1940 Act File No: 811-6393
As filed with the Securities and Exchange Commission
on
February 28, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 9 /X/
LFC UTILITIES TRUST
(Exact Name of Registrant as Specified in Declaration of Trust)
One Financial Center, Boston, Massachusetts 02111
(Address of Principal Executive Offices)
617-426-6750
(Registrant's Telephone Number, Including Area Code)
Name and Address
of Agent for Service Copy to:
Arthur O. Stern, Esq. John M. Loder, Esq.
Colonial Management Associates, Inc. Ropes & Gray
One Financial Center One International Place
Boston, MA 02111 Boston, MA 02110-2524
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EXPLANATORY NOTE
This Registration Statement has been filed by the Registrant pursuant to Section
8(b) of the Investment Company Act of 1940 (the "1940 Act"). However, beneficial
interests in the Registrant are not being registered under the Securities Act of
1933 (the "1933 Act") because such interests will be issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may only
be made by investment companies, insurance company separate accounts, common or
commingled trust funds or similar organizations or entities that are "accredited
investors" within the meaning of Regulation D under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any beneficial interests in the Registrant.
<PAGE>
Registrant's Registration Statement on Form N-1A under the 1940 Act is hereby
amended to read in its entirety as follows:
PART A
Responses to Items 1 through 3 have been omitted pursuant to paragraph 4 of
Instruction F of the General Instructions to Form N-1A.
Item 4. General Description of Registrant
Introduction
LFC Utilities Trust (the "Portfolio") is a no-load, diversified, open-end
management investment company which was organized as a trust under the laws of
the Commonwealth of Massachusetts on August 14, 1991. Beneficial interests in
the Portfolio (the "Interest" or "Interests") are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the Securities Act of 1933, as amended (the "1933
Act"). Investments in the Portfolio may be made only by investment companies,
insurance company separate accounts, common or commingled trust funds or similar
organizations or entities that are "accredited investors" within the meaning of
Regulation D under the 1933 Act. As of January 31, 1997, Colonial Global
Utilities Fund (the "Fund"), a series of Colonial Trust III, a Massachusetts
business trust, owned in excess of 99.99% of the Interests in the Portfolio and
the balance was owned by Liberty Financial Services, Inc. ("Liberty Services"),
a subsidiary of Liberty Financial Companies, Inc. ("Liberty Financial"). This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
The Portfolio's Investment Objective
The Portfolio's investment objective is to provide its investors with current
income and long-term growth of capital and income. It seeks to achieve its
objective by investing primarily in equity and debt securities of public utility
companies. The Portfolio is managed by Stein Roe & Farnham Incorporated ("the
Adviser"), successor to an investment advisory business that was founded in
1932.
How the Portfolio Pursues its Objective and Certain Risk Factors The basic
investment policies and strategies of the Portfolio are described in the Fund's
prospectus which is filed under and incorporated herein by reference to Part A
of Post-Effective Amendment No. 97 of the Registration Statement on Form N-1A of
Colonial Trust III, of which the Fund is a series. The EDGAR filing date and
accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Portfolio Turnover
The portfolio turnover of the Portfolio is disclosed under "Portfolio Turnover"
in Part 1 of the Fund's Statement of Additional Information which is filed under
and incorporated herein by reference to Part B of Post-Effective Amendment No.
97 of the Registration Statement on Form N-1A of Colonial Trust III, of which
the Fund is a series. The EDGAR filing date and accession number of such
Post-Effective Amendment is February 19, 1997, 0000021847-97-000033.
Item 5. Management of the Portfolio
The Management of the Portfolio's business and affairs is the responsibility of
the Board of Trustees of the Portfolio. Information regarding portfolio
managers, management fees and the placing of orders for the purchase and sale of
portfolio securities is described under "How the Fund and the Portfolio are
Managed" in the Fund's prospectus which is filed under and incorporated herein
by reference to Part A of Post-Effective Amendment No. 97 of the Registration
Statement on Form N-1A of Colonial Trust III, of which the Fund is a series. The
EDGAR filing date and accession number of such Post-Effective Amendment is
February 19, 1997, 0000021847-97-000033.
Other Information
Pursuant to its management agreement with the Portfolio, the Adviser is also
responsible for the supervision of the overall administration of the Portfolio
including providing office space and equipment in connection with the
maintenance of the headquarters of the Portfolio, with certain administrative
responsibilities being performed on its behalf by its affiliate, Colonial
Management Associates, Inc. ("Colonial"). Such administrative services include
(i) maintenance of books and records (other than accounting books and records);
(ii) the preparation and filing of all documents required for compliance by the
Portfolio with applicable laws and regulations; and (iii) negotiating the
Portfolio's agreements with, and overseeing and coordinating the activities of,
its custodian and other independent contractors and agents. Colonial, on behalf
of the Adviser, provides office space and facilities, equipment and personnel
for the performance of its administrative functions under the agreement. All
compensation of the trustees and officers of the Portfolio who are affiliated
persons of Colonial is paid by Colonial or its affiliates.
Under its management agreement with the Adviser, the Portfolio may use the name
"LFC," "Liberty," or "Liberty Financial" only so long as the management
agreement remains in effect.
Giving effect to the fee waiver and expense reimbursement agreements of the
Adviser then in effect, management fees of $1,602,643, $1,256,020 and $1,064,366
were paid for the fiscal years ended October 31, 1994, 1995 and 1996,
respectively.
The Adviser provides pricing and bookkeeping services to the Portfolio for a fee
of $25,000 per year plus 0.0025% of the Portfolio's average daily assets in
excess of $50 million and reimbursement of the Adviser's out-of-pocket expenses;
the Adviser also provides investor accounting services to the Portfolio for a
fee of $7,500 per year.
Custodian
State Street Bank and Trust Company ("State Street Bank") acts as the custodian
of the Portfolio's assets, including its portfolio securities and cash. Foreign
securities held by the Portfolio are maintained in the custody of foreign banks
and trust companies that are members of State Street Bank's Global Custody
Network or foreign depositories used by such members.
Expenses
The Portfolio pays all of its expenses, including: the compensation of its
Trustees who are not interested persons of the Portfolio; governmental fees;
interest charges; brokerage commissions; taxes; membership dues in the
Investment Company Institute allocable to the Portfolio; fees and expenses of
independent auditors, legal counsel and of the custodian of the Portfolio;
insurance premiums; amortization of organizational expenses; expenses of
calculating the net asset value of the Portfolio; and the investment management
and investor accounting service fees paid by the Portfolio to the Adviser,
SteinRoe Services, Inc. and Colonial, respectively. For fiscal year 1996, the
Portfolio's total expenses amounted to 0.60% of the Portfolio's average daily
net assets.
Item 5A. Management's Discussion of Fund Performance
Omitted pursuant to paragraph 4 of Instruction F of the General Instructions to
Form N-1A.
<PAGE>
Item 6. Capital Stock and Other Securities.
Investments in the Portfolio have no pre-emptive or conversion rights and are
fully paid and non-assessable, except as set forth below. The Portfolio is not
required and has no current intention to hold annual meetings of investors, but
the Portfolio will hold special meetings of investors when in the judgment of
the Trustees it is necessary or desirable to submit matters for an investor
vote. Changes in investment objective and fundamental policies will be submitted
to investors for approval. An investors' meeting will be held upon the written,
specific request to the Trustees of investors holding, in the aggregate, not
less than 10% of the Interests in the Portfolio. Investors have under certain
circumstances (e.g. upon application and submission of certain specified
documents to the Trustees by a specified number of shareholders) the right to
communicate with other investors in connection with requesting a meeting of
investors for the purpose of removing one or more Trustees. Investors also have
the right to remove one or more Trustees without a meeting by a declaration in
writing by a specified number of investors. Upon liquidation of the Portfolio,
investors would be entitled to share pro rata in the net assets of the Portfolio
available for distribution to investors (unless another sharing method is
required for federal income tax reasons, in accordance with the sharing method
adopted by the Trustees).
The Portfolio reserves the right to create and issue a number of series, in
which case investors in each series would participate solely in the earnings,
dividends and assets of the particular series. Interests in any series of the
Portfolio may be divided into two or more classes of Interests having such
preferences or special or relative rights or privileges as the Trustees of the
Portfolio may determine. Currently, the Portfolio has only one class of one
series.
The Portfolio is organized as a trust under the laws of the Commonwealth of
Massachusetts. Under the Declaration of Trust, the Trustees are authorized to
issue Interests in the Portfolio. Each investor is entitled to vote in
proportion to the amount of its investment in the Portfolio. Investments in the
Portfolio may not be transferred, but an investor may withdraw all or a portion
of his investment at any time at net asset value. Investors in the Portfolio
(e.g., investment companies, insurance company separate accounts and common and
commingled trust funds) will each be liable for all obligations of the
Portfolio. However, the risk of an investor in the Portfolio incurring financial
loss on account of such liability is limited to circumstances in which both
inadequate insurance exists and the Portfolio itself is unable to meet its
obligations.
It is intended that the Portfolio's assets, income and distributions will be
managed in such a way than an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code for qualification as a regulated
investment company, assuming that the investor invested all of its assets in the
Portfolio.
The net income of the Portfolio shall consist of (i) all income accrued, less
the amortization of any premium, on the assets of the Portfolio, less (ii) all
actual and accrued expenses of the Portfolio determined in accordance with
generally accepted accounting principles. Income includes discount earned
(including both original issue and, by election, market discount) on discount
paper accrued ratably to the date of maturity and any net realized gains or
losses on the assets of the Portfolio. All the Net Income of the Portfolio is
allocated among the investors in the Portfolio in accordance with their
Interests (unless another sharing method is required for federal income tax
reasons, in accordance with the sharing method adopted by the Trustees).
Under the anticipated method of operation of the Portfolio, the Portfolio will
not be subject to any Federal income tax. However, each investor in the
Portfolio will be taxable on its share (as determined in accordance with the
governing instruments of the Portfolio) of the Portfolio's ordinary income and
capital gain in determining its income tax liability. The determination of such
share will be made in accordance with an allocation method designed to satisfy
the Internal Revenue Code of 1986, as amended, (the "Code") and regulations
promulgated thereunder. Distributions of net income and capital gain are to be
made pro rata to investors in accordance with their investment in the Portfolio.
For federal income tax purposes, however, income, gain or loss may be allocated
in a manner other than pro rata, if necessary to reflect gains or losses
properly allocable to fewer than all investors as a result of contributions of
securities to the Portfolio or redemptions of portions of an investor's
unrealized gain or loss in Portfolio assets.
As of the date of this Amendment, the Fund held over 99.99% of the Interests in,
and accordingly controlled, Registrant.
Item 7. Purchase of Securities Being Offered.
Interests in the Portfolio are issued solely in private placement transactions
that do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Portfolio may be made only by investment
companies, insurance company separate accounts, common or commingled trust funds
or similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load. All investments
are made at net asset value next determined if an order is received by SteinRoe
Services Inc., the Portfolio's investor accounting agent, by the designated
cutoff time. The net asset value of the Portfolio is determined each day the New
York Stock Exchange ("Exchange") is open for trading as of the close of the
Exchange (normally 4:00 p.m. Boston time). The Portfolio determines its net
asset value by subtracting its liabilities from its total assets (i.e. the value
of its portfolio securities and other assets). For this purpose, portfolio
securities held by the Portfolio for which market quotations are readily
available are valued, in the case of listed domestic securities, at the last
sale price on the exchange on which that security is principally traded (or, if
there were no sales that day, at the latest bid price). Each over-the-counter
security for which the last sale price on the day of valuation is available from
NASDAQ is valued at the price. All other over-the-counter securities for which
reliable quotations are available are valued at the latest bid price. Long-term
corporate bonds and notes, for which market quotations are not considered
readily available, are valued on the basis of valuations furnished by a pricing
service approved by the Board of Trustees of the Portfolio which determines
valuations for normal, institutional-size trading units of such securities using
methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders. Foreign security valuations are generally based upon local convention
or regulation which may be the last sales price, last bid or asked price, or the
mean between last bid and asked price as of, in each case, the close of the
appropriate exchange or other designated time. Securities for which no such
reliable quotations or valuations are available are valued at fair value as
determined by the Board of Trustees of the Portfolio. Short-term securities with
less than sixty days remaining to maturity are valued at amortized cost, which
approximates market value.
