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SIGNATURE PAUL SCHUBERT
TITLE TREASURER
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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For period ending March 31, 1998
File number 811-6376
77. A. Is the Registrant filing any of the following
attachments with the current filing of Form
N-SAR? (ANSWER FOR ALL SERIES AS A
GROUP) _Y_
Y/N
NOTE: If answer is "Y" (Yes), mark those items below being filed
as an attachment to this form or incorporated by reference. _Y_
Y/N
B. Accountant's report on internal control ___
C. Matters submitted to a vote of security holders _N_
D. Policies with respect to security investments _N_
E. Legal proceedings _N_
F. Changes in security for debt _N_
G. Defaults and arrears on senior securities _N_
H. Changes in control of Registrant _N_
I. Terms of new or amended securities _N_
J. Revaluation of assets or restatement of capital
share account _N_
K. Changes in Registrant's certifying accountant _N_
L. Changes in accounting principles and practices ___
M. Mergers _N_
N. Actions required to be reported pursuant to Rule
2a-7 _N_
O. Transactions effected pursuant to Rule 10f-3 _N_
P. Information required to be filed pursuant to
existing exemptive orders _N_
Attachment Information (Cont. On Screen 39)
<PAGE>
For period ending March 31, 1998
File number 811-6376
Attachment Information (Cont. from Screen 38)
77. Q. 1. Exhibits _Y_
Y/N
2. Any information called for by instructions
to sub-item 77Q2 _N_
Y/N
3. Any information called for by instructions
to sub-item 77Q3 _N_
Y/N
SCREEN NUMBER: 39
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
79. List the "811" numbers and names of Registrant's
wholly-owned investment company subsidiaries
consolidated in this report.
811 Number Subsidiary
Name Period ending March 31, 1998
File number 811-6376
ANNUAL SUPPLEMENT
Page 53 is to be filed only once each year at the end of
Registrant's fiscal year.
105. Fidelity bond(s) in effect at the end of the period:
A. Insurer Name: ICI Mutual Insurance Co.
B. Second Insurer:
C. Aggregate face amount of coverage for
Registrant on all bonds on which
it is named as an insured ($000's omitted) $45,000
106. A. Is the bond part of a joint fidelity bond(s)
shared with other investment companies
or other entities? Y
Y/N
B. If the answer to 106A is "Y" (Yes), how many
other investment companies or other
entities are covered by the bond? 67
NOTE: Count each series as a separate
investment company.
107. A. Does the mandatory coverage of the fidelity
bond have a deductible? N
Y/N
B. If the answer to 107A is "Y" (Yes), what is the
amount of the deductible? $______
108. A. Were any claims with respect to this
Registrant filed under the bond during
the period? N
Y/N
B. If the answer to 108A is "Y" (Yes), what was
the total amount of such claim(s)? $______
109. A. Were any losses incurred with respect to this
Registrant that could have been filed
as a claim under the fidelity bond but were
not? N
Y/N
B. If the answer to sub-item 109A is "Y" (Yes),
what was the total amount of such
losses? ($000's omitted) $______
110. A. Are Registrant's officers and directors covered
as officers and directors of
Registrant under any errors and omissions
insurance policy owned by the Registrant
or anyone else? Y
Y/N
B. Were any claims filed under such policy
during the period with respect to
Registrant? N
Y/N<PAGE>
Exhibit 77Q(1)
PAINEWEBBER MANAGED ASSETS TRUST
AMENDED AND RESTATED DECLARATION OF
TRUST
DECLARATION OF TRUST, made at Boston,
Massachusetts, this 9th day of August, 1991 and amended and
restated this 19th day of November, 1997 by the Trustees:
WHEREAS, the Trustees desire to establish a trust
fund for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all
money and property contributed to the trust fund hereunder
shall be held and managed in trust under this Declaration of
Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "PaineWebber
Managed Assets Trust." The resident agent for the Trust in
Massachusetts shall be CT Corporation System, whose address
is 2 Oliver Street, Boston, Massachusetts, or such other person
as the Trustees may from time to time designate.
DEFINITIONS
Section 2. Wherever used herein, unless otherwise
required by the context or specifically provided:
(a) The Terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of
Section 2(a)(42) of the 1940 Act, whichever may be
applicable) and "Principal Underwriter" shall have the meanings
given them in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to PaineWebber Managed
Assets Trust and reference to the Trust, when applicable to one
or more Series of the Trust, shall refer to any such Series;
(c) "Net Asset Value" means the net asset value of
each Series of the Trust determined in the manner provided in
Article IX, Section 3;
(d) "Shareholder" means a record owner of Shares
of the Trust;
(e) The "Trustees" means the person who has
signed this Declaration of Trust so long as he shall continue in
office in accordance with the terms hereof, and all other
persons who may from time to time be duly elected or
appointed, qualified and serving as Trustees in accordance with
the provisions of Article IV hereof, and reference herein to a
Trustee or the Trustees shall refer to such person or persons in
his capacity or their capacities as trustees hereunder.
(f) "Shares" means the equal proportionate
transferable units of interest into which the beneficial interest
of each Series or Class thereof shall be divided from time to
time and includes fractions of shares as well as whole shares
(all of the transferable units of a Series or of a single Class may
be referred to as "Shares" as the context may require);
(g) The "1940 Act" refers to the Investment
Company Act of 1940, as amended from time to time;
(h) "Series" refers to series of Shares of the Trust
established in accordance with the provisions of Article III;
(i) "Class" refers to the class of Shares of a Series
of the Trust established in accordance with the Provisions of
Article III.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a
continuous source of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust shall be
divided into such transferable Shares of one or more separate
and distinct Series or Classes thereof as the Trustees shall from
time to time create and establish. The number of Shares is
unlimited and each Share shall have a par value of $0.001 per
Share and upon issuance in accordance with the terms hereof
shall be fully paid and nonassessable. The Trustees shall have
full power and authority, in their sole discretion and without
obtaining any prior authorization or vote of the Shareholders
of the Trust, to create and establish (and to change in any
manner) Shares with such preferences, terms of conversion,
voting powers, rights and privileges as the Trustees may from
time to time determine, to divide or combine the Shares into a
greater or lesser number, to classify or reclassify any unissued
Shares into one or more Series or Classes of Shares, to abolish
any one or more Series or Classes of Shares, and to take such
other action with respect to the Shares as the Trustees may
deem desirable. The Trustees, in their discretion without a
vote of the Shareholders, may divide the Shares of any Series
into Classes. In such event, each Class of a Series shall
represent interests in the assets of that Series and have identical
voting, dividend, liquidation and other rights and the same
terms and conditions, except that expenses allocated to a Class
of a Series may be borne solely by such Class as shall be
determined by the Trustees and a Class of a Series may have
exclusive voting rights with respect to matters affecting only
that Class. Without limiting the authority of the Trustees set
forth in this Section 1 to establish and designate any further
Series or Classes, the Trustees have established and designated
the Series of Shares and Classes listed in Schedule A attached
hereto and made a part hereof.
