<PAGE>
As filed with the Securities and Exchange Commission on April 19, 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:
/x/ Preliminary Proxy Statement / / Confidential, for Use of the Commission
/ / 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):
/x/ $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:
- ------------------------------------------------------------------------------
/ / 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.
1
<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 _____, 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!
2
<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 __, 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 _________ 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 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.
1
<PAGE>
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.
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.
2
<PAGE>
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:
<TABLE><CAPTION>
Number of
Name, Position Shares of
with Trust, Became Trust
and Age Trustee Principal Occupations Owned (1)
- -------------- ------- --------------------- ---------
<S> <C> <C> <C>
Keniston P. Merrill . . . 1993 SAC - Chairman and Chief
Chairman *(1)(2) Executive Officer, 1993 to
59 present; Sentinel 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.
Richard J. Borda . . . . 1993 NLIC - Former Vice Chairman of the Board,
Trustee 1985 to 1990, Director, 1975 to 1991;
64 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
International Studies - Vice Chairman,
Director and Trustee, 1991 to
present; Air Force Aid Society -
President, 1980 to 1995.
Dr. Kalman J. Cohen . . . 1993 Distinguished Bank Research Professor
Trustee(2) Emeritus, The Fuqua School of Business,
65 Duke University; Distinguished Bank
Research Professor, 1974 to 1993; SGF -
Director, 1973 to present; USLIFE Income
Fund, Inc. - Director, 1973 to present;
SCMF - Director, 1981 to 1983.
Richard D. Farman . . . . 1994 President, Chief Operating Officer
Trustee and Director, Pacific Enterprises,
60 1993 to present; Chairman and Chief
Executive Officer, Southern
California Gas Company, 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.
John D. Feerick . . . . . 1993 Fordham University School of Law - Dean,
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.
3
<PAGE>
Richard I. Johannesen,Jr. . 1994 Retired; Former Vice President and
Trustee Manager - BondMarket Research
61 Department, Salomon Brothers Inc; SGF -
Director, 1994 to present.
Robert B. Mathias . . . . 1993 Sports Consultant; formerly Executive
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
Nominee President - Americas Systems
46 Business Unit, 1995 to present; Miller
Van Buren, Inc. - Chief Executive
Officer, 1994 to 1995; Silicon
Graphics - Vice President, 1991 to
1994; International Business Machines
Corporation - General Manager, 1984
to 1987; SGF - Director, 1995 to
present.
Stanley R. Reber* . . . . 1995 ProvidentMutual Life Insurance Company -
Trustee Executive Vice President, 1988 to
52 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. -
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 ______
shares of the Trust which had net asset value of $_______ million,
representing ___% 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 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 $______, payable in quarterly
installments, and an additional fee of $1,500, 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
4
<PAGE>
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.
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 negate gains from discount purchases; (iii) maintain a
constant net asset value per unit pursuant to, and in compliance with, an
5
<PAGE>
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, 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:
6
<PAGE>
<TABLE>
<CAPTION>
Pension or
Retirment
Total Benefits
Aggregate Compensation Accrued as
Name of Compensation from Trust Part of Trust
Trustee from Trust and SGF Expenses
- ------- ------------ ------------ -------------
<S> <C> <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
Robert B. Mathias............ $3,500 $23,375 None
Susan M. Sterne.............. $3,300 $22,175 None
</TABLE>
SIGNIFICANT SHAREHOLDERS
NLIC and its controlled affiliates own ________ shares and ___% of
the outstanding voting securities of the Trust's shares. The above amount
includes _____ shares over which AG&T, a Delaware trust company, has
voting discretion, having aggregate net asset value of $_______,
representing __% 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 class of 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 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 _______ shares of the
Trust (such holdings do not amount to 1% or more of the outstanding voting
securities of such class).
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.
7
<PAGE>
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
May __, 1996
8
<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.
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.
A-1
<PAGE>
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 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
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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.
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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).
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,
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.
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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 Shareholder), if the value of such
account is less than Five Hundred Dollars ($500.00); provided, however,
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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.
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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.
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 annul the Trust or to revoke any existing
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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.
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.
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<PAGE>
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 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
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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 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.
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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.
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.
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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.
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.
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X.
LIMITATION OF LIABILITY AND INDEMNIFICATION
10.1. Limitation of Trustee Liability. Every act or thing done or
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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 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
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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
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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
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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
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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
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.
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<PAGE>
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 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.