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each day the Exchange is open. The investor's percentage of the
aggregate Interests in the Portfolio will be computed as the percentage equal to
the fraction (i) the numerator of which is the beginning of the day value of
such investor's investment in the Portfolio, on such day plus or minus, as the
case may be, the amount of any additions to or withdrawals from the investor's
investment in the Portfolio effected on such day, and (ii) the denominator of
which is the aggregate beginning of the day net asset value of the Portfolio on
such day plus or minus, as the case may be, the amount of the net additions to
or withdrawals from the aggregate investments in the Portfolio by all investors
in the Portfolio. The percentage so determined will then be applied to determine
the value of the investor's interest in the Portfolio as of the close of
business.
There is no minimum initial or subsequent investment in the Portfolio.
The Portfolio reserves the right to cease accepting investments at any time or
to reject any investment order.
Item 8. Redemption or Repurchase
An investor in the Portfolio may withdraw all or any portion of its investment
in the Portfolio at the next determined net asset value if a withdrawal request
in proper form is furnished by the investor to SteinRoe Services Inc., the
Portfolio's investor accounting agent, by the designated cutoff time. The
proceeds of a withdrawal will be paid by the Portfolio in federal funds normally
on the day (normally each day the Exchange is open) the withdrawal is effected,
but in any event within seven days. Investments in the Portfolio may not be
transferred.
The right of any investor to receive payment with respect to any withdrawal may
be suspended or the payment of the withdrawal proceeds postponed during any
period in which the Exchange is closed (other than weekends or holidays) or
trading on such Exchange is restricted, or to the extent otherwise permitted by
the 1940 Act as amended, if an emergency exists.
The Portfolio reserves its right to redeem in kind.
Item 9. Pending Legal Proceedings.
Not applicable.
<PAGE>
PART B
Item 10. Cover Page.
Not Applicable.
Item 11. Table of Contents.
Page
General Information and History
Investment Objective and Policies
Management of the Portfolio
Control Persons and Principal Holders of Securities
Investment Advisory and Other Services
Brokerage Allocation and Other Practices
Capital Stock and Other Securities
Purchase, Redemption and Pricing of Securities
Tax Status
Underwriters
Calculation of Performance Data
Financial Statements
Item 12. General Information and History.
Not applicable.
Item 13. Investment Objective and Policies.
The basic investment policies and strategies of the Portfolio are described in
Part A of this Registration Statement. Additional information about lower rated
bonds, foreign securities, zero coupon securities, pay-in-kind securities, money
market instruments, securities loans, forward commitments, repurchase
agreements, options on securities, futures contracts and related options and
foreign currency transactions, which supplements the information contained in
Part A regarding certain miscellaneous investment practices in which the
Portfolio may engage and the risks associated therewith, is described under
"Miscellaneous Investment Practices" in Part 2 of the Fund's Statement of
Additional Information which is filed under and incorporated herein by reference
to Part B of Post-Effective Amendment No. 97 of the Registration Statement on
Form N-1A of Colonial Trust III, of which the Fund is a series. The EDGAR filing
date and accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Fundamental Investment Policies
The fundamental investment policies which the Portfolio has adopted and which
may not be changed without approval by holders of a "majority of the outstanding
Interests" of the Portfolio, which as used in this Part B, means the vote of the
lesser of (i) 67% or more of the outstanding "voting Interests" of the Portfolio
present at a meeting, if the holders of more than 50% of the outstanding "voting
Interests" of the Portfolio are present or represented by proxy, or (ii) more
than 50% of the outstanding "voting Interests" of the Portfolio, are described
under "Fundamental Investment Policies" in Part 1 of the Fund's Statement of
Additional Information which is filed under and incorporated herein by reference
to Part B of Post-Effective Amendment No. 97 of the Registration Statement on
Form N-1A of Colonial Trust III, of which the Fund is a series. The EDGAR filing
date and accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Other Investment Policies
The Portfolio has also adopted additional non-fundamental investment policies
that may be required by various laws and administrative positions. These
policies are described under "Other Investment Policies" in Part 1 of the Fund's
Statement of Additional Information which is filed under and incorporated herein
by reference to Part B of Post-Effective Amendment No. 97 of the Registration
Statement on Form N-1A of Colonial Trust III, of which the Fund is a series. The
EDGAR filing date and accession number of such Post-Effective Amendment is
February 19, 1997, 0000021847-97-000033.
Portfolio Turnover
The portfolio turnover rate of the Portfolio is disclosed under "Portfolio
Turnover" in Part 1 of the Fund's Statement of Additional Information which is
filed under and incorporated herein by reference to Part B of Post-Effective
Amendment No. 97 of the Registration Statement on Form N-1A of Colonial Trust
III, of which the Fund is a series. The EDGAR filing date and accession number
of such Post-Effective Amendment is February 19, 1997, 0000021847-97-000033.
Item 14. Management of the Portfolio
Information regarding the officers and Trustees of the Portfolio is described
under "Other Information Concerning the Portfolio" in Part 1 and "Management of
the Colonial Funds" in Part 2 of the Fund's Statement of Additional Information
which is filed under and incorporated herein by reference to Part B of
Post-Effective Amendment No. 97 of the Registration Statement on Form N-1A of
Colonial Trust III, of which the Fund is a series. The EDGAR filing date and
accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
The Portfolio's Declaration of Trust provides that it will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Portfolio, unless it is determined that they had acted with willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
their offices or had not acted in good faith in the reasonable belief that their
actions were in the best interests of the Portfolio.
Information regarding Trustee and officer ownership is described under "Fund
Charges and Expenses" in Part 1 of the Fund's Statement of Additional
Information which is filed under and incorporated herein by reference to Part B
of Post-Effective Amendment No. 97 of the Registration Statement on Form N-1A of
Colonial Trust III, of which the Fund is a series. The EDGAR filing date and
accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Item 15. Control Persons and Principal Holders of Securities.
The Fund has informed the Portfolio that whenever it is requested to vote on
matters pertaining to the fundamental policies of the Portfolio, it will hold a
meeting of Fund shareholders and will cast its proportionate vote as instructed
by its shareholders. It is anticipated that other investors in the Portfolio
will follow the same or similar practice.
At January 31, 1997, the Fund owned in excess of 99.99% of the Interests in
Registrant, and the balance was owned by Liberty Services. On such date, no
person owned of record, or is known by Registrant to have owned beneficially, 5%
or more of the outstanding shares of the Fund. The officers and trustees of the
Fund as a group beneficially owned less than one percent of the outstanding
shares of the Fund on such date. The Fund's address is One Financial Center,
Boston, MA 02111.
Item 16. Investment Advisory And Other Services.
Information regarding investment advisory and other services provided by or to
the Portfolio is described under Item 5 of Part A of this Registration Statement
and is also described under "Fund Charges and Expenses" and "Other Information
Concerning the Portfolio" in Part 1 of the Fund's Statement of Additional
Information which is filed under and incorporated by reference herein to Part B
of Post-Effective Amendment No. 97 of the Registration Statement on Form N-1A of
Colonial Trust III, of which the Fund is a series. The EDGAR filing date and
accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Custodian
State Street Bank and Trust Company (the "Bank") is the custodian for the
securities and cash of the Portfolio, but it does not participate in the
investment decisions of the Portfolio. The Portfolio has authorized the Bank to
deposit certain portfolio securities in central depository systems as allowed by
federal law. The Bank's main office is at 225 Franklin Street, Boston,
Massachusetts 02107.
Portfolio securities purchased by the Portfolio in the U.S. are maintained in
the custody of the bank or of other domestic banks or depositories. Portfolio
securities purchased outside of the U.S. are maintained in the custody of
foreign banks and trust companies that are members of the Bank's Global Custody
Network, and foreign depositories of such foreign banks and trust companies.
Each of the domestic and foreign custodial institutions holding portfolio
securities has been approved by the Board of Trustees of the Portfolio in
accordance with regulations under the 1940 Act.
The Portfolio may invest in obligations (including repurchase agreements) of the
Bank and may purchase or sell securities from or to the Bank.
Independent Auditors
The independent auditors for the Portfolio are KPMG Peat Marwick LLP, Peat
Marwick Plaza, 303 East Wacker Drive, Chicago, IL 60601. KPMG Peat Marwick LLP
audits and reports on the annual financial statements of the Portfolio, reviews
certain regulatory reports of the Portfolio and its Federal income tax returns,
and performs such other accounting, auditing, tax and advisory services as the
Portfolio may engage them to do.
Limitation on Expenses
The Portfolio bears all expenses of its operations other than those expressly
assumed by other entities under contract with it, as described in Part A.
The Adviser has agreed not to impose their respective fees under their
management and administrative agreements with the Portfolio and the Fund to the
extent those fees would otherwise cause the aggregate expenses of the Fund and
the Portfolio, excluding interest, taxes, brokerage and other expenses which are
capitalized in accordance with generally accepted accounting practices and
extraordinary expenses, to exceed the applicable limits prescribed by any state
in which the Fund's shares are being offered to the public.
Item 17. Brokerage Allocation and Other Practices
Portfolio Transactions
Information regarding brokerage commissions and portfolio transactions is
described under "Fund Charges and Expenses" and "Other Information Concerning
the Portfolio" in Part 1 of the Fund's Statement of Additional Information which
is filed under and incorporated herein by reference to Part B of Post-Effective
Amendment No. 97 of the Registration Statement on Form N-1A of Colonial Trust
III, of which the Fund is a series. The EDGAR filing date and accession number
of such Post-Effective Amendment is February 19, 1997, 0000021847-97-000033.
Item 18. Capital Stock and Other Securities
Under the Declaration of Trust, the Trustees are authorized to issue Interests
in the Portfolio. Investors are entitled to participate pro rata in
distributions of taxable income, loss, gain and credit of the Portfolio (unless
another sharing method is required for federal income tax reasons, in accordance
with the sharing method adopted by the Trustees). Upon liquidation or
dissolution of the Portfolio, investors are entitled to share pro rata in the
Portfolio's net assets available for distribution to its investors (unless
another sharing method is required for federal income tax reasons, in accordance
with the sharing method adopted by the Trustees). Investments in the Portfolio
have no preference, preemptive, conversion or similar rights and are fully paid
and nonassessable, except as set forth below. Investments in the Portfolio may
not be transferred. No certificates representing an investor's Interest in the
Portfolio will be issued.
Each investor is entitled to vote in proportion to the amount of its investment
in the Portfolio. Investors in the Portfolio do not have cumulative voting
rights, and investors holding more than 50% of the aggregate Interest in the
Portfolio may elect all of the Trustees of the Portfolio if they choose to do so
and in such event the other investors in the Portfolio would not be able to
elect any Trustee. The Portfolio is not required and has no current intention to
hold annual meetings of investors but the Portfolio will hold special meetings
of investors when in the judgment of the Portfolio's Trustees it is necessary or
desirable to submit matters for an investor vote. The Portfolio will be required
to call a meeting of investors, upon specific written request to the Trustees of
investors holding, in the aggregate, not less than 10% of the Interests of the
Portfolio. The Trustees may make changes to the Portfolio's Declaration of Trust
which do not adversely affect the rights of investors, without investor
approval, if the Trustees deem such changes necessary or desirable.
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two-thirds of its
investors (with the vote of each being in proportion to the respective
percentages of the Interests in the Portfolio), except that if the Trustees of
the Portfolio recommend such sale of assets, the approval by vote of a majority
of the investors (with the votes of each being in proportion to their respective
percentages of the Interests of the Portfolio) will be sufficient. The Portfolio
will dissolve upon the complete withdrawal, resignation, retirement or
bankruptcy of any investor and will terminate unless reconstituted and continued
with the consent of all remaining investors. The Portfolio may also be
terminated (I) if approved by the vote of two-thirds of its investors (with the
votes of each being in proportion to the amount of their investment), or (ii) by
the Trustees of the Portfolio by written notice to its investors. The
Declaration of Trust of the Portfolio contains a provision limiting the life of
the Portfolio to a term of years; consequently, the Portfolio will terminate on
December 31, 2080.