ESTABLISHMENT OF SERIES OR CLASS
Section 2. The establishment of any Series or Class in
addition to those set forth in Section 1 shall be effective upon
the adoption of a resolution by a majority of the then Trustees
setting forth such establishment and designation and the
relative rights and preferences of the Shares of such Series or
Class thereof. At any time that there are no Shares outstanding
of any particular Series previously established and designated,
the Trustees may by a majority vote abolish that Series and the
establishment and designation thereof. At any time that there
are no shares outstanding of any particular Class of a Series,
the Trustees may by a majority vote abolish that Class and the
establishment and designation thereof. The Trustees by a
majority vote may change the name of any Series or Class.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be recorded
in the books of the Trust. The Trustees may make such rules
as they consider appropriate for the transfer of Shares and
similar matters. The record books of the Trust shall be
conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments in the
Trust from such persons and on such terms as they may from
time to time authorize. Such investments may be in the form
of cash or securities in which the appropriate Series is
authorized to invest, valued as provided in Article IX, Section
3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in
the Trustees' discretion be considered as outstanding and the
amount received by the Trustees on account of the contribution
shall be treated as an asset of the Trust or a Series thereof, as
appropriate. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after
the investment is received; provided, however, that the
Trustees may, in their sole discretion, (a) impose a sales charge
upon investments in the Trust or Series and (b) issue fractional
Shares. The Trustees shall have the right to refuse to accept
investments in the Trust or any Series at any time without any
cause or reason therefor whatsoever.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for
the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested,
all income, earnings, profits, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may
be, shall be referred to as "assets belonging to" that Series. In
addition, any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series shall be allocated by the
Trustees between and among one or more of the Series in such
manner as they, in their sole discretion, deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and shall be referred
to as assets belonging to that Series. The assets belonging to
a particular Series shall be so recorded upon the books of the
Trust, and shall be held by the Trustees in Trust for the benefit
of the holders of Shares of that Series. The assets belonging to
each particular Series shall be charged with the liabilities of that
Series and all expenses, costs, charges and reserves attributable
to that Series except that liabilities and expenses allocated
solely to a particular Class shall be borne by that Class. Any
general liabilities, expenses, costs, charges or reserves of the
Trust or Series which are not readily identifiable as belonging
to any particular Series or Class shall be allocated and charged
by the Trustees between or among any one or more of the
Series or Classes in such manner as the Trustees in their sole
discretion deem fair and equitable. Each such allocation shall
be conclusive and binding upon the Shareholders of all Series
or Classes for all purposes. Any creditor of any Series may
look only to the assets of that Series to satisfy such creditor's
debt. See Article X, Section 1.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or
other right to subscribe to any additional Shares or other
securities issued by the Trust or the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL
LIABILITY
Section 7. Shares shall be deemed to be personal
property giving only the rights provided in this Declaration of
Trust. Every Shareholder by virtue of having become a
Shareholder shall be held expressly to have assented and agreed
to the terms of this Declaration of Trust and to have become a
party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the
Trust nor entitle the representative of any deceased
Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the
rights of said decedent under this Trust. Ownership of Shares
shall not entitle the Shareholder to any title in or to the whole
or any part of the Trust property or right to call for a partition
or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners.
Neither the Trust nor the Trustees shall have any 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 for any Shares or
otherwise.
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers
necessary and desirable to carry out that responsibility. A
Trustee shall not be required to be a Shareholder of the Trust.
ELECTION OF TRUSTEES AND APPOINTMENT OF
INITIAL TRUSTEE
Section 2. On a date fixed by the Trustees, the
Shareholders shall elect the Trustees. Until such election, the
Trustees shall be the initial Trustee and such other persons as
may be hereafter appointed pursuant to Section 4 of this
Article IV. The initial Trustee shall be Mary Joan Floyd.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the
lifetime of this Trust, and until its termination as hereinafter
provided; except (a) that any Trustee may resign his trust by
written instrument signed by him and delivered to the other
Trustees or to any officer of the Trust, which shall take effect
upon such delivery or upon such later date as is specified
therein; (b) that any Trustee may be removed with or without
cause at any time by written instrument, signed by at least
two-thirds of the number of Trustees prior to such removal,
specifying the date when such removal shall become effective;
(c) that any Trustee who requests in writing to be retired or
who has become incapacitated by illness or injury may be
retired by written instrument signed by a majority of other
Trustees, specifying the date of his retirement; and (d) that any
Trustee may be removed at any Special Meeting of the Trust
by a vote of at least two-thirds of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death,
resignation, retirement, removal, incapacity, or inability of any
of the Trustees, or in case a vacancy shall exist by reason of an
increase in number or for any other reason, the remaining
Trustees shall fill such vacancy by appointment of such other
person as they in their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be
evidenced by a written instrument signed by a majority of the
Trustees in office or by a recording in the records of the Trust,
whereupon the appointment shall take effect. An appointment
of a Trustee may be made by the Trustees then in office as
aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall
become effective only at or after the effective date of said
retirement, resignation or increase in number of Trustees. As
soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees,
together with the continuing Trustees, without any further act
or conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions of
Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at
any one time to any other Trustee or Trustees, provided that in
no case shall less than two Trustees personally exercise the
other powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees shall initially be one
(1) and thereafter shall be such number as shall be fixed from
time to time by a written instrument signed by a majority of the
Trustees (or by an officer of the Trust pursuant to a vote of the
majority of such Trustees); provided, however, that the number
of Trustees serving hereunder at any time shall in no event be
less than one (1) nor more than fifteen (15).
Whenever a vacancy in the Board of Trustees shall
occur, until such vacancy is filled, or while any Trustee is
absent from his state of domicile (unless said Trustee has made
arrangements to be informed about, and to participate in, the
affairs of the Trust during such absence), or is physically or
mentally incapacitated by reason of disease or otherwise, the
other Trustees shall have all the powers hereunder and the
certificate of the other Trustees of such vacancy, absence or
incapacity, shall be conclusive.
EFFECT OF DEATH, RESIGNATION, ETC. OF A
TRUSTEE
Section 7. The death, declination, resignation,
retirement, removal, incapacity, or inability of the Trustee, or
any one of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of
this Declaration of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held
separate and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the Trustees or any
successor Trustees. All of the assets of the Trust shall at all
times be considered as vested in the Trustees.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. 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
appropriate in connection with the management of the Trust.
The Trustees shall not in any way 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 purposes of
this Trust. Subject to any applicable limitation in this
Declaration of Trust or the By-Laws of the Trust, the Trustees
shall have power and authority, without limitation:
(a) To invest and reinvest cash and other property,
and to hold cash or other property uninvested, without in any
event being bound or limited by any present or future law or
custom in regard to investments by trustees, and to sell,
exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust; to purchase
and sell (or write) options on securities, currencies, indices,
futures contracts and other financial instruments and enter into
closing transactions in connection therewith; to enter into all
types of commodities contracts, including without limitation
the purchase and sale of futures contracts and forward
contracts on securities, indices, currencies, and other financial
instruments; to engage in forward commitment, "when issued"
and delayed delivery transactions; to enter into repurchase
agreements and reverse repurchase agreements; and to employ
all kinds of hedging techniques and investment management
strategies.
(b) To adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of the business
of the Trust and to amend and repeal them to the extent that
they do not reserve the right to the Shareholders.
(c) To elect and remove such officers and appoint
and terminate such agents as they consider appropriate.
(d) To employ as custodian of any assets of the
Trust subject to any conditions set forth in this Declaration of
Trust or in the By-Laws, if any, a bank, trust company, or
other entity permitted by the Commission to serve as such.
(e) To retain a transfer agent and Shareholder
servicing agent, or both.
(f) To provide for the distribution of interests of
the Trust either through a principal underwriter in the manner
hereinafter provided for or by the Trust itself, or both.
(g) To set record dates in the manner hereinafter
provided for.
(h) To delegate such authority as they consider
desirable to any officers of the Trust and to any agent,
independent contractor, custodian or underwriter.
(i) To sell or exchange any or all of the assets of
the Trust, subject to the provisions of Article XI, Section 4(b)
hereof.
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities or
property; and to execute and deliver powers of attorney to
such person or persons as the Trustees shall deem proper,
granting to such person or persons such power and discretion
with relation to securities or property as the Trustees shall
deem proper.
(k) To exercise powers and rights of subscription
or otherwise which in any manner arise out of ownership of
securities.
(l) To hold any security or property in a form not
indicating any trust, whether in bearer, unregistered or other
negotiable form; or either in its own name or in the name of a
custodian or a nominee or nominees, subject in either case to
proper safeguards according to the usual practice of
Massachusetts trust companies or investment companies.
(m) To establish separate and distinct Series with
separately defined investment objectives and policies and
distinct investment purposes in accordance with the provisions
of Article III and to establish separate Classes thereof.
(n) To allocate assets, liabilities and expenses of the
Trust to a particular Series and liabilities and expenses to a
particular Class thereof or to apportion the same between or
among two or more Series or Classes, provided that any
liabilities or expenses incurred by a particular Series or Class
shall be payable solely out of the assets belonging to that Series
or Class as provided for in Article III.
(o) 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.
(p) 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.
(q) To make distributions of income and of capital
gains to Shareholders in the manner hereinafter provided for.
(r) To borrow money.
(s) To establish, from time to time, a minimum total
investment for Shareholders, and to require the redemption of
the Shares of any Shareholders whose investment is less than
such minimum upon giving notice to such Shareholder.
