,
which certificate of cancellation
may be signed by any one Trustee.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Notice..................... Shareholders shall be entitled to at The By-Laws provide that all notices of
least 15 days' notice of any meeting. meetings of Shareholders shall be sent or
otherwise given not less than ten
(10) nor more than ninety (90) days
before the date of the meeting. The
notice shall specify (i) the place,
date and hour of the meeting, and
(ii) the general nature of the
business to be transacted. The
notice of any meeting at which
Trustees are to be elected also
shall include the name of any
nominee or nominees who at the time
of the notice are intended to be
presented for election.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
Record Date................ The Trustees may fix in advance a For purposes of determining the
date, not exceeding 90 days preceding Shareholders entitled to vote or act at any
the date of any meeting of meeting or adjournment thereof, the
Shareholders, or the date for payment Trustees may fix in advance a record date
of any dividend, or the date for the which shall not be more than ninety (90)
allotment of rights, or the date when days nor less than ten (10) days before the
any change or conversion or exchange date of any such meeting. Without fixing
of Shares shall go into effect, as a a record date for a meeting, the Trustees
record date for the determination of may for voting and notice purposes close
the Shareholders entitled to notice of, the register or transfer books for one or
and to vote at, any such meeting, or more Series (or Classes) for all or any
entitled to receive payment of any such part of the period between the earliest
dividend, or to any such allotment of date on which a record date for such
rights, or to exercise the rights in meeting could be set in accordance
respect of any such change, conversion herewith and the date of such meeting. If
or exchange of Shares. the Trustees do not so fix a record date or
close the register or transfer
books of the affected Series (or
Classes), the record date for
determining Shareholders entitled
to notice of or to vote at a
meeting of Shareholders shall be at
the close of business on the
business day next preceding the day
on which notice is given or if
notice is waived, at the close of
business on the business day next
preceding the day on which the
meeting is held. The record date
for determining Shareholders
entitled to give consent to action
in writing without a meeting, (a)
when no prior action of the
Trustees has been taken, shall be
the day on which the first written
consent is given, or (b) when prior
action of the Trustees has been
taken, shall be (x) such date as
determined for that purpose by the
Trustees, which record date shall
not precede the date upon which the
resolution fixing it is adopted by
the Trustees and shall not be more
than 20 days after the date of such
resolution, or (y) if no record
date is fixed by the Trustees, the
record date shall be the close of
business on the day on which the
Trustees adopt the resolution
relating to that action. Nothing in
this Section shall be construed as
precluding the Trustees from
setting different record dates for
different Series (or Classes).
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Issue Current Proposed
----- ------- --------
<S> <C> <C>
For the purpose of determining the
Shareholders of any Series (or
Class) who are entitled to receive
payment of any dividend or of any
other distribution, the Trustees
may from time to time fix a date,
which shall be on or before the
date for the payment of such
dividend or such other payment, as
the record date for determining the
Shareholders of such Series (or
Class) having the right to receive
such dividend or distribution.
Without fixing a record date, the
Trustees may for distribution
purposes close the register or
transfer books for one or more
Series (or Classes) at any time
prior to the payment of a
distribution.
</TABLE>
14
<PAGE>
Zweig Series Trust
5 Hanover Square--17th Floor
New York, New York 10004
TABLE OF CONTENTS
Page
Introduction...................................................... 2
Proposals......................................................... 3
The Plan of Conversion............................................ 11
Evaluation by the Current Trust's Trustees........................ 15
Other Matters..................................................... 16
Shareholder Proposals for Subsequent Meetings..................... 16
Investment Manager................................................ 16
Principal Distributor............................................. 17
Revocation of Proxies............................................. 17
Voting Information................................................ 17
Exhibit A--Plan of Conversion
Exhibit B--Delaware Trust Instrument
Schedule 1
(i)
<PAGE>
- --------------------------------------------------------------------------------
Please refer to the Proxy Statement discussion of each of these matters.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, said attorneys shall vote in accordance with their best
judgment.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE FOLLOWING:
Please mark your votes as this |x|
FOR AGAINST ABSTAIN
Item 1--To ratify Coopers & Lybrand L.L.P. as
independent accountants to the Trust. | | | | | |
Item 2--To approve a plan providing for the
conversion of the Trust into a Delaware business
trust. | | | | | |
Item 3--In their discretion upon such other
business as may be properly brought before the
Special Meeting or any postponement or adjournment
thereof. | | | | | |
<PAGE>
Vote this proxy card TODAY! Your prompt response will save your Fund the expense
of additional mailings.
Please detach at perforation before mailing.
- --------------------------------------------------------------------------------
ZWEIG SERIES TRUST: ZWEIG CASH FUND
The undersigned, revoking previous proxies, hereby appoint(s) __________,
__________ and __________, or any one or more of them, attorneys, with full
power of substitution, to vote all shares of Zweig Series Trust: Zweig Cash Fund
which the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Trust to be held at the office of the Trust at 5 Hanover Square, 17th
Floor, New York, New York at [10:00 am] on April __, 1996 and at any
adjournments thereof. All powers may be exercised by a majority of said proxy
holders or substitutes voting or acting or, if only one votes and acts, then by
that one. This Proxy shall be voted on the proposals described in the Proxy
Statement as specified on the reverse side. Receipt of the Notice of the Meeting
and the accompanying Proxy Statement is hereby acknowledged.
NOTE: Please sign exactly as
your name(s) appears on this
Proxy. When signing in a
fiduciary capacity, such as
executor, administrator,
trustee, attorney, guardian,
etc., please so indicate.
Corporate and partnership
proxies should be signed by an
authorized person indicating
the person's title.
Date __________________, 1996
_____________________________
_____________________________
Signature(s) (Title(s), if
applicable)
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN THE ENCLOSED
ENVELOPE.