The Portfolio is organized as a common law trust under the laws of The
Commonwealth of Massachusetts. Investors in the Portfolio will be held
personally liable for its obligations and liabilities, subject, however, to
indemnification by the Portfolio in the event that there is imposed upon an
investor a greater portion of the liabilities and obligations of the Portfolio
than its proportionate Interest in the Portfolio. The Declaration of Trust also
provides that the Portfolio shall maintain appropriate insurance (for example,
fidelity bonding and errors and omissions insurance) for the protection of the
Portfolio, its investors, Trustees, officers, employees and agents covering
possible tort and other liabilities. Thus, the risk of an investor incurring
financial loss on account of investor liability is limited to circumstances in
which both inadequate insurance exists and the Portfolio itself is unable to
meet its obligations.
The Declaration of Trust of the Portfolio further provides that obligations of
the Portfolio are not binding upon the Trustees individually but only upon the
property of the Portfolio and that the Trustees will not be liable for any
action for failure to act, but nothing in the Declaration of Trust protects a
Trustee 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.
The Portfolio reserves the right to create and issue any number of series, in
which case investors in each series would participate only in the earnings and
assets of the particular series. Investors in each series would be entitled to
vote separately to approve advisory agreements or changes in investment policy,
but investors of all series may vote together in the election or selection of
Trustees, principal underwriters and accountants for the Portfolio. Upon
liquidation or dissolution of the Portfolio, the investors in each series would
be entitled to share pro rata in the net assets of their respective series
available for distribution to investors (unless another sharing method is
required for federal income tax reasons, in accordance with the sharing method
adopted by the Trustees). Interests of any series of the Portfolio may be
divided into two or more classes of interests having such preferences or special
or relative privileges as the Trustees of the Portfolio may determine.
Although it is expected that the Portfolio will initially have 10 or fewer
investors, the number of investors in the Portfolio will in no case exceed 100
in order to satisfy certain tax requirements. This number may be increased or
decreased should such requirements change. Similarly, if Congress enacts certain
proposed amendments to the Code, it may be desirable for the Portfolio to elect
the status of a regulated investment company ("RIC") as that term is defined in
Subchapter M of the Code, which would require that the Portfolio first change
its organizational status from that of a Massachusetts trust to that of a
Massachusetts business trust ("MBT") or other entity treated as a corporation
under the Code. The Portfolio's Declaration of Trust empowers the Trustees, on
behalf of the Portfolio, to change the Portfolio's organization form to that of
a MBT or otherwise reorganized as an entity treated as a corporation under the
Code and to elect RIC status without a vote of the investors. Any such action on
the part of the Trustees to on behalf of the Portfolio would be contingent upon
there being no adverse tax consequences to such action.
Item 19. Purchase, Redemption and Pricing of Securities Being Offered
Interests in the Portfolio are issued solely in private placement transactions
that do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Portfolio may be made only by investment
companies, insurance company separate accounts, common or commingled trust funds
or similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This registration statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
The value of each investor's investment in the Portfolio will be based on its
pro rata share of the total net asset value of the Portfolio (i.e., the value of
its portfolio securities and other assets less its liabilities) as of the same
date and time. The Portfolio's net asset value per share is calculated as of
4:00 p.m. (Boston time) on each day the Exchange is open for trading. For this
purpose, portfolio securities held by the Portfolio for which market quotations
are readily available are valued, in the case of listed securities, at the last
sale price on the exchange on which that security is principally traded (or, if
there were no sales that day, at the closing bid price). Each over-the-counter
security for which the last sale price on the day of valuation is available from
NASDAQ is valued at that price. All other over-the-counter securities for which
reliable quotations are available are valued at the latest bid price. Long-term
corporate bonds and notes, for which market quotations are not considered
readily available, are valued on the basis of valuations furnished by a pricing
service approved by the Board of Trustees of the Portfolio which determines
valuations for normal, institutional-size trading units of such securities using
methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders. Securities for which no such reliable quotations or valuations are
available are valued at fair value as determined by the board of Trustees of the
Portfolio. Short-Term securities with less than sixty days remaining to maturity
are valued at amortized cost, which approximates market value.
The computation of the Registrant's net assets applicable to its investors'
beneficial interest is included in the Statement of Assets and Liabilities of
Registrant as at October 31, 1996, referred to under Item 23. See
Item 6 of Part A.
Item 20. Tax Status
The Portfolio is organized as a common law trust under the laws of the
Commonwealth of Massachusetts. Under the anticipated method of operation of the
Portfolio, the Portfolio will not be subject to any Federal income tax, nor is
it expected to have any Massachusetts income tax liability. Each investor in the
Portfolio will be taxable on its share (as determined in accordance with the
governing instruments of the Portfolio) of the Portfolio's ordinary income and
capital gain in determining its income tax liability. The determination of such
share will be made in accordance with a method designed to satisfy the Code and
regulations promulgated thereunder. There can be no assurance, however, that the
Internal Revenue Service will agree with such a method of allocation.
The Portfolio's taxable year-end is October 31. Although, as described above,
the Portfolio will not be subject to federal income tax, it will file
appropriate income tax returns.
It is intended that the Portfolio's assets, income and distributions will be
managed in such a way that an investor in the Portfolio will be able to satisfy
the requirements of Subchapter M of the Code for qualification as a RIC,
assuming that the investor invests all of its assets in the Portfolio.
In order for the Fund or any other investment company investing in the Portfolio
to qualify for Federal income tax treatment as a regulated investment company,
at least 90% of its gross income for a taxable year must be derived from
qualifying income; i.e., dividends, interest, income derived from loans of
securities, gains from the sale of stock or securities or foreign currencies or
other income (including but not limited to gains from options, futures, or
forward contracts) derived with respect to its business of investing in stock,
securities or currencies. In addition, gains realized on the sale or other
disposition of any of the following held for less than three months must be
limited to less than 30% of its annual gross income: (i) stock or securities,
(ii) options, futures or forward contracts (other than on foreign currencies),
and (iii) foreign currencies and currency forward contracts that are not
directly related to its principal business of investing in stocks, securities,
and options and futures with respect to stocks or securities. Each of the Fund
and any such other investment company will also be required to distribute each
year at least 90% of its investment company taxable income (in order to escape
federal income tax on distributed amounts) and to meet certain tax
diversification requirements. Because the Fund will, and any such other
investment company may, invest all of its assets in the Portfolio, the Portfolio
must satisfy all of these tax requirements in order for the Fund and any such
other investment company to satisfy them. In order to avoid realizing excessive
gains on securities held less than three months, the Portfolio may be required
to defer the closing out of certain positions beyond the time when it would
otherwise be advantageous to do so. Year-end mark-to-market gains on positions
open for less than three months as of the end of the Portfolio's fiscal year are
not considered gains on securities held for less than three months for the
purposes of the 30% test.
The Portfolio will allocate at least annually to the Fund and its other
shareholders their respective distributive shares of any net investment income
and net capital gains which have been recognized for federal income tax purposes
(including unrealized gains at the end of the Portfolio's taxable year on
certain options and futures transactions that are required to be
marked-to-market).
To the extent the Portfolio invests in foreign securities, it may be subject to
withholding and other taxes imposed by foreign countries. Tax treaties between
certain countries and the United States may reduce or eliminate such taxes. The
Fund and any other investment companies investing all their assets in the
Portfolio do not expect to be able to pass through their respective distributive
shares of such foreign taxes to their shareholders, who therefore will not be
entitled to foreign tax credits or deductions. However, the Fund and such other
companies will be entitled to deduct their respective distributive shares of
such taxes in determining their distributable income.
The Portfolio's foreign currency gains and losses from foreign currency
dispositions, foreign-currency denominated debt securities and payables or
receivables, and foreign currency forward contracts are subject to special tax
rules that generally cause them to be recharacterized as ordinary income and
losses and may affect the timing and amount of the Portfolio's recognition of
income, gain or loss.
In order to avoid adverse tax consequences, the Portfolio may be required to
limit its equity investments in non-U.S. corporations that are treated as
"passive foreign investment companies" under the Code.
Item 21. Underwriters
Not Applicable.
Item 22. Calculations of Performance Data
Not Applicable.
Item 23. Financial Statements
The financial statements of Registrant, which are incorporated herein by
reference to the Fund's October 31, 1996 Annual Report (which was previously
filed electronically and whose EDGAR filing Accession Number is
0000021847-97-00004), have been included in reliance upon the report of KPMG
Peat Marwick LLP, independent auditors, as experts in accounting and auditing.
<PAGE>
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements (incorporated herein by reference to the Fund's
October 31, 1996 Annual Report which was previously filed pursuant to
Section 30(b)(2) of the Investment Company Act 1940 and whose EDGAR
filing Accession Number is 0000021847-97-000004)
The Financial Statements of the Registrant contained in the Fund's
Annual Report are as follows:
Investment portfolio Statement of assets and liabilities
Statement of operations Statement of changes in net assets
Financial Highlights Notes to Financial Statements Independent
Auditors' Report
(b) Exhibits
1. Declaration of Trust of Registrant(a)
1.a. Amendment dated 8/23/96 to Declaration of Trust of Registrant
2. By-laws of Registrant (a)
2.a. Amended and Restated By-Laws dated 8/23/96 of Registrant
3. Inapplicable
4. Inapplicable
5. Inapplicable
6. Inapplicable pursuant to Instruction F.4 to Form N-1A
7. Inapplicable
8. Custodian Contract between Registrant and State Street Bank
& Trust Company (a)
9.(a)(1) Management Agreement between Registrant and Stein Roe &
Farnham Incorporated (a)
(a)(2) Amendment effective March 1, 1994 to Management Agreement
between Registrant and Stein Roe & Farnham Incorporated (a)
(b) Service Agreement between Registrant and Stein Roe & Farnham
Incorporated(a)
(c) Accounting and Bookkeeping Agreement between Registrant and
Stein Roe & Farnham Incorporated (a)
10. Inapplicable pursuant to Instruction F.4 to Form N-1A
11. Inapplicable pursuant to Instruction F.4 to Form N-1A
12. Inapplicable pursuant to Instruction F.4 to Form N-1A
13. Inapplicable
14. Inapplicable
15. Inapplicable
16. Inapplicable
17. Power of Attorney for: Robert J. Birnbaum, Tom Bleasdale,
Lora S. Collins, James E. Grinnell, William D. Ireland, Jr.,
Richard W. Lowry, William E. Mayer, James L. Moody, Jr.,
John J. Neuhauser, George L. Shinn, Robert L. Sullivan and
Sinclair Weeks, Jr. (b)
- -----------------------------------------------------
(a) Incorporated by reference to Amendment No. 8 to Registrant's Form N-1A
filed on August 30, 1996.
(b) Incorporated by reference to Item 24 of Part C of
Post-Effective Amendment No. 97 of the Registration Statement
on Form N-1A of Colonial Trust III, of which Colonial Global
Utilities Fund, a feeder fund of the Registrant, is a series.
The EDGAR filing date and Accession number of such
Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
At January 31, 1997, over 99.99% of the outstanding Interests in Registrant were
held by the Fund, a registered open-end management investment company organized
as a series of Colonial Trust III, a Massachusetts business trust, and the
balance was owned by Liberty Services. See Item 15 above for information about
the principal holders of the shares of the Fund.
Item 26. Number of Holders of Securities
(1) (2)
Number of Record Holders (as of
Title of Class January 31, 1997)
Beneficial Interests 2
Item 27. Indemnification
See Article V, Sections 5.02 and 5.03 of Registrant's Declaration of Trust filed
as Exhibit 1 hereto.
Item 28. Business and Other Connections of Investment Adviser
Information about the business and other connections of the investment adviser
is described under and incorporated herein by reference to Item 28 of Part C of
Post-Effective Amendment No. 97 of the Registration Statement on Form N-1A of
Colonial Trust III, of which the Fund is a series. The EDGAR filing date and
Accession number of such Post-Effective Amendment is February 19, 1997,
0000021847-97-000033.