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.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer, other agent or
independent contractor of the Trust may acquire, own and
dispose of Shares to the same extent as if he were not a
Trustee, officer, agent or independent contractor; and the
Trustees may issue and sell or cause to be issued and sold
Shares to and buy such Shares from any such person or any
firm or company in which he is interested, subject only to the
general limitations herein contained as to the sale and purchase
of such Shares; and all subject to any restrictions which may be
contained in the By-Laws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a
meeting duly called or by unanimous written consent without
a meeting or by telephone consent provided a quorum of
Trustees participate in any such telephonic meeting, unless the
1940 Act requires that a particular action be taken only at a
meeting in person of the Trustees. At any meeting of the
Trustees, a majority of the Trustees shall constitute a quorum.
Meetings of the Trustees may be called orally or in writing by
the Chairman of the Trustees or by any two other Trustees.
Notice of the time, date and place of all meetings of the
Trustees shall be given by the party calling the meeting to each
Trustee by telephone or telegram sent to his home or business
address at least twenty-four hours in advance of the meeting or
by written notice mailed to his home or business address at
least seventy-two hours in advance of the meeting. Notice
need not be given to any Trustee who attends the meeting
without objecting to the lack of notice or who executes a
written waiver of notice with respect to the meeting either
before or after such meeting. Subject to the requirements of
the 1940 Act, the Trustees by majority vote may delegate to
any one of their number their authority to approve particular
matters or take particular actions on behalf of the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their
number to be Chairman of the Board of Trustees. The
Chairman shall preside at all meetings of the Trustees, shall be
responsible for the execution of policies established by the
Trustees and the administration of the Trust, and may be the
chief executive, financial and/or accounting officer of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III,
Section 5, the Trustees shall be reimbursed from the Trust
estate or the assets belonging to the appropriate Series for their
expenses and disbursements, including, without limitation, fees
and expenses of Trustees who are not Interested Persons of the
Trust, interest expense, taxes, fees and commissions of every
kind, expenses of pricing Trust portfolio securities, expenses of
issue, repurchase and redemption of Shares including expenses
attributable to a program of periodic repurchases or
redemptions, expenses of distributing its Shares and providing
services to Shareholders, expenses of registering and qualifying
the Trust and its Shares under Federal and State laws and
regulations, charges of investment advisers, administrators,
custodians, transfer agents, and registrars, expenses of
preparing and setting in type prospectuses and statements of
additional information, expenses of printing and distributing
prospectuses and statements of additional information sent to
existing Shareholders, auditing and legal expenses, reports to
Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expense, association
membership dues and for such non-recurring items as may
arise, including litigation to which the Trust is a party (except
those losses and expenses the indemnification of which is not
permitted under Article X hereof), 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 assets belonging
to the appropriate Series prior to any rights or interests of the
Shareholders thereto. This section shall not preclude the Trust
from directly paying any of the aforementioned fees and
expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER
AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the
Trustees may in their discretion from time to time enter into an
investment advisory or management contract(s) with respect to
the Trust or any Series thereof whereby the other party(ies) to
such contract(s) shall undertake to furnish the Trustees such
management, investment advisory, statistical and research
facilities and services and such other facilities and services, if
any, and all upon such terms and conditions, as the Trustees
may in their discretion determine. Notwithstanding any
provisions of this Declaration of Trust, the Trustees may
authorize the investment adviser(s) (subject to such general or
specific instruments as the Trustees may from time to time
adopt) to effect purchases, sales or exchanges of portfolio
securities and other investment instruments of the Trust on
behalf of the Trustees or may authorize any officer, agent, or
Trustee to effect such purchases, sales or exchanges pursuant
to recommendations of the investment adviser (and all without
further action by the Trustees). Any such purchases, sales and
exchanges shall be deemed to have been authorized by all of
the Trustees.
The Trustees may, subject to applicable requirements
of the 1940 Act, including those relating to Shareholder
approval, authorize the investment adviser to employ one or
more sub-advisers from time to time to perform such of the
acts and services of the investment adviser, and upon such
terms and conditions, as may be agreed upon between the
investment adviser and sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from
time to time enter into one or more contract(s) providing for
the sale of the Shares, whereby the Trust may either agree to
sell the Shares to the other party to the contract or appoint
such other party its sales agent for such Shares. In either case,
the contract shall be on such terms and conditions as may be
prescribed in the By-Laws, if any, and such further terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Article VII, or of the
By-Laws, if any; and such contract may also provide for the
repurchase or sale of Shares by such other party as principal or
as agent of the Trust. The Trustees may in their discretion
adopt a plan or plans of distribution and enter into any related
agreements whereby the Trust finances directly or indirectly
any activity that is primarily intended to result in sales of
Shares. Such plan or plans of distribution and any related
agreements may contain such terms and conditions as the
Trustees may in their discretion determine subject to the
requirements of Section 12 of the 1940 Act, Rule 12b-1
thereunder and any other applicable rules and regulations.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from
time to time enter into a transfer agency and Shareholder
service contract whereby the other party shall undertake to
furnish the Trustees and Trust with transfer agency and
shareholder services. The contract shall be on such terms and
conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or
of the By-Laws, if any. Such services may be provided by one
or more entities, including one or more agents of such other
party.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in
Sections 1, 2 and 3 of this Article VII or that relates to the
provision of custodian services to the Trust may be entered
into with any corporation, firm, partnership, trust or
association, although one more of the Trustees or officers of
the Trust may be an officer, director, trustee, shareholder, or
member of such other party to the contract, and no such
contract shall be invalidated or rendered voidable by reason of
the existence of any relationship, nor shall any person holding
such relationship be liable merely by reason of such relationship
for any loss or expense to the Trust under or by reason of said
contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered
into was reasonable and fair and not inconsistent with the
provisions of this Article VII or the By-Laws, if any. The same
person (including a firm, corporation, partnership, trust, or
association) may be the other party to contracts entered into
pursuant to Sections 1, 2 and 3 above or with respect to the
provision of custodian services to the Trust, and any individual
may be financially interested in or otherwise affiliated with
persons who are parties to any or all of the contracts
mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to
Sections 1 and 2 of this Article VII shall be consistent with and
subject to the applicable requirements of Sections 12 and 15 of
the 1940 Act and the rules and orders thereunder (including
any amendments thereto or other applicable Act of Congress
hereafter enacted) with respect to its continuance in effect, its
termination, and the method of authorization and approval of
such contract or renewal thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote
(i) for the election of Trustees as provided in Article IV,
Section 2, (ii) for the removal of Trustees as provided in
Article IV, Section 3(d), (iii) with respect to any investment
advisory or management contract as provided in Article VII,
Section 1, (iv) with respect to any termination or
reorganization of the Trust as provided in Article XI, Section
4, (v) with respect to the amendment of this Declaration of
Trust to the extent and as provided in Article XI, Section 7,
(vi) to the same extent as the shareholders of a Massachusetts
business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust or the
Shareholders, provided, however, that a Shareholder of a
particular Series shall not be entitled to bring any derivative or
class action on behalf of any other Series of the Trust, and
provided further that, within a Series, a Shareholder of a
particular Class shall not be entitled to bring any derivative or
class action on behalf of any other Class except with respect to
matters sharing a common fact pattern with said Shareholder's
own Class; and (vii) with respect to such additional matters
relating to the Trust as may be required or authorized by law,
by this Declaration of Trust, or the By-Laws of the Trust, if
any, or any registration of the Trust with the Commission or
any State, or as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all Shares shall
be voted by individual Series, except (i) when required by the
1940 Act, Shares shall be voted in the aggregate and not by
individual Series; and (ii) when the Trustees have determined
that the matter affects only the interests of one or more
Classes, then only the Shareholders of such Class or Classes
shall be entitled to vote thereon. Each whole Share shall be
entitled to one vote as to any matter on which it is entitled to
vote, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. 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 by law, this Declaration of Trust or any
By-Laws of the Trust to be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be held
as specified in Section 2 of Article IV at the principal office of
the Trust or such other place as the Trustees may designate.
Special meetings of the Shareholders or any Series or Class
thereof may be called by the Trustees and shall be called by the
Trustees upon the written request of Shareholders owning at
least one-tenth of the outstanding Shares entitled to vote.
