As filed with the Securities and Exchange Commission on May 3, 1996
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission
/x/ Definitive Proxy Statement Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SENTINEL PENNSYLVANIA TAX-FREE TRUST
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rule 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 to 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:/1/
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/x/ 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:
/1/ Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
SENTINEL PENNSYLVANIA TAX-FREE TRUST
NATIONAL LIFE DRIVE
MONTPELIER, VERMONT 05604
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 9, 1996
To Shareholders of Sentinel Pennsylvania Tax-Free Trust:
NOTICE IS HEREBY GIVEN that a Special Meeting of
Shareholders of Sentinel Pennsylvania Tax-Free Trust (the
"Trust") will be held at the office of National Life Insurance
Company, National Life Drive, Montpelier, Vermont, on Tuesday,
July 9, 1996 at 2:00 p.m., to take action upon the following
matters:
1. The election of Trustees;
2. The ratification or rejection of the selection of Price
Waterhouse LLP as independent accountants for the current fiscal
year;
3. Consideration of a proposal to amend the Trust's
Declaration of Trust by removing certain investment restrictions
no longer required under Pennsylvania law and to restate the
Declaration of Trust; and
4. The transaction of such other business as may properly
come before the meeting.
All shareholders of record at the close of business on April
24, 1996, are entitled to notice of and to vote at this meeting
or any adjournment thereof.
If by reason of having two or more accounts you receive more
than one proxy card, please sign and return each one.
By order of the Board of Trustees
D. Russell Morgan
Secretary
Montpelier, Vermont
May 13, 1996
IF YOU CANNOT ATTEND THE MEETING, PLEASE MARK, DATE, SIGN
AND RETURN THE ACCOMPANYING PROXY PROMPTLY. THIS WILL SAVE YOUR
FUND THE EXPENSE OF ADDITIONAL SOLICITATIONS. YOUR VOTE IS
IMPORTANT!
<PAGE>
SENTINEL PENNSYLVANIA TAX-FREE TRUST
NATIONAL LIFE DRIVE
MONTPELIER, VERMONT 05604
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JULY 9, 1996
This proxy statement is furnished in connection with the
solicitation of proxies by and on behalf of the Board of Trustees
of Sentinel Pennsylvania Tax-Free Trust (the "Trust", whose
address is National Life Drive, Montpelier, Vermont 05604), for
use at a Special Meeting of Shareholders of the Trust to be held
at the offices of National Life Insurance Company, National Life
Drive, Montpelier, Vermont, on Tuesday, July 9, 1996 at 10:00
a.m., and at any adjournments thereof. This proxy statement and
the enclosed proxy are being mailed to shareholders on or about
May 13, 1996.
Shareholders of record at the close of business on April 24,
1996 will be entitled to be present and to vote at the meeting.
As of that date there were 2,615,213.558 shares of the
Trust's common shares of beneficial interest issued and
outstanding. Each share of beneficial interest is entitled to
one vote for all purposes.
Whether or not you are able to attend the meeting, your
proxy vote is important. Because it is anticipated that most
shareholders will be unable to be present at the meeting, it is
necessary that enough shares be represented by proxy to
constitute, along with the shares present in person, a legal
quorum of shareholders, so that a meeting can be held and the
proposed actions taken. A quorum is present if the holders of a
majority of the shares of the Trust outstanding and entitled to
be voted are represented at the meeting, either in person or by
proxy. If a quorum is not present, no actions will be taken and
the meeting will be adjourned until such time as a quorum is
present. If a quorum is present, but less than a majority of
votes is cast in favor of or against one or more proposals, then,
with respect to such undecided proposals, the meeting will be
adjourned until such time as a majority of votes is obtained. WE
THEREFORE URGE YOU TO MARK, DATE, SIGN, AND MAIL YOUR PROXY
PROMPTLY, TO MAKE CERTAIN THAT YOUR SHARES ARE REPRESENTED AND
WILL BE VOTED AT THE MEETING. IN ORDER TO AVOID ADDITIONAL
EXPENSE TO THE TRUST OF FURTHER SOLICITATION, WE ASK YOUR
COOPERATION IN MAILING YOUR PROXY PROMPTLY.
Unless otherwise specified, all returned proxies will be
voted "FOR" the proposals set forth in the Notice of Special
Meeting of Shareholders preceding this proxy statement. In each
case where the shareholder has appropriately specified how the
proxy is to be voted, it will be voted in accordance with the
specification so made. Proxies which are returned but which are
marked "abstain" or on which a broker-dealer has declined to vote
on any proposal ("broker non-votes") will be counted as present
for the purposes of a quorum. However, abstentions and broker
non-votes will not be counted as votes cast. Abstentions and
broker non-votes will
<PAGE>
not have an effect on the vote on Proposals 1 and 2 but will have
the same effect as a vote against Proposal 3. Any shareholder
has the power to revoke his or her proxy at any time before it is
voted by attending the meeting and voting in person or by filing
with the Secretary of the Trust either an instrument revoking the
proxy or another duly executed proxy bearing a later date, at any
time before the meeting.
The accompanying proxy is solicited by and on behalf of the
Board of Trustees of the Trust, and the cost will be borne by the
Trust. In addition, proxies may be solicited by additional
mailings, by telephone and telegraph, or by facsimile or
personally by officers and employees of the Trust, Sentinel
Advisors Company ("SAC"), the Trust's investment advisor,
Sentinel Financial Services Company ("SFSC"), the Trust's
principal underwriter, Sentinel Administrative Service Company
("SASC"), the Trust's administrative service provider, or other
agents retained by the Trust. It is anticipated that the cost of
such supplementary solicitation, if any, will be nominal. The
Trust will reimburse such entities or other agents for their
reasonable expenses in forwarding proxy solicitation material to
the beneficial owners of the shares of the Trust. The principal
offices of each of SAC, SFSC, and SASC is National Life Drive,
Montpelier, Vermont 05604.
The Trust will furnish, without charge, a copy of the
Trust's Annual Report for the year ended November 30, 1995 to any
shareholder upon request. Shareholders may request this document
by writing to D. Russell Morgan, Secretary, Sentinel Pennsylvania
Tax-Free Trust, National Life Drive, Montpelier, Vermont 05604,
or by calling SASC at 1-800-282-3863.
PROPOSAL 1:
ELECTION OF TRUSTEES
The Trust is not required to hold a meeting of shareholders
each year and has not held meetings in recent years, in an effort
to avoid the expense involved in a solicitation of proxies from
its shareholders for routine purposes. A shareholder meeting is
required by law before a new Trustee of the Trust may be
appointed, if after such appointment less than two thirds of the
members of the Board of Trustees have been elected by the
shareholders. The last shareholder meeting of the Trust which
included an election of Trustees was held on February 19, 1993.
Since that time, four members of the Board, Hubert J. DeLynn,
Walter J. Boyd, Richard I. Fricke and Charles B. Reeder, have
retired. The Board appointed Richard I. Johannesen, Jr. and
Richard D. Farman to the Board in 1994 to fill two of those
vacancies, and Stanley R. Reber was appointed to fill another
vacancy in March 1995. At its meeting on August 11, 1995, the
Board nominated Deborah G. Miller to fill the remaining vacancy,
and as mentioned above, this nomination requires a meeting of
shareholders to elect the Board as proposed to be constituted.
2
<PAGE>
It is intended that the persons named in the accompanying
proxy will vote for the election to the Board of Trustees, for an
indefinite term, of the following ten persons: Richard J. Borda,
Dr. Kalman J. Cohen, Richard D. Farman, John D. Feerick, Richard
I. Johannesen, Jr., Robert B. Mathias, Keniston P. Merrill,
Deborah G. Miller, Stanley R. Reber and Susan M. Sterne. Each of
such persons has previously been elected to the Board by the
shareholders except Richard D. Farman, Richard I. Johannesen,
Jr., Deborah G. Miller and Stanley R. Reber. In the event that
any of such named persons shall become unable to serve (which
event is not anticipated), proxies may be voted at the meeting
for the election of another person in his or her stead. All of
the nominees have consented to being named in this proxy
statement and to serve on the Board if elected.
The affirmative vote of a majority of the votes cast will be
required to elect each Trustee.