Item 29. Principal Underwriters
Inapplicable
Item 30. Location of Accounts and Records
The journals and records required by items (1), (2)(i), (ii) and (iii), (3),
(5), (6), (7) and (8) and the ledger required by item 2(iv) of paragraph b of
Rule 31a-1 under the Investment Company Act of 1940 are maintained at Colonial
Management Associates, Inc., One Financial Center, Boston, MA 02111.
Item 31. Management Services
See Item 5 under Part A and Item 16 under Part B of this Registration Statement.
Item 32. Undertakings
Not applicable
<PAGE>
SIGNATURES
Pursuant to the requirements of the 1940 Act, the Registrant has duly caused
this Amendment No. 9 to its Registration Statement on Form N-1A to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Boston
and the Commonwealth of Massachusetts on the 28th day of February, 1997.
LFC UTILITIES TRUST
By: ARTHUR O. STERN
----------------
Arthur O. Stern
Secretary
Amended 2/9/97
DECLARATION OF TRUST
LFC UTILITIES TRUST
<PAGE>
TABLE OF CONTENTS
ARTICLE I. The Trust 1
1.01 Name 1
1.02 Definitions 2
ARTICLE II. Trustees 4
2.01 Number and Qualification 4
2.02 Term and Election 5
2.03 Resignation and Removal 5
2.04 Vacancies 6
2.05 Manner of Acting; By-laws 6
ARTICLE III. Powers of Trustees 7
3.01 General 7
3.02 Investments 7
3.03 Legal Title 9
3.04 Sale of Interests 9
3.05 Borrow Money 9
3.06 Delegation; Committees 10
3.07 Collection and Payment 10
3.08 Expenses 10
3.09 Miscellaneous Powers 10
3.10 Further Powers 11
ARTICLE IV. Investment Advisory, Administrative
Services and Placement Agent Arrangements 12
4.01 Investment Advisory and Other Arrangements 12
4.02 Parties to Contract 12
ARTICLE V. Limitations of Liability 14
5.01 No Personal Liability of Trustees, Officers,
Employees, Agents; Liability of Holders;
Indemnification 14
5.02 Non-liability of Trustees, etc. 15
5.03 Mandatory Indemnification 15
5.04 No Bond Required of Trustees 17
5.05 No Duty of Investigation; Notice in Trust
Instruments, etc. 17
5.06 Reliance on Experts, etc. 18
ARTICLE VI. Interests of the Trust 19
6.01 Interests 19
6.02 Rights of Holders 19
6.03 Issuance of Interests 20
6.04 Register of Interests 20
<PAGE>
6.05 Non-Transferability 20
6.06 Notices21
6.07 Series or Class Designation 21
ARTICLE VII. Decreases and Withdrawals 26
7.01 Decreases and Withdrawals 26
ARTICLE VIII. Determination of Book Capital Account
Balances, Net Income and distributions 27
8.01 Book Capital Account Balances 27
8.02 Distributions and Allocations to Holders 27
8.03 Power to Modify Foregoing Procedures 27
ARTICLE IX. 28
9.01 Meetings of Holders 28
9.02 Notice of Meetings 28
9.03 Record Date for Meetings 29
9.04 Proxies, etc. 29
9.05 Reports 29
9.06 Inspection of Records 30
9.07 Holder Action by Written Consent 30
ARTICLE X. Duration; Termination of Trust; Amendment;
Mergers, Etc. 30
10.1 Duration 30
10.2 Termination of Trust or a Series or a Class 30
10.3 Dissolution 32
10.4 Amendment Procedure 32
10.5 Merger, Consolidation and Sale of Assets 33
10.6 Incorporation 34
10.7 Massachusetts Business Trust 35
ARTICLE XI. Miscellaneous 35
11.1 Certificate of Designation; Agent
for Service of Process 35
11.2 Governing Law 35
11.3 Counterparts 35
11.4 Reliance by Third Parties 36
11.5 Provisions in Conflict with Law or
Regulations 36
<PAGE>
DECLARATION OF TRUST
OF
LFC UTILITIES TRUST
This is a DECLARATION OF TRUST of LFC Utilities Trust made on the 14th
day of August, 1991 by John L. Davenport, as trustee (such person, so long as he
shall continue in office in accordance with the terms of this Declaration of
Trust, and all other persons from time to time duly elected or appointed as
trustees in accordance with the provisions of this Declaration of Trust and then
in office, being hereinafter called the "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the law of
Massachusetts for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the trust assets be composed of funds
contributed thereto by the holders of interests in the trust entitled to
ownership rights in the trust;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all money and property contributed to the trust fund to manage and dispose
of the same for the benefit of the holders of the interests in the Trust and
subject to the provisions hereof, to wit:
ARTICLE I.
The Trust
1.01 Name. The name of the trust created hereby (the "Trust") shall be
"LFC Utilities Trust" and so far as may be practicable the Trustees shall
conduct the Trust's activities, execute all documents and sue or be sued under
that name, which name (and the word "Trust" wherever hereinafter used) shall
refer to the Trustees as Trustees, and not individually, and shall not refer to
the officers, agents, employees or holders of interests in the Trust.
1.02 Definitions. As used in this Declaration, the following terms
shall have the following meanings:
The terms "Affiliated Person," "Assignment" and "Interested Person" shall have
the meanings given them in the 1940 Act, as amended from time to time.
"Administrator" shall mean any party furnishing services to the Trust
pursuant to any administrative services contract described in Section 4.01
hereof.
"Book Capital Account" shall mean, for any Holder at any time, the Book
Capital Account of the Holder for such day, determined in accordance with
generally accepted accounting principles and the provisions of the 1940 Act.
"Class" means any division of Interests within a Series, which Class is
or has been established within such Series in accordance with the provisions of
Article VI.
"Commission" and "Interested Person" have the meanings given them in
the 1940 Act. Except as otherwise defined by the Trustees in conjunction with
the establishment of any Series or Class thereof of Interests, the term Majority
Interests Vote shall have the same meaning as is assigned to the term "vote of a
majority of the outstanding voting securities" in the 1940 Act.
"Declaration" shall mean this Declaration of Trust as amended from time
to time. References in this Declaration to "Declaration", "hereof," "herein,"
and "hereunder" shall be deemed to refer to the Declaration rather than the
article or section in which such words appear.
"Fiscal Year" shall mean an annual period as determined by the
Trustees.
"Holders" shall mean as of any particular time all holders of record of
Interests of the Trust at such time.
"Institutional Investor(s)" shall mean any regulated investment
company, segregated asset account, foreign investment company, common and
commingled trust Funds, insurance company separate account, group trust or
similar investment arrangement other than an
individual, S corporation, partnership or grantor trust beneficially owned by
any individual, S corporation or partnership.
"Interest(s)" shall mean the interest of a Holder in the Trust,
including the Interests of any and all Series or of any Class within any Series
(as the context may require) which may be established by the Trustees, and
including all rights, powers and privileges accorded to Holders in this
Declaration, which Interest may be expressed as a percentage, determined by
calculating, at such times and on such basis, as the Trustees shall from time to
time determine, the ratio of each Holders' Book Capital Account balance to the
total of all Holders' Book Capital Account balances. Reference herein to a
specified percentage in, or fraction of, Interests of the Holders, means Holders
whose combined Book Capital Accounts represent such specified percentage or
fraction of the Book Capital Accounts of all Holders. "Outstanding Interests"
mean those Interests shown from time to time on the books of the Trust or its
transfer agent as then issued and outstanding, but shall not include Interests
which have been decreased or withdrawn by the Trust and which are at the time
held by the Trust.
"Investment Adviser" shall mean any party furnishing services to the
Trust pursuant to any investment advisory contract described in Section 4.01
hereof.
"The 1940 Act" refers to the Investment Company Act of 1940, as amended
from time to time, and the rules and regulations thereunder.
"Person" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
"Placement Agent" shall mean any party furnishing placement agency
services to the Trust pursuant to any placement agency contract described in
Section 4.01 hereof.
"Registration Statement" shall mean the Registration Statement of the
Trust under the 1940 Act in effect from time to time.
"Series", individually or collectively, means the separately managed
component(s) of the Trust (or, if the Trust shall have only one such component,
then that one) as may be established and designated from time to time by the
Trustees pursuant to Section 6.01 hereof.
"Trustees" shall mean the signatories to this Declaration, so long as
they shall continue in office in accordance with the terms hereof, and all other
persons who at the time in question have been duly elected or appointed and have
qualified as trustees in accordance with the provisions hereof and are then in
office, who are herein referred to as the "Trustees," and reference in this
Declaration to a Trustee or Trustees shall refer to such person or persons in
their capacity as trustees hereunder.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust or the Trustees, including any and
all assets of or allocated to any Series or Class, as the context may require.
ARTICLE II.
Trustees
2.01 Number and Qualification. The number of Trustees shall be fixed by
the Trustees, except that,there shall not be less than three Trustees. No
reduction in the number of Trustees shall have the effect of removing any
Trustee from office. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.04 hereof, the Trustees in
office, regardless of their number, shall have all the powers granted to the
Trustees and shall discharge all the duties imposed upon the Trustees by this
Declaration. A Trustee shall be an individual at least 21 years of age who is
not under legal disability.
2.02 Term and Election. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.04 hereof, the Trustees may
succeed themselves and shall be elected by the Holders owning of record a
plurality of the Interests voting at a meeting of Holders on a date fixed by the
Trustees. Except in the event of resignation or removal pursuant to Section 2.03
hereof, each Trustee shall hold office until such time as less than a majority
of the Trustees holding office have been elected by Holders. In such event the
Trustees then in office will call a Holders' meeting for the election of
Trustees. Except for the foregoing circumstances, the Trustees shall continue to
hold office and may appoint successor Trustees.
2.03 Resignation and Removal. Any Trustee may resign his trust (without
need for prior or subsequent accounting). Any of the Trustees may be removed by
the affirmative vote of the Holders of two-thirds of the Interests or with
cause, by the action of two-thirds of the remaining Trustees (provided the
aggregate number of Trustees, after such removal and after giving effect to any
appointment made to fill the vacancy created by such removal, shall not be less
than the number required by Section 2.01 hereof). Removal with cause includes,
but is not limited to, the removal of a Trustee due to physical or mental
incapacity. Upon the resignation or removal of a Trustee, or his otherwise
ceasing to be a Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to the Trust or
the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the death of any Trustee or upon removal or resignation
due to any Trustee's incapacity to serve as trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.
2.04 Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of his death, retirement, resignation, removal,
bankruptcy, adjudicated incompetence or other incapacity to perform the duties
of the office of a Trustee. No such vacancy shall operate to annul the
Declaration or to revoke any existing agency created pursuant to the terms of
the Declaration. In the case of an existing vacancy, including a vacancy
existing by reason of an increase in the number of Trustees, subject to the
provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall fill
such vacancy by the appointment of such other person as they in their discretion
shall see fit. An appointment of a Trustee may be made in anticipation of a
vacancy to occur at a later date by reason of retirement, resignation or
increase in the number of Trustees, provided that such appointment shall not
become effective prior to such retirement, resignation or increase in the number
of Trustees. Whenever a vacancy in the number of Trustees shall occur, until
such vacancy is filled as provided in this Section 2.04, the Trustees in office,
regardless of their number, shall have all the powers granted to the Trustees
and shall discharge all the duties imposed upon the Trustees by the Declaration.
A written instrument certifying the existence of such vacancy signed by a
majority of the Trustees in office shall be conclusive evidence of the existence
of such vacancy.
2.05 Manner of Acting; By-laws. Except as otherwise provided herein or
in the By-laws, any action to be taken by the Trustees may be taken by a
majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of a majority of the
entire number of Trustees then in office. The Trustees may adopt By-laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend, alter or repeal such By-laws to the extent such power
is not reserved to the Holders.
Notwithstanding the foregoing provisions of this Section 2.05 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts of such
committee were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review or investigation of any
action, suit or proceeding which shall be pending or threatened to be brought
before any court, administrative agency or other adjudicatory body.
ARTICLE III.