Whenever ten or more Shareholders meeting the qualifications
set forth in Section 16(c) of the 1940 Act, as the same may be
amended from time to time, seek the opportunity of furnishing
materials to the other Shareholders with a view to obtaining
signatures on such a request for a meeting, the Trustees shall
comply with the provisions of said Section 16(c) and any rules
or orders thereunder with respect to providing such
Shareholders access to the list of the Shareholders of record of
the Trust or the mailing of such materials to such Shareholders
of record. Shareholders shall be entitled to at least fifteen days'
notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in
person or by proxy shall be a quorum for the transaction of
business at a Shareholders' meeting, except that where any
provision of law or of this Declaration of Trust permits or
requires that holders of any Series or Class thereof shall vote
as a Series or Class, then a majority of the aggregate number
of Shares of that Series or Class thereof entitled to vote shall
be necessary to constitute a quorum for the transaction of
business by that Series or Class. Any lesser number shall be
sufficient for adjournments. Any adjourned session or sessions
may be held, within one hundred twenty (120) days after the
date set for the original meeting, without the necessity of
further notice. Except when a larger vote is required by any
provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted in person or by proxy shall decide
any questions and a plurality shall elect a Trustee, provided that
where any provision of law or of this Declaration of Trust
permits or requires that the holders of any Series or Class shall
vote as a Series or Class, then a majority of the Shares of that
Series or Class voted on the matter shall decide that matter
insofar as that Series or Class is concerned.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and
pay dividends and other distributions. The amount of such
dividends and the payment of them shall be wholly in the
discretion of the Trustees.
(b) The Trustees shall have power, to the fullest
extent permitted by the laws of the Commonwealth of
Massachusetts, at any time to declare and cause to be paid
dividends on Shares of a particular Series, from the assets
belonging to that Series, which dividends and other
distributions, at the election of the Trustees, may be paid daily
or otherwise pursuant to a standing resolution or resolutions
adopted only once or with such frequency as the Trustees may
determine, and may be payable in Shares of that Series or Class
thereof, as appropriate, at the election of each Shareholder of
that Series or Class. All dividends and distributions on Shares
of a particular Series shall be distributed pro rata to the holders
of that Series in proportion to the number of Shares of that
Series held by such holders at the date and time of record
established for the payment of such dividends or distributions,
except that such dividends and distributions shall appropriately
reflect expenses allocated to a particular Class of such Series.
(c) Anything in this instrument to the contrary
notwithstanding, the Trustees may at any time declare and
distribute a "stock dividend" pro rata among the Shareholders
of a particular Series or of a Class thereof as of the record date
of that Series (fixed as provided in Section 3 of Article XI
hereof).
REDEMPTIONS
Section 2. In case any holder of record of Shares of a
particular Series or Class desires to dispose of his Shares, he
may deposit at the office of the transfer agent or other
authorized agent of that Series a written request or such other
form of request as the Trustees may from time to time
authorize, requesting that the Series purchase the Shares in
accordance with this Section 2; and the Shareholder so
requesting shall be entitled to require the Series to purchase,
and the Series or the principal underwriter of the Series shall
purchase his said Shares, but only at the Net Asset Value of the
Series or Class held by the Shareholder (as described in Section
3 hereof) minus any applicable sales charge or redemption or
repurchase fee. The Series shall make payment for any such
Shares to be redeemed, as aforesaid, in cash or property from
the assets of that Series and payment for such Shares shall be
made by the Series or the principal underwriter of the Series to
the Shareholder of record within seven (7) days after the date
upon which the request is effective; provided, however, that if
Shares being redeemed have been purchased by check, the
Trust may postpone payment until the Trust has assurance that
good payment has been collected for the purchase of the
Shares. The Trust may require Shareholders to pay a sales
charge to the Trust, the underwriter or any other person
designated by the Trustees upon redemption or repurchase of
Shares of any Series or Class thereof, in such amount as shall
be determined from time to time by the Trustees. The amount
of such sales charge may but need not vary depending on
various factors, including without limitation the holding period
of the redeemed or repurchased Shares. The Trustees may also
charge a redemption or repurchase fee in such amount as may
be determined from time to time by the Trustees.
DETERMINATION OF NET ASSET VALUE AND
VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series
shall mean that amount by which the assets of that Series
exceed its liabilities, all as determined by or under the direction
of the Trustees. Net Asset Value per Share shall be determined
separately for each Series of Shares and shall be determined on
such days and at such times as the Trustees may determine.
Such determination may be made on a Series-by-Series or
Class-by-Class basis, as appropriate, and shall include any
expenses allocated to a specific Series or Class. The
determination shall be made with respect to securities for which
market quotations are readily available at the market value of
such securities; and with respect to other securities and assets,
at the fair value as determined in good faith by the Trustees,
provided, however, that the Trustees, without Shareholder
approval, may alter the method of appraising portfolio
securities insofar as permitted under the 1940 Act and the
rules, regulations and interpretations thereof promulgated or
issued by the Commission or insofar as permitted by any order
of the Commission applicable to the Series. The Trustees may
delegate any of their powers and duties under this Section 3
with respect to appraisal of assets and liabilities. At any time
the Trustees may cause the Net Asset Value per Share last
determined to be determined again in a similar manner and may
fix the time when such redetermined values shall become
effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. Notwithstanding Section 2 hereof, the
Trustees may declare a suspension of the right of redemption
or postpone the date of payment as permitted under the 1940
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 next 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 the
case of a suspension of the right of redemption, a Shareholder
may either withdraw his request for redemption or receive
payment based on the Net Asset Value per Share existing after
the termination of the suspension.
ARTICLE X
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a particular Series
shall look only to the assets of the Trust or such Series, as the
case may be, for payment under such credit, contract or claim;
and neither the Shareholders nor the Trustees, nor any of the
Trust's officers, employees or agents, whether past, present or
future, nor any other Series shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever executed
or done by or on behalf of the Trust, any Series, or the
Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or
with respect to their or his capacity as Trustees or Trustee and
neither such Trustees or Trustee nor the Shareholders shall be
personally liable thereon. Every note, bond, contract,
instrument, certificate or undertaking made or issued by the
Trustees or by any officers or officer shall give notice that the
same was executed or made by them on behalf of the Trust or
by them as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument are not
binding upon any of them or the Shareholders individually but
are binding only upon the assets and property of the Trust or
the particular Series in question, as the case may be, but the
omission thereof shall not operate to bind any Trustees or
Trustee or officers or officer or Shareholders or Shareholder
individually.
Section 2. Provided they have exercised reasonable
care and have acted under the reasonable belief that their
actions are in the best interest of the Trust, the Trustees and
officers of the Trust shall not be responsible for or liable in any
event for neglect or wrongdoing of them or any officer, agent,
employee, investment adviser or independent contractor of the
Trust, but nothing contained in this Declaration of Trust shall
protect any Trustee or officer against any liability to which he
would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
INDEMNIFICATION
Section 3.
(a) Subject to the exceptions and limitations
contained in Section 3(b) below:
(i) every person who is, or has been a
Trustee or officer of the Trust (hereinafter referred to as
"Covered Person") shall be indemnified by the appropriate
Series to the fullest extent permitted by law against liability and
against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which
he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal or other, including appeals), actual
or threatened while in office or thereafter, and the words
"liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder
to a Covered Person:
(i) who shall have been adjudicated by a
court or body before which the proceeding was brought (A) to
be liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to
have acted in good faith in the reasonable belief that his action
was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there
has been a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office,
(A) by the court or other body
approving the settlement;
(B) by at least a majority of those
Trustees who are neither interested persons of
the Trust nor are parties to the matter based
upon a review of readily available facts (as
opposed to a full trial-type inquiry); or
(C) by written opinion of
independent legal counsel based upon a review
of readily available facts (as opposed to a full
trial-type inquiry);
provided, however, that any Shareholder may, by appropriate
legal proceedings, challenge any such determination by the
Trustees, or by independent counsel.
(c) The rights of indemnification herein provided
may be insured against by policies maintained by the Trust,
shall be severable, shall not be exclusive of or affect any other
rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be
such Trustee or officer and shall inure to the benefit of the
heirs, executors and administrators of such a person. Nothing
contained herein shall affect any rights to indemnification to
which Trust personnel, other than Trustees and officers, and
other persons may be entitled to by contract or otherwise under
law.
(d) Expenses in connection with the preparation
and presentation of a defense to any claim, action, suit or
proceeding of the character described in paragraph (a) of this
Section 3 may be paid by the applicable Series from time to
time prior to final disposition thereof upon receipt of an
undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the applicable Series if it is
ultimately determined that he is not entitled to indemnification
under this Section 3; provided, however, that either (a) such
Covered Person shall have provided appropriate security for
such undertaking, (b) the Trust is insured against losses arising
out of any such advance payments or (c) either a majority of
the Trustees who are neither interested persons of the Trust
nor parties to the matter, or independent legal counsel in a
written opinion, shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry or full
investigation), that there is reason to believe that such Covered
Person will not be disqualified from indemnification under this
Section 3.