INFORMATION ABOUT THE TRUSTEES
Certain information about the ten persons nominated for
election as Trustees of the Trust is set forth in the following
table:
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Number of
Name, Position Shares of
with Trust, Became Trust
and Age Trustee Principal Occupations Owned (1)
Keniston P. Merrill . . . 1993 SAC - Chairman and Chief Executive 0
Chairman *(1)(2) Officer, 1993 to present; Sentinel
59 Advisors, Inc. ("SAI") - Chairman and
Chief Executive Officer, 1986 to 1993;
President and Chief Operating Officer,
1982 to 1986, Director, 1982 to present;
National Life Insurance Company ("NLIC")
-Executive Vice President and Chief
Investment Officer, February, 1994 to
1995; Senior Vice President and Chief
Investment Officer, 1989 to February,
1994; Senior Vice President -
Investments, 1986 to 1989, Vice
President, 1982 to 1986; National Life
Investment Management Company, Inc.
("NLIMC") -
Chairman and Chief Executive Officer,
1990 to 1995, President and Chief
Executive Officer, 1986 to 1990,
Director, 1982 to present; Sentinel Cash
Management Fund, Inc. ("SCMF") -
Chairman and Director, 1990 to 1993,
President and Director, 1987 to 1990;
Sentinel Group Funds, Inc. ("SGF") -
Chairman and Director, 1987 to present;
American Guaranty & Trust Company
("AG&T") - Director, 1993 to present.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Number of
Name, Position Shares of
with Trust, Became Trust
and Age Trustee Principal Occupations Owned (1)
Richard J. Borda . . . . 1993 NLIC - Former Vice Chairman of the 0
Trustee Board, 1985 to 1990, Director, 1975 to
64 1991; SCMF -Chairman, 1987 to 1990,
President, 1985 to 1987, Director, 1985
to 1993;
NLIMC -Chairman, 1986 to 1990,
President, 1985 to 1986, Director, 1985
to 1990; SAI - Chairman and Chief
Executive Officer, 1985 to 1986,
Director, 1985 to
1987, 1988 to 1990; SGF -Chairman, 1987
to 1990, President, 1985 to 1987; ESI -
Director, 1985 to 1987,
1988 to 1990; The Monterey Institute OF International Studies - Vice
Chairman, Director and Trustee, 1991 to
present; Air Force Aid Society -
President, 1980 to 1995.
Dr. Kalman J. Cohen . . . 1993 Distinguished Research Professor 0
Trustee (2) Emeritus, The Fuqua
65 School of Business, Duke University,
1993 TO PRESENT; Distinguished Bank
Research Professor, 1974 to 1993; SGF -
Director, 1973 to present; USLIFE Income
Fund, Inc. -Director, 1973 to present;
SCMF - Director, 1981
to 1993.
Richard D. Farman . . . . 1994 President, Chief Operating Officer and 0
Trustee Director, Pacific Enterprises, 1993 to
60 present; Chairman and Chief Executive
Officer, Southern California Gas
Company, A SUBSIDIARY OF PACIFIC
ENTERPRISES, 1989 to 1993; SGF -
Director, 1994 to present; Chairman,
KCET Public Service Television; Director
and Executive
Committee Member, Los Angeles Area
Chamber of Commerce; Director, Union
Bank; Past Chairman and Director,
American Gas Association; Director,
Interstate Natural Gas Association of
America;
DIRECTOR, NATIONAL BUSINESS - HIGHER
EDUCATION FORUM.
Number of
Name, Position Shares of
with Trust, Became Trust
and Age Trustee Principal Occupations Owned (1)
John D. Feerick . . . . . 1993 Fordham University School of Law - Dean, 0
Trustee (2) 1982 to present; SCMF - Director, 1984
59 to present; American Home Products
Corporation -Director, 1987 to present;
The Association of the Bar of the City
of New York - President, 1992 to 1994;
New York State Commission on Government
Integrity - Chairman, 1987 to 1990.
Richard I. Johannesen, 1994 Retired; Former Vice President and 0
Jr. . . . . . . . . . . . Manager -Bond Market Research
Trustee Department, Salomon Brothers Inc; SGF -
61 Director, 1994 to present; BOARD MEMBER
- THE NATURE
CONSERVANCY, 1994 TO PRESENT, STOWE
PERFORMING ARTS, 1994 TO PRESENT, STOWE
FREE LIBRARY, 1995 TO PRESENT.
Robert B. Mathias . . . . 1993 Sports Consultant; formerly Executive 0
Trustee Director, National Fitness Foundation;
65 former United States Congressman; SGF -
Director, 1992 to present;
ProvidentMutual Investment Shares, Inc.
- Director, 1990 to 1993;
ProvidentMutual Growth Fund, Inc. -
Director, 1990 to 1993.
Deborah G. Miller . . . . Digital Equipment Corporation - Vice 0
Nominee President - Systems Business Unit
46 AMERICAS, 1995 to present; Miller Van
Buren, Inc. - Chief Executive Officer,
1994
to 1995; Silicon Graphics - Vice
President, 1990 to 1994; International
Business Machines Corporation -General
Manager, 1984 to 1987; SGF - Director,
1995 to
present.
Number of
Name, Position Shares of
with Trust, Became Trust
and Age Trustee Principal Occupations Owned (1)
Stanley R. Reber* . . . . 1995 ProvidentMutual Life Insurance Company - 0
Trustee Executive Vice
52 President, 1988 to present; prior
thereto, Senior Vice
President; SGF - Director, 1995 to
present; President and Director - Market
Street Fund, Inc.; President, CEO and
Director -Sigma American Corporation;
Trustee -ProvidentMutual Life and
Annuity Company of America,
ProvidentMutual Investment Management
Company,
ProvidentMutual Holding Company, PML
Securities Company, Software Development
Corp., and Provestco, Inc.
Susan M. Sterne . . . . . 1993 Economic Analysis Associates, Inc. - 0
Trustee President and Chief Economist, 1979 to
50 present; SCMF -Director, 1990
to 1993; SGF - Director, 1990 to
present.
</TABLE>
____________________
(1) Shares owned beneficially, directly or indirectly, as of
April 17, 1996. As of April 17, 1996, various accounts
controlled by NLIC (as discussed more specifically under
"Significant Shareholders" below), with which Mr. Merrill is
affiliated, owned an aggregate of 92,062.422 shares of the
Trust which had net asset value of $1,186,684.62, representing
3.5% of the total number of votes eligible to be cast at the
meeting. NLIC is the ultimate parent of the controlling general
partners of SAC, SFSC and SASC. As of
5
<PAGE>
April 17, 1996, none of the Trust's officers or directors,
including those named above, owned of record or beneficially
any shares of the Trust.
(2) Member, Audit Committee.
* "Interested Person" as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), by reason of, in the case
of Mr. Merrill, his position as the Chairman and Chief Executive
Officer of SAC, and in the case of Mr. Reber, his position as
Executive Vice President of ProvidentMutual Life Insurance
Company, the parent of one of the general partners of SAC.
The nominees for election as Trustees of the Trust have been
proposed by the Nominating Committee of the Board, which consists
of all of the Trustees who are not "interested persons" of the
Trust, as defined in the 1940 Act. Each of the Trustees who is
not affiliated with SAC is paid by the Trust an annual retainer
of $2,500, payable in quarterly installments, and
an additional fee of $200, together with all reasonable out-of-
pocket expenses, for each
meeting attended. The Trust pays no remuneration to any Trustee
who is affiliated with SAC. During the fiscal year ended
November 30, 1995, the Board of Trustees held four meetings.
Audit Committee
During the fiscal year ended November 30, 1995, the Audit
Committee of the Board, which is comprised of Messrs. Cohen,
Feerick and Merrill, held three meetings. The functions of the
Audit Committee are: recommendation to the full Board of Trustees
of the engagement or discharge of the independent accountants;
review and evaluation of matters within the scope of the
accountants' duties; review with the independent accountants of
the plan and results of the auditing engagement and the adequacy
of the Trust's system of internal accounting controls; review of
each professional service provided by the independent accountants
prior to the performance of such service; consideration of the
range of audit and non-audit fees; and review of the independence
of the independent accountants.
Nominating Committee
The Nominating Committee of the Board of Trustees held two
meetings during the fiscal year November 30, 1995. The purpose
of the Nominating Committee is to propose to the Board of
Trustees candidates for election as Trustees of the Trust. The
Nominating Committee will consider nominees recommended by
shareholders; recommendations should be sent to the Secretary of
the Trust.
Each Trustee of the Trust attended at least 75% of the
aggregate number of the meetings of the Board of Trustees and the
committees on which he or she served during the fiscal year ended
November 30, 1995.