Powers of Trustees
3.01 General. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust and any Series or
Class thereof to the same extent as if the Trustees were the sole owners of the
Trust Property and business in their own right, but with such powers of
delegation as may be permitted by this Declaration. The Trustees may perform
such acts as in their sole discretion are proper for conducting the business of
the Trust. The enumeration of any specific power herein shall not be construed
as limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
3.02 Investments. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an
investment company; and
(b) subscribe for, invest in, reinvest in, purchase or otherwise
acquire, hold, pledge, sell, assign,
transfer, exchange, distribute or otherwise deal in or dispose of United States
and foreign currencies and related instruments including options and futures
contracts, and forward foreign currency exchange contracts; securities,
including common, preferred and preference stocks, warrants, when-issued and
delayed securities, when, as and if securities, subscription rights,
profit-sharing interests or participations and all other contracts for or
evidence of equity interests; bonds, debentures, time notes and all other
evidences of indebtedness; negotiable or non-negotiable instruments,
obligations, certificates of deposit or indebtedness, Eurodollar certificates of
deposit, finance paper, bankers' acceptances, commercial paper, repurchase
agreements, reverse repurchase agreements, convertible securities, forward
contracts, options, futures contracts, options on futures contracts, and other
securities, including, without limitation, those issued, guaranteed or sponsored
by any state, territory or possession of the United States and the District of
Columbia and their political subdivisions, agencies and instrumentalities, or by
the United States Government, any foreign government, or any agency,
instrumentality or political subdivision of the United States Government or any
foreign government, or international instrumentalities, or by any bank, savings
institution, corporation or other business entity organized under the laws of
any State or of the United States or under foreign laws; and to exercise any and
all rights, powers and privileges of ownership or interest in respect of any and
all such investments of every kind and description, including, without
limitation, the right to consent and otherwise act with respect thereto, with
power to designate one or more persons, firms, associations, or corporations to
exercise any of said rights, powers and privileges in respect of any of said
instruments; and the Trustees shall be deemed to have the foregoing powers with
respect to any additional securities in which the Trustees may determine to
invest.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
3.03 Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have the power
to cause legal title to any Trust Property to be held by or in the name of one
or more of the Trustees, or in the name of the Trust or any Series of the Trust,
or in the name of any other Person on behalf of the Trust, on such terms as the
Trustees may determine.
The right, title and interest of the Trustees in the Trust Property and
the Trust Property of each Series of the Trust shall vest automatically in each
person who may hereafter become a Trustee upon his due election and
qualification. Upon the resignation, removal or death of a Trustee he shall
automatically cease to have any right, title or interest in any of the Trust
Property, and the Trust Property of each Series and the right, title and
interest of such Trustee in the Trust Property and the Trust Property of each
Series shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
3.04 Sale of Interests. Subject to the more detailed provisions set
forth in Articles VI and VII, the Trustees shall have the power to permit
persons to purchase Interests and to add to or reduce, in whole or in part,
their Interest in the Trust.
3.05 Borrow Money. The Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, including the lending
of portfolio securities, and to endorse, guarantee, or undertake the performance
of any obligation, contract or engagement of any other person, firm, association
or corporation.
3.06 Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust and
the Trust Property, to delegate from time to time to such of their number or to
officers, employees or agents of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or any Series or
Class of the Trust or the names of the Trustees or otherwise as the Trustees may
deem expedient.
3.07 Collection and Payment. The Trustees shall have power to collect
all property due to the Trust or any Series thereof; and to pay all claims,
including taxes, against the trust Property; to prosecute, defend, compromise or
abandon any claims relating to the Trust Property; to foreclose any security
interest securing any obligations, by virtue of which any property is owed to
the Trust; and to enter into releases, agreements and other instruments.
3.08 Expenses. Subject to Section 6.07 hereof, the Trustees shall have
power to incur and pay any expenses which in the opinion of the Trustees are
necessary or incidental to carry out any of the purposes of this Declaration,
and to pay reasonable compensation from the funds of the Trust to themselves as
Trustees. The Trustees shall fix the compensation of all officers, employees and
Trustees.
3.09 Miscellaneous Powers. The Trustees shall have the power to: (a)
employ or contract with such persons as the Trustees may deem desirable for the
transaction of the business of the Trust or any Series thereof and terminate
such employees or contractual relationships as they consider appropriate; (b)
enter into joint ventures, partnerships and any other combinations or
associations; (c) purchase, and pay for out of Trust Property or the Trust
Property of the appropriate Series of the Trust, insurance policies insuring the
Investment Adviser, Administrator, Placement Agent, Holders, Trustees, officers,
employees, agents, or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such person in such capacity, whether or not the Trust would
have the power to indemnify such person against such liability; (d) establish
pension, profit-sharing and other retirement, incentive and benefit plans for
any Trustees, officers, employees and agents of the Trust; (e) make donations,
irrespective of benefit to the Trust, for charitable, religious, educational,
scientific, civic or similar purposes; (f) to the extent permitted by law,
indemnify any person with whom the Trust or any Series thereof has dealings,
including the Investment Adviser, Administrator, placement agent, Holders,
Trustees, officers, employees, agents of independent contractors of the Trust or
any Series thereof, to such extent as the Trustees shall determine; (g)
guarantee indebtedness or contractual obligations of others; (h) determine and
change the Fiscal Year of the Trust or any Series thereof and the method in
which its accounts shall be kept; (i) adopt a seal for the Trust, but the
absence of such seal shall not impair the validity of any instrument executed on
behalf of the Trust; (j) enter into a plan of distribution and any related
agreements whereby the Trust may finance directly or indirectly any activity
which is primarily intended to result in sale of Interests; (k) adopt on behalf
of the Trust or any Series thereof any plan providing for the issuance of
multiple Classes of Interests (as authorized herein at Section 6.01); and (l)
determine, in their sole discretion, whether it is desirable for the Trust to be
treated as a regulated investment company, as that term is defined in subchapter
M of the Internal Revenue Code of 1986, as amended, and if so determined, to
make such changes to the organization and operation of the Trust as are
necessary to enable the Trust to qualify as a regulated investment company, and
to elect such status on behalf of the Trust, without any further action by the
Holders.
3.10 Further Powers. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices, whether within or without The Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the United
States of America and of foreign governments, and to do all such other things
and execute all such instruments as they deem necessary, proper or desirable in
order to promote the interests of the Trust and any Series thereof although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of this Declaration, the presumption
shall be in favor of a grant of power to the Trustees. The Trustees will not be
required to obtain any court order to deal with Trust Property.
ARTICLE IV.
Investment Advisory, Administrative Services
and Placement Agent Arrangements
4.01 Investment Advisory and Other Arrangements. The Trustees may in
their discretion, from time to time, enter into investment advisory,
administrative services and custodial contracts or placement agent agreements
or, if the Trustees establish multiple Series, separate investment advisory,
administrative, custodial or placement agency agreements with respect to one or
more Series, whereby the other party to such contract or agreement shall
undertake to furnish the Trust or such Series such investment advisory,
administrative, custodial, placement agent and/or other services as the Trustees
shall, from time to time, consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provisions of this Declaration, the Trustees may authorize any Investment
Adviser (subject to such general or specific instructions as the Trustees may,
from time to time, adopt) to effect purchases, sales, loans or exchanges of
Trust Property on behalf of the Trustees, or may authorize any officer, employee
or Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of any such Investment Adviser (and all without further action
by the Trustees). Any such purchases, sales, loans and exchanges shall be deemed
to have been authorized by all of the Trustees. The Trustees may, in their sole
discretion, call a meeting of Holders in order to submit to a vote of Holders at
such meeting the approval or continuance of any investment advisory contract. If
the Holders of any one or more of the Series of the Trust should fail to approve
any such investment advisory contract, the Investment Adviser may nonetheless
serve as Investment Adviser with respect to any Series whose Holders approve
such contract.
4.02 Parties to Contract. Any contract of the character described in
Section 4.01 of this Article IV or in the By-Laws of the Trust may be entered
into with any corporation, firm, trust or association, although one or more of
the Trustees or officers of the Trust or a Series thereof may be an officer,
director, Trustee, shareholder, or member of such other party to the contract,
and no such contract shall be invalidated or rendered voidable by reason of the
existence of any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Trust or a Series thereof under or by reason of said contract or
accountable for any profit realized directly or indirectly therefrom, provided
that the contract when entered into was reasonable and fair and not inconsistent
with the provisions of this Article IV or the By-Laws. The same person
(including a firm, corporation, trust, or association) may be the other party to
contracts entered into pursuant to Section 4.01 above or the By-Laws of the
Trust, and any individual may be financially interested or otherwise affiliated
with persons who are parties to any or all of the contracts mentioned in this
Section 4.02.
ARTICLE V.
Limitations of Liability
5.01 No Personal Liability of Trustees, Officers, Employees, Agents;
Liability of Holders; Indemnification. No Trustee, officer, employee or agent of
the Trust or any Series thereof shall be subject to any personal liability
whatsoever to any Person, other than the Trust or its Holders, in connection
with Trust Property or the affairs of the Trust or any Series thereof, save only
that arising from his bad faith, willful misfeasance, gross negligence or
reckless disregard of his duty to such Person; and all such Persons shall look
solely to the Trust Property, or to the Trust Property of one or more specific
Series of the Trust if the claim arises from the conduct of such Trustee,
officer, employee or agent with respect to only such Series, for satisfaction of
claims of any nature against a Trustee, officer, employee or agent of the Trust
arising in connection with the affairs of the Trust. Each Holder shall be
jointly and severally liable (with rights of contribution inter se in proportion
to their respective Interests in the Trust) for the liabilities and obligations
of the Trust or any Series thereof in the event that the Trust or the Series
fails to satisfy such liabilities and obligations; provided, however, that, to
the extent assets are available in the Trust or the Series, the Trust or the
Series shall indemnify and hold each Holder harmless from and against any claim
or liability to which such Holder may become subject by reason of its being or
having been a Holder to the extent that such claim or liability imposes on the
Holder an obligation or liability which, when compared to the obligations and
liabilities imposed on other Holders, is greater than its Interest
(proportionate share), and shall reimburse such Holder for all legal and other
expenses reasonably incurred by it in connection with any such claim or
liability. The rights accruing to a Holder under this Section 5.01 shall not
exclude any other right to which such Holder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust or any Series thereof
to indemnify or reimburse a Holder in any appropriate situation even though not
specifically provided herein. Notwithstanding the indemnification procedure
described above, it is intended that each Holder shall remain jointly and
severally liable to the Trust's or any Series' creditors as a legal matter.
5.02 Non-liability of Trustees, etc. No Trustee, officer, employee or
agent of the Trust shall be liable to the Trust, to any Series thereof, its
Holders, or to any Trustee, officer, employee, or agent thereof for any action
or failure to act (including, without limitation, the failure to compel in any
way any former or acting Trustee to redress any breach of trust) except for his
own bad faith, willful misfeasance, gross negligence or reckless disregard of
his duties.
5.03 Mandatory Indemnification. (a) Subject to the exceptions
and limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee, officer, employee or
agent of the Trust (including any individual who serves at its request as
director, officer, partner, trustee or the like of another organization in which
it has any interest as a shareholder, creditor or otherwise) shall be
indemnified by the Trust, or by one or more Series thereof if the claim arises
from his or her conduct with respect to only such Series, to the fullest extent
permitted by law against all 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; 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 Trustee
or officer:
(i) against any liability to the Trust, a Series thereof or
the Holders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust or a Series thereof;
(iii) in the event of a settlement or other disposition not
involving a final adjudication as provided in paragraph (b)(ii) resulting in a
payment by a Trustee or officer, 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 or other disposition; (B) based upon a
review of readily available facts (as opposed to a
full trial-type
inquiry) by (x) vote of a majority of the Non-interested Trustees (as defined
below) acting on the matter (provided that a majority of the Non-interested
Trustees then in office act on the matter) or (y) written opinion of independent
legal counsel; or
(C) a Majority Interests Vote (excluding
Interests owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer 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, administrators
and assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust or any Series thereof other
than Trustees and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 5.03 may be advanced by the Trust or a Series thereof prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 5.03, provided that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust or Series thereof
shall be insured against losses arising out of any such advances; or
(ii) a majority of the Non-interested Trustees acting on the
matter provided that a majority of the Non-interested Trustees act on the
matter) or an independent legal counsel in a written opinion shall determine,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient ultimately will be
found entitled to indemnification.