SHAREHOLDERS
Section 4. In case any Shareholder or former
Shareholder of any Series of the Trust 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 assets belonging to the applicable Series to be held
harmless from and indemnified against all loss and expense
arising from such liability. The Series shall, upon request by
the Shareholder, assume the defense of any claim made against
the Shareholder for any act or obligation of the Series and
satisfy any judgment thereon.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust
and not a partnership is created hereby. No Trustee hereunder
shall have any power to bind personally either the Trust's
officers or any Shareholder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE,
NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers
and discretion hereunder in good faith and with reasonable care
under the circumstances then prevailing, shall be binding upon
everyone interested. Subject to the provisions of Article X, the
Trustees shall not be liable for errors of judgment or mistakes
of fact or law. The Trustees may take advice of counsel or
other experts with respect to the meaning and operation of this
Declaration of Trust, and subject to the provisions of Article X,
shall be under no liability for any act or omission in accordance
with such advice or for failing to follow such advice. The
Trustees shall not be required to give any bond as such, nor
any surety if a bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer
books of the Trust for a period not exceeding sixty (60) days
preceding the date of any meeting of Shareholders, or the date
for the payment of any dividends, or the date for the allotment
of rights, or the date when any change or conversion or
exchange of Shares shall go into effect; or in lieu of closing the
stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding ninety (90) days preceding the
date of any meeting of Shareholders, or the date for payment
of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of Shares
shall go into effect, as a record date for the determination of
the Shareholders entitled to notice of, and to vote at, any such
meeting, or to receive payment of such dividend, or to receive
such allotment or rights, or to exercise such rights in respect of
any such change, conversion or exchange of Shares, and in
such case such Shareholders and only such Shareholders as
shall be Shareholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any Shares on the books of the
Trust after any such record date fixed or aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of
time but subject to the provisions of sub-section (b) of this
Section 4.
(b) Subject to a Majority Shareholder Vote of each
Series affected by the matter or, if applicable, to a Majority
Shareholder Vote of the Trust, the Trustees may
(i) sell, convey, merge and transfer all or
substantially all of the assets of the Trust or any affected Series
to another Series or to a trust, partnership, association or
corporation organized under the laws of any state which is an
investment company as defined in the 1940 Act, for adequate
consideration which may include the assumption of all
outstanding obligations, taxes and other liabilities, accrued or
contingent, of the Trust or any affected Series, and which may
include shares of beneficial interest or stock of such Series,
trust, partnership, association or corporation; or
(ii) at any time sell and convert into money
all or substantially all of the assets of the Trust or any affected
Series.
Upon making provision for the payment of all known
liabilities of the Trust or any affected Series in either (i) or (ii),
by such assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably
among the holders of the Shares of the Trust or any affected
Series then outstanding; however, the payment to any
particular Class within such Series may be reduced by any fees,
expenses or charges allocated to that Class. Nothing in this
Declaration of Trust shall preclude the Trustees from
distributing such remaining proceeds or assets so that holders
of the Shares of a particular Class of the Trust or any affected
Series receive as their ratable distribution shares solely of an
analogous class, as determined by the Trustees, of such trust,
partnership, association or corporation.
The Trustees may take any of the actions specified in
clauses (i) and (ii) above without obtaining a Majority
Shareholder Vote of any Series or the Trust if a majority of the
Trustees makes a determination that the continuation of a
Series or the Trust is not in the best interests of such Series,
the Trust or their respective Shareholders as a result of factors
or events adversely affecting the ability of such Series or the
Trust to conduct its business and operations in an economically
viable manner. Such factors and events may include the
inability of a Series or the Trust to maintain its assets at an
appropriate size, changes in laws or regulations governing the
Series or Trust or affecting assets of the type in which such
Series or the Trust invests or economic developments or trends
having a significant adverse impact on the business or
operations of such Series or the Trust.
(c) Upon completion of the distribution of the
remaining proceeds or the remaining assets as provided in sub-section
(b), the Trust or any affected Series shall terminate and
the Trustees shall be discharged of any and all further liabilities
and duties hereunder with respect thereto and the right, title
and interest of all parties therein shall be canceled and
discharged.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and
of each amendment hereto shall be kept at the office of the
Trust where it may be inspected by any shareholder. A copy of
this instrument and of each amendment hereto shall be filed by
the Trustees with the Secretary of the Commonwealth of
Massachusetts and the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be
required. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to whether
or not any such amendments to this Declaration of Trust have
been made and as to any matters in connection with the Trust
hereunder, and with the same effect as if it were the original,
may rely on a copy certified by an officer or Trustee of the
Trust to be a copy of this instrument or of any such
amendments. In this instrument or in any such amendments,
references to this instrument, and all expressions like "herein,"
"hereof" and "hereunder," shall be deemed to refer to this
instrument as amended from time to time. The masculine
gender shall include the feminine and neuter genders. Headings
are placed herein for convenience of reference only, and in 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.
APPLICABLE LAW
Section 6. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is created
under and is to be governed by and construed and administered
according to the laws of said Commonwealth. The Trust shall
be of the type commonly called a Massachusetts business trust,
and, without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a
trust.
AMENDMENTS
Section 7. All rights granted to the Shareholders under
this Declaration of Trust are granted subject to the reservation
of the right to amend this Declaration of Trust as herein
provided, except that no amendment shall repeal the limitations
on personal liability of any Shareholder or Trustee or repeal the
prohibition of assessment upon the Shareholders without the
express consent of each Shareholder or Trustee involved.
Subject to the foregoing, the provisions of this Declaration of
Trust (whether or not related to the rights of Shareholders)
may be amended at any time, so long as such amendment does
not adversely affect the rights of any Shareholder with respect
to which such amendment is or purports to be applicable and
so long as such amendment is not in contravention of
applicable law, including the 1940 Act, by an instrument in
writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to the vote of a majority of such
Trustees). Except as provided in the first sentence of this
Section 7, any amendment to this Declaration of Trust that
adversely affects the rights of Shareholders may be adopted at
any time by an instrument signed in writing by a majority of the
then Trustees (or by an officer of the Trust pursuant to the
vote of a majority of such Trustees) when authorized to do so
by Majority Shareholder Vote; provided, however, that an
amendment that shall affect the Shareholders of one or more
Series (or of one or more Classes), but not the Shareholders of
all outstanding Series (or Classes), shall be authorized by a
Majority Shareholder Vote of each Series (or Class, as the case
may be) affected, and no vote of a Series (or Class) not
affected shall be required. Subject to the foregoing, any such
amendment shall be effective as provided in the instrument
containing the terms of such amendment or, if there is no
provision therein with respect to effectiveness, upon the
execution of such instrument and of a certificate (which may be
a part of such instrument) executed by a Trustee or officer to
the effect that such amendment has been duly adopted. Copies
of the amendment to this Declaration of Trust shall be filed as
specified in Section 5 of this Article XI. A restated Declaration
of Trust, integrating into a single instrument all of the
provisions of the Declaration of Trust which are then in effect
and operative, may be executed from time to time by a majority
of the Trustees and shall be effective upon filing as specified in
such Section 5.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall be
determined by the Trustees in accordance with the By-Laws,
provided, however, that the Trustees may, without Shareholder
approval, change the fiscal year of the Trust. <PAGE>
Schedule A
Series of the Trust
PaineWebber Capital Appreciation Fund
Classes of Shares of Each Series
An unlimited number of shares of beneficial interest have been
established by the Board as Class A shares, Class B shares,
Class C shares and Class Y shares of each of the above Series.