6
<PAGE>
PROPOSAL 2:
RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT
ACCOUNTANTS
Price Waterhouse LLP has been employed as independent
accountants for the Trust since the Trust became a member of
the Sentinel Family of Funds. Upon the recommendation of the
Audit Committee of the Board they have been selected as
independent accountants for this fiscal year by the Board of
Trustees, including a majority of those members of the Board who
are not "interested persons" of the Trust. A representative of
Price Waterhouse LLP will attend the Special Meeting of
Shareholders and will be afforded the opportunity to make a
statement, as well as be available to respond to appropriate
questions submitted by shareholders.
The following resolution is to be submitted to shareholders
at the Special Meeting of Shareholders. The affirmative vote of
a majority of the votes cast is required to adopt this
resolution.
RESOLVED, that the selection of Price
Waterhouse LLP as independent accountants for
the Trust for the current fiscal year be, and it
hereby is, ratified and approved.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS
RATIFY THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT
ACCOUNTANTS FOR THE TRUST.
PROPOSAL 3:
AMENDMENT OF THE TRUST'S DECLARATION OF TRUST TO REMOVE CERTAIN
INVESTMENT RESTRICTIONS NO LONGER REQUIRED UNDER PENNSYLVANIA LAW
AND TO RESTATE THE DECLARATION OF TRUST
Under prior Pennsylvania law, in order for the Trust to
qualify to pass through to investors income exempt from
Pennsylvania personal income tax, the Trust was required to
adhere to certain investment restrictions. In order to comply
with this and other Pennsylvania law requirements previously in
effect, the Trust's Declaration of Trust provides that the Trust
will invest for income earnings rather than trading for profit,
and that the Trust will have no power to vary its portfolio
investments except to (i) eliminate unsafe investments and
investments not consistent with the preservation of the capital
or tax status of the investments of the Trust; (ii) honor
redemption orders, meet anticipated redemption requirements and
7
<PAGE>
negate gains from discount purchases; (iii) maintain a constant
net asset value per unit pursuant to, and in compliance with, an
order or rule of the U.S. Securities and Exchange Commission;
(iv) reinvest the earnings from securities in like securities; or
(v) defray normal administrative expenses (the "Pennsylvania
Requirements").
Pennsylvania has enacted legislation which eliminates the
necessity for the foregoing Pennsylvania Requirements.
Management believes that it would be desirable to delete the
Pennsylvania Requirements from the Trust's Declaration of Trust
since they are no longer required for the Trust to achieve its
investment objective of providing interest income exempt from
federal and Pennsylvania personal income taxes as is consistent
with liquidity and capital preservation. Furthermore, removing
the Pennsylvania Requirements will provide the Trust with
additional flexibility in portfolio management.
A copy of the proposed Amended and Restated Declaration of
Trust, marked to show the changes discussed above, is attached as
Exhibit A.
The following resolution is to be submitted to shareholders
at the Special Meeting of Shareholders. The affirmative vote of
a majority of the total votes of the Trust entitled to be cast is
required to adopt this resolution.
RESOLVED, that the amended and restated
Declaration of Trust, in the form presented to
the meeting, be, and it hereby is, approved.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS
APPROVE THE AMENDMENT TO THE DECLARATION OF TRUST.
EXECUTIVE OFFICERS OF THE TRUST
In addition to Mr. Merrill named above, the other executive
officers of the Trust are Joseph M. Rob, age 53, President (since
1993), John M. Grab, Jr., age 48, Vice President (since 1993),
Marvin Aber, age 58, Vice President and Treasurer (since 1993),
and D. Russell Morgan, age 40, Secretary (since 1993). Mr. Rob
has been Chairman Chief Executive Officer of Sentinel Management
Company ("SMC"), SFSC and SASC since their formations in 1993,
and has been Chairman and Chief Executive Officer of ESI, the
previous underwriter of shares of the Sentinel Family of Funds,
since 1985. Mr. Grab has been Senior Vice President and Chief
Financial Officer of SMC, SFSC and SASC since their formations in
1993, and has been Senior Vice President and Chief Financial
Officer of ESI and Sentinel Administrative Service Corporation
since 1988. Prior to that time, Mr. Grab was Chief Financial
Officer of National Property Advisors, Inc., another indirect
wholly-owned subsidiary of NLIC. Mr. Aber has been a Vice
President of SASC since its formation in 1993, and of ESI and
Sentinel Administrative Service Corporation since 1988. During
1988, he served as Treasurer of SGF. Mr. Morgan has been Counsel
to SAC since its formation in 1993, and to Sentinel Advisors,
8
<PAGE>
Inc., the previous investment advisor to the Funds, and ESI since
1986, and has been a member of the Law Department of NLIC since
1985. The Board of Trustees appoints officers annually,
generally in March of each year. None of the above officers
receives any compensation from the Trust.
COMPENSATION OF TRUSTEES
The following tables sets forth for the fiscal year ended
November 30, 1995 compensation paid by the Trust to the Trustees
who are not affiliated with SAC and for the calendar year ended
December 31, 1995 to aggregate compensation paid by the Trust and
SGF to the non-affiliated Trustees:
<TABLE>
<CAPTION>
Pension or
Retirement
Total Benefits
Aggregate Compensation Accrued as
Compensation from Trust Part of Trust
Name of Trustee from Trust and SGF Expense
<S> <C> <C>
Richard J. Borda . . . . . . . . . $3,500 $23,375 None
Kalman J. Cohen . . . . . . . . . . $3,500 $20,675 None
Richard D. Farman . . . . . . . . . $3,300 $23,375 None
John D. Feerick . . . . . . . . . . $3,500 $23,375 None
Richard I. Johannesen, Jr. . . . . $3,500 $23,375 None
Susan M. Sterne . . . . . . . . . . $3,300 $22,175 None
</TABLE>
SIGNIFICANT SHAREHOLDERS
NLIC and its controlled affiliates own 92,064.315 shares
and 3.5% of the outstanding voting securities of the Trust's
shares. The above amount includes 92,062.422 shares over
which AG&T, a Delaware trust company, has voting discretion,
having aggregate net asset value of $1,186,684.62, representing
3.5% of all votes eligible to be cast at the meeting.
These shares are held in trusts of which the beneficiaries are
individual trust clients of AG&T. NLIC and its affiliates have
sole voting and investment power over the remaining shares.
NLIC's address is National Life Drive, Montpelier, Vermont 05604,
and AG&T's address is 220 Continental Drive, Newark, Delaware
19713. The Trust anticipates that NLIC and its affiliates,
including AG&T, will vote their shares in favor of all three
proposals at the meeting.
The Trust is not aware of any other person who owns 5% or
more of the voting securities of any shares of the Trust. The
shareholdings of each individual Trustee or nominee are set
forth opposite his or her name above, and none of such holdings
amounts to as
9
<PAGE>
much as 1% of the voting securities of any class of shares of the
Trust. Taken as a group, the Trustees and executive officers of
the Trust own NO SHARES OF THE TRUST.
MEETINGS OF SHAREHOLDERS
The Trust is not required to hold an annual meeting of
shareholders. However, the Trust will be required to call
special meetings of shareholders in accordance with the
requirements of the 1940 Act to seek approval of new management
and investment advisory arrangements, of new distribution
arrangements or of a change in the fundamental policies,
objectives or restrictions of the Trust. The Trust is also
required to hold a special shareholder meeting to elect new
Trustees at such time as less than two thirds of the Trustees
holding office have been elected by shareholders. In addition,
the Code of Regulations of the Trust requires that a special
meeting of shareholders be held upon the written request of the
holders of 20% of the votes entitled to be cast at such meeting.
Any shareholder wishing to submit a proposal to be
considered at the next meeting of shareholders of the Trust must
submit such proposal a reasonable time before the solicitation of
proxies in respect of such meeting is made. The mere submission
of a proposal will not guarantee that such proposal will be
presented at the meeting because, in order to be so presented, a
proposal must meet certain requirements of the federal securities
laws.
ANNUAL REPORT DELIVERY
The Trust will furnish, without charge, a copy of its annual
report for the fiscal year ended November 30, 1995, to any
shareholder upon request. Such requests should be directed to
Sentinel Pennsylvania Tax-Free Trust, National Life Drive,
Montpelier, Vermont 05604, Attention: D. Russell Morgan, or to 1-
800-282-FUND (3863).