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<PAGE>
11.3. Termination of Trust. This Trust shall continue without
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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.
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
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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
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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.
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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
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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 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.
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<PAGE>
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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<PAGE>
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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<PAGE>
(LOGO) Sentinel Funds
Integrity Since 1934
Registration Line 1 Account Number: xxxxxxxxxx
Registration Line 2
Registration Line 3 Shares: xxx,xxx.xxx
Registration Line 4
Registration Line 5
Registration Line 6
Registration Line 7
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE
PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED, TO VOTE "FOR"
EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY
PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY
ATTEND THE MEETING, PLEASE COMPLETE, DETACH AND MAIL THE LOWER PORTION OF
THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE.
SENTINEL PENNSYLVANIA TAX-FREE TRUST
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
THE UNDERSIGNED HEREBY APPOINTS KENISTON P. MERRILL, JOSEPH M. ROB AND D.
RUSSELL MORGAN AS PROXIES, ACTING BY A MAJORITY OF THOSE PRESENT, EACH
WITH THE POWER TO APPOINT HIS SUBSTITUTE, AND HEREBY AUTHORIZES THEM TO
REPRESENT AND TO VOTE, AS DESIGNATED BELOW, ALL THE SHARES OF SENTINEL
PENNSYLVANIA TAX-FREE TRUST HELD OF RECORD BY THE UNDERSIGNED ON APRIL 24,
1996, AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JULY 9, 1996 OR
ANY ADJOURNMENT THEREOF.
TO VOTE, MARK THE BLOCKS BELOW AS FOLLOWS X PLEASE DETACH AND
RETURN THE LOWER PORTION ONLY
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SENTINEL PENNSYLVANIA TAX-FREE TRUST
Control Code: xxxxxxxxxx Account Number: xxxxxxxxxx Shares: xxx,xxx.xxx
For Withhold For All 1) TO ELECT DIRECTORS, THE NOMINEES ARE:
All Except 1) R.J. BORDA, 2) K.J. COHEN,
/ / / / / / 3) R.D. FARMAN, 4) J.D. FERRICK,
5) R.I. JOHANNESEN, 6) R.B. MATHIAS,
7) K.P. MERRILL, 8) D.G. MILLER,
9) S.R. REBER, 10) S.M. STERNE
-----------------------------------------------
Use only to withhold authority to vote on
individual nominees.
For Against Abstain
/ / / / / / 2) AMEND DECLARATION OF TRUST
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
- ----------------- ------------------------ -------------------
SIGNATURE SIGNATURE (JOINT OWNERS) DATE
PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING OF YOUR
SHARES AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS,
ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE.
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<PAGE>
<PAGE>
(LOGO) Sentinel Funds
May , 1996
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Sentinel Pennsylvania Tax-Free Trust, which is to be held on Tuesday, July
9, 1996 at 2:30 p.m., at the home office of National Life Insurance Company,
National Life Drive, Montpelier, Vermont 05604. The meeting will focus on
the Election of Trustees and a proposal to amend the Declaration of Trust to
eliminate certain investment restrictions which are no longer required by
Pennsylvania law. While we would like very much to have you attend the
meeting and vote in person, we realize that this may not be possible.
IF YOU CANNOT ATTEND THE MEETING, IT IS EXTREMELY IMPORTANT THAT
YOU COMPLETE, SIGN, AND RETURN THE ENCLOSED PROXY BALLOT SO THAT
YOUR VOTE, BASED ON THE SHARES YOU OWN, WILL BE REPRESENTED. BY
PROMPTLY RETURNING THE PROXY, YOU WILL HELP YOUR TRUST AVOID THE
NECESSITY AND CONSIDERABLE EXPENSE OF SENDING FOLLOW-UP MAILINGS
TO OBTAIN THE QUORUM OF SHAREHOLDER VOTES REQUIRED BY LAW.
IN THE EVENT YOU LATER DECIDE TO ATTEND THE MEETING, YOU
MAY REVOKE YOUR PROXY AT THAT TIME AND VOTE YOUR SHARES IN PERSON.
If you desire additional information concerning the matters proposed for
action at the meeting, we would be glad to hear from you. Your proxy ballot
on which to indicate your vote is enclosed, along with a postage-free
envelope. I urge you to return it promptly.
Sincerely,
Keniston P. Merrill
Chairman
Distributed by Sentinel Financial Services Company
One National Life Drive, Montpelier, Vermont 05604 . (800) 233-4332
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