Each of the Class A shares, Class B shares, Class C shares and
Class Y shares of a Series represents interests in the assets of
only that Series and has the same preferences, conversion and
other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of
redemption of shares, except as provided in the Trust's
Declaration of Trust and as set forth below with respect to the
Class B shares of each Series:
1. Each Class B share, other than a share purchased
through the reinvestment of a dividend or a
distribution with respect to the Class B share,
shall be converted automatically, and without any
action or choice on the part of the holder thereof,
into Class A shares of the same Series, based on
the relative net asset value of each such class at
the time of the calculation of the net asset value
of such class of shares on the date that is the first
Business Day (as defined in the Series' prospectus
and/or statement of additional information) of the
month in which the sixth anniversary of the
issuance of such Class B shares occurs (which,
for the purpose of calculating the holding period
required for conversion, shall mean (i) the date
on which the issuance of such Class B shares
occurred or (ii) for Class B shares obtained
through an exchange, the date on which the
issuance of the Class B shares of an eligible
PaineWebber fund occurred, if such shares were
exchanged directly, or through a series of
exchanges for the Series' Class B shares (the
"Conversion Date")).
2. Each Class B share purchased through the
reinvestment of a dividend or a distribution with
respect to the Class B shares and the dividends
and distributions on such shares shall be
segregated in a separate sub-account on the stock
records of the Series for each of the holders of
record thereof. On any Conversion Date, a
number of the shares held in the sub-account of
the holder of record of the share or shares being
converted, calculated in accordance with the next
following sentence, shall be converted
automatically, and without any action or choice
on the part of the holder thereof, into Class A
shares of the same Series. The number of shares
in the holder's sub-account so converted shall
bear the same relation to the total number of
shares maintained in the sub-account on the
Conversion Date as the number of shares of the
holder converted on the Conversion Date
pursuant to Paragraph 2(a) hereof bears to the
total number of Class B shares of the holder on
the Conversion Date not purchased through the
automatic reinvestment of dividends or
distributions with respect to the Class B shares.
3. The number of Class A shares into which a Class
B share is converted pursuant to paragraphs 1
and 2 hereof shall equal the number (including for
this purpose fractions of a share) obtained by
dividing the net asset value per share of the Class
B shares for purposes of sales and redemptions
thereof at the time of the calculation of the net
asset value on the Conversion Date by the net
asset value per share of the Class A shares for
purposes of sales and redemptions thereof at the
time of the calculation of the net asset value on
the Conversion Date.
4. On the Conversion Date, the Class B shares
converted into Class A shares will cease to
accrue dividends and will no longer be
outstanding and the rights of the holders thereof
will cease (except the right to receive declared
but unpaid dividends to the Conversion Date).
For purposes of Paragraph 1 above, the term "eligible
PaineWebber fund" includes any and all mutual funds for which
PaineWebber Incorporated or Mitchell Hutchins Asset
Management Inc. serves as investment adviser that offer shares
with a contingent deferred sales charge imposed upon certain
redemptions of such shares and that are exchangeable with the
Class B shares of the Series.
<PAGE>
IN WITNESS WHEREOF, the undersigned, being the
all the Trustees of the Trust, have executed this Amended and
Restated Declaration of Trust as of the day and year first above
written.
/s/ Margo N. Alexander
Margo N. Alexander
/s/ Meyer Feldberg
Meyer Feldberg
/s/ E. Garrett Bewkes, Jr.
A. Garrett Bewkes, Jr.
/s/ George W. Gowen
George W. Gowen
/s/ Richard Q. Armstrong
Richard Q. Armstrong
/s/ Frederic V. Malek
Frederic V. Malek
/s/ Richard R. Burt
Richard R. Burt
/s/ Carl W. Schafer
Carl W. Schafer
/s/ Mary C. Farrell
Mary C. Farrell
<PAGE>
PaineWebber Managed Assets Trust
Attachment 1
1. The principal place of business of
PaineWebber Managed Assets Trust
("Trust") is:
1285 Avenue of the Americas
New York, New York 10019
2. The Trustees of the Trust and their
business addresses* are:
Margo N. Alexander
Richard Q. Armstrong
78 West Brother Drive
Greenwich, CT 06830
E. Garrett Bewkes, Jr.
Richard R. Burt
1101 Connecticut Avenue, N.W.
Washington, D. C. 20036
Mary C. Farrell
Meyer Feldberg
Columbia University
101 Uris Hall
New York, New York 10027
George W. Gowen
666 Third Avenue
New York, New York 10017
Frederic V. Malek
1455 Pennsylvania Avenue, N.W.
Suite 350
Washington, D. C. 20004
Carl W. Schafer
P. O. Box 1164
Princeton, N. J. 08542
* Unless otherwise indicated, the
business address of each Trustee is
1285 Avenue of the Americas, New
York, New York 10019
<PAGE>
Exhibit 77 Q(1)
PAINEWEBBER MANAGED ASSETS
TRUST
A Massachusetts Business Trust
RESTATED BY-LAWS
November 19, 1997
<PAGE>
BY-LAWS OF PAINEWEBBER MANAGED ASSETS
TRUST
ARTICLE I
DECLARATION OF TRUST,
LOCATION OF OFFICES AND SEAL
Section 1.01. Declaration of Trust: These By-Laws
shall be subject to the Declaration of Trust, as from time to
time in effect (the "Declaration of Trust"), of PaineWebber
Managed Assets Trust, the Massachusetts business trust
established by the Declaration of Trust (the "Trust").
Section 1.02. Principal Office of the Trust: Resident
Agent: The principal office of the Trust shall be located in the
City of New York, New York. Its resident agent in
Massachusetts shall be CT Corporation System, 2 Oliver
Street, Boston, Massachusetts, or such other person as the
Trustees may from time to time designate. The Trust may
establish and maintain such other offices and places of business
as the Trustees may, from time to time, determine.
Section 1.03. Seal: The seal of the Trust shall be
circular in form and shall bear the name of the Trust. The form
of the seal shall be subject to alteration by the Trustees and the
seal may be used by causing it or a facsimile to be impressed or
affixed or printed or otherwise reproduced. Any officer or
Trustee of the Trust shall have authority to affix the seal of the
Trust to any document, instrument or other paper executed and
delivered by or on behalf of the Trust; however, unless
otherwise required by the Trustees, the seal shall not be
necessary to be placed on and its absence shall not impair the
validity of any document, instrument, or other paper executed
by or on behalf of the Trust.
ARTICLE II
SHAREHOLDERS
Section 2.01. Shareholder Meetings: Meetings of the
shareholders may be called at any time by the Trustees or, if the
Trustees shall fail to call any meeting for a period of 30 days
after written request of Shareholders owning at least one-tenth
of the outstanding shares entitled to vote, then such
Shareholders may call such meeting. Each call of a meeting
shall state the place, date, hour and purposes of the meeting.
Section 2.02. Place of Meetings: All meetings of the
Shareholders shall be held at the principal office of the Trust,
except that the Trustees may designate a different place of
meeting within the United States.
Section 2.03. Notice of Meeting: The secretary or an
assistant secretary or such other officer as may be designated
by the Trustees shall cause notice of the place, date and hour,
and purpose or purposes for which the meeting is called, to be
mailed, not less than fifteen days before the date of the
meeting, to each Shareholder entitled to vote at such meeting,
at his address as it appears on the records of the Trust at the
time of such mailing. Notice of any Shareholders' meeting
need not be given to any Shareholder if a written waiver of
notice, executed before or after such meeting, is filed with the
records of such meeting, or to any Shareholder who shall
attend such meeting in person or by proxy. Notice of
adjournment of a Shareholders' meeting to another time or
place need not be given, if such time and place are announced
at the meeting.
Section 2.04. Ballots: The vote upon any question
shall be by ballot whenever requested by any person entitled to
vote, but, unless such a request is made, voting may be
conducted in any way approved by the meeting.
Section 2.05. Voting; Proxies: Shareholders entitled
to vote may vote either in person or by proxy, provided that
such proxy to act is authorized to act by (1) a written
instrument, dated not more than eleven months before the
meeting and executed either by the Shareholder or by his or her
duly authorized attorney in fact (who may be so authorized by
a writing or by any non-written means permitted by the laws of
the Commonwealth of Massachusetts) or (2) such electronic,
telephonic, computerized or other alternative means as may be
approved by a resolution adopted by the Trustees. Proxies
shall be delivered to the secretary of the Trust or other person
responsible for recording the proceedings before being voted.
A proxy with respect to shares held in the name of two or more
persons shall be valid if executed by one of them unless at or
prior to exercise of such proxy the Trust receives a specific
written notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies shall
entitle the holder thereof to vote at any adjournment of a
meeting. A proxy purporting to be exercised by or on behalf
of a Shareholder shall be deemed valid unless challenged at or
prior to its exercise and the burden of proving invalidity shall
rest on the challenger. At all meetings of the Shareholders,
unless the voting is conducted by inspectors, all questions
relating to the qualifications of voters, the validity of proxies,
and the acceptance or rejection of votes shall be decided by the
chairman of the meeting.