OTHER BUSINESS
The only matters of which the management of the Trust is
aware that are to be presented for action at the meeting are
those outlined herein. Should any other matters requiring a vote
of shareholders or relating to the conduct of the meeting arise,
those who shall act as proxies will vote according to their best
judgment.
By order of the Board of Trustees
D. Russell Morgan
Secretary
10
<PAGE>
May 13, 1996
11
<PAGE>
EXHIBIT A
AMENDED AND RESTATED DECLARATION OF TRUST
--------------------
SENTINEL PENNSYLVANIA TAX-FREE TRUST
--------
_______, 1996
DECLARATION OF TRUST, by Richard J. Borda, Dr. Kalman J.
----------------------------------
Cohen, Richard D. Farman, John D. Feerick, Richard I. Johannesen,
----------------------------------------------------------------
Jr., Robert B. Mathias, Keniston P. Merrill, Stanley R. Reber and
-----------------------------------------------------------------
Susan M. Sterne (the "Trustees");
---------------
WHEREAS, Sentinel Pennsylvania Tax-Free Trust was
----------------------------------------
established on July 24, 1986, as a trust fund for the investment
-----------------------------
and reinvestment of funds contributed thereto;
WHEREAS, the Trustees have determined to amend and restate
----------------------------------------------------------
the DECLARATION OF TRUST;
------------------------
NOW, THEREFORE, the Trustees declare that all money and
property contributed to the trust fund hereunder shall be held
and managed under this AMENDED AND RESTATED DECLARATION OF TRUST
--------------------
as herein set forth below.
I.
NAME
This trust shall be known as SENTINEL PENNSYLVANIA TAX-FREE
--------
TRUST (hereinafter called the "Trust").
II.
PURPOSE OF TRUST
The Trust is a Pennsylvania common law trust formed for the
purpose of acting as a management investment company under the
Investment Company Act of 1940.
1
<PAGE>
III.
DEFINITIONS
3.1. Definition of Certain Terms. As used in this
___________________________
Declaration of Trust, the terms set forth below shall
have the following meanings:
A. "Shares" means the equal proportionate units of interest
of each class or series of a class into which the beneficial
interest in the Trust may be classified or reclassified from time
to time by the Trustees acting under this Declaration of Trust,
or in the absence of such action, means the equal proportionate
units of interest into which the entire beneficial interest in
the Trust shall be divided from time to time, and includes
fractions of Shares as well as whole Shares.
B. "Shareholder" means a record owner of Shares in the
Trust.
C. "Person" shall mean a natural person, a corporation, a
partnership, an association, a joint-stock company, a trust, a
fund or any organized group of persons whether incorporated or
not.
D. The "Trustees" refers to the individual trustees of the
Trust in their capacity as trustees hereunder and not as
individuals and to their successor or successors while serving in
office as a trustee of the Trust, and includes a single trustee.
E. The "Act" refers to the Investment Company Act of 1940,
as now or hereafter amended, to the rules and regulations adopted
from time to time thereunder and to any order or orders
thereunder which may from time to time be applicable to the
Trust.
F. The terms "affiliated person," "assignment" and
"interested person" shall have the respective meanings set forth
in the Act. The term "vote of a majority of outstanding Shares"
shall mean, where required under the Act, the "vote of a majority
of the outstanding voting securities" as defined in Section
2(a)(42) of the Act.
IV.
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 Trustees hereunder, by the Trustees or any successor Trustees.
All the assets of the Trust shall at all times be considered as
vested in the Trustees. Except to the extent otherwise required
by Article V hereof, no Shareholder shall be
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deemed to have severable ownership in any individual asset of the
Trust or any right of partition or possession thereof, but each
Shareholder shall have a proportionate undivided beneficial
interest in the Trust.
V.
SHAREHOLDERS: BENEFICIAL INTEREST IN THE TRUST:
PURCHASE AND REDEMPTION OF SHARES
5.1. Shares in the Trust.
---------------
A. The beneficial interest in the Trust shall at all times
be divided into transferable Shares without par value. All
Shares shall be of one class, provided, however, that subject
------ -----
to this Declaration of Trust, the Trustees shall have the power
to classify or reclassify any unissued Shares into a second class
or series of a class of Shares and any additional class or series
of a class of Shares by setting or changing in any one or more
respects, from time to time before the issuance thereof, their
preferences, designations, conversion or other rights,
restrictions, limitations as to distributions, conditions of
redemption, qualifications or other terms, provided further, that
the investment objective, policies and
------ -----
restrictions governing the management of the Trust, including the
management of assets belonging to any class or series of a class
of Shares, may from time to time be changed or supplemented by
the Trustees subject to the requirements of the Act. Each such
Share of each such class or series of a class shall represent an
equal proportionate interest in that class or series of the Trust
equal with each other Share of such class or series of a class
then outstanding. The Trustees may, from time to time divide or
combine the outstanding Shares of the Trust or of any class or
series of a class into a greater or lesser number without thereby
changing the proportionate beneficial interest of the Shares in
the Trust or in the assets belonging to such class or series, as
the case may be.
B. The holder of each Share shall be entitled to one vote
for each full Share, and a proportionate fractional vote for each
fractional Share, irrespective of the class or series, then
recorded in his name on the books of the Trust. On any matter
submitted to a vote of Shareholders, all Shares then issued and
outstanding and entitled to vote, irrespective of the class or
series, shall be voted in the aggregate and not by class or
series except: (1) as otherwise required by the Investment
Company Act of 1940, or (2) when the matter, as conclusively
determined by the Trustees, affects only the interests of the
Shareholders of a particular class or series of a class of Shares
(in such case only Shareholders of the affected class or series
shall be entitled to vote thereon).
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C. Each class of Shares of the Trust shall have the
following preferences, participating or other special rights,
qualifications, restrictions and limitations:
(1) All consideration received by the Trust for the
issue or sale of Shares of any class, together with all income,
earnings, profits and proceeds derived from the investment
thereof, including any proceeds derived from the sale, exchange
or liquidation of such investments, any funds or payments derived
from any reinvestment of such proceeds in whatever form the same
may be, and any general assets of the Trust not belonging to a
particular class which the Trustees may, in their sole
discretion, allocate to a class, shall irrevocably belong to the
class of Shares with respect to which assets, payments or funds
were received or allocated for all purposes, subject only to the
rights of creditors, and shall be so handled upon the books of
account of the Trust. Such assets and the income, earnings,
profits and proceeds thereof, including any proceeds derived from
the sale, exchange or liquidation thereof, and any assets derived
from any reinvestment of such proceeds in whatever form, are
herein referred to as "assets belonging to" such class.
(2) The assets belonging to any class of Shares shall
be charged with the direct liabilities in respect of such class
and shall also be charged with such class' share of the general
liabilities of the Trust in proportion to the relative net assets
of the respective class determined at such time or times as may
be authorized by the Trustees. The determination by the Trustees
shall be conclusive as to the nature and amount of such
liabilities, including the amount of accrued expenses and
reserves; as to any allocation of the same to or among one or
more classes and as to whether the same are allocable to one or
more classes. The liabilities so charged to a class are herein
referred to as "liabilities belonging to" such class.
(3) In the event of the termination of the Trust and
the winding up of its affairs, the Shareholders of each class
shall be entitled to receive, as a class, out of the assets of
the Trust available for distribution to Shareholders, but other
than general assets not belonging to any particular class of
Shares, the assets belonging to such class; and the assets so
distributable among such Shareholders of any class shall be
distributed among such Shareholders in proportion to the number
of Shares of such class held by them and recorded in their name
on the books of the Trust. In the event that there are any
general assets not belonging to any particular class of Shares
and available for distribution, such distribution shall be made
to the Shareholders of all classes in proportion to the relative
net assets of the respective class determined as hereinafter
provided and the number of Shares of such class held by them and
recorded in their name on the books of the Trust.
D. Each series of a class of Shares of the Trust shall have
the preferences, participating or other special rights,
qualifications, restrictions and limitations of such class and
shall, in addition, have such other preferences, participating or
other special rights,
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qualifications, restrictions and limitations as may from time to
time be determined by the Trustees.
5.2. Purchase of Shares in the Trust. The Trustees may
-------------------------------
accept investments in the Trust
from such persons and on such terms as they may from time to time
authorize. Each investment shall be credited to the
Shareholder's account in the form of full and fractional Shares
of the Trust.