As used in this Section 5.03, a "Non-interested Trustee" is one who (i)
is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order of
the Commission), and (ii) is not involved in the claim, action, suit or
proceeding.
5.04 No Bond Required of Trustees. No Trustee shall, as such,
be obligated to give any bond or surety or
other security for the performance of any of his duties hereunder.
5.05 No Duty of Investigation; Notice in Trust Instruments, etc. No
purchaser, lender, or other person dealing with the Trustees or any officer,
employee or agent of the Trust or a Series thereof shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the
Trustees or by said officer, employee or agent or be liable for the application
of money or property paid, loaned, or delivered to or on the order of the
Trustees or of said officer, employee or agent. Every obligation, contract,
instrument, certificate or other interest or undertaking of the Trust or a
Series or Class thereof, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively taken to have been executed or
done by the executors thereof only in their capacity as Trustees, officers,
employees or agents of the Trust or a Series or Class thereof. Every written
obligation, contract, instrument, certificate or other interest or undertaking
of the Trust or a Series or Class thereof made or sold by the Trustees or by any
officer, employee or agent of the Trust or a Series or Class thereof, in his
capacity as such, shall contain an appropriate recital to the effect that the
Trustee, officer, employee and agent of the Trust or a Series or Class thereof
shall not personally be bound by or liable thereunder, nor shall resort be had
to their private property for the satisfaction of any obligation or claim
thereunder, and appropriate references shall be made therein to the Declaration,
and may contain any further recital which they may deem appropriate, but the
omission of such recital shall not operate to impose personal liability on any
of the Trustees, officers, employees or agents of the Trust or any Series or
Class thereof. The Trustees may maintain insurance for the protection of the
Trust Property or the rust Property of the applicable Series, its Holders,
Trustees, officers, employees and agents in such amount as the Trustees shall
deem adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.
5.06 Reliance on Experts, etc. Each Trustee and officer or employee of
the Trust or any Series thereof shall, in the performance of his duties, be
fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of account
or other records of the Trust or any Series or Class thereof, upon an opinion of
counsel, or upon reports made to the Trust or any Series or Class thereof by any
of its officers or employees or by any Investment Adviser, Administrator,
accountant, appraiser or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
ARTICLE VI.
Interests of the Trust
6.01 Interests. The beneficial interest in the property of the Trust
shall consist of non-transferable Interests. The number of such Interests
authorized hereunder is unlimited although the number of Holders shall never
exceed 500 unless the Trust receives an opinion of legal counsel to the effect
that a higher number of Holders will not cause the Trust to be treated as an
association taxable as a corporation for Federal income tax purposes. The
Trustees may permit the purchase of Interests but only if the purchaser is an
Institutional Investor. Subject to applicable law and to such restrictions as
may be adopted by the Trustees, a Holder may increase or decrease its Interest
without limitation. The Trustees shall have the authority to establish and
designate one or more Series of Interests and one or more Classes thereof. Each
Interest in any Series shall represent an equal proportionate Interest in the
assets of that Series with each other Interest in that Series. Subject to the
provisions of Section 6.07 hereof, the Trustees may also authorize the creation
of additional Series of Interests (the proceeds of which may be invested in
separate, independently managed portfolios) and additional Classes of Interests
within any Series.
6.02 Rights of Holders. The ownership of the Trust Property of every
description and the right to conduct any business hereinbefore described are
vested exclusively in the Trustees, and the Holders shall have no right or title
therein other than the beneficial interest conferred by their Interests and they
shall have no right to call for any partition or division of any property,
profits or rights of the Trust or a Series thereof. The Interests shall be
personal property giving only the rights in this Declaration specifically set
forth.
6.03 Issuance of Interests. The Trustees in their discretion may, from
time to time, without vote of the Holders, issue Interests, in addition to the
then issued and outstanding Interests and Interests held by the Trust, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of, liabilities) and
businesses. In connection with any issuance of Interests, the Trustees may issue
fractional Interests and Interests held by the Trust. The Trustees may from time
to time divide or combine the Interests of the Trust or, if the Interests be
divided into Series or Classes, of any Series or any Class thereof of the Trust,
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the Trust or in the Trust Property allocated or
belonging to such Series or Class. Contributions to the Trust or Series thereof
may be accepted for, and Interests shall be redeemed as, whole Interests and/or
1/1,000ths of a Interest or integral multiples thereof.
6.04 Register of Interests. A register shall be kept at the Trust under
the direction of the Trustees which shall contain the names and addresses of the
Holders and the Book Capital Account balances of each Holder. Each such register
shall be conclusive as to who are the Holders of the Trust and who shall be
entitled to payments of distributions or otherwise to exercise or enjoy the
rights of Holders. No Holder shall be entitled to receive payment of any
distribution, nor to have notice given to it as herein provided, until it has
given its address to such officer or agent of the Trustees as shall keep the
said register for entry thereon.
6.05 Non-Transferability. Interests shall not be transferable.
6.06 Notices. Any and all notice to which any Holder hereunder may be
entitled and any and all communications shall be deemed duly served or given if
mailed, postage prepaid, addressed to any Holder of record at its last known
address as recorded on the register of the Trust.
6.07 Series or Class Designation. (a) Without limiting the authority
of the Trustees set forth in Section
6.01 to establish and designate any further Series, it is hereby confirmed that
the Trust consists of the presently
Outstanding Interests of a single Series: LFC Utilities Trust.
(b) Without limiting the authority of the Trustees set forth in Section
6.01 to establish and designate any further Classes, it is hereby confirmed that
the Trust presently consists of one Class of Interests: the Outstanding
Interests of LFC Utilities Trust. Each Outstanding Interest of any Series shall
be of the existing Class unless the Trustees, with the consent of the holder of
the Interest (which consent shall be evidenced by the holder's subscription of
Interests of a specified Class or by any other action prescribed by the
Trustees), determines that such Interest is or shall be of some other Class.
(c) The Interests of the existing Series and such Classes thereof
herein established and designated and any Interests of any further Series and
Classes thereof that may from time to time be established and designated by the
Trustees shall be established and designated, and the variations in the relative
rights and preferences as between the different Series shall be fixed and
determined, by the Trustees (unless the Trustees otherwise determine with
respect to further Series or Classes at the time of establishing and designating
the same); provided, that all Interests shall be identical except that there may
be variations so fixed and determined between different Series or Classes
thereof as to investment objective, policies and restrictions, purchase price,
payment obligations, distribution expenses, right of redemption, special and
relative rights as to dividends and on liquidation, conversion rights, exchange
rights, and conditions under which the several Series or Classes thereof shall
have separate voting rights, all of which are subject to the limitations set
forth below. All references to Interests in this Declaration shall be deemed to
be Interests of any or all Series or Classes as the context may require.
(d) As to any existing Series and Classes, both heretofore and herein
established and designated, and any further division of Interests of the Trust
into additional Series or Classes, the following provisions shall be applicable:
(i) The number of authorized Interests and the number of
Interests of each Series or Class thereof that may be issued shall be unlimited.
The Trustees may classify or reclassify any unissued Interests or any Interests
previously issued and reacquired of any Series or Class into one or more Series
or one or more Classes that may be established and designated from time to time.
The Trustees may hold as Interests (of the same or some other Series or Class),
reissue for such consideration and on such terms as they may determine, or
cancel any Interests of any Series or Class reacquired by the Trust at their
discretion from time to time.
(ii) All consideration received by the Trust for the issue or
sale of Interests of a particular Series or Class, 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
irrevocably belong to that Series or Class for all purposes, subject only to the
rights of creditors of such Series or Class and except as may otherwise be
required by applicable tax laws, and shall be so recorded upon the books of
account of the Trust. In the event that there are any assets, income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular Series or Class, the Trustees shall
allocate them among any one or more of the Series or Classes established and
designated from time to time in such manner and on such basis as they, in their
sole discretion, deem fair and equitable. Each such allocation by the Trustees
shall be conclusive and binding upon the Holders of all Series or Classes for
all purposes. No Holder of Interests of any Series shall have any claim on or
right to any assets allocated or belonging to any other Series.
(iii) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series or the appropriate
Class or Classes thereof and all expenses, costs, charges and reserves
attributable to that Series or Class or Classes thereof, and any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series or Class or Classes
thereof shall be allocated and charged by the Trustees to and among any one or
more of the Series or Class or Classes thereof established and designated from
time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive and binding upon
the Holders of all Series and Classes for all purposes. The Trustees shall have
full discretion, to the extent not inconsistent with the 1940 Act, to determine
which items are capital; and each such determination and allocation shall be
conclusive and binding upon the Holders. The assets of a particular Series or
Class of the Trust shall, under no circumstances, be charged with liabilities
attributable to any other Series or Class of the Trust. All persons extending
credit to, or contracting with or having any claim against a particular Series
or Class of the Trust shall look only to the assets of that particular Series or
Class for payment of such credit, contract or claim.
(iv) The power of the Trustees to allocate income and pay distributions
shall be governed by Section 8.02 of this Declaration with respect to any one or
more Series or Classes which represents the interests in the assets of the Trust
immediately prior to the establishment of two or more Series or Classes. With
respect to any other Series or Class, allocations may be made and distributions
on Interests of a particular Series or Class may be paid with such frequency as
the Trustees may determine, which may be daily or otherwise, pursuant to a
standing resolution or resolutions adopted only once or with such frequency as
the Trustees may determine, to the holders of Interests of that Series or Class,
from such of the income and capital gains, accrued or realized, from the assets
belonging to that Series or Class, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series or Class.
All distributions on Interests of a particular Series or Class shall be made pro
rata to the Holders of that Series or Class in proportion to the number of
Interests of that Series or Class held by such Holders at the time of record
established for the payment of such distribution unless another sharing method
is required for Federal income tax reasons in accordance with the method
selected by the Trustees pursuant to Section 8.02 hereof.
(v) Each Interest of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each Holder of Interests of a Series
or Class thereof shall be entitled to receive his pro rata share of
distributions of income and capital gains made with respect to such Series or
Class. Upon redemption of his Interests or indemnification for liabilities
incurred by reason of his being or having been a Holder of a Series or Class,
such Holder shall be paid solely out of the funds and property of such Series or
Class of the Trust. Upon liquidation or termination of a Series or Class of the
Trust, Holders of such Series or Class shall be entitled to receive a pro rata
share of the net assets of such Series or Class unless another sharing method is
required for Federal income tax reasons in accordance with the method selected
by the Trustees pursuant to Section 8.02 hereof. A Holder of a particular Series
of the Trust shall not be entitled to participate in a derivative or class
action on behalf of any other Series or the Holders of any other Series of the
Trust.
(vi) On each matter submitted to a vote of Holders, all Interests of
all Series and Classes shall vote as a single class; provided, however, that (1)
as to any matter with respect to which a separate vote of any Series or Class is
required by the 1940 Act or is required by attributes applicable to any Class,
such requirements as to a separate vote by that Series or Class shall apply, (2)
to the extent that a matter referred to in (1) above, affects more than one
Class or Series and the interests of each such Class or Series in the matter are
identical, then, subject to (3) below, the Interests of all such affected
Classes or Series shall vote as a single Class; (3) as to any matter which does
not affect the interests of a particular Series or Class, only the holders of
Interests of the one or more affected Series or Classes shall be entitled to
vote; and (4) the provisions of the following sentence shall apply. On any
matter that pertains to a Rule 12b-1 distribution plan, which matter is
submitted to a vote of Holders, Holders of a Class of a Series shall have
exclusive voting rights with respect to the Rule 12b-1 distribution plan
applicable to their respective Classes of Interests and to the extent that such
matter does not affect Interests of a particular Class of such Series, said
Interests shall not be entitled to vote (except where otherwise required by law
or permitted by the Board of Trustees acting in its sole discretion) even though
the matter is submitted to a vote of the Holders of any other Class or Series.
(vii) Except as otherwise provided in this Article VI, the Trustees
shall have the power to determine the designations, preferences, privileges,
payment obligations, limitations and rights, including voting and dividend
rights, of each Class and Series of Interests. Subject to compliance with the
requirement of the 1940 Act, the Trustees shall have the authority to provide
that the Holders of Interests of any Series or Class shall have the right to
convert or exchange said Interests into Interests of one or more Series or
Classes of Interests in accordance with such requirements and procedures as may
be established by the Trustees; provided however, that any conversion of
Interests is subject to the continuing availability of an opinion of counsel or
an Internal Revenue Service ruling that such conversion is a non-taxable event.