Section 2.06. Action Without a Meeting: Any action
to be taken by Shareholders may be taken without a meeting if
all Shareholders entitled to vote on the matter consent to the
action in writing and the written consents are filed with the
records of meetings of Shareholders of the Trust. Such
consent shall be treated for all purposes as a vote at a meeting.
ARTICLE III
TRUSTEES
Section 3.01. Regular Meetings: Regular meetings of
the Trustees may be held without further call or notice at such
places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting
following any such determination shall be given to absent
Trustees. A regular meeting of the Trustees may be held
without further call or notice immediately after and at the same
place as any meeting of the Shareholders.
Section 3.02. Special Meetings: Special meetings of
the Trustees may be held at any time and at any place
designated in the call of the meeting, when called by the
chairman of the Trustees or by two or more Trustees, provided
that notice thereof shall being given to each Trustee as set forth
in the Declaration of Trust.
Section 3.03. Committees: The Trustees, by vote of
a majority of the Trustees then in office, may elect from their
number an executive committee or other committees and may
delegate thereto some or all of their powers except those which
by law, by the Declaration of Trust, or by these By-Laws may
not be delegated. Except as the Trustees may otherwise
determine, any such committee may make rules for the conduct
of its business, but unless otherwise provided by the Trustees
or in such rules, its business shall be conducted so far as
possible in the same manner as is provided by these By-Laws
for the Trustees themselves. All members of such committees
shall hold such offices at the pleasure of the Trustees. The
Trustees may abolish any such committee at any time. Any
committee to which the Trustees delegate any of their powers
or duties shall keep records of its meetings and shall report its
actions to the Trustees. The Trustees shall have power to
rescind any action of any committee, but no such rescission
shall have retroactive effect. Any such committee may act by
meeting in person, by unanimous written consent, or by
telephonic meeting provided a quorum of members participates
in any such telephonic meeting.
Section 3.04. Other Committees: The Trustees may
appoint other committees, each consisting of one or more
persons, who need not be Trustees. Each such committee shall
have such powers perform such duties and abide by such
procedures as may be determined from time to time by the
Trustees, but shall not exercise any power which may lawfully
be exercised only by the Trustees or a committee of Trustees.
Section 3.05. Compensation: Each Trustee and each
committee member may receive such compensation for his
services and reimbursement for his expenses as may be fixed
from time to time by resolution of the Trustees.
ARTICLE IV
OFFICERS
Section 4.01. General: The officers of the Trust shall
be a president, a treasurer, a secretary and such other officers,
if any, as the Trustees from time to time may in their discretion
elect or appoint. The Trust may also have such agents, if any,
as the Trustees from time to time may in their discretion
appoint. Any officer may be but need not be a Trustee or
shareholder. Any two or more offices may be held by the same
person.
Section 4.02. Election and Term of Office: The
president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting in each calendar
year or at such later meeting in such year as the Trustees shall
determine ("Annual Meeting"). Other officers or agents, if any,
may be elected or appointed by the Trustees at said meeting or
at any other time. The president, treasurer and secretary shall
hold office until the next Annual Meeting and until their
respective successors are chosen and qualified, or in each case
until he dies, resigns, is removed or become disqualified. Each
other officer shall hold office and each agent shall retain his
authority at the pleasure of the Trustees.
Section 4.03. Powers: Subject to the other provisions
of these By-Laws, each officer shall have, in addition to the
duties and powers herein and in the Declaration of Trust set
forth, such duties and powers as are commonly incident to his
office as if the Trust were organized as a Massachusetts
business corporation and such other duties and powers as the
Trustees may from time to time designate.
Section 4.04. Chairman of the Board: The chairman
of the Board of Trustees, if one is so appointed, shall be chosen
from among the Trustees and may hold office only so long as
he continues to be a Trustee. Unless the Trustees otherwise
provide, the chairman, if any is so appointed, shall preside at all
meetings of the Shareholders and of the Trustees at which he
is present; may be ex officio a member of all committees
established by the Trustees; and shall have such other duties
and powers as specified herein and as may be assigned to him
by the Trustees.
Section 4.05. President: The president shall be the
chief executive officer of the Trust and, subject to the
supervision of the Trustees, shall have general charge of the
business, affairs and property of the Trust and general
supervision over its officers, employees and agents. He shall
exercise such other powers and perform such other duties as
from time to time may be assigned to him by the Trustees.
Section 4.06. Vice Presidents: The Trustees may from
time to time designate and elect one or more vice presidents
who shall have such powers and perform such duties as from
time to time may be assigned to them by the Trustees or the
president. At the request or in the absence or disability of the
president, the vice president (or, if there are two or more vice
presidents, then the senior of the vice presidents present and
able to act) may perform all the duties of the president and,
when so acting, shall have all the powers of and be subject to
all the restrictions upon the president.
Section 4.07. Treasurer and Assistant Treasurers: The
treasurer shall be the principal financial and accounting officer
of the Trust and shall have general charge of the finances and
books of account of the Trust. Except as otherwise provided
by the Trustees, he shall have general supervision of the funds
and property of the Trust and of the performance by the
custodian of its duties with respect thereto. He shall render to
the Trustees, whenever directed by the Trustees, an account of
the financial condition of the Trust and of all his transactions as
treasurer; and as soon as possible after the close of each
financial year he shall make and submit to the Trustees a like
report for such financial year. He shall perform all the acts
incidental to the office of treasurer, subject to the control of the
Trustees.
Any assistant treasurer may perform such duties of the
treasurer as the treasurer or the Trustees may assign, and, in
the absence of the treasurer, (or, if there are two or more
assistant treasurers, then the senior of the assistant treasurers
present and able to act) may perform all the duties of the
treasurer, subject to the control of the Trustees.
Section 4.08. Secretary and Assistant Secretaries: The
secretary shall attend to the giving and serving of all notices of
the Trust and shall record all proceedings of the meetings of
the Shareholders and Trustees in books to be kept for that
purpose. He shall keep in safe custody the seal of the Trust,
and shall have charge of the records of the Trust, all of which
shall at all reasonable times be open to inspection by the
Trustees. He shall perform such other duties as appertain to
his office or as may be required by the Trustees.
Any assistant secretary may perform such duties of the
secretary as the secretary or the Trustees may assign, and, in
the absence of the secretary, (or, if there are two or more
assistant secretaries. then the senior of the assistant secretaries
present and able to act) may perform all the duties of the
secretary.
Section 4.09. Subordinate Officers: The Trustees from
time to time may appoint such other officers or agents as they
may deem advisable, each of whom shall have such title, hold
office for such period, have such authority and perform such
duties as the Trustees may determine. The Trustees from time
to time may delegate to one or more officers or agents the
power to appoint any such subordinate officers or agents and
to prescribe their respective rights, terms of office, authorities
and duties.
Section 4.10. Remuneration: The salaries or other
compensation of the officers of the Trust shall be fixed from
time to time by resolution of the Trustees, except that the
Trustees may by resolution delegate to any person or group of
persons the power to fix the salaries or other compensation of
any subordinate officers or agents appointed in accordance
with the provisions of Section 4.09 hereof.
Section 4.11. Surety Bonds: The Trustees may require
any officer or agent of the Trust to execute a bond (including,
without limitation, any bond required by the Investment
Company Act of 1940, as amended, ("1940 Act") and the rules
and regulations of the Securities and Exchange Commission
("Commission")) to the Trust in such sum and with such surety
or sureties as the Trustees may determine, conditioned upon
the faithful performance of his duties to the Trust including
responsibility for negligence and for the accounting of any of
the Trust's property, funds or securities that may come into his
hands.
Section 4.12. Resignation: Any officer may resign his
office at any time by delivering a written resignation to the
Trustees, the president, the secretary, or any assistant
secretary. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
Section 4.13. Removal: Any officer may be removed
from office whenever in the judgment of the Trustees the best
interest of the Trust will be served thereby, by the vote of a
majority of the Trustees given at a regular meeting or any
special meeting of the Trustees called for such purpose. In
addition, any officer or agent appointed in accordance with the
provision of Section 4.09 hereof may be removed, either with
or without cause, by any officer upon whom such power of
removal shall have been conferred by the Trustees.