5.3. Net Asset Value Per Share. The net asset value per
-------------------------
Share of the Trust shall be
computed at such time or times as the Trustees may specify
pursuant to the Act. Assets shall be valued and net asset value
per Share shall be determined by such person or persons as the
Trustees may retain or appoint under the supervision of the
Trustees in such manner as the Trustees may determine or
authorize not inconsistent with the Act.
5.4. Ownership of Shares. The ownership of Shares shall be
-------------------
recorded on the books of the
Trust or its transfer agent. The Trustees may make such rules as
they consider appropriate for the transfer of Shares and similar
matters. Certificates certifying the ownership of Shares may be
issued as the Trustees may determine from time to time and the
Trustees may promulgate appropriate rules and regulations with
respect thereto. The record books of the Trust or any transfer
agent shall be conclusive as to the identity of holders of Shares
and as to the number of Shares held by each Shareholder.
5.5. Preemptive Rights. Shareholders shall have no
-----------------
preemptive or other rights to
subscribe to any additional Shares or other securities issued by
the Trust.
5.6. Redemption of Shares. To the extent the Trust has
--------------------
funds or other property legally
available therefor, a Shareholder of the Trust shall have the
right, subject to the provisions of Section 5.8 hereof, to
require the Trust to redeem his full and fractional Shares of any
class out of assets belonging to such class at a redemption price
equal to the net asset value per Share next determined after
receipt of a request to redeem in proper form determined by the
Trustees. If, in the opinion of the Trustees, ownership of
Shares has or may become concentrated to an extent which would
cause the Trust to be deemed a "personal holding company" within
the meaning of the Internal Revenue Code, as amended, the Trust
may compel the redemption of, reject any order for, or refuse to
give effect on the books of the Trust to the transfer of, any
Shares in an effort to maintain the ownership of Shares so as to
prevent that consequence. The Trustees shall establish such
rules and procedures as they deem appropriate for the redemption
of Shares, and may impose a redemption fee, provided that all
redemptions are made in accordance with the provisions of the
Act.
5.7. Option to Redeem Small Accounts. The Trust reserves
-------------------------------
the right to redeem Shares in
any account at the then current net asset value per Share (which
will be paid to the
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Shareholder), if the value of such account is less than Five
Hundred Dollars ($500.00); provided, however, that each
Shareholder shall first be notified in writing that the value of
his account is less than Five Hundred Dollars ($500.00) and
allowed thirty (30) days to make an additional investment before
such redemption is processed by the Trust.
5.8. Suspension of Right of Redemption. The Trustees may
---------------------------------
suspend the right of redemption by Shareholders or postpone the
date of payment as permitted under the Act. Such suspension
shall take effect at such time as the Trustees shall
specify but not later than the close of business
on the business day following the declaration
of suspension, and thereafter there shall be no right of
redemption or payment until the Trustees shall declare the
suspension at an end. In case of suspension of the right of
redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the net asset value
existing after the termination of the suspension.
VI.
THE TRUSTEES
6.1. Management of the Trust. The affairs of the Trust
-----------------------
shall be managed by the Trustees
and they shall have all powers necessary or desirable to carry
out such responsibility including, without limitation, the
appointment of and delegation of responsibility to such officers,
employees, agents, and contractors as they may select.
6.2. Number and Term of Office. The number of initial
-------------------------
Trustees of the Trust shall be
six (6) provided that the number of individuals to serve as
Trustees may be increased or decreased by the Trustees
themselves, but shall not be less than three (3). Each Trustee
shall hold office until termination of the Trust or until his
successor is elected and qualified. Except as otherwise provided
herein in the case of vacancies, Trustees (other than the Initial
Trustees provided in Section 6.3) shall be elected by the
Shareholders. Notwithstanding the foregoing, (a) any Trustee may
resign as a Trustee by written instrument signed by him and
delivered to the other Trustees at the principal business office
of the Trust (without need for prior or subsequent accounting),
which shall take effect upon such delivery or upon such later
date as is specified therein; (b) any Trustee may be removed at
any time with or without cause 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; (c) any Trustee who has become incapacitated by
illness or injury may be retired by written instrument signed by
a majority of the other Trustees; and (d) the term of a Trustee
shall terminate at his death, resignation, bankruptcy, removal or
adjudicated incompetency.
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6.3. Current Trustees. The Current Trustees shall be
----------------
Richard J. Borda, Dr. Kalman J.
-------------------------------
Cohen, Richard D. Farman, John D. Feerick, Richard I. Johannesen,
----------------------------------------------------------------
Jr., Robert B. Mathias, Keniston P. Merrill, Stanley R. Reber and
-----------------------------------------------------------------
Susan M. Sterne, who, by their execution hereof, have agreed to
---------------
be bound by the provisions of this Declaration of Trust.
6.4. Appointment of Trustees. In case of the death,
-----------------------
resignation, retirement, removal,
the inability or refusal of any Trustee to act, or in the case of
a vacancy by reason of an increase in number of Trustees, or for
any other reason, the remaining Trustees shall decrease the
number of individuals to serve as Trustees or fill such vacancy
by appointing such other person as they, in their discretion,
shall select subject to the provisions of Section 16(a) of the
Act. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office but the
appointment shall not take effect until the individual so named
shall have qualified by accepting in writing the appointment and
agreeing to be bound by the terms of this Declaration of Trust.
As soon as any Trustee so appointed shall have qualified, the
Trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or
conveyance.
6.5. Quorum. At all meetings of the Trustees, a majority
------
of the Trustees shall
constitute a quorum for the transaction of business and the
action of a majority of the Trustees present at any meeting at
which a quorum is present shall be the action of the Trustees
unless the concurrence of a greater proportion is required for
such action by law, the Code of Regulations (the "Regulations")
or this Declaration of Trust. Except as otherwise required by
the Act, a Trustee shall be deemed to be present at any meeting
for the purpose of obtaining a quorum, voting, or otherwise if,
by virtue of telephone, videotape or otherwise the Trustee is
able to hear, and be heard by, each other Trustee physically or
otherwise present at such meeting. If a quorum shall not be
present at any meeting of Trustees, the Trustees present thereat
may by a majority vote adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum shall be present. The Trustees may also act without a
meeting, unless provided otherwise in this Declaration of Trust
or required by law, by written consents of a majority of the
Trustees.
The Trustees may appoint committees of Trustees and delegate
powers to them as provided in the Regulations. Any committee of
the Trustees, including an executive committee, if any, may act
with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless
provided otherwise in this Declaration of Trust, any action of
any such committee may be taken at a meeting by vote of a
majority of the members present (a quorum being present) or
without a meeting by unanimous written consent of the members.
6.6. Effect of Death, Resignation, etc. of Trustee. The
---------------------------------------------
death, resignation, bankruptcy,
removal, or incapacity of the Trustees, or any one of them, shall
not operate to
7
<PAGE>
annul the Trust or to revoke any existing agency created pursuant
to the terms of this Declaration of Trust. Upon the resignation
or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to
the Trust or the remaining Trustees any Trust property held in
the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding
sentence.
6.7. Powers. The Trustees in all instances shall act as
------
principals, and are and shall
be free from the control of the Shareholders. 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 desirable in connection with the management
of the Trust. The Trustees shall not be bound or limited by
present or future laws or customs in regard to Trust investments,
but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall
deem proper to accomplish the purpose of this Trust. Subject to
any applicable limitation in this Declaration of Trust or the
Regulations, the Trustees shall have power and authority as to
the Trust:
A. To buy and invest funds in their hands in securities
including, but not limited to, obligations issued by or on behalf
of the Commonwealth of Pennsylvania and its political
subdivisions, agencies, instrumentalities or authorities, the
interest from which, in the opinion of counsel to the issuer, is
exempt from Federal income tax and "when issued" contracts for
such securities or to retain such funds in cash and from time to
time change the investments of its funds, without in any case
being subject to any limitations imposed by law upon the nature
of investments made by fiduciaries.
B. To adopt Regulations not inconsistent with this
Declaration of Trust, providing for the conduct of the affairs of
the Trust; and to amend and repeal such Regulations except to the
extent that the right to do so is expressly reserved solely to
the Shareholders.
C. To elect and remove officers and appoint and terminate
the appointment of agents.
D. To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Subsection B above, Article
XI, Section 11.3 and any requirements of the Act.
E. To vote or give assent, or exercise any rights of
ownership, with respect to securities or property; to solicit
proxies from Shareholders and to execute and deliver powers of
attorney and proxies 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.