(viii) The establishment and designation of any Series or Classes of
Interests shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation and
the relative rights and preferences of such Series or Classes, or as otherwise
provided in such instrument. At any time that there are no Outstanding Interests
of any particular Series or Class previously established and designated, the
Trustees may by an instrument executed by a majority of their number abolish
that Series or Class and the establishment and designation thereof. Each
instrument referred to in this section shall have the status of an amendment to
this Declaration.
ARTICLE VII.
Decreases And Withdrawals
7.01 Decreases and Withdrawals. A Holder shall have the authority to
decrease or withdraw its Interest in the Trust or a Series thereof, at such
Holder's option, subject to the terms and conditions provided in this Article
VII. The Trust shall, upon application of any Holder or pursuant to
authorization from any Holder, and subject to this Section 7.01, decrease or
withdraw such Holder's Interest in an amount determined by the application of a
formula adopted for such purpose by resolution of the Trustees; provided that
(a) such amount shall not exceed the reduction in a Holder's Book Capital
Account effected by such decrease or withdrawal of its Interest and (b) if so
authorized by the Trustees, the Trust may, at any time and from time to time,
charge fees for effecting such decrease or withdrawal, at such rates as the
Trustees may establish, and may, at any time and from time to time, suspend such
right of decrease or withdrawal. The procedures for effecting decreases or
withdrawals shall be as determined by the Trustees from time to time.
<PAGE>
ARTICLE VIII.
Determination of Book Capital Account
Balances, Net Income and Distributions
8.01 Book Capital Account Balances. The Book Capital Account balances
of Holders of the Trust or a Series thereof shall be determined daily at such
time or times as the Trustees may determine. The Trustees shall adopt
resolutions setting forth the method of determining the Book Capital Account
balances for each Holder. The power and duty to make calculations pursuant to
such resolutions may be delegated by the Trustees to the Investment Adviser,
Administrator, custodian, or such other person as the Trustees may determine.
8.02 Distributions and Allocations to Holders. The Trustees shall, in
compliance with the regulations promulgated under applicable provisions of the
Internal Revenue Code of 1986, as amended (herein the "Code"), agree to (i) the
daily allocation of income or loss to each Holder of the Trust or a Series or
Class thereof, (ii) the payment of distributions to Holders and (iii) upon
liquidation, the final allocation of items of taxable income and expense. Such
agreement shall be set forth in written instructions directed to the custodian
for the assets of the Trust or the Series specifying the method by which the
Trust or the Series will comply with the Code. The Trustees may amend the
instructions adopted pursuant to this Section 8.02 from time to time to the
extent necessary to comply with the Code or any regulations promulgated
thereunder. The Trustees may always retain from the net profits such amount as
they may deem necessary to pay the debts or expenses of the Trust or any Series
or Class thereof or to meet obligations of the Trust or a Series or Class, or as
they may deem desirable to use in the conduct of its affairs or to retain for
future requirements or extensions of the business.
8.03 Power to Modify Foregoing Procedures. Notwithstanding any of the
foregoing provisions of this Article VIII, the Trustees may prescribe, in their
absolute discretion, such other bases and times for determining the net income
and net assets of the Trust or any Series or Class thereof, the allocation of
income or the payment of distributions to the Holders of the Trust or any Series
or Class thereof as they may deem necessary or desirable to enable the Trust or
the Series or Class thereof to comply with any provision of the 1940 Act, any
rule or regulation thereunder, or any order of exemption issued by said
Commission, all as in effect now or hereafter amended or modified.
ARTICLE IX.
Holders
9.01 Meetings of Holders. Meetings of the Holders may be called at any
time by a majority of the Trustees and shall be called by any Trustee upon
written request of Holders holding, in the aggregate, not less than 10% of the
Interests of the Trust, such request specifying the purpose or purposes for
which such meeting is to be called. Meetings of the Holders of any Series of the
Trust shall be called by the President or the Secretary at the written request
of the Holder or Holders of ten percent (10%) or more of the total number of
Interests then issued and outstanding of such Series of the Trust entitled to
vote at such meeting. Any such meeting shall be held within or without The
Commonwealth of Massachusetts on such day and at such time as the Trustees shall
designate. Holders of a majority of the Interests of the Trust or a Series
thereof, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940 Act
or other applicable law or by this Declaration or the By-Laws of the Trust.
9.02 Notice of Meetings. Notice of all meetings of the Holders, stating
the time, place and purposes of the meeting, shall be given by the Trustees by
mail to each Holder, at his registered address, mailed at least 10 days and not
more than 60 days before the meeting. At any such meeting, any business properly
before the meeting may be considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
9.03 Record Date for Meetings. For the purpose of determining the
Holders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time fix a date, not more than 60 days prior to the
date of any meeting of the Holders or payment of distributions or other action,
as the case may be, as a record date for the determination of the Persons to be
treated as Holders of record for such purposes.
9.04 Proxies, etc. At any meeting of Holders, any Holder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at a
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust or a Series thereof as the Secretary
may direct, for verification prior to the time at which such vote shall be
taken. Pursuant to a resolution of a majority of the Trustees, proxies may be
solicited in the name of one or more Trustees or one or more of the officers of
the Trust or a Series thereof. Only Holders of record shall be entitled to vote.
Each Holder shall be entitled to a vote proportionate to its Interest in the
Trust or Series. When Interests are held jointly by several persons, any one of
them may vote at any meeting in person or by proxy in respect of such Interest,
but if more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such Interest. A proxy
purporting to be executed by or on behalf of a Holder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger.
9.05 Reports. The Trustees shall cause to be prepared, at least
annually, a report of operations containing a balance sheet and statement of
income and undistributed income of the Trust or a Series thereof prepared in
conformity with generally accepted accounting principles and an opinion of an
independent public accountant on such financial statements. The Trustees shall,
in addition, furnish to the Holders at least semi-annually interim reports
containing an unaudited balance sheet as of the end of such period and an
unaudited statement of income and surplus for the period from the beginning of
the current Fiscal Year to the end of such period.
9.06 Inspection of Records. The books and records of the Trust or a
Series thereof shall be open to inspection by Holders during normal business
hours to the extent as is permitted shareholders of a Massachusetts business
corporation.
9.07 Holder Action by Written Consent. Any action which may be taken by
Holders may be taken without a meeting if Holders holding more than 50% of the
total Interests entitled to vote (or such larger proportion thereof as shall be
required by any express provisions of this Declaration) shall consent to the
action in writing and the written consents are filed with the records of the
meetings of Holders. Such consent shall be treated for all purposes as a vote
taken at a meeting of Holders.
ARTICLE X.
Duration; Termination of Trust;
Amendment; Mergers; Etc.
10.01 Duration. Subject to possible termination or dissolution in
accordance with the provisions of Sections 10.02 and 10.03 respectively, the
Trust created hereby shall continue until December 31, 2080.
10.02 Termination of Trust or a Series or a Class.
(a) The Trust or any Series or Class thereof may be terminated (i) by the
affirmative vote of the Holders of the Trust or the appropriate Series or a
Class thereof, of not less than two-thirds of the Interests of the Trust or of
such Series or Class at any meeting of the Holders or by an instrument in
writing, without a meeting, signed by a majority of the Trustees and consented
to by the Holders of the Trust or the appropriate Series or Class thereof of not
less than a majority of such Interests, (ii) by a majority of the Trustees by
written notice to such Holders stating that a majority of the Trustees has
determined that the continuation of the Trust or a Series or a Class thereof is
not in the best interest of such Series or a Class, the Trust or their
respective Holders as a result of such factors or events adversely affecting the
ability of such Series or a Class 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 Class or the Trust to maintain its assets at an
appropriate size, changes in laws or regulations governing the Series or Class
or the Trust or affecting assets of the type in which such Series or Class or
the Trust invests or economic developments or trends having a significant
adverse impact on the business or operations of such Series or Class or the
Trust), or (iii) following the dissolution of the Trust as provided in Section
10.03 hereof if the Holders do not elect to continue the business of the Trust
as provided in said Section 10.03. Upon any such termination,
(i) The Trust or the Series or Class shall carry on no business
except for the purpose of winding up its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound up,
including the power to fulfill or discharge the contracts of the Trust, Series
or Class, collect its assets, sell, convey, assign, exchange, or otherwise
dispose of all or any part of the remaining Trust Property or Trust Property
allocated or belonging to such Series or Class to one or more persons at public
or private sale for consideration which may consist in whole or in part of cash,
securities or other property of any kind, discharge or pay its liabilities, and
do all other acts appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, or other disposition of all or substantially
all the Trust Property or Trust Property allocated or belonging to such Series
or Class shall require approval of the principal terms of the transaction and
the nature and amount of the consideration by the vote of Holders holding more
than 50% of the total Interests entitled to vote.
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements, as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, or the remaining Trust Property of the
terminated Series or Class in cash or in kind or partly each, among the Holders
of the Trust, Series or Class according to their respective rights.
(b) Upon termination of the Trust, Series or Class and
distribution to the Holders as herein provided, a majority of the Trustees shall
execute and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination. Upon termination of the Trust,
Series or Class the Trustees shall thereupon be discharged from all further
liabilities and duties hereunder, and the rights and interests of all Holders of
the Trust or the terminated Series or Class shall thereupon cease.
10.03 Dissolution. Upon the withdrawal, resignation, retirement,
bankruptcy or expulsion of any Holder, the Trust shall be dissolved effective
120 days after the event. However, the remaining Holders may, by a unanimous
affirmative vote at any meeting of the remaining Holders held prior to 120 days
after such event or by an instrument in writing without a meeting signed by a
majority of the Trustees and consented to by all of the remaining Holders prior
to 120 days after such event, agree to continue the business of the Trust even
if there has been a prior dissolution.
10.04 Amendment Procedure.
(a) This Declaration may be amended by the vote of Holders
holding more than 50% of the total Interests entitled to vote or by an
instrument in writing, without a meeting, signed by a majority of the Trustees
and consented to by the vote of Holders holding more than 50% of the total
Interests entitled to vote. The Trustees may also amend this Declaration without
the vote or consent of Holders to change the name of the Trust, to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or to conform this Declaration to the
requirements of applicable federal laws or regulations or the requirements of
the applicable provisions of the Internal Revenue Code of 1986, as amended, but
the Trustees shall not be liable for failing so to do. The Trustees may also
amend this Declaration without the vote or consent of the Holders if they deem
it necessary or desirable to make any other changes in the Declaration which do
not adversely affect the rights of the Holders thereunder.
(b) No amendment may be made, under Section 10.04(a) above, which would
change any rights with respect to any Interest in the Trust or a Series or Class
thereof by reducing the amount payable thereon upon liquidation of the Trust or
a Series or Class thereof or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or consent of the Holders of two-thirds
of the Interests of the Trust or such Series or Class outstanding and entitled
to vote.
(c) A certification in recordable form signed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted by the
Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust.
(d) All amendments shall be effective upon execution.
Notwithstanding any other provision hereof, until such time as Interests are
first sold, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
10.05 Merger, Consolidation and Sale of Assets. The Trust, or any
Series thereof, may merge or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or Trust Property allocated or belonging
to such Series, including its good will, upon such terms and conditions and for
such consideration when and as authorized (a) at any meeting of Holders called
for the purpose by the affirmative vote of the Holders of not less than
two-thirds of the Interests of the Trust or such Series; (b) by an instrument or
instruments in writing without a meeting, consented to by the Holders of not
less than two-thirds of such Interests; or (c) by any instrument in writing
without a meeting, signed by a majority of the Trustees and consented to by the
Holders of the Trust or such Series of not less than a majority of such
Interests, and any such merger, consolidation, sale, lease or exchange shall be
deemed for all purposes to have been accomplished under and pursuant to the
statutes of The Commonwealth of Massachusetts.