Section 4.14. Vacancies and Newly Created Offices:
If any vacancy shall occur in any office by reason of death,
resignation, removal, disqualification or other cause, or if any
new office shall be created, such vacancies or newly created
offices may be filled by the Trustees at any regular or special
meeting of the Trustees or, in the case of any office created
pursuant to Section 4.09 hereof, by any officer upon whom
such power shall have been conferred by the Trustees.
ARTICLE V
CUSTODIAN
Section 5.01. Employment of Custodian: The Trustees
shall at all times employ one or more banks or trust companies
organized under the laws of the U.S. or one of the states
thereof provided that each such bank or trust company has
capital, surplus and undivided profits of at least two million
dollars ($2,000,000) as custodian with authority as the Trust's
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in these By-Laws:
(1) to hold the securities owned by the Trust and
deliver the same upon written order, or oral
order if confirmed in writing, or order delivered
by such electromechanical or electronic devices
as are agreed to by the Trust and the custodian,
if such procedures have been authorized in
writing by the Trust;
(2) to receive and give receipt for any moneys due
to the Trust and deposit the same in its own
banking department or elsewhere as the
Trustees may direct; and
(3) to disburse such moneys upon orders or
vouchers;
and the Trust may also enjoy such custodian as its agent:
(1) to keep the books and accounts of the Trust
and furnish clerical and accounting services;
and
(2) to compute, if authorized to do so by the
Trustees, the Net Asset Value of any Series or
Class (which terms are defined in the
Declaration of Trust) in accordance with the
provisions of the Declaration of Trust;
all upon such basis of compensation as may be agreed upon
between the Trustees and the custodian. If so directed by a
vote of a majority of the outstanding shares of the Trust
entitled to vote, the custodian shall deliver and pay over all
property of the Trust held by it as specified in such vote.
The Trustees may also authorize the custodian to
employ one or more sub-custodians from time to time to
perform such of the acts and services of the custodian, and
upon such terms and conditions, as may be agreed upon
between the custodian and such sub-custodian and approved by
the Trustees, provided that in every case such sub-custodian
shall be a bank or trust company organized under the laws of
the United States or one of the states thereof and having
capital, surplus and undivided profits of at least two million
dollars ($2,000,000) or such other person as may be permitted
by the Commission, or otherwise in accordance with the 1940
Act.
Section 5.02. Use of Central Securities Handling
System: Subject to such rules, regulations and orders as the
Commission may adopt, the Trustees may direct the custodian
to deposit any or all of the securities owned by the Trust (1) in
a system for the central handling of securities established by a
national securities exchange or a national securities association
registered with the Commission under the Securities Exchange
Act of 1934, pursuant to which system all securities of any
particular class or series of any issuer deposited within the
system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of
such securities, provided that all such deposits shall be subject
to withdrawal only upon the order of the Trust; or (2) with
such other person as may be permitted by the Commission, or
otherwise in accordance with the 1940 Act.
ARTICLE VI
EXECUTION OF PAPERS
Section 6.01. General: Except as the Trustees may
generally or in particular cases authorize the execution thereof
in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts, and other obligations made,
accepted, or endorsed by the Trust shall be executed by the
president, any vice president, or the treasurer, or by whomever
else shall be designated for that purpose by the Trustees, and
need not bear the seal of the Trust.
ARTICLE VII
SHARES OF BENEFICIAL INTEREST
Section 7.01. Share Certificates: No certificates
certifying the ownership of Shares shall be issued except as the
Trustees may otherwise authorize. In the event that the
Trustees authorize the issuance of Share certificates, subject to
the provisions of Section 7.03, each Shareholder shall be
entitled to a certificate stating the number of shares owned by
him, in such form as shall be prescribed from time to time by
the Trustees. Such certificate shall be signed by the president
or a vice president and by the treasurer, assistant treasurer,
secretary or assistant secretary. Such signatures may be
facsimiles if the certificate is signed by a transfer or shareholder
services agent or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or
whose facsimile signature has been placed on such certificate
shall have ceased to be such officer before such certificate is
issued, it may be issued by the Trust with the same effect as if
he were such officer at the time of its issue.
In lieu of issuing certificates for shares, the Trustees,
the transfer agent or shareholder services agent may either
issue receipts therefor or may keep accounts upon the books of
the Trust for the record holders of such shares, who shall in
either case be deemed, for all purposes hereunder, to be the
holders of certificates for such shares as if they had accepted
such certificates and shall be held to have expressly assented
and agreed to the terms hereof.
Section 7.02. Loss of Certificates: In the case of the
alleged loss or destruction or the mutilation of a Share
certificate, a duplicate certificate may be issued in place
thereof, upon such terms as the Trustees may prescribe.
Section 7.03. Discontinuance of Issuance of
Certificates: The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to
each Shareholder, require the surrender of Share certificates to
the Trust for cancellation. Such surrender and cancellation
shall not affect the ownership of Shares in the Trust.
Section 7.04. Equitable Interest Not Recognized: The
Trust shall be entitled to treat the holder of record of any Share
or Shares of the Trust as the holder in fact thereof, and shall
not be bound to recognize any equitable or other claim of
interest in such Share or Shares on the part of any other person
except as may be otherwise expressly provided by law.
Section 7.05. Transfer of Shares: The Shares of the
Trust shall be transferable only by transfer recorded on the
books of the Trust, in person or by attorney.
ARTICLE VIII
FISCAL YEAR; ACCOUNTANT
Section 8.01. Fiscal Year: The fiscal year of the Trust
shall end on such date in each year as the Trustees shall from
time to time determine.
Section 8.02. Accountant:
(a) The Trust shall employ an independent public
accountant or firm of independent public accountants as its
accountant to examine the accounts of the Trust and to sign
and certify the financial statements of the Trust. The
accountant's certificates and reports shall be addressed both to
the Trustees and to the Shareholders of the Trust.
(b) Any vacancy occurring due to the death or
resignation of the accountant may be filled by a majority vote
of the Trustees who are not interested persons of the Trust.
ARTICLE IX
INSURANCE
Section 9.01. Insurance of Officers, Trustees, and
Employees: The Trust may purchase and maintain insurance
on behalf of any person who is or was a Trustee, officer or
employee of the Trust, or is or was serving at the request of the
Trust as a Trustee, officer or employee of a corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the
Trust would have the power to indemnify him against such
liability.
The Trust may not acquire or obtain a contract for
insurance that protects or purports to protect any Trustee or
officer of the Trust against any liability to the Trust or its
Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
ARTICLE X
AMENDMENTS; REPORTS; MISCELLANEOUS
Section 10.1. Amendments: These By-Laws may be
amended or repealed, in whole or in part, by a majority of the
Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such majority.
Section 10.2. Reports: The Trustees shall at least
semiannually submit to the Shareholders a written report of the
transactions of the Trust, including financial statements that
shall at least annually be certified by independent public
accountants.
Section 10.3. Gender: As used in these By-Laws, the
masculine gender shall include the feminine and neuter genders.
Section 10.3. Headings: Headings are placed in these
bylaws for convenience of reference only and in case of any
conflict, the text of these By-Laws rather than the headings
shall control.
Section 10.4. Inspection of Books: The Trustees shall
from time to time determine whether and to what extent, and
at what times and places, and under what conditions and
regulations the accounts and books of the Trust or any of them
shall be open to the inspection of the Shareholders, and no
Shareholder shall have any right to inspect any account or book
or document of the Trust except as conferred by law or
otherwise by the Trustees.
Report of Independent Auditors
To the Shareholders and Board of Trustees of
PaineWebber MidCap Fund
In planning and performing our audit of the financial statements of
PaineWebber MidCap Fund (formerly PaineWebber Capital Appreciation Fund) for
the year ended March 31, 1998, we considered its internal control, including
control activities for safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion on the financial
statements and to comply with the requirements of Form N-SAR, not to provide
assurance on the internal control.
The management of PaineWebber MidCap Fund is responsible for establishing and
maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for
external purposes that are fairly presented in conformity with generally
accepted accounting principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may become inadequate because
of changes in conditions or that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which the design or
operation of one or more of the internal control components does not reduce to
a relatively low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur and
not be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
the internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above at
March 31, 1998.
This report is intended solely for the information and use of the
shareholders, board of trustees and management of PaineWebber MidCap Fund and
the Securities and Exchange Commission.
ERNST & YOUNG LLP
May 13, 1998