8
<PAGE>
F. To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership of
securities.
G. To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or either in the Trust's own name or in the name
of the custodian or a nominee or nominees.
H. To consent to or participate in any plan for the
reorganization, consolidation or merger of any corporation or
concern, any security of which is held in the Trust; to consent
to any contract, lease, mortgage, purchase, or sale of property
by such corporation or concern, and to pay calls or subscriptions
with respect to any security held in the Trust.
I. 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.
J. To make distributions of income and of capital gains to
Shareholders.
K. To retain and employ persons to serve on behalf of the
Trust as investment adviser, administrator, transfer agent,
shareholder servicing agent, custodian, underwriter, distributor
or in such other capacities as they consider desirable.
L. To apportion unissued Shares into one or more classes or
series of a class having such rights and liabilities as the
Trustees shall determine; provided that the holders of Shares of
each class or series shall be preferred over the holders of
Shares of each other class or series in respect of the assets (if
any) allocated to that class or series.
M. To delegate such power and authority as they consider
desirable to any representatives of the Trust and to any
investment adviser, administrator, transfer agent, shareholder
servicing agent, custodian, underwriter, distributor or other
person.
N. To issue guarantees, to lend its assets and to borrow
money from banks and to pledge, mortgage or hypothecate the
assets of the Trust.
O. To issue, acquire, hold, resell and otherwise deal in
securities, and to apply to any acquisition of securities, any
property of the Trust whether capital or surplus or otherwise.
P. To set record dates in the manner provided for
hereinafter or in the Regulations.
Q. To do any and all such further acts or things and to
exercise any and all such further powers or rights as may be
necessary, incidental, relative, conducive, appropriate or
9
<PAGE>
desirable for the accomplishment, carrying out or attainment of
the purposes stated in Article II hereof.
No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority of the
Trustees, or to see to the application of any payments made or
property transferred to the Trustees or upon their order.
6.8. Trustees and Representatives as Shareholders. Any
--------------------------------------------
Trustee, officer, representative
or other agent of the Trust may acquire, own and dispose of
Shares of the Trust to the same extent as if he were not a
Trustee, officer, representative or agent; and the Trust may
issue and sell or cause to be issued and sold Shares of the Trust
to, and may buy such Shares from, any person with which such
Trustee, officer, representative or agent is affiliated subject
only to the general limitations herein contained as to the sale
and purchase of such Shares; all subject to any restrictions
which may be contained in the Regulations.
6.9. Trustee Reimbursement. The Trustees shall be
---------------------
reimbursed from the Trust estate for
their expenses and disbursements of the Trust, including, without
limitation, interest expenses, compensation payable to Trustees
and representatives of the Trust, taxes, fees and commissions of
every kind incurred in connection with the affairs of the Trust,
expenses of issue, repurchase and redemption of Shares, expenses
of registering and qualifying the Trust and its Shares under
Federal and State securities laws and regulations, charges of
custodians, transfer agents, investment advisers, administrators
and registrars, expenses of preparing and printing and
distributing prospectuses, auditing and legal expenses, expenses
of reports to Shareholders, expenses of meetings of Shareholders
and proxy solicitations therefor, insurance expense, association
membership dues and such non-recurring items as may arise,
including costs and expenses of litigation to which the Trust is
a party, and for all losses and liabilities by them incurred in
administering the Trust; and for the payment of such expenses,
disbursements, losses and liabilities, the Trustees shall have a
lien on the Trust estate prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust
from paying any of the aforementioned fees and expenses.
6.10. Power to Carry Out Trust's Purposes; Presumptions.
-------------------------------------------------
The Trustees shall have power
to carry out any and all acts consistent with the Trust's
purposes through branches and offices both within and without the
Commonwealth of Pennsylvania, in any and all states of the United
States of America, in the District of Columbia, and in any and
all commonwealths, territories, dependencies, possessions,
agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and
execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust although
such things are not herein specifically mentioned. 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, the presumption shall be in
favor of a grant of
10
<PAGE>
power to the Trustees. The Trustees shall not be required to
obtain any court order to deal with the Trust property.
6.11. Service in Other Capacities. Any Trustee, officer,
---------------------------
representative, employee or
agent of the Trust, including any investment adviser, transfer
agent, administrator, distributor, shareholder servicing agent,
custodian or underwriter for the Trust, may serve in any other
capacity on his or its own behalf or on behalf of others, and may
engage in other business activities in addition to his or its
services on behalf of the Trust, provided that such other
activities do not materially interfere with the performance of
his or its duties for or on behalf of the Trust.
VII.
AGREEMENTS WITH: INVESTMENT ADVISER;
PRINCIPAL UNDERWRITER; ADMINISTRATOR; TRANSFER AGENT
AND CUSTODIAN
7.1. Investment Adviser. The Trustees may enter into a
------------------
written investment advisory
agreement or agreements with any person or persons whereby such
person(s) shall undertake to furnish the Trustees such portfolio
management, investment advisory, statistical and research
facilities and other services for the Trust or any one or more
classes or series of a class of its Shares, upon such terms and
conditions as the Trustees may, in their discretion, determine.
Notwithstanding any provision of this Declaration of Trust, the
Trustees may authorize the investment adviser (subject to such
general or specific instructions as the Trustees may adopt) to
effect purchases, sales or exchanges of portfolio securities of
the Trust on behalf of the Trustees or may authorize any
representative or Trustee to effect such purchases, sales or
exchanges pursuant to the recommendations of the investment
adviser (and all without further action by the Trustees). Any
such purchases, sales and exchanges so effected shall be deemed
to have been authorized by all of the Trustees.
Any such investment advisory agreement or agreements,
including approvals or renewals thereof, shall in all respects be
consistent with, and subject to the requirements of the Act as
then in effect and the regulations of the Commission thereunder.
7.2. Administrator. The Trustees may, on such terms and
-------------
conditions as they may in their
discretion determine, enter into one or more agreements with any
person or persons providing for administrative services to the
Trust, including assistance in supervising the Trust's affairs
and performance of administrative, clerical and other services
considered desirable by the Trustees.
11
<PAGE>
Any such administration agreement or agreements, including
approvals or renewals thereof, shall in all respects be
consistent with, and subject to the requirements of the Act as
then in effect and the regulations of the Commission thereunder.
7.3. Principal Underwriter. The Trustees may, on such
---------------------
terms and conditions as they may
in their discretion determine, enter into one or more
distribution agreements with any person or persons providing for
the sale of Shares of the Trust at a price at least equal to the
net asset value per Share and providing for sale of the Shares
pursuant to arrangements by which the Trust may either agree to
sell the Shares to the other party to the agreement or appoint
such other party its sales agent for such Shares. Such agreement
may also provide for the repurchase of Shares of the Trust by
such other party as principal or as agent of the Trust, and may
authorize the other party to enter into agreements with others
for the purpose of the distribution or repurchase of Shares.
Any such distribution agreement or agreements, including
approvals or renewals thereof, shall in all respects be
consistent with, and subject to the requirements of the Act as
then in effect and the regulations of the Commission thereunder.
7.4. Transfer Agent. The Trustees may enter into one or
--------------
more agreements with any person
or persons providing for transfer agency and other services to
Shareholders of the Trust, on such terms and conditions as the
Trustees may in their discretion determine.
7.5. Custodian. The Trustees may, on such terms and
---------
conditions as they may in their
discretion determine, enter into one or more agreements with any
person or persons providing for the custody and safekeeping of
the property of the Trust. Such agreements shall be subject to
such restrictions, limitations, and other requirements, as may be
contained in the Act, regulations of the Commission thereunder
and by the Code of Regulations of the Trust.
7.6. Parties to the Agreements. The same person may be
-------------------------
employed in multiple capacities
under Sections 7.1 through 7.5 of this Article VII and may
receive compensation from the Trust in as many capacities in
which such persons shall serve the Trust. The Trustees may enter
into any agreement of the character described in this Article VII
with any person, including any person in which any Trustee,
officer, representative, employee or Shareholder of the Trust may
be interested, and no such agreement shall be invalidated or
rendered voidable by reason of the existence of any such
relationship, nor shall any person holding such relationship be
liable by reason of such relationship for any loss or expense to
the Trust under or by reason of said agreement or accountable for
any profit realized directly or indirectly therefrom.
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VIII.