10.06 Incorporation. Upon a Majority Interests Vote of the Trust or a
Series thereof, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or Trust Property allocated or belonging to such Series or to
carry on any business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust Property or Trust Property
allocated or belonging to such Series to any such corporation, trust,
association or organization in exchange for the equity interest thereof or
otherwise, and to lend money to, subscribe for the equity interests of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust or such Series holds or is about to acquire
equity interests. The Trustees may also cause a merger or consolidation between
the Trust or any Series or any successors thereto and any such corporation,
trust, partnership, association or other organization if and to the extent
permitted by law, as provided under the law then in effect. Nothing contained
herein shall be construed as requiring approval of the Holders of the Trust or
any Series thereof for the Trustees to organize or assist in organizing one or
more corporations, trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust Property or Trust
Property allocated to such Series to such organizations or entities.
10.07 Massachusetts Business Trust. A majority of the trustees may, in
their sole discretion, amend the Declaration so as to, or otherwise, adopt the
form of organization of a trust with transferrable shares organized under the
laws of The Commonwealth of Massachusetts, without any further action by the
Holders.
ARTICLE XI.
Miscellaneous
11.01 Certificate of Designation; Agent for Service of Process. The
Trust shall file with the Secretary of State of Massachusetts a certificate, in
the Trust name and signed by an officer of the Trust, designating the Secretary
of The Commonwealth of Massachusetts as an agent upon whom process in any action
or proceeding against the Trust may be served.
11.02 Governing Law. This Declaration is executed by the Trustees and
delivered in The Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of The Commonwealth of Massachusetts and reference shall be specifically made to
the trust law of The Commonwealth of Massachusetts as to the construction of
matters not specifically covered herein or as to which an ambiguity exists.
11.03 Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
11.04 Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration may be recorded, appears to be a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Holders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Trustees or Holders, (d) the fact that the number of
Trustees or Holders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any person dealing with the Trustees and their successors.
11.05 Provisions in Conflict With Law or Regulations.
(a) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, or with other applicable laws and
regulations, the conflicting provisions shall be deemed never to have
constituted a part of his Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
------------------------------------
John L. Davenport, as Trustee
and not individually
S:\FUNDS\TRUSTIII\LFC\DECTRUST.DOC
Amended and Restated: 8/23/96
BY-LAWS
OF
LFC UTILITIES TRUST
Section 1. Agreement and Declaration of Trust and Principal Office
1.1 Agreement and Declaration of Trust. These By-Laws shall be subject to
the Agreement and Declaration of Trust, as from time to time in effect
(the "Declaration of Trust"), of LFC Utilities Trust, a Massachusetts
trust established by the Declaration of Trust (the "Trust").
1.2 Principal Office of the Trust. The principal office of the Trust
shall be located in Boston, Massachusetts.
-----------------------------
Section 2. Interestholders
2.1 Interestholder Meetings. A meeting of the holders of interests
("Interests") in the Trust or of any one or more series or classes of
Interests may be called at any time by the Trustees, by the president
or, if the Trustees and the president shall fail to call any meeting of
Interestholders for a period of 30 days after written application of
one or more Interestholders who hold at least 10% of all outstanding
Interests in the Trust, if holders of all series are required under the
Declaration of Trust to vote in the aggregate and not by individual
series at such meeting, or of any series or class, if holders of such
series or class are entitled under the Declaration of Trust to vote by
individual series or class at such meeting, then such holders may call
such meeting. If the meeting is a meeting of the holders of one or more
series or classes of Interests, but not a meeting of all
interestholders of the Trust, then only the holders of such one or more
series or classes shall be entitled to notice of and to vote at the
meeting. Each call of a meeting shall state the place, date, hour and
purpose of the meeting.
2.2 Place of Meetings. All meetings of the Interestholders shall be held at
the principal office of the Trust, or, to the extent permitted by the
Declaration of Trust, at such other place within the United States as
shall be designated by the Trustees or the president of the Trust.
2.3 Notice of Meetings. A written notice of each meeting of
Interestholders, stating the place, date and hour and the purposes of
the meeting, shall be given at least ten days and not more than 60 days
before the meeting to each holder entitled to vote thereat by leaving
such notice with him or her or at his or her residence or usual place
of business or by mailing it, postage prepaid, and addressed to such
holder at his or her address as it appears in the records of the Trust.
Such notice shall be given by the secretary or an assistant secretary
or by an officer designated by the Trustees. No notice of any meeting
of Interestholders need be given to a holder if a written waiver of
notice, executed before or after the meeting by such holder or his or
her attorney thereunto duly authorized, is filed with the records of
the meeting.
2.4 Ballots. No ballot shall be required for any election unless
requested by an Interestholders present or
represented at the meeting and entitled to vote in the election.
2.5 Proxies. Interestholders entitled to vote may vote either in person or
by proxy in writing dated not more than six months before the meeting
named therein, which proxies shall be filed with the secretary or other
person responsible to record the proceedings of the meeting before
being voted. Unless otherwise specifically limited by their terms, such
proxies shall entitle the holders thereof to vote at any adjournment of
such meeting but shall not be valid after the final adjournment of such
meeting. The placing of an Interestholder's name on a proxy pursuant to
telephonic or electronically transmitted instructions obtained pursuant
to procedures reasonably designed to verify that such instructions have
been authorized by such holder shall constitute execution of such proxy
by or on behalf of such holder.
Section 3. Trustees
3.1 Committees and Advisory Board. The Trustees may appoint from their
number an executive committee and other committees. Except as the
Trustees may otherwise determine, any such committee may make rules for
conduct of its business. The Trustees may appoint an advisory board to
consist of not less than two nor more than five members. The members of
the advisory board shall be compensated in such manner as the Trustees
may determine and shall confer with and advise the Trustees regarding
the investments and other affairs of the Trust. Each member of the
advisory board shall hold office until the first meeting of the
Trustees following the next meeting of the Interestholders and until
his or her successor is elected and qualified, or until he or she
sooner dies, resigns, is removed or becomes disqualified, or until the
advisory board is sooner abolished by the Trustees.
In addition, the Trustees may appoint a dividend committee of not less
than three persons, who may (but need not) be Trustees.
No special compensation shall be payable to members of the Dividend
Committee. Each member of the Dividend Committee will hold office until
the successors are elected and qualified or until the member dies,
resigns, is removed, becomes disqualified or until the Committee is
abolished by the Trustees.
3.2 Regular Meetings. Regular meetings of the Trustees may be held without
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.
3.3 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 president or the treasurer or by two or more Trustees,
sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees
calling the meeting.
3.4 Notice. It shall be sufficient notice to a Trustee to send notice by
mail at least forty-eight hours or by telegram at least twenty-four
hours before the meeting addressed to the Trustee at his or her usual
or last known business or residence address or to give notice to him or
her in person or by telephone at least twenty-four hours before the
meeting. Notice of a meeting need not be given to any Trustee if a
written waiver of notice, executed by him or her before or after the
meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a
meeting nor a waiver of a notice need specify the purposes of the
meeting.
3.5 Quorum. At any meeting of the Trustees one-third of the Trustees then
in office shall constitute a quorum; provided, however, a quorum shall
not be less than two. Any meeting may be adjourned from time to time by
a majority of the votes cast upon the question, whether or not a quorum
is present, and the meeting may be held as adjourned without further
notice.
Section 4. Officers and Agents
4.1 Enumeration; Qualification. 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 none need be a Trustee or Interestholder. Any two or more offices
may be held by the same person.
4.2 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 or her 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, including without
limitation the power to make purchases and sales of portfolio
securities of the Trust pursuant to recommendations of the Trust's
investment adviser in accordance with the policies and objectives of
that series of shares set forth in its prospectus and with such general
or specific instructions as the Trustees may from time to time have
issued.
4.3 Election. The president, the treasurer and the secretary shall be
elected annually by the Trustees. Other
elected officers are elected by the Trustees. Assistant officers are
appointed by the elected officers.
4.4 Tenure. The president, the treasurer and the secretary shall hold
office until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or
becomes disqualified. Each other officer shall hold office at the
pleasure of the Trustees. Each agent shall retain his or her authority
at the pleasure of the Trustees.
4.5 President and Vice Presidents. The president shall be the chief
executive officer of the Trust. The president shall preside at all
meetings of the Interestholders and of the Trustees at which he or she
is present, except as otherwise voted by the Trustees. Any vice
president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 Treasurer and Controller. The treasurer shall be the chief financial
officer of the Trust and subject to any arrangement made by the
Trustees with a bank or trust company or other organization as
custodian or transfer or shareholder services agent, shall be in charge
of its valuable papers and shall have such other duties and powers as
may be designated from time to time by the Trustees or by the
president. Any assistant treasurer shall have such duties and powers as
shall be designated from time to time by the Trustees.
The controller shall be the chief accounting officer of the Trust and
shall be in charge of its books of account and accounting records. The
controller shall be responsible for preparation of financial statements
of the Trust and shall have such other duties and powers as may be
designated from time to time by the Trustees or the president.
4.7 Secretary and Assistant Secretaries. The secretary shall record all
proceedings of the Interestholders and the Trustees in books to be kept
therefor, which books shall be kept at the principal office of the
Trust. In the absence of the secretary from any meeting of
Interestholders or Trustees, an assistant secretary, or if there be
none or he or she is absent, a temporary clerk chosen at the meeting
shall record the proceedings thereof in the aforesaid books.
Section 5. Resignations and Removals
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the president, the treasurer or
the secretary or to a meeting of the Trustees. The Trustees may remove any
officer elected by them with or without cause by the vote of a majority of the
Trustees then in office. Except to the extent expressly provided in a written
agreement with the Trust, no Trustee, officer, or advisory board member
resigning, and no officer or advisory board member removed shall have any right
to any compensation for any period following his or her resignation or removal,
or any right to damages on account of such removal.
Section 6. Vacancies
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Interests
7.1 Certificates. No certificates certifying the ownership of Interests
shall be issued except as the Trustees may otherwise authorize. In the
event that the Trustees authorize the issuance of such certificates,
subject to the provisions of Section 7.3, each Interestholder shall be
entitled to a certificate stating the amount of Interests owned by him
or her, 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 or an assistant treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer
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 or she were such officer at the
time of its issue.
In lieu of issuing certificates for Interests, the Trustees or the
transfer agent may either issue receipts therefor or keep accounts upon
the books of the Trust for the record holders of such Interests, who
shall in either case be deemed, for all purposes hereunder, to be the
holders of certificates for such Interests as if they had accepted such
certificates and shall be held to have expressly assented and agreed to
the terms hereof.
7.2 Loss of Certificates. In the case of the alleged loss or destruction or
the mutilation of a certificate representing Interests, a duplicate
certificate may be issued in place thereof, upon such terms as the
Trustees may prescribe.
7.3 Discontinuance of Issuance of Certificates. The Trustees may at any
time discontinue the issuance of certificates and may, by written
notice to each Interestholder, require the surrender of certificates to
the Trust for cancellation. Such surrender and cancellation shall not
affect the ownership of Interests in the Trust.
7.4 Non-Transferability of Interests. Interest shall not be transferable.
Except as otherwise provided by law, the Trust shall be entitled to
recognize the exclusive right of a person in whose name Interests stand
on the record of holders as the owner of such Interests for all
purposes, including, without limitation, the rights to receive
distributions, and to vote as such owner, and the Trust shall not be
bound to recognize any equitable or legal claim to or interest in any
such Interests on the part of any other person.
Section 8. Record Date and Closing Transfer Books
The Trustees may fix in advance a time, which shall not be more than 60 days
before the date of any meeting of Interestholders or the date for the payment of
any dividend or making of any other distribution to Interestholders, as the
record date for determining the Interestholders having the right to notice and
to vote at such meeting and any adjournment thereof or the right to receive such
dividend or distribution, and in such case only Interestholders of record on
such record date shall have such right, notwithstanding any transfer of
Interests on the books of the Trust after the record date; or without fixing
such record date the Trustees may for any of such purposes close the transfer
books for all or any part of such period.
Section 9. Seal
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts" together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, 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 and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
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 signed, and all transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
Except as from time to time otherwise provided by the Trustees, President,
Secretary, Controller or Treasurer, the fiscal year of the Trust shall end on
October 31.
Section 12. 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 a majority.
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