SHAREHOLDERS' VOTING POWERS AND MEETINGS
8.1. Voting Powers. The Shareholders of the Trust, or of
-------------
any class or series of a class
of Shares thereof, shall have the power to vote (a) for the
election of Trustees; (b) with respect to the amendment of this
Declaration of Trust as provided in Article XI, Section 11.8 and
(c) with respect to such additional matters relating to the Trust
as may be required by law, by this Declaration of Trust, the
Regulations, by any requirement applicable to or agreement of the
Trust, and as the Trustees may consider desirable. Every
Shareholder of record shall have the right to one vote for every
whole Share standing in his name on the books of the Trust, and
to have a proportional fractional vote for any fractional Share,
as to any matter on which the Shareholder is entitled to vote.
There shall be no cumulative voting. Shares may be voted in
person or by proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required or permitted to be taken by Shareholders by law, this
Declaration of Trust or the Regulations.
8.2. Meetings. Meetings of Shareholders may be called by
--------
the Trustees as provided in
the Regulations and shall be called by the Trustees upon the
written request of Shareholders owning at least twenty percent
(20%) of the outstanding Shares entitled to vote.
8.3. Quorum and Required Vote. At any meeting of the
------------------------
Shareholders a quorum for the
transaction of particular business shall consist of a majority of
the Shares of the Trust outstanding and entitled to vote on the
matter appearing in person or by proxy, provided that
reasonable adjournments of such meeting for the purpose of voting
on such matter(s) until a quorum is obtained may be made by vote
of the Shares present in person or by proxy and entitled to vote
on such matter(s). A majority of the Shares voted shall decide
any question and a plurality shall elect a Trustee, subject to
any applicable requirements of law or of this Declaration of
Trust or the Regulations.
8.4. Shareholder Action by Written Consent. Any action
-------------------------------------
which may be taken by
Shareholders may be taken without a meeting if not less than
two-thirds of the Shareholders entitled to vote on the matter
consent to the action in writing and the 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.
8.5. Code of Regulations. The Regulations may include
-------------------
further provisions not
inconsistent with this Declaration of Trust for Shareholders'
meetings, votes, record dates, notices of meetings and related
matters.
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IX.
DISTRIBUTIONS AND DETERMINATION
OF NET INCOME
Distributions. The Board of Trustees may from time to time
-------------
determine, authorize and make
distributions in Shares or in cash, on any or all classes or
series of a class of Shares, the amount of such distributions and
the payment thereof being wholly in the discretion of the Board
of Trustees. Distributions on Shares of any class or series
shall be paid only out of the net income, surplus, capital or
other lawfully available assets belonging to such class or
series.
Inasmuch as the computation of net income and gains for
Federal income tax purposes may vary from the computation thereof
on the books of the Trust, the Trustees shall have the power in
their discretion to distribute for any fiscal year as ordinary
distributions and as capital gains distributions, respectively,
amounts sufficient to enable the Trust to qualify as a regulated
investment company under the Internal Revenue Code of 1954, as
amended, or any successor or comparable statute thereto, and
Regulations promulgated thereunder, in order to avoid any
liability for Federal income taxes in respect to that year.^
The decision of the Trustees as to what is income and what
is principal in accordance with generally accepted accounting
principles shall be final, and except as specifically provided
herein the decision of the Trustees as to expenses and charges of
the Trust to be charged against principal and against income
shall be final. Any income not distributed in any year may be
permitted to accumulate and as long as not distributed may be
invested from time to time in the same manner as the principal
funds of the Trust.
The Trustees shall have the power to make distributions in
cash or property. The Trustees may adopt any resolutions deemed
necessary or desirable providing for the determination,
authorization and making of such distributions on a daily,
monthly or other basis by one or more designated representatives
of the Trust, which may be made payable to Shareholders of record
at such time as may be fixed. Distributions declared but not yet
paid with respect to Shares which have been redeemed may be paid
prior to the time otherwise payable if the Trustees so determine
in their sole discretion.
X.
LIMITATION OF LIABILITY AND INDEMNIFICATION
10.1. Limitation of Trustee Liability. Every act or thing
-------------------------------
done or omitted, and every
power exercised or obligation incurred by the Trustees or any of
them in the administration of this Trust or in connection with
any affairs, property or concerns of the Trust, whether
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ostensibly in their own names or in their Trust capacity, shall
be done, omitted, exercised or incurred by them as Trustees and
not as individuals; and every person contracting or dealing with
the Trustees or having any debt, claim or judgment against them
or any of them shall look only to the funds and property of the
Trust for payment or satisfaction. No Trustee or Trustees of the
Trust shall ever be personally liable for or on account of any
contract, debt, tort, claim, damage, judgment or decree arising
out of or connected with the administration or preservation of
the Trust estate or the conduct of any of the affairs of the
Trust. Every note, bond, contract, order or other undertaking
issued by the Trust or the Trustees relating to the Trust, and
stationery used by the Trust shall include the notice set forth
in Section 10.4 of this Article X (but the omission thereof shall
not be construed as a waiver of the foregoing provision, and
shall not render the Trustees personally liable).
It is the intention of this Section 10.1 that no Trustee
shall be subject to any personal liability whatsoever to any
person for any action or failure to act (including without
limitation the failure to compel in any way any former or acting
Trustee to redress any breach of trust) except that nothing in
this Declaration of Trust shall protect any Trustee from any
liability to the Trust or its Shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith
or gross negligence in the performance of his duties, or by
reason of reckless disregard of his obligations and duties as
Trustee; and that all persons shall look solely to the Trust
property for satisfaction of claims of any nature arising in
connection with the affairs of the Trust.
10.2. Indemnification of Trustees, Officers and Employees.
---------------------------------------------------
The Trust shall indemnify
each of its Trustees against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in
compromise, as fines and penalties, and as counsel fees)
reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether
civil or criminal, in which he may be involved or with which he
may be threatened, while as a Trustee or thereafter, by reason of
his being or having been such a Trustee except with respect to
any matter as to which he shall have been adjudicated
to have acted in bad faith, willful misfeasance, gross negligence
or reckless disregard of his duties; provided, however, that as
to any matter disposed of by a compromise payment by such
person, pursuant to a consent decree or otherwise, no
indemnification either for said payment or any other expense
shall be provided unless the Trust shall have received a written
opinion from independent legal counsel approved by the Trustees
to the effect that if either the matter of willful misfeasance,
gross negligence or reckless disregard of duty, or the matter of
bad faith had been adjudicated, it would in his opinion have been
adjudicated in favor of such person. The rights accruing to any
person under these provisions shall not exclude any other right
to which he may be lawfully entitled; provided that no person may
satisfy any right of indemnity or reimbursement except out of the
property of the Trust. The Trustees may make advance payments in
connection with the indemnification under this Section 10.2,
provided that
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the indemnified person shall have given a written undertaking to
reimburse the Trust in the event it is subsequently determined
that he is not entitled to such indemnification.
The Trustees shall have the power, but not the duty, in
their sole discretion, to indemnify officers and employees of the
Trust to the same extent that Trustees are entitled to
indemnification pursuant to this Section 10.2.
In addition to such rights of indemnification as may be
provided hereunder, the Trustees may purchase insurance against
the risk of liability imposed against Trustees, officers or
employees by reason of their services on behalf of the Trust.
10.3. Reliance on Experts, etc. Each Trustee, officer and
------------------------
representative of the Trust
shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to
act resulting from reliance in good faith upon the books of
account or other records of the Trust, upon an opinion of counsel
satisfactory to the Trust, or upon reports made to the Trust by
any of its officers, representatives or employees or by the
investment adviser, the principal underwriter, selected dealers,
accountants, appraisers or other experts or consultants selected
with reasonable care by the Trustees or officers of the Trust,
regardless of whether such counsel or expert may also be a
Trustee.
10.4. Limitation of Shareholder Liability. Shareholders
-----------------------------------
shall not be subject to any
personal liability for the acts or obligations of the Trust. The
Trustees shall have no power to bind any Shareholder personally
or 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 by way of subscription to
any Shares or otherwise. Every note, bond, contract, order or
undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust, and the stationery used by the Trust,
shall include a recitation limiting the obligation represented
thereby to the Trust and its assets (but the omission of such a
recitation shall not operate to bind any Shareholder) as follows:
"The names `Sentinel Pennsylvania Tax-Free Fund' and
-----------------------------------
`Trustees of Sentinel Pennsylvania Tax-Free Fund' refer
-----------------------------------------------
respectively to the trust created and the Trustees, as trustees
but not individually or personally, acting from time to time
under a Declaration of Trust dated ________ __, 1996, which is on
----
file at the principal office of the Trust. The obligations of
Sentinel Pennsylvania Tax-Free Fund entered into in the name or
-----------------------------------
on behalf thereof by any of the Trustees, representatives or
agents are made not individually, but in such capacities, and are
not binding upon any of the Trustees, Shareholders or
representatives of the Trust personally, but bind only the trust
estate, and all persons dealing with the Trust must look
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solely to the trust property for the enforcement of any
claims against the Trust."
10.5. Indemnification of Shareholders. In case any
-------------------------------
Shareholder or former Shareholder
shall be held to be personally liable solely by reason of his
being or having been a Shareholder and not because of his acts or
omissions or for some other reason, the Shareholder or former
Shareholder (or his 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 out of the Trust estate to be held harmless from and
indemnified against all loss and expense arising from such
liability. The Trust shall, upon request by the Shareholder,
assume the defense of any claim made against any Shareholder for
any act or obligations of the Trust and satisfy any judgment
thereon.
XI.
MISCELLANEOUS
11.1. Trust Not a Partnership. It is hereby expressly
-----------------------
declared that a common law trust
and not a partnership is created hereby. No Trustee hereunder
shall have any power to bind personally either the Trust's
representatives or any Shareholders. 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 Trust for
payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, whether past, present or future,
shall be personally liable therefor.
11.2. No Bond or Surety. The Trustees shall not be
-----------------
required to give any bond as such,
nor any surety if a bond is required.
11.3. Termination of Trust. This Trust shall continue
--------------------
without limitation of time, provided, however, that:
A. The Trustees, with the vote of a majority of the
outstanding Shares, may sell and convey the assets belonging to
the Trust or to any class or series of Shares thereof to another
trust or corporation organized under the laws of any state of the
United States, which is a management investment company as
defined in the Act, for an adequate consideration which may
include the assumption of all outstanding obligations, taxes and
other liabilities, accrued or contingent, of the Trust or to any
class or series of Shares thereof and which may include
beneficial interests of such trust or stock of such corporation.
Upon making provision for the payment of all such liabilities, by
such assumption or otherwise, the Trustees shall distribute the
remaining proceeds ratably among the holders of the outstanding
Shares entitled thereto.
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B. The Trustees, with the vote of a majority of the
outstanding Shares, may sell and convert into money all the
assets of the Trust or of any class or series. Upon making
provision for the payment of all outstanding obligations, taxes
and other liabilities, accrued or contingent, of the Trust or of
any class or series, the Trustees shall distribute the remaining
assets of the Trust or of any class or series ratably among the
holders of the outstanding Shares entitled thereto.
C. Upon completion of the distribution of the remaining
proceeds or the remaining assets as provided in subsections A and
B, the Trust shall terminate and the Trustees shall be discharged
of any and all further liabilities and duties hereunder and the
right, title and interest of all parties shall be cancelled and
discharged.
11.4. Filing of Copies, References, Headings. The original
--------------------------------------
or a copy of this instrument
and of each Declaration of Trust supplemental 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 a representative of the Trust as to whether or not
any such supplemental Declaration of Trust has 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 a representative of the Trust to be a copy of this
instrument or of any such supplemental Declaration of Trust.
Headings are placed herein for convenience of reference only and
in the case of any conflict, the text of this instrument, rather
than the headings, shall control. This instrument may be
executed in any number of counterparts each of which shall be
deemed an original. All signatures to this instrument need not
appear on the same page.
11.5. Applicable Law. The Trust set forth in this
--------------
instrument is a common trust made in
the Commonwealth of Pennsylvania and is to be governed by and
construed and administered according to the laws of said
Commonwealth.
11.6. Provisions in Conflict With Law or Regulations.
----------------------------------------------
A. The provisions of this Declaration of Trust are
severable, and if the Trustees shall determine, with the advice
of counsel, that any such provision is in conflict with the Act,
the regulated investment company provisions of the Internal
Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a
part of this Declaration of Trust; provided, however, that such
determination
------ -----
shall not affect any of the remaining provisions of this
Declaration of Trust or render invalid or improper any action
taken or omitted prior to such determination.
B. If any provision of this Declaration of Trust shall be
held invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall attach only to such
provision in
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such jurisdiction and shall not in any manner affect such
provision in any other jurisdiction or any other provision of
this Declaration of Trust in any jurisdiction.
C. Notwithstanding the foregoing, nothing contained in this
Declaration of Trust shall permit any amendment of this
Declaration of Trust which would impair the exemption from
personal liability of the Trustees and Shareholders of the Trust
or to permit assessments upon Shareholders.
11.7. Amendment Procedure.
---------------
A. This Declaration of Trust may be amended by the
affirmative vote of the holders of not less than a majority of
the outstanding Shares.
B. The Trustees may also amend this Declaration without the
vote of Shareholders if they deem it necessary to conform this
Declaration of Trust to the requirements of desirable applicable
federal laws or regulations or the requirements of the regulated
investment company provisions of the Internal Revenue Code, but
the Trustees shall not be liable for failing so to do.
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IN WITNESS WHEREOF, the undersigned have executed this
Declaration of Trust as of the __ day of _______ 1996.
----
____________________________
Richard J. Borda
----------------
____________________________
Dr. Kalman J. Cohen
-------------------
____________________________
Richard D. Farman
-----------------
____________________________
John D. Feerick
---------------
____________________________
Richard I. Johannesen, Jr.
--------------------------
____________________________
Robert B. Mathias
-----------------
____________________________
Keniston P. Merrill
-------------------
____________________________
Stanley R. Reber
----------------
____________________________
Susan M. Sterne
---------------
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Exhibit (a)(1)
TRUST AGREEMENT OF EXCHANGEABLE SECURITIES TRUST
TRUST AGREEMENT, dated as of May 2, 1996, between Stephen J. Bujno,
as Depositor, and Stephen E. Stonefield, as Trustee. The Depositor and the
Trustee hereby agree as follows:
1. The trust created hereby shall be known as " Exchangeable
Securities Trust", in which name the Trustee may conduct the business of the
Trust, make and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over
to the Trustee the sum of $1. The Trustee hereby acknowledges receipt of
such amount in trust from the Depositor, which amount shall constitute the
initial trust estate. The Trustee hereby declares that it will hold the
trust estate in trust for the Depositor. It is the intention of the parties
hereto that the Trust created hereby constitute a business trust under
Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. Section 3801, et
-------
seq. and that this document constitute the governing instrument of the Trust.
The Trustee is hereby authorized and directed to execute and file a
certificate of trust with the Delaware Secretary of State in the form
attached hereto.
3. The Depositor and the Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party, to provide for the
contemplated operation of the Trust created hereby. Prior to the execution
and delivery of such amended and restated Trust Agreement, the Trustee shall
not have any duty or obligation hereunder or with respect to the trust
estate, except as otherwise required by applicable law or as may be necessary
to
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obtain prior to such execution and delivery any licenses, consents or
approvals required by applicable law or otherwise.
4. This Trust Agreement may be executed in one or more
counterparts.
5. The Trustee may resign upon thirty days' prior notice to the
Depositor.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
DEPOSITOR
/s/Stephen J. Bujno
---------------------------
Stephen J. Bujno,
as Depositor
TRUSTEE
/s/ Stephen E. Stonefield
----------------------------------
Stephen E. Stonefield,
as Trustee
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Exhibit (a)(2)
CERTIFICATE OF TRUST OF EXCHANGEABLE SECURITIES TRUST
This Certificate of Trust of Exchangeable Securities Trust (the
"Trust"), dated May 2, 1996, is being duly executed and filed by Stephen
Stonefield, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. C. Section 3801, et seq.)
------- ------
1. Name. The name of the business trust formed hereby is
----
Exchangeable Securities Trust.
2. Registered Office; Registered Agent. The business address of
-----------------------------------
the registered office of the Trust in the State of Delaware is One Rodney
Square, 10th Floor, Tenth and King Streets in the City of Wilmington, County
of New Castle, 19801. The name of the Trust's registered agent at such
address is RL&F Service Corp.
3. Effective Date. This Certificate of Trust shall be effective
--------------
upon the date and time of filing.
4. Other Matters. The Trust will be a registered investment
-------------
company under the Investment Company Act of 1940, as amended.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above-
written.
/s/ Stephen E. Stonefield
----------------------------------------
---------
Sole Trustee
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